As filed with the Securities and Exchange Commission on September 17, 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
SILVER BAY RESOURCES INC.
(Exact name of Registrant as Specified in its Charter)
Nevada 1000 26-2801338
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification No.)
4133 Stanford Ave.
Dallas, Texas 75225
Telephone 214-368-7746
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive Offices)
Corporate Services of Nevada
502 North Division Street
Carson City, Nevada, 89703
Telephone 775-684-5708
(Name, address, including zip code, and telephone number,
including area code of Agent for Service
Copies of all communication to:
Ms. Diane Dalmy, Attorney at Law,
8965 W. Cornell Place,
Lakewood, Colorado 80227
Telephone: 303-985-9324
Facsimile 303-988-6954
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement as determined by
market conditions.
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. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration 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 number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a smaller reporting company. See definitions of "large
accelerated filer," "accelerated filer," and "smaller reporting company," in
Rule 12b-2 of the Exchange Act. (Check one.)
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
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Title of Each Proposed Proposed
Class of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be Price Per Offering Registration
Registered Registered Share (1) Price (1) Fee
- --------------------------------------------------------------------------------
Common Stock,
$.001 par value(2) 10,000,000 $0.001 $10,000 $0.39*
- --------------------------------------------------------------------------------
Total Registration Fee $10,000 $0.39*
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(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(o) promulgated under the Securities Act of 1933, as
amended. Includes stock to be sold by the selling stockholder.
(2) The shares of common stock being registered hereunder are being registered
for resale by a certain selling stockholder named in the prospectus upon
conversion of outstanding secured convertible debentures. In accordance
with Rule 416(a), the registrant is also registering hereunder an
indeterminate number of shares that may be issued and resold to prevent
dilution resulting from stock splits, stock dividends or similar
transactions
* Estimate amount
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED SEPTEMBER 16, 2008
PROSPECTUS
SILVER BAY RESOURCES INC.
10,000,000 SHARES OF COMMON STOCK
The selling stockholder named in this prospectus is offering 10,000,000 shares
of common stock of Silver Bay Resources Inc. at a par value $0.001 per common
share. We will not receive any of the proceeds from the sale of these shares.
The shares were acquired by the selling stockholder directly from us in a
private offering of our common stock that was exempt from registration under the
securities laws. The selling stockholder has set an offering price for these
securities of par value $0.001 per common share and an offering period of four
months from the date of this prospectus. This is a fixed price for the duration
of the offering. The Selling stockholder is an underwriter, within the meaning
of Section 2(11) of the Securities Act. Any broker-dealers or agents that
participate in the sale of the common stock or interests therein are also be
deemed to be an "underwriter" within the meaning of Section 2(11) of the
Securities Act. Any discounts, commissions, concessions or profit earned on any
resale of the shares may be underwriting discounts and commissions under the
Securities Act. The Selling stockholder, who is an "underwriter" within the
meaning of Section 2(11) of the Securities Act, is subject to the prospectus
delivery requirements of the Securities Act. See "Security Ownership of Certain
Beneficial Owners" for more information about the selling stockholder.
Our common stock is presently not traded on any market or securities exchange.
The offering price at a par value $0.001 per common share may not reflect the
market price of our shares after the offering.
AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PLEASE REFER
TO "RISK FACTORS" ON PAGE 5 OF THIS PROSPECTUS FOR DETAILS REGARDING THE RISKS
RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL AS WELL AS RISKS GENERALLY
ASSOCIATED WITH THE MINING EXPLORATION INDUSTRY.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE
MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE
OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING
CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO
AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS
NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE
EXEMPT FROM REGISTRATION.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Proceeds to the selling stockholder do not include offering costs, including
filing fees, printing costs, legal fees, accounting fees, and transfer agent
fees estimated at $65,000. Silver Bay Resources Inc. will pay these expenses.
This Prospectus is dated September 16 2008.
TABLE OF CONTENTS
Page
----
PROSPECTUS SUMMARY 3
RISK FACTORS 6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 13
USE OF PROCEEDS 14
DETERMINATION OF OFFERING PRICE 14
DILUTION 14
SELLING SECURITY HOLDER 14
PLAN OF DISTRIBUTION 14
DESCRIPTION OF SECURITIES TO BE REGISTERED 16
INTERESTS OF NAMED EXPERTS AND COUNSEL 17
INFORMATION WITH RESPECT TO THE REGISTRANT 17
DESCRIPTION OF BUSINESS 17
MANAGEMENTS DISCUSSION AND ANALYSIS 21
DIRECTORS AND EXECUTIVE OFFICERS 22
EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE 23
FINANCIAL STATEMENTS F-1
2
SUMMARY INFORMATION
The following summary highlights some of the information in this prospectus. It
may not contain all of the information that is important to you. To understand
this offering fully, it is important that you read the entire prospectus
carefully, including the "RISK FACTORS" and our financial statements and the
notes accompanying the financial statements that appear elsewhere in this
prospectus. Unless otherwise specifically noted, the terms "Company," "we," "us"
or "our" refers to Silver Bay Resources Inc.
CORPORATE BACKGROUND AND INFORMATION
SILVER BAY RESOURCES INC.
Silver Bay Resources Inc., also referred to herein as Silver Bay Resources, or
Silver Bay, was organized under the laws of the State of Nevada on June 12, 2008
to explore mineral properties in North America.
Silver Bay Resources Inc., which is also referred to herein as Silver Bay
Resources, or Silver Bay, is engaged in the exploration for silver and other
minerals. The Company has staked one Mineral Titles Online (MTO) mineral claim
containing 12 cell claim units totaling 248.686 hectares on the shore of Jervis
Inlet on Deserted Bay, approximately 100 km northwest of Vancouver, BC, and 65
km north of Sechelt, BC. We refer to these mining claims as the Silver Bay
Property.
We are an exploration stage company and we have not realized any revenues to
date. We do not have sufficient capital to enable us to commence and complete
our exploration program. We will require financing in order to conduct the
exploration program described in the section entitled, "Business of the Issuer."
Our auditors have issued a going concern opinion, raising substantial doubt
about Silver Bay's financial prospects and the Company's ability to continue as
a going concern.
We are not a "blank check company," as we do not intend to participate in a
reverse acquisition or merger transaction. Securities laws define a "blank check
company" as a development stage company that has no specific business plan or
purpose or has indicated that its business plan is to engage in a merger or
acquisition with an unidentified company or companies, or other entity or
person.
Our offices are located 4133 Stanford Ave. Dallas, Texas 75225 USA. Our
telephone number is 214-368-7746.
3
THE OFFERING
Securities offered 10,000,000 shares of common stock
Selling stockholder Donald Gardner
Offering price $0.001 per share
Shares outstanding prior to the
offering 22,000,000 shares of common stock
Shares to be outstanding after the
offering 22,000,000 shares of common stock
Use of proceeds Silver Bay Resources Inc. will not
receive any proceeds from the sale of the
common stock by the selling stockholder
4
SUMMARY FINANCIAL INFORMATION
The following tables set forth the summary financial information for the
Company. You should read this information together with the financial statements
and the notes thereto appearing elsewhere in this prospectus and the information
under "Plan of Operation."
CONSOLIDATED STATEMENTS OF INCOME
Period Ended
July 31, 2008
-------------
Revenues $ 0
Operating expenses $ 81,440
Net loss from operations $ (81,440)
Net loss before taxes $ (81,440)
Loss per share - basic and diluted $ (0.004)
Weighted average shares
outstanding basic and diluted 22,000,000
BALANCE SHEET DATA
At July 31, 2008
----------------
Cash and cash equivalents $ 0
Total current assets $ 0
Stockholders' deficiency $ 22,000
Additional paid-in capital $ (2,000)
Total assets $ 0
Total liabilities $ 61,440
Deficit accumulated during exploration period $ (81,440)
Total stockholders' equity $ 0
5
RISK FACTORS
Investing in our securities involves a high degree of risk. In addition to the
other information contained in this registration statement, prospective
purchasers of the securities offered hereby should consider carefully the
following factors in evaluating the Company and its business.
The securities we are offering through this registration statement are
speculative by nature and involve an extremely high degree of risk and should be
purchased only by persons who can afford to lose their entire investment. We
also caution prospective investors that the following risk factors could cause
our actual future operating results to differ materially from those expressed in
any forward looking statements, oral, written, made by or on behalf of us. In
assessing these risks, we suggest that you also refer to other information
contained in this registration statement, including our financial statements and
related notes.
