The shares may also be sold in compliance with the Securities and Exchange Commission's Rule 144. The selling shareholders may also sell their shares directly to market makers acting as principals or brokers or dealers, who may act as agent or acquire the common stock as a principal. Any broker or dealer participating in such transactions as agent may receive a commission from the selling shareholders, or, if they act as agent for the purchaser of such common stock, from such purchaser. The selling shareholders will likely pay the usual and customary brokerage fees for such services. Brokers or dealers may agree with the selling shareholders to sell a specified number of shares at a stipulated price per share and, to the extent such broker or dealer is unable to do so acting as agent for the selling shareholders, to purchase, as principal, any unsold shares at the price required to fulfill the respective broker's or dealer's commitment to the selling shareholders. Brokers or dealers who acquire shares as principals may thereafter resell such shares from time to time in transactions in a market or on an exchange, in negotiated transactions or otherwise, at market prices prevailing at the time of sale or at negotiated prices, and in connection with such re-sales may pay or receive commissions to or from the purchasers of such shares. These transactions may involve cross and block transactions that may involve sales to and through other brokers or dealers.
We can provide no assurance that all or any of the common stock offered will be sold by the selling shareholders. We are bearing all costs relating to the registration of the common stock, estimated to be $29,500.00. The selling shareholders, however, will pay commissions or other fees payable to brokers or dealers in connection with any sale of the common stock. The selling shareholders must comply with the requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934 in the offer and sale of the common stock. In particular, during such times as the selling shareholders may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable law and may, among other things:
1. Not engage in any stabilization activities in connection with our common stock;
2. Furnish each broker or dealer through which common stock may be offered, such as copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Securities Exchange Act of 1934.
There is no assurance that any of the selling shareholders will sell any or all of the shares offered by them. Under the securities laws of certain states, the shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in certain states the shares may not be sold unless they have been registered or qualified for sale in that state or an exemption from registration or qualification is available and is met.
Of the 8,000,000 shares of common stock outstanding as of August 9, 2006, 5,000,000 are owned by our sole officer and director and may only be resold pursuant to this registration statement or in compliance with Rule 144 of the Securities Act of 1933.
We have not declared any cash dividends, nor do we intend to do so. We are not subject to any legal restrictions respecting the payment of dividends, except that they may not be paid to render us insolvent. Dividend policy will be based on our cash resources and needs and it is anticipated that all available cash will be needed for our operations in the foreseeable future.
Section 15(g) of the Exchange Act
Our shares are covered by section 15(g) of the Securities Exchange Act of 1934, as amended, and Rules 15g-1 through 15g-6, and 15g-9 promulgated thereunder. They impose additional sales practice requirements on broker/dealers who sell our securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses).
Rule 15g-1 exempts a number of specific transactions from the scope of the penny stock rules.
Rule 15g-2 declares unlawful broker/dealer transactions in penny stocks unless the broker/dealer has first provided to the customer a standardized disclosure document.
Rule 15g-3 provides that it is unlawful for a broker/dealer to engage in a penny stock transaction unless the broker/dealer first discloses and subsequently confirms to the customer current quotation prices or similar market information concerning the penny stock in question.
Rule 15g-4 prohibits broker/dealers from completing penny stock transactions for a customer unless the broker/dealer first discloses to the customer the amount of compensation or other remuneration received as a result of the penny stock transaction.
Rule 15g-5 requires that a broker/dealer executing a penny stock transaction, other than one exempt under Rule 15g-1, disclose to its customer, at the time of or prior to the transaction, information about the sales persons compensation.
Rule 15g-6 requires broker/dealers selling penny stocks to provide their customers with monthly account statements.
Rule 15g-9 requires broker/dealers to approve the transaction for the customer's account; obtain a written agreement from the customer setting forth the identity and quantity of the stock being purchased; obtain from the customer information regarding his investment experience; make a determination that the investment is suitable for the investor; deliver to the customer a written statement for the basis for the suitability determination; notify the customer of his rights and remedies in cases of fraud in penny stock transactions; and, the NASD's toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.
The application of the penny stock rules may affect your ability to resell your shares.
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BUSINESS
General
We were incorporated in the State of Nevada on January 26, 2006. We are an exploration stage corporation. We do not own any interest in any property, but merely have the right to conduct exploration activities on one property. The property consists of one located mineral claim comprising a total of 16 contiguous cells situated on the northside of Canim Lake straddling Boss Creek. The property is situated 33 air miles northeast of The Town of 100 Mile House on the southwestern flank of the Quesnel Highlands in south central British Columbia, Canada. We intend to explore for gold on the property. Our exploration program should take approximately 365 days, weather permitting. If we do not find mineralized material on the property, we do not know what we will do.
We have no plans to change our business activities or to combine with another business, and are not aware of any events or circumstances that might cause us to change our plans. Currently, we do not intend to acquire other interests in any other mineral properties. Our business plan is solely to explore one mineral property. If we are successful in our initial endeavors, we may look at other exploration situations.
Background
In May 2006, Mr. Salameh, our president and a member of the board of directors acquired one mineral property containing 16 contiguous cells in British Columbia, Canada by arranging the staking of the same through James W. McLeod, a non affiliated third party for US$3,500. Mr. McLeod is a self employed contract staker and field worker residing in Surrey, British Columbia. We have not paid and do not intend to reimburse Mr. Salameh for the cost of acquiring the claim.
Canadian jurisdictions allow a mineral explorer to claim a portion of available Crown lands as its exclusive area for exploration by depositing posts or other visible markers to indicate a claimed area. The process of posting the area is known as staking. The claim is recorded in the name of Mr. Salameh, one of our officers and directors, to avoid paying additional fees. James McLeod, a Surrey geologist, suggested that the property be held in Mr. Salameh's name and we concurred therein. The property was selected by Mr. Salameh after consulting with Mr. McLeod. Mr. McLeod was paid $3,500 to stake the claim. No money was paid to Mr. Salameh to hold the claim. No money will be paid to Mr. Salameh to transfer the property to us. Mr. Salameh has executed a declaration of trust wherein he has agreed to hold the property for us and will deliver title upon our demand. Mr. Salameh has not provided us with a signed or executed bill of sale in our favor as of the date of this prospectus. Mr. Salameh will i ssue a bill of sale to a subsidiary corporation to be formed by us should mineralized material be discovered on the property.
Under British Columbia law, title to British Columbia mineral claims can only be held by British Columbia residents. In the case of corporations, title must be held by a British Columbia corporation. Since we are an American corporation, we can never possess legal mineral claim to the land. In order to comply with the law we would have to incorporate a British Columbia wholly owned subsidiary corporation and obtain audited financial statements. We believe those costs would be a
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waste of our money at this time since the legal costs of incorporating a subsidiary corporation, the accounting costs of audited financial statements for the subsidiary corporation, together with the legal and accounting costs of expanding this registration statement would cost several thousands of dollars. Accordingly, we have elected not to create the subsidiary at this time, but will do so if mineralized material is discovered on the property.
