UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year endedMarch 31, 2008
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
COMMISSION FILE NUMBER000-51773
GREENLITE VENTURES INC.
(Exact name of registrant as specified in its charter)
| NEVADA | 91-2170874 |
| State or other jurisdiction of incorporation or organization | (I.R.S. Employer Identification No.) |
| 810 Peace Portal Drive, Suite 201 | |
| Blaine, WA | 98230 |
| (Address of principal executive offices) | (Zip Code) |
| (360) 318-3028 | |
| Issuer's telephone number | |
| Securities registered pursuant to Section 12(b) of the Act: | NONE. |
| Securities registered pursuant to Section 12(g) of the Act: | Common Stock, $0.001 Par Value Per Share. |
Indicate by check mark if the registrant is a well-known seasoned issuer as defined by Rule 405 of the Securities Act.
Yes [ ] No [X]
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 [X]
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 such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (s229.405 of this chapter) is
not contained herein, and will not be contained, to the best of the 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, or a
smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer [ ] | Accelerated filer [ ] |
| Non-accelerated filer [ ] | Smaller reporting company [X] |
| (Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).Yes [X] No [ ]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference
to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last
business day of the registrant’s most recently completed second fiscal quarter:$777,333 based on a price of $0.20, being
the average bid and asked price for the registrant’s common stock as quoted on the OTC Bulletin Board onSeptember 28, 2007.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable
date.As of July 7, 2008, the registrant had 11,366,666 shares of common stock outstanding.
GREENLITE VENTURES INC.
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED MARCH 31, 2008
TABLE OF CONTENTS
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PART I
The information in this discussion contains forward-looking statements. These forward-looking statements involve risks and uncertainties, including statements regarding the Company's capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks described below, and, from time to time, in other reports the Company files with the United States Securities and Exchange Commission (the “SEC”). These factors may cause the Company's actual results to differ materially from any forward-looking statement. The Company disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements.
As used in this Annual Report, the terms “we,” “us,” “our,” “Greenlite,” and “the Company” mean Greenlite Ventures Inc., unless otherwise indicated. All dollar amounts in this Annual Report are expressed in U.S. dollars, unless otherwise indicated.
ITEM 1. BUSINESS.
OVERVIEW
We were incorporated on December 21, 2000 under the laws of the State of Nevada. We are an exploration stage company engaged in the acquisition and exploration of mineral properties. We hold a 100% interest mineral claim that we refer to as the “Magnolia” mineral claim. We have not earned any revenues to date. We do not anticipate earning revenues until such time as we enter into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover proven reserves on our properties, or if such deposits are discovered, that we will enter into further substantial exploration programs.
Our plan of operation is to carry out exploration work on our claim in order to ascertain whether it possesses proven reserves of gold, silver, copper and iron. We will not be able to determine whether or not our mineral claim contains proven reserves, until appropriate exploratory work is done and an economic evaluation based on that work concludes economic viability. If the results of our exploration program do not reveal viable commercial mineralization, we may decide to abandon our claim and acquire new claims for exploration. The acquisition of additional claims will be dependent upon our possessing sufficient capital resources at the time to purchase such claims. If no funding is available, we may be forced to abandon our operations. We have not entered into any discussions, understandings, arrangements or other agreements, preliminary or otherwise, for acquiring any additional mineral claims and/or funding arrangements for the purpose of acquiring additional mineral claims. We can provide no assurance to investors that our mineral claim contains a mineral deposit until appropriate exploratory work is done and an evaluation based on that work concludes that further work programs are justified.
RECENT CORPORATE DEVELOPMENTS
We have experienced the following significant corporate developments since our last quarter ended December 31, 2007:
| 1. | On January 24, 2008, we issued a total of 500,000 shares of common stock on conversion of our 10% convertible notes originally issued on November 30, 2006. The shares were issued solely to non-US persons in reliance of Regulation S of the Securities Act of 1933 (the “Securities Act”). |
| 2. | On February 4, 2008, John Curtis, our then Chief Executive Officer, President and sole director, and Howard Thomson entered into a share transfer agreement (the “Share Transfer Agreement”) pursuant to which Howard Thomson agreed to purchase 4,980,000 shares of our common stock from |
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John Curtis for an aggregate purchase price of $4,980, being $0.001 per share (the “Share Transfer”). Closing of the Share Transfer occurred on February 16, 2008. | |
| 3. | Effective February 16, 2008, upon the closing of the Share Transfer, John Curtis resigned and Howard Thomson replaced Mr. Curtis as our sole director and as our Chief Executive Officer and President. There were no disagreements between Mr. Curtis and the Company regarding any matter relating to the Company’s operations, policies or practices. |
| 4. | Also effective February 16, 2008. Mr. Thomson replaced Douglas King as our Chief Financial Officer, Secretary and Treasurer. There were no disagreements between Mr. King and the Company regarding any matter relating to the Company’s operations, policies or practices. |
| 5. | On February 16, 2008, we entered into a management consulting agreement with Howard Thomson. Pursuant to the terms of the agreement, Mr. Thomson is to be paid consulting fees of $750 per month, in consideration of which Mr. Thomson has agreed to act as our Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer. Mr. Thomson may be granted, subject to the approval of the Company’s Board, incentive stock options to purchase shares of our common stock in such amounts and at such times as the Board, in its absolute discretion, may from time to time determine. The term of the agreement is for a period expiring at the close of business on February 16, 2010, unless otherwise terminated pursuant to the terms of the agreement or extended by the Board. |
COMPETITION
We are a mineral resource exploration company. We compete with other mineral resource exploration and development companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration and development companies with whom we compete have greater financial and technical resources than we do. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact our ability to finance further exploration and to achieve the financing necessary for us to develop our mineral properties.
The mineral exploration industry, in general, is intensively competitive and, even if commercial quantities of ore are discovered, a ready market may not exist for the sale of the ore. Numerous factors beyond our control may affect the marketability of any substances discovered. 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 us not receiving an adequate return on invested capital.
COMPLIANCE WITH GOVERNMENT REGULATION
We are required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in the Province of British Columbia, Canada. The main agency that governs the exploration of minerals in the Province of British Columbia, Canada, is the Ministry of Energy, Mines and Petroleum Resources (the “Ministry of Mines’).
The Ministry of Mines manages the development of British Columbia's mineral resources, and implements policies and programs respecting their development while protecting the environment. In addition, the Ministry of Mines regulates and inspects the exploration and mineral production industries in British Columbia to protect workers, the public and the environment.
The material legislation applicable to us is the Mineral Tenure Act, administered by the Mineral Titles Branch of the Ministry of Mines, and the Mines Act as well as the Health, Safety and Reclamation Code and the
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Mineral Exploration Code. The Mineral Tenure Act and its regulations govern the procedures involved in locating, recording and maintaining mineral titles in British Columbia. The Mineral Tenure Act also governs the issuance of leases which are long term entitlements to minerals, designed as production tenures. The Mineral Tenure Act does not apply to minerals held by crown grant or by freehold tenure.
All mineral exploration activities carried out on a mineral claim or mining lease in British Columbia must be in compliance with the Mines Act. The Mines Act applies to all mines during exploration, development, construction, production, closure, reclamation and abandonment. It outlines the powers of the Chief Inspector of Mines, to inspect mines, the procedures for obtaining permits to commence work in, on or about a mine and other procedures to be observed at a mine. Additionally, the provisions of the Health, Safety and Reclamation Code for mines in British Columbia contain standards for employment, occupational health and safety, accident investigation, work place conditions, protective equipment, training programs, and site supervision. Also, the Mineral Exploration Code contains standards for exploration activities including construction and maintenance, site preparation, drilling, trenching and work in and about a water body.
Additional approvals and authorizations may be required from other government agencies, depending upon the nature and scope of the proposed exploration program. If the exploration activities require the falling of timber, then either a free use permit or a license to cut must be issued by the Ministry of Forests. Items such as waste approvals may be required from the Ministry of Environment, Lands and Parks if the proposed exploration activities are significantly large enough to warrant them. Waste approvals refer to the disposal of rock materials removed from the earth which must be reclaimed. An environmental impact statement may be required.
Our mineral claim will expire on July 31, 2008. The minimum exploration work that must be performed or the fee payable in lieu of exploration work for keeping our claim current is equal to approximately $8.17 ($8.40 CDN) annually per hectare. Our mineral claim consists of 450 hectares. As our mineral claim is effective until July 31, 2008, we must file confirmation of the completion of exploration work in the minimum amount of approximately $3,677 (CDN$3,780) or make a payment in lieu or exploration work in the minimum amount by July 31, 2008. If we fail to complete the minimum required amount of exploration work or fail to make a payment in lieu of this exploration work, then our mineral claim will lapse on July 31, 2008, and we will lose all interest that we have in our mineral claim. We intend to pay the required fee or perform the minimum exploration work required to meet this amount to extend our mineral claim for an additional year upon the expiry of our mineral claim on July 31, 2008, unless the results of our exploration program indicate that the claim is not commercially viable.
