U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
Pre-Effective Amendment No.1 to
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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GLOBAL-TECH CAPITAL CORP.
(Name of Small Business Issuer in Its Charter)
Nevada 1000
(State or Other Jurisdiction of (Primary Standard Industrial
Incorporation or Organization) Classification Code)
98-0191489
(I.R.S. Employer
Identification Number)
P. O. BOX 84037
BURNABY, B.C. V5A 4T9, CANADA (604) 889-1111
(Address, Including Zip Code, and Telephone Number, including Area Code, of
Registrant's Executive Offices)
MICHAEL MITSIADIS
C/O GLOBAL-TECH CAPITAL CORP.
P. O. BOX 84037
BURNABY, B.C. V5A 4T9, CANADA (604) 889-1111
(Name, Address, Including Zip Code, and Telephone Number, including Area Code,
of Agent for Service)
Copies of all correspondence to:
JOSEPH SIERCHIO, ESQ.
SIERCHIO & COMPANY, LLP
150 EAST 58TH STREET
NEW YORK, NEW YORK 10155
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APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: As soon as practicable after this
registration statement becomes
effective.
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If this Form is filed to register additional securities for an offering pursuant
to Rule 426(b) under the Securities Act of 1933, 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 of 1933, check the following box and list the Securities Act
Registration Statement number of the earlier Registration Statement for the same
offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act of 1933, check the following box and list the Securities Act
Registration Statement number of the earlier Registration Statement for the same
offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
----------------------------------- ------------------------ ------------------------ --------------------------- ----------------
Title Of Each Class Of Securities Number of Shares To Be Proposed Maximum Proposed Maximum Amount of
To Be Registered Registered Offering Price Per Aggregate Offering Price Registration
Share Fee
----------------------------------- ------------------------ ------------------------ --------------------------- ----------------
----------------------------------- ------------------------ ------------------------ --------------------------- ----------------
Common Stock, $.001 par value 2,000,000 $0.05 (1) $100,000 $25.00
----------------------------------- ------------------------ ------------------------ --------------------------- ----------------
<FN>
(1) Calculated in accordance with Rule 457(o) under the Securities Act of 1933.
</FN>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(a), MAY DETERMINE.
2
GLOBAL-TECH CAPITAL CORP.
2,000,000 shares of Common Stock at a price of $.05 per share
This is our initial public offering. We are offering 2,000,000 shares
of our common stock at a price of $0.05 per share. We are offering the shares
directly, through our officers and directors on an all or none basis. This means
that we must sell all of the shares in order to close the offering.
The funds received from the subscribers will be held in escrow in a
non-interest bearing account by our escrow agent, Sierchio & Company, LLP. See
"Plan of Distribution." The offering will end on ________, 2001, a date which is
120 days from the date of this prospectus unless terminated by us on an earlier
date as we may deem appropriate. Under the terms of our escrow agreement, unless
our escrow agent receives a written notice from us by the termination of the
offering period stating that all of the shares offered were sold, the escrow
agent shall return all funds to the subscribers within five business days of the
termination of the offering period. The minimum number of shares that an
investor may purchase is 50,000. If all shares offered are not sold by _____,
2001, the offering will terminate and all funds received from subscribers will
be returned promptly. None of our officers and directors or affiliated persons
or related parties will be able purchase shares in this offering.
There is no trading market for our common stock.
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The purchase of shares involves substantial risk. See "Risk Factors" beginning
on page 7 for a discussion of risks to consider before purchasing our common
stock.
--------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
------------------------------- ---------------------------- ---------------------------- ----------------------------
Price to the Public(1) Maximum Commissions(1) Proceeds to the Company
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Per Share $0.05 -0- $0.05
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Total 2,000,000 Shares $100,000.00 -0- $100,000.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
<FN>
(1) We are offering the shares directly through our officers and directors on
an all or none basis. No compensation will be paid to our officers and
directors in connection with their efforts regarding the offer and sale of
our shares.
</FN>
The date of this prospectus is ________________, 2001.
3
TABLE OF CONTENTS
Prospectus Summary...........................................................5
Risk Factors.................................................................7
Cautionary Note Regarding Forward-Looking Statements .......................13
Use of Proceeds.............................................................14
Arbitrary Determination of Offering Price...................................15
Dilution....................................................................16
Plan of Distribution .......................................................17
Legal Proceedings...........................................................18
Directors, Executive Officers, Promoters and Control Persons................18
Security Ownership of Certain Beneficial Owners and Management..............20
Description of Securities...................................................21
Market for Common Equity and Related Stockholder Matters....................22
Limitation of Liability and Indemnification matters ........................23
Legal Matters...............................................................23
Experts.....................................................................23
Interest of Named Experts and Counsel.......................................24
Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................................24
Business and Description of Property........................................27
Executive Compensation......................................................34
Where You Can Find Additional Information...................................35
Certain Relationships and Related Transactions..............................35
Changes in and Disagreements with Accountants on Accounting
And Financial Disclosure...............................................36
Index to Financial Statements...............................................39
Dealer Prospectus Delivery Obligation
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 dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
4
PROSPECTUS SUMMARY
This summary contains material information about us and the offering
contained elsewhere in the prospectus. Sine it may not include all of the
information you may consider important, you should read the entire prospectus,
including the section titled "Risk Factors" and our financial statements and the
related notes, before deciding to purchase any shares.
Unless the context otherwise requires, references to "Global-Tech,"
"us," "we," and "our" refer to Global-Tech Capital Corp. and its wholly owned
subsidiaries. We have provided definitions for certain mining industry terms
beginning on page 36 which you may find helpful in reading this prospectus.
Global-Tech Capital Corp.
Originally formed for the purpose of developing and marketing products
that could effectively improve night time visibility under various conditions,
we refocused our business activities in 2000 and we are now engaged in the
location, acquisition and exploration of a mineral resource property in the
Omineca Mining region of the Province of British Columbia, Canada. We were
originally formed to pursue perceived business opportunities in the field of
night vision systems. After further investigation of this business sector
following our incorporation, we determined that the perceived opportunities were
not as attractive as first thought and would require technical and financial
capabilities which our principals did not have. As a result, we decided to
pursue opportunities in the mineral exploration business which would have
smaller initial capital requirements and in respect of which we could more
easily engage persons with the necessary technical capabilities such as Messrs.
Mallo and Turnbull.
We are an exploration stage company. We own only one property at this
time. Following the consummation of this offering, we intend to continue our
exploration program in our property.
Our administrative office is located at 2365 Paulus Cresent, Burnaby,
B.C. V5A 2M2, Canada. Our telephone number at our corporate offices is (604)
889-1111.
The Offering
Common stock offered by us 2,000,000 shares at $.05 per share on an all
or none basis.
Common stock to be outstanding 12,151,400 shares
after this offering
Use of proceeds The proceeds from the sale of the shares in
this offering will be utilized to pay the
offering
5
expenses (which we estimate will be
approximately $49,000), to continue Phase I
of our exploration program and for general
working capital purposes. Since there is a
minimum amount to be raised, proceeds from
our sale of shares will be placed in a
non-interest bearing escrow account until
the earlier of (i) all 2,000,000 shares being
sold; or (ii) the termination of the offering.
Under our escrow agreement, unless the escrow
agent receives written notice from us by the
date on which the offering period is terminated
setting forth that all shares offered by us
have been sold, all funds held in escrow will
be returned to the respective investors within
five business days following the termination of
the offering period. The offering proceeds
will be forwarded to us only upon receipt by
the escrow agent, on or prior to the date on
which the offering period is terminated, of our
written notice that all of the shares offered
were sold.
Term of Offering 120 days (subject to our right to terminate the
offering sooner without notice.)
6
RISK FACTORS
You should carefully consider the following risk factors before you
make an investment decision regarding the purchase of our shares. We have
separated the risks into two broad categories:
- risks related to our business, property and industry; and
- risks related to the offering and ownership of our common stock.
Risks Related to Our Business, Property and Industry
Our long term profitability is uncertain as it is related to the success of our
exploration program.
The claim to which we have a right to acquire an interest is in the
exploration stages only and is without a known body of commercial ore. Mineral
exploration involves a high degree of risk and few properties which are explored
are ultimately developed into producing mines. From the date of our inception
through June 30, 2001, we have not earned any income and have incurred
cumulative losses totaling $53,496. It is possible that our mineral exploration
activities will not result in any discoveries of commercial bodies of ore. Our
operation's long-term profitability will be in part directly related to the cost
and success of our exploration programs, which may be affected by a number of
factors.
As we are an exploration stage company, we may not have the funds required and
may not be able to obtain them in order to continue our exploration activities.
Substantial expenditures are required to conduct exploration activities
and to establish ore reserves through drilling. It is possible that the funds
required for further exploration will not be obtained on a timely basis or that
minerals will not be discovered in sufficient quantities and grades to justify
any commercial operation. Our property currently contains no proven reserves.
Even if our results of exploration are encouraging, we will require additional
funds to complete our exploration activities. It is possible that we will be
unable to obtain additional financing. Failure to obtain such financing would
preclude us from continuing our exploration activities.
Weather interruptions in the province of British Columbia may affect and delay
our proposed exploration operations.
Our proposed exploration work can only be performed approximately four
to five months out of the year. This is because rain and snow cause roads
leading to our claims to be impassible during four months of the year. When
roads are impassible, we are unable to work and generate income. This may cause
significant delays in our exploration activities which could have an adverse
affect on our business and results of operations because it would further delay
any potential to generate revenue.
7
We have a limited operating history.
We commenced our operations in 1998 but have been engaged in mineral
exploration only since 2000. As at June 30, 2001, we had incurred cumulative
losses from inception in the amount of $53,496 of which $31,456 were incurred
for the period of July 1, 2000 through June 30, 2001. We have not declared or
paid dividends since then and do not anticipate doing so in the foreseeable
future. We are subject to risks inherent in the establishment of a new business
enterprise including limited capital resources, possible delays in the
exploration of our property, and possible cost overruns. If we are not able to
address these events, should they occur, we may have to curtail or suspend our
operations.
Our short and long term liquidity and capital resources are uncertain which may
prevent us from continuing our operations in the future.
We have no history of earnings or cash flow from our present
operations. The only present source of funds available to us is through the sale
of equity or debt, securities or other borrowings. Even if the results of our
exploration are encouraging, we may not have sufficient funds to conduct the
further exploration that may be necessary to determine whether or not a
commercially minable deposit exists on any property and we may not realize a
return on our investment. It is possible that no additional working capital will
be available for our operations from such other sources as equity offerings,
borrowings, sale or possibly the joint venture exploration of our property
and/or a combination thereof. Failure to obtain such additional capital, if
needed, may cause us to cease our operations.
Our property contains no proven reserves.
The property in which we hold a right to acquire an interest is
considered to be in the exploration stage only and does not contain a known body
of commercial ore. See "Description of Property." Failure to locate ore reserves
may adversely affect the economic viability of our project and our operation.
It is possible that our title for the claims in which we have an interest will
be challenged by third parties.
The holder of the title for our claim has not obtained title insurance
for the property. It is possible that the title to the claim in which we have a
material interest will be challenged or impugned.
Our executive officers devote only a limited amount of time to our business
activities.
Messrs. Michael Mitsiadis and David Mallo, our executive officers, are
engaged in other business activities and devote only a limited amount of their
time (approximately 25% by Mr. Mitsiadis and 10% by Mr. Mallo) to our business.
As we expand our activities, a need for full time management may arise. In such
an event, should Messrs. Mitsiadis and Mallo be unwilling to dedicate more of
their time to our business or fail to hire additional personnel, our business
and results of operations would suffer a material adverse effect.
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Our directors may face conflicts of interest in connection with our
participation in certain ventures because they are directors of other mineral
resource companies.
