SEC File No. __________
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 1-A
Dated: April 17, 2023
REGULATION A OFFERING CIRCULAR UNDER THE SECURITIES ACT OF 1933
Franklin Mining, Inc.
(Exact name of issuer as specified in its charter)
Nevada
(State of other jurisdiction of incorporation or organization)
215 W. Bandera Rd.
#114-459
Boerne, TX 78006
830-331-0031
(Address, including zip code, and telephone number,
including area code of issuer's principal executive office)
Jeff Turner
897 W Baxter Dr.
South Jordan, UT 84095
801-810-4465
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
1040 |
| 76-3142864 |
(Primary Standard Industrial |
| (I.R.S. Employer |
This Preliminary Offering Circular shall only be qualified upon order of the Commission, unless a subsequent amendment is filed indicating the intention to become qualified by operation of the terms of Regulation A.
This Offering Circular is following the Offering Circular format described in Part II (a)(1)(ii) of Form 1-A.
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PART II – PRELIMINARY OFFERING CIRCULAR - FORM 1-A: TIER I
An Offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the Offering statement filed with the Securities and Exchange Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Final Offering Circular or the Offering statement in which such Final Offering Circular was filed may be obtained.
PRELIMINARY OFFERING CIRCULAR
Dated: April 17, 2023
Subject to Completion
You are a natural person who has had individual income in excess
PURSUANT TO REGULATION A OF THE SECURITIES ACT OF 1933
FRANKLIN MINING, INC.
215 W. Bandera Rd.
Boerne, TX 78006
866-307-4810
195,000,000 Shares of Common Stock
at a price range of $0.005-$0.008 per Share
Minimum Investment: $250
Maximum Offering: $1,560,000
PLEASE REVIEW ALL RISK FACTORS ON PAGES 10 THROUGH PAGE 17 BEFORE MAKING AN INVESTMENT IN THIS COMPANY. AN INVESTMENT IN THIS COMPANY SHOULD ONLY BE MADE IF YOU ARE CAPABLE OF EVALUATING THE RISKS AND MERITS OF THIS INVESTMENT AND IF YOU HAVE SUFFICIENT RESOURCES TO BEAR THE ENTIRE LOSS OF YOUR INVESTMENT, SHOULD THAT OCCUR.
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM REGISTRATION.
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Because these securities are being offered on a "best efforts" basis, the following disclosures are hereby made:
| Price to Public | Commissions (1) | Proceeds to | Proceeds to |
Per Share | $0.005-$0.008 | $0 | $0.005-$0.008 | None |
Minimum Investment | $250.00 | $0 | $250.00 | None |
Maximum Offering | $1,560,000 | $0 | $1,560,000 | None |
(1) The Company shall pay no commissions to underwriters for the sale of securities under this Offering.
(2) Does not reflect payment of expenses of this Offering, which are estimated to not exceed $25,000.00 and which include, among other things, legal fees, accounting costs, reproduction expenses, due diligence, marketing, consulting, administrative services other costs of blue sky compliance, and actual out-of-pocket expenses incurred by the Company selling the Shares. This amount represents the proceeds of the offering to the Company, which will be used as set out in "USE OF PROCEEDS TO ISSUER."
(3) There are no finder's fees or other fees being paid to third parties from the proceeds. See 'PLAN OF DISTRIBUTION.'
This Offering (the "Offering") consists of Common Stock (“Shares" or individually, each a "Share") that is being offered on a "best efforts" basis, which means that there is no guarantee that any minimum amount will be sold. The Shares are being offered and sold by Franklin Mining, Inc., a Nevada Corporation (the "Company"). There are 195,000,000 Shares being offered at a price range of $0.005-$0.008 per Share with a minimum purchase of $250.00 per investor. We may waive the minimum purchase requirement on a case-by-case basis at our sole discretion. The Shares are being offered only by the Company on a best efforts basis to an unlimited number of accredited investors and to an unlimited number non-accredited investors subject to the limitations of Regulation A. Under Rule 251(d)(2)(i)(C) of Regulation of Regulation A+, non-accredited, non-natural investors are subject to the investment limitation and may only invest funds which do not exceed 10% of the greater of the purchaser’s revenue or net assets (as of the purchaser’s most recent fiscal year end). A non-accredited, natural person may only invest funds which do not exceed 10% of the greater of the purchaser’s annual income or net worth (please see below on how to calculate your net worth). The maximum aggregate amount of the Shares offered is 195,000,000 Shares of Common Stock ($1,560,000 at the maximum offering price). There is no minimum number of Shares that needs to be sold in order for funds to be released to the Company and for this Offering to close.
Our Common Stock is currently quoted on the Pink tier of the OTC Markets Group, Inc. under the symbol "FMNJ". On April 6, 2023, the last reported sale price of our common stock was $0.00659.
The Shares are being offered pursuant to Regulation A of Section 3(b) of the Securities Act of 1933, as amended, for Tier I offerings. The Shares will only be issued to purchasers who satisfy the requirements set forth in Regulation A. The offering is expected to expire on the first of: (i) all of the Shares offered are sold; or (ii) the close of business 365 days from the date of qualification by the Commission, unless sooner terminated or extended by the Company's CEO. Pending each closing, payments for the Shares will be paid directly to the Company. Funds will be immediately transferred to the Company where they will be available for use in the operations of the Company's business in a manner consistent with the "USE OF PROCEEDS TO ISSUER" in this Offering Circular.
THIS OFFERING CIRCULAR DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS CONCERNING THE COMPANY OTHER THAN THOSE CONTAINED IN THIS OFFERING CIRCULAR, AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON.
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS OFFERING CIRCULAR, OR OF ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE COMPANY OR ANY OF ITS EMPLOYEES, AGENTS OR AFFILIATES, AS INVESTMENT, LEGAL, FINANCIAL OR TAX ADVICE.
GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR
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GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV (WHICH IS NOT INCORPORATED BY REFERENCE INTO THIS OFFERING CIRCULAR).
This Offering is inherently risky. See “Risk Factors” beginning on page 10.
Sales of these securities will commence within three calendar days of the qualification date and the filing of a Form 253(g)(2) Offering Circular AND it will be a continuous Offering pursuant to Rule 251(d)(3)(i)(F).
The Company is following the “Offering Circular” format of disclosure under Regulation A.
AN OFFERING STATEMENT PURSUANT TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR QUALIFICATION UNDER THE LAWS OF SUCH STATE. THE COMPANY MAY ELECT TO SATISFY ITS OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN TWO BUSINESS DAYS AFTER THE COMPLETION OF THE COMPANY’S SALE TO YOU THAT CONTAINS THE URL WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.
NASAA UNIFORM LEGEND
FOR RESIDENTS OF ALL STATES: THE PRESENCE OF A LEGEND FOR ANY GIVEN STATE REFLECTS ONLY THAT A LEGEND MAY BE REQUIRED BY THAT STATE AND SHOULD NOT BE CONSTRUED TO MEAN AN OFFER OR SALE MAY BE MADE IN A PARTICULAR STATE. IF YOU ARE UNCERTAIN AS TO WHETHER OR NOT OFFERS OR SALES MAY BE LAWFULLY MADE IN ANY GIVEN STATE, YOU ARE HEREBY ADVISED TO CONTACT THE COMPANY. THE SECURITIES DESCRIBED IN THIS OFFERING CIRCULAR HAVE NOT BEEN REGISTERED UNDER ANY STATE SECURITIES LAWS (COMMONLY CALLED 'BLUE SKY' LAWS).
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
IF THE PURCHASER LIVES OUTSIDE THE UNITED STATES, IT IS THE PURCHASER'S RESPONSIBILITY TO FULLY OBSERVE THE LAWS OF ANY RELEVANT TERRITORY OR JURISDICTION OUTSIDE THE UNITED STATES IN CONNECTION WITH ANY PURCHASE OF THE SECURITIES, INCLUDING OBTAINING REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER REQUIRED LEGAL OR OTHER FORMALITIES. THE COMPANY RESERVES THE RIGHT TO DENY THE PURCHASE OF THE SECURITIES BY ANY FOREIGN PURCHASER.
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PATRIOT ACT RIDER
The Investor hereby represents and warrants that Investor is not, nor is it acting as an agent, representative, intermediary or nominee for, a person identified on the list of blocked persons maintained by the Office of Foreign Assets Control, U.S. Department of Treasury. In addition, the Investor has complied with all applicable U.S. laws, regulations, directives, and executive orders relating to anti-money laundering , including but not limited to the following laws: (1) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, and (2) Executive Order 13224 (Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) of September 23, 2001.
NO DISQUALIFICATION EVENT (“BAD BOY” DECLARATION)
NONE OF THE COMPANY, ANY OF ITS PREDECESSORS, ANY AFFILIATED ISSUER, ANY DIRECTOR, EXECUTIVE OFFICER, OTHER OFFICER OF THE COMPANY PARTICIPATING IN THE OFFERING CONTEMPLATED HEREBY, ANY BENEFICIAL OWNER OF 20% OR MORE OF THE COMPANY'S OUTSTANDING VOTING EQUITY SECURITIES, CALCULATED ON THE BASIS OF VOTING POWER, NOR ANY PROMOTER (AS THAT TERM IS DEFINED IN RULE 405 UNDER THE SECURITIES ACT OF 1933) CONNECTED WITH THE COMPANY IN ANY CAPACITY AT THE TIME OF SALE (EACH, AN “ISSUER COVERED PERSON”) IS SUBJECT TO ANY OF THE “BAD ACTOR” DISQUALIFICATIONS DESCRIBED IN RULE 506(D)(1)(I) TO (VIII) UNDER THE SECURITIES ACT OF 1933 (A “DISQUALIFICATION EVENT”), EXCEPT FOR A DISQUALIFICATION EVENT COVERED BY RULE 506(D)(2) OR (D)(3) UNDER THE SECURITIES ACT. THE COMPANY HAS EXERCISED REASONABLE CARE TO DETERMINE WHETHER ANY ISSUER COVERED PERSON IS SUBJECT TO A DISQUALIFICATION EVENT.
Continuous Offering
Under Rule 251(d)(3) to Regulation A, the following types of continuous or delayed Offerings are permitted, among others: (1) securities offered or sold by or on behalf of a person other than the issuer or its subsidiary or a person of which the issuer is a subsidiary; (2) securities issued upon conversion of other outstanding securities; or (3) securities that are part of an Offering which commences within two calendar days after the qualification date. These may be offered on a continuous basis and may continue to be offered for a period in excess of 30 days from the date of initial qualification. They may be offered in an amount that, at the time the Offering statement is qualified, is reasonably expected to be offered and sold within one year from the initial qualification date. No securities will be offered or sold “at the market.” The supplement will not, in the aggregate, represent any change from the maximum aggregate Offering price calculable using the information in the qualified Offering statement. This information will be filed no later than two business days following the earlier of the date of determination of such pricing information or the date of first use of the Offering circular after qualification.
