As filed with the Securities and Exchange Commission on September 30, 2005
Registration No. 333-______
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CANTOP VENTURES INC.
(Name of small business issuer in its charter)
NEVADA 1000 20-2414965
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
Cantop Ventures Inc.
Christopher Paterson, President
564 Wedge Lane
Fernley, NV 89408
Telephone: (604) 805-6340
Facsimile: (604) 682-5335
(Address and telephone number of principal executive offices)
Robert C. Harris
564 Wedge Lane
Fernley, NV 89408
(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 $45,000 $0.01 $45,000 $5.30
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(1) Based on the last sales price on July 27, 2005
(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 SEPTEMBER 28, 2005.
================================================================================
PROSPECTUS
CANTOP VENTURES INC.
4,500,000 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 4-7.
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 $0.01 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices. We determined this offering price based
upon the price of the last sale of our common stock to investors.
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: SEPTEMBER 28, 2005.
TABLE OF CONTENTS
PAGE
----
Summary ..................................................................... 3
Risk Factors ................................................................ 4
- If we do not obtain additional financing, our business will
fail .............................................................. 4
- Because we have not commenced business operations, we face a
high risk of business failure ..................................... 5
- Because of the speculative nature of exploration of mining
properties, there is substantial risk that our business will
fail .............................................................. 5
- We need to continue as a going concern if our business is to
succeed Our independent auditor has raised doubt about our
ability to continue as a going concern ............................ 5
- Because of the inherent dangers involved in mineral
exploration, there is a risk that we may incur liability or
damages as we conduct our business ................................ 5
- Even if we discover commercial reserves of precious metals
on the Copper Road I - VI claim, we may not be able to
successfully obtain commercial production ......................... 6
- If we become subject to burdensome government regulation or
other legal uncertainties, our business will be negatively
affected .......................................................... 6
- 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 .......... 6
- If a market for our common stock does not develop,
shareholders may be unable to sell their shares ................... 6
- A purchaser is purchasing penny stock which limits the
ability to sell stock ............................................. 7
Use of Proceeds ............................................................. 7
Determination of Offering Price ............................................. 7
Dilution .................................................................... 7
Selling Securityholders ..................................................... 7
Plan of Distribution ........................................................ 12
Legal Proceedings ........................................................... 14
Directors, Executive Officers, Promoters and Control Persons ................ 14
Security Ownership of Certain Beneficial Owners and Management .............. 15
Description of Securities ................................................... 16
Interest of Named Experts and Counsel ....................................... 17
Disclosure of Commission Position of Indemnification for Securities
Act Liabilities ............................................................. 17
Organization Within Last Five Years ......................................... 18
Description of Business ..................................................... 18
Plan of Operations .......................................................... 22
Description of Property ..................................................... 23
Certain Relationships and Related Transactions .............................. 23
Market for Common Equity and Related Stockholder Matters .................... 24
Executive Compensation ...................................................... 25
Financial Statements ........................................................ 26
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure ........................................................ 26
2
SUMMARY
PROSPECTIVE INVESTORS ARE URGED TO READ THIS PROSPECTUS IN ITS ENTIRETY.
We are in the business of mineral property exploration. To date, we have not
conducted any exploration on our sole mineral property asset, known as the
Copper Road I - VI claim, located Approx 2 Kilometers East of Deep Water Bay
(N.T.S. 92K/03W) Quadra Island of British Columbia. Pursuant to a Mineral
Property Purchase Agreement dated March 3, 2005, we acquired a 100% undivided
right, title and interest in and to the property. The owner of the Copper Road I
- - VI claim and the grantor of the purchase is Larry Sostad of Vancouver, British
Columbia.
Our objective is to conduct mineral exploration activities on the Copper Road I
- - VI claim in order to assess whether it possesses economic reserves of gold. We
have not yet identified any economic mineralization on the property. Our
proposed exploration program is designed to search for an economic mineral
deposit.
We were incorporated on February 22, 2005 under the laws of the state of Nevada.
Our principal offices are located at 564 Wedge Lane, Fernley, NV 89408 Our
telephone number is (604) 805-6340.
THE OFFERING:
SECURITIES BEING OFFERED Up to 4,500,000 shares of common stock.
OFFERING PRICE The selling shareholders will sell our shares at
$0.01 per share until our shares are quoted on the
OTC Bulletin Board, and thereafter at prevailing
market prices or privately negotiated prices. We
determined this offering price 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
4,500,000 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 8,500,000 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.
3
SUMMARY FINANCIAL INFORMATION
BALANCE SHEET
July 31, 2005
-------------
Cash $22,034.00
----------
Total Assets $22,034.00
----------
Liabilities $4,342.00
----------
Total Stockholders' Equity $17,692.00
==========
STATEMENT OF OPERATIONS
From Incorporation on
February 22, 2005 to July 31, 2005
----------------------------------
Revenue $ 0
Net Loss and Deficit $ (9,808)
========
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock could decline due to any
of these risks, and you may lose all or part of your investment.
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 Copper Road I - VI 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 Copper Road I - VI claim. While we have sufficient funds to
conduct the phase one and two exploration programs on the property with
estimated budgets of U.S. $6,300 for each phase, we will require additional
financing in order to determine whether the property contains economic
mineralization and to cover our anticipated administrative costs. We will also
require additional financing if the costs of the exploration of the Copper Road
I - VI claim are greater than anticipated. Even after completing all proposed
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. Obtaining additional financing would be subject to a
number of factors, including the market price for gold, investor acceptance of
our property and general market conditions. These factors may make the timing,
amount, terms or conditions of additional financing unavailable to us.
4
BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF
BUSINESS FAILURE.
We have not yet commenced exploration on the Copper Road I - VI claim.
Accordingly, we have no way to evaluate the likelihood that our business will be
successful. We were incorporated on February 22, 2005 and to date have been
involved primarily in organizational activities and the acquisition of the
purchase of a mineral property. We have not earned any revenues as of the date
of this prospectus. Potential investors should be aware of the difficulties
normally encountered by new mineral exploration companies and the high rate of
failure of such enterprises. The likelihood of success must be considered in
light of the problems, expenses, difficulties, complications and delays
encountered in connection with the exploration of the mineral properties that we
plan to undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.
Prior to completion of our exploration stage, we anticipate that we will incur
increased operating expenses without realizing any revenues. We therefore expect
to incur significant losses into the foreseeable future.