Messrs. Mallo and Turnbull, who serve as our directors, are also
directors of other mineral resource companies and, to the extent that such other
companies may participate in ventures in which we may participate, our directors
may have a conflict of interest in negotiating and concluding terms respecting
the extent of such participation. It is possible that due to our directors'
conflicting interests, we may be precluded from participating in certain
projects that we might otherwise have participated in, or we may obtain less
favorable terms on certain projects than we might have obtained if our directors
were not also the directors of other participating mineral resources companies.
In their effort to balance their conflicting interests, our directors may
approve terms that are equally favorable to all of their companies as opposed to
negotiating terms that may be more favorable to us but adverse to their other
companies. Additionally, it is possible that we may not be afforded certain
opportunities to participate in particular projects because such projects are
assigned to our directors' other companies for which the directors may deem the
projects to have a greater benefit.
We have no sources of operating cash flow and we may be unable to meet our
additional funding requirements.
Our mineral claim is currently being assessed for exploration and as a
result, we have no source of operating cash flow. We have limited financial
resources. Specifically, as at June 30, 2001 we had cash and cash equivalents
totaling $31,736. It is possible that if additional funding were needed, it
would not be available to us on terms and conditions acceptable to us. Failure
to obtain such additional financing could result in the delay or indefinite
postponement of further exploration and the possible, partial or total loss of
our interest in our property. The undertaking of the latter phases of our
exploration program depends upon our ability to obtain financing through debt
financing, equity financing or other means. It is possible that we will be
unsuccessful in obtaining the required financing. Failure to obtain additional
financing on a timely basis could cause us to forfeit our interest in our
property and reduce or terminate our operations.
We face intense competition in our industry which may adversely affect our
ability to participate in certain agreements with other parties.
The mineral resources industry is intensely competitive and we compete
with many companies that have greater financial resources and technical
facilities than ourself. Significant competition exists for the limited number
of mineral acquisition opportunities available in the Omineca mining region of
British Columbia. As a result of this competition, our ability to acquire
additional attractive mining property interests on terms we consider acceptable
may be impaired.
We may, in the future, be unable to meet our share of costs incurred
under agreements to which we are a party and we may have our interests in the
properties subject to such agreements reduced as a result. Furthermore, if other
parties to such agreements do not meet
9
their share of such costs, we may be unable to finance the costs required to
complete the recommended programs.
We will have to suspend our exploration plans if we do not have access to all of
the supplies and materials we need.
Competition and unforeseen limited sources of supplies in the industry
could result in occasional spot shortages of supplies such as dynamite, and
equipment such as bulldozers and excavators that we might need to conduct
exploration. We have not attempted to locate or negotiate with any suppliers of
products, equipment or materials. We will attempt to locate products, equipment
and materials after this offering is complete. If we cannot find the products
and equipment we need, we will have to suspend our exploration plans until we
find the products and equipment we need.
Mineral prices are subject to fluctuation due to factors beyond our control.
The mining industry in general is intensely competitive and it is
possible that, even if commercial quantities of mineral resources are developed,
a profitable market will not exist for their sale. Factors beyond our control
may affect the marketability of any minerals discovered. It is possible that the
price of copper will not remain stable. Significant price movements over short
periods of time may be affected by numerous factors beyond our control,
including international economic and political trends, expectations of
inflation, currency exchange fluctuations (specifically, the U.S. dollar
relative to other currencies), interest rates and global or regional consumption
patterns, speculative activities and increased production due to improved mining
and production methods. The effect of these factors on the price of minerals and
therefore the economic viability of any of our exploration projects cannot
accurately be predicted.
Our operations are subject to environmental regulation.
All phases of our operations in British Columbia will be subject to
environmental regulations. Environmental legislation in British Columbia are
evolving in a manner which will require stricter standards and enforcement,
increased fines and penalties for non-compliance, more stringent environmental
assessments of proposed projects and a heightened degree of responsibility for
companies and their officers, directors and employees. It is possible that
future changes in environmental regulation will adversely affect our operations
as compliance will be more burdensome and costly.
Subscribers to the offering will have little or no influence on matters
requiring shareholder approval because we are controlled by our Director and
Officer and entities affiliated with him who will be able to control all matters
requiring shareholder approval.
Michael Mitsiadis, our President and a director, owns 40% of our issued
and outstanding shares of common stock. Mr. Mitsiadis will be able to
significantly influence all matters requiring approval by our shareholders,
including the election of directors and the approval of mergers or other
business combinations transactions. Even if we sell all 2,000,000
10
shares of common stock in this offering, Mr. Mitsiadis will still be able to
effectively control our corporate affairs as he will own 33% of our issued and
outstanding shares of common stock.
Our future performance is dependent on our ability to retain key personnel, the
loss of which would adversely affect our success and growth.
Our performance is substantially dependent on the performance of our
senior management. In particular, our success depends on the continued efforts
of our President and director, Michael Mitsiadis. The loss of his services could
have a material adverse effect on our business, results of operations and
financial condition as our potential future revenues would most likely
dramatically decline and our costs of operations would rise. We do not have
employment agreements in place with any of our officers or our key employee, nor
do we have key person insurance covering our employee.
Our management is inexperienced in managing a public company.
It is possible that due to our management's inexperience in managing a
public company, we will be unable to effectively manage the expansion of our
operations, that our systems, procedures or controls will not be adequate to
support our operations or that our management will be unable to achieve the
rapid execution necessary to fully exploit the market opportunity for our
products and services. Any inability to manage growth effectively could hinder
our future success.
Risks Related to the Offering and Ownership of our Common Stock
A substantial amount of the proceeds we raise in this offering will not be
utilized for the growth of our business.
At least half of the proceeds from this offering will be used to pay
for our costs of the offering, estimated at $49,000. Therefore, only half of the
proceeds will be available to cover our future exploration costs and for our
working capital that would be used for the growth of our business in general.
The value and transferability of our shares may be adversely impacted by the
limited trading market for our shares and the penny stock rules.
There is no current trading market for our shares and it is possible
that a trading market will not develop, or, if a trading market does develop,
that it will be sustained. To the extent that a market develops for our shares
at all, they will likely appear in what is customarily known at the "pink
sheets" or on the NASD Bulletin Board, which may limit their marketability and
liquidity.
To date, neither we nor anyone acting on our behalf has taken any
affirmative steps to request or encourage any broker/dealer to act as a market
maker for our shares. Further, we
11
have not had any discussions with any market maker regarding the participation
of any market maker in the future trading market, if any, for our shares.
In addition, holders of our common stock may experience substantial
difficulty in selling their securities as a result of the "penny stock rules."
Our common stock is covered by the penny stock rules, a Securities and Exchange
Commission rule that imposes additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors, generally institutions with assets in excess
of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and transaction prior to the sale.
Consequently, the rule may affect the ability of broker-dealers to sell our
securities and also may affect the ability of purchasers of our stock to sell
their shares in the secondary market. It may also cause fewer broker dealers to
make a market in our stock.
Future sales of shares by us may reduce the value of our stock.
The total amount of shares covered by this prospectus would represent
approximately 20% of the number of our outstanding shares on the date of this
prospectus. If all the shares being offered in this offering are sold, our
existing stockholders will suffer an immediate dilution of $.043 per share to
new investors. See "Dilution."
If required, we will seek to raise additional capital through the sale
of our common stock. Future sales of shares by us could cause the market price
of our common stock to decline and further dilution of the value of the shares
owned by our stockholders.
We have a large number of restricted shares outstanding, a portion of which may
be sold under Rule 144 following completion of our offering, which may reduce
the price of our shares should a trading market develop.
Of the 12,151,400 shares of our common stock to be outstanding upon
completion of this offering, 4,066,000 shall be "restricted securities,"
4,000,000 of which are owned by a corporation controlled by Michael Mitsiadis,
our President and Director. Mr. Mitsiadis is an affiliate of ours, as that term
is defined in Rule 144 under the Securities Act. Absent registration under the
Securities Act, the sale of such shares is subject to Rule 144, as promulgated
under the Securities Act. 4,000,000 of the "restricted securities" will be
eligible for resale under Rule 144. In general, under Rule 144, subject to the
satisfaction of certain other conditions, a person, including one of our
affiliates, who has beneficially owned restricted shares of our common stock for
at least one year is permitted to sell in a brokerage transaction, within any
three-month period, a number of shares that does not exceed the greater of 1% of
the total number of outstanding shares of the same class, or, if our common
stock is quoted on a stock exchange, the average weekly trading volume during
the four calendar weeks preceding the sale, if greater. Rule 144 also permits a
person who presently is not and who has not been an affiliate of ours for at
least three months immediately preceding the sale and who has beneficially owned
the shares of common stock for at least two years to sell such shares without
regard to any of the volume limitations described above.
12
No prediction can be made as to the effect, if any, that sales of
shares of common stock or the availability of such shares for sale will have on
the market prices of our common stock prevailing from time to time. The
possibility that substantial amounts of our common stock may be sold under Rule
144 into the public market may adversely affect prevailing market prices for the
common stock and could impair our ability to raise capital in the future through
the sale of equity securities.
The offering price of our shares was arbitrarily determined by us and thus, is
not an indication of the stock's valuation.
Prior to this offering, there has been no public trading market for our
shares. The initial public offering price of our shares has been arbitrary
determined by us and does not bear any relationship to established valuation
criteria such as assets, book value or prospective earnings. Among the factors
considered by us were the proceeds to be raised by the offering, the lack of
trading market, the amount of capital to be contributed by the public in
proportion to the amount of stock to be retained by present stockholders and our
relative requirements. As the offering price of our shares has been arbitrarily
determined, the stock's valuation, if a market were to develop, may be
significantly lower than the offering price.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains statements that plan for or anticipate the
future, called "forward-looking statements." In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"could," "expects," "plans," "intends," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of those terms and other
comparable terminology.
These forward-looking statements include statements about:
o our market opportunity;
o our strategies;
o competition;
o Expected activities and expenditures as we pursue our business plan;
and
o the adequacy of our available cash resources.
These statements appear in a number of places in this prospectus and
include statements regarding our intent, belief or current expectations, those
of our directors or officers with respect to, among other things: (i) trends
affecting our financial condition or results of operations, (ii) our business
and growth strategies, and (iii) our financing plans. Although we believe that
the expectations reflected in the forward-looking statement are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements.
The Private Securities Litigation Reform Act of 1995, which provides a
"safe harbor" for similar statements by existing public companies, does not
apply to our offering because, as this is our initial public filing, we are not
yet a reporting issuer.
13
The accompanying information contained in this prospectus, including
the information discussed under the headings "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business" identify important factors that could adversely affect actual results
and performance. All forward-looking statements attributable to us are expressly
qualified in their entirety by the cautionary statement appearing above.
USE OF PROCEEDS
The shares are being offered directly by us on an all or none basis.
This means that we must sell all 2,000,000 shares before we can close the
offering.
The shares will be sold on a first come-first serve basis. Unless all
2,000,000 shares are sold by _____, 2001 (which is 120 days of the date of this
Prospectus), the offering will terminate and all funds received from subscribers
by the date on which the offering is terminated will be promptly returned. The
proceeds of the offering will be held in a non-interest bearing escrow account
until the earlier of the date on which (i) all 2,000,000 shares are sold, or
(ii) the offering is terminated. Therefore, in the event that all 2,000,000
shares are not sold, prospective investors' funds may be held in escrow for as
long as 120 days before they are returned by the escrow agent.
If all 2,000,000 shares offered are sold, the gross proceeds of this
offering will be $100,000 and the net proceeds will be $51,000. We expect
expenses of the offering, including, but not limited to, accounting fees and
legal fees, to be approximately $49,000.