In the event that we find mineralized material and the mineralized material can be economically extracted, we will form a wholly owned British Columbia subsidiary corporation and Mr. Salameh will convey title to the property to the wholly owned subsidiary corporation. Should Mr. Salameh transfer title to another person and that deed is recorded before we record our documents, that other person will have superior title and we will have none. If that event occurs, we will have to cease or suspend activities and we will have no cause of action against Mr. Salameh. Mr. Salameh has agreed verbally with us not to cause the title to pass to another entity.
To date we have not performed any work on the property. All Canadian lands and minerals which have not been granted to private persons are owned by either the federal or provincial governments in the name of Her Majesty. Ungranted minerals are commonly known as Crown minerals. Ownership rights to Crown minerals are vested by the Canadian Constitution in the province where the minerals are located. In the case of the Company's property, that is the province of British Columbia.
In the nineteenth century, the practice of reserving the minerals from fee simple Crown grants was established. Legislation now ensures that minerals are reserved from Crown land dispositions. The result is that the Crown is the largest mineral owner in Canada, both as the fee simple owner of Crown lands and through mineral reservations in Crown grants. Most privately held mineral titles are acquired directly from the Crown. Our property is one such acquisition. Accordingly, fee simple title to our property resides with the Crown. That means that the Crown owns the surface and minerals.
Our claim is a mineral lease issued pursuant to the British Columbia Mineral Act. The lessee has exclusive rights to mine and recover all of the minerals contained within the surface boundaries of the lease continued vertically downward.
The property is unencumbered, that is there are no claims, liens, charges or liabilities against the property, and there are no competitive conditions, that is the action of some unaffiliated third party, that could affect the property. Further, there is no insurance covering the property and we believe that no insurance is necessary since the property is unimproved and contains no buildings or improvements.
To date we have not performed any work on the property. Accordingly, there is no assurance that a commercially viable mineral deposit, a reserve, exists in the property; in fact, the likelihood that a commercially viable mineral deposit exists is remote.
There are no native land claims that affect title to the property. We have no plans to try to interest other companies in the property if mineralization is found. If mineralization is found, we will try to develop the property ourselves.
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Mr. McLeod suggested purchasing the claim to Mr. Salameh. Mr. Salameh after reviewing the matter with Mr. McLeod agreed and accordingly it was decided to proceed with the project as discussed herein.
Claims
The following is a list of tenure numbers, claim, date of recording and expiration date of our claims:
Claim No.
| Name
| Recording
| Expiration
|
532758 | Gold Hunt | May 15, 2006 | May 15, 2007 |
The property was selected because gold and platinum has been discovered in the area.
The Gold Hunt property consists of one located mineral claim comprising a total of 16 contiguous cells in a 4N-4E configuration.
Location and Access
The property is situated on the northside of Canim Lake straddling Boss Creek. The property is situated 33 air miles northeast of The Town of 100 Mile House on the southwestern flank of the Quesnel Highlands in south central British Columbia, Canada.
The property is called the Gold Hunt mineral claim and it may be located on the NTS map sheet, 92P/15W. The claim can be accessed from 100 Mile House, B.C. by traveling northeast on the good all weather Canim-Hendrix Lake road for 48 miles.
The property is located on the northside of Canim Lake straddling Boss Creek. The property is situated 48 miles by good all weather road northeast of The Town of 100 Mile House in the southwestern part of the Quesnel Highlands in British Columbia, Canada.
The property lies within the Sub-Alpine Forest Zone and experiences about 50" of precipitation annually of which about 25% may occur as a snow equivalent. The summers can experience warm weather while the winters are generally cold.
The property area is mainly coniferous tree (spruce, pine and fir) covered plateau with some large patches of deciduous forest, such as aspen, alder and cottonwood along the lower drainage areas.
The property lies within the interior plateau on the south end of the Quesnel Highlands. The general area supports an active logging industry. Mining holds an historical and contemporary place in the development and economic well being of the area.
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The Town of 100 Mile House and Williams Lake, British Columbia are road accessible to the southwest and northwest of the property, respectively. Each offers much of the necessary infrastructure required to base and carry-out an exploration program such as accommodations, communications, limited equipment and supplies. Both centers are Provincial Highway #97 accessible from Vancouver, B.C. in a few hours, the time it takes to travel approximately 350 miles. The overnight Greyhound bus service is a popular way to send-in samples and to receive additional equipment and supplies.
The property is located in the southern part of the Quesnel Highlands. The claim area ranges in elevation from 2,700 feet to 3,300 feet mean sea level. The physiographic setting of the property can be described as rounded, low mountainous plateau terrain that has been surficially altered both by the erosional and the depositional (drift cover) effects of glaciation. Thickness of drift cover in the valleys may vary considerably.
MAP 1
![](https://capedge.com/proxy/SB-2/0001002014-06-000625/map1.gif)
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MAP 2
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Physiography
There is a moderate magnetic inflection across the northeastern portion of the claim in a northwest-southeast direction. The pattern of the inflection and a change in gradient between the southwest and northeast zone suggests a rock-type change, such as a contact or possibly a fault-contact. This type of feature is known to, at times, enhance the geological setting with the possibility of being receptive to mineralizing fluids ascend from underlying intrusions.
Regional Geology
The regional geological setting of the intermontane area is as an elongate northwest-southeast eugeosyclinal basin of Mesozoic age composed chiefly of interlayered volcano-sediments exhibiting various degrees of tilting and folding. A period of late Mesozoic igneous intrusion and Cenozoic plateau lavas and lesser flat or gently dipping sediments.
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Local Geology
The volcaniclastics, tuffs and generally fine grained, micro-porphyritic, crystalline rocks observed on the property have a similar appearance to the units of the Nicola Group rocks that the author has observed at a number of locations to the south in the Aspen Grove - Princeton areas of British Columbia. Locally these alkalic rocks may be interlayered with aphanitic textured tuffs of possible rhyodacite composition. The apparently youngest rock units observed in the claim area is a micro-porphyritic hornblende diorite that is observed to lie (or intrude) concordantly in the older layered sequences and to cut, in places, discordantly across these same units.
Property Geology
The property is underlain by a northerly trending belt of mafic to intermediate composition rock units which occur as flows and pyroclastic volcanics and less frequent interlayered sediments assigned to the eastern belt of the upper Triassic aged Nicola Group. These older units are in places intruded by quartz diorite of possible Cretaceous or younger age that are tentatively assigned to the Takomkane batholith type-unit occurring to the northeast of the claims. Volcanic dykes and overlying flows that appear to be the youngest rocks in the area, of possible Tertiary age, are also reported to have been observed cutting and/or overlying the older units.