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 property 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 Copper
Road I - VI 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.
WE NEED TO CONTINUE AS A GOING CONCERN IF OUR BUSINESS IS TO SUCCEED. OUR
INDEPENDENT AUDITOR HAS RAISED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE
AS A GOING CONCERN.
The report of our independent accountant to our audited financial statements for
the period ended July 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 an accumulated deficit since
inception, we are likely to incur further losses in the development of our
business and that we are dependent upon obtaining adequate financing and
generating profitable operations.
BECAUSE OF THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION, THERE IS A RISK
THAT WE MAY INCUR LIABILITY OR DAMAGES AS WE CONDUCT OUR BUSINESS.
The search for valuable minerals involves numerous hazards. As a result, we may
become subject to liability for such hazards, including pollution, cave-ins and
other hazards against which we cannot 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.
5
EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON THE COPPER ROAD I
- - VI CLAIM, WE MAY NOT BE ABLE TO SUCCESSFULLY COMMENCE COMMERCIAL PRODUCTION.
The Copper Road I - VI 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 property into commercial production. We may not be able to obtain such
financing.
IF WE BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATION OR OTHER LEGAL
UNCERTAINTIES, OUR BUSINESS WILL BE NEGATIVELY AFFECTED.
There are several governmental regulations that materially restrict mineral
property exploration and development. Under Canadian mining law, to engage in
certain types of exploration will require work permits, the posting of bonds,
and the performance of remediation work for any physical disturbance to the
land. While these current laws will not affect our current exploration plans, if
we proceed to commence drilling operations on the Mosquito King property, we
will incur modest regulatory compliance costs.
In addition, the legal and regulatory environment that pertains to the
exploration of ore is uncertain and may change. Uncertainty and new regulations
could increase our costs of doing business and prevent us from exploring for ore
deposits. The growth of demand for ore may also be significantly slowed. This
could delay growth in potential demand for and limit our ability to generate
revenues. In addition to new laws and regulations being adopted, existing laws
may be applied to mining that have not as yet been applied. These new laws may
increase our cost of doing business with the result that our financial condition
and operating results may be harmed.
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. Christopher Paterson only spends approximately 25% of his
business time providing his services to us. While Mr. Paterson presently
possesses adequate time to attend to our interests, it is possible that the
demands on Mr. Paterson 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.
IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, SHAREHOLDERS MAY BE UNABLE TO
SELL THEIR SHARES.
There is currently no market for our common stock and 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.
6
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.
Please refer to the "Plan of Distribution" section for a more detailed
discussion of penny stock and related broker-dealer restrictions.
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.
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 $0.01 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices. We determined this offering price, 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
4,500,000 shares of common stock offered through this prospectus. These shares
were acquired from us in private placements that were exempt from registration
under Regulation D of the Securities Act of 1933 and/or Regulation S of the
Securities Act of 1933 and pursuant to a mineral property purchase agreement.
The shares include the following:
1. 2,000,000 shares of our common stock that the selling shareholders
acquired from us in an offering that was exempt from registration
under Regulation D of the Securities Act of 1933 and/or Regulation S
of the Securities Act of 1933 and was completed on July 3, 2005; and
7
2. 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 D of the Securities Act of 1933 and/or Regulation S
of the Securities Act of 1933 and was completed on July 27, 2005.
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 Total Shares Percent
Be Offered For Owned Upon Owned Upon
Name Of Shares Owned Selling Completion Completion
Selling Prior to This Shareholders of this of This
Stockholder Offering Account Offering Offering
- ----------- -------- ------- -------- --------
Carolyn Roberts 250,000 250,000 Nil Nil
63-52A Street
Delta, BC V4M2Z6
William Roberts 250,000 250,000 Nil Nil
63-52A Street
Delta, BC V4M2Z6
Lori Kliman 250,000 250,000 Nil Nil
1506-989 Richards St
Vancouver, BC V6B6R6
James Etherington 250,000 250,000 Nil Nil
909-1068 Hornby St
Vancouver, BC V6Z2Y7
Beulah Harriot 250,000 250,000 Nil Nil
217-330 E. 7th Avenue
Vancouver, BC V7T4K5
Todd Czarnecki 250,000 250,000 Nil Nil
6352 Caminito Luisito
San Diego, CA 92111
8
Total Number
of Shares to Total Shares Percent
Be Offered For Owned Upon Owned Upon
Name Of Shares Owned Selling Completion Completion
Selling Prior to This Shareholders of this of This
Stockholder Offering Account Offering Offering
- ----------- -------- ------- -------- --------
Terri Proctor 250,000 250,000 Nil Nil
1457 Pacific St
Redlands, CA 92373
Janet Eisele 250,000 250,000 Nil Nil
6051 Las Nubes Drive
Las Vegas, NV 89142
John Kovacevic 100,000 100,000 Nil Nil
5773 Seaview Rd
W. Vancouver, BC V7W1P9
Stuart Omsen 100,000 100,000 Nil Nil
853 West 17th Ave
Vancouver, BC V5Z1V3
Paul Rickman 100,000 100,000 Nil Nil
2574 Byron Rd
N. Vancouver, BC V7H1M2
Stephen Rickman 100,000 100,000 Nil Nil
1506-121 W. 15th St
N. Vancouver, BC V7M1R8
George Rickman 100,000 100,000 Nil Nil
786 Edgewood Rd
N. Vancouver, BC V7R1Y4
James Ward 100,000 100,000 Nil Nil
2144 Whitman Ave
N. Vancouver, B.C. V7H2C5
Adrian Crawford 100,000 100,000 Nil Nil
1-1155 Melville St
Vancouver, B.C. V6E4C4
Beverley Paterson 100,000 100,000 Nil Nil
17365 SW 13th St
Pembroke Pines, FL 33029
9
Total Number
of Shares to Total Shares Percent
Be Offered For Owned Upon Owned Upon
Name Of Shares Owned Selling Completion Completion
Selling Prior to This Shareholders of this of This
Stockholder Offering Account Offering Offering
- ----------- -------- ------- -------- --------
Dan Perko 100,000 100,000 Nil Nil
701-183 Keefer Pl
Vancouver, B.C. V6B6B9
Meredith Powel 100,000 100,000 Nil Nil
507-1383 Marina Side Crescent
Vancouver, B.C. V6Z2W9
Shanon Rickman 100,000 100,000 Nil Nil
415-3608 Deercrest Dr.
