UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
| [X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| | For the fiscal year ended December 31, 2008 |
Commission file number 333-152417
GREENWOOD GOLD RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
4285 S.W. Martin Highway
Palm City, FL
34990
(Address of principal executive offices, including zip code.)
(772) 288-2775
(Registrant's telephone number, including area code)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ] Yes No [ X ]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act: [ ] Yes No [ X ]
Indicate by check mark whether the registrant(1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 day. [ X ] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy if information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 if the Exchange Act.
| | | Large Accelerated filer | | [ ] | | Accelerated filer [ ] |
| | | Non-accelerated filer | [ ] | | Smaller reporting company [ X ] |
| | | (Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [X] Yes [ ] No
On February 4, 2009, the Registrant had 6,327,750 outstanding common shares of voting common stock.
The aggregate market value of the voting common stock held by non-affiliates (3,327,750 shares of voting common stock) as of June 30, 2008, was $ 998,325, computed at $0.30 per share using the latest price of our common stock from our most recent private offering, assuming solely for the purposes of this calculation that the directors and executive officers of the issuer are “affiliates”. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
PART I
ITEM 1. BUSINESS
We were incorporated on March 26, 2008. We are an exploration stage corporation. An exploration stage corporation is one engaged in the search for mineral deposits or reserves which are not in either the development or production stage. We intend to conduct exploration activities on one property located in Central Newfoundland, Canada. Record title to the property upon which we intend to conduct exploration activities is held in the name of Gary D. Alexander, our president. The property consists of 13 claim blocks totaling 325 hectares or approximately 803 acres. We intend to explore for gold on the property. We have not yet generated or realized any revenues from our business operations.
The property is undeveloped raw land. Detailed exploration and surveying has not been initiated. The only events that have occurred are: the acquisition of the Greenwood Pond mineral claim by our sole officer and director, Gary D. Alexander, who is the record owner, holding the claim in trust for the Company and the preparation of an independent Geological Report, containing a proposed two phase exploration program dated April 30, 2008 by Richard Jeanne, consulting geologist. We have consulted with our geologist to discuss plans for the commencement of Phase 1 of our exploration program.
We have not yet commenced the field work phase of our initial exploration program. Exploration is currently in the planning stages. Our exploration program is exploratory in nature and there is no assurance that a commercially viable mineral deposit, a reserve, exists in the property until further exploration is done and a comprehensive evaluation concludes economic and legal feasibility.
Our administrative office is located at 4285 S.W. Martin Highway, Palm City, Florida 34990 and our telephone number is (772) 288-2775. Our registered statutory office is located at 1802 North Carson Street, Suite 212, Carson City, Nevada 89701. Our mailing address is the same as our administrative office, at 4285 S.W. Martin Highway, Palm City, Florida 34990.
Since inception, we issued 6,327,750 shares of common stock via private placement for cash proceeds of $42,575. In April 2008, we issued 3,000,000 restricted shares of common stock to Gary D. Alexander; our sole officer and director pursuant to Section 4(2) of the Securities Act of 1933. The shares were sold in a private transaction to Mr. Alexander. No commissions were paid to anyone in connection with the sale of the shares and general solicitation was not made to anyone.
In May 2008 we completed a private placement of 3,327,750 shares of common stock to 33 investors in consideration of $39,575. The shares were issued as restricted securities pursuant to the exemption from registration contained in Regulation 504 of the Securities Act of 1933 in that a Form D was filed with the Securities and Exchange Commission; we raised less than $1,000,000 in the last twelve months; and, each purchaser was solicited by Mr. Alexander, our sole officer and director.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
| ITEM 1B. | UNRESOLVED STAFF COMMENTS |
None.
Our administrative office is located at 4285 S.W. Martin Highway, Palm City, FL, 34990 and our telephone number is (772) 288-2775. Beginning June 1, 2008, the Company entered into a sublease agreement for approximately 144 square feet of executive style office space with an unrelated third party for an initial term of one year. Additional terms include annual rental in the amount of $1,800 plus applicable state and local taxes payable at a rate of $150 per month with first payment due June 1, 2008 and an option to renew for an additional one year at an annual rent amount to be agreed upon. A separate security deposit requirement was waived by mutual agreement of the parties.
In April 2008, we acquired the right to explore one property located in central Newfoundland, Canada. We do not own any property. The property consists of thirteen mineral title cells comprising 803 acres (325 hectares). Newfoundland allows a mineral explorer to claim a portion of available Crown lands as its exclusive area for exploration by registering the claim area on the Newfoundland and Labrador Department of Natural Resources Online Claims Staking system. The Online Claims Staking system is the Internet-based Newfoundland system used to register, maintain and manage the claims. A cell is an area which appears electronically on the Newfoundland Internet Mineral Titles Online Grid and was formerly called a claim. A claim is a grant from the Crown of the available land within the cells to the holder to remove and sell minerals. The online grid is the geographical basis for the cell. Previously, the claim was established by sticking stakes in the ground to define the area and then recording the staking information. The staking system is now antiquated in Newfoundland and has been replaced with the online grid. The property was staked by Richard A. Jeanne, a non-affiliated third party. Mr. Jeanne is a self-employed professional geologist residing in Reno, NV. Record title to the property upon which we intend to conduct exploration activities is held in the name of Gary D. Alexander, our president.
In April 2008, Mr. Alexander executed a declaration of trust acknowledging that he holds the property in trust for us and he will not deal with the property in any way, except to transfer the property to us. In the event that Mr. Alexander transfers title to a third party, the declaration of trust will be used as evidence that he breached his fiduciary duty to us. Mr. Alexander has not provided us with a signed or executed bill of sale in our favor.
