As filed with the Securities and Exchange Commission on July 27, 2005
Registration No. 333-125068
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NUMBER ONE TO
FORM SB-2
SEC FILE: 333-125068
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NORTHERN EXPLORATIONS LTD.
(Name of small business issuer in its charter)
NEVADA 1000 Applied For
State or jurisdiction of Primary Standard Industrial I.R.S. Employer
incorporation or organization Classification Code Number Identification No.
Northern Explorations Ltd.
470 Granville Street, Suite 1120
Vancouver, B.C. V6C 1V5
Telephone: 604-713-8012
Facsimile: 604-713-8018
(Address and telephone number of principal executive offices)
Empire Stock Transfer Inc.
7251 West Lake Mead Blvd Suite 300
Las Vegas, NV 89128
Telephone: 702-562-4091
Facsimile: 702-562-4081
(Name, address and telephone number of agent for service)
Approximate date of proposed sale to the public: as soon as practicable after
the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
CALCULATION OF REGISTRATION FEE
================================================================================
TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES DOLLAR OFFERING AGGREGATE AMOUNT OF
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE (1) PRICE (2) FEE (2)
- --------------------------------------------------------------------------------
Common Stock $254,000 $0.10 $254,000 $29.90
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(1) Based on the last sales price on January 17, 2004.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
SUBJECT TO COMPLETION, DATED JULY 27, 2005
================================================================================
PROSPECTUS
NORTHERN EXPLORATIONS LTD.
2,540,000 SHARES
COMMON STOCK
The selling shareholders named in this prospectus are offering all of the shares
of common stock offered through this prospectus.
Our common stock is presently not traded on any market or securities exchange.
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. SEE SECTION ENTITLED "RISK FACTORS" ON PAGES 2-4.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
The selling shareholders will sell our shares at $0.10 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices. We cannot ensure that our shares will be
quoted on the OTC Bulletin Board.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS: JULY 27, 2005
TABLE OF CONTENTS
Page
----
Summary 1
Risk Factors 2
- If we do not obtain additional financing, our business will fail 2
- Because we have not commenced business operations, we face a high
risk of business failure 2
- Because of the speculative nature of exploration of mining
properties, there is substantial risk that our business will fail 3
- Because our continuation as a going concern is in doubt, we will
be forced to cease business operations unless we can generate
profit in the future 3
- Because of the inherent dangers involved in mineral exploration,
there is a risk that we may incur liability or damages, which
could hurt our financial position and possibly result in the
failure of our business 3
- Even if we discover commercial reserves of precious metals on the
Cade Property, we may not be able to successfully obtain
commercial production 3
- Because our sole director owns 54.15% of our outstanding stock,
he could control and make corporate decisions that may be
disadvantageous to other minority stockholders 3
- Because our president has other business interests, he may not be
able or willing to devote a sufficient amount of time to our
business operations, causing our business to fail 4
- Because management has no technical experience in mineral
exploration, our business has a high risk of failure 4
- If a market for our common stock does not develop, shareholders
may be unable to sell their shares and will incur losses as a
result 4
- A purchaser is purchasing penny stock which limits the ability to
sell stock 4
Use of Proceeds 5
Determination of Offering Price 5
Dilution 5
Selling Securityholders 5
Plan of Distribution 7
Legal Proceedings 8
Directors, Executive Officers, Promoters and Control Persons 9
Security Ownership of Certain Beneficial Owners and Management 9
Description of Securities 10
Interest of Named Experts and Counsel 10
Disclosure of Commission Position of Indemnification for Securities Act
Liabilities 11
Organization Within Last Five Years 11
Description of Business 11
Plan of Operations 16
Description of Property 18
Certain Relationships and Related Transactions 18
Market for Common Equity and Related Stockholder Matters 18
Executive Compensation 19
Financial Statements 19
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure 19
SUMMARY
PROSPECTIVE INVESTORS ARE URGED TO READ THIS PROSPECTUS IN ITS ENTIRETY.
We intend to be in the business of mineral property exploration. To date, we
have not conducted any exploration on our sole exploration target, the Cade
mineral claim located approximately 25 kilometers west northwest of Pemberton in
south-western British Columbia, Canada. We have an option to acquire a 90%
interest in the Cade claim from Gillian Wells of Tsawwassen, British Columbia
by:
a) paying $2,500 to Wells by March 31, 2005 (paid);
b) incurring $5,000 in exploration expenditures on the Cade claim by
December 31, 2005; and
c) incurring an additional $10,000 in expenditures on the Cade claim by
December 31, 2006
Our objective is to conduct mineral exploration activities on the Cade claim in
order to assess whether it possesses economic reserves of copper, zinc and
silver. We have not yet identified any economic mineralization on the Cade
claim. Our proposed exploration program is designed to search for an economic
mineral deposit.
We were incorporated on November 17, 2004, under the laws of the state of
Nevada. Our principal offices are located at 470 Granville Street, Suite 1120,
Vancouver, British Columbia Canada V6C 1V5. Our telephone number is (604)
713-8010.
THE OFFERING:
SECURITIES BEING OFFERED Up to 2,540,000 shares of common stock.
OFFERING PRICE The selling shareholders will sell our shares
at $0.10 per share until our shares are quoted
on the OTC Bulletin Board, and thereafter at
prevailing market prices or privately
negotiated prices. We cannot ensure that our
shares will be quoted on the OTC Bulletin
Board. We determined this offering price based
upon the price of the last sale of our common
stock to investors.
TERMS OF THE OFFERING The selling shareholders will determine when
and how they will sell the common stock offered
in this prospectus.
TERMINATION OF THE OFFERING The offering will conclude when all of the
2,540,000 shares of common stock have been
sold, the shares no longer need to be
registered to be sold or we decide to terminate
the registration of the shares.
SECURITIES ISSUED AND
TO BE ISSUED 5,540,000 shares of our common stock are issued
and outstanding as of the date of this
prospectus. All of the common stock to be sold
under this prospectus will be sold by existing
shareholders.
USE OF PROCEEDS We will not receive any proceeds from the sale
of the common stock by the selling
shareholders.
1
SUMMARY FINANCIAL INFORMATION
BALANCE SHEET
March 31, 2005
Cash $27,672
Total Assets $27,672
Liabilities $ 0
Total Stockholders' Equity $27,672
STATEMENT OF OPERATIONS
From Incorporation on
November 17, 2004 to March 31, 2005
Revenue $ 0
Net Loss and Deficit $(4,328)
RISK FACTORS
An investment in our common stock involves a high degree of risk. The following
is a discussion of all of the material risks relating to the offering and our
business. You should carefully consider the risks described below and the other
information in this prospectus before investing in our common stock. If any of
the following risks occur, our business, operating results and financial
condition could be seriously harmed. The trading price of our common stock could
decline due to any of these risks, and you may lose all or part of your
investment.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
Our current operating funds are less than necessary to complete all intended
exploration of the Cade claim, and therefore we will need to obtain additional
financing in order to complete our business plan. We currently do not have any
operations and we have no income. As well, we will not receive any funds from
this registration.
Our business plan calls for significant expenses in connection with the
exploration of the Cade claim. While we have sufficient funds to conduct the
recommended phase one and two exploration programs on the claim, which is
estimated to cost $5,000 each, we will need additional funds to complete the
phase three program, which is estimated in total to cost $40,000. Even after
completing these three phases of exploration, we will not know if we have a
commercially viable mineral deposit.
We will require additional financing to sustain our business operations if we
are not successful in earning revenues once exploration is complete. We do not
currently have any arrangements for financing and may not be able to find such
financing if required.
BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF
BUSINESS FAILURE.
We have not yet commenced exploration on the Cade claim. Accordingly, we have no
way to evaluate the likelihood that our business will be successful. We were
incorporated on November 17, 2004 and to date have been involved primarily in
organizational activities and the acquisition of an interest in the Cade claim.
We have not earned any revenues as of the date of this prospectus. Potential
investors should be aware of the difficulties normally encountered by new
mineral exploration companies and the high rate of failure of such enterprises.
The likelihood of success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
exploration of the mineral properties that we plan to undertake. These potential
2
problems include, but are not limited to, unanticipated problems relating to
exploration, and additional costs and expenses that may exceed current
estimates.
Prior to completion of our exploration stage, we anticipate that we will incur
increased operating expenses without realizing any revenues. We therefore expect
to incur significant losses into the foreseeable future. We recognize that if we
are unable to generate significant revenues from development of the Cade
property and the production of minerals from the claim, we will not be able to
earn profits or continue operations.
