As filed on January 10, 2003 File No. 333 -______
================================================================================
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM SB-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BRINX RESOURCES LTD.
(Name of small business issuer in its charter)
<table>
<caption>
<s>
NEVADA 1040 APPLIED FOR
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification No.)
</table>
4519 WOODGREEN DRIVE, WEST VANCOUVER, B.C. V7S 2T8 CANADA
(604) 926-3677
(Address and telephone number of principal executive offices)
4519 WOODGREEN DRIVE, WEST VANCOUVER, B.C. V7S 2T8 CANADA
(Address of principal place of business or intended principal place of business)
KENNETH A. CABIANCA, 4519 WOODGREEN DRIVE, WEST VANCOUVER, B.C. V7S 2T8 CANADA
(604) 926-3677
(Name, address and telephone number of agent for service)
Copies of all communication to:
FAY M. MATSUKAGE, ESQ.
DILL DILL CARR STONBRAKER & HUTCHINGS, P.C.
455 SHERMAN STREET, SUITE 300
DENVER, COLORADO 80203
(303) 777-3737, FAX (303) 777-3823
Approximate date of proposed sale to the public: As soon as practicable after
the effective date of the 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, 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. [_] ____
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_] ____
<page>
CALCULATION OF REGISTRATION FEE
<table>
<caption>
- ------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF SECURITIES TO BE DOLLAR AMOUNT TO BE PROPOSED MAXIMUM AMOUNT OF
REGISTERED REGISTERED OFFERING PRICE PER UNIT REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c>
Common stock $16,500 $0.003 $1.52
- ------------------------------------------------------------------------------------------------------------------
</table>
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 said Section 8(a),
may determine.
Disclosure alternative used (check one): Alternative 1 Alternative 2 X
--- ---
<page>
SUBJECT TO COMPLETION, DATED JANUARY 10, 2003
PROSPECTUS
BRINX RESOURCES LTD.
5,500,000 SHARES OF COMMON STOCK
The selling shareholder named in this prospectus is offering 5,500,000
shares of common stock of Brinx Resources Ltd. We will not receive any of the
proceeds from the sale of these shares. The shares were acquired by the selling
shareholder directly from us in a private offering of our common stock that was
exempt from registration under the securities laws. The selling shareholder has
set an offering price for these securities of $0.003 per share.
Our common stock is presently not traded on any market or securities
exchange. The offering price may not reflect the market price of our shares
after the offering.
-------------------
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE
SHARES ONLY IF YOU CAN AFFORD A COMPLETE LOSS. SEE "RISK FACTORS" BEGINNING ON
PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is 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.
<table>
<caption>
- ------------------------------------------------------------------------------------------------
SHARES OFFERED BY SELLING AGENT PROCEEDS TO SELLING
SELLING SHAREHOLDER PRICE TO PUBLIC COMMISSIONS SHAREHOLDER
- ------------------------------------------------------------------------------------------------
<s> <c> <c> <c>
Per Share $0.003 Not applicable $0.003
- ------------------------------------------------------------------------------------------------
Total Offering $16,500 Not applicable $16,500
- ------------------------------------------------------------------------------------------------
</table>
Proceeds to the selling shareholder do not include offering costs,
including filing fees, printing costs, legal fees, accounting fees, and transfer
agent fees estimated at $10,000. Brinx Resources will pay these expenses.
This Prospectus is dated _________________, 2003.
<page>
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY.............................................................3
RISK FACTORS...................................................................4
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS..............................7
DILUTION.......................................................................7
DIVIDEND POLICY................................................................7
USE OF PROCEEDS................................................................7
BUSINESS AND PROPERTIES........................................................8
PLAN OF OPERATIONS............................................................10
DIRECTORS AND EXECUTIVE OFFICERS..............................................12
EXECUTIVE COMPENSATION........................................................12
SECURITY OWNERSHIP OF SELLING SHAREHOLDER AND MANAGEMENT......................13
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS.....................13
DESCRIPTION OF CAPITAL STOCK..................................................14
PLAN OF DISTRIBUTION..........................................................14
TRANSFER AGENT AND REGISTRAR..................................................15
SEC POSITION ON INDEMNIFICATION...............................................16
LEGAL MATTERS.................................................................16
EXPERTS.......................................................................16
AVAILABLE INFORMATION.........................................................16
REPORTS TO STOCKHOLDERS.......................................................17
FINANCIAL STATEMENTS.........................................................F-1
2
<page>
PROSPECTUS SUMMARY
BRINX RESOURCES LTD.
Brinx Resources Ltd. was organized under the laws of the State of
Nevada on December 23, 1998, to explore mining claims and property in New
Mexico. As of the date of this prospectus, we have conducted only limited
operations. We purchased 8 mining claim located in Hidalgo County, New Mexico in
September 2002. We refer to these mineral claims as the Antelope Pass Project.
We own a 100% interest in the Antelope Pass Project.
Our plan of operation is to conduct mineral exploration activities on
the Antelope Pass Project in order to assess whether these claims have
commercially exploitable gold mineral reserves. Our plan of operations is to
conduct the first phase of a staged exploration program on our mineral
properties. Our proposed exploration program is designed to explore for
commercially exploitable reserves of gold on these mineral claims. We are an
exploration stage company and we cannot assure you that a commercially viable
mineral deposit exists on our mineral claims.
Since we are in the exploration stage, we have not yet realized any
revenues from our planned operations. As of October 31, 2002, we had $28,729 in
cash on hand, total tangible assets of $29,540, and liabilities of $6,847.
Accordingly, our working capital position as of October 31, 2002 was $21,882.
Since our inception through October 31, 2002, we have incurred a net loss of
$8,707. We attribute our net loss to having no revenues to offset our operating
expenses such as corporate maintenance and professional fees. We have sufficient
funds to take us through the first phase of our exploration program. However,
our working capital is not sufficient to enable us to complete any other phases
of our exploration program. Accordingly, we will require additional financing in
order to complete the full exploration program described more fully in the
section entitled, "Business and Properties."
Our offices are located at 4519 Woodgreen Drive, West Vancouver,
British Columbia V7S 2T8 Canada, and our telephone number is (604) 926-3677.
THE OFFERING
Securities offered........................ 5,500,000 shares of common stock
Selling shareholder....................... Marc Cabianca
Shares outstanding prior
to the offering........................... 11,400,000 shares of common stock
Shares to be outstanding
after the offering........................ 11,400,000 shares of common stock
Use of proceeds........................... We will not receive any proceeds from
the sale of the common stock by the
selling shareholder.
3
<page>
RISK FACTORS
Investing in our securities involves a high degree of risk. You should
carefully consider the risks described below and all other information contained
in this prospectus before making an investment decision.
RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
Our current operating funds are not sufficient to complete more than
the first phase of exploration of our mineral claims. Therefore, we will need to
obtain additional financing in order to complete our business plan. We currently
do not have any operations and we have no income. We do not have any
arrangements for financing and we may not be able to find such financing if
required. Obtaining additional financing would be subject to a number of
factors, including investor acceptance of mineral claims and investor sentiment.
These factors may adversely affect the timing, amount, terms, or conditions of
any financing that we may obtain or make any additional financing unavailable to
us.
IF WE COMPLETE A FINANCING THROUGH THE SALE OF ADDITIONAL SHARES OF OUR
COMMON STOCK, THEN SHAREHOLDERS WILL EXPERIENCE DILUTION.
The most likely source of future financing presently available to us is
through the sale of shares of our common stock. Any sale of common stock will
result in dilution to existing shareholders.
