UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended April 30, 2009
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 333-152754
QUARTZ VENTURES INC.
(Exact name of registrant as specified in its charter)
Nevada 71-1029846
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
29115 North 144th Street, Scottsdale, AZ 85262
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 480-229-3668
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange On Which Registered
- ------------------- -----------------------------------------
N/A N/A
Securities registered pursuant to Section 12(g) of the Act:
N/A
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the last 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Website, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-K (ss.229.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
The aggregate market value of Common Stock held by non-affiliates of the
Registrant on July 31, 2009 was $0 based on a $0 closing price for the Common
Stock on July 31, 2009. For purposes of this computation, all executive officers
and directors have been deemed to be affiliates. Such determination should not
be deemed to be an admission that such executive officers and directors are, in
fact, affiliates of the Registrant.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date. 5,440,000 as of August 10, 2009
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
Item 1. Business............................................................ 3
Item 1A. Risk Factors........................................................ 6
Item 1B. Unresolved Staff Comments........................................... 9
Item 2. Properties.......................................................... 9
Item 3. Legal Proceedings................................................... 10
Item 4. Submission of Matters to a Vote of Security Holders................. 10
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities................... 10
Item 6. Selected Financial Data............................................. 11
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................... 11
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.......... 16
Item 8. Financial Statements and Supplementary Data......................... 17
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure............................................ 30
Item 9A. Controls and Procedures............................................. 30
Item 9B. Other Information................................................... 31
Item 10. Directors, Executive Officers and Corporate Governance.............. 31
Item 11. Executive Compensation.............................................. 33
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters..................................... 34
Item 13. Certain Relationships and Related Transactions, and Director
Independence........................................................ 35
Item 14. Principal Accounting Fees and Services.............................. 35
Item 15. Exhibits, Financial Statement Schedules............................. 36
2
PART I
ITEM 1. BUSINESS
This annual report contains forward-looking statements. These statements relate
to future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled "Risk Factors", that may cause our or our industry's actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.
Our financial statements are stated in United States Dollars (US$) and are
prepared in accordance with United States Generally Accepted Accounting
Principles.
In this annual report, unless otherwise specified, all dollar amounts are
expressed in United States dollars and all references to "common shares" refer
to the common shares in our capital stock.
As used in this current report and unless otherwise indicated, the terms "we",
"us", "our" and "Quartz" mean Quartz Ventures Inc.
GENERAL OVERVIEW
We were incorporated in the State of Nevada, USA, on July 22, 2005. We are an
exploration stage company engaged in the acquisition, and exploration of mineral
properties with a view to exploiting any mineral deposits we discover that
demonstrate economic feasibility.
On the date of our incorporation, July 22, 2005, Mr. Glenn Ennis was our sole
officer and director. On July 15, 2008, Mr. Ennis resigned as the President,
Chief Executive Officer, Chief Financial Officer, Treasurer and Secretary, but
continued to remain a member of the board of directors. As a result of Mr.
Ennis' resignation, we appointed Mr. Richard Goodhart as our President, Chief
Executive Officer, Chief Financial Officer, Treasurer, Secretary and a member of
our board of directors.
On January 15, 2007, we entered into a purchase and sale agreement with David
Heyman to acquire a100% interest in two mineral claims located in the Alberni
Mining Division, British Columbia, Canada for total consideration of $8,000.00
(collectively, the "Claim"). As of the date of this Annual Report, the claims
are in good standing and held in trust for us by the vendor of the property,
David Heyman. Upon our request, Mr. Heyman will have the claims recorded in our
name with the appropriate mining recorder. We had paid $5,000 to a geologist for
analysis of the property underlying our claims.
On September 25, 2008, we appointed Mr. Fred DaSilva to our board of directors.
Effective January 20, 2009, Mr. Richard Goodhard resigned as our President,
Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and a
director of our company. Also on January 20, 2009, Mr. Glenn Ennis resigned as a
director of our company. As a result of the resignations of Mr. Goodhard and Mr.
Ennis, we appointed Mr. Fred DaSilva as our President, Chief Executive Officer,
Chief Financial Officer, Treasurer and Secretary. We also appointed Mr. Rick
Shykora as a director of our company.
3
On June 4, 2009, certain shareholders of our company, pursuant to a written
consent resolution of the shareholders, removed Mr. Rick Shykora as a director
of our company and Mr. DeSilva as our President, Chief Executive Officer, Chief
Financial Officer, Treasurer, Secretary and a director of our company. As a
result of the removal of Mr. DeSilva and Mr. Shykora on June 4, 2009, we
appointed Mr. Georgios Polyhronopoulos as our President, Chief Executive
Officer, Chief Financial Officer, Treasurer, Secretary and a director of our
company. As of the date of this annual report on 10-K, Mr. Polyhronopoulos is
our sole director and officer.
Effective June 4, 2009, there was a change in control of our company. In
accordance with a verbal arrangement between our company Mr. Glenn Ennis, a
former director and officer of our company, Mr. Ennis returned an aggregate of
3,000,000 restricted shares of our common stock for cancellation. Also effective
June 4, 2009, Mr. Polyhronopoulos, our sole director and officer, acquired an
aggregate of 3,000,000 restricted shares of our common stock in consideration of
$25,000.00. The shares were issued to one (1) U.S. person, as that term is
defined in Regulation S of the Securities Act of 1933, relying on Section 4(2)
of the Securities Act and/or Rule 506 of Regulation D, promulgated under the
United States Securities Act of 1933, as amended.
OUR CURRENT BUSINESS
We are an exploration stage mining company engaged in the exploration of
minerals on a property located in British Columbia, Canada.
Our current operational focus is to conduct exploration activities on our
property in British Columbia, Canada and to complete the terms of the
acquisition agreement with General Metals Corporation for the acquisition of the
Nyinahin Mining Concession.
ALBERNI MINING CLAIM
GEOLOGICAL REPORT
We had obtained a geological report on the property underlying our Claim. The
geology report dated February 19, 2007 recommended renewed work in the project
area with the objective being to delineate viable targets for diamond drilling.
The first priority should be a comprehensive review of reports and maps
pertaining to all past exploration work, including surface surveys, drilling,
trenching and underground exploration followed by a field examination of the
subject area. The review will include preparation of compilations of all
available maps and sections pertaining to the property adjusted to common scales
to permit accurate comparisons of data from different projects. The geophysical
data, in particular the chargeability surveys previously carried out, should be
professionally re-evaluated and an effort should be made to re-locate the survey
grids. Their positions along with those of all known mineral occurrences,
trenches, drill holes, adits and geographical features should be established
with the aid of GPS instruments. Completion of this phase is expected to
identify gaps in data and areas where additional effort is needed and to permit
design of an appropriate program of additional work.
The nature and extent of any follow-up work will be contingent on the results of
the review but it is recommended that provision be made for a preliminary
program of geological mapping, fill-in soil sampling and possibly trenching
particularly in the areas of the chargeability anomalies. Consideration should
be given to the application of mobile metal ion geochemistry as an approach to
overcoming apparent difficulties with heavy overburden in parts of the property.
An estimate of the cost of the proposed initial review and field examination is
$13,000. Provision of an additional budget of $71,000 is recommended for the
contingent exploration work that would be required to complete the follow-up
surveys.