The first $ 49,000 raised will be used to pay offering expenses. The
net proceeds will be utilized as follows:
Amount raised: $ 100,000
Allocation
Offering expenses $ 49,000
Payment of Consulting Fees $ 2,000
Exploration $ 33,000
Working capital $ 16,000
The amount of money allocated for exploration is only an estimate. That
is because we do not know how much will ultimately be needed for exploration.
Indeed, our property was the subject of a geological report which recommends
that we carry out a four phase program of exploration. See "Description of
Property." At the close of this offering, subject to permissible weather
conditions, we plan to continue the implementation of Phase I of the exploration
program at a cost of approximately CAN $50,000 (approximately US$33,000). Phase
II, contingent upon successful results from Phase I is estimated to cost CAN
$150,000
14
(approximately US$100,000). Phase III, contingent upon successful results from
Phase II is estimated to cost CAN $300,000 (approximately US$200,000). Phase IV,
contingent upon successful results from Phase III is estimated to cost CAN
$500,000 (approximately US$333,333).
Although we have sufficient cash on hand to satisfy our operation
expenses over the next twelve months, we do not have sufficient capital to
implement Phase II of our exploration program in its entirety. We must sell all
of the shares offered in order to do so.
If successful results are obtained from Phase I, we will implement
Phase II of the program subject to our ability to secure additional financing to
cover the costs of that Phase. Likewise, if successful results are obtained from
the remaining phases, we currently intend to implement the latter phases. If we
are successful in implementing the entire exploration program, we may sell or
develop the property either alone or in conjunction with others.
While we currently intend to use the proceeds of this offering
substantially in the manner listed above, we reserve the right to reassess and
reassign the use if, successful results are not obtained from any phase of the
exploration program, or if for any reason in the judgment of our board of
directors, changes are necessary or advisable. At present, no material changes
are contemplated. Should there be any material changes in the above projected
use of proceeds in connection with this offering, we will issue an amended
prospectus reflecting the same.
It may be necessary for us to incur some administrative costs for
preparation and filings of periodic reports with the Securities and Exchange
Commission, the amount of which is not expected to be more than $10,000 through
June 30, 2002. It is expected that these costs would be paid from existing
working capital. We expect to keep any proceeds not utilized for these purposes
in a working capital reserve.
In the event that we are unable to sell all of the shares offered in
this offering and it is terminated, we will attempt to extend the deadlines
under the French Claim Property Option Agreement and will seek other sources of
financing. See "Description of Property."
Except as described in this prospectus, no portion of the proceeds of
the offering will be paid to officers, directors and/or their affiliates or
associates.
ARBITRARY DETERMINATION OF OFFERING PRICE
There is no trading market for our shares. The initial offering price
of $0.05 per share has been arbitrarily determined by us, and bears no
relationship whatsoever to our assets, earnings, book value or any other
objective standard of value. Among the factors considered by us in determining
the initial offering price were:
* The lack of trading market
* The proceeds to be raised by the offering
* The amount of capital to be contributed by the public in proportion to
the amount of stock to be retained by present stockholders
15
As the offering price of our shares has been arbitrarily determined,
the stock's valuation, if a market were to develop, may be deemed to be
significantly lower than the price you pay for the shares in this offering.
We have not declared, and do not foresee declaring, any dividends now
or into the foreseeable future.
DILUTION
The difference between the public offering price per share and the pro
forma net tangible book value per share of our Common Stock after this offering
constitutes the dilution to investors in this offering. Net tangible book value
per share is determined by dividing our net tangible book value (total tangible
assets less total liabilities) by the number of outstanding shares of Common
Stock. Dilution arises mainly from the arbitrary decision by a company as to the
offering price per share. Dilution of the value of the shares purchased by the
public in this offering will also be due, in part, to the lower book value of
the shares presently outstanding, and in part, to expenses incurred in
connection with the public offering.
Net tangible book value is the net tangible assets of a company (total
assets less total liabilities and intangible assets; please refer to "Financial
Statements"). At June 30, 2001, we had a net tangible book value of $31,735.90
or $.003 per share.
The following table illustrates the dilution on a per share basis based
upon the book value as at June 30, 2001 and the receipt by us of the proceeds
from the sale of the 2,000,000 shares:
Initial public offering price $ .050
Pro forma net tangible book value at June 30, 2001 .003
Increase in pro forma net tangible book value attributed to new investors .004
Adjusted pro forma net tangible book value after offering .007
Dilution to new investors .043
After giving effect to the sale of the 2,000,000 shares being offered
at an initial public offering price of $0.05 per share and after deducting
estimated expenses of this offering ($49,000), our adjusted net tangible book
value at June 30, 2001 after the offering would have been $82,736 or $0.007 per
share, representing an immediate increase in net tangible book value of $0.004
per share to the existing shareholders and an immediate dilution of $0.043 or
86% per share to new investors.
The following table sets forth, on a pro forma basis as of June 30,
2001, with respect to our existing stockholders and new investors, a comparison
of the number of shares of common stock we issued, percentage ownership of those
shares, the total consideration paid, the percentage of consideration paid and
the average per share.
16
Shares Purchased Total Consideration
----------------------- ------------------------
Average Average
Number Percentage Amount Percentage Price per Share
------ ---------- ------ ---------- ---------------
Existing shareholders 10,151,400 84.0% $88,500 47.0% $ .01
New investors 2,000,000 16.0% 100,000 53.0% $ .05
--------- ----- ------- -----
Total 12,151,400 100.0% $188,500 100.0%
========== ====== ======== ======
PLAN OF DISTRIBUTION
We offer the right to subscribe for 2,000,000 shares at $.05 per share.
The minimum number of shares you can purchase is 50,000. We propose to offer the
shares directly on an all or none basis. Therefore, all 2,000,000 shares must be
sold before the offering can be completed. The offering will be for a period of
120 days from the date of this prospectus unless terminated by us sooner.
The proceeds of the offering will be held in a non-interest bearing
escrow account until all 2,000,000 shares are sold or the offering is
terminated. Therefore, subscribers' funds may be held in escrow for up to 120
days before they are returned by the escrow agent. No funds will be returned to
the subscribers once all shares offered have been sold and the subscriptions
have been accepted by us.
No compensation is to be paid to any person for the offer and sale of
the shares. We will sell the shares in this offering through our president and
directors, Michael Mitsiadis, David Mallo and Douglas Turnbull, who will
distribute prospectuses related to this offering. We estimate that approximately
100 Prospectuses will be distributed by them. They intend to distribute
Prospectuses to acquaintances, friends and business associates.
Although each of our directors and officers is an associated person of
our company as that term is defined in Rule 3a4-1 under the Exchange Act, they
will deemed not to be a broker for the following reasons:
* They are not subject to a statutory disqualification as that term is
defined in Section 3(a)(39) of the Exchange Act at the time of their
participation in the sale of our securities.
* They will not be compensated for their participation in the sale of our
securities by the payment of commission or other remuneration based
either directly or indirectly on transactions in securities.
* They are not associated persons of a broker or dealers at the time of
their participation in the sale of our securities.
* They meet all of the following conditions:
17
* The associated persons primarily perform, or are intended
primarily to perform at the end of the offering, substantial
duties for or on our behalf otherwise than in connection with
transactions in securities; and
* The associated person was not a broker or dealer, or an
associated person of a broker or dealer, within the
preceding 12 months; and
* The associated person does not participate in selling an
offering of securities for any other issuer more than once
every 12 months other than in reliance on paragraphs (a)(4)(i)
or (a)(4)(iii) of Rule 3a4-1 under the Exchange Act.
As of the date of this prospectus, no broker has been retained by us
for the sale of shares being offered. In the event a broker who may be deemed an
underwriter is retained by us, an amendment to our registration statement will
be filed.
Method of Subscribing
You may subscribe by filling in and signing the subscription agreement
and delivering it, prior to the expiration date, to us. The subscription price
of $.05 per share must be paid in cash or by check, bank draft or postal express
money order payable in United States dollars to the order of Sierchio & Company,
LLP, as Escrow Agent. and delivered to us. We reserve the right to reject any
subscription in whole or in part in our sole discretion for any reason
whatsoever notwithstanding the tender of payment at any time prior to our
acceptance of the subscriptions received.
Under our escrow agreement, unless our escrow agent receives written
notice from us by the date on which the offering period is terminated setting
forth that all shares offered by us have been sold, all funds held in escrow
will be returned to the respective investors within five business days following
the termination of the offering period. The offering proceeds will be forwarded
to us only upon receipt by the escrow agent, on or prior to the date on which
the offering period is terminated, of our written notice that all of the shares
offered were sold.
Expiration Date
This offering will expire on __________________, 2001, 120 days from
the date of this prospectus, unless concluded by us on an earlier date as we may
deem appropriate.
LEGAL PROCEEDINGS
Neither we nor our property is a party to any planned or pending
material legal proceeding.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our director(s), executive officer(s) and other key employees, and
their ages, as of October 31, 2001 are as follows:
18
Name Age Positions held with the Company Since
---- --- ------------------------------- -----
Michael Mitsiadis 44 President and Director January 24, 2000
David Mallo 42 Secretary and Director August 1, 2001
Douglas Turnbull 38 Director August 1, 2001
The backgrounds and business experience of our directors, executive
officers and significant employees during the past five years are as follows:
Since 1997 Michael Mitsiadis has served as the corporate finance
officer for the Georgian Group, a private corporate management and
administration firm, where he has been involved in mergers and acquisitions and
venture capital transactions. Since January 24, 2000, Mr. Mitsiadis has also
served as our President and director. Prior to 1997, Mr. Mitsiadis worked as a
commercial and residential realtor.
David Mallo has served as Secretary and a director of our Company
since August 1, 2001. From July 1, 2000 to present, Mr. Mallo has worked as a
consulting geologist, primarily for Madison Enterprises Corp., a British
Columbia public company in the mineral exploration business. From 1993 through
2000, Mr. Mallo was Vice President of Exploration for Adrian Resources Ltd, a
British Columbia corporation. Mr. Mallo also serves as a director of Hyperion
Resources Corp. and Lund Venture Ltd. Both Hyperion Resources Corp. and Lund
Venture Ltd. trade on the Canadian Venture Exchange under the symbols HYP and
LUV, respectively. Each of Madison Enterprises, Ltd., Adrian Resources Ltd.,
Hyperion Resources Corp., and Lund Venture Ltd. are in the business of exploring
for natural resources.
Douglas Turnbull has served as our director since August 1, 2001. Mr.
Turnbull is a consulting geologist. His company, Lakehead Geological
Services, Inc., a British Columbia corporation, provides geological consulting
services for a number of Canadian private and public companies including Adrian
Resources Ltd., Buffalo Diamonds Ltd., Madison Enterprises Ltd. and Oromin
Exploration Ltd. Mr. Turnbull has been the President of Lakehead Geological
Services, Inc. since 1992. Mr. Turnbull became the director of Fresco
Developments Ltd. on November 8, 1999 and a director of Buffalo Diamonds Ltd. on
June 21, 2001. Each of Adrian Resources Ltd., Madison Enterprises Ltd., Oromin
Exploration Ltd., Fresco Developments Ltd. and Buffalo Diamonds Ltd. are in the
business of exploring for natural resources. Both Fresco Developments Ltd. and
Buffalo Diamonds Ltd. trade on the Canadian Venture Exchange under the symbols
FDP and YBU, respectively.
There are no family relationships among our directors, executive
officers or persons nominated or chosen by us to become directors or executive
officers. Each of our directors and officers shall serve for a term of one year
or until his successor is duly elected and qualified.
During the past five years, none of our directors, executive officers,
promoters or control persons have been:
19
(a) the subject of any bankruptcy petition filed by or against any
business of which such person was a general partner or
executive officer either at the time of the bankruptcy or
within two years prior to that time;
(b) convicted in a criminal proceeding or is subject to a pending
criminal proceeding (excluding traffic violations and other
minor offenses);
(c) subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type
of business, securities or banking activities; or
(d) found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading
Commission to have violated a federal or state securities or
commodities law.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following lists as of October 31, 2001 the beneficial ownership of
common stock of each person known to us who owns more than 5% of our issued and
outstanding common stock and of our directors and executive officers.
