OMB APPROVAL
OMB Number: 3235-0116
Expires: May 31, 2011
Estimated average burden
Hours per response: 8.7
UNITED STATE
S SECURITIES AND
EXCHANGE COMMISSION Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITES EXCHANGE ACT OF 1934
For the month of
September 2009
Commission File Number
29606
SHARPE RESOURCES CORPORATION
(Translation of registrant's name into English)
3258 MOB NECK ROAD, HEATHSVILLE, VIRGINIA 22473
(Address of principal executive offices)
Indicated by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F. Form 20-F X Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulations S-T Rule 101(b)(1):
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K
if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulations S-T Rule 101(b)(7):
Note:
Regulation S-T Rule 101(b)(7) only permits the submission in paper of a
Form 6-K if submitted to furnish a report or other document that the registrant foreign
private issuer must furnish and make public under the laws of the jurisdiction in which
the registrant is incorporated, domiciled or legally organized (the registrant's
"home country"), or under the rules of the home country exchange on which the
registrant's securities are traded, as long as the report or other document is not a press
release, is not required to be and has not been distributed to the registrant's security
holders, and, if discussing a material event, has already been the subject of a Form 6-K
submission or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this Form,
the registrant is also thereby furnishing the information to the Commission pursuant to
Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes X No
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-4009
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Sharpe Resources Corporation
(Registrant)
Date: September 1, 2009
By S Roland M. Larsen
President & CEO
SEC1815 (04-07)
Persons who are to respond to the collection of information contained in this form are
not required to respond unless the form displays a currently valid OMB control number.
Sharpe Resources Corporation (An Exploration Stage Company)
(Expressed in United States Dollars) Consolidated Financial Statements Three and Six
Months Ended June 30, 2009
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
The accompanying unaudited interim consolidated financial
statements of Sharpe Resources Corporation (An Exploration Stage Company) were prepared by
management in accordance with Canadian generally accepted accounting principles. The most
significant of these accounting principles have been set out in the December 31, 2008
audited consolidated financial statements. Only changes in accounting policies have been
disclosed in these unaudited interim consolidated financial statements. Management
acknowledges responsibility for the preparation and presentation of the unaudited interim
consolidated financial statements, including responsibility for significant accounting
judgments and estimates and the choice of accounting principles and methods that are
appropriate to the Company’s circumstances.
Management has established processes, which are in place to provide
them sufficient knowledge to support management representations that they have exercised
reasonable diligence that (i) the unaudited interim consolidated financial statements do
not contain any untrue statement of material fact or omit to state a material fact
required to be stated or that is necessary to make a statement not misleading in light of
the circumstances under which it is made, as of the date of and for the periods presented
by the unaudited interim consolidated financial statements and (ii) the unaudited interim
consolidated financial statements fairly present in all material respects the financial
condition, results of operations and cash flows of the Company, as of the date of and for
the periods presented by the unaudited interim consolidated financial statements.
The Board of Directors is responsible for reviewing and approving the
unaudited interim consolidated financial statements together with other financial
information of the Company and for ensuring that management fulfills its financial
reporting responsibilities. An Audit Committee assists the Board of Directors in
fulfilling this responsibility. The Audit Committee meets with management to review the
financial reporting process and the unaudited interim consolidated financial statements
together with other financial information of the Company. The Audit Committee reports its
findings to the Board of Directors for its consideration in approving the unaudited
interim consolidated financial statements together with other financial information of the
Company for issuance to the shareholders.
Management recognizes its responsibility for conducting the
Company’s affairs in compliance with established financial standards, and
applicable laws and regulations, and for maintaining proper standards of conduct for its
activities.
NOTICE TO READER
Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if
an auditor has not performed a review of the interim consolidated financial statements,
they must be accompanied by a notice indicating that the financial statements have not
been reviewed by an auditor.
The accompanying unaudited interim consolidated financial statements of
the Company have been prepared by and are the responsibility of the Company's management.
The Company's independent auditor has not performed a review of these
unaudited interim consolidated financial statements in accordance with standards
established by the Canadian Institute of Chartered Accountants for a review of interim
financial statements by an entity's auditor.