RISKS RELATED TO OUR COMPANY AND OUR INDUSTRY
THE COMPANY HAS NEVER EARNED A PROFIT AND WE ARE CURRENTLY OPERATING UNDER A NET
LOSS. THERE IS NO GUARANTEE THAT WE WILL EVER EARN A PROFIT.
From our inception on June 12, 2008 to the audited period ended on July 31, 2008
the Company has not generated any revenue. Rather, the Company incurred a net
loss of $81,440 as of the audited period ended July 31, 2008. The Company does
not currently have any revenue producing operations. The Company is not
currently operating profitably, and it should be anticipated that it will
operate at a loss at least until such time when the production stage is
achieved, if production is, in fact, ever achieved.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
We will need to obtain additional financing in order to complete our business
plan. We currently do not have any operations and we have no income. We are an
exploration stage company and we have not realized any revenues to date. We do
not have sufficient capital to enable us to commence and complete our
exploration program and based on our current operating plan, we do not expect to
generate revenue that is sufficient to cover our expenses for at least the next
twelve months. We will require financing in order to conduct the exploration
program described in the section entitled, "Business of the Issuer." We need to
raise $29,925 to complete the first phase of our exploration program and
$334,925 to complete all three phases of our program. We do not have any
arrangements for financing and we may not be able to find such financing if
required. We will need to obtain additional financing to operate our business
for the next twelve months, and if we do not our business will fail. We will
raise the capital necessary to fund our business through a Prospectus and public
offering of our common stock. Obtaining additional financing would be subject to
a number of factors, including investor acceptance of mineral claims and
investor sentiment. These factors may adversely affect the timing, amount,
terms, or conditions of any financing that we may obtain or make any additional
financing unavailable to us.
OUR COMPANY WAS RECENTLY FORMED, AND WE HAVE NOT PROVEN THAT WE CAN GENERATE A
PROFIT. IF WE FAIL TO GENERATE INCOME AND ACHIEVE PROFITABILITY AND INVESTMENT
IN OUR SECURITIES MAY BE WORTHLESS.
We have no operating history and have not proved we can operate successfully. We
face all of the risks inherent in a new business. If we fail, your investment in
our common stock will become worthless. From inception of June 12, 2008 to the
audited period ended on July 31, 2008, we incurred a net loss of $81,440 and did
6
not earn any revenue. The Company does not currently have any revenue producing
operations.
WE HAVE NO OPERATING HISTORY. THERE CAN BE NO ASSURANCE THAT WE WILL BE
SUCCESSFUL IN OUR GOLD AND COPPER MINERAL EXPLORATION ACTIVITIES.
The Company has no history of operations. As a result of our brief operating
history, there can be no assurance that that we will be successful exploring for
silver or other minerals. Our future performance will depend upon our management
and its ability to locate and negotiate additional exploration opportunities in
which we can participate. There can be no assurance that we will be successful
in these efforts. Our inability to locate additional opportunities, to hire
additional management and other personnel, or to enhance our management systems,
could have a material adverse effect on our results of operations. There can be
no assurance that the Company's operations will be profitable.
THERE IS A HIGHER RISK OUR BUSINESS WILL FAIL BECAUSE MR. DONALD R. GARDNER, OUR
SOLE OFFICER AND DIRECTOR, DOES NOT HAVE FORMAL TRAINING SPECIFIC TO THE
TECHNICALITIES OF MINERAL EXPLORATION.
Mr. Donald R. Gardner, our President and a Director of the Company, does not
have formal training as a geologist or in the technical aspects of management of
a mineral exploration company. He lacks technical training and experience with
exploring for, starting, and operating a mine. With no direct training or
experience in these areas, he may not be fully aware of the specific
requirements related to working within this industry. His decisions and choices
may not take into account standard engineering or managerial approaches mineral
exploration companies commonly use. Consequently, our operations, earnings, and
ultimate financial success could suffer irreparable harm due to management's
lack of experience in this industry.
WE ARE CONTROLLED BY MR. DONALD R. GARDNER, OUR SOLE EXECUTIVE OFFICER AND
DIRECTOR, AND, AS SUCH, YOU MAY HAVE NO EFFECTIVE VOICE IN OUR MANAGEMENT.
Upon the completion of this offering, Mr. Donald R. Gardner, our sole Executive
Officer and Director, will beneficially own approximately 55% of our issued and
outstanding common stock. Mr. Gardner will exercise control over all matters
requiring stockholder approval, including the possible election of additional
directors and approval of significant corporate transactions. If you purchase
shares of our common stock, you may have no effective voice in our management.
WE ARE SOLELY GOVERNED BY MR. DONALD R. GARDNER, OUR SOLE EXECUTIVE OFFICER AND
DIRECTOR, AND, AS SUCH, THERE MAY BE SIGNIFICANT RISK TO THE COMPANY OF A
CONFLICT OF INTEREST.
Mr. Donald R. Gardner, our sole Executive Officer and Director, makes decisions
such as the approval of related party transactions, the compensation of
Executive Officers, and the oversight of the accounting function. There will be
no segregation of executive duties and there may not be effective disclosure and
accounting controls to comply with applicable laws and regulations, which could
result in fines, penalties and assessments against us. Accordingly, the inherent
controls that arise from the segregation of executive duties may not prevail. In
addition, Mr. Gardner will exercise full control over all matters that typically
require the approval of a Board of Directors. Mr. Gardner's actions are not
subject to the review and approval of a Board of Directors and, as such, there
may be significant risk to the Company of a conflict of interest.
7
Our sole Executive Officer and Director exercises control over all matters
requiring stockholder approval including the election of Directors and the
approval of significant corporate transactions. Insofar as Mr. Donald R. Gardner
makes all decisions as to which projects the Company undertakes, there is a risk
of a conflict of interest arising between the duties of Mr. Gardner in his role
as our sole Executive Officer and his own personal financial and business
interests in other business ventures distinct and separate from the interests of
the Company. His personal interests may not, during the ordinary course of
business, coincide with the interests of the stockholders and, in the absence of
the effective segregation of such duties, there is a risk of a conflict of
interest. We have not voluntarily implemented various corporate governance
measures. As such, stockholders have limited protections against the
transactions implemented by Mr. Gardner, conflicts of interest and similar
matters.
We have not adopted corporate governance measures such as an audit or other
independent committees as we presently only have one independent director.
Stockholders should bear in mind our current lack of corporate governance
measures in formulating their investment decisions.
WE ARE CONTROLLED BY MR. DONALD R. GARDNER, OUR SOLE EXECUTIVE OFFICER AND
DIRECTOR, AND, AS SUCH, THE COMPANY MAY LACK THE ABILITY TO SUCCESSFULLY
IMPLEMENT ITS GROWTH PLANS.
Mr. Donald R. Gardner, our sole Executive Officer and Director, has no career
experience related to mining and mineral exploration. Accordingly, Mr. Gardner
may be unable to successfully operate and develop our business. We cannot
guarantee that we will overcome this obstacle. There may be additional risk to
the Company in that Mr. Gardner may lack the ability to successfully implement
growth plans given that the absence of an executive management team, and that
all plans rely exclusively on the ability and management of Mr. Gardner, our
Executive Officer and Director.
BECAUSE DONALD R. GARDNER, OUR SOLE EXECUTIVE OFFICER AND DIRECTOR, HAS OTHER
BUSINESS INTERESTS, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT
OF TIME TO OUR BUSINESS OPERATIONS, WHICH MAY CAUSE OUR BUSINESS TO FAIL.
It is possible that the demands on Mr. Donald R. Gardner, our sole Executive
Officer and Director, from other obligations could increase with the result that
he would no longer be able to devote sufficient time to the management of our
business. Mr. Gardner will devote fewer than 12-15 hours per month or 3-4 per
week to the affairs of the Company. In addition, Mr. Gardner may not possess
sufficient time to manage our business if the demands of managing our business
increased substantially.
THE IMPRECISION OF MINERAL DEPOSIT ESTIMATES MAY PROVE ANY RESOURCE CALCULATIONS
THAT WE MAKE TO BE UNRELIABLE.
Mineral deposit estimates and related databases are expressions of judgment
based on knowledge, mining experience, and analysis of drilling results and
industry practices. Valid estimates made at a given time may significantly
change when new information becomes available. By their nature, mineral deposit
estimates are imprecise and depend upon statistical inferences, which may
ultimately prove unreliable. Mineral deposit estimates included here, if any,
have not been adjusted in consideration of these risks and, therefore, no
assurances can be given that any mineral deposit estimate will ultimately be
reclassified as reserves. If the Company's exploration program locates a mineral
deposit, there can be no assurances that any of such deposits will ever be
classified as reserves.
