Blox, Inc. - Annual Report: 2019 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

☒ ANNUAL REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended March 31, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from _______ to ___________.

Commission file number 000-53565

BLOX, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (604) 314-9293

Securities registered pursuant to Section 12(b) of the Act None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.00001 par value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No. ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity as of March 31, 2019 was $8,919,088.

The number of shares outstanding of the registrant’s common stock as of June 27, 2019 was 142,822,664.

Documents Incorporated By Reference: None

TABLE OF CONTENTS

PART I.

As used in this annual report on Form 10-K, the terms “we”, “us” “our”, the “Company” or the “registrant” refer to Blox, Inc., a Nevada corporation, and its wholly-owned subsidiaries, Blox Energy Inc., Blox Minerals Inc., Quivira Gold, and Blox Minerals Guinea unless otherwise specified.

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

Forward-Looking Statements

This annual 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:

We are primarily engaged in acquiring and exploring mineral properties plus the development of mineral resources for mining with the intent of applying green innovation plus renewable energy and technology to traditional mining methods.

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.”.

Description of Property

Mansounia Property, Guinea, West Africa

On August 6, 2014, the Company announced that it had 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.

In consideration for the acquisition of the interest in the Mansounia Property, we paid $100,000 to BGL and $40,000 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.

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.

The Mansounia Gold Project 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 60 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. On December 17, 2017, an exploration permit extension was granted for a period of 12-months. The purpose of the extension was to provide time to complete the required feasibility study and environmental impact assessment to, National standards, that will be submitted to Ministre des Mines et de la Géologie and the La Ministre de l’Environnement, des Eaux et Forêts. Work is continuing on the feasibility study, the environmental impact assessment has been completed and we are in discussions with appropriate consultants to commence the community development plan and other remaining documentation. In July 2017, we announced the completion of field activities associated with a detailed Environmental and Social Impact Assessment (ESIA), which concludes a significant stage toward obtaining a Mining License for the Mansounia Gold Project in Guinea.

It is our intention to obtain a Mining License, which would give us the exclusive right to mine and dispose of minerals for 15-years, with a possible five-year extension. The Company submitted an application to Ministere des Mines for Mining License on December 7, 2018. On April 30, 2019, the exploration permit expired. On June 13, 2019, the Company made a presentation of a feasibility study to the National Commission as part of the process of obtaining the Mining License. The Company is moving on the next step of fulfilling the government’s recommendations on the feasibility study.

The ESIA document is used to communicate and discuss details of the project to all stakeholders, including government departments, environmental and other regulators, local communities as well as current and prospective shareholders. Apart from assessing the project’s environmental impact, the document also covers risk mitigation and potential benefits to local residents. The ESIA is the beginning of an ongoing process of involvement on all social and environmental fronts.

We engaged the internationally credentialed SAMEC (Security Africa Mining and Environmental Consulting) based in Conakry, to undertake the field-associated aspects of the ESIA program.

Based on the highly encouraging results obtained from historical soils geochemical programs and in-line with recent desktop and field studies undertaken by Spiers Geological Consultants (SGC 2016), a number of key target areas were identified for follow-up field activities. Our understanding of the deposit and surrounding areas continues to grow with each field season, and, to date, robust geological and structural context for the area/s has been developed using modelling software. The model was based on the pre-existing regional geochemical soil and rock chip sampling and drill-hole data from the Mansounia Property area.

West African consulting group, Scott-Taylor Ltd., was retained to undertake a thorough site visit as part of the process of further examining the economic potential of the Mansounia Property. Scott-Taylor Ltd. undertook a field visit to the Mansounia Property to focus on areas where significant outcrops exist, in addition to the verification of collar locations for selected previously drilled RC and Diamond holes.

The deep weathering and extensive lateritic cover have resulted in limited outcrop of Birimian lithologies within the project area. Reconnaissance mapping located outcrops of weathered brecciated granitoid, volcano sedimentary and metasedimentary lithologies. A number of outcrops with extensive quartz veining were identified, particularly within the brecciated granitoid and were sampled. Previous structural analysis identified a number of target areas for further exploration. In total, 15 samples were collected for assays during the field visit. Four samples returned gold grades from 0.49g/t to 3.04g/t are shown below.

These outcrop sampling assays were very encouraging and warranted further exploration to unlock the full potential of the Mansounia license area. As a result, an auger drilling program was designed and implemented with the assistance of Sahara Natural Resources. The new drilling target was defined after an extensive database compilation and exploration targeting exercise undertaken by Sahara Natural Resources on the historical data held by Blox in the region. Sahara is the largest exploration services group in West Africa with 200 geoscientists operating between Burkina Faso, Ghana, Cote D’Ivoire, Mali, Senegal, Mauritania and Guinea.

On July 6, 2018, the Company announced that a new drilling target had been defined by a 2.5km long Gold in Soil anomaly, defined by Sahara, at the Mansounia Gold Project. This area formed part of a thorough auger drilling and regolith mapping program designed to aid in the delineation of potential mineralization 5km south-east of the current existing resource. Field activities also included trenching and pitting across the area of anomalous soil and outcrop samples. Some extensional auger drilling to the south west of the existing resource was also conducted. As Blox is currently moving towards a mining license at the Mansounia Gold Project, the auger drilling was also intended to sterilise a portion of the concession for feasibility work.

On October 26, 2018, Blox announced that 2500-meters of auger drilling had been completed. The results identified five new gold targets, including doubling the previous gold-in-soil strike from 2.5km to 5km (identified as Target C in Figure 1 below). In addition, the existing Mansounia resource was extended by up to 1km. Results from across the northern and eastern portions of the concession returned highly anomalous results of up to 1526ppb gold.

The Mansounia South target has never had modern drilling completed. The 5km anomaly remains untested and open to the north and south. Blox will continue to explore the strike extensions with auger drilling to refine targets to enable resource drilling to follow up. Extensional soil and auger drilling completed to the south west of the existing 1.29-million ounce resource identified highly anomalous gold contiguous with current drilling. The targets A, B, C, D and E in Figure 1 have never been drilled. Target A is an extension to the current resource and is open to the south. Targets B, C, D and E are open to the north and south. Additional auger drilling will be completed in the hope of further extending these targets.

Figure 1. Mansounia Gold Project – Strike extension of the newly identified Mansounia Gold-in-Soil anomaly planned auger drilling program, auger anomaly occurrences and historical drill collars.

In total, 184 auger drill samples were taken from the planned 400-hole program. The laterite cap was in excess of 10m deep in most drill locations, instead of the 5m cover anticipated. As a result, it was not possible to complete all 400 planned holes before the onset of the wet season made further drilling impossible. Despite the slightly truncated program, positive drill results were returned from every line drilled. Blox will consider extensional resource drilling at targets A and B below following the closure of the West African wet season.

Management is excited about the new drill targets identified and the extensions of the drill ready targets unveiled by the auger drilling. Anomalies were revealed in every drill line commenced, which is a very positive sign. These results have given Blox confidence to move forward with its plans to raise capital to complete the current auger program and then plan high quality resource extensional drilling. The Company is also well advanced towards the submission of its Mining License application for the Mansounia Gold Project.

