U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
AMENDMENT #3
COMISSION FILE # 333-102740
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MANCHESTER INC.
---------------------------
(Exact name of Registrant as specified in its charter)
NEVADA 1000 98-0380409
-------------- ------------------------- -------------------
(State or other Standard Industrial (IRS Employer
jurisdiction of Classification Identification
incorporation or Number)
organization)
JACKSON W. BUCH
200-675 WEST HASTINGS STREET
VANCOUVER, BRITISH COLUMBIA,
CANADA V6B 1N2
-------------------------- -------
(Name and address of principal (Zip Code)
executive offices)
Registrant's telephone number,
including area code: (604)719-8747
Fax: (604)648-9262
--------------
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. |__|
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)
- -----------------------------------------------------------------------
Common Stock 1,812,500 shares $0.50 $906,250 83.38
- -----------------------------------------------------------------------
(1) Based on the last sales price on November 7, 2002
(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.
Agent for Service of Process:
Nevada Agency and Trust
50 Liberty Street, Suite 880
Reno Nevada, USA 89501, 775-322-0626
SUBJECT TO COMPLETION, Dated July 28, 2003
PROSPECTUS
MANCHESTER INC.
1,812,500 SHARES
COMMON STOCK
----------------
The selling shareholders named in this prospectus are offering all of
our shares of common stock offered through this prospectus.
Manchester Inc. will not receive any proceeds from this
offering.
The selling shareholders are required to sell our shares at $0.50 per
share until our shares are quoted on the OTC Bulletin Board, and
thereafter at prevailing market prices or privately negotiated prices.
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 6 - 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.
2
The Date Of This Prospectus Is: July 28,2003
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's obligation to
deliver a prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.
Table Of Contents
PAGE
Summary ....................................................... 5
Risk Factors .................................................. 6
Risks Related To Our Financial Condition and Business Model
- ------------------------------------------------------------
- If we do not obtain additional financing, our business
will fail ................................................ 6
- If we have to raise additional financing through the sale
of equity capital, this will result in dilution to the
existing shareholders .................................... 7
- If we do not complete the required capital expenditure
requirements mandated in our option, we will lose our
interest in the Mac South Property and our business will
fail........................................................7
- Because we have not commenced business operations, we face
a high risk of business failure .......................... 7
- Because of the speculative nature of exploration of mining
properties, there is a substantial risk that no commercially
viable minerals will be found on either of our
properties and our business will fail..................... 8
- 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. In such circumstances,
our business will fail ................................... 8
- Even if we discover commercial reserves of precious metals
on our optioned mineral properties, we may not be able to
obtain commercial production ............................. 8
- We need to continue as a going concern if our business is
to succeed ............................................... 9
Risks Related To Our Market And Strategy
- -----------------------------------------
- If we do not obtain clear title to the mining properties,
our business may fail .................................... 9
Risks Related To This Offering
- -------------------------------
- Because our Directors, own 39.84% of our
outstanding stock, they will control and make corporate
decisions that may be disadvantageous to other minority
stockholders ............................................. 9
3
- Because our president 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 ......................................... 9
- Because management has only limited experience in mineral
exploration, the business has a higher risk of failure ... 9
- If a market for our common stock does not develop,
shareholders may be unable to sell their shares .......... 10
- 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
Use of Proceeds ............................................... 10
Determination of Offering Price ............................... 10
Dilution ...................................................... 10
Selling Shareholders .......................................... 11
Plan of Distribution .......................................... 15
Legal Proceedings ............................................. 18
Directors, Executive Officers, Promoters and Control Persons... 18
Security Ownership of Certain Beneficial Owners and Management. 19
Description of Securities ..................................... 20
Interest of Named Experts and Counsel ......................... 21
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities .................................... 21
Organization Within Last Five Years ........................... 22
Description of Business ....................................... 22
Plan of Operations ............................................ 29
Description of Property ....................................... 31
Certain Relationships and Related Transactions ................ 31
Market for Common Equity and Related Stockholder Matters ...... 31
Executive Compensation ........................................ 33
Financial Statements .......................................... 33
Changes in and Disagreements with Accountants ................. 53
Available Information ......................................... 53
4
Summary
Manchester Inc.
We are in the business of exploring mineral properties to determine if
they contain economic quantities of minerals. We have entered into a
mineral property option agreement whereby we may acquire an 80% interest
in a total of 2 mineral claims comprising 11 claim units located in the
Sudbury Mining District, McLennan Township Province of Ontario, Canada.
We refer to these mineral claims respectively as the Mac South Property.
This option is exercisable by us completing aggregate exploration
expenditures of $209,800 on the Mac South Property by October 31, 2004.
We commenced exploration on the Mac South Property on June 19, 2003.
Our objective is to assess whether the Mac South Property possesses
commercially viable reserves of copper and/or nickel and platinum group
metals. We have not, as yet, identified any commercially viable reserves
and there can be no assurance that a commercially viable deposit exists
on either property until sufficient and appropriate geological work,
including economic feasibility has been performed. Our current
exploration program, as well as future proposed programs, is designed to
search for commercially viable deposits.
We were incorporated on August 27, 2002 under the laws of the state of
Nevada. Our principal offices are located at 200-675 West Hastings
Street, Vancouver, British Columbia, Canada. Our telephone number is 604-
719-8747 and our fax number is 604-648-9262.
The Offering
Securities Being Offered Up to 1,812,500 shares of common stock.
The offering price will be determined by
market factors and the independent
decisions of the selling shareholders.
Offering Price The selling shareholders will sell our
shares at $0.50 per share until our shares
are quoted on the OTC Bulletin Board, and
thereafter at prevailing market prices or
privately negotiated prices. We
determined this offering price arbitrarily
based upon the price of the last sale of
our common stock to investors.
Terms of the Offering The selling shareholders will determine
when and how they will sell the common
stock offered in this prospectus.
Termination of the Offering The offering will conclude when all of the
1,812,500 shares of common stock have been
sold, the shares no longer need to be
registered to be sold or we decide to
terminate the registration of shares.
Securities Issued 3,012,500 shares of our common stock are
And to be Issued 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.
5
Use of Proceeds We will not receive any proceeds from the
sale of the common stock by the selling
shareholders.
Summary Financial information
From incorporation on August 27, 2002 to May 31, 2003
Balance Sheet data
Cash $44,655
Total Assets $45,005
Liabilities $ 600
Total Shareholders Equity $44,405
Statement of Loss and Deficit
From incorporation on August
27, 2002 to May 31, 2003
Revenue $ 0
Net loss ($29,045)
Loss per share ($0.01)
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.
As of July , 2003, we had cash in the amount of $39,440.33. 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
optioned mineral claims. While we have sufficient funds to complete the
$23,800 phase one recommended exploration program on the Mac South
Property, we will require additional financing of $186,000 in order to
complete the full-recommended exploration program.
We will also require additional financing if the costs of the
exploration of our optioned 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 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 the market prices for
copper, nickel and platinum group metals, investor acceptance of
6
our property, and investor sentiment. These factors may make the timing,
amount, terms or conditions of additional financing unavailable to us.
IF WE HAVE TO RAISE ADDITIONAL FINANCING THROUGH THE SALE OF EQUITY
CAPITAL, THIS WILL RESULT IN DILUTION TO THE EXISTING SHAREHOLDERS.
The most likely source of future funds presently available to us is
through the sale of equity capital. 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 properties to be earned by another
party or parties carrying out further exploration thereof, which is not
presently contemplated.
IF WE DO NOT COMPLETE THE REQUIRED CAPITAL EXPENDITURE REQUIREMENTS
MANDATED IN OUR OPTION AGREEMENTS, WE WILL LOSE OUR INTEREST IN THE MAC
SOUTH PROPERTY AND OUR BUSINESS WILL FAIL.
We are obligated to incur exploration expenditures totaling $209,800 in
order to exercise the option to acquire an 80% interest in the Mac South
Property. While our existing cash reserves are sufficient to enable us
to complete phase one of the geological exploration program recommended
on the Mac South Property, we will require substantial additional
capital to fund the continued exploration of our optioned mineral claims
and exercise the options described above. If we do not meet the
exploration expenditures required by the option agreement, we will
forfeit our interest in the Mac South Property and will have no interest
in this mineral claim block. We have no agreements for additional
financing and we can provide no assurance to investors that additional
funding will be available to us on acceptable terms, or at all, to
continue operations, to fund new business opportunities or to execute
our business plan. If we lose our interest in the optioned mineral
claims, then there is a substantial risk that our business will fail.
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 optioned
mineral claims, and thus have no way to evaluate the likelihood that we
will be able to operate our business successfully. We were incorporated
on August 27, 2002 and to date have been involved primarily in
organizational activities and the acquisition of an interest in our
optioned 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.
