Blox, Inc. - Quarter Report: 2016 December (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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

December 31, 2016

o

Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period _____________to______________

Commission File Number: 333-150582

BLOX, INC.

 (Exact name of registrant as specified in its charter)

Nevada

20-8530914

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

incorporation of organization)

Suite 1500, 701 West Georgia Street, Vancouver, BC  Canada

V7Y 1C6

(Address of principal executive offices)

(ZIP Code)

Registrant’s telephone number, including area code:

(604) 696-4236

	(Former name, former address and former fiscal year,  if changed since last report

Indicate by check mark whether the issuer (1) 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

x Yes    o 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).

x Yes    o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of ‘‘accelerated filer and large accelerated filer’’ in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer

o

Small reporting company

x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

oYes   x No

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 108,611,814 shares of common stock as of February 10, 2017.

 

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BLOX, INC.

Quarterly Report on Form 10-Q
For The Quarterly Period Ended
December 31, 2016

INDEX

PART I - FINANCIAL INFORMATION

3

Item 1. Financial Statements

3

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

13

Item 3. Quantitative and Qualitative Disclosures About Market Risk

16

Item 4. Controls and Procedures

16

PART II - OTHER INFORMATION

17

Item 1. Legal Proceedings

17

Item 1A. Risk Factors

17

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

17

Item 3. Defaults Upon Senior Securities

17

Item 4. Submission of Matters to a Vote of Securities Holders

17

Item 5. Other Information

17

Item 6. Exhibits

17

SIGNATURES

18

2

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PART I

As used in this quarterly report on Form 10-Q, the terms “we”, “us” “our”, the “Company” or the “registrant” refer to Blox Inc., a Nevada corporation, and its wholly-owned subsidiaries.

Our financial statements are stated in United States Dollars (US$) unless otherwise stated and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this quarterly report, unless otherwise specified, all references to “common shares” refer to the common shares in our capital stock.

Forward-Looking Statements

This quarterly report contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except as required by applicable law, including the securities laws of the United States, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

*

our current lack of working capital;

*

our ability to obtain any necessary financing on acceptable terms;

*

timing and amount of funds needed for capital expenditures;

*

timely receipt of regulatory approvals;

*

our management team’s ability to implement our business plan;

*

effects of government regulation;

*

general economic and financial market conditions;

*

our ability to complete the required feasibility study for permitting of the Mansounia concession in Guinea;

*

our ability to develop our green mining business in Africa; and

*

the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain.

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements

The following unaudited interim financial statements of Blox, Inc. are included in this quarterly report on Form 10-Q.

3

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Blox, Inc.

Condensed Interim Consolidated Balance Sheets

(Unaudited – Expressed in U.S. Dollars)

				December 31, 2016 (unaudited)		March 31, 2016 (audited)
ASSETS
Current Assets
	Cash and cash equivalents		$	5,276	$	8,944
	Prepaid expenses			11,855		9,341
Total Current Assets				17,131		18,285
Equipment (Note 5)				74,407		75,234
Mineral Property Interest (Note 6)				931,722		931,722
Total Assets			$	1,023,260	$	1,025,241
LIABILITIES
Current Liabilities
	Accounts payable and accrued liabilities (Note 7,10)		$	68,490	$	55,883
	Royalty payments payable (Note 8)			54,811		56,739
	Loans payable (Note 7)			-		363,283
Total Current Liabilities				123,301		475,905
Long-term Liabilities
Loans payable (Note 7)				672,257		-
Total Liabilities				795,558		475,905
STOCKHOLDERS' EQUITY (Note 9)
Common Stock – 400,000,000 authorized
– 108,611,814 issued (March 31, 2016 – 108,611,814)				967		967
Additional Paid-in Capital				5,957,211		5,957,211
Contributed Surplus				3,500,756		3,500,756
Accumulated Other Comprehensive Income				15,491		15,491
Deficit				(9,246,723)		(8,925,089)
Total Stockholders' Equity				227,702		549,336
Total Liabilities and Stockholders' Equity			$	1,023,260	$	1,025,241

See accompanying notes to the condensed interim consolidated financial statements.