PROPERTY DESCRIPTION
The property consists of two contiguous claims listed in the table below:
4
CLAIM NUMBER AND NAME AREA (IN HECTARES) EXPIRY DATE
--------------------- ------------------ -----------
548275 - Horse's Wither 442.845 December 30, 2008
549813-Fetlock 42.176 January 18, 2009
TOTAL AREA: 485.021 --
EXPLORATION PROGRAM
We will engage a geologist to provide a further analysis of the property and
potential for minerals. Our initial program should subsequently be to prospect
the property locating all signs of unreported previous work and record the
results by global positioning system (GPS) coordinates. After all previous work
areas have been accurately located, a geologist can rapidly produce a detailed
geological map of the property delineating the favourable areas. Samples should
be carefully collected from all exposure of the formation and analyses
performed.
The requirement to raise further funding for exploration beyond that obtained
for the next six month period continues to depend on the outcome of geological
and engineering testing occurring over this interval. If results provide the
basis to continue development and geological studies indicate high probabilities
of sufficient production quantities, we will attempt to raise capital to further
our mining program, build production infrastructure, and raise additional
capital for further land acquisitions. This includes the following activity:
* Review all available information and studies.
* Digitize all available factual information.
* Complete an NI 43-101 Compliant Report with a qualified geologist
familiar with mineralization.
* Determine feasibility and amenability of extracting the minerals via
an ISL operation.
* Create investor communications materials, corporate identity.
* Raise funding for mineral development.
* Target further leases for exploration potential and obtain further
funding to acquire new development targets.
COMPETITION
We are a mineral resource exploration company. We compete with other mineral
resource exploration companies for financing and for the acquisition of new
mineral properties. Many of the mineral resource exploration companies with whom
we compete have greater financial and technical resources than those available
to 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 more 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. 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.
COMPLIANCE WITH GOVERNMENT REGULATION
We are committed to complying with and are, to our knowledge, in compliance
with, all governmental and environmental regulations applicable to our company
and our properties. Permits from a variety of regulatory authorities are
required for many aspects of mine operation and reclamation. We cannot predict
the extent to which these requirements will affect our company or our properties
if we identify the existence of minerals in commercially exploitable quantities.
5
In addition, future legislation and regulation could cause additional expense,
capital expenditure, restrictions and delays in the exploration of our
properties.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have incurred $Nil in research and development expenditures over the last
fiscal year.
EMPLOYEES
Currently, we do not have any employees. Our directors and certain contracted
individuals play an important role in the running of our company. We do not
expect any material changes in the number of employees over the next 12 month
period. We do and will continue to outsource contract employment as needed.
We engage contractors from time to time to consult with us on specific corporate
affairs or to perform specific tasks in connection with our exploration
programs.
SUBSIDIARIES
We do not have any subsidiaries.
INTELLECTUAL PROPERTY
We do not own, either legally or beneficially, any patent or trademark.
ITEM 1A. RISK FACTORS
Our business operations are subject to a number of risks and uncertainties,
including, but not limited to those set forth below:
RISKS ASSOCIATED WITH MINING
OUR PROPERTY IS IN THE EXPLORATION STAGE. THERE IS NO ASSURANCE THAT WE CAN
ESTABLISH THE EXISTENCE OF ANY MINERAL RESOURCE ON OUR PROPERTY IN COMMERCIALLY
EXPLOITABLE QUANTITIES. UNTIL WE CAN DO SO, WE CANNOT EARN ANY REVENUES FROM
OPERATIONS AND IF WE DO NOT DO SO WE WILL LOSE ALL OF THE FUNDS THAT WE EXPEND
ON EXPLORATION. IF WE DO NOT DISCOVER ANY MINERAL RESOURCE IN A COMMERCIALLY
EXPLOITABLE QUANTITY, OUR BUSINESS COULD FAIL.
Despite exploration work on our mineral property, we have not established that
it contains any mineral reserve, nor can there be any assurance that we will be
able to do so. If we do not, our business could fail.
A mineral reserve is defined by the Securities and Exchange Commission in its
Industry Guide 7 (which can be viewed over the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7) as that part
of a mineral deposit which could be economically and legally extracted or
produced at the time of the reserve determination. The probability of an
individual prospect ever having a "reserve" that meets the requirements of the
Securities and Exchange Commission's Industry Guide 7 is extremely remote; in
all probability our mineral resource property does not contain any 'reserve' and
any funds that we spend on exploration will probably be lost.
Even if we do eventually discover a mineral reserve on our property, there can
be no assurance that we will be able to develop our property into a producing
mine and extract those resources. Both mineral exploration and development
involve a high degree of risk and few properties which are explored are
ultimately developed into producing mines.
The commercial viability of an established mineral deposit will depend on a
number of factors including, by way of example, the size, grade and other
attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
6
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.
MINERAL OPERATIONS ARE SUBJECT TO APPLICABLE LAW AND GOVERNMENT REGULATION. EVEN
IF WE DISCOVER A MINERAL RESOURCE IN A COMMERCIALLY EXPLOITABLE QUANTITY, THESE
LAWS AND REGULATIONS COULD RESTRICT OR PROHIBIT THE EXPLOITATION OF THAT MINERAL
RESOURCE. IF WE CANNOT EXPLOIT ANY MINERAL RESOURCE THAT WE MIGHT DISCOVER ON
OUR PROPERTIES, OUR BUSINESS MAY FAIL.
Both mineral exploration and extraction require permits from various foreign,
federal, state, provincial and local governmental authorities and are governed
by laws and regulations, including those with respect to prospecting, mine
development, mineral production, transport, export, taxation, labour standards,
occupational health, waste disposal, toxic substances, land use, environmental
protection, mine safety and other matters. There can be no assurance that we
will be able to obtain or maintain any of the permits required for the continued
exploration of our mineral property or for the construction and operation of a
mine on our property at economically viable costs. If we cannot accomplish these
objectives, our business could fail.
We believe that we are in compliance with all material laws and regulations that
currently apply to our activities but there can be no assurance that we can
continue to remain in compliance. Current laws and regulations could be amended
and we might not be able to comply with them, as amended. Further, there can be
no assurance that we will be able to obtain or maintain all permits necessary
for our future operations, or that we will be able to obtain them on reasonable
terms. To the extent such approvals are required and are not obtained, we may be
delayed or prohibited from proceeding with planned exploration or development of
our mineral property.
IF WE ESTABLISH THE EXISTENCE OF A MINERAL RESOURCE ON OUR PROPERTY IN A
COMMERCIALLY EXPLOITABLE QUANTITY, WE WILL REQUIRE ADDITIONAL CAPITAL IN ORDER
TO DEVELOP THE PROPERTY INTO A PRODUCING MINE. IF WE CANNOT RAISE THIS
ADDITIONAL CAPITAL, WE WILL NOT BE ABLE TO EXPLOIT THE RESOURCE, AND OUR
BUSINESS COULD FAIL.
If we do discover mineral resources in commercially exploitable quantities on
our property, we will be required to expend substantial sums of money to
establish the extent of the resource, develop processes to extract it and
develop extraction and processing facilities and infrastructure. Although we may
derive substantial benefits from the discovery of a major deposit, there can be
no assurance that such a resource will be large enough to justify commercial
operations, nor can there be any assurance that we will be able to raise the
funds required for development on a timely basis. If we cannot raise the
necessary capital or complete the necessary facilities and infrastructure, our
business may fail.
MINERAL EXPLORATION AND DEVELOPMENT IS SUBJECT TO EXTRAORDINARY OPERATING RISKS.