Some or all of these units may be found to host economic mineralization. The property setting offers good underlying possibilities and all overburden areas should be checked when and if a field program is undertaken.
Mineralization
Pyrite-pyrrhotite-chalcopyrite mineralization as mesothermal replacements or vein-type of occurrences peripheral to the porphyry-type occurrence in the crystal, lithic volcanic tuffs or intrusive rock units or the volcanic skarn zones appear on the property. These occurrences appear in massive volcanic units and in medium grain-sized intrusive rock within steeply dipping to vertical fissure/fault zones with some dissemination in the adjacent wallrock. Rock alteration of some type nearly always accompany the mineralization.
The fault/fracture zones may be 10's of feet wide and 100's of feet in length and generally trend northerly. The gold quartz type mineralization may be of an epithermal origin, lower temperature and possibly with a carbonate accessory and be peripheral to a higher temperature porphyry stockwork or breccia pipe system.
History of Previous Work
To our knowledge, there has never been exploration activity on the property.
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Our Proposed Exploration Program
We are prospecting for gold. Our target is mineralized material. Our success depends upon finding mineralized material. Mineralized material is a mineralized body which has been delineated by appropriate spaced drilling or underground sampling to support sufficient tonnage and average grade of metals to justify removal. If we do not find mineralized material or we cannot remove mineralized material, either because we do not have the money to do it or because it is not economically feasible to do it, we will cease activities and you will lose your investment. We anticipate being able to delineate a mineralized body, if one exists, within nine months of beginning exploration.
We do not own any interest in any property, but merely have the right to conduct exploration activities on one property.
In addition, we may not have enough money to complete our exploration of the property. If it turns out that we have not raised enough money to complete our exploration program, we will try to raise additional funds from a second public offering, a private placement or loans. At the present time, we have not made any plans to raise additional money and there is no assurance that we would be able to raise additional money in the future. If we need additional money and cannot raise it, we will have to suspend or cease activities.
We must conduct exploration to determine what amount of minerals, if any, exist on the property and if any minerals which are found can be economically extracted and profitably processed.
The property is undeveloped raw land. Detailed exploration and surveying has not been initiated and will not be initiated until we raise money in this offering. That is because we do not have money to start exploration. Once the offering is concluded, we intend to start exploration activities. To our knowledge, no previous exploration activities have taken place on the property. The only event that has occurred is the staking of the property by Mr. McLeod, a physical examination of the property and five days of staking and prospecting. Mr. McLeod examined the surface and took samples. The samples did not reveal anything. Mr. McLeod used a hammer, pick and sack to take samples. While Mr. McLeod is a geologist, he is not an engineer, and accordingly his area of expertise is limited to geological matters. Mr. McLeod did not use any previous filed reports on the property. Before gold retrieval can begin, we must explore for and find mineralized material. After that has occurred we have to determine if it is economically feasible to remove the mineralized material. Economically feasible means that the costs associated with the removal of the mineralized material will not exceed the price at which we can sell the mineralized material. We cannot predict what that will be until we find mineralized material.
We do not know if we will find mineralized material.
Our exploration program is designed to economically explore and evaluate the property.
We do not claim to have any minerals or reserves whatsoever at this time on any of the property.
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We intend to implement an exploration program which consists of core sampling. Core sampling is the process of drilling holes to a depth of up to 1,400 feet in order to extract a samples of earth. Mr. Salameh and the consultant we hire will determine where drilling will occur on the property. The samples will be tested to determine if mineralized material is located on the property. Based upon the tests of the core samples, we will determine if we will terminate activities; proceed with additional exploration of the property; or develop the property. The proceeds from this offering are designed to only fund the costs of core sampling and testing. We intend to take our core samples to Geoterrex Limited, analytical chemists, geochemists and registered assayers located in Toronto, Ontario. Neither we nor our officers or directors have any affiliation with Geoterrex. Geoterrex is a registered assayer.
We estimate the cost of core sampling will be $20.00 per foot drilled. A drilling rig is required to take the core samples. The cost of the drilling rig is included in the drilling cost per foot. We will drill approximately 1,000 linear feet or ten holes. We estimate that it will take up to three months to drill the holes to a depth of 100 feet. We will pay an exploration consultant up to a maximum of $5,000 per month for his services during the three month period or a total of $15,000. The consultant will be responsible for managing the project, supervising the core sampling, and hiring subcontractors to perform work on the property. Our employees will not have involvement in the work performed, but will be overseeing everything. The total cost for analyzing the core samples will be $3,000.
The breakdown of estimated times and dollars was made by Mr. Salameh in consultation with Mr. McLeod.
We do not intend to interest other companies in the property if we find mineralized materials. We intend to try to develop the reserves ourselves.
If we are unable to complete exploration because we do not have enough money, we will cease activities until we raise more money. If we cannot or do not raise more money, we will cease activities. If we cease activities, we don't know what we will do and we don't have any plans to do anything else.
We cannot provide you with a more detailed discussion of how our exploration program will work and what we expect will be our likelihood of success. That is because we have a piece of raw land and we intend to look for mineralized material. We may or may not find any mineralized material. We hope we do, but it is impossible to predict the likelihood of such an event.
We do not have any plan to make our company to revenue generation. That is because we have not found economic mineralization yet and it is impossible to project revenue generation from nothing.
We anticipate starting exploration operation in the spring of 2007, weather permitting.
If we do not find mineralized material on the property, Mr. Salameh will allow the claim to expire and we will cease activities.
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Competitive Factors
The gold mining industry is fragmented. We compete with other exploration companies looking for gold. We are one of the smallest exploration companies in existence. We are an infinitely small participant in the gold mining market. While we compete with other exploration companies, there is no competition for the exploration or removal or mineral from out property. Readily available gold markets exist in Canada and around the world for the sale of gold. Therefore, we will be able to sell any gold that we are able to recover.
Regulations
Our mineral exploration program is subject to the British Columbia Mineral Tenure Act Regulation. This act sets forth rules for
* | locating claims |
* | working claims |
* | reporting work performed |
We are also subject to the British Columbia Mineral Exploration Code which tells us how and where we can explore for minerals. We must comply with these laws to operate our business. Compliance with these rules and regulations will not adversely affect our activities. These regulations will not impact our exploration activities. The only current costs we anticipate at this time are reclamation costs. Reclamation costs are the costs of restoring the property to its original condition should mineralized material not be found. We estimate that it will cost between $3,000 and $9,000 to restore the property to its original condition, should mineralized material not be found. The variance is based upon the number of holes that are drilled by us.
Environmental Law
We are also subject to the Health, Safety and Reclamation Code for Mines in British Columbia. This code deals with environmental matters relating to the exploration and development of mineral properties. Its goals are to protect the environment through a series of regulations affecting:
1. | Health and Safety |
2. | Archaeological Sites |
3. | Exploration Access |
We are responsible to provide a safe working environment, not disrupt archaeological sites, and conduct our activities to prevent unnecessary damage to the property.