Under Newfoundland law, title to Newfoundland mineral claims can only be held by Newfoundland residents. In the case of corporations, title must be held by a Newfoundland 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 Newfoundland wholly owned subsidiary corporation and obtain audited financial statements. We believe those costs would be a waste of our money at this time. 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 Newfoundland subsidiary corporation and Mr. Alexander will convey title to the property to the wholly owned subsidiary corporation. Should Mr. Alexander 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 operations. However, Mr. Alexander will be liable to us for monetary damages for breaching the terms of his agreement with us to transfer his title to a subsidiary corporation we create.
In the 19th 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. 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 Elizabeth II. 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. The Greenwood Pond property is one such acquisition. Accordingly, fee simple title to the property resides with the Crown. 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 our property, that is the Province of Newfoundland.
The property is comprised of mining leases issued pursuant to the Newfoundland Mineral Act. The lessee has exclusive rights to mine and recover all of the minerals contained within the surface boundaries of the lease vertically downward. The Crown does not have the right to reclaim provided the claims are maintained in good standing. The Crown could reclaim the property in an eminent domain proceeding, but would have to compensate the lessee for the value of the claim if it exercised the right of eminent domain. It is highly unlikely that the Crown will exercise the power of eminent domain. In general, where eminent domain has been exercised it has been in connection with incorporating the property into a provincial park.
The property is unencumbered and there are no competitive conditions which 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.
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.
Claims
The following is a list of tenure numbers, claim, and expiration date of our claims:
| | | Number of | Date of |
| License No. | Claim Name | MTO Cells | Expiration |
| 014760M | Greenwood Pond Property | 13 | 04/07/2013 |
The minimum annual assessment work required to be done to maintain the claims will be approximately $ 2,600.00. If the minimum amount is not expended, we must pay a security deposit that when added to the amount of work done, will equal $2,600.00.
Location and Access
The Greenwood Pond property is located in central Newfoundland, Canada. It comprises 325 hectares or approximately 803 acres, approximately centered at latitude 480 37= 33" North, longitude 550 13= 50" West.
The property is located about 35 miles southwest of Gander between the Northwest and Southwest Gander Rivers. Access to the property can be gained via the Salmon Pond access road that leaves the Trans-Canada Highway at Glenwood and extends southwestward along the west side of the Northwest Gander River. At 31.5 km, a branch road to the left crosses the river over a steel bridge and continues southwest along the east side of the river. Approximately 10 miles from the bridge, a branch road to the left leads to Greenwood Pond.
Groceries and general supplies and services such as air transportation, car rentals, banking, restaurants and lodging are available in the town of Gander, about an hour and one-half drive from the property. Gander's population is about 10,000, but the town provides services to surrounding communities whose total population approaches 90,000. The town hosts an international airport that, historically, was a refueling stop for transatlantic flights.
Physiography
The topography is relatively flat over much of the property, but slopes steeply toward the Northwest Gander River along its western edge. Forest cover is dominated by black spruce with lesser amounts of balsam fir, white birch, aspen and locally common white pine. Boggy areas are common and during the spring and early summer can impede vehicular travel. Elevations range between 260 feet and 525 feet above sea level.
The region receives abundant snowfall during the winter months, making geological exploration and other related activities impractical during this time. The climate during the remainder of the year is moderate.
History
There is evidence of previous exploration activity on the property.
Regional Geology
The Greenwood Pond property lies within the Dunnage tectonostratigraphic zone which encompasses much of central Newfoundland. The Dunnage zone consists of telescoped, early to middle Paleozoic oceanic terrane remnants comprised of volcaniclastic to epiclastic sedimentary rocks and ophiolitic and arc-to back-arc-volcanic rocks.
Property Geology
The eastern portion of the property is underlain by sandstone, greywacke, shale and conglomerate interbedded with laminated gray-green siltstone. The western portion of the property is underlain by red and green siltstone, sandstone, minor interbedded greywacke, locally graphitic shale, and minor cobble conglomerate. Both of these units have been intruded by gabbroic rocks.
Supplies
Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies, such as dynamite, and certain equipment such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or negotiate with any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials after this offering is complete. If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we do find the products and equipment we need.
Other Property
Other than our interest in the property, we own no plants or other property. With respect to the property, our right to conduct exploration activity is based upon our oral agreement with Mr. Alexander. Under this oral agreement, he has allowed us to conduct exploration activity on the property. Mr. Alexander holds the property in trust for us pursuant to a declaration of trust.
We are not party to any pending litigation and to the best of our knowledge none is contemplated or threatened.
| ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
During the fourth quarter, there were no matters submitted to a vote of our shareholders.
PART II
| ITEM 5. | MARKET FOR COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Our shares of Common Stock are issued in registered form. Signature Stock Transfer, Inc. PMB 317, 2220 Coit Road, Suite 480, Plano, TX 75075, Telephone: (972) 612-4120; Facsimile: (972) 612-4122 is the transfer agent for our common shares.
On February 23, 2009, subsequent to the period covered by this report, our common stock was approved for quotation on the Financial Industry Regulatory Association’s Over-the-Counter Bulletin Board. Our shares are listed under the trading symbol GGRI.OB and the price of the shares will be established by the market.
Holders
As at February 4, 2009 the Company had 34 shareholders of record of common stock, including shares held by brokerage clearing houses, depositories or otherwise in unregistered form. The beneficial owners of such shares are not known to the Company.
Dividends
The Company has not declared any cash dividends with respect to its common stock and does not intend to declare dividends in the foreseeable future. There are no material restrictions limiting, or that are likely to limit the Company’s ability to pay dividends in its common stock.
Section Rule 15(g) of the Securities Exchange Act of 1934
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 FINRA'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.
Securities authorized for issuance under equity compensation plans
We do not have any equity compensation plans and accordingly we have no securities authorized for issuance thereunder.