WE DO NOT CURRENTLY INSURE AGAINST THESE RISKS. IN THE EVENT OF A CAVE-IN OR
SIMILAR OCCURRENCE, OUR LIABILITY MAY EXCEED OUR RESOURCES, WHICH WOULD HAVE AN
ADVERSE IMPACT ON OUR COMPANY.
Mineral exploration, development and production involves many risks which even a
combination of experience, knowledge and careful evaluation may not be able to
overcome. Our operations will be subject to all the hazards and risks inherent
in the exploration for mineral resources and, if we discover a mineral resource
in commercially exploitable quantity, our operations could be subject to all of
the hazards and risks inherent in the development and production of resources,
including liability for pollution, cave-ins or similar hazards against which we
cannot insure or against which we may elect not to insure. Any such event could
result in work stoppages and damage to property, including damage to the
environment. We do not currently maintain any insurance coverage against these
operating hazards. The payment of any liabilities that arise from any such
occurrence would have a material adverse impact on our company.
MINERAL PRICES ARE SUBJECT TO DRAMATIC AND UNPREDICTABLE FLUCTUATIONS.
We expect to derive revenues, if any, either from the sale of our mineral
resource property or from the extraction and sale of metals such as lithium. The
price of those commodities has fluctuated widely in recent years, and is
affected by numerous factors beyond our control, including international,
economic and political trends, expectations of inflation, currency exchange
fluctuations, interest rates, global or regional consumptive patterns,
7
speculative activities and increased production due to new extraction
developments and improved extraction and production methods. The effect of these
factors on the price of metals, and therefore the economic viability of any of
our exploration properties and projects, cannot accurately be predicted.
THE MINING INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE THAT WE WILL
CONTINUE TO BE SUCCESSFUL IN ACQUIRING MINERAL CLAIMS. IF WE CANNOT CONTINUE TO
ACQUIRE PROPERTIES TO EXPLORE FOR MINERAL RESOURCES, WE MAY BE REQUIRED TO
REDUCE OR CEASE OPERATIONS.
The mineral exploration, development, and production industry is largely
un-integrated. We compete with other exploration companies looking for mineral
resource properties. While we compete with other exploration companies in the
effort to locate and acquire mineral resource properties, we will not compete
with them for the removal or sales of mineral products from our property if we
should eventually discover the presence of them in quantities sufficient to make
production economically feasible. Readily available markets exist worldwide for
the sale of mineral products. Therefore, we will likely be able to sell any
mineral products that we identify and produce.
In identifying and acquiring mineral resource properties, we compete with many
companies possessing greater financial resources and technical facilities. This
competition could adversely affect our ability to acquire suitable prospects for
exploration in the future. Accordingly, there can be no assurance that we will
acquire any interest in additional mineral resource properties that might yield
reserves or result in commercial mining operations.
RISKS RELATED TO OUR COMPANY
WE HAVE A LIMITED OPERATING HISTORY ON WHICH TO BASE AN EVALUATION OF OUR
BUSINESS AND PROSPECTS.
We have been in the business of exploring mineral resource properties since 2007
and we have not yet located any mineral reserve. As a result, we have never had
any revenues from our operations. In addition, our operating history has been
restricted to the acquisition and exploration of our mineral properties and this
does not provide a meaningful basis for an evaluation of our prospects if we
ever determine that we have a mineral reserve and commence the construction and
operation of a mine. We have no way to evaluate the likelihood of whether our
mineral property contains any mineral reserve or, if it does that we will be
able to build or operate a mine successfully. We anticipate that we will
continue to incur operating costs without realizing any revenues during the
period when we are exploring our properties. We therefore expect to continue to
incur significant losses into the foreseeable future. We recognize that if we
are unable to generate significant revenues from mining operations and any
disposition of our property, we will not be able to earn profits or continue
operations. At this early stage of our operation, we also expect to face the
risks, uncertainties, expenses and difficulties frequently encountered by
companies at the start up stage of their business development. We cannot be sure
that we will be successful in addressing these risks and uncertainties and our
failure to do so could have a materially adverse effect on our financial
condition. There is no history upon which to base any assumption as to the
likelihood that we will prove successful and we can provide investors with no
assurance that we will generate any operating revenues or ever achieve
profitable operations.
THE FACT THAT WE HAVE NOT EARNED ANY OPERATING REVENUES SINCE OUR INCORPORATION
RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE TO EXPLORE OUR MINERAL
PROPERTIES AS A GOING CONCERN.
We have not generated any revenue from operations since our incorporation and we
anticipate that we will continue to incur operating expenses without revenues
unless and until we are able to identify a mineral resource in a commercially
exploitable quantity on our mineral property and build and operate a mine. We
had cash in the amount of $Nil as of April 30, 2009. At April 30, 2009, we had a
working capital deficit of $26,195. We incurred a net loss of $44,382 for our
year ended April 30, 2009 and $59,195 since inception. We will have to raise
additional funds to meet our currently budgeted operating requirements for the
next 12 months. As we cannot assure a lender that we will be able to
successfully explore and develop our mineral property, we will probably find it
difficult to raise debt financing from traditional lending sources. We have
traditionally raised our operating capital from sales of equity and debt
securities, but there can be no assurance that we will continue to be able to do
so. If we cannot raise the money that we need to continue exploration of our
mineral property, we may be forced to delay, scale back, or eliminate our
exploration activities. If any of these were to occur, there is a substantial
risk that our business would fail.
8
These circumstances lead our independent registered public accounting firm, in
their report dated August 07, 2009, to comment about our company's ability to
continue as a going concern. Management has plans to seek additional capital
through a private placement of our capital stock. These conditions raise
substantial doubt about our company's ability to continue as a going concern.
Although there are no assurances that management's plans will be realized,
management believes that our company will be able to continue operations in the
future.
RISKS ASSOCIATED WITH OUR COMMON STOCK
WITHOUT A PUBLIC MARKET THERE IS NO LIQUIDITY FOR OUR SHARES AND OUR
SHAREHOLDERS MAY NEVER BE ABLE TO SELL THEIR SHARES WHICH WOULD RESULT IN A
TOTAL LOSS OF THEIR INVESTMENT.
Our common shares are not list on any exchange or quotation system and we do not
have a market maker who will assist us in having our shares quoted on the OTCBB.
At the present, time none of our selling security holders are able to sell their
shares other than through private transactions. Selling shares privately might
result in our selling security holders not receiving the price per share that
they might have obtained if the shares were quoted on the OTCBB. Management
intends to seek out a market maker. This will occur as follows:
* We will have to identify a market maker who will file a Form 211 for
us which will start the process with the FINRA and hopefully
eventually obtaining a quotation on the OTCBB; and
* We will have to be current in our financial statements to be quoted on
the OTCBB and hence we will be responsible for filing Forms 10-K and
10-Q on a periodic basis as required.
We do not know how long this process will take, but we estimate a period of
between six to twelve months. There is the distinct possibility that our company
will never be quoted on the OTCBB.
WE MIGHT IN THE FUTURE HAVE TO SELL SHARES BY WAY OF PRIVATE PLACEMENTS OR
THROUGH A PUBLIC OFFERING WHICH WILL HAVE THE EFFECT OF DILUTING OUR
SHAREHOLDERS' CURRENT PERCENTAGE OWNERSHIP IN OUR COMPANY.
If, in the future, we decide to sell shares to raise additional capital for
operations, our shareholders current percentage ownership in our company will be
diluted unless they participate in the purchase of shares equivalent to their
present ownership in our company. If they do not participate in either a future
private placement or public offering their percentage interest in our company
will be diluted.
