As Filed With the Securities and Exchange Commission on February 21, 2008
Registration No. 333-______
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MESQUITE MINING, INC.
(Exact name of registrant as specified in its charter)
Delaware 1000 26-1324237
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
4321 7th Avenue
Los Angeles, CA 90008
(760) 408-5748
(Address and telephone number of registrant's principal executive offices)
Beverly Frederick, President
Mesquite Mining, Inc.
4321 7th Avenue
Los Angeles, CA 90008
(760) 408-5748
(Name, address and telephone number of agent for service)
Copy to:
Karen Batcher
Batcher, Zarcone & Baker LLP
4252 Bonita Road #151
Bonita, CA 91902
(619) 475-7882
FAX (619) 789-6262
Approximate date of proposed sale to the public: As soon as practicable after
this Registration Statement is declared effective.
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 463(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 463(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. [ ]
Indicate by check mark whether the registrant is a large accelerated files, an
accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
========================================================================================================
Proposed Maximum
Amount Proposed Maximum Aggregate Amount of
Title of Each Class of to be Offering Price Per Offering Registration
Securities to be Registered Registered Share(2) Price(3) Fee(1)
- --------------------------------------------------------------------------------------------------------
Common Stock, Shares 1,000,000 $0.025 $25,000 $0.98
========================================================================================================
(1) Registration Fee has been paid via Fedwire.
(2) The offering price was arbitrarily determined by Mesquite Mining, Inc.
(3) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended (the
"Securities Act").
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), ACTING PURSUANT
TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
SUBJECT TO COMPLETION, DATED FEBRUARY 21, 2008
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS
NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
MESQUITE MINING, INC.
PROSPECTUS
1,000,000 SHARES
COMMON STOCK AT $.025 PER SHARE
This is the initial offering of common stock of Mesquite Mining, Inc. and no
public market currently exists for the securities being offered. We are offering
for sale a total of 1,000,000 shares of common stock at a price of $.025 per
share. The offering is being conducted on a self-underwritten, best effort,
all-or-none basis, which means our officer and/or director, Beverly Frederick
will attempt to sell the shares. This Prospectus will permit our officer and/or
director to sell the shares directly to the public, with no commission or other
remuneration payable to her for any shares she may sell. Ms. Frederick will sell
the shares and intends to offer them to friends, family members and business
acquaintances. In offering the securities on our behalf, she will rely on the
safe harbor from broker-dealer registration set out in Rule 3a4-1 under the
Securities and Exchange Act of 1934. 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 $.025 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 director for an additional 90 days.
The offering will end on __________, 200__ (date to be inserted in a subsequent
amendment).
Offering Price Proceeds to Company
Per Share Commissions Before Expenses
--------- ----------- ---------------
Common Stock $0.025 Not Applicable $25,000
Total $0.025 Not Applicable $25,000
Mesquite Mining, 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 Mesquite
Mining, Inc. which includes a statement expressing substantial doubt as to our
ability to continue as a going concern.
As of the date of this prospectus, our stock is presently not traded on any
market or securities exchange and there is no assurance that a trading market
for our securities will ever develop.
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. YOU SHOULD CAREFULLY READ AND CONSIDER THE SECTION OF THIS
PROSPECTUS ENTITLED "RISK FACTORS" ON PAGES 4 THROUGH 9 BEFORE BUYING ANY SHARES
OF MESQUITE MINING, INC.'S COMMON STOCK.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE 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 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 FEBRUARY 21, 2008
PROSPECTUS
MESQUITE MINING, INC.
1,000,000 SHARES
COMMON STOCK
TABLE OF CONTENTS
Page
----
PROSPECTUS SUMMARY 3
RISK FACTORS 4
USE OF PROCEEDS 10
DETERMINATION OF OFFERING PRICE 10
DILUTION 10
PLAN OF DISTRIBUTION 11
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 13
DESCRIPTION OF BUSINESS 17
FACILITIES 28
EMPLOYEES AND EMPLOYMENT AGREEMENTS 28
LEGAL PROCEEDINGS 28
DIRECTOR, EXECUTIVE OFFICER, PROMOTER AND CONTROL PERSON 28
EXECUTIVE COMPENSATION 29
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 30
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWENRS AND MANAGEMENT 30
DESCRIPTION OF SECURITIES 31
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES 32
LEGAL MATTERS 32
EXPERTS 32
AVAILABLE INFORMATION 32
FINANCIAL STATEMENTS 33
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 33
2
PROSPECTUS SUMMARY
AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, "WE," "US,"
"OUR," AND "MESQUITE" REFERS TO MESQUITE MINING, INC. THE FOLLOWING SUMMARY IS
NOT COMPLETE AND DOES NOT CONTAIN ALL OF THE INFORMATION THAT MAY BE IMPORTANT
TO YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS BEFORE MAKING AN INVESTMENT
DECISION TO PURCHASE OUR COMMON STOCK.
MESQUITE MINING, INC.
We are an exploration stage company engaged in the acquisition and exploration
of mineral properties. Mesquite Mining, Inc. was incorporated in the State of
Delaware on October 23, 2007. We intend to use the net proceeds from this
offering to develop our business operations (See "Description of Business" and
"Use of Proceeds"). We are an exploration stage company with no revenues or
operating history. The principal executive offices are located at 4321 7th
Avenue, Los Angeles, CA 90008.
We received our initial funding of $15,000 through the sale of common stock to
our director who purchased 1,500,000 shares of common stock at $.01 per share on
November 3, 2007. From inception until the date of this filing, we have had no
operating activities. Our financial statement from inception (October 23, 2007)
through the year ended December 31, 2007 report no revenues and a net loss of
$8,493. Our independent auditor has issued an audit opinion for Mesquite Mining,
Inc. which includes a statement expressing substantial doubt as to our ability
to continue as a going concern.
We currently own a 100% undivided interest in a mineral property, the Candy Lode
Mining Claim, located in the State of Nevada that we call the "Candy Property."
The Candy Property consists of an area of approximately 20 acres located in the
Goodsprings (Yellow Pine) Mining District, Clark County, Nevada. Title to the
Candy Property is held by Mesquite Mining, Inc. Our plan of operation is to
conduct mineral exploration activities on the Candy Property in order to assess
whether it possess deposits of minerals capable of commercial extraction.
We have not earned any revenues to date. We do not anticipate earning revenues
until such time as we enter into commercial production of our mineral
properties. We are presently in the exploration stage of our business and we can
provide no assurance that we will discover commercially exploitable levels of
mineral resources on our property, or if such deposits are discovered, that we
will enter into further substantial exploration programs.
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 OFFERING
The Issuer: Mesquite Mining, Inc.
Securities Being Offered: 1,000,000 shares of common stock
Price Per Share:
$0.025
Duration of Offering: 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: $25,000
3
Securities Issued and
Outstanding: 1,500,000 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 $4,500.
Risk Factors: See "Risk Factors" and the other information in this
prospectus for a discussion of the factors you
should consider before deciding to invest in shares
of our common stock.
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock, when and if we trade at
a later date, could decline due to any of these risks, and you may lose all or
part of your investment.
RISKS ASSOCIATED TO OUR BUSINESS
WE ARE AN EXPLORATION STAGE COMPANY BUT HAVE NOT YET COMMENCED EXPLORATION
ACTIVITIES ON OUR CLAIMS. WE EXPECT TO INCUR OPERATING LOSSES FOR THE
FORESEEABLE FUTURE.
We were incorporated on October 23, 2007 and to date have been involved
primarily in organizational activities and the acquisition of the mineral
claims. We have not yet commenced exploration on the Candy Lode Claim.
Accordingly, we have no way to evaluate the likelihood that our business will be
successful. 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 production of minerals from the claims
are not forthcoming, we will not be able to continue business 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.
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 our mineral claim. We will need the funds from this
offering to complete our business plan. As of December 31, 2007, we had cash in
the amount of $6,507. We currently do not have any operations and we have no
income.
WE HAVE YET TO EARN REVENUE AND OUR ABILITY TO SUSTAIN OUR OPERATIONS IS
DEPENDENT ON OUR ABILITY TO RAISE FINANCING. AS A RESULT, OUR ACCOUNTANT
BELIEVES THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING
CONCERN.
We have accrued net losses of $8,493 for the period from our inception on
October 23, 2007 to December 31, 2007, and have no revenues to date. Our future
is dependent upon our ability to obtain financing and upon future profitable
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operations from the development of our mineral claims. These factors raise
substantial doubt that we will be able to continue as a going concern. George
Stewart, our independent auditor, has expressed substantial doubt about our
ability to continue as a going concern. This opinion could materially limit our
ability to raise additional funds by issuing new debt or equity securities or
otherwise. If we fail to raise sufficient capital when needed, we will not be
able to complete our business plan. As a result we may have to liquidate our
business and you may lose your investment. You should consider our auditor's
comments when determining if an investment in Mesquite Mining, Inc. is suitable.
BECAUSE OF THE UNIQUE DIFFICULTIES AND UNCERTAINTIES INHERENT IN MINERAL
EXPLORATION VENTURES, WE FACE A HIGH RISK OF BUSINESS FAILURE.
