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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
COMMISSION FILE NUMBER 000-49664
OBAN MINING INC.
(Exact name of registrant as specified in its charter)
NEVADA 88-0467848
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
OBAN MINING INC.
11960 HAMMERSMITH WAY, SUITE 155
RICHMOND, BRITISH COLUMBIA
CANADA V7A 5C9
(Address of principal executive offices)
(604) 275-8994
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ x ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of JUNE 30, 2003: 7,000,000.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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OBAN MINING INC.
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEET
UNAUDITED
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JUNE 30, DECEMBER 31,
2003 2002
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$ $
ASSETS
CURRENT
Cash 49,200 70,810
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TOTAL ASSETS 49,200 70,810
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LIABILITIES
CURRENT
Accounts payable and accrued liabilities 955 2,550
Advances from a related party - 15,927
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TOTAL LIABILITIES 955 18,477
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STOCKHOLDERS' EQUITY
COMMON STOCK
Authorized: 100,000,000 shares, $0.00001 par value
Issued and outstanding: 7,000,000 shares
(December 31, 2002: 7,000,000 shares) 70 70
ADDITIONAL PAID-IN CAPITAL 99,980 99,980
DEFICIT ACCUMULATED DURING THE EXPLORATION STAGE (51,805) (47,717)
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TOTAL STOCKHOLDERS' EQUITY 48,245 52,333
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 49,200 70,810
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SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS
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OBAN MINING INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS
UNAUDITED
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CUMULATIVE
FROM INCEPTION
OF THE
FOR THE DEVELOPMENT
FOR THE THREE SIX STAGE ON
MONTHS MONTHS SEPTEMBER 20,
ENDED ENDED 2000 THROUGH
JUNE 30, JUNE 30, JUNE 30,
2003 2002 2003 2002 2003
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$ $ $ $ $
REVENUE - - - - -
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MINERAL PROPERTY COSTS - - - - 4,092
GENERAL AND ADMINISTRATIVE EXPENSES
Legal fees - - 1,682 3,350 31,178
Audit fees 400 500 905 1,012 7,297
Filing fees 221 155 221 155 1,271
Bank charges - - - 67 181
Office 31 108 55 386 817
Transfer agent 150 164 325 844 1,469
Accounting and administration 450 1,500 900 3,000 5,500
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1,252 2,427 4,088 8,814 51,805
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NET LOSS (1,252) (2,427) (4,088) (8,814) (51,805)
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BASIC LOSS PER SHARE 0.00 0.00 0.00 0.00
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WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING 7,000,000 6,736,264 7,000,000 6,209,167
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SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS
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OBAN MINING INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
UNAUDITED
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FROM INCEPTION (SEPTEMBER 20, 2000) TO JUNE 30, 2003
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DEFICIT
ACCUMULATED TOTAL
ADDITIONAL DURING THE STOCK-
COMMON STOCK PAID-IN EXPLORATION HOLDERS'
SHARES AMOUNT CAPITAL STAGE EQUITY
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$ $ $ $ $
BALANCE, SEPTEMBER 20, 2000 - - - - -
Common stock issued for cash 5,000,000 50 - - 50
Net loss for the period - - - (19,334) (19,334)
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BALANCE, DECEMBER 31, 2000 5,000,000 50 - (19,334) (19,284)
Net loss for the period - (12,777) (12,777)
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BALANCE, DECEMBER 31, 2001 5,000,000 50 - (32,111) (32,061)
Common stock issued for cash 2,000,000 20 99,980 - 100,000
Net loss for the period - - - (15,606) (15,606)
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BALANCE, DECEMBER 31, 2002 7,000,000 70 99,980 (47,717) 52,333
- - - (4,088) (4,088)
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BALANCE, JUNE 30, 2003 7,000,000 70 99,980 51,805 48,245
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SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS
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OBAN MINING INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS
UNAUDITED
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CUMULATIVE FROM
INCEPTION ON
FOR THE SIX MONTHS ENDED SEPTEMBER 20,
JUNE 30, 2000 THROUGH
2003 2002 JUNE 30, 2003
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$ $ $
CASH FLOWS USED IN OPERATING ACTIVITIES
Loss from operations (4,088) (8,814) (51,805)
Cash provided by changes in operating assets and
liabilities
(Decrease) increase in accounts payable (1,595) 820 955
Repayments to a related party (15,927) - -
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Net cash used in operating activities (21,610) (7,994) (50,850)
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CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Issuance of common stock for cash - 100,000 100,050
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Net cash provided by financing activities - 100,000 100,050
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(Decrease) increase in cash (21,610) 92,006 49,200
Cash at beginning of period 70,810 337 -
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CASH AT END OF PERIOD 49,200 92,343 49,200
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SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS
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OBAN MINING INC.
