REGISTRATION NO. 333-76950
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 19, 2002
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-1/A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VALEMONT SUPPLY LIMITED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 1499 912123475
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
6779 BLACKWELL RD
KAMLOOPS, BRITISH COLUMBIA V2C 6V7, CANADA
(604) 681 6599
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
AGENT FOR SERVICE: WITH A COPY TO:
MIKE FRANKENBERGER JAMES L. VANDEBERG
VALEMONT SUPPLY LIMITED OGDEN MURPHY WALLACE
6779 BLACKWELL RD #2100 - 1601 5TH AVENUE
KAMLOOPS, BRITISH COLUMBIA V2C 6V7, CANADA SEATTLE, WASHINGTON 98101
(250) 519 0553 (250) 519-0449 (206) 447-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, 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, check
the following box. [ ]
CALCULATION OF REGISTRATION FEE
TITLE OF EACH . . . . . . . . . DOLLAR PROPOSED PROPOSED
CLASS OF. . . . . . . . . . . . AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO . . . . . . . . . TO BE OFFERING PRICE AGGREGATE REGISTRATION
BE REGISTERED . . . . . . . . . REGISTERED PER UNIT OFFERING PRICE FEE
- ------------------------------- ---------------- --------------- --------------- -------------
Common stock. . . . . . . . . . 1,000,000 shares $0.04 per share $40,000.00 $10.56
- ------------------------------- ---------------- --------------- --------------- -------------
[GRAPHIC OMITED]
Note: Specific details relating to the fee calculation shall be furnished in
notes to the table, including references to provisions of Rule 457 (Section
230.457 of this chapter) relied upon, if the basis of the calculation is not
otherwise evident from the information presented in the table. If the filing fee
is calculated pursuant to Rule 457(o) under the Securities Act, only the title
of the class of securities to be registered, the proposed maximum aggregate
offering price for that class of securities and the amount of registration fee
needed to appear in the Calculation of Registration Fee table. Any difference
between the dollar amount of securities registered for such
offerings and the dollar amount of securities sold may be carried forward on a
future registration statement pursuant to Rule 429 under the Securities Act.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to such section 8(a), may determine.
WE WILL AMEND AND COMPLETE THE INFORMATION IN THIS PROSPECTUS. ALTHOUGH WE ARE
PERMITTED BY US FEDERAL SECURITIES LAW TO OFFER THESE SECURITIES USING THIS
PROSPECTUS, WE MAY NOT SELL THEM OR ACCEPT YOUR OFFER TO BUY THEM UNTIL THE
DOCUMENTATION FILED WITH THE SEC RELATING TO THESE SECURITIES HAS BEEN DECLARED
EFFECTIVE BY THE SEC. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES
OR OUR SOLICITATION OF YOUR OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION
WHERE THAT WOULD NOT BE PERMITTED OR LEGAL.
PROSPECTUS
June 19, 2002
VALEMONT SUPPLY LIMITED
6779 BLACKWELL RD
KAMLOOPS, BRITISH COLUMBIA V2C 6V7, CANADA
(250) 519 0553 (250) 519-0449
1,000,000 Shares of Common Stock
- - This is the initial public offering of common stock of Valemont Supply
Limited
- - No public market currently exists for shares of Valemont Supply Limited's
common stock.
- - The initial public offering price is $0.04 per share of common stock, which
was arbitrarily determined.
- - Best efforts, no minimum, direct participation offering. A.E. Daem,
Valemont Supply Limited's sole director, will use his best efforts to sell
the maximum number of securities offered (1,000,000).
- - Valemont Supply Limited is selling its common stock directly.
- - There are no underwriters or broker-dealers involved in the selling
efforts. Valemont Supply Limited's stock is not listed on any national
securities exchange or the NASDAQ Stock Market.
- - There is no minimum purchase requirement and no arrangement to place funds
in an escrow, trust, or similar account.
- - Valemont Supply Limited will close the offering the earlier of 150 days
after the date of initial effectiveness or the date the maximum offering is
achieved.
OFFERING PRICE UNDERWRITING DISCOUNTS AND COMMISSIONS PROCEEDS TO VALEMONT SUPPLY LIMITED
--------------- --------------------------------------- ---------------------------------
PER SHARE BASIS $0.04 per share $0.00 per share $0.04 per share
- --------------- --------------- --------------------------------------- ---------------------------------
TOTAL OFFERING. $40,000.00 $0.00 $40,000.00
- --------------- --------------- --------------------------------------- ---------------------------------
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 1.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS.
NOR HAVE THEY MADE, NOR WILL THEY MAKE, ANY DETERMINATION AS TO WHETHER ANYONE
SHOULD BUY THESE SECURITIES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
EXPLANATORY NOTE
This post-effective amendment to our S-1/A registration statement originally
filed January 18, 2002 and subsequently amended on June 19, 2002 reflects the
correction of the name of the registrant within this S-1 registration statement
to Valemont Supply Limited from Valemont Supply Limited Valemont Supply Limited
is the exact name of registrant as specified in its charter. This
post-effective amendment to our S-1/A registration statement also includes an
updated auditors consent letter in Exhibit 23.1
We have made no further changes to the previously filed S-1/A registration
statement. All information in this S-1/A registration statement is as of June
19, 2002 and does not reflect, unless otherwise noted, any subsequent
information or events other than the aforementioned changes.
Table Of Contents
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Determination of Offering Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Dilution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Selling Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Plan of Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Description of Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Interests of Named Experts and Counsel. . . . . . . . . . . . . . . . . . . . . . . . 10
Description of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Description of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Market Price of and Dividends on Capital Stock and Other Stockholder Matters. . . . . 15
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Management's Discussion and Analysis of Financial Condition and Results of Operations 16
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 18
Directors and Executive Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Security Ownership of Certain Beneficial Owners and Management. . . . . . . . . . . . 20
Certain Relationships and Related Transactions. . . . . . . . . . . . . . . . . . . . 20
Disclosure of Commission Position on Indemnification for Securities Act Liabilities . 21
Index to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
1
RISK FACTORS
You should carefully consider the following risk factors and all other
information contained in this prospectus before purchasing the common stock of
Valemont Supply Limited Investing in Valemont Supply Limited's common stock
involves a high degree of risk.
YOU MAY BE UNABLE TO EFFECTIVELY EVALUATE VALEMONT SUPPLY LIMITED FOR INVESTMENT
PURPOSES, BECAUSE IT HAS NO OPERATING HISTORY AND ITS BUSINESS MODEL IS
UNPROVEN. VALEMONT SUPPLY LIMITED IS IN ITS EARLIEST STAGES OF EXPLORATION AND
MAY NEVER BECOME PROFITABLE
Valemont Supply Limited is in the exploration stage and is engaged in the search
for mineral deposits (reserves). It is a new company with a limited operating
history. It faces all of the risks inherent in a new business. The Company's
prospects, given the nature of its business, must be considered in light of the
risks, expenses and difficulties frequently encountered by companies in the
early exploration stages. There can be no assurance that the Company will
achieve or sustain profitability or positive cash flows from operating
activities in the future.
EVEN IF COMMERCIAL QUANTITIES OF MICA ARE DISCOVERED FAILURE TO OBTAIN
SUFFICIENT CUSTOMERS FOR ITS MICA WOULD PREVENT VALEMONT SUPPLY LIMITED FROM
IMPLEMENTING ITS BUSINESS PLAN, AND COULD CAUSE ITS STOCK TO BE WORTHLESS.
The mining industry, in general, is intensively competitive and there is not any
assurance that even if commercial quantities of mica are discovered, a ready
market will exist for sale of same. Valemont Supply Limited's mineral claims are
located in the Cariboo Mining District of British Columbia, Canada. Collectively
the mineral claims make up a mineralized material whose primary mineral is mica
schist. However, these mineralized materials do not constitute reserves. If
commercial quantities of mica are discovered it would have a number of end uses
such as oil drilling muds, building products, paint, plastics, rubber and other
end uses. Failure to obtain sufficient customers for the mica would prevent
Valemont Supply Limited from implementing its business plan, and could cause its
stock to be worthless. Valemont Supply Limited's mica would compete against
those of other established companies, some of which have greater financial,
marketing and other resources than those of Valemont Supply Limited These
competitors may be able to institute and sustain price wars, resulting in a
reduction of Valemont Supply Limited's share of the market and limiting or
eliminating profitability.
VALEMONT SUPPLY LIMITED MAY DILUTE EXISTING SHAREHOLDERS BY COMPENSATING SERVICE
PROVIDERS BY ISSUING STOCK
Valemont Supply Limited might seek to compensate providers of services by
Issuance of stock in lieu of cash. Any such stock issuance would dilute
Ownership interests of shareholders. For example, it is possible that Valemont
Supply Limited would grant stock to compensate its exploration personnel with
stock options. Irrespective of whether Valemont Supply Limited's cash assets
prove to be inadequate to meet its operational needs, Valemont Supply Limited
might seek to compensate providers of services by issuance of stock in lieu of
cash, which again would dilute ownership interests of shareholders.
VALEMONT SUPPLY LIMITED'S SIGNIFICANT SHAREHOLDER COULD SELL HIS CONTROL BLOCK
TO AN OUTSIDE PARTY RESULTING IN A POSSIBLE CHANGE IN BUSINESS NOT CONSIDERED BY
OTHER SHAREHOLDERS
Valemont Supply Limited's significant shareholder, A.E. Daem, could sell his
control block of 8,000,000 shares to an outside party resulting in a majority of
the voting power being transferred to the purchaser(s). The result could be that
new shareholder(s) would control Valemont Supply Limited and persons unknown
could replace Valemont Supply Limited's management. It is uncertain whether any
such replacements would continue to implement Valemont Supply Limited's current
business plan.