You 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. The Candy Property does not contain a known body of any commercial
minerals and, therefore, any program conducted on the Candy Property would be an
exploratory search of any minerals There is no certainty that any expenditures
made in the exploration of the Candy Property will result in discoveries of any
commercial quantities of minerals. Most exploration projects do not result in
the discovery of commercially mineable mineral deposits. Problems such as
unusual or unexpected formations and other conditions are common to mineral
exploration activities and often result in unsuccessful exploration efforts. If
the results of our exploration program do not reveal viable commercial
mineralization, we may decide to abandon our claim and acquire new claims for
new exploration. Our ability to acquire additional claims will be dependent upon
our possessing adequate capital resources when needed. If no funding is
available, we may be forced to abandon our operations.
WE HAVE NO KNOWN MINERAL RESERVES AND IF WE CANNOT FIND ANY, WE MAY HAVE TO
CEASE OPERATIONS.
We have no mineral reserves. If we do not find any commercially exploitable
mineral reserves or if we cannot complete the exploration of any mineral
reserves, either because we do not have the money to do so or because it is not
economically feasible to do so, we may have to cease operations and you may lose
your investment. Mineral exploration is highly speculative. It involves many
risks and is often non-productive. Even if we are able to find mineral reserves
on our property our production capability will be subject to further risks
including:
- The costs of bringing the property into production including
exploration work, preparation of production feasibility studies, and
construction of production facilities, all of which we have not
budgeted for;
- The availability and costs of financing;
- The ongoing costs of production; and
- Risks related to environmental compliance regulations and restraints.
The marketability of any minerals acquired or discovered may be affected by
numerous factors which are beyond our control and which cannot be accurately
predicted, such as market fluctuations, the lack of milling facilities and
processing equipment near the Candy Property, and other factors such as
government regulations, including regulations relating to allowable production,
the importing and exporting of minerals, and environmental protection.
Given the above noted risks, the chances of our finding and commercially
exploiting reserves on our mineral properties are remote and funds expended on
exploration will likely be lost.
BECAUSE OF THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION, THERE IS A RISK
THAT WE MAY INCUR LIABILITY OR DAMAGES AS WE CONDUCT OUR BUSINESS.
5
The search for valuable minerals involves numerous hazards. As a result, we may
become subject to liability for such hazards, including pollution, cave-ins and
other hazards against which we cannot insure or against which we may elect not
to insure. At the present time we have no insurance to cover against these
hazards. The payment of such liabilities may result in our inability to complete
our planned exploration program and/or obtain additional financing to fund our
exploration program.
AS WE UNDERTAKE EXPLORATION OF OUR MINERAL CLAIMS, WE WILL BE SUBJECT TO
COMPLIANCE WITH GOVERNMENT REGULATION THAT MAY INCREASE THE ANTICIPATED COST OF
OUR EXPLORATION PROGRAM.
There are several governmental regulations that materially restrict mineral
exploration. We will be subject to the laws of the State of Nevada as we carry
out our exploration program. We may be required to obtain work permits, post
bonds and perform remediation work for any physical disturbance to the land in
order to comply with these laws. If we enter the production phase, the cost of
complying with permit and regulatory environment laws will be greater because
the impact on the project area is greater. Permits and regulations will control
all aspects of the production program if the project continues to that stage.
Examples of regulatory requirements include:
(a) Water discharge will have to meet drinking water standards;
(b) Dust generation will have to be minimal or otherwise re-mediated;
(c) Dumping of material on the surface will have to be re-contoured and
re-vegetated with natural vegetation;
(d) An assessment of all material to be left on the surface will need to
be environmentally benign;
(e) Ground water will have to be monitored for any potential contaminants;
(f) The socio-economic impact of the project will have to be evaluated and
if deemed negative, will have to be remediated; and
(g) There will have to be an impact report of the work on the local fauna
and flora including a study of potentially endangered species.
There is a risk that new regulations could increase our costs of doing business
and prevent us from carrying out our exploration program. We will also have to
sustain the cost of reclamation and environmental remediation for all
exploration work undertaken. Both reclamation and environmental remediation
refer to putting disturbed ground back as close to its original state as
possible. Other potential pollution or damage must be cleaned-up and renewed
along standard guidelines outlined in the usual permits. Reclamation is the
process of bringing the land back to its natural state after completion of
exploration activities. Environmental remediation refers to the physical
activity of taking steps to remediate, or remedy, any environmental damage
caused. The amount of these costs is not known at this time as we do not know
the extent of the exploration program that will be undertaken beyond completion
of the recommended work program. If remediation costs exceed our cash reserves
we may be unable to complete our exploration program and have to abandon our
operations.
BECAUSE OUR SOLE OFFICER AND/OR DIRECTOR DOES NOT HAVE ANY FORMAL TRAINING
SPECIFIC TO THE TECHNICALITIES OF MINERAL EXPLORATION, THERE IS A HIGHER RISK
OUR BUSINESS WILL FAIL.
Our sole officer and director is Beverly Frederick. Ms. Frederick has no formal
training as a geologist or in the technical aspects of management of a mineral
exploration company. Her prior business experiences have primarily been within
the residential and commercial real estate industry and not in the mineral
exploration business. With no direct training or experience in these areas, our
management may not be fully aware of the specific requirements related to
working within this industry. Our management's decisions and choices may not
6
take into account standard engineering or managerial approaches mineral
exploration companies commonly use. Consequently, our operations, earnings, and
ultimate financial success could suffer irreparable harm due to management's
lack of experience in this industry.
THERE IS A 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. We have a geological report detailing previous
exploration in the area, and the claim has been staked per Nevada regulations.
However, there is the possibility that previous work conducted was not carried
out properly and our claim does not contain any reserves, resulting in any funds
spent on exploration being lost.
BECAUSE WE HAVE NOT SURVEYED THE CANDY LODE 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 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 those 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 funds 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 any investment
you make in this offering.
IF ACCESS TO OUR MINERAL CLAIMS 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 claims to become impassable. If the roads are impassable we would be
delayed in our exploration timetable.
BASED ON CONSUMER DEMAND, THE GROWTH AND DEMAND FOR ANY ORE WE MAY RECOVER FROM
OUR CLAIMS MAY BE SLOWED, RESULTING IN REDUCED REVENUES TO THE COMPANY.
Our success will be dependent on the growth of demand for ores. If consumer
demand slows our revenues may be significantly affected. This could limit our
ability to generate revenues and our financial condition and operating results
may be harmed.
BECAUSE OUR CURRENT OFFICER AND/OR DIRECTOR HAS OTHER BUSINESS INTERESTS, SHE
MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS
OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
Ms. Beverly Frederick, our officer and director, currently devotes approximately
6 hours per week providing management services to us. While she presently
possesses adequate time to attend to our interest, it is possible that the
7
demands on her from other obligations could increase, with the result that she
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 THE SECURITIES AND EXCHANGE
COMMISSION RULE 15G-9 WHICH ESTABLISHED THE DEFINITION OF A "PENNY STOCK."
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 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 our shares
through our officer and/or director, who will receive no commissions. She will
offer the shares to friends, family members, and business associates, however,
there is no guarantee that she will be able to sell any of the shares. Unless
she is successful in selling all of the shares and we receive the proceeds from
this offering, we may have to seek alternative financing to implement our
business plan.
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
completion of the offering and apply to have the shares quoted on the
Over-The-Counter 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 filing with the SEC or applicable regulatory
authority. Market makers are not permitted to begin quotation of a security
whose issuer does not meet his filing requirement. Securities already quoted on
the OTCBB that become delinquent in their required filings will be removed
following a 30 to 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 Mesquite
Mining, Inc. and 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 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.
8
Our existing stockholder acquired her shares at a cost of $.01 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 (1,500,000 shares)
will be increased by $.017 per share without any additional investment on her
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
$.025 (per share) to $0.08 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 $.017 per share, reflecting an immediate reduction in the
$.025 per share he 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 $4,500 cost of this
registration statement to be paid from existing cash on hand. If necessary, Ms.
Frederick, our director, has verbally agreed to loan the company funds to
complete the registration process. We plan to contact a market maker immediately
following the close of the offering 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.
MS. FREDERICK, A DIRECTOR OF THE COMPANY, BENEFICIALLY OWNS 100% OF THE
OUTSTANDING SHARES OF OUR COMMON STOCK. AFTER THE COMPLETION OF THIS OFFERING
SHE WILL OWN 60% OF THE OUTSTANDING SHARES. IF SHE CHOOSES TO SELL HER SHARES IN
THE FUTURE, IT MIGHT HAVE AN ADVERSE EFFECT ON THE PRICE OF OUR STOCK.
Due to the amount of Ms. Frederick's share ownership in our company, if she
chooses to sell her 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 she does sell any of her common stock, she will be subject to Rule 144
under the 1933 Securities Act which will restrict her ability to sell her
shares.
FORWARD LOOKING STATEMENT
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.
9
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 $25,000. 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:
Planned Expenditures Over
Category The Next 12 Months
-------- ------------------
Phase 1 Exploration Program $ 6,500
Phase 2 Exploration Program $ 9,500
Legal and Accounting $ 7,500
Administrative Expenses $ 1,500
-------
TOTAL PROCEEDS TO COMPANY $25,000
=======
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, Ms. Frederick, 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 share 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 shareholders.