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
7
future. We recognize that if we are unable to generate significant
revenues from the exploration of our optioned 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 THE EXPLORATION OF MINING
PROPERTIES, THERE IS SUBSTANTIAL RISK THAT NO COMMERCIALLY VIABLE
MINERALS WILL BE FOUND ON EITHER OF OUR PROPERTIES AND OUR BUSINESS WILL
FAIL.
The search for valuable minerals as a business is extremely risky. We
can provide investors with no assurance that the Mac South Property
contains commercially viable reserves of copper, nickel and platinum
group metals. Exploration for minerals is a speculative venture
necessarily involving substantial risk. The expenditures to be made by
us in the exploration of the optioned mineral properties 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. IN SUCH CIRCUMSTANCES, OUR BUSINESS MAY FAIL.
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 insure or
against which we may elect not to insure. If we realize any of the
above liabilities in the course of our exploration of the Mac South
Property, we may become subject to penalties or lawsuit damages that may
prevent us from pursuing our business plan, or may jeopardize all of our
assets. In such circumstances, our shareholders will lose all of their
investment.
EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON OUR
OPTIONED MINERAL PROPERTIES, WE MAY NOT BE ABLE TO OBTAIN COMMERCIAL
PRODUCTION.
Our optioned mineral property does not contain any known bodies of ore.
If our exploration programs are successful in establishing an ore body
of commercial tonnage and grade, we will require additional funds in
order to place the Mac South Property into commercial production. At
this time, we can provide investors with no assurance that we will be
able to obtain such financing. If we are unable to arrange such funding,
we may have to sell an interest in the property to a company
that is able to place it into commercial production. In such an event,
the value of our assets would be diminished and the value of our common
stock would be negatively impacted.
8
WE NEED TO CONTINUE AS A GOING CONCERN IF OUR BUSINESS IS TO SUCCEED.
The Independent Auditor's Report to Manchester Inc. audited financial
statements for the period ended November 30, 2002, indicates that there
are a number of factors that raise substantial doubt about our ability
to continue as a going concern. Such factors identified in the report
are: we are in a net loss position; we have not obtained profitable
operations; and we are dependent upon obtaining adequate financing. If
we are not able to continue as a going concern, it is likely investors
will lose their investments.
Risks Related To Our Market And Strategy
IF WE DO NOT OBTAIN CLEAR TITLE TO THE MINING PROPERTIES, OUR BUSINESS
MAY FAIL.
While we have obtained geological reports with respect to the optioned
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 optioned mining properties have not been
surveyed and therefore, the precise locations and areas of the
properties may be in doubt.
Risks Related To This Offering
BECAUSE OUR DIRECTORS OWN 39.84% OF OUR OUTSTANDING COMMON STOCK, THEY
MAY MAKE AND CONTROL CORPORATE DECISIONS THAT MAY DIFFER FROM THE
INTERESTS OF OUR OTHER SHAREHOLDERS.
Mr. Dana Upton and Mr. Jackson Buch, both directors of our company, own
an aggregate of 39.84% of the outstanding shares of our common stock.
Accordingly, they will have a significant influence in determining the
outcome of all corporate transactions or other matters, including
mergers, consolidations and the sale of all or substantially all of our
assets, and also the power to prevent or cause a change in control. The
interests of Mr. Buch and Mr. Upton may differ from, and be adverse to,
the interests of the other stockholders.
BECAUSE OUR PRESIDENT 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.
Our president, Mr. Buch is presently required to spend only 20% of his
business time on business management services for our company. While Mr.
Buch presently possesses adequate time to attend to our interests, it is
possible that the demands on Mr. Buch 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.
Buch may not possess sufficient time for our business if the demands of
managing our business increased substantially beyond current levels.
BECAUSE MANAGEMENT HAS ONLY LIMITED EXPERIENCE IN MINERAL EXPLORATION,
THE BUSINESS HAS A HIGHER RISK OF FAILURE.
Our management has only limited experience in mineral exploration. As a
result of this inexperience, there is a higher risk of our being unable
to complete our business plan in the exploration and
9
exploitation of our optioned mineral property.
IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, SHAREHOLDERS MAY BE
UNABLE TO SELL THEIR SHARES.
There is currently no market for our common stock and we can provide no
assurance that a market will develop. We currently plan to apply for
listing 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 can provide investors with no
assurance that our shares will be traded on the bulletin board or, if
traded, that a public market will materialize. If no market is ever
developed for our shares, it will be difficult for shareholders to sell
their stock. In such a case, shareholders may find that they are unable
to achieve benefits from their investment.
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 1,812,500 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 represents approximately 60.16%
of the common shares outstanding as of the date of this prospectus.
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 the 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
The selling shareholders are required to sell our shares at $0.50 per
share until our shares are quoted on the OTC Bulletin Board, and
thereafter at prevailing market prices or privately negotiated price.
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.
10
Selling Shareholders
The selling shareholders named in this prospectus are offering all of
the 1,812,500 shares of common stock offered through this prospectus.
These shares were acquired from us in a private placement that was
exempt from registration under Regulation S of the Securities Act of
1933.
The following table provides as of November 30, 2002, 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; and
4. the percentage owned by each upon completion of the offering.
Total Number
Of Shares To Total Shares Percentageof
Be Offered For to Be Owned Shares owned
Name Of Shares Owned Selling Upon Upon
Selling Prior To This Shareholders Completion Of Completion of
Stockholder Offering Account This Offering This Offering
Kirsten Coke 125,000 125,000 Nil Nil
1707-1500
Howe Street
Vancouver BC
Canada
Delores Press 145,000 145,000 Nil Nil
1430 West
7th Avenue
Vancouver BC
Canada
Sarah Russell 130,000 130,000 Nil Nil
1420 East
29th Avenue
Vancouver BC
Canada
Shirley Waggett 150,000 150,000 Nil Nil
1645 Harbour Drive
Coquitlam BC
Canada
Jim Sawinski 100,000 100,000 Nil Nil
967 Floyd Avenue
Coquitlam BC
Canada
Neil Huff 150,000 150,000 Nil Nil
1555 Alpine Lane
Coquitlam BC
Canada
11
Total Number
Of Shares To Total Shares Percentageof
Be Offered For to Be Owned Shares owned
Name Of Shares Owned Selling Upon Upon
Selling Prior To This Shareholders Completion Of Completion of
Stockholder Offering Account This Offering This Offering
Tammy Iny 140,000 140,000 Nil Nil
2206-777
Cardero Street
Vancouver BC
Canada
Kerrie Iny 110,000 110,000 Nil Nil
6521 McKay Avenue.
Burnaby BC
Canada
Linda Iny 150,000 150,000 Nil Nil
3408 28th Avenue
Vancouver BC
Canada
Anna Skokan 150,000 150,000 Nil Nil
8518 104B Street
Delta BC
Canada
Michael Usher 135,000 135,000 Nil Nil
3956 West
11th Avenue
Vancouver BC
Canada
Delores Gough 115,000 115,000 Nil Nil
80 Lafayette Blvd.
Lethbridge Alberta
Canada
Trevor Wynd 50,000 50,000 Nil Nil
15170 66A
Avenue
Surrey BC, Canada
Julie Kuipers 50,000 50,000 Nil Nil
5055 Frost Road
Kelowna BC
Canada
Karlo Krauzig 50,000 50,000 Nil Nil
308-5627
Dunbar Street
Vancouver BC
Canada
Karl Kuipers 50,000 50,000 Nil Nil
203-595
K.L.O. Road
Kelowna BC
Canada 12
Total Number
Of Shares To Total Shares Percentageof
Be Offered For to Be Owned Shares owned
Name Of Shares Owned Selling Upon Upon
Selling Prior To This Shareholders Completion Of Completion of
Stockholder Offering Account This Offering This Offering
Jeff Murdoch 500 500 Nil Nil
659 Moberly Road
Vancouver BC
Canada
Balbier Bains 500 500 Nil Nil
6716 124A Street
Surrey BC
Canada
Parmjit Badasha 500 500 Nil Nil
14197 - 75 A Ave
Surrey BC
Canada
Kulwant Mahay 500 500 Nil Nil
12296-124 Street
Surrey BC
Canada
Gurdev Ball 500 500 Nil Nil
12475 - 70 Ave
Surrey BC
Canada
Bob Munro 500 500 Nil Nil
5521 Killarney Street
Vancouver BC
Canada
Bilvinder Nahah 500 500 Nil Nil
12633 - 68 Ave
Surrey BC
Canada
Shalesh Chand 500 500 Nil Nil
3568 Coast Meridian
Road, Port Coquitlam
BC, Canada
Bruce Brerton 500 500 Nil Nil
2263 Pitt River Road
Pitt Meadows BC
Canada
Malkiat Singh Bains 500 500 Nil Nil
8134-123 Street
Surrey BC
Canada
13
Total Number
Of Shares To Total Shares Percentageof
Be Offered For to Be Owned Shares owned
Name Of Shares Owned Selling Upon Upon
Selling Prior To This Shareholders Completion Of Completion of
Stockholder Offering Account This Offering This Offering
Ed Duncan 500 500 Nil Nil
601 - 1450 Pennyfarthing
Drive, Vancouver
Canada
Karnail Singh Civia 500 500 Nil Nil
3667 Liverpool Street
Port Coquitlam BC
Canada
Harbhjan S Deol 500 500 Nil Nil
7438-126 A Street
Surrey BC
Canada
Jarnail S Dhaliwal 500 500 Nil Nil
16948 Green Brook Drive
Surrey BC
Canada
Tyler Tisdale 500 500 Nil Nil
1904 West 16 Ave.
Vancouver BC
Canada
Baldev S Gill 500 500 Nil Nil
13380 - 88 A Ave.