8
WE ARE SENSITIVE TO FLUCTUATIONS IN THE PRICE OF GOLD AND COPPER, WHICH IS
BEYOND OUR CONTROL. THE PRICE OF GOLD AND COPPER IS VOLATILE AND PRICE CHANGES
ARE BEYOND OUR CONTROL.
The price of silver and other minerals can fluctuate. The prices of silver and
other minerals have been and will continue to be affected by numerous factors
beyond the Company's control. Factors that affect the price of silver include
the demand from consumers for products that use silver, economic conditions,
over supply from secondary sources and costs of production. Price volatility and
downward price pressure, which can lead to lower prices, could have a material
adverse effect on the costs or the viability of our projects.
MINERAL EXPLORATION AND PROSPECTING IS A HIGHLY COMPETITIVE AND SPECULATIVE
BUSINESS AND WE MAY NOT BE SUCCESSFUL IN SEEKING AVAILABLE OPPORTUNITIES.
The process of mineral exploration and prospecting is a highly competitive and
speculative business. Individuals are not subject to onerous accreditation and
licensing requirements prior to beginning mineral exploration and prospecting
activities. As such, the company, in seeking available opportunities, will
compete with a numerous individuals and companies, including established,
multi-national companies that have more experience and resources than the
Company. The exact number of active competitors at any one time is heavily
dependant on current economic conditions; however, statistics provided by the
AEBC (The Association for Mineral Exploration, British Columbia), state that
approximately 1000 mining companies operate in BC. Each one of these companies
can be considered to be in competition with our company for mineral resources in
British Columbia. Moreover, the Government of Canada at,
http://mmsd1.mms.nrcan.gc.ca/mmsd/exploration/default_e.asp, reports that in
2006, CDN $140.6 billion was spent in mineral exploration activities in British
Columbia.
Because we may not have the financial and managerial resources to compete with
other companies, we may not be successful in our efforts to acquire projects of
value, which may, ultimately, become productive. However, while we compete with
other exploration companies for the rights to explore other claims, there is no
competition for the exploration or removal of mineral from our claims from other
companies, as we have no agreements or obligations that limit our right to
explore or remove minerals from our claims.
COMPLIANCE WITH ENVIRONMENTAL CONSIDERATIONS AND PERMITTING COULD HAVE A
MATERIAL ADVERSE EFFECT ON THE COSTS OR THE VIABILITY OF OUR PROJECTS. THE
HISTORICAL TREND TOWARD STRICTER ENVIRONMENTAL REGULATION MAY CONTINUE, AND, AS
SUCH, REPRESENTS AN UNKNOWN FACTOR IN OUR PLANNING PROCESSES.
All mining is regulated by the government agencies at the Federal and Provincial
levels of government in Canada. Compliance with such regulation has a material
effect on the economics of our operations and the timing of project development.
Our primary regulatory costs have been related to obtaining licenses and permits
from government agencies before the commencement of mining activities. An
environmental impact study that must be obtained on each property in order to
obtain governmental approval to mine on the properties is also a part of the
overall operating costs of a mining company.
The possibility of more stringent regulations exists in the areas of worker
health and safety, the dispositions of wastes, the decommissioning and
reclamation of mining and milling sites and other environmental matters, each of
which could have an adverse material effect on the costs or the viability of a
9
particular project. Compliance with environmental considerations and permitting
could have a material adverse effect on the costs or the viability of our
projects.
MINING AND EXPLORATION ACTIVITIES ARE SUBJECT TO EXTENSIVE REGULATION BY FEDERAL
AND PROVINCIAL GOVERNMENTS IN CANADA. ANY FUTURE CHANGES IN GOVERNMENTS,
REGULATIONS AND POLICIES, COULD ADVERSELY AFFECT THE COMPANY'S RESULTS OF
OPERATIONS FOR A PARTICULAR PERIOD AND ITS LONG-TERM BUSINESS PROSPECTS.
Mining and exploration activities are subject to extensive regulation by
government. Such regulation relates to production, development, exploration,
exports, taxes and royalties, labor standards, occupational health, waste
disposal, protection and remediation of the environment, mine and mill
reclamation, mine and mill safety, toxic substances and other matters.
Compliance with such laws and regulations has increased the costs of exploring,
drilling, developing, constructing, operating mines and other facilities.
Furthermore, future changes in governments, regulations and policies, could
adversely affect the Company's results of operations in a particular period and
its long-term business prospects.
The development of mines and related facilities is contingent upon governmental
approvals, which are complex and time consuming to obtain and which, depending
upon the location of the project, involve various governmental agencies. The
duration and success of such approvals are subject to many variables outside the
Company's control.
RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL
THE COMPANY HAS NOT PAID ANY CASH DIVIDENDS ON ITS SHARES OF COMMON STOCK AND
DOES NOT ANTICIPATE PAYING ANY SUCH DIVIDENDS IN THE FORESEEABLE FUTURE.
ACCORDINGLY, INVESTORS WILL ONLY SEE A RETURN ON THEIR INVESTMENTS IF THE VALUE
OF THE SHARES APPRECIATES.
Payment of future dividends, if any, will depend on earnings and capital
requirements of the Company, the Company's debt facilities and other factors
considered appropriate by the Company's Board of Directors. To date, the Company
has not paid any cash dividends on the Company's Common Stock and does not
anticipate paying any such dividends in the foreseeable future. Accordingly,
investors will only see a return on their investments if the value of the
Company's shares appreciates.
IF WE DO NOT CONDUCT MINERAL EXPLORATION ON OUR MINERAL CLAIMS AND KEEP THE
CLAIMS IN GOOD STANDING, THEN OUR RIGHT TO THE MINERAL CLAIMS WILL LAPSE AND WE
WILL LOSE EVERYTHING THAT WE HAVE INVESTED AND EXPENDED TOWARDS THESE CLAIMS.
We must complete mineral exploration work on our mineral claims and keep the
claims in good standing. If we do not fulfill our work commitment requirements
on our claims or pay the fee to keep the claims in good standing, then our right
to the claims will lapse and we will lose all interest that we have in these
mineral claims. We are obligated to pay close to $1,300 in lieu of work to the
British Columbia Provincial government on an annual basis to keep our claims
in good standing.
BECAUSE OF OUR LIMITED RESOURCES AND THE SPECULATIVE NATURE OF OUR BUSINESS,
THERE IS A SUBSTANTIAL DOUBT AS TO OUR ABILITY TO OPERATE AS A GOING CONCERN.
10
The report of our independent auditors, on our audited financial statements for
the audited period ended July 31, 2008 indicates that there are a number of
factors that raise substantial doubt about our ability to continue as a going
concern. Our continued operations are dependent on our ability to obtain
financing and upon our ability to achieve future profitable operations from the
development of our mineral properties. If we are not able to continue as a going
concern, it is likely investors will lose their investment.
RISKS RELATED TO THIS OFFERING AND OUR STOCK
WE WILL NEED TO RAISE ADDITIONAL CAPITAL, IN ADDITION TO THE FINANCING AS
REPORTED IN THIS REGISTRATION STATEMENT. IN SO DOING, WE WILL FURTHER DILUTE THE
TOTAL NUMBER OF SHARES ISSUED AND OUTSTANDING. THERE CAN BE NO ASSURANCE THAT
THIS ADDITIONAL CAPITAL WILL BE AVAILABLE OR ACCESSIBLE BY US.
Silver Bay Resources will need to raise additional capital, in addition to the
financing as reported in this registration statement, by issuing additional
shares of common stock and will, thereby, increase the number of common shares
outstanding. There can be no assurance that this additional capital will be
available to meet these continuing exploration and development costs or, if the
capital is available, that it will be available on terms acceptable to the
Company. If the Company is unable to obtain financing in the amounts and on
terms deemed acceptable, the business and future success of the Company will
almost certainly be adversely affected. If we are able to raise additional
capital, we cannot be assured that it will be on terms that enhance the value of
our common shares.
IF WE COMPLETE A FINANCING THROUGH THE SALE OF ADDITIONAL SHARES OF OUR COMMON
STOCK IN THE FUTURE, THEN OUR STOCKHOLDERS WILL EXPERIENCE DILUTION.
The most likely source of future financing presently available to us is through
the sale of shares of our common stock. Any sale of common stock will result in
dilution of equity ownership to stockholders. This means that if we sell shares
of our common stock, more shares will be outstanding and each stockholder will
own a smaller percentage of the shares then outstanding. To raise additional
capital we may have to issue additional shares, which may substantially dilute
the interests of stockholders. Alternatively, we may have to borrow large sums,
and assume debt obligations that require us to make substantial interest and
capital payments.
