UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K /A
(Amendment No. 1)
| x | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended October 31, 2010 |
| o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT |
For the transition period from _________ to ________ | ||
Commission file number: _______________________ |
| Rider Exploration, Inc. | |||
| (Exact name of registrant as specified in its charter) |
| Nevada | 26-1094531 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 955 South Virginia Ste. 116, Reno, NV 89502 | 89502 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number: 775-284-0370 |
| Securities registered under Section 12(b) of the Exchange Act: |
| Title of each class | Name of each exchange on which registered |
| none | not applicable |
| Securities registered under Section 12(g) of the Exchange Act: |
| Title of each class | Name of each exchange on which registered |
| none | not applicable |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. Not available
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 38,582,400 as of January 12, 2011.
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This amendment to our Annual Report on Form 10-K for the fiscal year ended October 31, 2010 which was filed on January 20, 2011 is being filed solely to add signature dates to the Form 10-K.
In accordance with Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, currently dated certifications of our principal executive officer and our principal financial officer are attached to this Form 10-K/A as Exhibits 31.1, 31.2 and 32.1.
Except for the foregoing amended information, we have not updated the disclosures contained in the Form 10-K/A to reflect events that have occurred subsequent to the filing date of the Original 10-K. Accordingly, this Form 10-K/A should be read in conjunction with the Original 10-K and our subsequent filings with the SEC.
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TABLE OF CONTENTS
| Page | ||
| PART I | ||
| Item 1. | Business | 4 |
| Item 1A. | Risk Factors | 10 |
| Item 1B. | Unresolved Staff Comments | 10 |
| Item 2. | Properties | 10 |
| Item 3. | Legal Proceedings | 12 |
| Item 4. | Submission of Matters to a Vote of Security Holders | 13 |
| PART II | ||
| Item 5. | Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities | 13 |
| Item 6. | Selected Financial Data | 15 |
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 18 |
| Item 8. | Financial Statements and Supplementary Data | 18 |
| Item 9. | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure | 18 |
| Item 9A(T). | Controls and Procedures | 19 |
| Item 9B. | Other Information | 20 |
| PART III | ||
| Item 10. | Directors, Executive Officers and Corporate Governance | 20 |
| Item 11. | Executive Compensation | 22 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 24 |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 24 |
| Item 14. | Principal Accountant Fees and Services | 24 |
| PART IV | ||
| Item 15. | Exhibits, Financial Statement Schedules | 25 |
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PART I
Item 1. Business
We are an exploration stage company that desires to engage in the exploration of mineral properties. We have acquired an option to purchase an interest in mineral claims that we refer to as the Sallus mineral claims. Exploration of these mineral claims is required before a final determination as to their viability can be made. Our option on this property is currently unexercised. In the event that we do not exercise our option, we will have no interest in the Sallus mineral claims and will not be entitled to receive back any monies spent to maintain the option.
Our plan of operations is to carry out exploration work on these claims in order to ascertain whether they possess commercially exploitable quantities of copper, molybdenum, and other metallic minerals. We will not be able to determine whether or not the Sallus mineral claims contain a commercially exploitable mineral deposit, or reserve, until appropriate exploratory work is done and geological and economic evaluations based on that work indicate economic viability.
Phase I of our exploration program is expected to begin in the second quarter of 2011 and cost approximately $28,000. Once we receive the results of our Phase I exploration, our board of directors, in consultation with our consulting geologist, will assess whether to proceed with further exploration. Phase II of our exploration program will cost approximately $400,000. The existence of commercially exploitable mineral deposits in the Sallus mineral claims is unknown at the present time and we will not be able to ascertain such information until we receive and evaluate the results of our exploration program.
Our Option Agreement
Mr. M. McClaren staked and recorded his ownership in the Sallus mineral claims under the .mineral claim staking and recording procedures in place at that time in the Province of British Columbia. Under that system, a prospector records a description of the claim at the Provincial Mining Recorder’s Office. A party is able to stake and record an interest in a particular mineral claim if no other party has an interest in the said claim that is in good standing and on record at the Provincial Mining Recorder’s Office. There is no formal agreement between Mr. McClaren and the Province of British Columbia.
Mr. McClaren’s interest in the Sallus mineral claims will continue into perpetuity provided that the mineral claims remain in good standing by paying the applicable fee which is based upon whether exploration work takes place. If exploration work take places and expenditures are made for this purpose in an amount stipulated by the government, the claims can be maintained in good standing by simply remitting a filing fee to the Province of British Columbia that currently does not exceed $115. If no exploration work takes place, the claims can be kept in good standing by remitting to the Province of British Columbia the stipulated amount that otherwise was required to be expended for exploration work together with the payment of a filing fee or payment that currently does not exceed $115.
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In order to extend the expiry dates of a mineral claim, the British Columbia government requires either (1) completion of exploration work on the mineral claims valued at an amount stipulated by the government and the payment of a filing fee; or (2) payment to the Province of British Columbia the stipulated amount that otherwise was required to be expended for exploration work in lieu of completing exploration work and the payment of a filing fee to maintain the mineral claims. When exploration work valued at an amount stipulated by the government is completed and a filing fee is remitted to the Province of British Columbia, the expiry dates of the mineral claims can be extended for a maximum of 10 additional years at a time. In the event that no exploration work is completed and a filing fee and additional fee are p aid to the Province of British Columbia in lieu of completing exploration work, the expiry dates of the mineral claims can be extended for a maximum of only 1 additional year.