PURCHASERS MUST RELY ON MR. DAEM'S ABILITIES FOR ALL DECISIONS AS HE CONTROLS
THE MAJORITY OF THE STOCK. VALEMONT SUPPLY LIMITED HAS NO EMPLOYMENT AGREEMENT
WITH MR. DAEM AND HE SPENDS ONLY PART-TIME ON ITS BUSINESS. HIS LEAVING MAY
ADVERSELY AFFECT VALEMONT SUPPLY LIMITED'S ABILITY TO OPERATE
Mr. Daem is serving as Valemont Supply Limited's sole officer and director.
Valemont Supply Limited will be heavily dependent upon Mr. Daem's
entrepreneurial skills and experience to implement its business plan. Mr. Daem
devotes approximately 40% of his time to Valemont Supply Limited and investors
may, from time to time, find that his inability to devote full time and
attention to its affairs will result in delay(s) in progress towards the
implementation of its business plan or in a failure to implement its business
plan. moreover, Valemont Supply Limited does not have an employment agreement
with Mr. Daem and as a result, he may not continue to manage its affairs in the
future. nor has Valemont Supply Limited obtained a key man life insurance policy
on Mr. Daem. Valemont Supply Limited could lose the services of Mr. Daem, or Mr.
Daem could decide to join a competitor or otherwise compete directly or
indirectly with Valemont Supply Limited, which would have a significant adverse
effect on its business and could cause the price of its stock to be worthless.
the services of Mr. Daem would be difficult to replace.
VALEMONT SUPPLY LIMITED MAY NOT BE ABLE TO RAISE ADDITIONAL FINANCING IF NEEDED
FOR ITS BUSINESS AND IN THE EVENT OF A BANKRUPTCY SHAREHOLDERS COULD LOSE THEIR
ENTIRE INVESTMENT
Valemont Supply Limited's ultimate success may depend on its ability to raise
additional capital. Failure to raise the neces-sary funds in a timely fashion
will severely limit Valemont Supply Limited's future operations, if any and it
would be unable to implement its business plan. If Valemont Supply Limited
raises additional funds through the issuance of equity, equity-related or
convertible debt securities, these securities may have rights, preferences or
privileges senior to those of the rights of its common stock and its
stockholders may experience additional dilution. In the event of a bankruptcy in
either case, shareholders could loose their entire investments as a result of
the senior preferences or privileges. No commitments to provide additional funds
have been made by management or other shareholders. Valemont Supply Limited has
not investigated the availability, source or terms that might govern the
acquisition of additional financing. When additional capital is needed, Valemont
Supply Limited may not be able to source funds that can be obtained on terms
acceptable to it.
VALEMONT SUPPLY LIMITED'S AUDITORS HAVE EXPRESSED THAT THERE IS SUBSTANTIAL
DOUBT REGARDING VALEMONT SUPPLY LIMITED'S ABILITY TO CONTINUE AS A GOING CONCERN
AND THEREFORE INVESTORS COULD LOOSE THEIR ENTIRE INVESTMENT.
Valemont Supply Limited's auditors have expressed that there is substantial
doubt regarding Valemont Supply Limited's ability to continue as a going
concern. Valemont Supply Limited has not generated any revenues or conducted any
operations since inception. The ability of Valemont Supply Limited to achieve
success with respect to its planned principal business activity is dependent
upon its successful efforts to attain profitable operations. Valemont Supply
Limited may not be able to sell any of its products at a profit. There is
therefore substantial doubt regarding Valemont Supply Limited's ability to
continue as a going concern.
VALEMONT SUPPLY LIMITED COMMON STOCK HAS NO PRIOR MARKET AND STEPS HAVE NOT BEEN
TAKEN TO HAVE ITS COMMON STOCK LISTED ON THE NASD OVER-THE-COUNTER BULLETIN
BOARD. THERE ARE NO IMMEDIATE PLANS TO DO SO. FURTHERMORE VALEMONT SUPPLY
LIMITED MAY NEVER RECEIVE APPROVAL FOR LISTING AND ACCORDINGLY PRICES MAY
DECLINE AFTER THE OFFERING AND SHAREHOLDERS MAY HAVE DIFFICULTY SELLING THEIR
SHARES
There is no public market for Valemont Supply Limited's common stock and no
market may develop that would allow any shareholder to be able to liquidate his
investment without considerable delay, if at all. Valemont Supply Limited has
not taken any steps to have its shares listed on the NASD over-the-counter
bulletin board but does intend to do so. Although Valemont Supply Limited
intends to apply to have its shares traded on the NASD over-the-counter bulletin
board shortly after it has a sufficient number of shareholders to interest a
market maker in making a market in its securities there is no guarantee that
this will occur. The trading market price of Valemont Supply Limited's common
stock may therefore decline below the offering price. If a market should
develop, the price may be highly volatile. In addition, an active public market
for Valemont Supply Limited's common stock may not develop or be sustained. All
of Valemont Supply Limited's outstanding shares, except for those of A.E. Daem,
are being registered for sale pursuant to this offering. If Valemont Supply
Limited's selling stockholders sell substantial amounts of common stock in the
public market, the market price of Valemont Supply Limited's common stock could
fall. Factors such as those discussed in this "Risk Factors" section may have a
significant impact on the market price of Valemont Supply Limited's securities.
Owing to the low price of the securities many brokerage firms may not be willing
to effect transactions in the securities. Even if a purchaser finds a broker
willing to effect a transaction in Valemont Supply Limited's common stock, the
combination of brokerage commissions, state transfer taxes, if any, and other
selling costs may exceed the selling price. Further, many lending institutions
will not permit the use of such securities as collateral for loans. Thus, a
purchaser may be unable to sell or otherwise realize the value invested in
Valemont Supply Limited stock.
EVEN IF VALEMONT SUPPLY LIMITED IS APPROVED FOR QUOTATION BY A MARKET MAKER
THROUGH THE NASD OVER-THE-COUNTER BULLETIN BOARD, INVESTORS MAY FACE DIFFICULTY
SELLING THEIR SHARES.
Even if Valemont Supply Limited is approved for quotation by a marketmaker
through the NASD over-the-counter bulletin board, stocks traded over this
quotation system are usually thinly traded, highly volatile and not followed by
analysts. Investors may therefore have difficulty selling their shares.
INVESTORS MAY FACE SIGNIFICANT RESTRICTIONS ON THE RESALE OF VALEMONT SUPPLY
LIMITED STOCK DUE TO STATE BLUE SKY LAWS
Because Valemont Supply Limited's securities have not been registered for resale
under the blue sky laws of any state, the holders of such shares and those
persons desiring to purchase them in any trading market that may develop in the
future should be aware that there may be significant state blue sky law
restrictions on the ability of investors to sell and on purchasers to buy
Valemont Supply Limited's securities. Investors may be unable to sell their
stock in Valemont Supply Limited Accordingly, investors should consider the
secondary market for Valemont Supply Limited's securities to be a limited one.
Investors may be unable to resell their stock without the significant expense of
state registration or qualification.
INVESTORS MAY FACE SIGNIFICANT RESTRICTIONS ON THE RESALE OF VALEMONT SUPPLY
LIMITED STOCK DUE TO FEDERAL PENNY STOCK REGULATIONS
Because Valemont Supply Limited's securities will constitute "penny stock"
within the meaning of the rules, this may affect the ability of the owners of
Valemont Supply Limited shares to resell their securities. The Securities and
Exchange Commission has adopted a number of rules to regulate "penny stocks."
Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6,
15g-7, and 15g-9 under the Securities and Exchange Act of 1934. The rules
require broker-dealers to make certain disclosures regarding penny stocks to
potential buyers, and make a determination based upon information provided by
the potential buyer about such buyer's suitability for investing in penny
stocks. Because Valemont Supply Limited's securities will constitute "penny
stock" within the meaning of the rules, the rules would apply to Valemont Supply
Limited and its securities and there may be a limited market for penny stocks,
due to the regulatory burdens on broker-dealers.
INVESTORS MAY FACE SIGNIFICANT RESTRICTIONS ON THE RESALE OF VALEMONT SUPPLY
LIMITED STOCK DUE TO THE WAY IN WHICH STOCK TRADES ARE HANDLED BY BROKER-DEALERS
Because of large broker-dealer spreads, investors may be unable to sell the
stock immediately back to the broker-dealer at the same price the broker-dealer
sold the stock to the investor. In some cases, the stock may fall quickly in
value. Investors may be unable to reap any profit from any sale of the stock, if
they can sell it at all. The market among broker-dealers may not be active.
Investors in penny stock often are unable to sell stock back to the dealer that
sold them the stock. The mark ups or commissions charged by the broker-dealers
may be greater than any profit a seller may make.
THE MARKET FOR PENNY STOCKS HAS SUFFERED IN RECENT YEARS FROM PATTERNS OF FRAUD
AND ABUSE, WHICH MAY CAUSE INVESTORS TO LOSE THEIR INVESTMENT
Shareholders should be aware that, according to the Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse which could cause investors to
lose their entire investment. Such patterns include:
- - control of the market for the security by one or a few broker-dealers that
are often related to the promoter or issuer;
- - manipulation of prices through prearranged matching of purchases and sales
and false and misleading press releases;
- - "boiler room" practices involving high pressure sales tactics and
unrealistic price projections by inexperienced sales persons;
- - excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and
- - the wholesale dumping of the same securities by promoters and
broker-dealers after prices have been manipulated to a desired level,
along with the inevitable collapse of those prices with consequent
investor losses.
IT WOULD BE DIFFICULT FOR INVESTORS TO INITIATE LEGAL ACTION AND ENFORCE
JUDGMENTS AGAINST NON-U.S. RESIDENT EXECUTIVE OFFICERS OR DIRECTORS
It would be difficult for investors to:
- - Effect service of process within the United States on your non-U.S.
resident executive officers or directors named in your registration
statement;
- - Enforce judgments obtained in U.S. courts based on the civil liability
provisions of the U.S. federal securities laws against your non-U.S.
resident executive officers or directors named in your registration
statement;
- - Enforce judgments of U.S. courts based on civil liability provisions of the
U.S. federal securities laws in the Canadian court against your non-U.S.
resident executive officers or directors named in your registration
statement; and
- - Bring an original action in the Canadian court to enforce liabilities based
on the U.S. federal securities laws against your non-U.S. resident
executive officers or directors named in your registration statement.