OTHER RISKS
TRENDS, RISKS AND UNCERTAINTIES
We have sought to identify what we believe to be the most significant risks to
our business, but we cannot predict whether, or to what extent, any of such
risks may be realized nor can we guarantee that we have identified all possible
risks that might arise. Investors should carefully consider all of such risk
factors before making an investment decision with respect to our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
EXECUTIVE OFFICES
Our executive office is located at 29115 North 144th Street, Scottsdale, AZ
85262. We rent approximately 250 square feet at a cost of $0 per month.
9
MINERAL PROPERTY
As of the date of this annual report on Form 10-K, we hold a mineral property
located in the Alberni Mining Division in British Columbia, Canada. For a
detailed description of this property, please see the section entitled
"Business" above.
ITEM 3. LEGAL PROCEEDINGS
We know of no material, existing or pending legal proceedings against us, nor
are we involved as a plaintiff in any material proceeding or pending litigation.
There are no proceedings in which any of our directors, officers or affiliates,
or any registered or beneficial shareholder, is an adverse party or has a
material interest adverse to our company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of our security holders either through
solicitation of proxies or otherwise in the fourth quarter of the fiscal year
ended April 30, 2009.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is not presently listed for trading on any securities exchange
or market. We intend to apply to list our shares of common stock for trading on
the OTC Bulletin Board at the time the registration statement of which this
prospectus forms a part becomes effective.
National Association of Securities Dealers OTC Bulletin Board(1)
Quarter Ended High Low
------------- ---- ---
December 31, 2008 $0.90 $0.50
September 30, 2008 (3) Nil Nil
June 30, 2008 (3) Nil Nil
March 31, 2008 (3) Nil Nil
December 31, 2007 (3) Nil Nil
September 30, 2007 (2) N/A N/A
June 30, 2007 (2) N/A N/A
March 31, 2007 (2) N/A N/A
December 31, 2006 (2) N/A N/A
- ----------
(1) Over-the-counter market quotations reflect inter-dealer prices without
retail mark-up, mark-down or commission, and may not represent actual
transactions.
(2) Our common stock was quoted on the Over-the-Counter Bulletin Board on
October 22, 2007.
(3) The first trade in our common stock occurred on October 29, 2008.
Our common shares are issued in registered form. Empire Stock Trasnfer 2470 St.
Rose Pkwy Suite 304, Henderson, NV 89074 (Telephone: 702.818.5898; Facsimile:
702.974.1444) is the registrar and transfer agent for our common shares.
On August 6, 2009, the shareholders' list showed 31 registered shareholders and
5,440,000 common shares outstanding.
10
DIVIDEND POLICY
We have not paid any cash dividends on our common stock and have no present
intention of paying any dividends on the shares of our common stock. Our current
policy is to retain earnings, if any, for use in our operations and in the
development of our business. Our future dividend policy will be determined from
time to time by our board of directors.
EQUITY COMPENSATION PLAN INFORMATION
We currently do not have any stock option or equity compensation plans or
arrangements.
RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED
SECURITIES
We did not sell any equity securities which were not registered under the
Securities Act during the year ended April 30, 2009 that were not otherwise
disclosed on our quarterly reports on Form 10-Q or our current reports on Form
8-K filed during the year ended April 30, 2009.
PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
We did not purchase any of our shares of common stock or other securities during
our fourth quarter of our fiscal year ended April 30, 2009.
ITEM 6. SELECTED FINANCIAL DATA
As a "smaller reporting company", we are not required to provide the information
required by this Item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with our audited
financial statements and the related notes that appear elsewhere in this annual
report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed below and elsewhere in this annual report, particularly in the
section entitled "Risk Factors" beginning on page 7 of this annual report.
Our audited financial statements are stated in United States Dollars and are
prepared in accordance with United States Generally Accepted Accounting
Principles.
PLAN OF OPERATION
During the next twelve month period, we intend to focus our efforts on the
exploration of our Alberni Mining Claim.
An estimate of the cost of the proposed initial review and field examination is
$13,000. Provision of an additional budget of $71,000 is recommended for the
contingent exploration work that would be required to complete the follow-up
surveys.
As we do not have the funds necessary to cover our projected operating expenses
for the next twelve month period, we will be required to raise additional funds
through the issuance of equity securities, through loans or through debt
financing. There can be no assurance that we will be successful in raising the
required capital or that actual cash requirements will not exceed our estimates.
We intend to fulfill any additional cash requirement through the sale of our
equity securities.
11
RESULTS OF OPERATIONS FOR OUR YEARS ENDED APRIL 30, 2009 AND 2008
RESULTS OF OPERATIONS
YEAR ENDED APRIL 30, 2009 AND 2008
Year Ended
April 30,
2009 2008
------- -------
Revenue $ Nil $ Nil
Operating Expenses 44,382 6,145
Net Loss $44,382 $ 6,145
EXPENSES
Our operating expenses for the year ended April 30, 2009 and April 30, 2008 are
outlined in the table below:
Year Ended
April 30,
2009 2008
------- -------
Bank charges and interest $ 293 $ 100
Filing and transfer agent fees 5,340 Nil
Mineral property 5,413 Nil
Office expenses 104 Nil
Professional fees $33,232 $ 6,045
Operating expenses for the year ended April 30, 2009, increased by 622% as
compared to the comparative period in 2008 primarily as a result of an increase
in filing and transfer agent fees, mineral property expenses and professional
expenses.
REVENUE
We did not earn any revenues during the year ended April 30, 2009. We do not
anticipate earning revenues until such time as we have entered into commercial
production on the Hummingbird property. We have not commenced the exploration
stage of our business and can provide no assurance that we will discover
economic mineralization on the property, or if such minerals are discovered,
that we will enter into commercial production.
EQUITY COMPENSATION
We currently do not have any stock option or equity compensation plans or
arrangements.
LIQUIDITY AND FINANCIAL CONDITION
WORKING CAPITAL
At At
April 30, April 30, Increase/
2009 2008 Decrease
-------- -------- --------
Current Assets $ Nil $ 18,187 $(18,187)
Current Liabilities 26,195 Nil 26,195
Working Capital (deficit) $(26,195) $ 18,187 $(44,382)
12
CASH FLOWS
Year Ended Year Ended
April 30, April 30,
2009 2008
--------- --------
Net Cash Used in Operating Activities $ (44,382) $ (6,145)
Net Cash Provided by Investing Activities Nil Nil
Net Cash Provided by Financing Activities 23,500 Nil
DECREASE IN CASH DURING THE PERIOD $ (20,882) $ (6,145)
CONTRACTUAL OBLIGATIONS
As a "smaller reporting company", we are not required to provide tabular
disclosure obligations.
GOING CONCERN
We anticipate that additional funding will be required in the form of equity
financing from the sale of our common stock. At this time, we cannot provide
investors with any assurance that we will be able to raise sufficient funding
from the sale of our common stock or through a loan from our directors to meet
our obligations over the next twelve months. We do not have any arrangements in
place for any future debt or equity financing.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to
stockholders.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations
are based upon our financial statements, which have been prepared in accordance
with the accounting principles generally accepted in the United States of
America. Preparing financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenue, and expenses. These estimates and assumptions are affected by
management's application of accounting policies. We believe that understanding
the basis and nature of the estimates and assumptions involved with the
following aspects of our financial statements is critical to an understanding of
our financial statements.
