SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Amendment No. 2 to
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest reported): March 19, 2004
West Africa Gold, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Wyoming
(State or Other Jurisdiction of Incorporation)
0-24262 91-1363905
(Commission File Number) (IRS Employer Identification No.)
245 Park Avenue, 39th Floor, New York, 10167.
(Address of Principal Executive Offices) (Zip Code)
(212) 672 1878
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
.
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. Changes in Control of Registrant
On January 7, 2004 (the "Effective Date"), pursuant to a Stock Purchase
Agreement between Adven, Inc. ("Adven, Inc." or the "Company" ), a Wyoming
corporation and all of the shareholders of Barnard Castle Limited ("Barnard"),
Valley Forge Site Limited ("Valley Forge") and Steinbeck Limited ("Steinbeck")
(collectively the shareholders of these entities will be referred to as the
"Shareholders"), West Africa Gold acquired all of the shares of Barnard, Valley
Forge and Steinbeck from the Shareholders in consideration for the issuance of a
total of 200,000,640 shares of West Africa Gold to the Shareholders. Pursuant to
the Agreement, Barnard, Valley Forge and Steinbeck became wholly owned
subsidiaries of the Company and the company filed a Certificate of Amendment
in the State of Wyoming changing its name to West Africa Gold, Inc.
Pursuant to the terms of the Agreement, Henri Hornby and Sheila Ledrew resigned
as the directors of the Company and Richard Mark Axtell was appointed to the
Board of Directors. In addition, Henri Hornby resigned as President, Chief
Executive Officer and Chief Financial Officer of the Company, Sheila Ledrew
resigned as Secretary of the Company and Richard Axtell was appointed as
President, Chief Executive Officer, Chief Financial Officer and Secretary of the
Company.
The Acquisition was approved by the unanimous consent of the Board of Directors
of the Company and by unanimous consent of the Shareholders on January 7, 2004.
The following table sets forth information regarding the beneficial ownership of
the shares of the Common Stock (the only class of shares previously issued by
the Company) at March 30, 2004, by (i) each person known by the Company to be
the beneficial owner of more than five percent (5%) of the Company's outstanding
shares of Common Stock, (ii) each director of the Company, (iii) the executive
officers of the Company, and (iv) by all directors and executive officers of the
Company as a group, prior to and upon completion of this Offering. Each person
named in the table, has sole voting and investment power with respect to all
shares shown as beneficially owned by such person and can be contacted at the
address of the Company.
NAME OF SHARES OF PERCENT
TITLE OF CLASS BENEFICIAL OWNER COMMON STOCK OF CLASS
Common Richard Axtell (1) 0 0
President, CEO,
CFO and Director
Common Hanover Capital Group plc 56,951,392 28.18%
Common Roseau Enterprises Limited 15,000,064 7.42%
Common Europacific Consulting plc 14,000,064 6.92%
DIRECTORS AND 0 0
OFFICERS AS A GROUP
2
(1) Mr. Richard Axtell, the sole Officer and Director of the Company, does not
directly own any shares of the Company. However, Mr. Axtell is a Director of
Hanover Capital Group plc which owns 56,951,392 shares of the Company.
The following is a biographical summary of the directors and officers of the
Company:
RICHARD MARK AXTELL, 40, has been President, Chief Executive Officer, Chief
Financial Officer, Secretary and Director of the Company since January 7, 2004.
Mr. Axtell is a change management professional with over 17 years experience in
the development and implementation of strategic plans. From 2000 - 2003, Mr.
Axtell was the General Manager of Regus PLC where he reported to the group CEO
and assumed a senior "trouble shooting" position with responsibility for the
groups most challenged markets. In the first year he was based in Eastern Europe
with Managing Director responsibilities for this long term problem region and
the targeted turn-round expectation was 12 months. In the second year he was
brought into London to protect and grow the groups most (revenue and EBIT)
valuable business during the hardening of the B2B markets.