As of December 31, 2007, the net tangible book value of our shares was $6,507 or
$.004 per share, based upon 1,500,000 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
$25,000, the net tangible book value of the 2,500,000 shares to be outstanding
will be $31,507, or approximately $.013 per share. Accordingly, the net tangible
book value of the shares held by our existing stockholder (1,500,000 shares)
will be increased by $.017 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
$.025 (per share) or $.008 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 $.017 per share, reflecting an immediate reduction in the
$.025 price per share he paid for their shares. After completion of the
offering, the existing shareholder will own 60.0% of the total number of shares
then outstanding, for which she will have made an investment of $15,000 or $.01
10
per share. Upon completion of the offering, the purchasers of these shares
offered hereby will own 40.0% of the total number of shares then outstanding,
for which they will have made a cash investment of $25,000, or $.025 per share.
The following table illustrates the per share dilution to the new investors:
Public Offering Price Per Share $.025
Net Tangible Book Value Prior to this Offering $.004
Net Tangible Book Value After Offering $.017
Immediate Dilution per Share to New Investors $.008
The following table summarizes the number and percentages 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:
Price Per Total Number of Percent of Consideration
Share Shares Held Ownership Paid
----- ----------- --------- ----
Existing Shareholder $.01 1,500,000 60.0 $15,000
Investors in this
Offering $.025 1,000,000 40.0 $20,000
PLAN OF DISTRIBUTION
OFFERING WILL BE SOLD BY OUR OFFICER AND/OR DIRECTOR
This is a self-underwritten offering. This prospectus permits our officer and/or
director to sell the shares directly to the public, with no commission or other
remuneration payable to her for any shares she may sell. There are no plans or
arrangement to enter into any contracts or agreements to sell the shares with a
broker or dealer. Our officer and/or director, Ms. Beverly Frederick, will sell
the shares and intends to offer them to friends, family members and business
acquaintances. In offering the securities on our behalf, she 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/or 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/or 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 their participation; and,
b. Our officer and/or director will not be compensated in connection with
her participation by the payment of commissions or other remuneration
based either directly or indirectly on transaction in securities; and
c. Our officer and/or director is not, nor will she be at the time of her
participation in the offering, an associated person of a
broker-dealer; and
d. Our officer and/or director meets the conditions of paragraph
(a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that she (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).
11
Our officer and/or 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 $.025 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 will continue for
a period of 180 days (the "Expiration Date"), unless extended by our Board of
Directors for an additional 90 days.
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 $20,000 has been received.
At that time, the funds will be transferred to our business account for use in
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 Factors" section to read the related risk to you as a purchaser of any
shares.
PROCEDURES AND REQUIREMENTS FOR SUBSCRIPTION
If you decide to subscribe to any shares in this offering, you will be required
to execute a Subscription Agreement and tender it, together with a check or bank
money order made payable to Mesquite Mining, Inc. Subscriptions, once received
by the company, are irrevocable.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
NO PUBLIC MARKET FOR COMMON STOCK
There is currently no public market for our common stock. There has been no
public trading of our securities, and, therefore, no high and low bid pricing.
As of the date of this prospectus, Mesquite Mining, Inc. has one shareholder of
record. We have paid no cash dividends and have no outstanding options. We have
no securities authorized for issuance under equity compensation plans.
The SEC has 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 quotation system. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock, to
deliver a standardized risk disclosure document prepared by the SEC, that: (a)
contains a description of the nature and level of risk in the market for penny
stocks in both public offerings and secondary trading; b) contains a description
of the broker's or dealer's duties to the customer and of the rights and
remedies available to the customer with respect to a violation to such duties or
other requirements of Securities' laws; (c) contains a brief, clear, narrative
description of a dealer market, including bid and ask prices for penny stocks
and the significance of the spread between the bid and ask price; (d) contains a
toll-free telephone number for inquiries on disciplinary actions; (e) defines
significant terms in the disclosure document or in the conduct of trading in
12
penny stocks; and (f) contains such other information and is in such form,
including language, type, size and format, as the SEC shall require by rule or
regulation. The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) 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 (d) 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 suitably written statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock if it becomes subject to these
penny stock rules. Therefore, if our common stock becomes subject to the penny
stock rules, stockholders may have difficulty selling those securities.
REGULATION M
Our officer and/or director, who will sell the shares, is aware that she is
required to comply with the provisions of Regulation M, promulgated under the
Securities and Exchange Act of 1934, as amended. With certain exceptions,
Regulation M precludes the officer and/or 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.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
PLAN OF OPERATION
Our cash balance is $6,507 as of December 31, 2007. We believe our cash balance
is sufficient to fund our limited levels of operations until April, 2008. If we
experience a shortage of funds prior to funding we may utilize funds from our
director, who has informally agreed to advance funds to allow us to pay for
offering costs, filing fees, and professional fees, however she 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 $15,000 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 stage.
Our plan of operation is to conduct mineral exploration activities on the Candy
Property in order to assess whether the property contains mineral reserves
capable of commercial extraction. Our exploration program is designed to explore
for commercially viable deposits of silver, gold and other minerals. We have
not, nor has any predecessor, identified any commercially exploitable reserves
of these minerals on the Candy Property.
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 our
claim consisting of geological mapping, soil sampling and rock sampling. In
addition to the $16,000 we anticipate spending for Phase 1 and 2 for the
exploration program as outlined below, we anticipate spending an additional
$9,000 on professional and administrative fees, including fees payable in
connection with the filing of this registration statement and complying with
13
reporting obligations. Total expenditures over the next 12 months are therefore
expected to be approximately $25,000, which is the amount to be raised in this
offering and our cash on hand. If we experience a shortage of funds prior to
funding during the next 12 months, we may utilize funds from our director, who
has informally agreed to advance funds to allow us to pay for professional fees,
including fees payable in connection with the filing of this registration
statement and operation expenses, however she has no formal commitment,
arrangement or legal obligation to advance or loan funds to the company. We will
require the funds from this offering to proceed.
We engaged Mr. Laurence Sookochoff, P. Eng., to prepare a geological evaluation
report on the Candy Property. Mr. Sookochoff's report summarizes the results of
the history of the exploration of the mineral claims, the regional and local
geology of the mineral claims and the mineralization and the geological
formations identified as a result of the prior exploration in the claim areas.
The geological report also gives conclusions regarding potential mineralization
of the mineral claims and recommends a further geological exploration program on
the mineral claims. The exploration program recommended by Mr. Sookochoff is as
follows:
Phase Exploration Program Cost Status
- ----- ------------------- ---- ------
Phase I VLF-EM and magnetometer surveys $ 6,500 Expected to be completed in spring, 2008
(dependent on consulting geologist's
schedule).
Phase II Localized soil surveys, trenching and $ 9,500 Expected to be completed in fall, 2008
sampling over known and indicated (depending on the results of Phase 1, and
mineralized zones consulting geologist's schedule).
Expected to be completed in winter, 2008
Phase III Test Diamond drilling outlined by $70,000 (depending on the results of Phase 2, and
Phase 1 and 2 programs. consulting geologist's schedule.)
TOTAL ESTIMATED COST $86,000
If we are successful in raising the funds from this offering, we plan to
commence Phase I of the exploration program on the claim in spring, 2008. We
expect this phase to take 14 days to complete and an additional two months for
the consulting geologist to receive the results of the assay lab and prepare his
report.
The above program costs are management's estimates based upon the
recommendations of the professional consulting geologist's report and the actual
project costs may exceed our estimates. To date, we have not commenced
exploration.
Following Phase I of the exploration program, if it proves successful in
identifying mineral deposits, we intend to proceed with Phase II of our
exploration program. The estimated cost of this program is $9,500 and will take
approximately 10 days to complete and an additional two months for the
consulting geologist to receive the results from the assay lab and prepare his
report.
Following Phase II of the exploration program, if it proves successful in
identifying mineral deposits, we intend to proceed with Phase III of our
exploration program if we are able to raise the funds necessary. The estimated
cost of this program is $70,000 and will take approximately 2 weeks to complete
and an additional two months for the consulting geologist to receive the results
from the assay lab and prepare his report.
We anticipate commencing Phase II of our exploration program in fall, 2008,
depending on whether Phase 1 program proves successful in identifying mineral
deposits. Subject to financing, we anticipate commencing Phase III of our
exploration program in 2009, depending on whether Phase II program proves
successful in identifying mineral deposits. We have a verbal agreement with
14
Laurence Sookochoff, P. Eng., the consulting geologist who prepared the geology
report on our claim, to retain his services for our planned exploration program.
We will require additional funding to proceed with Phase III and 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 two phases of
the exploration program.
OFF-BALANCE SHEET ARRANGEMENTS
We have no 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.
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
two phases 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 use for the third 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 two phases of our
exploration program are successful in identifying mineral deposits we will
attempt to raise the necessary funds to proceed with phase three, and any
subsequent drilling and extraction. The sources of funding we may consider to
fund this work include a public offering, a private placement of our securities
or loans from our director or others.
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 third phase
of our exploration program and there are no remaining funds in the company.
While she 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 Candy Lode Claim consisting of one located
mineral claim comprising a total of approximately 20 acres. We have not carried
out any exploration work on the claims and have incurred no exploration costs.