THERE IS NO MARKET FOR OUR COMMON STOCK, WHICH LIMITS OUR STOCKHOLDERS ABILITY
TO RESELL THEIR SHARES OR PLEDGE THEM AS COLLATERAL.
There is currently no public market for our shares, and we cannot assure you
that a market for our stock will develop. Consequently, investors may not be
able to use their shares for collateral or loans and may not be able to
liquidate at a suitable price in the event of an emergency. In addition,
investors may not be able to resell their shares at or above the price they paid
for them or may not be able to sell their shares at all.
IF A PUBLIC MARKET FOR OUR STOCK IS DEVELOPED, FUTURE SALES OF SHARES COULD
NEGATIVELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK.
If a public market for our stock is developed, then sales of Common Stock in the
public market could adversely affect the market price of our Common Stock. There
are at present 22,000,000 shares of Common Stock issued and outstanding.
11
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S
PENNY STOCK REGULATIONS AND THE NASD'S SALES PRACTICE REQUIREMENTS, WHICH MAY
LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.
The Company's common shares may be deemed to be "penny stock" as that term is
defined in Regulation Section "240.3a51-1" of the Securities and Exchange
Commission (the "SEC"). Penny stocks are stocks: (a) with a price of less than
U.S. $5.00 per share; (b) that are not traded on a "recognized" national
exchange; (c) whose prices are not quoted on the NASDAQ automated quotation
system (NASDAQ - where listed stocks must still meet requirement (a) above); or
(d) in issuers with net tangible assets of less than U.S. $2,000,000 (if the
issuer has been in continuous operation for at least three years) or U.S.
$5,000,000 (if in continuous operation for less than three years), or with
average revenues of less than U.S. $6,000,000 for the last three years.
Section "15(g)" of the United States Securities Exchange Act of 1934, as
amended, and Regulation Section "240.15g(c)2" of the SEC require broker dealers
dealing in penny stocks to provide potential investors with a document
disclosing the risks of penny stocks and to obtain a manually signed and dated
written receipt of the document before effecting any transaction in a penny
stock for the investor's account. Potential investors in the Company's common
shares are urged to obtain and read such disclosure carefully before purchasing
any common shares that are deemed to be "penny stock".
Moreover, Regulation Section "240.15g-9" of the SEC requires broker dealers in
penny stocks to approve the account of any investor for transactions in such
stocks before selling any penny stock to that investor. This procedure requires
the broker dealer to: (a) obtain from the investor information concerning his or
her financial situation, investment experience and investment objectives; (b)
reasonably determine, based on that information, that transactions in penny
stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks of
penny stock transactions; (c) provide the investor with a written statement
setting forth the basis on which the broker dealer made the determination in
(ii) above; and (d) receive a signed and dated copy of such statement from the
investor confirming that it accurately reflects the investor's financial
situation, investment experience and investment objectives. Compliance with
these requirements may make it more difficult for investors in the Company's
common shares to resell their common shares to third parties or to otherwise
dispose of them. Stockholders should be aware that, according to Securities and
Exchange Commission Release No. 34-29093, dated April 17, 1991, the market for
penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include:
(i) control of the market for the security by one or a few broker-dealers
that are often related to the promoter or issuer
(ii) manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases
(iii)boiler room practices involving high-pressure sales tactics and
unrealistic price projections by inexperienced sales persons
(iv) excessive and undisclosed bid-ask differential and markups by selling
broker-dealers
(v) the wholesale dumping of the same securities by promoters and
broker-dealers after prices have been manipulated to a desired level,
along with the resulting inevitable collapse of those prices and with
consequent investor losses
12
Our management is aware of the abuses that have occurred historically in the
penny stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. Forward-looking statements in this prospectus include, among
others, statements regarding our capital needs, business plans and expectations.
Such forward-looking statements involve assumptions, risks and uncertainties
regarding, among others, the success of our business plan, availability of
funds, government regulations, operating costs, our ability to achieve
significant revenues, our business model and products and other factors. Any
statements contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expect", "plan", "intend", "anticipate", "believe", "estimate", "predict",
"potential" or "continue", the negative of such terms or other comparable
terminology. These forward-looking statements address, among others, such issues
as:
* the amount and nature of future exploration, development and other
capital expenditures,
* mining claims to be drilled,
* future earnings and cash flow,
* development projects,
* exploration prospects,
* drilling prospects,
* development and drilling potential,
* business strategy,
* expansion and growth of our business and operations, and
* our estimated financial information.
In evaluating these statements, you we believe that it is important that you
consider various factors, including the assumptions, risks and uncertainties
outlined in this prospectus under "Risk Factors". These factors or any of them
may cause our actual results to differ materially from any forward-looking
statement made in this prospectus. While these forward-looking statements, and
any assumptions upon which they are based, are made in good faith and reflect
our current judgment regarding future events, our actual results will likely
vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested herein. The forward-looking
statements in this prospectus are made as of the date of this prospectus and we
do not intend or undertake to update any of the forward-looking statements to
conform these statements to actual results, except as required by applicable
law, including the securities laws of the United States.
13
USE OF PROCEEDS TO ISSUER
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling stockholder.
DETERMINATION OF OFFERING PRICE
The prices at which the shares of common stock covered by this prospectus may
actually be sold will be determined by the prevailing public market price for
shares of common stock or by negotiations in private transactions.
DILUTION
The common stock to be sold by the selling stockholder is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to
stockholders.
SELLING SECURITY HOLDER
Donald R. Gardner Chief Executive Officer, Chief Financial
Officer, President, Secretary, Treasurer
and Director (Principal Executive Officer
and Principal Accounting Officer)
Securities offered 10,000,000 shares of common stock
Selling stockholder Donald Gardner
Offering price $0.001 per share
Shares outstanding prior to the
offering 22,000,000 shares of common stock
Shares to be outstanding after the
offering 22,000,000 shares of common stock
Use of proceeds Silver Bay Resources Inc. will not
receive any proceeds from the sale of the
common stock by the selling stockholder
PLAN OF DISTRIBUTION
The selling stockholder or their donees, pledges, transferees or other
successors-in-interest selling shares received after the date of this prospectus
from a selling stockholder as a gift, pledge, distribution or otherwise, may,
from time to time, sell any or all of their shares of common stock on any stock
exchange, market or trading facility on which the shares are traded or in
private transactions. These sales will be at par value $0.001. The selling
stockholder may use any one or more of the following methods when selling
shares:
* ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
14
* block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
* purchases by a broker-dealer as principal and resale by the
broker-dealer for its own account;
* an exchange distribution following the rules of the applicable
exchange;
* privately negotiated transactions;
* short sales that are not violations of the laws and regulations of any
state of the United States;
* through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;
* broker-dealers may agree with the selling stockholder to sell a
specified number of such shares at par value $0.001; and
* a combination of any such methods of sale or any other lawful method.
The selling stockholder may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock, from time to time, under
this prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act amending the list of selling
stockholder to include the pledgee, transferee or other successors-in-interest
as selling stockholder under this prospectus. The selling stockholder also may
transfer the shares of common stock in other circumstances, in which case the
transferees, pledgees or other successors-in-interest will be the selling
beneficial owners for purposes of this prospectus.
In connection with the sale of our common stock or interests therein, the
selling stockholder may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
stockholder also may sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholder also may enter into option or other transactions with broker-dealers
or other financial institutions for the creation of one or more derivative
securities which require the delivery to the broker-dealer or other financial
institution of shares offered by this prospectus, which shares the broker-dealer
or other financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect the transaction).
The aggregate proceeds to the selling stockholder from the sale of the common
stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. A selling stockholder reserves the right to
accept and, together with its agents from time to time, to reject, in whole or
in part, any proposed purchase of common stock to be made directly or through
agents. We will not receive any of the proceeds from this offering.
The selling stockholder and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be
"underwriters" within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act. A
selling stockholder that is an "underwriter" within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.
To the extent required, the shares of our common stock to be sold, the names of
the selling stockholder, the respective purchase prices and public offering
prices, the names of any agents, dealers or underwriters, and any applicable
commissions or discounts with respect to a particular offer, will be set forth
in an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.
15
SALES PURSUANT TO RULE 144
Any shares of common stock covered by this prospectus, which qualify for sale
pursuant to Rule 144 under the Securities Act, as amended, may be sold under
Rule 144 rather than pursuant to this prospectus.
REGULATION M
We plan to advise the selling stockholder that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling security holders and their affiliates.
Regulation M under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for, or purchasing for an account in
which the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Accordingly, the selling stockholder are not
permitted to cover short sales by purchasing shares while the distribution it
taking place. Regulation M also governs bids and purchases made in order to
stabilize the price of a security in connection with a distribution of the
security. In addition, we will make copies of this prospectus available to the
selling stockholder for the purpose of satisfying the prospectus delivery
requirements of the Securities Act.