4

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Blox, Inc.

Condensed Interim Consolidated Statements of Comprehensive Loss

(Unaudited - Expressed in U.S. Dollars)

See accompanying notes to the condensed interim consolidated financial statements.

  

5

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Blox, Inc.

Condensed Interim Consolidated Statements of Cash Flows

(Unaudited – Expressed in U.S. Dollars)

See accompanying notes to the condensed interim consolidated financial statements.

6

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Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Nine Months Ended December 31, 2016 and 2015

(Unaudited – Expressed in U.S. Dollars)

1.

Description of Business

Blox, Inc. (the "Company") was incorporated on July 21, 2005 under the laws of the state of Nevada. The address of the Company is #1500, 701 West Georgia Street, Vancouver, British Columbia, V7Y 1C6, Canada. The Company is primarily engaged in developing mineral exploration projects in Africa.

On February 27, 2014, the Company completed a business combination with International Eco Endeavors Corp. (“Eco Endeavors”) which has now been renamed “Blox Energy Inc.”  During the year ended March 31, 2015, the Company discontinued operations in Europe and disposed of Blox Energy Inc.’s subsidiary, Kenderesh Endeavors Corp.

2.

Basis of Presentation

(a)

Statement of Compliance

These condensed interim consolidated financial statements are presented in accordance with generally accepted accounting principles in the United States ("US GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC") and are expressed in U.S. dollars. The Company's fiscal year-end is March 31.

(b)

Basis of Presentation

The condensed interim consolidated financial statements of the Company comprise the Company and its subsidiaries. These consolidated financial statements are prepared on the historical cost basis except for financial instruments that have been measured at fair value.  These consolidated financial statements have also been prepared using the accrual basis of accounting, except for cash flow information.  In the opinion of management, all adjustments (including normal recurring ones), considered necessary for fair value have been included in these financial statements. All intercompany balances and transactions have been eliminated upon consolidation. The interim results are not necessarily indicative of results for the full year ending March 31, 2017, or future operating periods. For further information, see the Company’s annual consolidated financial statements for the year ended March 31, 2016, including the accounting policies and notes thereto.

(c)

Going Concern

These condensed interim consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has incurred a net loss of $321,634 for the nine months ended December 31, 2016, and has incurred cumulative losses since inception of $9,246,723 as at December 31, 2016. These factors raise substantial doubt about the ability of the Company to continue as going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary debt and/or equity financing to continue operations. These condensed interim consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management of the Company has undertaken steps as part of a plan to sustain operations for the next fiscal year including plans to raise additional equity financing, controlling costs and reducing operating losses. Waratah Investments Limited, the Company’s controlling shareholder agreed to provide a bridge loan to finance the required working capital (Note 7).

7

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Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Nine Months Ended December 31, 2016 and 2015

(Unaudited – Expressed in U.S. Dollars)

3.

Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

4.

Fair Value of Financial Instruments

The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:

Level 1 – fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3 – fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Financial instruments classified as Level 1 – quoted prices in active markets include cash and cash equivalents.

The following table sets forth the Company’s financial assets measured at fair value by level within the fair value hierarchy:

8

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Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Nine Months Ended December 31, 2016 and 2015

(Unaudited – Expressed in U.S. Dollars)

5.

Equipment

			Office Equipment		Machinery		Total
	Cost
	Balance at March 31, 2016	$	8,760	$	232,620	$	241,380
	Additions (disposals)		-		-		-
	Balance at December 31, 2016		8,760		232,620		241,380
	Accumulated Depreciation
	Balance at March 31, 2016		5,086		161,060		166,146
	Depreciation for the period		827		-		827
	Balance at December 31, 2016		5,913		161,060		166,973
	Carrying amounts
	As at December 31, 2016	$	2,847	$	71,560	$	74,407
	Carrying amounts
	As at March 31, 2016	$	3,674	$	71,560	$	75,234

Machinery in the amount of $71,560 has not been placed into production and is not currently being depreciated.