SHARPE RESOURCES CORPORATIO
N
(An Exploration Stage Company)
Interim Consolidated
Balance Sheets
(Expressed in United States Dollars)
|
June
30,
|
December 31,
|
|
(Unaudited)
|
2009
|
2008
|
|
|
$
|
$
|
|
Assets
|
|
|
|
Current assets
|
|
|
|
Cash and cash equivalents
|
125,511
|
239,155
|
|
Deposits
|
12,898
|
4,105
|
|
Due from related party (Note 7)
|
250,000
|
250,000
|
|
|
388,409
|
493,260
|
|
Liabilities
|
|
|
|
Current Liabilities
|
|
|
|
Accounts payable and accrued
liabilities
|
177,409
|
192,327
|
|
Current portion of due to related
parties (Note 7)
|
49,768
|
74,708
|
|
Loan claims (Note 9)
|
563,818
|
563,818
|
|
|
790,995
|
830,853
|
|
Due to related parties (Note 7)
|
88,035
|
85,998
|
|
|
879,030
|
916,851
|
|
Shareholders' Deficiency
|
|
|
|
Share capital (Note 5(b))
|
11,463,430
|
11,463,430
|
|
Contributed surplus
|
455,335
|
455,335
|
|
Deficit
|
(12,409,386)
|
(12,342,356)
|
|
|
(490,621)
|
(423,591)
|
|
|
388,409
|
493,260
|
The notes to the unaudited interim consolidated financial statements
are an integral part of these statements. Nature of Operations and Going Concern (Note 1)
SHARPE RESOURCES CORPORATION
(An Exploration Stage Company
)
Interim
Consolidated Statements of Loss and Comprehensive Loss
|
(Expressed
in United States Dollars)
|
|
(Unaudited)
|
Three months ended
June 30, 2009 2008
|
Six months ended
June 30, 2009 2008
|
Cumulative from
start of the exploration stage onJanuary 1, 2002
|
|
|
$
|
$
|
$
|
$
|
$
|
|
Revenue Petroleum and natural gas
revenue Interest income Other income
|
2,902 198 -
|
11,125 776 -
|
4,125 904 -
|
11,125 1,080 -
|
400,501 17,821 3,239
|
|
|
3,100
|
11,901
|
5,029
|
12,205
|
421,561
|
|
Operating and administrative
expenses
Operating
|
134
|
513
|
191
|
513
|
742,590
|
|
General and administrative
|
43,052
|
31,010
|
57,479
|
40,343
|
735,721
|
|
Depletion, depreciation and
amortization
|
-
|
-
|
-
|
-
|
35,353
|
|
Stock-option compensation
|
-
|
190,801
|
-
|
190,801
|
312,249
|
|
Interest on advance
|
508
|
508
|
1,016
|
1,016
|
12,586
|
|
Interest on loan claims
|
6,724
|
5,638
|
13,373
|
11,276
|
122,087
|
|
Management fees
|
-
|
-
|
-
|
-
|
169,000
|
|
|
50,418
|
228,470
|
72,059
|
243,949
|
2,129,586
|
|
Loss before the following:
|
(47,318)
|
(216,569)
|
(67,030)
|
(231,744)
|
(1,708,025)
|
|
Write-off of an option to acquire
mineral
|
|
|
|
|
|
|
property
|
-
|
-
|
-
|
-
|
(78,125)
|
|
Gain on disposal of petroleum and
|
|
|
|
|
|
|
natural gas properties
|
-
|
-
|
-
|
-
|
606,047
|
|
Gain on disposal of capital asset
|
-
|
-
|
-
|
-
|
10,000
|
|
Gain on settlement of debt
|
-
|
-
|
-
|
-
|
149,681
|
|
Net loss and comprehensive loss
for the period
|
(47,318)
|
(216,569)
|
(67,030)
|
(231,744)
|
(1,020,422)
|
|
Loss per common share Basic
and diluted
|
(0.00)
|
(0.00)
|
(0.00)
|
(0.00)
|
|
|
Weighted average of common
shares outstanding
|
46,619,863
|
46,619,863
|
46,619,863
|
46,619,863
|
|
The notes to the unaudited interim consolidated financial statements are
an integral part of these statements.