STATE SECURITIES LAWS
Under the securities laws of some states, the shares may be sold in such states
only through registered or licensed brokers or dealers. In addition, in some
states the common shares may not be sold unless the shares have been registered
or qualified for sale in the state or an exemption from registration or
qualification is available and is complied with.
EXPENSES OF REGISTRATION
We are bearing substantially all costs relating to the registration of the
shares of common stock offered hereby. These expenses are estimated to be
$65,000, including, but not limited to, legal, accounting, printing and mailing
fees. The selling stockholder, however, will pay any commissions or other fees
payable to brokers or dealers in connection with any sale of such shares common
stock.
DESCRIPTION OF SECURITIES TO BE REGISTERED
The authorized capital stock of the Company at the end of the audited period on
July 31, 2008, consists of 75,000,000 shares of common stock, par value $0.001
per share, of which there are 22,000,000 shares issued and outstanding. The
following summarizes provisions of the Company's capital stock.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each share on all
matters to be voted on by the stockholders; have no preemptive rights; have no
conversion or redemption rights or sinking fund; do not have cumulative voting
rights; and share ratably in dividends, if any, as may be declared from time to
time by the Board of Directors in its discretion from funds legally available
therefore. In the event of a liquidation, dissolution or winding up of the
company, the holders of common stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. All of the outstanding
shares of common stock are fully paid and non-assessable.
16
DIVIDENDS
Dividends, if any, will be contingent upon the Company's revenues and earnings,
if any, and capital requirements and financial conditions. The payment of
dividends, if any, will be within the discretion of the Company's Board of
Directors. The Company presently intends to retain all earnings, if any, and
accordingly the Board of Directors does not anticipate declaring any dividends.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Our audited financial statements as of July 31, 2008 have been audited by MOORE
& ASSOCIATES, Chartered, as set forth in its report. The financial statements
have been included in reliance upon the authority of MOORE & ASSOCIATES,
Chartered as experts in accounting and auditing.
Our Geology Report, entitled SILVER BAY PROPERTY, Oct 1 2007 referenced this
prospectus has been prepared by K W Geiger PhD, PEng., PGeol. and James Laird,
of Laird Exploration Ltd.
COUNSEL
Ms. Diane Dalmy, Attorney at Law, 8965 W. Cornell Place, Lakewood, Colorado
80227, has provided an opinion upon certain matters relating to the legality of
the common stock offered hereby for us.
INFORMATION WITH RESPECT TO THE REGISTRANT
We have not previously been subject to the reporting requirements of the
Securities and Exchange Commission. We have filed with the Commission a
registration statement on Form S-1 under the Securities Act with respect to the
shares offered hereby. This prospectus does not contain all of the information
set forth in the registration statement and the exhibits and schedules thereto.
For further information with respect to our securities and us you should review
the registration statement and the exhibits and schedules thereto. Statements
made in this prospectus regarding the contents of any contract or document filed
as an exhibit to the registration statement are not necessarily complete. You
should review the copy of such contract or document so filed.
You can inspect the registration statement and the exhibits and the schedules
thereto filed with the commission, without charge, at the office of the
Commission at Judiciary Plaza, 100 F Street, NE, Washington, D.C. 20549. You can
also obtain copies of these materials from the public reference section of the
commission at 100 F Street, NE, Washington, D.C. 20549, at prescribed rates. You
can obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The Commission maintains a web site on the Internet
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission at
http://www.sec.gov
DESCRIPTION OF BUSINESS
Silver Bay Resources Inc. was incorporated in the State of Nevada on June 12,
2008. Silver Bay Resources Inc., which is also referred to herein as Silver Bay
Resources, or Silver Bay, is engaged in the exploration for silver and other
minerals. The Company has staked one MTO mineral claim containing 12 cell claim
units totaling 248.686 hectares on the shore of Jervis Inlet on Deserted Bay,
17
approximately 100 km northwest of Vancouver, BC, and 65 km north of Sechelt, BC.
We refer to these mining claims as the Silver Bay Property.
We are an exploration stage company and we cannot provide assurance to investors
that our mineral claims contain a commercially exploitable mineral deposit, or
reserve, until appropriate exploratory work is done and an economic evaluation
based on such work concludes economic feasibility.
PROPERTY ACQUISITION DETAILS
Silver Bay Resources purchased the Silver Bay Property for USD $20,000.
ACCESS
The Silver Bay Property is located approximately 100 km northwest of Vancouver,
BC. Access is by helicopter or float plane from Vancouver or Sechelt, or by boat
from Egmont or Pender Harbour on the Sechelt Peninsula.
LAND STATUS, LOCATION AND ACCESS, TOPOGRAPHY
Land Status: the Silver Bay Property comprises one MTO mineral claim containing
12 cell claim units totaling 248.686 hectares. The property was originally
staked, February 14, 2007.
BC Tenure # Work Due Date Staking Date Total Area (Ha.)
----------- ------------- ------------ ----------------
551979 Feb 14, 2009 Feb. 14, 2007 248.686
Location and Access: the Silver Bay Property is located on the shore of Jervis
Inlet on Deserted Bay, approximately 100 km northwest of Vancouver, BC, and 65
km north of Sechelt, BC. The area is presently accessible by boat, helicopter or
float plane from the Sechelt Peninsula or Powell River. Several campsite
locations with good water supplies can be found on or near the property.
Supplies and services are available in Egmont or Pender Harbour.
Topography: the topography along Jervis Inlet extends from sea level to mountain
peaks in excess of 2000 metres elevation. The known showings and workings on the
Silver Bay Property are located near sea level. The climate is typical of the
West Coast of BC, generally mild and wet overall with significant snowfall in
the winter months. The summers are usually warm with less rainfall. Vegetation
is a dense growth of coniferous forest, with cedar, fir, spruce, hemlock, alder
and maple trees.
GEOLOGY OF THE MINERAL CLAIMS
Regional Geology: The Upper Jervis Inlet area is underlain by a variety of
Jurassic to Tertiary granitic intrusives of the Coast Plutonic Complex, which
intrude and metamorphose Jurassic to Lower Cretaceous sediments and volcanics of
the Gambier Group. The Gambier Group hosts the 60 million tonne Britannia
volcanogenic massive sulphide (VMS) copper, zinc, lead, silver, gold deposit on
Howe Sound about 80 km to the southeast. The Silver Bay Property is underlain by
metasediments and volcanics of the Gambier Group with zinc, lead, silver and
copper mineralization in a geological setting similar to the Britannia Mine.
Property Geology: The property is underlain by Lower Cretaceous Gambier Group
metamorphosed sediments and volcanics comprised of black argillaceous slate,
intermediate to felsic flows and tuffs, and basic dykes. Mineralization consists
of massive and disseminated pyrite, pyrrhotite, marcasite, sphalerite, galena,
18
arsenopyrite and chalcopyrite associated with quartz-sericite alteration and
intense silicification. Mineralization is exposed in a short adit on the
shoreline and in a series of open-cuts nearby.
PREVIOUS WORK AND COST ESTIMATES OF EXPLORATION PROGRAMS
On the Silver Bay Property, prospectors explored two areas of mineralization by
open-cuts and a short adit in the early 1900's. The Silver Bay Property was
originally staked and explored in 1983 by James Laird and subsequently optioned
to Newmont Exploration Ltd. A Newmont fieldwork program done in 1984 included
prospecting, geological mapping, and soil geochemistry. No work has been done
since this time.
The work by Newmont Exploration in 1984 included detailed geological mapping,
which divided the Gambier Group rocks into six rock units. The units included
green or black andesitic flows, phyllitic dacite, tuffaceous dacite, siliceous
rhyodacite and black slate. Late basic dykes are also present. Mineralization is
hosted within the siliceous rhyodacite and dacite units.
The Newmont soil geochemical survey showed corresponding silver, lead, zinc and
copper anomalies persisting and strengthening uphill from the known showings.
Maximum soil sample values were 1.7 ppm Ag, 783 ppm Pb, 1505 ppm Zn, and 165 ppm
Cu. The geochemical anomalies are associated with the siliceous rhyodacite and
dacite units, which continue to the northwest off of the property.
A proposed initial work program includes GPS-controlled geological mapping,
blasting fresh rock samples of surface showings and trench workings, and
prospecting. A geophysical grid survey (EM and magnetometer), additional soil
geochemistry and staking more claims to the north and northwest should also be
considered. Based on a compilation of these results, a diamond drill program
will be designed to explore and define the potential resources. The anticipated
costs of this development are presented in three results-contingent stages.