We will secure all necessary permits for exploration and, if development is warranted on the property, will file final plans of operation before we start any mineral activities. We anticipate no discharge of water into active stream, creek, river, lake or any other body of water regulated by environmental law or regulation. No endangered species will be disturbed. Restoration of the disturbed land will be completed according to law. All holes, pits and shafts will be sealed upon
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abandonment of the property. It is difficult to estimate the cost of compliance with the environmental law since the full nature and extent of our proposed activities cannot be determined until we start our activities and know what that will involve from an environmental standpoint.
We are in compliance with the act and will continue to comply with the act in the future. We believe that compliance with the act will not adversely affect our business activities in the future.
Exploration stage companies have no need to discuss environmental matters, except as they relate to exploration activities. The only "cost and effect" of compliance with environmental regulations in British Columbia is returning the surface to its previous condition upon abandonment of the property. We cannot speculate on those costs in light of our ongoing plans for exploration. When we are ready to drill, we will notify the B.C. Inspector of Mines. He will require a bond to be put in place to assure that the property will be restored to its original condition. We have estimated the cost of restoring the property to be between $3,000 to $9,000, depending upon the number of holes drilled.
Subcontractors
We intend to use the services of subcontractors for manual labor exploration work on our properties.
Employees and Employment Agreements
At present, we have no employees, other than our sole officer and director. Our sole officer and director is part-time employees and will devote about 10% of his time to our operation. Our sole officer and director does not have an employment agreement with us. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt plans in the future. There are presently no personal benefits available to our sole officer and director. Mr. Salameh will handle our administrative duties. Because Mr. Salameh is inexperienced with exploration, he will hire qualified persons to perform the surveying, exploration, and excavating of our property. As of today, we have not looked for or talked to any geologists or engineers who will perform work for us in the future. We do not intend to do so until we complete this offering.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This section of the prospectus includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this prospectus. These forward-looking states are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or out predictions.
We are a start-up, exploration stage corporation and have not yet generated or realized any revenues from our business activities.
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Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. Accordingly, we must raise cash from sources other than the sale of minerals found on the property. Our only other source for cash at this time is investment by others in our complete private placement. The cash we raised will allow us to stay in business for at least one year. Our success or failure will be determined by what we find under the ground.
To meet our need for cash we raised money from our private placement. If we find mineralized material and it is economically feasible to remove the mineralized material, we will attempt to raise additional money through a subsequent private placement, public offering or through loans. If we do not have enough money to complete our exploration of the property, we will have to find alternative sources, like a second public offering, a private placement of securities, or loans from our officers or others.
Our officers and directors are unwilling to make any commitment to loan us any money at this time. At the present time, we have not made any arrangements to raise additional cash. If we need additional cash and can't raise it, we will either have to suspend activities until we do raise the cash, or cease activities entirely. Other than as described in this paragraph, we have no other financing plans.
We do not own any interest in any property, but merely have the right to conduct exploration activities on one property. Even if we complete our current exploration program and it is successful in identifying a mineral deposit, we will have to spend substantial funds on further drilling and engineering studies before we will know if we have a commercially viable mineral deposit, a reserve.
We will be conducting research in the form of exploration of the property. Our exploration program is explained in as much detail as possible in the business section of this prospectus. We are not going to buy or sell any plant or significant equipment during the next twelve months. We will not buy any equipment until have located a reserve and we have determined it is economical to extract the minerals from the land.
We do not intend to interest other companies in the property if we find mineralized materials. We intend to try to develop the reserves ourselves.
If we are unable to complete any phase of exploration because we don' t have enough money, we will cease activities until we raise more money. If we can't or don't raise more money, we will cease activities. If we cease activities, we don't know what we will do and we don't have any plans to do anything.
We do not intend to hire additional employees at this time. All of the work on the property will be conduct by unaffiliated independent contractors that we will hire. The independent contractors will be responsible for surveying, geology, engineering, exploration, and excavation. The geologists will evaluate the information derived from the exploration and excavation and the engineers will advise us on the economic feasibility of removing the mineralized material.
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Milestones
The following are our milestones:
1. April 2007, retain our consultant to manage the exploration of the property. - Maximum cost of $15,000. Time of retention 0-90 days.
2. May 2007 to August, 2007 - Core drilling. Core drilling will cost $20.00 per foot. We plan to drill 15 holes to a depth of 100 feet. The total cost will be $30,000. Core drilling will be subcontracted to non-affiliated third parties. No power source is need for core drilling. The drilling rig operates on diesel fuel. All electric power need, for light and heating while on the property will be generated from gasoline powered generators. Time to conduct the core drilling - 120 days.
3. September 2007 to November, 2007 - Have independent an third party analyze the samples from the core drilling. Determine if mineralized material is below the ground. If mineralized material is found, define the body. We estimate that it will cost $4,500 to analyze the core samples and will take 30 days.
All funds for the foregoing activities have been obtained from our private placement.
Limited Operating History; Need for Additional Capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any revenues from activities. We cannot guarantee we will be successful in our business activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.
To become profitable and competitive, we conduct research and exploration of our properties before we start production of any minerals we may find. We are seeking equity financing to provide for the capital required to implement our research and exploration phases.
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our activities. Equity financing could result in additional dilution to existing shareholders.
Results of Activities
From Inception on January 26, 2006
We acquired the right to explore one property containing one claim. We do not own any interest in any property, but merely have the right to conduct exploration activities on one property. We have staked the property and will begin our exploration in April 2007.
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Since inception, we have used loans from Mr. Salameh, our president, to stake the property, to incorporate us, and for legal and accounting expenses. Net cash provided by him since inception on January 26, 2006 to April 30, 2006 was $922. The loans are not evidenced by any written instrument and are to be repaid at our discretion. The loans are without interest.
Liquidity and Capital Resources
As of the date of this prospectus, we have yet to generate any revenues from our business activities.
We issued 5,000,000 shares of common stock through a private placement pursuant to Regulation S of the Securities Act of 1933 to our sole officer and director, March 2006, in consideration of $5,000.00. The shares were sold to a non-US persons and all transactions closed outside the United States of America. This was accounted for as a purchase of shares of common stock.
In April 2006, we completed a private placement of 3,000,000 restricted shares of common stock pursuant to Reg. S of the Securities Act of 1933 and raised $30,000. All of the shares were sold to non-US persons and all transactions closed outside the United States of America. This was accounted for as a purchase of shares of common stock.
As of April 30, 2006, our total assets were $33,898 and our total liabilities were $4,422.
MANAGEMENT
Officers and Directors
Each of our directors serves until his or her successor is elected and qualified. Each of our officers is elected by the board of directors to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or she is removed from office. The board of directors has no nominating, auditing or compensation committees.
