U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
x Quarterly Report Under Section 13 or 15(d) of the Securities
- --- Exchange Act of 1934
For the quarterly period ended March 31, 2005.
Commission File Number 0-7501.
RUBY MINING COMPANY
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Colorado 83-0214117
-------- ----------
(State or other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
3490 Piedmont Rd., Suite 304, Atlanta, Georgia 30305
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
Issuers Telephone Number (404) 231-8500
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports),and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
----- -----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Class Outstanding at May 9, 2005
----- ----------------------------------
Common Stock, $.001 Par Value 55,551,390 shares
Transitional Small Business Disclosure Format: YES NO
X
------- -------
RUBY MINING COMPANY AND SUBSIDIARIES
Form 10-QSB
Index
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 9
Item 3. Controls and Procedures 12
PART II OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matter to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits 12
Signatures 13
Exhibit Index 14
2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RUBY MINING COMPANY AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
MARCH 31, DECEMBER 31,
2005 2004
------------ ------------
ASSETS
CURRENT ASSETS
Cash in bank $ 41,353 $ 268,996
Expense and employee receivable 264,216 261,488
Other 85,681 106,157
------------ ------------
TOTAL CURRENT ASSETS 391,250 636,641
Fixed assets, net of accumulated depreciation 462 522
New World Legacy-vessel; net of accumulated depreciation 747,559 760,019
depreciation
Investment 405,000 315,000
Other assets 49,870 38,014
------------ ------------
TOTAL ASSETS $ 1,594,141 $ 1,750,196
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES
Current liabilities
Accounts payable $ 278,975 $ 370,905
Accrued compensation and consulting fees 446,200 431,800
Short-term advances 369,758 369,758
------------ ------------
TOTAL CURRENT LIABILITIES 1,094,933 1,172,463
Long-term debt, net of discount 4,055,880 3,948,699
Interest payable 3,073,955 2,948,687
------------ ------------
TOTAL LIABILITIES 8,224,768 8,069,849
------------ ------------
Stockholders' deficit
Common stock 55,551 55,341
Paid-in capital 11,735,550 11,356,312
Subscribed shares 55,000 75,250
Development stage deficit (18,476,728) (17,806,556)
------------ ------------
TOTAL STOCKHOLDERS' DEFICIT (6,630,627) (6,319,653)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 1,594,141 1,750,196
============ ============
See notes to condensed consolidated financial statements.
3
RUBY MINING COMPANY AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
FROM INCEPTION MARCH 31,
THROUGH ------------------------------
MARCH 31, 2005 2005 2004
-------------- ------------- -------------
Revenues $ 199,927 $ -- $ --
-------------- ------------- -------------
Operating expenses
Compensation and employee benefits 3,485,657 84,132 108,746
Forgiveness of salaries (663,625) -- --
Research and development 1,867,593 27,170 250,000
General and administrative 4,048,813 63,187 88,918
Depreciation and amortization 200,294 12,519 59
Professional fees 4,199,849 55,956 134,057
Exploration expense 630,765 196,091 --
-------------- ------------- -------------
13,769,346 439,055 581,780
-------------- ------------- -------------
OPERATING (LOSS) (13,569,419) (439,055) (581,780)
Other income (expense) 750,226 1,331 50,226
Interest (expense) (5,657,535) (232,448) (218,220)
-------------- ------------- -------------
NET (LOSS) $ (18,476,728) $ (670,172) $ (749,774)
============== ============= =============
Net (loss) per common share:
Basic and diluted $ (0.01) $ (0.02)
============= =============
See notes to condensed consolidated financial statements.