Pramkese, Osenase and Asamankese, Ghana, West Africa

On June 22, 2013, we entered into a share purchase agreement with Waratah Investments Limited (“Waratah”) whereby we agreed to 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, we agreed to 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, owns and operates gold and diamond mining properties in Ghana.

The closing of the agreement was subject to the completion of a private placement financing of up to US$1,500,000, which private placement was completed in April 2018. We issued 30,000,000 units (the “Units”) at a price of US$0.05 per unit for aggregate gross proceeds of US$1,500,000. US$1,100,000 of the proceeds were advanced as non-interest bearing loans since 2014 and were utilized to cover general and administrative expenses, as well as to carry out exploration work on our mineral properties. The remaining balance of US$400,000 was received by April 2018. Each Unit consists of one common share and one share purchase warrant entitling the holder thereof to purchase one additional common share at a price of $0.05 per share for a term of five years from the date of issuance.

Closing the Agreement is also conditional upon receiving legal opinions of Ghana counsel confirming various matters relating to the laws of Ghana, including corporate and title opinions; the Company receiving legal opinions of Australian counsel confirming various matters relating to the laws of Australia, including corporate and title opinions; completion of certain ongoing transactions by Quivira relating to the transfer of title to certain assets and to an assignment of debt; and preparation of U.S. GAAP consolidated financial statements for Quivira.

Field work on the three Birim region concessions has been ongoing to maintain compliance while the Company’s prime focus is on the Mansounia Gold Project.

Our directors conducted their first visit to Ghana in August 2015, when they visited the Birim Region where the three Ghanaian concessions are located. The objective was to carry out a geological reconnaissance over the areas to identify potentially favourable lithologies.  The directors inspected the existing field programs in Ghana and oversaw the planning and implementation of programs for the near future.

Ashanti Sankofa Inc.

In April 2018, we entered into a Strategic Alliance Agreement with Ashanti Sankofa Inc., a TSX Venture Exchange listed company trading under the symbol “ASI” (“Ashanti”). Pursuant to the terms of the Strategic Alliance Agreement both parties have agreed to grant to the other party a right of first refusal to enter into a joint venture on any of their respective properties and/or projects and that any future acquisition of natural resource properties that may be acquired by either party that contains, but is not limited to, gold, precious metals, technology metals or diamonds (“Natural Resource Properties”), the acquiring party will grant to the other party a right of first refusal to participate in a joint venture on such Natural Resource Property, which shall be at the sole discretion of the acquiring party.

As part of our strategic alliance with Ashanti, we agreed to collaborate to explore and develop natural resource properties in West Africa, to undertake joint research projects and to consider joint commercial exploitation of any new property or project that may be acquired resulting from their joint research.

The strategic alliance with Ashanti will allow us to make our respective technical expertise in the field of exploration, exploitation and management of natural resources available to the other party.

In connection with the strategic alliance with Ashanti, we acquired by way of a private placement transaction, a total of 4,333,333 units in the capital stock of Ashanti for a total cost of CAD$130,000, with each unit consisting of one common share (the “Share”) and one transferable share purchase warrant (the “Warrant”) exercisable for a term of two-years at a price of CAD$0.05 per share.

Research and Development Activities

In addition to activities associated with the Mansounia Project, we have been involved with research and development studies relating to the other key pillars of the business, namely: technology, energy and expansion in Africa. Management is keen to develop new businesses in these key areas as they form part of our overall mandate. Diversifying into new (non-mining) markets, such as energy and technology, and expanding our presence in Africa offers a range of potential benefits. It is the opinion of management that establishing new revenue streams in several arenas will not only benefit our company as a whole but will also help insulate it from fluctuations in the price of precious metals.

We are currently working closely with strategic partners to develop our own, in-house tenement management software system to provide semi-automated, accurate, timely and compliant reporting on our four mining concessions in West Africa. As part of the Quivira Gold acquisition that also included Strategic Marketing Australia and the bespoke ERP software system, Abacus, we also have the right to acquire a 49% interest in Post One, an electronic document transfer system. Although Post One is still in the research and development stage, management believes that it has the potential to fill a gap in the manner in which professionals exchange sensitive and notarised documents and could create a potential future income stream for the Company.

Since inception, we have been committed to greening the mining process through the utilization of new, clean and sustainable technologies. Our aim is to significantly reduce the carbon emissions from any future mining operations, where possible and efficacious, to produce ‘green gold’ and market it as such. Initially, this can be partially achieved with the use of alternative energy sources at the mine site and camp. Guinea is the watershed of West Africa and we plan to work with experts to explore the option of investing in hydro-electric power for our Mansounia Property, to initially replace part, and ultimately all, of the conventional diesel power generation or coal-fired grid power that will be utilised in our future operations.

We also have a strong commitment to wealth creation, prosperity and education for locals within the catchment areas of our concessions both in Guinea and Ghana. Part of our mandate includes:

Geological and Technical Consultants

Kevin P. Thomson is a member of the Professional Geologists of Ontario (# 00191). Mr. Thomson has more than 25 years experience relevant to the style of mineralization and type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined by the NI 43-101. Mr. Thomson is a Director of our company and a consulting geologist to the company.

Competitive Conditions

The mineral exploration and development business is an extremely competitive industry. We are competing with many other companies exploring for minerals and potentially developing minerals resources into mines.  Our Mansounia Gold Project in Guinea is an advanced exploration / predevelopment project, while our Ghana projects are very early stage exploration. As a junior mineral exploration and development company, Blox competes with many companies like ourselves for financing and joint venture partners. Additionally, we compete for industry human resources such as professional geologists, and service providers.

Government Approvals and Recommendations

Mining operations and exploration activities are subject to various national and local laws and regulations in West Africa, which govern prospecting, development, exploitation, production, export, taxes, labour standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters.  We intend to secure all necessary permits for the Mansounia Property.

Our activities are also subject to various federal and state/provincial laws and regulations governing protection of the environment. These laws are continually changing and, in general, are becoming more restrictive. We intend to conduct business with a view to safeguarding public health and the environment and operating in compliance with applicable laws and regulations. We will generally be required to mitigate long-term environmental impacts by stabilizing, contouring, rescoping and revegetating various portions of a site after mining operations are completed. These reclamation efforts will be conducted in accordance with detailed plans, which must be reviewed and approved by the appropriate regulatory agencies. Changes to current laws and regulations in West Africa could in the future require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could impact the economics of our projects.

Guinea’s National Transition Council (CTN) amended its mining code in April 2013, in an effort to improve its investment record. The amendments brought profit taxes down to 30 percent, and cut the tax on bauxite to 0.15 percent of the international market price for aluminum. However, the new version still grants the government a free 15-percent stake in mining projects, as well as the option of purchasing an additional 20 percent stake. The clause is designed to encourage companies to process raw materials inside the sovereign’s borders, rather than just shipping the ore out. The state’s stake in the projects is said to shrink as the portion of value added inside the country’s borders increases.

Under the new mining code, an industrial exploitation or operating permit will be granted for 15 years. It can be renewed for five-year periods, provided the holder of the title complies with its obligations. Upon non-commencement of work within a year of the issuance of an exploitation permit for industrial operations, the previous monthly fine of GNF 5m has been revised to GNF10m, imposed for the first three months, with a monthly increase of 10 percent of the penalty amount thereafter.