The name, age and position of our officers and directors are set forth below:
Name
| Age
| Position Held
|
| | |
Suheil Salameh | 33 | President, Principal Executive Officer, Secretary, Treasurer, Principal Financial Officer, Principal Accounting Officer, and sole member of the Board of Directors. |
Mr. Salameh will serve until our next annual meeting of the stockholders. The Board of Directors elects officers and their terms of office are at the discretion of the Board of Directors.
- 25 -
Background of officers and directors
Mr. Suheil Salameh has been our president, principal executive officer, secretary, treasurer, principal financial officer, principal accounting officer and sole member of the board of directors since our inception on January 26, 2006. Since January 2005, Mr. Salameh is the controller at Broadway Locksmith, a family owned locksmith business located in Vancouver, British Columbia. From March 2003 to January 2005, Mr. Salameh was an insurance agent with Equinox Financial Group. From January, 2001 to February 2003, Mr. Salmeh was an investment advisor with Georgia Pacific Securities, specializing in technical analysis and the small cap market.
Audit Committee Financial Expert
We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we are only beginning our commercial operations, at the present time, we believe the services of a financial expert are not warranted.
Conflicts of Interest
There are no conflicts of interest.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to compensation paid by us to our officers and directors during the three most recent fiscal years. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.
Summary Compensation Table
| | | Long Term Compensation | |
| | Annual Compensation | Awards | Payouts | |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) |
| | | | Other | | | | |
| | | | Annual | Restricted | Securities | | |
| | | | Compen | Stock | Underlying | LTIP | All Other |
Name and Principal | | Salary | Bonus | sation | Award(s) | Options / | Payouts | Compens |
Position [1]
| Year
| ($)
| ($)
| ($)
| ($)
| SARs (#)
| ($)
| ation ($)
|
Suheil Salameh | 2006 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
President and Director | 2005 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2004 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
[1] All compensation received by our sole officer and director has been disclosed.
- 26 -
Option/SAR Grants
There are no stock option, retirement, pension, or profit sharing plans for the benefit of our officers and directors.
Long-Term Incentive Plan Awards
We do not have any long-term incentive plans.
Compensation of Directors
We do not have any plans to pay our directors any money.
Indemnification
Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the office or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.
PRINCIPAL AND SELLING SHAREHOLDERS
The following table sets forth, as of the date of this prospectus, the total number of shares owned beneficially by each of our directors, officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The table also reflects what their ownership will be assuming completion of the sale of all shares in this offering. The stockholders listed below have direct ownership of his/her shares and possess voting and dispositive power with respect to the shares.
- 27 -
| Direct Amount of | | Percent |
Name of Beneficial Owner
| Beneficial Owner
| Position
| of Class
|
Suheil Salameh [1] | 5,000,000 | President, Principal Executive Officer, | 62.50% |
| | and Director | |
| | | |
| | | |
All Officers and Directors as a | | | |
Group (1 Person) | 5,000,000 | | 62.50% |
Securities authorized for issuance under equity compensation plans.
We have no equity compensation plans.
Selling Shareholders
The following table sets forth the name of each selling shareholder, the total number of shares owned prior to the offering, the percentage of shares owned prior to the offering, the number of shares offered, and the percentage of shares owned after the offering, assuming the selling shareholder sells all of his shares and we sell the maximum number of shares.
| | | | Percentage of shares |
| | | | owned after the |
| Total number of | Percentage of | Number of | offering assuming |
| shares owned | shares owned | shares being | all of the share are |
Name | prior to offering | prior to offering | offered | sold in the offering |
| | | | |
Bains, Randy | 75,000 | 0.94% | 75,000 | 0% |
Bartacovic, Jason | 75,000 | 0.94% | 75,000 | 0% |
Basenden, Shane | 75,000 | 0.94% | 75,000 | 0% |
Blair, Charles | 75,000 | 0.94% | 75,000 | 0% |
Campbell, Sadie | 75,000 | 0.94% | 75,000 | 0% |
Chana, Sukhi | 75,000 | 0.94% | 75,000 | 0% |
Cosmidis, Demitri | 75,000 | 0.94% | 75,000 | 0% |
Crighton, Jason | 75,000 | 0.94% | 75,000 | 0% |
C.S. Nelson, Benjamin | 75,000 | 0.94% | 75,000 | 0% |
Demmery, Jennifer | 75,000 | 0.94% | 75,000 | 0% |
Dew, Micah | 75,000 | 0.94% | 75,000 | 0% |
Dionne, Bernie | 75,000 | 0.94% | 75,000 | 0% |
Dimingo, Edward | 75,000 | 0.94% | 75,000 | 0% |
Gaffar, Michael | 75,000 | 0.94% | 75,000 | 0% |
Goodman, Bradley | 75,000 | 0.94% | 75,000 | 0% |
Goodman, Susan | 75,000 | 0.94% | 75,000 | 0% |
Gray, Nathaniel | 75,000 | 0.94% | 75,000 | 0% |
- 28 -
Green, Andrew | 75,000 | 0.94% | 75,000 | 0% |
Hair, Houston | 75,000 | 0.94% | 75,000 | 0% |
Harper, Nigel | 75,000 | 0.94% | 75,000 | 0% |
Hughes, Kate | 75,000 | 0.94% | 75,000 | 0% |
Khadora, Nohad M. | 75,000 | 0.94% | 75,000 | 0% |
King, Kris | 75,000 | 0.94% | 75,000 | 0% |
Koch, Shawn M. | 75,000 | 0.94% | 75,000 | 0% |
Kroes, Ryon | 75,000 | 0.94% | 75,000 | 0% |
Lewis, Christa | 75,000 | 0.94% | 75,000 | 0% |
Linh Le, Thuy | 75,000 | 0.94% | 75,000 | 0% |
Lopac, Katherine E. | 75,000 | 0.94% | 75,000 | 0% |
Lopac, Alexander | 75,000 | 0.94% | 75,000 | 0% |
Nacher, Mohamed | 75,000 | 0.94% | 75,000 | 0% |
Nacher, Samer | 75,000 | 0.94% | 75,000 | 0% |
Pharaon, Mary | 75,000 | 0.94% | 75,000 | 0 |
Salameh, Nabil | 75,000 | 0.94% | 75,000 | 0% |
Stefan, Kiraly | 75,000 | 0.94% | 75,000 | 0% |
Todd, Andrea | 75,000 | 0.94% | 75,000 | 0% |
Tran, Patrick | 75,000 | 0.94% | 75,000 | 0% |
Tsithriotis, Alexander | 75,000 | 0.94% | 75,000 | 0% |
Tsithriotis,Maria | 75,000 | 0.94% | 75,000 | 0% |
Whitley, Corey | 75,000 | 0.94% | 75,000 | 0% |
Zohny, Basel | 75,000
| 0.94%
| 75,000
| 0% |
Total | 3,000,000
| 37.50%
| 3,000,000
| 0% |
We issued 3,000,000 shares of common stock as restricted securities pursuant to Reg. S of the Securities Act of 1933 in that all of the sales took place outside the United States of America with non-US persons.