There is no history upon which to base any assumption as to the likelihood that
we will prove successful, and it is doubtful that we will generate any operating
revenues or ever achieve profitable operations. If we are unsuccessful in
addressing these risks, our business will most likely fail.
BECAUSE OF THE SPECULATIVE NATURE OF EXPLORATION OF MINING PROPERTIES, THERE IS
A SUBSTANTIAL RISK THAT OUR BUSINESS WILL FAIL.
The search for valuable minerals as a business is extremely risky. The
likelihood of our mineral claim containing economic mineralization or reserves
of gold is extremely remote. Exploration for minerals is a speculative venture
necessarily involving substantial risk. In all probability, the Cade claim does
not contain any reserves and funds that we spend on exploration will be lost. As
well, problems such as unusual or unexpected formations and other conditions are
involved in mineral exploration and often result in unsuccessful exploration
efforts. In such a case, we would be unable to complete our business plan.
BECAUSE OUR CONTINUATION AS A GOING CONCERN IS IN DOUBT, WE WILL BE FORCED TO
CEASE BUSINESS OPERATIONS UNLESS WE CAN GENERATE PROFIT IN THE FUTURE.
The report of our independent accountant to our audited financial statements for
the period ended March 31, 2005 indicates that there are a number of factors
that raise substantial doubt about our ability to continue as a going concern.
Such factors identified in the report are that we have no source of revenue and
our dependence upon obtaining adequate financing. If we are not able to continue
as a going concern, it is likely investors will lose all of their investment.
BECAUSE OF THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION, THERE IS A RISK
THAT WE MAY INCUR LIABILITY OR DAMAGES, WHICH COULD HURT OUR FINANCIAL POSITION
AND POSSIBLY RESULT IN THE FAILURE OF OUR BUSINESS.
The search for valuable minerals involves numerous hazards. As a result, we may
become subject to liability for such hazards, including pollution, cave-ins and
other hazards against which we cannot insure or against which we may elect not
to insure. The payment of such liabilities may have a material adverse effect on
our financial position.
EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON THE CADE CLAIM, WE
MAY NOT BE ABLE TO SUCCESSFULLY COMMENCE COMMERCIAL PRODUCTION.
The Cade claim does not contain any known bodies of mineralization. If our
exploration programs are successful in establishing gold of commercial tonnage
and grade, we will require additional funds in order to place the Cade claim
into commercial production. We may not be able to obtain such financing.
BECAUSE OUR SOLE DIRECTOR OWNS 54.15% OF OUR OUTSTANDING COMMON STOCK, HE COULD
MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO OTHER
MINORITY SHAREHOLDERS.
3
Our director owns approximately 54.15% of the outstanding shares of our common
stock. Accordingly, he will have a significant influence in determining the
outcome of all corporate transactions or other matters, including mergers,
consolidations, and the sale of all or substantially all of our assets. He will
also have the power to prevent or cause a change in control. The interests of
our director may differ from the interests of the other stockholders and thus
result in corporate decisions that are disadvantageous to other shareholders.
BECAUSE OUR PRESIDENT HAS OTHER BUSINESS INTERESTS, HE MAY NOT BE ABLE OR
WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATIONS,
CAUSING OUR BUSINESS TO FAIL.
Our president, Mr. Richard Novis, intends to devote approximately 15% of his
business time, or approximately six hours per week, providing his services to
us. While Mr. Novis presently possesses adequate time to attend to our
interests, it is possible that the demands on Mr. Novis from his other
obligations could increase with the result that he would no longer be able to
devote sufficient time to the management of our business.
BECAUSE OUR SOLE DIRECTOR HAS NO TECHNICAL EXPERIENCE IN MINERAL EXPLORATION,
OUR BUSINESS HAS A HIGHER RISK OF FAILURE.
Our sole director has no technical training in the field of geology and
specifically in the areas of exploring for, starting and operating a mine. As a
result, we may not be able to recognize and take advantage of potential
acquisition and exploration opportunities in the sector without the aid of
qualified geological consultants. As well, with no direct training or
experience, our management may not be fully aware of the specific requirements
related to working in this industry. His decisions and choices may not be well
thought out and our operations, earnings and ultimate financial success may
suffer irreparable harm as a result.
IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, SHAREHOLDERS MAY BE UNABLE TO
SELL THEIR SHARES AND WILL INCUR LOSSES AS A RESULT.
There is currently no market for our common stock and no certainty that a market
will develop. We currently plan to apply for listing of our common stock on the
over the counter bulletin board upon the effectiveness of the registration
statement, of which this prospectus forms a part. Our shares may never trade on
the bulletin board. If no market is ever developed for our shares, it will be
difficult for shareholders to sell their stock. In such a case, shareholders may
find that they are unable to achieve benefits from their investment.
A PURCHASER IS PURCHASING PENNY STOCK WHICH LIMITS HIS OR HER ABILITY TO SELL
THE STOCK.
The shares offered by this prospectus constitute penny stock under the Exchange
Act. The shares will remain penny stock for the foreseeable future. The
classification of penny stock makes it more difficult for a broker-dealer to
sell the stock into a secondary market, thus limiting investment liquidity. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in our company will be subject to rules 15g-1 through 15g-10 of the
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results may differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us
described in the "Risk Factors" section and elsewhere in this prospectus.
4
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling shareholders.
DETERMINATION OF OFFERING PRICE
The selling shareholders will sell our shares at $0.10 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices. We cannot ensure that our shares will be
quoted on the OTC Bulletin Board. We determined this offering price, based upon
the price of the last sale of our common stock to investors.
DILUTION
The common stock to be sold by the selling shareholders is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to our
existing shareholders.
SELLING SECURITYHOLDERS
The selling shareholders named in this prospectus are offering all of the
2,540,000 shares of common stock offered through this prospectus. These shares
were acquired from us in private placements that were exempt from registration
under Regulation S of the Securities Act of 1933. The shares include the
following:
1. 2,500,000 shares of our common stock that the selling shareholders
acquired from us in an offering that was exempt from registration
under Regulation S of the Securities Act of 1933 and was completed on
December 22, 2004;
2. 40,000 shares of our common stock that the selling shareholders
acquired from us in an offering that was exempt from registration
under Regulation S of the Securities Act of 1933 and was completed on
January 17, 2004;
The following table provides as of the date of this prospectus, information
regarding the beneficial ownership of our common stock held by each of the
selling shareholders, including:
1. the number of shares owned by each prior to this offering;
2. the total number of shares that are to be offered for each;
3. the total number of shares that will be owned by each upon completion
of the offering; and
4. the percentage owned by each upon completion of the offering.