We received our initial funding of $15,000 through the sale of common stock to
Ms. Frederick, our director, who purchased 1,500,000 shares of our common stock
at $0.01 per share on November 3, 2007. From inception until the date of this
filing we have had no operating activities. Our financial statements from
inception (October 23, 2007) through the year ended December 31, 2007 report no
revenues and a net loss of $8,493.
15
SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Company reports revenues and expenses using the accrual method of accounting
for financial and tax reporting purposes.
USE OF ESTIMATES
Management uses estimates and assumption in preparing these financial statements
in accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses.
MINERAL PROPERTY ACQUISITION AND EXPLORATION COSTS
The Company expenses all costs related to the acquisition and exploration of
mineral properties in which it has secured exploration rights prior to
establishment of proven and probable reserves. To date, the Company has not
established the commercial feasibility of any exploration prospects; therefore,
all costs are being expensed.
DEPRECIATION, AMORTIZATION AND CAPITALIZATION
The Company records depreciation and amortization when appropriate using both
straight-line and declining balance methods over the estimated useful life of
the assets (five to seven years). Expenditures for maintenance and repairs are
charged to expense as incurred. Additions, major renewals and replacements that
increase the property's useful life are capitalized. Property sold or retired,
together with the related accumulated depreciation is removed from the
appropriated accounts and the resultant gain or loss is included in net income.
INCOME TAXES
The Company accounts for its income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes." Under
Statement 109, a liability method is used whereby deferred tax assets and
liabilities are determined based on temporary differences between basis used of
financial reporting and income tax reporting purposes. Income taxes are provided
based on tax rates in effect at the time such temporary differences are expected
to reverse. A valuation allowance is provided for certain deferred tax assets if
it is more likely than not, that the Company will not realize the tax assets
through future operations.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial Accounting Standards statements No. 107, "Disclosures About Fair Value
of Financial Instruments", requires the Company to disclose, when reasonably
attainable, the fair market values of its assets and liabilities which are
deemed to be financial instruments. The Company's financial instruments consist
primarily of cash and certain investments.
PER SHARE INFORMATION
The Company computes per share information by dividing the net loss for the
period presented by the weighted average number of shares outstanding during
such period.
16
DESCRIPTION OF BUSINESS
ORGANIZATION WITHIN THE LAST FIVE YEARS
Mesquite Mining, Inc. was incorporated on October 23, 2007 under the laws of the
State of Delaware. We are engaged in the business of acquisition, exploration
and development of natural resource properties.
Beverly Frederick serves as officer and director of our company from inception
(October 23, 2007) to current date. No other person other than Ms. Frederick has
acted as a promoter of Mesquite Mining, Inc. since our inception. Other than Ms.
Frederick's purchase of 1,500,000 shares of our common stock on November 3,
2007, Ms. Frederick has not entered into any agreement with us in which she is
to receive from us or provide to us anything of value. Ms. Frederick purchased
the 1,500,000 shares of our common stock at a price of $.01 per share for a
total of $15,000.
IN GENERAL
We are an exploration stage company engaged in the acquisition and exploration
of mineral properties. We currently own a 100% undivided interest in the Candy
Lode Mineral Claim located in Clark County, State of Nevada that we call the
"Candy Property." We are currently conducting mineral exploration activities on
the Candy Property in order to assess whether it contains any commercially
exploitable mineral reserves. Currently there are no known mineral reserves on
the Candy Property.
We have not earned any revenues to date. Our independent auditor has issued an
audit opinion 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 prepared by Laurence Sookochoff, P. Eng.
dated December 15, 2007.
There is the likelihood of our mineral claim containing little or no economic
mineralization or reserves of silver and other minerals. We are presently in the
exploration stage of our business and we can provide no assurance that any
commercially viable mineral deposits exist on our mineral claims, that we will
discover commercially exploitable levels of mineral resources on our property,
or, if such deposits are discovered, that we will enter into further substantial
exploration programs. Further exploration is required before a final
determination can be made as to whether our mineral claims possess commercially
exploitable mineral deposits. If our claim does not contain any reserves all
funds that we spend on exploration will be lost.
GLOSSARY OF TECHNICAL GEOLOGICAL TERMS
The following defined technical geological terms are used in our prospectus:
Anglesite A native sulphate of lead. It occurs in white or
yellowish transparent, prismatic crystals.
Azurite Blue carbonate of copper; blue malachite.
Basalt A general term for dark-colored mafic igneous
rocks, commonly extrusive but locally intrusive
(e.g., as in dikes).
Breccia A rock in which angular fragments are surrounded
by a mass of fine-grained minerals.
Brecciated The formation of angular rock fragments.
Calamine A white mineral; a common ore of zinc.
17
Carbonate A salt or ester of carbonic acid.
Cerussite A mineral consisting of lead carbonate that is
an important source of lead.
Chrysocolla A hydrous silicate of copper, occurring massive,
of a blue or greenish blue color.
Cinnabar A heavy reddish mineral consisting of mercuric
sulfide; the chief source of mercury.
Clastic Fragments of minerals, rocks, or organic
structures that have been moved individually
from their places of origin.
Cretaceous Rocks laid down during the last period of the
Mesozoic era (between the Jurassic and Tertiary
periods, about 146 to 65 million years ago), at
the end of which dinosaurs and many other
organisms died out.
Diamond drill(ing) A rotary type of rock drill in which the cutting
is done by abrasion rather than percussion. The
cutting bit is set with diamonds and is attached
to the end of long hollow rods through which water
or other fluid is pumped to the cutting face as a
lubricant. The drill cuts a core of rock that is
recovered in long cylindrical sections, two
centimeters or more in diameter.
Fault Zones A network of interconnected fractures representing
the surficial expression of a fault.
Fold A planar feature, such as a bedding plane, that
has been strongly warped, presumably by
deformation.
Galena The chief ore of lead, commonly found in shallow
ore veins in which open cavities are frequent;
hence, crystals are common and well developed.
Galena is widely distributed and constitutes by
far the most important ore for lead. Silver,
antimony, arsenic, copper, and zinc minerals
often occur in intimate association with galena;
consequently, galena ores mined for lead also
include other valuable by-products.
Granite Plutonic igneous rock having visibly crystalline
texture; generally composed of feldspar and mica
and quartz.
Hydrozincite An abundant element of the magnesium-cadmium
group, extracted principally from the minerals
zinc blend, smithsonite, calamine, and
franklinite, as an easily fusible bluish white
metal, which is malleable, especially when
heated.
Igneous A type of rock which has been formed by the
consolidation of magma, a molten substance from
the earth's core.
Intrusive A body of igneous rock formed by the
consolidation of magma intruded into other
rocks, in contrast to lavas, which are extruded
upon the surface.
Jurassic Second Period of Mesozoic Era, which covered span
of time between 190 - 135 million years before the
present time.
Limestone A bedded, sedimentary deposit consisting chiefly
of calcium carbonate.
Limonite A widely occurring iron oxide ore; a mixture of
goethite and hematite and lepidocrocite.
18
Lode A mineral deposit in solid rock.
Malachite Green mineral used as an ore of copper and for
making ornamental objects.
Mesozoic One of the eras of geologic time. It includes the
Triassic, Jurassic and Cretaceous periods.
Mineralization The concentration of metals and their chemical
compounds within a body of rock.
Monte Cristo Limestone
Formation A local name for a geological series of rocks.
Normal Fault A dip-slip fault in which the block above
the fault has moved downward relative to the
block below.
Ore A mixture of minerals and gangue from which at
least one metal can be extracted at a profit.
Oxidization A chemical reaction caused by exposure to oxygen
that results in a change in the chemical
composition of a mineral
Paleozoic Rocks that were laid down during the Paleozoic Era
(between 544 and 230 million years before the
present time).
Porphyritic Containing relatively large isolated crystals in a
mass of fine texture.
Porphyry A heterogeneous rock characterized by the presence
of crystals in a relatively finer-grained matrix.
Pyrite The most common of the sulphide minerals. It is
usually found associated with other sulphides or
oxides in quartz veins, sedimentary rock and
metamorphic rock, as well as in coal beds, and
as the replacement mineral in fossils.
Quartz A mineral whose composition is silicon dioxide.
A crystalline form of silica.
Sedimentary A type of rock which has been created by the
deposition of solids from a liquid.
Smithsonite Native zinc carbonate. It generally occurs in
stalactitic, reniform, or botryoidal shapes, of
a white to gray, green, or brown color.
Stratigraphy Strictly, the description of bedded rock
sequences; used loosely, the sequence of bedded
rocks in a particular area.
Structural Pertaining to geologic structure.
Tertiary Relating to the first period of the Cenozoic era,
about 65 to 1.64 million years ago.
Thrust Faults (Faulting) A dip-slip fault in which the upper block above
the fault plane moves up and over the lower block,
so that older strata are placed over younger.
Trenching The removal of overburden to expose the underlying
bedrock.
19
Triassic The system of strata that was deposited between
210 and 250 million years before the present time.
Vein An occurrence of ore with an irregular development
in length, width and depth usually from an
intrusion of igneous rock.
ACQUISITION OF THE CANDY PROPERTY
In December, 2007, we purchased a 100% undivided interest in a mineral claim
known as the Candy Lode Claim for a price of $8,500. The claims are in good
standing until September 1, 2008.
