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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NORMARK VENTURES CORP.
(Exact name of Registrant as specified in its charter)
NEVADA 98-0233347
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Norman Wareham, President
3575 Emerald Drive
N. Vancouver, British Columbia, Canada V7R 3B6
(Name and address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code:
(604) 506-4003
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.
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 PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES OFFERING AGGREGATE AMOUNT OF
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE (1) PRICE (2) FEE (2)
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Common Stock 4,200,000 shares $0.02 $84,000 $21.00
- ----------------------------------------------------------------------
(1) Based on last sales price on March 15, 2001
(2) Estimated solely for the purpose of calculating the registration
fee in accordance with Rule 457 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
COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
COPIES OF COMMUNICATIONS TO:
Michael A. Cane, Esq.
2300 W. Sahara Blvd., Suite 500
Las Vegas, NV 89102
(702) 312-6255
Fax: (702) 312-6249
Agent for service of process
SUBJECT TO COMPLETION, DATED NOVEMBER 14, 2001
PROSPECTUS
NORMARK VENTURES CORP.
4,200,000 SHARES
COMMON STOCK
----------------
The selling shareholders named in this prospectus are offering all of our shares
of common stock offered through this prospectus. The shares were acquired by
the selling shareholders directly from us in a private offering of our common
stock that was exempt from registration under the US securities laws.
Our common stock is presently not traded on any market or securities exchange.
----------------
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. SEE SECTION ENTITLED "RISK FACTORS" ON PAGES 5 - 10.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
THE DATE OF THIS PROSPECTUS IS: NOVEMBER 14, 2001
TABLE OF CONTENTS
Summary ..................................................................... 4
Risk Factors ............................................................... 5
If We Do Not Obtain Additional Financing, Our Business Will Fail ............ 5
If We Complete A Financing Through The Sale Of Additional Shares Of
Our Common Stock, Then Shareholders Will Experience Dilution ........... 5
If We Do Not Conduct Mineral Exploration On Our Mineral Claims
Or Pay Fees In Lieu Of Mineral Exploration, Then Our Mineral
Claims Will Lapse .................................................... 5
Because We Have Not Commenced Business Operations, We Face
A High Risk of business failure .................................. 6
Because We Anticipate Our Operating Expenses Will Increase Prior
To Our Achieving Revenues, We Expect Significant Losses Prior
to any Profitability ................................................... 6
Because Of The Speculative Nature Of Exploration Of Mining Properties,
There Is Substantial Risk That No Commercially Exploitable Minerals
Will Be Found And Our Business Will Fail ............................... 6
Because Of The Inherent Dangers Involved In Mineral Exploration, There
Is A Risk That We May Incur Liability Or Damages As We Conduct Our
Business ............................................................... 6
Even If We Discover Commercial Reserves Of Precious Metals On
Our Mineral claims, We May Not Be Able to Successfully
Obtain Commercial Production ......................................... 7
Because Access To Our Mineral Claims is Often Restricted by
Inclement Weather, We Will Be Delayed in Our Exploration and
Any Future Mining Efforts .............................................. 7
Because Of Our Limited Resources And The Speculative Nature Of Our
Business, If We Do Not Obtain Clear Title To The Mining
Properties, Our Business May Fail ...................................... 7
If We Are Unable To Hire And Retain Key Personnel, We May Not Be
Able To Implement Our Business Plan And Our Business Will Fail ......... 8
Because Our Sole Executive Officer Does Not Have Formal Training
Specific To The Technicalities Of Mineral Exploration, There
Is A Higher Risk Our Business Will Fail ................................ 8
Because Our Sole Executive Officer Has Other Business Interests, He May
Not Be Able Or Willing To Devote A Sufficient Amount Of Time
To Our Business Operations, Causing Our Business To Fail ............... 8
Because We Will Be Subject To Compliance With Government Regulation, Our
Anticipated Cost Of Our Exploration Program May Increase ............... 8
If We Receive Positive Results From Our Exploration Program And We
Determine To Pursue Commercial Production, Then We May Be
Subject To An Environmental Review Process That May Delay
Or Prohibit Our Proceeding To Commercial Production .................... 9
If A Market For Our Common Stock Does Not Develop, Our Investors
Will Be Unable To Sell their Shares .................................... 9
2
If A Market For Our Common Stock Develops, Our Stock Price
May Be Volatile ........................................................ 9
If The Selling Shareholders Sell A Large Number Of Shares All At
Once Or In Blocks, The Market Price Of Our Shares Would Most
Likely Decline 10 Because Our Stock Is Penny Stock,
Shareholders Will Be Limited In Their Ability To Sell
Their Stock ........................................................... 10
Use of Proceeds ............................................................ 11
Determination of Offering Price ............................................ 11
Dilution ................................................................... 11
Selling Shareholders ....................................................... 11
Plan of Distribution ....................................................... 16
Legal Proceedings .......................................................... 17
Directors, Executive Officers, Promoters and Control Persons ............... 17
Security Ownership of Certain Beneficial Owners and Management ............. 20
Description of Securities 21 Interest of Named Experts and Counsel ......... 22
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities ............................................ 22
Organization Within Last Five Years ........................................ 23
Description of Business .................................................... 23
Plan of Operations ......................................................... 29
Description of Property .................................................... 31
Certain Relationships and Related Transactions ............................. 31
Market for Common Equity and Related Stockholder Matters ................... 32
Executive Compensation ..................................................... 34
Financial Statements ....................................................... 35
Changes in and Disagreements with Accountants .............................. 35
Available Information ...................................................... 36
Until ______, all dealers that effect transactions in these securities whether
or not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealer' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
3
SUMMARY
NORMARK VENTURES CORP.
We are in the business of mineral exploration. To date, we have relied upon the
mineral exploration of others and have not yet conducted any mineral exploration
ourselves. We purchased four mineral claims located in the Whitehorse Mining
District of the Yukon Territory, Canada from Mr. Glen MacDonald on April 30,
2001 for $6,416. We refer to these mineral claims as the Wheaton River mineral
claims. We acquired a 100% interest in the Wheaton River mineral claims,
subject to a 2% net smelter returns royalty that we have agreed to pay to Mr.
MacDonald in the event that we enter into production of the Wheaton River
mineral claims.
Our plan of operations is to conduct mineral exploration activities on the
Wheaton River mineral claims in order to assess whether these claims possess
commercially exploitable gold and silver mineral reserves. We have not, nor
has any predecessor, identified any commercially exploitable reserves on these
mineral claims. Our proposed exploration program is designed to explore for
commercially exploitable deposits. We are an exploration stage company and
there is no assurance that a commercially viable mineral deposit exists on our
mineral claims.
We were incorporated on July 27, 2000 under the laws of the state of Nevada.
Our principal offices are located at 3575 Emerald Drive, North Vancouver,
British Columbia, Canada. The telephone number of our principal executive
office is (604) 506-4003.
THE OFFERING
Securities Being Offered: Up to 4,200,000 shares of common stock.
The offering price will be determined by
market factors and the independent decisions
of the selling shareholders.
Minimum Number of Shares None.
To Be Sold in This Offering
Securities Issued And
to be Issued 8,400,000 shares of our common stock are
issued and outstanding as of the date of this
prospectus. All of the common stock to be
sold under this prospectus will be sold by
existing shareholders.
Use of Proceeds We will not receive any proceeds from the sale
of the common stock by the selling
shareholders.
4
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock could decline due to any
of these risks, and you may lose all or part of your investment.
RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL
Our current operating funds are less than necessary to complete the exploration
of the optioned mineral claims, and therefore we will need to obtain additional
financing in order to complete our business plan. We had cash in the amount of
$34,345 as of July 31, 2001. We currently do not have any operations and we
have no income. Our business plan calls for significant expenses in connection
with the exploration of our mineral claims and the development of these mineral
claims if our exploration indicates that our mineral claims possess commercially
exploitable mineral reserves. We have obtained a geological report on our
mineral claims that recommends a three-phase exploration program. While we have
sufficient funds to carry out phase one of the recommended exploration program
on our mineral claims, we will require additional financing in order to complete
phase two and phase three of the recommended exploration program in full. We
will also require additional financing if the costs of the exploration and
development of our mineral claims are greater than anticipated. We will require
additional financing to sustain our business operations if we are not successful
in earning revenues once exploration and development is complete. We do not
currently have any arrangements for financing and we can provide no assurance to
investors that we will be able to find such financing if required. Obtaining
additional financing would be subject to a number of factors, including market
prices for gold and silver, investor acceptance of our mineral claims, and
investor sentiment. These factors may make the timing, amount, terms or
conditions of additional financing unavailable to us.
IF WE COMPLETE A FINANCING THROUGH THE SALE OF ADDITIONAL SHARES OF OUR COMMON
STOCK, THEN SHAREHOLDERS WILL EXPERIENCE DILUTION
The most likely source of future financing presently available to us is through
the sale of shares of our common stock. Any sale of share capital will result
in dilution to existing shareholders. The only other anticipated alternative
for the financing of further exploration would be the offering by us of an
interest in our mineral claims to be earned by another party or parties carrying
out further exploration or development thereof, which is not presently
contemplated.
IF WE DO NOT CONDUCT MINERAL EXPLORATION ON OUR MINERAL CLAIMS OR PAY FEES IN
LIEU OF MINERAL EXPLORATION, THEN OUR MINERAL CLAIMS WILL LAPSE
We must complete mineral exploration work on our Wheaton River mineral claims
and make filings with the Yukon Territory regarding the work completed or pay
filing fees in lieu of completing work on our claims. If we do not conduct any
mineral exploration on our claims or make the required payments in lieu of
completing mineral exploration, then our claims will lapse and we will lose all
5
interest that we have in these mineral claims. The expiry date of our mineral
claims is currently November 27, 2001, although we plan to complete exploration
work on our mineral claims prior to this date in order to extend the expiry date
of the mineral claims.
BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF
BUSINESS FAILURE.
We have not begun the initial stages of exploration of our mineral claims, and
thus have no way to evaluate the likelihood that we will be able to operate the
business successfully. We were incorporated on July 27, 2001 and to date have
been involved primarily in organizational activities, the acquisition of our
mineral claims and obtaining a geological report on our mineral claims. We have
not earned any revenues as of the date of this prospectus. Potential investors
should be aware of the difficulties normally encountered by new mineral
exploration companies and the high rate of failure of such enterprises. The
likelihood of success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
exploration of the mineral properties that we plan to undertake. These potential
problems include, but are not limited to, unanticipated problems relating to
exploration, and additional costs and expenses that may exceed current
estimates.
BECAUSE WE ANTICIPATE OUR OPERATING EXPENSES WILL INCREASE PRIOR TO OUR
ACHIEVING REVENUES, WE EXPECT SIGNIFICANT LOSSES PRIOR TO ANY PROFITABILITY
Prior to completion of our exploration stage, we anticipate that we will incur
increased operating expenses without realizing any revenues. We therefore
expect to incur significant losses into the foreseeable future. We recognize
that if we are unable to generate significant revenues from the exploration of
our mineral claims and the production of minerals thereon, if any, we will not
be able to earn profits or continue operations. There is no history upon which
to base any assumption as to the likelihood that we will prove successful, and
we can provide investors with no assurance that we will generate any operating
revenues or ever achieve profitable operations. If we are unsuccessful in
addressing these risks, our business will most likely fail.
BECAUSE OF THE SPECULATIVE NATURE OF EXPLORATION OF MINING PROPERTIES, THERE IS
SUBSTANTIAL RISK THAT NO COMMERCIALLY EXPLOITABLE MINERALS WILL BE FOUND AND OUR
BUSINESS WILL FAIL.
The search for valuable minerals as a business is extremely risky. We can
provide investors with no assurance that our mineral claims contain commercially
exploitable reserves of gold and silver. Exploration for minerals is a
speculative venture necessarily involving substantial risk. The expenditures to
be made by us in the exploration of our mineral claims may not result in the
discovery of commercial quantities of ore. Problems such as unusual or
unexpected formations and other conditions are involved in mineral exploration
and often result in unsuccessful exploration efforts. In such a case, we would
be unable to complete our business plan.
BECAUSE OF THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION, THERE IS A RISK
THAT WE MAY INCUR LIABILITY OR DAMAGES AS WE CONDUCT OUR BUSINESS.
The search for valuable minerals involves numerous hazards. As a result, we may
become subject to liability for such hazards, including pollution, cave-ins and
other hazards against which we cannot
6
insure or against which we may elect not to insure. The payment of such
liabilities may have a material adverse effect on our financial position.
EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON OUR MINERAL
CLAIMS, WE MAY NOT BE ABLE TO SUCCESSFULLY OBTAIN COMMERCIAL PRODUCTION
Our mineral claims do not contain any known mineral reserves. If our
exploration programs are successful in establishing reserves of commercial
tonnage and grade, we will require additional funds in order to place the
mineral claims into commercial production. At this time, we can provide no
assurance to investors that we will be able to do so.
BECAUSE ACCESS TO OUR MINERAL CLAIMS IS OFTEN RESTRICTED BY INCLEMENT WEATHER,
WE WILL BE DELAYED IN OUR EXPLORATION AND ANY FUTURE MINING EFFORTS
Access to the Wheaton River mineral claims is restricted through most of the
year due to snow and storms in the area. As a result, any attempts to test,
explore or mine the property is largely limited to the few months out of the
year when weather permits such activities. These limitations can result in
significant delays in exploration efforts, as well as mining and production in
the event that commercial amounts of minerals are found. Such delays can have a
significant negative effect on our results of operations.
BECAUSE OF OUR LIMITED RESOURCES AND THE SPECULATIVE NATURE OF OUR BUSINESS,
THERE IS A SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING CONCERN.
The report of Davidson & Company, our independent auditors, to our audited
financial statements for the period ended April 30, 2001, indicates that there
are a number of factors that raise substantial doubt about our ability to
continue as a going concern. The continued operations of Normark Ventures and
the recoverability of mineral property costs is dependent upon the existence of
economically recoverable reserves, confirmation of Normark Ventures' interest in
the underlying mineral claims, the ability of Normark Ventures to obtain
necessary financing to complete the development and upon future profitable
production. If Normark Ventures is not able to continue as a going concern, it
is likely investors will lose their investment.
IF WE DO NOT OBTAIN CLEAR TITLE TO THE MINING PROPERTIES, OUR BUSINESS MAY FAIL.
While we have obtained a geological report with respect to our mineral
properties, this should not be construed as a guarantee of title. The
properties may be subject to prior unregistered agreements or transfers or
native land claims, and title may be affected by undetected defects. Our
mineral claims have not been surveyed and therefore, the precise locations and
areas of the properties may be in doubt.
7
RISKS RELATED TO OUR MARKET AND STRATEGY
IF WE ARE UNABLE TO HIRE AND RETAIN KEY PERSONNEL, WE MAY NOT BE ABLE TO
IMPLEMENT OUR BUSINESS PLAN AND OUR BUSINESS WILL FAIL
Our success will be largely dependent on our ability to hire highly qualified
personnel with experience in geological exploration. These individuals may be
in high demand and we may not be able to attract the staff we need. In
addition, we may not be able to afford the high salaries and fees demanded by
qualified personnel, or may lose such employees after they are hired.
Currently, we have not hired any key personnel. Our failure to hire key
personnel when needed would have a significant negative effect on our business.
BECAUSE OUR SOLE EXECUTIVE OFFICER DOES NOT HAVE FORMAL TRAINING SPECIFIC TO THE
TECHNICALITIES OF MINERAL EXPLORATION, THERE IS A HIGHER RISK OUR BUSINESS WILL
FAIL
While Mr. G.W. Norman Wareham, our sole executive officer and a director, has
experience as a director of several mineral exploration companies, he does not
have formal training as a geologist or in the technical aspects of management of
a mineral exploration company. As a result of this inexperience, there is a
higher risk of our being unable to complete our business plan for the
exploration of our mineral claims. In addition, we will have to rely on the
technical services of others with expertise in geological exploration in order
for us to carry our planned exploration program. If we are unable to contract
for the services of such individuals, it will make it difficult and maybe
impossible to pursue our business plan. There is thus a higher risk of business
failure.
BECAUSE OUR SOLE EXECUTIVE OFFICER HAS OTHER BUSINESS INTERESTS, HE MAY NOT BE
ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS
OPERATIONS, CAUSING OUR BUSINESS TO FAIL
Mr. Wareham, our sole director and executive officer, presently spends
approximately 15% of his business time on business management services for our
company. While Mr. Wareham presently possesses adequate time to attend to our
interests, it is possible that the demands on Mr. Wareham from his other
obligations could increase with the result that he would no longer be able to
devote sufficient time to the management of our business. In addition, Mr.
Wareham may not possess sufficient time for our business if the demands of
managing our business increased substantially beyond current levels.
RISKS RELATED TO LEGAL UNCERTAINTY
BECAUSE WE WILL BE SUBJECT TO COMPLIANCE WITH GOVERNMENT REGULATION, OUR
ANTICIPATED COST OF OUR EXPLORATION PROGRAM MAY INCREASE
There are several governmental regulations that materially restrict the use of
ore. We will be subject to the Quartz Mining Act of the Yukon Territory and the
Canada Department of Indian and Northern Affairs - Land Use Branch as we carry
out our exploration program. We may be required to obtain land use permits and
perform remediation work for any physical disturbance to the land in order to
comply with these regulations. While our planned exploration program budgets
for regulatory compliance, there is a risk that new regulations could increase
our costs of doing business and prevent us from carrying our exploration
program.
8
IF WE RECEIVE POSITIVE RESULTS FROM OUR EXPLORATION PROGRAM AND WE DETERMINE TO
PURSUE COMMERCIAL PRODUCTION, THEN WE MAY BE SUBJECT TO AN ENVIRONMENTAL REVIEW
PROCESS THAT MAY DELAY OR PROHIBIT OUR PROCEEDING TO COMMERCIAL PRODUCTION
If the results of our geological exploration program indicate commercially
exploitable reserves, of which there is no assurance, and we determine to pursue
commercial production of our mineral claim, we may be subject to an
environmental review process under Canadian environmental assessment
legislation. Compliance with an environmental review process may be costly and
may delay commercial production. Furthermore, there is the possibility that we
would not be able to proceed with commercial production upon completion of the
environmental review process if government authorities did not approve our mine
or if the costs of compliance with government regulation adversely affected the
commercial viability of the proposed mine.
RISKS RELATED TO THIS OFFERING
IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, OUR INVESTORS WILL BE UNABLE
TO SELL THEIR SHARES
There is currently no market for our common stock and we can provide no
assurance to investors that a market will develop. We currently plan to apply
for trading of our common stock on the NASD over the counter bulletin board upon
the effectiveness of the registration statement of which this prospectus forms a
part. However, we cannot provide investors with any assurance that our common
stock will be traded on the bulletin board or, if traded, that a public market
will materialize. If our common stock is not traded on the bulletin board or if
a public market for our common stock does not develop, then investors may not be
able to re-sell the shares of our common stock that they have purchased and may
lose all of their investment.
IF A MARKET FOR OUR COMMON STOCK DEVELOPS, OUR STOCK PRICE MAY BE VOLATILE
If a market for our common stock develops, we anticipate that the market price
of our common stock will be subject to wide fluctuations in response to several
factors, including:
(1) the results of geological exploration program;
(2) our ability or inability to achieve financing;
(3) increased competition; and
(4) conditions and trends in the mineral exploration industry.
Further, if our common stock is traded on the NASD over the counter bulletin
board, our stock price may be impacted by factors that are unrelated or
disproportionate to our operating performance. These market fluctuations, as
well as general economic, political and market conditions, such as recessions,
interest rates or international currency fluctuations, may adversely affect the
market price of our common stock.
9
IF THE SELLING SHAREHOLDERS SELL A LARGE NUMBER OF SHARES ALL AT ONCE OR IN
BLOCKS, THE MARKET PRICE OF OUR SHARES WOULD MOST LIKELY DECLINE
The selling shareholders are offering 4,200,000 shares of our common stock
through this prospectus. The selling shareholders are not restricted in the
price they can sell the common stock. Our common stock is presently not traded
on any market or securities exchange, but should a market develop, shares sold
at a price below the current market price at which the common stock is trading
will cause that market price to decline. Moreover, the offer or sale of a
large numbers of shares at any price may cause the market price to fall. The
outstanding shares of common stock covered by this prospectus represent 50% of
the common shares outstanding as of the date of this prospectus.
BECAUSE OUR STOCK IS PENNY STOCK, SHAREHOLDERS WILL BE LIMITED IN THEIR ABILITY
TO SELL THEIR STOCK
The shares offered by this prospectus constitute penny stock under the
Securities and Exchange Act. The shares will remain penny stock for the
foreseeable future. The classification of penny stock makes it more difficult
for a broker-dealer to sell the stock into a secondary market, which makes it
more difficult for a purchaser to liquidate his or her investment. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in Normark Ventures will be subject to rules 15g-1 through 15g-10 of the
Securities and Exchange Act. Rather than complying with those rules, some
broker-dealers will refuse to attempt to sell our stock.
10
FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results are most likely to differ materially from those anticipated in
these forward-looking statements for many reasons, including the risks faced by
us described in this Risk Factors section and elsewhere in this prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling shareholders.
DETERMINATION OF OFFERING PRICE
We will not determine the offering price of the common stock. The offering
price will be determined by market factors and the independent decisions of the
selling shareholders.
DILUTION
The common stock to be sold by the selling shareholders is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to our
existing shareholders.
SELLING SHAREHOLDERS
The selling shareholders named in this prospectus are offering all of the
4,200,000 shares of common stock offered through this prospectus. The shares
include the 4,200,000 shares of our common stock that the selling shareholders
acquired from us in an offering that was exempt from registration under
Regulation S of the Securities Act of 1933 and completed on March 15, 2001
The following table provides as of November 14, 2001, information regarding the
beneficial ownership of our common stock held by each of the selling
shareholders, including:
1. the number of shares owned by each prior to this offering;
2. the total number of shares that are to be offered for each;
3. the total number of shares that will be owned by each upon completion
of the offering;
4. the percentage owned by each; and
5. the identity of the beneficial holder of any entity that owns the
shares.
11
Shares Total Number Total Shares
Owned Of Shares To To Be Owned Percent
Prior Be Offered Upon Com- Owned Upon
Name Of To This For Selling Pletion Of Completion
Selling Offer- Shareholders This Of This
Stockholder Ing Account Offering Offering
- -------------------------------------------------------------------------
Ian Fraser 150,000 150,000 NIL NIL
3056 West 2nd Ave.
Vancouver, BC,
V6K 1K4
Kevin Tuulos 300,000 300,000 NIL NIL
3020 West 3rd Ave.,
Suite B
Vancouver, BC,
V6K 1N1
Wayne H. Taylor 50,000 50,000 NIL NIL
50 Mill Street
Box 701
Grand Valley, ON,
L0N 1G0
Paul Lenzen 50,000 50,000 NIL NIL
9 Chinook Drive
Cochrane, AB,
Art Flett 50,000 50,000 NIL NIL
Box 335
RR#3, Site 44, C.32
Summerland, BC,
V0H 1Z0
John Wanless 50,000 50,000 NIL NIL
74 William
Street East
Smiths Falls, ON,
K7A 1C7
Elizabeth Taylor 50,000 50,000 NIL NIL
50 Mill Street
Grand Valley, ON,
L0N 1G0
Leanne Taylor-Truska 50,000 50,000 NIL NIL
R.R.2
Grand Valley, ON,
L0N 1G0
Michelle Fuller 50,000 50,000 NIL NIL
PO Box 412,
14 Spruyt Ave.
Grand Valley, ON,
L0N 1G0
12
TABLE IS CONTINUED FROM PAGE 12
Shares Total Number Total Shares
Owned Of Shares To Tol Be Owned Percent
Prior Be Offered Upon Com- Owned Upon
Name Of To This For Selling Pletion Of Completion
Selling Offer- Shareholders This Of This
Stockholder Ing Account Offering Offering
- -------------------------------------------------------------------------
Ron McCranor 50,000 50,000 NIL NIL
1156 Beechwood Cres.
North Vancouver, BC,
V7P 1G7
Tony Lee 50,000 50,000 NIL NIL
10649 Glenwood
Cres. East
Surrey, BC,
V4N 1W1
Les Penner 400,000 400,000 NIL NIL
65 Quigley Drive
Cochrane, AB,
T0L 0W4
James Brebner 200,000 200,000 NIL NIL
3586 Emerald Drive
North Vancouver, BC,
V7R 3B7
Randy Howarth 100,000 100,000 NIL NIL
3175 Turner Street,
PO Box 639
Abbotsford, BC,
V2S 6R7
Tammy Preast 200,000 200,000 NIL NIL
#1704, 33065 Mill
Lake Road
Abbotsford, BC,
V2S 8E6
Rudy Siemens 200,000 200,000 NIL NIL
#1702, 33065 Mill
Lake Road
Abbotsford, BC,
V2S 8E6
Sean Fahy 62,500 62,500 NIL NIL
2132 West 51st
Avenue
Vancouver, BC,
V6P 1E3
Lynette Fahy 62,500 62,500 NIL NIL
3869 West 26th
Avenue
Vancouver, BC,
V6S 1P3
13
TABLE IS CONTINUED FROM PAGE 13
Shares Total Number Total Shares
Owned Of Shares To To Be Owned Percent
Prior Be Offered Upon Com- Owned Upon
Name Of To This For Selling Pletion Of Completion
Selling Offer- Shareholders This Of This
Stockholder Ing Account Offering Offering
- -------------------------------------------------------------------------
Signature Financial
Corp. 400,000 400,000 NIL NIL
PO Box 260
Butterfield Sq.