PHASE 1
Reconnaissance geological mapping, prospecting and rock sampling. Five days on
site, two days travel, three days report preparation.
Senior Geologist - 10 days @ $750/day $ 7,500
Consultant/Project Manager - 10 days @ $500/day $ 5,000
Blaster/Geological Assistant - 7 days @ $350/day $ 2,450
Truck rental - 1000 km @ $ 0.75/km inclusive $ 750
Boat Rental with fuel - 7 days@ $150.00/day $ 1,050
Rock samples - 50 @ $50.00 per sample $ 2,500
BC Ferries $ 300
Per Diem (with camp rental) - 21 man-days @ $125.00/day $ 2,625
Misc. sampling and field supplies $ 750
Report and reproduction costs $ 1,000
Subtotal $ 23,925
--------
Management Fee @ 15% $ 3,600
Contingency @ 10% $ 2,400
--------
NET TOTAL $ 29,925
========
19
PHASE 2
Construction of a 10 km cutline geophysical grid
(EM, Magnetometer), geochemical soil sampling,
staking additional claims. $ 75,000
PHASE 3
1000 metres of diamond drilling @ $100.00 per metre,
geological supervision, camp and supplies, transportation,
assays, report and other ancillary costs. $ 230,000
---------
TOTAL $ 334,925
=========
COMPLIANCE WITH GOVERNMENT REGULATION
We will be required to conduct all mineral exploration activities in accordance
with government regulations. Such operations are subject to various laws
governing land use, the protection of the environment, production, exports,
taxes, labor standards, occupational health, waste disposal, toxic substances,
well safety and other matters. Unfavorable amendments to current laws,
regulations and permits governing operations and activities of resource
exploration companies, or more stringent implementation thereof, could have a
materially adverse impact and cause increases in capital expenditures which
could result in a cessation of operations.
EMPLOYEES
At present, we have no employees. We anticipate that we will be conducting most
of our business through agreements with consultants and third parties.
DESCRIPTION OF PROPERTY
Our offices are located at 4133 Stanford Avenue Dallas, Texas, 752245. Telephone
214-368-7746.
LEGAL PROCEEDINGS
The Company is not a party to any legal proceeding. No property of the Company
is the subject of a pending legal proceeding.
MARKET PRICE OF DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDERS MATTERS
DIVIDENDS
The Company has never paid cash dividends on common stock, and does not expect
to pay such dividends in the foreseeable future.
MARKET INFORMATION
The Company's common shares do not trade and are not listed or quoted on any
public market.
STOCKHOLDERS
There is one stockholder of the Company's common stock.
20
MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion of our financial condition and results of operations
should be read in conjunction with our consolidated financial statements and the
notes to those statements included elsewhere in this prospectus. In addition to
the historical consolidated financial information, the following discussion and
analysis contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including
those set forth under "Risk Factors" and elsewhere in this prospectus.
PLAN OF OPERATIONS
Our business plan is to proceed with the exploration of the Silver Bay Property
to determine whether there is any potential for copper, silver or other metals
located on the properties that comprise the mineral claims. We have decided to
proceed with the exploration program recommended by the geological report. We
anticipate that the three phases of the recommended geological exploration
program will cost approximately $29,925 $75,000 and $230,000 respectively. We
had $Nil in cash reserves as of July 31, 2008.
The lack of cash
has kept us from conducting any exploration work on the property.
We anticipate that we will incur the following expenses over the next twelve
months:
* $1,300 to be paid to the British Columbia Provincial Government to
keep the claims valid;
* $29,925 in connection with the completion of Phase 1 of our planned
geological work program;
* $75,000 in connection with the completion of Phase 2 of our planned
geological work program;
* $230,000 for Phase 3 of our planned geological work program; and
* $65,000 for operating expenses, including professional legal and
accounting expenses associated with compliance with the periodic
reporting requirements after we become a reporting issuer under the
Securities Exchange Act of 1934, but excluding expenses of the
offering.
If we determine not to proceed with further exploration of our mineral claims
due to a determination that the results of our initial geological program do not
warrant further exploration or due to an inability to finance further
exploration, we plan to pursue the acquisition of an interest in other mineral
claims. We anticipate that any future acquisition would involve the acquisition
of an option to earn an interest in a mineral claim as we anticipate that we
would not have sufficient cash to purchase a mineral claim of sufficient merit
to warrant exploration. This means that we might offer shares of our stock to
obtain an option on a property. Once we obtain an option, we would then pursue
finding the funds necessary to explore the mineral claim by one or more of the
following means: engaging in an offering of our stock; engaging in borrowing; or
locating a joint venture partner or partners.
RESULTS OF OPERATIONS
We have not yet earned any revenues. We anticipate that we will not earn
revenues until such time as we have entered into commercial production, if any,
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 properties, or if such resources
are discovered, that we will enter into commercial production of our mineral
properties.
21
LIQUIDITY AND CAPITAL RESOURCES
The company has no cash as of July 31, 2008. The Company has incurred a net loss
of $81,440 for the period from June 12, 2008 (inception) to July 31, 2008.
Income represents all of the company's revenue less all its expenses in the
period incurred. The Company has no revenues as of July 31, 2008 and has
incurred expenses of $81,440 since inception.
Liabilities are made up of current and long term liabilities. Current
liabilities include accounts payable of $1,440 as of July 31, 2008. Long term
liabilities are made up of a loan of $60,000 as of July 31, 2008. The company
issued to the founders 22,000,000 common shares of stock for $20,000. As of July
31, 2008, there are Twenty-two Million (22,000,000) shares issued and
outstanding at a value of $0.001 per share. There are no preferred shares
authorized. The Company has no stock option plan, warrants or other dilutive
securities.
Based on our current operating plan, we do not expect to generate revenue that
is sufficient to cover our expenses for at least the next twelve months. In
addition, we do not have sufficient cash and cash equivalents to execute our
operations for at least the next twelve months. We will need to obtain
additional financing to operate our business for the next twelve months. We will
raise the capital necessary to fund our business through a private placement and
public offering of our common stock. Additional financing, whether through
public or private equity or debt financing, arrangements with stockholders or
other sources to fund operations, may not be available, or if available, may be
on terms unacceptable to us. Our ability to maintain sufficient liquidity is
dependent on our ability to raise additional capital. If we issue additional
equity securities to raise funds, the ownership percentage of our existing
stockholders would be reduced. New investors may demand rights, preferences or
privileges senior to those of existing holders of our common stock. Debt
incurred by us would be senior to equity in the ability of debt holders to make
claims on our assets. The terms of any debt issued could impose restrictions on
our operations. If adequate funds are not available to satisfy either short or
long-term capital requirements, our operations and liquidity could be materially
adversely affected and we could be forced to cease operations. The financial
statements do not include any adjustments relating to the recoverability and
classification of recorded assets, or the amounts of and classification of
liabilities that might be necessary in the event the Company cannot continue in
existence.
CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
For the audited period ended July 31, 2008, we engaged Moore & Associates,
Chartered Accountants and Advisors as our principal accountant for the purposes
of auditing our financial statements. There are not and have not been any
disagreements between the Company and our accountants on any matter of
accounting principles, practices or financial statement disclosure.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company currently has no revenues. The Company's financial instruments are
comprised of trade accounts receivables and payables which are subject to normal
credit risks.
DIRECTORS AND EXECUTIVE OFFICERS
1. EXECUTIVE OFFICERS
The Company's Executive Officers are as follows:
Donald R. Gardner Chief Executive Officer, Chief Financial Officer,
President, Secretary, Treasurer and Director
(Principal Executive Officer and Principal
Accounting Officer)
22
BIOGRAPHY OF DONALD R. GARDNER
Donald R. Gardner is a graduate of the University of North Texas, B.B.A in
Business and Personnel Management. Mr. Gardner has spent the past thirty-two
years as an entrepreneur in diverse areas of business both domestically in the
US and internationally.
During Mr. Gardner's early career in the hospitality industry he personally
owned and operated 33 restaurants and nightclubs. All restaurants were start-ups
as opposed to acquisitions. The majority of Mr. Gardner's restaurant experience
was in various segments of the "Casual Dining" restaurant niche. In conjunction
with 25+ casual-themed restaurants Mr. Gardner has also owned and operated fast
food outlets, catering operations and nightclubs.
Mr. Gardner transitioned from the restaurant industry to the gaming industry in
the early 1990s. He began by investing in and operating small casinos in
Blackhawk, Colorado and Eastern Europe. During this period Mr. Gardner was a
licensed casino operator in the state of Colorado. Mr. Gardner was also involved
in casino joint ventures with the Radisson Hotels in Sochi, Russia and Riga,
Latvia. There was also a stand-alone casino in Bishkek, Kyrgyzstan.