Sale of these shares will commence within three calendar days of the qualification date and it will be a continuous Offering pursuant to Rule 251(d)(3)(i)(F).
Subscriptions are irrevocable and the purchase price is non-refundable as expressly stated in this Offering Circular. The Company, by determination of the Board of Directors, in its sole discretion, may issue the Securities under this Offering for cash, promissory notes, services, and/or other consideration without notice to subscribers. All proceeds received by the Company from subscribers for this Offering will be available for use by the Company upon acceptance of subscriptions for the Securities by the Company.
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Forward Looking Statement Disclosure
This Form 1-A, Offering Circular, and any documents incorporated by reference herein or therein contain forward-looking statements and are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this Form 1-A, Offering Circular, and any documents incorporated by reference are forward-looking statements. Forward-looking statements give the Company's current reasonable expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as 'anticipate,' 'estimate,' 'expect,' 'project,' 'plan,' 'intend,' 'believe,' 'may,' 'should,' 'can have,' 'likely' and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. The forward-looking statements contained in this Form 1-A, Offering Circular, and any documents incorporated by reference herein or therein are based on reasonable assumptions the Company has made in light of its industry experience, perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. As you read and consider this Form 1-A, Offering Circular, and any documents incorporated by reference, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (many of which are beyond the Company's control) and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect its actual operating and financial performance and cause its performance to differ materially from the performance anticipated in the forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect or change, the Company's actual operating and financial performance may vary in material respects from the performance projected in these forward- looking statements. Any forward-looking statement made by the Company in this Form 1-A, Offering Circular or any documents incorporated by reference herein speaks only as of the date of this Form 1-A, Offering Circular or any documents incorporated by reference herein. Factors or events that could cause our actual operating and financial performance to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
About This Form 1-A and Offering Circular
In making an investment decision, you should rely only on the information contained in this Form 1-A and Offering Circular. The Company has not authorized anyone to provide you with information different from that contained in this Form 1-A and Offering Circular. We are offering to sell, and seeking offers to buy the Shares only in jurisdictions where offers and sales are permitted. You should assume that the information contained in this Form 1-A and Offering Circular is accurate only as of the date of this Form 1-A and Offering Circular, regardless of the time of delivery of this Form 1-A and Offering Circular. Our business, financial condition, results of operations, and prospects may have changed since that date. The statements contained herein as to the content of any agreements or other documents are summaries and, therefore, are necessarily selective and incomplete and are qualified in their entirety by the actual agreements or other documents.
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TABLE OF CONTENTS
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS |
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OFFERING CIRCULAR SUMMARY, PERKS AND RISK FACTORS
The following summary is qualified in its entirety by the more detailed information appearing elsewhere in this Offering Circular and/or incorporated by reference in this Offering Circular. For full offering details, please (1) thoroughly review this Form 1-A filed with the Securities and Exchange Commission (2) thoroughly review this Offering Circular and (3) thoroughly review any attached documents to or documents referenced in, this Form 1-A and Offering Circular.
Business Overview
Franklin Mining, Inc., was incorporated in December 1976 under the laws of the State of Delaware under the name WCM Capital, Inc. Its purpose was to engage in the exploration and exploitation of precious and non- ferrous metals, including gold, silver, lead, copper and zinc. WCM Capital, Inc, unable to generate significant revenues, officially ceased operations and later re-entered the exploration stage as Franklin Resources, Inc. on October 14, 2003, under the laws of the State of Nevada. The Company’s current name, Franklin Mining, Inc, was adopted by Corporate Resolution dated January 3, 2004, and Certificate of Amendment filed with the Nevada Secretary of State on February 3, 2004. Historically, the Company's principal business involved conducted mining operations, and the Company owned interests in a number of previous ferrous and non-ferrous metal properties and conducted mining operations on those properties. We no longer own interests in any property and have ceased traditional mining operations. We are currently seeking to implement a new business model under the concept of "Royalty Mining".
We seek contracts with preexisting mines to either start or potentiate a mining operation within their concessional mining area under a Services Agreement, Entrepreneurial Association, Joint Venture Agreement, or Partial Acquisition. We also possess advanced machinery that can clean up tailings of prior mining operations and extract mineral values that previous processes were unable to capture. For a further description of our business and plan of operations, see the section entitled "Description of Business" beginning on page 21.
Issuer: | Franklin Mining, Inc. |
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Type of Stock Offering: | Common Stock |
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Price Per Share: | $0.005-$0.008 |
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Minimum Investment: | $250.00. We may waive the minimum purchase requirement on a case-by-case basis in our sole discretion. |
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Maximum Offering: | $1,560,000. The Company will not accept investments greater than the Maximum Offering amount. |
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Maximum Shares Offered: | 195,000,000 Shares of Common Stock |
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Investment Amount Restrictions: | Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(c) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov. |
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Method of Subscription: | After the qualification by the SEC of the Offering Statement of which this Offering Circular is a part, investors can subscribe to purchase the Shares by completing the Subscription Agreement and sending payment by check, wire transfer, or ACH. Upon the approval of any subscription, the Company shall immediately deposit said proceeds into the bank account of the Company and may dispose of the proceeds in accordance with the Use of Proceeds. Subscriptions are irrevocable and the purchase price is non-refundable. |
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Use of Proceeds: | See the description in section entitled "USE OF PROCEEDS TO ISSUER" on page 20 |
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Voting Rights: | The Shares have full voting rights. |
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Trading Symbols: | Our common stock is directly quoted on the OTC Pink tier of the OTC Markets Group, Inc. under the symbol "FMNJ." |
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Transfer Agent and Registrar | Olde Monmouth Stock Transfer Co., Inc. is our transfer agent and registrar in connection with the Offering. |
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Length of Offering: | Shares will be offered on a continuous basis until either (1) the maximum number of Shares or sold; (2) 365 days from the date of qualification by the Commission, or (3) the Company in its sole discretion withdraws this |
Common Stock Outstanding as of the date of this Offering Circular (1) | 1,792,547,454 Shares |
Common Stock in this Offering | 195,000,000 Shares |
Stock to be outstanding after the offering (2) | 1,987,547,454 Shares |
(1)The Company has also authorized 10,000,000 shares of Preferred Stock, of which 10,000,000 are issued and outstanding. No Preferred Stock is being sold in this Offering.
(2)The total number of Shares of Common Stock assumes that the maximum number of Shares are sold in this Offering. The Company may not be able to sell the Maximum Offering Amount. The Company will conduct one or more closings on a rolling basis as funds are received from investors.
There is no assurance Franklin Mining, Inc. will be profitable, or that management's opinion of the Company's future prospects will not be outweighed by the unanticipated losses, adverse regulatory developments and other risks. Investors should carefully consider the various risk factors below before investing in the Shares.
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The purchase of the Company's Common Stock involves substantial risks. You should carefully consider the following risk factors in addition to any other risks associated with this investment. The Shares offered by the Company constitute a highly speculative investment and you should be in an economic position to lose your entire investment. The risks listed do not necessarily comprise all those associated with an investment in the Shares and are not set out in any particular order of priority. Additional risks and uncertainties may also have an adverse effect on the Company's business and your investment in the Shares. An investment in the Company may not be suitable for all recipients of this Offering Circular. You are advised to consult an independent professional adviser or attorney who specializes in investments of this kind before making any decision to invest. You should consider carefully whether an investment in the Company is suitable in the light of your personal circumstances and the financial resources available to you.
The discussions and information in this Offering Circular may contain both historical and forward- looking statements. To the extent that the Offering Circular contains forward-looking statements regarding the financial condition, operating results, business prospects, or any other aspect of the Company's business, please be advised that the Company's actual financial condition, operating results, and business performance may differ materially from that projected or estimated by the Company in forward-looking statements. The Company has attempted to identify, in context, certain of the factors it currently believes may cause actual future experience and results may differ from the Company's current expectations.
Before investing, you should carefully read and carefully consider the following risk factors:
Risks Relating to the Company and Its Business
The Company has had limited operations.
We have had limited operations and sustained consistent losses. There can be no assurance that the Company's proposed plan of business can be realized in the manner contemplated and, if it cannot be, shareholders may lose all or a substantial part of their investment. There is no guarantee that it will ever realize any significant operating revenues or that its operations will ever be profitable.
The Company is dependent upon its management, key personnel, and consultants to execute its business plan.
The Company's success is heavily dependent upon the continued active participation of the Company's current executive officer, William A. Petty. The loss of this individual could have a material adverse effect upon the Company's business, financial condition, or results of operations. Further, the Company's success and achievement of the Company's growth plans depend on the Company's ability to recruit, hire, train and retain other highly qualified technical and managerial personnel. Competition for qualified employees among companies in the fintech sector, and the loss of any of such persons, or an inability to attract, retain and motivate any additional highly skilled employees required for the expansion of the Company's activities, could have a materially adverse effect on its ability to operate. The inability to attract and retain the necessary personnel, consultants and advisors could have a material adverse effect on the Company's business, financial condition, or results of operations.
Although dependent upon certain key personnel, the Company does not have any key man life insurance policies on any such people.
The Company is dependent upon management in order to conduct its operations and execute its business plan. However, the Company has not purchased any insurance policies with respect to those individuals in the event of their death or disability. Therefore, should any of these key personnel, management, or founders die or become disabled, the Company will not receive any compensation that would assist with such person's absence. The loss of such person could negatively affect the Company and its operations.
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Significant judgment is required in determining our provision for income taxes and other tax liabilities. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although the Company believes that our tax estimates will be reasonable: (i) there is no assurance that the final determination of tax audits or tax disputes will not be different from what is reflected in our income tax provisions, expense amounts for non-income based taxes and accruals and (ii) any material differences could have an adverse effect on our financial position and results of operations in the period or periods for which a determination is made.
The Company is not subject to Sarbanes-Oxley regulations and lacks the financial controls and safeguards required of public companies.
The Company does not have the internal infrastructure necessary, and is not required, to complete an attestation about our financial controls that would be required under Section 404 of the Sarbanes-Oxley Act of 2002. There can be no assurances that there are no significant deficiencies or material weaknesses in the quality of our financial controls. The Company expects to incur additional expenses and diversion of management's time if and when it becomes necessary to perform the system and process evaluation, testing and remediation required to comply with the management certification and auditor attestation requirements.
The Company's bank accounts will not be fully insured.
The Company's regular bank accounts have federal insurance that is limited to a certain amount of coverage. It is anticipated that the account balances in each account may exceed those limits at times. In the event that any of the Company's banks should fail, the Company may not be able to recover all amounts deposited in these bank accounts.
Our success will depend on our ability to obtain and maintain meaningful intellectual property protection for any such intellectual property. The names and/or logos of Company brands (whether owned by the Company or licensed to us) may be challenged by holders of trademarks who file opposition notices, or otherwise contest trademark applications by the Company for its brands. Similarly, domains owned and used by the Company may be challenged by others who contest the ability of the Company to use the domain name or URL. Such challenges could have a material adverse effect on the Company's financial results as well as your investment.