ITEM 6. SELECTED FINANCIAL DATA
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
This Management’s Discussion and Analysis of Financial Condition or Plan of Operation and other sections of this report contain forward-looking statements that are based on the current beliefs and expectations of management, as well as assumptions made by, and information currently available to, the Company’s management. Because such statements involve risks and uncertainties, actual actions and strategies and the timing and expected results thereof may differ materially from those expressed or implied by such forward-looking statements. 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.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited financial statements and accompanying notes and other financial information appearing elsewhere in this annual report on Form 10-K.
History of Operations
We were incorporated in the State of Nevada on March 26, 2008. We are an exploration stage corporation. An exploration stage corporation is one engaged in the search for mineral deposits or reserves which are not in either the development or production stage. We intend to conduct exploration activities on one property; herein referred to as the Greenwood Pond property. The property consists of thirteen mineral claim blocks totaling 325 hectares or approximately 803 acres. Our exploration target is to find an ore body containing gold. We have not yet generated or realized any revenues from our business operations.
Our auditor has 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. There is no assurance we will ever reach this point. Accordingly, we will need to raise cash from sources other than the sale of minerals found on our property. Our only other source for cash at this time is investments by others in our Company. Since inception, we issued 6,327,750 shares of common stock via private placement for cash proceeds of $42,575.
In April 2008, we issued 3,000,000 restricted shares of common stock to Gary D. Alexander; our sole officer and director pursuant to Section 4(2) of the Securities Act of 1933. The shares were sold in a private transaction to Mr. Alexander. No commissions were paid to anyone in connection with the sale of the shares and general solicitation was not made to anyone.
In May 2008 we completed a private placement of 3,327,750 shares of common stock to 33 investors in consideration of $39,575. The shares were issued as restricted securities pursuant to the exemption from registration contained in Regulation 504 of the Securities Act of 1933 in that a Form D was filed with the Securities and Exchange Commission; we raised less than $1,000,000 in the last twelve months; and, each purchaser was solicited by Mr. Alexander, our sole officer and director.
We had cash resources of $13,099 as at December 31, 2008. We do not know how long the money will last. This is dependant on the amount of exploration we conduct and the cost thereof. We will not know that information until we begin exploring our 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 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 will be able to raise additional money in the future.
We will be conducting research in the form of exploration on our property. We are not going to buy or sell any plant or significant equipment during the next twelve months. We are not intending to buy any equipment until we have located a body of ore and we have determined it is economical to extract the ore from the land.
To date we have not performed any work on the property. We are presently in the exploration stage and we cannot guarantee that a commercially viable mineral deposit, a reserve, exists in the property until further exploration is done and a comprehensive evaluation concludes economic and legal feasibility.
Plan of Operation
Our proposed exploration program
Our business plan is to proceed with the exploration of the Greenwood Pond property to determine whether there are commercially exploitable ore bodies containing gold. Our target is mineralized material. Our success depends upon finding mineralized material. Mineralized material is a mineralized body that has been delineated by appropriate spaced drilling or underground sampling to support sufficient tonnage and average grade of metals to justify removal. Before mineral retrieval can begin, we must conduct exploration to determine what amount of minerals, if any, exist on the property and if any minerals that are found can be economically extracted and profitably processed.
The property is undeveloped raw land. Detailed exploration and surveying has not been initiated. To our knowledge, the property has never been mined, although there is evidence of previous exploration activity on the property. The only event that has occurred is the recording of the property and the preparation of the proposed work program by Richard Jeanne; Consulting Geologist.
We intend to proceed with the proposed work program as recommended by our consulting geologist. We intend to initiate a mapping and sampling program and will begin to compile a geologic profile of the property. Gold is associated with structurally controlled hydrothermal veins, so emphasis should be placed on documenting their locations and characteristics. Sampling should accompany this phase to verify the published data and begin the delineation of mineralized zones. Prospective locations that exhibit alteration and structural features indicative of mineralization should be mapped in detail and thoroughly sampled. Where these features project into covered areas, trenching may be necessary to expose bedrock for follow-up mapping and sampling, pending the results of analyses of the initial sampling program.
The proposed work program involves undertaking a two phase mineral exploration program consisting of onsite surface reconnaissance, mapping, sampling and trench site identification followed by geochemical analyses. If encouraging results come from the initial investigation, we would then commence Phase 2. We anticipate the cost of these programs will total $21,940.
Phase 1 of the recommended geological exploration program will cost approximately $7,450. Phase 1 would consist of on-site surface reconnaissance, mapping, sampling and trench site identification. Geochemical analyses of the samples would follow. Phase 1 of the exploration program would take approximately between 0 to 90 days, weather permitting. We anticipate commencing this phase of the exploration program, spring 2009, subject to our geologist, Mr. Jeanne’s availability to proceed with our proposed exploration program. Upon our review of the results we will assess whether the results are sufficiently positive to warrant proceeding with Phase 2 of the exploration program.
Phase 2 of the recommended geological exploration program will cost approximately $14,490. We anticipate that it will take approximately six months to complete Phase 2 of the exploration program. Phase 2 would entail on-site trenching, mapping and sampling followed by further geochemical analyses. Our geologist will then be able to compile the data from the assay lab and provide us with a report. Pending the report results, we will assess whether the results are sufficiently positive to warrant further programs based upon our consulting geologist’s review of the results and recommendation.
We do not know if we will find mineralized material. We believe that activities occurring on adjoining properties are not material to our activities. The reason is that whatever is located under adjoining property may or may not be located under our property. We do not claim to have any minerals or reserves whatsoever at this time on any of our property. Our exploration program will not result in the generation of revenue. It is designed only to determine if mineralized material is located on the property. Revenue will only be generated if we discover mineralized material and extract the minerals and sell them. Because we have not found mineralized material yet, it is impossible to project revenue generation.