Concurrent with maintaining interests in these operations Mr. Gardner acquired
distributorships for code remediation from a San Francisco-based software
company. Mr. Gardner marketed and sold the software services to Federal
governments and large corporations throughout the US, Canada, France, England
and Africa.
From 1999 - 2003 Mr. Gardner was a consultant for Caribe Gaming and Gaming
Management Corporation, Inc. Mr. Gardner was responsible for the development,
design and construction of two casino projects in Panama and one in Colombia
along with numerous race and sports books in Mexico.
Mr. Gardner is currently involved in the construction business (specializing in
restaurant construction) and software development. Mr. Gardner, along with his
partner, has built over 400 restaurants in the US. Mr. Gardner is also involved
in the early stage development of trading software with Trade Point
Technologies. Mr. Gardner has served on numerous boards and committees of
privately held corporations.
2. DIRECTORS
Name Position
---- --------
Donald R. Gardner sole Director
See biography above.
EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE
Summary Compensation Table
(All figures are in US dollars)
The following table sets forth the overall compensation earned in the fiscal
year that will end December 31, 2008 by (1) each person who served as the
principal executive officer of the Company for fiscal year 2008; (2) the
Company's most highly compensated executive officers with compensation of
$100,000 or more during 2008 fiscal year; and (3) those individuals, if any, who
23
would have otherwise been in included in section (2) above but for the fact that
they were not serving as an executive of the Company as of July 31, 2008.
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Fiscal Stock Option Plan Compensation All Other Total
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Compensation($)
-------- ---- --------- -------- --------- --------- --------------- ----------- --------------- ---------------
Donald R. 2008 Nil Nil Nil Nil Nil Nil Nil --
Gardner
Chief Executive
Officer, Chief
Financial Officer,
President, Secretary,
Treasurer and
Director (Principal
Executive Officer
and Principal
Accounting Officer)
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of July 31, 2008, there were Twenty Two Million (22,000, 000) shares of
common stock issued and outstanding.
(1) This table is based on Twenty Two Million (22,000,000) shares of common
stock outstanding
As of the date of this prospectus, we had the following security holder holding
greater than 5%:
Name & Address of Owner Amount and Nature of Percentage of Class
And Position if Applicable Beneficial Ownership Before Offering After Offering
-------------------------- -------------------- --------------- --------------
Donald R. Gardner 22,000,000 100% 55%
Chief Executive Officer, Chief Financial
Officer, President, Secretary, Treasurer
and Director (Principal Executive Officer
and Principal Accounting Officer)
Total Officers, Directors &
Significant Shareholders as a group 22,000,000 100% 55%
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
As of the date of this statement, there are no, and have not been since
inception, any material agreements or proposed transactions, whether direct or
indirect, with any of the following:
* Any of our directors or officers;
* Any nominee for election as a director;
* The principal security holder(s) identified in the preceding Security
Ownership of Certain Beneficial Owners and Management " section; or
* Any relative or spouse, or relative of such spouse, of the above
referenced persons;
* Any promoters.
24
FINANCIAL STATEMENTS
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Silver Bay Resources Inc.
(An Exploration Stage Company)
We have audited the accompanying balance sheet of Silver Bay Resources Inc. (An
Exploration Stage Company) as of July 31, 2008, and the related statements of
operations, stockholders' equity and cash flows for the period ended since
inception on June 12, 2008 through July 31, 2008. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conduct our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Silver Bay Resources Inc. (An
Exploration Stage Company) as of July 31, 2008, and the related statements of
operations, stockholders' equity and cash flows for the period ended since
inception on June 12, 2008 through July 31, 2008, in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has an accumulated deficit of $81,440 since
inception June 12, 2008 through July 31, 2008, which raises substantial doubt
about its ability to continue as a going concern. Management's plans concerning
these matters are also described in Note 3. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Moore & Associates, Chartered
- --------------------------------------
Moore & Associates Chartered
Las Vegas, Nevada
August 25, 2008
2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146
(702) 253-7499 Fax (702) 253-7501
F-1
SILVER BAY RESOURCES INC.
(An Exploration Stage Company)
Balance Sheets
(Stated in US Dollars)
As of
July 31,
2008
--------
(Audited)
Assets
Current assets
Cash $ --
--------
Total current assets --
Total Assets $ --
========
Liabilities
Current liabilities
Accounts payable $ 1,440
--------
Total current liabilities 1,440
Long Term Liabilities
Shareholder Loan 60,000
--------
Total Liabilities $ 61,440
--------
Stockholders' Deficiency
Common Stock, $0.001 par value
75,000,00 Common Shares Authorized
22,000,000 Shares Issued 22,000
Additional paid-in capital (2,000)
Deficit accumuated during exploration period (81,440)
--------
Total stockholders deficit (61,440)
--------
Total liabilites and stockholders equity $ --
========
The accompanying notes are an integral part of these financial statements.
F-2
SILVER BAY RESOURCES INC.
(An Exploration Stage Company)
Statement of Operations
(Stated in US Dollars)
From inception
(June 12, 2008) to
July 31,
2008
-----------
Revenue $ --
-----------
Expenses
Recognition of an Impairment Loss (Mineral Claims) 20,000
Accounting & Professional Fees 60,600
Filing Fees 840
-----------
Total Expenses 81,440
-----------
Provision for income tax --
Net Income (Loss) $ (81,440)
===========
Basic & Diluted (Loss) per Common Share (0.004)
-----------
Weighted Average Number of Common Shares 22,000,000
===========
The accompanying notes are an integral part of these financial statements.
F-3
SILVER BAY RESOURCES INC.
(An Exploration Stage Company)
Statements of Stockholder's Equity
From Inception (June 12, 2008) to July 31, 2008
(Stated in US Dollars)
Deficit
Accumulated
Common Stock During
---------------------- Paid in Exploration Total
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
Shares issued to founders -
June 12, 2008 at $0.001 per share 22,000,000 $ 22,000 $ (2,000) $ -- $ 20,000
Net (Loss) for period (81,440) (81,440)
----------- -------- -------- --------- ---------
Balance, June 30, 2008 22,000,000 $ 22,000 $ (2,000) $ (81,440) $ (61,440)
=========== ======== ======== ========= =========
The accompanying notes are an integral part of these financial statements.
F-4
SILVER BAY RESOURCES INC.
(An Exploration Stage Company)
Statement of Cash Flows
(Stated in US Dollars)
From inception
(June 12, 2008) to
July 31,
2008
--------
OPERATING ACTIVITIES
Net income (loss) $(81,440)
Recognition of an Impairment Loss (Mineral Claims) 20,000
Accounts payable 1,440
--------
NET CASH USED IN OPERATING ACTIVITIES (60,000)
INVESTING ACTIVITES
Purchase of mineral claim (20,000)
--------
NET CASH USED IN INVESTING ACTIVITIES (20,000)
FINANCING ACTIVITIES
Shareholder Loan 60,000
Common shares issued to founders @ $0.001 per share 20,000
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 80,000
Cash at beginning of period --
--------
CASH AT END OF PERIOD $ --
========
CASH PAID FOR:
Interest $ --
========
Income Tax $ --
NON-CASH ACTIVITIES
Shares issued in Lieu of Payment for Service $ --
========
Stock issued for accounts payable $ --
========
Stock issued for notes payable and interest $ --
========
Stock issued for convertible debentures and interest $ --
========
Convertible debentures issued for services $ --
========
Warrants issued $ --
========
Stock issued for penalty on default of convertible debentures $ --
========
Note payable issued for finance charges $ --
========
Forgiveness of note payable and accrued interest $ --
========
The accompanying notes are an integral part of these financial statements.
F-5
SILVER BAY RESOURCES INC.
(An Exploration Stage Company)
Footnotes to the Financial Statements
From Inception (June 12, 2008 to July 31, 2008)
(Stated in US Dollars)
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
The Company was incorporated under the laws of the State of Nevada on June 12,
2008.
The Company is engaged in the exploration of silver and other minerals. Efforts
to date have focused on the Silver Bay Property located on Jervis Inlet, about
100km northwest of Vancouver Island.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a December 31 year-end.
Revenue Recognition
The Company recognizes revenue when persuasive evidence of an arrangement
exists, goods delivered, the contract price is fixed or determinable, and
collectibility is reasonably assured.
c. Income Taxes
The Company prepares its tax returns on the accrual basis. The Company accounts
for income taxes under the Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("Statement 109"). Under Statement 109, deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. Under Statement 109, the effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date.
d. Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
F-6
SILVER BAY RESOURCES INC.