Mining convention: The granting of a mining concession and an exploitation permit must be accompanied by the mining convention. The maximum duration of a mining convention is 25 years, renewable for one or several periods of 10 years. Mining conventions are subject to an executive order and will be signed by the Minister of Mines, following the advice of the National Mining Committee and the authorization of the Council of Ministers. Mining conventions will then be submitted for the legal opinion of the Supreme Court and ratified by Parliament.

Costs and Effects of Compliance with Environmental Laws

Although we currently have no costs to comply with environmental laws concerning our mineral property, we will have to sustain the cost of reclamation and environmental remediation for all work undertaken which causes sufficient surface disturbance to necessitate reclamation work.  Both reclamation and environmental remediation refer to putting disturbed ground back as close to its original state as possible.  Other potential pollution or damage must be cleaned and renewed along standard guidelines outlined in the usual permits.  Reclamation is the process of bringing the land back to a natural state after completion of exploration activities.  Environmental remediation refers to the physical activity of taking steps to remediate, or remedy, any environmental damage caused, i.e. refilling trenches after sampling or cleaning up fuel spills.  At this time, we do not require any reclamation or remediation other than minor clean up and removal of supplies because of minimal disturbance to the ground.  The amount of these costs is not known at this time as we do not know the extent of the exploration program we will undertake.  Because there is presently no information on the size, tenor, or quality of any resource or reserve at this time, it is impossible to assess the impact of any capital expenditures on our earnings or competitive position in the event a potentially economic deposit is discovered.

Employees

We currently have no employees. Our officers and directors provide consulting services to us on a part time basis. We intend to retain the services of geologists, prospectors and consultants on a contract basis to conduct the exploration programs on our mineral claims and to assist with regulatory compliance and preparation of financial statements.

Much of the information included in this annual report on Form 10-K includes, or is based upon, estimates, projections or other forward-looking statements.  Forward-looking statements are statements that relate to future events or future financial performance.  In some cases, you can identify forward-looking statements by the use of terminology such as “may”, “should”, “intend”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “project”, “predict”, “potential”, or “continue” or the negative of these terms or other comparable terminology.  Such forward-looking statements include any projections and estimates made by our management in connection with our business operations.  These statements speak only as of the date of this overview.  While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other forward-looking statements involve various risks and uncertainties as outlined below.  We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other forward-looking statements.

The material risks and uncertainties that may affect our forward-looking statements include, among other things: (1) our ability to obtain any necessary financing on acceptable terms; (2) timing and amount of capital expenditures; (3) timely receipt of regulatory approvals; (4) our management team’s ability to implement our business plan; (5) effects of government regulation; (6) general economic and financial market conditions; and (8) other factors beyond our control.

An investment in our common stock involves a number of very significant risks.  You should carefully consider the following known material risks and uncertainties in addition to other information in this report in evaluating our company and our business, before purchasing shares of our common stock.  Additional risks not presently known to us may also impair our business operations.  You could lose all or part of your investment due to any of these risks.

Risks Relating to Our Company

Our auditors have expressed doubt about our ability to continue as a 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 $11,615,101 and $1,489,775 for the years ended March 31, 2019 and March 31, 2018, respectively, and have incurred cumulative losses since inception of $22,469,528 as of March 31, 2019. These factors raise substantial doubt about our ability to continue as going concern. After auditing our financial statements, our independent auditor issued a going concern opinion and our ability to continue is dependent on our ability to raise additional capital.

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 annual report and eventually secure other sources of financing and attain profitable operations.

We will require additional funds which we plan to raise through the sale of our common stock, which requires favorable market conditions and interest in our activities by investors.  We may not be able to sell our common stock and funding may not be available for continued operations.

Our ability to continue is dependent on our ability to raise additional capital and our operations could be curtailed if we are unable to obtain required additional funding when needed. We have a working capital deficit of $543,395 as of March 31, 2019 (March 31, 2018 - $127,529) and we do not have funds to conduct work on the Mansounia Property presently. Continuing exploration activities will require additional funding. Our only present means of funding is through the sale of our common stock and shareholder loans. The sale of common stock requires favorable market conditions for junior exploration companies like ours, as well as specific interest in our stock, neither of which may exist. If we are unable to raise additional funds in the future, we may have to cease our operations.  

Our exploration activities are highly speculative and involve substantial risks.

Our Mansounia Property is an advanced exploration project in the process of defining a mineral resource, however, a proven minerals reserve has not yet been established. Our exploration work may not result in the discovery of mineable deposits of ore in a commercially economical manner. There may be limited availability of water, which is essential to milling operations, and interruptions may be caused by adverse weather conditions. Our future operations, if any, are subject to a variety of existing laws and regulations relating to exploration and development, permitting procedures, safety precautions, property reclamation, employee health and safety, air quality standards, pollution and other environmental protection controls.

We have uninsurable risks.

We may be subject to unforeseen hazards such as unusual or unexpected formations and other conditions. We may become subject to liability for pollution, cave-ins or hazards against which it cannot insure or against which it may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position.

We depend on consultants and engineers for our exploration programs.

We have relied on and will continue to rely upon consultants for exploration development, construction and operating expertise. Substantial expenditures are required to construct mines, to establish ore reserves through drilling, to carry out environmental and social impact assessments, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the exploration infrastructure at any site chosen for exploration. We may not be able to discover minerals in sufficient quantities to justify commercial operation, and we may not be able to obtain funds required for exploration on a timely basis.

We may not have clear title to our property.

Acquisition of title to mineral properties is a very detailed and time-consuming process, and our title to our properties may be affected by prior unregistered agreements or transfers, or undetected defects. There is a risk that we may not have clear title to its mineral property interests, or they may be subject to challenge or impugned in the future.

Mining exploration, development and operating activities are inherently hazardous.

If we experience mining accidents or other adverse conditions, our mining operations could be materially adversely affected. Our exploration activities may be interrupted by any or all of the following mining accidents such as cave-ins, rock falls, rock bursts, pit wall failures, fires or flooding. In addition, exploration activities may be reduced if unfavorable weather conditions, ground conditions or seismic activity are encountered, ore grades are lower than expected, the physical or metallurgical characteristics of the ore are less amenable than expected to mining or treatment, dilution increases or electrical power is interrupted. Occurrences of this nature and other accidents, adverse conditions or operational problems in future years may result in our failure to achieve current or future exploration and production estimates.

Due to the speculative nature of mineral property exploration, there is substantial risk that no commercially viable mineral deposits will be found on our Mansounia Property or other mineral properties that we may acquire.

In order for us to even commence mining operations we face a number of challenges which include finding qualified professionals to conduct our exploration program, obtaining adequate financing to continue our exploration program, locating a viable mineral body, partnering with a senior mining company, obtaining mining and exploitation permits, and ultimately selling minerals in order to generate revenue. Moreover, exploration for commercially viable mineral deposits is highly speculative in nature and involves substantial risk that no viable mineral deposits will be located on any of our present or future mineral properties.  There is a substantial risk that the exploration program that we will conduct on the Mansounia Property may not result in the discovery of any significant mineralization, and therefore no commercially viable mineral deposit.  There are numerous geological features that we may encounter that would limit our ability to locate mineralization or that could interfere with our exploration programs as planned, resulting in unsuccessful exploration efforts. In such a case, we may incur significant costs associated with an exploration program, without any benefit.  This would likely result in a decrease in the value of our common stock.