Changes in the economy could have a detrimental impact on the Company.
Changes in the general economic climate could have a detrimental impact on consumer expenditure and, therefore, on the Company's revenue. It is possible that recessionary pressures and other economic factors (such as declining incomes, future potential rising interest rates, higher unemployment and tax increases) may adversely affect customers' confidence and willingness to spend. Any such events or occurrences could have a material adverse effect on the Company's financial results and on your investment.
In order to achieve the Company's near and long-term goals, the Company will need to procure funds in addition to the amount raised in the Offering. There is no guarantee the Company will be able to raise such funds on acceptable terms, if at all. If we are not able to raise sufficient capital in the future, we will not be able to execute our business plan, our continued operations will be in jeopardy and we may be forced to cease operations and sell or otherwise transfer all or substantially all of our remaining assets, which could cause you to lose all or a portion of your investment.
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Additional financing may be necessary for the implementation of our growth strategy.
The Company may require additional debt and/or equity financing to pursue our growth and business strategies. These include, but are not limited to enhancing our operating infrastructure and otherwise respond to competitive pressures. Given our limited operating history and existing losses, there can be no assurance that additional financing will be available, or, if available, that the terms will be acceptable to us. Lack of additional funding could force us to substantially curtail our growth plans. Furthermore, the issuance by us of any additional securities pursuant to any future fundraising activities undertaken by us would dilute the ownership of existing shareholders and may reduce the price of our Shares.
Our operating plan relies in large part on assumptions and analysis developed by the Company. If these assumptions prove to be incorrect, the Company’s actual operating results may be materially different from our forecasted results.
Whether actual operating results and business developments will be consistent with the Company's expectations and assumptions as reflected in its forecast depends on a number of factors, many of which are outside the Company's control, including, but not limited to:
·whether the Company can obtain sufficient capital to sustain and grow its business
·our ability to manage the Company's growth
·demand for the Company's products and services
·the timing and costs of new and existing marketing and promotional efforts
·the Company's ability to retain existing key management, to integrate recent hires and to attract, retain and motivate qualified personnel
·the overall strength and stability of domestic and international economies
·consumer spending habits
Unfavorable changes in any of these or other factors, most of which are beyond the Company's control, could materially and adversely affect its business, results of operations and financial condition.
To date, the Company has not been profitable and may not be profitable in the foreseeable future. The Company cannot accurately predict when it might become profitable.
The Company has not been profitable and may not be able to generate significant revenues in the future. In addition, the Company expects to incur substantial operating expenses in order to fund the expansion of the Company's business. As a result, the Company expects to continue to experience substantial negative cash flow in the foreseeable future and cannot predict when, or even if, the Company might become profitable.
The Company may be unable to manage its growth or implement its strategy.
The Company may not be able to expand its product and service offerings, markets, or implement the other features of the Company's business strategy at the rate or to the extent presently planned. Rapid, significant growth will place a strain on the Company's administrative, operational, and financial resources. If the Company is unable to successfully manage its future growth, establish and continue to upgrade its operating and financial control systems, recruit and hire necessary personnel, or effectively manage unexpected expansion difficulties, the Company's financial condition and results of operations could be materially and adversely affected.
The Company's business model is evolving.
The Company's business model is unproven and is likely to continue to evolve. Accordingly, the Company's initial business model may not be successful and may need to be changed. The Company's ability to generate significant revenues will depend, in large part, on the Company's ability to successfully market its products to potential users who may not be convinced of the need for the Company's products and services or who may be reluctant to rely upon third parties to develop and provide these products. The Company intends to continue to develop its business model as the Company's market continues to evolve.
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The Company faces competition from companies of varying sizes, some of which have greater access to financial resources, research and development, and other resources.
Limitation on director liability.
The Company may provide for the indemnification of directors to the fullest extent permitted by law and, to the extent permitted by such law, eliminate or limit the personal liability of directors to the Company and its shareholders for monetary damages for certain breaches of fiduciary duty. Such indemnification may be available for liabilities arising in connection with this Offering. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Unfavorable global economic, business or political conditions could adversely affect our business, financial condition or results of operations.
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including conditions that are outside of our control, including the impact of health and safety concerns, such as those relating to the current COVID-19 outbreak. The most recent global financial crisis caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to our business, including weakening our ability to raise additional capital when needed on acceptable terms, if at all. Any of the foregoing could harm our business and we cannot anticipate all the ways in which the current economic climate and financial market conditions could adversely impact our business.
To date, the COVID-19 outbreak has not had a material adverse impact on our operations. However, the future impact of the COVID-19 outbreak is highly uncertain, cannot be predicted and there is no assurance that the COVID-19 outbreak will not have a material adverse impact on the future results of the Company. The extent of the impact, if any, will depend on future developments, including actions taken to contain the coronavirus.
Risks Related to our Business Plan
Fluctuating gold and mineral prices could negatively impact our business plan.
The potential for profitability of our gold and mineral mining operations and the value of any mining properties we may acquire will be directly related to the market price of gold and minerals that we mine. Historically, gold and other mineral prices have widely fluctuated, and are influenced by a wide variety of factors, including inflation, currency fluctuations, regional and global demand, and political and economic conditions. Fluctuations in the price of gold and other minerals that we mine may have a significant influence on the market price of our common stock and a prolonged decline in these prices will have a negative effect on our results of operations and financial condition.
Foreign operations involve numerous risks associated with fluctuating exchange rates and other financial risks.
We anticipate being involved in foreign mining operations in the future. Foreign operations involve numerous risks associated with fluctuating exchange rates and with increasing taxes and fees associated with importing of necessary goods, equipment and services not adequately found in country and with exporting of finished ore..
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Our future operations and past mining activities of others are subject to environmental risks, which could expose us to significant liability and delay, suspension or termination of our operations.
Mining exploration and exploitation activities are subject to federal, state and local laws, regulations and policies, including laws regulating the removal of natural resources from the ground and the discharge of materials into the environment. These regulations mandate, among other things, the maintenance of air and water quality standards and land reclamation. They also set forth limitations on the generation, transportation, storage and disposal of solid and hazardous waste. Exploration and exploitation activities are also subject to federal, state and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of exploration methods and equipment.
Environmental and other legal standards imposed by federal, state or local authorities are constantly evolving, and typically in a manner which will require stricter standards and enforcement, and increased fines and penalties for non-compliance. Such changes may prevent us from conducting planned activities or increase our costs of doing so, which would have material adverse effects on our business. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages that we may not be able to or elect not to insure against due to prohibitive premium costs and other reasons. Unknown environmental hazards may exist on properties we may operate in the future that have unknown environmental issues caused by previous owners or operators, or that may have occurred naturally.
Mineral deposit estimates are imprecise and subject to error.
Mineral deposit estimation calculations may prove unreliable. Assumptions made regarding the supporting data may prove inaccurate and unforeseen events may lead to further inaccuracies. Sample variability, mining and processing adjustments, environmental changes, metal price fluctuations, and law and regulation changes are all factors that could lead to deviances from any original estimations.
Our business plan is heavily dependent on the successful operation of our machinery.
We plan to collect revenues from the operation of advanced machinery that will clean up tailings left behind by previous mining operations and extract gold and other minerals that previous processes were unable to capture. If such machinery were to fail, we may not have sufficient capital resources to repair or replace the machinery and may be unable to compensate for the subsequent loss of revenue.
Risks Relating to This Offering and Investment
The Company may undertake additional equity or debt financing that may dilute the Shares in this Offering.
The Company may undertake further equity or debt financing, which may be dilutive to existing shareholders, including you, or result in an issuance of securities whose rights, preferences and privileges are senior to those of existing shareholders, including you, and also reducing the value of Shares subscribed for under this Offering.
An investment in the Shares is speculative and there can be no assurance of any return on such an investment.
An investment in the Company's Shares is speculative, and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment.
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The Shares are offered on a “best efforts” basis and the Company may not raise the maximum amount being offered.
Since the Company is offering the Shares on a "best efforts" basis, there is no assurance that the Company will sell enough Shares to meet its capital needs. If you purchase Shares in this Offering, you will do so without any assurance that the Company will raise enough money to satisfy the full Use Of Proceeds To Issuer which the Company has outlined in this Offering Circular or to meet the Company's working capital needs. If the maximum Offering amount is not sold, we may need to incur additional debt or raise additional equity in order to finance our operations. Increasing the amount of debt will increase our debt service obligations and make less cash available for distribution to our shareholders. Increasing the amount of additional equity that we will have to seek in the future will further dilute those investors participating in this Offering.
We have never paid cash dividends on our Shares and do not anticipate paying cash dividends in the future. Since we do not pay dividends, our Shares may be less valuable because a return on your investment will only occur if the market value of the Shares appreciates beyond your purchase price. While the Company may choose to pay dividends at some point in the future to its shareholders, there can be no assurance that cash flow and profits will allow such distributions to ever be made.
The Company may not be able to obtain additional financing.
Even if the Company is successful in selling the maximum number of Shares in the Offering, the Company may require additional funds to continue and grow its business. The Company may not be able to obtain additional financing as needed, on acceptable terms, or at all, which would force the Company to delay its plans for growth and implementation of its strategy which could seriously harm its business, financial condition, and results of operations. If the Company needs additional funds, the Company may seek to obtain them primarily through additional equity or debt financing. Those additional financings could result in dilution to the Company's current shareholders and to you if you invest in this Offering.
The offering price has been arbitrarily determined.
The offering price of the Shares has been arbitrarily established by the Company based upon its present and anticipated financing needs and bears no relationship to the Company's present financial condition, assets, book value, projected earnings, or any other generally accepted valuation criteria. The offering price of the Shares may not be indicative of the value of the Shares or the Company, now or in the future.
The management of the Company has broad discretion in the application and use of Offering proceeds.
The management of the Company has broad discretion to adjust the application and allocation of the net proceeds of this Offering in order to address changed circumstances and opportunities. As such, the success of the Company will be substantially dependent upon the discretion and judgment of the management of the Company with respect to the application and allocation of the net proceeds of the Offering.
An investment in the Company Shares could result in a loss of your entire investment.
An investment in this Offering involves a high degree of risk and you should not purchase the Shares if you cannot afford the loss of your entire investment. You may not be able to liquidate your investment for any reason in the near future.
Sales of a substantial number of shares of our Common Stock may cause the price of our Common Stock to decline.
If our shareholders sell substantial amounts of our Shares in the public market, Shares sold may cause the price to decrease below the current offering price. These sales may also make it more difficult for us to sell equity or equity-related securities at a time and price that we deem reasonable or appropriate.
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The Shares in this Offering have no protective provisions.