If we are unable to complete a phase of exploration because we do not have enough money, we will cease operations until we raise additional funds. If we cannot or do not raise additional funds, we will cease operations. At this time we cannot provide a more detailed discussion of how our exploration program will work and what we expect our likelihood of success to be, due to the nature of mineral exploration in unexplored territories. We will not move onto a subsequent phase until the phase we are working on is completed.
In order to proceed with any additional phases, if recommended, we will need to raise additional capital. If needed, we will raise additional capital from existing investors or by offering equity securities to new investors. We have no immediate plans to raise any additional funds until we assess the results of our initial exploration program.
We will be conducting research in the form of exploration of our property. We are not going to buy or sell any plant or significant equipment during the next twelve months. We do not intend to buy any equipment until we have located a body of ore and we have determined it is economical to extract the ore 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.
We have no employees, other than our sole officer and director, Gary D. Alexander. We do not intend to hire additional employees at this time. All of the property work will be conducted by unaffiliated independent contractors that we will hire on an as-needed basis. The independent contractors will be responsible for surveying, geology, engineering, exploration and excavation. The engineers will advise us on the economic feasibility of removing the mineralized material and the geologists will evaluate the information derived from the exploration and excavation.
Results of Activities
From Inception on March 26, 2008 to December 31, 2008
We acquired the right to conduct exploration activity on one mineral claim consisting of thirteen claim blocks, collectively referred to as the Greenwood Pond property. The Greenwood Pond property is located in central Newfoundland, Canada. We do not own any interest in the property, but merely have the right to conduct exploration activities on one property. We commissioned Richard Jeanne, Consulting Geologist to prepare a proposed exploration work program. We have not commenced any exploration work but intend to proceed with Phase 1 in the spring of 2009, weather permitting and subject to our geologist’s availability to proceed with our proposed exploration program.
Net cash from the sale of shares since inception on March 26, 2008 to December 31, 2008 was
$42,575. Since inception we have used our common stock to raise money for the property title acquisition, for corporate expenses and to repay outstanding indebtedness.
Liquidity and Capital Resources
As of the date of this report, we have yet to generate any revenues from our business operations.
In April 2008, we issued 3,000,000 restricted shares of common stock to Gary D. Alexander; our sole officer and director pursuant to Section 4(2) of the Securities Act of 1933. The shares were sold in a private transaction to Mr. Alexander. No commissions were paid to anyone in connection with the sale of the shares and general solicitation was not made to anyone.
In May 2008 we completed a private placement of 3,327,750 shares of common stock to 33 investors in consideration of $39,575. The shares were issued as restricted securities pursuant to the exemption from registration contained in Regulation 504 of the Securities Act of 1933 in that a Form D was filed with the Securities and Exchange Commission; we raised less than $1,000,000 in the last twelve months; and, each purchaser was solicited by Mr. Alexander, our sole officer and director.
As of December 31, 2008 we had $13,099 in total current assets and total current liabilities of $1,280 for a working capital position of $11,819. Total liabilities were comprised of professional fees.
We do not believe that we can sustain our operations from existing working capital and operations over the next 12 months, as we have yet to commence operations, and have not generated any revenues there can be no assurance that we can generate significant revenues from operations. During the next twelve months, we expect to incur indebtedness for carrying out our proposed exploration program, administrative and professional charges associated with preparing, reviewing, auditing and filing our financial statements and our periodic and other disclosure documents to maintain the Company in good standing. For the twelve months ending December 31, 2009, we have budgeted $25,000 for professional fees for our periodic filing requirements and miscellaneous office and filing fees and expenses.
We will require additional working capital, as we currently have inadequate capital to fund all of our business strategies, which could severely limit our operations. At the present time, we have not made any arrangements to raise additional cash. If we need additional cash and cannot raise it, we will either have to suspend operations until we do raise the cash, or cease operations entirely.
Recent accounting pronouncements
In October 2008, the FASB issued FSP FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, which addresses the application of Statement of Financial Accounting Standards (“SFAS”) No.157 for illiquid financial instruments. FSP FAS 157-3 clarifies that approaches to determining fair value other than the market approach may be appropriate when the market for a financial asset is not active. The Company does not expect the adoption of FSP FAS 157-3 to have a material effect on the Company’s financial statements.
In June 2008, the Financial Accounting Standards Board (FASB) issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities”. FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and affects entities that accrue cash dividends on share-based payment awards during the awards’ service period when the dividends do not need to be returned if the employees forfeit the awards. FSP EITF 03-6-1 states that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends participate in undistributed earnings with common shareholders and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method. FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company does not expect the adoption of FSP EITF 03-6-1 to have a material impact on its financial statements.
In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – An interpretation of FASB Statement No. 60”. SFAS No. 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk-management activities. SFAS No. 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.
In March 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment to FASB Statement No. 133”. SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The Company is currently evaluating the impact of SFAS No. 161 on its financial statements, and the adoption of this statement is not expected to have a material effect on the Company’s financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
None.
| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
GREENWOOD GOLD RESOURCES, INC.
(An Exploration Stage Company)
Financial Statements
(Expressed in U.S. Dollars)
Index
Report of Independent Registered Public Accounting Firm F–1
Balance Sheets F–2
Statements of Operations F–3
Statements of Cash Flows F–4
Statements of Stockholders’ Equity F–5
Notes to the Financial Statements F–6
Randall N. Drake, C.P.A., P.A.