N. Vancouver, B.C. V7G2S8
Tom Byrne 100,000 100,000 Nil Nil
1107-1250 Burnaby St
Vancouver, BC V6E1P6
Don Histed 100,000 100,000 Nil Nil
343-2655 Cranberry Dr.
Vancouver, BC V6K4V5
Carol Dahlberg 100,000 100,000 Nil Nil
842 Cedros Ave
Solana Beach, CA 92075
Ben Bohl 100,000 100,000 Nil Nil
842 Cedros Ave
Solana Beach, CA 92075
Diane McDaniel 100,000 100,000 Nil Nil
2263 E. Mercer Ln
Phoenix, AZ 85028
Danny Love 100,000 100,000 Nil Nil
76 F Street
Chula Vista, CA 91910
Barbara Daly 100,000 100,000 Nil Nil
2961 Columbia St. #16
San Diego, CA 92103
10
Total Number
of Shares to Total Shares Percent
Be Offered For Owned Upon Owned Upon
Name Of Shares Owned Selling Completion Completion
Selling Prior to This Shareholders of this of This
Stockholder Offering Account Offering Offering
- ----------- -------- ------- -------- --------
Laurel O'Neill 100,000 100,000 Nil Nil
PO Box 17724
San Diego, CA 92177
Edith Reyes 100,000 100,000 Nil Nil
2640 Tablerock Ave
Chula Vista, CA 91914
Vanesa Trester 50,000 50,000 Nil Nil
404-1850 W. 8th Ave
Vancouver, B.C. V6J5G3
Patti Ransom 50,000 50,000 Nil Nil
401-1107 Homer St
Vancouver, BC V6B2Y1
Tina Marie Steen 50,000 50,000 Nil Nil
583 E. 27th Ave
Vancouver, B.C. V5V2K7
Michelle Boey 50,000 50,000 Nil Nil
504-2288 Pine St
Vancouver, BC V6J5G4
Barb Dean 50,000 50,000 Nil Nil
2345 Cotswold Crescent
Unit 21
Burlington, ON L7P4S4
Robert Stoikos 50,000 50,000 Nil Nil
5233 Thornburn Dr.
Burlington, ON L7L6R3
Jenna Kelly 50,000 50,000 Nil Nil
102-1812 W. 7th Ave
Vancouver, BC V6J1S8
Laura Homiston 50,000 50,000 Nil Nil
1222 1/2Locust St
San Diego, CA 92106
11
Total Number
of Shares to Total Shares Percent
Be Offered For Owned Upon Owned Upon
Name Of Shares Owned Selling Completion Completion
Selling Prior to This Shareholders of this of This
Stockholder Offering Account Offering Offering
- ----------- -------- ------- -------- --------
Karen Neudecker 50,000 50,000 Nil Nil
313 Glen Creek Dr.
Bonita, CA 91902
Melissa Granados 50,000 50,000 Nil Nil
3752 Mykonos Ln
Suite 107
San Diego, CA 92130
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 8,500,000 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.
The selling shareholders will sell our shares at $0.01 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices. We determined this offering price
arbitrarily based upon the price of the last sale of our common stock to
investors. 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 $6,553.30. 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
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
12
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.
13
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings. The name and address for
the agent for service of process in Nevada is Robert C. Harris, 564 Wedge Lane,
Fernley, NV 89408.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our executive officers and directors and their respective ages as of the date of
this prospectus are as follows:
DIRECTORS:
Name of Director Age
- ---------------- ---
Christopher Paterson 39
Robert Roth 34
EXECUTIVE OFFICERS:
Name of Officer Age Office
- --------------- --- ------
Christopher Paterson 39 President, CEO, Secretary,
Treasurer and Director
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. CHRISTOPHER PATERSON has acted as our President, CEO, Secretary and
Treasurer since our incorporation on February 22, 2005. From 2000 to present,
Mr. Paterson acted as a Business Consultant and investor.
After receiving his degree in Marketing in 1987 Mr. Paterson went on to work for
John Tann Ltd. (UK) the Oldest and most established Security Equipment
Manufacturer in the world, where he held various positions in Sales and
Marketing until 1994.
He then worked for Honeywell Ltd. where he was responsible for the financial and
large commercial portfolios for the company until 1998. Since then, Mr. Paterson
has helped many companies meet their financial objectives through his marketing
consulting and ability to obtain and structure outside financing.
With his proven management skills and vast business experience, including the
funding of Mining and Exploration companies, he is positioned to capitalize on
the opportunities present in this growing sector.
Mr. Paterson does not have any professional training or technical credentials in
the exploration, development and operation of mines.
14
Mr. Paterson intends to devote approximately 25% of his business time to our
affairs.
MR. ROBERT ROTH received his Masters in Business Administration from Cal Poly
San Luis Obispo, in 1998. Since that date, Mr. Roth has worked for some of the
most influential and successful companies in the world. It is through these
endeavours that he has assisted companies in the areas of marketing, product
management, process management, usability, public relations, advertising,
customer retention, communications and graphic design.
From May, 1998 to present, Mr. Roth has worked with such companies as:
SimpleNet, Broadcast.com, Yahoo!, NetIdentity, NamePlanet, ThatYear, and
Infommersion.
Mr. Roth has experience as a member of the board of directors for the following
organizations: iLounge San Diego Conference Planning Committee, San Diego
iMarketers, NIRSA.
TERM OF OFFICE
Our directors are appointed for a one-year term to hold office until the next
annual general meeting of our shareholders or until removed from office in
accordance with our bylaws. Our officer is appointed by the board of directors
and will hold office until removed by the board.
SIGNIFICANT EMPLOYEES
We have no significant employees other than the officer and director 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
Title of Name and address beneficial Percent
Class of beneficial owner ownership of class
----- ------------------- --------- --------
COMMON Christopher Paterson 2,000,000 24.84%
STOCK President, CEO
Secretary and Treasurer
Director
200 - 675 West Hastings St.
Vancouver, BC V6B 1N2 CANADA
15
Amount of
Title of Name and address beneficial Percent
Class of beneficial owner ownership of class
----- ------------------- --------- --------
Robert Roth 2,000,000 24.84%
Director
6354 Caminito del Cervato
San Diego, CA 92111
COMMON All officers and directors 4,000,000 49.68%
STOCK as a group that consists of shares
two persons
The percent of class is based on 8,500,000 shares of common stock issued and
outstanding as of the date of this prospectus.
DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital stock consists of 120,000,000 shares of common stock at a
par value of $0.001 per share.
COMMON STOCK
As of September 28, 2005, there were 8,500,000 shares of our common stock issued
and outstanding that are held by 40 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.
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 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.
16
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.
INTEREST OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant. Nor was any such person
connected with the registrant as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
The financial statements included in this prospectus and the registration
statement have been audited by Moen and Company, Chartered Accountants, to the
extent and for the periods set forth in their report appearing elsewhere in this
document and in the registration statement filed with the SEC, and are included
in reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Our directors and officers are indemnified as provided by the Nevada Revised
Statutes and our Bylaws. 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 director 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 property for indemnification against such
liabilities is asserted by our director, officer, 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.
17
ORGANIZATION WITHIN LAST FIVE YEARS
We were incorporated on February 22, 2005 under the laws of the state of Nevada.
On that date, Christopher Paterson was appointed as our director. As well, Mr.
Paterson was appointed as our president, CEO, secretary and treasurer. On May 4,
2005, Mr. Paterson appointed a second director, Robert Roth, to our board of
directors.
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 that demonstrate economic
feasibility. We own a 100% undivided right, title and interest in and to a
mineral claim known as the Copper Road I - VI claim. There is no assurance that
a commercially viable mineral deposit exists on the property.
Our plan of operation is to conduct exploration work on the Copper Road I - VI
claim in order to ascertain whether it possesses economic quantities of gold.
There can be no assurance that an economic mineral deposit exists on the Copper
Road I - VI claim until appropriate exploration work is done and an economic
evaluation based on such work concludes that production of minerals from the
property is economically feasible.
Even if we complete our proposed exploration programs on the Copper Road I - VI
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.
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 Copper Road I - VI 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 directors will make this decision based upon the
recommendations of the independent geologist who oversees the program and
records the results.
DESCRIPTION, LOCATION AND ACCESS
The Copper Road I - VI claim property is located on Quadro Island, which is
between Vancouver Island and the British Columbia mainland, within three
kilometres off the east coast of Vancouver Island. The coordinates of the
property are 125(degree) 18' 05" W Longitude and 50(degree) 11' 05" N Latitude
in the Nanaimo Mining Division, within Map Sheet NTS 082K03W. The property is
accessible by ferry from the city of Campbell River to Quathiaski Cove on Quadra
Island, then inland by road approximately 21 kilometres. Facilities and skilled
population Campbell River are readily available and will provide all the
necessary services needed for property exploration.
18
THE COPPER ROAD I - VI PROPERTY PURCHASE AGREEMENT
On March 3, 2005, we entered into an agreement with Larry Solstad of Vancouver,
British Columbia, whereby he sold a 100% undivided right, title and interest in
and to the Copper Road I - VI mineral claim for $3,500.
The Copper Road I - VI claim consists of one mineral claim comprising a six cell
claim block with an area of approximately 150 hectacres. The property includes a
mineralized shear zone from which historic production of some 4,736 tonnes of
mineralized material was reportedly mined from which approximately 87,181 grams
silver, 716 grams gold, and 182,729 kilograms of copper were recovered.
INFRASTRUCTURE AND CONDITION OF THE PROPERTY
The Copper Road I - VI claim is free of mineral workings. There is no equipment
or other infrastructure facilities located on the property. There is no power
source located on the property. We will need to use portable generators if we
require a power source for exploration of the Copper I - VI claim.
MINERALIZATION
The Copper Road I - VI claim mineralization is descried in the 1963 Minister of
Mines Report as comprised of quartz and copper sulfides occurring in variable
amounts within the shear. Historic production was obtained from two main
mineralized "shoots" hosted by a shear zone indicated to have a width of up to
nine metres and to extend for 1,400 metres along strike. Mineralization,
although sparse in drill hole intersections testing an IP anomaly 1,000 feet
distant, has been defined to a depth of 200 feet. Mineralization is comprised of
quartz, calcite, bornite, chalcocite, chalcopyrite, native copper and malachite.
EXPLORATION HISTORY
Previous exploration included diamond drilling and geophysical surveys from
which estimates of mineral reserves were 115,000 tons copper and silver grading
2.8% Cu and 0.5oz Ag per ton by Anaconda (Wahl, 1983) and 60,000 tons of +2%
copper subject to confirmation by drilling and underground exploration by H.
Wall, P.Eng., (1983). Metallurgical tests completed in 1998 indicated that a
recovery of 91% of the copper could be achieved. It was stated that the good
cupper recover by flotation suggests that an all-flotation procedure may be a
viable process for recovery.
GEOLOGICAL ASSESSMENT REPORT: COPPER ROAD I - VI CLAIM
We commissioned Mr. Laurence Sookochoff to prepare a geological report on the
Copper Road I - VI claim. Mr. Sookochoff holds bachelor if science degree in
geology from the University of British Columbia and has practiced his profession
as a geologist for over 38 years. He is a member of the Association of
Professional Engineers and Geoscientists of the Province of British Columbia.
The report summarizes the results of prior exploration and makes recommendations
for further exploration.
19
CONCLUSIONS
In his report, Mr. Sookochoff concludes that the Copper Road I - VI claim has
the potential to host significant amounts of mineralization and that further
exploration of the property is warranted.
Mr. Sookochoff recommends a four phase exploration program to further delineate
the mineralized system currently recognized on the Copper Road I - VI claim.
The program would consist of compiling and analyzing previous exploration data,
investigation of anomalous areas along the shear zone, a geological review, and
geophysical surveying using both magnetic and electromagnetic instrumentation in
detail over the area of the showings and in a regional survey. Geophysical
surveying is the search for mineral deposits by measuring the physical property
of near-surface rocks, and looking for unusual responses caused by the presence
of mineralization. Electrical, magnetic, gravitational, seismic and radioactive
properties are the ones most commonly measured. Geophysical surveys are applied
in situations where there is insufficient information obtainable from the
property surface to allow informed opinions concerning the merit of properties.
PROPOSED BUDGET
Approximate costs for the recommended two phase program are as following:
PHASE I
Compilation of previous exploration data; Analysis
of the data, compilation map And investigate the
anomalous areas along The shear zone that are
indicated to contain mineralization
TOTAL PHASE I COSTS: $6,300.00
PHASE II
Localized general magnetometer and soil Surveys
over the prime indicated anomalous zones
TOTAL PHASE II COSTS: $6,300.00
PHASE III
Detailed magnetometer and soil surveys.
TOTAL PHASE III COSTS: $12,600.00
PHASE IV
Test diamond drilling of the targets delineated
within the potential exploration sites.
TOTAL PHASE IV COSTS: $29,400.00
----------
GRAND TOTAL EXPLORATION COSTS: $54,600.00
==========
20
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.
EMPLOYEES
We have no employees as of the date of this prospectus other than our director.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have not incurred any other research or development expenditures since our
incorporation.
21
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. 20002. Please call
the Commission at 1-800-SEC-0330 for further information on the operation of the
public reference rooms. The Securities and Exchange Commission also maintains a
web site at http://www.sec.gov that contains reports, proxy statements and
information regarding registrants that file electronically with the Commission.
Our registration statement and the referenced exhibits can also be found on this
site.
PLAN OF OPERATIONS
Our plan of operation for the twelve months following the date of this
prospectus is to complete the recommended phase one and two exploration programs
on the Copper Road I - VI claim. We anticipate that the cost of these programs
will be approximately $12,300. We anticipate commencing the phase one program in
Winter of 2005 and completing it within three months of commencement. We
anticipate commencing the phase two program in the Spring of 2006 and completing
it within four months of commencement. We have not retained a geologist to
conduct this exploration work.
In the next 12 months, we also anticipate spending an additional $4,000.00 on
administrative expenses, including fees payable in connection with the filing of
this registration statement and complying with reporting obligations.
22
Total expenditures over the next 12 months are therefore expected to be
$16,600.00. We have the cash on hand necessary to cover anticipated costs of the
phase one and two exploration programs.
We will require additional funding in order to cover all of our anticipated
administrative expenses and to proceed with additional exploration work on the
property beyond the first two recommended phases. We anticipate that additional
funding will be required in the form of equity financing from the sale of our
common stock. However, we cannot provide investors with any assurance that we
will be able to raise sufficient funding. We do not have any arrangements in
place for any future equity financing.
RESULTS OF OPERATIONS FOR THE PERIOD FROM INCEPTION THROUGH JULY 31, 2005
We have not earned any revenues from our incorporation on February 22, 2005 to
July 31, 2005. We do not anticipate earning revenues unless we enter into
commercial production on the Copper Road I - VI 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 property, or if
such minerals are discovered, that we will enter into commercial production.
We incurred operating expenses in the amount of $9,808.00 for the period from
our inception on February 22, 2005 to July 31, 2005. These operating expenses
were comprised of: accounting and audit fees, bank charges, mineral property
costs and resource expenditure, and incorporation costs.
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.
DESCRIPTION OF PROPERTY
We do not possess any interest in real property. Our interest in the Copper Road
I - VI mineral claim only provides us with the right to explore for and extract
minerals from the property area.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our president, Mr. Christopher Paterson, provides management services and office
premises to us free of charge. From our inception on February 22, 2005 to July
31, 2005, the management services were valued at $3,500.00 and the donated
office premises were valued at $1,000.00. These amounts were charged to
operations.
Otherwise, 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, Christopher James Paterson;
* Any member of the immediate family of any of the foregoing persons.
23
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 34 registered
shareholders.
RULE 144 SHARES
A total of 4,000,000 shares of our common stock are available for
resale to the public after May 4, 2006, 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 85,000 shares as of the
date of this prospectus; or
2. the average weekly trading volume of the company's common stock during
the four calendar weeks preceding the filing of a notice on Form 144
with respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about the
company.
Under Rule 144(k), a person who is not one of the company's affiliates at any
time during the three months preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least two years, is entitled to sell
shares without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144.
As of the date of this prospectus, persons who are our affiliates hold all of
the 4,000,000 shares that may be sold pursuant to Rule 144.
REGISTRATION RIGHTS
We have not granted registration rights to the selling shareholders or to any
other persons.
24
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 officer by any person for all services rendered in all
capacities to us for the fiscal period from our inception on February 22, 2005
to July 31, 2005 and the subsequent period to the date of this prospectus.
ANNUAL COMPENSATION
Restricted
Other Stock Options/ LTIP Other
Name Title Year Salary Bonus Comp. Awarded SARs(#) payouts($) Comp
- ---- ----- ---- ------ ----- ----- ------- ------- ---------- ----
Christopher Pres. CEO 2005 $0 0 0 0 0 0 0
Paterson Sec. Tres.
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 Mr. Paterson. We do
not pay him any amount for acting as director.
25
FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS:
1. Auditors' Report;
2. Audited financial statements for the period ending July 31, 2005,
including:
a. Report of Independent Registered Public Accounting Firm;
b. Balance Sheet;
c. Statement of Operations;
d. Statement of Cash Flows;
e. Statement of Stockholders' Equity; and
f. Notes to the Financial Statements
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
We have had no changes in or disagreements with our accountants.
26
MOEN AND COMPANY
CHARTERED ACCOUNTANTS
Securities Commission Building
Member: PO Box 10129, Pacific Centre
Canadian Institute of Chartered Accountants Suite 1400 - 701 West Georgia Street
Institute of Chartered Accountants of British Columbia
Institute of Management Accountants (USA) (From 1965) Vancouver, British Columbia
Canada V7Y 1C6
Registered with:
Public Company Accounting Oversight Board (USA) (PCAOB) Telephone: (604) 662-8899
Canadian Public Accountability Board (CPAB) Fax: (604) 662-8809
Canada - British Columbia Public Practice Licence Email: moenca@telus.net
- ---------------------------------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Directors of
Cantop Ventures, Inc.
We have audited the accompanying balance sheet of Cantop Ventures, Inc. as of
July 31, 2005 and the related statements of operations, retained earnings
(deficit), cash flows and stockholders' equity for the period from the date of
inception on February 22, 2005, to July 31, 2005. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluation 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 Cantop Ventures Inc. as of July
31, 2005 and the results of its operations and its cash flows for the period
from inception on February 22, 2005 to July 31, 2005 in conformity with U.S.
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, conditions exist which raise substantial doubt about the
Company's ability to continue as a going concern unless it is able to generate
sufficient cash flows to meet its obligations and sustain its operations.