6.

Mineral Property Interest

The Company entered into a Deed of Assignment and Assumption Agreement dated July 24, 2014 (the "Assumption Agreement") among Joseph Boampong Memorial Institute Ltd. ("JBMIL") and Equus Mining Ltd. ("EML"), Burey Gold Guinee sarl ("BGGs") and Burey Gold Limited ("BGL") and, collectively with EML and BGGs, (the "Vendors"), pursuant to which the Company agreed to assume JBMIL's right to acquire a 78% beneficial interest in the Mansounia Concession (the "Property") from the Vendors, which right was exercised by the Company

The Property lies in the southwest margin of the Siguiri Basin, in the Kouroussa Prefecture, Kankan Region, in Guinea, West Africa and covers a surface area of 145 square kilometres. The Property is located approximately 80 kilometres west, by road, from the country's third largest city, Kankan.

An exploration permit for the Property was granted by the Ministère des Mines et de la Géologie on August 20, 2013. As part of its due diligence, the Company obtained a legal opinion which confirmed that the license was in good standing at the time of acquisition. It is the Company's intention to obtain an exploitation permit to allow the Company the right to mine and dispose of minerals for 15 years, with a possible 5-year extension. The Company has commenced work on the feasibility study required for obtaining this permit.

9

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Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Nine Months Ended December 31, 2016 and 2015

(Unaudited – Expressed in U.S. Dollars)

6.

Mineral Property Interest (continued)

In consideration for the acquisition of the interest in the Property, the Company paid in cash $100,000 to BGL and $40,000 to EML and issued BGL and EML an aggregate of 6,514,350 shares of common stock of the Company (the "First Tranche Shares"), at a deemed price of $0.1765 per share, for an aggregate deemed value of $1,150,000. The First Tranche Shares were issued to BGL and EML in the proportions of 71.43% and 28.57%, respectively. For accounting purposes, the Company recorded the cash payment of $140,000, and $10,000 for an independent valuation of the property. Additionally, $781,722 was capitalized to mineral property interests, being the fair value of the first tranche of shares. The fair value of the first tranche shares was based on the closing price of the Company’s shares on the OTCQB on July 24, 2014.

Within 14 days of commercial gold production being publicly declared from ore mined from the Property, the Company will issue BGL and EML a second tranche of shares of common stock of the Company (the "Second Tranche Shares"). The number of Second Tranche Shares to be issued shall be calculated by dividing $1,150,000 by the volume weighted average share price of the Company's common stock over a 20-day period preceding the issuance date. The Second Tranche Shares shall be issued to BGL and EML in the proportions of 71.43% and 28.57%, respectively.

The mining exploration license for the Company was renewed for twelve months on September 26, 2016, and  the Company is now proceeding with the pre-feasibility study phase. During the nine months ended December 31, 2016, the Company spent $18,217 (December 31, 2015 – $7,006) on the property.

		Mansounia Property, West Africa
	Acquisition of mineral property interest
	Cash payment	$	150,000
	Issuance of 6,514,350 common shares	781,722
	Balance, December 31, 2016 and March 31, 2016	$	931,722

7.

Loans Payable

On November 1, 2016, the Company entered into an amended bridge loan agreement with Waratah Investments Limited (“Waratah”), pursuant to which Waratah agreed to loan to the Company up to Cdn$1,500,000 (US$1,117,200), which funds are to be used for general working capital until the completion of a financing of Cdn$1,500,000 by the Company. The original bridge loan agreement dated April 17, 2015, was to provide a loan of Cdn$150,000 to the Company, which was subsequently amended on April 29, 2016 to increase the loan amount to Cdn$600,000.

Pursuant to the terms of the amended bridge loan agreement, Waratah has the option to convert all or part of the outstanding bridge loan or any portion remaining upon the expiry date of the term, being April 17, 2020, into units at a share price to be determined based on the volume weighted average price of the Company’s stock on the OTCBB on the five trading days prior to the expiry date, less 20%. Each unit shall consist of one share and one warrant entitling the holder to purchase one additional share, exercisable for a term of two years from the date of issuance.