The following is a summary of the issuances of all shares pursuant to Reg. S of the Act.
a) | In March 2006, we issued 5,000,000 shares of common stock to Suheil Salameh, our sole officer and director in consideration of $0.001 per share or a total of $5,000.00. |
| |
b) | In April 2006, we issued 3,000,000 shares of common stock to forty individuals in consideration of $0.01 per share or a total of $30,000. The 3,000,000 shares so issued are being registered in this offering. |
Future Sales of Shares
A total of 8,000,000 shares of common stock are issued and outstanding. Of the 8,000,000 shares outstanding, all are restricted securities as defined in Rule 144 of the Securities Act of 1933. 3,000,000 are being offered for sale by the selling shareholders in this offering.
Shares purchased in this offering, which will be immediately resalable without restriction of any kind.
- 29 -
DESCRIPTION OF SECURITIES
Common Stock
Our authorized capital stock consists of 50,000,000 shares of common stock, $0.001 par value per share. The holders of our common stock:
* | have equal ratable rights to dividends from funds legally available if and when declared by our board of directors; |
* | are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs; |
| |
* | do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and |
| |
* | are entitled to one non-cumulative vote per share on all matters on which stockholders may vote. |
All shares of common stock now outstanding are fully paid for and non-assessable and all shares of common stock which are the subject of this offering, when issued, will be fully paid for and non-assessable. We refer you to our Articles of Incorporation, Bylaws and the applicable statutes of the state of Nevada for a more complete description of the rights and liabilities of holders of our securities.
Non-cumulative voting
Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors.
Cash dividends
As of the date of this prospectus, we have not paid any cash dividends to stockholders. The declaration of any future cash dividend will be at the discretion of our board of directors and will depend upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
Anti-takeover provisions
There are no Nevada anti-takeover provisions that may have the affect of delaying or preventing a change in control.
- 30 -
Reports
After we complete this offering, we will not be required to furnish you with an annual report. Further, we will not voluntarily send you an annual report. We will be required to file reports with the SEC under section 15(d) of the Securities Act. The reports will be filed electronically. The reports we will be required to file are Forms 10-KSB, 10-QSB, and 8-K. You may read copies of any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that will contain copies of the reports we file electronically. The address for the Internet site is www.sec.gov.
Stock transfer agent
Our stock transfer agent for our securities is Empire Stock Transfer, Inc., 7251 West Lake Mead Boulevard, Las Vegas, Nevada 89128 and its telephone number is (702) 562-4091.
CERTAIN TRANSACTIONS
We issued 5,000,000 shares of common stock to March 2006, in consideration of $5,000.00.
Mr. Salameh allows us to use a portion of his home as our office on a rent free basis.
As at April 30, 2006, we owed Mr. Salameh, are sole officer and director $922 for advances made to us. This amount is unsecured, bears no interest with no specific terms of repayment.
LITIGATION
We are not a party to any pending litigation and none is contemplated or threatened.
EXPERTS
Our financial statements for the period from inception to April 30, 2006, included in this prospectus have been audited by Manning Elliott LLP, Chartered Accountants, 11th Floor - 1050 West Pender Street, Vancouver, British Columbia, Canada V6E 3S7, as set forth in their report included in this prospectus. Their report is given upon their authority as experts in accounting and auditing.
LEGAL MATTERS
Conrad C. Lysiak, Attorney at Law, 601 West First Avenue, Suite 903, Spokane, Washington 99201, telephone (509) 624-1475 has acted as our legal counsel.
- 31 -
FINANCIAL STATEMENTS
Our fiscal year end is April 30. We will provide audited financial statements to our stockholders on an annual basis; the statements will be audited by a firm of Chartered Accountants.
Audited financial statements for January 26, 2006 (inception) to April 30, 2006 immediately follow:
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | F-1 |
FINANCIAL STATEMENTS |
| Balance Sheet | F-2 |
| Statement of Operation | F-3 |
| Statement of Stockholders' Equity | F-4 |
| Statement of Cash Flows | F-5 |
NOTES TO FINANCIAL STATEMENTS | F-6 |
- 32 -
![](https://capedge.com/proxy/SB-2/0001002014-06-000625/manninglogo.gif)
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Gemini Explorations, Inc.
(An Exploration Stage Company)
We have audited the accompanying balance sheet of Gemini Explorations, Inc. (An Exploration Stage Company) as of April 30, 2006 and the related statements of operations, cash flows and stockholders' equity for the period from January 26, 2006 (Date of Inception) to April 30, 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly, in all material respects, the financial position of Gemini Explorations, Inc. (An Exploration Stage Company), as of April 30, 2006, and the results of its operations and its cash flows for the period from January 26, 2006 (Date of Inception) to April 30, 2006 in conformity with accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not generated any revenue, has an accumulated losses since inception and will need additional equity financing to begin realizing its business plan. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
MANNING ELLIOTT LLP
CHARTERED ACCOUNTANTS
Vancouver, Canada
July 15, 2006
F-1
- 33 -
Gemini Explorations, Inc.
(An Exploration Stage Company)
Balance Sheet
(Expressed in U.S. dollars)
| | | April 30, 2006 $ |
| | | |
ASSETS | | | |
| | | |
Current Assets | | | |
| | | |
Cash
|
|
| 33,898
|
Total Assets
|
|
| 33,898
|
| | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | |
| | | |
Current Liabilities | | | |
| | | |
Accounts payable | | | 3,500 |
Due to related party (Note 3(a))
|
|
| 922
|
Total Liabilities
|
|
| 4,422
|
| | | |
| | | |
Contingencies and Commitments (Note 1) | | | |
| | | |
Stockholders' Equity | | | |
| | | |
Common Stock, 50,000,000 shares authorized, $0.001 par value; 8,000,000 shares issued and outstanding | | | 8,000 |
| | | |
Additional Paid-in Capital | | | 27,000 |
| | | |
Donated Capital (Note 3(b)) | | | 2,250 |
| | | |
Deficit Accumulated During the Exploration Stage
|
|
| (7,774)
|
Total Stockholders' Equity
|
|
| 29,476
|
Total Liabilities and Stockholders' Equity
|
|
| 33,898
|
F-2
(The Accompanying Notes are an Integral Part of These Financial Statements)
- 34 -
Gemini Explorations, Inc.