ENVIRONMENTAL REGULATIONS
We are required to sustain the cost of reclamation and environmental remediation for all exploration work undertaken. 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 up and renewed along standard guidelines outlined in the usual permits. Reclamation is the process of bringing the land back to its 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. The amount of these costs is not known at this time as we do not know the extent of the exploration program that will be undertaken beyond completion of the recommended work program. 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 earnings, our competitive position or us in the event a potentially economic deposit is discovered.
Prior to undertaking mineral exploration activities, we must make application under the British Columbia Mines Act for a permit, if we anticipate disturbing land. A permit is issued within 45 days of a complete and satisfactory application. We do not anticipate any difficulties in obtaining a permit, if needed. The initial exploration activities on the Magnolia Claim (grid establishment, geological mapping, soil sampling, and geophysical surveys) do not involve ground disturbance and as a result do not require a work permit. Any follow-up trenching and/or drilling will require permits, applications for which will be submitted well in advance of the planned work.
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If we enter the production phase, the cost of complying with permit and regulatory environment laws will be greater because the impact on the project area is greater. Permits and regulations will control all aspects of the production program if the project continues to that stage. Examples of regulatory requirements include:
| - | Water discharge will have to meet drinking water standards; |
| - | Dust generation will have to be minimal or otherwise re-mediated; |
| - | Dumping of material on the surface will have to be re-contoured and re-vegetated with natural vegetation; |
| - | An assessment of all material to be left on the surface will need to be environmentally benign; |
| - | Ground water will have to be monitored for any potential contaminants; |
| - | The socio-economic impact of the project will have to be evaluated and, if deemed negative, will have to be re-mediated; and |
| - | There will have to be an impact report of the work on the local fauna and flora including a study of potentially endangered species. |
EMPLOYEES
We have no employees as of the date of this Annual Report other than our sole officer. We conduct our business largely through agreements with consultants and arms-length third parties.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have not incurred any research or development expenditures since our inception.
PATENTS AND TRADEMARKS
We do not own any patents or trademarks.
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ITEM 1A. RISK FACTORS.
The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation.
If we do not obtain additional financing, our business will fail.
As of March 31, 2008, we had cash in the amount of $179. Our business plan calls for significant expenses in connection with the exploration of our mineral claim. We have completed Phases I and II of our exploration program and commenced Phase III of our exploration program. Our current operating funds are insufficient to complete the balance of Phase III of our exploration program. In order for us to complete the balance of Phase III of our exploration program, we will need to obtain additional financing. Obtaining additional financing would be subject to a number of factors, including the market prices for the mineral property and gold, silver, copper and iron. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.
We have yet to attain profitable operations and because we will need additional financing to fund our exploration activities, our accountants believe that there is substantial doubt about our ability to continue as a going concern.
We have incurred a net loss of $303,765 for the period from December 21, 2000 (inception) to March 31, 2008, and have no revenues to date. Our future is dependent upon our ability to obtain financing and upon future profitable operations from the development of our mineral claim. These factors raise substantial doubt that we will be able to continue as a going concern.
Our financial statements included with this Annual Report have been prepared assuming that we will continue as a going concern. Our auditors have made reference to the substantial doubt as to our ability to continue as a going concern in their audit report on our audited financial statements for the year ended March 31, 2008. If we are not able to achieve revenues, then we may not be able to continue as a going concern and our financial condition and business prospects will be adversely affected.
Because of the speculative nature of exploration of mining properties, there is substantial risk that no reserves will be found and our business will fail.
We are in the initial stages of exploration of our mineral claim, and thus have no way to evaluate the likelihood that we will be able to operate the business successfully. We were incorporated on December 21, 2000 and, to date, have been involved primarily in organizational activities and the acquisition of the Magnolia Claim. We have not earned any revenues as of the date of this report. Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The search for valuable minerals as a business is extremely risky. We may not find reserves of gold, silver, copper, and iron in our mineral claim. Exploration for minerals is a speculative venture necessarily involving substantial risk. The expenditures to be made by us on our exploration program may not result in the discovery of commercial quantities of ore. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral property that we plan to undertake. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan.
Even if we discover proven reserves of precious metals on our mineral claim, we may not be able to successfully commence commercial production.
Our mineral claim does not contain any known bodies of ore. If our exploration programs are successful in discovering proven reserves on our mineral claim, we will require additional funds in order to place the Magnolia Claim into commercial production. The expenditures to be made by us in the exploration of our mineral claim in all probability will be lost as it is an extremely remote possibility that the mineral claim will contain proven reserves. The funds required for commercial mineral production can range from several
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million to hundreds of millions. We currently do not have sufficient funds to place our mineral claim into commercial production. Obtaining additional financing would be subject to a number of factors, including the market prices for gold, silver, copper and iron, and the costs of exploring for or mining these materials. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. Because we will need additional financing to fund our exploration activities, there is substantial doubt about our ability to continue as a going concern. At this time, there is a risk that we will not be able to obtain such financing as and when needed.
We have no known mineral reserves and if we cannot find any we will have to acquire additional mineral claims or cease our operations.
We have no mineral reserves. If we do not find a mineral reserve containing gold or if we cannot explore the mineral reserve, either because we do not have the money to do it or because it will not be economically feasible to do so, we will have to cease operations and investors will lose their investment. Mineral exploration, particularly for gold, is highly speculative. It involves many risks and is often non-productive. The chances of finding reserves on our mineral property are remote and funds expended on exploration will likely be lost. If the results of exploration do not reveal mineral reserves, we may decide to abandon our claim and acquire new claims for exploration. The acquisition of additional claims will be dependent upon our possessing sufficient capital resources at the time in order to purchase such claims. If no funding is available, we may be forced to abandon our operations. We have not entered into any discussions, understandings, arrangements or other agreements, preliminary or otherwise, for acquiring any additional mineral claims and/or funding arrangements for the purpose of acquiring additional mineral claims.
Because we anticipate that our operating expenses will increase prior to our earning revenues, we may never achieve profitability.
Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate revenues from the exploration of our mineral claim, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any revenues or ever achieve profitability. If we are unsuccessful in addressing these risks, our business will most likely fail.
Because of 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 valuable minerals involves numerous hazards and risks normally incident to exploring for and developing mineral properties. As a result, we may become subject to liability for such hazards, including pollution, cave-ins, unusual or unexpected geological formations, environmental pollution, personal injuries, flooding, changes in technology or mining techniques, periodic interruptions, industrial accidents, and other hazards against which we cannot insure or against which we may elect not to insure. At the present time we have no coverage to insure against these hazards and have no plans to insure against these hazards. The payment of such liabilities may have a material adverse effect on our financial position.
Because our executive officers have only agreed to provide their services on a part-time basis, they may not be able or willing to devote a sufficient amount of time to our business operations, which may cause our business to fail.
Our sole executive officer, Howard Thomson, is employed on a full time basis by other companies. Mr. Thomson expects to expend approximately ten hours per week on our business. Competing demands on his time may lead to a divergence between his interests and the interests of other shareholders.
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As we undertake exploration of our mineral claim, we will be subject to compliance with government regulation that may increase the anticipated cost of our exploration program.
There are several governmental regulations that materially restrict mineral exploration. We will be subject to the laws of the Province of British Columbia as we carry out our exploration program. We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these laws. While our planned exploration program budgets for regulatory compliance, there is a risk that new regulations could increase our costs of doing business and prevent us from carrying out our exploration program.
If we receive positive results from our exploration program and we decide to pursue commercial production, we may be subject to an environmental review process that may delay or prohibit commercial production.
If the results of our geological exploration program indicate reserves on our mineral claim, and we decide to pursue commercial production of our mineral claim, we may be subject to an environmental review process under the Federal and Provincial Environmental Assessment Acts (“EAA”). Compliance with an environmental review process may be costly and may delay commercial production. Permits and regulations will control all aspects of any production program if the project continues to that stage because of the potential impact on the environment. Permits, issued by the British Columbia Ministry of Energy, Mines and Petroleum Resources under the provisions of the British Columbia EAA, are required for approval of reclamation programs. Permits, issued by the Ministry of Environment, Lands and Parks under the provisions of the Federal EAA, are required for any air emissions and water discharges from a minesite.
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 up and renewed along standard guidelines outlined in the usual permits. Reclamation is the process of bringing the land back to its 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. The amount of these costs is not known at this time as we do not know the extent of the exploration program that will be undertaken beyond completion of the recommended work program. 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 earnings, our competitive position or us in the event a potentially economic deposit is discovered.
Prior to undertaking mineral exploration activities, we must make an application under the British Columbia Mines Act for a permit, if we anticipate disturbing land. A permit is issued within 45 days of a complete and satisfactory application, and can cost $100 to $500, depending on the scope of the permit. We do not anticipate any difficulties in obtaining a permit, if needed. The initial exploration activities on the Magnolia Claim (grid establishment, geological mapping, soil sampling, and geophysical surveys) do not involve ground disturbance and as a result do not require a work permit. Any follow-up trenching and/or drilling will require permits, applications for which will be submitted well in advance of the planned work.