Surrey BC
Canada
Jaginder S. Dhinsa 500 500 Nil Nil
156-83 A Ave - 8332.
Surrey BC
Canada
Jasbir Dhaliwal 500 500 Nil Nil
15136 - 81 A Ave
Surrey BC
Canada
Karnal S. Dhinsa 500 500 Nil Nil
12628-70 A Ave Surrey BC
Canada
Balwant Pooni 500 500 Nil Nil
955 East 58th Avenue
Vancouver BC, Canada
Marco Bobini 500 500 Nil Nil
3470 7th Ave
Vancouver, BC
Canada
14
Total Number
Of Shares To Total Shares Percentageof
Be Offered For to Be Owned Shares owned
Name Of Shares Owned Selling Upon Upon
Selling Prior To This Shareholders Completion Of Completion of
Stockholder Offering Account This Offering This Offering
Rashhal Sanghara 500 500 Nil Nil
8238- 152 A Street
Surrey BC
Canada
Jarnal Sall 500 500 Nil Nil
2236 Ladysmith Road
Ladysmith BC
Canada
Amrit Basi 500 500 Nil Nil
11365 Mader Lane
Delta BC
Canada
Raj Nijjer 500 500 Nil Nil
1932 Valens Street
Port Coquitlam BC
Canada
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 3,012,500 shares of common stock
outstanding on July 28, 2003.
Except as disclosed below, none of the selling shareholders:
(a) has had a material relationship with us other than as a
shareholder at any time within the past three years; or
(b) has ever been one of our officers or directors.
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:
The selling shareholders are required to sell our shares at $0.50 per
share until our shares are quoted on the OTC Bulletin Board, and
15
thereafter at prevailing market prices or privately negotiated prices.
The shares may also be sold in compliance with the Securities and
Exchange Commission's Rule 144.
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.
If our selling shareholders enter into arrangements with brokers or
dealers, as described above, we are obligated to file a post-effective
amendment to this registration statement disclosing such arrangements,
including the names of any broker dealers acting as underwriters.
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. We estimate the cost of this offering to be $16,583.38
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.
16
The Securities Exchange Commission has also 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).
A purchaser is purchasing penny stock which limits the ability to sell
the 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 Manchester
Inc. will be subject to rules 15g-1 through 15g-10 of the Securities and
Exchange Act. Rather than creating a need to comply with those rules,
some broker-dealers will refuse to attempt to sell penny stock.
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:
* contains a description of the nature and level of risk in the
market for penny stocks in both public offerings and secondary
trading;
* 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
* contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" prices for penny stocks and the
significance of the spread between the bid and ask price;
* contains a toll-free telephone number for inquiries on
disciplinary actions;
* defines significant terms in the disclosure document or in the
* conduct of trading penny stocks; and
* contains such other information and is in such form (including
* language, type, size, and format) 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:
* with bid and offer quotations for the penny stock;
* the compensation of the broker-dealer and its salesperson in the
transaction;
* 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
* 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
17
written agreement to transactions involving penny stocks, and a signed
and dated copy of a written suitability statement. These disclosure
requirements will have the effect of reducing the trading activity in
the secondary market for our stock because it will be subject to these
penny stock rules. Therefore, stockholders may have difficulty selling
those securities.
Legal Proceedings
We are not currently a party to any legal proceedings. Our address for
service of process in Nevada is 50 Liberty Street West, Suite 880, Reno,
Nevada.
Directors, Executive Officers, Promoters And Control Persons
Our executive officers and directors and their respective ages as of
February 28, 2003 are as follows:
Directors:
Name of Director Age
- ----------------- -----
Jackson Buch 58
Dana Upton 49
Executive Officers:
Name of Officer Age Office
- ---------------------- ----- -------
Jackson Buch 58 President, Principal
Accounting Officer and
a Director
Dana Upton 49 Secretary, Treasurer
and a Director
Biographical Information
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.
Jackson Buch: Mr. Buch has acted as our president, Principal Accounting
Officer and a director since our inception on August 27, 2002.
Currently, Mr. Buch is only required to spend 20% of his time managing
and tending to our affairs.
Mr. Buch has had a lengthy career as a consultant in various business
endeavors. From 1992 to present Mr. Buch has been the president and
major shareholder in Buch Holdings Inc. a consulting company, having its
main focus in the area of pipeline management, fabrication and quality
assurance. Some of the major projects Mr. Buch has consulted for are,
the Iroquois Gas-Eastchester project, where he performed audit
and inspection services of the mill that produced the pipe for the
project.
Mr. Buch performed audit and inspection services of Napa Pipe Corp. of
Napa California for Alliance Pipeline Ltd. Mr. Buch also performed
audit and inspection services for Alliance Pipeline Inc. of the liquid
epoxy coating on a pipeline spanning from Fort St. John, British
Columbia, Canada to Chicago, Illinois, USA.
18
Dana Upton: Mr. Upton has acted as our, secretary, treasurer and as a
director since our inception on August 27, 2002. Currently, Mr. Upton
is only required to spend his time on an as needed basis tending to the
affairs of the company. Mr. Upton attended the University of British
Columbia faculty of engineering where he majored in mining engineering.
In the past, Mr. Upton has worked with several different mining
companies in their engineering department, including, Faro Mining Corp.
in 1973 where he performed mining engineering and mine surveying duties;
Burro Creek Minerals, where he was a director of the company from 1989
to 1993 and was responsible for over seeing the company's exploration
activities; Construction Aggregates, Inc. where Mr. Upton worked in 1972
and was responsible for lab testing duties; and Placid Oil Company,
where Mr. Upton worked in 1971 and worked as part of an exploration team
on various Properties.
Mr. Upton has been a partner in Skyward Marking Systems of Richmond
British Columbia, Canada since September 2001 and as President,
Secretary and Treasurer of Hudson Ventures, Inc. since November 2001.
Since September 2001, he has been responsible for establishing
distributors and original equipment manufacturers for Marsh Ink Jet
Systems. His activities were directed primarily at the management of
major accounts, including Nabob, B.C. Packers, Abbott Labs, and Shell
Oil.
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.
Significant Employees
We have no significant employees other than the officers and directors
described above.
Conflicts of Interest
We do not have any procedures in place to address conflicts of interest
that may arise in our directors between our business and their other
business activities.
Security Ownership Of Certain Beneficial Owners And Management
The following table provides the names and addresses of each person
known to us to own more than 5% of our outstanding common stock as of
November 30, 2002, and by the officers and directors, individually and
as a group. Except as otherwise indicated, all shares are owned
directly.
Amount of
Title of Name and address beneficial Percent
Class of beneficial owner ownership of class
Jackson Buch 600,000 19.92%
President, Principal Accounting
Officer And a Director
978 Fairway Crescent
Kelowna, B.C., Canada
19
Common Dana Upton 600,000 19.92%
Stock Secretary, Treasurer
and a Director
200-675 West Hastings Street
Vancouver, British Columbia
Canada
Common All Officers and Directors 1,200,000 shares 39.84%
Stock as a Group that consists of
two people
The percent of class is based on 3,012,500 shares of common stock issued
and outstanding as of November 30, 2002.
Description Of Securities
General
Our authorized capital stock consists of 100,000,000 shares of common
stock and 10,000,000 shares of preferred stock at a par value of $0.001
per share.
Common Stock
As of November 30, 2002, there were 3,012,500 shares of our common stock
issued and outstanding that were held by 43 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 a 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.
Preferred Stock
To date we have not issued any of the 10,000,000 Preferred shares
authorized.
20
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.
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
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.
Christopher J. Moran Jr., our independent legal counsel, has provided an
opinion on the validity of our common stock.
The financial statements included in this prospectus and the
registration statement have been audited by Morgan and Company,
Chartered Accountants, to the extent and for the periods set forth in
their report appearing elsewhere in this document and in the
registration statement filed with the SEC, and are included in reliance
upon such report given upon the authority of said firm as experts in
auditing and accounting.