(AN EXPLORATION STATE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
UNAUDITED
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NOTE 1 - BASIS OF PRESENTATION
These unaudited financial statements have been prepared in accordance with the
instructions to SEC Form 10-QSB. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such instructions. These unaudited financial statements should be
read in conjunction with the audited financial statements and notes thereto as
at December 31, 2002.
In the opinion of the Company's management, all adjustments considered necessary
for a fair presentation of these unaudited financial statements have been
included and all such adjustments are of a normal recurring nature. Operating
results for the three month and six month periods ended June 30, 2003 are not
necessarily indicative of the results that can be expected for the year ended
December 31, 2003.
NOTE 2 - GOING CONCERN
The Company was incorporated in the State of Nevada on September 20, 2000. Since
inception, the Company has acquired 2 mineral claims in the Slocan Mining
Division, Province of British Columbia, Canada. To date, the Company has not
conducted any exploration on the claims. Management has raised funds for a
preliminary exploration program to assess the mineral potential of the claims,
and to finance the cost of general and administrative expenses, and projected
further losses from operations in the exploratory stage.
The ability of the Company to maintain its existence and further exploration of
its mineral claims is dependent upon its raising sufficient new equity
financing. The commencement of principal operations is dependent upon the
discovery of economically recoverable ore reserves, confirmation of the
Company's interest in the mineral claims, the ability of the Company to obtain
necessary financing to complete development, and future profitable production or
proceeds from the sale of all or an interest in the mineral claims. The likely
outcome of these future events is indeterminable. The financial statements do
not include any adjustments to reflect the possible future effect on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of this uncertainty.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS.
This section of this report includes a number of forward- looking
statements that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by words
like: believe, expect, estimate, anticipate, intend, project and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements, which apply only
as of the date of our report. These forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from historical results or our predictions.
Our company is engaged in exploration of our property. Our company's
principal resources have been acquired through issuance of common stock and from
shareholder loans.
We are a start-up, exploration stage corporation and have not yet generated
or realized any revenues from our business operations.
In our audited financial statements ended December 31, 2002, our auditors
issued a going concern opinion. This means that our auditors believe there is
doubt that we can continue as an on-going business unless we obtain additional
capital to maintain our existence and to commence exploration of our mineral
claims.
As at June 30, 2003, the Company had cash resources of $49,200. We do not
know how long the money will last, however, we do believe it will last twelve
months.
PLAN OF OPERATION
Our success depends upon finding mineralized material. Mineralized material
is a mineralized body that has been delineated by appropriate spaced drilling or
underground sampling to support sufficient tonnage and average grade of metals
to justify removal.
During the year ended December 31, 2002, we began Phase 1 of our research
and exploration program. We began the research of available geologic literature.
We hired Locke Goldsmith to initiate an orientation program consisting of
geological mapping and collection of soil samples for geochemical analysis on
the Alta claims. The program commenced in early November 2002.
The orientation geochemical survey was initiated on one line along part of
the southern sector of Alta 2 claim. Seventeen samples were collected from
approximately 30 cm below the humus layer corresponding approximately to the "C"
horizon. Transported valley fill consisting of large boulders at several sites
forced the collection of samples from shallower horizons. Samples were placed in
wet strength paper envelopes and taken to ALS Chemex labs of North Vancouver,
British Columbia, Canada, where they were dried, screen to -180 um and the fine
fraction analyzed for silver, lead and zinc. The statistical data as summarized
in Mr. Goldsmith's report to us dated December 7, 2002 indicated four samples
contained anomalous silver and lead values, and one sample contained an
anomalous zinc value. Field notes taken at the time of sample collection
described the nature of the rock fragments as rounded, indicating that the rock
and sole had been moved along distances by stream transport and not derived from
bedrock sources nearby.
Prospecting throughout the eastern section of the property also did not
locate mineralization. The report concluded that the transported components and
nature of soils in the southern part of the Alta claims were not suitable for
development of geochemical patterns that could lead to concealed mineralization
in bedrock. Prospecting did not discover any potential sites for additional
exploration.
It was recommended that no further work be planned for the property.
Subsequent to the end of the quarter, the Company entered into a Letter of
Intent with Ikona Gear International Inc. ("Ikona") to enter into a Definitive
Voluntary Share Exchange Agreement to
effect a business combination between the companies.
Under the terms of the proposed transaction, the Company will effect a
forward split of its capital on a 3:1 basis and then will offer a up to a total
of 16,000,000 shares of Oban Mining common stock to the shareholders of Ikona in
exchange for all of the outstanding shares of common stock of Ikona. Upon
successful conclusion of the Share Exchange Agreements, (the "Share Exchange"),
Oban Mining will change its name to Ikona Gear International Inc.
Ikona Gear International Inc. is currently a private company that is
commercializing and further developing its unique, patented gear technology (the
"Ikona Gearing System").
While Oban Mining will continue to hold its mining claims, the Company will
no longer be devoting substantial efforts to the exploitation of these claims.