EXPLORATION STAGE COMPANY
Our company complies with the Financial Accounting Standards Board Statement No.
7, its characterization of our company as an exploration stage enterprise.
MINERAL INTERESTS
Mineral property acquisition, exploration and development costs are expensed as
incurred until such time as economic reserves are quantified. To date our
company has not established any proven or probable reserves on its mineral
properties. Our company has adopted the provisions of SFAS No. 143 "Accounting
for Asset Retirement Obligations" which establishes standards for the initial
measurement and subsequent accounting for obligations associated with the sale,
abandonment, or other disposal of long-lived tangible assets arising from the
acquisition, construction or development and for normal operations of such
assets. As at April 30, 2009, any potential costs relating to the retirement of
our company's mineral property interest has not yet been determined.
ENVIRONMENTAL COSTS
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations, and which do not contribute to current or future
13
revenue generation, are expensed. Liabilities are recorded when environmental
assessments and/or remedial efforts are probable, and the cost can be reasonably
estimated. Generally, the timing of these accruals coincides with the earlier of
completion of a feasibility study or our company's commitments to plan of action
based on the then known facts.
INCOME TAXES
Our company follows the liability method of accounting for income taxes. Under
this method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences). The effect on deferred income tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
At April 30, 2009, full deferred tax asset valuation allowance has been provided
and no deferred tax asset has been recorded.
BASIC AND DILUTED LOSS PER SHARE
Our company computes loss per share in accordance with SFAS No. 128, "Earnings
per Share" which requires presentation of both basic and diluted earnings per
share on the face of the statement of operations. Basic loss per share is
computed by dividing net loss available to common shareholders by the weighted
average number of outstanding common shares during the period. Diluted loss per
share gives effect to all dilutive potential common shares outstanding during
the period. Dilutive loss per share excludes all potential common shares if
their effect is anti-dilutive.
Our company has no potential dilutive instruments and accordingly basic loss and
diluted loss per share are equal.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities - Including an Amendment of FASB
Statement No. 115" ("SFAS No. 159"). SFAS No. 159 permits entities to choose to
measure many financial instruments and certain other items at fair value. Most
of the provisions of SFAS No. 159 apply only to entities that elect the fair
value option. However, the amendment to SFAS No. 115 "Accounting for Certain
Investments in Debt and Equity Securities" applies to all entities with
available-for-sale and trading securities. SFAS No. 159 is effective as of the
beginning of an entity's first fiscal year that begins after November 15, 2007.
Early adoption is permitted as of the beginning of a fiscal year that begins on
or before November 15, 2007, provided the entity also elects to apply the
provision of SFAS No. 157, "Fair Value Measurements". The adoption of SFAS No.
159 did not have a material impact on our company's financial position, results
of operations or cash flows.
In June 2007, the FASB ratified the consensus in EITF Issue No. 07-3,
"Accounting for Nonrefundable Advance Payments for Goods or Services to be Used
in Future Research and Development Activities" (EITF 07-3), which requires that
nonrefundable advance payments for goods or services that will be used or
rendered for future research and development (R&D) activities be deferred and
amortized over the period that the goods are delivered or the related services
are performed, subject to an assessment of recoverability. EITF 07-3 will be
effective for fiscal years beginning after December 15, 2007. Our company does
not expect that the adoption of EITF 07-3 will have a material impact on its
financial position, results of operations or cash flows.
SFAS No. 141(R), "Business Combinations" -- This statement includes a number of
changes in the accounting and disclosure requirements for new business
combinations occurring after its effective date. The changes in accounting
requirements include: acquisition costs will be expensed as incurred;
noncontrolling (minority) interests will be valued at fair value; acquired
contingent liabilities will be recorded at fair value; acquired research and
development costs will be recorded at fair value as an intangible asset with
indefinite life; restructuring costs will generally be expensed subsequent to
the acquisition date; and changes in deferred tax asset valuation allowances and
changes in income tax uncertainties after the acquisition date will generally
affect income tax expense. The statement is effective for new business
14
combinations occurring on or after the first reporting period beginning on or
after December 15, 2008. The adoption of SFAS No. 141(R) is not expected to have
a material impact on our financial position, results of operations or cash
flows.
In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements: An Amendment of ARB No. 51" -- This statement
changes the accounting and reporting for noncontrolling (minority) interests in
subsidiaries and for deconsolidation of a subsidiary. Under the revised basis,
the noncontrolling interest will be shown in the balance sheet as a separate
line in equity instead of as a liability. In the income statement, separate
totals will be shown for consolidated net income including noncontrolling
interest, noncontrolling interest as a deduction, and consolidated net income
attributable to the controlling interest. In addition, changes in ownership
interests in a subsidiary that do not result in deconsolidation are equity
transactions if a controlling financial interest is retained. If a subsidiary is
deconsolidated, the parent company will now recognize gain or loss to net income
based on fair value of the noncontrolling equity at that date. The statement is
effective prospectively for fiscal years and interim periods beginning on or
after December 15, 2008 and earlier adoption is prohibited. The adoption of SFAS
No. 160 is not expected to have a material impact the financial position,
results of operations or cash flows.
In March 2008, the Financial Accounting Standards Board (the "FASB") issued
Statement on Financial Accounting Standards ("SFAS") No. 161, "Disclosures about
Derivative Instruments and Hedging Activities - An Amendment of FASB Statement
No. 133" ("SFAS 161"). SFAS 161 enhances required disclosures regarding
derivatives and hedging activities, including enhanced disclosures regarding
how: (a) an entity uses derivative instruments; (b) derivative instruments and
related hedged items are accounted for under SFAS 133; and (c) derivative
instruments and related hedged items affect an entity's financial position,
financial performance, and cash flows. Specifically, SFAS No. 161 requires:
disclosure of the objectives for using derivative instruments in terms of
underlying risk and accounting designation; disclosure of the fair values of
derivative instruments and their gains and losses in a tabular format;
disclosure of information about credit-risk-related contingent features; and
cross-reference from the derivative footnote to other footnotes in which
derivative-related information is disclosed. SFAS 161 is effective for fiscal
years and interim periods beginning after November 15, 2008. Our company does
not expect that the adoption of this standard will have a material impact on its
financial position, results of operations or cash flows.
In May 2008, the FASB issued SFAS No. 162, "THE HIERARCHY OF GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES" ("SFAS No. 162"). SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (the GAAP
hierarchy). SFAS No. 162 will become effective 60 days following the SEC's
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, "The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles." Our company does not expect the adoption of
SFAS No. 162 will have a material effect on our financial position, results of
operations or cash flows.
In June 2008, the FASB ratified EITF No. 07-5, "Determining Whether an
Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock" ("EITF No.
07-5"). EITF No. 07-5 provides that an entity should use a two-step approach to
evaluate whether an equity-linked financial instrument (or embedded feature) is
indexed to its own stock, including evaluating the instrument's contingent
exercise and settlement provisions. It also clarifies the impact of foreign
currency denominated strike prices and market-based employee stock option
valuation instruments on the evaluation. EITF No. 07-5 is effective for fiscal
years beginning after December 15, 2008. We adopted EITF No. 07-5 effective on
January 1, 2009 and the adoption had no material effect on our financial
position, results of operations or cash flows.