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 matter has been settled by
21
controlling precedent, submit the question of whether such
indemnification is against public policy to court of appropriate
jurisdiction. We will then be governed by the court's decision.
Organization Within Last Five Years
We were incorporated on August 27, 2002 under the laws of the state of
Nevada.
We own an option to acquire a 80% interest in certain mineral claims
situated in the Province of Ontario, Canada pursuant to an agreement
dated October 4, 2002.
Mr. Jackson Buch, our president, and a director, and Mr. Dana Upton our
Secretary and Treasurer and a director have been our sole promoters
since our inception. Mr. Buch and Mr. Upton purchased 600,000 shares
each of our common stock at a price of $0.001 US per share on September
13, 2002. Mr. Buch and Mr. Upton paid a total purchase price of $600.00
each for these shares.
Description Of Business
In General
We have commenced operations as an exploration stage company. We are
involved in the acquisition and exploration of mineral properties with a
view to exploiting mineral deposits demonstrating potential economic
feasibility. We have entered into a mineral property option agreement
whereby we may acquire an 80% interest in a total of two mineral claims,
comprising 11 claim units located in the Province of Ontario, Canada.
Each claim unit is comprised of 40 acres. Accordingly, the total area
of the two mineral claims is 440 acres.
These claims are collectively referred to as the Mac South Property. In
the Province of Ontario Mining Act, a mineral claim is defined as "a
plot of ground staked out and acquired under the provisions of the Act."
Our mineral claims interest is described below under the headings "Mac
South Property Option Agreement". Our plan of operation is to carry out
exploration work on the Mac South Property in order to ascertain whether
these claims possess commercially viable quantities of copper and/or
nickel and Platinum group metals. There can be no assurance that a
commercially viable mineral deposit, or reserve, exists on the Mac South
Property until appropriate exploratory work is done and an economic
evaluation based on such work concludes there is the potential of
economic feasibility.
Economic evaluation to determine potential economic feasibility will
only occur if a defined body of ore is proven on one of our claims. If
warranted, we will hire an engineering firm specializing in the economic
evaluation process.
We have commenced the first phase of the exploration program recommended
for the Mac South Property under the supervision of Mr. John Siriunas.
Details of this program are described below under the section entitled
"Geological Report: Mac South Property".
22
Mac South Property Option Agreement
We have obtained the option to acquire an 80% interest, in two mineral
claims comprising of eleven claim units, situated in the Sudbury Mining
District, McLennan Township, Province of Ontario, Canada. This property
is known as the Mac South Property. The Mac South Property is subject to
a 1% net smelter returns royalty, in favor Of Mr. Terry Loney of Garson
Ontario, Canada. A net smelter returns royalty is the amount of money
that we would receive from the sale of minerals from the property to a
smelter, less refining charges, ore treatment charges, penalties and
transportation costs.
We refer to the two mineral claims described above as the Mac South
Property. We acquired our interest in the Mac South Property pursuant
to an agreement dated October 4, 2002 between Terry Loney and us. Terry
Loney holds the exclusive right to explore and extract minerals from the
Mac South Property. We paid cash consideration to Terry Loney for the
grant of the option in the amount of $8,000 on October 4, 2002. The
option agreement was negotiated as an arm's length transaction. It
provides that we will have exercised the option and thereby acquired an
undivided 80% interest in the Mac South Property when we have:
(A) paid Terry Loney $8,000(which we paid upon the execution of the
option agreement);
(B) incurred an aggregate of $209,800 of property exploration
expenditures on the Mac South Property within the following
periods:
(1) $23,800 by October 31, 2003;
(2) a further $186,000 by October 31, 2004.
To date, we have incurred approximately $5,000 in exploration
expenditures on the Mac South Property, in the form of a geological
report, commissioned by us, as well as the initial portion of the phase
one exploration program. In the event that we spend, in any of the
above periods, less than the required sum, we may, at our option, pay to
Terry Loney the cash difference between the amount actually spent and
the required exploration expenditure in full satisfaction of the
exploration expenditures to be incurred. In the event that we spend, in
any period, more than the required sum, then the excess will be carried
forward and applied to the required exploration expenditures to be
incurred in subsequent periods.
If we fail to make any required payment, or incur any required
exploration expenditures, our option will terminate and we will have no
further rights to the Mac South Property. Property exploration
expenditures include all costs of acquisition and maintenance of the
property, all expenditures on the exploration and development of the
property and all other costs and expenses of whatsoever kind or nature,
including those of a capital nature, incurred or chargeable with
respect to the exploration of the property. In addition, until we have
secured an 80% interest in the Mac South Property, we are obligated to
maintain in good standing the Mac South Property by:
(A) completing and filing assessment work or making of payments
in lieu thereof; and
(B) performing all other actions necessary to keep the Mac South
23
Property free and clear of all liens and other charges.
Under Ontario law, a mineral claim owner must expend $400 in Canadian
funds per claim unit in order to extend title rights for an additional
year. As the Mac South Property consists of 11 mineral claim units, we
will have to expend $4,400 to maintain title for each additional year.
However, the claims comprising the Mac South Property are in good
standing until August 24, 2004. In addition, the exploration work we
are currently conducting on the Mac South Property is credited to future
requirements.
Description of the Mac South Property
The Mac South Property comprises two mining claim blocks, comprising of
11 claim units located in the Sudbury Mining Division, McLennan
Township, of Ontario, Canada. Mr. Terry Loney staked the claims in
September 2002.
Staking typically involves placing wooden posts at claims boundaries. In
Ontario, this is a requirement for obtaining mineral rights with respect
to the claims. Re-staking involves the same process, but occurs after
the claims have lapsed. This happens when the previous owner has failed
to spend a certain amount of funds on exploration of the claims within a
certain time period as required by law.
When mineral claims are in "good standing", this means that we maintain
our right to explore and extract minerals from the claims. If we fail
to keep the claims in good standing, then another person make re-stake
the claims and acquire the interest in the claims that we previously
owned.
Location and Access of the Mac South Property
The Maclennan Township area is located approximately 27 kilometers to
the northeast of the center of the City of Sudbury. The claim block that
comprises the property can be reached from Regional Road 86 (the
Falconbridge Highway or Airport Road) by following the abandoned railway
right-of-way that now forms part of the Trans-Canada Trail.
History of the Mac South Property
Occurrences of native gold have been known since the late 1800s in the
Wanapitei Lake region. After the discovery of silver mineralization to
the north in the Gowganda area, much of the region was prospected in an
attempt to locate additional deposits. Considerable exploration also
occurred after the discovery of major copper nickel deposits in
Maclennan and Falconbridge Townships.
Much of the exploration in the region has focused on the margin of the
Sudbury Igneous Complex and related Contact Sublayer exposures and
offset dikes as targets for copper and nickel mineralization. The only
recorded work over the current property area is airborne geophysical
surveys carried out by the Canadian Nickel Company Ltd. in 1981.
Airborne geophysical surveying is the search for mineral deposits using
detection equipment and an airplane. The equipment measures the
physical property of near-surface rocks, and detects unusual responses
caused by the presence of mineralization. Electrical, magnetic,
gravitational, seismic and radioactive properties are the ones most
commonly measured. These surveys did not result in the detection of
any significant
24
electrical, magnetic, gravitational, seismic and radioactive occurrences
that would suggest the presence of precious or base metals on the
property.
Undocumented exploration work by Falconbridge Limited and Inco Limited
has been carried out over the property area and environs. This work is
believed to have consisted of airborne and ground geophysical surveys,
geological mapping and sampling. It is estimated that the total
apportioned cost of these programs would have exceeded $100,000. The
results of this work are not in the public domain.
Geological Report: Mac South Property
We have obtained a geological evaluation report on the Mac South
Property. The geological report was prepared by John M. Siriunas of
Milton Ontario, Canada.
In his geological report, Mr. Siriunas recommends proceeding with a two-
phase, staged exploration program on the Mac South Property based on his
conclusion that prospecting, geophysical surveys and soil and rock
sampling are the exploration techniques that have been the most
successful in locating copper, nickel and platinum group metals
mineralization in the region.
The main objective of the first phase or reconnaissance phase of this
exploration program is to locate the most favorable areas of mineral
concentration to carry out a more detailed diamond drill sampling
program to locate mineralization below the surface of the claims.
The initial phase of the recommended geological work program is
comprised of Geological review and Geophysical surveys of the Mac South
Property in order to make a preliminary assessment of mineralization. A
budget of $23,800 is estimated to be required to support this initial
geological work program. The components of the budget for this initial
geological work program are as follows:
PHASE 1
Linecutting 20 km @ $US260/km $ 5,200
Geophysics
Magnetics, VLF-EM 20 km @ $US150/km $ 3,000
Geophysical consulting and interpretation $ 1,550
Prospecting
Field work 30 days @ $US135/day $ 4,050
Trenching $ 5,800
Analyses $ 2,000
Contingencies $ 2,200
Total Phase 1 $23,800
The phase one program will commence with linecutting. Linecutting
involves removing bush from the property in order to produce straight
clearings. This provides grid boundaries for geophysical and other
surveys. Establishing such grid boundaries is also known as grid
emplacement. This involves dividing the portion of the property being
explored into small sections. The geologist overseeing the exploration
program will record results based on the section from which a sample is
taken, or various surveys are performed.