If we enter the production phase, the cost of complying with permit and regulatory environment laws will be greater because the impact on the project area is greater. Permits and regulations will control all aspects of the production program if the project continues to that stage. Examples of regulatory requirements include:
| (i) | Water discharge will have to meet drinking water standards; |
| (ii) | Dust generation will have to be minimal or otherwise re-mediated; |
| (iii) | Dumping of material on the surface will have to be re-contoured and re-vegetated with natural vegetation; |
| (iv) | An assessment of all material to be left on the surface will need to be environmentally benign; |
| (v) | Ground water will have to be monitored for any potential contaminants; |
| (vi) | The socio-economic impact of the project will have to be evaluated and if deemed negative, will have to be remediated; and |
| (vii) | There will have to be an impact report of the work on the local fauna and flora including a study of potentially endangered species. |
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An environmental review process would be required if we plan to construct a large producing mine facility. We would be required to apply under the British Columbia EAA for a determination as to whether an environmental review would be required. Furthermore, there is the possibility that we would not be able to proceed with commercial production upon completion of the environmental review process if government authorities did not approve our mine or if the costs of compliance with government regulation adversely affected the commercial viability of the proposed mine.
Title to our mineral claim is registered in the name of another person. Our failure to register legal title to the claim in our name may result in the loss of our interest in the claim.
Under British Columbia law, title to British Columbia mineral claims can only be held by individuals, British Columbia corporations or foreign corporations extra-provincially registered in British Columbia. Since we are a Nevada corporation and we are not extra-provincially registered in British Columbia, Canada, we are not legally allowed to hold claims in British Columbia. Therefore, title to the Magnolia Claim is not held in our name. Title to the claim is being held in trust by Lorrie Ann Archibald, a British Columbia resident from whom we purchased our mineral claim. In the event Ms. Archibald were to transfer legal title to our mineral claim to another party, we may not have a claim against the third party and may be forced to commence an action against Ms. Archibald. There is no assurance that we would succeed in recovering legal title to our mineral claim or recover damages from Ms. Archibald in such instance.
Because our sole executive officer does not have formal training specific to the technicalities of mineral exploration, there is a higher risk that our business will fail.
Howard Thomson, our sole executive officer and sole director, does not have any formal training as geologists or in the technical aspects of management of a mineral exploration company. Our management lacks technical training and experience with exploring for, starting, and operating a mine. With no direct training or experience in these areas, our management may not be fully aware of the specific requirements related to working within this industry. Our management’s decisions and choices may not take into account standard engineering or managerial approaches mineral exploration companies commonly use. Consequently, our operations, earnings, and ultimate financial success could suffer irreparable harm due to management’s lack of experience in this industry.
Because our sole executive officer and sole director, Howard Thomson, owns 43.8% of our outstanding common stock, investors may find that corporate decisions influenced by Mr. Thomson are inconsistent with the best interests of other stockholders.
Howard Thomson, our sole executive officer and sole director, controls 43.8% of the issued and outstanding shares of our common stock. Accordingly, in accordance with our Articles of Incorporation and Bylaws, Mr. Thomson is able to control who is elected to our board of directors and thus could act, or could have the power to act, as our management. The interests of Mr. Thomson may not be, at all times, the same as those of other shareholders. Since Mr. Thomson is not simply a passive investor but is also one of our active executives, his interests as an executive may, at times, be adverse to those of passive investors. Where those conflicts exist, our shareholders will be dependent upon Mr. Thomson exercising, in a manner fair to all of our shareholders, his fiduciary duties as an officer or as a member of our board of directors. Also, Mr. Thomson will have the ability to significantly influence the outcome of most corporate actions requiring shareholder approval, including the merger of our company 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 with Mr. Thomson may also have the effect of delaying, deferring or preventing a change in control of Greenlite which may be disadvantageous to minority shareholders.
Because our stock is a penny stock, shareholders will be more limited in their ability to sell their stock.
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system.
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Because our securities constitute “penny stocks” within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the trading price of our common stock is less than $5.00 per share, the common stock will be subject to rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:
| 1. | contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; |
| 2. | contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws; |
| 3. | contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; |
| 4. | contains a toll-free telephone number for inquiries on disciplinary actions; |
| 5. | defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and |
| 6. | contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation. |
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.
ITEM 2. PROPERTIES.
We own a 100% interest in the Magnolia Claim. We do not own any property other than the Magnolia Claim. We rent office space at Suite 201, 810 Peace Portal Drive, Blaine, WA 98230, consisting of approximately 80 square feet, at a cost of $200 per month. This rental is on a month-to-month basis without a formal contract.
THE MAGNOLIA MINERAL CLAIM
We acquired our 100% interest in the Magnolia Claim pursuant to an agreement (the “Mineral Claim Purchase Agreement”) dated April 30, 2002 with Lorrie Ann Archibald of North Vancouver, British Columbia, Canada for consideration of $4,000. Ms. Archibald has executed an undated Bill of Sale transferring title to the Magnolia Claim to us. We intend to file the Bill of Sale with the British Columbia mineral titles office upon our independent geologist’s recommendation to proceed with Phase IV of our planned geological exploration program.
Title to our mineral claim is not held in our name. Title to the claim is recorded in the name of Lorrie Ann Archibald in trust, a British Columbia resident from whom we purchased our mineral claim. In the event Ms. Archibald were to transfer legal title to our mineral claim to another party, we may not have a claim against the third party and may be forced to commence an action against Ms. Archibald. There is no assurance that we would succeed in recovering legal title to our mineral claim or recover damages from Ms. Archibald in such instance.
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Description and Location of the Magnolia Mineral Claim
The Magnolia Claim comprises one mineral claim with a total area of 450 hectares, located on Texada Island, British Columbia, Canada, 6.2 miles north of Gillies Bay. The Magnolia Claim property is accessible by gravel road. Texada Island is the largest island in the Strait of Georgia approximately 70 miles west northwest of Vancouver, British Columbia, Canada. The island is accessible by regular government ferry service or by charter service.
The Magnolia Claim is recorded with the Ministry of Energy, Mines and Petroleum Resources, British Columbia, Canada, under the following name, tag and tenure number:
| Name of Mineral Claim | Tag Number | Tenure Number | Expiry Date |
| MAGNOLIA 1 | 222774 | 392905 | July 31, 2008 |
Recorded title to the property is held in the name of Lorrie Ann Archibald. We hold a 100% beneficial interest in the property pursuant to the Mineral Claim Purchase Agreement with Ms. Archibald. The property boundary contains one reverted crown grant claim not owned by us. The Province of British Columbia owns the land covered by the mineral claim. To our knowledge, there are no aboriginal land claims that might affect our title to the mineral claim or the Province’s title of the property.
Location, Access and Physiography
The Magnolia Claim property is located on Texada Island, B.C., one kilometre north of the Town of Gillies Bay, see Figure 1 below. Texada Island is the largest island in the Strait of Georgia, and lies 110 km west-northwest of Vancouver, British Columbia. The island is accessible from Vancouver by car and ferry combinations either directly via Powell River on the mainland or through the Town of Comox on Vancouver Island. Alternatively, charter air service is available. Road access to and within the property consists of a gravel central road and the paved Gillies Bay - Vananda highway, which provide access to the northeastern and southwestern boundaries of the property, respectively.
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Figure 1 - Magnolia Claim
Exploration History of the Magnolia Claim
The Magnolia Claim is located on Texada Island, British Columbia, Canada, one kilometer north of the Town of Gillies Bay. Texada Island has a long history of mining and exploration for gold, copper and iron ore that began with the discovery of magnetite in 1873. Numerous pits, trenches, adits and at least one shaft on the Magnolia Claim property attest to previous, mostly unrecorded exploration of the property. A shaft was sunk, before 1914, to a depth of 27 meters (90 feet) and some drifting done. In 1975 a magnetometer and electromagnetic (VLF) survey was conducted in conjunction with geological mapping on and around the Cap Sheaf.
Reconnaissance-scale geologic mapping, prospecting, and soil/rock geochemical surveys were conducted in the area during 1984 and 1985 and an electromagnetic survey was run over the south end of the present claim in 1988. An airborne geophysical survey was conducted in August 1988. Aerodat Ltd. flew 175 line kilometers over an area partially covered by the prospecting and soil sampling were conducted over a portion of the existing claim. In April 1991, reconnaissance scale ground magnetic and electromagnetic surveys were carried out. In February 1992, further soil sampling and geophysical surveys together with limited geological mapping were conducted. In January 1994, a 1,500 meter long baseline was established for survey control for geological mapping in the Capsheaf area.
Property Geology and Mineralization
Texada Island is located along the Canadian Cordillera. The oldest rocks mapped on the island are on the southeastern tip of the island. Various stocks and minor intrusions, ranging in composition from gabbro through the more common diorite to quartz monzonite intrude the volcanics and limestone on the island. These have been radiometrically dated as Middle to Upper Jurassic, and may correlate with the Coast Plutonic Complex on the mainland or the island Intrusions on Vancouver Island.
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Recommendations of Geological Report and the Proposed Geological Exploration Program
We engaged Paul Reynolds, B.Sc., P.Geo., to prepare a geological evaluation report on the Magnolia Claim. Mr. Reynolds is a professional geoscientist registered in good standing with the Association of Professional Engineers and Geoscientists of British Columbia.