(An Exploration Stage Company)
Statement of Operations
(Expressed in U.S. dollars)
| | | Period from |
| | | January 26, 2006 |
| | | (Date of Inception) |
| | | to April 30, |
| | | 2006 |
| | | $ |
| | | |
Revenue
|
|
| -
|
| | | |
| | | |
Expenses | | | |
| | | |
Foreign exchange gain | | | (1,113) |
General and administrative (Note 3(b)) | 3,098 |
Impairment of mineral property costs (Note 4)
| 5,789
|
| | | |
Total Expenses
|
|
| 7,774
|
Net Loss
| (7,774)
|
| | | |
Net Loss Per Share - Basic and Diluted
| -
|
| | | |
| | | |
Weighted Average Shares Outstanding
| 2,218,000
|
| | | |
F-3
(The Accompanying Notes are an Integral Part of These Financial Statements)
- 35 -
Gemini Explorations, Inc.
(An Exploration Stage Company)
Statement of Cash Flows
(Expressed in U.S. dollars)
| | | Period from |
| | | January 26, 2006 |
| | | (Date of Inception) |
| | | to April 30, |
| | | 2006 |
| | | $ |
| | | |
Operating Activities | | | |
| | | |
Net loss | | | (7,774) |
| | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | |
| | | |
Donated rent | | | 750 |
Donated services | 1,500 |
Impairment of mineral property costs | 5,789 |
| | | |
Changes in operating assets and liabilities: | |
| | | |
Accounts payable | 3,500 |
Due to related party
| 922
|
Net Cash Provided by Operating Activities
| 4,687
|
| | | |
Investing Activities | |
| | | |
Mineral property costs
| (5,789)
|
| | | |
Net Cash Used in Investing Activities
| (5,789)
|
| | | |
Financing Activities | | | |
| | | |
Proceeds from issuance of common stock
| 35,000
|
| | | |
Net Cash Flows Provided By Financing Activities
| 35,000
|
| | | |
Increase in Cash | | | 33,898 |
| | | |
Cash - Beginning of Period
| -
|
| | | |
Cash - End of Period
|
|
| 33,898
|
| | | |
Supplemental Disclosures | | | |
| | | |
Interest paid | | | - |
Income taxes paid
|
|
| -
|
| | | |
F-4
(The Accompanying Notes are an Integral Part of These Financial Statements)
- 36 -
Gemini Explorations, Inc.
(An Exploration Stage Company)
Statement of Stockholders' Deficit
For the Period from January 26, 2006 (Date of Inception) to April 30, 2006
(Expressed in U.S. dollars)
| | | | | Deficit | |
| | | | | Accumulated | |
| | | Additional | | During the | |
| | | Paid-in | Donated | Exploration | |
| Shares | Amount | Capital | Capital | Stage | Total |
| # | $ | $ | $ | $ | $ |
| | | | | | |
Balance - January 26, 2006 (Date of Inception) | - | - | - | - | - | - |
| | | | | | |
March 21, 2006 - common shares issued for cash at $0.001 per share | 5,000,000 | 5,000 | - | - | - | 5,000 |
| | | | | | |
April 30, 2006 - common shares issued for cash at $0.01 per share | 3,000,000 | 3,000 | 27,000 | - | - | 30,000 |
| | | | | | |
Donated rent and services | - | - | - | 2,250 | - | 2,250 |
| | | | | | |
Net loss for the period
| -
| -
| -
| -
| (7,774)
| (7,774)
|
| | | | | | |
Balance - April 30, 2006
| 8,000,000
| 8,000
| 27,000
| 2,250
| (7,774)
| 29,476
|
| | | | | | |
F-5
(The Accompanying Notes are an Integral Part of These Financial Statements)
- 37 -
Gemini Explorations, Inc. |
(An Exploration Stage Company) |
Notes to the Financial Statements |
April 30, 2006 |
(Expressed in U.S. dollars) |
|
1. | Nature of Operations and Continuance of Business |
|
| The Company was incorporated in the State of Nevada on January 26, 2006. The Company is an Exploration Stage Company, as defined by Statement of Financial Accounting Standard (" SFAS" ) No.7 " Accounting and Reporting by Development Stage Enterprises" .. The Company' s principal business is the acquisition and exploration of mineral resources. The Company has not presently determined whether its properties contain mineral reserves that are economically recoverable. |
|
| These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, confirmation of the Company' s interests in the underlying properties, and the attainment of profitable operations. As at April 30, 2006, the Company has never generated any revenues and has accumulated losses of $7,774 since inception. These factors raise substantial doubt regarding the Company' s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
|
| The Company is planning to file an SB-2 Registration Statement with the United States Securities and Exchange Commission to register 3,000,000 shares of common stock for resale by existing shareholders of the Company at $0.01 per share until the shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices. The Company will not receive any proceeds from the resale of shares of common stock by the selling shareholders. |
|
2. | Summary of Significant Accounting Policies |
|
| a) | Basis of Presentation |
|
| | These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. The Company' s fiscal year-end is April 30. |
|
| b) | Use of Estimates |
|
| | The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
F-6
- 38 -
Gemini Explorations, Inc. |
(An Exploration Stage Company) |
Notes to the Financial Statements |
April 30, 2006 |
(Expressed in U.S. dollars) |
|
2. | Summary of Significant Accounting Policies (continued) |
|
| c) | Basic and Diluted Net Income (Loss) Per Share |
|
| | The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. |
|
| d) | Comprehensive Loss |
|
| | SFAS No. 130, " Reporting Comprehensive Income," establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at April 30, 2006, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements. |
|
| e) | Cash and Cash Equivalents |
|
| | The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. |
|
| f) | Mineral Property Costs |
|
| | The Company has been in the exploration stage since its inception on January 26, 2006 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred using the guidance in EITF 04-02, " Whether Mineral Rights Are Tangible or Intangible Assets" .. The Company assesses the carrying costs for impairment under SFAS No. 144, " Accounting for Impairment or Disposal of Long Lived Assets" at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations. |
F-7
- 39 -
Gemini Explorations, Inc. |
(An Exploration Stage Company) |
Notes to the Financial Statements |
April 30, 2006 |
(Expressed in U.S. dollars) |
2. | Summary of Significant Accounting Policies (continued) |
| g) | Long-lived Assets |
|
| | In accordance with SFAS No. 144, " Accounting for the Impairment or Disposal of Long-Lived Assets" , the carrying value of long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. |
|
| h) | Financial Instruments |
|
| | The fair values of financial instruments, which include cash and due to related party, were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The Company' s operations are in Canada which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company' s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk. |
|
| i) | Income Taxes |
|
| | Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109 " Accounting for Income Taxes" as of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. |
|
| j) | Foreign Currency Translation |
|
| | The Company' s functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with SFAS No. 52 " Foreign Currency Translation" , using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. |
|
| k) | Recent Accounting Pronouncements |
|
| | The Financial Accounting Standards Board has issued SFAS No. 155 "Accounting for Certain Hybrid Financial Instruments - an amendment of FASB Statements No. 133 and 140" and No. 156 "Accounting for Servicing of Financial Assets - an amendment of FASB Statement No. 140", but they will not have a material effect in the Company' s results of operations or financial position. |
F-8
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Gemini Explorations, Inc. |
(An Exploration Stage Company) |
Notes to the Financial Statements |
April 30, 2006 |
(Expressed in U.S. dollars) |
3. | Related Party Transactions |
| a) | At April 30, 2006, the Company is indebted to a director of the Company in the amount of $922, representing expenses paid on behalf of the Company. This amount is non-interest bearing, unsecured and due on demand. |
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| b) | During the period ended April 30, 2006, the Company recognized a total of $750 ($250 per month) for donated rent, and $1,500 ($500 per month) for donated services for office space and services provided by the President of the Company. |
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| c) | During the period ended April 30, 2006, the Company entered into trust agreements with the President of the Company. Refer to Note 4. |
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4. | Mineral Properties |