Providenciales
Turks & Caicos, BWI
Beneficial Owner:
Victor Nunes
Charles S. Underhill 25,000 25,000 NIL NIL
1788 West 13th Ave.,
Suite 900
Vancouver, BC,
V6J 2H1
Lee Underhill 25,000 25,000 NIL NIL
1788 West 13th Ave.,
Suite 900
Vancouver, BC,
V6J 2H1
Baxter Wareham 50,000 50,000 NIL NIL
7353 Longacre Drive
Vernon, BC, V1H 1H5
Terrance Sigmund 400,000 400,000 NIL NIL
Suite 204, 2609
Westview Drive
North Vancouver, BC,
V7N 4M2
William Edge 340,000 340,000 NIL NIL
1270 Rosewood
Crescent
North Vancouver, BC,
V7P 1H4
Warwick Smith 340,000 340,000 NIL NIL
1156 Beechwood
Crescent
North Vancouver, BC,
V7P 1G7
Kimberly D. McCranor 295,000 295,000 NIL NIL
1156 Beechwood
Crescent
North Vancouver, BC,
V7P 1G7
14
TABLE IS CONTINUED FROM PAGE 14
Shares Total Number Total Shares
Owned Of Shares To To Be Owned Percent
Prior Be Offered Upon Com- Owned Upon
Name Of To This For Selling Pletion Of Completion
Selling Offer- Shareholders This Of This
Stockholder Ing Account Offering Offering
- -------------------------------------------------------------------------
Norman &
Catherine Wareham 100,000 100,000 NIL NIL
3575 Emerald Drive
North Vancouver, BC,
V7R 3B6
Mark A. van
der Horst 100,000 100,000 NIL NIL
2930 West 20th
Avenue
Vancouver, BC,
V6L 1H6
- --------------------------------------------------------------------------------
Except as otherwise noted in the above list, the named party beneficially owns
and has sole voting and investment power over all shares or rights to these
shares. The numbers in this table assume that none of the selling shareholders
sells shares of common stock not being offered in this prospectus or purchases
additional shares of common stock, and assumes that all shares offered are sold.
The percentages are based on 8,400,000 shares of common stock outstanding on
November 14, 2001.
Mr. Norman Wareham, our sole director and executive officer, and Ms. Catherine
Wareham, the spouse of Mr. Norman Wareham, are the joint owners of 100,000
shares of our common stock. Other than Mr. Wareham and Ms. Wareham, none of the
selling shareholders or their beneficial owners:
* has had a material relationship with the company other than as a
shareholder at any time within the past three years; or
* has ever been an officer or directors of the company or any of its
predecessors or affiliates.
15
PLAN OF DISTRIBUTION
The selling shareholders may sell some or all of their common stock in one or
more transactions, including block transactions:
1. On such public markets or exchanges as the common stock may from
time to time be trading;
2. In privately negotiated transactions;
3. Through the writing of options on the common stock;
4. In short sales; or
5. In any combination of these methods of distribution.
The sales price to the public may be:
1. The market price prevailing at the time of sale;
2. A price related to such prevailing market price; or
3. Such other price as the selling shareholders determine from time
to time.
The shares may also be sold in compliance with the Securities and Exchange
Commission's Rule 144.
In the event of the transfer by any selling shareholder of their shares to any
pledgee, donee or other transferee, we will amend this prospectus and the
registration statement of which this prospectus forms a part by the filing of a
post-effective registration statement in order to name the pledgee, donee or
other transferee in place of the selling shareholder who has transferred their
shares.
The selling shareholders may also sell their shares directly to market makers
acting as principals or brokers or dealers, who may act as agent or acquire the
common stock as a principal. Any broker or dealer participating in such
transactions as agent may receive a commission from the selling shareholders,
or, if they act as agent for the purchaser of such common stock, from such
purchaser. The selling shareholders will likely pay the usual and customary
brokerage fees for such services. Brokers or dealers may agree with the selling
shareholders to sell a specified number of shares at a stipulated price per
share and, to the extent such broker or dealer is unable to do so acting as
agent for the selling shareholders, to purchase, as principal, any unsold shares
at the price required to fulfill the respective broker's or dealer's commitment
to the selling shareholders. Brokers or dealers who acquire shares as principals
may thereafter resell such shares from time to time in transactions in a market
or on an exchange, in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices, and in connection with
such re-sales may pay or receive commissions to or from the purchasers of such
shares. These transactions may involve cross and block transactions that may
involve sales to and through other brokers or dealers. If applicable, the
selling shareholders may distribute shares to one or more of their partners who
are unaffiliated with us. Such partners may, in turn, distribute such shares as
described above. We can provide no assurance that all or any of the common stock
offered will be sold by the selling shareholders.
We are bearing all costs relating to the registration of the common stock. The
selling shareholders, however, will pay any commissions or other fees payable to
brokers or dealers in connection with any sale of the common stock.
16
The selling shareholders must comply with the requirements of the Securities Act
and the Securities Exchange Act in the offer and sale of the common stock. In
particular, during such times as the selling shareholders may be deemed to be
engaged in a distribution of the common stock, and therefore be considered to be
an underwriter, they must comply with applicable law and may, among other
things:
1. Not engage in any stabilization activities in connection with our common
stock;
2. Furnish each broker or dealer through which common stock may be offered,
such copies of this prospectus, as amended from time to time, as may be
required by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted
under the Securities Exchange Act.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings.
Our agent for service of process in Nevada is Michael A. Cane, 2300 West Sahara
Avenue, Suite 500, Box 18, Las Vegas, Nevada 89102.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our executive officers and directors and their respective ages as of November
14, 2001 are as follows:
DIRECTORS:
Name of Director Age
- ---------------------- -----
G.W. Norman Wareham 48
EXECUTIVE OFFICERS:
Name of Officer Age Office
- -------------------- ----- -------
G.W. Norman Wareham 48 President, Secretary and Treasurer
Set forth below is a brief description of the background and business experience
of each of our executive officers and directors for the past five years.
MR. G.W. NORMAN WAREHAM is our president, secretary and treasurer and is our
sole director. Mr. Wareham has been our president, secretary and treasurer and
our sole director since July 31, 2000. Mr. Wareham has been president of
Wareham Management Ltd., a private consulting company owned by Mr. Wareham,
since May 1996. Mr. Wareham has provided management and accounting
17
consulting services to a number of public companies in the United States and
Canada through Wareham Management Ltd. From July 1995 to January 1996, Mr.
Wareham was an accountant with the certified general accounting firm of Wanzel,
Sigmund & Overes. From April 1993 to February 1995, Mr. Wareham served as
president and chief executive officer of Transatlantic Financial Corp., a
private investment banking company. From August 1986 to March 1993, Mr. Wareham
provided accounting and management consulting services through Wareham &
Company.
Mr. Wareham has served as a director of the following public companies during
the past five years:
1. Mr. Wareham has been a director of Widepoint Corporation (formerly ZMAX
Corporation) since September 1996. Widepoint Corporation is a public company
engaged in the business of information technology consulting whose shares are
traded on the NASD over the counter bulletin board.
2. Mr. Wareham was a director and the secretary/treasurer of ASP Ventures
Corp. from April 1999 to March 2001. ASP Ventures Corp. is a public company
whose shares are traded on the NASD over the counter bulletin board.
3. Mr. Wareham was a director and the president, secretary and treasurer of
Bullet Environmental Technologies, Inc. from March 1999 to March 2001. Bullet
Environmental Technologies, Inc. is a public company whose shares are traded on
the NASD over the counter bulletin board.
4. Mr. Wareham is a director of Cybernet Internet Services International,
Inc. since May 1997. Cybernet Internet Services International, Inc. is a public
company whose shares are traded on the NASD over the counter bulletin board.
5. Mr. Wareham was a director and the president, secretary and treasurer of
Quantum Power Corporation from December 1998 to March 2001. Quantum Power
Corporation is a public company whose shares are traded on the pink sheet
market.
6. Mr. Wareham was a director and the secretary and treasurer of ImuMed
International, Inc. from November 1998 to March 2001. ImuMed International, Inc.
is a public company engaged in the business of pharmaceutical drug production
whose shares are traded on the NASD over the counter bulletin board.
7. Mr. Wareham has been a director and the secretary, treasurer and chief
financial officer of San Antonios Resources Inc. since February 1998. San
Antonios Resources Inc. is a public company engaged in the business of mineral
exploration whose shares are traded on the NASD over the counter bulletin board.
8. Mr. Wareham has been a director of Solar Energy Limited since February
1997. Solar Energy Limited is a public company engaged in the business of
renewable energy whose shares are traded on the NASD over the counter bulletin
board.
9. Mr. Wareham was a director of Aquaplan, Inc. from May 1997 to July 1999.
Aquaplan, Inc. is a public company engaged in the business of aquaculture whose
shares are traded on the NASD over the counter bulletin board.
18
10. Mr. Wareham was a director and the chief financial officer and secretary
of Marine Shuttle Operations Inc. from during 1998 and 1999. Marine Shuttle
Operations Inc. is a public company engaged in the development of an offshore
shuttle for oil rigs whose shares are traded on the NASD over the counter
bulletin board.
11. Mr. Wareham was a director and the secretary and treasurer of Novamed,
Inc. from 1998 to March 1999. Novamed Inc. is a public company whose shares are
traded on the NASD over the counter bulletin board.
12. Mr. Wareham was a director of Pyrocap International, Inc. from 1998 to
February 1999. Pyrocap International, Inc. is a public company engaged in the
business of fire retardants whose shares are traded on the NASD over the counter
bulletin board.
13. Mr. Wareham was a director of Bio-Preserve International, Inc. from 1998
to February 1999. Bio-Preserve International, Inc. is a public company that was
engaged in acquiring medical equipment technology whose shares are traded on the
NASD over the counter bulletin board.
14. Mr. Wareham was a director of Anthian Resource Corp. from June 1998 to
June 2000. Anthian Resource Corp. is a public company engaged in the business
of mineral exploration whose shares are traded on the Canadian Venture Exchange.
15. Mr. Wareham was a director of Orko Gold Corp. from February 1997 to
April 2000. Orko Gold Corp. is a public company engaged in the business of
mineral exploration whose shares are traded on the Canadian Venture Exchange.
16. Mr. Wareham was a director and secretary of Pine Resources Inc.
(formerly Intercap Resource Management Ltd.) from May 1996 to October 1998.
Intercap Resource Management Ltd. is a public company engaged in the business of
oil and gas exploration whose shares are traded on the Canadian Venture
Exchange.
17. Mr. Wareham was a director of Triune Resources Ltd. from February 1997
to [May] 1997. Triune Resources Ltd. is a public company engaged in the
business of mineral exploration whose shares are traded on the Canadian Venture
Exchange.
18. Mr. Wareham was a director of Quest International Resources Corp.
(formerly Consolidated Ramrod Gold Corp.) from November 1995 to May 1997. Quest
International Resources Corp. is a public company engaged in the business of
mineral exploration whose shares are traded on the Canadian Venture Exchange.
TERM OF OFFICE
Our directors are appointed for a one-year term to hold office until the next
annual general meeting of our shareholders or until removed from office in
accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board.
19
SIGNIFICANT EMPLOYEES
We have no significant employees other than Mr. Wareham, our sole officer and
director.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the number of
shares of our common stock owned beneficially as of November 14, 2001 by: (i)
each person (including any group) known to us to own more than five percent (5%)
of any class of our voting securities, (ii) each of our directors, and (iii)
officers and directors as a group. Unless otherwise indicated, the shareholders
listed possess sole voting and investment power with respect to the shares
shown.
- --------------------------------------------------------------------------------
Name and address Number of Shares Percentage of
Title of class of beneficial owner of Common Stock Common Stock(1)
- --------------------------------------------------------------------------------
Common Stock G.W. Norman Wareham 4,300,000 shares(2) 51.2%
Director, President,
Secretary & Treasurer
3575 Emerald Drive
North Vancouver,
British Columbia
Canada V7R 3B6
Common Stock Directors and
Officers 4,300,000 shares(2) 51.2%
As a Group (1 Person)
- --------------------------------------------------------------------------------
(1) Based on a total of 8,400,000 shares of our common stock issued and
outstanding as of November 14, 2001.