25
Once linecutting and grid emplacement is completed, the consulting
geologist will then oversee magnetic and VLF-EM surveys over the
property surface. A magnetic survey involves measuring the strength of
the earth's magnetic field. Variations in the magnetic readings on the
property may indicate the increased likelihood of precious or base
minerals in the area.
VLF, or very low frequency, surveys use radio waves to determine whether
rocks on a mineral property conduct electricity. Almost all of the
precious and base metals that we seek are above average conductors of
electricity and will affect VLF readings.
Once these surveys are completed and the results are compiled by the
geologist, he and his assistants will collect grab samples from the
property surface or the bedrock below. The geologist accesses the
bedrock through a process known as trenching. Trenching involves
removing surface soil using a backhoe or bulldozer.
Grab samples are soil samples or pieces of rock that appear to contain
precious metals such as gold and silver, or industrial metals such as
copper and nickel. All samples gathered will be sent to a laboratory
where they are crushed and analysed for metal content.
Mr. Siriunas recommended that the second phase of the exploration
program consist of Diamond drilling, core logging and assay sampling.
This second phase of the geological work program is estimated to require
a budget of $186,000. Mr. Siriunas concluded in his geological report
that the decision to proceed with each subsequent phase of the
exploration program should be contingent upon reasonable encouragement
having been gained from the results of the previous exploration program.
PHASE 2
Geology
Mobilization/demobilzation $ 2,500
Mapping, sampling $17,500
Field support $ 7,500
Equipment, supplies, consumables $ 2,500
Geochemical analyses $ 3,000
Compilation, reporting, interpretation $ 5,000
Geochemistry
Sampling $ 8,000
Analyses $13,000
Reporting, interpretation $ 5,000
Diamond drilling 1500 m @ $US70/m (all incl.) $105,000
Contingencies $17,000
Grand Total Phase 1 and Phase 2 $209,800
Phase two will consist of additional sampling of rocks on the property.
We will focus on areas of the claims where we previously gathered
samples that contained significant amounts of mineralization. Based on
the results from these samples, we will conduct a drilling program on
the property. Drilling involves extracting a long cylinder of rock from
the ground to determine amounts of metals contain in rock located at
different depths. Pieces of the rock obtained, known as drill core, are
analysed for mineral content.
26
We have decided to accept the recommendation of the geological report
and proceed with this initial geological work program. We will make a
decision whether to proceed with phase two of the staged exploration
program upon completion of this initial geological work program and an
analysis of the results of this first phase of the exploration program.
If the results from the laboratory show that the samples gathered from
the property contain significant levels of precious or base minerals, we
will proceed with phase two. The decision to proceed to phase two will
be made by our management in conjunction with the geologist who oversees
the phase one program. If the amount of precious or base minerals that
are contained in the samples suggest that the property may have a
significant enough mineral resource to economically justify a mine, we
will continue with our exploration.
We began the phase one exploration program on the Mac South Property on
June 19, 2003. We estimate that the phase will take approximately two
months to complete. The phase one exploration work is being performed
under the guidance of Mr. Siriunas in accordance with the
recommendations in his geological report. We are retaining him at a per
diem rate of $250 on an as needed basis. It is expected that his fees
for the phase one program will not exceed $1,000.
To date, we have completed the establishment of a grid on the property
by removing significant amounts of brush. Due to unexpected rain,
initial prospecting consisting of the gathering of rock samples has been
delayed. However, we expect to complete the prospecting portion of the
phase one program by the end of July.
Phase two is estimated to take three months to complete. Based on
positive phase one results, we hope to commence this phase in spring
2004.
Should we determine at any time not to proceed to the next phase of the
geological work program, we will use our remaining operating capital, if
any, to obtain an option or options on other mineral claims. Any
remaining funds will then be used to conduct mineral exploration
activities on those claims. It is likely we will need further financing
to pay for that exploration. We do not have any plans to engage in any
alternative business. In such circumstances, we anticipate raising
additional funds in order to acquire an interest in other mineral claims
and to explore such claims for economic mineralization. We have no
specific plans in this regard.
The two-phase program recommended in the report constitutes a
reconnaissance exploration program, which is only an initial phase of a
full exploration effort. If we complete both phases of the exploration
program and the results of these efforts are positive, we will still
have to undertake an extensive and additional exploration program which
might consist of further soil sampling, geophysical surveys, trenching
or drilling before we will be able to identify commercially-viable
reserves. The costs of these subsequent programs
will be significantly more than the costs set forth above for the
initial two phase exploration program.
Competition
The mineral industry is intensely competitive in all its phases. We
will
27
compete with many companies possessing greater financial resources and
technical facilities than us for the acquisition of mineral concessions,
claims, leases and other mineral interests as well as for the
recruitment and retention of qualified employees.
We must overcome significant barriers to enter into the business of
mineral exploration as a result of our limited operating history. There
can be no assurance that Manchester Inc. will be able to compete
effectively with current or future competitors or that the competitive
pressures faced by us will not have a material adverse effect on our
business, financial condition and operating results.
Qualifications of John M. Siriunas, P.Eng.
John M. Siriunas, has offices at 25 3rd Side Road, Milton, Ontario,
Canada.
1) Mr. Siriunas holds a Bachelor of Applied Science degree in
Geological Engineering (1976) and a Master of Applied Science Degree in
Applied Geology (1979) from the University of Toronto in Toronto,
Ontario, Canada.
2) He is registered as a Professional Engineer in the Province of
Ontario and possess a Certificate of Authorization for the practice of
professional engineering.
3) Mr. Siriunas has practised his profession as an engineer and
consultant continuously since 1979.
Compliance with Government Regulation
We will be required to conduct all mineral exploration activities in
accordance with the Ontario Mining Act. We will be required to obtain
work permits from the Ministry of Northern Development and Mines for any
exploration work that results in a physical disturbance to the land. We
will be required to obtain additional work permits if we proceed with
the second phase of our exploration program. There is no charge to
obtain a work permit under the Mining Act. We will incur the expense of
our consulting geologist to prepare the required submission to the
Ministry of Northern Development and Mines. As the exploration program
proceeds to the trenching, drilling and bulk-sampling stages, we may be
required to post small bonds and file statements of work with the
Ministry of Northern Development and Mines. We will be required by the
Environmental Regulations Act to conduct 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.
As mentioned above we will have to sustain the cost of reclamation and
environmental mediation for all exploration and other work undertaken.
The costs of complying with environmental regulations will likely be
less than $1,000 through phase two on each property. Because these costs
are nominal, we have not budgeted for regulatory compliance costs in the
proposed exploration programs recommended by the geological reports.
The amount of these costs is not known at this time as we do not know
the extent of the exploration program that will be undertaken beyond
28
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 or our competitive position.
Employees
We have no employees as of the date of this prospectus other than our
two Directors. All directors are part time employees, with Mr. Upton
contributing his time on an as needed basis and Mr. Buch spending 20% of
his time managing the company.
Research and Development Expenditures
We have not incurred any exploration expenditures to date. We have
not incurred any other research or development expenditures since our
incorporation.
Subsidiaries
We do not have any subsidiaries.
Patents and Trademarks
We do not own, either legally or beneficially, any patents or
trademarks.
Plan Of Operations
Our current business plan is to conduct exploration sufficient to
determine whether there is reason to begin an extensive and costly
exploration program. This constitutes phase one of the exploration
program recommended by the geological report. We anticipate that phase
one of the recommended geological exploration program will cost
approximately $23,800 on the Mac South Property.
Specifically, we anticipate spending the following over the next 12
months:
* $9,000 on legal fees, $3,000 on accounting fees, $2,500 on EDGAR
filing fees, $2,000 on transfer agent fees and $83.38 on
registration fees. This includes professional fees payable in
connection with the filing of this registration statement;
* $23,800 on exploration expenses for the first phase of the
exploration program on the Mac South Property, as recommended by
Mr. John M. Siriunas , the author of the geological report on the
Mac South Property;
Total expenditures over the next 12 months are therefore expected to be
approximately $40,383.38.
We are able to complete phase one of the exploration program on the Mac
South Property without additional financing. Completion of these
exploration expenditures will also enable us to meet the exploration
expenditure requirement under the option agreement for the period
through October 31, 2003.
29
We commenced the phase one exploration program on June 19, 2003. We
anticipate proceeding with phase two of the exploration program in the
spring of 2004. We will obtain a geological report upon the completion
of each phase summarizing the results of that phase. The costs of the
geological reports are included in the cost of the exploration program.