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| a) | On March 27, 2006, the Company acquired a 100% interest in two mineral claims located in the Province of British Columbia, Canada, for $2,200. The claims are registered in the name of the President of the Company, who has executed a trust agreement whereby the President agreed to hold the claims in trust on behalf of the Company. The cost of the mineral property was initially capitalized. At April 30, 2006, the Company recognized an impairment loss of $2,200, as it has not yet been determined whether there are proven or probable reserves on the property. |
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| b) | On April 28, 2006, the Company acquired, by staking, a 100% interest in a mineral claim located in the Province of British Columbia, Canada for $3,589. Subsequent to April 30, 2006, the claim was registered in the name of the President of the Company, who has executed a trust agreement whereby the President agreed to hold the claim in trust on behalf of the Company. The costs of the mineral property was initially capitalized. At April 30, 2006, the Company recognized an impairment loss of $3,589, as it has not yet been determined whether there are proven or probable reserves on the property. |
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5. | Common Stock |
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| a) | On March 21, 2006, the Company issued 5,000,000 shares of common stock to the President of the Company at $0.001 per share for proceeds of $5,000. |
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| b) | On April 30, 2006, the Company issued 3,000,000 shares of common stock at $0.01 per share for proceeds of $30,000. |
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6. | Income Taxes |
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| Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has a net operating losses of $5,500 which commence expiring in 2026. Pursuant to SFAS No. 109, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of the net operating losses has not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. |
F-9
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Gemini Explorations, Inc. |
(An Exploration Stage Company) |
Notes to the Financial Statements |
April 30, 2006 |
(Expressed in U.S. dollars) |
|
6. | Income Taxes (continued) |
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| The components of the net deferred tax asset at April 30, 2006 and the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are scheduled below: |
| | | | April 30, 2006 $ |
| | | | |
Net Operating Loss | | | | 5,500 |
| | | | |
Statutory Tax Rate | | | | 35% |
| | | | |
Effective Tax Rate | | | | - |
| | | | |
Deferred Tax Asset | | | | 1,925 |
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Valuation Allowance
|
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| (1,925)
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| | | | |
Net Deferred Tax Asset
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| -
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| | | | |
F-10
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Until _______________, 2006, ninety days after the date of this prospectus, all dealers effecting transactions in our registered securities, whether or not participating in this distribution, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The only statute, charter provision, bylaw, contract, or other arrangement under which any controlling person, director or officer of the registrant is insured or indemnified in any manner against any liability which he may incur in his capacity as such, is as follows:
| 1 | Article XII of the Articles of Incorporation of the company, filed as Exhibit 3.1 to our Form SB-2 registration statement. |
| 2 | Article X of the Bylaws of the company, filed as Exhibit 3.2 to our Form SB-2 registration statement. |
| 3 | Nevada Revised Statutes, Chapter 78. |
The general effect of the foregoing is to indemnify a control person, officer or director from liability, thereby making the company responsible for any expenses or damages incurred by such control person, officer or director in any action brought against them based on their conduct in such capacity, provided they did not engage in fraud or criminal activity.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering, all of which are to be paid by the registrant, are as follows:
SEC Registration Fee | $ | 5.13 |
Printing Expenses | $ | 100.00 |
Accounting/administrative Fees and Expenses | $ | 4,394.87 |
Blue Sky Fees/Expenses | $ | 0.00 |
Legal Fees/ Expenses | $ | 25,000.00 |
Escrow fees/Expenses | $ | 0.00 |
Transfer Agent Fees | $ | 0.00 |
Miscellaneous Expenses
| $
| 0.00
|
TOTAL
| $
| 29,500.00
|
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ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
Since inception, the registrant has sold the following securities which were not registered under the Securities Act of 1933, as amended.
a) | In March 2006, we issued 5,000,000 shares of common stock to Mr. Suheil Salameh in consideration of $0.001 per share or a total of $5,000.00. |
| |
b) | In April 2006, we issued 3,000,000 shares of common stock to forty individuals in consideration of $0.01 per share or a total of $30,000. |
We issued the foregoing 8,000,000 shares of common stock as restricted securities pursuant to Reg. S of the Securities Act of 1933 in that all of the sales took place outside the United States of America with non-US persons.
ITEM 27. EXHIBITS.
The following exhibits are filed with this Form SB-2 registration statement:
Exhibit No. | Document Description |
| |
3.1 | Articles of Incorporation |
3.2 | Bylaws |
4.1 | Specimen Stock Certificate |
5.1 | Opinion of Conrad C. Lysiak, Attorney at Law |
10.1 | Trust Agreement |
23.1 | Consent of Manning Elliott LLP, Chartered Accountants |
23.2 | Consent of Conrad C. Lysiak |
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ITEM 28. UNDERTAKINGS.
We hereby undertake:
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
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| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
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| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and |
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| (iii) | To include any additional or changed material information on the plan of distribution. |
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(2) | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time to be the initial bona fide offering thereof. |
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(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
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(4) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, we have been advised 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. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
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(5) | For determining any liability under the Securities Act of 1933: |
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| (i) | we shall treat the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by us under Rule 424(b)(1), or (4) or 497(h) under the Securities Act as part of this registration statement as of the time the Commission declared it effective. For determining any liability under the Securities Act of 1933, we shall treat each post-effective amendment that contains a form of prospectus as a new registration statement for the securities offered in the registration statement, and that offering of the securities at that time as the initial bona fide offering of those securities. |
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| (ii) | we shall treat each prospectus filed by us pursuant to Rule 424(b)(3) as part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement. Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registra tion statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or |
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| (iii) | we shall treat each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing of this Form SB-2 Registration Statement and has duly caused this Form SB-2 Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Surrey, British Columbia, Canada on this 23rd of August, 2006.
| GEMINI EXPLORATIONS, INC. |
| |
| BY: | SUHEIL SALAMEH |
| | Suheil Salameh |
| | President, Principal Executive Officer, Secretary, Treasurer, Principal Financial Officer, Principal Accounting Officer, and sole member of the Board of Directors |
| | |
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