4
RUBY MINING COMPANY AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31, FROM INCEPTION
--------------------------------- THROUGH
2005 2004 MARCH 31, 2005
------------- ------------- --------------
Operating activities
Net loss $ (670,172) $ (749,774) $(18,476,728)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 12,520 59 199,077
Discount amortization 107,181 96,412 2,151,738
Equity-based professional services -- 177,000 1,108,960
(Decrease) Increase in accounts
payable and accrual (77,532) (374,039) 1,080,689
Increase in interest payable 125,268 106,136 3,096,824
Other, net 5,894 56,564 322,553
------------ ------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (494,113) (687,642) (10,516,887)
------------ ------------ ------------
Investing activities
Advances under expense receivable -- (42,623) (151,206)
Investment purchase (90,000) -- (110,000)
Purchase of fixed assets -- -- (149,177)
Purchase of vessel -- (429,472) (447,921)
------------ ------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (92,728) (472,095) (858,304)
------------ ------------ ------------
Financing activities
Issuance of common stock and warrants 359,198 575,000 8,592,594
Short-term advances -- 296,031 844,558
Stock subscription -- -- 75,250
Issuance of debentures -- -- 1,904,142
------------ ------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 359,198 871,031 11,416,544
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH (227,643) (288,706) 41,353
CASH AT BEGINNING OF PERIOD 268,996 352,037 --
------------ ------------ ------------
CASH AT END OF PERIOD $ 41,353 $ 63,331 $ 41,353
============ ============ ============
See notes to condensed consolidated financial statements.
5
RUBY MINING COMPANY AND SUBSIDIARIES
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
March 31, 2005
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include the
accounts of Ruby Mining Company (the "Company") and its wholly-owned
subsidiaries, Admiralty Corporation ("Admiralty"), and Admiralty Marine
Operations, LTD. ("AMO"). Significant inter-company transactions and accounts
are eliminated in consolidation.
The financial statements as of March 31, 2005, and for the three months ended
March 31, 2005 and 2004, and the from-inception statements are unaudited and
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted pursuant to such rules and regulations. These condensed consolidated
financial statements should be read in conjunction with the audited financial
statements and notes thereto included in the Company's annual report on Form
10-KSB for the year ended December 31, 2004. The financial information included
herein reflects all adjustments (consisting of normal recurring adjustments),
which are, in the opinion of management, necessary to a fair presentation of the
financial position and results of operations for interim periods.
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities and
income and expense amounts. Actual results could differ from those estimates.
The Company and its subsidiaries are a development stage company and have had
only minimal revenues. The consolidated development stage deficit of the
entities is $18,476,728. These circumstances indicate substantial doubt about
the ability of the Company to continue as a going concern. Management of the
Company recognizes that additional capital will be needed to continue operations
and is seeking to establish arrangements for capital or financing. The success
of the Company is dependent upon management's ability to implement plans for
capital and financing.
During the quarter ending March 31, 2004, the Company organized AMO as a
wholly-owned subsidiary. AMO, through capitalization from the Company, acquired
the New World Legacy, a research vessel, for cash consideration of $429,472, and
for equity instruments of the Company valued at $350,000.
During the quarter ending March 31, 2005, the Company issued 210,500 shares of
common stock and 3,631,000 warrants on the Company's common stock. The warrants
have exercise prices ranging from $.35 to $.90 per share. Each warrant is for
one share of the Company's common stock. The warrants have exercise periods
ranging from three to four years. All of the warrants are for restricted stock
of the company. In addition, 200,000 warrants were exercised during the current
quarter for cash of $25,100. Total cash equivalent consideration received by the
Company for the issuance and exercise of these instruments in the quarter ending
March 31, 2005 was $379,450.