We engaged Laurence Sookochoff, P. Eng., to prepare a geological evaluation
report on the Candy Property. Mr. Sookochoff is a consulting professional
geologist in the Geological Section of the Association of Professional Engineers
and Geoscientists of British Columbia. Mr. Sookochoff attended the University of
British Columbia and holds a Bachelor of Science degree in geology.
The work completed by Mr. Sookochoff in preparing the geological report
consisted of a review of geological data from previous exploration within the
region. The acquisition of this data involved the research and investigation of
historical files to locate and retrieve data information acquired by previous
exploration companies in the area of the mineral claims.
We received the geological evaluation report on the Candy Property entitled
"Geological Evaluation Report on the Candy Lode Mining Claim, Yellow Pine Mining
District, Clark County, Nevada, USA" prepared by Mr. Sookochoff on December 15,
2007. The geological report summarizes the results of the history of the
exploration of the mineral claims, the regional and local geology of the mineral
claims and the mineralization and the geological formations identified as a
result of the prior exploration. The geological report also gives conclusions
regarding potential mineralization of the mineral claims and recommends a
further geological exploration program on the mineral claims. The description of
the Candy Property provided below is based on Ms. Sookochoff's report.
DESCRIPTION OF PROPERTY
The property owned by Mesquite Mining, Inc., on which the net proceeds of the
offering will be spent, is the Candy Lode Claim which is comprised of one
located mineral claim. The Candy Lode Claim is located within Sections 28 & 33
Range 58E, Township 25S at the easternmost portion of the Yellow Pine Mining
District of Clark County, Nevada. Access from Las Vegas, Nevada to the Candy
Lode Claim is southward via Interstate Highway #15 for approximately 31 miles,
to within five miles past Jean, Nevada, thence westerly for seven miles to the
Candy Lode Claim.
The claim was recorded with the County and the Bureau of Land Management.
20
[MAP SHOWING THE CLAIM LOCATION IN NEVADA]
21
[CLOSEUP MAP SHOWING THE CLAIM LOCATION]
22
PHYSIOGRAPHY, CLIMATE, VEGETATION AND WATER
The Candy Lode Claim is situated at the southern end of the Sheep Mountain
Range, a north-south trending range of mountains with peaks reaching an
elevation of 4, 184 feet. The Claim covers a plateau-like area at an elevation
of 1,300 feet with a range of elevation on the Claim of a maximum 100 feet.
The area is of a typically desert climate with relatively high temperatures and
low precipitation. Vegetation consists mainly of desert shrubs and cactus.
Sources of water would be available from valley wells.
PROPERTY HISTORY
The history of the Yellow Pine Mining District stems from 1856 when Mormon
missionaries reported ore in the area. In 1857 the smelting of ore produced
9,000 pounds of lead and in 1898 a mill was built south of Goodsprings. As a
result of the mill availability, exploration activity led to the discovery of
many of the mines in the area.
The completion of the San Pedro, Los Angeles and Salt Lake railroad in 1905 and
recognition of oxidized zinc minerals in the ore in 1906 stimulated development
of the mines and the region has been subject to intermittent activity up to
1964, particularly during the World War I and II years.
Although less famous than many of the other mining districts of the Great Basin,
it nevertheless ranks second only to Tonopah in total Nevada lead and zinc
production. During World War I this district was one of the most productive in
the West, but by the end of World War II only a few mines remained in operation.
Even though the mines of this district have been worked primarily for their
lead-zinc-silver values, an estimated 91,000 ounces of gold has been recovered
as a by-product of copper-lead-silver mining.
Production from the mines of the Yellow Pine Mining District from 1902 to 1929
was 477,717 tons. Bullion recovery from 7,656 tons of this ore by amalgamation
and cyanidation was 9,497 ounces of gold and 2,445 ounces of silver. The
concentrator treated 230,452 tons of ore which yielded 58,641 tons of lead-zinc
concentrate and 32,742 tons of lead concentrate. Crude ore shipped to 1929 was
227,952 tons from which recovery amounted to 3,196 ounces of gold, 422,379
ounces silver, 3,085,675 pounds copper, 34,655,360 pounds lead and 110,833,051
pounds zinc.
The Candy Lode Claim covers the formerly productive Silver Gem mine from which
reported production is included with production from the nearby Christmas mine
and the Eureka mine. Reported production from 1911-1922 is 532,505 pounds of
lead, 449,886 pounds of zinc, 16,635 ounces of silver, 2 ounces of gold, and 195
pounds of copper.
REGIONAL GEOLOGY
In the Yellow Pine district, the Spring Mountain Range in the west, and the
Sheep Mountain Range in the east consist mainly of Paleozoic sediments which
have undergone intense folding accompanied by faulting. A series of
Carboniferous sediments consists largely of siliceous limestone and include
strata of pure crystalline limestone and dolomite with occasional intercalated
beds of fine grained sandstone. These strata have a general west to southwest
dip of from 15 to 45 degrees which is occasionally disturbed by local folds.
Igneous rocks are scarce and are represented chiefly by quartz-monzonite
porphyry dikes and sills. The quartz-monzonite porphyry is intruded into the
strata and is of post-Jurassic age, perhaps Tertiary.
23
[MAP SHOWING THE REGIONAL GEOLOGY]
24
STRATIGRAPHY
The sedimentary rocks in the district range in age from Upper Cambrian to
Recent. The Paleozoic section includes the Cambrian Bonanza King and Nopah
Formations, the Devonian Sulta, Mississippian Monte Cristo Limestone,
Pennsylvanian/Mississippian Bird Spring Formation and Permian Kaibab Limestone.
The Mesozoic section is comprised only of the Triassic Moenkopi and Chinle
Formations and an upper Mesozoic unit of uncertain age termed the Lavinia Wash
Formation. The Paleozoic rocks are dominantly carbonates while the Mesozoic
units are continental clastics. Tertiary rocks include gravels and minor
volcanic tuffs.
Only two varieties of intrusive rocks are known in the district. The most
abundant is granite porphyry which forms three large sill-like masses. The sills
generally lie near major thrust faults and are thought to have been emplaced
along breccia zones at the base of the upper plate of the thrust fault. Locally,
small dikes of basaltic composition and uncertain age have been encountered in
some of the mine workings.
STRUCTURE
The region reveals a record of folding, thrust faulting and normal faulting.
Folding began in the early Jurassic, resulting in broad flexures in the more
massive units and tight folds in the thinly bedded rocks. The thrust faults in
the district are part of a belt of thrust faulted rocks, the Foreland Fold and
Thrust Belt that stretches from southern Canada to southern California.
Deformation within the belt began in the Jurassic and continued until Cretaceous
time. Within the Goodsprings District thrust faulting appears to post-date much
of the folding, but despite intensive study the actual age of thrusting
continues to be the subject of contentious debate. Three major thrusts have been
mapped; from west to east, the Green Monster, Keystone and Contact thrusts.
Of these, the Keystone is the most persistent along strike having been mapped
for a distance of over 50 kilometers. The stratigraphic relationships along the
Keystone fault are similar to those for all the major thrusts in the area,
Cambrian Bonanza King Formation has been thrust eastward over younger Paleozoic
rocks.
PROPERTY GEOLOGY
The Candy Lode Claim is indicated to be underlain by the Mississippian to
Permian Bird Spring Formation which unconformably overlies the Yellowpine
Limestone Member of the Monte Cristo Limestone Formation.
REGIONAL MINERALIZATION
Ore deposits in the Goodsprings (Yellow Pine) district fall into two distinct
types, which may or may not be related, gold-copper deposits and lead-zinc
deposits. Gold-copper deposits are clearly related to sill-like masses of
granite porphyry. All existing mines worked the contact between the intrusive
and surrounding sedimentary rocks. Gold occurred in both the intrusive and the
carbonate wall rocks. It appears any carbonate unit was a suitable host.
The lead-zinc deposits are often distant from intrusives and occur as veins or
replacements of brecciated rocks along fault zones, either thrust faults or
normal faults. Unlike the gold deposits, the productive lead-zinc deposits are
restricted to the Monte Cristo Formation.
Mineralogy of gold-copper deposits consist of native gold, pyrite, limonite,
cinnabar, malachite, azurite and chrysocolla. Lead-zinc deposits are comprised
of hydorzincite, calamine, smithsonite, cerrusite, anglesite, galena and iron
25
oxides. The rather unusual mineralogy of the district is due to the great depth
of surface oxidation exceeding 600 feet.
Typical sulfides such as chalcopyrite, sphalerite and pyrite have been partially
or completely altered to more stable hydrated carbonates and sulfates. Only the
highly insoluble lead sulfide, galena has successfully resisted surface
oxidation.
Primary alteration is difficult to characterize due to the supervene overprint,
but again appears to differ for gold-copper deposits and lead-zinc deposits.
Gold-copper ores have been extensively sericitized and daolinized, altering the
host pluton to a rock that can be mined through simple excavation with little or
not blasting. The rock is so thoroughly altered it decrepitates on exposure of
the atmosphere. On the other head, lead-zinc deposits appear to be characterized
by colomitization and minor silicification.