SHARPE RESOURCES CORPORATION
(An Exploration Stage Company
) Interim Consolidated
Statements of Changes in Shareholders' Deficiency (Expressed in United States Dollars
)
Share Contributed Accumulated Capital Warrants Surplus Deficit Total
|
Balance, December 31, 2001
Net
loss for the year
|
$ 10,921,861
-
|
$
|
--
|
$
|
--
|
$ (11,388,964) (111,999)
|
$
|
(467,103) (111,999)
|
|
Balance, December 31, 2002 Stock
options granted Net loss for the year
|
$ 10,921,861
-
|
$
|
--
|
$
|
-17,660 -
|
$ (11,500,963) -(13,648)
|
$
|
(579,102) 17,660 (13,648)
|
|
Balance, December 31, 2003 Shares
issued for mining property Net loss for the year
|
$ 10,921,861
78,125 -
|
$
|
---
|
$
|
17,660 --
|
$ (11,514,611) -(194,909)
|
$
|
(575,090) 78,125 (194,909)
|
|
Balance, December 31, 2004 Stock
options granted Net income for the year
|
$ 10,999,986
--
|
$
|
---
|
$
|
17,660 15,484 -
|
$ (11,709,520) -289,238
|
$
|
(691,874) 15,484 289,238
|
|
Balance, December 31, 2005 Issued on
private placement Fair value of warrants issued Net loss for the year
|
$ 10,999,986
378,530
(204,408) -
|
$
|
--204,408 -
|
$
|
33,144 ---
|
$ (11,420,282) --(344,752)
|
$
|
(387,152) 378,530 -(344,752)
|
|
Balance, December 31, 2006 Exercise
of warrants Fair value of warrants exercised Expiry of warrants Fair value of granted
options Net loss for the year
|
$ 11,174,108
228,000 61,322
---
|
$
|
204,408 -(61,322) (143,086) --
|
$
|
33,144 --143,086 90,232 -
|
$ (11,765,034) ----(255,827)
|
$
|
(353,374) 228,000 --90,232
(255,827)
|
|
Balance, December 31, 2007
Stock-based compensation Net loss for the year
|
$ 11,463,430
--
|
$
|
---
|
$
|
266,462 188,873 -
|
$ (12,020,861) -(321,495)
|
$
|
(290,969) 188,873 (321,495)
|
|
Balance, December 31, 2008 Net
loss for the period
|
$ 11,463,430
-
|
$
|
--
|
$
|
455,335 -
|
$ (12,342,356) (67,030)
|
$
|
(423,591) (67,030)
|
|
Balance, June 30, 2009
|
$ 11,463,430
|
$
|
-
|
$
|
455,335
|
$ (12,409,386)
|
$
|
(490,621)
|
The notes to the unaudited interim consolidated financial statements are an integral
part of these statements. Page 4
SHARPE RESOURCES CORPORATIO
N
(An Exploration Stage Company
)
Interim
Consolidated Statements of Cash Flow
s
|
(Expressed in United
States Dollars)
|
|
Cumulative
|
|
from start of
|
|
the exploration
|
|
Three months ended Six months ended
stage on
|
|
June 30, June 30, January 1,
|
|
(Unaudited) 2009 2008 2009 2008 2002
|
|
$ $ $ $ $
|
|
Cash flows used in operating
activities
|
|
Net loss for the period (47,318)
(216,569) (67,030) (231,744) (1,020,422)
|
|
Operating items not involving cash:
|
|
Depletion, depreciation and
amortization
-
-
-
-35,353
|
|
Stock-option compensation
-
190,801
-
190,801 312,249
|
|
Write-off of an option to acquire
|
|
mineral property
-
-
-
-78,125
|
|
Gain on disposal of petroleum and
|
|
natural gas properties
-
-
-
-(606,047)
|
|
Gain on disposal of capital asset
-
-
-
-(10,000)
|
|
Gain on settlement of debt
-
-
-
-(149,681)
|
|
Changes in non-cash working capital
items
13,319
(105,750)
(21,614)
(96,236) 330,024
|
|
(33,999)
|
(131,518)
|
(88,644)
|
(137,179)
|
(1,030,399)
|
|
Cash flows
provided by (used in) financing activities
|
|
|
|
|
|
Repayment of long term debt
|
-
|
-
|
-
|
-
|
(117,654)
|
|
Repayment of loan claims
|
-
|
-
|
-
|
-
|
(100,715)
|
|
Advances to/from related parties
|
-
|
1,056,205
|
(25,000)
|
1,056,205
|
(146,814)
|
|
Common shares issued
|
-
|
-
|
-
|
-
|
606,530