Due to the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.

The search for minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or may elect not to insure. We currently have no such insurance nor do we expect to obtain such insurance for the foreseeable future. If a hazard were to occur, the costs of rectifying the hazard may exceed our asset value and cause us to liquidate all our assets and cease operations, resulting in the loss of your entire investment.

The market price for precious metals is based on numerous factors outside of our control. There is a risk that the market price for precious metals will significantly decrease, which will make it difficult for us to fund further mineral exploration activities, and would decrease the probability that any significant mineralization that we locate can be economically extracted.  

Numerous factors beyond our control may affect the marketability of minerals. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection.  The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in our not receiving an adequate return on invested capital and you may lose your entire investment in our company.

Changes in the exchange rates between the United States dollar and foreign currencies may be volatile and may negatively impact our costs, which in turn could adversely affect our operating results.

When operating in foreign countries, such as Canada and Africa, we expect to incur a certain amount of our expenses from our operations in foreign currency and translate these amounts into United States dollars for purposes of reporting operating results. As a result, fluctuations in foreign currency exchange rates may adversely affect our expenses and results of operations, as well as the value of our assets and liabilities. Fluctuations may adversely affect the comparability of period-to-period results. In addition, we anticipate holding foreign currency balances, which will create foreign exchange gains or losses, depending upon the relative values of the foreign currency at the beginning and end of the reporting period, which may affect our net income and earnings per share. Although we may use hedging techniques in the future (which we currently do not use), we may not be able to eliminate the effects of currency fluctuations. Thus, exchange rate fluctuations could have a material adverse impact on our operating results and stock price.

Since the majority of our shares of common stock are owned by one significant stockholder our other stockholders may not be able to influence control of our company or decision making by our management.   

One significant shareholder beneficially owns approximately 64% of our outstanding common stock. The interests of this stockholder may not be, at all times, the same as that of our other shareholders. This significant shareholder will have the ability to significantly influence the outcome of most corporate actions requiring shareholder approval, including our merger with or into another company, the sale of all or substantially all of our assets and amendments to our articles of incorporation. This concentration of ownership may also have the effect of delaying, deferring or preventing a change of control of our company, which may be disadvantageous to minority shareholders.

Since our directors and officers have the ability to be employed by or consult for other companies, their other activities could compete for time on our activities.

Our directors and officers may work with other mineral exploration companies. They are not required to work exclusively for us and do not devote all of their time to our operations. Therefore, it is possible that a conflict of interest with regard to their time may arise based on their employment by other companies. Their other activities may prevent them from devoting full-time to our operations which could slow our operations and may reduce our financial results because of the slowdown in operations. It is expected that our directors and officers will devote between 10 and 20 hours per week to our operations on an ongoing basis, and when required will devote whole days and even multiple days at a stretch when property visits are required or when extensive analysis of information is needed. We do not have any written procedures in place to address conflicts of interest that may arise between our business and the business activities of our directors and officers.

Because our directors and officers may work for other companies engaged in mineral exploration, a potential conflict of interest could negatively impact our ability to acquire properties to explore and to run our business.

Our directors and officers may work for other mining and mineral exploration companies. Due to time demands placed on them and due to the competitive nature of the exploration business, the potential exists for conflicts of interest to occur from time to time that could adversely affect our ability to conduct our business. Their employment with other entities in addition to limiting the amount of time they can dedicate to us as a director or officer, may present a conflict of interest in helping us identify and obtain the rights to mineral properties and as to other business opportunities because they may also be considering the same properties or opportunities for other companies they may work or consult for.

Damage to the environment could result from our operations. If our business is involved in one or more of these hazards, we may be subject to claims of a significant size which could force us to cease our operations.

Mineral resource exploration, production and related operations are subject to extensive rules and regulations. Failure to comply with these rules and regulations can result in substantial penalties. Our cost of doing business may be affected by the regulatory burden on the mineral industry since the rules and regulations frequently are amended or interpreted. We cannot predict the future cost or impact of complying with these laws.

Environmental enforcement efforts with respect to mineral operations have increased over the years, and it is possible that regulation could expand and have a greater impact on future mineral exploration operations. Although our management intends to comply with all legislation and/or actions of local, provincial, state and federal governments, non-compliance with applicable regulatory requirements could subject us to penalties, fines and regulatory actions, the cost of which could harm our results of operations. We cannot be sure that our proposed business operations will not violate environmental laws in the future.

We are subject to extensive regulations relating to environmental protection, including the generation, storage, handling, emission, transportation and discharge of materials into the environment, and relating to safety and health. We will also have to sustain the cost of reclamation and environmental remediation for all work undertaken which causes sufficient surface disturbance to necessitate reclamation work.   Other potential pollution or damage must be cleaned and renewed.  Our initial programs do not require any reclamation or remediation other than minor clean up and removal of supplies because of minimal disturbance to the ground.  The amount of these costs is not known at this time as we do not know the extent of the exploration program we will undertake, beyond completion of the recommended phases.  Because there is presently no information on the size, tenor, or quality of any resource or reserve at this time, it is impossible to assess the impact of any capital expenditures on our earnings or competitive position in the event a potentially economic deposit is discovered.

Risks Relating to Our Common Stock

Since public trading in our common stock is limited and sporadic, there can be no assurance that our stockholders will be able to liquidate their holdings of our common stock.

Our common stock price is currently quoted on the OTCQB under the symbol “BLXX”.  However, trading has been limited and sporadic and we can provide no assurance that the market for our common stock will be sustained.   We cannot guarantee that any stockholder will find a willing buyer for our common stock at any price, much less a price that will result in realizing a profit on an investment in our shares.  There may be limited opportunity for stockholders to liquidate any of their holdings in common stock of our company.  Trading volume may be insignificant and stockholders may be forced to hold their investment in our shares for an extended period of time.  The lack of liquidity may also cause stockholders to lose part or all of their investment in our common stock.

Since public trading in our common stock is limited and sporadic, the market price of our common stock may be subject to wide fluctuations.

There is currently a limited public market for our common stock and we can provide no assurance that the market for our common stock will be sustained.  If a market is sustained, however, we anticipate that the market price of our common stock will be subject to wide fluctuations in response to several factors, including:

Further, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance.  These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations, may adversely affect the market price of our common stock.

Our common stock is subject to the “penny stock” rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

Under U.S. federal securities legislation, our common stock will constitute “penny stock”.  Penny stock is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions.  For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential  investor’s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.  In order to approve an investor’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.  The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth the basis on which the broker or dealer made the suitability determination.  Brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.  Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions.  Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a shareholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for its shares.

We may, in the future, issue additional shares of common stock, which would reduce investors’ percent of ownership and may dilute our share value.

Our Articles of Incorporation authorize the issuance of 400,000,000 shares of common stock. As of June 27, 2019, we had 142,822,644 shares of common stock outstanding. Accordingly, we may issue up to an additional 257,177,336 shares of common stock. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis.  The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.