We have sufficient cash on hand in order to complete the first phase
work program on the property.
We will assess whether to proceed to phase two of the recommended
geological exploration program upon completion of an assessment of the
results of phase one of the geological exploration program. We will
require additional funding in the event that we decide to proceed with
phase two of the exploration program. The anticipated cost of phase two
of the exploration program is $186,000, which is well beyond our
projected cash reserves. Unless we raise and spend $186,000 on the Mac
South Property by October 31, 2004, we will lose our interest in the
property.
We anticipate that additional funding will be required 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 both phases
of the exploration program. We believe that debt financing will not be
an alternative for funding the complete exploration program. We do not
have any arrangements in place for any future equity financing.
Our cash reserves are not sufficient to meet our obligations for the
next twelve-month period. As a result, we will need to seek additional
funding in the near future. We currently do not have a specific plan of
how we will obtain such funding; however, we anticipate that additional
funding will be in the form of equity financing from the sale of our
common stock. We may also seek to arrange a short-term loan through our
President, although no such arrangement has, as yet, been made. At this
time, we cannot provide investors with any assurance that we will be
able to raise sufficient funding from the sale of our common stock or
through a loan from our President to meet our obligations over the next
twelve months. We do not have any arrangements in place for any future
equity financing.
If we do not complete the exploration expenditures required under the
option agreement for the Mac South Property, then our option in will
terminate and we will lose all our rights and interest in the Mac South
Property. If we do not secure additional financing to incur the required
exploration expenditures, we may consider bringing in a joint venture
partner to provide the required funding. We have not undertaken any
efforts to locate a joint venture partner. In addition, we cannot
provide investors with any assurance that we will be able to locate a
joint venture partner who will assist us in funding the exploration of
the Mac South Property. We may also pursue acquiring interests in
alternate mineral properties in the future.
Results of Operations
We did not earn any revenues from our inception on August 27, 2002 to
May 31, 2003. We are presently in the exploration stage of our
business and we can provide no assurance that we will discover
commercially viable levels of mineral deposits on our properties, or if
such mineral deposits are discovered, that we will enter into commercial
production of our mineral properties.
30
We incurred operating expenses in the amount of $29,045 for the
period from inception to May 31, 2003. These operating expenses were
comprised primarily of professional fees attributable to our corporate
organization, the preparation and filing of this
registration statement, administrative services and the acquisition
of our options to acquire the Mac South Property.
We have not attained profitable operations and are dependent upon
obtaining financing to pursue exploration activities. For these
reasons our auditors stated in their report that they have
substantial doubt Manchester Inc. will be able to continue as
a going concern.
Description Of Property
Our executive offices are located at 200-675 West Hastings Street,
Vancouver, British Columbia, Canada. Mr. Jackson Buch, our president,
provides this office space to us free of charge.
We own an option to acquire an 80% interest in the Mac South Property,
as described in detail in this Prospectus under the heading Mac South
Property Option Agreement. We do not own or lease any property other
than our option to acquire an interest in the Mac South Property.
The Mac South Property comprises two claims and 11 claim units in the
Sudbury Mining District of the Province of Ontario, Canada. Mr. Terry
Loney is the registered owner of both the claims. The claims expire on
August 24, 2004.
There are no mines or physical equipment or property located on the
mineral claims. There is no source of power to the 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; Jackson Buch and Dana Upton our directors and
officers
* Any relative or spouse of any of the foregoing persons who has the
same house address as such person.
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 prospectus. 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.
31
Stockholders of Our Common Shares
As of the date of this prospectus, we had 43 registered shareholders.
Rule 144 Shares
A total of 1,200,000 shares of our common stock will be available for
resale to the public after September 13, 2003 in accordance with the
volume and trading limitations of 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, will equal approximately 30,125
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 directors,
officers, and affiliates hold all of the 1,200,000 shares that may be
sold pursuant to Rule 144 after September 13, 2003.
Stock Option Grants
To date, we have not granted any stock options.
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:
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
32
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 by any person for all services
rendered in all capacities to us since our incorporation on August 27,
2002 to July 28, 2003.
Annual Compensation
Other Restricted Options Other
Annual Stock *SARs Comp.
Name Title Year Mgmt. Bonus Comp. Awarded #) ($)
Jackson Pres., 2002 $0 0 0 0 0 0
Buch Dir.
Prin. Acc.Off.
Dana Sec.
upton Tre. 2002 $1000 0 0 0 0 0
Stock Option Grants
We did not grant any stock options to the executive officers during
our most recent fiscal year which ends November 30, 2002.
Consulting and or Management Agreements
We do not have an employment contract, consulting agreement or other
arrangement concerning compensation with Mr. Buch and do not pay Mr.
Buch any amount for acting as our President and Chief Executive Officer.
We do not have any employment contract, consulting agreement or other
arrangement concerning compensation with Mr. Upton. However, we did pay
Mr. Upton a one-time management fee of $1,000 for acting as our
Secretary and Treasurer.
We do not have any standard arrangements pursuant to which our directors
are compensated for services provided as directors.
Financial Statements
Index to Financial Statements:
1. Auditors' Report;
2. Audited financial statements for the period ending November 30, 2002
including:
a. Balance Sheet
33
b. Statement of Loss and Deficit
c. Statement of Cash Flows
d. Statement of Stockholders' Equity
e. Notes to Financial Statements
3. Unaudited financial statements for the period ending May 31, 2003
including:
a. Balance Sheet
b. Statement of Loss and Deficit
c. Statement of Stockholders' Equity; and
d. Notes to Financial Statements
34
MANCHESTER INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
NOVEMBER 30, 2002
(Stated in U.S. Dollars)
35
AUDITORS' REPORT
To the Shareholders of
Manchester Inc.
(An Exploration Stage Company)
We have audited the balance sheet of Manchester Inc. (an exploration
stage company) as at November 30, 2002 and the statements of loss and
deficit accumulated during the exploration stage, cash flows, and
stockholders' equity for the period from August 27, 2002 (date of
inception) to November 30, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with United States generally
accepted auditing standards. Those standards require that we plan and
perform an audit to obtain reasonable assurance 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 November
30, 2002 and the results of its operations and cash flows for the period
from August 27, 2002 (date of inception) to November 30, 2002 in
accordance with United States generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 1(c) to
the financial statements, the Company incurred a net loss of $21,410
since inception, has not attained profitable operations and is dependent
upon obtaining adequate financing to fulfil its exploration activities.
These factors raise substantial doubt that the Company will be able to
continue as a going concern. Management's plans in regard to these
matters are also discussed in Note 1(c). The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
Vancouver, B.C. /s/ Morgan & Company
Chartered Accountants
December 6, 2002
36
MANCHESTER INC.
(An Exploration Stage Company)
BALANCE SHEET
NOVEMBER 30, 2002
(Stated in U.S. Dollars)
ASSETS
Current
Cash $ 50,740
Prepaid expenses 2,500
53,240
Mineral Property Interest (Note 3) -
$ 53,240
LIABILITIES
Current
Accounts payable and accrued liabilities $ 1,200
STOCKHOLDERS' EQUITY
Capital Stock
Authorized:
100,000,000 common shares, par value $0.001 per share
10,000,000 preferred shares, par value $0.001 per
share
Issued and outstanding:
3,012,500 common shares 3,012
Additional paid-in capital 70,438
Deficit Accumulated During The Exploration Stage (21,410)
52,040
$ 53,240
37
MANCHESTER INC.
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
PERIOD FROM DATE OF INCEPTION, AUGUST 27, 2002, TO NOVEMBER 30, 2002
(Stated in U.S. Dollars)
Expenses
Consulting fees $ 7,000
Office and sundry 210
Professional fees 4,200
Mineral property exploration expenditures 2,000
Mineral property option payments 8,000
Net Loss For The Period 21,410
Deficit Accumulated During The Exploration Stage, -
Beginning Of Period
Deficit Accumulated During The Exploration Stage,$ 21,410
End Of Period
Basic And Diluted Loss Per Share $ (0.01)
Weighted Average Number Of Shares Outstanding 2,036,198
38
MANCHESTER INC.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
PERIOD FROM DATE OF INCEPTION, AUGUST 27, 2002, TO NOVEMBER 30, 2002
(Stated in U.S. Dollars)
Cash Flows From Operating Activities
Net loss for the period $ (21,410)
Adjustments To Reconcile Net Loss To Net Cash Used By
Operating Activities
Prepaid expenses (2,500)
Accounts payable and accrued liabilities 1,200
(22,710)
Cash Flows From Financing Activity
Share capital issued 73,450
Increase In Cash 50,740
Cash, Beginning Of Period -
Cash, End Of Period $ 50,740
39
MANCHESTER INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
NOVEMBER 30, 2002
(Stated in U.S. Dollars)
COMMON STOCK
ADDITION
AL PAID-
SHARES AMOUNT IN DEFICIT TOTAL
CAPITAL
Opening balance,
August 27, - $- $ - $ - $ -
2002
September 2002 -
Shares issued for 1,200,000 1,200 - - 1,200
cash at $0.001
October 2002 - Shares
issued for cash at 1,600,000 1,600 14,400 - 16,000
$0.01
October 2002 -
Shares issued for 200,000 200 49,800 - 50,000
cash at $0.25
November 2002 -
Shares issued for 12,500 12 6,238 - 6,250
cash at $0.50
Net loss for the - - - (21,410)(21,410)
period
Balance, November 3,012,500 $3,012 $ 70,438 $(21,410)$52,040
30, 2002
40
MANCHESTER INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2002
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A., on
August 27, 2002. The Company's intended year end is November 30,
2002.
b) Exploration Stage Activities
The Company has been in the exploration stage since its formation
and has not yet realized any revenues from its planned operations.