|
|
|
-
|
1,056,205
|
(25,000)
|
1,056,205
|
241,347
|
|
Cash flows (used in) provided
by investing activities
|
|
|
|
|
|
|
Additions to petroleum and
natural gas
|
|
|
|
|
|
|
properties
|
-
|
|
-
|
-
|
(31,404)
|
|
Proceeds on disposal of petroleum
and
|
|
|
|
|
|
|
natural gas properties
|
-
|
-
|
-
|
-
|
606,467
|
|
Proceeds on disposal of capital
assets
|
-
|
-
|
-
|
-
|
10,000
|
|
Purchase of short-term investments
|
-
|
(1,147,808)
|
-
|
(1,147,808)
|
-
|
|
|
-
|
(1,147,808)
|
-
|
(1,147,808)
|
585,063
|
|
Decrease in cash and cash
equivalents during the period
|
(33,999)
|
(223,121)
|
(113,644)
|
(228,782)
|
(203,989)
|
|
Cash and cash equivalents,
beginning of period
|
159,510
|
286,773
|
239,155
|
292,434
|
329,500
|
|
Cash and cash equivalents, end
of period
|
125,511
|
63,652
|
125,511
|
63,652
|
125,511
|
The notes to the unaudited interim consolidated financial statements
are an integral part of these statements. Page 5
SHARPE RESOURCES CORPORATIO
N
(An Exploration Stage Company
)
Notes to
Interim Consolidated Financial Statement
s
(Expressed in
United States Dollars
) Three and six months ended June 30, 2009
(Unaudited)
1. Nature of Operations and Going Concern
Sharpe Resources Corporation (the "Company") is a
publicly held company, engaged in the development of mineral resources in the United
States of America. Currently the Company has oil and gas royalty interests in Texas
through its wholly-owned subsidiary, Sharpe Energy Company, in a single cost centre in the
United States of America. The Company's shares are listed in the United States on the
OTC:BB symbol SHGP.
The Company is considered in the exploration stage as of January 1,
2002 for the following reasons:
-
(i
)
-
The Company started disposing of its interests in petroleum and natural gas properties
at the beginning of 2002. The entire process of disposal of these properties was completed
during the fiscal year ended on December 31, 2005;
-
(ii)
-
The Company has not earned significant revenue from petroleum and natural gas interests
since that date; and
(iii) The Company changed the focus of its business and started looking
for mineral/coal properties and at present is exploring various options to invest in this
industry.
As at June 30, 2009, the Company had negative working capital of
$402,586 (December 31, 2008 - $337,593) and an accumulated deficit of $12,409,386
(December 31, 2008 - $12,342,356).
These unaudited interim consolidated financial statements have been
prepared on the basis that the Company is a going concern, which contemplates the
realization of its assets and the settlement of its liabilities in the normal course of
operations. In assessing whether the going concern assumption is appropriate, management
takes into account all available information about the future, which is at least, but is
not limited to, twelve months from the end of the reporting period. The ability of the
Company to continue operations is dependent upon obtaining the necessary financing. In the
event the Company is unable to obtain adequate funding, there is uncertainty as to whether
the Company will be able to continue as a going concern. These unaudited interim
consolidated financial statements do not include any adjustments related to the carrying
values and classifications of assets and liabilities that would be necessary should the
Company be unable to continue as a going concern.