(2) Includes 4,200,000 shares in the name of Norman Wareham and 100,000
shares in the name of Norman Wareham and Catherine Wareham, the spouse of Norman
Wareham, as joint owners.
- --------------------------------------------------------------------------------
It is believed by us that all persons have full voting and investment power with
respect to the shares indicated. Under the rules of the Securities and Exchange
Commission, a person (or group of persons) is deemed to be a "beneficial owner"
of a security if he or she, directly or indirectly, has or shares the power to
vote or to direct the voting of such security, or the power to dispose of or to
direct the disposition of such security. Accordingly, more than one person may
be deemed to be a beneficial owner of the same security. A person is also deemed
to be a beneficial owner of any security, which that person has the right to
acquire within 60 days, such as options or warrants to purchase our common
stock.
20
DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital stock consists of 100,000,000 shares of common stock at a
par value of $0.001 per share.
COMMON STOCK
As of November 14, 2001, there were 8,400,000 shares of our common stock issued
and outstanding that were held by approximately twenty-nine (29) stockholders of
record.
Holders of our common stock are entitled to one vote for each share on all
matters submitted to a stockholder vote. Holders of common stock do not have
cumulative voting rights. Therefore, holders of a majority of the shares of
common stock voting for the election of directors can elect all of the
directors. Holders of our common stock representing a majority of the voting
power of our capital stock issued, outstanding and entitled to vote, represented
in person or by proxy, are necessary to constitute a quorum at any meeting of
our stockholders. A vote by the holders of a majority of our outstanding shares
is required to effectuate certain fundamental corporate changes such as
liquidation, merger or an amendment to our Articles of Incorporation.
Holders of common stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available funds. In the
event of liquidation, dissolution or winding up, each outstanding share entitles
its holder to participate pro rata in all assets that remain after payment of
liabilities and after providing for each class of stock, if any, having
preference over the common stock. Holders of our common stock have no
pre-emptive rights, no conversion rights and there are no redemption provisions
applicable to our common stock.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
SHARE PURCHASE WARRANTS
We have not issued and do not have outstanding any warrants to purchase shares
of our common stock.
OPTIONS
We have not issued and do not have outstanding any options to purchase shares of
our common stock.
21
CONVERTIBLE SECURITIES
We have not issued and do not have outstanding any securities convertible into
shares of our common stock or any rights convertible or exchangeable into shares
of our common stock.
NEVADA ANTI-TAKEOVER LAWS
Nevada revised statutes sections 78.378 to 78.3793 provide state regulation over
the acquisition of a controlling interest in certain Nevada corporations unless
the articles of incorporation or bylaws of the corporation provide that the
provisions of these sections do not apply. Our articles of incorporation and
bylaws do not state that these provisions do not apply. The statute creates a
number of restrictions on the ability of a person or entity to acquire control
of a Nevada company by setting down certain rules of conduct and voting
restrictions in any acquisition attempt, among other things. The statute is
limited to corporations that are organized in the state of Nevada and that have
200 or more stockholders, at least 100 of whom are stockholders of record and
residents of the State of Nevada; and does business in the State of Nevada
directly or through an affiliated corporation.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant or any of its parents or
subsidiaries. Nor was any such person connected with the registrant or any of
its parents or subsidiaries as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
Michael A. Cane of Cane & Company, LLC, our independent legal counsel, has
provided an opinion on the validity of our common stock.
Davidson & Company, independent chartered accountants, audited our financial
statements included in this prospectus and registration statement to the extent
and for the periods set forth in their audit report. Davidson & Company
presented their report with respect to our audited financial statements. The
report of Davidson & Company is included in reliance upon their authority as
experts in accounting and auditing.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Our directors and officers are indemnified as provided by the Nevada Revised
Statutes and our Bylaws. We have been advised that in the opinion of the
Securities and Exchange Commission indemnification for liabilities arising under
the Securities Act is against public policy as expressed in the Securities Act,
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities is asserted by one of our directors, officers, or
controlling persons in connection with the securities being registered, we will,
unless in the opinion of our legal counsel the
22
matter has been settled by controlling precedent, submit the question of
whether such indemnification is against public policy to a court of appropriate
jurisdiction. We will then be governed by the court's decision.
ORGANIZATION WITHIN LAST FIVE YEARS
We were incorporated on July 27, 2000 under the laws of the state of Nevada.
We acquired our mineral claims situated in the Yukon Territory, Canada on April
30, 2001.
Mr. G.W. Norman Wareham, our president, secretary and treasurer and a director,
has been our sole promoter since our inception. Other than the purchase of his
stock and a management agreement, Mr. Wareham has not entered into any agreement
with us in which he is to receive from us or provide to us any thing of value.
Mr. Wareham acquired 4,200,000 shares of our common stock at a price of $0.001
US per share on August 15, 2000. Mr. Wareham paid a total purchase price of
$4,200 for these shares. Mr. Wareham and Ms. Catherine Wareham, the spouse of
Mr. Wareham, purchased 100,000 shares of our common stock at a price of $0.02
per share on March 15, 2001. Mr. Wareham and Ms. Wareham paid a total purchase
price of $2,000 for these shares. Wareham Management Ltd., a private company
controlled by Mr. Wareham, entered into a management agreement with us on
September 15, 2000.
DESCRIPTION OF BUSINESS
IN GENERAL
We are an exploration stage company engaged in the acquisition and exploration
of mineral properties. We own four mineral claims that we refer to as the
Wheaton River mineral claims, as described below. Further exploration of our
mineral claims is required before a final evaluation as to the economic and
legal feasibility of any mineral reserves that we may discover on our mineral
claims can be completed. There is no assurance that a commercially viable
mineral deposit exists on our mineral claims. Our plan of operations is to
carry out exploration work on our mineral claims in order to ascertain whether
our claims possess commercially exploitable quantities of gold and silver. We
can provide no assurance to investors that our mineral claims contain a
commercially exploitable mineral deposit, or reserve, until appropriate
exploratory work is done and an economic evaluation based on such work concludes
economic feasibility.
MINERAL CLAIMS PURCHASE AGREEMENT
We purchased four mineral claims located in the Whitehorse Mining District of
the Yukon Territory, Canada from Mr. Glen MacDonald pursuant to a purchase
agreement between Mr. MacDonald and us dated April 30, 2001. We paid a purchase
price of $6,416 in consideration for our mineral claims. We refer to these
mineral claims as the Wheaton River mineral claims. We acquired a 100% interest
to the Wheaton River mineral claims, subject to a 2% net smelter returns royalty
that we have agreed to pay to Mr. MacDonald in the event that we enter into
production of the Wheaton River mineral claims. The net smelter returns royalty
will equal 2% of the net smelter returns on the gross proceeds that we earn from
the sale of any bullion, concentrates or ore from the mining of the mineral
claims, less eligible costs of transportation and smelting and refining charges.
If, after
23
commencement of commercial production from the mineral claims, the net smelter
returns royalty payable to Mr. MacDonald in any calendar year is less than
$20,000 Canadian, then we will be obligated to pay to Mr. MacDonald the
difference between $20,000 Canadian and the actual amount of net smelter returns
royalty paid to Mr. MacDonald for the year. The net smelter returns royalty will
terminate once we pay to Mr. MacDonald a total of $1,000,000 Canadian in royalty
payments.
RECORDING OF THE MINERAL CLAIMS
The Wheaton River mineral claims consist of four mineral claims located in the
Whitehorse Mining District of the Yukon Territories, Canada. Mr. MacDonald
recorded the mineral claims on November 27, 2000, pursuant to the Yukon Quartz
Mining Act. The mineral claims have the following legal description:
Name of Mining Claim Grant Number Claim Sheet Number
----------------------- ------------- -------------------
AVA 1 YC18994 105D03
AVA 2 YC18995 105D03
AVA 3 YC18996 105D03
AVA 4 YC18997 105D03
The four mineral claims comprising the Wheaton River mineral claims were staked
in November 2000 by Mr. Glen MacDonald to cover the main area of potential gold
mineralization, as identified by Mr. MacDonald. Each mineral claim is
effective until November 27, 2001. We are the beneficial owner of title to the
mineral claims and no other person has any interest in the mineral claims,
subject to our agreement to pay to Mr. MacDonald the net smelter returns
royalty. During their existence, the mineral claims entitle us to all minerals
found on or under the property comprising the mineral claims, together with the
right to enter on and use and occupy the surface of the mineral claims. The
Yukon Territory owns the land covered by the mineral claims in fee simple.
In order to maintain our mineral claims in good standing, we must complete
exploration work on the mineral claims and file confirmation of the completion
of work on the mineral claims with the applicable mining recording office of the
Yukon Territory. Currently, exploration work with a minimum value of $100
Canadian is required during each year. If we do not complete this minimum
amount of exploration work, we may pay a fee of $100 Canadian each year and by
pass this requirement. The completion of mineral exploration work or payment in
lieu of exploration work in any year will extend the existence of our mineral
claims for one additional year. As our mineral claims are effective until
November 27, 2001, we must file confirmation of the completion of exploration
work in the minimum amount of $100 Canadian or make a payment in lieu or
exploration work in the amount of $100 Canadian by November 27, 2001. We
anticipate filing confirmation of the completion of the required amount of work
with the mining recording office of the Yukon Territory prior to the expiry date
of November 27, 2001 as part of the completion of phase one of the exploration
program described below. If we fail to complete the minimum required amount of
exploration work or fail to make a payment in lieu of this exploration work,
then our mineral claims will lapse and we will lose all interest that we have in
these mineral claims.
24
LOCATION OF THE MINERAL CLAIMS
The Wheaton River mineral claims are located approximately 5 kilometers south of
the city of Whitehorse in the Yukon Territories, Canada. Access to the mineral
claims is by the Alaska and Klondike highways and then by gravel roads requiring
a vehicle with four-wheel drive capability.
The Wheaton River mineral claims cover a broad northwest trending ridge south of
Mount Anderson. The region is characterized by rolling uplands with prominent
peaks and steep-walled stream and river valleys. Glacial action has caused
major valleys to have deep u-shaped drainages. The elevation of the mineral
claims ranges from 884 meters to 1,850 meters above sea level. The mineral
claims cover a barren ridge extending south from Mount Anderson. Timber covers
the mineral claims at elevations below 1,200 meters. The ground above 1,200
meters is generally barren. The climate is a dry-arctic climate, with
influences from the Pacific Ocean. Summer temperatures average 12 degrees
centigrade. The exploration season lasts from May until October.
GEOLOGICAL REPORT
We engaged Mr. William G. Timmins, P.Eng. to prepare a geological evaluation
report on the Wheaton River mineral claims in June 2001. The work completed by
Mr. Timmins in completing the geological report consisted of the acquisition of
geological data from previous geological exploration and a review and synthesis
of this geological data. This data acquisition involved the research and
investigation of historic files to locate and retrieve data information acquired
by pervious exploration companies in the area of the mineral claim. The work
involved in this data acquisition included map and report reproduction, drafting
and production of base maps, and compilation of preexisting information into a
common database and map.
We received the geological evaluation report on the mineral claims prepared by
Mr. Timmins in July 2001. The geological report summarizes the results of the
history of the exploration of the mineral claims, the regional and local geology
of the mineral claims and the mineralization and the geological formations
identified as a result of the prior exploration. The geological report also
gives conclusions regarding potential mineralization of the mineral claims and
recommends a further geological exploration program on the mineral claims.
EXPLORATION HISTORY OF THE MINERAL CLAIMS
The history of the exploration of the mineral claims is summarized in the
geological report that we obtained from Mr. Timmins, P. Eng. The following
summary of the exploration history of the mineral claims is based on Mr.
Timmins' summary of this exploration history.
Exploration of the region in which the mineral claims are located began 1893 at
the time of the Klondike gold rush. Intensive exploration began in 1906 after
the discovery of gold in the area of Mount Anderson. This discovery resulted in
wagon roads being built to provide access to Mount Anderson. Limited mining of
high-grade gold and silver bearing ore occurred; however, no record of ore
production exists.
From the mid-1920's to the late 1960's, little exploration of significance took
place. In the 1970's, many of the old showings were restaked as an increase in
the value of base and precious metals
25
rekindled the interest of prospectors and mining companies in the area. The
Mount Skukum mine was developed in the 1980's within twenty kilometers of the
location of the mineral claims.