IF WE DO NOT CONDUCT MINERAL EXPLORATION ON OUR MINERAL CLAIMS OR PAY
FEES IN LIEU OF MINERAL EXPLORATION, THEN OUR MINERAL CLAIMS WILL LAPSE.
We must complete mineral exploration work on our mineral claims and
make filings with the Bureau of Land Management of the Department of Interior
regarding the work completed or pay maintenance fees in lieu of completing work
on our claims. If we do not conduct any mineral exploration on our claims or
make the required payments in lieu of completing mineral exploration, then our
claims will lapse and we will lose all interest that we have in these mineral
claims. The expiry date of our mineral claims is currently September 2003.
OUR COMPANY WAS RECENTLY FORMED AND WE HAVE NOT PROVEN THAT WE CAN
GENERATE A PROFIT. IF WE FAIL TO GENERATE INCOME AND ACHIEVE PROFITABILITY, AN
INVESTMENT IN OUR SECURITIES MAY BE WORTHLESS.
We have no operating history and have not proved we can operate
successfully. If we fail, your investment in our common stock will become
worthless. From inception to October 31, 2002, we incurred a net loss of $8,707.
At October 31, 2002, we had working capital of $21,882.
We were organized under the laws of the State of Nevada on December 23,
1998, and have had no operations other than to conduct a private offering and to
acquire 8 mineral claims in the state of New Mexico. As of the date of this
prospectus, two shareholders hold our common stock. We face all of the risks
inherent in a new business. The purchase of the securities offered hereby must
therefore be regarded as the placing of funds at a high risk in a new or
"start-up" venture with all the unforeseen costs, expenses, problems, and
difficulties to which such ventures are subject.
BECAUSE WE ANTICIPATE OUR OPERATING EXPENSES WILL INCREASE PRIOR TO OUR
OBTAINING REVENUES, WE EXPECT SIGNIFICANT LOSSES PRIOR TO ANY PROFITABILITY.
Prior to completion of our exploration stage, we anticipate that we
will incur increased operating expenses without realizing any revenues. We
therefore expect to incur significant losses into the foreseeable future. If we
are unable to generate significant revenues from the exploration of our mineral
claims and the production of minerals thereon, we will not be able to earn
profits or continue operations. There is no history upon which to base any
assumption as to the likelihood that we will prove successful, and we may not be
able to generate any operating
4
<page>
revenues or ever achieve profitable operations. If we are unsuccessful in
addressing these risks, our business will most likely fail.
BECAUSE OF THE SPECULATIVE NATURE OF EXPLORATION OF MINING PROPERTIES,
THERE IS SUBSTANTIAL RISK THAT NO COMMERCIALLY EXPLOITABLE MINERALS WILL BE
FOUND AND OUR BUSINESS WILL FAIL.
The search for valuable minerals as a business is extremely risky. Our
mineral claims may not contain commercially exploitable reserves of gold.
Exploration for minerals is a speculative venture necessarily involving
substantial risk. The expenditures to be made by us in the exploration of our
mineral claims may not result in the discovery of commercial quantities of ore.
Problems such as unusual or unexpected formations and other conditions are
involved in mineral exploration and often result in unsuccessful exploration
efforts. In such a case, we would be unable to complete our business plan.
BECAUSE OF 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 valuable 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 against
which we may elect not to insure. The payment of such liabilities may have a
material adverse effect on our financial position.
EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON OUR
MINERAL CLAIMS, WE MAY NOT BE ABLE TO SUCCESSFULLY OBTAIN COMMERCIAL PRODUCTION.
Our mineral claims do not contain any known mineral reserves. If our
exploration programs are successful in establishing reserves of commercial
tonnage and grade, we will require additional funds in order to place the
mineral claims into commercial production. At this time, we cannot assure you
that we will be able to do so.
BECAUSE OF OUR LIMITED RESOURCES AND THE SPECULATIVE NATURE OF OUR
BUSINESS, THERE IS A SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING
CONCERN.
The report of Wheeler Wasoff, P.C., our independent auditors, on our
audited financial statements for the periods ended October 31, 2002, indicates
that there are a number of factors that raise substantial doubt about our
ability to continue as a going concern. Our continued operations are dependent
on our ability to obtain financing and upon our ability to achieve future
profitable operations from the development of our mineral properties. If we are
not able to continue as a going concern, it is likely investors will lose their
investment.
RISKS RELATED TO OUR MARKET AND STRATEGY
IF WE ARE UNABLE TO HIRE AND RETAIN KEY PERSONNEL, WE MAY NOT BE ABLE
TO IMPLEMENT OUR BUSINESS PLAN AND OUR BUSINESS WILL FAIL.
Our success will be largely dependent on our ability to hire highly
qualified personnel with experience in geological exploration. These individuals
may be in high demand and we may not be able to attract the staff we need. In
addition, we may not be able to afford the high salaries and fees demanded by
qualified personnel, or may lose such employees after they are hired. Currently,
we have not hired any key personnel. Our failure to hire key personnel when
needed would have a significant negative effect on our business.
BECAUSE OUR SOLE EXECUTIVE OFFICER HAS OTHER BUSINESS INTERESTS, HE MAY
NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS
OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
Mr. Cabianca, our sole executive officer and director, presently spends
approximately 25% of his business time on business management services for our
company. It is possible that the demands on Mr. Cabianca from his other
obligations could increase with the result that he would no longer be able to
devote sufficient time to the
5
<page>
management of our business. In addition, Mr. Cabianca may not possess sufficient
time for our business if the demands of managing our business increased
substantially beyond current levels.
RISKS RELATED TO LEGAL UNCERTAINTY
BECAUSE WE WILL BE SUBJECT TO COMPLIANCE WITH GOVERNMENT REGULATION,
OUR ANTICIPATED COST OF OUR EXPLORATION PROGRAM MAY INCREASE.
There are several governmental regulations that materially restrict the
use of ore. We will be subject to the laws and regulations of the Bureau of Land
Management of the United States Department of the Interior as we carry out our
exploration program. We may be required to obtain land use permits and perform
remediation work for any physical disturbance to the land in order to comply
with these regulations. New regulations could be passed which could increase our
costs of doing business and prevent us from carrying out our exploration
program.
RISKS RELATED TO THIS OFFERING
THERE IS A LACK OF A PUBLIC MARKET FOR OUR COMMON SHARES, WHICH LIMITS
OUR SHAREHOLDERS ABILITY TO RESELL THEIR SHARES OR PLEDGE THEM AS COLLATERAL.
There is currently no public market for our shares, and we cannot
assure you that a market for our stock will develop. Consequently, investors may
not be able to use their shares for collateral or loans and may not be able to
liquidate at a suitable price in the event of an emergency. In addition,
investors may not be able to resell their shares at or above the price they paid
for them or may not be able to sell their shares at all.
IF A MARKET FOR OUR COMMON STOCK DEVELOPS, OUR STOCK PRICE MAY BE
VOLATILE.
If a market for our common stock develops, we anticipate that the
market price of our common stock will be subject to wide fluctuations in
response to several factors, including:
o the results of our geological exploration program;
o our ability or inability to achieve financing;
o increased competition; and
o conditions and trends in the mineral exploration industry.
Further, if our common stock is traded on the OTC Bulletin Board, our
stock price may be impacted by factors that are unrelated or disproportionate to
our operating performance. These market fluctuations, as well as general
economic, political and market conditions, such as recessions, interest rates or
international currency fluctuations, may adversely affect the market price of
our common stock.
OUR BOARD OF DIRECTORS IS AUTHORIZED TO ISSUE SHARES OF PREFERRED
STOCK, WHICH MAY HAVE RIGHTS AND PREFERENCES DETRIMENTAL TO THE RIGHTS OF THE
HOLDERS OF OUR COMMON SHARES.