6
RUBY MINING COMPANY AND SUBSIDIARIES
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
March 31, 2005
(Unaudited)
NOTE 2 - STOCK BASED COMPENSATION
The Company accounts for stock-based compensation utilizing the intrinsic value
method. Presented below is certain financial information of the Company with
comparative proforma information determined as if the Company had accounted for
the stock-based compensation utilizing the fair-value method
March 31, 2004 March 31, 2005
-------------- --------------
Net Loss as reported $ (749,774) $ (670,172)
Basic and diluted loss per share
as reported $ (0.02) $ (0.01)
Stock-based employee compensation
cost included in net loss as reported $ -- $ --
Stock based employee compensation
cost based on fair-value method $ -- $ --
Proforma net loss including stock-based
compensation cost based on fair-value method $ 749,774) $ (670,172)
Proforma basic and diluted loss per share
including stock-based compensation
cost based on fair-value method $ .02) $ (0.01)
NOTE 3 - EARNINGS PER SHARE
Earnings per share are calculated on the basis of the weighted average number of
shares outstanding. As the Company has granted stock options and other equity
instruments to officers and others associated with the Company, earnings per
share may be diluted by these instruments. As these equity instruments would be
anti-dilutive, diluted earnings per share separate from basic earnings per share
has not been presented in the accompanying statements of operations. At March
31, 2005 the Company had outstanding 19,366,956 warrants and 768,200 options on
common stock, each convertible to one share of the Company's common stock. The
following presents the calculation of basic earnings per share:
For the Three Months Ended March 31, 2005
-----------------------------------------------------
Weighted
Average Shares Per-Share
(Numerator) (Denominator) Amount
--------------- --------------- ---------------
BASIC EPS
Income (loss) available to
common shareholders' $ (670,172) $ 55,551,390 $ (.01)
=============== =============== ===============
7
RUBY MINING COMPANY AND SUBSIDIARIES
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
March 31, 2005
(Unaudited)
NOTE 3 - EARNINGS PER SHARE (CONTINUED
For the Three Months Ended March 31, 2004
-------------------------------------------------------
Weighted
Average Shares Per-Share
(Numerator) (Denominator) Amount
--------------- ---------------- ----------------
BASIC EPS
Income (loss) available to
common shareholders' $ (749,774) $ 48,573,077 $ (0.02)
=============== =============== ===============
NOTE 4 - IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based
Payment ("SFAS No. 122(R)"). SFAS No. 123(R) will require companies to measure
all employee stock-based compensation awards using a fair value method and
record such expense in its financial statements. In addition, the adoption of
SFAS No. 123(R) requires additional accounting and disclosure related to the
income tax and cash flow effects resulting from share-based payment
arrangements. SFAS No. 123(R) is effective beginning as of the first annual
reporting period beginning after December 15, 2005. The Company is currently
evaluating the impact that the adoption of SFAS No. 123(R) will have on its
financial position, results of operations and cash flows. The cumulative effect
of adoption, if any, will be measured and recognized in the statement of
operations on the date of adoption.
In April 2005, the Securities and Exchange Commission's Office of the Chief
Accountant and its Division of Corporation Finance released Staff Accounting
Bulletin (SAB) No. 107 to provide guidance regarding the application of FASB
Statement No. 123 (revised 2004), Share-Based Payment. Statement No. 123(R)
covers a wide range of share-based compensation arrangements including share
options, restricted share plans, performance-based awards, share appreciation
rights, and employee share purchase plans. SAB 107 also reminds public companies
of the importance of including disclosures within filings made with the SEC
relating to the accounting for share-based payment transactions, particularly
during the transition to Statement No. 123(R).
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Ruby Mining Company (the "Company") and its wholly owned subsidiaries Admiralty
Corporation ("Admiralty") and Admiralty Marine Operations Ltd. ("AMO") are a
development stage company and have had only minimal revenues from operations.
The consolidated Company satisfied liquidity and capital requirements during the
three months ended March 31, 2005 through the issuance of 210,500 shares of
common stock for a consideration of $32,450 from four individuals and entities.
This includes 21,000 two-year warrants exercisable at $1.35 each and 21,000
four-year warrants exercisable at $2.25 each. These warrants were issued as part
of a Private Placement offering of a $0.70 unit consisting of one share of
restricted common stock, a two year warrant exercisable for $1.35, and a four
year warrant exercisable for $2.25 a share (shares issued upon exercise of these
options are unregistered common stock of the Company). The certificates
representing these shares were issued on or about January 26, 2005. The Private
Placement began in 2004 and continued through the quarter ending March 31, 2005.
A total of 3,470,000 three-year warrants exercisable at $0.35 into registered
stock, were placed for a total consideration of $347,000. A total of 17
individuals or entities have participated in the before referenced Private
Placement during the first quarter of 2005.
Additionally, two entities, one an individual that provides services to the
company and an entity, exercised a total of 200,000 warrants (10,000 at $.001,
100,000 at $0.25) for a total consideration of $25,100 (this amount is included
in the reported total consideration of $379,450 reported in note 1 and the
shares issued of 200,000 are part of the 210,500 total shares issued for the
quarter).