Total Number of
Shares to be
Offered for Total Shares Percent Owned
Shares Owned Selling Owned Upon Upon
Prior to this Shareholders Completion of Completion of
Name of Selling Stockholder Offering Account this Offering this Offering
- --------------------------- -------- ------- ------------- -------------
Dimosthenis (Jimmy) Bekropoulos
1349 Shannon Avenue, SW
Calgary, Alberta T2Y 2Z5 200,000 200,000 Nil Nil
Rob Fetter
1918 34th Avenue, SW
Calgary, Alberta T2T 2C1 200,000 200,000 Nil Nil
William (Bill) Brown
73 Glamis Drive, Suite 308
Calgary, Alberta T3E 6R2 150,000 150,000 Nil Nil
5
Tracy Hemeyer
2827 26th Street, SW
Calgary, Alberta T3E 2B1 150,000 150,000 Nil Nil
Tony Braile
2827 26th Street, SW
Calgary, Alberta T3E 2B1 150,000 150,000 Nil Nil
Kent Pozzo
30 Oakbury Place, SW
Calgary, Alberta T2V 4A2 150,000 150,000 Nil Nil
Dimos Bekropoulos
20 Woodfield Green, SW
Calgary, Alberta T2W 3T9 100,000 100,000 Nil Nil
Leith Rusnak
25 Bridlewood Crescent, SW
Calgary, Alberta T2X 3N1 100,000 100,000 Nil Nil
Stavroula M. Tsaprailis
5 Coach Court, SW
Calgary, Alberta T3H 4P7 100,000 100,000 Nil Nil
Tyler Tanner
2339 53rd Avenue, SW
Calgary, Alberta, T3E 1L1 100,000 100,000 Nil Nil
Lampros Tsaprailis
5 Coach Court, SW
Calgary, Alberta T3H 4P7 100,000 100,000 Nil Nil
Yulin Yang
342 15th Avenue SW, Suite 803
Calgary, Alberta 100,000 100,000 Nil Nil
Kathy Tsambouris
48 Selkirk Drive, SW
Calgary, Alberta T2W 0M2 100,000 100,000 Nil Nil
George Liaridis
703 75th Avenue, NW
Calgary, Alberta T2K 0R1 100,000 100,000 Nil Nil
Toula Liaridis
703 75th Avenue, NW
Calgary, Alberta T2K 0R1 100,000 100,000 Nil Nil
Marge Rusnak
25 Bridlewood Crescent, SW
Calgary, Alberta T2X 3N1 80,000 80,000 Nil Nil
Andrew Austin
3029 27th Street, SW
Calgary, Alberta T3E 2G6 80,000 80,000 Nil Nil
Chad Rusnak
4975 130th Avenue SW, Ste 4319
Calgary, Alberta T2Z 4M5 75,000 75,000 Nil Nil
Nabil Shlah
640 Strathcona Drive, SW
Calgary, Alberta T3H 1K4 75,000 75,000 Nil Nil
Chad Hason
3029 27th Street, SW
Calgary, Alberta T3E 2G6 70,000 70,000 Nil Nil
Nick Bekos
20 Woodfield Green, SW
Calgary, Alberta T2W 3T9 50,000 50,000 Nil Nil
John Rudin
101 Cougarstone Manor, SW
Calgary, Alberta T3H 5N5 50,000 50,000 Nil Nil
Heather Williams
215 86th Avenue SE, Suite 1206
Calgary, Alberta T2J 4H1 50,000 50,000 Nil Nil
6
Matthew Leith
484 Queen Charlotte Road, SE
Calgary, Alberta 40,000 40,000 Nil Nil
Leah Rusnak
91 Woodborough Crescent, SW
Calgary, Alberta T2W 5A1 30,000 30,000 Nil Nil
Charles Kayihura
351 West Ranch Place, SW
Calgary, Alberta T3H 5C3 10,000 10,000 Nil Nil
Dana Peck
56 Woodstock Road, SW
Calgary, Alberta T2W 5W2 10,000 10,000 Nil Nil
Dina Hasapes
351 West Ranch Place, SW
Calgary, Alberta T3H 5C3 10,000 10,000 Nil Nil
Wenhui Ruan
1340 University Drive, NW
Calgary, Alberta T2N 3Y7 10,000 10,000 Nil Nil
Each of the above shareholders beneficially owns and has sole voting and
investment over all shares or rights to the shares registered in his or her
name. The numbers in this table assume that none of the selling shareholders
sells shares of common stock not being offered in this prospectus or purchases
additional shares of common stock, and assumes that all shares offered are sold.
The percentages are based on 5,540,000 shares of common stock outstanding on the
date of this prospectus.
None of the selling shareholders:
(1) has had a material relationship with us other than as a shareholder at
any time within the past three years;
(2) has ever been one of our officers or directors; or
(3) is a broker-dealer or affiliate of a broker dealer.
PLAN OF DISTRIBUTION
The selling shareholders may sell some or all of their common stock in one or
more transactions, including block transactions. Such sales may occur in private
transactions arranged by each selling shareholder in accordance with resale
exemptions in applicable jurisdictions or through the facilities of the OTC
Bulletin Board, if we successfully obtain a quotation for our stock, of which
there is no guarantee.
The selling shareholders will sell our shares at $0.10 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices. We cannot ensure that our shares will be
quoted on the OTC Bulletin Board.
We determined this offering price arbitrarily based upon the price of the last
sale of our common stock to investors. The shares may also be sold in compliance
with the Securities and Exchange Commission's Rule 144.
We are bearing all costs relating to the registration of the common stock. These
are estimated to be $7,000. The selling shareholders, however, will pay any
commissions or other fees payable to brokers or dealers in connection with any
sale of the common stock.
The selling shareholders must comply with the requirements of the Securities Act
and the Exchange Act in the offer and sale of the common stock. In particular,
during such times as the selling shareholders may be deemed to be engaged in a
7
distribution of the common stock, and therefore be considered to be an
underwriter, they must comply with applicable law and may, among other things:
1. Not engage in any stabilization activities in connection with our
common stock;
2. Furnish each broker or dealer through which common stock may be
offered, such copies of this prospectus, as amended from time to time,
as may be required by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under
the Exchange Act.
The Securities Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the Commission, which:
* contains a description of the nature and level of risk in the market
for penny stocks in both public offerings and secondary trading;
* contains a description of the broker's or dealer's duties to the
customer and of the rights and remedies available to the customer with
respect to a violation of such duties;
* contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" prices for penny stocks and the significance
of the spread between the bid and ask price;
* contains a toll-free telephone number for inquiries on disciplinary
actions;
* defines significant terms in the disclosure document or in the conduct
of trading penny stocks; and
* contains such other information and is in such form (including
language, type, size, and format) as the Commission shall require by
rule or regulation;
The broker-dealer also must provide, prior to proceeding with any transaction in
a penny stock, the customer:
* with bid and offer quotations for the penny stock;
* details of the compensation of the broker-dealer and its salesperson
in the transaction;
* the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
* monthly account statements showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
those securities.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings. Our address for service
of process in Nevada is 7251 West Lake Mead Blvd Suite 300 Las Vegas, NV 89128.
8
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our executive officer and director and his age as of the date of this prospectus
is as follows:
DIRECTORS:
Name of Director Age
- ---------------- ---
Richard Novis 55
EXECUTIVE OFFICERS:
Name of Officer Age Office
- --------------- --- ------
Richard Novis 55 President, Secretary, Treasurer
and Chief Executive Officer
BIOGRAPHICAL INFORMATION
Set forth below is a brief description of the background and business experience
of our executive officer and director for the past five years.
MR. RICHARD NOVIS has acted as our president, secretary, treasurer, chief
executive officer and as a director since our incorporation on November 17,
2004. Mr. Novis is a graduate of the Burnaby based British Columbia Institute of
Technology where he earned a diploma in financial administration. He also
completed additional courses in economics, marketing and human resources at the
University of British Columbia in Vancouver and Simon Fraser University in
Burnaby. From 1999 to present, Mr. Novis has acted as managing director of Micro
Cap et al, a private Vancouver, British Columbia based business involved in
providing marketing, promotion and investor relations services to private and
reporting companies. From July 2004 to present, he has also acted as president,
secretary, treasurer and a director of International Oil & Gas Inc., a United
States reporting company involved in oil and gas exploration.
Mr. Novis does not have any professional training or technical credentials in
the exploration, development and operation of mines.
Mr.Novis intends to devote approximately 15% of his business time to our
affairs.
TERM OF OFFICE
Our sole director is appointed for a one-year term to hold office until the next
annual general meeting of our shareholders or until removed from office in
accordance with our bylaws. Our sole officer is appointed by our board of
directors and hold office until removed by the board.
SIGNIFICANT EMPLOYEES
We have no significant employees other than the officers and directors described
above.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides the names and addresses of each person known to us
to own more than 5% of our outstanding common stock as of the date of this
prospectus, and by the officers and directors, individually and as a group.
Except as otherwise indicated, all shares are owned directly.
Amount of
Name and address beneficial Percent
Title of Class of beneficial owner ownership of class
- -------------- ------------------- --------- --------
Common stock Richard Novis 3,000,000 54.15%
470 Granville Street, Suite 1120
Vancouver, B.C., V6C 1V5
Common stock All officers and directors as a 3,000,000 54.15%
group that consists of two people
The percent of class is based on 5,540,000 shares of common stock issued and
outstanding as of the date of this prospectus.
9
DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital stock consists of 75,000,000 shares of common stock at a
par value of $0.001 per share.
COMMON STOCK
As of July 27, 2005, there were 5,540,000 shares of our common stock issued and
outstanding that are held by 30 stockholders of record. Holders of our common
stock are entitled to one vote for each share on all matters submitted to a
stockholder vote. Holders of common stock do not have cumulative voting rights.
Therefore, holders of a majority of the shares of common stock voting for the
election of directors can elect all of the directors. Two persons present and
being, or representing by proxy, shareholders are necessary to constitute a
quorum at any meeting of our stockholders. A vote by the holders of a majority
of our outstanding shares is required to effectuate certain fundamental
corporate changes such as liquidation, merger or an amendment to our articles of
incorporation.
Holders of common stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available funds. In the
event of a liquidation, dissolution or winding up, each outstanding share
entitles its holder to participate pro rata in all assets that remain after
payment of liabilities and after providing for each class of stock, if any,
having preference over the common stock.