From 1997 - 2000, he was the Chief Executive Officer of Essential Beverage
Holdings Limited. Mr. Axtell was based in South Africa where he was brought in
to control group holdings board. Appointed to achieve business growth through
logical restructure program and turned organization into a public listed company
and raising capital to fund future expansion programs.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Pursuant to the Agreement, the Company acquired one hundred percent (100%) of
the issued and outstanding shares of common stock of Barnard. Valley Forge and
Steinbeck for 200,000,640 shares of common stock of the Company. Pursuant to the
Agreement, Barnard, Valley Forge and Steinbeck became wholly owned subsidiaries
of the Company. Barnard, Valley Forge and Steinbeck control, in the aggregate,
seventy (70%) percent of Toubikoto, Manianguiti, In Darset, Anefis and Touban,
being the gold mining prospects in Mali. Through this Agreement the Company
acquired certain rights to prospect for minerals in certain concession areas in
the Republic of Mali. Five projects are considered, namely Toubikoto (Gold),
Manianguinti (Gold), In Darset (Gold, Base Metals), Anefis (Gold, Base Metals)
and Touban (Nickel, Copper, pge's). The five projects are in three areas, viz.,
south-west, north and south-east of Mali. As such, the five projects are
presently at different levels of prospectivity and all require additional work
to prove their defined resource base.
In Mali, the Company will have gold potential producing areas with the three
gold projects. There is an extensive exploration ground and an encouraging base
metals deposit with significant gold and silver by-products and a nickel and PGE
exploration project that may yield results at depth.
3
Of the three gold projects, the In Darset project has a Proven Reserve; however,
the Probable and Measured Reserve base is substantial. The other two projects
lack a Reserve base at present, but have a large Resource base in areas
adjoining known large gold prospects / potential mines. Subsequently, this gives
a high degree of confidence.
The group's business plan is based on the exploration of the resources defined
or inferred on five viable targets. The Anefis project is in all probability a
viable gold and base metals project. The In Darset project is also thought to
have a good chance of succeeding. The two other gold projects, viz., Toubikoto
and Manianguinti are located in the centre of activity near the Segala gold
deposit, with the latter project being more favored because of the greater scope
of previous work done there. The Mali mining code is administered by the DNGM
(Direction Nationale de la Geologie et des Mines) or National Directorate of
Geology and Mines under the Ministry of Mines, Energy and Hydrology.
The Toubikoto and Manianguinti projects
These two projects in the same area in the Kenieba region in western Mali, and
in the vicinity of the more famous Segala and Tabakoto permits, and some 15
kilometres north of the government administrative centre of Kenieba, can be
considered together, even though they are separate concessions (permits).
Kenieba is accessible by the laterite air strip from Bamako 360 kilometres to
the south-east, and by road; access from the rail terminal Kayes on the Dakar,
Senegal to Bamako railroad is by good 60 kilometre road to the Sadiola mine and
a further 140 kilometres of four-wheel drive road, that is tricky in the rainy
season.
The Toubikoto Authorisation to Explore has been issued on November 6, 1996 under
the number 1031/DNGM. It is on the process of being transformed into an
exploration permit. The Manianguinti Authorisation to Explore has been issued on
November 6, 1996 under the number 1030/DNGM.
The permit areas actually adjoin each other for some 1 000 metres to the south
of Toubikoto and north of Manianguinti. To the west of Toubikoto is the Segala
permit and to its south and west of Manianguinti are the Keita (also known as
Dar Salam) permits, whereas to the south of both Dar Salam and Manianguinti is
the Tabakoto permit.
The deposits in the permit areas are essentially similar to Segala and Nevsun's
Tabakoto prospect and together with the Medinandi permit further south are
structurally controlled by the same north-east - south-west shear zone within
both brittle and competent units, such as feldspar porphyries, silicified
metasediments and small granitic or gabbroic intrusions.
The Segala and Dar Salam permits are underlain by the highly gold-prospective
Dalema series of metasediments. This series forms the eastern margin of the most
southerly major greenstone belt within the Kenieba or Kedougou-Kenieba Inlier,
which is a window through younger cover rocks to the Lower Proterozoic Birimian
volcano-sedimentary system. Late post-tectonic dioritic and kimberlitic dykes
and diatremes intrude all the rocks in the area that is also traversed by
numerous north-east - south-west striking shear structures that together make up
the major Mali-Senegal fault or deformation zone.
4
The initial drilling targets were defined by simply following the artisanal
(orpaillage) mining sites running from Segala north into Toubikoto and
southwards into the northern part of the Manianguinti prospects with sporadic
grab sampling of the artisanal workings and the rejected material from their
operations. It was noted that as the artisanals only recover the free gold and
the deposits are about 50 % free gold, they reject a large proportion of the
gold that is locked up in the sulphides, mostly pyrite and arsenopyrite.
The exploration plan here is first of all to re-map and check all outcrops in
relation to a structural model obtained from air-photo and satellite imagery
interpretation. This should be followed by geophysical surveys, with airborne
magnetic and electromagnetic survey, if available and / or ground geophysics,
including the two areas and a gravimetric survey of the target areas and the
surrounding area.