In addition, employees of the Company have partially deferred payments of
compensation to help provide liquidity for the Company.
The Company also deferred monthly payments of a loan associated with the
Company's research vessel, the New World Legacy. These loans, along with the
associated interest of 6.75% per annum, are amortized over a period of 84 months
and are held by two note-holders (one of which is an executive officer of the
Company).
PLAN OF OPERATION
As the Company has commenced exploration operations, management believes that
the Company has enhanced access to investment of capital. Management is
utilizing existing relationships and business advisors to seek additional
opportunities for capital investments. Currently, Management is continuing to
privately place $1,080,000 worth of warrants at a price of $0.10 per Unit to
accredited investors. Additionally the company expects to do a private placement
of up to 2,000,000 of common stock (restricted) at $0.25 per share. With the
Company's current cash level, operations of the Company would be limited over
the next twelve months without an additional capital investment to satisfy
existing liabilities and to fund future operations. During the three months
ended March 31, 2005 the Company satisfied liquidity needs through short-term
borrowings, deferral of some salaries and expenses and the sale of equity
securities. The Company expects to continue in similar manner for the remainder
of 2005.
9
RESULTS OF OPERATIONS
The Company had no revenue from operations during the three months ended March
31, 2005. For the three months ended March 31, 2005, the Company incurred a net
loss of $670,172 compared to a net loss of $749,774 for the three months ended
March 31, 2004. Compensation and employee benefits for the three months ended
March 31, 2005 were relatively comparable to compensation and employee benefits
for the three months ended March 31, 2004. Research and development costs were
$27,170 for the three months ended March 31, 2005, a reduction of $222,830 from
$250,000 for the three months ended March 31, 2004. This is the result of
progress payments on the exploration technology. Professional fees for the three
months ended March 31, 2005 were $55,956, a reduction of $78,101, as the Company
utilized fewer professional services. Exploration expense was $196,091 for the
three months ended March 31, 2005. There was no expense for exploration in the
three months ended March 31, 2004, as exploration activities had not commenced
at that time. The increase was primarily due to an increase in costs associated
with the Company's marine expeditions at Pedro Bank, Jamaica. and the Caribbean
on Project Orange including professional fees for archaeological costs in
Jamaica. The Company also incurred professional fees for settlement of legal
disputes. The Company's present activities consist of establishing and
maintaining financing and funding sources and opportunities and establishing and
maintaining relationships and arrangements that will enhance the Company's
ability to pursue historic shipwrecks.
During the first quarter of 2005 construction was begun on our Conservation
Laboratory in Port Royal, Jamaica. The laboratory is located within the Coast
Guard base at Port Royal. The building is a two story building. The top floor
will be utilized as a guard barracks and the ground floor will be our
laboratory. We are supplying the building materials at our cost and the Jamaican
Coast Guard is supplying the site for the building and the labor to build it at
their cost. The building is well underway.
Work is continuing on the construction of our first commercial ATLIS(TM) unit.
This unit will be diver deployed. Its construction is being managed by our
scientist and the inventor of the technology, James Larsen. Assistance is being
given by personnel from Nova Ray, our affiliate who is in the business of
building ROV's.
A significant number of repairs have been made on our search and recovery ship,
the New World Legacy. Many of the repairs were minor and a number of them were
cosmetic, but all of them were important to extend the useful life of the ship
and to maintain its appearances at a level of which we can be proud.
The Nature Conservancy along with the University of the West Indies are
partnering with the Jamaican regulatory and enforcement agencies (the Fisheries
Division the National Environment and Planning Agency (NEPA) and the Jamaican
Coast Guard Services) to reduce coral reef degradation by providing solutions to
two main threats not currently addressed on the Bank--direct over fishing of
resources and degradation of coral reefs and coral cays due to unsustainable
development. The project partners are scheduled to conduct a week-long coral
reef assessment in April 2005 as a part of achieving the main project objectives
of filling critical gaps and developing a management plan for the Pedro Bank.
A preliminary reconnaissance survey was done beforehand in order to determine
the specific stud sites for the April expedition. The Admiralty Corporation
agreed to provide support to the project by extending the use and services of
its vessel, the New World Legacy, for the duration of the reconnaissance work.