Name and address* of Amount and Nature Percent of
Beneficial Owner of Beneficial Ownership Class
------------------------- ---------------------------- -----
Michael Mitsiadis 4,018,500 (1)(2) 39.6%
David Mallo 0 0%
Douglas Turnbull 0 0%
All directors, executive officers
and significant employees as a
group (3 persons) 4,018,500 39.6%
* Unless otherwise referenced, the address for each of the above
mentioned parties is c/o Global-Tech Capital Corp., P. O. Box
84037, Burnaby, B.C. V5A 4T9, Canada.
(1) Beneficial Ownership.
(2) Includes 4,000,000 shares registered in the name of Westar Capital Corp., a
British Columbia corporation controlled by Mr. Mitsiadis; Includes 9,000
shares registered in the name of Greg Mitsiadis, Mr. Mitsiadis' son;
Includes 9,000 shares registered in the name of Chris Mitsiadis, Mr.
Mitsiadis' son; Includes 500 shares registered in the name of Nicholas
Mitsiadis, Mr. Mitsiadis' son; Does not include 490,000 shares registered
in the name of Nancy Mitsiadis, Mr. Mitsiadis' mother, as to which Mr.
Mitsiadis disclaims any direct or beneficial interest; Does not include
9,000 shares registered in the name of Kimon Mitsiadis, Mr. Mitsiadis'
father, as to which Mr.
20
Mitsiadis disclaims any direct or beneficial interest; Does not include
475,000 shares registered in the name of Genie Kouris, Mr. Mitsiadis'
sister, as to which Mr. Mitsiadis disclaims direct or beneficial interest.
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue 200,000,000 shares of common stock, $0.001
par value per share, of which 10,151,400 shares were issued and outstanding as
of the date of this prospectus. Each outstanding share of common stock entitles
the holder to one vote, either in person or by proxy, on all matters that may be
voted upon by the owners of those shares at meetings of the stockholders.
The holders of common stock (i) have equal rights to dividends from
funds legally available for the payment of dividends, when, as and if declared
by our board of directors; (ii) do not have preemptive, subscription or
conversion rights, and (iii) are entitled to one non-cumulative vote per share
on all matters on which stockholders may vote at all meetings of stockholders.
All shares of common stock which are the subject of this offering, when
issued, will be fully paid for and non-assessable, with no personal liability
attaching to their ownership. Each shareholder of common stock is entitled to
one vote per share with respect to all matters that are required by law to be
submitted to shareholders. The holders of shares of our common stock do not have
cumulative voting rights, which means that the holders of more than 50% of the
outstanding shares, voting for the election of directors, can elect all of our
directors if they so choose and, in that event, the holders of the remaining
shares will not be able to elect any of our directors.
The holders of a majority of the stock issued and outstanding and
entitled to vote at a stockholders meeting constitute a quorum and must be
present in person or represented by proxy in order to hold a meeting of
stockholders. Notices of meetings of stockholders shall be in writing and signed
by the President or Vice-President or the Secretary or an Assistant Secretary or
by such other person or persons as the Directors shall designate. Such notice
shall state the purpose or purposes for which the meeting is called and the time
and the place, where it is to be held. A copy of such notice shall be either
delivered personally to or shall be mailed, postage prepaid, to each stockholder
of record entitled to vote at such meeting not less than ten nor more than sixty
days before such meeting.
Annual meetings of the stockholders shall be held on the anniversary
date of incorporation each year if not a legal holiday and, if a legal holiday,
then on the next secular day following, or at such other time as may be set by
the Board of Directors from time to time, at which the stockholders shall elect
by vote a Board of Directors and transact such other business as may properly be
brought before the meeting.
Special meetings of the stockholders, for any purpose or purposes, may
be called by the President or the Secretary, by resolution of the Board of
Directors or at the request in writing of
21
stockholders owning a majority in amount of the entire capital stock of the
corporation issued and outstanding and entitled to vote. Such request shall
state the purpose of the proposed meeting.
Each share of common stock is entitled to share pro rata in dividends
and distributions with respect to the common stock when, as and if declared by
the board of directors from funds legally available for that purpose. No holder
of any shares of common stock has any pre-emptive right to subscribe for any of
our securities. All shares of common stock outstanding are fully paid and
nonassessable.
Dividends
We have not declared any dividends since inception, and have no present
intention of paying any cash dividends on our common stock in the foreseeable
future. The payment of dividends, if any, in the future, rests within the
discretion of our board of directors and will depend, among other things, upon
our earnings, our capital requirements and our financial condition, as well as
other relevant facts.
Transfer Agent and Registrar
Currently, the transfer agent and registrar for our common stock is the
Nevada Agency & Trust Company, Suite 880, 50 West Liberty Street, Reno, Nevada,
89501.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There has been no trading market for our common stock. It is possible
that a trading market will not develop. To date, neither we nor anyone acting on
our behalf has taken any affirmative steps to retain or encourage any
broker/dealer to act as a market maker for our common stock. Further, there have
been no discussions or understandings, preliminary or otherwise, between us or
anyone acting on our behalf and any market maker regarding the participation of
any market maker in the future trading market, if any, for our common stock.
There are currently 37 holders of our outstanding common stock. The
outstanding common stock was sold pursuant to Rule 504 of Regulation D and the
terms of Regulation S.
There are no outstanding options or warrants to purchase, or securities
convertible into, our common equity.
As of the date of this prospectus, of the 10,151,400 shares of our
common stock issued and outstanding, 6,085,400 of our shares of common stock are
immediately eligible for sale in the public market without restriction or
further registration under the Securities Act of 1933, unless purchased by or
issued to any "affiliate" of ours, as that term is defined in Rule 144
promulgated under the Securities Act of 1933, described below. All other
outstanding shares of our common stock are "restricted securities" as that term
is defined under Rule 144, in that those shares were issued in private
transactions not involving a public offering and may not be
22
sold in the absence of registration other than in accordance with Rule 144,
144(k) or 701 promulgated under the Securities Act of 1933 or another exemption
from registration.
Sales of substantial amounts of our common stock under Rule 144, this
prospectus or otherwise could adversely affect the prevailing market price of
our common stock and could impair our ability to raise capital through the
future sale of our securities.
No dividends have been paid on our common stock since our inception.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
We believe that provisions of our Articles of Incorporation and bylaws
will be useful to attract and retain qualified persons as directors and
officers. Our Articles of Incorporation eliminates any personal liability of
directors or officers to the Company or our stockholders for damages for breach
of fiduciary duties as directors or officers except for acts or omissions which
involve intentional misconduct, fraud or a knowing violation of law or the
payment of dividends in violation of Nevada statutes. Our bylaws provide for the
indemnification by us to the fullest extent permitted by the Nevada Corporation
Law for officers and directors.
Insofar as indemnification for liabilities arising under the Securities
Act of 1993 may be permitted to our directors and officers under the provisions
mentioned above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission that indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against those liabilities
(other than our payment of expenses incurred or paid by a director or officer in
the successful defense of any action, suit or proceeding) is asserted by a
director or officer in connection with the securities being registered, we will,
unless in the opinion of our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
the indemnification by us is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of that
issue.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby has
been passed upon for us by Sierchio & Company, LLP, New York, New York.
EXPERTS
The financial statements of Global-Tech Corp. at June 30, 2001 and June
30, 2000 appearing in this prospectus and in the registration statement have
been audited by Richard M. Prinzi, CPA, as described in his report regarding the
financial statements appearing elsewhere in this registration statement, and are
included in reliance upon that report given upon the authority of that firm as
experts in auditing and accounting.
23
INTEREST OF NAMED EXPERTS AND COUNSEL
Our experts and counsel were not hired on a contingent basis, will not
receive an interest in our company, nor were they a director, promoter, officer
or employee of our company.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our plan of operation, financial condition
and results of operations should be read in conjunction with the Consolidated
Financial Statements and Notes to those financial statements included elsewhere
in this prospectus. This discussion contains forward-looking statements that
involve risks and uncertainties. Our actual results may differ materially from
those anticipated in these forward-looking statements as a result of various
factors, including but not limited to, those discussed under "Risk Factors" and
elsewhere in this prospectus.
PLAN OF OPERATION
The property in which we hold a right to acquire an interest is
considered in the exploration stage only. Therefore, we have not had revenues
from operations since our inception and have no regular cash flow. We are, thus,
dependent on raising funds through the issuance of our shares in order to
undertake further exploration of our property, finance further acquisitions and
meet general and administrative expenses in the long-term. It is possible that
we will be unsuccessful in raising the required financings.
Our property was the subject of a geological report which recommends
that we carry out a four phase program of exploration. See "Description of
Property." Phase I would consist of geological mapping of the entire property as
well as prospecting and soil sampling, at an estimated cost of CAN $50,000
(approximately US$33,000). We have commenced Phase I of our exploration program
and plan to complete Phase I of the exploration program within the next 12
months. In the event that Phase I is successful, we will carry out the next
phase of the exploration program subject to our ability to secure additional
financing to cover the costs of Phase II.
Phase II would consist of detailed follow-up sampling of geochemical
anomalies verified and/or detected during Phase I, trenching, geological trench
mapping and 750 meters of diamond drilling, at an estimated cost of CAN $150,000
(approximately US $100,000). Due to weather conditions in the region in which
the property is located, exploration work can only be performed for
approximately four to five months out of the year. Therefore, even if Phase I is
successful, it is unlikely that we will commence Phase II of our exploration
program within the next 12 months. If we are able to commence Phase II, we will
only conduct the initial follow-up sampling before our work is interrupted due
to weather conditions.
We expect our current cash reserves to satisfy our cash requirements
for the next _____ months exclusive of any cash requirements associated with the
implementation of our
24
exploration program. Accordingly, we will not need to raise additional funds in
the next twelve months unless we were to implement Phase II of our exploration
program, in which case we would have to secure additional financing. See
Liquidity and Capital Resources.
We do not expect to purchase or sell any plants and/or significant
equipment. We do not expect any significant changes in our number of employees.
RESULTS OF OPERATIONS
For the years ended June 30, 2000 and 2001
For the year ended June 30, 2001, we had a net loss of $31,455.80
compared to a net loss of $21,305.70 for the year ended June 30, 2000, an
increased loss of $10,150.10 or 48%. The loss per share of $.002 for the year
ending June 30, 2000 increased to $.003 per share for the year ended June 30,
2001. As we have not had any revenues from operations since our inception, the
increased loss for the year ended June 30, 2001 was comprised of the $17,289.38
realized loss on investments compared to $0 for the year ended June 30, 2000, as
well as expenses totaling $14,176.33 for the year ended June 30, 2001 as
compared to $21,305.70 for the year ended June 30, 2000.
The major components of our expenses were office, legal and
professional, bank charges as well as taxes and state fees. Although the office
expenses increased by $275.24 from $25.50 for the year ended June 30, 2000 to
$300.74 for the year ended June 30, 2001 and taxes and state fees increased by
$1,085.89 from $210 for the year ended June 30, 2000 to $1,295.89 for the year
ended June 30, 2001, the legal and professional expenses decreased by $8,500
from $21,000 for the year ended June 30, 2000 to $12,500 for the year ended June
30, 2001. This decrease of 41% in legal and professional expenses can be
attributed to the fact that the expenses associated with the refocus of our
business efforts and our initial capitalization were incurred in the year ended
June 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES
To date, virtually all funding for our acquisition of and expenditures
on our resource property and ongoing operations has come from the issuance of
our common stock.