We are authorized to issue up to 1,000,000 shares of preferred stock,
$0.01 par value. As of the date of this prospectus, we have not issued any
shares of preferred stock. Our preferred stock may bear such rights and
preferences, including dividend and liquidation preferences, as the board of
directors may fix and determine from time to time. Any such preferences may
operate to the detriment of the rights of the holders of the common stock being
offered hereby. See "Description of Capital Stock."
REGULATIONS RELATING TO "PENNY STOCKS" MAY LIMIT THE ABILITY OF OUR
SHAREHOLDERS TO SELL THEIR SHARES AND, AS A RESULT, OUR SHAREHOLDERS MAY HAVE TO
HOLD THEIR SHARES INDEFINITELY.
If a market develops for our common stock, our common stock would, most
likely, be subject to rules promulgated by the SEC relating to "penny stocks,"
which apply to non-NASDAQ companies whose stock trades at less than $5.00 per
share or whose tangible net worth is less than $2,000,000. These rules require
brokers who sell
6
<page>
"penny stocks" to persons other than established customers and "accredited
investors" to complete certain documentation, make suitability inquiries of
investors, and provide investors with certain information concerning the risks
of trading in the security. These rules may discourage or restrict the ability
of brokers to sell our common stock and may affect the secondary market for the
common stock.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks
and uncertainties. We use words such as "anticipate", "expect", "intend",
"plan", "believe", "seek" and "estimate", and variations of these words and
similar expressions to identify such forward-looking statements. You should not
place too much reliance on these forward-looking statements. Our actual results
are most likely to differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us
described in the preceding "Risk Factors" section and elsewhere in this
prospectus.
DILUTION
The common stock to be sold by the selling shareholder is common stock
that is currently issued and outstanding. Accordingly, there will be no dilution
to our existing shareholders.
DIVIDEND POLICY
To date, we have not declared or paid any dividends on our common
stock. We do not intend to declare or pay any dividends on our common stock in
the foreseeable future, but rather to retain any earnings to finance the growth
of our business. Any future determination to pay dividends will be at the
discretion of our board of directors and will depend on our results of
operations, financial condition, contractual and legal restrictions and other
factors the board of directors deems relevant.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock
offered through this prospectus by the selling shareholder.
7
<page>
BUSINESS AND PROPERTIES
GENERAL
We are an exploration stage company engaged in the acquisition and
exploration of mineral properties. We own eight mineral claims that we refer to
as the Antelope Pass Project, as described below. Further exploration of our
mineral claims is required before a final evaluation as to the economic and
legal feasibility of any mineral reserves that we may discover on our mineral
claims can be completed. We cannot assure you that a commercially viable mineral
deposit exists on our mineral claims. Our plan of operations is to carry out
exploration work on our mineral claims in order to ascertain whether our claims
possess commercially exploitable quantities of gold. We cannot provide assurance
to investors that our mineral claims contain a commercially exploitable mineral
deposit, or reserve, until appropriate exploratory work is done and an economic
evaluation based on such work concludes economic feasibility.
PROPERTY ACQUISITION
In September 2002, we acquired a 100% interest in the Antelope Pass
Project, located in the Hidalgo County, New Mexico, from Leroy Halterman, a
non-affiliate of our company. The Antelope Pass Project consists of the Kendra 1
through Kendra 8 mineral claims.
ANTELOPE PASS PROJECT
LOCATION AND ACCESS. The Antelope Pass Project is located in west
central Hidalgo County, New Mexico, approximately 10 miles east of the New
Mexico-Arizona border. The prospect lies in the Peloncillo Mountains, 35 miles
southwest of Lordsburg, New Mexico. The closest major air service to the
property is located in Tucson, Arizona. Access to the property is from Tucson
traveling east via Interstate Highway 10 for approximately 130 miles to the
Animas, New Mexico exit. From that exit, travel is south 20 miles on State
Highway 338 to the town of Animas and then west for 7 miles via State Highway 9.
The property can be reached on gravel roads and dirt tracks.
The property is comprised of low hills and alluvial valleys, with
elevations ranging from a low of 4,480 feet to a high of 4,580 feet. Vegetation
is sparse and includes desert grasses, cacti, and creosote bushes.
KENDRA CLAIMS. The prospect consists of eight unpatented lode mining
claims totaling 160 acres, situated in Township 27 South, Range 20 West,
Sections 18 and 19 and Township 27 South, Range 21 West, Sections 13 and 24. The
claims are located on federal lands under the administration of the Bureau of
Land Management (BLM). They are not subject to any royalties, but annual
maintenance fees must be paid to the BLM of $100 per claim or a total of $800
for the entire claim block to keep them valid.
PREVIOUS OPERATIONS AND HISTORY. The property and surrounding vicinity
was initially evaluated during a general reconnaissance program in 1981. During
this program, anomalous gold and arsenic values obtained from rock chip samples
led to the area being staked by Energy Reserves Group. Goldsil Resources Ltd.
then acquired the claims from Energy Reserves Group, but latter dropped the
claims. In 1985, Santa Fe Pacific Mining leased the claim block. Santa Fe
Pacific Mining then terminated its lease in late 1987.
Both Energy Reserves Group and Santa Fe Pacific Mining sampled the
property. Santa Fe collected 130 rock chip samples. Fifteen percent of the
sample results showed more than 1.0 parts per million gold (more than .029
ounces per ton gold), with a high value of 9.46 parts per million gold (.28
ounces per ton gold). In addition to gold, these samples were assayed for
silver, arsenic and antimony. Results were generally low silver associated with
high arsenic and antimony, which is considered to be characteristic of the low
temperature hydrothermal systems that deposited many of the significant gold
deposits like those found in Nevada.
Neither Mr. Halterman nor we have conducted any work on the claims.
There are no known reserves on the property.
8
<page>
GEOLOGY OF THE MINERAL CLAIMS. An evaluation report identified Tertiary
age, rhyolitic volcanic rocks present on the western portion of the prospect
area. Rhyolite is a very acid volcanic rock, which is the lava form of granite.
These volcanics are related to the Rodeo Caldera, which is located just west of
the Antelope Pass prospect vicinity. This caldera is the probable source of the
anomalous gold mineralization detected in the area. Rocks that outcrop in the
prospect vicinity include limestone and Tertiary Age volcanics.
The most obvious form of alternation on the prospect is the presence of
strong silicification in the form of jasperoid development. Silicification is
the introduction of, or replacement by, silica, generally resulting in the
formation of fine-grained quartz or opal, which may fill pores and replace
existing minerals. Jasperoid is a dense, usually gray, chertlike siliceous rock,
in which cryptocrystalline (consisting of crystals that are too small to be
recognized and separately distinguished even under the ordinary microscope)
quartz has replaced the carbonate minerals of limestone or dolomite.
PROPOSED PROGRAM OF EXPLORATION
The evaluation report concludes that the property merits exploration
and evaluation. Since the rock samples have not been evaluated by trench,
drilling, or even geochemical soil sampling, a two-phase program is recommended
with the second phase depended upon the successful results of the first phase.
The first phase should include conventional soil sampling on specified grids. In
addition, several new techniques have been developed in the field of soil
geochemical sampling and reportedly the enzyme leach assay technique has met
with good results. This technique should also be tested. Based upon the results
of the Phase I program a drilling program should take place to test the existing
anomalies and those disclosed during the Phase I program. The recommended
programs are presented below.