2. Basis of Presentation and Accounting Policies
These unaudited interim consolidated financial statements have been
prepared in accordance with Canadian generally accepted accounting principles
("GAAP") for interim financial information. Accordingly they do not include all
of the information and notes to the financial statements required by Canadian GAAP for
annual consolidated financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. Operating results for the
three and six months ended June 30, 2009 may not necessarily be indicative of the results
that may be expected for the year ending December 31, 2009.
The balance sheet at December 31, 2008 has been derived from the
audited consolidated financial statements at that date but does not include all of the
information and footnotes required by Canadian GAAP for annual financial statements. The
consolidated interim financial statements have been prepared by management in accordance
with the accounting policies described in the Company's annual audited consolidated
financial statements for the year ended December 31, 2008, except as noted below. For
further information, refer to the audited consolidated financial statements and notes
thereto for the year ended December 31, 2008.
SHARPE RESOURCES CORPORATIO
N
(An Exploration Stage Company
)
Notes to
Interim Consolidated Financial Statement
s
(Expressed in
United States Dollars
) Three and six months ended June 30, 2009
(Unaudited)
2. Basis of Presentation and Accounting Policies
(Continued)
New accounting policies
Credit Risk and the Fair Value of Financial Assets and Financial
Liabilities
In January 2009, the Emerging Issues Committee of the Canadian
Institute of Chartered Accountants (CICA) issued EIC-173, Credit Risk and the Fair Value
of Financial Assets and Financial Liabilities, which applies to interim and annual
financial statements for periods ending on or after January 20, 2009. The Company has
evaluated the new section and determined that adoption of these new requirements had no
impact on the Company’s consolidated financial statements.
Mining Exploration Costs
On March 27, 2009, the Emerging Issues Committee of the CICA
approved an abstract EIC-174, “Mining Exploration Costs”, which
provides guidance on capitalization of exploration costs related to mining properties in
particular, and on impairment of long-lived assets in general. The adoption of this
abstract had no impact on the Company’s presentation of its financial position
or results of operations as at June 30, 2009.
Recent accounting pronouncements
International Financial Reporting Standards
(“IFRS”)
In January 2006, the CICA’s Accounting Standards Board
("AcSB") formally adopted the strategy of replacing Canadian GAAP with IFRS for
Canadian enterprises with public accountability. On February 13, 2008 the AcSB confirmed
that the use of IFRS will be required in 2011 for publicly accountable profit-oriented
enterprises. For these entities, IFRS will be required for interim and annual financial
statements relating to fiscal years beginning on or after January 1, 2011. The Company
will be required to have prepared, in time for its first quarter of fiscal 2011 filing,
comparative financial statements in accordance with IFRS for the three months ended March
31, 2010. While the Company has begun assessing the impact of adoption of IFRS on its
consolidated financial statements, the financial reporting impact of the transition to
IFRS cannot be reasonably estimated at this time.
Business Combinations, Consolidated Financial Statements and
Non-Controlling Interests
The CICA issued three new accounting standards in January 2009:
Section 1582, "Business Combinations", Section 1601, "Consolidated
Financial Statements" and Section 1602, "Non-Controlling interests". These
new standards will be effective for fiscal years beginning on or after January 1, 2011.
Section 1582 replaces section 1581 and establishes standards for the accounting for a
business combination. It provides the Canadian equivalent to IFRS 3, "Business
Combination". Section 1601 and 1602 together replace section 1600, "Consolidated
Financial Statements". Section 1602 establishes standards for accounting for a
non-controlling interest in a subsidiary in consolidated financial statements subsequent
to a business combination. It is equivalent to the corresponding provisions of IFRS
IAS-27, "Consolidated and Separate Financial Statements". The Company is in the
process of evaluating the requirements of these standards.