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Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Nine Months Ended December 31, 2016 and 2015

(Unaudited – Expressed in U.S. Dollars)

7.

Loans Payable (continued)

In addition, at any time during the term of the amended bridge loan agreement, Waratah may require that interest be paid on the outstanding bridge loan at the prime business rate of the Bank of Canada on the date that Waratah submits a written request for payment of interest on the loan. Thereafter, the Company shall pay interest to Waratah on the aggregate outstanding bridge loan, payable semi-annually in arrears on the last business day of March and September of each calendar year.

As at December 31, 2016, the Company is indebted to Waratah, a controlling shareholder of the Company, in the amount of $672,257 (March 31, 2016 - $363,283). For the nine months ended December 31, 2016, the Company accrued interest of $2,845 (December 31, 2015 - $Nil) for this loan.

8.

Royalty Payments Payable

Pursuant to a royalty payment agreement on a discontinued operation, as at December 31, 2016, the Company is indebted to Waratah in the amount of $54,811 (Cdn$73,591) (March 31, 2016 – $56,739). The debt is unsecured, non-interest bearing with no fixed repayment terms.

9.

Share Capital

(a)

Warrants

The Company had 88,000,000 outstanding warrants as at December 31, 2016 and March 31, 2016, exercisable at a price of $0.05 until February 27, 2019 (2.2 years).

(b)

Stock Options

The following table summarizes historical information about the Company’s incentive stock options:

	Number of Options	Weighted Average Exercise Price
March 31, 2015	6,000,000	$0.13
Granted	4,000,000	$0.01
Forfeited	(5,350,000)	$0.13
December 31 and March 31, 2016	4,650,000	$0.03

At December 31, 2016, the following stock options were outstanding and exercisable:

Exercise Price	Expiry Date	Options Outstanding	Weighted Average Remaining Life in Years	Options Exercisable
$0.01	21-Jul-20	4,000,000	3.6	4,000,000
$0.15	07-Aug-19	650,000	2.6	650,000
		4,650,000	3.4	4,650,000

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Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Nine Months Ended December 31, 2016 and 2015

(Unaudited – Expressed in U.S. Dollars)

10.

Related Party Transactions

The Company’s related parties include its controlling shareholder, directors and key management personnel. Transactions with related parties for goods and services are based on exchange amounts as agreed to by the related parties.

The Company incurred the following expenses with related parties during the three and nine months ended December 31, 2016 and 2015:

		Three Months Ended				Nine Months Ended
		December 31, 2016		December 31, 2015		December 31, 2016		December 31, 2015
	Compensation – Directors	$	57,339	$	-	$	162,161	$	11,108
	Compensation – Officers		16,390		15,478		49,873		30,630
	Stock-based compensation		-		5,111		-		598,375

During the nine months ended December 31, 2016, $6,500 (December 31, 2015 - $Nil) was paid for bookkeeping services to a company owned by an officer of the Company.

As at December 31, 2016, the Company was indebted the amounts as below to its related parties:

	December 31, 2016		March 31, 2016
Accounts payable and accrued liabilities (Note 7)	$	51,527	$	5,922
Loan payable (Note 7)		672,257		363,283
Royalty payable (Note 8)		54,811		56,739

11.

Commitments

On June 22, 2013, the Company entered into a share purchase agreement with Waratah Investments Limited (“Waratah”) where the Company shall purchase all of Waratah’s right, title, and interest in the Quivira Gold (“Quivira”) shares, of which Waratah holds 100% of the outstanding shares. As consideration for the Quivira shares, the Company will issue to Waratah 60,000,000 shares of common stock and 60,000,000 warrants. Each warrant entitles the holder to purchase one additional common share at $0.05 for a period of five years from the closing date. Quivira, a subsidiary of Waratah Investments, owns and operates gold and diamond mining properties in Ghana.