These investigations could give a clearer picture of stratigraphic pile and the
structural controls of the geochemical inferred mineralization and outline the
drilling targets. Core drilling will then follow with several essentially
stratigraphic drill holes on the re-defined targets and further exploration will
be success-driven, based on the continuing geological and structural
interpretations afforded by the drilling results.
It is expected that the Toubikoto and Manianguinti projects can prove reserves
of the order of magnitude and grade, etc. as those in the Nevsun Resources'
Tabakoto Project in the vicinity. For this, the proposed prospecting operation
detailed in this report will allocate funds and resources for extensive
geophysical and geochemical work on the properties to be followed by drilling
and comprehensive sampling, analysis and metallurgical testing of the defined
ore bodies for inclusion in a complete feasibility study.
The In Darset and Anefis projects
The two projects of the Taghlit S.A. exploration or research permits (Permis de
Recherche) are located in the north of the country, a relatively short distance
form the Algerian border and the In Darset permit includes the larger resource
and the best grade identified in the group's projects.
They are located in the Adrar des Iforas on the western side of the Trans-Sahara
highway which connects Oran, Algeria on the Mediterranean coast with Gao on the
Niger River to the south. This portion of the highway is symbolically marked
with kilometre posts, but often degenerates into a series of parallel tracks.
The 1,175-kilometre road from Bamako to Gao on the Niger River is paved and
there are twice-daily ferries across the river to the north bank for vehicles of
all sizes up to full-sized tractor trailers.
The Anefis permit is some 350 kilometres north of Gao, along the Tilemsi valley
of the Trans-Sahara and In Darset lies 50 kilometres beyond it. The region lies
in the `Kidal Cercle' or special development region centred on the town of
Kidal, located some 150 kilometres south of the Aguel'hoc junction between the
two permits. The only other village in the area is Tessalit in the north of the
In Darset permit, near the Algerian border.
5
The regional geology has been discussed as part of the general geology of
northern Mali in 2.3 above. The Adrar area is underlain by the Tuareg Shield
with Early and Late Proterozoic volcano-sedimentary rocks draped over it as an
antiform with locally developed Pan-African conglomerates.
The permit areas are largely underlain by metamorphosed Late Proterozoic
volcano-sedimentary rocks that have been intruded by lesser large-scale syn- to
post-tectonic granitoids and smaller gabbroic bodies. The two permit areas are
underlain by greywacke schists and supposed marine-laid tillites and In Darset
has a single basin of Pan-African conglomerates surrounding an anorogenic
alkaline complex. The areas are located over a major structural `suture zone'
expressed by a major gravimetric low.
The In Darset permit has been issued on September 8th, 1999 under the number PR
96/66. The Anefis permit has been issued on September 8th, 1999 under the number
PR 96/67. The depository of all historical exploration data is the DNGM
(Direction Nationale de la Geologie et des Mines) in Bamako. There are some
difficulties in accessing the material in the archives and some of the reports,
maps, etc. are missing, so that some serious assistance is required here. In
addition to the DNGM archives, there is additional data reportedly also archived
in the BRGM (Bureau de Recherches Geologiques et Minieres) and the CGG (Centre
de Geologie et Geophysique en Montpellier) in France and the United Nations
Revolving Fund for Natural Resources Exploration in New York, USA. Most useful
is the DNGM `Plan Mineral' of 1978.
A preliminary phase will consist of an exhaustive literature search of the
sparse data, acquisition and study of the available satellite imagery, possible
air-photo interpretation, with field geological mapping and regional-scale
geological and structural interpretation. It is proposed to follow this work
from the permit areas to the possible extensions of the Algerian occurrences to
the east. The fieldwork will form the basis of the planning for additional
geophysical work, with a possible airborne geophysical survey.
This initial phase is expected to provide a sophisticated level of
geological-structural interpretation and aid in the selecting and refining of
target areas. A starting point will then be the previous sampling and trenching,
following up on both the French and the SONAREM Soviet-advised programmes.
The proposed country office at Bamako will provide backup to a regional
dispatching centre to be set up at Gao, which is 500 nautical miles or 950
kilometres, two hours, by air from Bamako, with a good airstrip, but a few days
by car. Facilities at Kidal are not known at this stage. Field accommodation
will be sought at Tessalit which has a good source of drinking water, is
conveniently located between the two permits and has some interesting gold
values in its own permit area.
6
The operation on the western side of the Adrar des Iforas would also allow the
investigation and exploration of possible extensions of the Algerian
Tirek-Amesmessa deposits into the Mali side of the eastern Adrar. After all, all
the Mali `discoveries' above lie alongside the Trans-Sahara highway.