State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell shares of our common stock.

Secondary trading in our common stock will not be possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or an exemption from registration is available for secondary trading in the state.  If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of our common stock in any particular state, the common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly impacted thus causing you to realize a loss on your investment.

Our company is subject to Multilateral Instrument 51-105 as adopted by all jurisdictions in Canada except the Province of Ontario which, among other things, imposes certain resale restrictions and legend requirements on our shares.

As a reporting issuer in the Province of British Columbia, our company is subject to Multilateral Instrument 51-105 which regulates companies with certain connections to any jurisdiction in Canada other than the Province of Ontario that have a class of securities that has been assigned a ticker symbol by the Financial Industry Regulatory Authority in the United States for use on any of the over-the-counter markets in the United States and includes a class of securities whose trades have been reported in the grey market.  In addition to disclosure and reporting obligations required under MI 51-105, the instrument imposes certain resale requirements of private placement securities acquired after the ticker-symbol date including the following:

As a result, it may be difficult for our shareholders to resell their securities and may result in reducing demand for our shares and reduced trading activity of our stock.

Because we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.

We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.  

None.

We do not own any real estate or other property used in the operation of our current business. Our principal executive offices are located at #908, 938 Howe Street, Vancouver, British Columbia, Canada V6Z 1N9. We are utilizing the corporate office of our Corporate Secretary at no cost to our company. We believe that this space is sufficient until we are able to generate significant revenues, if at all, and hire more employees.

We do not have any ownership or lease interests in any property other than our mineral property interests described above in Item 1.

There are no pending legal proceedings to which we are a party or in which any director, officer or affiliate of our company, or any owner of record or beneficially of more than 5% of any class of voting securities of our company is a party adverse to us or has a material interest adverse to our company.  Our property is not the subject of any pending legal proceedings.    

Not applicable.

PART II

Market Information

Quotation of our shares of common stock on the OTCQB was approved on July 18, 2008 under the symbol “NAVA”. On July 31, 2013, our quotation symbol on the OTCQB changed to “BLXX”, to reflect our name change to “Blox Inc.”. The following table sets forth the high and low bid prices of our common stock for our fiscal years ended March 31, 2019 and March 31, 2018 as reported on the OTCQB. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

Set forth below are the range of high and low bid quotations for the periods indicated as reported by the OTC Bulletin Board. The market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions.

On June 27, 2019, the price of our common stock as reported by the OTCQB was $0.195 per share.

Transfer Agent

Our shares of common stock are issued in registered form. The transfer agent and registrar for our common shares is Vstock Transfer, LLC, 18 Lafayette Place, Woodmere New York 11598 Tel: 212-848-8436; Fax: 646-536-3179

Holders of Common Stock

As of June 27, 2019, we had 142,822,664 shares of our common stock issued and outstanding held by 40 holders of record.

Dividends

The payment of dividends, if any, in the future, rests within the sole discretion of our board of directors. The payment of dividends will depend upon our earnings, our capital requirements and our financial condition, as well as other relevant factors. We have not declared any cash dividends since our inception and have no present intention of paying any cash dividends on our common stock in the foreseeable future.

There are no restrictions in our articles of incorporation or bylaws, nor are we subject to any contractual restrictions, that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

Securities Authorized Under Equity Compensation Plans

The following table summarizes certain information regarding our equity compensation plans as of March 31, 2019.

On February 27, 2014, our board of directors adopted a new Stock Option Plan (the “Plan”). The Plan provides for the grant of incentive stock options to purchase shares of our common stock to our directors, officers, employees and consultants. The Plan is administered by our board of directors, except that it may, in its discretion, delegate such responsibility to a committee comprised of at least two directors. A maximum of 10,000,000 shares are reserved and set aside for issuance under the Plan. Each option, upon its exercise, entitles the optionee to acquire one share of our common stock, upon payment of the applicable exercise price. The exercise price will be determined by the board of directors at the time of grant. Stock options may be granted under the Plan for an exercise period of up to ten years from the date of grant of the option or such lesser periods as may be determined by the board, subject to earlier termination in accordance with the terms of the Plan.

Unregistered Sales of Equity Securities and Use of Proceeds

On September 29, 2017, the Company entered into an agreement with Waratah Capital Ltd. (“Waratah”), a controlling shareholder, whereby Waratah and the Company agreed that in order to allow the Company to finalize its acquisition of Quivira Gold Ltd. pursuant to the Share Purchase Agreement dated June 22, 2013 among the Company, Quivira Gold Ltd. and Waratah (the “Quivira Agreement”), the Bridge Loan Agreement dated as of April 17, 2015, and amended on April 28, 2016 and November 1, 2016 between the Company and Waratah would be cancelled and the Company will utilize the loan proceeds advanced to close a private placement of $1,500,000 required to consummate the Company’s acquisition of Quivira Gold Ltd.

On April 24, 2018, the Company closed the private placement as part of the Quivira acquisition and issued 30,000,000 units at a price of $0.05 per unit for gross proceeds of $1,500,000. Each unit consists of one common share and one transferable share purchase warrant exercisable at a price of $0.05 per share for a term of five years.

The above securities were issued to non-US persons (as that term is defined in Regulation S of the Securities Act of 1933), in offshore transactions relying on Regulation S of the Securities Act of 1933, as amended.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Not applicable.

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this annual 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 annual report on Form 10-K.

Overview

We were incorporated in the State of Nevada on July 21, 2005 and are engaged in the exploration of early-stage mineral properties. On August 6, 2014, we announced that we entered into a Deed of Assignment and Assumption Agreement dated July 24, 2014 with Joseph Boampong Memorial Institute Ltd. and Equus Mining Ltd., Burey Gold Guinee sarl and Burey Gold Limited and, collectively with EML and BGGs, pursuant to which we agreed to assume JBMIL’s right to acquire a 78% beneficial interest in the Mansounia Concession. We also announced that we had exercised that right and had acquired a 78% beneficial interest in the Mansounia Property.

Plan of Operation

Our plan of operation for the next twelve months is to commence a feasibility study on our Mansounia Property in order to obtain an exploitation permit, which management anticipates will allow us the exclusive right to mine and dispose of minerals for fifteen years, with a possible five year extension, subject to our obtaining the necessary funding.

In the coming year, we also plan to initiate exploration programs for our three concessions in the Birim Region of Ghana. In particular, our Osenase tenement, which shares a boundary with GCD - a company that has produced millions of carats of diamonds. Systematic exploration at Osenase by Cornucopia in the 1990s showed massive meta-ultramafic occurs in several horizons from which GCD have already produced diamonds. Diamonds from the bulk samples at several site streams contained diamonds that have been reported by Kaminsky 1996 to have been derived from a nearby bedrock source. The diamonds are of large size and have surface features that are easily removed by transport.

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. As of March 31, 2019, we had an accumulated deficit of $22,469,528. 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 annual report and eventually secure other sources of financing and attain profitable operations.

Results of Operations

Years Ended March 31, 2019 and 2018

The following summary of our results of operations should be read in conjunction with our audited consolidated financial statements for the years ended March 31, 2019 and 2018 which are included herein.