PROPERTY MINERALIZATION
The mineralization on the Candy Lode Claim is reported in documentation on the
included Silver Gem mine as a thin breccia zone parallel to bedding in the Bird
Spring Formation sporadically imbedded with galena. Vanadinite and
cuprodeschloizite are common.
CONCLUSIONS AND RECOMMENDATIONS
Mr. Sookochoff states in his geology report that the Candy Lode Claim covers
some exploratory workings on mineral zones hosting mineralization of sufficient
economic values to be shipped to a smelter. As the nature of the mineralization
nor the controlling structures to the mineralization have been defined, and as
the Yellow Pine district has a history of significant lead/zinc production from
within veins or replacements of brecciated rocks along fault zones, the
mineralized zones of the Candy Lode Claim should be explored for potential
economical mineral zones.
It is recommended that Mesquite Mining Inc. complete a three phased exploration
program on the Candy Lode Claim. Phase I would consist of VLF-EM and
magnetometer surveys along the extensions of the known mineral zones to
determine the potential structural controls to the known mineral zones. Phase II
would consist of localized soil surveys, trenching, and sampling over the
indicated extensions of the mineral zones. Phase III would consist of test
diamond drilling of the prime indicated mineral zones.
RECOMMENDED EXPLORATION PROGRAM AND ESTIMATED COST
Phase Exploration Program Cost Status
- ----- ------------------- ---- ------
Phase I VLF-EM and magnetometer surveys $ 6,500 Expected to be completed in spring, 2008
(dependent on consulting geologist's
schedule).
Phase II Localized soil surveys, trenching and $ 9,500 Expected to be completed in fall, 2008
sampling over known and indicated (depending on the results of Phase 1, and
mineralized zones consulting geologist's schedule).
Expected to be completed in winter, 2008
Phase III Test Diamond drilling outlined by $70,000 (depending on the results of Phase 2, and
Phase 1 and 2 programs. consulting geologist's schedule.)
TOTAL ESTIMATED COST $86,000
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COMPETITION
We are an explorations stage company. 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 the U.S.
and around the world for the sale of gold, silver and other minerals. Therefore,
we will likely be able to sell any gold, silver 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 will need to
conduct exploration. We have not yet attempted to locate or negotiate with any
suppliers or 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.
We compete with other mineral resource exploration and development companies for
financing and for the acquisition of new mineral properties. Many of the mineral
resource exploration and development companies with whom we compete have greater
financial and technical resources than us. Accordingly, these competitors may be
able to spend greater amounts on acquisitions of mineral properties of merit, on
exploration of their mineral properties and on development of their mineral
properties. In addition, they may be able to afford greater geological expertise
in the targeting and exploration of mineral properties. This competition could
result in competitors having mineral properties of greater quality and interest
to prospective investors who may finance additional exploration and development.
This competition could adversely impact on our ability to finance further
exploration and to achieve the financing necessary for us to develop our mineral
properties.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have not incurred any research expenditures since our incorporation.
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 the United States generally, and in the state of Nevada specifically. We will
also be subject to the regulations of the Bureau of Land Management, Department
of the Interior.
PATENTS AND TRADEMARKS
We do not own, either legally or beneficially, any patents or trademarks.
NEED FOR GOVERNMENT APPROVAL FOR ITS PRODUCTS OR SERVICES
We are not required to apply for or have any government approval for our product
or services.
27
FACILITIES
We currently do not own any physical property or own any real property. We
purchased the Candy Property at a cost of $8,500. Title to the Candy Property
mineral claims is held by Mesquite Mining, Inc.
We currently utilize space provided to us on a rent free basis from our officer
and director, Beverly Frederick at 4321 7th Avenue, Los Angeles, CA 90008.
Management believes the current premises are sufficient for its needs at this
time.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
We have no employees other than our officer and director as of the date of this
prospectus. Ms. Frederick currently devotes approximately 6 hours per week to
company matters and after receiving funding, she 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 employees. We conduct our business largely through consultants.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings, and we are not aware of
any pending or potential legal actions.
DIRECTOR, EXECUTIVE OFFICER, PROMOTER AND CONTROL PERSON
The names, ages and titles of our executive officers and director are as
follows:
Name and Address of Executive
Officer and/or Director Age Position
----------------------- --- --------
Beverly Frederick 49 President, Secretary, Treasurer and
4321 7th Avenue Director
Los Angeles, CA 90008
Ms. Beverly Frederick is the promoter of Mesquite Mining, Inc., as that term is
defined in the rules and regulations promulgated under the Securities and
Exchange Act of 1933.
Ms. Frederick has no formal training as a geologist or in the technical or
managerial aspects of management of a mineral exploration company. Her prior
business experiences have primarily been within the residential and commercial
real estate industry and not in the mineral exploration industry. Accordingly,
we will have to rely on the technical services of others to advise us on the
managerial aspects specifically associated with a mineral exploration company.
We do not have any employees who have professional training or experience in the
mining industry. We rely on independent geological consultants to make
recommendations to us on work programs on our property, to hire appropriately
skilled persons on a contract basis to complete work programs and to supervise,
review, and report on such programs to us.
TERM OF OFFICE
Our director is appointed to hold office until the next annual meeting of our
stockholders or until her successor is elected and qualified, or until she
resigns or is removed in accordance with the provisions of the Delaware Revised
Statutes. Our officer is appointed by our Board of Directors and holds office
until removed by the Board.
28
SIGNIFICANT EMPLOYEES
We have no significant employees other than our officer and/or director, Ms.
Beverly Frederick. Ms. Frederick currently devotes approximately 6 hours per
week to company matters. After receiving funding per our business plan Ms.
Frederick intends to devote as much time as the Board of Directors deem
necessary to mange the affairs of the company.
Ms. Frederick has not 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 limited 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 he purchase or sale of any securities.
Ms. Frederick has not been convicted in any criminal proceeding (excluding
traffic violations) nor is she subject of any currently pending criminal
proceeding.
We conduct our business through agreements with consultants and arms-length
third parties. Currently, we have no formal consulting agreements in place. We
have a verbal arrangement with the consulting geologist currently conducting the
exploratory work on the Candy Property. We pay the consulting geologist the
usual and customary rates received by geologists performing similar consulting
services.
RESUME
BEVERLY FREDERICK serves as President, Secretary and Treasurer of Mesquite
Mining, Inc. since October 23, 2007 (inception). From 2007 to current, Ms.
Frederick serves as a management executive at Bond Companies, a commercial real
estate company in Los Angeles, CA. From 2005 to 2007, she was a commercial real
estate management consultant for Cedar Management, LLC, Los Angeles, CA. From
2000 to 2005, Ms. Frederick worked in residential and commercial real estate in
Riverside County, CA. Ms. Frederick is a member of the National Association of
Realtors and the California Association of Realtors.
EXECUTIVE COMPENSATION
MANAGEMENT COMPENSATION
Our current director and officer is Beverly Frederick.
The table below summarizes all compensation awarded to, earned by, or paid to
our executive officers by any person for all services rendered in all capacities
to us for the period from our inception through to December 31, 2007:
Annual Compensation Long Term Compensation
--------------------------------- ---------------------------------
Restricted
Other Annual Stock Options/* LTIP All Other
Name Title Year Salary($) Bonus Compensation Awarded SARs(#) payouts($) Compensation
- ---- ----- ---- --------- ----- ------------ ------- ------- ---------- ------------
Beverly President, 2007 $0 $0 $0 $0 $0 $0 $0
Frederick Secretary,
Treasurer,
and Director
29
There are no current employment agreements between the company and its
officer/director.
On November 3, 2007, a total of 1,500,000 shares of common stock were issued to
Ms. Beverly Frederick in exchange for cash in the amount of $15,000 or $0.01 per
share. The terms of this stock issuance was as fair to the company, in the
opinion of the board of director, as if it could have been made with an
unaffiliated third party.
Ms. Frederick currently devotes approximately 6 hours per week to manage the
affairs of the company. She 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 the
officer or director 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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Ms. Frederick will not be paid for any underwriting services that she performs
on our behalf with respect to this offering. She will also not receive any
interest on any funds that she may advance to us for expenses incurred prior to
the offering being closed. Any funds loaned will be repaid from the proceeds of
the offering.
On November 3, 2007, a total of 1,500,000 shares of Common Stock was issued to
Ms. Frederick in exchange for $15,000, or $0.01 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 a director of the Company. (See "Dilution".)
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the number of
shares of our common stock owned beneficially as of February 21, 2008 by: (i)
each person (including any group) known to us to own more than five percent (5%)
of any class of our voting securities, (ii) our director, and or (iii) our
officer. Unless otherwise indicated, the stockholder listed possesses sole
voting and investment power with respect to the shares shown.