The Shares in this Offering have no protective provisions. As such, you will not be afforded protection by any provision of the Shares or as a Shareholder in the event of a transaction that may adversely affect you, including a reorganization, restructuring, merger or other similar transaction involving the Company. If there is a 'liquidation event' or 'change of control' the Shares being offered do not provide you with any protection. In addition, there are no provisions attached to the Shares in the Offering that would permit you to require the Company to repurchase the Shares in the event of a takeover, recapitalization, or similar transaction.
You will not have a significant influence on the management of the Company.
Substantially all decisions with respect to the management of the Company will be made exclusively by the officers, directors, managers or employees of the Company. You will have a very limited ability, if at all, to vote on issues of Company management and will not have the right or power to take part in the management of the Company and will not be represented on the board of directors or by managers of the Company. Accordingly, no person should purchase Shares unless he or she is willing to entrust all aspects of management to the Company.
No guarantee of return on investment.
There is no assurance that you will realize a return on your investment or that you will not lose your entire investment. For this reason, you should read this Form 1-A, Offering Circular, and all exhibits and referenced materials carefully and should consult with your own attorney and business advisor prior to making any investment decision.
Our subscription agreement identifies the State of Nevada for purposes of governing law.
These provisions may discourage shareholder lawsuits or limit shareholders’ ability to obtain a favorable judicial forum dispute with the company and its directors, officers or other employees.
IN ADDITION TO THE RISKS LISTED ABOVE, BUSINESSES ARE OFTEN SUBJECT TO RISKS NOT FORESEEN OR FULLY APPRECIATED BY THE MANAGEMENT. IT IS NOT POSSIBLE TO FORESEE ALL THE RISKS THAT MAY AFFECT THE COMPANY. MOREOVER, THE COMPANY CANNOT PREDICT WHETHER THE COMPANY WILL SUCCESSFULLY EFFECTUATE THE COMPANY'S CURRENT BUSINESS PLAN. EACH PROSPECTIVE PURCHASER IS ENCOURAGED TO CAREFULLY ANALYZE THE RISKS AND MERITS OF AN INVESTMENT IN THE SECURITIES AND SHOULD TAKE INTO CONSIDERATION WHEN MAKING SUCH ANALYSIS, AMONG OTHER FACTORS, THE RISK FACTORS DISCUSSED ABOVE.
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DETERMINATION OF OFFERING PRICE
This Offering is a self-underwritten offering, which means that it does not involve the participation of an underwriter to the market. The Offering Price has been arbitrarily determined and is not meant to reflect a valuation of the Company.
The term 'dilution' refers to the reduction (as a percentage of the aggregate Shares outstanding) that occurs for any given share of stock when additional Shares are issued. If all of the Shares in this Offering are fully subscribed and sold, the Shares offered herein will constitute approximately 9.81% of the total Shares of stock of the Company. The Company anticipates that subsequent to this Offering the Company may require additional capital and such capital may take the form of Common Stock, other stock or securities or debt convertible into stock. Such future fundraising will further dilute the percentage ownership of the Shares sold herein in the Company.
If you purchase shares in this Offering, your ownership interest in our Common Stock will be diluted immediately, to the extent of the difference between the price to the public charged for each share in this Offering and the net tangible book value per share of our Common Stock after this Offering.
Our historical net tangible book value as of December 31, 2022, was $840,374. Historical net tangible book value equals the amount of our total tangible assets, less total liabilities, as of the date specified.
The following table illustrates the per share dilution to new investors discussed above, assuming the sale of, respectively, 100%, 75%, 50% and 25% of the Shares offered for sale in this Offering (before deducting our estimated offering expenses of $25,000):
Funding Level | 100% | 75% | 50% | 25% |
Gross Proceeds | $1,560,000 | $1,170,000 | $780,000 | $390,000 |
Offering Price | $0.0080 | $0.0080 | $0.0080 | $0.0080 |
Net Tangible Book Value per Share of Common Stock before this Offering | $0.000469 | $0.000469 | $0.000469 | $0.000469 |
Increase in Net Tangible Book Value per Share Attributable to New Investors in this Offering | $0.000739 | $0.000568 | $0.000389 | $0.000199 |
Net Tangible Book Value per Share of Common Stock after this Offering | $0.001208 | $0.001037 | $0.000857 | $0.000668 |
Dilution per share to Investors in the Offering | $(0.006792) | $(0.006963) | $(0.007143) | $(0.007332) |
There is no material disparity between the price of the Shares in this Offering and the effective cash cost to officers, directors, promoters and affiliated persons for shares acquired by them in a transaction during the past year, or that they have a right to acquire.
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After the Offering Statement has been qualified by the Securities and Exchange Commission (the "SEC"), the Company will accept tenders of funds to purchase the Shares. No escrow agent is involved, and the Company will receive the proceeds directly from any subscription. You will be required to complete a subscription agreement in order to invest.
All subscription agreements and checks received by the Company for the purchase of shares are irrevocable until accepted or rejected by the Company and should be delivered to the Company as provided in the subscription agreement. A subscription agreement executed by a subscriber is not binding on the Company until it is accepted on our behalf by the Company’s Chief Executive Officer or by specific resolution of our board of directors. Any subscription not accepted within 30 days will be automatically deemed rejected. Once accepted, the Company will deliver a stock certificate to a purchaser within five days from request by the purchaser; otherwise, purchasers’ shares will be noted and held on the book records of the Company.
At this time no broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority ("FINRA"), is being engaged as an underwriter or for any other purpose in connection with this Offering. This Offering will commence on the qualification of this Offering Circular, as determined by the Securities and Exchange Commission and continue for a period of 365 days. The Company may extend the Offering for an additional time period unless the Offering is completed or otherwise terminated by us, or unless we are required to terminate by application of Regulation A of the JOBS Act. Funds received from investors will be counted towards the Offering only if the form of payment, such as a check or wire transfer, clears the banking system and represents immediately available funds held by us prior to the termination of the subscription period, or prior to the termination of the extended subscription period if extended by the Company.
If you decide to subscribe for any Common Stock in this Offering, you must deliver funds for acceptance or rejection. The minimum investment amount for a single investor is the principal amount of $250, equal to 1,000 Shares of Common Stock at the maximum offering price. All subscription checks should be sent to the following address:
Franklin Mining, Inc.
215 W. Bandera Rd.
#114-459
Boerne, TX 78006
In such case, subscription checks should be made payable to Franklin Mining, Inc. If a subscription is rejected, all funds will be returned to subscribers within ten days of such rejection without deduction or interest. Upon acceptance by the Company of a subscription, a confirmation of such acceptance will be sent to the investor. The Company maintains the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. The Company maintains the right to accept subscriptions below the minimum investment amount or minimum per share investment amount in its discretion. All monies from rejected subscriptions will be returned by the Company to the investor, without interest or deductions.
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This is an offering made under "Tier I" of Regulation A, and the shares will not be listed on a registered national securities exchange upon qualification. Therefore, the shares will be sold only to a person if the aggregate purchase price paid by such person is no more than 10% of the greater of such person's annual income or net worth, not including the value of his primary residence, as calculated under Rule 501 of Regulation D promulgated under Section 4(a)(2) of the Securities Act of 1933, as amended. In the case of sales to fiduciary accounts (Keogh Plans, Individual Retirement Accounts (IRAs) and Qualified Pension/Profit Sharing Plans or Trusts), the above suitability standards must be met by the fiduciary account, the beneficiary of the fiduciary account, or by the donor who directly or indirectly supplies the funds for the purchase of the shares. Investor suitability standards in certain states may be higher than those described in this Form 1-A and/or Offering Circular. These standards represent minimum suitability requirements for prospective investors, and the satisfaction of such standards does not necessarily mean that an investment in the Company is suitable for such persons. Different rules apply to accredited investors.
The shares may not be offered, sold, transferred, or delivered, directly or indirectly, to any person who (i) is named on the list of "specially designated nationals" or "blocked persons" maintained by the U.S. Office of Foreign Assets Control ("OFAC") at www.ustreas.gov/offices/enforcement/ofac/sdn or as otherwise published from time to time, (ii) an agency of the government of a Sanctioned Country, (iii) an organization controlled by a Sanctioned Country, or (iv) is a person residing in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC. A "Sanctioned Country" means a country subject to a sanctions program identified on the list maintained by OFAC and available at www.ustreas.gov/offices/enforcement/ofac/sdn or as otherwise published from time to time. Furthermore, the shares may not be offered, sold, transferred, or delivered, directly or indirectly, to any person who (i) has more than fifteen percent (15%) of its assets in Sanctioned Countries or (ii) derives more than fifteen percent (15%) of its operating income from investments in, or transactions with, sanctioned persons or Sanctioned Countries.
The sale of other securities of the same class as those to be offered for the period of distribution will be limited and restricted to those sold through this Offering. Because the Shares being sold are not publicly or otherwise traded, the market for the securities offered is presently stabilized.
OTC Markets Considerations
The OTC Markets is separate and distinct from the New York Stock Exchange and Nasdaq Stock Market or other national exchanges. Neither the New York Stock Exchange nor Nasdaq has a business relationship with issuers of securities quoted on the OTC Markets. The SEC’s order handling rules, which apply to New York Stock Exchange and Nasdaq-listed securities, do not apply to securities quoted on the OTC Markets.
Although other national stock markets have rigorous listing standards to ensure the high quality of their issuers and can delist issuers for not meeting those standards; the OTC Markets has no listing standards. Rather, it is the market maker who chooses to quote a security on the system, files the application, and is obligated to comply with keeping information about the issuer in its files.
Investors may have greater difficulty in getting orders filled than if we were on Nasdaq or other exchanges. Trading activity in general is not conducted as efficiently and effectively on OTC Markets as with exchange-listed securities. Also, because OTC Markets stocks are usually not followed by analysts, there may be lower trading volume than New York Stock Exchange and Nasdaq-listed securities.
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The Use of Proceeds is an estimate based on the Company's current business plan. We may find it necessary or advisable to reallocate portions of the net proceeds reserved for one category to another, or to add additional categories, and we will have broad discretion in doing so.
The maximum gross proceeds from the sale of the Shares in this Offering are $1,560,000. The net proceeds from the offering, assuming it is fully subscribed, are expected to be approximately $1,535,000 after the payment of offering costs such as printing, mailing, marketing, legal and accounting costs, and other compliance and professional fees that may be incurred. The estimate of the budget for offering costs is an estimate only and the actual offering costs may differ from those expected by management.
The management of the Company has wide latitude and discretion in the use of proceeds from this Offering. Ultimately, the management of the Company intends to use substantially all of the net proceeds for general working capital, repayment of outstanding debt obligations, and acquisitions. At present, management's best estimate of the use of proceeds, at various funding milestones, is set out in the chart below. However, potential investors should note that this chart contains only the best estimates of the Company's management based upon information available to them at the present time, and that the actual use of proceeds is likely to vary from this chart based upon circumstances as they exist in the future, various needs of the Company at different times in the future, and the discretion of the Company's management at all times.
