As Filed With the Securities and Exchange Commission on July 13, 2006
Registration No. 333-_______
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
Registration Statement
Under the Securities Act of 1934
Mattmar Minerals, Inc.
(Name of Small Business Issuer in Its Charter)
NEVADA 1000 20-4718599
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
#208-828 Harbourside Drive
North Vancouver, BC V7P 3R9 (604)696-2026 (610) 471 6293
(Address of principal Executive Offices) (Telephone Number) (Fax Number)
Karen Batcher, Batcher & Zarcone
4252 Bonita Road #151
Bonita, CA 91902 (619)475-7882 (619)789-6262
(Name and Address of Agent for Service) (Telephone Number) (Fax Number)
Approximate Date of Commencement 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, 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
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Title of Each Proposed Proposed
Class of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be Price Offering Registration
Registered Registered Per Share (2) Price (3) Fee (1)
- --------------------------------------------------------------------------------
Common Stock 3,000,000 $0.01 $30,000 $3.21
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(1) Registration Fee has been paid via Fedwire.
(2) This is the initial offering and no current trading market exists for our
common stock. The price paid for the currently issued and outstanding
common stock was valued at $0.001 per share.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
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 said Section 8(a),
may determine.
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PROSPECTUS
MATTMAR MINERALS, INC.
3,000,000 SHARES OF COMMON STOCK AT $.01 PER SHARE
This is the initial offering of common stock of Mattmar Minerals, Inc. and no
public market currently exists for the securities being offered. Mattmar
Minerals, Inc. is offering for sale a total of 3,000,000 of common stock at a
price of $0.01 per share. The offering is being conducted on a
self-underwritten, best effort, all-or-none basis, which means our officer and
director will attempt to sell the shares. We intend to open a standard,
non-interest bearing, bank checking account to be used only for the deposit of
funds received from the sale of the shares in this offering. If all the shares
are not sold and the total offering amount is not deposited by the expiration
date of the offering, the funds will be promptly returned to the investors,
without interest or deduction. The shares will be offered at a price of $.01 per
share for a period of one hundred and eighty (180) days from the effective date
of this prospectus, unless extended by our board of directors for an additional
90 days. The offering will end on _______, 200_ (date to be inserted in a
subsequent amendment).
Mattmar Minerals, Inc. is an exploration stage company and currently has no
operations. Any investment in the shares offered herein involves a high degree
of risk. You should only purchase shares if you can afford a loss of your
investment. Our independent auditor has issued an audit opinion for Mattmar
Minerals which includes a statement expressing substantial doubt as to our
ability to continue as a going concern.
BEFORE INVESTING, YOU SHOULD CAREFULLY READ THIS PROSPECTUS, PARTICULARLY, THE
RISK FACTORS SECTION BEGINNING ON PAGE 4.
Neither the U.S. Securities and Exchange Commission nor any state securities
division has approved or disapproved these securities, or determined if this
prospectus is truthful, accurate, current or complete. Any representation to the
contrary is a criminal offense.
Offering Total
Price Amount of Underwriting Proceeds
Per Unit Offering Commissions To Us
-------- -------- ----------- -----
Common Stock $.01 $30,000 $0 $30,000
As of the date of this prospectus, there is no public trading market for our
common stock and no assurance that a trading market for our securities will ever
develop.
The information in this prospectus is not complete and may be changed. We will
not sell these securities until the registration statement filed with the U.S.
Securities and Exchange Commission has been cleared of comments and is declared
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 of
sale is not permitted.
Subject to Completion, Dated __________, 200__
TABLE OF CONTENTS
Page No.
--------
SUMMARY OF PROSPECTUS 3
General Information about Our Company 3
The Offering 3
RISK FACTORS 4
Risks Associated with our Company 4
Risks Associated with this Offering 6
FORWARD LOOKING STATEMENTS 9
USE OF PROCEEDS 9
DETERMINATION OF OFFERING PRICE 10
DILUTION 10
PLAN OF DISTRIBUTION 12
Offering will be Sold by Our Officers and Directors 12
Terms of the Offering 12
Deposit of Offering Proceeds 13
Procedures for and Requirements for Subscribing 13
LEGAL PROCEEDINGS 13
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 15
DESCRIPTION OF SECURITIES 15
INTEREST OF NAMED EXPERTS AND COUNSEL 16
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES 16
ORGANIZATION WITHIN LAST FIVE YEARS 17
DESCRIPTION OF OUR BUSINESS 17
Glossary 17
General Information 19
Competition 27
Compliance with Government Regulation 27
Patents and Trademarks 28
Need for Any government Approval of Principal Products 28
Research and Development Activities 28
Employees and Employment Agreements 28
Reports to Security Holders 28
PLAN OF OPERATION 29
DESCRIPTION OF PROPERTY 33
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 33
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 33
EXECUTIVE COMPENSATION 36
FINANCIAL STATEMENTS 36
CHANGES IN & DISAGREEMENTS WITH ACCOUNTANTS 36
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SUMMARY
GENERAL INFORMATION
You should read the following summary together with the more detailed business
information and the financial statements and related notes that appear elsewhere
in this prospectus. In this prospectus, unless the context otherwise denotes,
references to "we", "us", "our", "Mattmar", and "Mattmar Minerals" are to
Mattmar Minerals, Inc.
Mattmar Minerals, Inc. (the "Company") was incorporated in the State of Nevada
on April 18, 2006 to engage in the acquisition, exploration and development of
natural resource properties. We intend to use the net proceeds from this
offering to develop our business operations. (See "Business of the Company" and
"Use of Proceeds".) We are an exploration stage company with no revenues and a
limited operating history. The principal executive offices are located at
#208-828 Harbourside Drive, North Vancouver, BC V7P 3R9. The telephone number is
(604) 696-2026.
We received our initial funding of $10,000 through the sale of common stock to
our officer and director of the company who purchased 10,000,000 shares of our
common stock at $0.001 per share on April 19, 2006. From inception until the
date of this filing we have had limited operating activities. Our financial
statements from inception (April 18, 2006) through the year ended May 31, 2006
report no revenues and a net loss of $5,539. Our independent auditor has issued
an audit opinion for Mattmar which includes a statement expressing substantial
doubt as to our ability to continue as a going concern.
Our mineral claim has been staked and we have engaged the services of a
professional geologist to prepare a geological report. We have not yet commenced
any exploration activities on the claim. Our property, know as the RET Mineral
Claim, is without known reserves and there is the possibility that it does not
contain any reserves and funds that we spend on exploration will be lost. Even
if we complete our current exploration program and are successful in identifying
a mineral deposit we will be required to expend substantial funds to bring our
claim to production.
There is no current public market for our securities. As our stock is not
publicly traded, investors should be aware they probably will be unable to sell
their shares and their investment in our securities is not liquid.
THE OFFERING
Securities Being Offered 3,000,000 shares of common stock.
Price per Unit $0.01
Offering Period The shares are offered for a period not to exceed
180 days, unless extended by our board of directors for
an additional 90 days.
Net Proceeds $30,000
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Securities Issued
And Outstanding 10,000,000 shares of common stock were issued and
outstanding as of the date of this prospectus.
Registration costs We estimate our total offering registration costs to be
$8,000.
RISK FACTORS
An investment in these securities involves an exceptionally high degree of risk
and is extremely speculative in nature. Following are what we believe to be all
the material risks involved if you decide to purchase shares in this offering.
RISKS ASSOCIATED WITH OUR COMPANY:
WE ARE AN EXPLORATION STAGE COMPANY BUT HAVE NOT YET COMMENCED EXPLORATION
ACTIVITIES ON OUR CLAIM. WE EXPECT TO INCUR OPERATING LOSSES FOR THE FORESEEABLE
FUTURE.
We have not yet commenced exploration on the RET Mineral Claim.
Accordingly, we have no way to evaluate the likelihood that our business
will be successful. We were incorporated on April 18, 2006 and to date have
been involved primarily in organizational activities and the acquisition of
the mineral claim. We have not earned any revenues as of the date of this
prospectus. Potential investors should be aware of the difficulties
normally encountered by new mineral exploration companies and the high rate
of failure of such enterprises. The likelihood of success must be
considered in light of the problems, expenses, difficulties, complications
and delays encountered in connection with the exploration of the mineral
properties that we plan to undertake. These potential 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 expect to
incur significant losses into the foreseeable future. We recognize that if
we are unable to generate significant revenues from development of the RET
Mineral Claim and the production of minerals from the claim, we will not be
able to earn profits or continue operations. There is no history upon which
to base any assumption as to the likelihood that we will prove successful,
and it is doubtful that we will generate any operating revenues or ever
achieve profitable operations. If we are unsuccessful in addressing these
risks, our business will most likely fail.
BECAUSE MANAGEMENT HAS NO TECHNICAL EXPERIENCE IN MINERAL EXPLORATION, OUR
BUSINESS HAS A HIGHER RISK OF FAILURE.
Our director has no professional training or technical credentials in the
field of geology and specifically in the areas of exploring, developing and
operating a mine. As a result, he may not be able to recognize and take
advantage of potential acquisition and exploration opportunities in the
sector without the aid of qualified geological consultants. His decisions
and choices may not take into account standard engineering or managerial
approaches mineral exploration companies commonly use. Consequently our
operations, earnings and ultimate financial success may suffer irreparable
harm as a result.
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OUR INDEPENDENT AUDITOR HAS ISSUED AN AUDIT OPINION FOR MATTMAR MINERALS WHICH
INCLUDES A STATEMENT DESCRIBING OUR GOING CONCERN STATUS. OUR FINANCIAL STATUS
CREATES A DOUBT WHETHER WE WILL CONTINUE AS A GOING CONCERN.
As described in Note 1 of our accompanying financial statements, our
limited exploration stage and our lack of any guaranteed sources of future
capital create substantial doubt as to our ability to continue as a going
concern. If our business plan does not work, we could remain as a start-up
company with limited operations and revenues.
WITHOUT THE FUNDING FROM THIS OFFERING WE WILL BE UNABLE TO IMPLEMENT OUR
BUSINESS PLAN.
Our current operating funds are less than necessary to complete the
intended exploration program on the RET Mineral Claim, and therefore we
will need the funds from this offering to complete our business plan. As of
May 31, 2006, we had cash in the amount of $10,000. We currently do not
have any operations and we have no income.
THERE IS THE RISK THAT OUR PROPERTY DOES NOT CONTAIN ANY KNOWN BODIES OF ORE
RESULTING IN ANY FUNDS SPENT ON EXPLORATION BEING LOST.
There is the likelihood of our mineral claim containing little or no
economic mineralization or reserves of gold, copper or other minerals. We
have a geological report detailing previous exploration in the area and the
claim has been staked. However; there is the possibility that the previous
work was not carried out properly and the RET Mineral Claim does not
contain any reserves, resulting in any funds spent by us on exploration
being lost.
BECAUSE WE HAVE NOT SURVEYED THE RET MINERAL CLAIM, WE MAY DISCOVER
MINERALIZATION ON THE CLAIMS THAT IS NOT WITHIN OUR CLAIM BOUNDARIES.
While we have conducted a mineral claim title search, this should not be
construed as a guarantee of claim boundaries. Until the claim is surveyed,
the precise location of the boundaries of the claim may be in doubt. If we
discover mineralization that is close to the estimated claim boundaries, it
is possible that some or all of the mineralization may occur outside the
boundaries. In such a case we would not have the right to extract these
minerals.
IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON OUR MINERAL PROPERTY,
WE CAN PROVIDE NO ASSURANCE THAT WE WILL BE ABLE TO SUCCESSFULLY ADVANCE THE
MINERAL CLAIMS INTO COMMERCIAL PRODUCTION.
If our exploration program is successful in establishing ore of commercial
tonnage and grade, we will require additional funds in order to advance the
claim into commercial production. Obtaining additional financing would be
subject to a number of factors, including the market price for the
minerals, investor acceptance of our claims and general market conditions.
These factors may make the timing, amount, terms or conditions of
additional financing unavailable to us. The most likely source of future
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funds presently available to us is through the sale of equity capital. Any
sale of share capital will result in dilution to existing shareholders. We
may be unable to obtain any such funds, or to obtain such funds on terms
that we consider economically feasible and you may lose your investment in
this offering.
IF ACCESS TO OUR MINERAL CLAIM IS RESTRICTED BY INCLEMENT WEATHER, WE MAY BE
DELAYED IN OUR EXPLORATION AND ANY FUTURE MINING EFFORTS.
It is possible that snow or rain could cause the mining roads providing
access to our claim to become impassable. Annual precipitation is
approximately 12 inches of rain per year and about 14 to 16 inches of snow
which falls mainly in December and January. Winter access can be
temporarily disrupted by snow but snow removal equipment is locally
available as there are several native villages and logging camps in the
vicinity that require regular road service. If the roads are impassable we
would be delayed in our exploration timetable.
GOVERNMENT REGULATION OR OTHER LEGAL UNCERTAINTIES MAY INCREASE COSTS AND OUR
BUSINESS WILL BE NEGATIVELY AFFECTED.
There are several governmental regulations that materially restrict mineral
claim exploration and development. Under Canadian mining law, engaging in
certain types of exploration requires 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 initial exploration
phases, if we identify exploitable minerals and proceed to drilling
operations, we will incur regulatory compliance costs based upon the size
and scope of our operations. In addition, new regulations could increase
our costs of doing business and prevent us from exploring for and the
exploitation of ore deposits. 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 CURRENT OFFICER HAS OTHER BUSINESS INTERESTS, HE MAY NOT BE ABLE OR
WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATIONS,
CAUSING OUR BUSINESS TO FAIL.
Sean Mitchell, the president and a director of the company, currently
devotes approximately 10 hours per week providing management services to
us. While our executive officer presently possesses adequate time to attend
to our interests, it is possible that the demands on him 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. This could
negatively impact our business development.
RISKS ASSOCIATED WITH THIS OFFERING:
THE TRADING IN OUR SHARES WILL BE REGULATED BY SECURITIES AND EXCHANGE
COMMISSION RULE 15G-9 WHICH ESTABLISHED THE DEFINITION OF A "PENNY STOCK."
6
The shares being offered are defined as a penny stock under the Securities
and Exchange Act of 1934, and rules of the Commission. The Exchange Act and
such penny stock rules generally impose additional sales practice and
disclosure requirements on broker-dealers who sell our securities to
persons other than certain accredited investors who are, generally,
institutions with assets in excess of $5,000,000 or individuals with net
worth in excess of $1,000,000 or annual income exceeding $200,000 ($300,000
jointly with spouse), or in transactions not recommended by the
broker-dealer. For transactions covered by the penny stock rules, a
broker-dealer must make a suitability determination for each purchaser and
receive the purchaser's written agreement prior to the sale. In addition,
the broker-dealer must make certain mandated disclosures in penny stock
transactions, including the actual sale or purchase price and actual bid
and offer quotations, the compensation to be received by the broker-dealer
and certain associated persons, and deliver certain disclosures required by
the Commission. Consequently, the penny stock rules may make it difficult
for you to resell any shares you may purchase, if at all.
WE ARE SELLING THIS OFFERING WITHOUT AN UNDERWRITER AND MAY BE UNABLE TO SELL
ANY SHARES.
This offering is self-underwritten, that is, we are not going to engage the
services of an underwriter to sell the shares; we intend to sell them
through our officer and director, who will receive no commissions. He will
offer the shares to friends, relatives, acquaintances and business
associates, however; there is no guarantee that he will be able to sell any
of the shares. Unless he is successful in selling all of the shares and we
receive all of the proceeds from this offering, we may have to seek
alternative financing to implement our business plans.
DUE TO THE LACK OF A TRADING MARKET FOR OUR SECURITIES, YOU MAY HAVE DIFFICULTY
SELLING ANY SHARES YOU PURCHASE IN THIS OFFERING.
We are not registered on any public stock exchange. There is presently no
demand for our common stock and no public market exists for the shares
being offered in this prospectus. We plan to contact a market maker
immediately following the effectiveness of this Registration Statement and
apply to have the shares quoted on the OTC Electronic Bulletin Board
(OTCBB). The OTCBB is a regulated quotation service that displays real-time
quotes, last sale prices and volume information in over-the-counter (OTC)
securities. The OTCBB is not an issuer listing service, market or exchange.
Although the OTCBB does not have any listing requirements per se, to be
eligible for quotation on the OTCBB, issuers must remain current in their
filings with the SEC or applicable regulatory authority. Market makers are
not permitted to begin quotation of a security whose issuer does not meet
this filing requirement. Securities already quoted on the OTCBB that become
delinquent in their required filings will be removed following a 30 or 60
day grace period if they do not make their required filing during that
time. We cannot guarantee that our application will be accepted or approved
and our stock listed and quoted for sale. As of the date of this filing,
there have been no discussions or understandings between Mattmar Minerals,
or anyone acting on our behalf, with any market maker regarding
participation in a future trading market for our securities. If no market
is ever developed for our common stock, it will be difficult for you to
sell any shares you purchase in this offering. In such a case, you may find
7
that you are unable to achieve any benefit from your investment or
liquidate your shares without considerable delay, if at all. In addition,
if we fail to have our common stock quoted on a public trading market, your
common stock will not have a quantifiable value and it may be difficult, if
not impossible, to ever resell your shares, resulting in an inability to
realize any value from your investment.
YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION OF THE PRICE YOU PAY FOR YOUR
SHARES.
Our existing stockholder acquired his shares at a cost of $.001 per share,
a cost per share substantially less than that which you will pay for the
shares you purchase in this offering. Upon completion of this offering the
net tangible book value of the shares held by our existing stockholder
(10,000,000 shares) will be increased by $.002 per share without any
additional investment on his part. The purchasers of units in this offering
will incur immediate dilution (a reduction in the net tangible book value
per share from the offering price of $.01 per Share) of $.017 per share. As
a result, after completion of the offering, the net tangible book value of
the shares held by purchasers in this offering would be $.003 per share,
reflecting an immediate reduction in the $.01 price per share they paid for
their shares.
WE WILL BE HOLDING ALL THE PROCEEDS FROM THE OFFERING IN A STANDARD BANK
CHECKING ACCOUNT UNTIL ALL SHARES ARE SOLD. BECAUSE THE SHARES ARE NOT HELD IN
AN ESCROW OR TRUST ACCOUNT THERE IS A RISK YOUR MONEY WILL NOT BE RETURNED IF
ALL THE SHARES ARE NOT SOLD.
All funds received from the sale of shares in this offering will be
deposited into a standard bank checking account until all shares are sold
and the offering is closed, at which time, the proceeds will be transferred
to our business operating account. In the event all shares are not sold we
have committed to promptly return all funds to the original purchasers.
However since the funds will not be placed into an escrow, trust or other
similar account, there can be no guarantee that any third party creditor
who may obtain a judgment or lien against us would not satisfy the judgment
or lien by executing on the bank account where the offering proceeds are
being held, resulting in a loss of any investment you make in our
securities.
WE WILL INCUR ONGOING COSTS AND EXPENSES FOR SEC REPORTING AND COMPLIANCE.
WITHOUT REVENUE WE MAY NOT BE ABLE TO REMAIN IN COMPLIANCE, MAKING IT DIFFICULT
FOR INVESTORS TO SELL THEIR SHARES, IF AT ALL.
Our business plan allows for the payment of the estimated $8,000 cost of
this registration statement to be paid from existing cash on hand. We plan
to contact a market maker immediately following the effectiveness of our
Registration Statement and apply to have the shares quoted on the OTC
Electronic Bulletin Board. To be eligible for quotation, issuers must
remain current in their filings with the SEC. In order for us to remain in
compliance we will require future revenues to cover the cost of these
filings, which could comprise a substantial portion of our available cash
resources. If we are unable to generate sufficient revenues to remain in
compliance it may be difficult for you to resell any shares you may
purchase, if at all.
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MR. MITCHELL, THE SOLE DIRECTOR AND OFFICER OF THE COMPANY, BENEFICIALLY OWNS
100% OF THE OUTSTANDING SHARES OF OUR COMMON STOCK. AFTER THE COMPLETION OF THIS
OFFERING HE WILL OWN 77% OF THE OUTSTANDING SHARES. IF HE CHOOSES TO SELL HIS
SHARES IN THE FUTURE, IT MIGHT HAVE AN ADVERSE EFFECT ON THE PRICE OF OUR STOCK.
Due to the controlling amount of Mr. Mitchell's share ownership in our
company, if he chooses to sell his shares in the public market, the market
price of our stock could decrease and all shareholders suffer a dilution of
the value of their stock. If he does sell any of his common stock, he will
be subject to Rule 144 under the 1933 Securities Act. Rule 144 restricts
the ability of our director or officer to sell his shares by limiting the
sales of securities during any three-month period to the greater of: (1) 1%
of the outstanding common stock of the issuer; or (2) the average weekly
reported trading volume in the outstanding common stock reported on all
securities exchanges during the four calendar weeks preceding the filing of
the required notice of the sale under Rule 144 with the SEC.
MR. MITCHELL WILL CONTROL AND MAKE CORPORATE DECISIONS THAT MAY DIFFER FROM
THOSE THAT MIGHT BE MADE BY THE OTHER SHAREHOLDERS.
Due to the controlling amount of his share ownership in our company Mr.
Mitchell, our sole director and officer, will have a significant influence
in determining the outcome of all corporate transactions, including the
power to prevent or cause a change in control. His interests may differ
from the interests of the other stockholders and thus result in corporate
decisions that are disadvantageous to other shareholders.
FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risk and
uncertainties. We use words such as "anticipate", "believe", "plan", "expect",
"future", "intend", and similar expressions to identify such forward-looking
statements. Investors should be aware that all forward-looking statements
contained within this filing are good faith estimates of management as of the
date of this filing. Our actual results could differ materially from those
anticipated in these forward-looking statements for many reasons, including the
risks faced by us as described in the "Risk Factors" section and elsewhere in
this prospectus.
USE OF PROCEEDS
Assuming sale of all of the shares offered herein, of which there is no
assurance, the net proceeds from this Offering will be $30,000. The proceeds are
expected to be disbursed, in the priority set forth below, during the first
twelve (12) months after the successful completion of the Offering:
Total Proceeds to the Company $30,000
Phase I Exploration Program 15,000
Administration and Office Expense 4,000
Legal and Accounting 8,000
Working Capital 3,000
-------
Total Use of Net Proceeds $30,000
=======
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We will establish a separate bank account and all proceeds will be deposited
into that account until the total amount of the offering is received and all
shares are sold, at which time the funds will be released to us for use in our
operations. In the event we do not sell all of the shares before the expiration
date of the offering, all funds will be returned promptly to the subscribers,
without interest or deduction. If necessary, Mr. Mitchell, our director, has
verbally agreed to loan the company funds to complete the registration process
but we will require full funding to implement our complete business plan.