3. Capital Management
When managing capital, the Company's objective is to ensure the
entity continues as a going concern as well as achieve optimal returns to shareholders and
benefits for other stakeholders. Management adjusts the capital structure as necessary, in
order to support the acquisition, exploration and development of its projects. The Board
of Directors does not establish quantitative return on capital criteria for management,
but rather relies on the expertise of the Company's management to sustain future
development of the business. The Company considers its capital to be equity, which is
comprised of share capital, contributed surplus and accumulated deficit which at June 30,
2009 was a deficiency of $490,621 (December 31, 2008 - $423,591).
SHARPE RESOURCES CORPORATIO
N
(An Exploration Stage Company
)
Notes to
Interim Consolidated Financial Statement
s
(Expressed in
United States Dollars
) Three and six months ended June 30, 2009
(Unaudited)
3. Capital Management (Continued)
The properties in which the Company currently has an interest are
in the exploration stage; as such, the Company is dependent on external financing to fund
its activities. In order to carry out the planned exploration and pay for administrative
costs, the Company will spend its existing working capital and raise additional funds as
needed. The Company will continue to assess new properties and seek to acquire an interest
in additional properties if it feels there is sufficient geologic or economic potential
and if it has adequate financial resources to do so.
Management reviews its capital management approach on an ongoing basis
and believes that this approach, given the relative size of the Company, is reasonable.
There were no changes in the Company's approach to capital management
during the period ended June 30, 2009. The Company is not subject to externally imposed
capital requirements.
4. FINANCIAL RISK FACTORS
The Company’s activities expose it to a variety of
financial risks: credit risk, liquidity risk, market risk (including interest rate,
foreign exchange rate and commodity price risk).
Risk management is carried out by the Company's management team with
guidance from the Audit Committee under policies approved by the Board of Directors. The
Board of Directors also provides regular guidance for overall risk management.
Credit Risk
Credit risk is the risk of loss associated with a
counterpart’s inability to fulfill its payment obligations. The Company's credit
risk is primarily attributable to cash and cash equivalents. Cash and cash equivalents
consist of non-interest and interest bearing bank accounts with reputable financial
institutions. Management believes that the credit risk concentration with respect to
financial instruments included in cash and cash equivalents is minimal.
Liquidity Risk
Liquidity risk is the risk that the Company will not have
sufficient cash resources to meet its financial obligations as they come due. The
Company's liquidity and operating results may be adversely affected if the Company's
access to the capital market is hindered, whether as a result of a downturn in stock
market conditions generally or as a result of conditions specific to the Company. As at
June 30, 2009, the Company had a cash and cash equivalents balance of $125,511 (December
31, 2008- $239,155) to settle accounts payable and accrued liabilities of $177,409
(December 31, 2008 - $192,327) and the current portion of due to related parties of
$49,768 (December 31, 2008 - $74,708). Most of the Company's accounts payable and accrued
liabilities have contractual maturities of less than 30 days and are subject to normal
trade terms. Due to related parties are unsecured with no set date of repayment. The
Company is seeking sources of additional capital to improve its liquidity position.
The Company can also redeem, all or in part, at a discount price,
preferred shares shown as current liabilities on the balance sheet in the amount of
$563,818 (December 31, 2008 - $563,818). As of June 30, 2009, the Company does not intend
to redeem the preferred shares due to the limited financial resources of the Company.
SHARPE RESOURCES CORPORATIO
N
(An Exploration Stage Company
)
Notes to
Interim Consolidated Financial Statement
s
(Expressed in
United States Dollars
) Three and six months ended June 30, 2009
(Unaudited)
4. FINANCIAL RISK FACTORS (Continued)
Market Risk
Market risk is the risk of loss that may arise from changes in
market factors such as interest rates, foreign exchange rates, and commodity prices.
Interest Rate Risk
The Company has cash balances and balances due to related parties with
fixed interest rates (refer to Note 7(ii) and (iii)). The Company's current policy is to
invest excess cash in interest bearing bank accounts. The Company periodically monitors
its interest bearing bank accounts and is satisfied with the creditworthiness of its banks
.
Foreign Currency Risk
The Company's functional currency is the United States dollar and major
purchases are transacted in United States dollars. An operating account is maintained in
Canadian dollars primarily for settlement of general and corporate expenditures.