A portion of the proceeds from this Offering may be used to compensate or otherwise make payments to officers or directors of the issuer. The officers and directors of the Company may be paid salaries and receive benefits that are commensurate with similar companies, and a portion of the proceeds may be used to pay these ongoing business expenses.
USE OF PROCEEDS
Assuming $0.008 Offering Price (Max) |
| 10% |
| 25% |
| 50% |
| 75% |
| 100% | |||||
Working Capital |
| $ | 156,000 |
|
| 390,000 |
|
| 780,000 |
|
| 1,170,000 |
|
| 1,560,000 |
Total |
| $ | 156,000 |
|
| 390,000 |
|
| 780,000 |
|
| 1,170,000 |
|
| 1,560,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assuming $0.0065 Offering Price (Mid) |
| 10% |
| 25% |
| 50% |
| 75% |
| 100% | |||||
Working Capital |
| $ | 126,750 |
|
| 316,875 |
|
| 633,750 |
|
| 950,625 |
|
| 1,267,500 |
Total |
| $ | 126,750 |
|
| 316,875 |
|
| 633,750 |
|
| 950,625 |
|
| 1,267,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assuming $0.005 Offering Price (Min) |
| 10% |
| 25% |
| 50% |
| 75% |
| 100% | |||||
Working Capital |
| $ | 97,500 |
|
| 243,750 |
|
| 487,500 |
|
| 731,250 |
|
| 975,000 |
Total |
| $ | 97,500 |
|
| 243,750 |
|
| 487,500 |
|
| 731,250 |
|
| 975,000 |
As indicated in the table above, if we sell only 75%, or 50%, or 25% or 10% of the shares offered for sale in this Offering, we would expect to use the resulting net proceeds for the same purposes as we would use the net proceeds from a sale of 100% of the shares, and in approximately the same proportions, until such time as such use of proceeds would leave us without working capital reserve. At that point we would expect to modify our use of proceeds by limiting our expansion, leaving us with the working capital reserve indicated.
The expected use of net proceeds from this Offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve and change. The amounts and timing of our actual expenditures, specifically with respect to working capital, may vary significantly depending on numerous factors. The precise amounts that we will devote to each of the foregoing items, and the timing of expenditures, will vary depending on numerous factors. As a result, our management will retain broad discretion over the allocation of the net proceeds from this Offering.
In the event we do not sell all the shares being offered, we may seek additional financing from other sources in order to support the intended use of proceeds indicated above. If we secure additional equity funding, investors in this Offering would be diluted. In all events, there can be no assurance that additional financing would be available to us when wanted or needed and, if available, on terms acceptable to us.
The allocation of the use of proceeds among the categories of anticipated expenditures represents management’s best estimates based on the current status of the Company’s proposed operations, plans, investment objectives, capital
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requirements, and financial conditions. No assurances can be provided that any milestone represented herein will be achieved. Future events, including changes in the economic or competitive conditions of our business plan or the completion of less than the total Offering amount, may cause the Company to modify the above-described allocation of proceeds. The Company’s use of proceeds may vary significantly in the event any of the Company’s assumptions prove inaccurate. We reserve the right to change the allocation of net proceeds from the Offering as unanticipated events or opportunities arise. Additionally, the Company may from time to time need to raise more capital to address future needs.
The Company reserves the right to change the use of proceeds set out herein based on the needs of the ongoing business of the Company and the discretion of the Company's management. The Company may reallocate the estimated use of proceeds among the various categories or for other uses if management deems such a reallocation to be appropriate.
Company Overview and Plan of Operation
Franklin Mining, Inc., was incorporated in December 1976 under the laws of the State of Delaware under the name WCM Capital, Inc. Its purpose was to engage in the exploration and exploitation of precious and non- ferrous metals, including gold, silver, lead, copper, and zinc. WCM Capital, Inc, unable to generate significant revenues, officially ceased operations and later re-entered the exploration stage as Franklin Resources, Inc. on October 14, 2003, under the laws of the State of Nevada. The Company’s current name, Franklin Mining, Inc, was adopted by Corporate Resolution dated January 3, 2004, and Certificate of Amendment filed with the Nevada Secretary of State on February 3, 2004. Historically, the Company's principal business involved conducted mining operations, and the Company owned interests in a number of previous ferrous and non-ferrous metal properties and conducted mining operations on those properties. We no longer own interests in any mining properties and have ceased operations. We are currently seeking to implement a new business model under the concept of "Royalty Mining".
Royalty mining involves contracting with pre-existing mines to either start or potentiate a mining operation within their concessional mining area under a Services Agreement, Entrepreneurial Association, Joint Venture Agreement, or Partial Acquisition. We also possess advanced machinery that can clean up tailings of prior mining operations and extract mineral values that previous processes were unable to capture.
Our Mission
We seek to generate value in fields in which we operate and projects that we participate in by operating a business model focused on safety, low costs, innovative technology, social commitment, and respect for the environment. Through our commitment to these values, we strive to create added value for shareholders, employees, and the region in which we operate.
Our Process
We seek contracts for specific projects, preferably a producing mine, a mine close to production, or a mine with advanced feasibility studies. We typically will not consider projects in the early stages of development.
Analysis
We analyze and approve the viability of any project based on the technical and financial merits of the prospect based on various factors, including reserves, tenor, grade, volume, and operational difficulties. Approval of projects is executed after carefully considering the advice of our engineers, geologists, executives, and officers.
Royalty Mining
We work under the concept of "Royalty Mining", where we receive revenues based on various agreements that we enter into with various partners. The documents outlining the schedules of financing royalties and operational activities are carefully prepared and negotiated by our management team.
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Advanced Machinery
As mentioned above, we possess advanced machinery that has the ability to clean up tailings of prior mining operations and extract mineral values that previous processes were unable to capture. We plan to enter into agreements with various mining operations to clean up tailings of prior mining operations and extract minerals, especially gold, that were not captured previously. Mines in Bolivia, in particular, operate with outdated machinery that is inefficient in capturing mineral reserves. As a result, many mining operations in Bolivia are only able to recover an estimated 40% of the gold nuggets, leaving the remaining 60% untouched. These untouched gold tailings that wash into the river are referred to as fish-scale or microscopic gold. The machinery we have purchased will allow us to recover up to 95% of these fine gold particles. The machinery is currently located in California, and we plan to ship it to Bolivia once we have secured enough financing to cover shipping costs and related expenses. It comes with its own trailer and can be pulled with a truck, allowing us to operate with fewer delays. It only needs a small generator, consuming 2-5 liters of fuel per day, and is built to handle up to 70 tons of ore per hour. With a recovery rate of up to 95% per ton, we will be able to run two shifts per day with a total of up to 1400 tons of ore per day. The machinery is also environmentally friendly. We believe that as we implement this new machinery in future projects that we will be able to maximize revenues for the Company.
Letter of Intent with Las Piedras
On August 3, 2021, we announced that we have entered into a Letter of Intent with Las Piedras, a Bolivian Mining Co-op, outlining the future development plans of the area known as San Ramon. The Las Piedras hold the mining rights for a 62 Cuadricula Concession (nearly 4,000 acres) with indications of heavy mineralization. This region is located within the Precambrian Shield, a geological area rich in Gold, Wolfram, Tantalite, and other minerals located near the town of San Ramon, in the Department of Santa Cruz, Bolivia. We are currently in negotiations with Las Piedras regarding the terms of the association between the Company and Las Piedras and the scope of the operation. The execution of a definitive agreement will depend on the results of various legal, geological, technical, financial, and other investigations that will be conducted by the Company over the coming months. The Letter of Intent was executed by the Company to declare our willingness to participate in the planning and negotiation process in order to fast-track operations in the highly prospective area.
Letter of Intent with the Bolivia Progresa Cooperative
On October 21, 2021, we announced a similar Letter of Intent to the Las Piedras Letter of Intent for the development of the Puqio Norte mine in Bolivia, now known as "DHARMA". The execution of a definitive agreement will depend on the results of various legal, geological, technical, financial, and other investigations that will be conducted by the Company over the coming months. The Letter of Intent was executed by the Company to declare our willingness to participate in the planning and negotiation process in order to fast-track operations in the highly prospective area.
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We lease a corporate office at 215 W Banderra Road #114-459, Boerne, TX 78006 at a monthly rate of $500 a month. This lease is negotiable annually.
The Company does not currently own, lease, or possess a royalty right or similar interest in any mining properties or mining operations. As such, the Company is not deemed to be engaged in mining operations and is not required to provide the Mining Disclosures required under subpart 1300 of Regulation S-K. The Company plans to purchase royalty rights in various mining operations in the future. If the purchase of any royalty rights or other property results in the Company being required to provide the Mining Disclosures required under subpart 1300 of Regulation S-K, this Offering Statement will be updated to include the necessary disclosures.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are forward-looking statements. These forward-looking statements generally are identified by the words believes, project, expects, anticipates, estimates, intends, strategy, plan, may, will, would, will be, will continue, will likely result, and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
For the periods mentioned below, the Company had limited operations. As we receive the proceeds from this Offering, we plan to increase operations in accordance with our business plan as described above in the section entitled "Description of Business".
Year ended December 31, 2022, Compared to Year ended December 31, 2021.
Revenues – For the Years ended December 31, 2022, and 2021, our business had no revenues.
Net Loss – For the Years ended December 31, 2022, and 2021, we recorded net losses of $446,934 and $113,997, respectively.
General and Administrative Expenses – For the Years ended December 31, 2022, and 2021, our business had general and administrative expenses of $(184,592) and $(47,411), respectively.
Liquidity and Capital Resources
Net cash used in operating activities for the Years ended December 31, 2022, and 2021 was $1,380,348 and $2,201,602, respectively.
There was no net cash used in investing activities for the Years ended December 31, 2022, and 2021.
Net cash provided by financing activities for the Years ended December 31, 2022, and 2021 was $1,373,049 and $5,164,641, respectively.
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As of December 31, 2022, the Company had $2,543.00 in cash to fund its operations. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations or substantially curtail some of its planned activities. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities should the Company be unable to continue as a going concern.
As the Company continues to incur losses, achieving profitability is dependent on achieving a level of revenues adequate to support the Company's cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital. Management intends to fund future operations through additional private or public equity offerings and may seek additional capital through arrangements with strategic partners of from other sources. There can be no assurances, however, that additional funding will be available on terms acceptable to the Company, or at all. Any equity financing may be dilutive to existing shareholders.
Off Balance Sheet Arrangements
As of December 31, 2022, there were no off-balance sheet arrangements.
Going Concern
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred recurring operating losses, and as of December 31, 2022, had an accumulated deficit of $52,206,304. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses and/or seeking out and completing a merger or other business combination with an existing operating company. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.
There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout Management's Discussion and Analysis of Financial Condition and Results of Operation where such policies affect our reported and expected financial results. Note that our preparation of the financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.