It is primarily engaged in the acquisition and exploration of
mining properties. Upon location of a commercial minable reserve,
the Company expects to actively prepare the site for its extraction
and enter a development stage.
c)Going Concern
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern.
As shown in the accompanying financial statements, the Company has
incurred a net loss of $21,410 for the period from August 27, 2002
(inception) to November 30, 2002, and has no sales. The future of
the Company is dependent upon its ability to obtain financing and
upon future profitable operations from the development of its
mineral properties. Management has plans to seek additional
capital through a private placement and public offering of its
common stock. The financial statements do not include any
adjustments relating to the recoverability and classification of
recorded assets, or the amounts of and classification of
liabilities that might be necessary in the event the Company cannot
continue in existence.
SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the United
States. Because a precise determination of many assets and liabilities
is dependent upon future events, the preparation of financial
statements for a period necessarily involves the use of estimates
which have been made using careful judgement.
41
MANCHESTER INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2002
(Stated in U.S. Dollars)
2.SIGNIFICANT ACCOUNTING POLICIES (Continued)
The financial statements have, in management's opinion, been properly
prepared within reasonable limits of materiality and within the
framework of the significant accounting policies summarized below:
a)Mineral Property Option Payments and Exploration Costs
The Company expenses all costs related to the maintenance and
exploration of mineral claims in which it has secured exploration
rights prior to establishment of proven and probable reserves. To
date, the Company has not established the commercial feasibility of
its exploration prospects, therefore, all costs are being expensed.
b)Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities, and disclosure of contingent assets and
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses for the reporting period.
Actual results could differ from these estimates.
c)Income Taxes
The Company has adopted Statement of Financial Accounting Standards
No. 109 - "Accounting for Income Taxes" (SFAS 109). This standard
requires the use of an asset and liability approach for financial
accounting, and reporting on income taxes. If it is more likely
than not that some portion or all of a deferred tax asset will not
realized, a valuation allowance is recognized.
d)Basic and Diluted Loss Per Share
In accordance with SFAS No. 128 - "Earnings Per Share", the basic
loss per common share is computed by dividing net loss available to
common stockholders by the weighted average number of common shares
outstanding. Diluted loss per common share is computed similar to
basic loss per common share except that the denominator is
increased to include the number of additional common shares that
would have been outstanding if the potential common shares had been
issued and if the additional common shares were dilutive. At
November 30, 2002, the Company has no common stock equivalents that
were anti-dilutive and excluded in the earnings per share
computation.
42
MANCHESTER INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2002
(Stated in U.S. Dollars)
3.MINERAL PROPERTY INTEREST
The Company has entered into an option agreement, dated October 4,
2002, to acquire an 80% interest in a total of two mineral claims
located in the Sudbury Mining District in Ontario, Canada.
In order to earn its interests, the Company made a cash payment
totalling $8,000 on signing and must incur exploration expenditures
totalling $209,800 as follows:
Exploration expenditures:
- $23,800 by October 31, 2003;
- - A further $186,000 by October 31, 2004.
The properties are subject to a 1% net smelter return royalty.
4. CONTINGENCY
Mineral Property
The Company's mineral property interests have been acquired pursuant
to option agreements. In order to retain its interest, the Company
must satisfy the terms of the option agreements described in Note 3.
5.RELATED PARTY TRANSACTION
During the period ended November 30, 2002, the Company incurred $1,000
for consulting services provided by a director of the Company.
43
MANCHESTER INC.
(An Exploration Stage Company)
UNAUDITED INTERIM FINANCIAL STATEMENTS
MAY 31, 2003
(Stated in U.S. Dollars)
44
MANCHESTER INC.
(An Exploration Stage Company)
INTERIM BALANCE SHEET
(Unaudited)
(Stated in U.S. Dollars)
MAY 31 NOVEMBER
30
2003 2002
ASSETS
Current
Cash $ 44,655 $50,740
Prepaid expenses 350 2,500
$ 45,005 $53,240
LIABILITIES
Current
Accounts payable and accrued liabilities $ 600 $1,200
STOCKHOLDERS' EQUITY
Capital Stock
Authorized:
100,000,000 common shares, par value $0.001
per share
10,000,000 preferred shares, par value $0.001
per share
Issued and outstanding:
3,012,500 common shares 3,012 3,012
Additional paid-in capital 70,438 70,438
Deficit Accumulated During The Exploration (29,045)(21,410)
Stage
44,405 52,040
$ 45,005 $53,240
45
MANCHESTER INC.
(An Exploration Stage Company)
INTERIM STATEMENT OF LOSS
(Unaudited)
(Stated in U.S. Dollars)
CUMULATIV
E
FROM DATE
THREE SIX OF
INCEPTION
MONTHS MONTHS AUGUST 27
ENDED ENDED 2002 TO
MAY 31 MAY 31 MAY 31
2003 2003 2003
Expenses
Consulting fees $ - $ - $7,000
Filing fees 900 4,296 4,296
Office and sundry 300 1,864 2,074
Professional fees - 675 4,875
Transfer agent fees - 800 800
Mineral property exploration
expenditures (Note 4) - - 2,000
Mineral property option - - 8,000
payments
Net Loss For The Period $ 1,200 $ 7,635 $29,045
Basic And Diluted Loss Per $ (0.01) $ (0.01)
Share
Weighted Average Number Of
Shares Outstanding 3,012,500 3,012,500
46
MANCHESTER INC.
(An Exploration Stage Company)
INTERIM STATEMENT OF CASH FLOWS
(Unaudited)
(Stated in U.S. Dollars)
CUMULATIV
E
FROM DATE
THREE SIX OF
INCEPTION
MONTHS MONTHS AUGUST 27
ENDED ENDED 2002 TO
MAY 31 MAY 31 MAY 31
2003 2003 2003
Cash Flows From Operating Activities
Net loss for the period $ (1,200)$(7,635)$(29,045)
Adjustments To Reconcile Net Loss To
Net Cash Used By Operating
Activities
Prepaid expenses 900 2,150 (350)
Accounts payable and accrued - (600) 600
liabilities
(300) (6,085)(28,795)
Cash Flows From Financing Activity
Share capital issued - - 73,450
(Decrease) Increase In Cash (300) (6,085) 44,655
Cash, Beginning Of Period 44,955 50,740 -
Cash, End Of Period $44,655 $44,655 $44,655
47
MANCHESTER INC.
(An Exploration Stage Company)
INTERIM STATEMENT OF STOCKHOLDERS' EQUITY
MAY 31, 2003
(Unaudited)
(Stated in U.S. Dollars)
DEFICIT
COMMON STOCK ACCUMULAT
ED
ADDITIONAL DURING THE
PAID-IN EXPLORATION
SHARES AMOUNT CAPITAL STAGE TOTAL
Opening balance,
August 27, - $ - $ - $ - $ -
2002
September 2002 -
Shares issued for 1,200,000 1,200 - - 1,200
cash at $0.001
October 2002 - Shares
issued for cash at 1,600,000 1,600 14,400 - 16,000
$0.01
October 2002 - Shares
issued for cash at 200,000 200 49,800 - 50,000
$0.25
November 2002 -
Shares issued for 12,500 12 6,238 - 6,250
cash at $0.50
Net loss for the - - - (21,410) (21,410)
period
Balance, November 3,012,500 3,012 70,438 (21,410) 52,040
30, 2002
Net loss for the - - - (7,635) (7,635)
period
Balance, May 31, 3,012,500 $ 3,012 $ 70,438 $ (29,045) $ 44,405
2003
48
MANCHESTER INC.
(An Exploration Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
MAY 31, 2003
(Unaudited)
(Stated in U.S. Dollars)
1.BASIS OF PRESENTATION
The unaudited interim financial statements as of May 31, 2003 included
herein have been prepared without audit pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with United States generally
accepted accounting principles have been condensed or omitted pursuant
to such rules and regulations. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. It is suggested
that these financial statements be read in conjunction with the
November 30, 2002 audited financial statements and notes thereto.