Management's plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ "Moen and Company"
Vancouver, British Columbia, Canada Chartered Accountants
September 14, 2005
F-1
CANTOP VENTURES, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
BALANCE SHEET
At July 31, 2005
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
July 31,
2005
--------
ASSETS
Current Assets
Cash $ 22,034
--------
Total Assets $ 22,034
========
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $ 3,642
Due to related party (Note 7) 700
--------
Total Liabilities 4,342
--------
STOCKHOLDERS' EQUITY
Common Stock (Note 4)
120,000,000 shares authorized, consisting of 100,000,000
common shares, with a $0.001 par value, and 20,000,000
preferred shares with a $0.001 par value
8,500,000 common shares issued and outstanding par value 8,500
Additional Paid in Capital 22,500
--------
31,000
Common stock subscription repaid (3,500)
Deficit Accumulated During The Exploration Stage (9,808)
--------
Total Stockholders' Equity 17,692
--------
Total Liabilities and Stockholders' Equity $ 22,034
========
APPROVED ON BEHALF OF THE BOARD: SUBSEQUENT EVENTS: NOTE 5
_________________, Director and Chief Executive Officer
_________________, Director and Chief Financial Officer
The accompanying notes are an integral part of these financial statements
F-2
CANTOP VENTURES, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
STATEMENT OF OPERATIONS
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
From
February 22, 2005
(Inception) to
July 31,
2005
-----------
Revenue $ --
-----------
Expenses
Accounting and audit fees 3,642
Bank charges 66
Mineral property costs and resource expenditure 5,500
Incorporation costs 600
-----------
Total Expenses 9,808
-----------
Net loss for the period $ (9,808)
===========
Basic and diluted loss per share (0.01)
===========
Basic and Diluted
Weighted average number of shares outstanding 3,284,277
===========
The accompanying notes are an integral part of these financial statements
F-3
CANTOP VENTURES, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
STATEMENT OF RETAINED EARNINGS (DEFICIT)
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
From
February 22, 2005
(Inception) to
July 31,
2005
-------
Retained earnings, beginning of the period $ --
Net loss for the period 9,808
-------
Retained earnings (Deficit), end of period $(9,808)
=======
The accompanying notes are an integral part of the financial statements
F-4
CANTOP VENTURES, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
From
February 22, 2005
(Inception) to
July 31,
2005
--------
Operating Activities
Net loss for the period $ (9,808)
Change in non-cash working capital balance
related to operations
Accounts payable and accrued liabilities 3,642
--------
Net cash used in operating activities (6,166)
--------
Net cash from investing activities --
--------
Financing Activities
Capital stock issued 31,000
Capital stock subscription (3,500)
Due to related party 700
--------
Net cash from financing activities 28,200
--------
Increase (decrease) in cash during the period 22,034
Cash, beginning of the period --
--------
Cash, end of the period $ 22,034
========
Supplemental Disclosure
Interest paid --
Income taxes paid --
The accompanying notes are an integral part of these financial statements
F-5
CANTOP VENTURES, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
Deficit
Accumulated
Common Shares Additional Common During the
---------------------- Paid-in Shares Exploration
Number Par Value Capital Subscription Stage Total
------ --------- ------- ------------ ----- -----
@ $0.001
per share
Balance February 22, 2005 (Date of Inception) -- $ -- $ -- $ -- $ -- $ --
Capital stock issued for cash
- March, 2005 at $0.001 2,000,000 2,000 -- -- -- 2,000
- June, 2005 at $0.001 3,500,000 3,500 -- -- -- 3,500
- July, 2005 at $0.001 500,000 500 -- -- -- 500
- July, 2005 at $0.01 2,500,000 2,500 22,500 -- -- 25,000
Capital stock subscription (3,500) -- (3,500)
Net loss for the period from May 26, 2004
(inception) to July 31, 2005 -- -- -- -- (9,808) (9,808)
---------- ------ -------- ------- ------- --------
Balance, July 31, 2005 8,500,000 $8,500 $ 22,500 $(3,500) $(9,808) $ 17,692
========== ====== ======== ======= ======= ========
The accompanying notes are an integral part of these financial statements
F-6
CANTOP VENTURES, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2005
- --------------------------------------------------------------------------------
Note 1 NATURE AND CONTINUANCE OF OPERATIONS
Cantop Ventures Inc. (the "Company") was incorporated under the law of the
State of Nevada on February 22, 2005. 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 Province
of British Columbia, Canada, and has not yet determined whether this
property contains reserves that are economically recoverable. The
recoverability of amounts from the property 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 to complete the development of the property, and
upon future profitable production or proceeds for the sale thereof.
Going Concern
These financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America applicable
to a going concern which assume that the Company will realize its assets
and discharge its liabilities in the normal course of business. The Company
has incurred losses since inception of $9,808 to July 31, 2005 and might
not have sufficient operating funds for the next twelve months. These
factors create doubt as to the ability of the Company to continue as a
going concern. Realization values may be substantially different from the
carrying values as shown in these financial statements should the Company
be unable to continue as a going concern. Management is in the process of
identifying sources for additional financing to fund the ongoing
development of the Company's business
Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
MINERAL PROPERTY COSTS
The Company is in the exploration stage since its incorporation and
inception on February 22, 2005 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.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with US 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.
F-7
CANTOP VENTURES, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2005
- --------------------------------------------------------------------------------
Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (cont'd)
FOREIGN CURRENCY TRANSLATION
The Company's functional and reporting currency is the United States
dollar. The financial statements of the Company are translated to United
States dollars in accordance with SFAS No. 52 "Foreign Currency
Translation". Monetary assets and liabilities denominated in foreign
currencies are translated using the exchange rate prevailing at the balance
sheet date. Gains and losses arising on translation or settlement of
foreign currency denominated transactions or balances are included in the
determination of income. Foreign currency transactions are primarily
undertaken in Canadian dollars. The Company has not, to the date of these
financials statements, entered into derivative instruments to offset the
impact of foreign currency fluctuations. There is no foreign currency
translation adjustment to July 31, 2005.
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 financial risk is
the risk to the Company's operations that arise 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.
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 a plan of action based on
the then known facts.
INCOME TAXES
Potential benefits of income tax losses are not recognized in the accounts
until realization is more likely than not. The Company has adopted SFAS No.
109 as of its inception. 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 it is more
likely than not it will utilize the net operating losses carried forward in
future years, and is reduced to Nil by a valuation reserve.