RECOMMENDATIONS PHASE I AND PHASE II PROGRAMS
PHASE I. The Phase I program will be limited to defining drill targets
for the Phase II program. It is anticipated to cost approximately $11,250. The
following discussion gives a brief description of the Phase I program.
1. Additional mapping and sampling to confirm earlier sampling
and to better target drill holes to test untested mineralized
areas of the Kendra claim block.
2. Perform close spaced geochemical soil sampling across the
entire staked area. This type of sampling would collect
samples from approximately 1-2 feet below the surface and have
them tested for gold, silver, antimony, mercury and arsenic.
In addition to this technique a new geochemical technique
called enzyme leach should be tested. This new technique has
recently been used with some success in tests and also in
exploration.
The Quaternary gravel that covers most of the prospect may limit the
usefulness of conventional soil geochemistry but test grids will have to be
surveyed, sampled and analyzed to determine its usefulness. The enzyme leach
method may be a more useful geochemical tool. However, more information and
results from test and exploration programs that are currently employing this
technique needs to be analyzed to determine if enzyme leach is a cost-effective
exploration tool. It should be noted that because of the limited size of the
fault trace on this property the cost of both techniques would not be excessive.
PHASE II PROGRAM. The Phase II program is estimated to cost
approximately $41,500 and will involve the drill testing of strong rock and soil
geochemical anomalies. In addition to testing the geochemical anomalies,
geological mapping will generate other drill targets that may not be highly
mineralized at the surface but will still warrant testing with several drill
holes. These holes should be drilled to a depth of 300 to 400 feet or until the
geological target has been intercepted.
9
<page>
<table>
COST ESTIMATES PHASE I PROGRAM
<caption>
ITEM ESTIMATED COST
<s>
Sample 100 soil and 25 Enzyme -Leach samples, average $30/Sample....................$ 3,500
Sampling supplies 125 samples @ $2.00/ sample....................................... 250
Rock samples 50 samples @ $20/ sample............................................... 1,000
Geologist, 10 days @ $400/day....................................................... 4,000
Per diem 10 days @ $100/day......................................................... 1,000
Vehicle Mileage 2,000 @ $.45 / Mile................................................. 900
Miscellaneous and field supplies.................................................... 600
--------
TOTAL PHASE I COST.............................................................$ 11,250
========
</table>
<table>
ESTIMATED COST PHASE II PROGRAM
<caption>
ITEM ESTIMATED COST
<s>
Drilling
Mineralized Outcrops and soil anomalies, 3 holes 400 ft. each /$15.00/ft.......$ 18,000
Test Geological targets 2 holes 350 ft each./ $15.00/ft........................ 10,500
Assaying, 400 samples $12.00........................................................ 2,400
Geologist 28 days @ $400/ day....................................................... 5,100
Per diem 28 days @ $100/ day........................................................ 1,400
Vehicle 5000 miles @$.45/mile....................................................... 2,250
Miscellaneous....................................................................... 1,500
--------
TOTAL PHASE II COST............................................................$ 41,150
========
</table>
COMPLIANCE WITH GOVERNMENT REGULATION
We will be required to conduct all mineral exploration activities in
accordance with the Bureau of Land Management of the United States Department of
the Interior. We will be required to obtain a permit prior to the initiation of
the proposed exploration program. To obtain a permit we will have to submit a
plan of operation as part of our permit application.
EMPLOYEES
We have no employees other than our sole officer and director, Kenneth
Cabianca, who as of the date of this prospectus is serving without compensation.
We anticipate that we will be conducting most of our business through agreements
with consultants and third parties.
PLAN OF OPERATIONS
Our business plan is to proceed with the exploration of the Antelope
Pass Project to determine whether there are commercially exploitable reserves of
gold located on the property comprising the mineral claims. We have decided to
proceed with the first phase of a staged exploration program recommended by the
geological report. We anticipate that this phase of the recommended geological
exploration program will cost approximately $11,250. We had $28,729 in cash
reserves as of October 31, 2002. Accordingly, we are able to proceed with Phase
I of the exploration program without additional financing.
We will assess whether to proceed to the Phase II of the recommended
geological exploration program upon completion of an assessment of the results
of Phase I of the geological exploration program. In completing this
determination, we will review the conclusions and recommendations that we
receive from our geologist based
10
<page>
on his geological review of the results of the first phase. We will also make an
assessment as to whether the results of Phase I are sufficiently positive to
enable us to achieve the financing necessary for us to proceed with Phase II of
the exploration program.
This assessment will include an assessment of our cash reserves after
the completion of Phase I and the market for financing of mineral exploration
projects at the time of our assessment.
We anticipate that we will incur the following expenses over the next
twelve months:
o $11,250 in connection with the completion of the Phase I of our
recommended geological work program;
o $10,000 for operating expenses, including professional legal and
accounting expenses associated with our becoming a reporting
issuer under the Securities Exchange Act of 1934.
We anticipate spending approximately $21,250 over the next twelve
months in pursuing our stated plan of operations. Of the anticipated expenses,
we anticipate that expenses of approximately $10,000 will be incurred over the
next six months. Based on our working capital position of $21,882 as of October
31, 2002, we believe we have sufficient cash resources to pay for our operating
expenses over the next twelve months.
We anticipate that we will require additional funding in the event that
we decide to proceed with Phase II of the exploration program. The anticipated
cost of Phase II of the exploration program is $41,150. This amount is in excess
of our projected cash reserves remaining upon completion of Phase I of the
exploration program. We anticipate that additional funding will be in the form
of equity financing from the sale of our common stock. However, 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 Phase II of the exploration
program. We believe that debt financing will not be an alternative for our
exploration program. We do not have any arrangements in place for any future
equity financing.
If we determine not to proceed with further exploration of our mineral
claims due to a determination that the results of our initial geological program
do not warrant further exploration or due to an inability to finance further
exploration, we plan to pursue the acquisition of an interest in other mineral
claims. We anticipate that any future acquisition would involve the acquisition
of an option to earn an interest in a mineral claim as we anticipate that we
would not have sufficient cash to purchase a mineral claim of sufficient merit
to warrant exploration.
RESULTS OF OPERATIONS
We have not yet earned any revenues. We anticipate that we will not
earn revenues until such time as we have entered into commercial production of
our mineral properties. We are presently in the exploration stage of our
business and we can provide no assurance that we will discover commercially
exploitable levels of mineral resources on our properties, or if such resources
are discovered, that we will enter into commercial production of our mineral
properties.
We incurred operating expenses in the amount of $7,307 for the year
ended October 31, 2002, most of which were professional fees and expenses to
maintain our corporate existence. Accordingly, our loss for the year ended
October 31, 2002 was $7,307.
We incurred a loss of $1,400 for the year ended October 31, 2001, all
of which was attributable to operating expenses of $1,400.
LIQUIDITY AND CAPITAL RESOURCES
We had cash of $28,729 as of October 31, 2002 and had working capital
of $21,882 as of October 31, 2002.
11
<page>
DIRECTORS AND EXECUTIVE OFFICERS
Information about our sole director and executive officer follows:
NAME AGE POSITION AND TERM OF OFFICE
Kenneth A. Cabianca 62 President, Secretary, Treasurer and sole
director
Our Bylaws provide for a board of directors ranging from 1 to 12
members, with the exact number to be specified by the board. All directors hold
office until the next annual meeting of the stockholders following their
election and until their successors have been elected and qualified. The board
of directors appoints officers. Officers hold office until the next annual
meeting of our board of directors following their appointment and until their
successors have been appointed and qualified.