1981 Promenade Way
Clearwater, FL 33760
727-536-4863
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of Greenwood Gold Resources, Inc.:
We have audited the accompanying balance sheet of Greenwood Gold Resources, Inc. (an exploration stage company) as of December 31, 2008 and the statements of operations, stockholders' equity and cash flows for the period from March 26, 2008 (date of inception) through December 31, 2008. 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 an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, these financial statements present fairly, in all material respects, the financial position of Greenwood Gold Resources Inc. as of December 31, 2008 and the results of its operations and its cash flows for the period from March 26, 2008 (date of inception) through December 31, 2008 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business, and further losses are anticipated. The Company requires additional funds to meet its obligations and the costs of its operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Randall N. Drake, CPA, PA
Randall N. Drake CPA, PA
Clearwater, FL
March 27, 2009
Greenwood Gold Resources, Inc.
(An Exploration Stage Company)
Balance Sheet
| | As at December 31, 2008 | |
| | | |
| ASSETS | | |
| | | |
| Current Assets | | |
| Cash | $ | 13,099 | |
| | | | |
| | | | |
| TOTAL ASSETS | $ | 13,099 | |
| | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
| | | | |
| Current Liabilities | | | |
| Accounts payable | $ | 1,280 | |
| | | | |
| Total Liabilities | $ | 1,280 | |
| | | | |
| Stockholders’ Equity | | | |
| | | | |
| Common stock (Note 5) | | | |
| 75,000,000 shares authorized, with a $0.001 par value, | | | |
| 6,327,750 shares issued and outstanding | $ | 6,327 | |
| Additional paid-in capital | | 36,248 | |
| Accumulated Deficit | | (30,756 | ) |
| | | | |
| Total Stockholders’ Equity | $ | 11,819 | |
| | | | |
| Total Liabilities and Stockholders’ Equity | $ | 13,099 | |
| | | | |
The accompanying notes are an integral part of these financial statements
F-2
Greenwood Gold Resources, Inc.
(An Exploration Stage Company)
Statement of Operations
| | Cumulative results from March 26, 2008 (date of inception) to December 31, 2008 | |
| | | |
| REVENUE | $ | - | |
| | | | |
| EXPENSES | | | |
| | | | |
| General office expenses | $ | 924 | |
| Accounting Fees | | 6,000 | |
| Legal fees | | 16,030 | |
| Mineral property costs | | 3,780 | |
| Postage and Delivery | | 863 | |
| Rent - Office | | 1,118 | |
| Transfer agent and filing fees | | 2,041 | |
| | | | |
| Total Expenses | $ | 30,756 | |
| | | | |
| Net Loss | $ | (30,756 | ) |
| | | | |
| Earnings (Loss) Per Share | | | |
| | | | |
| Basic | $ | (0.00 | ) |
| Diluted | $ | (0.00 | ) |
| | | | |
| Weighted Average Number of Shares Outstanding | | | |
| | | | |
| Basic | | 4,305,387 | |
| Diluted | | 4,305,387 | |
| | | | |
The accompanying notes are an integral part of these financial statements
F-3
Greenwood Gold Resources, Inc.
(An Exploration Stage Company)
Statements of Cash Flows
| | Cumulative From March 26, 2008 (date of inception) to December 31, 2008 | |
| | | |
| | | |
| | | |
| CASH FROM OPERATING ACTIVITIES: | | |
| | | |
| Accumulated Deficit | $ | (30,756 | ) |
| | | | |
| Changes in operating assets and liabilities | | | |
| | | | |
| Accounts payable | | 1,280 | |
| | | | |
Net Cash Used in Operating Activities | | (29,476 | ) |
| | | | |
| CASH FROM FINANCING ACTIVITIES: | | | |
| | | | |
| Proceeds from issuance of common stock | | 42,575 | |
| | | | |
| Net Cash from Financing Activities | | 42,575 | |
| | | | |
| Net increase (decrease) in Cash | | 13,099 | |
| | | | |
| Cash, Beginning | | – | |
| | | | |
| Cash, Ending | $ | 13,099 | |
| | | | |
The accompanying notes are an integral part of these financial statements
F-4
Greenwood Gold Resources, Inc.
(An Exploration Stage Company)
Statements of Stockholders’ Equity (Deficit)
For the period from March 26, 2008 (Date of Inception) to December 31, 2008
(Expressed in U.S. Dollars)
| | Common Shares | Additional Paid-in Capital | Deficit Accumulated during the Exploration | | | |
| | Number | Par Value | (Discount) | Stage | | Total | |
| | | $ | | $ | | $ | | | $ | | |
| | | | | | | | | | | | |
Balance March 26, 2008 (Date of Inception) | | – | | – | | – | | – | | | – | |
| | | | | | | | | | | | | |
Shares issued for cash on April 1, 2008 at $0.001 per share | | 3,000,000 | | 3,000 | | – | | – | | | 3,000 | |
| | | | | | | | | | | | | |
Shares issued for cash on April 29, 2008 at $0.005 per share | | 3,250,000 | | 3,250 | | 13,000 | | – | | | 16,250 | |
| | | | | | | | | | | | | |
Shares issued for cash on May 29, 2008 at $0.30 per share | | 77,750 | | 78 | | 23,247 | | -- | | | 23,325 | |
| | | | | | | | | | | | | |
| Net loss for the year | | – | | – | | – | | ( 30,756 | ) | | ( 30,756 | ) |
| | | | | | | | | | | | | |
| Balance, December 31, 2008 | | 6,327,750 | | 6,328 | | 36,247 | | ( 30,756 | ) | | 11,819 | |
The accompanying notes are an integral part of these financial statements
F-5
Greenwood Gold Resources, Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
December 31, 2008
1. Nature of Operations and Continuance of Business
Greenwood Gold Resources, Inc (“the Company”) was incorporated in the State of Nevada on March 26, 2008. 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 business plan is to acquire, explore and develop mineral properties. The Company has not determined whether its mining claims contain ore 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. At December 31, 2008 the Company has limited cash resources and will likely require new financing, either through issuing shares or debt, to continue the development of its business. Management intends to offer additional common stock; however, there can be no assurance that management will be successful in raising the funds necessary to maintain operations, or that a self-supporting level of operations will ever be achieved. The likely outcome of these future events is indeterminable. The continuation of the Company as a going concern is dependent upon the ability of the Company to determine the existence of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, obtain necessary financing and then profitable operations. As of December 31, 2008, the Company has never generated any revenues and has accumulated losses of $30,756 since inception. 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. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
2. Summary of Significant Accounting Policies
a) Basis of Presentation
The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and are expressed in U.S. dollars. The Company’s fiscal year-end is December 31st.
b) Use of Estimates and Assumptions
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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances.