We are in the exploration stage on our mineral property and therefore
have no regular cash flow. We are, therefore, dependent on raising funds by the
issuance of shares in order to finance further acquisitions, undertake the
exploration program of our mineral property, and meet general and administrative
expenses in the long-term. Our auditors have expressed a going concern
uncertainty in their report stating that our property currently contains no
proven reserves and that failure to locate ore reserves may adversely affect our
economic viability. Moreover, even if the results of our explorations are
encouraging, we will require additional funds through the sale of equity or debt
securities, other borrowings or possibly a joint venture to further explore the
property.
We have no commitment to sell all of the shares offered in this
offering. If we are not
25
successful in completing this offering, it is unlikely that we will be able to
pursue continued exploration absent our ability to raise additional capital. We
plan to raise additional capital, if necessary, through private placements
and/or borrowings, although we have no currently identified and available
sources of funds. We cannot assure you that we will be successful in raising the
required financing.
If we are successful in selling all of the shares offered in this
offering and we proceed with our exploration program, based on our cost
projections, we expect our current cash reserves and the proceeds from this
offering to satisfy our cash requirements for the next 18 months. At the end of
such time, we will make a determination as to our future plans after assessing
the continued viability of our exploration project based on our ability to raise
additional funds and the results of the exploration on our property through such
time.
Since we are solely involved in the exploration and evaluation of our
one mineral property, it is the opinion of management that the most meaningful
financial information relates primarily to current liquidity and solvency. As at
June 30, 2001 we had working capital of $31,735.90. We had no bank loans at June
30, 2001. Our future financial success will be dependent on the success of our
exploration program. Such exploration may take years to complete and future cash
flows, if any, are difficult to determine with any certainty. The realization
value of any mineralization discovered by us is largely dependent on factors
beyond our control such as the market value of the metals produced, mining
regulations in Canada and foreign exchange rates.
We presently have no producing properties, and our material property
contains no known mineral reserves; the limited activities on such property to
date have been exploratory in nature. Except as disclosed herein, we do not
possess reliable information concerning the history of previous operations
including the names of previous operators, if any, on our property.
Our capital commitments for the next twelve months consist of the
expenses associated with the completion of Phase I of our exploration program,
estimated to be $33,000, and the payment due under our French Claim Option
Agreement of CAN $5,000 (approximately US $3,300) due five business days after
our receipt from the SEC of written notice that our registration statement on
Form SB-2 has become effective. If successful results are obtained from Phase I
and we feel it is warranted, we will implement Phase II of the exploration
program, which is expected to last 4 months and is estimated to cost CAN
$150,000 (approximately US$100,000) in its entirety. If Phase II is commenced
within the next 12 months (which is unlikely due to the weather conditions in
the region in which the property is located), our capital commitment for the
next twelve months will also include those expenses of Phase II that will be
incurred within the next twelve months, estimated to be $27,000. We expect that
our existing capital requirements arising from the evaluation of our existing
mineral property and the further fulfillment of our exploration program will be
met from the proceeds raised in this offering, if any, as well as future equity
financings and/or borrowings. However, we do not have any currently identified
and available sources of funds.
26
BUSINESS AND DESCRIPTION OF PROPERTY
Overview
We were incorporated under the laws of Nevada on July 21, 1998 for the
purposes of developing and marketing products designed to improve visibility at
night under various circumstances. Not being able to implement our business
plan, we refocused our business activities in 2000 and are engaged in the
location, acquisition and exploration of mineral resource properties in and
around the Omineca mining region of British Columbia, Canada. The mineral
property in which we have a right to acquire an interest is currently in the
exploration stage. Our primary objective is to explore the French claim
Property. Our secondary objective is to locate, evaluate and acquire other
mineral properties, primarily in the British Columbia region and, to finance
their exploration either through equity financing, by way of joint venture or
option agreements or through a combination of both.
Although we are actively reviewing the acquisition of additional
claims, our primary focus is the initiation of the exploration programs on the
French Claim Property. See "Description of Property."
Competitive Factors
We compete with other exploration companies looking for copper. We are
one of the smallest exploration companies in existence. We are an infinitely
small participant in the copper mining market. While we compete with other
exploration companies, there is no competition for the exploration or removal or
mineral from our property. Readily available markets exist in Canada and around
the world for the sale of copper. Therefore, we will be able to sell any copper
that we are able to recover.
Environmental Regulation
All phases of our operations in Canada are subject to environmental
regulations. Environmental legislation in Canada is evolving in a manner which
may require stricter standards and enforcement, increased fines and penalties
for non-compliance, more stringent environmental assessments of proposed
projects and a heightened degree of responsibility for companies and their
officers, directors and employees.
Although compliance with such laws is not presently a significant
factor in our operations, it is possible that compliance with future changes in
environmental regulation, if any, will adversely affect our operations. See
"Risk Factors."
1. Federal Environmental Regulation
Under the Canadian Constitution Act of 1983, the federal and provincial
governments have discrete areas of jurisdiction. For the most part,
responsibility for the environment is a matter which falls under provincial, not
federal, jurisdiction. As a result, federal legislation and regulations do not
materially affect the Company's operations.
27
The Canadian federal government does have an environmental assessment
process in place embodied in the Canadian Environmental Assessment Act. However,
a project will fall under the federal government's jurisdiction and be subject
to Canadian Environmental Assessment Act only if the federal government is:
1. involved in the project as a proponent; or
2. providing financial assistance to the project; or
3. involved in the project as vendor of land; or
4. involved in the project as a regulator of the project under a
provision listed in federal regulations.
None of these four situations apply to our operations and we do not
expect to be subject to Canadian Environmental Assessment Act.
2. Provincial Environmental Regulation
There are a number of provincial acts and regulations set forth below
(together with the Environmental Assessment Act and Regulations and other
provincial acts herein referred to as the "Provincial Laws") which we will or
may be required to comply with in some way. These are not expected to materially
affect our operations, except as indicated below.
Pursuant to the requirements of the Provincial Laws, we must provide
prior notice and a description of the planned exploration work before the
commencement of the work.
Work which involves mechanized activities such as drilling, trenching,
heavy mineral studies, airborne geophysical surveys, extensive use of off road
vehicles, establishment of a camp or other activities capable of causing ground
disturbance, water quality impairments or disruption to wildlife or wildlife
habitat, cannot commence until the plan has been reviewed by the Department of
Natural Resources and an Exploration Approval issued, on such terms and
conditions deemed necessary and prescribed by the Minister.
We do not believe that compliance with the Provincial Laws will have a
material adverse impact on our operations nor do we anticipate any difficulty in
obtaining approval from provincial authorities to commence mining operations if
and when warranted. In the event provincial approval is not granted, we may be
precluded from carrying on our mining operations.
Regulations
Our mineral exploration program is subject to the Canadian Mineral
Tenure Act Regulation. This act sets forth rules for
* locating claims
* posting claims
* working claims
28
* reporting work performed
We are also subject to the British Columbia Mineral Exploration Code
which tells us how and where we can explore for minerals. We must comply with
these laws to operate our business. Compliance with these rules and regulations
will not adversely affect our operations.
Environmental Law
We are also subject to the Health, Safety and Reclamation Code for
Mines in British Columbia. This code deals with environmental matters relating
to the exploration and development of mining properties. Its goals are to
protect the environment through a series of regulations affecting:
1. Health and Safety
2. Archaeological Sites
3. Exploration Access
We are responsible for providing a safe working environment, not
disrupting archaeological sites, and conducting our activities to prevent
unnecessary damage to the property.
No permits will be required to carry the recommended Phase I work
program on the French Claim Property. Phase II of our exploration program,
contingent upon successful results in Phase I, will require a work permit from
the Province of British Columbia, which we will obtain upon making a decision to
proceed with Phase II. If development of our property is warranted in the
future, we will file final plans of operation before we begin any mining
operations.
We anticipate no discharge of water into active stream, creek, river,
lake or any other body of water regulated by environmental law or regulation. No
endangered species will be disturbed. Restoration of the disturbed land will be
completed according to law. All holes, pits and shafts will be sealed upon
abandonment of the property. It is difficult to estimate the cost of compliance
with the environmental law since the full nature and extent of our proposed
activities cannot be determined until we start our operations and know what that
will involve from an environmental standpoint.
We are in compliance with the act and will continue to comply with the
act in the future. We believe that compliance with the act will not adversely
affect our business operations in the future.
We have never undergone bankruptcy, receivership, or similar
proceeding.
Employees
As of the date of this Prospectus, we employ one full time employee.
29
Description of Property
French Claim Property, British Columbia
---------------------------------------
Title
The French Claim Property is comprised of mineral claim number 374997
located in the Omineca Mining Division of the Province of British Columbia.
Under the terms of the French Claim Property Option Agreement dated May 10, 2001
(the "Agreement") with Robin Day and Valley Gold Ltd. ("Valley Gold"), we were
granted an option to acquire a 100% interest in the French Claim Property, that
option to be exercisable by us:
(a) paying to Valley Gold CAN$10,000 cash to be paid as follows:
(i) CAN$5,000 on the execution of the Agreement (which
amount has been paid);
(ii) CAN$5,000 on the date that is five (5) business days
after the receipt by us of written confirmation from
the U.S. Securities and Exchange Commission that our
registration statement under the Securities Act of
1933 has become effective (the "Approval Date");
(iii) CAN$15,000 on or before the first anniversary of the
Approval Date;
(iv) CAN$25,000 on or before the second anniversary of the
Approval Date;
(v) CAN$47,500 on or before the third anniversary of the
Approval Date;
(b) issuing to Valley Gold 10,000 of our common shares on or before
the Approval Date;
(c) paying or issuing to Valley Gold, either cash or our common shares
or any combination thereof as determined by us at our sole
discretion, as follows:
(i) cash or our common shares having a value of
CAN$15,000 on or before the first anniversary
of the Approval Date;
(ii) cash or our common shares having a value of
CAN$25,000 on or before the second anniversary of
the Approval Date;
(iii) cash or our common shares having a value of
CAN$47,500 on or before the third anniversary of
the Approval Date; and
(d) incurring Expenditures of not less than CAN$1,000,000 on or
before the fourth anniversary of the Approval Date, of which not
less than CAN$50,000 must be incurred on or before the first
anniversary of the Approval Date, not less than
30
CAN$200,000, in the aggregate, must be incurred on or before the
second anniversary of the Approval Date and of which not less than
CAN$500,000, in the aggregate, must be incurred on or before the
third anniversary of the Approval Date.
The value of our shares which might be issued under paragraph (c) above
will be determined by the average closing price for our common shares on any
recognized stock exchange or quotation system on which our common shares may be
listed for the thirty trading days prior to the particular anniversary of the
Approval Date for the period in which such common shares might be issued. As
additional consideration for the grant of the option, the parties agree that
Valley Gold will receive a royalty equal to two percent (2%) of Net Smelter
Returns.
Location, Access & Physiography
The French Claim Property is located about 60 kilometers
north-northeast of Smithers, British Columbia, at approximately
55 degrees 22'47''N and 126 degrees 54'01''W. It covers a five square kilometer
area centered on Minfile 093M 014 - (SNOW), and overlaps the eastern two thirds
of the former RCM-1 Claim. Access is from Smithers by truck to a nearby logging
block and by helicopter to the 5,500 foot level. At present, there is no
underground or surface plant or equipment on the French Claim Property. The
French Claim Property is situated less than three kilometers west of the 6,600
foot French Peak. The property area is covered mostly by alpine plateau meadows
and treed creek valleys. The plateau is covered by shallow overburden and frost
heave boulders.
Exploration History
Prospecting and limited follow-up exploration work was undertaken on
the French Claim Property over a twenty year period by Mastodon-Highland Bell
Mines Ltd. (AMHB@) (1966-1969), Silver Standard Mines Ltd. (ASSM@) (1970-1971)
and Ryan Exploration Company (ARyan@) (1984-1985).