Expenses

Our operating expenses were as follows:

The net loss and comprehensive loss for the year ended March 31, 2019 (“Fiscal 2019) were $11,615,101 and $11,595,876, respectively, as compared to the net loss and comprehensive loss for the year ended March 31, 2018 (“Fiscal 2018) of $1,489,775 and $1,469,472, respectively. Operating expenses for the Fiscal 2019 are totaled $445,360 compared to the Fiscal 2018 of $1,502,810, a decrease of $1,057,451. Some of the more items contributing to the net loss and comprehensive loss for the Fiscal 2019 and Fiscal 2018 were as follows:

Management anticipates operating expenses will materially increase in future periods as we focus on resource and exploration drilling, the feasibility study and potentially predevelopment activities in consideration of building a mining project on Mansounia Property.

Liquidity and Capital Resources

Working Capital

Current Assets

The decrease in current assets as of March 31, 2019 compared to March 31, 2018 was primarily due to a decrease in cash of $17,689.

Current Liabilities  

Current liabilities as at March 31, 2019 increased by $398,177 due to an increase of $125,031 in accounts payable and accrued liabilities and a shareholder loan from a significant shareholder in the sum of $273,146.

Cash Flow

Our cash flow for the years ended March 31, 2019 and 2018 was as follows:

Operating activities

The decrease in net cash used in operating activities from Fiscal 2018 to Fiscal 2019 was primarily as a result of the most operating activities were funded by a significant shareholder.

Financing activities

The decreased net cash provided by financing activities from Fiscal 2019 to Fiscal 2018 was primarily as a result of most proceeds from private placement received in Fiscal 2018 rather than Fiscal 2019.

Investing activities

The decreased net cash provided by investing activities from Fiscal 2018 to Fiscal 2019 was primarily as a result of no sufficient cash to invest the potential projects.

Critical Accounting Policies

In determining our functional currency, we periodically review our primary and secondary indicators to assess the primary economic environment in which we operate in determining our functional currencies.  We analyze the currency that mainly influences labor, material and other costs of providing goods or services which is often the currency in which such costs are denominated and settled.  We also analyze secondary indicators such as the currency in which funds from financing activities such as equity issuances are generated and the funding dependency of the parent company whose predominant transactional currency is the Canadian dollar. Determining our predominant economic environment requires significant judgment.

Our consolidated financial statements have been prepared on a going concern basis, which implies we will continue to realize our assets and discharge our liabilities in the normal course of business. We have incurred a net loss of $11,615,101 and $1,489,775 for the years ended March 31, 2019 and March 31, 2018, respectively, and have incurred cumulative losses since inception of $22,469,528 as at March 31, 2019. These factors raise substantial doubt about the ability of our company to continue as a going concern. The continuation of our company as a going concern is dependent upon the continued financial support from our shareholders, the ability of our company to obtain the necessary debt and/or equity financing to continue operations. Our 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 we be unable to continue as a going concern. Management of our company has undertaken steps as part of a plan to sustain operations for the next fiscal year, including plans to raise additional equity financing, control costs and reduce operating losses.

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 $1,250,000 to $1,500,000 and we currently have approximately $9,792 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.

Not applicable.

Blox, Inc.

Consolidated Financial Statements

For the Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of

Blox, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Blox, Inc. (the “Company”) as at March 31, 2019 and 2018, the related consolidated statements of comprehensive loss, changes in stockholders’ equity, and cash flows, for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter

The accompanying financial statements referred to above have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company incurred losses from operations since inception, has not attained profitable operations and is dependent upon obtaining adequate financing to fulfill its operating activities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We have served as the Company’s auditor since 2013.

Blox, Inc.

Consolidated Balance Sheets

(Expressed in U.S. Dollars)

See accompanying notes to the consolidated financial statements.

Blox, Inc.

Consolidated Statements of Comprehensive loss

(Expressed in U.S. Dollars)

See accompanying notes to the consolidated financial statements.

Blox, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

See accompanying notes to the consolidated financial statements.

Blox, Inc.

Consolidated Statements of Cash Flows

(Expressed in U.S. Dollars)

See accompanying notes to the consolidated financial statements.

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

Blox, Inc. (the “Company”) was incorporated on July 21, 2005 under the laws of the state of Nevada. The address of the Company is #1177 Avenue of Americas 5^th Floor, New York, NY 10036.

The Company is primarily engaged in developing mineral exploration projects in Guinea, West Africa.

These 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.

The consolidated financial statements of the Company comprise the Company and its subsidiaries, Blox Energy Inc. and Blox Minerals Guinea. These consolidated financial statements are prepared on the historical cost basis. 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. All intercompany balances and transactions have been eliminated upon consolidation.

The functional currency of an entity is the currency of the primary economic environment in which the entity operates. The functional currency of the Company is the Canadian dollar (“CAD”). The Company’s reporting currency is the US dollar.

Transactions:

Monetary assets and liabilities denominated in foreign currencies are translated into functional currencies of the Company and its subsidiaries using period end foreign currency exchange rates and expenses are translated using the exchange rate approximating those in effect on the date of the transactions during the reporting periods in which the expenses were transacted. Non-monetary assets and liabilities are translated at their historical foreign currency exchange rates. Gains and losses resulting from foreign exchange transactions are included in the determination of net income or loss for the period.

Translations:

Foreign currency financial statements are translated into the Company’s reporting currency, the US dollar as follows:

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the period. Actual outcomes could differ from these estimates. Revisions to accounting estimates are recognized in the period in which the estimate is revised and may affect both the period of revision and future periods

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

In applying the Company’s accounting policies, management has made certain judgments that may have a significant effect on the consolidated financial statements. Such judgments include the determination of the functional currencies and use of the going concern assumption.

In determining the Company’s functional currency, it periodically reviews its primary and secondary indicators to assess the primary economic environment in which the entity operates in determining the Company’s functional currencies. The Company analyzes the currency that mainly influences labor, material and other costs of providing goods or services which is often the currency in which such costs are denominated and settled. The Company also analyzes secondary indicators such as the currency in which funds from financing activities such as equity issuances are generated and the funding dependency of the parent company whose predominant transactional currency is the Canadian dollar. Determining the Company’s predominant economic environment requires significant judgment.

These 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 $11,615,101 and $1,489,775 for the years ended March 31, 2019 and 2018, respectively, and has incurred cumulative losses since inception of $22,469,528 (2018 - $10,854,427) as at March 31, 2019.

These factors raise substantial doubt about the ability of the Company to continue as a 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 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, control costs and reduce operating losses.

Transactions in foreign currencies are translated to the respective functional currencies of the Company’s entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured in terms of historical costs in a foreign currency are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognized in profit or loss, except for differences arising on the translation of available-for-sale financial instruments, which are recognized in other comprehensive income.

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

The assets and liabilities of foreign operations are translated to U.S. dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated to U.S. dollars at exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income. When a foreign operation is disposed of, the relevant amount in the accumulated other comprehensive income is transferred to profit or loss as part of the gain or loss on disposal.

Cash includes cash deposited at banks and highly liquid investments with original maturities of three months or less when purchased.

Financial assets

All financial assets are initially recorded at fair value and classified upon inception into one of the following four categories: held to maturity, available for sale, loans and receivables or at fair value through profit or loss (“FVTPL”).