Holders of our common stock have no pre-emptive rights, no conversion rights and
there are no redemption provisions applicable to our common stock.
PREFERRED STOCK
We do not have an authorized class of preferred stock.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
SHARE PURCHASE WARRANTS
We have not issued and do not have outstanding any warrants to purchase shares
of our common stock.
OPTIONS
We have not issued and do not have outstanding any options to purchase shares of
our common stock.
CONVERTIBLE SECURITIES
We have not issued and do not have outstanding any securities convertible into
shares of our common stock or any rights convertible or exchangeable into shares
of our common stock.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
10
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant. Nor was any such person
connected with the registrant as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
Joseph I. Emas has provided an opinion on the validity of our common stock.
The financial statements included in this prospectus and the registration
statement have been audited by Armando C. Ibarra, Certified Public Accountants,
to the extent and for the periods set forth in their report appearing elsewhere
in this document and in the registration statement filed with the SEC, and are
included in reliance upon such report given upon the authority of said firm as
experts in auditing and accounting.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Our directors and officers are indemnified as provided by the Nevada Revised
Statutes and our Bylaws. These provisions provide that we shall indemnify a
director or former director against all expenses incurred by him by reason of
him acting in that position. The directors may also cause us to indemnify an
officer, employee or agent in the same fashion.
We have been advised that in the opinion of the Securities and Exchange
Commission indemnification for liabilities arising under the Securities Act is
against public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless in
the opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction. We will then be governed by the
court's decision.
ORGANIZATION WITHIN LAST FIVE YEARS
We were incorporated on November 17, 2004 under the laws of the state of Nevada.
On that date, Richard Novis was appointed as our sole director. As well, Mr.
Novis was appointed as our president, secretary, treasurer and chief executive
officer.
DESCRIPTION OF BUSINESS
IN GENERAL
We intend to commence operations as an exploration stage company. We will be
engaged in the acquisition and exploration of mineral properties with a view to
exploiting any mineral deposits we discover. We own the option to acquire a 90%
interest in one mineral claim known as the Cade claim. In order to exercise this
option, we must:
a) pay $2,500 to Wells by March 31, 2005 (paid);
b) incur $5,000 in exploration expenditures on the Cade claim by December
31, 2005; and
c) incur an additional $10,000 in expenditures on the Cade claim by
December 31, 2006
If we are in default of any of the above requirements, Ms. Wells cannot
terminate the option agreement until she has first provided us with 60 days
written notice of the default and we have failed to cure the default during that
notice period.
11
There is no assurance that a commercially viable mineral deposit exists on the
Cade claim. We do not have any current plans to acquire interests in additional
mineral properties, though we may consider such acquisitions in the future.
We are not a "blank check" company as defined in Rule 419 of Regulation C of the
Securities Act of 1933. Rule 419 and the corresponding adopting release define a
blank check company as a company that has no specific business plan, or merely
creates the appearance that it has a specific business plan. Our business plan,
as stated herein, is to conduct the geologist recommended phase one and two
exploration programs on the Cade claim, as well as any additional exploration
work recommended by the independent geologist who oversees these first two
phases. In addition, we intend to be engaged in the acquisition and exploration
of additional mineral properties.
We do not have any intention of entering into a merger or acquisition within the
next twelve months.
Mineral property exploration is typically conducted in phases. Each subsequent
phase of exploration work is recommended by a geologist based on the results
from the most recent phase of exploration. We have not yet commenced the initial
phase of exploration on the Cade claim. Once we have completed each phase of
exploration, we will make a decision as to whether or not we proceed with each
successive phase based upon the analysis of the results of that program. Our
director will make this decision based upon the recommendations of the
independent geologist who oversees the program and records the results.
Our plan of operation is to conduct exploration work on the Cade claim in order
to ascertain whether it possesses economic quantities of copper, zinc and
silver. There can be no assurance that an economic mineral deposit exists on the
Cade claim until appropriate exploration work is completed.
Even if we complete our proposed exploration programs on the Cade claim and we
are successful in identifying a mineral deposit, we will have to spend
substantial funds on further drilling and engineering studies before we will
know if we have a commercially viable mineral deposit.
CADE CLAIM OPTION AGREEMENT
On January 4, 2005, we entered into a mineral property option agreement with
Gillian Wells of Tsawassen, British Columbia, whereby she granted us the option
to acquire a 90% undivided right title and interest in one mineral claim located
in the Lillooet Mining Division of British Columbia, Canada. In order to
exercise the option, we must
a) pay $2,500 to Wells by March 31, 2005 (paid);
b) incur $5,000 in exploration expenditures on the Cade claim by December
31, 2005; and
c) incur an additional $10,000 in expenditures on the Cade claim by
December 31, 2006
DESCRIPTION, LOCATION AND ACCESS
The Cade claim is located south of Lillooet River approximately 25 kilometres
west northwest of Pemberton in southwestern British Columbia. It lies just off a
paved highway immediately south of the Pemberton Meadows on Lillooet River, in
British Columbia's southern Coast Mountains. The property is approximately 115
kilometres north of Vancouver. It can be accessed by two wheel drive vehicle in
about three hours from Vancouver via the Sea-to-Sky Highway 99: north along Howe
Sound from Vancouver's North Shore to Squamish, and then through the winter
resort town of Whistler to Pemberton. Pemberton is a fully-serviced community of
12
some 3,000 people and through which the BC Rail mainline runs as does major
power transmission. Local access to the property is only practical via
helicopter, but a year-round helicopter base in nearby Pemberton is only 15
minutes flight-time away. Accordingly, every time that we conduct exploration on
the Cade property, we will incur $1,000 in helicopter costs in order to gain
access to it. We have included this cost in our exploration budgets. This will
not have an impact on the frequency of our exploration phases.
Lillooet River is at an elevation of about 850 feet, and the ridge tops and
peaks near the east side of the property are in excess of 7,000 feet, so the
intervening slopes are commonly steep. Lower slopes heavily forested and mantled
by thick glacial drift, although local cliffs and creek canyons afford good rock
exposure. On the higher slopes, the tree line varies in elevation from about
5,000 to 6,000 feet, and bedrock exposure is generally excellent.
The vegetation of the Cade claim is typical rain forest found in the
coastal-interior ranges of British Columbia. There is a mix of cedar, hemlock,
spruce trees with alder, willow and cottonwood on old roads and poorly drained
areas. Undergrowth brush is typical with salal, devil's club and assorted berry
bushes. Climate is subtly changed from the lower mainland area with longer,
colder winters and warmer summers. The most snow observed on the tops of the
hills was four meters in late January. We will have access to the claims for
exploration from approximately April to November each year.
TITLE TO THE CADE CLAIM
The Cade property consists of one mineral claim comprising 500 hectares. A
"mineral claim" refers to a specific section of land over which a title holder
owns rights to explore the ground and subsurface, and extract minerals. Title to
the Cade claim is registered in the name of Gillian Wells. She has provided us
with an absolute bill of sale with respect to the property, with which we can
register a 90% interest in our name following the exercise of the option. If we
fail to exercise the option, we must return the absolute bill of sale to her and
we will not own any interest in the property.
Because title to the Cade claim is not registered in our name, we may incur
significant legal expenses if prior to us exercising the option, Ms. Wells
becomes bankrupt or transfers the claims to a third party without our knowledge.
Claim details are as follows:
Claim Name Record Number Expiry Date
---------- ------------- -----------
Cade 414552 August 18, 2005
The claim was created on August 28, 2004 and is in good standing until August
28, 2005. This means that the claim will expire on August 28, 2005 unless we
complete at least $100 worth of exploration work on the claim by that date. If
this required exploration work is incurred, then the deadline is extended to
August 28, 2006. In subsequent years, we must spend at least $200 on the claim
to extend the expiry date by one year.
MINERALIZATION
The area of the Cade claim is mapped as being underlain by Cretaceous - Jurassic
Age plutonic rocks, that is, rocks that vary from 65 to 206 million years old.
Plutonic rocks are created when a mass of molten rock cools below the earth's
surface. Volcanic boulders containing sulphides were located in drainages south
of the claim probably represent rock types on the claim. Sulphides are compounds
containing sulphur and one additional element, which are often associated with
valuable mineralization.