In April 2009, the FASB issued FSP FAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly , provides
guidelines for making fair value measurements more consistent with the
principles presented in FASB Statement No. 157 ("SFAS 157"), Fair Value
Measurements. FSP FAS 157-4 reaffirms what SFAS 157 states is the objective of
15
fair value measurement, to reflect how much an asset would be sold for in an
orderly transaction at the date of the financial statements under current market
conditions. Specifically, it reaffirms the need to use judgment to ascertain if
a formerly active market has become inactive and in determining fair values when
markets have become inactive. Our company does not expect this pronouncement to
have a material impact on its results of operations, financial position, or cash
flows
In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosures
about Fair Value of Financial Instruments, enhances consistency in financial
reporting by increasing the frequency of fair value disclosures. This relates to
fair value disclosures for any financial instruments that are not currently
reflected on the balance sheet at fair value. FSP FAS 107-1 and APB 28-1 now
require that fair value disclosures be made on a quarterly basis, providing
qualitative and quantitative information about fair value estimates for all
those financial instruments not measured on the balance sheet at fair value. Our
company does not expect this pronouncement to have a material impact on its
results of operations, financial position, or cash flows.
In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, Recognition and
Presentation of Other-Than-Temporary Impairments , provides additional guidance
designed to create greater clarity and consistency in accounting for and
presenting impairment losses on securities. This FSP is intended to bring
greater consistency to the timing of impairment recognition and to provide
greater clarity to investors about the credit and noncredit components of
impaired debt securities that are not expected to be sold. This FSP also
requires increased and timelier disclosures sought by investors regarding
expected cash flows, credit losses, and an aging of securities with unrealized
losses. Our company does not expect this pronouncement to have a material impact
on its results of operations, financial position, or cash flows.
Other recent accounting pronouncements issued by the FASB (including its
Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed
by management to, have a material impact on our company's present or future
financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a "smaller reporting company", we are not required to provide the information
required by this Item.
16
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS PAGE
- ----------------- ----
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 18
BALANCE SHEETS AS OF APRIL 30, 2009 AND 2008 19
STATEMENT OF LOSSES FOR THE YEARS ENDED APRIL 30, 2009 AND 2008 AND FOR
THE PERIOD JULY 22, 2005 (DATE OF INCEPTION) TO APRIL 30, 2009 20
STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD JULY 22, 2005 (DATE OF
INCEPTION) TO APRIL 30, 2009 21
STATEMENT OF CASH FLOWS FOR THE YEARS ENDED APRIL 30, 2009 AND 2008
AND FOR THE PERIOD JULY 22, 2005 (DATE OF INCEPTION) TO APRIL 30, 2009 22
NOTES TO THE FINANCIAL STATEMENTS 23
17
RBSM LLP
CERTIFIED PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Quartz Ventures, Inc.
We have audited the accompanying balance sheets of Quartz Ventures,
Inc.(the "Company"), an exploration stage company, as of April 30, 2009 and
2008, and the related statements of losses, stockholder's equity and cash flows
for the two years in the period ended April 30, 2009 and the period July 22,
2005 (date of inception) through April 30, 2009. 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 have conducted our audits in accordance with auditing standards of the
Public Company Accounting Oversight Board (United States of America). Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no
such opinion. 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 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 Quartz Ventures, Inc. at
April 30, 2009 and 2008 and the results of its operations and its cash flows for
the two years in the period ended April 30, 2009 and the period July 22, 2005
(date of inception) through April 30, 2009 in conformity with accounting
principles generally accepted 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 1 to the
financial statements, the Company has suffered recurring losses from operations.
This raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ RBSM LLP
---------------------------------------
RBSM LLP
Certified Public Accountants
New York, New York
August 07, 2009
18
QUARTZ VENTURES, INC.
(An Exploration Stage Company)
Balance Sheets
- --------------------------------------------------------------------------------
April 30, April 30,
2009 2008
-------- --------
ASSETS
CURRENT ASSETS
Cash $ -- $ 18,187
-------- --------
TOTAL ASSETS $ -- $ 18,187
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft $ 2,695 $ --
Loans payable - Shareholder 23,500 --
-------- --------
TOTAL CURRENT LIABILITIES 26,195 --
-------- --------
STOCKHOLDERS' EQUITY
Capital stock
Authorized:
75,000,000 common shares with a par value of $0.001
Issued and outstanding:
5,440,000 common shares as of April 30, 2009 and 2008 5,440 5,440
Additional paid-in-capital 27,560 27,560
Deficit accumulated during the exploration stage (59,195) (14,813)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (26,195) 18,187
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ -- $ 18,187
======== ========
The accompanying notes are an integral part of
these audited financial statements
19
QUARTZ VENTURES, INC.
(A Exploration Stage Company)
Statements of Losses
- --------------------------------------------------------------------------------
Cumulative from
July 22, 2005
(Date of
Year Ended Year Ended Inception) to
April 30, April 30, April 30,
2009 2008 2009
---------- ---------- ----------
COSTS AND EXPENSES:
Bank charges and interest $ 293 $ 100 $ 545
Filing and transfer agent fees 5,340 -- 5,340
Mineral property 5,413 -- 13,413
Office expenses 104 -- 620
Professional fees 33,232 6,045 39,277
---------- ---------- ----------
Total operating expenses 44,382 6,145 59,195
---------- ---------- ----------
Net loss from operations (44,382) (6,145) (59,195)
---------- ---------- ----------
Net loss before provision for income taxes (44,382) (6,145) (59,195)
---------- ---------- ----------
Income taxes (benefit) -- -- --
---------- ---------- ----------
Net loss $ (44,382) $ (6,145) $ (59,195)
========== ========== ==========
LOSS PER SHARE - BASIC AND DILUTED $ (0.00) $ (0.00)
========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (BASIC AND FULLY DILUTED) 5,440,000 5,440,000
========== ==========
The accompanying notes are an integral part of
these audited financial statements
20
QUARTZ VENTURES, INC.
(A Exploration Stage Company)
Statement of Stockholders' Equity
From July 22, 2005 (Date of Inception) to April 30, 2009
- --------------------------------------------------------------------------------
Deficit
Accumulated
Number of Additional During the
Common Par Paid-in Development
Shares Value Capital Stage Total
------ ----- ------- ----- -----
August 3, 2005
Subscribed for cash at $0.001 3,000,000 $ 3,000 $ -- $ -- $ 3,000
August 31, 2005
Subscribed for cash at $0.01 400,000 400 3,600 -- 4,000
September 20, 2005
Subscribed for cash at $0.01 700,000 700 6,300 -- 7,000
October 11, 2005
Subscribed for cash at $0.01 600,000 600 5,400 -- 6,000
November 30, 2005
Subscribed for cash at $0.01 600,000 600 5,400 -- 6,000
December 15, 2005
Subscribed for cash at $0.05 140,000 140 6,860 -- 7,000
Net Loss -- -- -- (568) (568)
--------- ------- -------- --------- ---------
Balance, April 30, 2006 5,440,000 5,440 27,560 (568) 32,432
Net loss -- -- -- (8,100) (8,100)
--------- ------- -------- --------- ---------
Balance, April 30, 2007 5,440,000 5,440 27,560 (8,668) 24,332
Net loss -- -- -- (6,145) (6,145)
--------- ------- -------- --------- ---------
Balance, April 30, 2008 5,440,000 5,440 27,560 (14,813) 18,187
Net loss -- -- -- (44,382) (44,382)
--------- ------- -------- --------- ---------
Balance, April 30, 2009 5,440,000 $ 5,440 $ 27,560 $ (59,195) $ (26,195)
========= ======= ======== ========= =========
The accompanying notes are an integral part of
these audited financial statements
21
QUARTZ VENTURES, INC.