Financial assets classified as FVTPL are measured at fair value with unrealized gains and losses recognized through earnings. The Company’s cash is classified as FVTPL. Financial assets classified as loans and receivables and held to maturity assets are measured at amortized cost. Financial assets classified as available for sale are measured at fair value with unrealized gains and losses recognized in other comprehensive income and loss except for losses in value that are considered other than temporary which are recognized in earnings.

Transaction costs associated with FVTPL financial assets are expensed as incurred, while transaction costs associated with all other financial assets are included in the initial carrying amount of the asset.

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows, discounted at the original effective interest rate.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. For financial assets measured at amortized cost, this reversal is recognized in profit or loss.

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

Financial liabilities

All financial liabilities are initially recorded at fair value and classified upon inception as FVTPL or other financial liabilities.

Financial liabilities classified as other financial liabilities are initially recognized at fair value less directly attributable transaction costs. After initial recognition, other financial liabilities are subsequently measured at amortized cost using the effective interest rate method. The effective interest rate method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period. The Company’s liabilities are classified as other financial liabilities.

Financial liabilities classified as FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Derivatives, including separated embedded derivatives are also classified as held for trading and recognized at fair value with changes in fair value recognized in earnings unless they are designated as effective hedging instruments. Fair value changes on financial liabilities classified as FVTPL are recognized in earnings.

Equipment is carried at cost less accumulated depreciation and impairment losses, if any. Depreciation is provided at rates and methods designed to write off cost of the assets over their estimated useful lives as follows:

Management reviews the depreciation method, useful lives and residual values annually and accounts for any changes in estimates on a prospective basis. Where an item of plant and equipment comprises major components with different useful lives, the components are accounted for as separate items of production facility, and depreciated separately.

The Company accounts for the impairment or disposal of long-lived assets according to the Financial Accounting Standards Board’s (“FASB’) Accounting Standards Codification (“ASC”) 360 “Property Plant and Equipment”. ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.

Impairment tests on intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its fair value, the asset is written down accordingly.

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

A legal or constructive obligation to incur restoration, rehabilitation and environmental costs may arise when environmental disturbance is caused by the operation of an alternative energy plant. Such costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and capitalized to the carrying amount of the asset, as soon as the obligation to incur such costs arises. A pre-tax discount rate that reflects the time value of money and the risks specific to the liability are used to calculate the net present value of the expected future cash flows. These costs are charged to profit on loss over the economic life of the related asset, through depreciation expense using relevant amortization method. The related liability is progressively increased each period as the effect of discounting unwinds, creating an expense recognized in profit or loss. The liability is assessed at each reporting date for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation.

The Company has no material restoration, rehabilitation and environmental costs as the disturbance to date is minimal.

Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.

The FASB has issued ASC 740 “Income Taxes”. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that the tax position of the Company has not met the more-likely-than-not threshold as of March 31, 2019.

The Company computes loss per share in accordance with ASC 260, “Earnings per Share”, which requires presentation of both basic and diluted loss per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted loss per share, the average stock price for the period issued in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted loss per share excludes all dilutive potential shares if their effect is anti-dilutive.

The Company accounts for Stock-Based Compensation under ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees”. Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options or warrants issued to non-employees are recorded in expense and additional paid-in capital in stockholders’ equity over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options or warrants at the end of each period.

The Company issues stock to consultants for various services. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete. The Company recognized consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services.

The Company is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. An impairment loss is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral property. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral property over its estimated fair value.

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.

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

On April 16, 2018, the Company participated in a private placement offering by its strategic partner, Ashanti Sankofa Inc (TSX.V- ASI), which shares the same management group and board of directors as the Company. The Company purchased 1,000,000 units at CAD$0.03 per unit for a total cost of $23,850 (CAD$30,000). Each unit consists of one common share and one transferable share purchase warrant with each warrant entitling the holder to acquire one additional common share at a price of CAD$0.05 for a period of 24 months from the closing of the private placement. On the date of issuance, the Company determined the fair value of the common share and warrants to be $13,420 and $10,430, respectively.

As at March 31, 2019, the fair value of common shares was $97,279 which resulted in an unrealized gain of $19,225 that was recorded in other comprehensive income. In addition, the fair value of warrants was $25,016, which resulted in a loss of $33,788 that was recorded in net income.

As at March 31, 2019 fair value of the warrants was determined with the Black-Scholes option pricing model using the following assumptions: risk free interest rate of 1.70%, volatility of 128%, annual rate of dividend of 0%, and expected life of 0.99 – 1.05 years.

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

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

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 has agreed to assume JBMIL’s right to acquire a 78% beneficial interest in the Mansounia Concession (the “Property”) from the Vendors. The Company exercised that right and acquired a 78% beneficial interest in the Property.

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 and environmental impact assessment required for obtaining this permit.

In consideration for the acquisition of the interest in the Property, the Company paid $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 permit for the Company expired on April 30, 2019. The Company submitted an application to Ministère des Mines for mining permit on December 7, 2018.

During the year ended March 31, 2019, the Company spent $194,117 (2018 – $196,567) on the property.

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

A summary of exploration and evaluation expenditures included in comprehensive loss are as follows:

The Company is subject to income taxes on its unconsolidated financial statements in Canada and the United States. The consolidated provision for income taxes varies from the amount that would be computed by applying the combined statutory income tax rates to net loss before taxes were approximately as follows:

The significant components of the Company’s deferred income tax assets were approximately:

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

The Company has non-capital losses of approximately $6,255,000 which may be carried forward and applied against taxable income in future years and expire as follows:

On September 29, 2017, the Company entered into an agreement with Waratah Capital Ltd. (“Waratah”), a controlling shareholder, whereby Waratah and the Company agreed that in order to allow the Company to finalize its acquisition of Quivira Gold Ltd. pursuant to the Share Purchase Agreement dated June 22, 2013 among the Company, Quivira Gold Ltd. and Waratah (the “Quivira Agreement”), the Bridge Loan Agreement dated as of April 17, 2015, and amended on April 28, 2016 and November 1, 2016 between the Company and Waratah would be cancelled and the Company will utilize the loan proceeds advanced to close a private placement of $1,500,000 required to consummate the Company’s acquisition of Quivira Gold Ltd.

On April 24, 2018, the Company closed the private placement as part of the Quivira acquisition and issued 30,000,000 units at a price of $0.05 per unit for gross proceeds of $1,500,000. Each unit consists of one common share and one transferable share purchase warrant exercisable at a price of $0.05 per share for a term of five years.

On April 24, 2018, the Company issued 30,000,000 share purchase warrants as part of the $1,500,000 private placement. The warrants expire five years from the date of issuance and are exercisable at $0.05 per share. The fair value of these warrants was determined with the Black-Scholes option pricing model using the following assumptions: risk free interest rate of 2.73%, volatility of 204.3%, annual rate of dividend of 0%, and expected life of 5 years.