The closing of the agreement is subject to the completion of due diligence and the completion of a private placement.  The Agreements provide that closing is subject to completion of a private placement financing of up to US$1,500,000, consisting of units priced at $0.05 per unit, with each unit comprises a share in the common stock of the Company and a share purchase warrant, exercisable at $0.05 for five years.  As of the issuance date of these interim consolidated financial statements, the due diligence and financing has not yet been completed.

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Blox, Inc.

Notes to Condensed Interim Consolidated Financial Statements

Nine Months Ended December 31, 2016 and 2015

(Unaudited – Expressed in U.S. Dollars)

12.

Geographical Area Information

			Canada		Africa		Total
	December 31, 2016:
	Current assets	$	17,131	$	-	$	17,131
	Equipment		2,847		71,560		74,407
	Mineral property interest		-		931,722		931,722
	Total assets	$	19,978	$	1,003,282	$	1,023,260
	Total liabilities	$	795,558	$	-	$	795,558
	March 31, 2016:
	Current assets	$	18,285	$	-	$	18,285
	Equipment		3,674		71,560		75,234
	Mineral property interest		-		931,722		931,722
	Total assets	$	21,959	$	1,003,282	$	1,025,241
	Total liabilities	$	475,905	$	-	$	475,905

 

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Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this quarterly report on Form 10-Q.

Overview

We were incorporated in the State of Nevada on July 21, 2005, under the name “Nava Resources, Inc.” for the purpose of conducting mineral exploration activities. We were authorized to issue 400,000,000 shares of common stock, having a par value of $0.001 per share.  On January 4, 2007, we obtained written consent from our shareholders to amend our Articles of Incorporation to change the par value of our common stock from $0.001 to $0.00001 per share, which change was effected on February 28, 2007.  Effective July 30, 2013, we changed our name from “Nava Resources, Inc.” to “Blox Inc.”.

On February 27, 2014, we consummated an Amalgamation Agreement (the “Amalgamation Agreement”) with our wholly-owned subsidiary, Ourco Capital Ltd., (“Ourco”), International Eco Endeavors Corp. (“Eco Endeavors”), which was incorporated on April 28, 2011 under the laws of the Province of British Columbia, Kenderesh Endeavors Corp. (“Kenderesh”), and Kenderes Biogaz Termelo Korlatolt Fele Lossegu Tarsasag (“Kenderes Biogaz”), pursuant to which Ourco and Eco Endeavors amalgamated to form Blox Energy Inc. (“Blox Energy”), pursuant to the provisions of the Business Corporations Act (British Columbia).  Blox Energy is a private company incorporated pursuant to the Business Corporations Act (British Columbia) and is engaged in the development of renewable energy projects and intends to expand into the provision of renewable energy services.  Kenderes Biogaz was a wholly-owned subsidiary of Kenderesh which, in turn, was a wholly-owned subsidiary of Eco Endeavors. Kenderes Biogaz owned and operated a biogas plant located near Budapest, Hungary.

Due to uneconomic conditions brought on by political and economic forces in Hungary we deemed it necessary and in the best interest of our company to cease operations at our Kenderes Biogas Plant in Hungary, which has been moved to Africa where we will look to provide energy to mining projects.  We completed the sale of our wholly-owned Hungarian subsidiary and any assets that we deemed to be uneconomical to move were sold off.  

On August 6, 2014, we announced that we entered into a Deed of Assignment and Assumption Agreement dated July 24, 2014 (the "Assumption Agreement") with Joseph Boampong Memorial Institute Ltd. ("JBMIL") and Equus Mining Ltd. ("EML"), Burey Gold Guinee sarl ("BGGs") and Burey Gold Limited ("BGL") and, collectively with EML and BGGs, (the "Vendors"), pursuant to which we agreed to assume JBMIL's right to acquire a 78% beneficial interest in the Mansounia Concession (the "Mansounia Property") from the Vendors, which right was exercised.