DETERMINATION OF OFFERING PRICE
The offering price of the shares has been determined arbitrarily by us. The
price does not bear any relationship to our assets, book value, earnings, or
other established criteria for valuing a privately held company. In determining
the number of shares to be offered and the offering price, we took into
consideration our cash on hand and the amount of money we would need to
implement our business plans. Accordingly, the offering price should not be
considered an indication of the actual value of the securities.
DILUTION
Dilution represents the difference between the offering price and the net
tangible book value per share immediately after completion of this offering. Net
tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly as a
result of our arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a result of
the lower book value of the shares held by our existing stockholder.
As of May 31, 2006, the net tangible book value of our shares was $4,461 or $Nil
per share, based upon 10,000,000 shares outstanding.
Upon completion of this offering, but without taking into account any change in
the net tangible book value after completion of this offering other than that
resulting from the sale of the shares and receipt of the total proceeds of
$30,000, the net tangible book value of the 13,000,000 shares to be outstanding
will be $34,461, or approximately $.003 per share. Accordingly, the net tangible
book value of the shares held by our existing stockholder (3,000,000 shares)
will be increased by $.002 per share without any additional investment on his
part. The purchasers of shares in this offering will incur immediate dilution (a
reduction in the net tangible book value per share from the offering price of
$.01 per share) of $.017 per share. As a result, after completion of the
offering, the net tangible book value of the shares held by purchasers in this
offering would be $.003 per share, reflecting an immediate reduction in the $.01
price per share they paid for their shares.
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After completion of the offering, the existing shareholder will own 77% of the
total number of shares then outstanding, for which he will have made an
investment of $10,000, or $.001 per share. Upon completion of the offering, the
purchasers of the shares offered hereby will own 23% of the total number of
shares then outstanding, for which they will have made a cash investment of
$30,000, or $.01 per Share.
The following table illustrates the per share dilution to the new investors:
Public Offering Price per Share $ .01
Net Tangible Book Value Prior to this Offering $ Nil
Net Tangible Book Value After Offering $ .003
Immediate Dilution per Share to New Investors $ .017
The following table summarizes the number and percentage of shares purchased,
the amount and percentage of consideration paid and the average price per share
paid by our existing stockholder and by new investors in this offering:
Total
Price Number of Percent of Consideration
Per Share Shares Held Ownership Paid
--------- ----------- --------- ----
Existing
Stockholder $ .001 10,000,000 77% $10,000
Investors in
This Offering $ .01 3,000,000 23% $30,000
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PLAN OF DISTRIBUTION
OFFERING WILL BE SOLD BY OUR OFFICER AND DIRECTOR
This is a self-underwritten offering. This Prospectus is part of a prospectus
that permits our officer and director to sell the shares directly to the public,
with no commission or other remuneration payable to him for any shares he may
sell. There are no plans or arrangements to enter into any contracts or
agreements to sell the shares with a broker or dealer. Sean Mitchell, our
officer and director, will sell the shares and intends to offer them to friends,
family members, acquaintances, and business associates. In offering the
securities on our behalf, he will rely on the safe harbor from broker dealer
registration set out in Rule 3a4-1 under the Securities Exchange Act of 1934.
Our officer and director will not register as a broker-dealer pursuant to
Section 15 of the Securities Exchange Act of 1934, in reliance upon Rule 3a4-1,
which sets forth those conditions under which a person associated with an Issuer
may participate in the offering of the Issuer's securities and not be deemed to
be a broker-dealer.
a. Our officer and director is not subject to a statutory disqualification, as
that term is defined in Section 3(a)(39) of the Act, at the time of his
participation; and,
b. Our officer and director will not be compensated in connection with his
participation by the payment of commissions or other remuneration based
either directly or indirectly on transactions in securities; and
c. Our officer and director is not, nor will he be at the time of his
participation in the offering, an associated person of a broker-dealer; and
d. Our officer and director meets the conditions of paragraph (a)(4)(ii) of
Rule 3a4-1 of the Exchange Act, in that he (A) primarily performs, or is
intended primarily to perform at the end of the offering, substantial
duties for or on behalf of our company, other than in connection with
transactions in securities; and (B) is not a broker or dealer, or been an
associated person of a broker or dealer, within the preceding twelve
months; and (C) has not participated in selling and offering securities for
any Issuer more than once every twelve months other than in reliance on
Paragraphs (a)(4)(i) or (a)(4)(iii).
Our officer, director, control persons and affiliates of same do not intend to
purchase any shares in this offering.
TERMS OF THE OFFERING
The shares will be sold at the fixed price of $.01 per share until the
completion of this offering. There is no minimum amount of subscription required
per investor, and subscriptions, once received, are irrevocable.
This offering will commence on the date of this prospectus and continue for a
period of 180 days (the "Expiration Date"), unless extended by our Board of
Directors for an additional 90 days.
12
DEPOSIT OF OFFERING PROCEEDS
This is a "best efforts", "all or none" offering and, as such, we will not be
able to spend any of the proceeds unless all the shares are sold and all
proceeds are received. We intend to hold all funds collected from subscriptions
in a separate bank account until the total amount of $30,000 has been received.
At that time, the funds will be transferred to our business account for use in
the implementation of our business plan. In the event the offering is not sold
out prior to the Expiration Date, all money will be promptly returned to the
investors, without interest or deduction. We determined the use of the standard
bank account was the most efficient use of our current limited funds. Please see
the risk factor section to read the related risk to you as a purchaser of any
shares.
PROCEDURES AND REQUIREMENTS FOR SUBSCRIPTION
If you decide to subscribe for any shares in this offering, you will be required
to execute a Subscription Agreement and tender it, together with a check or bank
draft to us. Subscriptions, once received by the company, are irrevocable. All
checks for subscriptions should be made payable to Mattmar Minerals, Inc.
LEGAL PROCEEDINGS
Mattmar Minerals is not currently involved in any legal proceedings and we are
not aware of any pending or potential legal actions.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The sole director and officer of Mattmar Minerals, Inc., whose one year terms
will expire on 05/01/07, or at such a time as his successor(s) shall be elected
and qualified is as follows:
Name & Address Age Position Date First Elected Term Expires
- -------------- --- -------- ------------------ ------------
Sean Mitchell 39 President, 4/18/06 05/01/07
2986 W. 30th Avenue Secretary,
Vancouver, BC Treasurer,
Canada V6L 1Z4 CFO, CEO &
Director
The foregoing person is a promoter of Mattmar Minerals, as that term is defined
in the rules and regulations promulgated under the Securities and Exchange Act
of 1933.
Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and qualified. Officers are appointed
to serve until the meeting of the board of directors following the next annual
meeting of stockholders and until their successors have been elected and
qualified.
13
Mr. Mitchell currently devotes 10 hours per week to company matters. After
receiving funding per our business plan Mr. Mitchell intends to devote as much
time as the board of directors deems necessary to manage the affairs of the
company.
No executive officer or director of the corporation has been the subject of any
order, judgment, or decree of any court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring, suspending or
otherwise limiting him or her from acting as an investment advisor, underwriter,
broker or dealer in the securities industry, or as an affiliated person,
director or employee of an investment company, bank, savings and loan
association, or insurance company or from engaging in or continuing any conduct
or practice in connection with any such activity or in connection with the
purchase or sale of any securities.
No executive officer or director of the corporation has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.
RESUME
SEAN MITCHELL - Sean has been our President, Secretary, Treasurer and sole
Director since inception. Since graduating from the University of British
Columbia in 1989 with a Bachelor of Commerce Degree (Finance Major), Sean has
developed extensive experience in a diverse range of business developments,
including commercial real estate salesman for Royal Lepage Commercial Inc. from
January 1995 to December 1996. Royal Lepage Commercial Inc. was a real estate
brokerage firm with offices across Canada and a focus on commercial real estate
sales and leasing. From March 1997 to December 1999 he was an Associate with The
Pacific Rim Group dealing with merchant banking and enterprise development
services within the private and public markets. The Pacific Rim Group had
offices in Vancouver, Canada and Hong Kong and was a financial services
organization focused on assisting private and public entities. From November
2001 to July 2003, he worked for Leone International Marketing Inc., with a
focus on their A-Wear clothing collection. Responsibilities included working
with clothing factories, merchandising personnel, assisting with logistics
(shipping, receiving and accounts payable), assisting merchandise buyers and
assisting marketing executives. From May 2002 Sean has been an officer of FII
International Inc., a publicly-traded Nevada corporation, that provides online
fashion services.
14
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information on the ownership of Mattmar Minerals
voting securities by officers, directors and major shareholders as well as those
who own beneficially more than five percent of our common stock as of the date
of this prospectus:
No. of No. of
Name and Shares Shares Percentage of Ownership:
Address Before After Before After
Beneficial Owner(1) Offering Offering Offering Offering
- ------------------- -------- -------- -------- --------
Sean Mitchell 10,000,000 10,000,000 100% 77%
All Officers and
Directors as a Group 10,000,000 10,000,000 100% 77%
(1) The person named above may be deemed to be a "parent" and "promoter" of the
Company, within the meaning of such terms under the Securities Act of 1933, as
amended, by virtue of his direct holdings in the Company.
DESCRIPTION OF SECURITIES
COMMON STOCK
The authorized capital stock of the Company consists of 75,000,000 shares of
Common Stock, par value $.001. The holders of common stock currently (i) have
equal ratable rights to dividends from funds legally available therefore, when,
as and if declared by the Board of Directors of the Company; (ii) are entitled
to share ratably in all of the assets of the Company available for distribution
to holders of common stock upon liquidation, dissolution or winding up of the
affairs of the Company; (iii) do not have preemptive, subscription or conversion
rights and there are no redemption or sinking fund provisions or rights
applicable thereto; and (iv) are entitled to one non-cumulative vote per share
on all matters on which stockholders may vote. All shares of common stock now
outstanding are fully paid for and non-assessable and all shares of common stock
which are the subject of this Offering, when issued, will be fully paid for and
non-assessable. Please refer to the Company's Articles of Incorporation, By-Laws
and the applicable statutes of the State of Nevada for a more complete
description of the rights and liabilities of holders of the Company's
securities.
NON-CUMULATIVE VOTING
The holders of shares of common stock of the Company do not have cumulative
voting rights, which means that the holders of more than 50% of such outstanding
shares, voting for the election of directors, can elect all of the directors to
be elected, if they so choose, and, in such event, the holders of the remaining
shares will not be able to elect any of the Company's directors. After this
Offering is completed, the present stockholder will own approximately 77% of the
outstanding shares. (See "Principal Stockholders".)
15
CASH DIVIDENDS
As of the date of this prospectus, the Company has not declared or paid any cash
dividends to stockholders. The declaration or payment of any future cash
dividend will be at the discretion of the Board of Directors and will depend
upon the earnings, if any, capital requirements and financial position of the
Company, general economic conditions, and other pertinent factors. It is the
present intention of the Company not to declare or pay any cash dividends in the
foreseeable future, but rather to reinvest earnings, if any, in the Company's
business operations.
INTEREST OF NAMED EXPERTS AND COUNSEL
None of the below described experts or counsel have been hired on a contingent
basis and none of them will receive a direct or indirect interest in the
Company.