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

On February 27, 2019, the Company extended the term of 88 million share purchases warrants from February 27, 2019 to February 27, 2020, no other terms were changed. As a result of the extension of the expiration date of the warrants, the Company recorded an $11,136,000 non-cash charge to shareholder expense and a corresponding increase to contributed surplus. The exercise price of the share purchase warrants is $0.05. On February 28, 2019, 456,250 warrants were exercised to common shares for gross proceeds of $22,813. The fair value of the modified warrants was determined using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 1.81%, volatility of 109%, annual rate of dividends of 0%, and expected life of 1 year.

The following table summarizes historical information about the Company’s warrants:

As at March 31, 2019, the following warrants were outstanding and exercisable:

On June 26, 2018, 4,000,000 stock options were exercised via cashless exercise at a price of $0.01 per share, resulting in issuance of 3,754,600 common shares. The cash component, equivalent to $40,000, is calculated as 245,400 shares at $0.163, the closing market price of the Company on the date of issuance.

On September 26, 2018, 1,500,000 stock options were cancelled due to the optionee who ceased to be an officer of the Company.

On February 15, 2018, the Company granted 3,000,000 stock options to two officers. These stock options have an exercise price of $0.27 and expire on February 15, 2023 vesting on the date of grant. The weighted average fair value of stock options was determined with the Black-Scholes option pricing model using the following assumptions: risk free interest rate of 2.65%, volatility of 199%, annual rate of dividend of 0% and expected life of options of 5 years.

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

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

At March 31, 2019, the following stock options were outstanding and exercisable:

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).

Level 2 and 3 financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment for estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values.

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

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

During the years ended March 31, 2019, the Company received advances from Waratah Capital Ltd. (“Waratah”), a controlling shareholder of the Company, in the amount of $273,145. As at March 31, 2019, the Company was indebted to Waratah for $329,346 (2018 - $56,200). The advances from shareholder are unsecured, non-interest bearing and have no fixed repayment terms.

On June 22, 2013, the Company entered into a share purchase agreement with Waratah Investments Limited (“Waratah”) where the Company agreed to 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 for $1,500,000. The private placement closed during the year ended March 31, 2019. As of the issuance date of these financial statements, the due diligence has not yet been completed.

Blox, Inc.

Notes to Consolidated Financial Statements

Years ended March 31, 2019 and 2018

(Expressed in U.S. Dollars)

The Company’s related parties include its subsidiaries, and key management personnel, controlling shareholders, and strategic partner. Transactions with related parties for goods and services are based on the exchange amount as agreed to by the related parties.

The Company incurred the following expenses with related parties during the years ended March 31, 2019 and 2018:

During the year ended March 31, 2019, $2,179 (2018 - $8,834) was paid for bookkeeping services to a company owned by a former officer of the Company. The Company also recognized $8,749,076 (2018 - $Nil) in shareholder expenses related to the modification of warrants held by a controlling shareholder.

As at March 31, 2019, the Company was indebted to its related parties for the amounts as below:

These amounts owing are unsecured, non-interest bearing and have no fixed repayment terms.

None.

Disclosure Controls and Procedures

As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934, we evaluated our disclosure controls and procedures (as defined in Rules 13a-15(c) and 15d-15(c) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this Annual Report on Form 10-K, these disclosure controls and procedures were adequate to ensure that the information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and include controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over our financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management conducted an assessment, based upon criteria established in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our internal controls over financial reporting were effective as of March 31, 2019.

Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate. This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the year ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

None.

PART III

Directors and Executive Officers

All directors of our company hold office until the next annual meeting of our stockholders or until their successors have been elected and qualified, or until their death, resignation or removal. The executive officers of our company are appointed by our board of directors and hold office until their death, resignation or removal from office.

Our directors and executive officers, their ages, positions held, and duration of such, are as follows:

Business Experience

The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

Ronald Renne

Ronald Renne has been a director of our Company since December 5, 2013. On March 4, 2019, Mr. Renne was appointed as interim Chief Executive Officer. Mr. Renne has over 10 years’ experience in the banking sector and managing information technology resources. He has worked at HFC Bank in London and Royal Bank of Scotland as Branch Manager. Mr. Renne graduated from the Manchester Metropolitan University in 2000 with a Bachelor of Arts (Hons). He also holds all the required retail banking certificates to allow him to practice banking services in the United Kingdom.

Kevin Thomson

Mr. Thomson is a senior mining professional with 30 years’ experience, including international technical, corporate and project management experience in West Africa and Canada. His experience ranges from project generation and grass-roots exploration to resource development, project assessment and due diligence. Kevin previously resided in Ghana for 12 years, during which time he served as Group Exploration Manager at Perseus Mining Limited and Regional Exploration Manager at Newmont Mining Corp. Kevin holds an Hons. BSc. Geology & Physical Geography degree, and is a member of the Professional Geoscientists of Ontario. Mr. Thomson has been a director of our Company since February 2019.

Nancy Zhao

Nancy Zhao is a CPA with over nine years of experience with various industries including mining, realtor developer, property management, sports entertainment, hockey pool website, marketing and farming.

Involvement in Certain Legal Proceedings

None of our directors and executive officers has been involved in any of the following events during the past ten years:

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the SEC and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons we believe that during the year ended March 31, 2019 all filing requirements applicable to our executive officers and directors, and persons who own more than 10% of our common stock were complied with, with the exception of Nicholas Taylor.

Code of Ethics

We have not adopted a code of ethics because our board of directors believes that our small size does not merit the expense of preparing, adopting and administering a code of ethics. Our board of directors intends to adopt a code of ethics when circumstances warrant.

Committees of Board of Directors

We do not presently have a separately constituted compensation committee, nominating committee, or any other committees of our board of directors, other than our Audit Committee. Our board of directors does not believe that it is necessary to have such committees because it believes that the functions of such committees can be adequately performed by our board of directors.

We do not have any defined policy or procedure requirements for our stockholders to submit recommendations or nominations for directors. We do not currently have any specific or minimum criteria for the election of nominees to our board of directors and we do not have any specific process or procedure for evaluating such nominees. Our board of directors assesses all candidates, whether submitted by management or stockholders, and makes recommendations for election or appointment.

A stockholder who wishes to communicate with our board of directors may do so by directing a written request to the address appearing on the first page of this annual report.

Audit Committee Financial Expert

Our board of directors has determined that Ronald Renne qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K.

Summary Compensation

The particulars of compensation paid to the following persons:

who we will collectively refer to as the named executive officers, for all services rendered in all capacities to our company and subsidiaries for the years ended March 31, 2019, March 31, 2018 and March 31, 2017 are set out in the following summary compensation table:

SUMMARY COMPENSATION TABLE

Employment or Consulting Agreements

There are no employment contracts, compensatory plans or arrangements, including payments to be received from our company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with our company, or our subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of our company.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth for each named executive officer certain information concerning the outstanding equity awards as of March 31, 2019:

Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide retirement or similar benefits for our directors and officers.

Resignation, Retirement, Other Termination, or Change in Control Arrangements

We have no contract, agreement, plan or arrangement, whether written or unwritten, that provides for payments to our directors or executive officers at, following, or in connection with the resignation, retirement or other termination of our directors or executive officers, or a change in control of our company or a change in our directors’ or executive officers’ responsibilities following a change of control.

Compensation of Directors

The table below shows the compensation of our directors who were not our named executive officers for the fiscal year ended March 31, 2019: