Registration No. 333-_________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MASCOT VENTURES INC
(Exact name of registrant as specified in its charter)
| Nevada | 1000 | None | ||
| (State or Other Jurisdiction of | (Primary Standard Industrial | (IRS Employer | ||
| Incorporation or Organization) | Classification Number) | Identification Number) |
1802 North Carson Street, Suite 212
Carson City, Nevada 89701
(646) 520-7426
(Address, including zip code, and telephone number, including area code,
of registrant’s principal executive offices)
Wendy Wildmen
President and Chief Executive Officer
Mascot Ventures Inc.
1802 North Carson Street, Suite 212
Carson City, Nevada 89701
(646) 520-7426
(Address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Thomas E. Puzzo, Esq.
Law Offices of Thomas E. Puzzo, PLLC
4216 NE 70th Street
Seattle, Washington 98115
Telephone No.: (206) 522-2256
Facsimile No.: (206) 260-0111
Approximate date of proposed sale to the public: As soon as practicable and from time to time after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨ | Accelerated filer ¨ |
Non-accelerated filer ¨ | Smaller reporting company x |
| (Do not check if a smaller reporting company) |
CALCULATION OF REGISTRATION FEE
| Title of Each Class | Proposed Maximum | Proposed Maximum | ||||||||||||||
| of Securities | Amount to Be | Offering Price | Aggregate | Amount of | ||||||||||||
| to be Registered | Registered(1) | per Share | Offering Price | Registration Fee | ||||||||||||
| Common Stock, $0.001 per share | 1,860,000 | (2) | $ | 0.10 | (3) | $ | 186,000 | $ | 13.26 | |||||||
| TOTAL | 1,860,000 | $ | - | $ | 186,000 | 13.26 | ||||||||||
(1) In the event of a stock split, stock dividend or similar transaction involving our common stock, the number of shares registered shall automatically be increased to cover the additional shares of common stock issuable pursuant to Rule 416 under the Securities Act of 1933, as amended.
(2) Represents the number of shares of common stock currently outstanding to be sold by the selling security holders.
(3) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) and (o) of the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED APRIL 9, 2010
MASCOT VENTURES INC
1,860,000 SHARES OF COMMON STOCK
This prospectus relates to the resale by certain selling security holders of Mascot Ventures Inc of up to 1,860,000 shares of common stock held by selling security holders of Mascot Ventures Inc. We will not receive any of the proceeds from the sale of the shares by the selling stockholders.
The selling security holders will be offering our shares of common stock at a fixed price of $0.10 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. Each of the selling stockholders may be deemed to be an “underwriter” as such term is defined in the Securities Act of 1933, as amended (the “Securities Act”).
There has been no market for our securities and a public market may never develop, or, if any market does develop, it may not be sustained. Our common stock is not traded on any exchange or on the over-the-counter market. After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application with the Financial Industry Regulatory Authority for our common stock to be eligible for trading on the Over-the-Counter Bulletin Board. We do not yet have a market maker who has agreed to file such application. There can be no assurance that our common stock will ever be quoted on a stock exchange or a quotation service or that any market for our stock will develop.
OUR BUSINESS IS SUBJECT TO MANY RISKS AND AN INVESTMENT IN OUR SHARES OF COMMON STOCK WILL ALSO INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING “RISK FACTORS” BEGINNING ON PAGE 5 BEFORE INVESTING IN OUR SHARES OF COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The information in this prospectus is not complete and may be changed. This prospectus is included in the registration statement that was filed by us with the Securities and Exchange Commission. The selling security holders may not sell these securities until the registration statement becomes effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
The date of this prospectus is _______________, 2010.
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The following table of contents has been designed to help you find information contained in this prospectus. We encourage you to read the entire prospectus.
TABLE OF CONTENTS
| Page | ||
| Prospectus Summary | 4 | |
| Risk Factors | 6 | |
| Risk Factors Relating to Our Company | 6 | |
| Risk Factors Relating to Our Common Stock | 9 | |
| Use of Proceeds | 12 | |
| Determination of Offering Price | 12 | |
| Selling Security Holders | 12 | |
| Plan of Distribution | 13 | |
| Description of Business | 18 | |
| Our Executive Offices | 25 | |
| Legal Proceedings | 25 | |
| Market for Common Equity and Related Stockholder Matters | 25 | |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26 | |
| Directors, Executive Officers, Promoters and Control Persons | 29 | |
| Executive Compensation | 31 | |
| Security Ownership of Certain Beneficial Owners and Management | 31 | |
| Certain Relationships and Related Transactions | 32 | |
| Disclosure of Commission Position on Indemnification for Securities Act Liabilities | 32 | |
| Where You Can Find More Information | 32 | |
| Changes In and Disagreements with Accountants on Accounting and Financial Disclosure | 33 | |
| Financial Statements | F-1 |
Until ___ ______, 2010 (90 business days after the effective date of this prospectus) all dealers that effect transactions in these securities whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
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A CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors,” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
PROSPECTUS SUMMARY
As used in this prospectus, references to the “Company,” “we,” “our”, “us” or “Mascot” refer to Mascot Ventures Inc. unless the context otherwise indicates.
The following summary highlights selected information contained in this prospectus. Before making an investment decision, you should read the entire prospectus carefully, including the “Risk Factors” section, the financial statements, and the notes to the financial statements.
OUR COMPANY
Mascot Ventures Inc. was incorporated on September 25, 2007, under the laws of the State of Nevada, for the purpose of conducting mineral exploration activities.
We are an exploration stage company formed for the purposes of acquiring, exploring, and if warranted and feasible, developing natural resource property. We raised an aggregate of $40,500 through private placements of our securities. Proceeds from these placements were used to acquire a mineral property and for working capital.
The Monty Lode Claim, comprising 20 acres, was located on November 26, 2007 and was filed in the Clark County recorder’s office in Las Vegas, Nevada, on November 30, 2007. We had a qualified consulting geologist prepare a geological evaluation report on the claim. We intend to conduct exploratory activities on the claim and if feasible, develop the claim.
The Company’s principal offices are located at 1802 North Carson Street, Suite 212, Carson City, Nevada 89701 and our telephone number is (646) 520-7426.
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THE OFFERING
| Securities offered: | The selling stockholders are offering hereby up to 1,860,000 shares of common stock. | |
| Offering price: | The selling stockholders will offer and sell their shares of common stock at a fixed price of $0.10 per share until our shares are quoted on the OTC Bulletin Board, if our shares of common stock are ever quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices. | |
| Shares outstanding prior to offering: | 11,860,000 | |
| Shares outstanding after offering: | 11,860,000 | |
| Market for the common shares: | There is no public market for our shares. Our common stock is not traded on any exchange or on the over-the-counter market. After the effective date of the registration statement relating to this prospectus, we hope to have a market maker file an application with the Financial Industry Regulatory Authority (“FINRA”) for our common stock to eligible for trading on the Over The Counter Bulletin Board. We do not yet have a market maker who has agreed to file such application. There is no assurance that a trading market will develop, or, if developed, that it will be sustained. Consequently, a purchaser of our common stock may find it difficult to resell the securities offered herein should the purchaser desire to do so when eligible for public resale. | |
| Use of proceeds: | We will not receive any proceeds from the sale of shares by the selling security holders |
SUMMARY FINANCIAL INFORMATION
The tables and information below are derived from our audited financial statements for the period from September 25, 2007 (Inception) to October 31, 2009. Our working capital as at October 31, 2009 was $42,850.
| October 31, 2009 ($) | ||||
| Financial Summary | ||||
| Cash and Deposits | 42,850 | |||
| Total Assets | 49,350 | |||
| Total Liabilities | — | |||
| Total Stockholder’s Equity | 49,350 | |||
| Accumulated From September 25, 2007 | ||||
| (Inception) to October 31, 2009 ($) | ||||
| Statement of Operations | ||||
| Total Expenses | 39,562 | |||
| Net Loss for the Period | 38,650 | |||
| Net Loss per Share | (0.00 | ) | ||
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RISK FACTORS
An investment in our common stock involves a number of very significant risks. You should carefully consider the following known material risks and uncertainties in addition to other information in this prospectus in evaluating our company and its business before purchasing shares of our company’s common stock. You could lose all or part of your investment due to any of these risks.
RISKS RELATING TO OUR COMPANY
OUR AUDITORS HAVE EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
Our financial statements for the year ended October 31, 2009 were prepared assuming that we will continue our operations as a going concern. We were incorporated on September 25, 2007 and do not have a history of earnings. As a result, our independent accountants in their audit report have expressed substantial doubt about our ability to continue as a going concern. Continued operations are dependent on our ability to complete equity or debt financings or generate profitable operations. Such financings may not be available or may not be available on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty.
WE MAY REQUIRE ADDITIONAL FUNDS WHICH WE PLAN TO RAISE THROUGH THE SALE OF OUR COMMON STOCK, WHICH REQUIRES FAVORABLE MARKET CONDITIONS AND INTEREST IN OUR ACTIVITIES BY INVESTORS. IF WE ARE NOT BE ABLE TO SELL OUR COMMON STOCK, FUNDING WILL NOT BE AVAILABLE FOR CONTINUED OPERATIONS, AND OUR BUSINESS WILL FAIL.
We anticipate that our current cash of $42,850 will be sufficient to complete the first phase of our planned exploration program on the Monty Lode mining claim. Subsequent exploration activities will require additional funding. Our only present means of funding is through the sale of our common stock. The sale of common stock requires favorable market conditions for exploration companies like ours, as well as specific interest in our stock, neither of which may exist if and when additional funding is required by us. If we are unable to raise additional funds in the future, our business will fail.
WE HAVE A VERY LIMITED HISTORY OF OPERATIONS AND ACCORDINGLY THERE IS NO TRACK RECORD THAT WOULD PROVIDE A BASIS FOR ASSESSING OUR ABILITY TO CONDUCT SUCCESSFUL MINERAL EXPLORATION ACTIVITIES. WE MAY NOT BE SUCCESSFUL IN CARRYING OUT OUR BUSINESS OBJECTIVES.
We were incorporated on September 25, 2007 and to date, have been involved primarily in organizational activities, obtaining financing and acquiring an interest in the claims. Accordingly we have no track record of successful exploration activities, strategic decision making by management, fund-raising ability, and other factors that would allow an investor to assess the likelihood that we will be successful as a junior resource exploration company. Junior exploration companies often fail to achieve or maintain successful operations, even in favorable market conditions. There is a substantial risk that we will not be successful in our exploration activities, or if initially successful, in thereafter generating any operating revenues or in achieving profitable operations.
The Monty Lode mining claim has an expiration date of September 1, 2010. In order to maintain the tenure of our ownership of the claim in good standing, it will be necessary for us to pay an annual maintenance fee of $125 to the Bureau of Land Management before the expiration date.
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DUE TO THE SPECULATIVE NATURE OF MINERAL PROPERTY EXPLORATION, THERE IS SUBSTANTIAL RISK THAT NO COMMERCIALLY VIABLE MINERAL DEPOSITS WILL BE FOUND ON OUR MONTY LODE CLAIM OR OTHER MINERAL PROPERTIES THAT WE ACQUIRE.
In order for us to even commence mining operations we face a number of challenges which include finding qualified professionals to conduct our exploration program, obtaining adequate financing to continue our exploration program, locating a viable mineral body, partnering with a senior mining company, obtaining mining permits, and ultimately selling minerals in order to generate revenue. Moreover, exploration for commercially viable mineral deposits is highly speculative in nature and involves substantial risk that no viable mineral deposits will be located on any of our present or future mineral properties. There is a substantial risk that the exploration program that we will conduct on the Claim may not result in the discovery of any significant mineralization, and therefore no commercial viable mineral deposit. There are numerous geological features that we may encounter that would limit our ability to locate mineralization or that could interfere with our exploration programs as planned, resulting in unsuccessful exploration efforts. In such a case, we may incur significant costs associated with an exploration program, without any benefit. This would likely result in a decrease in the value of our common stock.
DUE TO THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION, THERE IS A RISK THAT WE MAY INCUR LIABILITY OR DAMAGES AS WE CONDUCT OUR BUSINESS.
The search for minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or may elect not to insure. We currently have no such insurance nor do we expect to obtain such insurance for the foreseeable future. If a hazard were to occur, the costs of rectifying the hazard may exceed our asset value and cause us to liquidate all our assets and cease operations, resulting in the loss of your entire investment.
OUR ACTIVITIES ARE SUBJECT TO GOVERNMENTAL REGULATIONS WHICH MAY SUBJECT US TO PENALTIES FOR FAILURE TO COMPLY, MAY LIMIT OUR ABILITY TO CONDUCT EXPLORATION ACTIVITIES AND COULD CAUSE US TO DELAY OR ABANDON OUR PROJECT.
Various regulatory requirements affect the current and future activities of the Company, including exploration activities on our lode claim. Exploration activities require permits from various federal, state and local governmental authorities and are subject to laws and regulations governing, among other things, prospecting, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety, and others which currently or in the future may have a substantial adverse impact on the Company. Exploration activities are also subject to substantial regulation under these laws by governmental agencies and may require that the Company obtain permits from various governmental agencies.
Licensing and permitting requirements are subject to changes in laws and regulations and in various operating circumstances. There can be no assurance that the Company will be able to obtain or maintain all necessary licenses and/or permits it may require for its activities or that such permits will be will be obtainable on reasonable terms or on a timely basis or that such laws and regulations will not have an adverse effect on any project which we might undertake. If the Company is unable to obtain the necessary licenses or permits for our exploration activities, we might have to change or abandon our planned exploration for such non-permitted properties and/or to seek other joint venture arrangements. In such event, the Company might be forced to sell or abandon its property interests.
Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing exploration activities to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining activities may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations and, in particular, environmental laws.
Any change in or amendments to current laws, regulations and permits governing activities of mineral exploration companies, or more stringent implementation thereof, could require increases in exploration expenditures, or require delays in exploration or abandonment of new mineral properties. The cost of compliance with changes in governmental regulations has a potential to increase the Company’s expenses.
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BECAUSE THE COMPANY IS SUBJECT TO COMPLIANCE WITH ENVIRONMENTAL REGULATION, THE COST OF OUR EXPLORATION PROGRAM MAY INCREASE.
Our operations may be subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain exploration and mining industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner which means stricter standards, and enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of operations.
THE MARKET PRICE FOR PRECIOUS METALS IS BASED ON NUMEROUS FACTORS OUTSIDE OF OUR CONTROL. THERE IS A RISK THAT THE MARKET PRICE FOR PRECIOUS METALS WILL SIGNIFICANTLY DECREASE, WHICH WILL MAKE IT DIFFICULT FOR US TO FUND FURTHER MINERAL EXPLORATION ACTIVITIES, AND WOULD DECREASE THE PROBABILITY THAT ANY SIGNIFICANT MINERALIZATION THAT WE LOCATE CAN BE ECONOMICALLY EXTRACTED.
Numerous factors beyond our control may affect the marketability of minerals. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in our not receiving an adequate return on invested capital and you may lose your entire investment in this offering.
OUR OFFICERS AND DIRECTORS MAY HAVE A CONFLICT OF INTEREST WITH THE MINORITY SHAREHOLDERS AT SOME TIME IN THE FUTURE. SINCE THE MAJORITY OF OUR SHARES OF COMMON STOCK ARE OWNED BY OUR PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTORS, OUR OTHER STOCKHOLDERS MAY NOT BE ABLE TO INFLUENCE CONTROL OF THE COMPANY OR DECISION MAKING BY MANAGEMENT OF THE COMPANY.
Our directors beneficially own 84.2% of our outstanding common stock. The interests of our directors may not be, at all times, the same as that of our other shareholders. Our directors are not simply passive investors but are also executive officers of the Company, their interests as executives may, at times be adverse to those of passive investors. Where those conflicts exist, our shareholders will be dependent upon our directors exercising, in a manner fair to all of our shareholders, their fiduciary duties as officers or as members of the Company’s Board of Directors. Also, our directors will have the ability to control the outcome of most corporate actions requiring shareholder approval, including the sale of all or substantially all of our assets and amendments to our articles of incorporation. This concentration of ownership may also have the effect of delaying, deferring or preventing a change of control of us, which may be disadvantageous to minority shareholders.
SINCE OUR OFFICERS AND DIRECTORS HAVE THE ABILITY TO BE EMPLOYED BY OR CONSULT FOR OTHER COMPANIES, THEIR OTHER ACTIVITIES COULD SLOW DOWN OUR OPERATIONS.
Our officers and directors are not required to work exclusively for us and do not devote all of their time to our operations. Therefore, it is possible that a conflict of interest with regard to their time may arise based on their employment by other companies. Their other activities may prevent them from devoting full-time to our operations which could slow our operations and may reduce our financial results because of the slowdown in operations. It is expected that each of our officers and directors will devote between 5 and 10 hours per week to our operations on an ongoing basis, and when required will devote whole days and even multiple days at a stretch when property visits are required or when extensive analysis of information is needed. We do not have any written procedures in place to address conflicts of interest that may arise between our business and the business activities of our directors.
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CURRENT MANAGEMENT’S LACK OF EXPERIENCE IN AND/OR WITH MINING AND, IN PARTICULAR, MINERAL EXPLORATION ACTIVITY, MEANS THAT IT IS DIFFICULT TO ASSESS, OR MAKE JUDGMENTS ABOUT, OUR POTENTIAL SUCCESS.
None of our officers or directors has any prior experience with or ever been employed in the mining industry. Additionally, none of our officer or directors has a college or university degree, or other educational background, in mining or geology or in a field related to mining. More specifically, each of our officers and directors lack technical training and experience with exploring for, starting, and/or operating a mine. With no direct training or experience in these areas, each of our officers and directors may not be fully aware of many of the specific requirements related to mineral exploration, let alone the overall mining industry as a whole. For example, each of our officer’s and director’s decisions and choices may fail to take into account standard engineering and other managerial approaches mineral exploration companies commonly use. Consequently, our operations, earnings, and ultimate financial success could suffer irreparable harm due to our officers’ and directors’ future possible mistakes, lack of sophistication, judgment or experience in this particular industry. As a result, if we do obtain the funding or other means to implement a bona fide mineral exploration program, such program will likely have to be implemented and carried out by joint venturers, partners or independent contractors who would have the requisite mineral exploration experience and know-how that we currently lack.
IF THE SELLING SHAREHOLDERS SELL A LARGE NUMBER OF SHARES ALL AT ONCE OR IN BLOCKS, THE MARKET PRICE OF OUR SHARES WOULD MOST LIKELY DECLINE.
The selling shareholders are offering up to 1,860,000 shares of our common stock through this prospectus. Our common stock is presently not traded or quoted on any market or securities exchange, but should a market develop, shares sold at a price below the current market price at which the common stock is quoted will cause that market price to decline. Moreover, the offer or sale of a large number of shares at any price may cause the market price to fall. The outstanding shares of common stock covered by this prospectus represent 15.8% of the common shares outstanding as of the date of this prospectus.
RISKS RELATING TO OUR COMMON STOCK
THERE IS NO LIQUIDITY AND NO ESTABLISHED PUBLIC MARKET FOR OUR COMMON STOCK AND WE MAY NOT BE SUCCESSFUL AT OBTAINING A QUOTATION ON A RECOGNIZED QUOTATION SERVICE. IN SUCH EVENT IT MAY BE DIFFICULT TO SELL YOUR SHARES.
There is presently no public market in our shares. There can be no assurance that we will be successful at developing a public market or in having our common stock quoted on a quotation facility such as the OTC Bulletin Board. There are risks associated with obtaining a quotation, including that broker dealers will not be willing to make a market in our shares, or to request that our shares be quoted on a quotation service. In addition, even if a quotation is obtained, the OTC Bulletin Board and similar quotation services are often characterized by low trading volumes, and price volatility, which may make it difficult for an investor to sell our common stock on acceptable terms. If trades in our common stock are not quoted on a quotation facility, it may be very difficult for an investor to find a buyer for their shares in our Company.
Under U.S. federal securities legislation, our common stock will constitute “penny stock”. Penny stock is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor’s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
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WE MAY, IN THE FUTURE, ISSUE ADDITIONAL COMMON SHARES, WHICH WOULD REDUCE INVESTORS’ PERCENT OF OWNERSHIP AND MAY DILUTE OUR SHARE VALUE.
Our Articles of Incorporation authorize the issuance of 75,000,000 shares of common stock. As of April 9, 2010, the Company had 11,860,000 shares of common stock outstanding. Accordingly, we may issue up to an additional 63,140,000 shares of common stock. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.
THERE IS NO CURRENT TRADING MARKET FOR OUR SECURITIES AND IF A TRADING MARKET DOES NOT DEVELOP, PURCHASERS OF OUR SECURITIES MAY HAVE DIFFICULTY SELLING THEIR SHARES.
There is currently no established public trading market for our securities and an active trading market in our securities may not develop or, if developed, may not be sustained. We intend to have an application filed for admission to quotation of our securities on the OTC Bulletin Board after this prospectus is declared effective by the SEC. If for any reason our common stock is not quoted on the OTC Bulletin Board or a public trading market does not otherwise develop, purchasers of the shares may have difficulty selling their common stock should they desire to do so. No market makers have committed to becoming market makers for our common stock and none may do so.
Secondary trading in common stock sold in this offering will not be possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common stock in any particular state, the common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly impacted thus causing you to realize a loss on your investment.
Upon effectiveness of this Prospectus, the Company intends to become a “reporting issuer” under Section 12(g) of the U.S. Securities Exchange Act of 1934, as amended, by way of filing a Form 8-A with the Securities and Exchange Commission (“SEC”). A Form 8-A is a “short form” of registration whereby information about the Company will be incorporated by reference to the Registration Statement on Form S-1, under which this Prospectus became effective. Upon filing of the Form 8-A, the Company’s shares of common stock will become “covered securities,” or “federally covered securities” as described in some states’ laws, which means that unless you are an “underwriter” or “dealer,” you will have a “secondary trading” exemption under the laws of most states (and the District of Columbia, Guam, the Virgin Islands and Puerto Rico) to resell the shares of common stock you purchase in this offering. However, four states do impose filing requirements on the Company: Michigan, New Hampshire, Texas and Vermont. The Company intends, at its own cost, to make the required notice filings in Michigan, New Hampshire, Texas and Vermont immediately after filings its Form 8-A with the SEC.
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The Company does not intend to seek registration or qualification of its shares of common stock the subject of this offering in any State or territory of the United States. Aside from a “secondary trading” exemption, other exemptions under state law and the laws of US territories may be available to purchasers of the shares of common stock sold in this offering,
ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF NEVADA STATE LAW HINDER A POTENTIAL TAKEOVER OF MASCOT VENTURES.
Though not now, we may be or in the future we may become subject to Nevada’s control share law. A corporation is subject to Nevada’s control share law if it has more than 200 stockholders, at least 100 of whom are stockholders of record and residents of Nevada, and it does business in Nevada or through an affiliated corporation. The law focuses on the acquisition of a “controlling interest” which means the ownership of outstanding voting shares sufficient, but for the control share law, to enable the acquiring person to exercise the following proportions of the voting power of the corporation in the election of directors:
(i) one-fifth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more. The ability to exercise such voting power may be direct or indirect, as well as individual or in association with others.
The effect of the control share law is that the acquiring person, and those acting in association with it, obtains only such voting rights in the control shares as are conferred by a resolution of the stockholders of the corporation, approved at a special or annual meeting of stockholders. The control share law contemplates that voting rights will be considered only once by the other stockholders. Thus, there is no authority to strip voting rights from the control shares of an acquiring person once those rights have been approved. If the stockholders do not grant voting rights to the control shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The acquiring person is free to sell its shares to others. If the buyers of those shares themselves do not acquire a controlling interest, their shares do not become governed by the control share law.
If control shares are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of the voting power, any stockholder of record, other than an acquiring person, who has not voted in favor of approval of voting rights is entitled to demand fair value for such stockholder’s shares.
Nevada’s control share law may have the effect of discouraging takeovers of the corporation.
The effect of Nevada’s business combination law is to potentially discourage parties interested in taking control of Mascot Ventures from doing so if it cannot obtain the approval of our board of directors.
BECAUSE WE DO NOT INTEND TO PAY ANY CASH DIVIDENDS ON OUR COMMON STOCK, OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS THEY SELL THEM.
We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.
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USE OF PROCEEDS
This prospectus relates to shares of our common stock that may be offered and sold from time to time by the selling stockholders. We will not receive any of the proceeds from the sale of the common shares being offered for sale by the selling security holders.
DETERMINATION OF THE OFFERING PRICE
The selling shareholders will sell our shares at $0.10 per share until our shares are quoted on the OTCBB, and thereafter at prevailing market prices or privately negotiated prices. This price was arbitrarily determined by us.
SELLING SECURITY HOLDERS
The following table sets forth the shares beneficially owned, as of April 9, 2010, by the selling security holders prior to the offering contemplated by this prospectus, the number of shares each selling security holder is offering by this prospectus and the number of shares which each would own beneficially if all such offered shares are sold.
Beneficial ownership is determined in accordance with Securities and Exchange Commission rules. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.
The percentages below are calculated based on 11,860,000 shares of our common stock issued and outstanding as of April 9, 2010. We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock.
Total Number of | ||||||||||||||||
Shares to be Offered for | Total Shares | Percentage of | ||||||||||||||
Shares Owned | the Security | Owned After the | Shares owned After | |||||||||||||
| Name of | Before | Holder’s | Offering is | the Offering is | ||||||||||||
| Selling Shareholder | the Offering | Account | Complete | Complete | ||||||||||||
| Lisa Steele | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Doug Walman | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| David Bromley | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Justin Berridge | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Doug Waldie | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Kevin Woods | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Chad Smith | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| George Clark | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Stan Ker | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Peter Dillon | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Philip Argue | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Jennifer Cano | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Ruth Lawless | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Al Haines | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Tony Cairns | 100,000 | 100,000 | 0 | 0 | ||||||||||||
| Kelly Short | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Jan Young | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Murray Mason | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Harold Cole | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Jim Parton | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Ron White | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Bob West | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Bob David | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Andrew Wagner | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Bob Jones | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Mark Eli | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Kelly Price | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Anne Clarke | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Mark Crain | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Bill Hay | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Alex French | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Karen Kelly | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Dan Bissett | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Bob Legh | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Daniel Long | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Bill Lyons | 10,000 | 10,000 | 0 | 0 | ||||||||||||
| Peter Levy | 50,000 | 50,000 | 0 | 0 | ||||||||||||
| Ed Hunter | 50,000 | 50,000 | 0 | 0 | ||||||||||||
| Ben Lund | 50,000 | 50,000 | 0 | 0 | ||||||||||||
| Total | 1,860,000 | 1,860,000 | 0 | 0 | ||||||||||||
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We may require the selling stockholders to suspend the sales of the securities offered by this prospectus upon the occurrence of any event that makes any statement in this prospectus, or the related registration statement, untrue in any material respect, or that requires the changing of the statements in these documents in order to make statements in those documents not misleading. We will file a post-effective amendment to the registration statement to reflect any such material changes to this prospectus.
PLAN OF DISTRIBUTION
As of the date of this prospectus, there is no market for our securities. After the date of this prospectus, we expect to have an application filed with the Financial Industry Regulatory Authority for our common stock to be eligible for trading on the OTC Bulletin Board. Until our common stock becomes eligible for trading on the OTC Bulletin Board, the selling security holders will be offering our shares of common stock at a fixed price of $0.10 per common share. After our common stock becomes eligible for trading on the OTC Bulletin Board, the selling security holders may, from time to time, sell all or a portion of the shares of common stock on OTC Bulletin Board, in privately negotiated transactions or otherwise. After our common stock becomes eligible for trading on the OTC Bulletin Board, such sales may be at fixed prices prevailing at the time of sale, at prices related to the market prices or at negotiated prices.
After our common stock becomes eligible for trading on the OTC Bulletin Board, the shares of common stock being offered for resale by this prospectus may be sold by the selling security holders by one or more of the following methods, without limitation:
* ordinary brokerage transactions and transactions in which the broker solicits purchasers;
* privately negotiated transactions;
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* market sales (both long and short to the extent permitted under the federal securities laws);
* at the market to or through market makers or into an existing market for the shares;
* through transactions in options, swaps or other derivatives (whether exchange listed or otherwise); and
* a combination of any of the aforementioned methods of sale.
In the event of the transfer by any of the selling security holders of its shares of common stock to any pledgee, donee or other transferee, we will amend this prospectus and the registration statement of which this prospectus forms a part by the filing of a post-effective amendment in order to have the pledgee, donee or other transferee in place of the selling security holder who has transferred his, her or its shares.
The selling security holders and any broker-dealers or agents that participate with the selling security holders in the sale of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act in connection with these sales. In that event, any commissions received by the broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
From time to time, any of the selling security holders may pledge shares of common stock pursuant to the margin provisions of customer agreements with brokers. Upon a default by a selling security holder, their broker may offer and sell the pledged shares of common stock from time to time. After our common stock becomes eligible for trading on the OTC Bulletin Board, upon a sale of the shares of common stock, the selling security holders intend to comply with the prospectus delivery requirements under the Securities Act by delivering a prospectus to each purchaser in the transaction. We intend to file any amendments or other necessary documents in compliance with the Securities Act that may be required in the event any of the selling security holders defaults under any customer agreement with brokers.
To the extent required under the Securities Act, a post effective amendment to this registration statement will be filed disclosing the name of any broker-dealers, the number of shares of common stock involved, the price at which the shares of common stock is to be sold, the commissions paid or discounts or concessions allowed to such broker-dealers, where applicable, that such broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus and other facts material to the transaction.
We and the selling security holders will be subject to applicable provisions of the Exchange Act and the rules and regulations under it, including, without limitation, Rule 10b-5 and, insofar as a selling security holder is a distribution participant and we, under certain circumstances, may be a distribution participant, under Regulation M. All of the foregoing may affect the marketability of the shares of common stock.
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Any shares of common stock covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act, as amended, may be sold under Rule 144 rather than pursuant to this prospectus.
PENNY STOCK RULES
The Securities Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in “penny stocks” as such term is defined by Rule 15g-9. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
The shares offered by this prospectus constitute penny stock under the Securities and Exchange Act. The shares will remain penny stock for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his or her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in our company will be subject to the penny stock rules.
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the Commission, which: (i) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (ii) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities’ laws; (iii) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and significance of the spread between the bid and ask price; (iv) contains a toll-free telephone number for inquiries on disciplinary actions; (v) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (vi) contains such other information and is in such form as the Commission shall require by rule or regulation. The broker-dealer also must provide to the customer, prior to effecting any transaction in a penny stock, (i) bid and offer quotations for the penny stock; (ii) the compensation of the broker-dealer and its salesperson in the transaction; (iii) 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 (iv) monthly account statements showing the market value of each penny stock held in the customer’s account.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling those securities.
REGULATION M
During such time as we may be engaged in a distribution of any of the shares we are registering by this registration statement, we are required to comply with Regulation M. In general, Regulation M precludes any selling security holder, any affiliated purchasers and any broker-dealer or other person who participates in a distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase, any security which is the subject of the distribution until the entire distribution is complete. Regulation M defines a “distribution” as an offering of securities that is distinguished from ordinary trading activities by the magnitude of the offering and the presence of special selling efforts and selling methods. Regulation M also defines a “distribution participant” as an underwriter, prospective underwriter, broker, dealer, or other person who has agreed to participate or who is participating in a distribution.
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Regulation M under the Exchange Act prohibits, with certain exceptions, participants in a distribution from bidding for or purchasing, for an account in which the participant has a beneficial interest, any of the securities that are the subject of the distribution. Regulation M also governs bids and purchases made in order to stabilize the price of a security in connection with a distribution of the security. We have informed the selling shareholders that the anti-manipulation provisions of Regulation M may apply to the sales of their shares offered by this prospectus, and we have also advised the selling shareholders of the requirements for delivery of this prospectus in connection with any sales of the common stock offered by this prospectus.
CANADIAN SECURITIES LAW
Selling shareholders who are residents of a province of Canada must comply with applicable provincial securities laws to resell their securities. To the extent required by such provincial securities laws, selling shareholders will have to rely on available prospectus and registration exemptions to resell their securities. To the extent such an exemption is not available such residents may be subject to an indefinite hold period with respect to their securities of the Company. All Canadian shareholders should consult independent legal counsel with respect to ascertaining any available prospectus exemptions for reselling their securities of the Company.
GLOSSARY OF TECHNICAL TERMS
The following are definitions of certain technical terms used in this prospectus.
Bedding: A layer of sedimentary deposit.
Brecca: Rock composed of angular fragments of older rocks melded together.
Bullion: Gold or silver considered in mass rather than in value.
Conformity: Contact relationship between adjacent layers of the sedimentary rock, which are undisturbed and parallel to one and another. The thickness of each layer is uniform.
Cyanidation (MacArthur-Forrest Process): The method in which copper, silver, and gold are extracted from their ores.
Deposit: When mineralized material has been systematically drilled and explored so that a reasonable estimate of tonnage and economic grade can be made.
Development – Preparation of a mineral deposit for commercial production, including installation of plant and machinery.
Exploration Stage: A mining prospect which is not in either the development or production stage.
Fault: A planar feature produced by breaking of the Earth’s crust with movement on one, or both, sides of the plane.
Fold: A portion of strata that is folded or bent, as an anticline or syncline, or that connects two horizontal or parallel portions of strata of different levels (as a monocline).
Geophysical: Surveys that are conducted to measure the Earth’s physical properties as a means of identify areas where anomalous features may exist.
Igneous rocks - One of three types of rocks. It was formed from the congealing of molten rock fluids.
Intercalated: Interpolated; interposed.
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Mine: An opening or excavation in the ground for the purpose of extracting minerals; a pit or excavation from which ores or other mineral substances are taken by digging; an opening in the ground made for the purpose of taking out minerals; an excavation properly underground for digging out some usable product, such as ore, including any deposit of any material suitable for excavation and working as a placer mine; collectively, the underground passage and workings and the minerals themselves.
Mineralized: Material added by hydrothermal solutions, principally in the formation of ore deposits. Often refers to the presence of a mineral of economic interest in a rock.
Mineralized Material: The term “mineralized material” refers to material that is not included in the reserve as it does not meet all of the criteria for adequate demonstration for economic or legal extraction.
Oxide: A mineral compound characterized by the linkage of oxygen with one or more metallic elements. Sulfide minerals typically convert to oxides on exposure to oxygen. Oxides are more amenable to heap leach techniques than are sulfides.
Porphyry: An igneous rock containing conspicuous crystals or phenocysts in a fine-grained groundmass; type of mineral deposit in which ore minerals are widely disseminated, generally of a low grade by large tonnage.
Sediments: Material that has been deposited on the surface of the Earth through geologic means, usually transported and deposited by water. This material may eventually be cemented into rock.
Silica: The dioxide form of silicon, SiO 2 , occurring especially as quartz sand, flint, and agate: used usually in the form of its prepared white powder chiefly in the manufacture of glass, water glass, ceramics, and abrasives. Also called silicon dioxide.
Siliceous: Adjective form of the noun silica; containing, consisting of, or resembling silica.
Sulfide: A mineral compound characterized by the linkage of sulphur with a metal.
Strata: Rock layers and their places in succession can be identified at a specific position in the sequence and do not recur. These rock layers are called strata.
Stratigraphy: a branch of geology dealing with the classification, nomenclature, correlation, and interpretation of stratified rocks.
Strike: The course or bearing of the outcrop of an inclined bed, vein, or fault plane on a level surface; the direction of a horizontal line perpendicular to the direction of the dip.
Tons: A unit of weight measurement. In this prospectus it means dry short tons (2,000 pounds).
Quartz: A mineral of silicon dioxide.
Sulfide: a compound of sulfur with a more electropositive element or, less often, a group.
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Time Periods:
| Name of Era | Name of Period | Number of Years Before Present | |||
| Quaternary | Holocene | 0 to 400,000 | |||
| Pleistocene | 400,000 to 1,800,000 | ||||
| Tertiary | Pliocene | 1,800,000 to 5,000,000 | |||
| Miocene | 5,000,000 to 24,000,000 | ||||
| Oligocene | 24,000,000 to 36,500,000 | ||||
| Eocene | 36,500,000 to 56,000,000 | ||||
| Paleocene | 56,000,000 to 66,000,000 | ||||
| Mesozoic | Cretaceous | 66,000,000 to 140,000,000 | |||
| Jurassic | 140,000,000 to 200,000,000 | ||||
| Triassic | 200,000,000 to 250,000,000 | ||||
| Paleozoic | Permian | 250,000,000 to 290,00,000 | |||
| Carboniferous | 290,000,000 to 365,000,000 | ||||
| Devonian | 365,000,000 to 405,000,000 | ||||
| Silurian | 405,000,000 to 425,000,000 | ||||
| Ordivician | 425,000,000 to 500,000,000 |
DESCRIPTION OF BUSINESS
ORGANIZATION WITHIN THE LAST FIVE YEARS
On September 25, 2007, the Company was incorporated under the laws of the State of Nevada. We are engaged in the business of acquisition, exploration and development of natural resource properties.
Wendy Wildmen has served as our President and Chief Executive Officer, and Treasurer, from October 3, 2007, until the current date. Clive Hope has served as our Secretary since October 3, 2007, until the current date. Our board of directors is comprised of two persons: Ms. Wildmen and Clive Hope.
We are authorized to issue 75,000,000 shares of common stock, par value $.001 per share. In October 2007 we issued 5,000,000 shares of common stock to each of our two directors, for an aggregate issuance of 10,000,000 shares. Said issuances were paid at a purchase price of the par value per share or a total of $10,000.
IN GENERAL
We are an exploration stage company engaged in the acquisition and exploration of mineral properties. We currently own a 100% undivided interest in the Monty Lode Claim located in Clark County, State of Nevada, that we call the “Monty Lode Property.” We are currently conducting mineral exploration activities on the Monty Lode Property in order to assess whether it contains any commercially exploitable mineral reserves. Currently there are no known mineral reserves on the Monty Lode Property.
We have not earned any revenues to date. Our independent auditor has issued an audit opinion which includes a statement expressing substantial doubt as to our ability to continue as a going concern. The source of information contained in this discussion is our geology report prepared by Laurence Sookochoff, P. Eng., dated September 23, 2009.
There is the likelihood of our mineral claim containing little or no economic mineralization or reserves of silver and other minerals. We are presently in the exploration stage of our business and we can provide no assurance that any commercially viable mineral deposits exist on our mineral claims, that we will discover commercially exploitable levels of mineral resources on our property, or, if such deposits are discovered, that we will enter into further substantial exploration programs. Further exploration is required before a final determination can be made as to whether our mineral claims possess commercially exploitable mineral deposits. If our claim does not contain any reserves all funds that we spend on exploration will be lost.
On September 23, 2009, we purchased a 100% undivided interest in a mineral claim known as the Monty Lode Claim for a price of $6,500. The claims are in good standing until September 1, 2010.
We engaged Laurence Sookochoff, P. Eng., to prepare a geological evaluation report on the Monty Lode Property. Mr. Sookochoff is a consulting professional geologist in the Geological Section of the Association of Professional Engineers and Geoscientists of British Columbia. Mr. Sookochoff attended the University of British Columbia and holds a Bachelor of Science degree in geology.
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The work completed by Mr. Sookochoff in preparing the geological report consisted of a review of geological data from previous exploration within the region. The acquisition of this data involved the research and investigation of historical files to locate and retrieve data information acquired by previous exploration companies in the area of the mineral claims.
We received the geological evaluation report on the Monty Lode Property entitled “Geological Evaluation Report on the Monty Lode Mining Claim, Yellow Pine Mining District, Clark County, Nevada, USA” prepared by Mr. Sookochoff on September 23, 2009. The geological report summarizes the 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 geological report also gives conclusions regarding potential mineralization of the mineral claims and recommends a further geological exploration program on the mineral claims. The description of the Monty Lode Property provided below is based on Mr. Sookochoff’s report.
DESCRIPTION OF PROPERTY
The property owned by Mascot Ventures is the Monty Lode Claim which is comprised of one located mineral claim. The Monty Lode Claim is located within Township 25S, Range 58E, Sections 28 & 33 in the Yellow Pine Mining District of Clark County Nevada. Access from Las Vegas, Nevada to the Monty Lode Claim is southward via Interstate Highway 15 for approximately 31 miles, to within five miles past Jean, Nevada, and then westerly for seven miles to the Monty Lode Claim. The entire distance from Las Vegas to the Monty Lode Claim is approximately 39 miles.
The claim was recorded with the Recorder’s Office in Clark County, NV and the Bureau of Land Management.
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PHYSIOGRAPHY, CLIMATE, VEGETATION & WATER
The Monty Lode Property is situated in Nevada, at the southern end of the Sheep Mountain Range, a north-south trending range of mountains with peaks reaching an elevation of 4,184 feet. The western portion of the claim covers a plateau-like area at an elevation of 1,300 feet with a range of elevation on the property of a maximum of 100 feet.
The area is of a typically desert climate and relatively high temperature and low precipitation. Vegetation consists mainly of desert shrubs and cactus. Sources of water would be available from valley wells.
PROPERTY HISTORY
The Monty Lode Property is situated in the Yellow Pine Mining District, which stems from 1856, when Mormon missionaries reported ore in the area. In 1857, the smelting of ore produced approximately 9,000 pounds of lead, and in 1898, a mill was built south of Goodsprings, near the Monty Lode Property. As a result of the mill availability, exploration activity led to the discovery of many of the mines in the area. The completion of the San Pedro, Los Angeles and Salt Lake railroads in 1905 and recognition of oxidized zinc minerals in the ore in 1906 stimulated development of the mines and the region has been subject to intermittent activity up to 1964, particularly during the World War I and II years.
Production from the mines of the Yellow Pine Mining District from 1902 to 1929 was 477,717 tons. Bullion recovery from 7,656 tons of this ore by amalgamation and cyanidation was 9,497 ounces of gold and 2,445 ounces of silver. The concentrator treated 230,452 tons of ore which yielded 58,641 tons of lead-zinc concentrate and 32,742 tons of lead concentrate. Crude ore shipped to 1929 was 227,952 tons from which recovery amounted to 3,196 ounces gold, 422,379 ounces silver, 3,085,675 pounds copper, 34,655,460 pounds lead and 110,833,051 pounds zinc.
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Reported production from the Monty Lode Property workings is included in production from the mines within the immediate area of the Monty Lode Claim including Reported production from the Monty Lode Property workings is included in production from the mines within the immediate area of the Monty Lode Claim including production from the Christmas Mine and the Eureka Mine. The three mines reported production of 532,505 lb lead, 449,886 lb zinc, 16,635 oz silver, 2 oz gold and 195 lb copper.
REGIONAL GEOLOGY
In the Yellow Pine district, the Spring Mountain Range in the west, and the Sheep Mountain Range in the east consist maily of Paleozoic sediments which have undergone intense folding accompanied by faulting. A series of Carnoniferous sediments consist largely of siliceous limestones and include strata of pure crystalline limestone and dolomite with occasional intercalated beds of fine grained sandstone. These strata have a general west to southwest dip of from 15 to 45 degrees which is occasionally disturbed by local folds. Igneous rocks are scarce and are represented chiefly by quartz-monzonite porphyry dikes and sills. The quartz-monzonite porphyry is intruded into these strata and is of post-Jurassic age, perhaps Tertiary.
STRATIGRAPHY
The sedimentary rocks in the district range in age from Upper Cambrian to Recent. The Paleozoic section includes the Cambrian Bonanza King and Nopah Formations, the Devonian Sultan, Mississippian Monte Cristo Limestone, Pennsylvanian/Mississippian Bird Spring Formation and Permina Kaibab Limestone (Carr, 1987).
The Mesozoic section is comprised only of the Trissic Moenkopi and Chinle Formations and an upper Mesozoic unit of uncertain age termed the Lavinia Wash Formation. The Paleozoic rocks are dominantly carbonates while the Mesozoic units are continental clastics. Tertiary rocks include gravels and minor volcanic tuffs.
Only two varieties of intrusive rocks are known in the district. The most abundant is granite porphyry which forms three large sill-like masses (Hewett, 1931). The sills generally lie near major thrust faults and are thought to have been emplaced along breccia zones at the base of the upper plate of the thrust fault. Locally, small dikes of basaltic composition and uncertain age have been encountered in some of the mine workings.
STRUCTURE
The region reveals an amazing record of folding, thrust faulting and normal faultings. Folding began in the early Jurassic, resulting in broad flexures in the more massive units and tight folds in the thinly bedded rocks. The thrust faults in the district are part of a belt of thrust faulted rocks, the Foreland Fold and Thrust Belt that stretches from southern Canada to southern California. Deformation within this belt began in the Jurassic and continued until Cretaceous time. Within the Goodsprings District thrust faulting appears to post-date much of the folding, but despite intensive study the actual age of thrusting continues to be the subject of contentious debate. Three major thrusts have been mapped; from west to east, the Green Monster, Keystone and Contact thrusts.
Of these, the Keystone is the most persistent along strike having been mapped for a distance of over 50 kilometers. The stratigraphic relationships along the Keystone fault are similar to those for all the major thrusts in the area. The Cambrian Bonanza King Formation has been thrust eastward over younter Paleozoic rocks.
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PROPERTY GEOLOGY
The Monty Lode Claim covers some former exploratory workings which explored mineralization hosted by a breccia zone parallel to bedding in the Bird Spring Formation.
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REGIONAL MINERALIZATION
ORE MINERALOGY AND ALTERATION
It is reported (Albritton, 1954) that ore deposits in the Goodsprings (Yellow Pine) district can at best be characterized as enigmatic. They appear to fall into two distinct types, which may or may not be related, gold-copper deposits and lead-zinc deposits. Gold-copper deposits are clearly related to sill-like masses of granite porphyry. All existing mines worked the contact between the intrusive and surrounding sedimentary rock. Gold occurred in both the instrusive and the carbonate wall rocks. It appears any carbonate unit was a suitable host.
The lead-zinc deposits are often distant from the intrusives and occur as veins or replacements of brecciated rocks along fault zones, either thrust faults or normal faults. Unlike the gold deposits, the productive lead-zinc deposits are restricted to the Monte Cristo Formation.
Mineralogy of gold-copper deposits consists of native gold, pyrite, limonite, cinnabar, malachite, azurite and chrysocolla. Lead-zinc deposits are comprised of hydrozincite, calamine, smithsonite, cerrusite, anglesite, galena and iron oxides. The rather unusual mineralogy of the district is due to the great depth of surface oxidation; exceeding 600 feet.
ORE MINERALOGY AND ALTERATION
Typical sulfides such as chalcopyrite, sphalerite and pyrite have been partially or completely altered to more stable hydrated carbonates and sulfates. Only the highly insoluble lead sulfide, galena has successfully resisted surface oxidation.
Primary alteration is difficult to characterize due to the supergene overprint, but again appears to differ for gold-copper deposits and lead-zinc deposits. Gold-copper ores have been extensively sericitized and kaolinized, alterning the host pluton to a rock that can be mined through simple excavation with little or no blasting. The rock is so thoroughly altered it decrepitates on exposure to the atmosphere. On the other hand, lead-zinc deposits appear to be characterized by dolomization and minor silicification.
PROPERTY MINERALIZATION
The workings on the Monty Lode Claim reveal silver/lead/zinc mineralization with vanadinite and cuprodescloizite in a limesone breccia zone parallel to bedding in the Bird Spring Formation. Gold is also reported.
PRESENT PROPERTY CONDITION AND PERMITTING REQUIREMENTS
The Monty Lode Property has no plant and equipment, infrastructure or other facilities, and there is currently no exploration of the Monty Lode Property. We have incurred $39,562 in operating costs, which sum includes $3,620 of exploration expenditures, as at October 31, 2009. We expect to incur $94,000 of exploration costs to complete Phases 1, 2 and 3 of our Plan of Operation, with Phase 3 being Positive areas of the Monty Lode Property being diamond drill tested. There is no source of power or water on the Monty Lode Property that can be utilized.
A yearly maintenance fee of $125.00 is required to be paid to the Bureau of Land Management prior to the expiry date to keep the claim in good standing for an additional year. No other permits are required for us to perform the exploration activities on the Monty Lode Property.
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CONDITIONS TO RETAIN TITLE TO THE CLAIM
State and Federal regulations require a yearly maintenance fee to keep the claim in good standing. In accordance with Federal regulations, the Monty Lode Claim is in good standing to September 1, 2010. A yearly maintenance fee of $125.00 is required to be paid to the Bureau of Land Management prior to the expiry date to keep the claim in good standing for an additional year.
COMPETITIVE CONDITIONS
The mineral exploration business is an extremely competitive industry. We are competing with many other exploration companies looking for minerals. We are a very early stage mineral exploration company and a very small participant in the mineral exploration business. Being a junior mineral exploration company, we compete with other companies like ours for financing and joint venture partners. Additionally, we compete for resources such as professional geologists, camp staff, helicopters and mineral exploration supplies.
GOVERNMENT APPROVALS AND RECOMMENDATIONS
We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in USA generally, and in Nevada specifically.
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COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS
We currently have no costs to comply with environmental laws concerning our exploration program. We will also have to sustain the cost of reclamation and environmental remediation for all work undertaken which causes sufficient surface disturbance to necessitate reclamation work. Both reclamation and environmental remediation refer to putting disturbed ground back as close to its original state as possible. Other potential pollution or damage must be cleaned-up and renewed along standard guidelines outlined in the usual permits. Reclamation is the process of bringing the land back to a natural state after completion of exploration activities. Environmental remediation refers to the physical activity of taking steps to remediate, or remedy, any environmental damage caused, i.e. refilling trenches after sampling or cleaning up fuel spills. Our initial programs do not require any reclamation or remediation other than minor clean up and removal of supplies because of minimal disturbance to the ground. The amount of these costs is not known at this time as we do not know the extent of the exploration program we will undertake, beyond completion of the recommended three phases described above. Because there is presently no information on the size, tenor, or quality of any resource or reserve at this time, it is impossible to assess the impact of any capital expenditures on our earnings or competitive position in the event a potentially economic deposit is discovered.
EMPLOYEES
We currently have no employees other than our directors. We intend to retain the services of geologists, prospectors and consultants on a contract basis to conduct the exploration programs on our mineral claims and to assist with regulatory compliance and preparation of financial statements.
OUR EXECUTIVE OFFICES
Our executive offices are located at 1802 North Carson Street, Suite 212, Carson City, Nevada 89701
LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s mineral claim is not the subject of any pending legal proceedings.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
ADMISSION TO QUOTATION ON THE OTC BULLETIN BOARD
We intend to have our common stock be quoted on the OTC Bulletin Board. If our securities are not quoted on the OTC Bulletin Board, a security holder may find it more difficult to dispose of, or to obtain accurate quotations as to the market value of our securities. The OTC Bulletin Board differs from national and regional stock exchanges in that it:
(1) is not situated in a single location but operates through communication of bids, offers and confirmations between broker-dealers, and
(2) securities admitted to quotation are offered by one or more Broker-dealers rather than the “specialist” common to stock exchanges.
To qualify for quotation on the OTC Bulletin Board, an equity security must have one registered broker-dealer, known as the market maker, willing to list bid or sale quotations and to sponsor the company listing. We do not yet have an agreement with a registered broker-dealer, as the market maker, willing to list bid or sale quotations and to sponsor the Company listing. If the Company meets the qualifications for trading securities on the OTC Bulletin Board our securities will trade on the OTC Bulletin Board until a future time, if at all, that we apply and qualify for admission to quotation on the NASDAQ Capital Market. We may not now and it may never qualify for quotation on the OTC Bulletin Board or be accepted for listing of our securities on the NASDAQ Capital Market.
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TRANSFER AGENT
We have not retained a transfer agent to serve as transfer agent for shares of our common stock. Until we engage such a transfer agent, we will be responsible for all record-keeping and administrative functions in connection with the shares of our common stock.
HOLDERS
As of April 9, 2010, the Company had 11,860,000 shares of our common stock issued and outstanding held by 41 holders of record.
The selling stockholders are offering hereby up to 1,860,000 shares of common stock at a price of $0.10 per share.
DIVIDEND POLICY
We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future. Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the Board of Directors. There are no contractual restrictions on our ability to declare or pay dividends. See the Risk Factor entitled “ BECAUSE WE DO NOT INTEND TO PAY ANY CASH DIVIDENDS ON OUR COMMON STOCK, OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS THEY SELL THEM.” on page 10.
SECURITIES AUTHORIZED UNDER EQUITY COMPENSATION PLANS
We have no equity compensation or stock option plans. We may in the future adopt a stock option plan as our mineral exploration activities progress.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
Certain statements contained in this prospectus, including statements regarding the anticipated development and expansion of our business, our intent, belief or current expectations, primarily with respect to the future operating performance of the Company and the products we expect to offer and other statements contained herein regarding matters that are not historical facts, are “forward-looking” statements. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain forward-looking statements, because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.
All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.
PLAN OF OPERATION
Our plan of operation for the twelve months following the date of this prospectus is to complete the first and second phases of the three phased exploration program on our claim. In addition to the $19,000 we anticipate spending for the first two phases of the exploration program as outlined below, we anticipate spending an additional $16,000 on general and administration expenses including fees payable in connection with the filing of our registration statement and complying with reporting obligations, and general administrative costs. Total expenditures over the next 12 months are therefore expected to be approximately $35,000. If we experience a shortage of funds prior to funding we may utilize funds from our directors, however they have no formal commitment, arrangement or legal obligation to advance or loan funds to the company.
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Phase 1: Localized soil surveys, trenching and sampling over known and indicated mineralized zones.
Phase 2: VLF-EM and magnetometer surveys.
Phase 3: Positive areas will need to be diamond drill tested. The amount of drilling will depend on the success of phase 1 and 2.
BUDGET
| $ | ||||
| Phase 1 | 10,000 | |||
| Phase 2 | 9,000 | |||
| Phase 3 | 75,000 | |||
| Total | 94,000 | |||
We plan to commence Phase 1 of the exploration program on the claim in Spring 2010. We expect this phase to take two weeks to complete and an additional one to two months for the geologist to prepare his report.
The above program costs are management’s estimates based upon the recommendations of the professional geologist’s report and the actual project costs may exceed our estimates. To date, we have not commenced exploration.
Following phase one of the exploration program, if it proves successful in identifying mineral deposits, we intend to proceed with phase two of our exploration program. Subject to the results of phase 1, we anticipate commencing with phase 2 in spring 2010. We will require additional funding to proceed with phase 3 work on the claim; we have no current plans on how to raise the additional funding. We cannot provide any assurance that we will be able to raise sufficient funds to proceed with any work after the first two phases of the exploration program.
ACCOUNTING AND AUDIT PLAN
We intend to continue to have our Chief Financial Officer prepare our quarterly and annual financial statements and have these financial statements reviewed or audited by our independent auditor. Our independent auditor is expected to charge us approximately $1,500 to review our quarterly financial statements and approximately $5,000 to audit our annual financial statements. In the next twelve months, we anticipate spending approximately $11,000 to pay for our accounting and audit requirements.
SEC FILING PLAN
We will be required to file annual and periodic reports subsequent to the effectiveness of this Form S-1. This means that we will file documents with the United States Securities and Exchange Commission.
We expect to incur filing costs of approximately $1,000 per quarter to support our quarterly and annual filings. In the next twelve months, we anticipate spending approximately $10,000 for legal costs in connection with our three quarterly filings, annual filing, and costs associated with filing the registration statement to register our common stock.
RESULTS OF OPERATIONS
We have had no operating revenues since our inception on September 25, 2007, through October 31, 2009. Our activities have been financed from the proceeds of share subscriptions. From our inception to October 31, 2009 we have raised a total of $50,500 from private offerings of our common stock. All such private offerings were made in reliance on the exemption from registration afforded by Rule 903(b)(3) of Regulation S, promulgated pursuant to the Securities Act of 1933, as amended. The Company made all offers and sales offshore of the US, to non-US persons, with no directed selling efforts in the US, and were offering restrictions were implemented.
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For the period from inception to October 31, 2009, we incurred total expenses of $39,562, consisting of general and administrative expenses of $39,562.
LIQUIDITY AND CAPITAL RESOURCES
At October 31, 2009, we had a cash balance of $42,850. We believe that we have enough cash on hand to complete Phases 1 and 2 of our exploration program. If the results of the Phases 1 and 2 are particularly encouraging, we may wish to raise additional funds for a more in depth Phase 3. Additional funds will need to be raised to support work that may be undertaken subsequent to Phase 3.
If additional funds become required, the additional funding will likely come from equity financing from the sale of our common stock or sale of part of our interest in our mineral claims. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our exploration activities. In the absence of such financing, our business will fail.
There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our exploration of the Claims and our business will fail.
GOING CONCERN CONSIDERATION
We have not generated any revenues since inception. As of October 31, 2009, the Company had accumulated losses of $38,650. Our independent auditors included an explanatory paragraph in their report on the accompanying financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors. Our financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
OFF BALANCE SHEET ARRANGEMENTS.
We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company’s year end is October 31.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with original maturity of three months or less to be cash equivalents.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
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EXPLORATION STAGE COMPANY
The Company complies with Accounting Standards Codification (“ASC”) 915 “Development Stage Entities for its characterization of the Company as pre-exploration stage.
FAIR VALUE OF FINANCIAL INSTRUMENT
The Company’s financial instrument consisted of cash and accounts payable. Unless otherwise noted, it is management’s opinion the Company is not exposed to significant interest, currency or credit risks arising from this financial instrument. Because of the short maturity of such assets and liabilities the fair value of these financial instruments approximate their carrying values, unless otherwise noted.
INCOME TAXES
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740-10-50 “Accounting for Income Taxes” as of its inception. Pursuant to the standard, the Company is required to compute tax asset benefits for net operating losses carried forward.
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE
The Company computes net income (loss) per share in accordance with ASC 260-10-4-5, "Earnings per Share.” The standard requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The Directors and Officers currently serving our Company is as follows:
| Name | Age | Positions and Offices | ||
| Ms. Wendy Wildmen (1) | 48 | President, Chief Executive Officer and Director | ||
| Mr. Clive Hope (1) | 58 | Secretary & Director |
(1) c/o Mascot Ventures Inc., 1802 North Carson Street, Suite 212, Carson City, Nevada 89701.
The directors named above will serve until the next annual meeting of the stockholders or until their respective resignation or removal from office.. Thereafter, directors are anticipated to be elected for one-year terms at the annual stockholders’ meeting. Officers will hold their positions at the pleasure of the Board of Directors, absent any employment agreement, of which none currently exists or is contemplated.
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WENDY WILDMEN
Ms. Wildmen, age 48, has served as our President, Chief Executive Officer and a Director since October 3, 2009. Ms. Wildmen has been a contract instructor for various community colleges in the Province of Ontario, Canada, since1989, teaching primarily in the field of economics. Ms. Wildmen earned her B.A. Degree in Economics from Simon Fraser University, of British Columbia, Canada, followed by her M.A. in Economics, in 1987, at the University of Waterloo, Ontario, Canada.
CLIVE HOPE
Mr. Hope, age 58, has been our Secretary and a Director since incorporation. Mr. Hope has been employed as a pipe fitter for Syncrude Canada since September 1988.
DIRECTOR INDEPENDENCE
Our board of directors is currently composed of two members, neither of whom qualifies as an independent director in accordance with the published listing requirements of the NASDAQ Global Market. The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of his family members has engaged in various types of business dealings with us. In addition, our board of directors has not made a subjective determination as to each director that no relationships exist which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our board of directors made these determinations, our board of directors would have reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management.
SIGNIFICANT EMPLOYEES AND CONSULTANTS
Other than our officers and directors, we currently have no other significant employees.
CONFLICTS OF INTEREST
Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. The Board of Directors has not established an audit committee and does not have an audit committee financial expert, nor has the Board established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company is an early exploration stage company and has only two directors, and to date, such directors have been performing the functions of such committees. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions.
There are no family relationships among our directors or officers. Other than as described above, we are not aware of any other conflicts of interest with any of our executive officers or directors.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
There are no legal proceedings that have occurred since our incorporation concerning our directors, or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one’s participation in the securities or banking industries, or a finding of securities or commodities law violations.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below summarizes all compensation awarded to, earned by, or paid to our Officers for all services rendered in all capacities to us for the fiscal periods indicated.
| Non-Equity | ||||||||||||||||||||||||||||||||||
| Name and | Incentive | Nonqualified | ||||||||||||||||||||||||||||||||
| Principal | Stock | Option | Plan | Deferred | All Other | |||||||||||||||||||||||||||||
| Position | Year | Salary($) | Bonus($) | Awards($) | Awards($) | Compensation($) | Compensation($) | Compensation($) | Total($) | |||||||||||||||||||||||||
| Wendy Wildmen (1) | 2009 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
| 2008 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
| Clive Hope (2) | 2009 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
| 2008 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
(1) President and Chief Executive Officer, Treasurer and a Director.
(2) Secretary and a Director.
None of our directors have received monetary compensation since our inception to the date of this prospectus. We currently do not pay any compensation to our directors serving on our board of directors.
STOCK OPTION GRANTS
We have not granted any stock options to the executive officers since our inception. Upon the further development of our business, we will likely grant options to directors and officers consistent with industry standards for junior mineral exploration companies.
EMPLOYMENT AGREEMENTS
Pursuant to a letter agreement, dated November 19, 2009, (i) the Company is obligated to pay Wendy Wildmen, the Company’s President and Chief Executive Officer, and a Director, for a term of two years, $1,000 per month, as consideration for Ms. Wildmen serving and performing her duties as President of the Company, and (ii) Wildmen shall assign her right to such compensation of $1,000 per month to the Company, until such time as the Company closes on an equity or debt financing of not less than $100,000.
DIRECTOR COMPENSATION
The following table sets forth director compensation as of April 9, 2010:
| Fees | Non-Equity | Nonqualified | ||||||||||||||||||||||||||
| Earned | Incentive | Deferred | ||||||||||||||||||||||||||
| Paid in | Stock | Option | Plan | Compensation | All Other | |||||||||||||||||||||||
| Name | Cash($) | Awards($) | Awards($) | Compensation($) | Earnings($) | Compensation($) | Total($) | |||||||||||||||||||||
| Wendy Wildmen | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
| Clive Hope | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists, as of April 9, 2010, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.
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The percentages below are calculated based on 11,860,000 shares of our common stock issued and outstanding as of April 9, 2010. We do not have any outstanding warrant, options or other securities exercisable for or convertible into shares of our common stock.
| Name and Address | Number of Shares | |||||||||
| Title of Class | of Beneficial Owner | Owned Beneficially | Percent of Class Owned | |||||||
| Common Stock: | Ms. Wendy Wildmen, President, Chief | 5,000,000 | 42.1 | % | ||||||
| Executive Officer, Treasurer, and Director (1) | ||||||||||
| Common Stock: | Mr. Clive Hope, Secretary and | 5,000,000 | 42.1 | % | ||||||
| Director (1) | ||||||||||
| All executive officers and directors as a group | 10,000,000 | 84.2 | % | |||||||
(1) c/o Mascot Ventures Inc., 1802 North Carson Street, Suite 212, Carson City, Nevada 89701.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Wendy Wildmen, the President of the Company, provides management fees and office premises to the Company at no charge. The donated services are valued at $1,000 per month for the management fees and $500 for rent. A total of $37,500 for donated management fees were charged to general and administrative expenses and recorded as additional paid in capital from inception through the period ended October 31, 2009.
Pursuant to a letter agreement, dated November 19, 2009, (i) the Company is obligated to pay Wendy Wildmen, the Company’s President and Chief Executive Officer, and a Director, for a term of two years, $1,000 per month, as consideration for Ms. Wildmen serving and performing his duties as President of the Company, and (ii) Wildmen shall assign her right to such compensation of $1,000 per month to the Company, until such time as the Company closes on an equity or debt financing of not less than $100,000.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our By-laws provide to the fullest extent permitted by law that our directors or officers, former directors and officers, and persons who act at our request as a director or officer of a body corporate of which we are a shareholder or creditor shall be indemnified by us. We believe that the indemnification provisions in our By-laws are necessary to attract and retain qualified persons as directors and officers.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Company pursuant to provisions of the State of Nevada, the Company has been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Commission a Registration Statement on Form S-1, under the Securities Act of 1933, as amended, with respect to the securities offered by this prospectus. This prospectus, which forms a part of the registration statement, does not contain all the information set forth in the registration statement, as permitted by the rules and regulations of the Commission. For further information with respect to us and the securities offered by this prospectus, reference is made to the registration statement. We do not file reports with the Securities and Exchange Commission, and we will not otherwise be subject to the proxy rules. The registration statement and other information may be read and copied at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains a web site at http://www.sec.gov that contains reports and other information regarding issuers that file electronically with the Commission.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
LBB & Associates Ltd., LLP, Certified Public Accountants is our registered independent auditor. There have not been any changes in or disagreements with accountants on accounting and financial disclosure or any other matter.
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MASCOT VENTURES INC.
INDEX TO FINANCIAL STATEMENTS
| Report of Independent Registered Public Accounting Firm | F-2 |
| Financial Statements | F-3 |
| Balance Sheets | F-3 |
| Statements of Operations | F-4 |
| Statements of Stockholders’ Equity (Deficit) | F-5 |
| Statements of Cash Flows | F-6 |
| Notes to Financial Statements | F-7 |
| Financial Statements for the first quarter ended January 31, 2010 (unaudited) | F-12 |
| Balance Sheets (unaudited) | F-12 |
| Statements of Operations (unaudited) | F-13 |
| Statements of Cash Flows (unaudited) | F-14 |
| Notes to Financial Statements (unaudited) | F-15 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Report of Independent Registered Public Accounting Firm
To the Board of Directors of
Mascot Ventures Inc
(An Exploration Stage Company)
Carson City, Nevada
We have audited the accompanying balance sheets of Mascot Ventures Inc (the “Company”) as of October 31, 2009 and 2008, and the related statements of operations, stockholders' equity, and cash flows for each of the years then ended and for the period from September 25, 2007 (inception) through October 31, 2009. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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, 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 Mascot Ventures Inc as of October 31, 2009 and 2008, and the related statements of operations and cash flows for each of the years then ended and for the period from September 25, 2007 (inception) through October 31, 2009 in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the financial statements, the Company's absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2010 raise substantial doubt about its ability to continue as a going concern. The 2009 financial statements do not include any adjustments that might result from the outcome of this uncertainty.
LBB & Associates Ltd., LLP
Houston, Texas
January 21, 2010
F-2
MASCOT VENTURES INC
(An Exploration Stage Company)
Balance Sheets
| October 31, 2009 | October 31, 2008 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 42,850 | $ | 26,968 | ||||
| Total current assets | 42,850 | 26,968 | ||||||
| Other Assets | ||||||||
| Mining Claim | 6,500 | - | ||||||
| TOTAL ASSETS | $ | 49,350 | $ | 26,968 | ||||
| LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||
| TOTAL LIABILITIES | ||||||||
| $ | - | $ | - | |||||
| COMMITMENTS | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| 75,000,000 common shares authorized at par value of $0.001 | ||||||||
| 11,860,000 and 11,540,000 shares issued and | ||||||||
| outstanding at October 31, 2009 and 2008 respectively | 11,860 | 11,540 | ||||||
| Additional paid-in capital | 76,140 | 34,960 | ||||||
| (Deficit) accumulated during exploration stage | (38,650 | ) | (19,532 | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY | 49,350 | 26,968 | ||||||
| Total Stockholders' Equity | ||||||||
| TOTAL LIABILITIES & | ||||||||
| STOCKHOLDERS' EQUITY | $ | 49,350 | $ | 26,968 | ||||
The accompanying footnotes are an integral part of these financial statements.
F-3
MASCOT VENTURES INC
(An Exploration Stage Company)
Statements of Operations
| Inception | ||||||||||||
| (September 25, 2007) | ||||||||||||
| Through | ||||||||||||
| October 31, 2009 | October 31, 2008 | October 31, 2009 | ||||||||||
| Operating Costs | ||||||||||||
| General & Administative | $ | 20,030 | $ | 18,025 | $ | 39,562 | ||||||
| Total Operating Costs | (20,030 | ) | (18,025 | ) | (39,562 | ) | ||||||
| Interest Income | 912 | - | 912 | |||||||||
| Net Loss | $ | (19,118 | ) | $ | (18,025 | ) | $ | (38,650 | ) | |||
| (0.00 | ) | (0.00 | ) | |||||||||
| Weighted average number of | ||||||||||||
| common shares outstanding | 11,643,764 | 11,460,712 | ||||||||||
The accompanying footnotes are an integral part of these financial statements.
F-4
MASCOT VENTURES INC
(An Exploration Stage Company)
Statements of Stockholders' Equity
Period from September 25, 2007 (inception) through October 31, 2009
| Deficit | ||||||||||||||||||||
| Additional | Accumulated | |||||||||||||||||||
| Common | Stock | Paid-in | During | |||||||||||||||||
| Shares | Amount | Capital | Exploration | Total | ||||||||||||||||
| Stage | ||||||||||||||||||||
| Stock issued to founders for cash | 10,000,000 | $ | 10,000 | - | $ | - | $ | 10,000 | ||||||||||||
| Donated services | - | - | 1,500 | - | 1,500 | |||||||||||||||
| Net loss | - | - | - | (1,507 | ) | (1,507 | ) | |||||||||||||
| Balance October 31, 2007 | 10,000,000 | 10,000 | 1,500 | (1,507 | ) | 9,993 | ||||||||||||||
| Stock issued for cash | 1,540,000 | 1,540 | 15,460 | - | 17,000 | |||||||||||||||
| Donated services | - | - | 18,000 | - | 18,000 | |||||||||||||||
| Net loss | - | - | - | (18,025 | ) | (18,025 | ) | |||||||||||||
| Balance October 31, 2008 | 11,540,000 | 11,540 | 34,960 | (19,532 | ) | 26,968 | ||||||||||||||
| Stock issued for cash | 320,000 | 320 | 23,180 | - | 23,500 | |||||||||||||||
| Donated services | - | - | 18,000 | - | 18,000 | |||||||||||||||
| Net loss | - | - | - | (19,118 | ) | (19,118 | ) | |||||||||||||
| Balance October 31, 2009 | 11,860,000 | $ | 11,860 | $ | 76,140 | $ | (38,650 | ) | $ | 49,350 | ||||||||||
The accompanying footnotes are an integral part of these financial statements.
F-5
MASCOT VENTURES INC
(An Exploration Stage Company)
Statements of Cash Flows
| Inception | ||||||||||||
| (September 25, 2007) | ||||||||||||
| Through | ||||||||||||
| October 31, 2009 | October 31, 2008 | October 31, 2009 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
| Net loss | $ | (19,118 | ) | $ | (18,025 | ) | $ | (38,650 | ) | |||
| Adjustments to reconcile net loss to net cash | ||||||||||||
| provided by (used in) operating activities: | ||||||||||||
| Donated services | 18,000 | 18,000 | 37,500 | |||||||||
| Changes in operating assets and liabilities: | - | - | - | |||||||||
| Net cash provided by (used in) operating activities | (1,118 | ) | (25 | ) | (1,150 | ) | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
| Mining Claim | (6,500 | ) | - | (6,500 | ) | |||||||
| Net cash (used in) investing activities | (6,500 | ) | - | (6,500 | ) | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
| Issuance of common stock for cash | 23,500 | 17,000 | 50,500 | |||||||||
| Net cash provided by financing activities | 23,500 | 17,000 | 50,500 | |||||||||
| Net increase in cash | 15,882 | 16,975 | 42,850 | |||||||||
| Cash and cash equivalents at beginning of period | 26,968 | 9,993 | - | |||||||||
| Cash and cash equivalents at end of period | $ | 42,850 | $ | 26,968 | $ | 42,850 | ||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||||||
| Cash paid during year for : | ||||||||||||
| Interest | $ | - | $ | - | $ | - | ||||||
| Income Taxes | $ | - | $ | - | $ | - | ||||||
The accompanying footnotes are an integral part of these financial statements.
F-6
MASCOT VENTURES INC
NOTES TO FINANCIAL STATEMENTS
(An Exploration Stage Company)
Period from September 25, 2007 (Inception) through October 31, 2009
1. NATURE OF OPERATIONS
Mascot Ventures Inc. (“The Company”) was incorporated in the State of Nevada on September 25, 2007 to engage in the acquisition, exploration and development of natural resource properties. The Company is in the exploration stage with no revenues and limited operating history.
These financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company anticipates future losses in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and/or issuance of common shares.
In May 2009, the Financial Accounting Standards Board (“FASB”) issued accounting guidance, effective for financial statements issued for interim and annual periods ending after June 15, 2009, which requires us to disclose the date through which we have evaluated subsequent events and whether the date corresponds with the release of our financial statements. We have evaluated subsequent events through January 21, 2010, the date the financial statements were available to be issued.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company’s year end is October 31.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturity of three months or less to be cash equivalents.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
Foreign Currency Translation
The Company's functional currency is United States ("U.S.") dollars as substantially all of the Company's operations use this denomination. The Company uses the U.S. dollar as its reporting currency.
Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. Any exchange gains and losses would be included in Other Income (Expenses) on the Statement of Operations.
F-7
MASCOT VENTURES INC
NOTES TO FINANCIAL STATEMENTS
(An Exploration Stage Company)
Period from September 25, 2007 (Inception) through October 31, 2009
Exploration Stage company
The Company complies with Accounting Standards Codification (“ASC”) 915 “Development Stage Entities” for its characterization of the Company as pre-exploration stage.
Mineral Properties
Mineral property acquisition costs are capitalized in accordance with EITF 04-2. Mineral property exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. To date the Company has not established any reserves on its mineral properties.
Impairment of Long-lived Assets
The Company reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If the review indicates that the carrying amount of the asset may not be recoverable, the potential impairment is measured based on a projected discounted cash flow method using a discount rate that is considered to be commensurate with the risk inherent in the Company's current business model. For purposes of recognition and measurement of an impairment loss, a long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets.
Fair Value of Financial Instrument
The Company’s financial instrument consisted of cash and accounts payable. Unless otherwise noted, it is management’s opinion the Company is not exposed to significant interest, currency or credit risks arising from this financial instrument. Because of the short maturity of such assets and liabilities the fair value of these financial instruments approximate their carrying values, unless otherwise noted.
Income Taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740-10-50 “Accounting for Income Taxes” as of its inception. Pursuant to the standard, the Company is required to compute tax asset benefits for net operating losses carried forward.
Basic and Diluted Net Income (Loss) per Share
The Company computes net income (loss) per share in accordance with ASC 260-10-4-5, "Earnings per Share.” The standard requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.
F-8
MASCOT VENTURES INC
NOTES TO FINANCIAL STATEMENTS
(An Exploration Stage Company)
Period from September 25, 2007 (Inception) through October 31, 2009
Recently Adopted Accounting Standards
Effective September 15, 2009, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 105-10, “Generally Accepted Accounting Principles.” ASC 105-10 establishes the FASB Accounting Standards Codification™ (“Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification supersedes all existing non-SEC accounting and reporting standards. The FASB will now issue new standards in the form of Accounting Standards Updates (“ASUs”). The FASB will not consider ASUs as authoritative in their own right. ASUs will serve only to update the Codification, provide background information about the guidance and provide the bases for conclusions on the changes in the Codification. References made to FASB guidance have been updated for the Codification throughout this document.
Effective June 30, 2009, we adopted guidance issued by the FASB and included in ASC 855-10, “Subsequent Events,” which establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events (see Note 1).
Effective April 1, 2009, we adopted guidance issued by the FASB that requires disclosure about the fair value of financial instruments for interim financial statements of publicly traded companies, which is included in the Codification in ASC 825-10-65, “Financial Instruments.” The adoption of ASC 825-10-65 did not have an impact on our consolidated results of operations or financial condition. Our adoption of the standard had no impact on our financial results.
Effective January 1, 2009, we adopted guidance issued by the FASB that relates to the presentation and accounting for noncontrolling interests, which is included in the Codification in ASC 810-10-65, “Consolidation.” In accordance with ASC 810-10-65, noncontrolling interests (previously shown as minority interest) are reported below net income under the heading “Net income attributable to noncontrolling interests” in the statements of income and shown as a component of equity in the balance sheets. Our adoption of the standard had no impact on our financial results.
Effective January 1, 2009, we adopted guidance issued by the FASB that requires enhanced disclosures regarding derivative instruments and hedging activities, enabling a better understanding of their effects on an entity’s financial position, financial performance and cash flows. The guidance is included in the Codification in ASC 815-10, “Derivatives and Hedging.” Our adoption of the standard had no impact on our financial results.
Effective January 1, 2008, we adopted ASC 820-10, “Fair Value Measurements and Disclosures,” with respect to recurring financial assets and liabilities. We adopted ASC 820-10 on January 1, 2009, as it relates to nonrecurring fair value measurement requirements for nonfinancial assets and liabilities. ASC 820-10 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Our adoption of the standard had no impact on our financial results.
3. RELATED PARTY
The President of the Company provides management fees and office premises to the Company at no charge. The donated services are valued at $1,000 per month for the management fees and $500 for rent. A total of $37,500 for donated management fees were charged to general and administrative expenses and recorded as additional paid in capital from inception through the period ended October 31, 2009.
F-9
MASCOT VENTURES INC
NOTES TO FINANCIAL STATEMENTS
(An Exploration Stage Company)
Period from September 25, 2007 (Inception) through October 31, 2009
Pursuant to a letter agreement, dated November 19, 2009, (i) the Company is obligated to pay Wendy Wildmen, the Company’s President and Chief Executive Officer, and a Director, for a term of two years, $1,000 per month, as consideration for Ms. Wildmen serving and performing her duties as President of the Company, and (ii) Wildmen shall assign her right to such compensation of $1,000 per month to the Company, until such time as the Company closes on an equity or debt financing of not less than $100,000.
| 4. | COMMON SHARES |
| a) | In October 2007 the Company issued 5,000,000 common shares of the Company to each of two Directors at $0.001 per share for a total of 10,000,000 shares and cash proceeds of $10,000. |
| b) | In November 2007 the Company issued 1,500,000 common shares of the Company at $0.01 per share for cash proceeds of $15,000. |
| c) | In June 2008 the Company issued 40,000 common shares of the Company at $0.05 per share for cash proceeds of $2,000. |
| d) | In November 2008, the Company authorized for issue 20,000 shares of the Company at $0.05 per share for cash proceeds of $1,000. |
| e) | In July 2009, the Company authorized for issue 150,000 common shares of the Company at $0.05 per share for cash proceeds of $7,500. |
| f) | In September 2009 the Company authorized for issue 150,000 shares of the Company at $0.10 per share for cash proceeds of $15,000. |
As of October 31, 2009 the total amount of common shares outstanding was 11,860,000.
| 5. | INCOME TAXES |
The Company follows ASC 740-10-50 “Accounting for Income Taxes.” Deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry-forwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry-forward has been recognized, as it is not deemed likely to be realized.
The provision for refundable federal income tax consists of the following for the periods ending:
| October 31, 2009 | October 31, 2008 | |||||||
| Federal income tax benefit attributed to: | ||||||||
| Net operating loss | 6,500 | 6,100 | ||||||
| Valuation allowance | (6,500 | ) | (6,100 | ) | ||||
| Net benefit | - | - | ||||||
F-10
MASCOT VENTURES INC
NOTES TO FINANCIAL STATEMENTS
(An Exploration Stage Company)
Period from September 25, 2007 (Inception) through October 31, 2009
| The cumulative tax effect at the expected rate of 34% of significant | ||||||||
| items comprising our net deferred tax amount is as follows: | October 31, 2009 | October 31, 2008 | ||||||
| Deferred tax attributed: | 13,140 | 6,640 | ||||||
| Net operating loss carryover | (13,140 | ) | (6,640 | ) | ||||
| Less: change in valuation allowance | ||||||||
| Net deferred tax asset | - | - | ||||||
At October 31, 2009, the Company had an unused net operating loss carry-forward approximating $38,650 that is available to offset future taxable income; the loss carry-forward will start to expire in 2029. The change in the valuation allowance for 2009 was approximately $6,500.
F-11
| MASCOT VENTURES INC |
| (An Exploration Stage Company) |
| Balance Sheets |
| January 31, 2010 | October 31, 2009 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 30,425 | $ | 42,850 | ||||
| Total current assets | 30,425 | 42,850 | ||||||
| Other Assets | ||||||||
| Mining Claim | 6,500 | 6,500 | ||||||
| TOTAL ASSETS | $ | 36,925 | $ | 49,350 | ||||
| LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | 2,620 | $ | - | ||||
| Total current liabilities | 2,620 | - | ||||||
| TOTAL LIABILITIES | 2,620 | - | ||||||
| STOCKHOLDERS' EQUITY | ||||||||
| 75,000,000 common shares authorized at par value of $0.001 | ||||||||
| Common stock, ($0.001 par value, 75,000,000 shares | ||||||||
| 11,860,000 shares issued and outstanding at January 31, 2010 | ||||||||
| and October 31, 2009 | 11,860 | 11,860 | ||||||
| Additional paid-in capital | 80,640 | 76,140 | ||||||
| (Deficit) accumulated during exploration stage | (58,195 | ) | (38,650 | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY | 34,305 | 49,350 | ||||||
| Total Stockholders' Equity | ||||||||
| TOTAL LIABILITIES & | ||||||||
| STOCKHOLDERS' EQUITY | $ | 36,925 | $ | 49,350 | ||||
The accompanying footnotes are an integral part of these financial statements.