The Mansounia Property lies in the southwest margin of the Siguiri Basin, in the Kouroussa Prefecture, Kankan Region, in Guinea, West Africa and covers a surface area of 145 square kilometres. The Mansounia Property is located approximately 80 kilometres west, by road, from the country's third largest city, Kankan.

An exploration permit for the Mansounia Property was granted by the Ministère des Mines et de la Géologie on August 20, 2013. As part of our due diligence, we obtained a legal opinion which confirmed that the license remains in good standing. It is our intention to obtain an exploitation permit, which would give us the exclusive right to mine and dispose of minerals for 15 years, with a possible 5 year extension. We have commenced work on the feasibility study required for obtaining this permit.

In consideration for the acquisition of the interest in the Mansounia Property, we paid $107,143 to BGL and $42,857 to EML and on July 31, 2014, issued BGL and EML an aggregate of 6,514,350 shares of common stock of our company (the "First Tranche Shares"), at a deemed price of $0.1765 per share, for an aggregate deemed value of $1,150,000. The First Tranche Shares were issued to BGL and EML in the proportions of 71.43% and 28.57%, respectively. For accounting purposes, we recorded the cash payment of $150,000 plus $781,722 as the fair value of the First Tranche Shares in mineral interest. The fair value of the First Tranche Shares was based on the closing price of our shares on the OTCQB on July 24, 2014.

14

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Within 14 days of commercial gold production being publicly declared from ore mined from the Mansounia Property, we will issue BGL and EML a second tranche of shares of our common stock (the "Second Tranche Shares"). The number of Second Tranche Shares to be issued shall be calculated by dividing $1,150,000 by the volume weighted average share price of our common stock over a 20 day period preceding the issuance date. The Second Tranche Shares shall be issued to BGL and EML in the proportions of 71.43% and 28.57%, respectively.

Going Concern

Our financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have not yet established an ongoing source of revenues sufficient to cover our operating costs and to allow us to continue as a going concern. We have incurred a net loss of $105,426 and $321,634 for the three and nine months ended December 31, 2016, and have incurred cumulative losses since inception of $9,246,723.  These factors raise substantial doubt about the ability of the Company to continue as going concern. Our ability to continue as a going concern is dependent on our ability to continue obtaining adequate capital to fund operating losses until we become profitable. If we are unable to obtain adequate capital, we could be forced to significantly curtail or cease operations.

We will need to raise additional funds to finance continuing operations. However, there are no assurances that we will be successful in raising additional funds. Without sufficient additional financing, it would be unlikely for us to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to successfully accomplish the plans described in this quarterly report and eventually secure other sources of financing and attain profitable operations.

Results of Operations

Three and Nine Months Ended December 31, 2016 and 2015

The following summary of our results of operations should be read in conjunction with our unaudited consolidated interim financial statements for the three and nine months ended December 31, 2016 and 2015, which are included herein.

Expenses

The expenses were as follows:

	Three Months Ended		Nine Months Ended
	December 31, 2016 $	December 31, 2015 $	December 31, 2016 $	December 31, 2015 $
Administration and office	8,401	6,444	30,975	44,344
Consulting and professional fees	88,414	35,807	270,682	183,757
Depreciation	276	394	827	1,181
Exploration	10,706	3,438	18,217	7,006
Foreign exchange	(11,479)	(3,490)	(16,295)	1,314
Interest expenses	2,845	533	2,845	1,952
Travel	6,083	-	14,383	-
Share-based compensation	-	5,111	-	603,024
Net Loss	105,246	48,237	321,634	842,578

We incurred a net loss of $105,246 and $321,634 ($0.00 per share) for the three and nine month ended December 31, 2016, compared to $48,237 and $842,578 ($0.01 loss per share), in the same periods in 2015. In the nine months ended December 31, 2015, $603,024 of non-cash stock based compensation expenses were incurred and during the nine months ended December 31, 2016 there was increased activity as a result of management’s activities in Mansounia.