We received the geological evaluation report on the Magnolia Claim prepared by Mr. Reynolds on May 4, 2002. This report is entitled "Summary Report on the Magnolia Property". The geological report summarizes the results of the history of the exploration of the mineral claim, the regional and local geology of the mineral claim and the mineralization and the geological formations identified as a result of the prior exploration. The geological report also gives conclusions regarding potential mineralization of the mineral claim and recommends a further geological exploration program on the mineral claim.
In his geological report, Mr. Reynolds, recommended that a four phase exploration program, be undertaken on the property to assess its potential to host high grade gold mineralization within quartz and sulphide veins. The costs of the planned fourth phase, consisting of diamond drilling and/or mechanical trenching, are undetermined and are subject to positive results from earlier exploratory work. The four phase program consists of the following:
| Phase | Exploration Program | Status | Cost |
Phase I | A thorough assessment of the known showings along with basic geological mapping and rock sampling. | Completed in April, 2003. | $4,003 |
Phase II | Prospecting, geological outcrop mapping, and detailed soil sampling in areas of interest. | Completed in August, 2005. | $6,100 |
Phase III | Soil sampling and geological mapping to be conducted on a flagged grid within prospective areas identified by the two previous phases was completed in January, 2007. An additional recommended exploration phase consisting of expanding a flagged survey grid and a magnetic survey over the grid is intended to be completed. | Initial phase Completed in January, 2007 Additional exploration to be completed during the summer exploration season of 2008 | $6,238 $5,000 |
| Phase IV | Subject to positive results from the previous phases, mechanical trenching and/or diamond drilling. | To be determined based on the Results of Phase III. | To be determined based on the Results of Phase III. |
The phased program of exploration activities is intended to generate and prioritize targets to test by trenching or drilling. The initial exploration activities on the Magnolia Claim (grid establishment, geological mapping, soil sampling, and geophysical surveys) do not involve ground disturbance and as a result do not require a work permit. Any follow-up trenching and/or drilling will require permits. Applications are expected to be submitted well in advance of the planned work.
Our cash on hand as of March 31, 2008 is $179.As at the date of this Annual Report, we have completed Phases I, II and the initial portion of Phase III of our exploration program at a cost of $16,341. We have insufficient cash on hand to pay the estimated costs of the remainder of Phase III approximately in the amount of $5,000. Accordingly, we will require additional financing in order to proceed with any additional
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work beyond Phase III of our exploration program. Although we have a wide ranging projected exploration program, we do not know how much money will ultimately be needed for exploration. Further work must then be carried out to determine the extent of the gold, silver, copper or iron mineralization, if any, in order to proceed with Phase IV and to determine whether it might be economically viable to mine over the long term. Therefore, costs of exploration are not limited to the initially described four-phase exploration program.
Current State of Exploration
Our mineral claim presently does not have any proven mineral reserves. Our planned exploration program is exploratory in nature and no mineral reserves may ever be found. Results of our exploration program are intended only to define potential exploration targets, and significant and costly exploration work will be needed if initial results warrant further effort.
Phase I Exploration Results – Completed April, 2003
Phase I of our exploration program, consisting of a thorough assessment of the known showings along with basic geological mapping and rock sampling, was conducted on April 18 and 19, 2003 at a cost of $4,003. Our geologist visited the Magnolia Claim property during this period, at which time the Capsheaf showing was relocated and several traverses were made in the suspected area of the Milner Trench on the property. Four rock samples were collected from the Capsheaf area of the property.
The results of our Phase I exploration indicated that there are two known gold and copper bearing skarn zones on the Magnolia property, Capsheaf and Southcap. These zones appear to be associated with intersecting northwest and northeast trending fault zones. Our geologist recommended that this area be further prospected and mapped in more detail. Based on the results of Phase I of our exploration program, our geologist recommended that we proceed with Phase II of our exploration program.
Phase II Exploration Results – Completed August, 2005
Phase II was completed in August, 2005 at a cost of $6,100. During the period from April, 2005 through August, 2005, a program of grid establishment and soil geochemical sampling was conducted on the Magnolia Claim property. A survey grid, comprised of 10 east-west oriented lines of 900 metres length, spaced at 100 metre intervals was established across a portion of the Magnolia Claim property. A total of nine kilometres of grid was surveyed and stations established at 25 metre intervals.
A total of 188 soil samples were collected at 50 metre intervals along the lines. Soils were collected at a depth of approximately 30 centimetres utilizing a grub hoe and shovel. Samples were marked with the grid location. If no soil was present at a proposed sample site, the site was moved east or west until a suitable sample could be collected. Soil samples were shipped to Acme Analytical Laboratories Ltd., in Vancouver, British Columbia, Canada, for analysis.
We received the final Phase II report from our geologist dated November 22, 2005. The results of the Phase II exploration revealed several coincident copper, iron and gold soil anomalies occurring within the area between the Capsheaf and Southcap showings located at the north and south ends of the soil grid respectively. Our geologist recommended that these anomalies be followed up by ground magnetics and detailed geological mapping as part of Phase III of our exploration program.
Phase III Exploration – Initial Phase Completed January, 2007
The initial portion of Phase III was completed in January, 2007. We received a report on Phase III of our exploration program dated March 19, 2007 from Paul Reynolds, our consulting geologist. Pursuant to the report, the Phase III exploration included a magnetic survey that was conducted over the grid established in 2005. The magnetic survey was conducted over the entire grid for a total of nine line kilometres. The results of the survey showed four north-south trending, strong magnetic highs. These appear to be broken by north trending and northwest trending faults. The report concluded that many of the gold in soil anomalies discovered during the 2005 soil geochemical survey are coincident with or on the periphery of magnetic highs.
Based on the results of the survey, Mr. Reynolds recommended that we conduct further exploration on the Magnolia property consisting of expanding the flagged survey grid to the property limits and conducting a
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property wide magnetic survey over this grid. In conjunction with the magnetic survey, Mr. Reynolds recommended geological mapping and prospecting be conducted over the flagged grid in particular, areas with coincident magnetic and geochemical anomalies and that further soil sampling should be extended 200 metres north and south of the existing grid. We intend to complete the remaining portion of Phase III during the summer exploration season of 2008.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any legal proceedings and, to our knowledge, no such proceedings are pending, threatened or contemplated.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to our security holders during the fourth quarter of our fiscal year ended March 31, 2008.
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PART II
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATEDSTOCKHOLDERMATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
Our shares of common stock commenced trading on the Over-The-Counter Bulletin Board (the “OTC Bulletin Board”) under the symbol “GLTV” on March 22, 2007. The following table indicates the high and low bid prices of the common shares obtained during the periods indicated:
| 2008 | 2007 | ||||
| High | Low | High | Low | ||
| First Quarter ended June 30 | $ 0.00 | $ 0.00 | $ N/A | $ N/A | |
| Second Quarter ended September 30 | $ 0.00 | $ 0.00 | $ N/A | $ N/A | |
| Third Quarter ended December 31 | $ 0.00 | $ 0.00 | $ N/A | $ N/A | |
| Fourth Quarter ended March 31 | $ 0.00 | $ 0.00 | $ 0.20 | $ 0.00 | |
The high and low price quotes of our common stock as set out in the table above are as quoted on the OTC Bulletin Board. The market quotations provided reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
PENNY STOCK RULES
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, which: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and in such form as the SEC shall require by rule or regulation. The broker-dealer also must, prior to effecting any transaction in a penny stock, provide the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock that is not otherwise exempt from those rules, the broker-dealer must: (a) make a special written determination that the penny stock is a suitable investment for the purchaser and (b) receive from the purchaser his or her written acknowledgement of receipt of the determination and a written agreement to the transaction.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock and therefore stockholders may have difficulty selling those securities.
REGISTERED HOLDERS OF OUR COMMON STOCK
As of July 7, 2008, we had 127 registered shareholders and 11,366,666 shares of our common stock issued and outstanding. We believe that a large number of stockholders hold stock on deposit with their brokers or investment bankers registered in the name of stock depositories.
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DIVIDENDS
We have neither declared nor paid any cash dividends on our capital stock since our inception and do not contemplate paying cash dividends in the foreseeable future. It is anticipated that earnings, if any, will be retained for the operation of our business. Our board of directors will determine future dividend declarations and payments, if any, in light of the then-current conditions they deem relevant and in accordance with the Nevada Revised Statutes.
There are no restrictions in our articles of incorporation or in our bylaws which prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of a dividend:
| (a) | We would not be able to pay our debts as they become due in the usual course of business; or | |
| (b) | Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving distributions. |
RECENT SALES OF UNREGISTERED SECURITIES
None.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
PLAN OF OPERATION
Our business plan is to proceed with the exploration of the Magnolia Claim to determine whether there are proven reserves of gold, silver, copper, iron or other metals. As at the date of this Annual Report, we have completed Phases I, II and the initial portion of Phase III of our exploration program at a cost of $16,341.