F-12
| MASCOT VENTURES INC |
| (An Exploration Stage Company) |
| Statements of Operations |
| (Unaudited) |
| Inception | ||||||||||||
| (September 25, 2007) | ||||||||||||
| Three Months Ending | Three Months Ending | Through | ||||||||||
| January 31, 2010 | January 31, 2009 | January 31, 2010 | ||||||||||
| Operating Costs | ||||||||||||
| General & Administative | $ | 19,545 | $ | 4,504 | $ | 59,107 | ||||||
| Total Operating Costs | (19,545 | ) | (4,504 | ) | (59,107 | ) | ||||||
| Interest Income | 912 | 912 | ||||||||||
| Net Loss | $ | (19,545 | ) | $ | (3,592 | ) | $ | (58,195 | ) | |||
| $ | (0.00 | ) | $ | (0.00 | ) | |||||||
| Weighted average number of | ||||||||||||
| common shares outstanding | 11,860,000 | 11,560,000 | ||||||||||
The accompanying footnotes are an integral part of these financial statements.
F-13
| MASCOT VENTURES INC |
| (An Exploration Stage Company) |
| Statements of Cash Flows |
| Inception | ||||||||||||
| (September 25, 2007) | ||||||||||||
| Through | ||||||||||||
| January 31, 2010 | January 31, 2009 | January 31, 2010 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
| Net loss | $ | (19,545 | ) | $ | (3,592 | ) | $ | (58,195 | ) | |||
| Adjustments to reconcile net loss to net cash | ||||||||||||
| provided by (used in) operating activities: | ||||||||||||
| Donated services | 4,500 | 4,500 | 42,000 | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts Payable | 2,620 | - | 2,620 | |||||||||
| Net cash provided by (used in) operating activities | (12,425 | ) | 908 | (13,575 | ) | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
| Acquisition of mining claim | - | - | (6,500 | ) | ||||||||
| Net cash (used in) investing activities | - | - | (6,500 | ) | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
| Issuance of common stock for cash | - | 1,000 | 50,500 | |||||||||
| Net cash provided by financing activities | - | 1,000 | 50,500 | |||||||||
| Net increase in cash | (12,425 | ) | 1,908 | 30,425 | ||||||||
| Cash and cash equivalents at beginning of period | 42,850 | 26,968 | - | |||||||||
| Cash and cash equivalents at end of period | $ | 30,425 | $ | 28,876 | $ | 30,425 | ||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||||||
| Cash paid during year for : | ||||||||||||
| Interest | $ | - | $ | - | $ | - | ||||||
| Income Taxes | $ | - | $ | - | $ | - | ||||||
The accompanying footnotes are an integral part of these financial statements.
F-14
MASCOT VENTURES INC. NOTES TO FINANCIAL STATEMENTS (An Exploration Stage Company) Period from September 25, 2007 (Inception) through January 31, 2010 (Unaudited) |
1. NATURE OF OPERATIONS
Mascot Ventures Inc. (“the Company”) was incorporated in the State of Nevada on September 25, 2007 to engage in the acquisition, exploration and development of natural resource properties. The Company is in the exploration stage with no revenues and limited operating history.
The accompanying unaudited interim financial statements of Mascot Ventures Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form S-1 Registration Statement filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for our interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2009, as reported, have been omitted.
| These financial statements have been prepared on an on going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company anticipates future losses in the development of its business, raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and/or issuance of common shares. |
2. RELATED PARTY TRANSACTIONS
The President of the Company provides management fees and office premises to the Company for a fee of $1,500 per month, the right to which the President has agreed to assign to the Company until such time as the Company closes on an equity or debt financing of not less than $100,000. The assigned rights are valued at $1,000 per month for executive compensation and $500 for rent. A total of $42,000 for donated management fees were charged to operating and general expenses and recorded as donated capital (Additional Paid in Capital) for the period from September 25, 2007 (inception) to January 31, 2010, and $4,500 for the three months ended January 31, 2010 and 2009.
F-15
[OUTSIDE BACK COVER PAGE]
PROSPECTUS
MASCOT VENTURES INC
1,860,000 SHARES OF
COMMON STOCK
TO BE SOLD BY CURRENT SHAREHOLDERS
We have not authorized any dealer, salesperson or other person to give you written information other than this prospectus or to make representations as to matters not stated in this prospectus. You must not rely on unauthorized information. This prospectus is not an offer to sell these securities or a solicitation of your offer to buy the securities in any jurisdiction where that would not be permitted or legal. Neither the delivery of this prospectus nor any sales made hereunder after the date of this prospectus shall create an implication that the information contained herein nor the affairs of the Issuer have not changed since the date hereof.
Until ___________, 2010 (90 days after the date of this prospectus), all dealers that effect transactions in these shares of common stock may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.
THE DATE OF THIS PROSPECTUS IS ____________, 2010
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses in connection with the issuance and distribution of the securities being registered hereby. All such expenses will be borne by the Company; none shall be borne by any selling security holders.
| Amount | ||||
| Item | (US$) | |||
| SEC Registration Fee | $ | 13.26 | ||
| Transfer Agent Fees | 1,000.00 | |||
| Legal Fees | 5,000.00 | |||
| Accounting Fees | 5,000.00 | |||
| Printing Costs | 500.00 | |||
| Miscellaneous | 1,000.00 | |||
| TOTAL | $ | 12,513.26 | ||
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company’s Bylaws and Articles of Incorporation provide that we shall, to the full extent permitted by the Nevada General Business Corporation Law, as amended from time to time (the “Nevada Corporate Law”), indemnify all of our directors and officers. Section 78.7502 of the Nevada Corporate Law provides in part that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of another corporation or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Similar indemnity is authorized for such persons against expenses (including attorneys’ fees) actually and reasonably incurred in defense or settlement of any threatened, pending or completed action or suit by or in the right of the corporation, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and provided further that (unless a court of competent jurisdiction otherwise provides) such person shall not have been adjudged liable to the corporation. Any such indemnification may be made only as authorized in each specific case upon a determination by the stockholders or disinterested directors that indemnification is proper because the indemnitee has met the applicable standard of conduct. Under our Bylaws and Articles of Incorporation, the indemnitee is presumed to be entitled to indemnification and we have the burden of proof to overcome that presumption. Where an officer or a director is successful on the merits or otherwise in the defense of any action referred to above, we must indemnify him against the expenses which such offer or director actually or reasonably incurred. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
II-1
RECENT SALES OF UNREGISTERED SECURITIES
Within the past two years we have issued and sold the following securities without registration.
In October 2007, we issued 5,000,000 shares of common stock to each of our two directors, at a purchase price of $0.001 per share, for aggregate offering of 10,000,000 shares and aggregate proceeds of $10,000. The offering was made to non-U.S. persons in transactions pursuant to the exemption from registration provided by Rule 903(b)(3) of Regulation S of the Securities Act.
In November 2007, we accepted subscriptions for 1,500,000 shares of our common stock from 16 investors. The shares of common stock were sold at a purchase price of $0.01 per share, amounting in the aggregate to $15,000. The offering was made to non-U.S. persons in transactions pursuant to the exemption from registration provided by Rule 903(b)(3) of Regulation S of the Securities Act.
In June 2008, we accepted subscriptions for 40,000 shares of our common stock from 4 investors. The shares of common stock were sold at a purchase price of $0.05 per share, amounting in the aggregate to $2,000. The offering was made to non-U.S. persons in transactions pursuant to the exemption from registration provided by Rule 903(b)(3) of Regulation S of the Securities Act.
In November 2008, we accepted subscriptions for 20,000 shares of our common stock from 2 investors. The shares of common stock were sold at a purchase price of $0.05 per share, amounting in the aggregate to $1,000. The offering was made to non-U.S. persons in transactions pursuant to the exemption from registration provided by Rule 903(b)(3) of Regulation S of the Securities Act.
In July 2009, we accepted subscriptions for 150,000 shares of our common stock from 15 investors. The shares of common stock were sold at a purchase price of $0.05 per share, amounting in the aggregate to $7,500. The offering was made to non-U.S. persons in transactions pursuant to the exemption from registration provided by Rule 903(b)(3) of Regulation S of the Securities Act.
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In September 2009, we accepted subscriptions for 150,000 shares of our common stock from 3 investors. The shares of common stock were sold at a purchase price of $0.10 per share, amounting in the aggregate to $15,000. The offering was made to non-U.S. persons in transactions pursuant to the exemption from registration provided by Rule 903(b)(3) of Regulation S of the Securities Act.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following exhibits are filed as part of this registration statement:
| Exhibit | Description | |
| 3.1 | Articles of Incorporation of Registrant (1) | |
| 3.2 | Bylaws of the Registrant (1) | |
| 5.1 | Opinion of Law Offices of Thomas E. Puzzo, PLLC, regarding the legality of the securities being registered | |
| 10.1 | Letter agreement, dated November 19, 2009, by and between Mascot Ventures Inc. and Wendy Wildmen (1) | |
| 23.1 | Consent of Law Offices of Thomas E. Puzzo, PLLC (included in Exhibit 5.1) | |
| 23.2 | Consent of LBB & Associates Ltd., LLP, Certified Public Accountants |
(1) Incorporated by reference to Registrant’s Form S-1 (file no. 333-164845), filed with the Commission on February 10, 2010.
UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales of securities are being made, a post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement; and notwithstanding the forgoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectuses filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
(iii) Include any additional or changed material information on the plan of distribution;
Provided however, that:
A. Paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 15 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement; and
B. Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in repots filed with or furnished by the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) If the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financials statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least s a current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.
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(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
i. If the registrant is relying on Rule 430B:
A. Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in registration statement; and
B. Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933, shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or
(ii). If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
6. That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
i. Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
ii. Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
iii. The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
iv. Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to our director, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our director, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our director, officers, or controlling person sin connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue.
For the purposes of determining liability under the Securities Act for any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has authorized this registration statement to be signed on its behalf by the undersigned, in the City of Regina, Saskatchewan, on the 9th day of April, 2010.
MASCOT VENTURES INC (Registrant) | |||
| By: | /s/ Wendy Wildmen | ||
| Name: | Wendy Wildmen | ||
| Title: | President and Chief Executive Officer | ||
| (Principal Executive Officer and Principal Financial and Accounting Officer) | |||
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Wendy Wildmen, as his true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement on Form S-1 of Mascot Ventures Inc, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, grant unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the foregoing, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated.
| Signature | Title | Date | ||
| /s/ Wendy Wildmen | President and Chief Executive Officer, | April 9, 2010 | ||
| Wendy Wildmen | Treasurer and Director | |||
| /s/ Clive Hope | Secretary and Director | April 9, 2010 | ||
| Clive Hope |
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EXHIBIT INDEX
| Exhibit | Description | |
| 3.1 | Articles of Incorporation of Registrant (1) | |
| 3.2 | Bylaws of the Registrant (1) | |
| 5.1 | Opinion of Law Offices of Thomas E. Puzzo, PLLC, regarding the legality of the securities being registered | |
| 10.1 | Letter agreement, dated November 19, 2009, by and between Mascot Ventures Inc. and Wendy Wildmen (1) | |
| 23.1 | Consent of Law Offices of Thomas E. Puzzo, PLLC (included in Exhibit 5.1) | |
| 23.2 | Consent of LBB & Associates Ltd., LLP, Certified Public Accountants |
(1) Incorporated by reference to Registrant’s Form S-1 (file no. 333-164845), filed with the Commission on February 10, 2010.
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