(An Exploration Stage Company)
Footnotes to the Financial Statements
From Inception (June 12, 2008 to July 31, 2008)
(Stated in US Dollars)
e. Assets
The company has no cash as of July 31, 2008.
f. Mineral Property
In 2008 the Company purchased mining claims located in the Jervis Inlet. About
100 km northwest of Vancouver, BC. Access is by helicopter or float plane from
Vancouver or Sechelt, or by boat from Egmont or Pender Harbour on the Sechelt
Peninsula. The Silver Bay Property comprises one MTO mineral claim containing 12
cell claim units totaling 248.686 hectares.
In accordance with FASB No. 89 paragraph 14 "Additional Disclosure by
Enterprises with Mineral Resources Assets" the Company since inception (June 12,
2008) has yet to establish proven or probable mining reserves and has no
quantities of proved mineral reserves or probable mineral reserves. Moreover,
the Company has not purchased or sold proved or probable minerals reserves since
inception. Due to the fact that we have no proven or probable mining reserves
the Company will record our exploration and development costs within operating
expenses, as opposed to capitalizing those costs.
g. Income
Income represents all of the company's revenue less all its expenses in the
period incurred. The Company has no revenues as of July 31, 2008 and has
incurred expenses of $81,440 since inception.
In accordance with FASB/ FAS 142 option 12, paragraph 11 "Intangible Assets
Subject to Amortization", a recognized intangible asset shall be amortized over
its useful life to the reporting entity unless that life is determined to be
indefinite. If an intangible asset has been has a finite useful life, but the
precise length of that life is not known, that intangible asset shall be
amortized over the best estimate of its useful life. The method of amortization
shall reflect the pattern in which the economic benefits of the intangible asset
are consumed or otherwise used up. If that pattern cannot be reliable
determined, a straight-line amortization method shall be used. An intangible
asset shall not be written down or off in the period of acquisition unless it
becomes impaired during that period.
The Company has determined that its mineral properties are to be held and used
for impairment, as per SFAS 144: "Accounting for the Impairment of Long-Live
Assets." Impairment is the condition that exists when the carrying amount of a
long-lived asset (asset group) exceeds its fair value. An impairment loss shall
be recognized only if the carrying amount of a long- lived asset (asset group)
is not recoverable and exceeds its fair value. The carrying amount of a
long-lived asset (asset group) is not recoverable if it exceeds the sum of the
F-7
SILVER BAY RESOURCES INC.
(An Exploration Stage Company)
Footnotes to the Financial Statements
From Inception (June 12, 2008 to July 31, 2008)
(Stated in US Dollars)
undisclosed cash flows expected to result from the use and eventual disposition
of the asset (asset group). Our determination is based on the Company's current
period operating loss combined with the Company's history of operating losses
and our projection that demonstrates continuing losses associated with the
mineral properties.
In accordance with FASB 144, 25, "An impairment loss recognized for a long-lived
asset (asset group) to be held and used shall be included in income from
continuing operations before income taxes in the income statement of a business
enterprise and in income from continuing operations in the statement of
activities of a not-for-profit organization. If a subtotal such as "income from
operations" is presented, it shall include the amount of that loss." The Company
has recognized the impairment of a long-lived asset by declaring that amount as
a loss in income from operations in accordance with an interpretation of FASB
144.
From inception
(June 12, 2008) to
July 31,
2008
--------
Revenue $ --
--------
Expenses
Recognition of an Impairment Loss (Mineral Claims) 20,000
Accounting & Professional Fees 60,600
Filing Fees 840
--------
Total Expenses 81,440
--------
Provision for income tax --
--------
Net Income (Loss) $(81,440)
========
h. Basic Income (Loss) Per Share
In accordance with SFAS No. 128-"Earnings Per Share", the basic loss per common
share is computed by dividing net loss available to common stockholders by the
weighted average number of common shares outstanding. Diluted loss per common
share is computed similar to basic loss per common share except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if the potential common shares had been issued and
F-8
SILVER BAY RESOURCES INC.
(An Exploration Stage Company)
Footnotes to the Financial Statements
From Inception (June 12, 2008 to July 31, 2008)
(Stated in US Dollars)
if the additional common shares were dilutive. At July 31, 2008, the Company has
no stock equivalents that were anti-dilutive and excluded in the earnings per
share computation.
i. Cash and Cash Equivalents
For purposes of the statement of cash flows, the company considers all highly
liquid investments purchased with maturity of three months or less to be cash
equivalents.
j. Liabilities
Liabilities are made up of current liabilities. Current liabilities include
accounts payable of $1,440 as of July 31, 2008 and a loan of $60,000. The loan
is interest free and has no fixed term.
Share Capital
a) Authorized:
75,000,000 common shares with a par value of $0.001
b) Issued:
The company issued to the founders 22,000,000 common shares of stock for
$20,000. As of July 31, 2008, there are Twenty-two Million (22,000,000) shares
issued and outstanding at a value of $0.001 per share
There are no preferred shares authorized. The Company has issued no preferred
shares.
The Company has no stock option plan, warrants or other dilutive securities.
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of business.
However, the Company has accumulated a loss and is new. This raises substantial
doubt about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from this
uncertainty.
F-9
SILVER BAY RESOURCES INC.
(An Exploration Stage Company)
Footnotes to the Financial Statements
From Inception (June 12, 2008 to July 31, 2008)
(Stated in US Dollars)
As shown in the accompanying financial statements, the Company has incurred a
net loss of $81,440 for the period from June 12, 2008 (inception) to July 31,
2008 and has not generated any revenues. The future of the Company is dependent
upon its ability to obtain financing and upon future profitable operations from
the development of acquisitions. Management has plans to seek additional capital
through a private placement and public offering of its common stock. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts of and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.
F-10
PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid by us in connection with the securities being registered
are as follows:
Amount
----------
Securities and Exchange Commission Registration Fee........ $ 0.39*
Audit Fees and Expenses ................................... 3,500.00
Legal Fees and Expenses ................................... 60,600.00
Transfer Agent and Registrar Fees and Expenses ............ 400.00
Miscellaneous Expenses .................................... 840.00
----------
Total .................................................... $65,340.39*
==========
- ----------
* Estimated amount
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.7502 of the Nevada Revised Statutes and Article VII of our Articles
of Incorporation permit us to indemnify our officers and directors and certain
other persons against expenses in defense of a suit to which they are parties by
reason of such office, so long as the persons conducted themselves in good faith
and the persons reasonably believed that their conduct was in our best interests
or not opposed to our best interests and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful. See
our Articles of Incorporation filed as Exhibit 2.1 to this registration
statement.
Indemnification is not permitted in connection with a proceeding by us or in our
right in which the officer or director was adjudged liable to us or in
connection with any other proceeding charging that the officer or director
derived an improper personal benefit, whether or not involving action in an
official capacity.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The Company issued 22,000,000 shares of common stock to the founder, Donald R.
Gardner, at a price of $0.001 per share, for total proceeds of $20,000. These
shares were issued pursuant to Section 4(2) of the Securities Act. The
22,000,000 shares of common stock are restricted shares as defined in the
Securities Act. This issuance was made to the Company's founders who are
sophisticated investor. As promoters of our Company since our inception, the
founders are in a position of access to relevant and material information
regarding our operations.
II-1
ITEM 16. EXHIBITS
The following exhibits are included as part of this Form S-1 or are incorporated
by reference to our previous filings:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
5.1 Legal Opinion of Diane Dalmy, Attorney, September 2008*
10.1 Asset Purchase Agreement*
23.1 Consent of Moore and Associates, August 2008*
- ----------
* Filed Herein
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the underwriter at
the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement Form S-1 to be signed on its behalf by
the undersigned, in the City of Dallas, Texas, on September 16, 2008.
SILVER BAY RESOURCES INC.
By: /s/ Donald R. Gardner
-------------------------------------------------
Donald R. Gardner,
Chief Executive Officer, Chief Financial Officer,
(Principal Executive Officer and
Principal Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following person, in the capacity and on the
date indicated.
Signature Title Date
--------- ----- ----
/s/ Donald R. Gardner Chief Executive Officer, September 16, 2008
- ------------------------------ Chief Financial Officer, President,
Donald R. Gardner Secretary, Treasurer and Director
(Principal Executive Officer and
Principal Accounting Officer)
II-3
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
5.1 Legal Opinion of Diane Dalmy, Attorney, September 2008*
10.1 Asset Purchase Agreement*
23.1 Consent of Moore and Associates, August 2008*
- ----------
* Filed Herein