Exploration work carried out by MHB included prospecting, geochemical
and geophysical surveys (ground magnetic and induced polarization), bulldozer
trenching, geological mapping and rock sampling in a search for favourable
mineralized targets to drill. Available data from this work is very limited.
SSM conducted an additional soil geochemical survey and drilled five
holes totalling 1,505 feet. Soil and trench sample results yielded broad copper
anomalies (contoured at >100 ppm, >400 ppm and >1,000 ppm intervals) especially
in the area of previous trenching activity.
The drilling was undertaken by SSM in the trench area, west of the
strong copper plus molybdenum-silver anomaly, partially coincident with magnetic
and chargeability geophysical anomalies identified previously by MHB. The trench
area is located near the porphyry-hornfels geologic contact area. The drill core
was systematically sampled, predominantly across ten foot interval lengths.
31
Drill holes 1 to 4 cut pyrite-sericite feldspar porphyry, with moderate
to strong argillic alteration, closely to moderately spaced pyrite fractures,
and local chalcopyrite stringers +/- sphalerite. Molybdenite and tetrahedrite
were noted in places.
Drill hole 5 intersected slightly magnetic, pyritic hornfels-fragmental
volcanics in contact with quartz feldspar porphyry. Both units were described as
exhibiting moderate argillic alteration, moderate sericitization, 2-5% pyrite,
and 20-30 pyrite fractures or stringers per foot.
Drill core assays from the five holes average around 0.1% copper with
0.02% molybdenum. The most noteworthy copper mineralization intersected during
the drilling program was a 97 foot interval of 0.2% copper at the top of hole 3,
in altered porphyry. Included within this section are two 10 foot intervals of
0.29% copper beginning at 40 feet and 60 feet, and a 10 foot interval of 0.44%
copper beginning at 70 feet. Below this 97 foot section is a 30 foot interval of
bleached hornfels in fault contact, which returned 0.13% copper.
In 1985, Ryan collected a total of 65 rock samples. Despite leaching of
oxidized outcrops, trench rocks yielded 13 anomalous copper values above 400
ppm, the top five ranging from 0.11 to 0.48% copper. The anomalous copper values
from the rock sampling are distributed throughout the trench area of the
property. A total of 234 soil samples (+/- rock chip fines) were also collected
by Ryan along the trenches at 20 meter intervals, and along a widely spaced grid
(400 meter by 500 meter line spacing with 100 meter sample stations) designed to
further define previous operators results.
Trench soil copper values commonly range from 150-400 ppm, and 22
samples yielded 0.1% - 0.24% copper. The soil grid sampling was too widely
spaced for valid interpretation of the results but showed that the area is
geochemically responsive.
Exploration - Recent Results
A recent work program carried out in the summer of 2000 by Valley Gold
Ltd., one of the optionors of the French Claim Property, included widely spaced
soil trench sampling designed to provide verification of historical results. The
soil sampling results confirm the values obtained by previous operators on the
Property. In addition to the soil sampling efforts, a suite of eighteen rock
samples ( thirteen porphyry and five hornfels samples) were collected for
petrological study, whole rock geochemistry and ICP analytical work.
Regional and Local Geology
The French Peak plutonic complex is located within the Stikine Terrane
of the Intermontane geomorphological belt, on the north flank of the Skeena
Arch, west-central British Columbia, Canada. The French Peak complex is
classified as Late Cretaceous (Bulkley age). Bulkley intrusions are distributed
along a 50 kilometer-wide belt parallel to the regional north to northwest
lithostructural trend. Within this belt are clusters of porphyry copper and
copper-molybdenum (+/- gold) deposits and prospects, notably north to northeast
of Smithers in the vicinity of French Peak.
32
The intrusive complex is contained within a positive airborne magnetic
area with a 10 kilometer north/south axis, overlies the southernmost of three
hydrothermal centres within this axis and has been subjected to complex block
faulting, dominated by north-south regional faults.
In the area of the French Claim Property, a sedimentary sequence
comprising shale, mudstone, siltstone and conglomerate, was intruded by a
Bulkley intrusive complex and metamorphosed to the present hornfels
stratigraphy. The intrusive complex consists predominantly of quartz monzonite
to granodiorite compositional porphyries. The rocks in the area are reportedly
highly altered and oxidized, with ubiquitous boxwork and vuggy gossans.
Alteration types include various intensities of phyllic, propylitic, K-silicate,
and argillic. Phyllic alteration (sericite-quartz-pyrite) has affected the
majority of the porphyry bodies in the trenched area of the Property. Copper
mineralization, identified to date, is interpreted to be a late occurring event
and accompanied by phyllic alteration.
Field observations suggest increasing alteration in the porphyry is
associated with increasing sulphides and stockwork veining. Millimetric,
grey-white, quartz pseudo-stockwork to stockwork veins host pyrite (average
2-5%, up to 20%), with chalcopyrite, galena, sphalerite and arsenopyrite noted
locally. The presence of tetrahedrite has also been reported, as well as
argentiferous massive pyrite veins.
Proposed Exploration
The French Claim Property is the subject of a compilation report dated
May, 2001 by Z.G. Arias, M.Sc., consulting geologist, which reviews all
available data respecting the French Claim Property. A primary conclusion of Ms.
Arias' report is that the copper-molybdenum-silver soil anomaly which extends
upslope and to the east of west-inclined drill holes, was not adequately tested.
In addition, exploration results to date warrant further geological, geochemical
and geophysical work toward the delineation of drill targets to test for a
low-grade to medium-grade, bulk tonnage, porphyry copper deposit. Previous
exploration results and detailed interpretive work suggests that much of the
porphyry mineralization has been preserved at minimal depth below surface and
not subjected to erosional activity, often accompanying similar deposits
throughout this region.
Ms. Arias' report recommends that we carry out a four phase program of
exploration of the French Claim Property. Phase I will consist of geological
mapping of the entire property together with prospecting and soil sampling, at
an estimated cost of CAN$50,000 (approximately US$33,000). Phase II, contingent
upon successful results from Phase I, would consist of detailed follow-up
sampling of geochemical anomalies verified and/or detected during Phase I,
trenching, geological trench mapping and 750 meters of diamond drilling, at an
estimated cost of CAN$150,000 (approximately US$100,000). Phase III, contingent
upon successful results from Phase II, would consist of 2,500 meters of diamond
drilling, at an estimated cost of CAN$300,000 (approximately US$198,000). Phase
IV, contingent upon successful results from Phase III, would consist of 4,000
metres of diamond drilling, at an estimated cost of CAN$500,000 (approximately
US$330,000).
33
Despite the foregoing, the French Claim property is without known
reserves and the proposed program is exploratory in nature.
We do not have any policies or limitations in connection with
investment in real estate, interests in real estate, or investment in real
estate mortgages.
Leasehold and Equipment
We currently occupy space rent-free in the residence of Mr.
Mitsiadis, our President, on a month-to-month basis and are provided with access
to telephone, fax and copy services without cost on equipment owned by Mr.
Mitsiadis at an estimated value of CAN$100 (approximately US$66) per month. We
expect to continue to utilize this space until the time when our operations
require the hiring of additional personnel. We believe that the value estimated
for the use of the space and equipment is comparable to rates payable to third
parties negotiated at arms length for comparable space. We will not reimburse
Mr. Mitsiadis for the use of this space and equipment. Therefore, due to the
immaterial amount, no disclosure has been made in the financial statements.
EXECUTIVE COMPENSATION
The following summary compensation table reflects all compensation
awarded to, earned by, or paid to our Chief Executive Officer and president and
our other executive officers who were serving as our executive officers as of
the end our last completed fiscal year for all services rendered to us in all
capacities during each of the years ended June 30, 1999, 2000 and 2001.
--------------------------------------------------------------------------------
Summary Compensation Table
--------------------------------------------------------------------------------
------------------------------------- -------- ---------- -------- -------------
All Annual
Name and Principal Position Year Salary Bonus Compensation
--------------------------- ---- ------ ----- ------------
(**)
------------------------------------- -------- ---------- -------- -------------
------------------------------------- -------- ---------- -------- -------------
Michael Mitsiadis 1999 $ 0 $ 0 $ 0
President 2000 $ 0 $ 0 $ 0
2001 $ 0 $ 0 $ 0
------------------------------------- -------- ---------- -------- -------------
------------------------------------- -------- ---------- -------- -------------
David Mallo 1999 $ 0 $ 0 $ 0
Secretary, director 2000 $ 0 $ 0 $ 0
2001 $ 0 $ 0 $ 0
------------------------------------- -------- ---------- -------- -------------
Directors' Compensation
Except for our arrangement with David Mallo, under which he is
compensated for the provision of geological consulting services on a project by
project basis, we have no arrangements, standard or otherwise, pursuant to which
directors are compensated by us for their services in their capacity as
directors, or for committee participation, involvements in special assignments
or for services as consultant or expert. Mr. Mallo's fees are negotiated
34
on a project by project basis. Upon completion of this offering, Mr. Mallo will
receive CAN$3,000 (approximately $2,000) for consulting services rendered to us
with respect to Phase I of our exploration program.
None of our directors have received any manner of compensation for
services provided in their capacity as directors during our most recently
completed financial year.
Employment and Severance Agreement
There are no employment contracts or agreements between us and our
officers.
We do not have any employee stock option or other incentive plans.
We do not have any compensatory plan or arrangement which will result
from the resignation, retirement or other termination of employment of any
directors or executive officers or from a change of our control, or a change in
any of their responsibilities following a change of control.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a
registration statement on Form SB-2. This prospectus, which is a part of the
registration statement, does not contain all of the information included in the
registration statement. Some information is omitted and you should refer to the
registration statement and its exhibits. With respect to references made in this
prospectus to any of our contracts, agreements or other documents, those
references are not necessarily complete and you should refer to the exhibits
attached to the registration statement for copies of the actual contract,
agreement or other document.
Our registration statement and other filings with the Securities and
Exchange Commission can be reviewed by accessing the Securities and Exchange
Commission's Internet site at http://www.sec.gov, which contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the Securities and Exchange Commission.
We intend to send an annual report, including audited financial
statements, to our shareholders. We will also file annual, quarterly and current
reports, proxy statements and other information with the Securities and Exchange
Commission. You may read and copy any reports, statements or other information
on file at the public reference rooms. You can also request copies of these
documents, for a copying fee, by writing to the Securities and Exchange
Commission.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no transactions during the last two years, or proposed
transactions, to which we were or are a party in which any of our directors,
officers, shareholders owning more than 5% of our securities or members of their
family had or have a material interest.
35
Michael Mitsiadis is our sole promoter. Westar Capital Corp, a
corporation controlled by Mr. Mitsiadis, purchased 4,000,000 shares of our
common stock in consideration for payment to us of $0.001 per share.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
Our previous auditor, Barry L. Friedman, passed away on January 27,
2001. The auditor's report on our financial statements for either of the past
two years did not contain an adverse opinion or disclaimer of opinion nor was it
modified as to uncertainty, audit scope of accounting principles. There were no
disagreement with the former auditor or any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
On June 22, 2001, we engaged Richard M. Prinzi, CPA to audit our
financial statements for the years ended June 30, 2001 and June 30, 2000.
GLOSSARY
The following are definitions for the geologic or highly technical
terms used in the mining industry and in this prospectus.
Argentiferous - A descriptive term referring to a mineral that contains
silver as a component part.
Argillic - A form of alteration in which certain minerals of a
rock are converted to clay or a member of the clay
mineral group.
Arseno pyrite - A tin-white to steel gray colored mineral comprised of
iron, arsenic and sulphur. Often associated with lead
and silver.