The Touban Copper-Nickel and Platinum Project
The Kadiolo-Touban area is in south-eastern Mali, near the border with the Ivory
Coast and Burkina Faso (former Upper Volta). The regional centre Kadiolo is some
300 kilometres due south of the Mali capital Bamako (some 400 kilometres by
road) and some 75 kilometres by road south of Sikasso on the main Bamako -
Burkina Faso road. The Touban permit has been issued on July 1st, 2002 the
number PR 2002/158. The concession area the village of Touban and the
copper-nickel and platinum anomaly lies on a small hill immediately to the east
and south-east of the village. The principal anomaly is contained on this hill
with elongated north-north-west - south-south-east axis and measuring some 2000
by 600 metres.
The geology of the area has been reported from various sources, following the
geological reports on the geochemical sampling, drilling and analysis undertaken
by the Mali BRGM (Bureau of Geological and Mining Research) under the Direction
National de la Geologie et Mines undertaken from the 1970's. This followed from
an extensive petrographic study of the samples obtained and detailed Atomic
Absorption Spectrophotometry geochemical analysis of prepared sections from the
boreholes and samples.
The Touban hill is an intrusive basic-ultra basic elongated plug-like body that
contains two petrographically distinct facies, an ultra basic peridotitic-type
partly serpentinised facies and a gabbroic facies with little mineral
alteration. The petrographic and geochemistry studies indicate that the Touban
intrusive is differentiated from komatiite magma with similar mineralogy and
geochemical characteristics of other known stratified basic-ultra basic bodies
with massive sulphide mineral association. This factor is significant from the
point of view of the mineral economic potential of the body.
The proposed work will consist of various phases to confirm the nickel and
platinum potential of the Touban body and to drill a number of deep holes into
the body to uncover a possible massive sulphide deposit at depth with economic
nickel and / or platinum values.
The first stages will set up a grid on the ground followed by a field mapping
and geochemical and geophysical surveys, including a detailed magnetometer and
possibly a gravimetric survey. This will be immediately followed by further
mapping and field investigations of any possible further anomalies uncovered and
the interpretation of the structure and attitude of the body. A simple sample
handling laboratory can be set up on or near the site for sizing and undertake
simple preliminary geochemical assays of elements such as chrome and to send
selected prepared samples for detailed analysis. Petrographic studies and
further geochemical analysis and research will be done on core samples from the
new boreholes.
7
Following this preliminary study, one or possibly two 600 metre boreholes will
be drilled in the best position in the body most likely to intercept the deepest
part of the basic-ultra basic body, in order to maximise the possible
intersection of a massive sulphide body and establish its attitude and relative
structure within the Touban plug-like body. The structure analysis of the
results obtained will be used to drill further boreholes to identify further
targets within the Touban body.
The success or failure of this borehole will then dictate either the abandonment
or continuation of the project as a potential PGE prospect; the nickel anomalies
will also be further studied, leading to a possible full feasibility study of
the area as a nickel producer.
Item 7.
(a) Financial statements of businesses acquired.
Audited Financial Statements of the Company are filed with this
amendment No. 2 on Form 8K.
(b) Pro forma financial information.
Pro forma Financial Statements have been filed with this amendment No.
2, on Form 8K.
(c) Exhibits
Number Exhibit
2.1 Stock Purchase Agreement.
(1) Filed on January 21, 2004 (SEC File no. 000-24262)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
WEST AFRICA GOLD INC.
By:/s/ Richard Mark Axtell
--------------------------
Richard Mark Axtell
President
March 30, 2004
8
ADVEN, INC.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
DECEMBER 31, 2003
WITH
INDEPENDENT AUDITORS' REPORT OF
CERTIFIED PUBLIC ACCOUNTANTS
TABLE OF CONTENTS
Independent Auditors' Report..................................................2
Balance Sheet.................................................................3
Statements of Income (Operations) and Other Comprehensive Income (Loss).......4
Statements of Changes in Stockholders' Deficit................................5
Statements of Cash Flows......................................................6
Notes to Financial Statements.................................................7
MARK BAILEY & COMPANY, LTD.
Certified Public Accountants
Management Consultants
Office Address: Mailing Address:
1495 Ridgeview Drive, Ste. 200 Phone: 775/332.4200 P.O. Box 6060
Reno, Nevada 89509-6634 Fax: 775/332.4210 Reno, Nevada 89513
Independent Auditors' Report
March 17, 2004
Board of Directors
Adven, Inc.