We plan to complete the balance of Phase III at an estimated cost of $5,000 during the summer exploration season of 2008. Once the results from Phase III are received, we will assess whether to proceed to any further exploration phases. In making this determination, we will make an assessment as to whether the results from Phases I, II and III are sufficiently positive to enable us to obtain the financing necessary to proceed. This assessment will include an assessment of our cash reserves, the price of minerals and the market for financing of mineral exploration projects at the time of our assessment. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of exploration do not reveal viable commercial mineralization, we may decide to abandon our claim and acquire new claims for exploration.
Cash Requirements
We anticipate that we will incur over the next twelve months the following expenses:
Category | Planned Expenditures over the Next Twelve Months |
| Professional Fees | $15,000 |
| Management Fees | $9,000 |
| Office Expenses/Rent | $3,600 |
| Mineral Exploration Expenses | $5,000 |
| TOTAL | $32,600 |
Our total expenditures over the next twelve months are anticipated to be approximately $32,600. As at March 31, 2008, we had cash in the amount of $179. As such we will require additional financing to fund our
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operations over the next twelve months. In addition, there are no assurances that the actual costs of completing this exploration program will not exceed our estimates of those costs. If the actual costs of the exploration program are substantially greater than what we have estimated, or if we decide to proceed beyond Phase III of our proposed exploration program, of which there is no assurance, we will be required to seek additional financing.
RESULTS OF OPERATIONS
| Summary of Year End Results | ||||||
| Year Ended March 31 | Percentage | |||||
| 2008 | 2007 | Increase / (Decrease) | ||||
| Revenue | $- | $- | n/a | |||
| Expenses | (71,779) | (52,274) | 37.3% | |||
| Net Income (Loss) | $(71,779) | $(52,274) | 37.3% | |||
Revenues
We have not earned any revenue since inception. We do not anticipate earning revenues until such time as we enter into commercial production of our mineral property. We are presently in the exploration stage of our business and we can provide no assurance that we will discover proven reserves on our property, or if such deposits are discovered, that we will enter into further exploration programs.
Expenses
Our expenses for the year are outlined in the table below:
| Year Ended March 31 | Percentage | ||||||||
| 2008 | 2007 | Increase / (Decrease) | |||||||
| Accounting | $ | 17,380 | $ | 23,200 | (25.1)% | ||||
| Bank Charges | 228 | 10 | 2,180% | ||||||
| Consulting | 1,750 | -- | n/a | ||||||
| Exploration and Development | 2,485 | -- | n/a | ||||||
| Interest | 4,096 | 1,658 | 147.0% | ||||||
| Legal | 26,382 | 19,558 | 34.9% | ||||||
| Office Administration | 10,500 | 25 | 41,900% | ||||||
| Regulatory Expenses | 5,893 | 5,309 | 11.0% | ||||||
| Rent | 2,400 | 2,400 | n/a | ||||||
| Telephone | 347 | 114 | 204.4% | ||||||
| Travel and Entertainment | 318 | -- | n/a | ||||||
| Total Expenses | $ | 71,779 | $ | 52,274 | 37.3% | ||||
The majority of our expenses for the year ended March 31, 2008 consisted of accounting and legal expenses in connection with meeting our ongoing reporting obligations under the Securities Exchange Act of 1934. The additional legal expenses during the year ended March 31, 2008 relate primarily to fees incurred in connection with our change in control.
Office administration fees increased significantly as a primarily result of the fact that we paid management consulting fees to our sole executive officer and our former executive officer during the fiscal year 2008.
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We anticipate that our expenses will increase significantly as we continue to undertake our plan of operation and pursue our exploration program for the Magnolia Claim. Our expenses will continue to increase if our board of directors decides to proceed beyond Phase III of our exploration program. However, there are no assurances that such a determination will be made.
LIQUIDITY AND CAPITAL RESOURCES
| Cash Flows | ||
| Year Ended March 31 | ||
| 2008 | 2007 | |
| Net Cash from (used in) Operating Activities | $(72,691) | $(36,995) |
| Net Cash from Investing Activities | -- | -- |
| Net Cash from Financing Activities | 49,000 | 50,000 |
| Net Increase in Cash During Period | $(23,691) | $13,005 |
| Working Capital | |||
| Percentage | |||
| At March 31, 2008 | At March 31, 2007 | Increase / (Decrease) | |
| Current Assets | $3,278 | $23,870 | (86.3)% |
| Current Liabilities | (34,543) | (23,356) | 47.9% |
| Working Capital Deficit | $(31,265) | $514 | (6,182.7)% |
Our cash on hand as of March 31, 2008 was $179. Accordingly, we do not have sufficient cash to meet the anticipated costs of completing the remainder of Phase III of our exploration program and to pay our anticipated operating expenses for the next twelve months. Additionally, if our board of directors decides to proceed through to Phase IV of our exploration program, of which there is no assurance, we will need additional financing in order to complete Phase IV. There is no assurance that we will be able to acquire such additional financing on terms that are acceptable to us, or at all.
Financing Requirements
Since our inception, we have used our common stock to raise money for our property acquisition, for corporate expenses and to repay outstanding indebtedness. We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive exploration activities. For these reasons, our auditors stated in their report to our audited financial statements for the year ended March 31, 2008 that they have substantial doubt about our ability to continue as a going concern.
On July 25, 2007, we approved a private placement offering of up to 350,000 units at a price of $0.15 US per Unit pursuant to Regulation S of the Securities Act. Each Unit consists of one share of our common stock and one share purchase warrant. Each warrant entitles the holder to purchase an additional share of our common stock at a price of $0.15 US per share for a period of one (1) year from the date the Units were issued. On November 7, 2007, we issued 266,666 Units at a price of $0.15 US per Unit to non-U.S. persons in reliance of Regulation S of the Securities Act. The balance of the offering has not been closed and there is no assurance that the remaining Units will be sold.
We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any of additional sales of our equity securities or arrange for debt or other financing for to fund our planned mining, development and exploration activities.
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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 is material to stockholders.
CRITICAL ACCOUNTING POLICIES
The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.
We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operation.
Exploration Stage Company
We have been in the exploration stage since our formation and have not yet realized any revenues from our operations. We are primarily engaged in the acquisition and exploration of mining properties. Upon the location of commercially minable reserves, we plan to prepare for mineral extraction and enter the development stage. To date, the exploration stage of our operations has consisted of contracting with a geologist to sample and assessing the mining viability of our mineral claim.
Mineral Rights
Mineral rights and related exploration costs have been expensed as their recoverability is presumed to be insupportable during the exploration stage.
Pro Forma Compensation Expense
We account for costs of stock-based compensation in accordance with APB No. 25, "Accounting for Stock Based Compensation" instead of the fair value based method in SFAS No. 123. No stock options have been issued by us.
Use of Estimates
Management uses estimates and assumptions in preparing our financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
| 1. | |
| 2. | Balance Sheets as at March 31, 2008 and March 31, 2007; |
| 3. | Statement of Operations and Accumulated Deficit for the years ended March 31, 2008, March 31, 2007, and for the period from inception on December 21, 2000 to March 31, 2008; |
| 4. | Statement of Changes in Stockholders’ Equity (Deficiency) for the period from inception on December 21, 2000 to March 31, 2008; |
| 5. | Statement of Cash Flows for the years ended March 31, 2008, March 31, 2007, and for the period from inception on December 21, 2000 to March 31, 2008; |
| 6. | Notes to Financial Statements. |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Greenlite Ventures Inc.
Blaine, Washington
We have audited the accompanying balance sheet of Greenlite Ventures Inc., an exploration stage company, as of March 31, 2008 and March 31, 2007 and the related statements of operations and accumulated deficit, changes in stockholders’ equity/(deficit), and cash flows for the years then ended, and for the period December 21, 2000 (date of inception) to March 31, 2008. These financial statements are the responsibility of the management of Greenlite Ventures Inc. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Greenlite Ventures Inc. as of March 31, 2008 and March 31, 2007, and the results of its operations, changes in stockholders’ equity/(deficit) and cash flows for the years then ended, and for the period December 21, 2000 (date of inception) to March 31, 2008, in conformity with accounting principles generally accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental statement of operating expenses is presented for the purposes of additional analysis and is not a required part of the basic financial statements, and in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 7 to the financial statements, the Company has suffered recurring losses from operations, which raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Sarna & Company
Certified Public Accountants
Westlake Village, California
June 25, 2008
F-1
GREENLITE VENTURES INC.