Chalcopyrite - A bright brassy-yellow tetragonal mineral comprised of
copper, iron and sulphur. Chalcopyrite often occurs in
a massive form or commonly as disseminations within
porphyry deposits. It is the primary copper ore.
Chargeability - The primary unit of measurement of Induced Polarization
geophysical surveys relating to conductance ability of
the tested material.
Galena - A bluish gray, cubic mineral which is the most
important ore for lead. It is comprised of lead and
sulphur.
36
Gossan - An iron-bearing, weathered material overlying
sulphide occurrences resulting from the oxidation of
sulphides and leaching out of metallic minerals.
Granodiorite - A coarse grained plutonic (intrusive) rock of
intermediate composition (equal or near equal) mafic and
felsic mineral components.
Hornfels - A fine grained rock composed of a mosaic of
equidimensional grains typically formed as a result of
contact metamorphic processes.
Hydrothermal - Alteration resulting from interaction of minerals with hot
water, most often at depth.
ICP - An analytical method for defining geochemical levels of
concentration for various metals and elements.
Induced Polarization -A geophysical method utilized to measure conductance of
a material subjected to an introduced (induced)
charge.
Lithostructural - An assemblage of rocks that is unified on the basis of
similar structural features, or origins.
Molybdenite - A lead-gray hexagonal mineral, commonly found
disseminated within a porphyry. It is the primary ore of
molybdenum and comprised of molybdenum and sulphur.
Petrologic - Study of geology dealing with the origin, occurrence,
structure and history of rocks.
Phyllic - A style of hydrothermal alteration related to the removal
of sodium, calcium and magnesium from the host
units. A common type of alteration surrounding a central
core zone of Potassic (K-silicate) alteration in
porphyry base-metal deposits.
Porphyry - An igneous rock of any composition which contains
conspicuous phenocrysts (crystals) within a fine
grained rock. Porphyry deposits, large scale
disseminated mineralization, occur within such geologic
hosts.
Propylitic - Alteration suite comprising epidote, chlorite and
carbonates resulting from low pressure and temperature
influences. Often marginal to porphyry base-metal
deposts.
Quartz Monzanite - A plutonic (intrusive) rock which is gradational with
granodiorite and granite based on mineral ratios
of composition.
37
Sphalerite - A yellow, brown or black isometric mineral with a resinous
surface appearance. It is the primary ore of zinc metal
and is comprised of zinc, iron and sulphur.
Tetrahedrite - A steel-gray to iron-black isometric mineral comprised
of copper, iron, antimony and sulphur and is a common
ore of copper. It can contain zinc, lead, mercury,
cobalt, nickel or silver as well and is often a common
ore in silver deposits.
Whole Rock
Geochemistry - An analytical method which evaluates the original
compositional and alteration mineral assemblage
constituents of rock samples.
38
INDEX TO
FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001 AND 2000
------------------------------------------
CONTENTS
-----------
Page
----
Report of Independent Public Accountants 40
Financial statements:
Balance Sheets - June 30, 2001 and June 30, 2000 41
Statement of Operations for the period July 1, 2000 through June
30, 2001, July 1, 1999 through June 30, 2000 and July 21, 1998 (date
of inception) through June 30, 2001 42
Statements of Changes in Shareholders' Equity for July 1, 2000 through
June 30, 2001 and for the period July 21, 1998 (date of inception)
through June 30, 2000 43
Statements of Cash Flows for the period July 1, 2000 through June 30,
2001, July 1, 1999 through June 30, 2000 and July 21, 1998 (date of
inception) through June 30, 2001. 44
Notes to financial statements 45
39
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Board of Directors Global-Tech Capital Corp.:
We have audited the accompanying balance sheets of Global-Tech Capital Corp. (a
Nevada corporation in the Exploration stage) as of June 30, 2001 and June 30,
2000, and the related statements of operations, changes in shareholders' equity
and cash flows for the periods from July 1, 2000 through June 30, 2001, July 1,
1999 to June 30, 2000 and July 21, 1998 (date of Inception) through June 30,
2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Global-Tech Capital Corp. as of
June 30, 2001 and June 30, 2000, and the related statements of operations,
changes in shareholders' equity and cash flows for the periods from July 1, 2000
through June 30, 2001 and July 1, 1999 to June 30, 2000 and July 21, 1998 (date
of Inception) through June 30, 2001 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note #1 to the financial
statements, the Company has no established source of revenue. This raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are described in Note #1. The financial
statements do not include any adjustments that might result from the outcome for
this uncertainty.
/s/ Richard M. Prinzi, Jr.
--------------------------
Staten Island, New York
July 16, 2001
40
Global -Tech Capital Corp., Inc.
(An Exploration Stage Company)
Balance Sheet
Assets
June 30, June 30,
2001 2000
----------------------------
Current Assets:
Cash & Cash Equivalents $ 31,736 $ 460
----------------------------
Total Current Assets 31,736 460
Noncurrent Assets:
Intangible Assets 3,268 -
----------------------------
Total Assets $ 35,004 $ 460
============================
Liabilities And Shareholders' Equity
Total Liabilities - -
----------------------------
Shareholders' Equity:
Common stock, $.001 par value, 200,000,000 shares
authorized, 10,151,400 shares issued and outstanding $ 10,151 $ 10,085
Additional Paid in Capital 78,349 12,415
----------------------------
Total Stockholders' Equity 88,500 22,500
Loss accumulated during the Exploration stage (53,496) (22,040)
-----------------------------
Total Shareholders' Equity 35,004 460
-----------------------------
Total Liabilities and Shareholders' Equity $ 35,004 $ 460
=============================
See Accompanying Notes to Financial Statements
41
Global -Tech Capital Corp., Inc.
(An Exploration Stage Company)
Statement of Operations
For the period
July 21, 1998 For the period For the period
(Date of Inception) July 1, 2000 July 1, 1999
To December To June To June
31, 2001 30, 2001 30, 2000
------------------------------------------------------------------------------
Income:
Realized Loss on Investments $ (17,289) $ (17,289) -
Interest 10 10 -
------------------------------------------------------------------------------
Total Income (17,279) (17,279) -
Expenses:
Office 326 301 25
Legal & Professional 33,500 12,500 21,000
Bank Charges 215 80 70
Taxes & Stage Fees 2,176 1,295 210
------------------------------------------------------------------------------
Total Expenses 36,217 14,176 21,305
------------------------------------------------------------------------------
Loss Accumulated During
The Exploration Stage
$ (53,496) $ (31,455) $ (21,305)
==============================================================================
Loss per Common Share $ (.0053) $ (.0031) $ (.0021)
==============================================================================
Weighted Average of Common
Shares Outstanding
10,118,400 10,085,400 10,085,400
==============================================================================
See Accompanying Notes to Financial Statements
42
Global -Tech Capital Corp., Inc.
(An Exploration Stage Company)
Statement of Changes in Shareholders' Equity
Loss
Common Stock Accumulated
------------------------------ Additional During the
Paid In Exploration
Par Values Capital Stage Total
---------------------------------------------------------------------------
For the period July 21,
1998 (date if inception)
Through June 30, 2000
------------------------
Issuance of stock 10,085,400 $ 10,085 $ 12,415 $ 22,500
Loss Accumulated During the
Exploration Stage $ (22,040) (22,040)
----------------------------------------------------------------------------
Balance, June 30, 2000 10,085,400 10,085 12,415 (22,040) 460
For the period July 1,
2000 To June 30, 2001
------------------------
Issuance of stock 66,000 66 65,934 66,000
Loss Accumulated During the
Exploration Stage (31,456) (31,456)
----------------------------------------------------------------------------
Balance, June 30, 2001 10,151,400 $ 10,151 $ 78,349 $ (53,496) $ 35,004
============================================================================
See Accompanying Notes to Financial Statements
43
Global -Tech Capital Corp., Inc.
(An Exploration Stage Company)
Statement of Cash Flows
For the period
July 21, 1998
(Date of For the period For the period
Inception) July 1, 2000 July 1, 1999
To June 30, to June 30, To June 30,
2001 2001 2000
-----------------------------------------------------------------------
Cash Flows From Operating Activities:
Loss Accumulated During
the Exploration Stage $ (53,496) $ (31,456) $ (22,040)
-----------------------------------------------------------------------
Net Cash Used in Operating Activities (53,496) (31,456) (22,040)
-----------------------------------------------------------------------
Cash Flows From Investing Activities:
Net (increase) decrease in Other Assets (3,268) (3,268) -
-----------------------------------------------------------------------
Net Cash Used in Investing Activities (3,268) (3,268) -
-----------------------------------------------------------------------
Cash Flow From Financing Activities:
Proceeds from issuance of common stock 88,500 66,000 22,500
-----------------------------------------------------------------------
Net Cash Provided By Financing Activities 88,500 66,000 22,500
-----------------------------------------------------------------------
Net Increase in Cash: 31,736 31,276 460
-----------------------------------------------------------------------
Cash, beginning of period - 460 -
-----------------------------------------------------------------------
Cash, end of period $ 31,736 $ 31,736 $ 460
=======================================================================
See Accompanying Notes to Financial Statements
44
Global -Tech Capital Corp., Inc.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. COMPANY INFORMATION
Global-Tech Capital Corp., ("The Company") was organized July 21, 1998, under
the laws of the State of Nevada, as Global-Tech Capital Corp. The Company is
currently in the exploration stage. Management has elected a June 30 year-end
for the Company. The Company will be in the exploration stage until it raises
the required capital and begins the development of the property.
The Company is an exploration stage company engaged in the location,
acquisition, and exploration of a mineral resource property, the rights of which
are currently held, and following the successful consummation of this offering,
intends to continue an exploration program of the property. The property
currently contains no proven reserves and failure to locate ore reserves may
adversely affect the economic viability of the Company. Even if the results of
exploration are encouraging, the Company will require additional funds through
the sale of equity or debt securities, other borrowings or possibly a joint
venture to further explore the property. The Company intends to raise additional
capital if the initial tests of the property are fruitful.
.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash & Cash Equivalents
For the purpose of the statement of cash flows, cash equivalents include all
highly liquid investments, with a maturity of three months or less.
Basis of Financial Statements
These financial statements are prepared on the accrual basis of accounting in
conformity with generally accepted accounting principles.
Income Taxes
Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards No.109, "Accounting for Income Taxes". Under this method,
deferred income taxes are determined based on differences between the tax basis
of assets and liabilities and their financial reporting amounts at each year
end, and are measured based on enacted tax rates and laws that will be in
45
Global -Tech Capital Corp., Inc.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
Income Taxes (Continued)
effect when the differences are expected to reverse. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized. No provision for income taxes is included in the
statement due to its immaterial amount
Utilization of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Net Income Per Common Share
Net income per common share is computed based on the weighted average number of
common shares outstanding and common stock equivalents, if not anti-dilutive.
NOTE 3. CAPITAL STOCK
The Company is offering the right to subscribe for 2,000,000 shares at $.05 per
share on an all or none basis. Therefore, all 2,000,000 shares must be sold
before the offering can be completed. The shares will be sold through the
President and Directors of the Company and no compensation is to be paid to any
person for the offer and sale of the shares.
The Company's Certificate of Incorporation authorizes the issuance of
200,000,000 shares of common stock. The Company's Board of Directors has the
power to issue any or all of the authorized but unissued common stock without
stockholder approval. To the extent that additional shares of common stock are
issued, dilution to the interest of the Company's stockholders participating in
the Offering will occur.
There are presently outstanding 10,151,400 shares of the Company's Common Stock
for which a relatively nominal consideration was paid. In contrast, the
purchasers of the shares offered are providing the Company with $100,000 of
funding. Purchasers of the shares will represent 16% of all shares outstanding,
46
Global -Tech Capital Corp., Inc.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 3. CAPITAL STOCK (Continued)
although they will have provided the major portion of the Company's funding to
date. The purchasers of the shares offered hereby would have no effective voice
in the Company's management and the Company would be controlled by the existing
stockholders.
