FORWARD LOOKING STATEMENTS
The following discussion of our financial condition and results of operations
for the three and nine months ended August 31, 2021 and 2020 should be read in
conjunction with the consolidated financial statements and the notes to those
statements that are included elsewhere in this report. Our discussion includes
forward-looking statements based upon current expectations that involve risks
and uncertainties, such as our plans, objectives, expectations and intentions.
Actual results and the timing of events could differ materially from those
anticipated in these forward-looking statements because of several factors,
including those set forth under the Part I, Item 1A, Risk Factors and Business
sections in our Annual Report on Form 10-K for the fiscal year ended November
30, 2020, as filed with the SEC on June 16, 2021, this report, and our other
filings with the SEC. We use words such as "anticipate," "estimate," "plan,"
"project," "continuing," "ongoing," "expect," "believe," "intend," "may,"
"will," "should," "could," and similar expressions to identify forward-looking
statements. In addition, any statements that refer to projections of our future
financial performance, our anticipated growth and trends in our businesses, and
other characterizations of future events or circumstances are forward-looking
statements. Such statements are based on our current expectations and could be
affected by the uncertainties and risk factors described throughout this report.
General Overview
We were incorporated in the State of Nevada on April 29, 2008, under the name
"Mayetok, Inc.". As Mayetok, Inc. we were engaged in the development of a
website to market vacation properties in the Ukraine.
On June 8, 2010, we initiated a one (1) old for 35 new forward stock split of
our issued and outstanding common stock. As a result, our authorized capital
increased from 100,000,000 to 3,500,000,000 shares of common stock and the
issued and outstanding increased from 2,200,000 shares of common stock to
77,000,000 shares of common stock, all with a par value of $0.001.
Also, on June 8, 2010, we changed our name from "Mayetok, Inc." to "First
American Silver Corp.", by way of a merger with our wholly owned subsidiary
First American Silver Corp., which was formed solely for the change of name. We
changed the name of our company to reflect the new direction of our company in
the business of acquiring, exploring and developing mineral properties. As of
June 2010, we had abandoned our former business plan of seeking to market
vacation properties.
Our name change and forward stock split became effective with the
Over-the-Counter Bulletin Board at the opening of trading on June 16, 2010, on
which date we adopted the new stock symbol "FASV".
On June 18, 2018, we changed our name from "First American Silver Corp." to
"Century Cobalt Corp", by way of a merger with our wholly owned subsidiary
Century Cobalt Corp., which was formed solely for the change of name. We changed
the name of our company to reflect the new direction of our company in the
business of acquiring, exploring and developing mineral properties. Our name
change became effective with the Over-the-Counter Bulletin Board at the opening
of trading on June 18, 2018, on which date we adopted the new stock symbol
"CCOB"
Our Current Business
On August 7, 2018, we entered into an assignment agreement with Oriental Rainbow
Group Ltd., in regards to the acquisition of certain mineral claims in Lemhi
County, Idaho known as the "Idaho Cobalt Belt".
Oriental Rainbow and Plateau Ventures LLC had entered into a purchase agreement
dated September 4, 2017, wherein Oriental Rainbow had acquired from Plateau a
100% interest in the property, subject to certain subsequent payments and
conditions. The claims comprising the property (649 claims) initially totaled
approximately 12,980 acres, subject to an option under the purchase agreement
for the acquisition of additional claims. Such option had been exercised with
additional claims acquired, resulting in a total of 695 claims comprising
approximately 13,900 acres.
Oriental Rainbow has assigned its interest in the property to us in
consideration for 2,500,000 restricted shares of common stock (the
"Consideration Shares"). We have assumed all of Oriental Rainbow's obligations
under the purchase agreement, which material obligations include: the issuance
of up to 500,000 restricted shares of common stock to Plateau upon listing on a
recognized stock exchange; paying pending BLM fees for the claims in the amount
of $108,000; and paying Plateau $1,000,000 in four equal staged payments upon
completion of a positive feasibility study on the property.
Century Cobalt's, acreage, known as the "Emperium Cobalt Project," as noted
above totals 12,980 Acres / 5,625 Hectares, making it larger than the combined
land claims of the 5 largest publicly traded companies currently active in the
Idaho Cobalt Belt. The project is located approximately 16 miles (26 km)
southwest of Salmon, Idaho. As of March 2020, the Company's land position has
been reduced to 694 claims.