Should the Company be able to sell or assign these claims in the future, the
Company will use any proceeds received from the sale or assignment of these
claims to satisfy the Company's working capital needs.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about Oban Mining upon which
to base an evaluation of our performance. We are an exploration stage
corporation and have not generated any revenues from operations. We cannot
guarantee we will be successful in our business operations. Our business is
subject to risks inherent in the establishment of a new business enterprise,
including limited capital resources, possible delays in the exploration of our
properties, and possible cost overruns due to price and cost increases in
services.
If the Share Exchange is completed, the Company will become subject to all
of the risks associated with Ikona's business. Upon completion of the Share
Exchange, the Company will timely file with the Securities and Exchange
Commission a Current Report on Form 8-K disclosing the terms thereof.
If the Ikona Share Exchange is completed, the Company expects that it will
need to raise substantial additional funding to further Ikona's business plan.
If the Company is unable to raise such funding, its ability to proceed with its
business plan may be adversely affected.
RESULTS OF OPERATIONS
FROM INCEPTION ON SEPTEMBER 20, 2000 TO JUNE 30, 2003
From September 20, 2000 to present, we have engaged in no significant
operations other than organizational activities, acquiring and staking our first
property, preparation for registration of our securities, completing our public
offering, and beginning Phase 1 of our exploration plan.
Since inception, we have used our common stock to raise money for the
property acquisition, for corporate expenses and to repay outstanding
indebtedness. Net cash provided by the sale of shares from inception on
September 20, 2000 to June 30, 2003 was $100,050.
From inception we have spent $4,092 on our property. This includes $826 for
the cost of the staking, $760 and $706 for assessment work to maintain the
property in each of 2001 and 2002 respectively, and $1,800 for the orientation
program consisting of geological mapping and collection of soil samples for
geochemical analysis on the Alta claims.
We have spent a total of $31,178 for legal fees of which $25,000 was for
the preparation and filing of the registration statement, $ 5,432 was for the
preparation and filing of quarterly and annual financial statements and $746 was
for Canadian legal advice and services.
We have spent a total of $7,297 for audit fees of which $3,000 was related
to the filing of the registration statement, $1,000 for the December 31, 2001
financial statements, $2,392 was for the quarterly and annual financial
statements for the 2002 year and $905 for the 2003 year to date.
From inception, $1,271 was spent on filing fees, $1,469 for transfer agent
fees, and $6,498 was spent for office administration and general office costs.
We have repaid the loan advanced from a related party of $15,927.
LIQUIDITY AND CAPITAL RESOURCES
As of the date of this report, we have yet to generate any revenues from
our business operations.
As of June 30, 2003 we had cash resources of $49,200. We had total
liabilities of $955.
Subsequent to the end of the quarter, the Company entered into a Letter of
Intent with Ikona Gear International Inc. ("Ikona") to enter into a Definitive
Voluntary Share Exchange Agreement to effect a business combination between the
companies.
If the Ikona Share Exchange is completed, the Company expect that it will
need to raise substantial additional funding to further Ikona's business plan.
If the Company is unable to raise such funding, its ability to proceed with its
business plan may be adversely affected.
If the Company does not complete the Ikona Share Exchange, during the next
twelve months, the Company's only foreseeable cash requirements will relate to
maintaining the Company in good standing or the payment of expenses associated
with reviewing or investigating any potential business ventures. Management
believes that the Company's current cash on hand will be sufficient to meet
these expenses over the next twelve months.
ITEM 3. CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure
that information required to be disclosed in the Company's Securities Exchange
Act of 1934 reports is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms, and that such information
is accumulated and communicated to the Company's management, including its Chief
Executive and Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.
Within 90 days prior to the date of this report, the Company's management
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive and Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based
upon the foregoing, the Company's Chief Executive and Financial Officer
concluded that the Company's disclosure controls and procedures are effective in
connection with the filing of the Quarterly Report on Form 10-QSB for the
quarter ended June 30, 2003.
There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation, including any significant deficiencies or material
weaknesses of internal controls that would require corrective action.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter for which
this report is filed.
(b) Exhibits
Exhibit 99.1 - Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 - Chief Executive and Financial Officer
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 thereunto duly authorized on this 5th day of August 2003.
OBAN MINING INC.
BY: /s/ Richard Achron
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Richard A. Achron,
Principal Executive Officer and
Principal Financial Officer
SECTION 302 CERTIFICATION
I, Richard A. Achron, certify that:
1. I have reviewed this quarterly report of Oban Mining, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rule 13a-14 and 15d-14) for the
registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relation to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which the quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report my conclusions about the
effectiveness of the disclosure controls and procedures based on my
evaluation of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent function);
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weakness in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls, and
6. I have indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: August 5th 2003 /s/ Richard Achron
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Richard A. Achron
Principal Executive Officer and
Principal Financial Officer