Our financial statements for the period from inception to the year ended May 31,
2006, included in this prospectus, have been audited by De Joya Griffith &
Company. We include the financial statements in reliance on their reports, given
upon their authority as experts in accounting and auditing.
The Law Office of Batcher, Zarcone & Baker, has passed upon the validity of the
shares being offered and certain other legal matters and is representing us in
connection with this offering.
T.L. Sadlier-Brown, P.Geo., has provided us with the geology report contained
herein.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the By-Laws of the company, 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 Act, and is, therefore unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by such director, officer, or other control person 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 to a
court of appropriate jurisdiction the question whether such indemnification by
it, is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
16
ORGANIZATION WITHIN THE LAST FIVE YEARS
Mattmar Minerals, Inc. was incorporated in Nevada on April 18, 2006 to engage in
the business of acquisition, exploration and development of natural resource
properties. At that time Sean Mitchell was named sole Officer and Director of
the company. At that time the Board of Directors voted to seek capital and begin
development of our business plan. We received our initial funding of $10,000
through the sale of common stock to Mr. Mitchell who purchased 10,000,000 shares
of our Common Stock at $0.001 per share on April 19, 2006.
DESCRIPTION OF BUSINESS
We are an exploration stage company with no revenues and a limited operating
history. Our independent auditor has issued an audit opinion for Mattmar
Minerals which includes a statement expressing substantial doubt as to our
ability to continue as a going concern. The source of information contained in
this discussion is our geology report that has been included as Exhibit 99.2 to
this prospectus.
There is the likelihood of our mineral claim containing little or no economic
mineralization or reserves of gold, copper and other minerals. The RET Mineral
Claim, consisting of 637 acres, is the only claim currently in the company's
portfolio. There is the possibility that the RET Mineral Claim does not contain
any reserves and funds that we spend on exploration will be lost. Even if we
complete our current exploration program and are successful in identifying a
mineral deposit we will be required to expend substantial funds on further
drilling and engineering studies before we will know if we have a commercially
viable mineral deposit or reserve.
GLOSSARY OF MINING TERMS
"Adit" An opening driven horizontally into the side of a
mountain or hill for providing access to a mineral
deposit.
"Agglomerate" A breccia composed of largely or entirely of fragments of
volcanic rock.
"Anomalous" A departure from the norm which may indicate the presence
of mineralization
"Argillite" A metamorphic rock, intermediate between shale and slate,
that does not possess true slate cleavage
"Basalt" An extrusive volcanic rock
"BCDM" British Columbia Department of Mines
"Breccia" A rock in which angular fragments are surrounded by a
mass of fine-grained minerals
"Chalcopyrite" A sulphide mineral of copper and iron; the most important
ore mineral in copper
"Chert" A variety of silica that contains microcrystalline quartz
"Chlorite" A dark green, soft, flaky mineral similar to mica; it is
common as an alteration or metamorphic mineral
"Clastic Rock" A sedimentary rock composed principally of fragments
derived from pre-existing rocks and transported
mechanically to their place of deposition
"Copper" or "Cu" A reddish or salmon-pink isometric mineral, the native
metallic element of copper. It is ductile and malleable,
a good conductor of heat and electricity, usually dull
and tarnished
17
"Diamond drill" A rotary type of rock drill that cuts a core of rock that
is recovered in long cylindrical sections
"Diorite" An intrusive igneous rock composed chiefly of sodic
plagioclase, hornblende, biotite or pyroxene
"Epidote" A common crystallized calcium, aluminum, iron mineral
"Fault" A fracture dividing a rock into two sections that have
visibly moved relative to each other
"Feldspars" silicate minerals which occur in igneous rocks -
plagioclase contains calcium and sodium
"Flows" Volcanic rock formed from lava that flowed out onto the
earth's surface
"Galena" A lead sulphide - the most common ore mineral of lead
"Geological mapping" The process of observing and measuring geological
features in a given area and plotting these features, to
scale, onto a map
"Geophysical survey" A method of exploration that measures the physical
properties of rock formations including magnetism,
specific gravity, electrical conductivity and resistance
"Gold" or "Au" A heavy, soft, yellow, ductile, malleable, metallic
element. Gold is a critical element in computer and
communications technologies
"Granodiorite" Igenous rock, less felsic than granite, typically light
in color; rough plutonic equivalent of dacite
"Isolated Rafts" Literally small bodies of a rock unit that "sit" on top
of a different rock
"Jurassic" Epoch in Earth history from about 135 million to 190
million years ago Also refers to the rocks and sediment
deposited in that epoch
"Lead" or "Pb" Heavy, easily fusible soft malleable base metal of dull
pale bluish-grey colour
"Limestones" A sedimentary rock composed primarily of calcium
carbonate
"Mafic" Class of rock which crystallizes from silicate minerals
at relatively high temperatures. It is also sometimes
called basalt
"Marble" A metamorphic rock derived from the re-crystallization of
limestone by the application of heat and pressure
"Massive sulphide
mineralization" Mineralization that contains a variety of different
sulphide minerals - usually includes - sphalerite,
chalcopyrite, pyrite and pyrrhotite.
"Metamorphic" A rock that has undergone chemical or structural changes
(heat, pressure, or a chemical reaction) that causes
changes to its original state - High-grade metamorphic is
a large amount of change
"Mineral claim" A portion of land held either by a prospector or a mining
company, in British Columbia each claim is 500m x 500m
(1,640 ft2)
"MINFILE" A government data base detailing mineral occurrences in
BC
"Monzonite" A felsic igneous rock usually light colored with > 20%
quartz content
"Ore" A mixture of mineralized rock from which at least one of
the metals can be extracted at a profit
"Permian" Epoch in earths history about 290-248 million years ago
"Pillow" Basalts erupting under water form pillows, mounds of
elongated lava formed by the repeated oozing and
hardening of the hot basalt
"Precious metal" Any of several metals, including gold and platinum, that
have high economic value - metals that are often used to
make coins or jewelry
"Pyrite" A yellow iron sulphide mineral - sometimes referred to as
"fools gold"
18
"Pyrrhotite" A bronze colored, magnetic iron sulphide mineral
"Quartz" Common rock forming mineral consisting of silicon and
oxygen
"Schists" A coarse-grained, strongly foliated metamorphic rock that
develops from phyllite and splits easily into flat,
parallel slabs
"Sedimentary rocks" Secondary rocks formed from material derived from other
rocks and laid down underwater.
"Sericite" A term for a fine-grained white mica, mainly Muscovite or
Paragonite
"Shale" A sedimentary rock composed of fine sediment particles -
tend to be red, brown, black, or gray, and usually
originate in relatively still waters
"Silver" or "Ag" A white metallic element that is ductile, very malleable
and capable of a high polish. This precious metal has
major industrial applications in photography, x-rays,
electronics and electrical contacts, batteries, brazing
alloys, catalysts, mirrors, jewelry and sterlingware
"Soil sampling" The collecting of samples of soil, usually 2 pounds per
sample, from soil thought to be covering mineralized
rock. The samples are submitted to a laboratory that will
analyze them for mineral content
"Sphalerite" A zinc sulphide mineral; the most common ore mineral of
zinc
"Stockwork" A complex system of structurally controlled or randomly
oriented veins, also referred to as stringer zones
"Trenching" The digging of long, narrow excavation through soil, or
rock, to expose mineralization
"Tuff" Rock composed of fine volcanic ash
"Vein" A crack in the rock that has been filled by minerals that
have traveled upwards from a deeper source
"Volcanic rocks" Igneous rocks formed from magma that has flowed out or
has been violently ejected from a volcano
"Zinc" or "Zn" A white metallic element
GENERAL INFORMATION
The one property in the Company's portfolio, on which the net proceeds of the
offering will be spent, is the RET Mineral Claim, consisting of 258 hectares
(637 acres), included within 15 Mineral Title Grid Units. The Claim has been
recorded online as per B.C. Regulations and is recorded in the name of Sean
Miller Mitchell of Vancouver, B.C.
The Claim lies on an East-facing lower slope west of the Lillooet River, about
4.5 km (2.8 mi) northwest of the village of Skookumchuck, 32 km (22 mi)
northwest of Harrison Lake and 73 km (45 mi) by road southeast of Pemberton.
Access from the Vancouver area is north via Highway 99 to Pemberton then
southeast along the Lillooet River road (west side) to Chief Paul Creek. A
poorly maintained logging road leads West from here up the slope to the vicinity
of south part of the property. The terrain in the general area is rugged,
locally precipitous, and ranges in elevation from about 300 to 800 meters (990
to 2,640 feet) above sea level. Bedrock exposures are common: soil cover
generally consists of poorly developed regolith (a layer of loose, dissimilar
material covering solid rock) occurring mainly on lower more gentle slopes and
in the valleys. The area is generally mantled in both old growth and second
growth evergreen forest.
19
At the current time the property is without known reserves and the proposed
program is exploratory in nature. We have not carried out any exploration work
on the claim and have incurred no exploration costs. The future cost of
exploration work on the property is disclosed in detail in the Plan of Operation
section of this prospectus.
There is not a plant or any equipment currently located on the property.
Water required for exploration and development of the claim is available from
streams and creeks that flow year round.
A two-phase exploration program to evaluate the area is considered appropriate
and is recommended by the geologist. In the past, soil geochemical surveys have
proved both successful and cost-effective in identifying mineral occurrences in
the area - including both the silver breccia zone and the auriferous shear zone
south of the RET Claim. Accordingly, Phase 1 would consist of a comprehensive
soil survey of the claim area. This work would be accompanied by conventional
prospecting. The property would be adequately covered by about 8 line km (5 mi)
of survey work with lines run on a bearing of 030(Degree) at 200 metre (220 yd)
intervals and controlled using both chain and compass and GPS equipment. Samples
would be taken at 25 metre (27 yd) intervals and all sample stations would be
flagged and numbered.
Provision will be made for a second phase of exploration contingent upon Phase 1
results. Although a decision on the precise nature of this work or allocation of
the various tasks is not yet possible, it may be expected to include geophysical
surveys (EM and magnetic) and detailed geological mapping, trenching and rock
sampling. If a target for more detailed work is identified, a diamond drilling
program would constitute a third phase.
An estimate of the cost of the proposed program is $15,000 for the initial phase
of exploration work and $75,000 for a contingent second phase. We plan to
commence Phase 1 of the exploration program in the fall 2006.
The discussions contained herein are management's estimates. Because we have not
commenced our exploration program we cannot provide a more detailed discussion
of our plans if we find a viable store of minerals on our property, as there is
no guarantee that exploitable mineralization will be found, the quantity or type
of minerals if they are found and the extraction process that will be required.
We are also unable to assure you we will be able to raise the additional funding
to proceed with any subsequent work on the claims if mineralization is found in
Phase 1.
ACQUISITION OF THE RET MINERAL CLAIM
The RET Claim is assigned Tenure Number 532620 and is recorded in the name of
Sean Miller Mitchell of Vancouver, B.C. The date of record is April 19th 2006
and the claim is in good standing to April 20th 2007.
20
REQUIREMENTS OR CONDITIONS FOR RETENTION OF TITLE
Title to the property has already been granted to our president and director,
Sean Mitchell, who holds the claim in trust for the Company. To obtain a Free
Miner's Certificate, which is required to hold a mining claim in British
Columbia, Section 8(1) of the B.C. Mineral Tenure Act (MTA) stipulates that a
corporation must be registered under the British Columbia Business Corporations
Act. Section 8(2) of the MTA stipulates that an individual applicant must either
be a resident of Canada or be authorized to work in Canada. As the corporation
is not registered in British Columbia the claim is held in trust for the Company
by Mr. Mitchell, a Canadian citizen. The mineral title claim has been registered
with the Government of British Columbia and a title search has been done to
ensure there are no competing claims to the property.