Greenwood Gold Resources, Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
December 31, 2008
2. Summary of Significant Accounting Policies (continued)
b) Use of Estimates and Assumptions (continued)
The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
c) 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.
d) Mineral Property Costs
The Company has been in the exploration stage since its inception on March 26, 2008 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 Emerging Issues Task Force (“EITF”) 04-02, “Whether Mineral Rights Are Tangible or Intangible Assets”. The Company assesses the carrying costs for impairment under Statement of Financial Accounting Standard (“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.
The fair values of cash, accounts payable, accrued liabilities and due to related partyapproximate their carrying values because of the short-term maturity of these instruments.
| f) | Concentration of Credit Risk |
Financial instruments that potentially subject the Company to credit risk consist principally of cash. Cash was deposited with a high quality credit institution.
Greenwood Gold Resources, Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
December 31, 2008
2. Summary of Significant Accounting Policies (continued)
| g) | Foreign Currency Translation |
The Company’s functional and reporting currency is the United States dollar. Occasional transactions may occur in Canadian dollars and management has adopted SFAS No. 52 “Foreign Currency Translation”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
The Company accounts for income taxes using the asset and liability method in accordance with SFAS No. 109, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduced deferred tax assets to the amount that is believed more likely than not to be realized.
| i) | Stock-based Compensation |
The Company has not adopted a stock option plan and has not granted any stock options. No stock based compensation has been granted to date.
The Company computes loss per share in accordance with SFAS No. 128, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
Greenwood Gold Resources, Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
December 31, 2008
2. Summary of Significant Accounting Policies (continued)
| k) | Recent Accounting Pronouncements |
In October 2008, the FASB issued FSP FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, which addresses the application of Statement of Financial Accounting Standards (“SFAS”) No.157 for illiquid financial instruments. FSP FAS 157-3 clarifies that approaches to determining fair value other than the market approach may be appropriate when the market for a financial asset is not active. The Company does not expect the adoption of FSP FAS 157-3 to have a material effect on the Company’s financial statements.
In June 2008, the Financial Accounting Standards Board (FASB) issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities”. FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and affects entities that accrue cash dividends on share-based payment awards during the awards’ service period when the dividends do not need to be returned if the employees forfeit the awards. FSP EITF 03-6-1 states that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends participate in undistributed earnings with common shareholders and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method. FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company does not expect the adoption of FSP EITF 03-6-1 to have a material impact on its financial statements.
In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – An interpretation of FASB Statement No. 60”. SFAS No. 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk-management activities. SFAS No. 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.
Greenwood Gold Resources, Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
December 31, 2008
2. Summary of Significant Accounting Policies (continued)
| k) | Recent Accounting Pronouncements (continued) |
In March 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment to FASBStatement No. 133”. SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The Company is currently evaluating the impact of SFAS No. 161 on its financial statements, and the adoption of this statement is not expected to have a material effect on the Company’s financial statements.
On April 30, 2008, the Company, through its President and director, acquired title to a mineral property in the southwest of Gander, Central Newfoundland; herein referred to as “Greenwood Pond Property”. The claim is registered in the name of the President of the Company, who is holding the claim in trust on behalf of the Company. The Company paid $780.00 for staking fees and $3,000.00 for the preparation of an independent Geological Report by Richard A. Jeanne, LTD, consulting geologist.
| 4. | Related Party Transactions |
At December 31, 2008 the company had no outstanding related party transactions.
Since inception, the Company issued 3,000,000 shares of common stock at $0.001 per share, 3,250,000 shares of common stock at $0.005 per share and 77,750 shares of common stock at $0.30 per share for cash proceeds of $42,575.
Beginning June 1, 2008, the Company entered into a sublease agreement for approximately 144 square feet of executive style office space with an unrelated third party for an initial term of one year. Additional terms include annual rental in the amount of $1,800 plus applicable state and local taxes payable at a rate of $150 per month with first payment due June 1, 2008 and an option to renew for an additional one year at an annual rent amount to be agreed upon. A separate security deposit requirement was waived by mutual agreement of the parties.
Greenwood Gold Resources, Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
December 31, 2008
7. Income Taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has incurred net operating losses of 30,756, which expire in 2023. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit 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.
The components of the net deferred tax asset at December 31, 2008 and the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are indicated below:
Inception (March 26, 2008) through December 31, 2008
| Net operating losses carried forward | $ | 30,756 | |
| Statutory tax rate | | 35% | |
| Effective tax rate | | - | |
| Deferred tax asset | | 10,765 | |
| Valuation allowance | | ( 10,765 | ) |
| | | | |
| Net deferred tax asset | $ | 0 | |
| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
There have been no disagreements on accounting and financial disclosures from the inception of the Company through the date of this Form 10-K. Our financial statements for the fiscal year ended December 31, 2008, included in this report have been audited by Randall N. Drake, C.P.A., 5340 Gulf Drive, Suite 205, New Port Richey, FL 34652 as set forth in their report included herein.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) during the most recently completed fiscal quarter, pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our Disclosure Controls were effective as of the end of the period covered by this report.