Set forth below is a brief description of the recent employment and
business experience of our sole director and executive officer:
KENNETH A. CABIANCA has been our sole officer and director since our
inception in December 1998. Since 1983, Mr. Cabianca has been an independent
businessman involved in the management of various companies. Many of his
activities have been conducted through his company, Wellington Financial
Corporation. His experience includes raising venture capital, general
management, and public relations. He was a director of a public company that
developed both gold and copper mineral properties from the exploration stage
through production. From August 1991 to September 1999, Mr. Cabianca was a
director and president of Primo Resources International Inc., a mining company
whose stock trades on the CDNX. While he served as president Primo Resources
engaged in joint ventures projects with Mitsubishi Corp., Mitsubishi Materials
Corp., and Golden Peaks Resources Ltd. He served as a director of Primo
Resources International again from November 2001 to November 2002. Mr. Cabianca
served as a director with other publicly-traded mining companies in Canada prior
to 1990. He received a D.D.S. degree and practiced dentistry in Vancouver,
British Columbia from 1965 to 1986. He also received a Bachelor of Science
degree from Creighton University in 1965.
EXECUTIVE COMPENSATION
The following table sets forth the remuneration of our sole director
and officer:
<table>
<caption>
- ------------------------------------------------------------------------------------------------
CAPACITIES IN WHICH REMUNERATION
NAME OF INDIVIDUAL WAS RECEIVED AGGREGATE REMUNERATION
- ------------------------------------------------------------------------------------------------
<s> <c> <c>
Kenneth A. Cabianca Sole executive officer $-0-
- ------------------------------------------------------------------------------------------------
</table>
We have no employment agreements with our executive officers. We do not
pay compensation to our directors for attendance at meetings. We reimburse the
directors for reasonable expenses incurred during the course of their
performance.
12
<page>
SECURITY OWNERSHIP OF SELLING SHAREHOLDER AND MANAGEMENT
The following table lists the share ownership of persons who, as of the
date of this prospectus owned of record or beneficially, directly or indirectly,
more than five percent (5%) of the outstanding common stock, and our sole
officer and director:
<table>
<caption>
- --------------------------------------------------------------------------------------------------------------------
SHARES TO BE SHARES TO BE PERCENT OF CLASS(1)<F1>
SHARES OWNED OFFERED FOR OWNED UPON ----------------------
NAME AND ADDRESS OF OWNER PRIOR TO SELLING COMPLETION OF BEFORE AFTER
OFFERING SHAREHOLDER'S OFFERING OFFERING OFFERING
ACCOUNT
- --------------------------------------------------------------------------------------------------------------------
<s>
Marc Cabianca (2)<F2> 10,000,000 5,500,000 4,500,000 87.7% 39.5%
11F - 178 Ta Rung East Street
Taichung, Taiwan ROC
- -------------------------------------------------------------------------------------------------------------------
Kenneth A. Cabianca 1,400,000 Not applicable 1,400,000 12.3% 12.3%
4519 Woodgreen Drive
West Vancouver, B.C.
V7S 2T8 Canada
- -------------------------------------------------------------------------------------------------------------------
- --------------------
<FN>
(1)<F1> This table is based on 11,400,000 shares of common stock outstanding.
(2)<F2> Marc Cabianca is the son of Kenneth Cabianca.
</FN>
</table>
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Since our inception to February 28, 2001, Kenneth A. Cabianca, our sole
officer and director advanced $1,400 for our expenses. As of February 28, 2001,
we issued 1,400,000 shares to Mr. Cabianca in consideration for these advances.
On September 6, 2002, Marc Cabianca, the son of Kenneth Cabianca,
purchased 10,000,000 shares of common stock for a cash investment of $30,000.
As of October 31, 2002, we owed $3,617 to Downtown Consulting for
administrative services. Downtown Consulting is an entity owned and controlled
by Sarah Cabianca, the daughter of Ken Cabianca.
As of the date of this prospectus, other than the transactions
described above, there are no, and have not been since inception, any material
agreements or proposed transactions, whether direct or indirect, with any of the
following:
- any of our directors or officers;
- any nominee for election as a director;
- any principal security holder identified in the preceding
"Security Ownership of Selling Shareholder and Management"
section; or
- any relative or spouse, or relative of such spouse, of the above
referenced persons.
13
<page>
DESCRIPTION OF CAPITAL STOCK
We are authorized to issue up to 50,000,000 shares of common stock, par
value $0.001 per share, and up to 1,000,000 shares of preferred stock, par value
$0.01 per share.
COMMON STOCK
The holders of common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the stockholders. We do not
have cumulative voting rights in the election of directors, and accordingly,
holders of a majority of the voting shares are able to elect all of the
directors.
Subject to preferences that may be granted to any then outstanding
preferred stock, holders of common stock are entitled to receive ratably such
dividends as may be declared by the board of directors out of funds legally
available therefore as well as any distributions to the stockholders. We have
never paid cash dividends on our common stock, and do not expect to pay such
dividends in the foreseeable future.
In the event of a liquidation, dissolution or winding up of our
company, holders of common stock are entitled to share ratably in all of our
assets remaining after payment of liabilities and the liquidation preference of
any then outstanding preferred stock. Holders of common stock have no preemptive
or other subscription or conversion rights. There are no redemption or sinking
fund provisions applicable to the common stock.
PREFERRED STOCK
Our articles of incorporation permit the board of directors, without
further shareholder authorization, to issue preferred stock in one or more
series and to fix the price and the terms and provisions of each series,
including dividend rights and preferences, conversion rights, voting rights,
redemption rights, and rights on liquidation, including preferences over the
common stock, all of which could adversely affect the rights of the holders of
the common stock. Our board of directors has not issued nor established a series
of preferred stock.
PLAN OF DISTRIBUTION
The selling shareholder may sell some of all of his common stock in one
or more transactions, including block transactions:
o on such public markets or exchanges as the common stock may from time
to time be trading;
o in privately negotiated transactions;
o through the writing of options on the common stock;
o in short sales; or
o in any combination of these methods of distribution.
The sales price to the public may be:
o the market price prevailing at the time of sale;
o a price related to such prevailing market price; or
o such other price as the selling shareholder may determine from time to
time.
The sales price of our stock will be $0.003 per share until the shares
of our common stock become traded on the NASD OTC Bulletin Board or another
exchange. Although we intend to apply for trading of our common stock on the
NASD OTC Bulletin Board, public trading of our common stock may never
materialize. If trading of common stock does take place on the NASD OTC Bulletin
Board or another exchange, the market for our stock will determine the actual
selling price at the time of resale.
The shares may also be sold in compliance with the Securities and
Exchange Commission's Rule 144.
14
<page>
In the event of the transfer by any selling shareholder of their shares
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 registration statement in order to name the pledgee, donee,
or other transferee in place of the selling shareholder who has transferred his
shares.
The selling shareholder may also sell his shares directly to market
makers acting as principals or brokers or dealers, who may act as agent or
acquire the common stock as a principal. Any broker or dealer participating in
such transactions as agent may receive a commission from the selling shareholder
or, if they act as agent for the purchaser of such common stock, from such
purchaser. The selling shareholder will likely pay the usual and customary
brokerage fees for such services. Brokers or dealers may agree with the selling
shareholder to sell a specified number of shares at a stipulated price per share
and, to the extent such broker or dealer is unable to do so acting as agent for
the selling shareholder, to purchase, as principal, any unsold shares at the
price required to fulfill the respective broker's or dealer's commitment to the
selling shareholder. Brokers or dealers who acquire shares as principals may
thereafter resell such shares from time to time in transactions in a market or
on an exchange, in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices, and in connection with
such resales may pay or receive commissions to or from the purchasers of such
shares. These transactions may involve cross and block transactions that may
involve sales to and through other brokers or dealers. We can provide no
assurance that all or any of the common stock offered will be sold by the
selling shareholder.