OTHER RISKS
YOU SHOULD NOT RELY ON FORWARD-LOOKING STATEMENTS BECAUSE THEY ARE INHERENTLY
UNCERTAIN
This prospectus contains forward-looking statements that involve risks and
uncertainties. Valemont Supply Limited's actual results could differ materially
from those anticipated in these forward-looking statements for many reasons,
including the risks faced by Valemont Supply Limited described in "Risk Factors"
and elsewhere in this prospectus. We use words such as "anticipates",
"believes", "plans", "expects", "future", "intends" and similar expressions to
identify these forward-looking statements. Prospective investors should not
place undue reliance on these forward-looking statements, which apply only as of
the date of this prospectus.
USE OF PROCEEDS
The net proceeds to Valemont Supply Limited from the sale of the 1,000,000
shares of common stock offered by Valemont Supply Limited hereby at an assumed
initial public offering price of $.04 per share are estimated to be $40,000.
Valemont Supply Limited expects to use the net proceeds as follows:
Assuming Assuming Assuming Assuming
sale of 10% sale of 25% sale of 50% sale of
of stock of stock of stock 100% of
being being being stock being
Purpose . . . . . . . . . . . offered offered offered offered
- ----------------------------- ------------ ------------ ------------ ------------
Site visit
Flag drill sites, clean up
and re-cut claim lines,
clean up previous trenching . $ 3,000 $ 3,000 $ 3,000 $ 3,000
Meet with local contactors
(Valemont Area)
Inspect equipment,
interview management
and check references. . . . . $ 1,000 $ 1,000 $ 1,000 $ 1,000
Exploration and verification
of exploration history $ $ 6,000 $ 12,000 $ 15,000
Market Research
Review of various trade
shows to search for
applicability to Valemont
Supply Limited $ $ $ 2,000 $ 4,000
Office Expenses . . . . . . . $ 0 $ 0 $ 2,000 $ 5,000
Trade Shows . . . . . . . . . $ 0 $ 0 $ 0 $ 7,000
Travel. . . . . . . . . . . . $ 0 $ 0 $ 0 $ 5,000
Estimated offering expenses are as follows and are already paid:
SEC registration fee . . . . . . . . . . . . . . . $ 10
Printing and engraving expenses. . . . . . . . . . 5,000
Attorneys' fees and expenses . . . . . . . . . . . 4,000
Accountants' fees and expenses . . . . . . . . . . 2,000
Transfer agent's and registrar's fees and expenses 500
Miscellaneous. . . . . . . . . . . . . . . . . . . 490
- -----------------------------------------------------------
Total. . . . . . . . . . . . . . . . . . . . . . . $12,000
- -----------------------------------------------------------
Valemont Supply Limited continually evaluates other business opportunities that
may be available to it, whether in the form of assets acquisitions or business
combinations. Valemont Supply Limited may use a portion of the proceeds for
these purposes. Valemont Supply Limited is not currently a party to any
contracts, letters of intent, commitments or agreements and is not currently
engaged in active negotiations with respect to any acquisitions.
DETERMINATION OF OFFERING PRICE
Valemont Supply Limited arbitrarily determined the price of the securities in
this Offering. The offering price is not an indication of and is not based upon
the actual value of Valemont Supply Limited It bears no relationship to the book
value, assets or earnings of Valemont Supply Limited or any other recognized
criteria of value. The offering price should not be regarded as an indicator of
the future market price of the securities.
DILUTION
No sale of Valemont Supply Limited's common stock has ever been sold from one
investor to another and the only issue of stock from treasury occurred on June
25, 2001 when a total of 8,000,000 shares of Valemont Supply Limited common
stock were issued at a price of $0.0058 per share. All stock was issued based on
a valuation by the Board of Directors. The price of the securities in this
Offering is $0.04 per share or $0.0342 per share higher.
The net tangible book value of the Valemont Supply Limited at April 30, 2002
was$0.0008 per share. "Net tangible book value per share" represents the amount
of total tangible assets less total liabilities divided by the number of shares
of Common Stock outstanding.
After giving effect to the sale of all of the 1,000,000 shares offered pursuant
to this Registration Statement at a price of $0.04 per share, the net tangible
book value of the Valemont Supply Limited as of April 30, 2002, after deducting
offering costs, would be $46,541 or $0.0058 per share. This represents immediate
dilution of $0.0336 per share to new investors and an immediate increase in net
tangible book value per share of $0.0050 to existing stockholders. The following
illustrates the per share dilution in this case:
Share price: $0.0400
Net tangible book value before offering: $0.0008
Increase attributable to new investors: $0.0050
Net tangible book value after offering: $0.0058
Dilution to new investors: $0.0342
SELLING SHAREHOLDERS
There are no selling security holders.
PLAN OF DISTRIBUTION
This is not an underwritten offering and there are no broker dealers involved in
the selling efforts. This prospectus is part of a registration statement that
permits Valemont Supply Limited to sell a maximum of 1,000,000 shares of its
common stock to the public on a direct participation basis.
In accordance with Regulation M under the Exchange Act, we may not bid for,
purchase or attempt to induce any person to bid for or purchase any of our
common stock while we are selling stock in this offering. We do not intend to
engage in any passive market making or undertake any stabilizing activity for
our common stock.
Valemont Supply Limited will offer and sell its common stock through its sole
officer and director, A.E. Daem, under the exemption from registration as a
broker dealer under Rule 3a4-1 of the Exchange Act. All sales will be made in
compliance with the securities laws of local jurisdictions. Mr. Daem will offer
stock by delivering prospectuses to business associates with whom he has a
pre-existing relationship.
The gross proceeds to Valemont Supply Limited will be $40,000 if all the shares
offered are sold. No commissions or other fees will be paid, directly or
indirectly, by Valemont Supply Limited, or any of its principals, to any person
or firm in connection with solicitation of sales of the shares. Mr. Daem will be
reimbursed for any expenses incurred in connection with this offering. Mr. Daem
will not be allowed to purchase shares in this offering.
While the registration statement is effective, new shareholders may sell their
shares directly to the public, without the aid of a broker or dealer, or they
may sell their shares through a broker or dealer if Valemont Supply Limited's
stock is authorized for inclusion on the NASD over-the-counter bulletin board.
Any commission, fee or other compensation of a broker or dealer would depend on
the brokers or dealers involved in the transaction.
No public market currently exists for shares of Valemont Supply Limited's common
stock. Valemont Supply Limited intends to apply to have its shares traded on the
NASD over-the-counter bulletin board under the symbol "VALE". Valemont Supply
Limited has not taken any actions to have its shares traded on the NASD
over-the-counter bulletin board. Valemont Supply Limited intends to apply to
have its shares traded on the NASD over-the-counter bulletin board immediately
after it has met the listing standards for the NASD over-the-counter bulletin
board as set out by the National Association of Stock Dealers. In the case of
Valemont Supply Limited these listing standards are:
- - An effective Registration Statement Under The Securities Act of 1933
- - To remain current with its quarterly and annual report filings with the
Securities and Exchange Commission
- - At least one market maker to make a market in its securities
Other than to remain current with its quarterly and annual report filings,
Valemont Supply Limited needs to achieve a sufficient number of shareholders to
interest a market maker in making a market in its securities. There is no
minimum number of shareholders required for a stock to trade on the NASD
over-the-counter Bulleting Board. Valemont Supply Limited anticipates that a
registered offering by its selling shareholders may result in its stock being
held by enough shareholders to interest a market maker to make a market in
trading Valemont Supply Limited's stock.
DESCRIPTION OF CAPITAL STOCK
Valemont Supply Limited's authorized capital consists of 100,000,000 shares of
common stock, par value $.0001 per share and 20,000,000 of preferred stock, par
value $.0001 per share. Immediately prior to this offering, 8,000,000 common
shares were issued and outstanding. Each record holder of common stock is
entitled to one vote for each share held on all matters properly submitted to
the shareholders for their vote. The articles of incorporation do not permit
cumulative voting for the election of directors, and shareholders do not have
any preemptive rights to purchase shares in any future issuance of Valemont
Supply Limited's common stock.
Because the holders of shares of Valemont Supply Limited's common stock do not
have cumulative voting rights, the holders of more than 50% of Valemont Supply
Limited's outstanding shares, voting for the election of directors, can elect
all of the directors to be elected, if they so choose. In such event, the
holders of the remaining shares will not be able to elect any of Valemont Supply
Limited's directors.
The holders of shares of common stock are entitled to dividends, out of funds
legally available therefore, when and as declared by the Board of Directors. The
Board of Directors has never declared a dividend and does not anticipate
declaring a dividend in the future. In the event of liquidation, dissolution or
winding up of the affairs of Valemont Supply Limited, holders are entitled to
receive, ratably, the net assets of Valemont Supply Limited available to
shareholders after payment of all creditors.
To the extent that additional shares of Valemont Supply Limited's common stock
are
issued, the relative interests of existing shareholders may be diluted.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Neither Manning Elliott Chartered Accountants (Auditors) or Ogden Murphy Wallace
(Legal Counsel) was employed on a contingent basis in connection with the
registration or offering of Valemont Supply Limited's common stock.
DESCRIPTION OF BUSINESS
GENERAL
Valemont Supply Limited was incorporated under the laws of the State of
Washington on June 25, 2001, and is in its early exploration stage. To date,
Valemont Supply Limited's only activities have been organizational, directed at
acquiring its mineral claims, raising its initial capital and exploration.
Valemont Supply Limited has not commenced commercial operations. Valemont Supply
Limited has no full time employees and owns no real estate. Valemont Supply
Limited intends to complete the exploration of its mineral claims its search for
mica and to generally meet its future corporate obligations.