Changes in Internal Controls
During the most recently completed fiscal quarter we have also evaluated our internal controls for financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation.
Limitations on the Effectiveness of Controls
Our management, which includes our CEO and CFO, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
CEO and CFO Certifications
Appearing immediately following the Signatures section of this report there are Certifications of the CEO and the CFO. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this report, which you are currently reading is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2008 using the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of December 31, 2008, the Company determined that there were control deficiencies that if aggregated, could constitute a material weakness, as described below.
| 1. | We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the Company’s Management view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, consisting of one sole member who is not independent of management and lacks sufficient financial expertise for overseeing financial reporting responsibilities. |
| 2. | Dual Signatures of Checks - The Company’s check signing authority lies with the Company’s sole officer and director. Management feels that the lack of dual signatures on checks can increase the likelihood of misappropriation of assets given the fact that the person who prepares the checks is the same person required to sign all checks. |
| 3. | Insufficient documentation of financial statement preparation and review procedures - The Company employs policies and procedures in reconciliation of the financial statements and the financial information based on which the financial statements are prepared, however, such controls and policies employed by the Company are not sufficiently documented. |
| 4. | We did not maintain proper segregation of duties for the preparation of our financial statements – As of December 31, 2008 the majority of the preparation of financial statements was carried out by one person. Additionally, the Company currently only has one officer/director having oversight on all transactions. This has resulted in several deficiencies including: |
a) Significant, non-standard journal entries were prepared and approved by the same person, without being checked or approved by any other personnel within the Company.
b) Lack of control over preparation of financial statements, and proper application of accounting policies.
| 5. | We lack sufficient information technology controls and procedures – As of December 31, 2008 the Company lacked a proper data back up procedure, and while backup did take place in actuality, we believe that it was not regulated by methodical and consistent activities and monitoring by the Company. |
Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2008 based on criteria established in Internal Control—Integrated Framework issued by COSO.
Randall N. Drake, C.P.A., an independent registered public accounting firm, was not required to and has not issued a report concerning the effectiveness of our internal control over financial reporting as of December 31, 2008.
Continuing Remediation Efforts to address deficiencies in Company’s Internal Control over Financial Reporting
Once the Company is engaged in a business of merit and has sufficient personnel available, then our Board of Directors, in particular and in connection with the aforementioned deficiencies, will establish the following remediation measures:
| 1. | Our Board of Directors will nominate an audit committee and audit committee financial expert. |
| 2. | Our Board of Directors will appoint a member of management to act as the secondary authorized signatory on the Company’s bank account; to decrease the likelihood of misappropriation of the Company’s assets. |
| 3. | We will establish policies to ensure that all significant transactions resulting in non-standard journal entries are reviewed and approved by the Company’s Board of Directors and that approval be documented in the Company’s corporate records. |
| 4. | We will appoint additional personnel to assist with the preparation of the Company’s financial statements; which will allow for proper segregation of duties, as well as additional manpower for proper documentation. |
| 5. | We will engage in a thorough review and restatement of our IT procedures, in addition to procurement of all hardware and software that will enable us to maintain proper backups, access, control etc. |
| ITEM 9B. | OTHER INFORMATION |
None.
PART III
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Identification of Directors and Executive Officers
| Name | Age | Title |
Gary D. Alexander | 56 | Chief Executive and Chief Financial Officer, President, Secretary/Treasurer, Principal Accounting Officer and sole Director |
| | | |
Background of Officers and Directors
Gary D. Alexander has been our president, chief executive officer, treasurer, chief financial officer and our sole directors since inception on March 26, 2008. Since November 2007, Mr. Alexander has been an independent director of FirstPlus Financial Group, Inc. located in Beaumont, Texas. FirstPlus Financial is a diversified company that provides commercial loan, auto loan, consumer lending, real estate holding, residential and commercial restoration, facility (janitorial) care and construction management services. FirstPlus Financial files reports with the Securities and Exchange Commission pursuant to Section 13 of the Securities Exchange Act of 1934 and is traded on the Pink Sheets under the symbol FPFX. Since March 2004, Mr. Alexander has been president of Treasure Coast Private Equity, LLC, a private equity firm that specializes in providing debt and equity resources for privately owned business seeking expansion capital. Treasure Coast Private Equity is located in Palm City, Florida. From November 2006 to April 2007, Mr. Alexander was acting chief financial officer of Air Rutter International, LLC and Airspace LLC located in Long Beach California. Air Rutter and Airspace are engaged in the business jet charter aircraft management. From November 2005 to March 2006, Mr. Alexander was acting Chief Financial Officer for Jet First, Inc. located in West Palm Beach, Florida. Jet First is a jet charter company. From June 1987 to December 2006, Mr. Alexander was a principal at Alexander Company CPA=s located in Palm City, Florida.
Involvement in Certain Legal Proceedings
To the best of the issuer’s knowledge, during the past five years, no director, executive officer, promoter or control person of the Company:
- has any bankruptcy petition filed by or against any business of which the director, executive officer, promoter or control person was a general partner or executive officer either at the time of bankruptcy or within two years prior to that time;
- was convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
- was the subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
- were the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity;
- were found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors, officers and persons who beneficially owned more than ten percent of the Company’s common stock to file reports of ownership and changes in ownership of common stock. To the best of the Company’s knowledge, all such reports as required were filed on a timely basis in compliance with Section 16(a).
Audit Committee and Audit Committee Financial Expert
The Company does not have an audit committee or 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 of our limited operations, we believe the services of a financial expert are not warranted at this time.
The Board of Directors currently acts in the capacity of an audit committee.