13
EXPLORATION HISTORY
The Cade clam was staked following initial field investigations that discovered
mineralized boulders down slope from the property. Several unexplained stream
sediment anomalies are also present throughout the drainages in the area of the
claim. Extensive research uncovered no previous property-scale work that had
been done in the immediate area of the claim. There is no assurance that a
commercially viable mineral deposit exists on the Cade property
GEOLOGICAL REPORT
We retained Mr. George Nicholson, a professional geologist, to complete an
evaluation of the Cade claim and to prepare a geology report on the claim.
Mr. Nicholson is a professional geologist who graduated from the University of
British Columbia with a bachelor's degree in geology in 1986. Since his
graduation, Mr. Nicholson has been continuously employed as a geologist. He is a
member of the Association of Professional Engineers and Geoscientists of British
Columbia and a Fellow of the Royal Geographic Society.
Based on his review, Mr. Nicholson concludes that the Cade claim warrants
further exploration due to the geochemistry and inferred geological continuity,
as well as the lack of previous exploration.
Mr. Nicholson recommends an initial exploration program consisting of two
phases. The first phase would consist of geological mapping, prospecting and
geochemical sampling. Geological mapping involves plotting previous exploration
data relating to a property area on a map in order to determine the best
property locations to conduct subsequent exploration work. Prospecting involves
analyzing rocks on the property surface with a view to discovering indications
of potential mineralization. Geochemical sampling involves gathering rock and
soil samples from property areas with the most potential to host economically
significant mineralization. All samples gathered are sent to a laboratory where
they are crushed and analysed for metal content.
We intend to commence the phase one program in August 2005 and expect that the
program will take one month to complete. We will pay for the costs of the phase
one program from existing cash on hand.
The first phase is estimated to cost $5,000 as described below.
BUDGET - PHASE I
Geologist 3 day @ $400/day $ 1,200
Geotechnician 3 days @ $350/day $ 1,050
Equipment rental 1 x 4 wheeldrive vehicle $ 300
Fuel, Food, Field Supplies $ 400
Assays 20 @ $20 each $ 400
Helicopter 1 hour @ $1,000 $ 1,000
Report $ 500
Filing Fees $ 150
-------
TOTAL $ 5,000
=======
The second phase would consist of a follow-up of the initial stage geological
mapping and include a detailed geology. This exploration will focus on areas on
the property that are identified in phase one as containing mineralization. We
will gather additional rock samples from the property surface from these areas
and have our consulting geologist determine whether there is a geological
explanation to explain the patterns of mineralization found on the property. The
second phase would cost approximately $5,000 as outlined below.
14
BUDGET - PHASE II
Follow-up Geochemical Sampling and Detailed Geology $ 5,000
We intend to commence the phase two program in October of 2005 and expect that
the program will take one month to complete. We will pay for the costs of the
phase two program from existing cash on hand.
After the completion of the phase two exploration program, we will have our
consulting geologist prepare a report discussing the results and conclusions of
the first two phases of exploration. We will also ask him to provide us with a
recommendation for additional exploration work on the Cade property, which will
include a proposed budget. Until we complete the phase one and two programs, we
will not know what the phase three exploration program will entail. However, we
expect that we will need to raise additional financing to cover the costs of the
phase three program through the sale of our common stock, although we currently
do not have any specific financing arranged. Subject to financing, we expect to
commence a third phase of exploration on the Cade property in the spring of
2006.
COMPLIANCE WITH GOVERNMENT REGULATION
We will be required to comply with all regulations, rules and directives of
governmental authorities and agencies applicable to the exploration of minerals
in Canada generally, and in British Columbia specifically.
We will have to sustain the cost of reclamation and environmental mediation for
all exploration and development work undertaken. The amount of these costs is
not known at this time as we do not know the extent of the exploration program
that will be undertaken beyond completion of the currently planned work
programs. Because there is presently no information on the size, tenor, or
quality of any resource or reserve at this time, it is impossible to assess the
impact of any capital expenditures on earnings or our competitive position in
the event a potentially economic deposit is discovered.
If we enter into production, the cost of complying with permit and regulatory
environment laws will be greater than in the exploration phases because the
impact on the project area is greater. Permits and regulations will control all
aspects of any production program if the project continues to that stage because
of the potential impact on the environment. Examples of regulatory requirements
include:
- Water discharge will have to meet water standards;
- Dust generation will have to be minimal or otherwise re-mediated;
- Dumping of material on the surface will have to be re-contoured and
re-vegetated;
- An assessment of all material to be left on the surface will need to
be environmentally benign;
- Ground water will have to be monitored for any potential contaminants;
- The socio-economic impact of the project will have to be evaluated and
if deemed negative, will have to be re-mediated; and
- There will have to be an impact report of the work on the local fauna
and flora.
Because there will not be any appreciable disturbance to the land during the
phase one and two exploration programs on the Cade claim, we will not have to
seek any government approvals prior to conducting exploration.
15
EMPLOYEES
We have no employees as of the date of this prospectus other than our sole
director.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have not incurred any other research or development expenditures since our
incorporation.
SUBSIDIARIES
We do not have any subsidiaries.
PATENTS AND TRADEMARKS
We do not own, either legally or beneficially, any patents or trademarks.
REPORTS TO SECURITY HOLDERS
Although we are not required to deliver a copy of our annual report to our
security holders, we will voluntarily send a copy of our annual report,
including audited financial statements, to any registered shareholder who
requests it. We will not be a reporting issuer with the Securities and Exchange
Commission until our registration statement on Form SB-2 is declared effective.
We have filed a registration statement on Form SB-2, under the Securities Act of
1933, with the Securities and Exchange Commission with respect to the shares of
our common stock offered through this prospectus. This prospectus is filed as a
part of that registration statement, but does not contain all of the information
contained in the registration statement and exhibits. Statements made in the
registration statement are summaries of the material terms of the referenced
contracts, agreements or documents of the company. We refer you to our
registration statement and each exhibit attached to it for a more detailed
description of matters involving the company, and the statements we have made in
this prospectus are qualified in their entirety by reference to these additional
materials. You may inspect the registration statement, exhibits and schedules
filed with the Securities and Exchange Commission at the Commission's principal
office in Washington, D.C. Copies of all or any part of the registration
statement may be obtained from the Public Reference Section of the Securities
and Exchange Commission, 100 F Street NE, Washington, D.C. 20549. Please call
the Commission at 1-800-SEC-0330 for further information on the operation of the
public reference rooms. The Securities and Exchange Commission also maintains a
web site at http://www.sec.gov that contains reports, proxy statements and
information regarding registrants that file electronically with the Commission.
This site contains information statements and other information regarding
issuers that file electronically with the Commission. Our registration statement
and the referenced exhibits can also be found on this site.
PLAN OF OPERATIONS
Our plan of operation for the next twelve months is to complete the recommended
phase one and two exploration programs on the Cade claim consisting of a
geological mapping, prospecting and geochemical sampling. We anticipate that
these exploration programs will each cost approximately $5,000. To date, we have
not commenced exploration on the Cade claim.
We plan to commence the phase one exploration program on the Cade claim in
August of 2005. The program should take approximately up to a one month to
complete. We will then undertake the phase two work program during October of
2005. This program will take approximately one month to complete. We do not have
any verbal or written agreement regarding the retention of any qualified
engineer or geologist for these exploration programs, though Mr. George
Nicholson has indicated that he will oversee all exploration if he is available.
16
Our budgets for the phase one and two exploration programs are as follows:
BUDGET - PHASE I
Geologist 3 day @ $400/day $ 1,200
Geotechnician 3 days @ $350/day $ 1,050
Equipment rental 1 x 4 wheeldrive vehicle $ 300
Fuel, Food, Field Supplies $ 400
Assays 20 @ $20 each $ 400
Helicopter 1 hour @ $1,000 $ 1,000
Report $ 500
Filing Fees $ 150
-------
TOTAL $ 5,000
=======
BUDGET - PHASE II
Follow-up Geochemical Sampling and Detailed Geology $ 5,000
We will finance the cost of the phase one and two exploration programs from cash
on hand.
After the completion of the phase two exploration program, we will have our
consulting geologist prepare a report discussing the results and conclusions of
the first two phases of exploration. We will also ask him to provide us with a
recommendation for additional exploration work on the Cade property, which will
include a proposed budget. Until we complete the phase one and two programs, we
will not know what the phase three exploration program will entail. However, we
expect that we will need to raise additional financing to cover the costs of the
phase three program through the sale of our common stock, although we currently
do not have any specific financing arranged. Subject to financing, we expect to
commence a third phase of exploration on the Cade property in the spring of
2006.
As well, we anticipate spending an additional $15,000 on administrative fees,
including fees payable in connection with the filing of this registration
statement and complying with reporting obligations. We will pay these expenses
from our current cash on hand.