We are bearing all costs relating to the registration of the common
stock. The selling shareholder, however, will pay any commissions or other fees
payable to brokers or dealers in connection with any sale of the common stock.
We are paying the expenses of the offering because we seek to: (i)
become a reporting company with the Commission under the Securities Exchange Act
of 1934 (the "1934 Act"); and (ii) enable our common stock to be traded on the
NASD OTC Bulletin Board. We believe that the registration of the resale of
shares on behalf of existing shareholder may facilitate the development of a
public market in our common stock if our common stock is approved for trading on
the NASD OTC Bulletin Board.
We consider that the development of a public market for our common
stock will make an investment in our common stock more attractive to future
investors. In order for us to continue with our mineral exploration program, we
will at some point in the near future need to raise additional capital through
private placement offerings. We believe that obtaining reporting company status
under the 1934 Act and trading on the OTC Bulletin Board should increase our
ability to raise these additional funds from investors.
The selling shareholder must comply with the requirements of the
Securities Act and the Securities Exchange Act in the offer and sale of the
common stock. In particular, during such times as the selling shareholder may be
deemed to be engaged in a distribution of the common stock, and therefore be
considered to be an underwriter, he must comply with applicable law and may,
among other things:
o Not engage in any stabilization activities in connection with our
common stock;
o Furnish each broker or dealer through which common stock may be
offered, such copies of this prospectus, as amended from time to time,
as may be required by such broker or dealer; and
o Not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under
the Securities Exchange Act.
TRANSFER AGENT AND REGISTRAR
Standard Registrar & Transfer Agency, P.O. Box 14411, Albuquerque, New
Mexico 87191, serves as the transfer agent and registrar for our common stock.
15
<page>
SEC POSITION ON INDEMNIFICATION
Our bylaws provide that each officer and director of our company shall
be indemnified by us against all costs and expenses actually and necessarily
incurred by him or her in connection with the defense of any action, suit or
proceeding in which he or she may be involved or to which he or she may be made
a party by reason of his or her being or having been such director or officer,
except in relation to matters as to which he or she has been finally adjudged in
such action, suit or proceeding to be liable for negligence or misconduct in the
performance of duty.
The indemnification provisions of our bylaws diminish the potential
rights of action, which might otherwise be available to shareholders by
affording indemnification against most damages and settlement amounts paid by a
director in connection with any shareholders derivative action. However, there
are no provisions limiting the right of a shareholder to enjoin a director from
taking actions in breach of his fiduciary duty, or to cause Brinx Resources to
rescind actions already taken, although as a practical matter courts may be
unwilling to grant such equitable remedies in circumstances in which such
actions have already been taken. Also, because Brinx Resources does not
presently have directors' liability insurance and because there is no assurance
that we will procure such insurance or that if such insurance is procured it
will provide coverage to the extent directors would be indemnified under the
provisions, we may be forced to bear a portion or all of the cost of the
director's claims for indemnification under such provisions. If we are forced to
bear the costs for indemnification, the value of our stock may be adversely
affected.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of Brinx Resources pursuant to the foregoing provisions, or otherwise,
Brinx Resources 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.
LEGAL MATTERS
Dill Dill Carr Stonbraker & Hutchings, P.C., 455 Sherman Street, Suite
300, Denver, CO 80203 will pass upon certain matters relating to the legality of
the common stock offered hereby for us.
EXPERTS
Our financial statements as of October 31, 2002, and for the periods
ended October 31, 2002, of the company included in this prospectus, have been
audited by Wheeler Wasoff, P.C., independent certified public accountants, as
set forth in its report. The financial statements have been included in reliance
upon the authority of Wheeler Wasoff, P.C. as an expert in accounting and
auditing.
AVAILABLE INFORMATION
We have not previously been subject to the reporting requirements of
the Securities and Exchange Commission. We have filed with the Commission a
registration statement on Form SB-1 under the Securities Act with respect to the
shares offered hereby. This prospectus does not contain all of the information
set forth in the registration statement and the exhibits and schedules thereto.
For further information with respect to our securities and us you should review
the registration statement and the exhibits and schedules thereto. Statements
made in this prospectus regarding the contents of any contract or document filed
as an exhibit to the registration statement are not necessarily complete. You
should review the copy of such contract or document so filed.
You can inspect the registration statement and the exhibits and the
schedules thereto filed with the commission, without charge, at the office of
the Commission at Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549.
You can also obtain copies of these materials from the public reference section
of the commission at
16
<page>
450 Fifth Street, NW, Washington, D.C. 20549, at prescribed rates. You can
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The Commission maintains a web site on the Internet that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission at
HTTP://WWW.SEC.GOV.
REPORTS TO STOCKHOLDERS
As a result of filing the registration statement, we are subject to the
reporting requirements of the federal securities laws, and are required to file
periodic reports and other information with the SEC. We will furnish our
shareholders with annual reports containing audited financial statements
certified by independent public accountants following the end of each fiscal
year and quarterly reports containing unaudited financial information for the
first three quarters of each fiscal year following the end of such fiscal
quarter.
17
<page>
BRINX RESOURCES LTD.
(AN EXPLORATION STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
Page
Independent Auditor's Report F-2
Balance Sheet
October 31, 2002 F-3
Statements of Operations
Years Ended October 31, 2001 and 2002
and Cumulative Amounts from Inception to October 31, 2002 F-4
Statements of Stockholders' Equity
Years Ended October 31, 2001 and 2002 F-5
Statements of Cash Flows
Years Ended October 31, 2001 and 2002
and Cumulative Amounts from Inception to October 31, 2002 F-6
Notes to Financial Statements F-7 - F-11
F-1
<page>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
BRINX RESOURCES LTD.
We have audited the accompanying balance sheet of Brinx Resources Ltd. (a Nevada
Corporation) (an exploration stage company) as of October 31, 2002 and the
related statements of operations, stockholders' equity, and cash flows for each
of the two years in the period ended October 31, 2002 and cumulative amounts
from inception to October 31, 2002. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brinx Resources Ltd. as of
October 31, 2002 and the results of its operations and its cash flows for each
of the two years in the period ended October 31, 2002 and cumulative amounts
from inception to October 31, 2002 in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, the Company
has incurred losses since inception and has not commenced principal operations.
These factors, among others, raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regard to these matters
are described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ WHEELER WASOFF, P.C.
Wheeler Wasoff, P.C.
Denver, Colorado
December 30, 2002
F-2
<page>
BRINX RESOURCES LTD.
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEET
OCTOBER 31, 2002
<table>
ASSETS
<caption>
<s>
CURRENT ASSETS
Cash $ 28,729
-----------
Total Current Assets 28,729
UNDEVELOPED MINERAL PROPERTY 811
-----------
$ 29,540
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 6,847
-----------
Total Current Liabilities 6,847
-----------
STOCKHOLDERS' EQUITY
Preferred stock - $.01 par value; authorized - 1,000,000 shares
Issued - none -
Common stock - $.001 par value; authorized - 50,000,000 shares
Issued and outstanding - 11,400,000 shares 11,400
Capital in excess of par value 20,000
(Deficit) accumulated during the development stage (8,707)
-----------
22,693
-----------
$ 29,540
===========
</table>
The accompanying notes are an integral part of these financial statements.