In order to retain title to the property exploration work costs must be recorded
and filed with the British Columbia Department of Energy Mines and Petroleum
Resources ("BCDM"). The BCDM charges a filing fee, equal to 10% of the value of
the work recorded, to record the work.
LOCATION, ACCESS, CLIMATE, LOCAL RESOURCES & INFRASTRUCTURE
The Claim lies on an east-facing lower slope west of the Lillooet River, about
4.5 km (2.8 mi) northwest of the village of Skookumchuck, 32 km (22 mi)
northwest of Harrison Lake and 73 km (45 mi) by road southeast of Pemberton.
Access from the Vancouver area is north via Highway 99 to Pemberton then
southeast along the Lillooet River road (west side) to Chief Paul Creek. A
poorly maintained logging road leads west from here up the slope to the vicinity
of south part of the property. The terrain in the general area is rugged,
locally precipitous, and ranges in elevation from about 300 to 800 meters (990
to 2,640 feet) above sea level. Bedrock exposures are common: soil cover
generally consists of poorly developed regolith (a layer of loose, dissimilar
material covering solid rock) occurring mainly on lower more gentle slopes and
in the valleys. The area is generally mantled in both old growth and second
growth evergreen forest.
The climate in the area of interest is temperate: the maximum daily summer
temperatures occur in July and reach about 78 degrees and minimum daily winter
temperatures are about 23 degrees in January. Annual precipitation is about 12
inches of rain per year and about 12 to 14 inches of snow which falls mainly in
December and January. Winter access can be temporarily disrupted by snow but
snow removal equipment is locally available as there are several native villages
and logging camps in the vicinity that require regular road service. The area is
traversed by several streams.
Pemberton, located 45 miles from the Claim, is a fully-serviced community of
some 3,000 people and through which the BC Rail mainline runs. Amenities in
Pemberton and the surrounding area include police, hospitals, groceries, fuel,
hardware and other necessary items. Drilling companies are present in the area
and assay facilities are located in Vancouver.
21
FIGURE 1: LOCATION MAP SHOWING PEMBERTON-LILLOOET LAKE AREA, SOUTHWEST B.C.
RET CLAIM (TENURE NUMBER 532620) IS IN LOWER RIGHT CENTRE. SCALE ~ 1:200,000.
PHYSIOGRAPHY
The terrain in the general area is rugged, locally precipitous, and ranges in
elevation from about 300 to 800 meters (990 to 2,640 feet) above sea level.
Bedrock exposures are common: soil cover generally consists of poorly developed
regolith (a layer of loose, dissimilar material covering solid rock) occurring
mainly on lower more gentle slopes and in the valleys. The area is generally
mantled in both old growth and second growth evergreen forest.
22
CLAIM MAP SHOWING THE RET CLAIM (532620) AND ADJOINING PROPERTIES.
APPROXIMATE SCALE IS 1:50,000
HISTORY
The area was first prospected during the late 1800s at which time gold
discoveries were made at Fire Mountain about 12 km southeast of the Ret Claim
and at the Mayflower Mine, now covered by the claim adjoining just south of the
Ret property. A limited amount of mining and milling was carried out in both
areas during the early 1900s.
Workings at the Mayflower Mine include several hundred feet of tunneling in an
auriferous quartz vein associated with mineralized rhyolite breccia. Reported
grades are on the order of $5/ton (Cairnes 1927). A 2-stamp mill was constructed
and operated for a time by Mayflower Mining and Milling Co. A small but unknown
tonnage of gold-bearing quartz was mined and processed but the venture was
terminated after a few years. In 1929 the prospect was re-staked as the Dandy
Claim but little if any work was done at that time. The claim subsequently
lapsed and the property appears to have lain idle until the 1970s when it was
23
again re-staked as the Moneymaker Claim by Mr. G. Nagy, a local prospector.
Optionees carried out some exploration work but, upon expiration of the option,
the claims were again allowed to revert to the crown. In 1981 the Easy and Jo
claims were staked by Hillside Energy Corp. and Lacana Gold Corp. respectively.
Geochemical surveys and conventional prospecting during the 1980s identified an
extensive silver geochemical anomaly on the Easy Claim about 2km southeast of
the RET Claim. In 1988, a soil geochemical survey also identified an intense
gold anomaly, also on the Easy Claim, now covered by Claim 520281 which adjoins
south of the RET Claim as shown in Figure 2. Both the silver and gold targets
were subjected to a very limited amount of follow-up drilling but with
inconclusive results. Subsequent corporate restructuring and resulting ownership
changes engendered financing issues and no additional work has been carried out
in the area to date.
Previous work completed in the area is helpful as it provides some indication as
to the type, grades and location of minerals present in the area, though there
is no guarantee the previous work will result in any exploitable mineral
deposits on our claim.
REGIONAL GEOLOGY
The RET property lies within the southeast margin of the Coast Belt of British
Columbia, a geological terrain characterized Mesozoic volcanic and sedimentary
rocks with a complex history of deformation, metamorphism and igneous activity.
The layered rocks in the area of interest comprise the Gambier Assemblage, a
Cretaceous sequence that includes the predominantly sedimentary Peninsula
Formation (KP) and the overlying and predominantly volcanic Brokenback Hill
Formation (KBH). These rocks correlate with a similar succession lying west of
Harrison Lake and which has been described as the Harrison Lake Formation and
Fire Lake Sequence (Journeay 1990).
The sedimentary and volcanic rocks have been subjected to intense folding and
faulting along a northwest axis and are intruded both to the east and west by
Mesozoic and Tertiary diorite and granodiorite plutons. As a result, they
essentially comprise a roof pendant within the Coast Plutonic Complex. The
oldest tectonic activity consists of the northwest-striking folding and
transcurrent faulting and southwest directed thrust faulting. The region is also
dissected by a much younger system of northeast-striking dextral and oblique
faults downdropped to the northwest. These faults are considered to be Tertiary
in age but may be younger. They tend to offset the more northerly Gambier strata
and structures within them to the northeast and also appear to provide the
permeability for a number of hot springs in the region.
More detailed descriptions of the regional geology have been published by Lynch
(1990) and Journeay (1990).
PROPERTY GEOLOGY AND MINERALIZATION
The claim area is underlain by the rocks of the lower Cretaceous Brokenback Hill
Formation (KBH), a subaqueous volcanic succession of intermediate composition
including dacitic and andesitic flows and tuffs with minor amounts of rhyolite
and basalt. The volcanic rocks are variably altered to chlorite and steatite
schists, locally intruded by porphyritic diorite dykes and cut by numerous
24
quartz, quartz calcite and sulphide viens. In the area south of the RET Claim,
where the bulk of the past exploration has been concentrated, these rocks have
been found to host two styles of gold, silver and base metal mineralization: 1)
a breccia zone containing silver and base metals as breccia fillings in a coarse
heterogenic volcanic and metamorphic breccia and 2) a mineralized shear zone
containing base metal sulphides and native gold. No mineral deposits are
currently known to occur on the RET Claim but its proximity to these partially
explored precious and base metal prospects makes it an attractive exploration
target
The silver-bearing breccias observed south of the RET property appear to occur
in the lower part of the Brokenback Hill sequence above its contact with the
underlying Peninsula Formation. The origin of the breccia is not clear but it
could be either a product of post-depositional tectonism or volcanic activity.
Epigenetic pyrite, pyrrhotite, sphalerite and argentiferous galena occur as
fillings between the mainly coarse breccia fragments.
About 200 metres north of the breccia zones and about 2.5 km south of the RET
Claim boundary is a shear zone cutting a sequence of dacitic and andesitic flows
and tuffs and minor intercalated argillite. The zone strikes at 140(Degree),
dips easterly at between 70 and 75(Degree) and is mineralized with disseminated
and massive pyrite, minor galena, sphalerite and chalcopyrite and is locally
weakly silicified. Gold values from within the zone vary from negligible to 5.39
gm/mt (0.157 oz/t). Weathering is intense and surface exposures are
characterized by abundant limonite and black, earthy manganese oxides. A sample
of this material assayed 13.63 gm/mt (0.39 oz/t). Fine angular free gold can
also be panned from exposed parts of the shear zone (Sadlier-Brown,1990).
The geology of the RET Claim area is essentially a northwesterly extension of
the lithologies and structures found on the adjoining property. The strike of
the mineralized shear is such that, if it persists toward the northwest, it
would traverse the RET Claim.
25
GEOLOGICAL SKETCH MAP OF THE RET CLAIM AREA (YELLOW) SHOWING KNOWN GOLD
PROSPECTS (RED).
26
COMPETITION
We do not compete directly with anyone for the exploration or removal of
minerals from our property as we hold all interest and rights to the claim.
Readily available commodities markets exist in Canada and around the world for
the sale of gold, copper and other minerals. Therefore, we will likely be able
to sell any gold, copper or other minerals that we are able to recover.
We will be subject to competition and unforeseen limited sources of supplies in
the industry in the event spot shortages arise for supplies such as dynamite,
and certain equipment such as bulldozers and excavators that we may need to
conduct phase 2 of the exploration. We have not yet attempted to locate or
negotiate with any suppliers of products, equipment or services and will not do
so until funds are received from this offering. If we are unsuccessful in
securing the products, equipment and services we need we may have to suspend our
exploration plans until we are able to do so.
BANKRUPTCY OR SIMILAR PROCEEDINGS
There has been no bankruptcy, receivership or similar proceeding.
REORGANIZATIONS, PURCHASE OR SALE OF ASSETS
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.
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.
The initial steps of exploration can be carried out without permitting or
notification to any government body as it is deemed "low-disturbance/low-impact"
by the British Columbia Department of Energy Mines and Petroleum Resources
(BCDM).
With respect to any mechanized trenching or diamond drilling, a plan of
operation will need to be filed with the BCDM. This plan will detail the extent,
location and amount of surface disturbance for the trenching and/or drilling. As
the amount of trenching and drilling (initially) will be limited, the permit
should be issued within 30 days. We will be required to obtain a refundable bond
in the amount of $3,000 - $5,000 (depending on the anticipated amount of
disturbance). The bond is to ensure that we reclaim or repair the disturbance
caused by the trenching and drilling. Usually this reclaiming work entails
filling in and smoothing the surface at trenching sites, clean up and removal of
any work material, and seeding native grass/plants at the site of any
disturbance.
In the event that trees larger than 6 inches in diameter need to be cut down, a
permit will need to be obtained from the BC Ministry of Forests. This usually
takes less than 30 days to obtain. We will try to adjust the areas we work at
and trench around larger trees (initially) to avoid any disturbance to larger
trees. If the disturbance to larger trees is unavoidable then a permit to cut
will be obtained.
27
There are nominal costs involved in obtaining the BCDM or Forestry permits (less
than $100.00). The bond required by the BCDM is returned (with interest) upon
proper clean up of the site. There will be costs for the crew and equipment
required to fill in the trenches etc., but as heavy equipment is available
locally, and the amount of disturbance is expected to be minimal, the costs will
be most likely be less than $2,500.
In order to retain title to the property exploration work costs must be recorded
and filed with the British Columbia Department of Energy Mines and Petroleum
Resources ("BCDM").