Total expenditures over the next 12 months are therefore expected to be $25,000.
While we have enough funds to cover these anticipated expenses, we will require
additional funding in order to proceed with any additional recommended
exploration on the Cade claim following the completion of the phase two program.
We anticipate that additional funding will be in the form of equity financing
from the sale of our common stock or from director loans. We do not have any
arrangements in place for any future equity financing or loans.
RESULTS OF OPERATIONS FOR THE PERIOD FROM INCEPTION THROUGH MARCH 31, 2005
We have not earned any revenues from our incorporation on November 17, 2004 to
March 31, 2005. We do not anticipate earning revenues unless we enter into
commercial production on the Cade claim, which is doubtful. We have not
commenced the exploration stage of our business and can provide no assurance
that we will discover economic mineralization on the Cade claim, or if such
minerals are discovered, that we will enter into commercial production.
We incurred operating expenses in the amount of $4,328 for the period from our
inception on November 17, 2004 to March 31, 2005. These operating expenses were
comprised of mineral property acquisition costs of $2,500, general and
administration expenses of $1,700 and bank fees $128.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue exploration activities. For these reasons our auditors
believe that there is substantial doubt that we will be able to continue as a
going concern.
17
DESCRIPTION OF PROPERTY
We have the option to acquire a 90% interest in the Cade mineral claim. We do
not own any real property interest in the Cade claim or any other property.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None of the following parties has, since our date of incorporation, had any
material interest, direct or indirect, in any transaction with us or in any
presently proposed transaction that has or will materially affect us:
* Any of our directors or officers;
* Any person proposed as a nominee for election as a director;
* Any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to our
outstanding shares of common stock;
* Our sole promoter, Richard Novis;
* Any member of the immediate family of any of the foregoing persons.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
NO PUBLIC MARKET FOR COMMON STOCK
There is presently no public market for our common stock. We anticipate applying
for trading of our common stock on the over the counter bulletin board upon the
effectiveness of the registration statement of which this prospectus forms a
part. However, we can provide no assurance that our shares will be traded on the
bulletin board or, if traded, that a public market will materialize.
STOCKHOLDERS OF OUR COMMON SHARES
As of the date of this registration statement, we have 30 registered
shareholders.
RULE 144 SHARES
A total of 3,000,000 shares of our common stock are available for resale to the
public after December 7, 2005 in accordance with the volume and trading
limitations of Rule 144 of the Act. In general, under Rule 144 as currently in
effect, a person who has beneficially owned shares of a company's common stock
for at least one year is entitled to sell within any three month period a number
of shares that does not exceed the greater of:
1. 1% of the number of shares of the company's common stock then
outstanding which, in our case, will equal 55,400 shares as of the
date of this prospectus; or
2. the average weekly trading volume of the company's common stock during
the four calendar weeks preceding the filing of a notice on Form 144
with respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about the
company.
Under Rule 144(k), a person who is not one of the company's affiliates at any
time during the three months preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least two years, is entitled to sell
shares without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144.
As of the date of this prospectus, persons who are our affiliates hold all of
the 3,000,000 shares that may be sold pursuant to Rule 144.
18
REGISTRATION RIGHTS
We have not granted registration rights to the selling shareholders or to any
other persons.
DIVIDENDS
There are no restrictions in our articles of incorporation or bylaws that
prevent us from declaring dividends. The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:
1. we would not be able to pay our debts as they become due in the usual
course of business; or
2. our total assets would be less than the sum of our total liabilities
plus the amount that would be needed to satisfy the rights of
shareholders who have preferential rights superior to those receiving
the distribution.
We have not declared any dividends, and we do not plan to declare any dividends
in the foreseeable future.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below summarizes all compensation awarded to, earned by, or paid to
our executive officers by any person for all services rendered in all capacities
to us for the fiscal period from our inception on November 17, 2004 to March 31,
2005 and the subsequent period to the date of this prospectus.
ANNUAL COMPENSATION
Restr
Other Stock Options/ LTIP
Name Title Year Salary Bonus Comp. Awarded SARS(#) payouts($)
---- ----- ---- ------ ----- ----- ------- ------- ----------
Richard Novis Pres, Sec, 2005 $0 0 0 0 0 0
Treas, CEO,
& Dir
STOCK OPTION GRANTS
We have not granted any stock options to the executive officers since our
inception.
CONSULTING AGREEMENTS
We do not have any employment or consulting agreement with our directors or
officers. We do not pay Mr. Novis any amount for acting as a director of the
Company.
FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS:
1. Report of Independent Registered Public Accounting Firm;
2. Audited financial statements for the period ending March 31, 2005,
including:
a. Balance Sheets;
b. Statements of Operations;
c. Statements of Stockholders' Equity;
d. Statements of Cash Flows; and
e. Notes to Financial Statements
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
We have had no changes in or disagreements with our accountants.
19
ARMANDO C. IBARRA
Certified Public Accountants
A Professional Corporation
Armando C. Ibarra, C.P.A. Members of the California Society of
Certified Public Accountants
Armando Ibarra, Jr., C.P.A., JD Members of the of American Institute
of Certified Public Accountants
Registered with the Public Company
Accounting Oversight Board
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Northern Explorations, LTD.
(An Exploration Stage Company)
We have audited the accompanying balance sheet of Northern Explorations, LTD.
(An Exploration Stage Company) as of March 31, 2005, and the related statements
of operations, changes in stockholders' equity, and cash flows for the period of
November 17, 2004 (inception) through March 31, 2005 (year-end). These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these statements based on our audit.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United Stated). These 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 the Company as of March 31,
2005, and the results of its operations and its cash flows for the period of
November 17, 2004 (inception) through March 31, 2005, in conformity with US
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. Because of the Company's current
status and limited operations there is substantial doubt about its ability to
continue as a going concern. Management's plans in regard to its current status
are also described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Armando C. Ibarra
- ---------------------------------
Armando C. Ibarra, CPA
Chula Vista, Ca.
May 5, 2005
July 11, 2005 (revised)
F-1
NORTHERN EXPLORATIONS, LTD.
(An Exploration Stage Company)
Balance Sheet
(Stated in US Dollars)
- --------------------------------------------------------------------------------
As of
March 31,
2005
--------
ASSETS
CURRENT ASSETS
Cash $ 27,672
--------
TOTAL CURRENT ASSETS 27,672
--------
$ 27,672
========
LIABILITIES & STOCKHOLDERS' EQUITY
TOTAL LIABILITIES $ --
STOCKHOLDERS' EQUITY
Common stock, ($0.001 par value, 75,000,000 shares
authorized; 5,540,000 shares issued and outstanding
as of March 31, 2005 5,540
Additional paid-in capital 26,460
Retained earnings (deficit) (4,328)
--------
TOTAL STOCKHOLDERS' EQUITY 27,672
--------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 27,672
========
See Notes to Financial Statements
F-2
NORTHERN EXPLORATIONS, LTD.
(An Exploration Stage Company)
Statement of Operations
(Stated in US Dollars)
- --------------------------------------------------------------------------------
November 17, 2004
(inception)
through
March 31,
2005
-----------
REVENUES
Revenues $ --
-----------
TOTAL REVENUES --
GENERAL & ADMINISTRATIVE EXPENSES 4,328
-----------
INCOME (LOSS) BEFORE INCOME TAXES (4,328)
INCOME TAX BENEFIT (EXPENSE) --
-----------
NET INCOME (LOSS) $ (4,328)
===========
BASIC EARNINGS PER SHARE $ (0.00)
===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,532,889
===========
See Notes to Financial Statements
F-3
NORTHERN EXPLORATIONS, LTD.
(An Exploration Stage Company)
Statement of Changes in Stockholders' Equity
From November 17, 2004 (Inception) through March 31, 2005
(Stated in US Dollars)
- --------------------------------------------------------------------------------
Common Additional Retained
Common Stock Paid-in Earnings
Stock Amount Capital (Deficit) Total
----- ------ ------- --------- -----
BALANCE, NOVEMBER 17, 2004 -- $ -- $ -- $ -- $ --
Stock issued for cash on December 7, 2004
@ $0.001 per share 3,000,000 3,000 3,000
Stock issued for cash on December 22, 2004
@ $0.01 per share 2,500,000 2,500 22,500 25,000
Stock issued for cash on January 17, 2005
@ $0.10 per share 40,000 40 3,960 4,000
Net loss, March 31, 2005 (4,328) (4,328)
---------- ---------- ---------- ---------- ----------
BALANCE, MARCH 31, 2005 5,540,000 $ 5,540 $ 26,460 $ (4,328) $ 27,672
========== ========== ========== ========== ==========
See Notes to Financial Statements
F-4
NORTHERN EXPLORATIONS, LTD.
