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GOLD TORRENT, INC. - 10-K - Management's Discussion and Analysis of Financial Condition and Results of Operations

June 25, 2014

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The discussions of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future.

Results of Operations Revenues



We have limited operational history. From our inception on August 15, 2006 to March 31, 2014, we did not generate any revenues. We anticipate that we will incur substantial losses for the foreseeable future and our ability to generate any revenues in the next 12 months continues to be uncertain.

Expenses



From our inception on August 15, 2006 to March 31, 2014, we incurred total expenses of $559,455, including $310,903 in accounting and legal fees, $101,316 in licenses and fees, $133,728 in consulting and development fees, $6,992 in office expenses, $5,988 in bank charges and $528 in amortization.

For the fiscal year ended March 31, 2014, we incurred total expenses of $131,136, including $78,134 in accounting and legal fees, $14,752 in licenses and fees, $35,000 in consulting and development fees, $2,015 in bank charges and $1,235 in office expenses. For the fiscal year ended March 31, 2013, we incurred total expenses of $96,202, including $36,723 in accounting and legal fees, $22,540 in licenses and fees, $35,000 in consulting and development fees, $1,884 in bank charges and $55 in office expenses. The increase in expenses are mainly due to increase in the accounting and legal fees we incurred in connection with the changes in control.

Net Loss



From our inception on August 15, 2006 to March 31, 2014, we incurred a net loss of $559,455. For the fiscal year ended March 31, 2014, we incurred a net loss of $131,136 and a net loss per share of $0.03. For the fiscal year ended March 31, 2013, we incurred a net loss of $96,202 and a net loss per share of $0.02.

Liquidity and Capital Resources

As of March 31, 2014, we had $35,696 in cash, $2,060 in non-current assets, $504,011 in total liabilities and a working capital deficit of $468,315. As of March 31, 2014, we had an accumulated deficit of $559,455. We are dependent on funds raised through equity financing and advances from related parties. Our cumulative net loss of $559,455 from our inception on August 15, 2006 to March 31, 2014 was funded by equity financing and advances from stockholders. Since our inception on August 15, 2006, we have raised gross proceeds of $93,200 in cash from the sale of our securities.

From our inception on August 15, 2006 to March 31, 2014, we spent $93,032 on operating activities. During the fiscal year ended March 31, 2014, we spent $41,431 on operating activities, compared to $102,733 during the fiscal year ended March 31, 2013. Our decrease in cash spending on operating activities during the fiscal year ended March 31, 2014 was primarily due to the increase in accounts payable between the two periods.

From our inception on August 15, 2006 to March 31, 2014, we spent $2,588 on investing activities, for purchases of equipment and intangible asset. During the fiscal year ended March 31, 2014, we did not engage in any investing activities, whereas during the fiscal year ended March 31, 2013, we spent $2,060 on investing activities, for intangible asset purchases.

6



From our inception on August 15, 2006 to March 31, 2014, we received $131,316 from financing activities, including $39,266 in advances from stockholders and $92,050 in net proceeds from the issuance of our common stock. During the fiscal year ended March 31, 2014, we received $74,266 in cash from financing activities, including $39,266 in advances from stockholders and $35,000 in net proceeds from the issuance of our common stock compared to cash receipts of $107,614 from advances from related parties during the fiscal year ended March 31, 2013.

Our increase in cash for the fiscal year ended March 31, 2014 was $32,835 mainly due to decrease in cash used in operating activities.

During the fiscal year ended March 31, 2014, our monthly cash requirements to fund our operating activities, was approximately $10,928, compared to approximately $8,016 during the fiscal year ended March 31, 2013. In the absence of the continued sale of our common stock or advances from related parties, our cash of $35,696 as of March 31, 2014 is sufficient to cover our current monthly burn rate for three months. Until we are able to complete private and/or public financing as described below, we anticipate that we will rely on advances from related parties to proceed with our plan of operations.

Our business strategy going forward is to acquire ownership in late-stage exploration to development-stage gold mining projects and/or royalty or streaming interests in low capital intensity, mining projects in North America. Our main focus will be on identifying solid resources, and then utilize funding to bring a distressed asset into production, while either securing equity ownership or rights of title in the form of royalties.

We expect to require approximately $1,200,000 to carry out our business strategy. Our plan of operations over the next 12 months is to obtain the necessary financing to fill a number of key operational positions. If we secure less than the full amount of financing that we require, we will not be able to carry out our complete business plan and we will be forced to proceed with a scaled back business plan based on our available financial resources.

Future Financings



We have not generated any revenues, have achieved losses since our inception, and rely upon the sale of our securities, loans and advances from related parties to fund our operations. We anticipate that we will incur substantial losses for the foreseeable future, and we are dependent upon obtaining outside financing to carry out our operations. Our audited financial statements for the year ended March 31, 2014 have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty.

We will require approximately $1,200,000 over the next 12 months in order to enable us to proceed with our plan of operations, including paying our ongoing expenses. These cash requirements are in excess of our current cash and working capital resources. Accordingly, we intend to raise the balance of our cash requirements for the next 12 months from private placements, advances from related parties or possibly a registered public offering (either self-underwritten or through a broker-dealer). If we are unsuccessful in raising enough money through such efforts, we may review other financing possibilities such as bank loans. At this time we do not have a commitment from any broker-dealer to provide us with financing, and there is no guarantee that any financing will be available to us or if available, on terms that will be acceptable to us.

If we are unable to obtain the necessary additional financing, then we plan to reduce the amounts that we spend on our operations so as not to exceed the amount of capital resources that are available to us. If we do not secure additional financing our current cash reserves and working capital will not be sufficient to enable us to sustain our operations for the next 12 months, even if we do decide to scale back our operations.

Off-Balance Sheet Arrangements

We have no significant 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 are material to stockholders.

7 Critical Accounting Policies



Our audited financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of the notes to our audited financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by our management.

Foreign Currency Translation



Our audited financial statements are presented in United States dollars. Transactions in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rate in effect at the balance sheet date for monetary assets and liabilities, and at historical exchange rates for non-monetary assets and liabilities. Expenses are translated at the average rates for the period, excluding amortization, which is translated on the same basis as the related assets. Resulting translation gains or losses are reflected in net loss.

Reverse Split Accounting



During the year ended March 31, 2014, the Company reverse split its common stock on the basis of one for five. All figures as to the number of common stock as well as loss per shares in the financial statements and throughout the Form 10-K are reverse split amounts and have been retroactively restated.

Recent Accounting Guidance Not Yet Adopted

On June 10, 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that reduces some of the disclosure and reporting requirements for development stage entities. The change will be effective for interim and annual reporting periods beginning after December 15, 2014, with early adoption permitted. As of such date, among other things, development stage entities will no longer be required to report inception-to-date information. The Company is currently assessing what effects this will have on the presentation of its financial statements in future filings.

Inflation



The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.


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Source: Edgar Glimpses


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