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Additional Company Matters
The Company has not filed for bankruptcy protection nor has it ever been involved in receivership or similar proceedings. The company is not, to its knowledge, the subject of any criminal investigation or party to any material pending legal proceedings.
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
Directors and Executive Officers
William Petty (CEO, Director)
William Petty, 72, has over 35 years of experience in driving growth and opportunity in publicly and privately held companies in both the US and South America. Mr. Petty's innate abilities to both work with global financing entities like the IFC and with international governments and associated ministries to derive business opportunities provide the Company with excellent leadership and broad-based business development. In addition to being CEO of the Company, Mr. Petty is CEO for Petty International and International Mining and Metals. For the past 5 years, Mr. Petty’s focus has been on establishing Franklin Mining’s mining operations, primarily in South America.
R. Nickolas Jones (CFO)
Mr. Jones has 20+ years’ experience in preparing financial statements. Mr. Jones has a Bachelor’s degree from BYU in Economics, and a Master’s of Accounting degree from Southern Utah University. Mr. Jones has served as CFO of several small public companies over the past 15 years.
Stock Incentive Plan
In the future, we may establish a management stock incentive plan pursuant to which stock options and awards may be authorized and granted to our directors, executive officers, employees and key employees or consultants. Details of such a plan, should one be established, have not been decided yet. Stock options or a significant equity ownership position in us may be utilized by us in the future to attract one or more new key senior executives to manage and facilitate our growth.
Board of Directors
Our board of directors currently consists of two directors, neither of which are considered "independent" as defined in Rule 4200 of FINRA's listing standards. We may appoint additional independent directors to our board of directors in the future, particularly to serve on committees should they be established.
Committees of the Board of Directors
Compensation of Directors and Executive Officers
As of the date of this filing, we have not entered into any employment or compensation agreements with any of our executive officers. In the future, we may enter into agreements with our executive officers whereby they will be compensated for their services.
We do not pay our directors any compensation for their services as board members, with the exception of reimbursing and board-related expenses. In the future, we may compensate directors, particularly those who are not also employees and who act as independent board members, on either a per meeting or fixed compensation basis.
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Limitation of Liability and Indemnification of Officers and Directors
Our Bylaws limit the liability of directors and officers of the Company to the maximum extent permitted by Nevada law. The Bylaws state that the Company shall indemnify and hold harmless each person who was or is a party or is threatened to be made a party to, or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director or an officer of the Company or such director or officer is or was serving at the request of the Company as a director, officer, partner, member, manager, trustee, employee or agent of another company or of a partnership, limited liability company, joint venture, trust or other enterprise.
The Company believes that indemnification under our Bylaws covers at least negligence and gross negligence on the part of indemnified parties. The Company also may secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in connection with their services to us, regardless of whether our Bylaws permit such indemnification.
The Company may also enter into separate indemnification agreements with its directors and officers, in addition to the indemnification provided for in our Bylaws. These agreements, among other things, may provide that we will indemnify our directors and officers for certain expenses (including attorneys' fees), judgments, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of such person's services as one of our directors or officers, or rendering services at our request, to any of its subsidiaries or any other company or enterprise. We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and officers.
There is no pending litigation or proceeding involving any of our directors or officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.
For additional information on indemnification and limitations on the liability of our directors and officers, please review the Company's Bylaws, which are attached to this Offering Circular.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
The following table sets forth information regarding beneficial ownership of our Stock as of the date of this Offering Circular. None of our Officers or Directors are selling stock in this Offering.
Beneficial ownership and percentage ownership are determined in accordance with the rules of the Securities and Exchange Commission and include voting or investment power with respect to Shares of stock. This information does not necessarily indicate beneficial ownership for any other purpose.
Unless otherwise indicated and subject to applicable community property laws, to our knowledge, each Shareholder named in the following table possesses sole voting and investment power over their Shares of Stock. The percentage of beneficial ownership before the offering is based on 1,719,681,321 Shares of Common Stock outstanding and 10,000,000 shares of Preferred Stock outstanding as of the date of this Offering Circular.
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| Class |
| Shares Beneficially Owned Prior to Offering |
| Shares Beneficially Owned After Offering | ||||||||
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|
|
|
| Number | Percent |
| Number | Percent | |||||
William Petty (CEO, Director) |
|
| Common Stock |
| 77,852,779 | 4.34% |
| 77,852,779 | 3.91% | |||||
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| Preferred Stock |
| 10,000,000 | 100% |
| 10,000,000 | 100% | |||||
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INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
The Company has not engaged in any material transactions with related parties during the last two completed fiscal years or the current fiscal year.
The Company is offering Shares of its Common Stock. Except as otherwise required by law, the Company's Articles of Incorporation or Bylaws, each Shareholder shall be entitled to one vote for each Share held by such Shareholder on the record date of any vote of Shareholders of the Company. The Shares of Common Stock, when issued, will be fully paid and non-assessable. Since it is anticipated that at least for the next 12 months the majority of the Company's voting power will be held by Management, the holders of Common Stock issued pursuant to this Offering Circular should not expect to be able to influence any decisions by management of the Company through the voting power of such Common Stock.
The Company does not expect to create any additional classes of Common Stock during the next 12 months, but the Company is not limited from creating additional classes which may have preferred dividend, voting and/or liquidation rights or other benefits not available to holders of its common stock.
The Company does not expect to declare dividends for holders of Common Stock in the foreseeable future. Dividends will be declared, if at all (and subject to the rights of holders of additional classes of securities, if any), at the discretion of the Company's Board of Directors. Dividends, if ever declared, may be paid in cash, in property, or in shares of the capital stock of the Company, subject to the provisions of law, the Company's Bylaws and the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Company available for dividends such sums as the Board of Directors, in its absolute discretion, deems proper as a reserve for working capital, to meet contingencies, for equalizing dividends, for repairing or maintaining any property of the Company, or for such other purposes as the Board of Directors shall deem in the best interests of the Company.
There is no minimum number of Shares that need to be sold in order for funds to be released to the Company and for this Offering to hold its first closing.
The minimum subscription that will be accepted from an investor is $250.00 (the 'Minimum Subscription').
A subscription for $250.00 or more in the Shares may be made only by tendering to the Company the executed Subscription Agreement (electronically or in writing) delivered with the subscription price in a form acceptable to the Company, via check, wire, credit or debit card, or ACH. The execution and tender of the documents required, as detailed in the materials, constitutes a binding offer to purchase the number of Shares stipulated therein and an agreement to hold the offer open until the Expiration Date or until the offer is accepted or rejected by the Company, whichever occurs first.
There are no liquidation rights, preemptive rights, conversion rights, redemption provisions, sinking fund provisions, impacts on classification of the Board of Directors where cumulative voting is permitted or required related to the Common Stock, provisions discriminating against any existing or prospective holder of the Common Stock as a result of such Shareholder owning a substantial amount of securities, or rights of Shareholders that may be modified otherwise than by a vote of a majority or more of the shares outstanding, voting as a class defined in any corporate document as of the date of filing. The Common Stock will not be subject to further calls or assessment by the Company. There are no restrictions on alienability of the Common Stock in the corporate documents other than those disclosed in this Offering Circular. The Company has engaged Transfer Online to serve as the transfer agent and registrant for the Shares. For additional information regarding the Shares, please review the Company's Bylaws, which are attached to this Offering Circular.
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Excepting matters arising under federal securities laws, any disputes between the Company and shareholders shall be governed in reliance on the laws of the state of Nevada. Furthermore, the Subscription Agreement for this Regulation A offering appoints the state and federal courts located in the state of Nevada as having jurisdiction over any disputes related to this Regulation A offering between the Company and shareholders.
Transfer Agent
Our transfer agent is Olde Monmouth Stock Transfer Co., Inc. The address for our transfer agent is 200 Memorial Pkwy Atlantic Heights, NJ 07716 and its phone number is 732-872-2727. Our transfer agent is registered with the Securities and Exchange Commission.
DISQUALIFYING EVENTS DISCLOSURE
Recent changes to Regulation A promulgated under the Securities Act prohibit an issuer from claiming an exemption from registration of its securities under such rule if the issuer, any of its predecessors, any affiliated issuer, any director, executive officer, other officer participating in the offering of the interests, general partner or managing member of the issuer, any beneficial owner of 20% or more of the voting power of the issuer's outstanding voting equity securities, any promoter connected with the issuer in any capacity as of the date hereof, any investment manager of the issuer, any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of the issuer's interests, any general partner or managing member of any such investment manager or solicitor, or any director, executive officer or other officer participating in the offering of any such investment manager or solicitor or general partner or managing member of such investment manager or solicitor has been subject to certain "Disqualifying Events" described in Rule 506(d)(1) of Regulation D subsequent to September 23, 2013, subject to certain limited exceptions. The Company is required to exercise reasonable care in conducting an inquiry to determine whether any such persons have been subject to such Disqualifying Events and is required to disclose any Disqualifying Events that occurred prior to September 23, 2013, to investors in the Company. The Company believes that it has exercised reasonable care in conducting an inquiry into Disqualifying Events by the foregoing persons and is aware of the no such Disqualifying Events.
It is possible that (a) Disqualifying Events may ¿exist of which the Company is not aware and (b) the SEC, a court or other finder of fact may determine that the steps that the Company has taken to conduct its inquiry were inadequate and did not constitute reasonable care. If such a finding were made, the Company may lose its ability to rely upon exemptions under Regulation A, and, depending on the circumstances, may be required to register the Offering of the Company's Common Stock with the SEC and under applicable state securities laws or to conduct a rescission offer with respect to the securities sold in the Offering.
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Fiduciaries of certain ERISA Plans which provide for individual accounts (for example, those which qualify under Section 401(k) of the Code, Keogh Plans and IRAs) and which permit a beneficiary to exercise independent control over the assets in his individual account, will not be liable for any investment loss or for any breach of the prudence or diversification obligations which results from the exercise of such control by the beneficiary, nor will the beneficiary be deemed to be a fiduciary subject to the general fiduciary obligations merely by virtue of his exercise of such control. On October 13, 1992, the Department of Labor issued regulations establishing criteria for determining whether the extent of a beneficiary's independent control over the assets in his account is adequate to relieve the ERISA Plan's fiduciaries of their obligations with respect to an investment directed by the beneficiary. Under the regulations, the beneficiary must not only exercise actual, independent control in directing the particular investment transaction, but also the ERISA Plan must give the participant or beneficiary a reasonable opportunity to exercise such control, and must permit him to choose among a broad range of investment alternatives.