Under the terms of the Mining Option Agreement between Rider Exploration, Inc. and Mr. McClaren, we acquired an option to purchase a 100% interest in the Sallus mineral claims. Under that Agreement, we have already paid Mr. McClaren an initial sum of C$5,000 to acquire the option and an additional option payment of C$5,000, which was due prior to December 31, 2008. The Agreement also requires an additional C$10,000 prior to December 31, 2010, C$ 2,000 of which has been extended to January 15, , 2011, and C$8,000 of which has been extended to May 31, 2011. In addition, we incurred C$4,000 in cash-in-lieu of exploration expenditures prior to December 31, 2009, and prior to June 10, 2010 we must incur further exploration expenses (or cash-in-lieu) of C$4,000 prior to May 31, 2011, C$50,000 prior to December 31, 2011 and CDN$100,000 prior to Decmber 31, 2012. Under the terms of the Mining Option Agreement, we are to exercise our option by making the above payments and incurring the above exploration expenses.
We will either satisfy the payment terms of the Mining Option Agreement in the time frame provided, thereby resulting in us exercising this option, or we will fail to satisfy the payment terms and be in default of the Mining Option Agreement. The Optionor can terminate the Mining Option Agreement if we fail to cure any default within 45 days after the receipt of notice of default. Our option will expire if we are in default of the Mining Option Agreement and fail to cure any default within 45 days after the receipt of notice of default.
We selected Sallus mineral properties based upon an independent geological report, which was commissioned from Barry Price, a Consulting Geologist. Mr. Price recommended a two-phase exploration program on these claims that will cost us approximately US$428,000. We expect to begin Phase I of our exploration program in the second quarter of 2011.
Description and Location of the Sallus mineral claims
The Sallus mineral claims consist of the following claims located in the Lillooet Mining Division of British Columbia:
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MINERAL TITLES – SALLUS PROPERTY
| Tenure Number | Claim Name | Owner | Map Number | Good To Date | Status | Area |
| 588045 | SALLUS | 117354 (100%) | 092I | 2011/jun/10 | GOOD | 490.318 |
| 588046 | SALLUS 2 | 117354 (100%) | 092I | 2011/jun/10 | GOOD | 367.9 |
The Province of British Columbia owns the land covered by the Sallus mineral claims. Currently, we are not aware of any native land claims that might affect the title to the mineral claims or to British Columbia’s title to the property. Although we are unaware of any situation that would threaten these claims, it is possible that a native land claim could be made in the future. The federal and provincial government policy at this time is to consult with all potentially affected native bands and other stakeholders in the area of any potential commercial production. If we should encounter a situation where a native person or group claims an interest in these claims, we may choose to provide compensation to the affected party in order to continue with our exploration work, or if such an option is not available, we may have to relinquis h any interest that we hold in these claims.
Prior to the expiry dates listed above, based on the work completed and/or fees paid, the expiry dates of the claims have been extended to 2011. In order to extend the expiry dates of a mineral claim, the government requires either (1) completion of exploration work on the mineral claims valued at an amount stipulated by the government and the payment of a filing fee; or (2) payment to the Province of British Columbia the stipulated amount that otherwise was required to be expended for exploration work in lieu of completing exploration work and the payment of a filing fee to maintain the mineral claims.
Currently, an exploration work value of approximately $1.30 per acre is required during each of the first three years after a claim is acquired and an exploration work value of approximately $2.60 per acre is required in subsequent years. This stipulated amount of expenditures toward exploration work is set by the Province of British Columbia and can be altered in their sole discretion. Mr. W.A. McClaren originally staked and recorded his ownership in the Sallus mineral claims. Exploration expenditures on the Sallus mineral claims must be completed and filed with the Province in the required amounts per acre, depending on the claim, or this amount must be paid to the Province of British Columbia by the respective date. A maximum of ten years of work credit may be filed on a claim at a time.
The exploration fees we anticipate incurring over the coming twelve months will result in an extension of the expiry dates of the mineral claims for the maximum of ten years provided that a report and filing fee not exceeding $115 is remitted to the Province of British Columbia. In the event that no exploration work is completed and a filing fee is paid to the Province of British Columbia in lieu of completing exploration work, the expiry dates of the mineral claims can be extended only on an annual basis into perpetuity for a maximum of only one additional year. If the required exploration work expenditure is not completed and filed with the Province in any year or if a payment is not made to the Province of British Columbia in lieu of the required work within this year, the mineral claims will lapse and title with revert to the Province of British Columbia.
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Geological Exploration Program in General
We have obtained an independent Geological Report and have acquired an option to purchase the Sallus mineral claims. Barry Price, M.Sc., P. Geo, Consulting Geologist, has prepared this Geological Report and reviewed all available exploration data completed on these mineral claims. A primary purpose of the geological report is to review information, if any, from the previous exploration of the mineral claims and to recommend exploration procedures to establish the feasibility of commercial production project on the mineral claims. The report, among other things, lists the mineral titles on the Sallus property, describes the location and access to the property, provides climate and physiographic information, contains a history and geology of the property, and reviews adjacent properties. The report also gives conclusio ns regarding potential mineralization of the mineral claims and recommended a further geological exploration program.
Mr. Price is an Independent Consulting Geologist with offices at Ste. 1028 – 470 Granville Street, Vancouver, BC, telephone: (604) 682-1501.
He graduated from the University of British Columbia in Vancouver, BC, in 1965 with a Bachelors Degree in Science (B.Sc) (Honours), in the field of Geology, and received a further degree of Master of Science (M.Sc) in Economic Geology from the same University in 1972.
He has practiced as a Geologist for the past 40 years in the fields of Mining Exploration, Oil and Gas Exploration, and Geological Consulting. He has also been the author of a considerable number of Qualifying Reports, Technical Reports and Opinions of Value for junior companies in the past 35 years.
The property that is the subject of the Sallus Creek Property mineral claim is undeveloped and does not contain any open-pit or underground mines which can be rehabilitated. There is no commercial production plant or equipment located on the property that is the subject of the mineral claim. Currently, there is no power supply to the mineral claims. 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 mineral reserves will be found. The details of the Geological Report are provided below.
Sallus Creek Property Mineral Claim Geological Report, Dated Aug 15, 2008
A primary purpose of the geological report is to review information, if any, from the previous exploration of the mineral claims and to recommend exploration procedures to establish the feasibility of commercial production project on the mineral claims. The summary report lists results of the history of the exploration of the mineral claims, the regional and local geology of the mineral claims and the mineralization and the geological formations identified as a result of the prior exploration. The summary report also gave conclusions regarding potential mineralization of the mineral claims and recommended a further geological exploration program.
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Exploration Potential of the Sallus Creek Property Mineral Claim
Previous sampling by the Johns-Manville Company yielded copper/Molybdenum anomalies on ground currently covered by the Sallus Creek Property claims. The claims are underlain by rocks of similar age and lithology as those in which gold anomalies are currently being developed by Paragon Minerals Corp. on their nearby Appleton Linear and JBP claims.
The Sallus Creek area is underlain by the western contact of the Early Jurassic Mount Martley stock which intrudes the Western belt of the Cache Creek Complex (mainly sedimentary rocks including shales and limestones), the stock is a medium to course grained, massive granodiorite with local secondary silicification and serictization near the contacts. Pervasive quartz veins and aplite dikes are found within the stock near the contact. Intense thermal alteration of the sediments is evident near the contact of the stock and disseminated copper mineralization was seen. Limestone, in part, is totally recrystallized. Intense pyritization of the argillites is observed near the contacts, evidenced on surface by rust colorization and gossans.
Within the claims, a plug of rusty, weathered and altered diorite and quartz diorite intrudes argillite. This plus has a very irregular contact, approximately 914 meters long by 609 meters wide, and is probably genetically related to the Mount Martley stock, 1600 meters to the east. Pyrite is abundantly disseminated and smeared along fracture faces throughout the diorite. Very fine traces of native copper have been recognized in the highly weathered diorite. Malachite stain is evident in the diorite.
The Sallus Creek Claim bock is located 10 miles Northeast of Lillooet, British Columbia (N.T.S 92 I/071 and 072) between Gibbs Creek on the south and Sallus Creek on the north. Access is from Lillooet via a secondary road on the east side of the Fraser River to a logging road about 1.3 miles north of Gibbs Creek, and thence eastward to the claims. Four wheel drive vehicles are recommended. Helicopter access to some sites may be more practical, and a helicopter company is based in Lillooet.
No visit to the property has yet been made by us or our consulting geologists.
Recommendations from Our Consulting Geologist
A preliminary prospecting and mapping program could be done initially to examine the porphyry style mineralization and to plan a preliminary drill program of about 5 diamond core holes of about 200-300 meters each. This would assess the likelihood of substantial copper porphyry on the property. The area of the Mt. Martley stock should be prospected and staked if additional porphyry style mineralization is suspected.
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Exploration Budget
| Phase I | Exploration Expenditure |
| Geological supervision | $7,500 |
| Helper | 2,500 |
| Vehicle | 1,250 |
| Food, lodging, or camp costs | 1,250 |
| Field, camp supplies | 500 |
| Helicopter | 6,250 |
| Samples | 1,875 |
| Mob and Demob | 500 |
| Cell Phone/Radio | 100 |
| Reports and Drafting | 2,000 |
| Reclamation Bond | 0 |
| Subtotal (Rounded) | 24,000 |
| GST at 6% | 1,400 |
| Contingency 10% | 2,400 |
| Total Phase I (Rounded) | $28,000 |
In US (at date of prospectus) | $22,400 |
| Phase II | |
| This phase would be contingent on favorable results from Phase I | |
| Geological Supervision | $15,000 |
| Helper | 5,000 |
| Vehicle | 2,500 |
| Food, Lodging, or camp costs | 3,000 |
| Field, camp supplies | 5,500 |
| Helicopter | 75,000 |
| Heli Transportable Drill | 187,500 |
| Samples | 15,000 |
| Mob and Demob | 3,000 |
| Cell Phone/Radio | 500 |
| Reports and Drafting | 10,000 |
| Reclamation Bond | 10,000 |
| Subtotal (Rounded) | 330,000 |
| GST at 6% | 20,000 |
| Contingency 15% | 50,000 |
| Total Phase I (Rounded) | $400,000 |
In US (at date of prospectus) | $320,000 |
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While we have not commenced the field work phase of our initial exploration program, we intend to begin the initial exploratory work as recommended. We expect that Phase I will begin in the spring of 2011, with Phase II to follow, depending on the initial results. Upon our review of the results, we will assess whether the results are sufficiently positive to warrant proceeding to Phase II and any additional phases of the exploration program. We will make the decision to proceed with any further programs based upon our consulting geologist’s review of the results and recommendations. In order to complete significant additional exploration beyond the currently planned Phase I, we will need to raise additional capital.
Employees
We have no employees other than our President and CEO, Mr. Friberg, and our Secretary and Treasurer, Mr. Decker. We conduct our business largely through agreements with consultants and other independent third party vendors.
Research and Development Expenditures
We have not incurred any research or development expenditures since our incorporation.
Subsidiaries
We have neither formed, nor purchased any subsidiaries since our incorporation.
Patents and Trademarks
We do not own, either legally or beneficially, any patent or trademark.
Item 1A. Risk Factors.
A smaller reporting company is not required to provide the information required by this Item.
Item 1B. Unresolved Staff Comments
A smaller reporting company is not required to provide the information required by this Item.
Item 2. Properties
We have acquired an option to purchase the Sallus mineral claims. We do not own or lease any property.
Mineral Claims
The Sallus group of reverted crown granted mineral claims is located adjacent to Harrison Mills, BC, a small community between Mission and Agassiz on the Loughheed Highway on the north side of the Fraser River, approximately 75 miles east of Vancouver, B.C. The CPR main line passes through the property. The Loughheed Highway and a number of logging roads provide access to the property. The following maps indicate the location of the Sallus mineral claims within the surrounding area.
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Map 1
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FIGURE 2. LOCATION MAP SHOWING PORPHYRY COPPER AND MOLYBDENUM DEPOSITS IN SOUTHWESTERN BC.
Corporate Offices
Our principal offices are located at 955 S. Virginia Street, Suite 116, Reno NV 89502-0413, telephone 775-284-0370. Our agent for service of process in Nevada is Nevada Agency and Trust Company., 50 West Liberty Street, Suite 880, Reno, NV 89501.
Item 3. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
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Item 4. Submission of Matters to a Vote of Security Holders
On November 10, 2010, the Company effectuated a 15-for-1 forward stock split of the outstanding shares of common stock of the Company. This action was approved by a majority of the Security Holders.
PART II
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
Common Stock
Our Certificate of Incorporation authorizes the issuance of up to 50,000,000 shares of common stock, par value $.001 per share (the “Common Stock”). The Common Stock is not listed on a publicly-traded market. As of November 30, 2010 there were 37 holders of record of the Common Stock.
Preferred Stock
There are no Preferred Shares authorized at this time.
Dividend Policy
The Company has not declared or paid any cash dividends on its common stock and does not intend to declare or pay any cash dividend in the foreseeable future. The payment of dividends, if any, is within the discretion of the Board of Directors and will depend on the Company’s earnings, if any, its capital requirements and financial condition and such other factors as the Board of Directors may consider.
Securities Authorized for Issuance under Equity Compensation Plans
The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its common stock or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.
Recent Sales of Unregistered Securities
On November 10, 2010, the Company effectuated a 15-for-1 forward stock split of the outstanding shares of common stock of the Company. This stock split has been reflected on the financial statements on a retroactive basis.
As of October 31, 2010 and 2009, the Company had 38,582,400 and 32,100,000 shares of common stock issued and outstanding.
On July 21, 2010, the Company issued 6,482,400 (432,160 pre-split) shares of its par value $0.001 common stock for $0.0033 ($0.05 pre-split) per share in exchange for the related party debt totaling $21,608.
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During the fiscal year ended October 31, 2009, the Company collected $5,500 in outstanding stock subscriptions receivable.
In the year ended October 31, 2008, the Company issued 22,500,000 (1,500,000 pre-split) common shares to directors in exchange for $1,500 in cash and 9,600,000 (640,000 pre-split) common shares in exchange for $32,000 in cash in a private placement.
Issuer Purchases of Equity Securities
n/a
Market Information
Our common stock is currently not quoted on any stock exchange or over-the-counter market.
Penny Stock
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and reme dies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account.
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In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.
As of November 30, 2010, we had 38,582,400 shares of our common stock issued and outstanding, held by 37 shareholders of record.
Dividends
The Company has not declared, or paid, any cash dividends since inception and does not anticipate declaring or paying a cash dividend for the foreseeable future.
Nevada law prohibits our board from declaring or paying a dividend where, after giving effect to such a dividend, (i) we would not be able to pay our debts as they came due in the ordinary course of our business, or (ii) our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time of distribution, to satisfy the rights of any creditors or preferred stockholders.
Securities Authorized for Issuance under Equity Compensation Plans
We do not have any equity compensation plans.
Item 6. Selected Financial Data
A smaller reporting company is not required to provide the information required by this Item.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likel y result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forwa rd-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
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Plan of Operation in the Next Twelve Months
Our plan of operations is to proceed with the exploration of the Sallus mineral claims to determine whether there are commercially exploitable reserves of copper, zinc, molybdenum and other metallic minerals. We have entered into a Mining Option Agreement regarding the Sallus mineral claims and intend to proceed with the initial exploration program as recommended by our consulting geologist.
Our total expenditures over the next twelve months, excluding costs associated with being a public company, are anticipated to be approximately $60,000 as we undertake Phase I exploration. Specifically, we expect to incur approximately $27,500 in connection with the commencement of Phase I of our recommended geological work program. We will also expend C$14,000 in connection with the Option Agreement and monies due to Mr. McClaren prior to June 10, 2010, or approximately $13,700 We had a working capital deficit in the amount of $4,739 as of October 31, 2010. As such, we have insufficient funds to cover our anticipated expenditures in the next twelve months. However, we plan to raise equity financing in the amount of $80,000 to $100,000, and that should be enough to cover the approximately $60,000 in anticipated expenditures in the next tw elve months. Any remaining monies will be carried forward to complete Phase I and begin Phase II. Because of the uncertainties inherent in foreign currency exchange rates, there are uncertainties in our operational costs. Our accounting is in US$ while our Option Agreement payments and other expenses generally require payment in CDN$.
A report of our consulting geologist regarding findings from Phase I is expected within six months of the commencement of Phase I explorations. Once we receive the analysis of our Phase I exploration program, our board of directors, in consultation with our consulting geologist will assess whether to proceed with Phase II of our mineral exploration program. In making this determination to proceed with a further exploration program, we will make an assessment as to whether the results of the Phase I exploration program are sufficiently positive to enable us to proceed. This assessment will include an evaluation of our cash reserves after the completion of the initial exploration, the price of minerals, and the market for the financing of mineral exploration projects at the time of our assessment.
16
In the event the results of our initial exploration program prove not to be sufficiently positive to proceed with further exploration on the Sallus mineral claims, we intend to seek out and acquire interests in other North American mineral exploration properties, which, in the opinion of our consulting geologist, offer attractive mineral exploration opportunities. If we are unable locate and acquire such prospects, we may be forced to seek other business opportunities. Presently, we have not given any consideration to the acquisition of other exploration properties because we have only recently commenced our initial exploration program and have not received any results.
In the event our Phase II mineral exploration program is undertaken, it would likely result in significantly more geological data than Phase I because much of the infrastructure constructed in Phase I will still be available during Phase II exploration.