We have audited the accompanying balance sheet of Adven, Inc., as of
December 31, 2003, and the related statements of income and other
comprehensive income (loss), changes in stockholders' deficit, and cash
flows for the years ended December 31, 2003, and 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 audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Adven, Inc.
as of December 31, 2003, and the results of its operations and its cash
flows for the years ended December 31, 2003, and 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 described in Note 1 to
the financial statements, the Company has no operations, and existing
cash and available credit are insufficient to fund the Company's cash
flow needs for the next year. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in
Note 1. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Mark Bailey & Company, Ltd.
Reno, Nevada
2
ADVEN, INC.
Balance Sheet
ASSETS
2003
-----------------
Cash $ 6,575
-----------------
Total current assets 6,575
-----------------
Other Assets
Investments 33
Deferred tax asset (net of valuation allowance of
$390,146) -
-----------------
Total other assets 33
-----------------
Fixed Assets
Computer equipment 2,390
Accumulated depreciation (1,977)
-----------------
Total fixed assets 413
-----------------
Total assets $ 7,021
=================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 1,401
Related party advance 10,970
-----------------
Total current liabilities 12,371
-----------------
Commitment and Contingencies
Stockholders' Deficit
Common stock, $.0001 par value,
1,357,267 shares issued and outstanding 136
Additional paid-in-capital 1,206,141
Accumulated deficit (1,211,627)
-----------------
Total stockholders' deficit (5,350)
-----------------
Total liabilities and stockholders' deficit $ 7,021
=================
The Accompanying Notes are an Integral Part of the Financial Statements
3
ADVEN, INC.
Statements of Income (Operations) and
Other Comprehensive Income (Loss
For the Years Ended
December 31, December 31,
2003 2002
--------------- ---------------
Revenue $ - $ -
General and administrative expenses (6,100) (3,686)
Legal and accounting expense (7,254) (4,300)
Depreciation expense (275) (459)
--------------- ---------------
Loss from operations (13,629) (8,445)
Loss on impairment of investment - (397,490)
Gain on extinguishment of debt 16,332 -
--------------- ---------------
Net income (loss) before interest expense and income taxes 2,703 (405,935)
Interest expense (970) (989)
--------------- ---------------
Net income (loss) before income taxes 1,733 (406,924)
Provision for income taxes - -
--------------- ---------------
Net income (loss) $ 1,733 $(406,924)
=============== ===============
Earnings (loss) per share: $ 0.00 $ (0.41)
=============== ===============
Weighted average of basic and diluted common shares 1,173,934 990,942
=============== ===============
Comprehensive income (loss):
Net income (loss) $ 1,733 $(406,924)
Plus: Reclassification adjustment for losses included in net income - 397,420
--------------- ---------------
Comprehensive income (loss) $ 1,733 $ (9,504)
=============== ===============
The Accompanying Notes are an Integral Part of the Financial Statements
4
ADVEN, INC.
Statements of Changes in Stockholders' Deficit
Additional Other
Common Stock Paid-in Retained Comprehensive Total
Shares Amount Capital Deficit Deficit Equity
-------------------------------------------------------------------------------------
Balance at December 31, 2001 491,967 $ 49 $ 1,171,963 $ (806,436) $ (397,420) $(31,844)
Shares issued in April 2002 for
shareholder advances 665,300 67 33,198 - - 33,265
Reclassification adjustment for losses
included in other comprehensive loss 397,420 397,420
Net income for the year ended
December 31, 2002 (406,924) - (406,924)
-------------------------------------------------------------------------------------
Balance at December 31, 2002 1,157,267 116 1,205,161 (1,213,360) - (8,083)
Shares issued in December 2003 for
shareholder advances and services 200,000 20 980 - - 1,000
Net income at year ended
December 31, 2003 1,733 - 1,733
-------------------------------------------------------------------------------------
Balance at December 31, 2003 1,357,267 $ 136 $ 1,206,141 $(1,211,627) - $ (5,350)
=====================================================================================
The Accompanying Notes are an Integral Part of the Financial Statements
5
ADVEN, INC.