Amount and Nature Percentage of
of Beneficial Common
Title of Class Name and Address of Beneficial Owner Ownership Stock(1)
- -------------- ------------------------------------ --------- --------
Common Stock Beverly Frederick, Director
4321 7th Avenue 1,500,000 100%
Los Angeles, CA 90008 Direct
Common Stock Officer and/or director as a Group 1,500,000 100%
Holders of More Than 5% of Our Common Stock
- ----------
(1) A beneficial owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding, relationship,
or otherwise has or shares: (i) voting power, which includes the power to
vote, or to direct the voting of shares; and (ii) investment power, which
includes the power to dispose or direct the disposition of shares. Certain
shares may be deemed to be beneficially owned by more than one person (if,
30
for example, persons share the power to vote or the power to dispose of the
shares). In addition, shares are deemed to be beneficially owned by a
person if the person has the right to acquire the shares (for example, upon
exercise of an option) within 60 days of the date as of which the
information is provided. In computing the percentage ownership of any
person, the amount of shares outstanding is deemed to include the amount of
shares beneficially owned by such person (and only such person) by reason
of these acquisition rights. As a result, the percentage of outstanding
shares of any person as shown in this table does not necessarily reflect
the person's actual ownership or voting power with respect to the number of
shares of common stock actually outstanding on February 21, 2008. As of
February 21, 2008, there were 1,500,000 shares of our common stock issued
and outstanding.
DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital stock consists of 80,000,000 shares of common stock, with
a par value of $0.0001 per share. As of February 21, 2008, there were 1,500,000
shares of our common stock of our common stock issued and outstanding that was
held of record by one (1) registered stockholder.
COMMON STOCK
The following is a summary of the material rights and restrictions associated
with our common stock. This description does not purport to be a complete
description of all of the rights of our stockholders and is subject to, and
qualified in its entirety by, the provisions of our most current Articles of
Incorporation and Bylaws, which are included as exhibits to this Registration
Statement.
The holders of our common stock currently have (i) 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 stock
holders 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 Delaware 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 holder of more than 50% of such outstanding
shares, voting for the election of director, can elect all of the directors to
be elected, if she so chooses, 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 60% of the outstanding
shares. (See "Dilution").
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
31
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our Articles of Incorporation provide that we will indemnify an officer,
director, or former officer or director, to the full extent permitted by law. We
have been advised that, in the opinion of the SEC, indemnification for
liabilities arising under the Securities Act is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (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 one of our director, officers, or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our legal counsel
the matter has been settled by controlling precedent, submit the question of
whether such indemnification is against public policy to a court of appropriate
jurisdiction. We will then be governed by the court's decision.
LEGAL MATTERS
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in our company or any of its parents or
subsidiaries. Nor was any such person connected with our company or any of its
parents or subsidiaries as a promoter, managing or principal underwriter, voting
trustee, director, officer, or employee.
EXPERTS
The law firm of Batcher, Zarcone & Baker LLP, has passed upon the validity of
the shares being offered and certain other legal matters and is representing us
in connection with this offering. Ms. Batcher's consent is attached to this
prospectus as an exhibit.
George Stewart, CPA, our independent registered public accountant, has audited
our financial statements included in this prospectus and registration statement
to the extent and for the periods set forth in their audit report. George
Stewart has presented its report with respect to our audited financial
statements. The report of George Stewart is included in reliance upon their
authority as experts in accounting and auditing, and his consent is attached to
this prospectus as an exhibit.
Laurence Sookochoff, P. Eng., Sookochoff Consultants Inc., is our consulting
geologist. Mr. Sookochoff is a consulting professional geologist in the
Geological Section and is a member in good standing of the Association of
Professional Engineers and Geoscientists in British Columbia, Canada. Mr.
Sookochoff's consent is attached to this prospectus as an exhibit.
AVAILABLE INFORMATION
We have not previously been required to comply with the reporting requirements
of the Securities Exchange Act. We have filed with the SEC a registration
statement on Form S-1 to register the securities offered by this prospectus. For
future information about us and the securities offered under this prospectus,
you may refer to the registration statement and to the exhibits filed as a part
of the registration statement.
In addition, after the effective date of this prospectus, we will be required to
file annual, quarterly and current reports, or other information with the SEC as
provided by the Securities Exchange Act. You may read and copy any reports,
statements or other information we file at the SEC's public reference facility
maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can
request copies of these documents, upon payment of a duplicating fee, by writing
to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference room. Our SEC filings are also available to
the public through the SEC Internet site at www.sec.gov.
32
FINANCIAL STATEMENTS
The financial statements of Mesquite Mining, Inc. for the year ended December
31, 2007, and related notes, included in this prospectus have been audited by
George Stewart, CPA, 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
ACCOUNTING AND FINANCIAL DISCLOSURE
We have had no changes in or disagreements with our accountants.
33
MESQUITE MINING, INC.
INDEX
Report of Independent Registered Public Accounting Firm F-1
Financial Statements:
Balance Sheet - December 31, 2007 F-2
Statement of Operations - October 23, 2007 through December 31, 2007 F-3
Statement of Stockholders' Equity - October 23, 2007 through
December 31, 2007 F-4
Statement of Cash Flows - October 23, 2007 through December 31, 2007 F-5
Notes to Financial Statements F-6
34
GEORGE STEWART, CPA
2301 SOUTH JACKSON STREET, SUITE 101-G
SEATTLE, WASHINGTON 98144
(206) 328-8554 FAX(206) 328-0383
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Mesquite Mining, Inc.
I have audited the accompanying balance sheet of Mesquite Mining, Inc. (An
Exploration Stage Company) as of December 31, 2007, and the related statement of
operations, stockholders' equity and cash flows for the period from October 23,
2007 (inception), to December 31, 2007. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I 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. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Mesquite Mining, Inc. (An
Exploration Stage Company) as of December 31, 2007, and the results of its
operations and cash flows from October 23, 2007 (inception), to December 31,
2007 in conformity with generally accepted accounting principles in the United
States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note # 6 to the financial
statements, the Company has had no operations and has no established source of
revenue. This raises substantial doubt about its ability to continue as a going
concern. Management's plan in regard to these matters is also described in Note
# 6. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ George Stewart, CPA
- --------------------------------
Seattle, Washington
February 12, 2008
F-1
Mesquite Mining, Inc.
(An Exploration Stage Company)
Balance Sheet
- --------------------------------------------------------------------------------
As of
December 31,
2007
--------
ASSETS
CURRENT ASSETS
Cash $ 6,507
--------
TOTAL CURRENT ASSETS 6,507
--------
TOTAL ASSETS $ 6,507
========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ --
--------
TOTAL CURRENT LIABILITIES --
--------
TOTAL LIABILITIES --
--------
STOCKHOLDERS' EQUITY
Common stock, ($0.0001 par value, 80,000,000 shares
authorized; 1,500,000 shares issued and outstanding
as of December 31, 2007 150
Additional paid-in capital 14,850
Deficit accumulated during exploration stage (8,493)
--------
TOTAL STOCKHOLDERS' EQUITY 6,507
--------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 6,507
========
See Notes to Financial Statements
F-2
Mesquite Mining, Inc.
(An Exploration Stage Company)
Statement of Operations
- --------------------------------------------------------------------------------
October 23, 2007
(inception)
through
December 31,
2007
----------
REVENUES
Revenues $ --
----------
TOTAL REVENUES --
GENERAL & ADMINISTRATIVE EXPENSES 8,493
----------
TOTAL GENERAL & ADMINISTRATIVE EXPENSES (8,493)
----------
NET INCOME (LOSS) $ (8,493)
==========
BASIC EARNING (LOSS) PER SHARE $ (0.01)
==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,500,000
==========
See Notes to Financial Statements
F-3
Mesquite Mining, Inc.
(An Exploration Stage Company)
Statement of Changes in Stockholders' Equity
From October 23, 2007 (Inception) through December 31, 2007
- --------------------------------------------------------------------------------
Deficit
Accumulated
Common Additional During
Common Stock Paid-in Exploration
Stock Amount Capital Stage Total
----- ------ ------- ----- -----
BALANCE, OCTOBER 23, 2007 -- $ -- $ -- $ -- $ --
Stock issued for cash on
November 3, 2007 @ $0.01
per share 1,500,000 150 14,850 15,000
Net loss, December 31, 2007 (8,493) (8,493)
---------- ------ -------- -------- --------
BALANCE, DECEMBER 31, 2007 1,500,000 $ 150 $ 14,850 $ (8,493) $ 6,507
========== ====== ======== ======== ========
See Notes to Financial Statements
F-4
Mesquite Mining, Inc.
(An Exploration Stage Company)
Statement of Cash Flows
- --------------------------------------------------------------------------------
October 23, 2007
(inception)
through
December 31,
2007
--------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (8,493)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
Accounts Payable --
--------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (8,493)
CASH FLOWS FROM INVESTING ACTIVITIES
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES --
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 150
Additional paid-in capital 14,850
--------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 15,000
--------
NET INCREASE (DECREASE) IN CASH 6,507
CASH AT BEGINNING OF PERIOD --
--------
CASH AT END OF YEAR $ 6,507
========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ --
========
Income Taxes $ --
========
See Notes to Financial Statements
F-5
Mesquite Mining, Inc.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Mesquite Mining, Inc. (the Company) was incorporated on October 23, 2007 under
the laws of the State of Delaware. The Company is primarily engaged in the
acquisition and exploration of mining properties.
The Company has been in the exploration stage since its formation and has not
yet realized any revenues from its planned operations. Upon the location of
commercially mineable reserves, the Company plans to prepare for mineral
extraction and enter the development stage.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Company reports revenue and expenses using the accrual method of accounting
for financial and tax reporting purposes.
USE OF ESTIMATES
Management uses estimates and assumptions in preparing these financial
statements in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities, and the reported revenues
and expenses.