F-8
CANTOP VENTURES, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2005
- --------------------------------------------------------------------------------
Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (cont'd)
BASIC AND DILUTED NET LOSS PER SHARE
The Company computes net income (loss) per share in accordance with SFAS
No. 128, "Earnings per Share". SFAS No. 128 requires presentation of both
basic and diluted earnings per share (EPS) on the face of the income
statement. Basic EPS is computed by dividing net income (loss) available to
common shareholders (numerator) by the weighted average number of shares
outstanding (denominator) during the period. Diluted EPS gives effect to
all dilutive potential common shares outstanding during the period using
the treasury stock method. In computing Diluted EPS, the average stock
price for the period is used in determining the number of shares assumed to
be purchased from the exercise of stock options or warrants. Diluted EPS
excludes all dilutive potential shares if their effect is anti dilutive.
STOCK-BASED COMPENSATION
In December 2002, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure" ("SFAS No. 148"), an amendment of Financial
Accounting Standard No. 123 "Accounting for Stock-Based Compensation"
("SFAS No. 123"). The purpose of SFAS No. 148 is to: (1) provide
alternative methods of transition for an entity that voluntarily changes to
the fair value based method of accounting for stock-based employee
compensation, (2) amend the disclosure provisions to require prominent
disclosure about the effects on reported net income of an entity's
accounting policy decisions with respect to stock-based employee
compensation, and (3) to require disclosure of those effects in interim
financial information. The disclosure provisions of SFAS No. 148 were
effective for the Company for the year ended July 31, 2005.
The Company has elected to continue to account for stock-based employee
compensation arrangements in accordance with the provisions of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees", ("APB No. 25") and comply with the disclosure provisions of
SFAS No. 123 as amended by SFAS No. 148 as described above. In addition, in
accordance with SFAS No. 123 the Company applies the fair value method
using the Black-Scholes option-pricing model in accounting for options
granted to consultants. Under APB No. 25, compensation expense for
employees is recognized based on the difference, if any, on the date of
grant between the estimated fair value of the Company's stock and the
amount an employee must pay to acquire the stock. Compensation expense is
recognized immediately for past services and pro-rata for future services
over the option-vesting period. To July 31, 2005 the Company has not
granted any stock options.
The Company accounts for equity instruments issued in exchange for the
receipt of goods or services from other than employees in accordance with
SFAS No. 123 and the conclusions reached by the Emerging Issues Task Force
in Issue No. 96-18. Costs are measured at the estimated fair market value
of the consideration received or the estimated fair value of the equity
instruments issued, whichever is more reliably measurable. The value of
equity instruments issued for consideration other than employee services is
determined on the earliest of a performance commitment or completion of
performance by the provider of goods or services as defined by EITF 96-18.
F-9
CANTOP VENTURES, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2005
- --------------------------------------------------------------------------------
Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (cont'd)
STOCK-BASED COMPENSATION (cont'd)
The Company has also adopted the provisions of the Financial Accounting
Standards Board Interpretation No.44, Accounting for Certain Transactions
Involving Stock Compensation - An Interpretation of APB Opinion No. 25
("FIN 44"), which provides guidance as to certain applications of APB 25.
FIN 44 is generally effective July 1, 2000 with the exception of certain
events occurring after December 15, 1998.
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 July 31, 2005, the Company has no items that
represent other comprehensive loss and, therefore, has not included a
schedule of comprehensive loss in the financial statements.
CASH AND CASH EQUIVALENTS
Cash represents funds on deposit with the Company's banker.
CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to credit risk
consist principally of cash. Cash is deposited with a high quality credit
institution.
Note 3 MINERAL PROPERTY
Pursuant to a mineral property purchase agreement dated March 3, 2005, the
Company acquired a 100% undivided right, title and interest in the Copper
Road I -VI mineral claim, located approximately 2 kilometres East of Deep
Water Bay, Quadra Island of British Columbia, Canada for $3,500. During the
period ended July 31, 2005 the company incurred $2,000 in resource property
expenditures that are expensed in the statement of operations. The Tenure
Number ID is 504841 that expires January 25, 2006. The property is in the
name of Larry Ralph W. Sostad held by him in trust for the company.
F-10
CANTOP VENTURES, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2005
- --------------------------------------------------------------------------------
Note 3 MINERAL PROPERTY- (cont'd)
Pursuant to an Evaluation Report dated June 13, 2005, related to the
aforementioned property by Sookochoff Consultant Inc., that firm
recommended an exploration program as follows:
Recommended An Exploration Program & Estimated Cost
Canadian U.S. Dollars
Dollars Equivalent
------- ----------
Phase I
Compilation of previous exploration data; analysis of the
data, @ 0.84
Compilation map and investigate the anomalous areas along the ---------- ----------
Shear zone that are indicated to contain mineralization $ 7,500.00 $ 6,300.00
Phase II
Localized general magnetometer and soil surveys over the prime
indicated anomalous zones 7,500.00 6,300.00
Phase III
Detailed magnetometer and soil surveys 15,000.00 12,600.00
Phase IV
Test diamond drilling of the targets delineated within the
Potential exploration sites 35,000.00 29,400.00
---------- ----------
Total Estimated Cost $65,000.00 $54,600.00
========== ==========
In order to carry out the exploration program the Company will require to
raise funding.
Note 4 SHARE CAPITAL
The authorized Common Stock that may be issued by the Company is
100,000,000 shares of stock with a par value of one tenth of one cent
($0.001) per share and the authorized Preferred Stock is 20,000,000 shares
of stock with a par value of one tenth of one cent ($0.001) per share and
no other class of shares is authorized.
During the period from February 22, 2005 (Inception) to July 31, 2005 the
Company issued 8,500,000 common shares for total cash proceeds of $31,000.
Subsequent to the year end the Company received $3,500 common stock
subscription outstanding as at July 31, 2005.
At July 31, 2005 there are no outstanding stock options and no outstanding
warrants.
F-11
CANTOP VENTURES, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2005
- --------------------------------------------------------------------------------
Note 5 SUBSEQUENT EVENTS
(a) The Company is in the process of completion of an SB-2 Registration
Statement for filing to register 4,500,000 shares of common stock for
resale by existing shareholders of the Company with the United States
Securities and Exchange Commission. The Company will not receive any
proceeds from the resale of these shares of common stock by the
selling stockholders.
(b) Subsequent to July 31, 2005, the company received $3,500 for stock
subscriptions unpaid at July 31, 2005.
Note 6 INCOME TAXES
The Company has losses forward for income tax purposes to July 31, 2005.