PATENTS, TRADEMARKS, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS, OR LABOR
CONTRACTS
We have no current plans for any registrations such as patents, trademarks,
copyrights, franchises, concessions, royalty agreements or labor contracts. We
will assess the need for any copyright, trademark or patent applications on an
ongoing basis.
NEED FOR GOVERNMENT APPROVAL FOR ITS PRODUCTS OR SERVICES
We are not required to apply for or have any government approval for our
products or services.
RESEARCH AND DEVELOPMENT COSTS DURING THE LAST TWO YEARS
We have not expended funds for research and development costs since inception.
We paid $2,500 for the geology report.
NUMBER OF EMPLOYEES
Our only employee is our sole officer, Sean Mitchell. Mr. Mitchell currently
devotes 10 hours per week to company matters and after receiving funding he
plans to devote as much time as the board of directors determines is necessary
to manage the affairs of the company. There are no formal employment agreements
between the company and our current employee.
REPORTS TO SECURITIES HOLDERS
We provide an annual report that includes audited financial information to our
shareholders. We will make our financial information equally available to any
interested parties or investors through compliance with the disclosure rules of
Regulation S-B for a small business issuer under the Securities Exchange Act of
1934. We will become subject to disclosure filing requirements once our SB-2
registration statement becomes effective, including filing Form 10K-SB annually
and Form 10Q-SB quarterly. In addition, we will file Form 8K and other proxy and
information statements from time to time as required. We do not intend to
voluntarily file the above reports in the event that our obligation to file such
reports is suspended under the Exchange Act. The public may read and copy any
materials that we file with the Securities and Exchange Commission, ("SEC"), at
the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site
(http://www.sec.gov) that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the SEC.
28
PLAN OF OPERATION
Our current cash balance is $10,000. Until approximately December of 2006, we
believe our cash balance is sufficient to fund our limited levels of operations.
If we experience a shortage of funds prior to funding we may utilize funds from
Mr. Mitchell, our director, who has informally agreed to advance funds to allow
us to pay for offering costs, filing fees, and professional fees, however he has
no formal commitment, arrangement or legal obligation to advance or loan funds
to the company. In order to achieve our business plan goals, we will need the
funding from this offering. We are an exploration stage company and have
generated no revenue to date. We have sold $10,000 in equity securities to pay
for our minimum level of operations.
Our auditor has issued a going concern opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated revenues and no revenues are anticipated until we
begin removing and selling minerals. There is no assurance we will ever reach
that point.
Our exploration target is to find exploitable minerals on our property. Our
success depends on achieving that target. There is the likelihood of our mineral
claim containing little or no economic mineralization or reserves of gold,
copper and other minerals. There is the possibility that the RET Mineral Claim
does not contain any reserves and funds that we spend on exploration will be
lost. Even if we complete our current exploration program and are successful in
identifying a mineral deposit we will be required to expend substantial funds to
bring our claim to production. We are unable to assure you we will be able to
raise the additional funds necessary to implement any future exploration or
extraction program even if mineralization is found.
Our plan of operation for the twelve months following the date of this
prospectus is to complete the first phase of the exploration program on the RET
Mineral Claim consisting of a comprehensive soil survey of the claim area and
accompanied by conventional prospecting. In addition to the $15,000 we
anticipate spending for Phase I of the exploration program as outlined below, we
anticipate spending an additional $25,000 on professional fees, including fees
payable in connection with the filing of this registration statement and
complying with reporting obligations, and general administrative costs. Total
expenditures over the next 12 months are therefore expected to be $40,000, which
is the amount to be raised in this offering and our cash on hand. We will
require the funds from this offering to proceed.
A two-phase exploration program to evaluate the area is considered appropriate
and is recommended. In the past, soil geochemical surveys have proved both
successful and cost-effective in identifying mineral occurrences in the area -
including both the silver breccia zone and the auriferous shear zone south of
the Ret Claim. Accordingly, Phase 1 should consist of a comprehensive soil
survey of the claim area. This work should be accompanied by conventional
prospecting. The property would be adequately covered by about 8 line km of
survey work with lines run on a bearing of 030(Degree) at 200 metre intervals
29
and controlled using both chain and compass and GPS equipment. Samples should be
taken at 25 metre intervals and all sample stations should be flagged and
numbered.
Provision should be made for a second phase of exploration contingent upon Phase
1 results. Although a decision on the precise nature of this work or allocation
of the various tasks is not yet possible, it may be expected to include
geophysical surveys (EM and magnetic) and detailed geological mapping, trenching
and rock sampling. If a target for more detailed work is identified, a diamond
drilling program would constitute a third phase.
An estimate of the cost of the proposed program is $15,000 for the initial phase
of exploration work and $75,000 for a contingent second phase.
COST PROPOSAL
PHASE I
Soil sampling survey and prospecting: ~ 8.5 line km 4,200
Geochemical analyses: 34 element ICP + Au FA & AA; ~330 samples @ $21 7,000
Data evaluation, interpretation and report preparation 2,400
Contingency allowance 1,400
------
Sub-total 15,000
PHASE II
Provision for geophysical surveys 20,000
Provision for geological mapping, trenching & rock sampling and assays 40,000
Data evaluation, interpretation and report preparation 15,000
------
Sub-total 75,000
GRAND TOTAL 90,000
======
If we are successful in raising the funds from this offering we plan to commence
Phase 1 of the exploration program on the claim in the fall of 2006. We expect
this phase to take 7 to 14 days to complete.
The above program costs are management's estimates based upon the
recommendations of the professional geologist's report and the actual project
costs may exceed our estimates. To date, we have not commenced exploration.
Following phase one of the exploration program, if it proves successful in
identifying mineral deposits and we are able to raise the necessary funds, of
which there is no guarantee, we intend to proceed with phase two of our
exploration program. The estimated cost of this program is $75,000 and will take
approximately 30 days to complete.
Subject to financing and the success of Phase 1, we anticipate commencing the
second phase of our exploration program in summer 2007. We do not have any
verbal or written agreement regarding the retention of any qualified engineer or
geologist for our planned exploration program. We will require additional
funding to proceed with any subsequent work on the claim, we have no current
plans on how to raise the additional funding. We cannot provide investors with
any assurance that we will be able to raise sufficient funds to proceed with any
work after the first phase of the exploration program.
30
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us on which to base an
evaluation of our performance. We are an exploration stage company and have not
generated revenues from operations. We cannot guarantee we will be successful in
our business operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital resources,
possible delays in the exploration of our property, and possible cost overruns
due to increases in the cost of services.
To become profitable and competitive, we must conduct the exploration of our
properties before we start into production of any minerals we may find. We are
seeking funding from this offering to provide the capital required for the first
phase of our exploration program. We believe that the funds from this offering
will allow us to operate for one year.
We have no assurance that future financing will materialize. If that financing
is not available to us for the second phase of our exploration program we may be
unable to continue.
LIQUIDITY AND CAPITAL RESOURCES
To meet our need for cash we are attempting to raise money from this offering.
We cannot guarantee that we will be able to sell all the shares required. If we
are successful any money raised will be applied to the items set forth in the
Use of Proceeds section of this prospectus. If the first phase of our
exploration program is successful in identifying mineral deposits we will
attempt to raise the necessary funds to proceed with Phase 2. The sources of
funding we may consider include a second public offering, a private placement of
our securities or loans from our director or others.
Mr. Mitchell, our director, has agreed to advance funds as needed until the
offering is completed or failed and has agreed to pay the cost of reclamation of
the property should exploitable minerals not be found and we abandon the second
phase of our exploration program. While he has agreed to advance the funds, the
agreement is verbal and is unenforceable as a matter of law.
The one property in the Company's portfolio, on which the net proceeds of the
offering will be spent, is the RET Mineral Claim, recorded online as per British
Columbia Regulations. The mineral claim has a total surface area of
approximately 258 hectares (637 acres), included within 15 Mineral Title Grid
Units. At the current time the property is without known reserves and the
proposed program is exploratory in nature. We have not carried out any
exploration work on the claim and have incurred no exploration costs.
31
We received our initial funding of $10,000 through the sale of common stock to
Mr. Mitchell, our officer and director, who purchased 10,000,000 shares of our
common stock at $0.001 per share on April 19, 2006. From inception until the
date of this filing we have had limited operating activities. Our financial
statements from inception (April 18, 2006) through the year ended May 31, 2006
report no revenues and a net loss of $5,539.
CRITICAL ACCOUNTING POLICIES
USE OF ESTIMATES - The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
INCOME TAXES - The Company accounts for its income taxes in accordance with
Statement of Financial Accounting Standards No. 109, which requires recognition
of deferred tax assets and liabilities for future tax consequences attributable
to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax basis and tax credit carry
forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in operations in
the period that includes the enactment date.
Management feels the Company will have a net operating loss carryover to be used
for future years. The Company has not established a valuation allowance for the
full tax benefit of the operating loss carryovers due to the uncertainty
regarding realization.
NET LOSS PER COMMON SHARE - The Company computes net loss per share in
accordance with SFAS No. 128, Earnings per Share (SFAS 128) and SEC Staff
Accounting Bulletin No. 98 (SAB 98). Under the provisions of SFAS 128 and SAB
98, basic net loss per share is computed by dividing the net loss available to
common stockholders for the period by the weighted average number of shares of
common stock outstanding during the period. The calculation of diluted net loss
per share gives effect to common stock equivalents; however, potential common
shares are excluded if their effect is anti-dilutive. For the period from April
18, 2006 (Date of Inception) through May 31, 2006, the Company had no
potentially dilutive securities.
STOCK-BASED COMPENSATION - The Company has not adopted a stock option plan and
has not granted any stock options. Accordingly no stock-based compensation has
been recorded to date.
NEW ACCOUNTING PRONOUNCEMENTS - In December 2004, the FASB issued SFAS No. 123
(revised 2004). Share-Based Payment, is a revision of SFAS No. 123, Accounting
for Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees, and amends SFAS No. 95, Statement of
Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the
approach described in SFAS No. 123. However, SFAS No. 123(R) requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the income statement based on their fair values. Pro forma
32
disclosure is no longer an alternative. The new standard will be effective for
the Company in the first interim or annual reporting period beginning after
December 15, 2005. The Company does not expect the adoption of this standard
will have a material impact on its financial statements.
In December 2004, the FASB issued SFAS No. 153, "Exchanges of Non-monetary
Assets, an amendment of APB Opinion No. 29 "effective for non-monetary asset
exchanges occurring in the fiscal year beginning January 1, 2006. SFAS No.153
requires that exchanges of productive assets be accounted for at fair value
unless fair value cannot be reasonably determined or the transaction lacks
commercial substance. SFAS No. 153 is not expected to have a material effect on
the company's Consolidated Financial Statements.
In May 2005, the FASB issued SFAS 154, "Accounting Changes and Error Corrections
- - a Replacement of APB Opinion No. 20 and FASB Statement No. 3". SFAS 154
requires retrospective application to prior period financial statements of
changes in accounting principle, unless it is impracticable to determine either
the period-specific effects or the cumulative effect of the change. SFAS 154
also redefines "restatement" as the revising of previously issued financial
statements to reflect the correction of an error. This statement is effective
for accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005. The Company does not believe that the adoption of SFAS
154 will have a significant impact on the financial statements.