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEET
| ASSETS | ||||||
| MARCH 31, | MARCH 31, | |||||
| 2008 | 2007 | |||||
| Current Assets: | ||||||
| Cash | $ | 179 | $ | 23,870 | ||
| Receivable – Trust Account | 2,899 | -0- | ||||
| Prepaid Expenses | 200 | -0- | ||||
| Total Current Assets | 3,278 | 23,870 | ||||
| TOTAL ASSETS | $ | 3,278 | $ | 23,870 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT) | ||||||
| Current Liabilities: | ||||||
| Accounts Payable and Accrued Expenses | $ | 19,789 | $ | 21,698 | ||
| Loans Payable Stockholders | 9,000 | -0- | ||||
| Interest Payable | 5,754 | 1,658 | ||||
| Total Current Liabilities | 34,543 | 23,356 | ||||
| Long Term Debt | -0- | 50,000 | ||||
| Stockholders' Equity/(Deficit): | ||||||
| Common Stock, $0.001 par value | ||||||
| 100,000,000 shares authorized, | ||||||
| 11,366,666 and 10,600,000 | ||||||
| shares issued | 11,366 | 10,600 | ||||
| Additional Paid in Capital | 261,134 | 171,900 | ||||
| Deficit Accumulated During | ||||||
| The Exploration Stage | (303,765 | ) | (231,986 | ) | ||
| Total Stockholders' Equity/(Deficit) | (31,265 | ) | (49,486 | ) | ||
| TOTAL LIABILITIES AND | ||||||
| STOCKHOLDERS' EQUITY/(DEFICIT) | $ | 3,278 | $ | 23,870 | ||
See Notes to Financial Statements
F-2
GREENLITE VENTURES INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
| DEC. 21, 2000 | |||||||||
| (Date of Inception) | |||||||||
| YEAR ENDED | YEAR ENDED | to | |||||||
| MARCH 31, 2008 | MARCH 31, 2007 | MARCH 31, 2008 | |||||||
| Revenues | $ | -0- | $ | -0- | $ | -0- | |||
| Operating Expenses | (71,779 | ) | (52,274 | ) | (303,765 | ) | |||
| Loss Before Provision for | (71,779 | ) | (52,274 | ) | (303,765 | ) | |||
| Income Taxes | |||||||||
| Provision for Income Taxes | -0- | -0- | -0- | ||||||
| Net Loss | (71,779 | ) | (52,274 | ) | (303,765 | ) | |||
| Accumulated Deficit, | |||||||||
| Beginning of Period | (231,986 | ) | (179,712 | ) | -0- | ||||
| Accumulated Deficit, | |||||||||
| End of Period | $ | (303,765 | ) | $ | (231,986 | ) | $ | (303,765 | ) |
| Net Loss per Share | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.04 | ) |
| Weighted Average | |||||||||
| Shares Outstanding | 10,762,500 | 10,600,000 | 8,424,999 |
See Notes to Financial Statements
F-3
GREENLITE VENTURES INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY/(DEFICIT)
| Common Stock | Additional | Accumulated | Total | |||||||||||
| Dollar | Paid in | Deficit | Stockholders' | |||||||||||
| Shares | Amount | Capital | Equity/(Deficit) | |||||||||||
| Balances, December 21, 2000 | ||||||||||||||
| (Date of Inception) | ---- | $ | ---- | $ | ---- | $ | ---- | $ | ---- | |||||
| Stock Subscriptions Received | ||||||||||||||
| $0.001 per share | ||||||||||||||
| February 14, 2001 | ---- | ---- | 2,500 | ---- | 2,500 | |||||||||
| Net Loss, Period Ended | ||||||||||||||
| March 31, 2001 | ---- | ---- | ---- | (1,310 | ) | (1,310 | ) | |||||||
| Balances, March 31, 2001 | ---- | $ | ---- | $ | 2,500 | $ | (1,310 | ) | $ | 1,190 | ||||
| Stock Subscriptions Received | ||||||||||||||
| $0.001 per share | ||||||||||||||
| February 25, 2002 | ---- | ---- | 2,500 | ---- | 2,500 | |||||||||
| Common Stock Issued | ||||||||||||||
| $0.001 per share | ||||||||||||||
| February 28, 2002 | 7,500,000 | 7,500 | (5,000 | ) | ---- | 2,500 | ||||||||
| Net Loss, Period Ended | ||||||||||||||
| March 31, 2002 | ---- | ---- | ---- | (8,244 | ) | (8,244 | ) | |||||||
| Balances, March 31, 2002 | 7,500,000 | $ | 7,500 | ---- | $ | (9,554 | ) | $ | (2,054 | ) | ||||
| Common Stock Issued | ||||||||||||||
| $0.05 per share | ||||||||||||||
| November 30, 2002 | 1,400,000 | 1,400 | 68,600 | ---- | 70,000 | |||||||||
| Net Loss, Period Ended | ||||||||||||||
| March 31, 2003 | ---- | ---- | ---- | (29,203 | ) | (29,203 | ) | |||||||
| Balances, March 31, 2003 | 8,900,000 | $ | 8,900 | $ | 68,600 | $ | (38,757 | ) | $ | 38,743 | ||||
| Net Loss, Period Ended | ||||||||||||||
| March 31, 2004 | ---- | ---- | ---- | (45,729 | ) | (45,729 | ) | |||||||
| Balances, March 31, 2004 | 8,900,000 | $ | 8,900 | $ | 68,600 | $ | (84,486 | ) | $ | (6,986 | ) | |||
| Common Stock Issued | ||||||||||||||
| $0.05 per share | ||||||||||||||
| September 30, 2004 | 900,000 | 900 | 44,100 | ---- | 45,000 | |||||||||
| Net Loss, Period Ended | ||||||||||||||
| March 31, 2005 | ---- | ---- | ---- | (46,137 | ) | (46,137 | ) | |||||||
| Balances, March 31, 2005 | 9,800,000 | $ | 9,800 | $ | 112,700 | $ | (130,623 | ) | $ | (8,123 | ) | |||
See Notes to Financial Statements
F-4
GREENLITE VENTURES INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY/(DEFICIT) (Continued)
| Common Stock | Additional | Accumulated | Total | |||||||||||
| Dollar | Paid in | Deficit | Stockholders' | |||||||||||
| Shares | Amount | Capital | Equity/(Deficit) | |||||||||||
| Balances | ||||||||||||||
| March31,2005 | 9,800,000 | 9,800 | 112,700 | (130,623 | ) | (8,123 | ) | |||||||
| Common Stock Issued | ||||||||||||||
| $0.075 per share | ||||||||||||||
| September29, 2005 | 800,000 | 800 | 59,200 | ---- | 60,000 | |||||||||
| Net Loss, Period Ended | ||||||||||||||
| March31,2006 | ---- | ---- | ---- | (49,089 | ) | (49,089 | ) | |||||||
| Balances | ||||||||||||||
| March31,2006 | 10,600,000 | $ | 10,600 | $ | 171,900 | $ | (179,712 | ) | $ | 2,788 | ||||
| Net Loss, Period Ended | ||||||||||||||
| March31,2007 | ---- | ---- | ---- | (52,274 | ) | (52,274 | ) | |||||||
| Balances | ||||||||||||||
| March31,2007 | 10,600,000 | $ | 10,600 | $ | 171,900 | $ | (231,986 | ) | $ | (49,486 | ) | |||
| Common Stock Issued | ||||||||||||||
| $0.15 per share | ||||||||||||||
| November 7, 2007 | 266,666 | 266 | 39,734 | ---- | 40,000 | |||||||||
| Common Stock Issued | ||||||||||||||
| $0.10 per share | ||||||||||||||
| January 24, 2008 | 500,000 | 500 | 49,500 | ---- | 50,000 | |||||||||
| Net Loss, Period Ended | ||||||||||||||
| March 31, 2008 | ---- | ---- | ---- | (71,779 | ) | (71,779 | ) | |||||||
| Balances | ||||||||||||||
| March 31, 2008 | 11,366,666 | $ | 11,366 | $ | 261,134 | $ | (303,765 | ) | $ | (31,265 | ) | |||
See Notes to Financial Statements
F-5
GREENLITE VENTURES INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF CASH FLOWS
| DEC. 21, 2000 | |||||||||
| (Date of Inception) | |||||||||
| YEAR ENDED | YEAR ENDED | to | |||||||
| MAR 31, 2008 | MAR 31, 2007 | MARCH 31, 2008 | |||||||
| Cash Flows from | |||||||||
| Operating Activities: | |||||||||
| Net Loss | $ | (71,779 | ) | $ | (52,274 | ) | $ | (303,765 | ) |
| Adjustments to Reconcile Net | |||||||||
| Income to Net Cash Provided/ | |||||||||
| (Used) by Operating Activities: | |||||||||
| (Increase)Decrease in: | |||||||||
| Prepaid Expenses | (200 | ) | -0- | (200 | ) | ||||
| Receivable – Trust Account | (2,899 | ) | 7,936 | (2,899 | ) | ||||
| Increase(Decrease) in: | |||||||||
| Accounts Payable | (1,909 | ) | 5,685 | 19,789 | |||||
| Interest Payable | 4,096 | 1,658 | 5,754 | ||||||
| Net Cash Used by | |||||||||
| Operating Activities | (72,691 | ) | (36,995 | ) | (281,321 | ) | |||
| Cash Flows from | |||||||||
| Investing Activities: | -0- | -0- | -0- | ||||||
| Cash Flows from | |||||||||
| Financing Activities: | |||||||||
| Proceeds from Issuance of Debt | 9,000 | 50,000 | 59,000 | ||||||
| Proceeds from Issuance of | |||||||||
| Common Stock | 40,000 | -0- | 222,500 | ||||||
| Cash Provided by | |||||||||
| Financing Activities | 49,000 | 50,000 | 281,500 | ||||||
| Net Increase/(Decrease) in Cash | (23,691 | ) | 13,005 | 179 | |||||
| Cash at Beginning of Period | 23,870 | 10,865 | -0- | ||||||
| Cash at End of Period | $ | 179 | $ | 23,870 | $ | 179 |
See Notes to Financial Statements
F-6
GREENLITE VENTURES INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Greenlite Ventures Inc. was incorporated on December 21, 2000 in the state of Nevada. The Company acquires and develops certain mineral rights in Canada.