Statements of Cash Flows
2003 2002
Cash Flows from Operating Activities
Net income (loss) $ 1,733 $ (406,924)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation expense 275 459
Gain on extinguishment of debt (16,332) -
Shares issued for services 500 -
Increase (decrease) in accounts payable (450) 1,092
Decrease in prepaid legal fees 211 -
Increase (decrease) in accrued interest 970 989
Impairment of investment - 397,490
---------------- ----------------
Net cash provided by (used in) operating activities (13,093) (6,894)
---------------- ----------------
Cash Flows from Financing Activities
Proceeds from shareholder advance 8,010 7,515
Proceeds from related party advance 10,970 -
---------------- ----------------
Net cash provided by financing activities 18,980 7,515
---------------- ----------------
Net increase in cash and cash equivalents 5,887 621
Cash and cash equivalents at December 31, 2002, and 2001 688 67
---------------- ----------------
Cash and cash equivalents at December 31, 2003, and 2002 $ 6,575 $ 688
================ ================
The Accompanying Notes are an Integral Part of the Financial Statements
Supplemental Information and Noncash Transactions
During the years ended December 31, 2003, and 2002, $1,307 and $4,446 were paid
for interest, respectively, and no amounts were paid for income taxes.
In December 2003, the Company issued 100,000 common shares for payment of
services valued at $500. The shares were issued at a fair value of $0.005 per
share.
Also in December 2003, the Company issued 100,000 common shares for relief of
$500 of shareholder advances from the President. The shares were issued at a
fair value of $0.005 per share.
In April 2002, the Company issued 665,300 common shares to the President of the
company for payment of advances and accrued interest of $33,265. The shares were
issued at a fair value of $0.0005 per share.
6
ADVEN, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
1. Organization and Significant Accounting Policies
The Company was incorporated in the State of Washington in August 1986.
In 2003 the state of the Company's domicile was changed to Wyoming. The
Company has no operations at this time.
These financial statements have been prepared assuming that the Company
will continue as a going concern. The Company has sustained recurring
losses over the past years and currently has no source of operating
income. The Company's cash flow and existing credit are insufficient to
fund the Company's cash flow needs based on the expenses expected to be
incurred during the next year. In January 2004, the Company merged with
three foreign companies, and planned to enter the mining industry.
The preparation of the financial statements in conformity with
generally accepted accounting standards requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three
months or less to be cash equivalents. The Company had no cash
equivalents as of December 31, 2003.
Fixed Assets
Depreciation expense is recorded using an accelerated method of
depreciation.
Loss Per Share
Net loss per share is provided in accordance with Statement of
Financial Accounting Standard (SFAS) No. 128 "Earnings Per Share".
Basic loss per share for each period is computed by dividing net loss
by the weighted average number of shares of common stock outstanding
during the period. Diluted loss per share reflects per share amounts
that would have resulted if dilutive common stock equivalents had been
converted to common stock. As of December 31, 2003, the Company had no
dilutive common stock equivalents such as stock options.
7
Revenue Recognition
In 2000 the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) 101, "Revenue Recognition in Financial Statements."
Pursuant to SAB 101 and the relevant generally accepted accounting
principles, the Company will recognize revenue upon the passage of
title, ownership and the risk of loss to the customer. During the
period ended December 31, 2003, there was no revenue.
New Accounting Pronouncements
In April 2003 the Financial Accounting Standards Board (FASB) issued
SFAS 149 "Amendment of Statement 133 on Derivative Instruments and
Hedging Activities." This statement, which amends and clarifies
existing accounting pronouncements, addresses financial accounting and
reporting for derivative or other hybrid instruments. This Statement
requires that contracts with comparable characteristics be accounted
for similarly. It is effective for contracts entered into or modified
after September 30, 2003. The Company does not expect the adoption of
SFAS 149 to have any impact on the financial statements.
In May 2003 the FASB issued SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity," which
is effective at the beginning of the first interim period beginning
after March 15, 2003. This statement establishes standards for the
Company's classification of liabilities in the financial statements
that have characteristics of both liabilities and equity. The Company
believes the adoption of SFAS 150 will have no effect on the Company's
financial position or results of operations.
In December 2003 the FASB issued SFAS 132R, "Employers' Disclosures
about Pensions and Other Postretirement Benefits--an amendment of SFAS
87, 88, and 106". This Statement revises employers' disclosures about
pension plans and other postretirement benefit plans. It does not
change the measurement or recognition of those plans required by SFAS
87, "Employers' Accounting for Pensions, SFAS 88, Employers' Accounting
for Settlements and Curtailments of Defined Benefit Pension Plans and
for
8
Termination Benefits, and SFAS 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions". This Statement retains
the disclosure requirements contained in SFAS 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits", which it
replaces. It requires additional disclosures to those in the original
Statement 132 about the assets, obligations, cash flows, and net
periodic benefit cost of defined benefit pension plans and other
defined benefit postretirement plans. The required information is
required to be provided separately for pension plans and for other
postretirement benefit plans. The Company has no Pension or Other
Postretirement Benefits.