DESCRIPTION OF PROPERTY
We currently utilize shared office space at #208-828 Harbourside Drive, North
Vancouver, BC Canada V7P 3R9. The rental fees for the office space are $25 on a
month to month basis. The corporate records are stored at the home office of our
president at 2986 W. 30th Avenue, Vancouver BC V6L 1Z4. We intend to use these
shares office facilities for the time being until we feel we have outgrown them.
We currently have no investment policies as they pertain to real estate, real
estate interests or real estate mortgages.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Mitchell will not be paid for any underwriting services that they perform on
our behalf with respect to this offering. He will also not receive any interest
on any funds that he advances to us for offering expenses prior to the offering
being closed. Any funds loaned will be repaid from the proceeds of the offering.
On April 19, 2006, a total of 10,000,000 shares of Common Stock were issued to
Mr. Mitchell in exchange for $10,000 US, or $.001 per share. All of such shares
are "restricted" securities, as that term is defined by the Securities Act of
1933, as amended, and are held by an officer and director of the Company. (See
"Principal Stockholders".)
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
We plan to contact a market maker immediately following the effectiveness of our
Registration Statement and apply to have the shares quoted on the OTC Electronic
Bulletin Board (OTCBB). The OTCBB is a regulated quotation service that displays
33
real-time quotes, last sale prices and volume information in over-the-counter
(OTC) securities. The OTCBB is not an issuer listing service, market or
exchange. Although the OTCBB does not have any listing requirements per se, to
be eligible for quotation on the OTCBB, issuers must remain current in their
filings with the SEC or applicable regulatory authority. Market Makers are not
permitted to begin quotation of a security whose issuer does not meet this
filing requirement. Securities already quoted on the OTCBB that become
delinquent in their required filings will be removed following a 30 or 60 day
grace period if they do not make their required filing during that time. We
cannot guarantee that our application will be accepted or approved and our stock
listed and quoted for sale. As of the date of this filing, there have been no
discussions or understandings between Mattmar Minerals, nor, anyone acting on
our behalf with any market maker regarding participation in a future trading
market for our securities.
As of the date of this filing, there is no public market for our securities.
There has been no public trading of our securities, and, therefore, no high and
low bid pricing. As of the date of this prospectus Mattmar had one shareholder
of record. We have paid no cash dividends and have no outstanding options.
PENNY STOCK RULES
The Securities and Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
A purchaser is purchasing penny stock which limits the ability to sell the
stock. The shares offered by this prospectus constitute penny stock under the
Securities and Exchange Act. The shares will remain penny stocks for the
foreseeable future. The classification of penny stock makes it more difficult
for a broker-dealer to sell the stock into a secondary market, which makes it
more difficult for a purchaser to liquidate his/her investment. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, to deliver a standardized risk
disclosure document, which:
- - contains a description of the nature and level of risk in the market for
penny stock 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 or other requirements of the Securities Act of
1934, as amended;
34
- - contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" price for the penny stock 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 Securities and Exchange Commission shall
require by rule or regulation;
The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, to the customer:
- - the bid and offer quotations for the penny stock;
- - the compensation of the broker-dealer and its salesperson in the
transaction;
- - the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market
for such stock; and
- - monthly account statements showing the market value of each penny stock
held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a 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
their securities.
REGULATION M
Our officer and director, who will offer and sell the shares, is aware that he
is required to comply with the provisions of Regulation M, promulgated under the
Securities Exchange Act of 1934, as amended. With certain exceptions, Regulation
M precludes the officer and director, sales agent, any broker-dealer or other
person who participate in the distribution of shares in this offering from
bidding for or purchasing, or attempting to induce any person to bid for or
purchase any security which is the subject of the distribution until the entire
distribution is complete.
REPORTS
We will become subject to certain filing requirements and will furnish annual
financial reports to our stockholders, certified by our independent accountant,
35
and will furnish un-audited quarterly financial reports in our quarterly reports
filed electronically with the SEC. All reports and information filed by us can
be found at the SEC website, www.sec.gov.
EXECUTIVE COMPENSATION
Our current officer receives no compensation. The current Board of Directors is
comprised solely of Mr. Sean Mitchell.
Summary Compensation Table
Other
Name & Annual Restricted All Other
Principal Compen- Stock Options LTIP Compen-
Position Year Salary($) Bonus($) sation($) Award(s)($) SARs(#) Payouts($) sation($)
- -------- ---- --------- -------- --------- ----------- ------- ---------- ---------
S Mitchell 2006 -0- -0- -0- -0- -0- -0- -0-
President
There are no current employment agreements between the company and its executive
officer.
On April 19, 2006, a total of 10,000,000 shares of common stock were issued to
Mr. Mitchell in exchange for cash in the amount of $10,000 U.S., or $.001 per
share.
The terms of these stock issuances were as fair to the company, in the opinion
of Mr. Mitchell in his position as the sole director, as could have been made
with an unaffiliated third party. In making this determination they relied upon
the fact that the 10,000,000 shares were valued at par ($0.001) and purchased
for $10,000 in cash.
Mr. Mitchell currently devotes an immaterial amount of time to manage the
affairs of the company, approximately 10 hours per week. He has agreed to work
with no remuneration until such time as the company receives sufficient revenues
necessary to provide management salaries. At this time, we cannot accurately
estimate when sufficient revenues will occur to implement this compensation, or
what the amount of the compensation will be.
There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees in the event of retirement at normal retirement
date pursuant to any presently existing plan provided or contributed to by the
company or any of its subsidiaries, if any.
FINANCIAL STATEMENTS
The financial statements of Mattmar Minerals for the year ended May 31, 2006,
and related notes, included in this prospectus have been audited by De Joya
Griffith & Company, Certified Public Accountants, and have been so included in
reliance upon the opinion of such accountants given upon their authority as an
expert in auditing and accounting.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE
None.
36
De Joya Griffith & Company, LLC
Certified Public Accountants & Consultants
2580 Anthem Village Drive
Henderson, Nevada 89052
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Mattmar Minerals, Inc.
(A Development Stage Company)
Vancouver, BC
We have audited the accompanying balance sheet of Mattmar Minerals, Inc. (A
Developmental Stage Company) as of May 31, 2006, and the related statements of
operations, stockholders' equity, and cash flows for the year ended May 31, 2006
and for the period from April 18, 2006(Inception) through May 31, 2006. 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 audits.
We conducted our audits 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 evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, based on our audit, the financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as of May 31, 2006 and the results of its operations and its cash flows for the
year ended May 31, 2006, and for the period from April 18, 2006 (Inception)
through May 31, 2006, 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, the Company has suffered losses from operations, all of
which raise substantial doubt about its ability to continue as a going concern.
Management's plans in regards 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/ De Joya Griffith & Company, LLC
- ---------------------------------------
De Joya Griffith & Company, LLC
June 15, 2006
Henderson, Nevada
F-1
Mattmar Minerals Inc
(An Exploration Stage Enterprise)
Balance Sheet
Audited as of
May 31, 2006
------------
ASSETS
CURRENT ASSETS
Total Current Assets $ 10,000
--------
Total Assets $ 10,000
========
LIABILITIES
CURRENT LIABILITIES
Accounts Payable and Accrued Liabilities 4,787
Note Payable to Director 752
--------
Total Current Liabilities 5,539
--------
STOCKHOLDERS' EQUITY
COMMON STOCK
75,000,000 authorized shares, par value $.001
1,000,000 shares issued and outstanding 1,000
Additional Paid-in-Capital 9,000
Deficit accumulated during exploration stage (5,539)
--------
Total Stockholders' Equity 4,461
--------
Total Liabilities and Stockholders' Equity $ 10,000
========
See accompanying notes to financial statements.
F-2
Mattmar Minerals Inc.
(An Exploration Stage Enterprise)
Statement of Operations
Period from
April 18, 2006
(Date of inception)
through
May 31, 2006
------------
(Audited)
REVENUES:
Revenues $ --
===========
Total Revenues --
EXPENSES:
Operating Expenses
Exploration Expenses 2,612
General and Adminstrative 727
Professional Fees 2,200
Total Expenses 5,539
===========
Net loss from Operations $ (5,539)
PROVISION FOR INCOME TAXES:
Income Tax Benefit --
Net Income (Loss) for the period $ (5,539)
===========
Basic and Diluted Earnings Per Common Share (0.01)
-----------
Weighted Average number of Common Shares
used in per share calculations 1,000,000
===========
See accompanying notes to financial statements.
F-3
Mattmar Minerals Inc
(An Exploration Stage Enterprise)
Statement of Stockholders' Equity
For the period from April 18, 2006 (inception) to May 31, 2006
(Audited)
$0.001 Paid-In Accumulated Stockholders'
Shares Par Value Capital Deficit Equity
------ --------- ------- ------- ------
Balance, April 18, 2006 (Date of Inception) -- $ -- $ -- $ -- $ --
Stock Issued for cash at $0.001 per share 1,000,000 1,000 9,000 -- 10,000
on April 20, 2006
Net (Loss) -- -- -- (5,539) (5,539)
--------- ------ ------ ------- --------
Balance, May 31, 2006 1,000,000 $1,000 $9,000 $(5,539) $ 4,461
========= ====== ====== ======= ========
See accompanying notes to consolidated financial statements.
F-4
Mattmar Minerals Inc.
(An Exploration Stage Enterprise)
Statement of Cash Flows
Period from
April 18, 2006
(Date of inception) to
May 31, 2006
------------
(Audited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) $ (5,539)
Accounts Payable (5,539)
--------
Net Cash Provided from Operating Activities --
--------
CASH FLOWS FROM INVESTING ACTIVITIES:
Other Assets --
--------
Net Cash Used in Investing Activities --
--------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common Stock issued for cash 10,000
--------
Net Cash Provided from Financing Activities 10,000
--------
Net Increase in Cash 10,000
--------
Cash Balance, Begin Period --
--------
Cash Balance, End Period $ 10,000
========
See accompanying notes to financial statements.
F-5
MATTMAR MINERALS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
DESCRIPTION OF BUSINESS AND HISTORY - MattMar Minerals Inc., a Nevada
corporation, (hereinafter referred to as the "Company" or "MattMar Minerals")
was incorporated in the State of Nevada on April 18, 2006. The Company was
formed to engage in the acquisition, exploration and development of natural
resource properties of merit. The Company acquired mineral claims during the
initial period ending May 31, 2006 for $2,625.
The Company's operations have been limited to general administrative operations,
initial property staking and investigation, and is considered an Exploration
Stage Company in accordance with Statement of Financial Accounting Standards No.
7.
The Company will review and further develop the accounting policies as the
business plan is implemented.
The Company is planning to file a form SB-2 Registration Statement in connection
with a planned prospectus offering of up to 3,000,000 shares of the Company's
common stock at a price of $0.01 per share for gross proceeds of $30,000.
MANAGEMENT OF COMPANY - The Company filed its articles of incorporation with the
Nevada Secretary of State on April 18, 2006, indicating Sandra L. Miller on
behalf of Resident Agents of Nevada, Inc. as the sole incorporator. The initial
list of officers filed with the Nevada Secretary of State on April 19, 2006,
indicate Sean Mitchell as the President, Secretary, and Treasurer.
GOING CONCERN - The Company incurred net losses of approximately $5,539 from the
period of April 18, 2006 (Date of Inception) through May 31, 2006 and has
commenced limited operations, raising substantial doubt about the Company's
ability to continue as a going concern. The Company will seek additional sources
of capital through the issuance of debt or equity financing, but there can be no
assurance the Company will be successful in accomplishing its objectives.