On the area covered by our mineral claims, recent exploration started when the
Wheaton River Joint Venture performed prospecting, grid development, mapping,
geochemical and geophysical surveys, and bulldozer trenching and road building
in 1984-1985. Mineralized rock formations were discovered in the area. Work
done by previous owners from 1991 to 2000 has included bulldozer trenching, road
construction, geological mapping, diamond drilling and prospecting. A trench is
a long, narrow excavation dug through overburden or blasted out of rock to
expose a vein or ore structure. Geochemical analysis is the analytical
procedure conducted by a credited laboratory to determine the specific elemental
concentrations of minerals contained within samples. Such samples may be from a
variety of medium, including rock, soil and stream sediment.
GEOLOGY OF THE MINERAL CLAIM
The geological report concluded that gold and silver mineralization occurs on
our Wheaton River mineral claims in at least two distinct styles of
mineralization. This gold and silver mineralization occurs in quartz veins. A
vein is a fault, crack or fissure in a rock filled by minerals that have
traveled upwards from some deep source. This mineralization is present in two of
the three significant mineral formations identified in the area of our mineral
claims that have the potential to include gold and silver mineralization.
Moderate gold-silver and silver-lead soil geochemical anomalies occur on our
mineral claims. Geochemical anomalies are concentrations of minerals present in
mineral ore that are above normal concentrations occurring in the bedrock of the
mineral claims.
RECOMMENDATIONS OF GEOLOGICAL REPORT
In his geological report, Mr. Timmins, P. Eng. recommends the completion of a
three-phase geological work program on the Wheaton River mineral claims.
The first phase of the exploration program would be comprised of a detailed
geological survey of the mineral claims and a geological review of the results
of the geological survey. This survey would include a visit to the site of the
mineral claims. The estimated cost of completion of the first phase of the
exploration program is $10,000.
The second phase of the exploration program would be comprised of trenching of
the mineral claims and a geological interpretation of the results of the
trenching program. The trenching would require bulldozer access to the site of
the mineral claims in order to complete the trenching. The estimated cost of
completion of the second phase of the exploration program is $25,000.
The third phase of the exploration program would be comprised of drilling
approximately 500 meters of rock and a geological interpretation of the results
of the drilling program. The drilling program would require access to the site
of the mineral claims with drilling equipment. The estimated cost of completion
of the second phase of the exploration program is $75,000.
The geological review and interpretations required in each phase of the
exploration program would be comprised of review of the data acquired from each
phase of the exploration program and an analysis of this data to assess the
potential mineralization of the mineral claims. Geological review
26
entails the geological study of an area to determine the geological
characteristics, identification of rock types and any obvious indications of
mineralization. A significant component of this review would occur on site. The
purpose of undertaking the geological review would be to determine if there is
sufficient indication for the area to host mineralization to warrant additional
exploration. Positive results of each phase of the exploration program would be
required to justify continuing with the next phase of the exploration program.
Such positive results would include the identification of zones of
mineralization.
CURRENT STATE OF EXPLORATION
The mineral claims presently do not have any proven mineral reserves. The
property that is the subject to the mineral claim is undeveloped and does not
contain any open-pit or underground mines. There is no mining plant or
equipment located on the property that is the subject of the mineral claim.
Currently, there is no power supply to the mineral claim.
We have only recently commenced exploration of the mineral claim and exploration
is currently in the preliminary stages. The status of our planned exploration
program is discussed in detail below. Our planned exploration program is
exploratory in nature and there is no assurance that mineral reserves will be
proven.
GEOLOGICAL EXPLORATION PROGRAM
We have accepted the recommendations of the geological report and we are
proceeding with the first phase of the recommended geological exploration
program. We have engaged Mr. Timmins to undertake this initial work program
and we have agreed to advance the amount of $1,000 to Mr. Timmins to begin the
exploration program. Mr. Timmins will not be able to complete this work program
until he has visited the site of the mineral claim. We anticipate that Mr.
Timmins will complete phase one of this current geological work program by the
end of November 2001.
We will make a determination whether to proceed with the second phase of the
exploration program upon completion of the first phase of the exploration
program by Mr. Timmins and the review of the results of this first phase. In
completing this determination, we will make an assessment as to whether the
results of phase one are sufficiently positive to enable us to achieve any
financing that may be necessary for us to proceed with phase two of the
exploration program. This assessment will include an assessment of the market
for financing of mineral exploration projects at the time of our assessment.
COMPLIANCE WITH GOVERNMENT REGULATION
We will be required to conduct all mineral exploration activities in accordance
with the Quartz Mining Act of the Yukon Territories. We will not be required to
obtain any land use permit from the Department of Indian and Northern Affairs -
Land Use Branch in order to proceed with phase one of the recommended work
program. We will be required to obtain a land use permit from the Department of
Indian and Northern Affairs - Land Use Branch for any exploration work that
results in a physical disturbance to the land. Accordingly, we will be required
to obtain a work permit if we proceed with the second phase of our exploration
program. There is a nominal fee to obtain a land use permit and the time to
obtain a land use permit is approximately six weeks. We will incur the expense
of our consultant geologist to prepare the required submissions to obtain a land
use permit.
27
We will be required to undertake remediation work on any work that results in
physical disturbance to the land. The cost of remediation work will vary
according to the degree of physical disturbance. No remediation work is
anticipated as a result of completion of phase one of the exploration program.
We have budgeted for regulatory compliance costs in the proposed exploration
program recommended by the geological report.
If we enter into production, the cost of complying with permit and regulatory
environment laws will be greater than in our recommended exploration program
because the impact on the project area is greater. Permits and regulations will
control all aspects of any production program if the project continues to
production because of the potential impact on the environment. We will subject
to an administrative review process and an environmental review process if we
determine to proceed with a producing mine. An environmental review is not
required to proceed with the recommended exploration program on our mineral
claims. As mentioned above, we will have to sustain the cost of reclamation and
environmental remediation for all exploration and other work undertaken. The
amount of reclamation and environmental remediation costs are not known at this
time as we do not know the extent of the exploration program that will be
undertaken beyond completion of the recommended exploration program. Because
there is presently no information on the size, tenor, or quality of any resource
or reserve at this time, it is impossible to assess the impact of any capital
expenditures on earnings, our competitive position or us in the event a
potentially economic deposit is discovered.
EMPLOYEES
We have no employees other than Mr. Norman Wareham, our president, secretary and
treasurer.
The services of Mr. Wareham are provided to us pursuant to a management
agreement with Wareham Management Ltd., a private company controlled by Mr.
Wareham. We pay Wareham Management Ltd. a management fee of $1000 per month in
consideration for Wareham Management Ltd. providing management and
administration services for us. These management services include the services
of Mr. Wareham on the basis that the services provided by Mr. Wareham will
account for approximately 15% of his business time. The amount of the
management fee will be increased in the event that Mr. Wareham is required to
devote more than 15% of this business time to our business. Administrative
services include the provision of our office and office related services,
including telephone and computer services. The management agreement is for a
term commencing September 15, 2000 and expiring on April 30, 2002.
We conduct our business largely through agreements with consultants and
arms-length third parties.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have not incurred any research or development expenditures since our
incorporation.
SUBSIDIARIES
We do not have any subsidiaries.
28
PATENTS AND TRADEMARKS
We do not own, either legally or beneficially, any patent or trademark.
PLAN OF OPERATIONS
PLAN OF OPERATIONS
Our business plan is to proceed with the exploration of the Wheaton River
mineral claims to determine whether there are commercially exploitable reserves
of gold and silver. We have decided to proceed with the first phase of the
exploration program recommended by the geological report. We anticipate that
phase one of the recommended geological exploration program will cost
approximately $10,000. We had $34,345 in cash reserves as of July 31, 2001.
Accordingly, we are able to proceed with phase one of the exploration program
without additional financing.
We are presently in the process of completing the first phase of our recommended
geological work program. We have engaged Mr. Timmins, the geologist who
prepared the geological report on the Wheaton River mineral claims, to complete
this initial work program and Mr. Timmins has commenced work. However, the work
program will not be complete until Mr. Timmins has visited the site of the
mineral claim. We anticipate that Mr. Timmins will visit the mineral claim and
complete his work by November 2001. We will assess the results of this program
upon receipt of Mr. Timmins' report on this first phase of the geological work
program.
We will assess whether to proceed to second phase of the recommended geological
exploration program upon completion of an assessment of the results of phase one
of the geological exploration program. In completing this determination, we will
review the conclusions and recommendations that we receive from Mr. Timmins
based on his geological review of the results of the first phase. We will also
make an assessment as to whether the results of phase one are sufficiently
positive to enable us to achieve the financing necessary for use to proceed with
phase two of the exploration program. If we decide to proceed with the second
phase of the recommended exploration program based on the results of the first
phase, we anticipate that this phase will proceed in the summer of 2002. It
will not be possible to start the second phase in 2001 due to the short snow
free period of access of the mineral claims.
If we complete the second phase of our exploration program, we will assess
whether to proceed to the third phase of the recommended geological exploration
program upon completion of an assessment of the results of the second phase of
the geological exploration program. In completing this determination, we will
make an assessment as to whether the results of phase two are sufficiently
positive to enable us to achieve the financing necessary for use to proceed with
phase three of the exploration program. This assessment will include an
assessment of our cash reserves after the completion of phase two and the market
for financing of mineral exploration projects at the time of our assessment.
29
We anticipate that we will incur the following expenses over the next twelve
months:
1. $10,000 in connection with the completion of the first phase of our
recommended geological work program;
2. $25,000 in connection with the completion of the second phase of our
recommended geological work program, if we determine to proceed with this
phase;
3. $30,000 for operating expenses, including professional legal and
accounting expenses associated with our becoming a reporting issuer
under the Securities Exchange Act of 1934;
We anticipate spending approximately $65,000 over the next twelve months in
pursuing our stated plan of operations. Of the anticipated expenses, we
anticipate that expenses of approximately $30,000 will be incurred over the next
six months. Based on our cash position of $34,345 as of July 31, 2001, we
believe we have sufficient cash resources to pay for our operating expenses over
the next six months. We believe we will require additional financing in order
to pursue our plan of operations over the next twelve months.
We anticipate that we will we will require additional funding in the event that
we decide to proceed with the second phase and the third phase of the
exploration program. The anticipated cost of the second phase of the
exploration program is $25,000. The anticipated cost of the third phase of the
exploration program is $75,000. Each of these amounts is in excess of our
projected cash reserves remaining upon completion of phase one of the
exploration program. We anticipate that additional funding will be in the form
of equity financing from the sale of our common stock. However, we cannot
provide investors with any assurance that we will be able to raise sufficient
funding from the sale of our common stock to fund phase three of the exploration
program. We believe that debt financing will not be an alternative for funding
phase three of the exploration program. We do not have any arrangements in
place for any future equity financing.
If we determine not to proceed with further exploration of our mineral claims
due to a determination that the results of our initial geological program do no
warrant further exploration or due to an inability to finance further
exploration, we plan to pursue the acquisition of an interest in other mineral
claims. We anticipate that any future acquisition would involve the acquisition
of an option to earn an interest in a mineral claim as we anticipate that we
would not have sufficient cash to purchase a mineral claim of sufficient merit
to warrant exploration.
RESULTS OF OPERATIONS FOR PERIOD ENDING APRIL 30, 2001 AND THREE MONTHS ENDED
JULY 31, 2001
We did not earn any revenues during the period ending April 30, 2001, other than
interest income in the amount of $809. We did not earn any revenues during the
three months ended July 31, 2001. We do not anticipate earning revenues until
such time as we have entered into commercial production of our mineral
properties. We are presently in the exploration stage of our business and we
can provide no assurance that we will discover commercially exploitable levels
of mineral resources on our properties, or if such resources are discovered,
that we will enter into commercial production of our mineral properties.
30
We incurred operating expenses in the amount of $44,609 for the period ended
April 30, 2001. These operating expenses were professional fees in the amount of
$19,260 that were primarily attributable our corporate organization and the
acquisition of our option to acquire an interest in the mineral claims. We also
paid an amount of $7,500 to Wareham Management Ltd. in consideration of the
provision of the management services of Mr. Norman Wareham, our sole officer and
director, and office administration services. We also incurred $4,129 of
consulting fees in connection with our Wheaton River mineral claims. We
incurred further operating expenses in the amount of $15,928 for the three
months ended July 31, 2001.
We incurred a loss of $43,800 for the period ending April 30, 2001. We incurred
a loss of $15,928 for the three months ended July 31, 2001. Our losses were
attributable entirely to our operating expenses.
LIQUIDITY AND CAPITAL RESOURCES
We had cash of $53,801 as of April 30, 2001, and had working capital of $44,400
as of April 30, 2001. We had cash of $34,345 as of July 31, 2001, and had
working capital of $28,773 as of July 31, 2001.