Management believes the foreign exchange risk derived from currency conversions is
negligible and therefore does not hedge its foreign exchange risk.
Commodity Price Risk
Commodity price risk could adversely affect the Company. In particular,
the Company’s future profitability and viability from mineral exploration
depends upon the world market price of coal. Commodity prices have fluctuated
significantly in recent years. There is no assurance that, even as commercial quantities
of coal may be produced in the future, a profitable market will exist for them. As of June
30, 2009, the Company was not a producer of coal. As a result, commodity price risk may
affect the completion of future equity transactions such as equity offerings and the
exercise of stock options and warrants. This may also affect the Company's liquidity and
its ability to meet its ongoing obligations. The Company closely monitors commodity prices
as it relates to coal to determine the appropriate course of action to be taken by the
Company.
Sensitivity Analysis
Based on management's knowledge and experience of the financial
markets, the Company believes the following movements are "reasonably possible"
over a six month period:
-
(i
)
-
Held-for-trading assets include an interest bearing bank account with a variable
interest rate. As at June 30, 2009, sensitivity to a plus or minus 10% change in interest
rates is not significant to the statement of loss and comprehensive loss.
-
(ii)
-
The Company is exposed to foreign currency risk on fluctuations related to cash and cash
equivalents, accounts payable and accrued liabilities and due to related parties that are
denominated in Canadian dollars. Sensitivity to a plus or minus 10% change in the foreign
exchange rate would affect net loss and comprehensive loss by approximately $5,400 with
all other variables held constant.
SHARPE RESOURCES CORPORATIO
N
(An Exploration Stage Company
)
Notes to
Interim Consolidated Financial Statement
s
(Expressed in
United States Dollars
) Three and six months ended June 30, 2009
(Unaudited)
5. Share Capital
(a) Authorized
Unlimited common shares without par value
(b
) Issued and Outstanding Shares Amount
Balance, December 31, 2008 and June 30, 2009 46,619,863 $ 11,463,430
6. Stock Options
The changes in stock options for the six months ended June 30, 2009 are as
follows:
Weighted Number of average stock options exercise price ($CDN)
$
Balance, December 31, 2008 3,780,000 0.10 Cancelled (200,000) 0.10
Balance, June 30, 200
9 3,580,000 0.10
The following table reflects the actual stock options issued and
outstanding as of June 30, 2009:
|
Exercise price
|
|
per share
|
Fair
|
Number of
|
Weighted average
|
|
($CDN)
|
Expiry date
|
value
|
stock options remaining
contract life (years)
|
|
$
|
|
$
|
|
0.10 0.10 0.10
|
May 16, 2010 May 15, 2012 May 8,
2013
|
15,484 90,232 166,653
|
480,000 1,600,000 1,500,000
|
0.88 2.88 3.86
|
|
|
|
272,369
|
3,580,000
|
3.02
|
|
SHARPE
RESOURCES CORPORATION
(An Exploration Stage Company)
Notes
to Interim Consolidated Financial Statements
(Expressed in United States
Dollars) Three and six months ended June 30, 2009 (Unaudited)
|
|
7.
|
Related Party Balances and
Transactions Balances with related parties are comprised of:
|
|
June 30
,
2009
|
December 31, 2008
|
|
|
Due from related party (i)
|
$
|
250,000
|
$ 250,000
|
|
|
Due to related parties Roland Larsen
(ii) Royal Standard Minerals Inc. (iii) Kentucky Standard Energy Company (iv)
|
$
|
25,400 112,403 -
|
$ 25,400 110,306 25,000
|
$ 137,803
$ 160,706
-
(i)
-
Standard Energy Company ("Standard") is related by virtue of its ownership by
an officer and director of the Company. The loan receivable is unsecured, non-interest
bearing and no date is set for its repayment.
-
(ii)
-
This loan is payable to an officer and director of the Company. It is unsecured, bearing
interest at 8% and has no date set for repayment. The interest payable on this loan has
been accrued but has not yet been paid.