In the event our board of directors, in consultation with our consulting geologist, chooses to complete the Phase I and Phase II mineral exploration programs, we will require additional financing. The objective of the Phase I work is to identify areas that have a strong likelihood of hosting mineral deposits that can be explored further during Phase II. The objective of Phase II work is to commence diamond drilling in areas identified in Phase I to obtain core samples for geochemical analysis.
Upon the completion of the first two exploration phases, or any additional programs, which are successful in identifying mineral deposits, we will have to spend substantial funds on further drilling and engineering studies before we know that we have discovered a mineral reserve. A mineral reserve is a commercially viable mineral deposit.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment over the next twelve months.
Results of Operations for the year ended October 31, 2010 and period from Inception (May 17, 2007) to October 31, 2010
We did not earn any revenues from inception through the period ending October 31, 2010. We do not anticipate earning revenues until such time that we are able to locate and exploit commercial reserves of copper, molybdenum and other metallic minerals. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on the Sallus mineral properties, or if such resources are discovered, that we will enter into commercial production.
We incurred operating expenses in the amount of $21,382 for the year ended October 31, 2010, and $63,812 from our inception on May 17, 2007 to October 31, 2010. The operating expenses of $21,382 for the year ended October 31, 2010 were all general and administrative expenses including $3,766 of cash-in-lieu of exploration expenditures. The operating expenses of $63,812 for period from inception (May 17, 2007) to October 31, 2010 were also all general and administrative expenses.
17
We anticipate our operating expenses will increase as we undertake our plan of operations. The increase will be attributable to undertaking the additional phases of our geological exploration program and the professional fees associated with our becoming a reporting company under the Securities Exchange Act of 1934.
We incurred a net loss of $21,382 for the year ended October 31, 2010 and $63,648 from our inception on May 17, 2007 through period ending October 31, 2010. Our losses for all periods are attributable to operating expenses and our lack of revenue.
Liquidity and Capital Resources
We had cash of $1,201 as our only current asset as of October 31, 2010. We had current liabilities of $9,741 as of Ocotber 31, 2010. We therefore had a working capital deficit of $8,540 as of October 31, 2010.
We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities. For these reasons our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.
Off Balance Sheet Arrangements
As of October 31, 2010, there were no off balance sheet arrangements.
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities. For these reasons our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 8. Financial Statements and Supplementary Data
See the financial statements annexed to this annual report.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
During the year, we changed auditors from Moore and Company Charetered to Seale and Beers,CPAs.LLC. There were no disagreements with Moore and Company, Chartered, they were unable to continue as auditors.
18
Item 9A(T). Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in company reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our chief executive officer and treasurer, as appropriate to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our chief executive officer and chief financial officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2009. Based on their evaluation, they concluded that our disclosure controls and procedures were ineffective. Due to the Company’s size and limited resources, adequate segregation of duties is not able to be maintained and the Company lacks an audit committee. The Company plans to address these material weaknesses as resources become available to do so.
Our internal control over financial reporting is a process designed by, or under the supervision of, our chief executive officer and chief financial officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles , and that our receipts and expenditures are being made only in accordance with the authorization of our board of directors and management; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Under the supervision and with the participation of our management, including our chief executive officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation under the criteria established in Internal Control – Integrated Framework, our management concluded that our internal control over financial reporting was effective as of October 31, 2010 .
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
19
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The following information sets forth the names of our current directors and executive officers, their ages as of October 31, 2010 and their present positions.
| Name | Age | Position Held with the Company |
| Steve Friberg | 67 | President, Chief Executive Officer, and Director |
| Dan Decker | 59 | Treasurer, Secretary and Director |
Set forth below is a brief description of the background and business experience of executive officers and directors.
Steve Friberg. Mr. Friberg is the Company’s President and a director. As President, Mr. Friberg is responsible for the day-to-day management of the Company and for the continued strategic evolution of its mineral exploration and development programs. His business experience includes:
42 years of experience in the mining and exploration industry, working for the past 27 years as a consulting exploration geologist for several major and junior companies. He began his career in Nevada, shortly after the discovery of the Carlin Gold Mine and was
responsible for the discovery of a one million ounce gold deposit there. He has since worked throughout North and South America, as well as China. Mr. Friberg holds a BS degree from the University of Nevada.
Dan Decker. Mr. Decker is the Company Secretary, Treasurer and a director. In this capacity, he will be responsible for all administrative functions and corporate filings.
Mr. Decker served five years as Executive Director of the non-profit CCTV, a children’s educational program which produced drama on film. He subsequently founded and operated a commercial writing school for adults, successfully building and running this company for 15 years. He has produced over 35 stage plays, original, licensed, or written by him and has optioned or sold 15 of his own screenplays. He brings his proven skills in management and administration to Rider Exploration.
20
Family Relationships
There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, during the past five years, none of the following occurred with respect to a present or former director, executive officer, or employee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of & #160;any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
Audit Committee
We do not have a separately-designated standing audit committee. The entire Board of Directors performs the functions of an audit committee, but no written charter governs the actions of the Board when performing the functions of what would generally be performed by an audit committee. The Board approves the selection of our independent accountants and meets and
Code of Ethics
As of October 31, 2010, we had not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
21
Item 11. Executive Compensation
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to both to our officers and to our directors for all services rendered in all capacities to us for our fiscal years ended October 31, 2010 and 2009.
| SUMMARY COMPENSATION TABLE | |||||||||
Name and principal position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
| Steve Friberg, President, CEO and Director | 2010 2009 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 |
| Dan Decker Secretary, Treasurer and Director | 2010 2009 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 |
Narrative Disclosure to the Summary Compensation Table
Although we do not currently compensate our officers, we reserve the right to provide compensation at some time in the future. Our decision to compensate officers depends on the availability of our cash resources with respect to the need for cash to further our business purposes.