2. NATURE OF OPERATIONS
c) Organization
The Company was incorporated in the State of Nevada, U.S.A., on
August 27, 2002.
d) Exploration Stage Activities
The Company has been in the exploration stage since its formation
and has not yet realized any revenues from its planned operations.
It is primarily engaged in the acquisition and exploration of
mining properties. Upon location of a commercial minable reserve,
the Company expects to actively prepare the site for its extraction
and enter a development stage.
c)Going Concern
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern.
As shown in the accompanying financial statements, the Company has
incurred a net loss of $29,045 for the period from August 27, 2002
(inception) to May 31, 2003, and has no sales. The future of the
Company is dependent upon its ability to obtain financing and upon
future profitable operations from the development of its mineral
properties. Management has plans to seek additional capital
through a private placement and public offering of its common
stock. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded
assets, or the amounts of and classification of liabilities that
might be necessary in the event the Company cannot continue in
existence.
49
MANCHESTER INC.
(An Exploration Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
MAY 31, 2003
(Unaudited)
(Stated in U.S. Dollars)
3.SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the United
States. Because a precise determination of many assets and
liabilities is dependent upon future events, the preparation of
financial statements for a period necessarily involves the use of
estimates which have been made using careful judgement.
The financial statements have, in management's opinion, been properly
prepared within reasonable limits of materiality and within the
framework of the significant accounting policies summarized below:
a)Organizational and Start Up Costs
Costs of start up activities, including organizational costs, are
expensed as incurred.
b)Mineral Property Option Payments and Exploration Costs
The Company expenses all costs related to the maintenance and
exploration of mineral claims in which it has secured exploration
rights prior to establishment of proven and probable reserves. To
date, the Company has not established the commercial feasibility of
its exploration prospects, therefore, all costs are being expensed.
c)Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities, and disclosure of contingent assets and
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses for the reporting period.
Actual results could differ from these estimates.
d)Income Taxes
The Company has adopted Statement of Financial Accounting Standards
No. 109 - "Accounting for Income Taxes" (SFAS 109). This standard
requires the use of an asset and liability approach for financial
accounting, and reporting on income taxes. If it is more likely
than not that some portion or all of a deferred tax asset will not
realized, a valuation allowance is recognized.
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MANCHESTER INC.
(An Exploration Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
MAY 31, 2003
(Unaudited)
(Stated in U.S. Dollars)
3.SIGNIFICANT ACCOUNTING POLICIES (Continued)
e)Basic and Diluted Loss Per Share
In accordance with SFAS No. 128 - "Earnings Per Share", the basic
loss per common share is computed by dividing net loss available to
common stockholders by the weighted average number of common shares
outstanding. Diluted loss per common share is computed similar to
basic loss per common share except that the denominator is
increased to include the number of additional common shares that
would have been outstanding if the potential common shares had been
issued and if the additional common shares were dilutive. At May
31, 2003, the Company has no common stock equivalents that were
anti-dilutive and excluded in the earnings per share computation.
4.MINERAL PROPERTY INTEREST
The Company has entered into an option agreement, dated October 4,
2002, to acquire an 80% interest in a total of two mineral claims
located in the Sudbury Mining District in Ontario, Canada.
In order to earn its interests, the Company made a cash payment
totalling $8,000 on signing and must incur exploration expenditures
totalling $209,800 as follows:
Exploration expenditures:
- $23,800 by October 31, 2003;
- - A further $186,000 by October 31, 2004.
The properties are subject to a 1% net smelter return royalty.
5. CONTINGENCY AND COMMITMENT
i)Mineral Property
The Company's mineral property interests have been acquired
pursuant to option agreements. In order to retain its interest,
the Company must satisfy the terms of the option agreements
described in Note 4.
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MANCHESTER INC.
(An Exploration Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
MAY 31, 2003
(Unaudited)
(Stated in U.S. Dollars)
5. CONTINGENCY AND COMMITMENT (Continued)
ii) Commitment
The Company has committed to pay the costs associated with a
planned offering of 1,812,500 shares held by shareholders of the
Company.
Changes In And Disagreements With Accountants
We have had no changes in or disagreements with our accountants.
Available Information
Currently, we are not required to deliver our annual report to security
holders. However, we will voluntarily send an annual report, including
audited financial statements, to any shareholder that requests it.
We are filing this 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 this
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 detailed 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 Room 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.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Indemnification Of Directors And Officers
Our officers and directors are indemnified as provided by the Nevada
Revised Statutes and our bylaws.
Under the NRS, 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 that is
not the case with our articles of incorporation. Excepted from that
immunity are:
(1) 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;
(2) 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);
(3) a transaction from which the director derived an improper
personal profit; and
(4) 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:
(1) such indemnification is expressly required to be made by law;
(2) the proceeding was authorized by our Board of Directors;
(3) such indemnification is provided by us, in our sole discretion,
pursuant to the powers vested us under Nevada law; or
(4) such indemnification 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
53
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.
Other Expenses Of Issuance And Distribution
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee $ 83.38
Federal Taxes $ NIL
State Taxes and Fees $ NIL
Transfer Agent Fees $ 2,000.00
Accounting fees and expenses $ 3,000.00
Legal fees and expenses $ 9,000.00
Edgar Filing Fees $ 2,500.00
----------
Total $16,583.38
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.
Recent Sales Of Unregistered Securities
We issued 1,200,000 shares of common stock on September 13, 2002 to Mr.
Jackson Buch our president and Mr. Dana Upton our Secretary Treasurer.
Mr. Buch and Mr. Upton acquired 600,000 shares each at a price of $0.001
per share for total proceeds to us of $1,200. These shares were issued
pursuant to Section 4(2) of the Securities Act of 1933 (the "Securities
Act") and are restricted shares as defined in the Securities Act.
We initiated an offering of 1,600,000 shares of our common stock at a
price of $0.01 of which 1,600,000 shares were subscribed for to a total
of 12 purchasers. The total amount received from this offering was
$16,000.00. All shares subscribed for were sold pursuant to Regulation S
of the Securities Act of 1933. Appropriate legends will affixed when
shares are issued to each purchaser in accordance with Regulation S.
We initiated an offering of 200,000 shares of our common stock at a
price of $0.25 per share to a total of 4 purchasers. The total amount
received from this offering was $50,000. All shares subscribed for were
sold pursuant to Regulation S of the Securities Act of 1933. Appropriate
legends will be affixed when shares are issued to each purchaser in
accordance with Regulation S.
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We initiated an offering of 50,000 shares of our common stock at a price
of $0.50 per share, of which 12,500 shares were subscribed for to a
total of 25 purchasers. The total amount received from this offering was
$6,250. All shares subscribed for were sold pursuant with Regulation S
of the securities Act of 1933.Appropriate legends will be affixed in
accordance with Regulation S.
With respect to each of these 4 offerings, each purchaser represented to
us that he or she was a non-US person as defined in Regulation S. We
did not engage in a distribution of this offering in the United States.
Each purchaser represented his or her intention to acquire the
securities for investment only and not with a view toward distribution.
Appropriate legends will be affixed to the stock certificates when
issued to each purchaser in accordance with Regulation S.
Each investor was given adequate access to sufficient information about
us to make an informed investment decision. None of the securities were
sold through an underwriter and accordingly, there were no underwriting
discounts or commissions involved. No registration rights were granted
to any of the purchasers.
Exhibits
Exhibit
Number Description
3.1 Articles of Incorporation
3.2 Bylaws
5.1 Legal opinion of Christopher J. Moran Jr., Attorney
at Law with consent to use
10.1 Option Agreement dated October 4, 2002
23.1 Consent of John M. Siriunas P.Eng.
23.2 Consent of Morgan & Company, Chartered Accountants
99.1 Disclosure Statement $0.25
99.2 Disclosure Statement $0.50
99.3 Form of Subscription Agreement
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) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the registration statement; and
Notwithstanding the forgoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation From the low or high end of
55
the estimated maximum offering range may be reflected in the
form of prospects filed with the Commission pursuant to
Rule 424(b)if, in the aggregate, the changes in the volume
and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
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.
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.
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 Kelowna, Province of British Columbia on
July 28, 2003.
MANCHESTER INC.
By:/s/ Jackson Buch
-------------------------
Jackson Buch, President, Principal
Accounting Office and a Director
56
Power of Attorney
ALL MEN BY THESE PRESENT, that each person whose signature appears
below constitutes and appoints Jackson Buch, 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.
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.
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SIGNATURE CAPACITY IN WHICH SIGNED DATE
/S/ Jackson Buch President, Principal Accounting
Officer and Director July 28, 2003
Jackson Buch
/s/ Dana Upton Secretary and Treasurer July 28, 2003
and Director
Dana Upton
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