F-3
<page>
BRINX RESOURCES LTD.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS
<table>
<caption>
CUMULATIVE
AMOUNTS FROM
YEARS ENDED INCEPTION TO
OCTOBER 31, OCTOBER 31,
2001 2002 2002
<s> <c> <c> <c>
REVENUES $ - $ - $ -
------------ ------------ -------------
OPERATING EXPENSES
General and administrative 1,400 7,307 8,707
------------ ------------ -------------
NET (LOSS) $ (1,400) $ (7,307) $ (8.707)
============ ============ =============
NET (LOSS) PER COMMON SHARE
BASIC AND DILUTED $ (.0001) $ (.0006) $ (.0008)
============ ============ =============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
BASIC AND DILUTED 11,400,000 11,400,000 11,400,000
============ ============ =============
</table>
The accompanying notes are an integral part of these financial statements.
F-4
<page>
BRINX RESOURCES LTD.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED OCTOBER 31, 2001 AND 2002
<table>
<caption>
(DEFICIT)
ACCUMULATED
CAPITAL IN DURING THE
COMMON STOCK EXCESS OF PAR DEVELOPMENT
SHARES AMOUNT VALUE STAGE
<s>
BALANCE, NOVEMBER 1, 2000 - $ - $ - $ -
Issuance of common stock to
founder/officer for expenses,
valued at $.001 per share 1,400,000 1,400 - -
Net (loss) - - - (1,400)
---------- --------- ------------ ------------
BALANCE, OCTOBER 31, 2001 1,400,000 1,400 - (1,400)
Sale of common stock for cash,
at $.003 per share 10,000,000 10,000 20,000 -
Net (loss) - - - (7,307)
---------- --------- ------------ ------------
BALANCE OCTOBER 31, 2002 11,400,000 $ 11,400 $ 20,000 $ (8,707)
==-======= ========= ============ ============
</table>
The accompanying notes are an integral part of these financial statements.
F-5
<page>
BRINX RESOURCES LTD.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<table>
<caption>
CUMULATIVE
AMOUNTS FROM
YEARS ENDED INCEPTION TO
OCTOBER 31, OCTOBER 31,
2001 2002 2002
<s>
CASH FLOWS FROM OPERATING ACTIVITES
Net (loss) $ (1,400) $ (7,307) $ (8,707)
Adjustment to reconcile net (loss) to net cash (used) by
operating activities
Stock issuance for costs and expenses 1,400 - 1,400
Changes in assets and liabilities
Increase in accounts payable and accrued expenses - 6,847 6,847
---------- ---------- ------------
Net cash (used) by operating activities - (460) (460)
---------- ---------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of undeveloped mineral property - (811) (811)
---------- ---------- ------------
Net cash (used) in investing activities - (811) (811)
---------- ---------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock - 30,000 30,000
---------- ---------- ------------
Net cash provided by financing activities - 30,000 30,000
---------- ---------- ------------
NET INCREASE IN CASH - 28,729 28,729
CASH, BEGINNING OF PERIODS - - -
---------- ---------- ------------
CASH, END OF PERIODS $ - $ 28,729 $ 28,729
========== ========== ============
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Stock issued for costs and expenses $ 1,400 $ - $ 1,400
========== ========== ============
</table>
The accompanying notes are an integral part of these financial statements.
F-6
<page>
BRINX RESOURCES LTD.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Brinx Resources Ltd. (the Company) was incorporated under the laws of the
State of Nevada on December 23, 1998, issued its initial common stock in
February 2001, and is considered a development stage company as defined by
Statement of Financial Accounting Standards No. 7 (SFAS 7) and a mining
company in the exploration stage. The Company's principal activities since
inception have been the acquisition of mineral properties, principally in
the State of New Mexico.
UNDEVELOPED MINERAL PROPERTY
Undeveloped mineral property consists of leases on unpatented lode mining
claims located in New Mexico. Mineral exploration costs are expensed as
incurred. When it has been determined that a mineral property can be
economically developed, the costs incurred to develop such property,
including costs to further delineate the ore body and remove overburden to
initially expose the ore body, are capitalized. Such costs and estimated
future development costs are amortized using a unit-of-production basis
over the estimated life of the ore body. Ongoing development expenditures
to maintain production are charged to operations as incurred.
Significant expenditures directly related to the acquisition of exploration
interests are capitalized. If a mineable ore body is discovered, such costs
are amortized using a unit-of-production method. If no mineable ore body is
discovered, such costs are expensed in the period in which it is determined
the property has no future economic value.
IMPAIRMENT OF LONG-LIVED ASSETS
The Company has adopted SFAS 121, "Accounting for the Impairment of
Long-Lived Assets to be Disposed of", which requires that long-lived assets
to be held be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company will assess the recoverability of the carrying
cost of long-lived assets based on a review of projected undiscounted cash
flows related to the asset held for use. If assets are determined to be
impaired, then the asset is written down to its fair value based on the
present value of the discounted cash flows of the related asset or other
relevant measures (quoted market prices or third-party offers).
INCOME TAXES
The Company has adopted the provisions of SFAS 109, "Accounting for Income
Taxes". SFAS 109 requires recognition of deferred tax liabilities and
assets for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method,
deferred tax liabilities and assets are determined based on the difference
between the financial statement and tax basis of assets and liabilities
using enacted tax rates in effect for the year in which the differences are
expected to reverse.
F-7
<page>
BRINX RESOURCES LTD.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
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 reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
(LOSS) PER SHARE
(Loss) per common share is computed based on the weighted average number of
common shares outstanding during the periods. All shares issued from
inception are considered outstanding for all periods presented.
CASH EQUIVALENTS
For purposes of reporting cash flows, the Company considers as cash
equivalents all highly liquid investments with a maturity of three months
or less at the time of purchase. On occasion, the Company may have cash
balances in excess of federally insured amounts.
SHARE BASED COMPENSATION
In October 1995, SFAS 123 "Accounting for Stock-Based Compensation" was
issued. This standard defines a fair value based method of accounting for
an employee stock option or similar equity instrument. This statement gives
entities a choice of recognizing related compensation expense to employees
by adopting the fair value method or to continue to measure compensation
using the intrinsic value approach under Accounting Principles Board (APB)
Opinion No. 25. The Company has elected to utilize APB 25 for measurement;
and will, pursuant to SFAS 123, disclose on a supplemental basis the pro
forma effects on net income and earnings per share of using the fair value
measurement criteria.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 2001, the Financial Accounting Standards Board ("FASB"), issued
SFAS 143, "Accounting for Asset Retirement Obligations." SFAS 143 addresses
financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset
retirement costs. SFAS 143 generally requires obligations associated with
asset retirements to be recognized earlier and displayed as liabilities
rather than as contra-assets. The pronouncement is effective for financial
statements issued for fiscal years beginning after June 15, 2002.
Management does not believe that the adoption of SFAS 143 will have any
impact on its financial position or results of operations.
F-8
<page>
BRINX RESOURCES LTD.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In August 2001, FASB issued SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS 144 addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. SFAS 144
establishes a single accounting model for long-lived assets to be disposed
of by sale. The pronouncement is effective for financial statements issued
for fiscal years beginning after December 15, 2001. Management does not
believe that the adoption of SFAS 144 will have any impact on its financial
position or results of operations.
In June 2002, FASB issued SFAS 146, "Accounting for Costs Associated with
Exit or Disposal Activities." SFAS 146 addresses financial accounting and
reporting for costs associated with exit or disposal activities and
nullifies Emerging Issues Task Force Issue No. 94-3, "Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an
Activity." SFAS 146 generally requires a liability for a cost associated
with an exit or disposal activity to be recognized and measured initially
at its fair value in the period in which the liability is incurred. The
pronouncement is effective for exit or disposal activities initiated after
December 31, 2002. Management does not believe that the adoption of SFAS
146 will have any impact on its financial position or results of
operations.