2. Investment
According to SFAS 115 "Accounting for Certain Investments in Debt and
Equity Securities," all applicable equity securities should be
classified as either trading or available for sale. The Company
classified the investment in Asconi Corporation, formerly Grand Slam
Treasures, Inc., as available for sale at December 31, 2003. Also
according to SFAS 115, available for sale securities are required to be
reported at fair value, with any unrealized losses included as a part
of other comprehensive income and as a separate component of
stockholders' equity until the losses are realized. If the losses are
"other than temporary," SFAS 115 requires that an impairment loss be
recorded against the asset. The fair market value of the Asconi
Corporation investment at December 31, 2003, was $33. An impairment
loss of $397,490 was recorded in 2002. Of this amount, $397,420 was
reclassified out of accumulated other comprehensive income into
earnings for the year ended December 31, 2002.
3. Common Stock
In December 2003 the Company issued 100,000 common shares to a related
party for payment of $500 of the advances and related interest payable
to the President. The shares were issued at fair value of $0.005 per
share.
Also in December 2003 the Company issued 100,000 common shares to a
related party for payment of services of $500. The shares were issued
at fair value of $0.005 per share.
9
Also in December 2003 the Company changed the number of shares
authorized to an unlimited number of shares of stock without nominal or
par value.
In May 2003 the Company authorized a reverse stock split of 10:1 shares
of its common stock. The company retained the authorized number of
shares at 20,000,000 and the par value of the common stock at $0.0001.
4. Provisions for Income Taxes
The Company recognizes deferred tax liabilities and benefits for the
expected future tax impact of transactions that have been accounted for
differently for book and tax purposes.
Deferred tax benefits and liabilities are calculated using enacted tax
rates in effect for the year in which the differences are expected to
reverse. A valuation allowance has been provided to reduce the asset to
the amount of tax benefit management believes it will realize. As time
passes, management will be able to better assess the amount of tax
benefit it will realize from using the carryforward. Deferred tax
benefits and liabilities are calculated using enacted tax rates in
effect for the year in which the differences are expected to reverse.
The following is a schedule of the composition of the provision for income taxes:
December 31, 2003
-----------------
Deferred noncurrent tax asset $ 390,146
Valuation allowance (390,146)
-----------
Total provision for income taxes $ -0-
=========
Deferred federal income taxes consist of future tax benefits and liabilities attributed to:
December 31, 2003
-----------------
Loss carry forward $ 390,146
Valuation allowance (390,146)
-----------
Net deferred income tax $ -0-
==========
10
The net change in the valuation account at December 31, 2003, was $589.
The Company has available net operating loss carryforwards totaling
approximately $1,147,000, which expire in the years 2019 to 2022.
5. Related Party Transactions
The President of Adven, Inc. advanced the Company funds to pay
expenses. The advance was due upon demand and carried an interest rate
of 8.0% per annum. During 2003, the President forgave a total of
$16,332 of advances and the related interest payable. This resulted in
a $16,332 gain on extinguishment of debt for the Company. The balance
of the advance payable of $500 was relieved via the issuance of 100,000
common shares to related party at $0.005 per share.
In December 2003 the Company issued 100,000 shares of its common stock,
valued at $500 to a director, for service as a director.
6. Fair Value of Financial Instruments
The FASB issued SFAS 107, "Disclosure about Fair Value of Financial
Instruments," as part of a continuing process to improve information on
financial statements. The following methods and assumptions were used
by the Company in estimating its fair value disclosures for such
financial instruments as defined by the Statement.
The carrying amount and the estimated fair value of the investment in
Asconi Corporation at December 31, 2003, were both $33. The estimated
fair value of this investment is based on the quoted market price.
The carrying amounts reported in the balance sheet for the related
party advance at December 31, 2003, approximates fair value because all
balances mature in less than one year.
7. Subsequent Events
On January 7, 2004, the Company purchased 100% of the voting stock of
Barnard Castle Limited, Valley Forge Limited, and Steinbeck Limited
(Barnard, Valley and Steinbeck). Accordingly the results of operations
Barnard, Valley and Steinbeck are presented from that date forward. The
acquisition was made for the purpose of acquiring certain rights to
prospect for minerals in certain concession areas in the Republic of
Mali. The Company changed its name to West Africa Gold, Inc.
The Company issued 200,000,640 shares of its common stock with a par
value of $.0001, for all the outstanding stock of Barnard, Valley and
Steinbeck. As there is no market at this time for the stock of the
Company or Barnard, Valley and Steinbeck, the fair value of the
purchase is the par value of the stock given ($20,000). Barnard, Valley
and Steinbeck have $4,608 in net assets. As a result, the excess of par
value of the stock given over the net assets has been treated as
goodwill.