On March 17, 2021 we executed on an opportunity to expand our asset base and
change our strategic focus. Pursuant to this, the company, together with Block
Commodities Limited, it entered into an option agreement to acquire 70 percent
interest (the "Acquisition") in a Medicinal Cannabis license granted to Magnus
Cannabis Group (Private) Limited ("Magnus") by the government of Zimbabwe. Block
Commodities Ltd. is listed on the Aquis Stock Exchange, trading with ticker code
BLCC.PL ("BLCC").
The acquiring parties will each hold 35 percent. The stake in the Magnus
license, will secure supply of medicinal grade cannabis for the production of
Nutraceuticals.
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The option is for an exclusivity period of 90 days to complete the Acquisition.
On June 15, 2021, the option was extended to August 31, 2021 and not renewed
pending further negotiations. As of October 20, 2021, the acquisition has not
been completed. The proposed terms of the Acquisition are as follows:
• Payment of an option fee of £50,000 (approximately $69,000) to acquire
land and a cannabis license fee in Zimbabwe, to be apportioned equally
between the acquiring parties, and
• Payment by BLCC of £1,500,000 (approximately $2,095,000) through the issue
of 2,142,857,142 fully paid ordinary shares in BLCC (calculated at 0.07p
per share) upon exercise of the option, and contemporaneously the payment
by CCOB of £1.5m of CCOB fully paid ordinary shares, price based on a
30-day VWAP (using the US$/GB£ closing middle market exchange rate
published by Bloomberg on the day immediately prior to completion).
The Company paid the entire option fee on July 22, 2021 for £50,000
(approximately $69,000) pending the completion of the acquisition negotiations.
We believe that this opportunity will enhance shareholder value over the longer
term.
Given the foregoing, we had been exploring further options regarding the
monetization of its Emperium Cobalt Project, which may include the sub-licensing
or sale of the assets. Further to these efforts, on March 17, 2021, we signed an
MOU and entered into discussions with UK-based Technology Minerals Limited
("Technology Minerals") for Technology Minerals to acquire the Company's entire
interest ("the assets") in the Emperium Cobalt Project.
Technology Minerals is comprised of mining assets and a major recycling group,
laying the foundations for the UK's first meaningful green circular economy in
the battery industry and is currently in the process of becoming a UK-listed
Company on the Standard List of the London Stock Exchange, by way of a Reverse
Take Over.
Technology Minerals will extract the raw materials required for Li-ion Battery
cathodes and then help solve the ecological issue of spent Li-ion batteries by
recycling them for reuse by battery manufacturers.
To date, as noted herein, Century Cobalt has focused on exploring and developing
its large Emperium Cobalt Project to take advantage of the growing demand for
secure, domestic cobalt supplies, but the Directors believe that a sale of its
assets to Technology Minerals represents an attractive and quicker route to
monetize the Project.
On September 14, 2021, the Company signed a share purchase agreement to sell the
assets of Emperium 1 Holdings Corp to Technology Minerals PLC, a related party.
Technology Minerals PLC become new UK public company during the three months
ended August 31, 2021. The Company will be issued 420,000,000 unregistered
shares (0.001£ par value) of Technology Minerals PLC common stock. The Company
estimates it will own approximately 35% of the outstanding shares of Technology
Minerals PLC.
If the negotiations are successful and the sale of the Project is completed, the
Company will change its strategic direction and focus on the above noted
medicinal cannabis license opportunity in partnership with its UK listed
partner, Block Commodities Limited.
Results of Operations
For the three months Ended August 31, 2021 Compared to the three months Ended
August 31, 2020
Revenue
We have not earned any revenues since our inception and we do not anticipate
earning revenues in the upcoming quarter.
Net loss
We had a net loss of $246,575 for the three-month period ended August 31, 2021
which was $65,837 higher than the net loss of $180,738 for the three-month
period ended August 31, 2020. The change in our net loss over the two periods
are primarily a result of an approximate $92,000 increase in consulting fees
primarily from the issuance of the Company's common stock to our CEO and former
COO for service to the Company, an approximate $14,000 increase in exploration
fees for potential mining operations, an approximate $11,000 increase in
professional fees for our SEC reporting requirements and a potential acquisition
and an approximate $4,000 increase in interest expense from our notes payable,
offset by an approximate $47,000 decrease in foreign exchange adjustments and an
approximate $8,000 decrease in general administrative expenses from lower rent
expense.