PRODUCT DESCRIPTION
Collectively the mineral claims make up s whose primary mineral is mica schist.
However, these mineralized materials do not constitute reserves. Mica has a
number of end uses such as oil drilling muds, building products, paint,
plastics, rubber and other end uses.
- - Drilling muds for the oil and gas industry.
Drilling muds are used to lubricate and seal drilling shafts when exploring for
oil and gas. The muds have a natural tendency to flow into and seal cracks in
the perimeter of the drill shaft preventing the influx of unwanted fluid into
the shaft while drilling and possible loss of oil well control. The platy
structure of mica added to drilling mud facilitates the overlapping of particles
to form a layer or wall on the outside of the shaft, thereby preventing fluid
influx. Low quality mica is consumed in oil wells where purity and color are
not important. Generally the rock formations in North America are such that
drilling mud is required to effectively drill for oil and gas. This is not
generally the case in other oil drilling areas in the Middle East and the North
Sea. Mica competes with several other products used in drilling mud,
particularly a substance called bentonite. Bentonite is another mineral that is
mined and has the same pliability, viscosity and lubrication properties as mica.
Consumption of mica in drilling muds is directly related to oil well drilling
activity and the availability and cost of substitute products. Consumption by
the oil and gas industry has grown substantially as a result of new drill
programs being initiated throughout North America. This has been a direct result
of high oil and gas prices and governments desire to become energy sufficient.
- - Building Industry
The largest market for mica is in the building industry. Mica is used:
- - In civil engineering applications including to strengthening and rebuilding
bridges, water systems and highways.
- - As a filler and extender in joint cement, which is used to fill joints in
the erection of gypsum plasterboard. When mica is mixed into the joint
cement compound, it acts as a reinforcing agent and prevents cracking and
peeling and reduces shrinkage. Consumption of mica in joint cement is
closely related to the level of construction activity and the use of gypsum
plasterboard by the construction industry. Use of plasterboard is common
only in the North American construction industry.
- - Insulating And Fireproofing
Mica is used in the production of insulating and fireproof wallboards,
particularly in the United Kingdom. Mica is used as an asbestos substitute due
to its similar insulating and fire-resistant physical properties. Valemont
Supply Limited expects that the use of mica in wallboard will expand throughout
North America, Europe and Japan due to its fire resistant properties.
SHORT-TERM PLAN OF OPERATION FOR THE PERIOD BEGINNING APRIL 30, 2002 AND ENDING
OCTOBER 31, 2002
The initial step that Valemont Supply Limited plans to take is to attempt to
verify the previous mica schist discoveries. Valemont Supply Limited then
intends begin limited sales of raw mica schist to support the proving of
commercial feasibility of the deposit. It is anticipated that this work program
will cost approximately $18,000 and management believes that it will need to
sell at least 50% of the offering in order to satisfy these expenditures and
other cash requirements over the next six months. If less than 50% of the
offering is sold, management will scale down its work plan as dictated by cash
on hand.
The verification process may not yield results that are concurrent with previous
findings in respect of the mica property. Valemont Supply Limited recognizes
this fact. To address this possibility, Valemont Supply Limited does not
discount other business opportunities that may be available to it, whether in
the form of asset acquisitions or business combinations. Valemont Supply
Limited's officer and director, A.E. Daem, may devote a portion of the time he
devotes to Valemont Supply Limited evaluating business opportunities that may be
available. Valemont Supply Limited has had no discussions with any third parties
regarding business opportunities. Any asset acquisition or business combination
would likely include the issuance of a significant amount of Valemont Supply
Limited's common stock, which would dilute the ownership interest of holders of
existing shares of Valemont Supply Limited's common stock.
INDUSTRY CONDITIONS AND COMPETITION
Although Valemont Supply Limited is an exploration company and has no reserves,
it has acquired a property with mineralized material and does not at this time
contemplate attempting to acquire other properties. Thus management feels that
it has no real competitors with respect to property acquisitions.
EMPLOYEES
Valemont Supply Limited is an exploration stage company and currently has no
employees. A.E. Daem, its only officer and director, currently manages Valemont
Supply Limited Valemont Supply Limited looks to Mr. Daem for his entrepreneurial
and exploration skills and talents. He has extensive operating experience,
covering a broad spectrum of businesses. His experience includes working as
president and chief executive officer for a packaging company and most recently
as the president and chief executive officer of an exploration company.
Management plans to use consultants, attorneys and accountants as necessary and
does not plan to engage any full-time employees in the near future. A portion of
any future employee compensation likely would include the right to acquire stock
in Valemont Supply Limited, which would dilute the ownership interest of holders
of existing shares of Valemont Supply Limited's common stock.
AVAILABLE INFORMATION
Valemont Supply Limited has filed with the Securities and Exchange Commission a
registration statement on Form S-1 with respect to the common stock offered by
this prospectus. This prospectus, which constitutes a part of the registration
statement, does not contain all of the information set forth in the registration
statement or the exhibits and schedules which are parts of the registration
statement. For further information with respect to Valemont Supply Limited and
its common stock, see the registration statement and the exhibits and schedules
thereto. Any document Valemont Supply Limited files may be read and copied at
the Commission's Public Reference Room located at 450 Fifth Street N.W.,
Washington D.C. 20549, and the public reference rooms in New York, New York, and
Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for further
information about the public reference rooms. Valemont Supply Limited's filings
with the Commission are also available to the public from the Commission's
website at http://www.sec.gov.
Upon completion of this offering, Valemont Supply Limited will become subject to
the information and periodic reporting requirements of the Securities Exchange
Act and, accordingly, will file periodic reports, proxy statements and other
information with the Commission. Such periodic reports, proxy statements and
other information will be available for inspection and copying at the
Commission's public reference rooms, and the website of the Commission referred
to above.
DESCRIPTION OF PROPERTY
Valemont Supply Limited's mineral claims are located in the Cariboo Mining
District of British Columbia, Canada. Specifically, the property lies at
latitude 52o 46'N and longitude 119o 18'W. eight km south of Valemont, B.C., and
the mineral title reference is:
Map. 083D14W
U.T.M. Zone 11
Administrative Area
Mining Division:
District 2075
Mining Dist. 03 - Cariboo
Access to the claims area is by an all weather road that connects directly to a
highway. The road dissects Valemont Supply Limited's mineral claims and is
maintained by the British Columbia Department of Highways. The main line of the
Canadian National Railway is 2km East of the mica schist deposit located on the
property. For power the Avola-Valemont transmission line crosses the property.
For water the Canoe River flows along the South boundary of the property.
To maintain the claims on an annual basis Valmont Supply Limited must perform a
minimum of two hundred Canadian dollars per claim of validated work plus pay a
ten Canadian dollar per claim registration fee to the Provincial Government.
Cash may be paid in lieu of work. All claims have been maintained and are
current with the provincial government.
The mica in this property was discovered in 1961. Prior to being acquired by
Valemont Supply Limited, much work was carried out in order to better understand
the exact nature and location of the mica schist found on the property. This
work included:
Surface exploration and geochemistry
- - Several trenches were dug and bulk samples taken.
- - In addition several drill holes were made with assay results indicating
the property owned by Valemont Supply Limited contains a mineralized
material of 2,286,000 tons of mica schist accessible to open pit recovery.
However, these mineralized materials do not constitute reserves.
- - Metallurgical test conducted in 1981 at Bacon, Donaldson laboratories in
Vancouver, with input from Kilborn engineering, on behalf of Brinco Mining
Ltd verified a the mineralized material, but not reserves.
- - A small-scale mining project was carried out in 1987 by Beaty Geological
Ltd on behalf of Lico Resources Inc and Technigen Platinum Corporation
resulting in four 60-70 ton bulk samples and six diamond drill holes being
drilled which further outlined and exposed the deposit for the current
owners, Valemont Supply Limited
No work has been done by Valemont Supply Limited on the property. Valemont
Supply Limited does not have reserves, but it's proposed program of exploration
includes engaging professionals to review the previous findings of mineralized
materials with respect to the property. This will encompass the following:
- - Walk the claims making sure the lines are clear of underbrush and to check
the condition of the staking posts, the metal claim tags and numbers on
each post
- - Verify and validate all the data Valemont Supply Limited has compiled on
the claims. This work history goes back forty years to 1961.
o Valemont Supply Limited will try to locate bulldozer trenching to take
samples.
o Valemont Supply Limited will try to locate some of the 18 short holes
drilled to see of any of the core is available for sampling
- - During a 1978 summer program several small pits were dug
o Valemont Supply Limited will try to locate some of these pits for
sampling. If the pits are in unusable condition Valemont Supply
Limited will dig several sample pits for sampling
o Valemont Supply Limited will try to locate the areas of the two drill
programs carried out in 1978 with the object of finding core for
sampling. The drill locations will be cleaned up and marked for use if
further validation is necessary
- - Valemont Supply Limited will conduct a thorough outcrop search of the
property mapping and samplings were appropriate.
- - The two new roads cut in the area will be examined and sampled should they
prove of interest.
Valemont Supply Limited's property is without known reserves and the proposed
program is exploratory in nature. Once the foregoing has been completed and
analyzed to verify the existing reports, Valemont Supply Limited hopes to
determine if its mineral deposit is economically and legally viable.
Valemont Supply Limited acquired the Valemont mineral claims from Mr. Douglas
Payne in an arms length transaction.Valemont Supply Limited paid $30,000 US in
cash to Mr. Payne in exchange for the mineral claims. In addition under the
terms of sale Valemont Supply Limited is required to pay or cause to be paid
$2.00 US per ton of pit run of mica containing ore extracted from the mineral
claims, this payment constitutes a net royalty payment to Mr. Payne. This
payment is to be made within 30 days of the pit run mica leaving the mineral
claims. The price per ton will be negotiated at the end of the first five years
and each five years thereafter. The price renewal will not exceed the United
States of America inflation rate, nor be less than the preceding five year
period.