Code of Ethics
The Company has attached a code of business conduct and ethics for directors, officers and employees. The Company’s Code of Ethics is filed as part of this annual report on Form 10-K as Exhibit 14.1.
Family Relationships
We have only one officer/director. Accordingly, there are no family relationships amongst or between the directors and executive officers.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth information with respect to compensation paid by us to our sole executive officer and director during the fiscal years ended December 31, 2008 and 2007. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.
Executive Officer Compensation Table
| | | | | | | Non- | Nonqualified | | |
| | | | | | | Equity | Deferred | All | |
| Name | | | | | | Incentive | Compensa- | Other | |
| and | | | | Stock | Option | Plan | tion | Compen- | |
| Principal | | Salary | Bonus | Awards | Awards | Compensation | Earnings | sation | Total |
| Position | Year | (US$) | (US$) | (US$) | (US$) | (US$) | (US$) | (US$) | (US$) |
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
| Gary D. Alexander | 2008 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| CEO, CFO, President, | 2007 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Secretary/Treasurer, Principal Accounting Officer | | | | | | | | | |
The following table sets forth information with respect to compensation paid by us to our sole director during the last completed fiscal year. Our fiscal year end is December 31, 2008.
Director Compensation Table
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) |
| | Fees | | | | | | |
| | Earned | | | Non-Equity | Nonqualified | All | |
| | or | | | Incentive | Deferred | Other | |
| | Paid in | Stock | Option | Plan | Compensation | Compen- | |
| | Cash | Awards | Awards | Compensation | Earnings | sation | Total |
| Name | ($) | ($) | ($) | ($) | ($) | ($) | ($) |
| | | | | | | | |
| Gary D. Alexander | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
There are no employment agreements with our sole officer and none are being contemplated.
The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our sole named director and executive officer.
There are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our sole director and officer.
Options/SAR Grants
No individual grants of stock options, whether or not in tandem with stock appreciation rights (“SARs”) and freestanding SARs have been made to our sole executive officer, or director or employees during the current fiscal year. No previously granted stock options remain in effect.
Long-Term Incentive Plan Awards
The Company does not have any long-term incentive plans that provide compensation intended to serve as incentive for performance to occur over a period longer than one fiscal year, whether such performance is measured by reference to the Company’s financial performance, stock price or any other measure.
Compensation of Directors
There are no standard arrangements pursuant to which the Company’s sole director is compensated for services provided as directors. No additional amounts are payable to the Company’s sole director for committee participation or special assignments.
Employment Contracts and Termination of Employment and Change-in-Control Arrangements
None.
Report on Repricing of Options/SAR
The Company did not reprice any options or SARs during the year ended December 31, 2008.
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
The following table sets forth the beneficial shareholdings of those persons or entities who beneficially hold five percent or more of the Company’s common stock, and our directors and executive officers as a group, as of February 4, 2009, with the computation being based upon 6,327,750 shares of common stock being outstanding. Each person has sole voting and investment power with respect to the shares of common stock shown and all ownership is of record and beneficial.
| | Direct Amount of | | Percent |
| Name of Beneficial Owner | Beneficial Owner | Position | of Class |
| Gary D. Alexander [1] | 3,000,000 | President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, Treasurer, Secretary and Director | 47.42% |
| | | | |
| All Officers and Directors as a | | | |
| Group (1 Person) | 3,000,000 | | 47.42% |
Changes in Control
To the knowledge of management, there are no other present arrangements or pledges of the Company’s securities, which may result in a change of control of the Company.
Securities Authorized for Issuance Under Compensatory Plans
None.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ANDDIRECTOR INDEPENDENCE
Certain Business Relationships
None.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
(1) Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:
(2) Audit-Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:
(3) Tax Fees
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:
(4) All Other Fees
The aggregate fees billed in each of the last two fiscal yeas for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:
(5) Our audit committee’s pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.
(6) The percentage of hours expended on the principal accountant’s engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full time, permanent employees was 0%.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
| | | Incorporated by reference | |
| Exhibit | Document Description | Form | Date | Number | Filed herewith |
| | | | | | |
3.1 | Articles of Incorporation | S-1 | July 18, 2008 | 3.1 | |
| 3.2 | Bylaws | S-1 | July 18, 2008 | 3.2 | |
| 4.1 | Specimen stock certificate | S-1 | July 18, 2008 | 4.1 | |
| 10.1 | Declaration of Trust of Gary Alexander | S-1 | July 18, 2008 | 10.1 | |
14.1 | Code of Ethics | | | | X |
| | | | | | |
31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended | | | | X |
| | | | | | |
32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Office and Chief Financial Officer) | | | | X |
| | | | | | |
SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on behalf by the undersigned, thereto duly authorized on this 27th day of March, 2009.
| | GREENWOOD GOLD RESOURCES, INC. |
| | | |
| | BY: | GARY D. ALEXANDER |
| | | Gary D. Alexander, President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, Secretary, Treasurer and a member of the Board of Directors. |
EXHIBIT INDEX
| | | Incorporated by reference | |
| Exhibit | Document Description | Form | Date | Number | Filed herewith |
| | | | | | |
3.1 | Articles of Incorporation | S-1 | July 18, 2008 | 3.1 | |
| 3.2 | Bylaws | S-1 | July 18, 2008 | 3.2 | |
| 4.1 | Specimen stock certificate | S-1 | July 18, 2008 | 4.1 | |
| 10.1 | Declaration of Trust of Gary Alexander | S-1 | July 18, 2008 | 10.1 | |
14.1 | Code of Ethics | | | | X |
| | | | | | |
31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended | | | | X |
| | | | | | |
32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Office and Chief Financial Officer) | | | | X |
| | | | | | |