DESCRIPTION OF PROPERTY
We do not own or lease any property other than our interest in our mineral
claims.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None of the following parties has, since our date of incorporation, had any
material interest, direct or indirect, in any transaction with us or in any
presently proposed transaction that has or will materially affect us:
* Any of our directors or officers;
* Any person proposed as a nominee for election as a director;
* Any person who beneficially owns, directly or indirectly, shares carrying
more than 10% of the voting rights attached to our outstanding shares of
common stock;
* Any of our promoters;
* Any relative or spouse of any of the foregoing persons who has the same
house as such person.
Mr. G.W. Norman Wareham, our sole officer and director, has been our sole
promoter since our inception. Mr. Wareham has acquired 4,200,000 shares of our
common stock at a price of $0.001 US per share. Mr. Wareham paid a total
purchase price of $4,200 for these shares. Mr. Wareham purchased these shares
on August 15, 2000. Other than the purchase of his stock Mr. Wareham has not
entered into any agreement with us in which he is to receive from us or provide
to us any thing of value.
31
Mr. Wareham and Ms. Catherine Wareham, the spouse of Mr. Wareham, purchased
100,000 shares of our common stock at a price of $0.02 per share on March 15,
2001. Mr. Wareham and Ms. Wareham paid a total purchase price of $2,000 for
these shares.
We have entered into a management agreement with Wareham Management Ltd., a
private company controlled by Mr. Wareham, dated September 15, 2000. We pay
Wareham Management Ltd. a management fee of $1000 per month in consideration for
providing the management and administration services of Mr. Wareham. The amount
of the management fee will be increased in the event that Mr. Wareham is
required to devote more than 15% of his business time to our business.
Administrative services include the provision of our office and office related
services, including telephone and computer services. The management agreement is
for a term commencing September 15, 2000 and expiring on April 30, 2002.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
NO PUBLIC MARKET FOR COMMON STOCK
There is presently no public market for our common stock. We anticipate
applying for trading of our common stock on the over the counter bulletin board
upon the effectiveness of the registration statement of which this prospectus
forms a part. However, we can provide no assurance that our shares will be
traded on the bulletin board or, if traded, that a public market will
materialize.
The Securities Exchange Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or quoted on the
Nasdaq system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or system. The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the Commission, which: (a) contains a
description of the nature and level of risk in the market for penny stocks in
both public offerings and secondary trading; (b) contains a description of the
broker's or dealer's duties to the customer and of the rights and remedies
available to the customer with respect to a violation to such duties or other
requirements of Securities' laws; (c) contains a brief, clear, narrative
description of a dealer market, including bid and ask prices for penny stocks
and significance of the spread between the bid and ask price; (d) contains a
toll-free telephone number for inquiries on disciplinary actions; (e) defines
significant terms in the disclosure document or in the conduct of trading in
penny stocks; and (f) contains such other information and is in such form as the
Commission shall require by rule or regulation. The broker-dealer also must
provide, prior to effecting any transaction in a penny stock, the customer: (a)
with bid and offer quotations for the penny stock; (b) the compensation of the
broker-dealer and its salesperson in the transaction; (c) the number of shares
to which such bid and ask prices apply, or other comparable information relating
to the depth and liquidity of the market for such stock; and (d) monthly account
statements showing the market value of each penny stock held in the customer's
account. In addition, the penny stock rules require that prior to a transaction
in a penny stock not otherwise exempt from those rules; the broker-dealer must
make a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written acknowledgment
of the receipt of a risk disclosure statement, a written agreement
32
to transactions involving penny stocks, and a signed and dated copy of a written
suitably statement. These disclosure requirements may have the effect of
reducing the trading activity in the secondary market for our stock if it
becomes subject to these penny stock rules. Therefore, if our common stock
becomes subject to the penny stock rules, stockholders may have difficulty
selling those securities.
HOLDERS OF OUR COMMON STOCK
As of the date of this registration statement, we had forty-three (43)
registered shareholders.
RULE 144 SHARES
A total of 4,200,000 shares of our common stock will be available for resale to
the public after August 15, 2001 in accordance with the volume and trading
limitations of Rule 144 of the Act. An additional 4,200,000 shares of our
common stock will be available for resale to the public after March 15, 2002 in
accordance with the volume and trading limitations of Rule 144 of the Act.
After March 15, 2002, all of our outstanding shares will be available for resale
under Rule 144 of the Act.
In general, under Rule 144 as currently in effect, a person who has beneficially
owned shares of a company's common stock for at least one year is entitled to
sell within any three month period a number of shares that does not exceed the
greater of:
1. 1% of the number of shares of the company's common stock then outstanding
which, in our case, equals approximately 84,000 shares as of the date
of this prospectus; or
2. the average weekly trading volume of the company's common stock during
the four calendar weeks preceding the filing of a notice on form
144 with respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about the
company.
Under Rule 144(k), a person who is not one of the company's affiliates at any
time during the three months preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least two years, is entitled to sell
shares without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144.
As of the date of this prospectus, persons who are our affiliates hold all of
the 4,200,000 shares that may be sold pursuant to Rule 144 after August 15,
2001. Persons who are our affiliates hold 100,000 of the shares that may be
sold pursuant to Rule 144 after March 15, 2002.
REGISTRATION RIGHTS
We have not granted registration rights to the selling shareholders or to any
other persons.
DIVIDENDS
There are no restrictions in our articles of incorporation or bylaws that
prevent us from declaring dividends. The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:
33
1. we would not be able to pay our debts as they become due in the usual
course of business; or
2. our total assets would be less than the sum of our total liabilities plus
the amount that would be needed to satisfy the rights of shareholders who
have preferential rights superior to those receiving the distribution.
We have not declared any dividends, and we do not plan to declare any dividends
in the foreseeable future.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below summarizes all compensation awarded to, earned by, or paid to
our executive officers for all services rendered in all capacities to us for the
fiscal period ended April 30, 2001.
Annual Compensation Long Term Compensation
------------------- ----------------------
Other All
Annual Other
Com- Com-
pen- Restricted pen-
sa- Stock Options/* LTIP sa-
Name Title Year Salary Bonus tion Awarded SARs (#)payouts($)tion
- ---- ----- ---- ------ ----- ------ ------- ------- --------- ----
G.W. Presi- 2001 $7,500 0 0 0 0 0 0
Norman dent,
Wareham Secre-
tary,
Treas-
urer
&
Direc-
tor
STOCK OPTION GRANTS
We did not grant any stock options to the executive officers during our most
recent fiscal year ended April 30, 2001. We have also not granted any stock
options to the executive officers since April 30, 2001. We do not have any
stock options outstanding.
MANAGEMENT AGREEMENT
The services of Mr. Wareham are provided to us pursuant to a management
agreement with Wareham Management Ltd., a company controlled by Mr. Wareham. We
pay Wareham Management Ltd. a management fee of $1000 per month in consideration
for Wareham Management Ltd. providing management and administration services for
us. These management services include the services of Mr. Wareham.
Administrative services include the provision of our office and office related
services, including telephone and computer services. The management agreement is
for a term commencing September 15, 2000 and expiring on April 30, 2002.
34
FINANCIAL STATEMENTS
Index to Financial Statements:
1. Auditors' Report;
2. Audited Financial Statements for the period ending April 30, 2001, including:
a. Balance Sheet
b. Statement of Operations
c. Statement of Stockholders' Equity
d. Statement of Cash Flows
e. Notes to Financial Statements
3. Unaudited Interim Financial Statements for the three months ended July 31,
2001, including:
a. Balance Sheet
b. Statements of Operations
c. Statements of Cash Flows
d. Statement of Stockholders' Equity
e. Notes to Financial Statements
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have had no changes in or disagreements with our accountants.
35
AVAILABLE INFORMATION
We have filed a registration statement on form SB-2 under the Securities Act of
1933 with the Securities and Exchange Commission with respect to the shares of
our common stock offered through this prospectus. This prospectus is filed as a
part of that registration statement and does not contain all of the information
contained in the registration statement and exhibits. Statements made in the
registration statement are summaries of the material terms of the referenced
contracts, agreements or documents of the company and are not necessarily
complete. We refer you to our registration statement and each exhibit attached
to it for a more complete description of matters involving the company, and the
statements we have made in this prospectus are qualified in their entirety by
reference to these additional materials. You may inspect the registration
statement, exhibits and schedules filed with the Securities and Exchange
Commission at the Commission's principal office in Washington, D.C. Copies of
all or any part of the registration statement may be obtained from the Public
Reference Section of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for
further information on the operation of the public reference rooms. The
Securities and Exchange Commission also maintains a web site at
http://www.sec.gov that contains reports, proxy statements and information
regarding registrants that file electronically with the Commission. Our
registration statement and the referenced exhibits can also be found on this
site.
36
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
(Expressed in United States Dollars)
APRIL 30, 2001
<Page>
A Partnership of
DAVIDSON & COMPANY======Chartered Accountants=======Incorporated Professionals
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors of
Normark Ventures Corp.
(An Exploration Stage Company)
We have audited the accompanying balance sheet of Normark Ventures
Corp. as at April 30, 2001 and the related statements of operations,
stockholders' equity and cash flows for the period from incorporation
on July 27, 2000 to April 30, 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 generally accepted auditing
standards in the United States of America. Those standards require
that we plan and perform an 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, these financial statements present fairly, in all
material respects, the financial position of the Company as at
April 30, 2001 and the results of its operations and its cash flows
for the period from incorporation on July 27, 2000 to April 30, 2001
in conformity with generally accepted accounting principles in the
United States of America.
The accompanying financial statements have been prepared assuming that
Normark Ventures Corp. will continue as a going concern. As discussed
in Note 2 to the financial statements, unless the Company attains
profitable operations and/or obtains additional financing, there is
substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regards to these matters are discussed
in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ DAVIDSON & COMPANY
Vancouver, Canada
Chartered Accountants
June 18, 2001
A Member of SC INTERNATIONAL
============================
Suite 1200, Stock Exchange Tower, 609 Granville Street,
P.O. Box 10372, Vancouver, BC, Canada, V7Y 1G6
Telephone (604) 687-0947 Fax (604) 687-6172
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
BALANCE SHEET
(Expressed in United States Dollars)
AS AT APRIL 30, 2001
===========================================================================
ASSETS
Current
Cash $ 53,801
------------
Total assets $ 53,801
===========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 9,401
------------
Stockholders' equity
Common stock (Note 6)
Authorized
100,000,000 common shares, par value of $0.001
Issued
8,400,000 common shares 8,400
Additional paid-in capital 79,800
Deficit accumulated during the exploration stage (43,800)
------------
44,400
------------
Total liabilities and stockholders' equity $ 53,801
===========================================================================
History and organization of the Company (Note 1)
Commitment (Note 9)
The accompanying notes are an integral part of these financial statements.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
STATEMENT OF OPERATIONS
(Expressed in United States Dollars)
PERIOD FROM INCORPORATION ON JULY 27, 2000 TO APRIL 30, 2001
===========================================================================
REVENUE
Interest income $ 809
------------
EXPENSES
Bank charges 308
Consulting fees 4,129
Management fees 8,025
Mineral property acquisition costs (Note 5) 6,416
Office and general 1,706
Professional fees 19,260
Telephone and utilities 206
Travel and promotion 4,559
------------
44,609
------------
Loss for the period $ (43,800)
===========================================================================
Basic and diluted loss per share $ (0.01)
===========================================================================
Weighted average number of shares of common stock outstanding 4,594,223
===========================================================================
The accompanying notes are an integral part of these financial statements.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
(Expressed in United States Dollars)
===========================================================================
Deficit
Common Stock Accumulated
Issued Additional During the Total
----------------- Paid-in Exploration Stockholders'
Shares Amount Capital Stage Equity
============================================================================
Balance,
July 27, 2000 - $ - $ - $ - $ -
Common stock
issued for
cash at
$0.001 per
share 4,200,000 4,200 - - 4,200
Common stock
issued for
cash at
$0.02 per
share 4,200,000 4,200 79,800 - 84,000
Loss for the
Period - - - (43,800) (43,800)
--------- --------- ---------- ----------- -----------
Balance,
April 30, 2001 8,400,000 $ 8,400 $ 79,800 $ (43,800) $ 44,400
===========================================================================
The accompanying notes are an integral part of these financial statements.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Expressed in United States Dollars)
PERIOD FROM INCORPORATION ON JULY 27, 2000 TO APRIL 30, 2001
===========================================================================
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (43,800)
Changes in non-cash working capital items:
Increase in accounts payable and accrued liabilities 9,401
------------
Net cash used in operating activities (34,399)
------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of capital stock for cash 88,200
------------
Net cash provided by financing activities 88,200
------------
Change in cash during the period 53,801
Cash, beginning of period -
------------
Cash, end of period $ 53,801
===========================================================================
Cash paid during the period for interest $ -
===========================================================================
Cash paid during the period for income taxes $ -
===========================================================================
The accompanying notes are an integral part of these financial statements.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
APRIL 30, 2001
===========================================================================
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated on July 27, 2000 under the Laws of
the State of Nevada and is in the business of exploration and
development of mineral properties. The Company has not yet
determined whether its properties contain mineral resources that
may be economically recoverable. The Company therefore has not
reached the development stage and is considered to be an
exploration stage company in accordance with Statement of
Financial Accounting Standards No. 7.