Basis of Presentation
The Company reports revenue and expenses using the accrual method of accounting for financial and tax reporting purposes.
Use of Estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.
Exploration Stage Company
The Company has been in the exploration stage since its formation and has not yet realized any revenues from its planned operations. The Company is primarily engaged in the acquisition and exploration of mining properties. Upon the location of commercially minable reserves, the Company plans to prepare for mineral extraction and enter the development stage. To date, the exploration stage of the Company’s operations consists of the contracting with a geologist to sample and assess the mining viability of the Company’s claim.
Pro Forma Compensation Expense
Greenlite Ventures Inc. accounts for costs of stock-based compensation in accordance with APB No. 25, "Accounting for Stock Based Compensation" instead of the fair value based method in SFAS No. 123. No stock options have been issued by Greenlite Ventures Inc. Accordingly, no pro forma compensation expense is reported in these financial statements.
Mineral Rights
Mineral rights and related exploration costs have been expensed as their recoverability is presumed to be insupportable during the exploration stage.
F-7
GREENLITE VENTURES INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Depreciation, Amortization and Capitalization
The Company records depreciation and amortization when appropriate using both straight-line and declining balance methods over the estimated useful life of the assets (five to seven years).
Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property's useful life are capitalized. Property sold or retired, together with the related accumulated depreciation, is removed from the appropriate accounts and the resultant gain or loss is included in net income.
Income Taxes
The Company accounts for its income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". Under Statement 109, a liability method is used whereby deferred tax assets and liabilities are determined based on temporary differences between basis used for financial reporting and income tax reporting purposes. Income taxes are provided based on tax rates in effect at the time such temporary differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not, that the Company will not realize the tax assets through future operations.
Fair Value of Financial Instruments
Financial accounting Standards Statement No. 107, "Disclosures About Fair Value of Financial Instruments", requires the Company to disclose, when reasonably attainable, the fair market values of its assets and liabilities which are deemed to be financial instruments. The Company's financial instruments consist primarily of cash and certain investments.
Per Share Information
The Company follows SFAS No. 128, “Earnings Per Share” and SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity,” which establish standards for the computation, presentation and disclosure requirements for basic and diluted earnings per share for entities with publicly-held common shares and potential common stock issuances. Basic earnings (loss) per share are computed by dividing net income by the weighted average number of common shares outstanding. In computing diluted earnings per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities, such as convertible notes, stock options, and warrants. Common stock equivalent shares are excluded from the computation if their effect is antidilutive.
F-8
GREENLITE VENTURES INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 - PROVISION FOR INCOME TAXES
The provision for income taxes for the periods ended March 31, 2008 and March 31, 2007 represents the minimum state income tax expense of the Company, which is not considered significant.
NOTE 3 – LOANS PAYABLE
On December 7, 2007, the Company obtained loans from two stockholders totaling $9,000. These loans are non-interest-bearing, short-term loans due on demand, and were obtained to provide working capital and to pay ordinary expenses.
NOTE 4 – LONG-TERM DEBT
On October 31, 2006, the Company’s Board of Directors approved a private placement of 10% convertible notes for proceeds of $50,000. These notes were issued on November 30, 2006, were due on October 31, 2008, and bore interest at 10% annually. The noteholders were entitled to convert all or any portion of the notes into shares of the Company’s common stock, at the lesser of $0.10 per share or 75% of the average trading price for the ten trading days immediately preceding the date of conversion. The proceeds are intended to fund completion of work on the Company’s mineral claim, and for working capital purposes. As discussed in Note 8, on January 24, 2008 these notes were converted into 500,000 shares of the Company’s common stock.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company currently rents administrative office space under a monthly renewable contract.
Litigation
The Company is not presently involved in any litigation.
NOTE 6 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Recently issued accounting pronouncements will have no significant impact on the Company and its reporting methods.
F-9
GREENLITE VENTURES INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 7 – GOING CONCERN
Future issuances of the Company’s equity or debt securities will be required in order for the Company to continue to finance its operations and continue as a going concern. The Company’s present revenues are insufficient to meet operating expenses.
The financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred cumulative net losses of $303,765 since its inception and requires capital for its contemplated operational and marketing activities to take place. The Company's ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful completion of the Company's contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.
NOTE 8 – STOCK ISSUANCES
On July 25, 2007, the Company approved a private placement of up to 350,000 units at a price of $0.15 per unit. Each unit consists of one common share of the Company’s stock and one share purchase warrant, with each warrant entitling the holder to purchase an additional common share at a price of $0.20 per share, for a period ending one year from the date the units are issued. The proceeds of this offering are to be used to retire corporate debt and for general corporate expenses. This offering was made to non-US investors pursuant to Regulation S of the United States Securities Act of 1933. On November 7, 2007, 266,666 units were issued under this private placement, for a total contribution of $40,000.
On January 24, 2008, $50,000 of 10% convertible notes payable were converted into 500,000 shares of the Company’s common stock according to the terms described in Note 3 to the financial statements.
F-10
SUPPLEMENTAL STATEMENT
F-11
GREENLITE VENTURES INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATING EXPENSES
| DEC. 21, 2000 | |||||||||
| (Date of Inception) | |||||||||
| YEAR ENDED | YEAR ENDED | to | |||||||
| MARCH 31, 2008 | MARCH 31, 2007 | MARCH 31, 2008 | |||||||
| Operating Expenses | |||||||||
| Accounting | $ | 17,380 | $ | 23,200 | $ | 75,685 | |||
| Bank Charges | 228 | 10 | 376 | ||||||
| Consulting | 1,750 | -0- | 1,750 | ||||||
| Exploration & Development | 2,485 | -0- | 20,750 | ||||||
| Interest | 4,096 | 1,658 | 5,754 | ||||||
| Legal | 26,382 | 19,558 | 116,570 | ||||||
| Office Administration | 10,500 | 25 | 30,972 | ||||||
| Property Rights | -0- | -0- | 4,000 | ||||||
| Regulatory Expenses | 5,893 | 5,309 | 23,448 | ||||||
| Rent | 2,400 | 2,400 | 18,650 | ||||||
| Telephone | 347 | 114 | 1,823 | ||||||
| Travel & Entertainment | 318 | -0- | 3,987 | ||||||
| Total Operating Expenses | $ | 71,779 | $ | 52,274 | $ | 303,765 |
See Notes to Financial Statements
F-12
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A(T). CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2008 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.
Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Annual Report on Form 10-K for the year ended March 31, 2008 fairly present our financial condition, results of operations and cash flows in all material respects.
Management's Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.
Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.
Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation
Page 23 of 31
under this framework, management concluded that our internal control over financial reporting was not effective as of the Evaluation Date.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of Evaluation Date and identified the following material weaknesses:
Insufficient Resources:We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting.
Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.
Lack of Audit Committee & Outside Directors on the Company’s Board of Directors:We do not have a functioning audit committee and outside directors on the Company’s Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.
Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) may consider appointing outside directors and audit committee members in the future.
Management, including our Chief Executive Officer and Chief Financial Officer, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report.
Changes in internal control over financial reporting
As of the Evaluation Date, there were no changes in our internal control over financial reporting that occurred during the fiscal year ended March 31, 2008 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the effectiveness of controls and procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that the our controls and procedures will prevent all potential errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
ITEM 9B. OTHER INFORMATION.
None.
Page 24 of 31
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The following table sets forth the name and positions of our sole executive officer and director as of the date hereof.
| Name | Age | Positions |
| Howard Thomson | 62 | President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer, Director |
Set forth below is a brief description of the background and business experience of our sole executive officer and director:
Howard Thomson has been our President, Chief Executive Officer, Secretary, Treasurer, and Chief Financial Officer and our sole director since February 16, 2008. Mr. Thomson was employed from 1981 to 1998 in senior management positions with the Bank of Montreal, including 5 years as Branch Manager, 4 years as Regional Marketing Manager and 5 years as Senior Private Banker. Mr. Thomson retired from the Bank of Montreal in 1998. From February, 1999 to August 2006, Mr. Thomson served as a director and officer of Royalite Petroleum Company Inc. (formerly Worldbid Corporation), a public company quoted on the OTC Bulletin Board, specializing in international business-to-business and government-to-business facilitation service. Mr. Thomson serves as the sole executive officer and sole director of Terrace Ventures Inc., a public company quoted on the OTC Bulletin Board, engaged in the exploration of mineral properties.