(A Exploration Stage Company)
Statements of Cash Flows
- --------------------------------------------------------------------------------
Cumulative from
July 22, 2005
(Date of
Year Ended Year Ended Inception) to
April 30, April 30, April 30,
2009 2008 2009
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(44,382) $ (6,145) $(59,195)
-------- -------- --------
Net cash used in operations (44,382) (6,145) (59,195)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Loans payable 23,500 -- 23,500
Shares subscribed for cash -- -- 33,000
-------- -------- --------
Net cash provided by financing activities 23,500 -- 56,500
Net decrease in cash and equivalents (20,882) (6,145) (2,695)
Cash and equivalents at the beginning of the period 18,187 24,332 --
-------- -------- --------
(Bank overdraft) Cash at the end of the period $ (2,695) $ 18,187 $ (2,695)
======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Interest $ -- $ -- $ --
======== ======== ========
Taxes $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of
these audited financial statements
22
QUARTZ VENTURES, INC.
(An Exploration Stage Company)
Notes To The Financial Statements
April 30, 2009
- --------------------------------------------------------------------------------
1. BUSINESS AND BASIS OF PRESENTATION
Quartz Ventures, Inc. ("the Company") was incorporated on July 22, 2005
under the laws of State of Nevada, U.S. with an authorized capital of
75,000,000 common shares with a par value of $0.001. The Company has an
April 30, year end. The Company is in the exploration stage of its resource
business. The Company commenced operations in 2006 by issuing shares and
acquiring a mineral property located in the Province of British Columbia,
Canada. The Company has not yet determined whether this property contains
reserves that are economically recoverable. The recoverability of costs
incurred for acquisition and exploration of the property will be dependent
upon the discovery of economically recoverable reserves, confirmation of
the Company's interest in the underlying property, the ability of the
Company to obtain necessary financing to satisfy the expenditure
requirements under the property agreement and to complete the development
of the property and upon future profitable production or proceeds for the
sale thereof.
GOING CONCERN
These financial statements have been prepared on a going concern basis
which assumes the Company will be able to realize its assets and discharge
its liabilities in the normal course of business for the foreseeable
future. The Company has incurred losses since inception resulting in an
accumulated deficit of $59,195 as at April 30, 2009 and used $59,195 in
cash for operating activities from its inception through April 30, 2009 and
further losses are anticipated in the development of its business raising
substantial doubt about the Company's ability to continue as a going
concern.
The ability to continue as a going concern is dependent upon the Company
generating profitable operations in the future and/or to obtain the
necessary financing to meet its obligations and repay its liabilities
arising from normal business operations when they come due. Management
intends to finance operating costs over the next twelve months with
existing cash on hand and loans from directors and or private placement of
common stock. However, the planned principal operations have not commenced
and no assurance can be given that management's actions will result in
profitable operations or the resolution of its liquidity problems. The
accompanying statements do not include any adjustments that might result
should the Company be unable to continue as a going concern.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance
with generally accepted accounting principles in the United States of
America and are presented in US dollars.
CASH AND CASH EQUIVALENTS
For purposes of Statement of Cash Flows the Company considers all highly
liquid debt instruments purchased with a maturity date of three months or
less to be cash equivalent.
EXPLORATION STAGE COMPANY
The Company complies with the Financial Accounting Standards Board
Statement No. 7, its characterization of the Company as an exploration
stage enterprise.
MINERAL INTERESTS
Mineral property acquisition, exploration and development costs are
expensed as incurred until such time as economic reserves are quantified.
To date the Company has not established any proven or probable reserves on
its mineral properties. The Company has adopted the provisions of SFAS No.
143 "Accounting for Asset Retirement Obligations" which establishes
standards for the initial measurement and subsequent accounting for
obligations associated with the sale, abandonment, or other disposal of
long-lived tangible assets arising from the acquisition, construction or
development and for normal operations of such assets. As at April 30, 2009,
any potential costs relating to the retirement of the Company's mineral
property interest has not yet been determined.
23
QUARTZ VENTURES, INC.
(An Exploration Stage Company)
Notes To The Financial Statements
April 30, 2009
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates.
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in United States dollars. In
accordance with Statement of Financial Accounting Standards No. 52,
"Foreign Currency Translation", foreign denominated monetary assets and
liabilities are translated into their United States dollar equivalents
using foreign exchange rates which prevailed at the balance sheet date. Non
monetary assets and liabilities are translated at the exchange rates
prevailing on the transaction date. Revenue and expenses are translated at
average rates of exchange during the year. Gains or losses resulting from
foreign currency transactions are included in results of operations.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of cash and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is management's opinion the Company
is not exposed to significant interest, currency or credit risks arising
from these financial instruments.
ENVIRONMENTAL COSTS
Environmental expenditures that relate to current operations are expensed
or capitalized as appropriate. Expenditures that relate to an existing
condition caused by past operations, and which do not contribute to current
or future revenue generation, are expensed. Liabilities are recorded when
environmental assessments and/or remedial efforts are probable, and the
cost can be reasonably estimated. Generally, the timing of these accruals
coincides with the earlier of completion of a feasibility study or the
Company's commitments to plan of action based on the then known facts.
INCOME TAXES
The Company follows the liability method of accounting for income taxes.
Under this method, deferred income tax assets and liabilities are
recognized for the estimated tax consequences attributable to differences
between the financial statement carrying values and their respective income
tax basis (temporary differences). The effect on deferred income tax assets
and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. At April 30, 2009, full deferred
tax asset valuation allowance has been provided and no deferred tax asset
has been recorded.
BASIC AND DILUTED LOSS PER SHARE
The Company computes loss per share in accordance with SFAS No. 128,
"Earnings per Share" which requires presentation of both basic and diluted
earnings per share on the face of the statement of operations. Basic loss
per share is computed by dividing net loss available to common shareholders
by the weighted average number of outstanding common shares during the
period. Diluted loss per share gives effect to all dilutive potential
common shares outstanding during the period. Dilutive loss per share
excludes all potential common shares if their effect is anti-dilutive.
The Company has no potential dilutive instruments and accordingly basic
loss and diluted loss per share are equal.
24
QUARTZ VENTURES, INC.
(An Exploration Stage Company)
Notes To The Financial Statements
April 30, 2009
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RESEARCH AND DEVELOPMENT
The Company accounts for research and development costs in accordance with
the Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 2 ("SFAS 2"), "Accounting for Research and
Development Costs". Under SFAS 2, all research and development costs must
be charged to expense as incurred. Accordingly, internal research and
development costs are expensed as incurred. Third-party research and
developments costs are expensed when the contracted work has been performed
or as milestone results have been achieved. Company-sponsored research and
development costs related to both present and future products are expensed
in the period incurred. The Company incurred expenditures $0 for the period
from July 22, 2005 (date of inception) to April 30, 2009.
REVENUE RECOGNITION
The Company will recognize revenue in accordance with Staff Accounting
Bulletin No. 104, REVENUE RECOGNITION ("SAB104"), which superseded Staff
Accounting Bulletin No. 101, REVENUE RECOGNITION IN FINANCIAL STATEMENTS
("SAB101"). SAB 101 requires that four basic criteria must be met before
revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred; (3) the selling price is fixed and
determinable; and (4) collectibility is reasonably assured. Determination
of criteria (3) and (4) are based on management's judgments regarding the
fixed nature of the selling prices of the products delivered and the
collectibility of those amounts. Provisions for discounts and rebates to
customers, estimated returns and allowances, and other adjustments are
provided for in the same period the related sales are recorded. The Company
will defer any revenue for which the product has not been delivered or is
subject to refund until such time that the Company and the customer jointly
determine that the product has been delivered or no refund will be
required.