2. GOING CONCERN
These financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going
concern which contemplates the realization of assets and the
satisfaction of liabilities and commitments in the normal course
of business. The general business strategy of the Company is to
acquire mineral properties either directly or through the
acquisition of operating entities. The continued operations of
the Company and the recoverability of mineral property costs is
dependent upon the existence of economically recoverable
reserves, confirmation of the Company's interest in the
underlying mineral claims, the ability of the Company to obtain
necessary financing to complete the development and upon future
profitable production. The Company has incurred operating losses
and requires additional funds to meet its obligations and
maintain its operations. Management's plan in this regard is to
raise equity financing as required. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern. These financial statements do not include any
adjustments that might result from this uncertainty.
===========================================================================
April 30,
2001
===========================================================================
Deficit accumulated during the exploration stage $ (43,800)
Working capital 44,400
===========================================================================
3. SIGNIFICANT ACCOUNTING POLICIES
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 amount of
assets and liabilities and the disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the reporting
period. Actual results could differ from these estimates.
Loss per share
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" requires basic and diluted earnings per share to be
presented. Basic earnings per share is computed by dividing
income available to common shareholders by the weighted average
number of shares of common stock outstanding during the period.
Diluted earnings per share takes into consideration shares of
common stock outstanding (computed under basic earnings per
share) and potentially dilutive shares of common stock.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
APRIL 30, 2001
===========================================================================
3. SIGNIFICANT ACCOUNTING POLICIES (cont'd...)
Foreign currency translation
Translation amounts denominated in foreign currencies are
translated into United States currency at exchanges rates
prevailing at transactions dates. Carrying values of monetary
assets and liabilities are adjusted at each balance sheet date to
reflect the exchange rate at that date. Gains and losses from
restatement of foreign currency monetary assets and liabilities
are included in income.
Comprehensive income
The Company has adopted Statement of Financial Accounting
Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income".
This statement establishes rules for the reporting of
comprehensive income and its components. The adoption of SFAS
130 had no impact on total stockholders' equity as of April 30,
2001.
Income taxes
Income taxes are provided in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes". A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting and net
operating loss carryforwards. Deferred tax expenses (benefit)
result from the net change during the period of deferred tax
assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in
the opinion of management, it is more likely than not that some
portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects
of changes in tax laws and rates on the date of enactment.
Accounting for derivative instruments and hedging activities
In June 1998, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard No. 133
"Accounting for Derivative Instruments and Hedging Activities"
("SFAS 133") which establishes accounting and reporting standards
for derivative instruments and for hedging activities. SFAS 133
is effective for all fiscal quarters of fiscal years beginning
after June 15, 1999. In June 1999, the FASB issued SFAS 137 to
defer the effective date of SFAS 133 to fiscal quarters of fiscal
years beginning after June 15, 1999. In June 2000, the FASB
issued Statement of Financial Accounting Standard No. 138 which
is a significant amendment to SFAS 133. The Company does not
anticipate that the adoption of these statements will have a
significant impact on its financial statements.
Mineral properties
Costs of acquisition, exploration, carrying, and retaining
unproven properties are expensed as incurred. Direct costs
relating to the acquisition, exploration and development of
proven properties are capitalzed until the properties are placed
into production, sold or abandoned. These costs will be
amortized over the proven reserves of the properties following
commencement of production or over a shorter period if the
properties are shown to have an impairment in value.
Environmental requirements
At the report date, environmental requirements related to mineral
claims acquired (Note 5) are unknown and therefore an estimate of
any future cost cannot be made.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
APRIL 30, 2001
===========================================================================
4. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and accounts
payable and accrued liabilities. Unless otherwise noted, it is
management's opinion that the Company is not exposed to
significant interest, currency or credit risks arising from these
financial instruments. The fair value of these financial
instruments approximate their carrying values, unless otherwise
noted.
5. MINERAL PROPERTY
Pursuant to an agreement dated April 30, 2001, the Company
acquired a 100% interest in certain mining claims located in the
Whitehorse Mining District of the Yukon Territory in Canada for
$6,416 (CDN$10,000 - paid). As the claims do not contain any
known reserves, the acquisition costs were expensed during the
period ended April 30, 2001. The property is subject to a 2% Net
Smelter Returns royalty ("NSR") payable to the vendor. If, after
commencement of commercial production from the mineral claims,
the NSR payable to the vendor in any calendar year is less than
$12,832 (CDN$20,000), then the Company will be obligated to pay
to the vendor the difference between the $12,832 and the actual
NSR paid for the year. The royalty will terminate once the
vendor receives a total of CDN$1,000,000 in royalty payments.
If the Company abandons the property, the Company is obligated to
maintain the claims in good standing for a minimum period of one
year from the date of abandonment.
The mineral property claims expire November 27, 2001.
6. COMMON STOCK
On August 15, 2000, the Company issued 4,200,000 shares of common
stock under Regulation S of the Securities Act of 1933 for total
proceeds of $4,200.
On March 15, 2001, the Company issued 4,200,000 shares of common
stock under Regulation S of the Securities Act of 1933 for total
proceeds of $84,000.
Common shares
The common shares of the Company are all of the same class, are
voting and entitle shareholders to receive dividends. Upon
liquidation or wind-up, shareholders are entitled to participate
equally with respect to any distribution of net assets or any
dividends which may be declared.
Additional paid-in capital
The excess of proceeds received for shares of common stock over
their par value of $0.001, less share issue costs, is credited to
additional paid-in capital.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
APRIL 30, 2001
===========================================================================
7. RELATED PARTY TRANSACTIONS
During the period ended April 30, 2001, the Company entered into
the following transactions with related parties:
a) Paid management fees of $8,025 to a company controlled by the
director of the Company.
b) Issued 4,200,000 shares of common stock for proceeds of
$4,200 to a director of the Company and 100,000 shares of
common stock for proceeds of $2,000 to a relative of a director
of the Company.
These transactions were in the normal course of operations and
were measured at the exchange value which represented the amount
of consideration established and agreed to by the related
parties.
8. INCOME TAXES
The Company's total deferred tax asset is as follows:
===========================================================================
April 30,
2001
===========================================================================
Tax benefit of net operating loss carryforward $ 15,050
Valuation allowance (15,050)
-----------
$ -
===========================================================================
The Company has net operating loss carryforwards of approximately
$43,000. The valuation allowance increased to $15,050 during the
period ended April 30, 2001 since the realization of the
operating loss carryforwards are doubtful. It is reasonably
possible that the Company's estimate of the valuation allowance
will change.
The operating loss carryforwards will expire in 2021.
9. COMMITMENT
The Company is committed to pay the director of the Company a
monthly management fee of $1,000 per month pursuant to a
Management Services Agreement expiring April 30, 2002.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Prepared by Management)
JULY 31, 2001
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
BALANCE SHEETS
(Expressed in United States Dollars)
(Prepared by Management)
==========================================================================
July 31, April 30,
2001 2001
- --------------------------------------------------------------------------
ASSETS
Current
Cash $ 34,345 $ 53,801
----------- -----------
Total assets $ 34,345 $ 53,801
==========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 5,572 $ 9,401
----------- -----------
Stockholders' equity
Common stock (Note 7)
Authorized
100,000,000 common shares,
par value of $0.001
Issued
8,400,000 common shares
(April 30, 2001 -
8,400,000 common shares) 8,400 8,400
Additional paid-in capital 79,800 79,800
Deficit accumulated during the
exploration stage (59,427) (43,800)
----------- -----------
28,773 44,400
----------- -----------
Total liabilities and stockholders' equity $ 34,345 $ 53,801
=========================================================================
History and organization of the Company (Note 1)
Commitment (Note 10)
The accompanying notes are an integral part of these financial statements.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
(Prepared by Management)
==========================================================================
Cumulative
Amounts
From Three
Incorporation Month
on July 27, Period
2000 to Ended
July 31, July 31,
2001 2001
- --------------------------------------------------------------------------
EXPENSES
Bank charges $ 413 $ 105
Consulting fees 8,698 4,569
Management fees 11,235 3,210
Mineral property acquisition costs (Note 6) 6,526 110
Office and general 2,021 315
Professional fees 20,455 1,195
Telephone and utilities 1,000 794
Travel and promotion 10,189 5,630
----------- ------------
Loss before other item (60,537) (15,928)
----------- ------------
OTHER ITEM
Interest income 1,110 301
----------- ------------
Loss for the period $ (59,427) $ (15,627)
=========================================================================
Basic and diluted loss per share $ (0.01)
=========================================================================
Weighted average number of shares of common stock outstanding 8,400,000
=========================================================================
For the period from incorporation on July 27, 2000 to July 31, 2000,
the Company was inactive and, accordingly, no comparative figures for
this period have been presented.
The accompanying notes are an integral part of these financial statements.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
(Expressed in United States Dollars)
(Prepared by Management)
===========================================================================
Deficit
Common Stock Accumulated
Issued Additional During the Total
----------------- Paid-in Exploration Stockholders'
Shares Amount Capital Stage Equity
- ----------------------------------------------------------------------------
Balance,
July 27, 2000 - $ - $ - $ - $ -
Common stock
issued for
cash at $0.001
per share 4,200,000 4,200 - - 4,200
Common stock
issued for
cash at
$0.02 per
share 4,200,000 4,200 79,800 - 84,000
Loss for the
period - - - (43,800) (43,800)
Balance,
April 30,
2001 8,400,000 8,400 79,800 (43,800) 44,400
Loss for
the period - - - (15,627) (15,627)
--------- ------- --------- ---------- -----------
Balance,
July 31,
2001 8,400,000 $ 8,400 $ 79,800 $ (59,427) $ 28,773
===========================================================================
The accompanying notes are an integral part of these financial statements.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
(Prepared by Management)
==========================================================================
Cumulative
Amounts
From Three
Incorporation Month
on July 27, Period
2000 to Ended
July 31, July 31,
2001 2001
- --------------------------------------------------------------------------
EXPENSES
Bank charges $ 413 $ 105
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (59,427) $ (15,627)
Changes in non-cash working capital item:
Increase (decrease) in accounts payable
and accrued liabilities 5,572 (3,829)
----------- ------------
Net cash used in operating activities (53,855) (19,456)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of capital stock for cash 88,200 -
----------- ------------
Net cash provided by financing activities 88,200 -
----------- ------------
Change in cash during the period 34,345 (19,456)
Cash, beginning of period - 53,801
----------- ------------
Cash, end of period $ 34,345 $ 34,345
=========================================================================
Cash paid during the period for interest $ - $ -
=========================================================================
Cash paid during the period for income taxes $ - $ -
=========================================================================
For the period from incorporation on July 27, 2000 to July 31, 2000,
the Company was inactive and, accordingly, no comparative figures for
this period have been presented.
There were no material non-cash financing or investing activities for
the periods presented.
The accompanying notes are an integral part of these financial statements.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Prepared by Management)
JULY 31, 2001
==========================================================================
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated on July 27, 2000 under the Laws of
the State of Nevada and is in the business of exploration and
development of mineral properties. The Company has not yet
determined whether its properties contain mineral resources that
may be economically recoverable. The Company therefore has not
reached the development stage and is considered to be an
exploration stage company in accordance with Statement of
Financial Accounting Standards No. 7.
2. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been
prepared by the Company in accordance with general accepted
accounting principles for interim financial statements and
pursuant to the rules and regulations of the Securities and
Exchange commission.
In the opinion of management, the accompanying financial
statements contain all adjustments necessary (consisting of
normal recurring accruals) to present fairly the financial
information contained therein. These statements do not include
all disclosures required by generally accepted accounting
principles and should be read in conjunction with the audited
financial statements of the Company for the period ended April
30, 2001. The results of operations for the three month period
ended July 31, 2001 are not necessarily indicative of the results
to be expected for the year ending April 30, 2002.
3. GOING CONCERN
These financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going
concern which contemplates the realization of assets and the
satisfaction of liabilities and commitments in the normal course
of business. The general business strategy of the Company is to
acquire mineral properties either directly or through the
acquisition of operating entities. The continued operations of
the Company and the recoverability of mineral property costs is
dependent upon the existence of economically recoverable
reserves, confirmation of the Company's interest in the
underlying mineral claims, the ability of the Company to obtain
necessary financing to complete the development and upon future
profitable production. The Company has incurred operating losses
and requires additional funds to meet its obligations and
maintain its operations. Management's plan in this regard is to
raise equity financing as required. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern. These financial statements do not include any
adjustments that might result from this uncertainty.