Stock Option Grants
We have not granted any stock options to the executive officers or directors since our inception.
22
Outstanding Equity Awards at Fiscal Year-End
The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of October 31, 2010.
| OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | |||||||||
| OPTION AWARDS | STOCK AWARDS | ||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
| Steve Friberg, President, CEO and Director | - | - | - | - | - | - | - | - | - |
| Dan Decker, Secretary, Treasurer and Director | - | - | - | - | - | - | - | - | - |
Compensation of Directors
We do not pay any compensation to our directors at this time. However, we reserve the right to compensate our directors in the future with cash, stock, options, or some combination of the above.
Stock Option Plans
We did not have a stock option plan in place as of October 31, 2010.
23
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of October 31, 2010 (adjusted for 15:1 forward split of Nov 10, 2010) certain information as to shares of our common stock owned by (i) each person known by us to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, and (iii) all of our executive officers and directors as a group:
Title of Class | Name and address of beneficial owner | Number of Shares of Common Stock | Percentage of Common Stock (1) |
| Common Stock | Steve Friberg 1011 W. 25th Ave Spokane, WA 99203 | 15,000,000 | 38.9% |
| Common Stock | Dan Decker 9573 Gainey Ranch Ave. Las Vegas, NV 89147 | 7,500,000 | 19.4% |
| Common Stock | Silverstone Capital 2251 N. Rampart Blvd., #323, Las Vegas, NV 89128 | 6,482,400 | 16.8% |
| Common Stock | All Officers and Directors as a Group (one person) | 22,500,000 | 58.3% |
| (1) | The percent of class is based on 38,582,400 shares of common stock issued and outstanding as of October 31, 2010 (adjusted for forward split). |
The persons named above have full voting and investment power with respect to the shares indicated. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.
Item 13. Certain Relationships and Related Transactions, and Director Independence
None of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the foregoing persons has any material interest, direct or indirect, in any transaction over the last two years or in any presently proposed transaction which, in either case, has or will materially affect us.
As of the date of this annual report, our common stock is not traded on any stock exchange or over-the-counter market.
Item 14. Principal Accounting Fees and Services
Below is the table of Audit Fees (amounts in US$) billed by our auditor in connection with the audit of the Company’s annual financial statements for the years ended:
| Financial Statements for the Year Ended Oct 31 | Audit Services | Audit Related Fees | Tax Fees | Other Fees | |||
| 2010 | $ | 4,000 | $0 | $0 | $0 | ||
| 2009 | $ | 6,750 | $0 | $0 | $0 | ||
24
PART IV
Item 15. Exhibits, Financial Statements Schedules
Index to Financial Statements Required by Article 8 of Regulation S-X:
Audited Financial Statements: | |
| F-1 | Report of Independent Registered Public Accounting Firm |
F-2 | Consolidated Balance Sheets as of October 31, 2010 and 2009 |
F-3 | Statements of Operations for year ended October 31, 2010, year ended October 31, 2009 and from inception (May 17, 2007) through October 31, 2010. |
F-4 | Statement of Stockholders’ Equity for period from inception (May 17, 2007) to October 31, 2010 |
F-5 | Statements of Cash Flows for year ended October 31, 2010, year ended October 31, 2009 and from inception (May 17, 2007) through October31, 2010. |
F-6 | Notes to Financial Statements |
| Exhibit Number | Description |
| 31.1 | Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31.2 | Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
25
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| RIDER EXPLORATION, INC. | |||
| By: | /s/ Steve Friberg | ||
| Steve Friberg | |||
| President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Director | |||
| Date: January 20, 2011 | |||
In accordance with Section 13 or 15(d) of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
| By: | /s/ Dan Decker | By: | /s/ Steve Friberg | ||
| Dan Decker | Steve Friberg | ||||
| Secretary, Treasurer and Director Date: January 20, 2011 | President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Director | ||||
| Date: January 20, 2011 |
26
SEALE AND BEERS, CPAs
PCAOB & CPAB REGISTERED AUDITORS
www.sealebeers.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Rider Exploration, Inc.
(An Exploration Stage Company)
We have audited the accompanying balance sheets of Rider Exploration, Inc. (An Exploration Stage Company) as of October 31, 2010 and 2009, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended and for the period from inception on May 17, 2007 through October 31, 2010. 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 audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rider Exploration, Inc. (An Exploration Stage Company) as of October 31, 2010 and 2009, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended and for the period from inception on May 17, 2007 through October 31, 2010, 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 2 to the financial statements, the Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and has incurred an accumulated deficit since inception of the business. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Seale and Beers, CPAs
Seale and Beers, CPAs
Las Vegas, Nevada
January 17, 2011
50 S. Jones Blvd. Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 Fax: (888)782-2351
F-1
RIDER EXPLORATION, INC.
(An Exploration Stage Company)
Balance Sheets
| ASSETS | ||||||||
| October 31, | October 31, | |||||||
| 2010 | 2009 | |||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 1,201 | $ | 1,547 | ||||
| Total Current Assets | 1,201 | 1,547 | ||||||
| TOTAL ASSETS | $ | 1,201 | $ | 1,547 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 1,280 | $ | 255 | ||||
| Related party payable | 8,461 | 10,058 | ||||||
| Total Current Liabilities | 9,741 | 10,313 | ||||||
| STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Common stock: $0.001 par value, 50,000,000 shares | ||||||||
| authorized; 38,582,400 and 32,100,000 shares issued | ||||||||
| and outstanding, respectively | 38,582 | 32,100 | ||||||
| Additional paid-in capital | 16,526 | 1,400 | ||||||
| Deficit accumulated during the exploration stage | (63,648 | ) | (42,266 | ) | ||||
| Total Stockholders' Equity (Deficit) | (8,540 | ) | (8,766 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' | ||||||||
| EQUITY (DEFICIT) | $ | 1,201 | $ | 1,547 | ||||
The accompanying notes are an integral part of these financial statements.