(An Exploration Stage Company)
Statement of Cash Flows
(Stated in US Dollars)
- --------------------------------------------------------------------------------
November 17, 2004
(inception)
through
March 31,
2005
--------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (4,328)
--------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (4,328)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES --
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 5,540
Additional paid-in capital 26,460
--------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 32,000
--------
NET INCREASE (DECREASE) IN CASH 27,672
CASH AT BEGINNING OF YEAR --
--------
CASH AT END OF YEAR $ 27,672
========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ --
========
Income Taxes $ --
========
See Notes to Financial Statements
F-5
NORTHERN EXPLORATIONS, LTD.
(An Exploration Stage Company)
Notes To Financial Statements
March 31, 2005
(Stated in U.S. Dollars)
NOTE 1. NATURE AND CONTINUANCE OF OPERATIONS
The Company was incorporated in the State of Nevada on November 17, 2004, and
its year-end is March 31st. The Company is an Exploration Stage Company as
defined by Statement of Financial Accounting Standard ("SFAS") No. 7. The
Company has acquired a mineral property located in the Nicola Mining Division,
British Columbia, Canada, and has not yet determined whether this property
contains reserves that are economically recoverable. The recoverability of
property expenditures will be dependent upon the discovery of economically
recoverable reserves, confirmation of the Company's interest in the underlying
property, the ability of the Company to obtain necessary financing to satisfy
the expenditure requirements under the property agreement and upon future
profitable production or proceeds for the sale thereof.
These financial statements have been prepared on a going concern basis. The
Company has incurred losses since inception resulting in an accumulated deficit
of $4,328 since inception and further losses are anticipated in the development
of its business raising substantial doubt about the Company's ability to
continue as a going concern. Its ability to continue as a going concern is
dependent upon the ability of the Company to generate profitable operations in
the future and/or to obtain the necessary financing to meet its obligations and
repay its liabilities arising from normal business operations when they come
due. Management has plans to seek additional capital through a private placement
and public offering of its common stock. The financial statements do not include
any adjustments relating to the recoverability and classification of recorded
assets, or the amounts of and classification of liabilities that might be
necessary in the event the Company cannot continue in existence.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period necessarily
involves the use of estimates, which have been made using careful judgment.
Actual results may vary from these estimates.
F-6
NORTHERN EXPLORATIONS, LTD.
(An Exploration Stage Company)
Notes To Financial Statements
March 31, 2005
(Stated in U.S. Dollars)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The financial statements have, in management's opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:
A) MINERAL PROPERTY COSTS
The Company has been in the exploration stage since its formation on November
17, 2004 and has not yet realized any revenues from its planned operations. It
is primarily engaged in the acquisition and exploration of mining properties.
Mineral property acquisition and exploration costs are charged to operations as
incurred. When it has been determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves,
the costs incurred to develop such property, are capitalized. Such costs will be
amortized using the units-of-production method over the estimated life of the
probable reserve.
B) USE OF ESTIMATES AND ASSUMPTIONS
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. In accordance with FASB 16 all
adjustments are normal and recurring.
C) FINANCIAL INSTRUMENTS
The carrying value of cash, and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. The Company's operations are in Canada and virtually all of its
assets and liabilities are giving rise to significant exposure to market risks
from changes in foreign currency rates. The Company's financial risk is the risk
that arises from fluctuations in foreign exchange rates and the degree of
volatility of these rates. Currently, the Company does not use derivative
instruments to reduce its exposure to foreign currency risk.
F-7
NORTHERN EXPLORATIONS, LTD.
(An Exploration Stage Company)
Notes To Financial Statements
March 31, 2005
(Stated in U.S. Dollars)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D) ENVIRONMENTAL COSTS
Environmental expenditures that relate to current operations are charged to
operations or capitalized as appropriate. Expenditures that relate to an
existing condition caused by past operations, and which do not contribute to
current or future revenue generation, are charged to operations. Liabilities are
recorded when environmental assessments and/or remedial efforts are probable,
and the cost can be reasonably estimated. Generally, the timing of these
accruals coincides with the earlier of completion of a feasibility study or the
Company's commitments to plan of action based on the then known facts.
E) INCOME TAXES
The Company uses the asset and liability method of accounting for income taxes
in accordance with SFAS No. 109 - "Accounting for Income Taxes". This standard
requires the use of an asset and liability approach for financial accounting and
reporting on income taxes. If it is more likely than not that some portion or
all of a deferred tax asset will not be realized, a valuation allowance is
recognized.
F) BASIC AND DILUTED NET LOSS PER SHARE
The Company reports basic loss per share in accordance with SFAS No. 128 -
"Earnings Per Share". Basic loss per share is computed using the weighted
average number of common stock outstanding during the period. Diluted loss per
share is computed using the weighted average number of common and potentially
dilutive common stock outstanding during the period. As the Company generated
net losses in the period presented, the basic and diluted loss per share is the
same, as any exercise of options or warrants would be anti-dilutive.
G) COMPREHENSIVE LOSS
SFAS No. 130, "Reporting Comprehensive Income," establishes standards for the
reporting and display of comprehensive loss and its components in the financial
statements. As at March 31, 2005, the Company has no items that represent a
comprehensive loss and, therefore, has not included a schedule of comprehensive
loss in the financial statements.
F-8
NORTHERN EXPLORATIONS, LTD.
(An Exploration Stage Company)
Notes To Financial Statements
March 31, 2005
(Stated in U.S. Dollars)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H) CASH AND CASH EQUIVALENTS
For purposes of the balance sheet and statement of cash flows, the Company
considers all highly liquid instruments with maturity of three months or less at
the time of issuance to be cash equivalents. At March 31, 2005, the Company had
no cash equivalents.
I) NEW ACCOUNTING STANDARDS
Management does not believe that any recently issued, but not yet effective,
accounting standards, if currently adopted, could have a material effect on the
accompanying financial statements.
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company generated a net loss of
$4,328 during the period from November 17, 2004 (inception) to March 31, 2005.
This condition raises substantial doubt about the Company's ability to continue
as a going concern. The Company's continuation as a going concern is dependent
on its ability to meet its obligations, to obtain additional financing as may be
required and ultimately to attain profitability. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Management plans to raise additional funds through debt or equity offerings.
Management has yet to decide what type of offering the Company will use or how
much capital the Company will attempt to raise. There is no guarantee that the
Company will be able to raise any capital through any type of offerings.
F-9
NORTHERN EXPLORATIONS, LTD.
(An Exploration Stage Company)
Notes To Financial Statements
March 31, 2005
(Stated in U.S. Dollars)
NOTE 4. MINERAL PROPERTY
Pursuant to a mineral property option agreement dated January 4, 2005, the
Company was granted an option to acquire the sole and exclusive right, privilege
and option to explore the claim together with the sole and exclusive right,
privilege and option to purchase a 90% interest in the Cade Claim located in the
Nicola Mining Division, British Columbia, Canada, for:
A) CASH PAYMENTS
Cash payment of $2,500 by March 31, 2005 (paid on March 17, 2005).
B) EXPENDITURE COMMITMENTS
Expenditures for exploration and development work on the Claim totalling at
least $15,000 by December 31, 2006, which work shall be conducted by the Company
under the direction of a qualified geologist or project engineer, as follows:
- $5,000 in expenditures on the Claim by December 31, 2005; and
- an additional $10,000 in expenditures on the Claim by December
31, 2006.
C) ASSESSMENT WORK
All Claim payments and assessment work required to keep the Claim and this
Option in good standing during the term of this Agreement.
NOTE 5. SHARE CAPITAL
On December 7, 2004, the Company sold 3,000,000 shares of its common stock at
$0.001 per share. On December 22, 2004, the Company sold 2,500,000 shares of its
common stock at $0.01 per share. On January 17, 2005, the Company sold 40,000
shares of its common stock at $0.10 per share.
At March 31, 2005, there were no outstanding stock options or warrants.
F-10
NORTHERN EXPLORATIONS, LTD.
(An Exploration Stage Company)
Notes To Financial Statements
March 31, 2005
(Stated in U.S. Dollars)
NOTE 6. INCOME TAXES
Potential benefits of income tax losses are not recognized in the accounts until
realization is more likely than not. The Company has incurred net operating
losses of $4,328, which expire in 2025. Pursuant to SFAS No. 109, the Company is
required to compute tax asset benefits for net operating losses carried forward.