The mineralized material is exposed in sparse outcrops and in trenches excavated
by a mining company in l981. However, these mineralized materials do not
constitute reserves. Drilling has encountered three beds of mineralized material
striking northeasterly and dipping shallowly northwestward into the moderately
south sloping hillside. The top bed varies from 15 m to 25 m thick (averaging
17 m) and contains an average mica content of 60.6%. The mica schist bed also
continues to the northwest but management feels that increasingly thick hard
surface materials would increase the waste produced when mined, making it less
economic and thus more expensive to mine.
The mica content is variable throughout the extent of the three beds of mica
schist. In order to confirm the mica content, six holes were drilled in
January-February 1987 to provide more information. Analytical results indicate
that the percentage of mica averages 56.1%. The analysis indicates that the
total percentage of mica appears to increase to the east.
Valemont Supply Limited currently maintains limited office space, occupied by
Mr. Daem, for which it pays no rent. Its address is 6779 Blackwell Rd, Kamloops,
British Columbia V2C 6V7, Canada, and its phone number is ((604) 681 6599.
Valemont Supply Limited does not believe that it will need to obtain additional
office space at any time in the foreseeable future until its business plan is
more fully implemented, at which time it may need office facilities.
LEGAL PROCEEDINGS
Valemont Supply Limited is not a party to any material pending legal
proceedings, and none of its property is the subject of a pending legal
proceeding. Further, the officer and director knows of no legal proceedings
against Valemont Supply Limited or its property contemplated by any governmental
authority.
MARKET PRICE OF AND DIVIDENDS ON CAPITAL
STOCK AND OTHER SHAREHOLDER MATTERS
No established public trading market exists for Valemont Supply Limited's
securities. Valemont Supply Limited has no common equity subject to outstanding
purchase options or warrants. Valemont Supply Limited has no securities
convertible into its common equity. There is no common equity that could be sold
pursuant to Rule 144 under the Securities Act or that, except for this offering;
Valemont Supply Limited has agreed to register under the Securities Act for sale
by shareholders. Except for this offering, there is no common equity that is
being, or has been publicly proposed to be, publicly offered by Valemont Supply
Limited The principal operations of Valemont Supply Limited have not yet
commenced.
Valemont Supply Limited has 8,000,000 shares of common stock issued and
outstanding, all of which were issued to Valemont Supply Limited's president and
sole director on June 25, 2001 at $0.0058 per share. All stock was issued based
on a valuation by the Board of Directors. No sale of Valemont Supply Limited's
common stock has ever been sold from one investor to another.
Upon effectiveness of the registration statement that includes this prospectus,
1.0 million shares of Valemont Supply Limited will be eligible for sale from
Valemont Supply Limited's treasury.
To date Valemont Supply Limited has not paid any dividends on its common stock
and does not expect to declare or pay any dividends on its common stock in the
foreseeable future. Payment of any dividends will depend upon Valemont Supply
Limited's future earnings, if any, its financial condition, and other factors as
deemed relevant by the Board of Directors.
SELECTED FINANCIAL DATA
The following selected financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements appearing elsewhere in this prospectus.
The statement of operations data set forth below for the period from June 25,
2001, (inception) to the nine months ended, and the balance sheet data at April
30, 2002, are derived from Valemont Supply Limited's unaudited 3rd quarter 2002
financial statements included elsewhere in this prospectus. The historical
results are not necessarily indicative of results to be expected for any future
period.
Inception to
April 30, 2002
---------------
STATEMENT OF OPERATIONS DATA:
Net sales . . . . . . . . . . . . . . . . $ Nil
===============
Loss from continuing operations . . . . . $ 54,065
===============
Loss per share from continuing operations $ Nil
===============
As of
April 30, 2002
BALANCE SHEET DATA:
Total assets. . . . . . . . . . . . . . . $ 6,541
===============
Total liabilities . . . . . . . . . . . . $ 532
===============
Valemont Supply Limited is in its early exploration and promotional stages. To
date, Valemont Supply Limited's only activities have been organizational,
directed at acquiring its mineral claims, raising its initial capital and
exploration. Valemont Supply Limited has not commenced commercial operations. As
a result, the selected financial data presented above bear no resemblance to the
results that Valemont Supply Limited expects when it begins operations. See
"Risk Factors," "Description of Business" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
During the period from June 25, 2001, (inception) through the nine months ended
April 30, 2002, Valemont Supply Limited has engaged in no significant operations
other than organizational activities, acquisition of a mica property and
preparation for registration of its securities under the Securities Act of 1933.
Valemont Supply Limited received no revenues during this period.
Valemont Supply Limited's operations in the upcoming twelve-month period will
vary based on the receipt of funding that is not assured to be received. As a
result Valemont Supply Limited's auditor has indicated that there is substantial
doubt regarding Valemont Supply Limited's ability to continue as a going concern
and has expressed this opinion in their audit report on the July 31, 2001
financial statements. Regardless of whether funding is received in the upcoming
twelve-month period Valemont Supply Limited anticipates incurring a loss as a
result of organizational expenses, expenses associated with registration under
the Securities Act of 1933, and expenses associated with setting up a company
structure to begin implementing its business plan. The costs associated with
filing this registration statement, and Valemont Supply Limited's expenses
associated with applying for Valemont Supply Limited's shares to trade on the
OTC bulletin board are not expected to exceed $5,500, are prepaid and will be
expensed. The extent of these costs will depend primarily on the states in which
a market maker would want Valemont Supply Limited's shares to be qualified.
Valemont Supply Limited intends to continue the exploration of its property, in
an attempt to establish mica reserves, and to generally meet its future
corporate obligations. Valemont Supply Limited anticipates that until these
procedures are completed it will not generate revenues, and may continue to
operate at a loss thereafter, depending upon the performance of the business.
Valemont Supply Limited anticipates that the offering will take about 5 months
beginning after the completion of this registration statement. The following
table illustrates how Valemont Supply Limited has budgeted its cash on hand over
the upcoming twelve-month period assuming various funding levels received:
Assuming Assuming Assuming Assuming
sale of 10% sale of 25% sale of 50% sale of
of stock of stock of stock 100% of
being being being stock being
Purpose. . . . . . . . . . . . . offered offered offered offered
------------ ------------ ------------ ------------
Attorneys' fees and expenses . . 241 241 241 241
Accountants' fees and expenses . 500 500 500 500
Transfer agent's and registrar's
fees and expenses. . . . . . . . 300 300 300 300
Site visit . . . . . . . . . . . 3,000 3,000 3,000 3,000
Meet with local contactors . . . 1,000 1,000 1,000 1,000
Exploration and verification
of exploration history . . . . . 0 6,000 12,000 15,000
Market Research. . . . . . . . . 0 0 2,000 4,000
Office Expenses. . . . . . . . . 0 0 2,000 5,000
Trade Shows. . . . . . . . . . . 0 0 0 7,000
Travel . . . . . . . . . . . . . 0 0 0 5,000
Working capital
------------ ------------ ------------ ------------
Total cash on hand and . . . . .
prepaid expenses . . . . . . . . $ 5,041 $ 11,041 $ 21,041 $ 41,041
------------ ------------ ------------ ------------
Valemont Supply Limited therefore anticipates satisfying its cash requirements
over the next 12 months in both full funding and no funding scenarios, however
if Valemont Supply Limited fails to raise at least $18,000 it will be not be
able to conduct its planned exploration activities. If Valemont Supply Limited
does not generate sufficient capital to conduct its planned operations, it will
conduct a limited work program with available funds. In addition Valemont Supply
Limited would seek providers of exploration services willing to be compensate by
issuance of stock in lieu of cash. In this way Valemont Supply Limited would
attempt to complete the planned exploration activities.
Over the upcoming twelve-month period Valemont Supply Limited:
- does not intend to perform any product research and development;
- does not expect to purchase any significant plant or equipment; and
- other than new sales staff does not expect any significant changes in
the number of employees
LIQUIDITY AND CAPITAL RESOURCES
Valemont Supply Limited remains in the exploration stage and, since inception,
has experienced no significant change in liquidity or capital resources or
shareholders' equity. Consequently, Valemont Supply Limited's balance sheet as
of April 30, 2002, reflects total assets of $1,041 in the form of cash.
Valemont Supply Limited expects to carry out its plan of business discussed
above. In addition, Valemont Supply Limited may engage in a combination with
another business. Valemont Supply Limited cannot predict the extent to which its
liquidity and capital resources will be diminished prior to the consummation of
a business combination or whether its capital will be further depleted by the
operating losses (if any) of the business entity with which Valemont Supply
Limited may eventually combine. Valemont Supply Limited has not engaged in
discussions concerning potential business combinations and there currently are
no business acquisitions that are probable. The conditions or events that would
cause Valemont Supply Limited to engage in business combination with another
business include:
Valemont Supply Limited may not be successful in developing a viable market for
its products due to its limited financial resources, the only way Valemont
Supply Limited will be able to diversify its activities, should its business
plan prove to be impractical, would be to enter into a business combination.
Valemont Supply Limited has no specific long-term capital requirements. If
Future sales do occur, it is expected that these future costs of sales including
product extraction costs and commissions are payable after the time that
Valemont Supply Limited expects to be paid by its customer. Valemont Supply
Limited therefore plans to generate sufficient cash flow from sales to meet its
long-term requirements. Valemont Supply Limited may need additional capital to
carry out its business plan or to engage in a business combination. In the event
that Valemont Supply Limited requires more capital, no commitments to provide
additional funds have been made by management or other shareholders.
Accordingly, there can be no assurance that any additional funds will be
available on terms acceptable to Valemont Supply Limited or at all.
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Manning Elliott Chartered Accountants has served as Valemont Supply Limited's
independent auditor since inception, and Valemont Supply Limited has not had any
dispute with Manning Elliott Chartered Accountants over accounting or financial
disclosure.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name, age and position of each director and
executive officer of Valemont Supply Limited:
NAME. . . AGE POSITION
--- -----------------------------------------
A.E. Daem 64 President, Secretary, Treasurer, Director
- --------- --- -----------------------------------------
Mr. Daem became a director and officer of Valemont Supply Limited in June 2001.