This support included room and board for the team members and a dive platform.
The team members provided their own diving gear and scuba tanks. The
reconnaissance team was composed of Nathalie Zenny-Conservation Planner, the
Nature Conservancy Jamaica County Program, Dr. George Warner - Director, Center
for Marine Science UWI Mona and Mr. Peter Wilson-Kelly-Manager, Integrated
Watershed & Coastal Zone Management Branch, NEPA, Officer Coast Guard Reserve
We have signed a Joint Venture Agreement (JVA) with Corazon & Corazon to
arrest and potentially recover valuable artifacts from a shipwreck thought to be
either a sixteenth or seventeenth century wreck. The wreck site is situated in
international waters in the Caribbean. Several dives have already been made on
the wreck and various artifacts have been viewed, including lead sheathing,
copper tacks, flints, a large bronze peg (thought to have been used to hold
planking together), musket balls, cannon balls, 28 cannons and 5 anchors.
We have arrested a 30 square mile area, in international waters, in the
Caribbean which it believes contains at least one ship from the sixteenth or
seventeenth century.
The WARRANT OF ARREST IN REM, No. 205 CV 0804; ORDER, No. 205 CV 0804; ORDER
APPOINTING SPECIAL PROCESS SERVER, No. 205 CV 0804; and ORDER APPOINTING
SUBSTITUE CUSTODIAN, No. 205 CV 0804 were assigned on Thursday, March 24, 2005
in the United States District Court for the Northern District of Georgia by the
Honorable Clarence Cooper, Federal District Judge.
Admiralty intends to further examine the wreck site area within the arrested
location in an effort to identify the ship(s) which wrecked and to locate
additional artifacts. Admiralty is working closely with its joint venture
partner, Corazon a Corazon in this effort. To date, all artifacts discovered are
in less than 100 feet of water and we believe that the bulk of the remains also
lie at a relatively shallow depth. Our ship, the New World Legacy, is currently
working at the site.
Corazon a Corazon is a Georgia Corporation formed in 1998 to do charitable work.
One of the principals of Corazon a Corazon, Dr. Stephen Foster, has been
performing charitable work in the Caribbean as a physician. It was during this
period that he discovered the wreck while sport diving. We have been working
with other groups to establish agreements to secure additional permits as well
as to establish marketing outlets for our artifacts. These agreements will be
disclosed in due course as they are signed.
For the three months ended March 31, 2005, depreciation and amortization have
increased from the three months ending March 31, 2004 due to the New World
Legacy acquisition. This amount should increase in the future with building of
the ATLISTM field units and the acquisition of other technology and equipment.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The Company may, from time to time, make written or oral forward-looking
statements, including statements contained in the Company's filings with the
Securities and Exchange Commission (the "Commission") and its reports to
stockholders. Such forward-looking statements are made based on management's
belief as well as assumptions made by, and information currently available to,
management pursuant to "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. The Company's actual results may differ
materially from the results anticipated in these forward-looking statements due
to a variety of factors, including governmental monetary and fiscal policies,
the ability of the Company to obtain funding or financing for operations, the
ability of the Company to establish and maintain relationships with foreign
countries, and the successful utilization of the Company's developed technology.
The Company cautions that such factors are not exclusive. The Company does not
undertake to update any forward-looking statements that may be made from time to
time by, or on behalf of, the Company.
10
ITEM 3. CONTROLS AND PROCEDURES
(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Within 90 days before
filing this report, the Company evaluated the effectiveness of the design and
operation of its disclosure controls and procedures. The Company's disclosure
controls and procedures are the controls and other procedures that the Company
has designed to ensure that it records, processes, summarizes and reports in a
timely manner the information the Company must disclose in its reports filed
under the Securities Exchange Act. G. Howard Collingwood, Chief Executive
Officer and Murray D. Bradley, Jr., Chief Financial Officer, reviewed and
participated in this evaluation. Base on this evaluation, Messrs. Collingwood
and Bradley concluded that, as of the date of their evaluation, the Company's
disclosure controls and procedures were effective.