Potential benefit of net operating losses have not been recognized in these
financial statements because the Company cannot be assured that it is more
likely than not it will utilize the net operating losses carried forward in
future years.
The components of the net deferred tax asset at March 31, 2005, and the
statutory tax rate, the effective tax rate and the elected amount of the
valuation allowance are indicated below:
Net operating loss $ 4,328
Statutory tax rate 34%
Effective tax rate --
-------
Deferred tax asset $ 1,471
Valuation allowance (1,471)
-------
Net deferred tax asset $ --
=======
NOTE 7. FOREIGN CURRENCY TRANSLATION
Functional currency for Northern Explorations, Ltd is in US dollars. In
accordance with FASB #52 paragraph 9 the Company will continue to issue their
financial statements in their established functional currency unless significant
changes in economic facts and circumstances indicate clearly that the functional
currency has changed.
NOTE 8. REVISED FINANCIAL STATEMENTS
The Company's March 31, 2005 financial statements have been revised only to
address comments 36 through 38 issued by U.S. Securities and Exchange
Commission.
F-11
Until ______________, all dealers that effect transactions in these securities
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealer's obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the Nevada Revised
Statutes (the "NRS") and our bylaws.
Under the NRS, director immunity from liability to a company or its shareholders
for monetary liabilities applies automatically unless it is specifically limited
by a company's articles of incorporation that is not the case with our articles
of incorporation. Excepted from that immunity are:
(1) a willful failure to deal fairly with the company or its shareholders
in connection with a matter in which the director has a material
conflict of interest;
(2) a violation of criminal law (unless the director had reasonable cause
to believe that his or her conduct was lawful or no reasonable cause
to believe that his or her conduct was unlawful);
(3) a transaction from which the director derived an improper personal
profit; and
(4) willful misconduct.
Our bylaws provide that we will indemnify our directors and officers to the
fullest extent not prohibited by Nevada law; provided, however, that we may
modify the extent of such indemnification by individual contracts with our
directors and officers; and, provided, further, that we shall not be required to
indemnify any director or officer in connection with any proceeding (or part
thereof) initiated by such person unless:
(1) such indemnification is expressly required to be made by law;
(2) the proceeding was authorized by our Board of Directors;
(3) such indemnification is provided by us, in our sole discretion,
pursuant to the powers vested us under Nevada law; or
(4) such indemnification is required to be made pursuant to the bylaws.
Our bylaws provide that we will advance all expenses incurred to any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was our director or
officer, or is or was serving at our request as a director or executive officer
of another company, partnership, joint venture, trust or other enterprise, prior
to the final disposition of the proceeding, promptly following request. This
advanced of expenses is to be made upon receipt of an undertaking by or on
behalf of such person to repay said amounts should it be ultimately determined
that the person was not entitled to be indemnified under our bylaws or
otherwise.
Our bylaws also provide that no advance shall be made by us to any officer in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made: (a) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to the proceeding; or (b) if such quorum is not obtainable, or,
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to the
decision- making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to our best interests.
II-1
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee $ 29.90
Transfer Agent fees $1,000.00
Accounting and auditing fees and expenses $3,000.00
Legal fees and expenses $1,500.00
Edgar filing fees $1,500.00
---------
Total $7,029.90
=========
All amounts are estimates other than the Commission's registration fee.
We are paying all expenses of the offering listed above. No portion of these
expenses will be borne by the selling shareholders. The selling shareholders,
however, will pay any other expenses incurred in selling their common stock,
including any brokerage commissions or costs of sale.
RECENT SALES OF UNREGISTERED SECURITIES
We completed an offering of 3,000,000 shares of our common stock at a price of
$0.001 per share to our president, Richard Novis, on December 7, 2004. The total
amount received from this offering was $3,000. These shares were issued pursuant
to Regulation S of the Securities Act.
We completed an offering of 2,500,000 shares of our common stock at a price of
$0.01 per share to a total of twenty-five purchasers on December 22, 2004. The
total amount received from this offering was $9,000. These shares were issued
pursuant to Regulation S of the Securities Act. The purchasers in this offering
were as follows:
Name of Subscriber Number of Shares
------------------ ----------------
Dimosthenis (Jimmy) Bekropoulos 200,000
Rob Fetter 200,000
William (Bill) Brown 150,000
Tracy Hemeyer 150,000
Tony Braile 150,000
Kent Pozzo 150,000
Dimos Bekropoulos 100,000
Leith Rusnak 100,000
Stavroula M. Tsaprailis 100,000
Tyler Tanner 100,000
Lampros Tsaprailis 100,000
Yulin Yang 100,000
Kathy Tsambouris 100,000
George Liaridis 100,000
Toula Liaridis 100,000
Marge Rusnak 80,000
Andrew Austin 80,000
Chad Rusnak 75,000
Nabil Shlah 75,000
Chad Hason 70,000
Nick Bekos 50,000
John Rudin 50,000
Heather Williams 50,000
Matthew Leith 40,000
Leah Rusnak 30,000
II-2
We completed an offering of 40,000 shares of our common stock at a price of
$0.10 per share to a total of four purchasers on January 17, 2004. The total
amount received from this offering was $4,000. We completed this offering
pursuant to Regulation S of the Securities Act. The purchasers in this offering
were as follows:
Name of Subscriber Number of Shares
------------------ ----------------
Charles Kayihura 10,000
Dana Peck 10,000
Dina Hasapes 10,000
Wenhui Ruan 10,000
Regulation S Compliance
Each offer or sale was made in an offshore transaction;
Neither we, a distributor, any respective affiliates nor any person on behalf of
any of the foregoing made any directed selling efforts in the United States;
Offering restrictions were, and are, implemented;
No offer or sale was made to a U.S. person or for the account or benefit of a
U.S. person;
Each purchaser of the securities certifies that it was not a U.S. person and was
not acquiring the securities for the account or benefit of any U.S. person;
Each purchaser of the securities agreed to resell such securities only in
accordance with the provisions of Regulation S, pursuant to registration under
the Act, or pursuant to an available exemption from registration; and agreed not
to engage in hedging transactions with regard to such securities unless in
compliance with the Act;
The securities contain a legend to the effect that transfer is prohibited except
in accordance with the provisions of Regulation S, pursuant to registration
under the Act, or pursuant to an available exemption from registration; and that
hedging transactions involving those securities may not be conducted unless in
compliance with the Act; and
We are required, either by contract or a provision in its bylaws, articles,
charter or comparable document, to refuse to register any transfer of the
securities not made in accordance with the provisions of Regulation S pursuant
to registration under the Act, or pursuant to an available exemption from
registration; provided, however, that if any law of any Canadian province
prevents us from refusing to register securities transfers, other reasonable
procedures, such as a legend described in paragraph (b)(3)(iii)(B)(3) of
Regulation S have been implemented to prevent any transfer of the securities not
made in accordance with the provisions of Regulation S.
EXHIBITS
Exhibit
Number Description
- ------ -----------
3.1* Articles of Incorporation
3.2* Bylaws
5.1* Legal opinion of Joseph I. Emas, with consent to use
10.1* Mineral property option agreement dated January 4, 2005
23.1 Consent of Armando C. Ibarra, Certified Public Accountants
23.2* Consent of George Nicholson, professional geologist, with consent to use
99.1* Location map
- ----------
* filed as an exhibit to our registration statement on Form SB-2 dated May
19, 2005
II-3
THE UNDERSIGNED REGISTRANT HEREBY UNDERTAKES:
1. To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
a. include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
b. reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information set forth
in this registration statement; and notwithstanding the forgoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the commission pursuant to Rule 424(b) if, in
the aggregate, the changes in the volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration Statement; and
c. include any additional or changed material information on the plan of
distribution.
2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered hereby which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of our directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of our directors, officers, or controlling
person sin connection with the securities being registered, we will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
II-4
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Vancouver, Province of British Columbia on July 27, 2005.
NORTHERN EXPLORATIONS LTD.
By: /s/ Richard Novis
------------------------------------
Richard Novis
President, Secretary, Treasurer,
Chief Executive Officer and Director
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated:
SIGNATURE CAPACITY IN WHICH SIGNED DATE
- --------- ------------------------ ----
/s/ Richard Novis President, Secretary, Treasurer, July 27, 2005
- --------------------------- Chief Executive Officer, principal
Richard Novis accounting officer, principal financial
officer and Director
II-5