(iii) Royal Standard Minerals Inc. ("RSM") is a related
company by virtue of common management and common directors. The loan payable was
unsecured, non-interest bearing and had no date set for its repayment.
On September 9, 2008, the Company entered into an agreement with RSM
for the repayment of the loan. To this end, the Company has executed a promissory note
(the "Note") in favour of RSM that provides for the repayment of the loan over a
three-year period commencing on September 9, 2008. The first principle payment of $42,499
is due on September 9, 2009, $42,499 on September 9, 2010 and $42,499 on September 9,
2011. Pursuant to the Note, the outstanding amount of the loan will accumulate interest at
the rate of 4% per annum, such interest to accrue daily and be payable monthly, in arrears
on the first business day of each and every month commencing on October 9, 2008 until the
full amount of the loan together with all interest on such amount has been repaid in full.
For the three and six months ended June 30, 2009, the Company accrued interest of $1,087
and $2,097 respectively (three and six months ended June 30, 2008 - $nil) on this
liability.
(iv) This loan was payable to Kentucky Standard Energy Company with
which the Company has common management and common directors. It was unsecured,
non-interest bearing, and was repaid in February, 2009.
These transactions are in the normal course of operations and are
measured at the exchange amount (the amount of consideration established and agreed to by
the related parties which approximates the arm's length equivalent value).
SHARPE RESOURCES CORPORATIO
N
(An Exploration Stage Company
)
Notes to
Interim Consolidated Financial Statement
s
(Expressed in
United States Dollars
) Three and six months ended June 30, 2009
(Unaudited)
8. Segmented Information
The Company has one reportable business segment. Substantially all
of the Company's assets are located in the United States except for small balances held in
Canadian banks. The Company's operations in Canada consist of general and administrative
expenses necessary to maintain the Company's public company status.
9. Loan Claims
June 30
, December 31,
2009
2008
Unsecured vendor loan claims
563,818
563,818
Pursuant to a voluntary reorganization under Chapter 11 of the United
States Bankruptcy Code, the agreed unsecured vendor loan claims of Sharpe Energy were paid
partially by 10% cash settlement. The remaining 90% of the claims were settled by the
issue of preferred stock certificates of Sharpe Energy, bearing a quarterly dividend of 4%
per annum. The certificates were fully redeemable in 2006. At the discretion of the
Company, the certificates can be redeemed, all or in part, at a discount based upon the
time of redemption.
The amount outstanding has been classified as a current liability given
the redemption feature and the dividend payments are reflected as interest expense.
10. Mining Interests
(a) Business Combination
On December 1, 2007, the Company entered into an agreement to
acquire 100% interest in Standard.
Standard is a private company related by virtue of its ownership by an
officer and director of the Company.
Standard’s primary asset includes 100% ownership interest in
all of the coal seams on more than 17,000 acres in Preston County, West Virginia.
The purchase price consists of the forgiveness of the repayment of
$250,000 demand promissory note owing from Standard to the Company and the issuance of 2
million shares of the Company’s common stock.
As of June 30, 2009, the business combination has not been completed.
SHARPE RESOURCES CORPORATIO
N
(An Exploration Stage Company
)
Notes to
interim Consolidated Financial Statement
s
(Expressed in
United States Dollars
) Three and six months ended June 30, 2009
(Unaudited)
10. Mining Interests (Continued)
(b) Coal Projects
The Company has entered into an option agreement whereby it agreed
to an option for RSM to acquire a 50% interest in coal properties in eastern Kentucky by
advancing to the project $2 million prior to December 9, 2009. Once the option is
exercised by RSM a 50/50 Joint Venture agreement will be entered into by the parties.
The optionee of the agreement is RSM which is related to the Company
due to the fact that they have common management and directors.
Sharpe Resource (CE) (USOTC:SHGP)
Gráfico Histórico do Ativo
De Jan 2025 até Fev 2025
Sharpe Resource (CE) (USOTC:SHGP)
Gráfico Histórico do Ativo
De Fev 2024 até Fev 2025