In 1960, Mr. Daem graduated from the University of British Columbia with a
degree in Science and Pharmacy. During the last 15 years, Mr. Daem has worked
for Circle Drugs Inc, a private company, as director, president and chief
executive officer, growing the retail chain while maintaining profitability. Mr.
Daem also worked for Air packaging International a public company from 1989 to
1991 as director, president and chief operating officer; a packaging company
which has developed a number of packaging products. Mr. Daem worked from 1991 to
1999 as president, director and chief executive officer of International
Tournigan Inc, a public exploration company searching for minerals. Through
International Tournigan Inc. Mr. Daem has the experience of financing,
administration and engaging and managing the activities of numerous professional
engineers and geologists in the search for minerals in Canada, Unites States,
Africa, Papua New Guinea and Peru. Mr. Daem is also the sole shareholder of
Armanda International Trader Inc. in which he conducts his private passive
investment business, which consists of a diversified portfolio of long term
equity investments in large publicly traded companies. Mr. Daem devotes
approximately 40% of his time to his position in Valemont Supply Limited, in the
areas of finance, administration and exploration coordination.
The director named above will serve until the first annual meeting of Valemont
Supply Limited's shareholders. Thereafter, directors will be elected for
one-year terms at the annual shareholders' meeting. Officers will hold their
positions at the pleasure of the board of directors. No employment agreements
currently exist or are being contemplated. There is no arrangement or
understanding between the director and officer of Valemont Supply Limited and
any other person pursuant to which any director or officer is to be selected as
a director or officer.
The directors and officers of Valemont Supply Limited will devote their time to
Valemont Supply Limited's affairs on an "as needed" basis. As a result, the
actual amount of time that they will devote to Valemont Supply Limited's affairs
is not consistent and is likely to vary substantially from month to month.
EXECUTIVE COMPENSATION
No officer or director has received any remuneration from Valemont Supply
Limited Although there is no current plan in existence, it is possible that
Valemont Supply Limited will adopt a plan to pay or accrue compensation to its
officers and directors for services related to the implementation of Valemont
Supply Limited's business plan. Valemont Supply Limited has no stock option,
retirement, incentive, defined benefit, actuarial, pension or profit-sharing
programs for the benefit of directors, officers or other employees, but the
Board of Directors may recommend adoption of one or more such programs in the
future. Valemont Supply Limited has no employment contract or compensatory plan
or arrangement with any executive officer of Valemont Supply Limited The
Director currently does not receive any cash compensation from Valemont Supply
Limited for his service as members of the board of directors. There is no
compensation committee, and no compensation policies have been adopted. See
"Certain Relationships and Related Transactions."
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 30, 2002:
- Valemont Supply Limited's outstanding common stock owned or
beneficially owned by each executive officer and director;
- Valemont Supply Limited's outstanding common stock owned or
beneficially owned by each person who owned of record, or was known
by Valemont Supply Limited to own beneficially, more than 5% of
Valemont Supply Limited's common stock;
- The shareholdings of all executive officers and directors as a group.
Percentage of
Outstanding
Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shares Owned Shares Owned
- ------------------------------------------------------------ ------------ --------------
A.E. Daem, President, Secretary, Treasurer, and Director
Kamloops, B.C. Canada . . . . . . . . . . . . . . . . . . . 8,000,000 100%
- ------------------------------------------------------------ ------------ --------------
All Executive Officers & Directors As A Group (1 Individual) 8,000,000 100%
- ------------------------------------------------------------ ------------ --------------
All shares are held of record and each record shareholder has sole voting and
investment power. Valemont Supply Limited knows of no one who has the right to
acquire beneficial ownership in Valemont Supply Limited common stock. Other than
the sale of Valemont Supply Limited stock contemplated by this prospectus, there
are no arrangements known to Valemont Supply Limited the operation of which may
at a subsequent date result in a change of control of Valemont Supply Limited
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No director, executive officer or nominee for election as a director of Valemont
Supply Limited, and no owner of five percent or more of Valemont Supply
Limited's outstanding shares or any member of their immediate family has entered
into or proposed any transaction in which the amount involved exceeds $60,000.
A.E. Daem is the only promoter of Valemont Supply Limited Other than the
8,000,000 shares issued to Mr. Daem in exchange for $46,000 upon inception of
Valemont Supply Limited, there has been nothing of value (including money,
property, contracts, options, or rights of any kind) received or to be received
by Mr. Daem, directly or indirectly, from the Valemont Supply Limited Valemont
Supply Limited has not received any other assets, services or other
consideration as a result. Valemont Supply Limited arbitrarily determined the
price of the shares issued to Mr. Daem.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Valemont Supply Limited's bylaws provide that Valemont Supply Limited will
indemnify its officers and directors for costs and expenses incurred in
connection with the defense of actions, suits, or proceedings against them on
account of their being or having been directors or officers of Valemont Supply
Limited, absent a finding of negligence or misconduct in the performance of
duty.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling Valemont
Supply Limited pursuant to the forgoing provisions, Valemont Supply Limited has
been informed that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in that Act and is,
therefore, unenforceable.
INDEX TO FINANCIAL STATEMENTS
Valemont Supply Limited
(An Exploration Stage Company)
NINE MONTHS ENDED APRIL 30, 2002 (UNAUDITED) AND
JUNE 25, 2001 (DATE OF INCEPTION) TO APRIL 30, 2002
Interim Balance Sheet. . . . . . . . . . . . . . . . F-2
Interim Statement of Operations. . . . . . . . . . . F-3
Interim Statement of Cash Flows. . . . . . . . . . . F-4
Notes to the Interim Financial Statements. . . . . . F-5 to F-6
JUNE 25, 2001 (DATE OF INCEPTION) TO JULY 31, 2001
Independent Auditor's Report . . . . . . . . . . . F-7
Balance Sheet. . . . . . . . . . . . . . . . . . . F-8
Statement of Operations. . . . . . . . . . . . . . F-9
Statement of Stockholders' Equity. . . . . . . . . F-10
Statement of Cash Flows. . . . . . . . . . . . . . F-11
Notes to the Financial Statements. . . . . . . . . F-12 to F-14
F-1
Valemont Supply Limited
(An Exploration Stage Company)
Interim Balance Sheets
(expressed in U.S. dollars)
April 30, July 31,
2002 2001
$ $
(unaudited) (audited)
------------
ASSETS
Current Assets
Cash 1,041 2,823
Prepaid expenses 5,500 10,000
- ---------------------------------------------------------------------------------------
Total Current Assets 6,541 12,823
- ---------------------------------------------------------------------------------------
Total Assets 6,541 12,823
- ---------------------------------------------------------------------------------------
LIABILITIES
Current Liabilities 532 -
- ---------------------------------------------------------------------------------------
Contingency (Note 1)
STOCKHOLDERS' EQUITY
Stockholders' Equity
Common Stock: 100,000,000 common shares authorized with
a par value of $0.0001; 8,000,000 issued and outstanding 800 800
Additional Paid-in Capital 45,200 45,200
Donated Capital (Note 4) 14,074 1,250
- ---------------------------------------------------------------------------------------
60,074 47,250
- ---------------------------------------------------------------------------------------
Preferred Stock: 20,000,000 preferred shares authorized with
a par value of $.0001; none issued - -
- ---------------------------------------------------------------------------------------
Deficit Accumulated During the Exploration Stage (54,065) (34,427)
- ---------------------------------------------------------------------------------------
Total Stockholders' Equity 6,009 12,823
- ---------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity 6,541 12,823
- ---------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
F-2
Valemont Supply Limited
(An Exploration Stage Company)
Interim Statement of Operations
(expressed in U.S. dollars)
(unaudited)
Accumulated from Accumulated from
June 25, 2001 Nine Months June 25, 2001
(Date of Inception) Ended April 30, (Date of Inception)
to April 30, 2002 2002 to July 31, 2001
$ $ $
Revenue
- ----------------------------------------------------------------------------------------------------------
Expenses
Communication 1,730 1,730 -
Consulting 10,000 9,000 1,000
Mineral property acquisition costs (Note 3) 31,574 1,574 30,000
Professional fees 8,261 5,084 3,177
Rent 2,500 2,250 250
54,065 19,638 34,427
- ----------------------------------------------------------------------------------------------------------
Net Loss for the Period (54,065) (19,638) (34,437)
- ----------------------------------------------------------------------------------------------------------
Deficit - Beginning of Period - (34,427) -
- ----------------------------------------------------------------------------------------------------------
Deficit - End of Period (54,065) (54,065) (34,437)
- ----------------------------------------------------------------------------------------------------------
Net Loss Per Share - Basic (0.01)
- ----------------------------------------------------------------------------------------------------------
Weighted Average Shares Outstanding 8,000,000
- ----------------------------------------------------------------------------------------------------------
(Diluted loss per share has not been presented, as the result is anti-dilutive)
The accompanying notes are an integral part of these financial statements
F-3
Valemont Supply Limited
(An Exploration Stage Company)
Interim Statement of Cash Flows
(expressed in U.S. dollars)
(unaudited)
Nine Months
Ended
April30,
2002
$
Cash Flows To Operating Activities
Net loss. . . . . . . . . . . . . . . . . (19,638)
Non-cash items
Donated consulting services . . . . . . . 9,000
Donated rent. . . . . . . . . . . . . . . 2,250
Donated mineral maintenance fees. . . . . 1,574
Adjustments to reconcile net loss to cash
Prepaid expenses. . . . . . . . . . . . . 4,500
Accounts payable. . . . . . . . . . . . . 532
- --------------------------------------------------------
Net Cash Used In Operating Activities . . (1,782)
- --------------------------------------------------------
Net Decrease in Cash. . . . . . . . . . . (1,782)
Cash - Beginning of Period. . . . . . . . 2,823
- --------------------------------------------------------
Cash - End of Period. . . . . . . . . . . 1,041
========================================================
Non-Cash Financing Activities . . . . . . -
========================================================
Supplemental Disclosures
Interest paid . . . . . . . . . . . . . . -
Income taxes paid . . . . . . . . . . . . -
========================================================
The accompanying notes are an integral part of these financial statements
F-4
VALEMONT SUPPLY, LIMITED
(AN EXPLORATION STAGE COMPANY)
Notes to Interim Financial Statements
(Expressed in U.S. dollars)
APRIL 30, 2002
1. Exploration Stage Company
The Company was incorporated in the state of Washington on June 25, 2001. On
June 26, 2001 the Company purchased Mica Mineral Claims, situated in the Cariboo
Mining Division in the Province of British Columbia, Canada. Mica is mainly used
in the oil and gas industry, in the form of oil drilling mud, to lubricate the
shafts of drilling rigs.