Upon any liquidation, dissolution or winding up of the Company, holders of
Shares of Common Stock are entitled to receive pro rata all of the assets of the
Company available for distribution to holders of shares of the Company's Common
Stock. Moreover, in the event such a liquidation were to occur all stockholders
of the Company including those owning shares purchased privately at less than
the public offering price, will receive the liquidated assets on a pro-rata
basis (as opposed to being based on the amounts paid for such shares).
NOTE 4. INCOME TAXES
The Company has available at June 30, 2001 and June 30, 2000, $53,496 and
$22,040 of unused operating loss carry forwards that may be applied against
future taxable income and expire in various years beginning 2019.
NOTE 5. INTANGABLE ASSETS
The Company purchased an option to acquire a 100% interest in a mineral claim,
located in the Omineca Mining Division of the Province of British Columbia,
exercisable by the Company. The option required an execution payment of $3,268
and a subsequent payment of $3,268 five business days after the receipt by the
Company of written confirmation from the U.S. Securities and Exchange Commission
that the Company's registration statement under the Securities Act of 1933 has
become effective. Thereafter, the option renews annually at the discretion of
the Company requiring annual payments and minimum expenditures by the Company.
Amortization of the option cost will commence upon vesting of the option.
Termination of the option will cause the full amount to be expensed in the
termination period.
47
GLOBAL-TECH CAPITAL CORP.
2,000,000 Shares of
Common Stock
--------------------
PROSPECTUS
--------------------
_________, 2001
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Indemnification of Directors and Officers
Section 78.7502 of the Corporation Laws of the State of Nevada provides for
the indemnification of the company's officers, directors and corporate employees
and agents when any such person was or is a party or is threatened to be made a
party to any threatened, pending or completed action except an action by or in
right of the company, by reason of the fact that he is or was a director,
officer, employee or agent of the company, or is or was serving at the request
of the company against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, if he acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the company, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
In an action by or in the right of the company to procure a judgment in its
favor, the company may indemnify any person who was or is a party or is
threatened to be made a party thereto by reason of the fact that he is or was a
director, officer, employee or agent of the company, against expenses, including
amounts paid in settlement and attorneys' fees actually and reasonably incurred
by him in connection with the defense or settlement of the action if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the company. However, the company will not indemnify
such person for any claim as to which such a person has been adjudged by a court
to be liable to the company or for amounts paid in settlement to the company,
unless and only to the extent that a court determines upon application that in
view of all the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.
To the extent that a director, officer, employee or agent of the company
has been
48
successful on the merits or otherwise in defense of any action referred to
above, the company shall indemnify him against expenses, including attorneys'
fees, actually and reasonably incurred by him in connection with the defense.
Section 78.751 of the Nevada Corporation Law, as amended, sets forth the
authorization required for discretionary indemnification, advancement of
expenses and limitations thereon:
1. Any discretionary indemnification under Section 78.7502 of the Nevada
Corporation Laws, unless ordered by a court or advanced pursuant to subsection 2
below, may be made by the company only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances. This determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the action so orders, by independent legal counsel in a
written opinion; or
(d) If a quorum consisting of directors who were not parties to the
action cannot be obtained, by independent legal counsel in a written
opinion.
2. The articles of incorporation, the bylaws or an agreement made by the
company may provide that the expenses of officers and directors incurred in
defending a civil or criminal action must be paid by the company as they are
incurred and in advance of the final disposition of the action upon receipt of
an undertaking by or on behalf of the director or officer to repay the amount if
it is ultimately determined by a court that he is not entitled to be indemnified
by the company.
3. The indemnification and advancement of expenses authorized in or ordered
by a court pursuant to Section 78.751 of the Nevada Corporation Law continues
for a person who has ceased to be a director, officer, employee or agent and
does not exclude any other rights to which a person seeking indemnification or
advancement of expenses may be entitled under the company's charter bylaws, or
agreement except that indemnification, unless ordered by a court pursuant to
Section 78.7502 of the Nevada Corporation Law or for the advancement of expenses
made pursuant to subsection 2, may not be made to or on behalf of any director
or officer if a final adjudication establishes that his acts or omissions
involved intentional misconduct, fraud or a knowing violation of the law and was
material to the cause of action.
The company's bylaws provide for the indemnification by the company to
the fullest extent permitted by the Nevada Corporation Laws as described above.
The indemnification provided by the company's bylaws is not exclusive of
any other rights to which those indemnified may be entitled under any agreement,
vote of shareholders or disinterested directors, provision of law or otherwise.
49
The company may purchase and maintain insurance on behalf of any person
who 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 officer of another corporation against
liability asserted against such person and incurred in such capacity or arising
out of such status, whether or not the company would have the power to indemnify
such person. The company has not taken out such insurance policies.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemization of various expenses, all of
which we will pay, in connection with the sale and distribution of the
securities being registered. All of the amounts shown are estimates, except the
Securities and Exchange Commission registration fee.
Securities and Exchange Commission Registration Fee $ 25.00
Accounting Fees and Expenses $ 3,500.00
Legal Fees and Expenses $40,000.00
Transfer Agents Fees $ 500.00
Printing Costs $ 500.00
Blue Sky Fees and Expenses $ 1,000.00
EDGAR Filing Fees $ 3,000.00
Miscellaneous $ 475.00
-----------
Total $49,000.00
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
Set forth in chronological order is information regarding shares of common
stock sold by the company during the past three years. Also included is the
consideration, if any, received by the Company for such shares and information
relating to the section of the Securities Act of 1933 (the "Securities Act"), or
rule of the Securities and Exchange Commission under which exemption from
registration was claimed.
In March, 1999, the Company offered and sold to Westar Capital Corp., a
British Columbia corporation controlled by Michael Mitsiadis, the Company's
President, 4,000,000 shares of its common stock at a price of $.001 per share
for total consideration of $4,000. The Company believes that such transaction
was exempt from registration by virtue of Rule 504 of Regulation D thereunder.
Form D was filed on April 1, 1999.
In March, 1999, the Company offered and sold to twelve persons who are
non-accredited investors, 6,000,000 shares of its common stock at a price of
$.001 per share for total consideration of $6,000. The Company believes that
such transactions were exempt from the registration requirements of the
Securities Act by virtue of Rule 504 of Regulation D thereunder. Form D was
filed on April 1, 1999.
In April, 1999, the Company offered and sold 81,000 shares of its common
stock to nine persons who are not accredited investors at a price of $.10 per
share for total
50
consideration of $8,100. The Company believes that such transactions were exempt
from the registration requirements of the Securities Act by virtue of Rule 504
of Regulation D thereunder. Form D was filed on May 6, 1999.
In April, 1999 the Company offered and sold 4,400 shares of its common
stock to fourteen persons who are not accredited investors at a price of $1.00
per share for total consideration of $4,400. The Company believes that such
transactions were exempt from the registration requirements of the Securities
Act by virtue of Rule 504 of Regulation D thereunder. Form D was filed on May 6,
1999.
On December 15, 2001, the Company offered and sold 66,000 shares of its
common stock to Nell M. Dragovan at a price of $1.00 per share for total
consideration of $66,000. The Company believes that such transaction was exempt
from the registration requirements of the Securities Act pursuant to Regulation
S.
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS
The following Exhibits are attached hereto:
EXHIBIT DESCRIPTION OF EXHIBIT AND FILING REFERENCE
NUMBER
3.1 Articles of Incorporation*
3.2 Bylaws*
5.1 Opinion of Sierchio & Company, LLP, regarding
the legality of the securities being registered
10 Agreement between the Company, Robin Day and
Valley Gold, Ltd.*
23.1 Consent of Sierchio & Company, LLP. (included in
Exhibit 5.1)
23.2 Consent of Richard M. Prinzi, Jr.
* Filed Previously
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 24 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event
51
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
52
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 of filing on Form SB-2 and authorizes this registration
statement to be signed on its behalf by the undersigned, in the City of Burnaby,
Province of British Columbia, on the 5th day of November, 2001.
GLOBAL-TECH CAPITAL CORP.
By: /s/ Michael Mitsiadis
---------------------------------------
Michael Mitsiadis
President and Chief Financial Officer
In accordance with the requirements of the Securities
Act of 1933, this Registration Statement was signed by
the following persons in the capacities and on the
dates stated:
SIGNATURE TITLE DATE
/s/ Michael Mitsiadis President and Director November 5, 2001
---------------------
Michael Mitsiadis (principal executive and financial officer)
/s/David Mallo Secretary and Director November 5, 2001
---------------------
David Mallo
/s/ Douglas Turnbull Director November 5, 2001
---------------------
Douglas Turnbull
53
EXHIBIT INDEX
The following Exhibits are attached hereto:
EXHIBIT DESCRIPTION OF EXHIBIT AND FILING REFERENCE PAGE
NUMBER
3.1 Articles of Incorporation*
3.2 Bylaws *
5.1 Opinion of Sierchio & Company, LLP, regarding the legality
of the securities being registered 55
10 Agreement between the Company, Robin Day and Valley Gold, Ltd.*
23.1 Consent of Sierchio & Company, LLP. (included in Exhibit 5.1)
23.2 Consent of Richard M. Prinzi, Jr. 57
* Filed Previously
54
EXHIBIT 5.1
-----------
SIERCHIO & COMPANY, LLP
ATTORNEYS
150 East 58th Street, 25th Floor
New York, New York 10155
PHONE (212) 446-9500 - TELEFAX (212) 446-9504
November 6, 2001
Global-Tech Capital Corp.
P.O. Box 84037
Burnaby, B.C.
V5A 4T9 Canada
Re: Global-Tech Capital Corp.
Registration Statement on Form SB-2
File No: 333-69414
Filed September 14, 2001
Dear Sir or Madam:
We have acted as counsel for Global-Tech Capital Corp., a corporation
existing under the laws of the State of Nevada (the "Company") in connection
with the preparation and filing of a registration statement on Form SB-2 (the
"Registration Statement") relating to the registration and the offer and sale by
the Company of 2,000,000 of the Company's shares of common stock, $0.001 par
value (the "Common Shares").
In this connection, we have examined such documents, corporate records,
officers' certificates and other instruments as we have deemed necessary or
appropriate for purposes of this opinion, including, but not limited to, (i) the
Company's Certificate of Incorporation and Bylaws, and (ii) the Registration
Statement. We have assumed the legal capacity to sign and the genuineness of all
signatures of all persons executing instruments or documents examined or relied
upon by us and have assumed the conformity with the original documents of all
documents examined by us as copies of such documents.
Based upon and subject to the foregoing, we are of the opinion that when
offered and sold as described in the Registration Statement, the Common Shares
will be validly issued, fully paid and non-assessable.
55
SIERCHIO & COMPANY, LLP
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby concede that
we are within the category of persons whose consent is required under the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours
Sierchio & Company, LLP
By: /s/ Joseph Sierchio
-------------------
Joseph Sierchio
56
Exhibit 23.2
[Letterhead of Richard M. Prinzi, Jr., CPA]
CONSENT OF INDEPENDENT AUDITOR
We hereby consent to the use in the Prospectus constituting part of this
Amendment no. 1 to the Registration Statement to Form SB-2 of our report dated
July 29, 2001 relating to the financial statements of Global-Tech Capital Corp.
(a Nevada corporation in the development stage) as of June 30, 2001 and June 30,
2000, and the related statements of operations, changes in shareholders' equity
and cash flows for the periods from July 1, 2000 through June 30, 2001 and July
1, 1999 to June 30, 2000, which appears in such Prospectus. We also consent to
the reference to us under the heading "Experts" in such Prospectus.
/s/ Richard M. Prinzi, Jr.
Staten Island, New York
November 2, 2001
57