Mr. Thomson does not have formal training as a geologist or in the technical or managerial aspects of management of a mineral exploration company. Accordingly, we will have to rely on the technical services of others to advise us on the managerial aspects specifically associated with a mineral exploration company. We do not have any employees who have professional training and experience in the mining industry. We rely on our independent geological consultant, Paul Reynolds, to make recommendations to us on work programs on our property, to hire appropriately skilled persons on a contract basis to complete work programs and to supervise, review, and report on such programs to us.
SIGNIFICANT EMPLOYEES
We have no employees other than our sole executive officer and director.
We have a verbal agreement with Mr. Reynolds to provide us with consulting services on request, in accordance with standard industry practices. Pursuant to the terms of the agreement, Mr. Reynolds agreed to provide us with geological consulting services in accordance with the geological exploration program prepared by Mr. Reynolds. The length of time Mr. Reynolds will perform consulting services for Greenlite is based on whether we continue to proceed with each phase of the exploration program. Mr. Reynolds is not involved in the day to day operations of Greenlite. He is our geological consultant who was hired to perform our planned geological exploration program. Any decisions made by our management with respect to proceeding with each of the phases outlined in our exploration program are based on recommendations of Mr. Reynolds following the completion of each phase of the exploration program.
TERMS OF OFFICE
Our directors are elected to hold office until the next annual meeting of the shareholders and until their respective successors have been elected and qualified. Our executive officers are appointed by our board of directors and hold office until removed by our board of directors or until their successors are appointed.
Page 25 of 31
AUDIT COMMITTEE
Mr. Thomson is our sole director. As a result, we do not maintain a separately-designated standing audit committee. As a result, our sole director acts as our audit committee. Mr. Thomson does not meet the definition of an “audit committee financial expert.” We believe that the cost related to appointing a financial expert to our board of directors at this time is prohibitive.
CODE OF ETHICS
We adopted a Code of Ethics applicable to our officers and directors which is a "code of ethics" as defined by applicable rules of the SEC. Our Code of Ethics was included as an exhibit to our Annual Report on Form 10-KSB for the fiscal year ended March 31, 2006, filed on June 29, 2006. If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our Chief Executive Officer, Chief Financial Officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a current report on Form 8-K filed with the SEC.
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 a registered class of our securities (“Reporting Persons”), to file reports of ownership and changes in ownership with the SEC. Reporting Persons are required by SEC regulations to furnish us with copies of all forms they file pursuant to Section 16(a). Other than as described below, based solely on our review of such reports received by us, no other reports were required for those persons, the following persons have failed to file on a timely basis, the identified reports required by Section 16(a) of the Exchange Act.
| Number of Late | Transactions Not | Known Failures to File | |
| Name and Principal Position | Reports | Timely Reported | a Required Form |
| Howard Thomson, | None | None | None |
| CEO, CFO, President, | |||
| Secretary, Treasurer and | |||
| Director | |||
| John Curtis, | One | One | None |
| Former CEO, Former | |||
| President and Form Director | |||
| Douglas King, | None | None | None |
| Former CFO, Former | |||
| Secretary and Former | |||
| Treasurer |
Page 26 of 31
ITEM 11. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
The following table sets forth the total compensation paid or accrued to our named executive officers, as that term is defined in Item 402(m)(2) of Regulation S-K , and to our directors, during our last two completed fiscal years.
| SUMMARY COMPENSATION TABLE | |||||||||
Name & Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compen- sation ($) | Nonqualified Deferred Compen- sation Earnings ($) | All Other Compen -sation ($) | Total ($) |
| Howard Thomson, CEO, CFO, President, Secretary, Treasurer and Director | 2008 2007 | $0 $0 | $0 $0 | $0 $0 | $0 $0 | $0 $0 | $0 $0 | $0 $0 | $0 $0 |
| John Curtis, Former CEO, Former President and Former Director | 2008 2007 | $1,750 $0 | $0 $0 | $0 $0 | $0 $0 | $0 $0 | $0 $0 | $0 $0 | $1,750 $0 |
| Douglas King, Former CFO, Former Secretary and Former Treasurer | 2008 2007 | $0 $0 | $0 $0 | $0 $0 | $0 $0 | $0 $0 | $0 $0 | $0 $0 | $0 $0 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
As at March 31, 2008, we did not have any outstanding equity awards
EMPLOYMENT CONTRACTS
On February 16, 2008, we entered into a management consulting agreement with Mr. Thomson, our sole executive officer and director, pursuant to which Mr. Thomson agreed to provide us with consulting services in consideration of which we agreed to pay Mr. Thomson $750 per month.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
EQUITY COMPENSATION PLANS
We have no equity compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of July 7, 2008by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our directors and each of our named executive officers (as defined under Item 402(m)(2) of Regulation S-K), and (iii) officers and directors as a
Page 27 of 31
group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.
Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percentage of Common Stock(1) |
Security Ownership of Management | |||
| Common Stock | Howard Thomson Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer Sole Director | 4,980,000 Direct | 43.8% |
| Common Stock | All Officers and Directors as a Group (1 person) | 4,980,000 | 43.8% |
Security Ownership of Certain Beneficial Owners | |||
| Common Stock | Gordon King H 65 Eaton Square London, England(2) | 2,500,000 Direct | 22.0% |
| Common Stock | Howard Thomson Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer Sole Director Brookside, Ballymabin Dunmore East, County Waterford Ireland | 4,980,000(4) Direct | 43.8% |
| Notes | |
| (1) | Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding. As of July 7, 2008, there were 11,366,666 shares of the Company’s common stock issued and outstanding. |
| (2) | Gordon King is the son of Douglas King, our former Chief Financial Officer, Secretary and Treasurer. |
CHANGES IN CONTROL
We are not aware of any arrangement which may result in a change in control in the future.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
RELATED TRANSACTIONS
None of the following persons has any direct or indirect material interest in any transaction to which we were or are a party during the last two fiscal years, or in any proposed transaction to which we propose to be a party:
| (a) | any director or officer; |
| (b) | any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our common stock; or |
| (c) | any immediate family member, including any spouse, child, parent, step-child, step-parent, sibling or in-law, of any of the foregoing. |
DIRECTOR INDEPENDENCE
Our common stock is quoted on the OTC Bulletin Board inter-dealer quotation system, which does not have director independence requirements. Under NASDAQ Rule 4200(a)(15), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. Our sole director, Howard Thomson, is also our sole executive officer. As a result, we do not have any independent directors.
As a result of our limited operating history and minimal resources, our management believes that it will have difficulty in attracting independent directors. In addition, we would likely be required to obtain directors and officers insurance coverage in order to attract and retain independent directors. Our management believes that the costs associated with maintaining such insurance is prohibitive at this time.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The aggregate fees billed for the fiscal years ended March 31, 2008 and March 31, 2007 for professional services rendered by the principal accountant for the audit of the Corporation’s annual financial statements and review of the financial statements included in our Quarterly Reports on Form 10-QSB and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
| Year Ended March 31, 2008 | Year Ended March 31, 2007 | |
| Audit Fees | $8,800 | $9,100 |
| Audit-Related Fees | $9,600 | $8,020 |
| Tax Fees | $NIL | $NIL |
| All Other Fees | $NIL | $NIL |
| Total | $18,400 | $17,120 |
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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
The following documents are filed as part of this report:
| (1) | Our financial statements are included in Part II, Item 8. | |
| (2) | All financial statement supporting schedules are omitted because the information is inapplicable or presented in the notes to our financial statements. |
| Exhibit | |
| Number | Description of Exhibits |
| 3.1 | Articles of Incorporation.(1) |
| 3.2 | Bylaws, as amended.(1) |
| 10.1 | Mineral Claim Purchase Agreement between Greenlite Ventures Inc. and Lorrie Ann Archibald dated April 30, 2002.(1) |
| 10.2 | Bill of Sale.(1) |
| 10.3 | Form of Convertible Note.(3) |
| 10.4 | Management Consulting Agreement with John Curtis.(4) |
| 10.5 | Management Consulting Agreement with Howard Thomson.(5) |
| 14.1 | Code of Ethics.(2) |
| 31.1 | |
| 32.1 |
| Notes: | |
| (1) | Filed as an exhibit to our registration statement on Form SB-2 originally filed with the SEC on March 9, 2004, as amended. |
| (2) | Filed as an exhibit to our Annual Report on Form 10-KSB filed with the SEC on June 29, 2006. |
| (3) | Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on December 5, 2006. |
| (4) | Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on November 9, 2007. |
| (5) | Filed as an exhibit to our Quarterly Report on Form 10-QSB filed with the SEC on February 19, 2008. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| GREENLITE VENTURES INC. | |
| By: | /s/ Howard Thomson |
| HOWARD THOMSON | |
| Chief Executive Officer, Chief Financial Officer , | |
| President, Secretary, Treasurer | |
| (Principal Executive Officer and Principal Accounting Officer) | |
| Date: | July 15, 2008 |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Howard Thomson |
| HOWARD THOMSON | |
| Chief Executive Officer, Chief Financial Officer , | |
| President, Secretary, Treasurer | |
| Director | |
| (Principal Executive Officer and Principal Accounting Officer) | |
| Date: | July 15, 2008 |