PRO FORMA COMPENSATION EXPENSE
No stock options have been issued by the Company. Accordingly; no pro forma
compensation expense is reported in these financial statements.
MINERAL PROPERTY ACQUISITION AND EXPLORATION COSTS
The Company expenses all costs related to the acquisition and exploration of
mineral properties in which it has secured exploration rights prior to
establishment of proven and probable reserves. To date, the Company has not
established the commercial feasibility of any exploration prospects; therefore,
all costs are being expensed.
DEPRECIATION, AMORTIZATION AND CAPITALIZATION
The Company records depreciation and amortization, when appropriate, using both
straight-line and declining balance methods over the estimated useful life of
the assets (five to seven years). Expenditures for maintenance and repairs are
charged to expense as incurred. Additions, major renewals and replacements that
increase the property's useful life are capitalized. Property sold or retired,
F-6
Mesquite Mining, Inc.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
together with the related accumulated depreciation is removed from the
appropriate accounts and the resultant gain or loss is included in net income.
INCOME TAXES
The Company accounts for its income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". Under
Statement 109, a liability method is used whereby deferred tax assets and
liabilities are determined based on temporary differences between basis used for
financial reporting and income tax reporting purposes. Income taxes are provided
based on tax rates in effect at the time such temporary differences are expected
to reverse. A valuation allowance is provided for certain deferred tax assets if
it is more likely than not, that the Company will not realize the tax assets
through future operations.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments", requires the Company to disclose, when
reasonably attainable, the fair market values of its assets and liabilities
which are deemed to be financial instruments. The Company's financial
instruments consist primarily of cash and certain investments.
INVESTMENTS
Investments that are purchased in other companies are valued at cost less any
impairment in the value that is other than temporary in nature.
PER SHARE INFORMATION
The Company computes per share information by dividing the net loss for the
period presented by the weighted average number of shares outstanding during
such period.
NOTE 3 - PROVISION FOR INCOME TAXES
Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and
carry-forwards are expected to be available to reduce taxable income. As the
achievement of required future taxable income is uncertain, the Company recorded
a valuation allowance.
F-7
Mesquite Mining, Inc.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
As of December 31, 2007
-----------------------
Deferred tax assets:
Net Operating Loss $ 8,493
Tax Rate 34%
Gross deferred tax assets $ 2,888
Valuation allowance $(2,888)
-------
Net deferred tax assets $ 0
=======
NOTE 4 - COMMITMENTS AND CONTINGENCIES
Litigation
The Company is not presently involved in any litigation.
NOTE 5 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Recently issued accounting pronouncements will have no significant impact on the
Company and its reporting methods.
NOTE 6 - GOING CONCERN
Future issuances of the Company's equity or debt securities will be required in
order for the Company to continue to finance its operations and continue as a
going concern. The Company's present revenues are insufficient to meet operating
expenses.
The consolidated financial statements of the Company have been prepared assuming
that the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has incurred cumulative net losses of
$ 8,493 since its inception and requires capital for its contemplated
operational and marketing activities to take place. The Company's ability to
raise additional capital through the future issuances of common stock is
unknown. The obtainment of additional financing, the successful development of
the Company's contemplated plan of operations, and its transition, ultimately,
to the attainment of profitable operations are necessary for the Company to
continue operations. The ability to successfully resolve these factors raise
substantial doubt about the Company's ability to continue as a going concern.
The consolidated financial statements of the Company do not include any
adjustments that may result from the outcome of these aforementioned
uncertainties.
F-8
Mesquite Mining, Inc.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
NOTE 7 - RELATED PARTY TRANSACTIONS
Beverly Frederick, the sole officer and director of the Company may, in the
future, become involved in other business opportunities as they become
available, thus she may face a conflict in selecting between the Company and her
other business opportunities. The Company has not formulated a policy for the
resolution of such conflicts.
Beverly Frederick, the sole officer and director of the Company, will not be
paid for any underwriting services that she performs on behalf of the Company
with respect to the Company's upcoming S-1 offering. She will also not receive
any interest on any funds that she advances to the Company for offering expenses
prior to the offering being closed which will be repaid from the proceeds of the
offering.
NOTE 8 - STOCK TRANSACTIONS
Transactions, other than employees' stock issuance, are in accordance with
paragraph 8 of Statement of Financial Accounting Standards 123. Thus issuances
shall be accounted for based on the fair value of the consideration received.
Transactions with employees' stock issuance are in accordance with paragraphs
(16-44) of Statement of Financial Accounting Standards 123. These issuances
shall be accounted for based on the fair value of the "consideration received or
the fair value of the equity instruments issued, or whichever is more readily
determinable.
On November 3, 2007 the Company issued a total of 1,500,000 shares of common
stock to one director for cash in the amount of $0.01 per share for a total of
$15,000.
As of December 31, 2007 the Company had 1,500,000 shares of common stock issued
and outstanding.
NOTE 9 - STOCKHOLDERS' EQUITY
The stockholders' equity section of the Company contains the following classes
of capital stock as of December 31, 2007:
Common stock, $ 0.0001 par value: 80,000,000 shares authorized; 1,500,000 shares
issued and outstanding.
NOTE 10 - MINERAL PROPERTY
During the period ended December 31, 2007, the Company entered into a purchase
agreement to acquire an undivided 100% interest in a mineral claim (known as the
"Candy Lode Mining Claim") located in the Yellow Pine Mining District, Clark
County, Nevada. The consideration was $8,500 cash (paid) on execution of the
agreement.
F-9
DEALER PROSPECTUS DELIVERY OBLIGATION
Until ________, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealer's obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Expenses (1) US($)
------------ ----------
SEC Registration Fee $ 0.98
Phase 1 Exploration Program $ 6,500.00
Phase 2 Exploration Program $ 9,500.00
Legal and Accounting $ 7,500.00
Working Capital $ 1,499.02
----------
TOTAL $25,000.00
==========
- ----------
(1) All amounts are estimates, other than the SEC's registration fee.
ITEM 14. INDEMNIFICATION OF DIRECTOR AND OFFICERS
Mesquite Mining Inc.'s By-Laws allow for the indemnification of the officer
and/or director in regards to her carrying out the duties of her office. The
Board of Directors will make determination regarding the indemnification of the
director, officer or employee as is proper under the circumstances if she has
met the applicable standard of conduct set forth in the Delaware General
Corporation Law.
As to indemnification for liabilities arising under the Securities Act of 1933
for a director, officer and/or person controlling Mesquite Mining, Inc., we have
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy and unenforceable.
ITEM 15. 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 commission was paid in connection with the
sale of any securities.
We issued 1,500,000 shares of common stock on November 3, 2007 to Beverly
Frederick, our director. These shares were issued pursuant to Section 4(2) of
the Securities Act at a price of $0.01 per share, for total proceeds of $15,000.
The 1,500,000 shares of common stock are restricted shares as defined in the
Securities Act.
ITEM 16. EXHIBITS
Exhibit
Number Description of Exhibits
------ -----------------------
3.1 Articles of Incorporation.
3.2 By-Laws
5.1 Opinion re: Legality
23.1 Consent of Counsel (see Exhibit 5.1)
23.2 Consent of Independent Auditor
23.3 Consent of Professional Geologist
99.1 Subscription Agreement
99.2 Purchase Agreement
II-1
UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(a) Include any prospectus required by Section 10(a)(3) of the Securities
Act;
(b) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
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 or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) if, in the aggregate, the changes in the
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(c) Include any additional or changed material information on the plan of
distribution.
2. To, for the purpose of determining any liability under the Securities Act,
treat each post-effective amendment as a new registration statement
relating to the securities offered herein, and to treat the offering of
such securities at that time 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 that remains unsold at the
termination of the offering.
4. For determining liability of the undersigned Registrant under the
Securities Act to any purchaser in the initial distribution of the
securities, that in a primary offering of securities of the undersigned
Registrant pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned Registrant will be a seller to
the purchaser and will be considered to offer or sell such securities to
such purchaser:
(a) Any preliminary prospectus or prospectus of the undersigned Registrant
relating to the offering required to be filed pursuant to Rule 424;
(b) Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned Registrant or used or referred to by the
undersigned Registrant;
(c) The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
Registrant or its securities provided by or on behalf of the
undersigned Registrant; and
(d) Any other communication that is an offer in the offering made by the
undersigned Registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to our director, officers and controlling
persons pursuant to the provisions above, or otherwise, we have been advised
that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable.
II-2
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of our director,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of our director, officers, or controlling
person sin connection with the securities being registered, we will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
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.
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.
For the purposes of determining liability under the Securities Act for any
purchaser, each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
II-3
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-1 and authorized this registration
statement to be signed on its behalf by the undersigned, in Los Angeles, CA on
February 21, 2008.
MESQUITE MINING, INC.
By: /s/ Beverly Frederick
-----------------------------------------
BEVERLY FREDERICK
President, Secretary, Treasurer
Chief Executive Officer, Chief Financial
Officer, Principal Accounting Officer and
and Director
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
Signature Title Date
- --------- ----- ----
/s/ Beverly Frederick President and Director, February 21, 2008
- ----------------------------- Chief Executive Officer, Chief
BEVERLY FREDERICK Financial Officer, Principal Accounting
Officer
II-4