There are no current or deferred tax expenses for the period ended July 31,
2005, due to the Company's loss position. The Company has fully reserved
for any benefits of these losses. The deferred tax consequences of
temporary differences in reporting items for financial statement and income
tax purposes are recognized, as appropriate. Realization of the future tax
benefits related to the deferred tax assets is dependent on many factors,
including the Company's ability to generate taxable income within the net
operating loss carryforward period. Management has considered these factors
in reaching its conclusion as to the valuation allowance for financial
reporting purposes. The income tax effect of temporary differences
comprising the deferred tax assets and deferred tax liabilities on the
accompanying consolidated balance sheets is a result of the following:
July 31, 2005
-------------
Deferred tax assets $ 3,335
Valuation allowance $ (3,335)
Net deferred tax assets $ --
A reconciliation between the statutory federal income tax rate and the
effective income rate of income tax expense for the period ended July 31,
2005 is as follows:
July 31, 2005
-------------
Statutory federal income tax rate -34.00%
Valuation allowance 34.00%
Effective income tax rate 0.00%
The benefit of a potential reduction in future income taxes has not been
recorded as an asset at July 31, 2005 as it is reduced to nil by a
valuation allowance, due to uncertainty of the application of losses.
Note 7 RELATED PARTIES
A director advanced $100 to the Company and incurred incorporation and
related costs on behalf of the Company of $600. The amount owing to the
director of $700 as at July 31, 2005 is unsecured, bear no interest, and
has no specific repayment date.
F-12
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 officer and director 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
director 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
II-1
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.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission registration fee $ 5.30
Transfer Agent Fees $ 900.00
Accounting fees and expenses $ 2,400.00
Legal fees and expenses $ 3,000.00
Edgar filing fees $ 250.00
----------
Total $ 6,555.30
==========
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 4,000,000 shares of our common stock at a price of
$0.001 per share to our president and director, Christopher Paterson, and
director Robert Roth on May 4, 2005. The total amount received from this
offering was $4,000. These shares were issued pursuant to Rule 4 of the
Securities Act. Appropriate legends were affixed to the stock certificates
representing these shares.
We completed an offering of 2,000,000 shares of our common stock at a price of
$0.001 per share to a total of eight purchasers on July 3, 2005. The total
amount received from this offering was $2,000.00. We completed this offering
pursuant to Regulation D and Regulation S of the Securities Act. The purchasers
were as follows:
II-2
Name of Shareholder Number of Shares Reg D / Reg S
----------------------- ---------------- -------------
Carolyn Roberts 250,000 Reg S
William Roberts 250,000 Reg S
Lori Kliman 250,000 Reg S
James Etherington 250,000 Reg S
Beulah Harriot 250,000 Reg S
Todd Czarnecki 250,000 Reg D
Terri Proctor 250,000 Reg D
Janet Eisele 250,000 Reg D
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 30 shareholders on July 27, 2005. The total amount
received from this offering was $25,000. We completed this offering pursuant to
Regulation D and Regulation S of the Securities Act. The purchasers were as
follows:
Name of Shareholder Number of Shares Reg D / Reg S
----------------------- ---------------- -------------
John Kovacevic 100,000 Reg S
Stuart Omsen 100,000 Reg S
Paul Rickman 100,000 Reg S
Stephen Rickman 100,000 Reg S
George Rickman 100,000 Reg S
James Ward 100,000 Reg S
Adrian Crawford 100,000 Reg S
Beverley Paterson 100,000 Reg S
Dan Perko 100,000 Reg S
Meredith Powel 100,000 Reg S
Shanon Rickman 100,000 Reg S
Tom Byrne 100,000 Reg S
Don Histed 100,000 Reg S
Carol Dahlberg 100,000 Reg D
Ben Bohl 100,000 Reg D
Diane McDaniel 100,000 Reg D
Danny Love 100,000 Reg D
Barbara Daly 100,000 Reg D
Laurel O'Neill 100,000 Reg D
Edith Reyes 100,000 Reg D
Vanesa Trester 50,000 Reg S
Patti Ransom 50,000 Reg S
Tina Marie Steen 50,000 Reg S
Michelle Boey 50,000 Reg S
Barb Dean 50,000 Reg S
Robert Stoikos 50,000 Reg S
Jenna Kelly 50,000 Reg S
Laura Homiston 50,000 Reg D
Karen Neudecker 50,000 Reg D
Melissa Granados 50,000 Reg D
REGULATION S COMPLIANCE
Each offer or sale pursuant to Regulation S was made in an offshore transaction;
II-3
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.
REGULATION D COMPLIANCE
All sales of securities pursuant to Regulation D were part of the same offering.
No sales of securities were made more than six months before the start of the
Regulation D offerings or made more than six months after completion of the
Regulation D offerings.
We did not, nor did any person acting on our behalf, offer or sell the
securities by any form of general solicitation or general advertising.
Pursuant to the limitations on resale contained in Regulation D, we exercised
reasonable care to assure that purchasers were not underwriters within the
meaning of section 2(11) of the Act by inquiring of each and every purchaser the
following: (1) that each purchaser was purchasing the securities for the
purchaser's own account for investment purposes and not with a view towards
distribution, and (2) that each purchaser had no arrangement or intention to
sell the securities. Further, written disclosure was provided to each purchaser
prior to the sale that the securities have not been registered under the Act
II-4
and, therefore, cannot be resold unless the securities are registered under the
Act or unless an exemption from registration is available.
All securities sold pursuant to Regulation D contained a restrictive legend on
the share certificate stating that the securities have not been registered under
the Act and setting forth or referring to the restrictions on transferability
and sale of the securities.
EXHIBITS
Exhibit
Number Description
------ -----------
3.1 Articles of Incorporation
3.2 Bylaws
5.1 Legal opinion regarding tradability of stock to be provided
prior to the effective date
10.1 Mineral Property Purchase Agreement dated March 3, 2005
23.1 Consent of Moen and Company, Chartered Accountants
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.
II-5
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 property for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of our directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of our directors, officers, or controlling
person sin connection with the securities being registered, we will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in Vancouver, British
Columbia, Canada on September 28, 2005.
CANTOP VENTURES INC.
By: /s/ Christopher Paterson
------------------------------
Christopher Paterson
President, Chief Executive Officer,
Secretary, Treasurer 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/ Christopher Paterson President, CEO September 28, 2005
- --------------------------- Secretary, Treasurer,
Christopher Paterson Principal Accounting
Officer, Principal Financial
Officer and Director
II-6