F-2
RIDER EXPLORATION, INC.
(An Exploration Stage Company)
Statements of Operations
| From Inception | ||||||||||||
| on May 17, | ||||||||||||
| For the Year Ended | 2007 Through | |||||||||||
| October 31, | October 31, | |||||||||||
| 2010 | 2009 | 2010 | ||||||||||
| REVENUES | $ | - | $ | - | $ | - | ||||||
| OPERATING EXPENSES | ||||||||||||
| General and administrative | 21,382 | 35,817 | 63,812 | |||||||||
| Total Operating Expenses | 21,382 | 35,817 | 63,812 | |||||||||
| LOSS FROM OPERATIONS | (21,382 | (35,817 | ) | (63,812 | ) | |||||||
| OTHER INCOME | ||||||||||||
| Interest income | - | 99 | 164 | |||||||||
| Total Other Income | - | 99 | 164 | |||||||||
| LOSS BEFORE INCOME TAXES | (21,382 | ) | (35,718 | ) | (63,648 | ) | ||||||
| PROVISION FOR INCOME TAXES | - | - | - | |||||||||
| NET LOSS | $ | (21,382 | ) | $ | (35,718 | ) | $ | (63,648 | ) | |||
| BASIC LOSS PER SHARE | $ | (0.00 | ) | $ | (0.00 | ) | ||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | 33,929,280 | 32,100,000 | ||||||||||
The accompanying notes are an integral part of these financial statements.
F-3
RIDER EXPLORATION, INC.
(An Exploration Stage Company)
Statements of Stockholders' Equity (Deficit)
| Deficit | ||||||||||||||||||||||||
| Accumulated | Total | |||||||||||||||||||||||
| Additional | Stock | During the | Stockholders' | |||||||||||||||||||||
| Common Stock | Paid-in | Subscription | Exploration | Equity | ||||||||||||||||||||
| Shares | Amount | Capital | Receivable | Stage | (Deficit) | |||||||||||||||||||
| Balance at inception, May 17, 2007 | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
| Net loss from inception on May 17, | ||||||||||||||||||||||||
| 2007 through October 31, 2007 | - | - | - | - | (5,047 | ) | (5,047 | ) | ||||||||||||||||
| Balance, October 31, 2007 | - | - | - | - | (5,047 | ) | (5,047 | ) | ||||||||||||||||
| Common stock issued for cash at $0.0001 | ||||||||||||||||||||||||
| per share on September 30, 2008 | 22,500,000 | 22,500 | (21,000 | ) | - | - | 1,500 | |||||||||||||||||
| Common stock issued for cash at $0.0033 | ||||||||||||||||||||||||
| per share on September 30, 2008 | 5,550,000 | 5,550 | 12,950 | - | - | 18,500 | ||||||||||||||||||
| Common stock issued for cash at $0.0033 | ||||||||||||||||||||||||
| per share on October 30, 2008 | 4,050,000 | 4,050 | 9,450 | (5,500 | ) | - | 8,000 | |||||||||||||||||
| Net loss for the year ended | ||||||||||||||||||||||||
| October 31, 2008 | - | - | - | - | (1,501 | ) | (1,501 | ) | ||||||||||||||||
| Balance, October 31, 2008 | 32,100,000 | 32,100 | 1,400 | (5,500 | ) | (6,548 | ) | 21,452 | ||||||||||||||||
| Stock subscriptions received | - | - | - | 5,500 | - | 5,500 | ||||||||||||||||||
| Net loss for the year ended | ||||||||||||||||||||||||
| October 31, 2009 | - | - | - | - | (35,718 | ) | (35,718 | ) | ||||||||||||||||
| Balance, October 31, 2009 | 32,100,000 | 32,100 | 1,400 | - | (42,266 | ) | (8,766 | ) | ||||||||||||||||
| Common stock issued for debt at $0.0033 | ||||||||||||||||||||||||
| per share on July 21, 2010 | 6,482,400 | 6,482 | 15,126 | - | - | 21,608 | ||||||||||||||||||
| Net loss for year ended | ||||||||||||||||||||||||
| October 31, 2010 | - | - | - | - | (21,382 | ) | (21,382 | ) | ||||||||||||||||
| Balance, October 31, 2010 | 38,582,400 | $ | 38,582 | $ | 16,526 | $ | - | $ | (63,648 | ) | $ | (8,540 | ) | |||||||||||
The accompanying notes are an integral part of these financial statements.
F-4
RIDER EXPLORATION, INC.
(An Exploration Stage Company)
Statements of Cash Flows
| From Inception | ||||||||||||
| on May 17, | ||||||||||||
| For the Year Ended | 2007 Through | |||||||||||
| October 31, | October 31, | |||||||||||
| 2010 | 2009 | 2010 | ||||||||||
| OPERATING ACTIVITIES | ||||||||||||
| Net loss | $ | (21,382 | ) | $ | (35,718 | ) | $ | (63,648 | ) | |||
| Adjustments to reconcile net loss to net cash | ||||||||||||
| used by operating activities: | ||||||||||||
| Expenses paid by related party | 20,011 | 4,957 | 27,319 | |||||||||
| Changes in operating assets and liabilities | ||||||||||||
| Increase (decrease) in accounts payable | 1,025 | 255 | 4,030 | |||||||||
| Net Cash Used in | ||||||||||||
| Operating Activities | (346 | ) | (30,506 | ) | (32,299 | ) | ||||||
| INVESTING ACTIVITIES | - | - | - | |||||||||
| FINANCING ACTIVITIES | ||||||||||||
| Proceeds from related party loans | - | - | - | |||||||||
| Common stock issued for cash | - | 5,500 | 33,500 | |||||||||
| Net Cash Provided by | ||||||||||||
| Financing Activities | - | 5,500 | 33,500 | |||||||||
| NET INCREASE (DECREASE) IN CASH | (346 | ) | (25,006 | ) | 1,201 | |||||||
| CASH AT BEGINNING OF PERIOD | 1,547 | 26,553 | - | |||||||||
| CASH AT END OF PERIOD | $ | 1,201 | $ | 1,547 | $ | 1,201 | ||||||
| SUPPLEMENTAL DISCLOSURES OF | ||||||||||||
| CASH FLOW INFORMATION | ||||||||||||
| CASH PAID FOR: | ||||||||||||
| Interest | $ | - | $ | - | $ | - | ||||||
| Income Taxes | $ | - | $ | - | $ | - | ||||||
| NON-CASH FINANCING ACTIVITIES: | ||||||||||||
| Common stock issued for debt | $ | 21,608 | $ | - | $ | 21,608 | ||||||
| Expenses paid by related party | $ | 20,011 | $ | - | $ | 27,319 | ||||||
The accompanying notes are an integral part of these financial statements.