FAIR VALUE
The carrying amount reported in the balance sheet for cash and accounts
payable and accrued expenses approximates fair value because of the
immediate or short-term maturity of these financial instruments.
CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Company to
concentrations of credit risk consist of cash. The Company maintains cash
at one financial institution. The Company periodically evaluates the credit
worthiness of financial institutions, and maintains cash accounts only in
large high quality financial institutions, thereby minimizing exposure for
deposits in excess of federally insured amounts. The Company believes that
credit risk associated with cash is remote.
COMPREHENSIVE INCOME
There are no adjustments necessary to net (loss) as presented in the
accompanying statements of operations to derive comprehensive income in
accordance with SFAS 130, "Reporting Comprehensive Income."
F-9
<page>
BRINX RESOURCES LTD.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the basis of
accounting principles applicable to a going concern, which contemplates the
realization of assets and extinguishment of liabilities in the normal
course of business. As shown in the accompanying balance sheet the Company
has accumulated a deficit of $8,707 through October 31, 2002. As of October
31, 2002, the Company has not commenced principal operations. These factors
among others, may indicate that the Company may be unable to continue in
existence. The Company's financial statements do not include any
adjustments related to the realization of the carrying value of assets or
the amounts and classification of liabilities that might be necessary
should the Company be unable to continue in existence. The Company's
ability to establish itself as a going concern is dependent upon its
ability to obtain additional financing, in order to commence exploration
activities on its mining property and ultimately, to achieve profitable
operations. Management believes that they can be successful in obtaining
equity financing which will enable the Company to continue in existence and
establish itself as a going concern.
NOTE 3 - UNDEVELOPED MINERAL PROPERTY
The Company has acquired eight unpatented lode mining claims from an
unrelated party for $811, and must perform annual assessment work of $100
for each claim.
No exploration efforts have been conducted on the Company's mineral
properties and, accordingly, the ultimate recovery of the Company's
investment in mineral properties is dependent upon the discovery of
commercially profitable ore reserves through future exploration efforts and
the subsequent development or sale of such reserves.
NOTE 4 - COMMON STOCK
In February 2001, the Company issued 1,400,000 shares of its common stock,
valued at $1,400 ($.001 per share), to its founder for costs and expenses
incurred in conjunction with the organization of the Company.
In September 2002, the Company sold 10,000,000 shares of its common stock
for cash consideration of $30,000 ($.003 per share), to a relative of the
founder of the Company.
NOTE 5 - RELATED PARTY TRANSACTIONS
Accounts payable at October 31, 2002 includes $3,617 due to a related
entity for administrative services performed on behalf of the Company.
F-10
<page>
BRINX RESOURCES LTD.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - INCOME TAXES
At October 31, 2002, the Company had a net operating loss carryforward of
approximately $8,700 that may be offset against future taxable income
through 2022. These carryforwards are subject to review by the Internal
Revenue Service.
The Company has fully reserved the $1,300 tax benefit of operating loss
carryforwards, by a valuation allowance of the same amount, because the
likelihood of realization of the tax benefit cannot be determined. Of the
total tax benefit, $1,100 is attributable to 2002.
Temporary differences between the time of reporting certain items for
financial and tax reporting purposes consists primarily of exploration
costs on undeveloped mineral properties.
NOTE 7 - SEGMENT REPORTING
In June 1997, SFAS 131, "Disclosure about Segments of an Enterprise and
Related Information," was issued. Operating segments, as defined in the
pronouncement, are components of an enterprise about which separate
financial information is available and that are evaluated regularly by the
Company in deciding how to allocate resources and in assessing performance.
The financial information is required to be reported on the basis that is
used internally for evaluating segment performance and deciding how to
allocate resources to segments.
As of October 31, 2002, the Company had one operating segment, mineral
exploration and development.
F-11
<page>
[OUTSIDE BACK COVER PAGE]
No dealer, salesman or any other person has been authorized to give any
quotation or to make any representations in connection with the offering
described herein, other than those contained in this prospectus. If given or
made, such other information or representation, must not be relied upon as
having been authorized by Brinx Resources Ltd. or by any underwriter. This
prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy any securities offered hereby in any jurisdiction to any person to whom
it is unlawful to make such an offer or solicitation in such jurisdiction.
DEALER PROSPECTUS DELIVERY OBLIGATION
Until ____________________________ (90th day after the later of (1) the
effective date of the registration statement or (2) the first date on which the
securities are offered publicly), 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 dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
<page>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 78.7502 of the Nevada Revised Statutes and Article VI of our
Articles of Incorporation permit us to indemnify our officers and directors and
certain other persons against expenses in defense of a suit to which they are
parties by reason of such office, so long as the persons conducted themselves in
good faith and the persons reasonably believed that their conduct was in our
best interests or not opposed to our best interests and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. See our Articles of Incorporation filed as Exhibit 2.1 to this
registration statement. Indemnification is not permitted in connection with a
proceeding by us or in our right in which the officer or director was adjudged
liable to us or in connection with any other proceeding charging that the
officer or director derived an improper personal benefit, whether or not
involving action in an official capacity.
ITEM 2. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses to be paid by us in connection with the securities being
registered are as follows:
AMOUNT
Securities and Exchange Commission Registration Fee........... $ 2
Accounting Fees and Expenses..................................
Blue Sky Fees and Expenses....................................
Legal Fees and Expenses.......................................
Transfer Agent and Registrar Fees and Expenses................
Printing Expenses.............................................
Miscellaneous Expenses........................................
---------------
Total................................................. $ 10,000*
- --------------
*Estimated amount
ITEM 3. UNDERTAKINGS.
Brinx Resources Ltd. hereby undertakes to:
1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
i) Include any prospectus required by section 10(a)(3) of
the Securities Act; and
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
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)) if, in
the aggregate, the changes in 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; and
iii) Include any additional or changed material information
on the plan of distribution.
II-1
<page>
2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 a director,
officer or controlling person of Brinx Resources in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, we will,
unless in the opinion of our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
ITEM 4. UNREGISTERED SECURITIES ISSUED OR SOLD WITHIN ONE YEAR.
Since December 2001, Brinx Resources Ltd. sold 10,000,000 shares of its
common stock in September 2002 to Marc Cabianca for cash consideration of
$30,000. Brinx Resources Ltd. relied upon the exemption from registration
contained in Section 4(2) of the Securities Act of 1933. Mr. Cabianca was deemed
to be sophisticated with regard in an investment in the registrant. No
underwriters were used.
ITEM 5. INDEX TO EXHIBITS.
REGULATION S-B EXHIBIT CONSECUTIVE
NUMBER PAGE NUMBER
2.1 Articles of Incorporation, as amended 33
2.2 Bylaws 39
10.1 Consent of Dill Dill Carr Stonbraker & Hutchings,
P.C. (incorporated by reference to Exhibit 11.1)
10.2 Consent of Wheeler Wasoff, P.C. 57
11.1 Opinion Regarding Legality 59
ITEM 6. DESCRIPTION OF EXHIBITS.
See Item 5 above.
II-2
<page>
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 of filing on Form SB-1 and authorized this registration
statement to be signed on its behalf by the undersigned, in the city of
Vancouver, province of British Columbia, on January 8, 2003.
BRINX RESOURCES LTD.
By: /s/ KENNETH A. CABIANCA
---------------------------------------
Kenneth A. Cabianca, President
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
President, Secretary, Treasurer
and director (principal executive,
/s/ KENNETH A. CABIANCA financial and accounting officer) January 8, 2003
- ------------------------- ---------------
Kenneth A. Cabianca
II-3