==========================================================================
July 31, April 30,
2001 2001
- --------------------------------------------------------------------------
Deficit accumulated during the exploration stage $ (59,427) $ (43,800)
Working capital 28,773 44,400
==========================================================================
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Prepared by Management)
JULY 31, 2001
==========================================================================
4. SIGNIFICANT ACCOUNTING POLICIES
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 amount of
assets and liabilities and the disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the reporting
period. Actual results could differ from these estimates.
Loss per share
Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" requires basic and diluted earnings per share to be
presented. Basic earnings per share is computed by dividing
income available to common shareholders by the weighted average
number of shares of common stock outstanding during the period.
Diluted earnings per share takes into consideration shares of
common stock outstanding (computed under basic earnings per
share) and potentially dilutive shares of common stock.
Foreign currency translation
Translation amounts denominated in foreign currencies are
translated into United States currency at exchange rates
prevailing at transactions dates. Carrying values of monetary
assets and liabilities are adjusted at each balance sheet date to
reflect the exchange rate at that date. Gains and losses from
restatement of foreign currency monetary assets and liabilities
are included in income.
Cash and cash equivalents
Cash and cash equivalents include highly liquid investments with
original maturities of three months or less.
Comprehensive income
The Company has adopted Statement of Financial Accounting
Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income".
This statement establishes rules for the reporting of
comprehensive income and its components. The adoption of SFAS
130 had no impact on total stockholders' equity as of July 31, 2001.
Income taxes
Income taxes are provided in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes". A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting and net
operating loss carryforwards. Deferred tax expenses (benefit)
result from the net change during the period of deferred tax
assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in
the opinion of management, it is more likely than not that some
portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects
of changes in tax laws and rates on the date of enactment.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Prepared by Management)
JULY 31, 2001
==========================================================================
4. SIGNIFICANT ACCOUNTING POLICIES (cont'd.)
Accounting for derivative instruments and hedging activities
In June 1998, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard No. 133
"Accounting for Derivative Instruments and Hedging Activities"
("SFAS 133") which establishes accounting and reporting standards
for derivative instruments and for hedging activities. SFAS 133
is effective for all fiscal quarters of fiscal years beginning
after June 15, 1999. In June 1999, the FASB issued SFAS 137 to
defer the effective date of SFAS 133 to fiscal quarters of fiscal
years beginning after June 15, 1999. In June 2000, the FASB
issued Statement of Financial Accounting Standard No. 138 which
is a significant amendment to SFAS 133. The adoption of these
statements had no significant impact on the Company's financial
statements.
Mineral properties
Costs of acquisition, exploration, carrying, and retaining
unproven properties are expensed as incurred. Direct costs
relating to the acquisition, exploration and development of
proven properties are capitalized until the properties are placed
into production, sold or abandoned. These costs will be
amortized over the proven reserves of the properties following
commencement of production or over a shorter period if the
properties are shown to have an impairment in value.
Environmental requirements
At the report date, environmental requirements related to mineral
claims acquired (Note 6) are unknown and therefore an estimate of
any future cost cannot be made.
Comparative figures
Certain comparative figures have been reclassified to conform
with the current period's presentation.
5. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and accounts
payable and accrued liabilities. Unless otherwise noted, it is
management's opinion that the Company is not exposed to
significant interest, currency or credit risks arising from these
financial instruments. The fair value of these financial
instruments approximate their carrying values, unless otherwise
noted.
6. MINERAL PROPERTY
Pursuant to an agreement dated April 30, 2001, the Company
acquired a 100% interest in certain mining claims located in the
Whitehorse Mining District of the Yukon Territory in Canada for
$6,416 (CDN$10,000 - paid). As the claims do not contain any
known reserves, all acquisition costs are expensed. The property
is subject to a 2% Net Smelter Returns royalty ("NSR") payable to
the vendor. If, after commencement of commercial production from
the mineral claims, the NSR payable to the vendor in any calendar
year is less than $12,832 (CDN$20,000), then the Company will be
obligated to pay to the vendor the difference between the $12,832
and the actual NSR paid for the year. The royalty will terminate
once the vendor receives a total of CDN$1,000,000 in royalty
payments.
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Prepared by Management)
JULY 31, 2001
==========================================================================
6. MINERAL PROPERTY (cont'd.)
If the Company abandons the property, the Company is obligated to
maintain the claims in good standing for a minimum period of one
year from the date of abandonment.
The mineral property claims expire November 27, 2001.
7. COMMON STOCK
On August 15, 2000, the Company issued 4,200,000 shares of common
stock under Regulation S of the Securities Act of 1933 for total
proceeds of $4,200.
On March 15, 2001, the Company issued 4,200,000 shares of common
stock under Regulation S of the Securities Act of 1933 for total
proceeds of $84,000.
Common shares
The common shares of the Company are all of the same class, are
voting and entitle shareholders to receive dividends. Upon
liquidation or wind-up, shareholders are entitled to participate
equally with respect to any distribution of net assets or any
dividends which may be declared.
Additional paid-in capital
The excess of proceeds received for shares of common stock over
their par value of $0.001, less share issue costs, is credited to
additional paid-in capital.
8. RELATED PARTY TRANSACTIONS
During the period ended July 31, 2001, the Company paid
management fees of $3,210 to a company controlled by the director
of the Company.
These transactions were in the normal course of operations and
were measured at the exchange value which represented the amount
of consideration established and agreed to by the related
parties.
9. INCOME TAXES
The Company's total deferred tax asset is as follows:
==========================================================================
July 31, April 30,
2001 2001
- --------------------------------------------------------------------------
Tax benefit of net operating loss carryforwards $ 20,099 $ 15,050
Valuation allowance (20,099) (15,050)
---------- -----------
$ - $ -
=========================================================================
<Page>
NORMARK VENTURES CORP.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Prepared by Management)
JULY 31, 2001
==========================================================================
9. INCOME TAXES (cont'd.)
The Company has net operating loss carryforwards of approximately
$58,000 (April 30, 2001 - $43,000). The valuation allowance
increased to $20,099 from $15,050 during the three month period
ended July 31, 2001 since the realization of the operating loss
carryforwards are doubtful. It is reasonably possible that the
Company's estimate of the valuation allowance will change.
The operating loss carryforwards will expire beginning in 2021.
10. COMMITMENT
The Company is committed to pay the director of the Company a
monthly management fee of $1,000 per month pursuant to a
Management Services Agreement expiring April 30, 2002.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the Nevada Revised
Statutes and our bylaws.
Under the Nevada Revised Statutes, director immunity from liability to a company
or its shareholders for monetary liabilities applies automatically unless it is
specifically limited by a company's Articles of Incorporation. Our Articles of
Incorporation do not specifically limit our directors' immunity. Excepted from
that immunity are: (a) a willful failure to deal fairly with the company or its
shareholders in connection with a matter in which the director has a material
conflict of interest; (b) a violation of criminal law, unless the director had
reasonable cause to believe that his or her conduct was lawful or no reasonable
cause to believe that his or her conduct was unlawful; (c) a transaction from
which the director derived an improper personal profit; and (d) willful
misconduct.
Our bylaws provide that we will indemnify our directors and officers to the
fullest extent not prohibited by Nevada law; provided, however, that we may
modify the extent of such indemnification by individual contracts with our
directors and officers; and, provided, further, that we shall not be required to
indemnify any director or officer in connection with any proceeding, or part
thereof, initiated by such person unless such indemnification: (a) is expressly
required to be made by law, (b) the proceeding was authorized by our board of
directors, (c) is provided by us, in our sole discretion, pursuant to the powers
vested us under Nevada law or (d) is required to be made pursuant to the bylaws.
Our bylaws provide that we will advance to any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer, of the company, or
is or was serving at the request of the company as a director or executive
officer of another company, partnership, joint venture, trust or other
enterprise, prior to the final disposition of the proceeding, promptly following
request therefore, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by or on behalf
of such person to repay said amounts if it should be determined ultimately that
such person is not entitled to be indemnified under our bylaws or otherwise.
Our bylaws provide that no advance shall be made by us to an officer of the
company, except by reason of the fact that such officer is or was a director of
the company in which event this paragraph shall not apply, in any action, suit
or proceeding, whether civil, criminal, administrative or investigative, if a
determination is reasonably and promptly made: (a) by the board of directors by
a majority vote of a quorum consisting of directors who were not parties to the
proceeding, or (b) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, that the facts known to the decision-making party at the time
such determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the company.
37
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee $ 21.00
Federal Taxes $ NIL
State Taxes and Fees $ NIL
Transfer Agent Fees $ 1,000.00
Accounting fees and expenses $ 2,000.00
Legal fees and expenses $20,000.00
Blue Sky fees and expenses $ 2,000.00
Miscellaneous $ NIL
--------------
Total $25,021.00
==============
- --------------------------------------------------------------------------------
All amounts are estimates other than the Commission's registration fee.
We are paying all expenses of the offering listed above. No portion of these
expenses will be borne by the selling shareholders. The selling shareholders,
however, will pay any other expenses incurred in selling their common stock,
including any brokerage commissions or costs of sale.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
We issued 4,200,000 shares of common stock on August 15, 2000 to Mr. G.W. Norman
Wareham. Mr. Wareham is our sole director and our president, secretary and
treasurer. These shares were issued pursuant to Section 4(2) of the Securities
----------
Act of 1933 (the "Securities Act") at a price of $0.001 per share, for total
- -------------
proceeds of $4,200. The 4,200,000 shares of common stock are restricted shares
- ---
as defined in the Securities Act.
We completed an offering of 4,200,000 shares of our common stock at a price of
$0.02 per share to a total of twenty-eight purchasers on March 15, 2001. The
total amount received from this offering was $84,000. We completed the offering
pursuant to Regulation S of the Securities Act. All sales were made in reliance
of Category 3 of Rule 903 of Regulation S on the basis that: (a) each sale was
an offshore transaction; (b) no directed selling efforts were made by us in
completing any sales; and (c) offering restrictions were implement. These
offering restrictions included endorsing all stock certificates representing the
purchased shares with the legend required by Rule 905 of Regulation S. Each
purchaser: (a) certified to us that purchaser is not a U.S. person as defined in
Regulation S; (b) agreed to resell the purchased shares only in accordance with
the provisions of Regulation S, pursuant to registration under the Act, or
pursuant to an available exemption from registration; (c) agreed not to engage
in hedging transactions with regard to the shares unless in compliance with the
Act; and (d) agreed that we were required to refuse to register any transfer of
the shares not in compliance with the provisions of Regulation S, pursuant to
registration under the Act or pursuant to an available exemption from
registration. We did not engage in a distribution of this offering in the
United States. Each purchaser represented his intention to acquire the
securities for investment only and not with a view toward distribution. Each
investor was given adequate access to sufficient information about us to make an
informed investment decision. None of the securities were sold
38
through an underwriter and accordingly, there were no underwriting discounts or
commissions involved. No registration rights were granted to any of the
purchasers.
ITEM 27. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------------ --------------------
3.1 Articles of Incorporation
3.2 By-Laws, as amended
4.1 Share Certificate
5.1 Opinion of Cane & Company, LLC, with consent
to use
10.1 Management Agreement with Wareham Management Ltd.
dated September 15, 2000
10.2 Mining Property Purchase Agreement with Glen
MacDonald dated April 30, 2001
23.1 Consent of Davidson & Company, Chartered
Accountants
23.2 Consent of W.G. Timmins, P.Eng.
ITEM 28. 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 this registration statement, or
most recent post-effective amendment, which, individually or in
the aggregate, represent a fundamental change in the information
set forth in this registration statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in this 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, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered herein, 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 hereby which remain unsold at the termination of
the offering.
39
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of our directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of our directors, officers, or controlling
person sin connection with the securities being registered, we 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 is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
40
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Vancouver, Province of British Columbia on November 14, 2001.
NORMARK VENTURES CORP.
By:
/s/ G.W. Norman Wareham
---------------------------------
G.W. Norman Wareham, President
POWER OF ATTORNEY
ALL MEN BY THESE PRESENT, that each person whose signature appears below
constitutes and appoints G.W. Norman Wareham, his true and lawful
attorney-in-fact and agent, with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all pre- or post-effective amendments to this registration statement, and to
file the same with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any one of them, or their or his substitutes,
may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
/s/ G.W. Norman Wareham President, Secretary, Treasurer November 14, 2001
- ------------------ and Director
G.W. Norman Wareham (Principal Executive Officer)
(Principal Financial Officer)
(Principal Accounting Officer)