(B) INTERNAL CONTROLS. Since the date of the evaluation described above,
there have not been any significant changes in the Company's internal controls
or in other factors that could significantly affect those controls, including
any corrective actions with regard to significant deficiencies and material
weaknesses. The Company is currently reviewing proposed internal control
procedures to increase compliance with SEC reporting through Forms 3, 4 and 5 by
individuals affected by these requirements.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
A Complaint for Turnover was filed in the United States Bankruptcy Court for the
Northern District of Georgia, Atlanta Division, against Admiralty by Dale R. F.
Goodman, Trustee for the Bankruptcy Estate of Ralph Franklin Ketchum, Jr. and
Patsy Sue Ketchum on April 19, 2002. The Trustee obtained a judgment against
Admiralty in the amount of $66,000 for back salary allegedly due to the Debtor
Ralph Franklin Ketchum, Jr. for the years 1999 and 2000. Admiralty is attempting
to settle the judgment for a lesser amount.
The Company is also engaged in litigation against its former CEO filed in the
Superior Court of Fulton County to recover monies owed the Company for advances
and loans from the Company. Additional details involving this litigation are
provided in the Company's 10-KSB for the year ended December 31, 2004.
The Company may also be engaged in various other litigation matters from time to
time in the ordinary course of business. The Company will vigorously defend or
prosecute its position, as the case may be, and believes the outcome of any
litigation will not have a material effect on the Company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities
Beginning April 1, 2004 through and including January 20, 2005, the Company
initiated a private placement of unregistered securities in the form of units,
with each unit consisting of one share of restricted common stock, one two-year
warrant to purchase a restricted share of common stock at an exercise price of
$1.35 and one four-year warrant to purchase a restricted share of common stock
at an exercise price of $2.25. From April 19, 2004 through January 26, 2005, a
total of 891,215 units were sold for aggregate consideration of $623,835. The
detail of this transaction is more fully reported on Form D filed on January 3,
2005 with the United States Securities and Exchange Commission ("SEC") and in
the 2004 annual filing with the United States Securities and Exchange Commission
("SEC") on form 10KSB filed on April 14, 2005.
11
For the quarter ending March 31, 2005, the company issued 10,500 shares of its
common stock in exchange for $7,350 at a sale price of $0.70 a unit to two
accredited individuals. Also, in connection with the purchase of these 10,500
units, 10,500 two year warrants exercisable at $1.35 and 10,500 four year
warrants exercisable at $2.25 were also issued to these same individuals. In
addition, two shareholders exercised warrants to purchase 200,000 shares for a
total consideration of $25,100. Finally, the company issued 3,470,000 three year
warrants (exercisable at $0.35 into restricted stock for a total consideration
of $347,000.00
In making the foregoing sales and issuances of securities, the Company relied
upon the exemptions from the registration requirements of the Securities Act of
1933, as amended (the "Act"), provided by Sections 4(2) and 4(6) of the Act and
Rule 506 of Regulation D promulgated by the SEC pursuant to authority granted to
it by the Act, as transactions not involving a public offering made solely to
"accredited investors."
Repurchase of Securities
The Company did not repurchase any of its common shares during the first quarter
of 2005.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits
(a) Exhibits
Exhibit 31.1 Certification of President and Chief Executive Officer
pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
Exhibit 31.2 Certification of Chief Financial Officer pursuant to Section
302 of Sarbanes-Oxley Act of 2002.
Exhibit 32.1 Certifications pursuant to Section 906 of Sarbanes- Oxley
Act of 2002.
12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on May 11, 2005.
Ruby Mining Co.,
a Colorado corporation
By: /s/ G. Howard Collingwood
-----------------------------------
Name: G. Howard Collingwood
Title: Chief Executive Officer
By: /s/ Murray D. Bradley, Jr.
-----------------------------------
Name: Murray D. Bradley, Jr.
Title: Chief Financial Officer
13
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
Exhibit 31.1 Certification of President and Chief Executive
Officer pursuant to Section 302 of Sarbanes-Oxley
Act of 2002.
Exhibit 31.2 Certification of Chief Financial Officer pursuant to
Section 302 of Sarbanes-Oxley Act of 2002.
Exhibit 32.1 Certifications pursuant to Section 906 of Sarbanes-
Oxley Act of 2002.
14