Trustees and other fiduciaries making the investment decision for any qualified retirement plan, IRA or Keogh Plan (or beneficiaries exercising control over their individual accounts) should also consider the application of the prohibited transactions provisions of ERISA and the Code in making their investment decision. Sales and certain other transactions between a qualified retirement plan, IRA or Keogh Plan and certain persons related to it (e.g., a plan sponsor, fiduciary, or service provider) are prohibited transactions. The particular facts concerning the sponsorship, operations and other investments of a qualified retirement plan, IRA or Keogh Plan may cause a wide range of persons to be treated as parties in interest or disqualified persons with respect to it. Any fiduciary, participant or beneficiary considering an investment in Shares by a qualified retirement plan IRA or Keogh Plan should examine the individual circumstances of that plan to determine that the investment will not be a prohibited transaction. Fiduciaries, participants or beneficiaries considering an investment in the Shares should consult their own legal advisors if they have any concern as to whether the investment would be a prohibited transaction.
Regulations issued on November 13, 1986, by the Department of Labor (the "Final Plan Assets Regulations") provide that when an ERISA Plan or any other plan covered by Code Section 4975 (e.g., an IRA or a Keogh Plan which covers only self-employed persons) makes an investment in an equity interest of an entity that is neither a "publicly offered security" nor a security issued by an investment company registered under the Investment Company Act of 1940, the underlying assets of the entity in which the investment is made could be treated as assets of the investing plan (referred to in ERISA as "plan assets"). Programs which are deemed to be operating companies or which do not issue more than 25% of their equity interests to ERISA Plans are exempt from being designated as holding "plan assets." Management anticipates that we would clearly be characterized as an "operating" for the purposes of the regulations, and that it would therefore not be deemed to be holding "plan assets."
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Classification of our assets as "plan assets" could adversely affect both the plan fiduciary and management. The term "fiduciary" is defined generally to include any person who exercises any authority or control over the management or disposition of plan assets. Thus, classification of our assets as plan assets could make the management a "fiduciary" of an investing plan. If our assets are deemed to be plan assets of investor plans, transactions which may occur in the course of its operations may constitute violations by the management of fiduciary duties under ERISA. Violation of fiduciary duties by management could result in liability not only for management but also for the trustee or other fiduciary of an investing ERISA Plan. In addition, if our assets are classified as "plan assets," certain transactions that we might enter into in the ordinary course of our business might constitute "prohibited transactions" under ERISA and the Code.
The income earned by a qualified pension, profit sharing or stock bonus plan (collectively, "Qualified Plan") and by an individual retirement account ("IRA") is generally exempt from taxation. However, if a Qualified Plan or IRA earns "unrelated business taxable income" ("UBTI"), this income will be subject to tax to the extent it exceeds $1,000 during any fiscal year. The amount of unrelated business taxable income in excess of $1,000 in any fiscal year will be taxed at rates up to 36%. In addition, such unrelated business taxable income may result in a tax preference, which may be subject to the alternative minimum tax. It is anticipated that income and gain from an investment in the Shares will not be taxed as UBTI to tax exempt shareholders, because they are participating only as passive financing sources.
DIVIDEND POLICY
Subject to preferences that may be applicable to any then-outstanding shares of Preferred Stock, if any, and any other restrictions, holders of Common Stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by our board of directors out of legally available funds. We and our predecessors have not declared any dividends in the past. Further, we do not presently contemplate that there will be any future payment of any dividends on Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this Offering, there has been a limited market for our Common Stock on the OTC Markets. Future sales of substantial amounts of our Common Stock, or securities or instruments convertible into our Common Stock, in the public market, or the perception that such sales may occur, could adversely affect the market price of our Common Stock prevailing from time to time. Furthermore, because there will be limits on the number of shares available for resale shortly after this Offering due to contractual and legal restrictions described below, there may be resales of substantial amounts of our Common Stock in the public market after those restrictions lapse. This could adversely affect the market price of our Common Stock prevailing at that time.
Upon completion of this Offering, assuming the maximum number of shares of Common Stock offered in this Offering are sold, there will be 1,919,681,321 shares of our Common Stock outstanding.
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Rule 144
In general, a person who has beneficially owned restricted shares of our Common Stock for at least twelve months, in the event we are a reporting company under Regulation A, or at least six months, in the event we have been a reporting company under the Exchange Act for at least 90 days before the sale, would be entitled to sell such securities, provided that such person is not deemed to be an affiliate of ours at the time of sale or to have been an affiliate of ours at any time during the 90 days preceding the sale. A person who is an affiliate of ours at such time would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of shares that does not exceed the greater of the following:
| · | 1% of the number of shares of our Common Stock then outstanding; or |
| · | the average weekly trading volume of our Common Stock during the four calendar weeks preceding the filing by such person of a notice on Form 144 with respect to the sale; |
provided that, in each case, we are subject to the periodic reporting requirements of the Exchange Act for at least 90 days before the sale. Rule 144 trades must also comply with the manner of sale, notice and other provisions of Rule 144, to the extent applicable.
INVESTOR ELIGIBILITY STANDARDS & ADDITIONAL INFORMATION ABOUT THE OFFERING
Investment Limitations
Generally, no sale may be made to you in this Offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth (please see below on how to calculate your net worth). Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A+. For general information on investing, we encourage you to refer to www.investor.gov.
Because this is a Tier I Regulation A+ offering, most investors must comply with the 10% limitation on investment in the Offering. The only investor in this Offering exempt from this limitation is an “accredited investor” as defined under Rule 501 of Regulation D under the Securities Act. If you meet one of the following tests you should qualify as an accredited investor:
| (i) | You are a natural person who has had individual income in excess of $200,000 in each of the two most recent years, or joint income with your spouse in excess of $300,000 in each of these years, and have a reasonable expectation of reaching the same income level in the current year; |
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| (ii) | You are a natural person and your individual net worth, or joint net worth with your spouse, exceeds $1,000,000 at the time you purchase Shares (please see below on how to calculate your net worth); |
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| (iii) | You are an executive officer or general partner of the issuer or a manager or executive officer of the general partner of the issuer; |
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| (iv) | You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or the Code, a corporation, a Massachusetts or similar business trust or a partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000. |
�� | (v) | You are a bank or a savings and loan association or other institution as defined in the Securities Act, a broker or dealer registered pursuant to Section 15 of the Exchange Act, an insurance company as defined by the Securities Act, an investment company registered under the Investment Company Act of 1940 (Investment Company Act), or a business development company as defined in that act, any Small Business Investment Company licensed by the Small Business Investment Act of 1958 or a private business development company as defined in the Investment Advisers Act of 1940; |
| (v) | You are an entity (including an Individual Retirement Account trust) in which each equity owner is an accredited investor; |
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| (vii) | You are a trust with total assets in excess of $5,000,000, your purchase of Shares is directed by a person who either alone or with his purchaser representative(s) (as defined in Regulation D promulgated under the Securities Act) has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment, and you were not formed for the specific purpose of investing in the Shares; or |
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| (viii) | You are a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has assets in excess of $5,000,000. |
Offering Period and Expiration Date
This Offering will start on the date on which the SEC initially qualifies this Offering Statement (the Qualification Date) and will terminate on the Termination Date.
Procedures for Subscribing
If you decide to subscribe for our Common Stock shares in this Offering, you should:
1. | Electronically receive, review, execute and deliver to us a Subscription Agreement; and |
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2. | Deliver funds directly to the Company’s designated bank account via bank wire transfer (pursuant to the wire transfer instructions set forth in our Subscription Agreement) or electronic funds transfer via wire transfer or via personal check mailed to the Company, at 215 W Bandera Rd. #114-459 Boerne, Texas 78006. |
Any potential investor will have ample time to review the subscription agreement, along with their counsel, prior to making any final investment decision. We shall only deliver such subscription agreement upon request after a potential investor has had ample opportunity to review this Offering Circular.
Right to Reject Subscriptions. After we receive your complete, executed subscription agreement and the funds required under the subscription agreement have been transferred to our designated account, we have the right to review and accept or reject your subscription in whole or in part, for any reason or for no reason. We will return all monies from rejected subscriptions immediately to you, without interest or deduction.
Acceptance of Subscriptions. Upon our acceptance of a subscription agreement, we will countersign the subscription agreement and issue the shares subscribed at closing. Once you submit the subscription agreement, you may not revoke or change your subscription or request your subscription funds. All submitted subscription agreements are irrevocable.
Under Rule 251 of Regulation A+, non-accredited, non-natural investors are subject to the investment limitation and may only invest funds which do not exceed 10% of the greater of the purchaser’s revenue or net assets (as of the purchaser’s most recent fiscal year end). A non-accredited, natural person may only invest funds which do not exceed 10% of the greater of the purchaser’s annual income or net worth (please see below on how to calculate your net worth).
NOTE: For the purpose of calculating your net worth, it is defined as the difference between total assets and total liabilities. This calculation must exclude the value of your primary residence and may exclude any indebtedness secured by your primary residence (up to an amount equal to the value of your primary residence). In the case of fiduciary accounts, net worth and/or income suitability requirements may be satisfied by the beneficiary of the account or by the fiduciary, if the fiduciary directly or indirectly provides funds for the purchase of the Shares.
In order to purchase our Common Stock shares and prior to the acceptance of any funds from an investor, an investor will be required to represent, to the Company’s satisfaction, that such investor is either an accredited investor or is in compliance with the 10% of net worth or annual income limitation on investment in this Offering.
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LEGAL MATTERS
Certain legal matters with respect to the shares of common stock offered hereby will be passed upon by Jeff Turner, JDT Legal, PLLC.
REPORTS
Following this Tier I, Regulation A offering, we will be required to comply with certain ongoing disclosure requirements under Rule 257 of Regulation A in addition to our disclosure requirements with OTC Markets under the Pink Basic Disclosure Guidelines.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a Regulation A Offering Statement on Form 1-A under the Securities Act with respect to the shares of common stock offered hereby. This Offering Circular, which constitutes a part of the Offering Statement, does not contain all of the information set forth in the Offering Statement or the exhibits and schedules filed therewith. For further information about us and the common stock offered hereby, we refer you to the Offering Statement and the exhibits and schedules filed therewith. Statements contained in this Offering Circular regarding the contents of any contract or other document that is filed as an exhibit to the Offering Statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the Offering Statement. Upon the completion of this Offering, we will be required to file periodic reports, proxy statements, and other information with the SEC pursuant to the Securities Exchange Act of 1934. You may read and copy this information at the SEC's Public Reference Room, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC on 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, including us, that file electronically with the SEC. The address of this site is www.sec.gov.
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Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this Offering statement to be signed on its behalf by the undersigned, thereunto duly authorized, on April 17, 2023.
Franklin Mining, Inc. |
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By: | /s/ William A. Petty |
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| William A. Petty |
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| Principal Executive Officer and Director |
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Dated:
This Offering statement has been signed by the following persons in the capacities and on the dates indicated.
By: | /s/ R. Nickolas Jones |
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| R. Nickolas Jones |
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| Principal Financial Officer |
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| Dated: April 17, 2023 |
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ACKNOWLEDGEMENT ADOPTING TYPED SIGNATURES
The undersigned hereby authenticate, acknowledge and otherwise adopt the typed signatures above and as otherwise appear in this filing and Offering.