F-5
RIDER EXPLORATION, INC.
(An Exploration Stage Company)
Notes to Financial Statements
October 31, 2010 and 2009
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Rider Exploration, Inc., (the Company) was incorporated in the State of Nevada on May 17, 2007. The Company is in the mineral exploration and development business. The Company owns various mining claims with the intent to conduct mineral exploration. The Company has not realized any revenues to date and therefore is classified as an exploration stage company.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.
Accounting Basis
The basis is accounting principles generally accepted in the United States of America. The Company has adopted an October 31 fiscal year end.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Revenue Recognition
The Company currently has no source of revenues. Revenue recognition policies will be determined when principal operations begin.
Stock-based compensation
As of October 31, 2010, the Company has not issued any share-based payments to its employees. The Company adopted ASC 718 effective January 1, 2006 using the modified prospective method. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 718.
Basic (Loss) per Common Share
Basic (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of October 31, 2010.
F-6
RIDER EXPLORATION, INC.
(An Exploration Stage Company)
Notes to Financial Statements
October 31, 2010 and 2009
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Reclassifications
Certain amounts in the year ended October 31, 2009 financial statements have been reclassified to conform to the current period ended October 31, 2010 presentation.
Conversion of Debt
In valuing the reacquisition price of converted debt, the Company applies ASC 470 which states that the more clearly evident value between the stock and the debt should be used. During the year ended October 31, 2010 the Company used both the face value of the debt and the last cash sale price of shares to calculate the conversion price of the debt. Refer to note 4 for additional information on the conversion.
Income Taxes
The Company provides for income taxes under ASC 740 which requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Company’s predecessor operated as entity exempt from Federal and State income taxes.
ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 39% to the net loss before provision for income taxes for the following reasons:
October 31 2010 | October 31, 2009 | |||||||
| Income tax expense at statutory rate | $ | 8,339 | $ | 13,969 | ) | |||
| Common stock issued for services | - | - | ||||||
| Valuation allowance | (8,339 | ) | (13,969 | ) | ||||
| Income tax expense per books | $ | - | $ | - | ||||
Net deferred tax assets consist of the following components as of:
October 31, 2010 | October 31, 2009 | |||||||
| NOL carryover | $ | 24,861 | ) | $ | 16,522 | ) | ||
| Valuation allowance | (24,861 | ) | (16,522 | ) | ||||
| Net deferred tax asset | $ | - | $ | - | ||||
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $63,747 for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.
Recent Accounting Pronouncements
The Company’s management has evaluated the recently issued accounting pronouncements through the filing date of these financial statements and has determined that the application of these pronouncements will have no material impact on the Company’s financial position and results of operations.
F-7
RIDER EXPLORATION, INC.
(An Exploration Stage Company)
Notes to Financial Statements
October 31, 2010 and 2009
NOTE 2 – GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 – RELATED PARTY PAYABLE
Various general and administrative expenses of the Company as well as loans for operating purposes have been paid for or made by a related party of the Company. The related party payable totaled $8,461 and $10,058 as of October 31, 2010 and 2009. The related party payable bears no interest, is uncollateralized and due on demand.
NOTE 4 – COMMON STOCK
The authorized common stock is 50,000,000 shares with a par value of $0.001 per share.
On November 10, 2010, the Company effectuated a 15-for-1 forward stock split of the outstanding shares of common stock of the Company. This stock split has been reflected on these financial statements on a retroactive basis.
As of October 31, 2010 and 2009, the Company had 38,582,400 and 32,100,000 shares of common stock issued and outstanding.
On July 21, 2010, the Company issued 6,482,400 (432,160 pre-split) shares of its par value $0.001 common stock for $0.0033 ($0.05 pre-split) per share in exchange for the related party debt totaling $21,608.
During the fiscal year ended October 31, 2009, the Company collected $5,500 in outstanding stock subscriptions receivable.
In the year ended October 31, 2008, the Company issued 22,500,000 (1,500,000 pre-split) common shares to directors in exchange for $1,500 in cash and 9,600,000 (640,000 pre-split) common shares in exchange for $32,000 in cash in a private placement.
F-8
RIDER EXPLORATION, INC.
(An Exploration Stage Company)
Notes to Financial Statements
October 31, 2010 and 2009
NOTE 5 – SUBSEQUENT EVENTS
On February 24, 2010 the Company amended the Sallus Claims option agreement to extend the following payments to the dates indicated.
| · | $8,000 CDN in option fees on or before May 31, 2011 |
| · | $4,000 CDN in exploration expenditures or cash-in-lieu on or before May 31, 2011 |
| · | $50,000 CDN in additional exploration expenditures on or before December 31, 2011 |
| · | $10,000 CDN in additional exploration expenditures on or before December 31, 2012 |
In accordance with ASC 855 Company management reviewed all material events through the date these financial statements were filed and there are no additional material subsequent events to report.
F-9