The ability of the Company to continue as a going concern is dependent on
additional sources of capital and the success of the Company's plan. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
YEAR END - The Company's year end is May 31, with its initial period being from
April 18, 2006 to May 31, 2006.
F-6
MATTMAR MINERALS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
(continued)
USE OF ESTIMATES - The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
INCOME TAXES - The Company accounts for its income taxes in accordance with
Statement of Financial Accounting Standards No. 109, which requires recognition
of deferred tax assets and liabilities for future tax consequences attributable
to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax basis and tax credit carry
forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in operations in
the period that includes the enactment date.
Management feels the Company will have a net operating loss carryover to be used
for future years. The Company has not established a valuation allowance for the
full tax benefit of the operating loss carryovers due to the uncertainty
regarding realization.
NET LOSS PER COMMON SHARE - The Company computes net loss per share in
accordance with SFAS No. 128, Earnings per Share (SFAS 128) and SEC Staff
Accounting Bulletin No. 98 (SAB 98). Under the provisions of SFAS 128 and SAB
98, basic net loss per share is computed by dividing the net loss available to
common stockholders for the period by the weighted average number of shares of
common stock outstanding during the period. The calculation of diluted net loss
per share gives effect to common stock equivalents; however, potential common
shares are excluded if their effect is anti-dilutive. For the period from April
18, 2006 (Date of Inception) through May 31, 2006, the Company had no
potentially dilutive securities.
STOCK-BASED COMPENSATION - The Company has not adopted a stock option plan and
has not granted any stock options. Accordingly no stock-based compensation has
been recorded to date.
F-7
MATTMAR MINERALS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
(continued)
NEW ACCOUNTING PRONOUNCEMENTS - In December 2004, the FASB issued SFAS No. 123
(revised 2004). Share-Based Payment, is a revision of SFAS No. 123, Accounting
for Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees, and amends SFAS No. 95, Statement of
Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the
approach described in SFAS No. 123. However, SFAS No. 123(R) requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the income statement based on their fair values. Pro forma
disclosure is no longer an alternative. The new standard will be effective for
the Company in the first interim or annual reporting period beginning after
December 15, 2005. The Company does not expect the adoption of this standard
will have a material impact on its financial statements.
In December 2004, the FASB issued SFAS No. 153, "Exchanges of Non-monetary
Assets, an amendment of APB Opinion No. 29 "effective for non-monetary asset
exchanges occurring in the fiscal year beginning January 1, 2006. SFAS No.153
requires that exchanges of productive assets be accounted for at fair value
unless fair value cannot be reasonably determined or the transaction lacks
commercial substance. SFAS No. 153 is not expected to have a material effect on
the company's Consolidated Financial Statements.
In May 2005, the FASB issued SFAS 154, "Accounting Changes and Error Corrections
- - a Replacement of APB Opinion No. 20 and FASB Statement No. 3". SFAS 154
requires retrospective application to prior period financial statements of
changes in accounting principle, unless it is impracticable to determine either
the period-specific effects or the cumulative effect of the change. SFAS 154
also redefines "restatement" as the revising of previously issued financial
statements to reflect the correction of an error. This statement is effective
for accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005. The Company does not believe that the adoption of SFAS
154 will have a significant impact on the financial statements.
F-8
MATTMAR MINERALS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
(continued)
In February 2006, the FASB issued Statement of Financial Accounting Standards
No. 155, Accounting for Certain Hybrid Financial Instruments ("SFAS No. 155"),
which amends Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities ("SFAS No. 133") and Statement of
Financial Accounting Standards No. 140, Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities ("SFAS No. 140"). SFAS
No. 155 permits fair value measurement for any hybrid financial instrument that
contains an embedded derivative that otherwise would require bifurcation,
establishes a requirement to evaluate interests in securitized financial assets
to identify interests that are freestanding derivatives or hybrid financial
instruments containing embedded derivatives. We expect the adoption of SFAS 155
to have a material impact on its consolidated financial position, results of
operations or cash flows.
In March 2006, the FASB issued Statement of Financial Accounting Standards No.
156, Accounting for Servicing of Financial Assets ("SFAS No. 156"), which amends
FASB Statement No. 140 ("SFAS No. 140"). SFAS 156 may be adopted as early as
January 1, 2006, for calendar year-end entities, provided that no interim
financial statements have been issued. Those not choosing to early adopt are
required to apply the provisions as of the beginning of the first fiscal year
that begins after September 15, 2006 (e.g., January 1, 2007, for calendar
year-end entities). The intention of the new statement is to simplify accounting
for separately recognized servicing assets and liabilities, such as those common
with mortgage securitization activities, as well as to simplify efforts to
obtain hedge-like accounting. Specifically, the FASB said FAS No. 156 permits a
service using derivative financial instruments to report both the derivative
financial instrument and related servicing asset or liability by using a
consistent measurement attribute, or fair value. We do not expect the adoption
of SFAS 155 to have a material impact on its consolidated financial position,
results of operations or cash flows.
2. PROPERTY AND EQUIPMENT
As of May 31, 2006, the Company does not own any property and/or equipment.
3. STOCKHOLDER'S EQUITY
The Company has 75,000,000 shares authorized with a par value of $0.001 per
share.
A total of 10,000,000 shares of the Company's common stock were issued to the
founding and sole director of the Company pursuant to a stock subscription
agreement at $0.001 per share for total proceeds of $10,000.
F-9
MATTMAR MINERALS INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
4. RELATED PARTY TRANSACTIONS
During the period, Sean Mitchell, the sole director and officer of the Company
incurred $752 of expenses on behalf of the Company. As at May 31, 2006 $752 is
owing to Mr. Mitchell and is included in the liabilities section of the balance
sheet.
Sean Mitchell, the sole officer and director of the Company will not be paid for
any underwriting services that he performs on behalf of the Company with respect
to the Company's upcoming SB-2 prospectus offering.
Mr. Mitchell will not receive any interest on any funds that he advances to the
Company for offering expenses prior to the offering being closed which will be
repaid from the proceeds of the offering.
As of May 31, 2006 there are no other related party transactions between the
Company and any officers other than those mentioned above.
5. STOCK OPTIONS
As of May 31, 2006, the Company does not have any stock options outstanding, nor
does it have any written or verbal agreements for the issuance or distribution
of stock options at any point in the future.
6. LITIGATION
As of May 31, 2006, the Company is not aware of any current or pending
litigation which may affect the Company's operations.
7. SUBSEQUENT EVENTS
The Company expects to file an SB-2 registration statement on July 14, 2006 with
the Securities and Exchange Commission in order to raise an aggregate amount of
$30,000 from the sale of 3,000,000 common shares at $.01 per share.
F-10
Dealer Prospectus Delivery Obligation
"UNTIL ______________, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES,
WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS."
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Mattmar's By-Laws allow for the indemnification of the officers and directors in
regard to their carrying out the duties of their offices. The board of directors
will make determination regarding the indemnification of the director, officer
or employee as is proper under the circumstances if he/she has met the
applicable standard of conduct set forth in the Nevada General Corporation Law.
Section 78.751 of the Nevada Business Corporation Act provides that each
corporation shall have the following powers:
"1. A corporation may indemnify 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,
except an action by or in the right of the corporation, by reason of any fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a pleas of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had a reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction, determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
II-1
3. To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in sections 1 and 2, or in defense of any claim, issue or
matter therein, he must be indemnified by the corporation against expenses,
including attorneys fees, actually and reasonably incurred by him in connection
with the defense.
4. Any indemnification under sections 1 and 2, unless ordered by a court or
advanced pursuant to section 5, must be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:
a. By the stockholders;
b. By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding;
c. If a majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding so orders, by independent legal
counsel, in a written opinion; or
d. If a quorum consisting of directors who were not parties to the act,
suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion.
5. The certificate of articles of incorporation, the bylaws or an agreement made
by the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or on behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. The provisions of this section do not affect any
rights to advancement of expenses to which corporate personnel other than
director or officers may be entitled under any contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or ordered by a
court pursuant to this section:
a. Does not include any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
certificate or articles of incorporation or any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, for either an
action in his official capacity or an action in another capacity while
holding his office, except that indemnification, unless ordered by a
court pursuant to section 2 or for the advancement of expenses made
pursuant to section 5, may not be made to or on behalf of any director
or officer if a final adjudication establishes that his acts or
omission involved intentional misconduct, fraud or a knowing violation
of the law and was material to the cause of action.
II-2
b. Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors
and administrators of such a person.
c. The Articles of Incorporation provides that "the Corporation shall
indemnify its officers, directors, employees and agents to the fullest
extent permitted by the General Corporation Law of Nevada, as amended
from time to time."
As to indemnification for liabilities arising under the Securities Act of 1933
for directors, officers or persons controlling Mattmar Minerals, we have been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of the offering are denoted below. Please note all amounts
are estimates other than the Commission's registration fee.
Securities and Exchange Commission registration fee $ 3
Accounting fees and expenses $3,500
Legal fees $2,200
Preparation and EDGAR conversion fees $1,200
Transfer Agent fees $ 850
Printing $ 247
------
Total $8,000
======
RECENT SALES OF UNREGISTERED SECURITIES
Set forth below is information regarding the issuance and sales of securities
without registration since inception. No such sales involved the use of an
underwriter; no advertising or public solicitation was involved; the securities
bear a restrictive legend; and no commissions were paid in connection with the
sale of any securities.
On April 19, 2006, a total of 10,000,000 shares of common stock were issued in
exchange for $10,000 US, or $.001 per share. These securities were issued to the
officer and director of the company.
EXHIBITS
Exhibit 3.1 Articles of Incorporation
Exhibit 3.2 Bylaws
Exhibit 5 Opinion re: Legality
Exhibit 10 Mineral Title
Exhibit 23.1 Consent of counsel (See Exhibit 5)
Exhibit 23.2 Consent of independent auditor
Exhibit 23.3 Consent of professional geologist (See Appendix A to Exhibit 99.2)
Exhibit 99.1 Subscription Agreement
Exhibit 99.2 Geology Report
II-3
UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers of sales are being made, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in this
registration statement. Notwithstanding the foregoing, 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 and 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 volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement ; and
(iii) 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, treat each post-effective amendment as a new registration statement of
the securities offered herein, and that the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered hereby which remain unsold at the
termination of the offering.
4. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the By-Laws of the
company, 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 Act, and is, therefore unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment of expenses incurred or paid by a director, officer
or controlling person in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or other control person
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 to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
5. For determining any liability under the Securities Act, we shall treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by us under Rule 424(b)(1), or (4), or 497(h) under the
Securities Act as part of this registration statement as of the time the
Commission declared it effective.
6. For determining any liability under the Securities Act, we shall treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that the offering of the securities at that time as the
initial bona fide offering of those securities.
II-4
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe it meets all of
the requirements for filing Form SB-2 and authorized this registration statement
to be signed on its behalf by the undersigned, in the city of Vancouver BC, on
July 10, 2006.
Mattmar Minerals, Inc.
/s/ Sean Mitchell
--------------------------------
By: Sean Mitchell
(Principal Executive Officer)
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following person in the capacities and
date stated.
/s/ Sean Mitchell July 10, 2006
- ------------------------------------- -------------
Sean Mitchell, President Date
(Principal Executive Officer, Principal Financial Officer,
Principal Accounting Officer)
II-5