Purchase price $20,000
Net assets of Barnard, Valley and Steinbeck (4,608)
---------
Resulting goodwill $ 15,392
=========
The following condensed balance sheet shows the fair value of the
assets acquired and the liabilities assumed as of the date of the
acquisition. The pro forma information is based on the assumption that
the acquisition took place as of January 1, 2003.
11
WEST AFRICA GOLD, INC.
PRO FORMA COMBINED BALANCE SHEET - (UNAUDITED)
December 31, 2003
Adven, Valley Forge Steinbeck, Barnard Pro Forma Pro Forma
Inc. Site, LTD. LTD Castle, Ltd Adjustments Combined
Cash $ 6,575 $ - $ - $ - $ - $ 6,575
------------- ----------------- ------------- -------------- ----------------- -------------
Total current assets 6,575 - - - - 6,575
------------- ----------------- ------------- -------------- ----------------- -------------
Other Assets
Investments 33 40,000 40,000 20,000 100,033
Goodwill - - - - 15,392 15,392
Deferred tax asset
(net of valuation allowance
of $390,146) - - - - - -
------------- ----------------- ------------- -------------- ----------------- -------------
Total other assets 33 40,000 40,000 20,000 15,392 115,425
------------- ----------------- ------------- -------------- ----------------- -------------
Fixed Assets
Computer equipment 2,390 - - - - 2,390
Accumulated depreciation (1,977) - - - - (1,977)
------------- ----------------- ------------- -------------- ----------------- -------------
Total fixed assets 413 - - - - 413
------------- ----------------- ------------- --------------------------------------------------
Total assets $ 7,021 $ 40,000 $ 40,000 $ 20,000 $ 15,392 $ 122,413
============= ================= ============= ============== ================= =============
LIABILITIES AND STOCKHOLDERS' EQUITY ( DEFICIT)
Current Liabilities
Accounts payable $ 1,401 $ 38,464 $ 38,464 $ 18,464 $ - $ 96,793
Advance from shareholder 10,970 - - - - 10,970
--------------- ----------------- -------------- -------------- -------------- --------------
Total current liabilities 12,371 38,464 38,464 18,464 - 107,763
---------------- ----------------- -------------- -------------- ------------- --------------
Commitment and Contingencies
Stockholders' Equity (Deficit)
Common stock 136 1,536 1,536 1,536 15,392 20,136
Additional paid-in-capital 1,206,141 - - - - 1,206,141
Retained earnings (deficit) (1,211,627) - - - - (1,211,627)
---------------- ----------------- -------------- -------------- ------------- --------------
Total stockholders' equity
(deficit) (5,350) 1,536 1,536 1,536 15,392 14,650
---------------- ----------------- -------------- -------------- ------------- --------------
Total liabilities and
stockholders' equity
(deficit) $ 7,021 $ 40,000 $ 40,000 $ 20,000 $ 15,392 $ 122,413
============== ================= ============== ============== ============== ===============
See the Accompanying Notes and Accountant's Report
12
WEST AFRICA GOLD, INC.
PRO FORMA STATEMENT OF INCOME - (UNAUDITED)
For the Year Ended December 31, 2003
Adven, Valley Forge Steinbeck Barnard Pro Forma Pro Forma
Inc. Site, Ltd. Ltd. Castle, Ltd. Adjustments Combined
----------- ----------- ----------- --------------- ------------------ -----------------
Revenue $ - $ - $ - $ - $ - $ -
General and administrative expenses (6,100) - - - - (6,100)
Legal and accounting expense (7,254) - - - - (7,254)
Depreciation expense (275) - - - - (275)
----------- ----------- ----------- --------------- ------------------ -----------------
Loss from operations (13,629) - - - - (13,629)
Gain on extinguishment of debt 16,332 - - - - 16,332
Net income before interest expense
and income taxes 2,703 - - - - 2,703
Interest expense (970) - - - - (970)
----------- ----------- ----------- --------------- ------------------ -----------------
Net income before income taxes 1,733 - - - - 1,733
Provision for income taxes - - - - - -
----------- ----------- ----------- --------------- ------------------ -----------------
Net income 1,733 - - - - 1,733
----------- ----------- ----------- --------------- ------------------ -----------------
Earnings per share: $ 0.00 $ 0.09
=========== =================
The Accompanying Notes are an Integral Part of the Financial Statements
13