For the nine months Ended August 31, 2021 Compared to the nine months Ended
August 31, 2020
Revenue
We have not earned any revenues since our inception and we do not anticipate
earning revenues in the upcoming quarter.
Net loss
We had a net loss of $658,993 for the nine-month period ended August 31, 2021
which was $197,718 higher than the net loss of $461,275 for the nine-month
period ended August 31, 2020. The change in our net loss over the two periods
are primarily a result of an approximate $123,000 increase in consulting fees
primarily from the issuance of the Company's common stock to the Company's CEO
and former COO for service to the Company, an approximate $35,000 increase in
exploration fees for potential mining operations, an approximate $34,000
increase in professional fees for our SEC reporting requirements and a potential
acquisition, an approximate $15,000 increase in foreign exchange adjustments and
an approximate $5,000 increase in interest expense from our notes payable,
offset by an approximate $14,000 decrease in general administrative expenses
from lower rent expense, OTC market fees and supplies expenses.
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Liquidity and Capital Resources
Our balance sheet as of August 31, 2021 reflects current assets of $24,116. We
had cash of $7,619 and working capital deficit of $1,520,331 as of August 31,
2021. We do not have sufficient working capital to enable us to carry out our
stated plan of operation for the next twelve months.
We anticipate generating losses and, therefore, may be unable to continue
operations further in the future.
Cash Flows
Operating Activities
Net cash used in operating activities during the nine months ended August 31,
2021 was $232,967, a $108,925 increase from the $136,274 net cash outflow during
the nine months ended August 31, 2020 as a result of the Company's increased
activity for our SEC reporting cost and a potential acquisition.
Investing Activities
Net cash used in investing activities during the nine months ended August 31,
2021 was $68,815 from the $-0- net cash outflow during the nine months ended
August 31, 2020 as a result of the Company's purchase of an option to acquire
land and a cannabis license in Zimbabwe.
Financing Activities
Cash provided by financing activities during the nine months ended August 31,
2021 was $289,919, a $169,874 increase from $120,045 in cash provided by
financing activities during the nine months ended August 31, 2020 from a related
party promissory note payable and a convertible note payable during the nine
months ended August 31, 2021 and two stock subscription and convertible notes
payable during the nine months ended August 31, 2020.
We estimate that our operating expenses and working capital requirements for the
12 months ended August 31, 2022 to be as follows:
Estimated Net Expenditures During The Next Twelve Months
Expense Cost
General and administrative expenses $ 25,000
Management and administrative costs $ 300,000
Legal Fees $ 10,000
Auditor Fees $ 15,000
Exploration $ 150,000
Total $ 500,000Of the $500,000 that we require for the next 12 months, we had $7,619 in cash as
of August 31, 2021 and a working capital deficit of $1,520,331. In order to
improve our liquidity, we plan to pursue additional equity or debt financing
from private investors or possibly a registered public offering. We do not
currently have any definitive arrangements in place for the completion of any
further financings and there is no assurance that we will be successful in
completing any further financings. If we are unable to achieve the necessary
additional financing, then we plan to reduce the amounts that we spend on our
business activities and administrative expenses in order to be within the amount
of capital resources that are available to us.
We are not aware of any known trends, demands, commitments, events or
uncertainties that will result in or that are reasonably likely to result in our
liquidity increasing or decreasing in any material way.
Future Financings
We anticipate continuing to rely on equity sales of our common stock in order to
continue to fund our business operations. Issuances of additional shares will
result in dilution to our existing stockholders. There is no assurance that we
will achieve any additional sales of our equity securities or arrange for debt
or other financing to fund our planned business activities.
We presently do not have any arrangements for additional financing for the
expansion of our exploration operations, and no potential lines of credit or
sources of financing are currently available for the purpose of proceeding with
our plan of operations.
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, and capital
expenditures or capital resources that are material to stockholders.
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Critical Accounting Policies
Please refer to Note 2 - Summary of Significant Accounting Policies in the
accompanying Notes to the Consolidated Financial Statements.
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CENTURY COBALT CORP. 