By: | /s/ William A. Petty |
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| William A. Petty |
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| Chief Executive Officer |
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| Dated: April 17, 2023 |
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PART III: EXHIBITS
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| Filed |
| Incorporated by Reference | ||
Exhibit No. |
| Description |
| Herewith |
| Filing |
| Date Filed |
2.1 |
| Articles of Incorporation, as amended through August 13, 2010 |
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|
| 1-A |
| 01/06/2022 |
2.2 |
| Amendment to Articles of Incorporation, dated October 16, 2013 |
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| 1-A |
| 01/06/2022 |
2.3 |
| Bylaws |
|
|
| 1-A |
| 01/06/2022 |
4.1 |
|
| * |
|
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| |
12.1 |
|
| * |
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| |
35
PART F/S: FINANCIAL STATEMENTS
FINANCIAL STATEMENTS OF FRANKLIN MINING, INC.
(Unaudited)
F-1
Condensed Balance Sheets | ||||||||
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ASSETS | ||||||||
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| December 31, |
| December 31, | ||
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| 2022 |
| 2021 | ||
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|
| (Unaudited) |
|
| (Unaudited) |
CURRENT ASSETS |
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| ||||
| Cash |
| $ | 2,543 |
|
| 9,842 | |
| Prepaid expenses and other assets |
| 2,917 |
|
| 2,917 | ||
| Other current assets |
| - |
|
| - | ||
|
| Total Current Assets |
| 5,459 |
|
| 12,759 | |
Non-current assets |
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|
|
|
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| ||
| Property and Equipment, Net |
| 355,937 |
|
| 293,822 | ||
| Other assets |
|
| - |
|
| 6,895 | |
|
| TOTAL ASSETS | $ | 361,396 |
|
| 313,476 | |
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LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
CURRENT LIABILITIES |
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| |||||
| Accounts payable and accrued expenses | $ | 1,333,401 |
|
| 1,315,324 | ||
| Accounts Payable - related party |
| (1,851,600) |
|
| (955,328) | ||
| Notes payable -short term |
| 39,220 |
|
| - | ||
|
| Total Current Liabilities |
| (478,978) |
|
| 359,996 | |
LONG-TERM LIABILITIES |
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| |||
| NOTES PAYABLE |
| - |
|
| - | ||
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| Total Liabilities |
| (478,978) |
|
| 359,996 | |
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STOCKHOLDERS' DEFICIT |
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| Preferred stock: 5,000,000 shares authorized, |
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| ||
| at $0.0010 par value, 5,000 issued and outstanding. | $ | 10,000 |
|
| 10,000 | ||
| Common stock: 95,000,000 shares authorized, |
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| ||
| at $0.0010 par value, 1,792,547,454 and 1,748,381,321 issued and outstanding. |
| 1,792,547 |
|
| 1,748,381 | ||
| Additional paid-in capital |
| 51,244,131 |
|
| 49,954,469 | ||
| Accumulated deficit |
| (52,206,304) |
|
| (51,759,370) | ||
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| Total Stockholders' Deficit |
| 840,374 |
|
| (46,520) | |
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| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 361,396 |
|
| 313,476 | |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. | ||||||||
F-2
Condensed Statements of Operations | ||||||
(Unaudited) | ||||||
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| For the Year Ended | ||||
|
| December 31, | ||||
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| 2022 |
| 2021 | ||
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REVENUES |
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| |
| Revenues | $ | - |
|
| - |
GROSS MARGIN |
| - |
|
| - | |
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OPERATING EXPENSES |
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| |
| Professional fees |
| 262,342 |
|
| 66,586 |
| General and administrative |
| 184,592 |
|
| 47,411 |
Total Operating Expenses |
| 446,934 |
|
| 113,997 | |
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OPERATING LOSS |
| (446,934) |
|
| (113,997) | |
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LOSS BEFORE INCOME TAXES |
| (446,934) |
|
| (113,997) | |
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| Provision for income taxes |
| - |
|
| - |
NET LOSS BEFORE NON-CONTROLLING INTEREST |
| (446,934) |
|
| (113,997) | |
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COMPREHENSIVE LOSS | $ | (446,934) |
|
| (113,997) | |
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| BASIC AND DILUTED LOSS PER SHARE | $ | (0.01) |
|
| (0.01) |
| BASIC AND DILUTED WEIGHTED AVERAGE |
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| NUMBER OF SHARES OUTSTANDING |
| 1,792,547,454 |
|
| 1,713,412,156 |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. | ||||||
F-3
Statements of Stockholders' Equity (Deficit) | ||||||||||||||
(Unaudited) | ||||||||||||||
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Year Ended December 31, 2022 | ||||||||||||||
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| Additional |
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| Total | ||||
|
| Common Stock |
| Preferred Stock |
| Paid-In |
| Accumulated |
| Stockholders' | ||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Equity (Deficit) |
Balance, December 31, 2021 |
| 1,748,381,321 |
| 1,748,381 |
| 10,000,000 |
| 10,000 |
| 49,954,469 |
| (51,759,370) |
| (46,520) |
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Shares issued for cash |
| 44,166,133 |
| 44,166.13 |
| - |
| - |
| 1,289,662 |
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|
| 1,333,828 |
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Net loss for the year ended |
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|
December 31, 2022 |
| - |
| - |
| - |
| - |
| - |
| (446,934) |
| (446,934) |
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Balance, December 2022 |
| 1,792,547,454 |
| $1,792,547 |
| 10,000,000 |
| $10,000 |
| $51,244,131 |
| $(52,206,304) |
| $840,374 |
Year Ended December 31, 2021 | ||||||||||||||
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| Additional |
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| Total | ||||
|
| Common Stock |
| Preferred Stock |
| Paid-In |
| Accumulated |
| Stockholders' | ||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Equity (Deficit) |
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Balance, December 31, 2020 |
| 1,655,528,822 |
| $1,655,528 |
| 10,000,000 |
| 10,000 |
| 47,882,681 |
| (51,645,373) |
| $(2,097,164) |
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Shares issued for cash |
| 92,852,499 |
| 92,853 |
| - |
| - |
| 2,071,788 |
| - |
| 2,164,641 |
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Net loss for the year ended ended |
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December 31, 2021 |
| - |
| - |
| - |
| - |
| - |
| (113,997) |
| (113,997) |
|
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Balance, December 31, 2021 |
| 1,748,381,321 |
| $1,748,381 |
| 10,000,000 |
| 10,000 |
| 49,954,469 |
| (51,759,370) |
| $(46,520) |
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The accompanying notes are an integral part of these unaudited financial statements. | ||||||||||||||
F-4
Condensed Statements of Cash Flows | ||||||||
(Unaudited) | ||||||||
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| For the Year Ended | ||||
|
|
|
| December 31, | ||||
|
|
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| 2022 |
| 2021 | ||
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CASH FLOWS FROM OPERATING ACTIVITIES |
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| |||
| Net loss |
| $ | (446,934) |
|
| (113,997) | |
| Adjustments to reconcile net loss to net cash |
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| ||
| used by operating activities: |
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|
| ||
| Changes in operating assets and liabilities |
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| ||
|
| Prepaid expenses and other current assets |
| - |
|
| (2,917) | |
|
| Depreciation and amortization |
| (62,115) |
|
| (25,055) | |
|
| Accounts payable and accrued expenses |
| 18,077 |
|
| (196,352) | |
|
| Other assets |
| 6,895 |
|
| (6,895) | |
|
| Related party accounts payable |
| (896,272) |
|
| (1,856,386) | |
|
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| Net Cash Used in Operating Activities |
| (1,380,348) |
|
| (2,201,602) |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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| |||
|
| Common stock issued for cash |
| 1,333,828 |
|
| 2,164,641 | |
|
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| Net Cash Provided by Financing Activities |
| 1,373,049 |
|
| 2,164,641 |
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| NET CHANGES IN CASH |
| (7,300) |
|
| (36,961) | ||
| CASH AT BEGINNING OF PERIOD |
| 9,842 |
|
| 46,803 | ||
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| CASH AT END OF PERIOD | $ | 2,543 |
|
| 9,842 | ||
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| CASH FLOW INFORMATION |
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| ||
| CASH PAID FOR: |
|
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| ||
|
| Interest | $ | - |
|
| - | |
|
| Income Taxes | $ | - |
|
| - | |
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|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. | ||||||||
F-5
NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business and Organization
Franklin Mining, Inc. (formerly WCM Capital, Inc.) (Company), incorporated on December 1, 1976 under the laws of the State of Delaware. In 2003 and currently the company is incorporated in the state of Nevada. The company was formed to engage in the exploration, development and mining of precious and non-ferrous metals, including gold, silver, lead, copper and zinc. The Company owns or has an interest in a number of precious and non-ferrous metal properties. The Company's principal mining properties are (i) the Franklin Mines, located near Idaho Springs in Clear Creek County, Colorado, for which the Company acquired the exclusive right to explore, develop, mine, and extract all minerals located in approximately 51 mining claims of which 28 are patented (Franklin Mines) and (ii) the Franklin Mill, a crushing and flotation mill which is located on the site of the Franklin Mines (Franklin Mill). The Company has begun processing minerals in Bolivia.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. While actual results could differ from those estimates, management does not expect such variances, if any, to have a material effect on the financial statements.
Revenue Recognition
Revenues, if any, from the possible sales of mineral concentrates will be recognized by the Company only upon receipt of final settlement funds from the smelter.
Recent Accounting Pronouncements
Recent accounting pronouncements, other accounting standards or interpretations issued or recently adopted are expected to have no material impact on the Company’s financial position, operations, or cash flows.
Basic and Diluted Loss Per Share
Net loss per share was computed by dividing the net loss by the weighted average number of shares outstanding during the period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. For purposes of computation of loss per share, basic and diluted shares outstanding are the same, as the inclusion of common stock equivalents would be anti-dilutive.
Cash and Cash Equivalents
The Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents.
Basis of Presentation
The unaudited financial statements as of the company have been prepared in accordance with accounting principles generally accepted in the United States.
F-6
NOTE 3 - GOING CONCERN
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred recurring operating losses, and as of December 31, 2022 and December 31, 2021, has an accumulated deficit of $52,206,304 and $51,759,370, respectively. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing a merger or other business combination with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 - PREFERRED STOCK
As of December 31, 2022 and December 31, 2021, the Company had 10,000,000 shares of Series A preferred stock issued and outstanding. The holders of the Series A preferred stock have voting power equal to 51% of the total issued and outstanding equity ownership of the Company as of any record date. The preferred stock is equivalent to common stock with respect to liquidation and dividend preference.
NOTE 5 - INCOME TAXES
The Company follows ASC 740, under which deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry-forwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry-forward has been recognized, as it is not deemed likely to be realized.
NOTE 6 - SUBSEQUENT EVENTS
In accordance with ASC 855 Company management reviewed all material events through filing of these financial statements and there are no material subsequent events to report.
F-7