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The increase in consulting and professional fees of $88,414 and $270,682 during the three and nine months ended December 31, 2016, respectively, compared to $35,807 and $183,757 during the same quarters in 2015 relates to additional consultants retained.  Total office and administration expenses incurred was $8,401 and $30,975 during the three and nine months ended December 31, 2016, respectively, compared to $6,444 and $44,344 during the same periods in 2015 due primarily to the outsourcing of administrative support.

Stock based compensation expensed was $Nil for the three and nine months ended December 31, 2016, compared to $5,111 and $603,024 for the three and nine months ended December 31, 2015. During the period ended December 31, 2015, we granted a stock option to one director and options granted to previous directors and officers were forfeited during the same period.   

Management anticipates operating expenses will materially increase in future periods as we focus on green mineral development and incur increased costs as a result of being a public company with a class of securities registered under the Securities Exchange Act of 1934.

Liquidity and Capital Resources

Working Capital

Continuing Operations	December 31, 2016	March 31, 2016
Current Assets	$       17,131	$       18,285
Current Liabilities	123,301	475,905
Working Capital (Deficit)	$  (106,170)	$  (457,620)

Current Assets

The nominal decrease in current assets as of December 31, 2016 compared to March 31, 2016 was primarily due to an decrease in cash from $8,944 to $5,276, which was offset by an increase in prepaid expenses from $9,341 to $11,855.  

Current Liabilities  

Current liabilities as at December 31, 2016 decreased by $352,604 since March 31, 2016, primarily due to a loan payable that was recently renewed and accordingly, was reclassified as a long-term liability.

Cash Flow

Our cash flow was as follows:

	Nine months Ended December 31
	2016 $	2015 $
Net cash used in operating activities	(312,642)	(165,597)
Net cash used in investing activities	-	-
Net cash provided by financing activities	308,974	173,246
Increase (decrease) in cash and cash equivalents	(3,668)	7,649

Operating activities

The increase in net cash used in operating activities for the three and nine months ended December 31, 2016, compared to the same periods in 2015 was primarily as a result of increased operating activities on the Mansounia property during fiscal 2016.

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Investing activities

There is no cash used in investing activities for the nine months ended December 31, 2016 or December 31, 2015.  

Financing activities

The increased net cash provided by financing activities for the nine months ended December 31, 2016, compared to the same period in 2015 was mainly attributable to the increased funding from a loan provided by a shareholder.

Critical Accounting Policies

There have been no significant changes to the critical accounting policies as described in our Annual Form 10-K for the year ended March 31, 2016.

Cash Requirements

Our current cash position is not sufficient to meet our present and near-term cash needs.  We will require additional cash resources, including the sale of equity or debt securities, to meet our planned capital expenditures and working capital requirements.  For the next 12 months we estimate that our capital needs will be $250,000 to $500,000 and we currently have approximately $3,600 in cash. We will seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities will result in dilution to our stockholders. The incurrence of indebtedness will result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict our operations or modify our plans to grow the business. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, will limit our ability to expand our business operations and could harm our overall business prospects.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.

Contractual Obligations

Not applicable.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our Disclosure Controls were effective as of the end of the period covered by this report.

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Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

We are not a party to any pending legal proceeding. Management is not aware of any threatened litigation, claims or assessments.

Item 1A.

Risk Factors

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

We did not issue any securities during the quarter ended December 31, 2016.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosure

Not applicable.

Item 5.

Other Information

None

Item 6. Exhibits

Number	Exhibit Description
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14 Or 15d-14 of the Securities Exchange Act Of 1934,as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14 Or 15d-14 of the Securities Exchange Act Of 1934,as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C.  Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C.  Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 **	Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.
	101.INS	XBRL Instance Document
	101.SCH	XBRL Taxonomy Extension Schema Document
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
	101.LAB	XBRL Taxonomy Extension Label Linkbase Document
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

BLOX INC.

By:	/s/ Robert Spiers
Name:	Robert Spiers
Title:	Chief Executive Officer
Date:	February 10, 2017

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