The Company's principal business plan is to continue exploration of its property
in order to confirm the mica content of mineralized materials found there and to
ultimately seek earnings by exploiting any mica available from the mineral
claims.
The Company currently has yet to generate any revenues and in accordance with
SFAS No. 7, is considered an exploration stage company. At present, management
devotes most of its activities in becoming a public company which will allow the
Company to raise sufficient funds to explore their Mica property. Planned
principal activities have not yet begun. The ability of the Company to emerge
from the exploration stage with respect to any planned principal business
activity is dependent upon its successful efforts to raise additional equity
financing and/or attain profitable operations. There is no guarantee that the
Company will be able to raise any equity financing or successfully explore the
Mica property and thus extract and sell Mica at a profit. These factors raise
substantial doubt regarding the Company's ability to continue as a going
concern.
2. Summary of Significant Accounting Principles
a) Year End
The Company's year-end is July 31
b) 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 the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
c) Basic Earnings (Loss) Per Share
Basic earnings (loss) per share have been calculated in conformity with
Financial Accounting Standards Board Statement No. 128 "Earnings per
Share". The Company has a simple capital structure without potential common
shares. Basic earnings (loss) per share is calculated on the weighted
average number of common shares outstanding each year.
d) Mineral Properties
The Company is in the exploration stage and all costs relating to mineral
property grassroots exploration are charged to operations as incurred.
F-5
VALEMONT SUPPLY, LIMITED
(AN EXPLORATION STAGE COMPANY)
Notes to Interim Financial Statements
(Expressed in U.S. dollars)
APRIL 30, 2002
3. Prepaid expenses
Prepaid expenses represent a single payment to a company that provides legal,
accounting and electronic filing services
4. Mineral Properties
Pursuant to a sales agreement dated June 26, 2001, the Company acquired 12
mineral claims containing a mica mineral deposit. The mineral property is
located in the Cariboo Mining Division in the Province of British Columbia.
Consideration paid was $30,000 and an exclusive right to a Royalty on the mica
produced from the mica claims in the amount of US$2.00 per ton of pit run of
mica containing ore extracted from the mica claims. This payment constitutes a
net royalty payment to the vendor. This payment is to be made within 30 days of
the pit run mica leaving the mica claims. The price per ton will be negotiated
every five years. The mica in this property was first discovered in 1961 and
prior to acquiring the property previous owners performed an exploration program
in order to better understand the nature and location of the mica. This
exploration included trenching, bulk sampling and several assayed drill holes.
This exploration program verified a commercially acceptable grade of mica
accessible to open pit recovery. In 1987 a small-scale mining project was
carried out resulting in four bulk samples of 60 to 70 tons each and six diamond
drill holes being drilled. This project outlined and exposed the deposit
further. The Company has not conducted a full evaluation required to designate
reserves, and therefore has no mica reserves. Pursuant to the Company's
accounting policy on mineral properties the acquisition costs of $30,000 have
been charged to operations as persuasive engineering evidence has not yet been
obtained to prove recoverable mica reserves exist.
5. Related Party Transactions
The President of the Company has donated services valued at $1,000 per month and
rent valued at $250 per month. During the period the President of the Company
also paid for and donated mineral claim maintenance fees totaling $1,575 on
behalf of the Company. These amounts have been charged to operations and
classified as "donated capital" in shareholders' equity.
F-6
F-7
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Valemont Supply Limited
(An Exploration Stage Company)
We have audited the accompanying balance sheet of Valemont Supply Limited (An
Exploration Stage Company) as of July 31, 2001 and the related statements of
operations, stockholders' equity and cash flows for the period from June 25,
2001 (Date of Inception) to July 31, 2001. 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 audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards. 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 audit provides a reasonable basis for our opinion.
In our opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of Valemont Supply Limited (An
Exploration Stage Company), as of July 31, 2001, and the results of its
operations and its cash flows for the period from June 25, 2001 (Date of
Inception) July 31, 2001, in conformity with U.S. generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has not generated any revenues or conducted any
operations since inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also discussed in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/S/ "MANNING ELLIOTT"
CHARTERED ACCOUNTANTS
Vancouver, Canada
September 21, 2001
F-7
Valemont Supply Limited
(An Exploration Stage Company)
Balance Sheet
(expressed in U.S. dollars)
July 31,
2001
$
ASSETS
Current Assets
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,823
Prepaids. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
- ---------------------------------------------------------------------------------------------
Total Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,823
=============================================================================================
LIABILITIES
Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -
- ---------------------------------------------------------------------------------------------
Contingency (Note 1)
STOCKHOLDERS' EQUITY
Stockholders' Equity
Common Stock, par value $0.0001; 100,000,000 shares authorized;
8,000,000 shares issued and outstanding . . . . . . . . . . . . . . . . . . . . . 800
Additional Paid-in Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,200
Donated Capital (Note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,250
- ---------------------------------------------------------------------------------------------
47,250
- ---------------------------------------------------------------------------------------------
Preferred Stock, par value of $0.0001; 20,000,000 shares authorized; none issued. -
- ---------------------------------------------------------------------------------------------
Deficit Accumulated During the Exploration Stage. . . . . . . . . . . . . . . . . (34,427)
- ---------------------------------------------------------------------------------------------
Total Stockholders' Equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,823
- ---------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity. . . . . . . . . . . . . . . . . . . . 12,823
=============================================================================================
The accompanying notes are an integral part of these financial statements
F-8
Valemont Supply Limited
(An Exploration Stage Company)
Statement of Operations
(expressed in U.S. dollars)
Accumulated from
June 25, 2001
(Date of Inception)
to July 31, 2001
$
Revenue . . . . . . . . . . . . . . . . . . -
- -----------------------------------------------------------------
Expenses
Consulting. . . . . . . . . . . . . . . . . 1,000
Mineral property acquisition costs (Note 3) 30,000
Professional fees . . . . . . . . . . . . . 3,177
Rent. . . . . . . . . . . . . . . . . . . . 250
- -----------------------------------------------------------------
34,427
- -----------------------------------------------------------------
Net Loss for the Period . . . . . . . . . . (34,427)
=================================================================
Net Loss Per Share - Basic. . . . . . . . . (0.01)
=================================================================
Weighted Average Shares Outstanding . . . . 8,000,000
=================================================================
(Diluted loss per share has not been presented as the result is anti-dilutive)
The accompanying notes are an integral part of these financial statements
F-9
Valemont Supply Limited
(An Exploration Stage Company)
Statement of Cash Flows
(expressed in U.S. dollars)
Accumulated from
June 25, 2001
(Date of Inception)
to July 31, 2001
$
Cash Flows To Operating Activities
Net loss. . . . . . . . . . . . . . . . . (34,427)
Non-cash items
Donated consulting services . . . . . . . 1,000
Donated rent. . . . . . . . . . . . . . . 250
Adjustment to reconcile net loss to cash
Prepaids. . . . . . . . . . . . . . . . . (10,000)
- ---------------------------------------------------------------
Net Cash Used In Operating Activities . . (43,177)
- ---------------------------------------------------------------
Cash Flows From Financing Activities
Sale of capital stock . . . . . . . . . . 46,000
- ---------------------------------------------------------------
Net Cash Provided By Financing Activities 46,000
- ---------------------------------------------------------------
Net Increase in Cash. . . . . . . . . . . 2,823
Cash - Beginning of Period. . . . . . . . -
- ---------------------------------------------------------------
Cash - End of Period. . . . . . . . . . . 2,823
- ---------------------------------------------------------------
Non-Cash Financing Activities . . . . . . -
- ---------------------------------------------------------------
Supplemental Disclosures
Interest paid . . . . . . . . . . . . . . -
Income taxes paid . . . . . . . . . . . . -
- ---------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
F-10
Valemont Supply Limited
(An Exploration Stage Company)
Statement of Stockholders' Equity
From June 25, 2001 (Date of Inception) to July 31, 2001
(expressed in U.S. dollars)
Deficit
Accumulated
Additional During the
Paid-in Donated Exploration
Shares Amount Capital Capital Total Stage
# $ $ $ $ $
- ---------------------------------------------------------------------------------------------
Balance - June 25, 2001
(Date of Inception). . . . - - - - - -
Stock issued on June 25,
2001 for cash. . . . . . . 8,000,000 800 45,200 - 46,000 -
Value of rent donated by
related party. . . . . . . - - - 250 250 -
Value of services donated
by related party . . . . . - - - 1,000 1,000 -
Net loss for the period (34,427)
- ---------------------------------------------------------------------------------------------
Balance - July 31, 2001. . 8,000,000 800 45,200 1,250 47,250 (34,427)
- ---------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
F-11
VALEMONT SUPPLY, LIMITED
(A EXPLORATION STAGE COMPANY)
Notes to Financial Statements
(Expressed in U.S. dollars)
July 31, 2001
1. Exploration Stage Company
The Company was incorporated in the state of Washington on June 25, 2001. On
June 26, 2001 the Company purchased twelve mica mineral claims, situated in the
Cariboo Mining Division in the Province of British Columbia, Canada. Mica is
mainly used in the oil and gas industry, in the form of oil drilling mud, to
lubricate the shafts of drilling rigs.
The Company's principal business plan is to continue exploration of its property
in order to confirm the mica content of mineralized materials found there and to
ultimately seek earnings by exploiting any mica available from the mineral
claims.
The Company is an exploration stage company. At present, management devotes most
of its activities in becoming a public company which will allow the Company to
raise sufficient funds to further explore the mica property. Planned principal
activities have not yet begun. The ability of the Company to emerge from the
exploration stage with respect to any planned principal business activity is
dependent upon its successful efforts to raise additional equity financing
and/or attain profitable operations. There is no guarantee that the Company will
be able to raise any equity financing or successfully explore the mica property
to thus be able to extract and sell mica at a profit. These factors raise
substantial doubt regarding the Company's ability to continue as a going
concern.
2. Summary of Significant Accounting Principles
a) Year End
The Company's year end is July 31.
b) 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
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
c) Basic Earnings (Loss) Per Share
Basic earnings (loss) per share have been calculated in conformity with
Financial Accounting Standards Board Statement No. 128 "Earnings per Share". The
Company has a simple capital structure without potential common shares. Basic
earnings (loss) per share is calculated on the weighted average number of common
shares outstanding each year.
d) Mineral Properties
The Company is in the exploration stage and all costs relating to mineral
property grassroots exploration are charged to operations as incurred.
e) Income Taxes
The Company has adopted the provisions of Financial Accounting Standards Board
Statement No. 109 (SFAS 109), Accounting for Income Taxes.
Pursuant to SFAS 109 the Company is required to compute tax asset benefits for
net operating loss carry forwards. Potential benefit of net operating losses has
not been recognized in the financial statements because the Company cannot be
assured that it is more likely than not that it will utilize the net operating
loss carry forwards in future years.
The Company has a tax loss of $4,427 to offset future years taxable income
expiring in fiscal 2016.
F-12
VALEMONT SUPPLY, LIMITED
(A EXPLORATION STAGE COMPANY)
Notes to Financial Statements
(Expressed in U.S. dollars)
July 31, 2001
Summary of Significant Accounting Principles (continued)
The components of the net deferred tax asset, the statutory tax rate, the
effective tax rate and the elected amount of the valuation allowance are
scheduled below:
2001
$
Net Operating Losses . 4,427
Statutory Tax Rate . . 34%
Effective Tax Rate . . -
Deferred Tax Asset . . 1,505
Valuation Allowance. . (1,505)
Net Deferred Tax Asset -
3. Prepaid expenses
Prepaid expenses represent a single payment to a company that provides legal,
accounting and electronic filing services
4. Mineral Properties
Pursuant to a sales agreement dated June 26, 2001, the Company acquired 12
mineral claims containing a mica mineral deposit. The mineral property is
located in the Cariboo Mining Division in the Province of British Columbia.
Consideration paid was $30,000 and an exclusive right to a Royalty on the mica
produced from the mica claims in the amount of US$2.00 per ton of pit run of
mica containing ore extracted from the mica claims. This payment constitutes a
net royalty payment to the vendor. This payment is to be made within 30 days of
the pit run mica leaving the mica claims. The price per ton will be negotiated
every five years. The mica in this property was first discovered in 1961 and
prior to acquiring the property previous owners performed an exploration program
in order to better understand the nature and location of the mica. This
exploration included trenching, bulk sampling and several assayed drill holes.
This exploration program verified a commercially acceptable grade of mica
accessible to open pit recovery. In 1987 a small-scale mining project was
carried out resulting in four bulk samples of 60 to 70 tons each and six diamond
drill holes being drilled. This project outlined and exposed the deposit
further. The Company has not conducted a full evaluation required to designate
reserves, and therefore has no mica reserves. Pursuant to the Company's
accounting policy on mineral properties the acquisition costs of $30,000 have
been charged to operations as persuasive engineering evidence has not yet been
obtained to prove recoverable mica reserves exist.
5. Related Party Transactions
The President of the Company has donated services valued at $1,000 per month and
rent valued at $250 per month. These amounts have been charged to operations and
classified as "donated capital" in shareholders' equity.
F-13
PROSPECTUS
June 19, 2002
VALEMONT SUPPLY LIMITED
6779 BLACKWELL RD
KAMLOOPS, BRITISH COLUMBIA V2C 6V7, CANADA
(250) 519 0553 (250) 519-0449
1,000,000 Shares of Common Stock
to be sold by current shareholders
Valemont Supply Limited has not authorized any dealer, salesperson or other
person to give you written information other than this prospectus or to make
representations as to matters not stated in this prospectus. You must not rely
on unauthorized information. This prospectus is not an offer to sell these
securities or a solicitation of your offer to buy the securities in any
jurisdiction where that would not be permitted or legal. Neither the delivery of
this prospectus nor any sales made hereunder after the date of this prospectus
shall create an implication that the information contained herein or the affairs
of Valemont Supply Limited have not changed since the date hereof.
Until September 18, 2002 (90 days after the date of this prospectus),all dealers
that effect transactions in these shares of common stock may be required to
deliver a prospectus. This is in addition to the dealer's obligation to deliver
a prospectus when acting as an underwriter and with respect to their unsold
allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The securities are being registered for the account of selling shareholders. All
of the following expenses will be borne by Valemont Supply Limited The amounts
set forth are estimates except for the SEC registration fee:
SEC registration fee . . . . . . . . . . . . . . . $ 10
Printing and engraving expenses. . . . . . . . . . 5,000
Attorneys' fees and expenses . . . . . . . . . . . 4,000
Accountants' fees and expenses . . . . . . . . . . 2,000
Transfer agent's and registrar's fees and expenses 500
Miscellaneous. . . . . . . . . . . . . . . . . . . 990
Total. . . . . . . . . . . . . . . . . . . . . . . $12,500
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to Washington State law, a corporation may indemnify an individual made
a party to a proceeding because the individual is or was a director against
liability incurred in the proceeding if the individual acted in good faith; and
he or she reasonably believed that, in the case of conduct in the individual's
official capacity with the corporation, his or her conduct was in its best
interests; in cases not involving his or her official capacity, his or her
conduct was at least not opposed to its best interests; and in the case of any
criminal proceeding, he or she had no reasonable cause to believe the conduct
was unlawful. A corporation is prohibited from indemnifying a director in
connection with a proceeding by or in the right of the corporation in which the
director was adjudged liable to the corporation, in connection with any other
proceeding charging improper personal benefit to the director, whether or not
involving action in the director's official capacity, in which the director was
adjudged liable on the basis that personal benefit was improperly received by
the director.
The articles of Valemont Supply Limited, filed as Exhibit 3.1, provide that
Valemont Supply Limited will indemnify its directors to the full extent
permitted under Washington state law. The bylaws of Valemont Supply Limited,
filed as Exhibit 3.2, provide that Valemont Supply Limited will indemnify and
hold harmless each person who was, is or is threatened to be made a party to or
is otherwise involved in any threatened proceedings by reason of the fact that
he or she is or was a Director or officer of the corporation or is or was
serving at the request of the corporation as a Director, officer, partner,
trustee, employee or agent of another entity, against all losses, claims,
damages, liabilities and expenses actually and reasonably incurred or suffered
in connection with such proceeding.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Set forth below is information regarding the issuance and sales of Valemont
Supply Limited's securities without registration since its formation. No such
sales involved the use of an underwriter and no commissions were paid in
connection with the sale of any securities.
a. On June 25, 2001 Valemont Supply Limited issued a total of 8,000,000 shares
of common stock to A.E. Daem. The issuance of the common stock was exempt from
registration under Regulation S. A.E. Daem was not a resident or citizen of the
U.S. at the time it received the offer to purchase and at the closing of the
purchase of the stock, and did not acquire the stock for the account or benefit
of any U.S. person. A.E. Daem agreed to resell such securities only in
accordance with the provisions of Regulation S, pursuant to registration, or
pursuant to an available exemption from registration. The stock contains a
legend to the effect that transfer is prohibited except in accordance with the
provisions of Regulation S, pursuant to registration, or pursuant to an
available exemption from registration. Valemont Supply Limited will refuse to
register any transfer of the Stock not made in accordance with the provisions of
Regulation S, pursuant to registration, or pursuant to an available exemption
from registration. The issuance of the shares was also exempt from registration
under Rule 506 of Regulation D, and sections 3(b) and 4(2) of the Securities Act
of 1933, as amended, due to Mr. Daem's status as the founder and initial
management of Valemont Supply Limited, his status as an accredited investor and
the limited number of investors (one).
Item 16(a). Exhibits.
Exhibit Number Name Page
-----------------------------------------------------------
3.1* . . . . . Articles of Incorporation
3.2* . . . . . Bylaws
4.1 . . . . . Specimen Share of Common Stock
5.1 . . . . . Opinion re: Legality
10.1*. . . . . Sale Agreement
10.2 . . . . . Subscription Agreement and Investment Letter re: A.E. Daem
23.1 . . . . . Consent of Independent Auditors.
23.2 . . . . . Consent of Counsel (see Exhibit 5.1)
*Previously filed
ITEM 16(B). FINANCIAL STATEMENT SCHEDULES.
As of April 30, 2002, Valemont Supply Limited:
- has no valuation or qualifying accounts
- does not have a substantial portion of its business devoted to
acquiring and holding for investment real estate or interests therein
- has no subsidiaries
- has no investments in mortgage loans on real estate.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) To include any prospectus required by section 10(a)(3) of the Securities
Act of 1933;
(b) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
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 volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Kamloops, Province of
British Columbia, Canada, on June 19, 2002.
Valemont Supply Limited
/s/ A.E. Daem
---------------
By A.E. Daem
It's President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
/s/ A.E. Daem President, Secretary, Treasurer, and Director
- ---------------
A.E. Daem June 19, 2002
/s/ A.E. Daem Principal Accounting Officer
- ---------------
A.E. Daem June 19, 2002