SAB 104 incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"),
MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS. EITF 00-21 addresses accounting
for arrangements that may involve the delivery or performance of multiple
products, services and/or rights to use assets. The effect of implementing
EITF 00-21 will not have immediate impact on the Company's financial
position and results of operations
From the date of inception through April 30, 2009, the Company has not
generated any revenue to date.
ADVERTISING
The Company follows the policy of charging the costs of advertising to
expenses incurred. The Company incurred $0 in advertising costs during the
years ended April 30, 2009 and 2008.
LIQUIDITY
The Company has incurred net losses of $59,195 from its inception on July
22, 2005 through April 30, 2009. As of April 30, 2009, the Company's has
excess of current liabilities over its current assets by $26,195, with bank
overdraft representing $2,695.
STOCK-BASED COMPENSATION
In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment",
which replaced SFAS No. 123, "Accounting for Stock-Based Compensation" and
superseded APB Opinion No. 25, "Accounting for Stock Issued to Employees".
In January 2005, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 107, "Share-Based Payment", which
provides supplemental implementation guidance for SFAS No. 123R. SFAS No.
123R requires all share-based payments to employees, including grants of
employee stock options, to be recognized in the financial statements based
on the grant date fair value of the award. SFAS No. 123R was to be
effective for interim or annual reporting periods beginning on or after
June 15, 2005, but in April 2005 the SEC issued a rule that will permit
most registrants to implement SFAS No. 123R at the beginning of their next
fiscal year, instead of the next reporting period as required by SFAS No.
123R. The pro-forma disclosures previously permitted under SFAS No. 123 no
longer will be an alternative to financial statement recognition. Under
SFAS No. 123R, the Company must determine the appropriate fair value model
to be used for valuing share-based payments, the amortization method for
compensation cost and the transition method to be used at date of adoption.
25
QUARTZ VENTURES, INC.
(An Exploration Stage Company)
Notes To The Financial Statements
April 30, 2009
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The transition methods include prospective and retroactive adoption
options. Under the retroactive options, prior periods may be restated
either as of the beginning of the year of adoption or for all periods
presented. The prospective method requires that compensation expense be
recorded for all unvested stock options and restricted stock at the
beginning of the first quarter of adoption of SFAS No. 123R, while the
retroactive methods would record compensation expense for all unvested
stock options and restricted stock beginning with the first period
restated. The Company adopted the modified prospective approach of SFAS No.
123R for the year ended April 30, 2006. The Company did not record any
compensation expense for the year ended April 30, 2009 as there were no
stock options outstanding prior to the adoption or at April 30, 2009.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities - Including an Amendment of FASB
Statement No. 115" ("SFAS No. 159"). SFAS No. 159 permits entities to
choose to measure many financial instruments and certain other items at
fair value. Most of the provisions of SFAS No. 159 apply only to entities
that elect the fair value option. However, the amendment to SFAS No. 115
"Accounting for Certain Investments in Debt and Equity Securities" applies
to all entities with available-for-sale and trading securities. SFAS No.
159 is effective as of the beginning of an entity's first fiscal year that
begins after November 15, 2007. Early adoption is permitted as of the
beginning of a fiscal year that begins on or before November 15, 2007,
provided the entity also elects to apply the provision of SFAS No. 157,
"Fair Value Measurements". The adoption of SFAS No. 159 did not have a
material impact on the Company financial position, results of operations or
cash flows.
In June 2007, the FASB ratified the consensus in EITF Issue No. 07-3,
"Accounting for Nonrefundable Advance Payments for Goods or Services to be
Used in Future Research and Development Activities" (EITF 07-3), which
requires that nonrefundable advance payments for goods or services that
will be used or rendered for future research and development (R&D)
activities be deferred and amortized over the period that the goods are
delivered or the related services are performed, subject to an assessment
of recoverability. EITF 07-3 will be effective for fiscal years beginning
after December 15, 2007. The Company does not expect that the adoption of
EITF 07-3 will have a material impact on its financial position, results of
operations or cash flows.
SFAS No. 141(R), "Business Combinations" -- This statement includes a
number of changes in the accounting and disclosure requirements for new
business combinations occurring after its effective date. The changes in
accounting requirements include: acquisition costs will be expensed as
incurred; noncontrolling (minority) interests will be valued at fair value;
acquired contingent liabilities will be recorded at fair value; acquired
research and development costs will be recorded at fair value as an
intangible asset with indefinite life; restructuring costs will generally
be expensed subsequent to the acquisition date; and changes in deferred tax
asset valuation allowances and changes in income tax uncertainties after
the acquisition date will generally affect income tax expense. The
statement is effective for new business combinations occurring on or after
the first reporting period beginning on or after December 15, 2008. The
adoption of SFAS No. 141(R) is not expected to have a material impact on
our financial position, results of operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests
in Consolidated Financial Statements: An Amendment of ARB No. 51" -- This
statement changes the accounting and reporting for noncontrolling
(minority) interests in subsidiaries and for deconsolidation of a
subsidiary. Under the revised basis, the noncontrolling interest will be
shown in the balance sheet as a separate line in equity instead of as a
liability. In the income statement, separate totals will be shown for
consolidated net income including noncontrolling interest, noncontrolling
interest as a deduction, and consolidated net income attributable to the
controlling interest. In addition, changes in ownership interests in a
subsidiary that do not result in deconsolidation are equity transactions if
a controlling financial interest is retained. If a subsidiary is
deconsolidated, the parent company will now recognize gain or loss to net
income based on fair value of the noncontrolling equity at that date. The
statement is effective prospectively for fiscal years and interim periods
beginning on or after December 15, 2008 and earlier adoption is prohibited.
The adoption of SFAS No. 160 is not expected to have a material impact the
financial position, results of operations or cash flows.
26
QUARTZ VENTURES, INC.
(An Exploration Stage Company)
Notes To The Financial Statements
April 30, 2009
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In March 2008, the Financial Accounting Standards Board (the "FASB") issued
Statement on Financial Accounting Standards ("SFAS") No. 161, "Disclosures
about Derivative Instruments and Hedging Activities - An Amendment of FASB
Statement No. 133" ("SFAS 161"). SFAS 161 enhances required disclosures
regarding derivatives and hedging activities, including enhanced
disclosures regarding how: (a) an entity uses derivative instruments; (b)
derivative instruments and related hedged items are accounted for under
SFAS 133; and (c) derivative instruments and related hedged items affect an
entity's financial position, financial performance, and cash flows.
Specifically, SFAS No. 161 requires: disclosure of the objectives for using
derivative instruments in terms of underlying risk and accounting
designation; disclosure of the fair values of derivative instruments and
their gains and losses in a tabular format; disclosure of information about
credit-risk-related contingent features; and cross-reference from the
derivative footnote to other footnotes in which derivative-related
information is disclosed. SFAS 161 is effective for fiscal years and
interim periods beginning after November 15, 2008. The Company does not
expect that the adoption of this standard will have a material impact on
its financial position, results of operations or cash flows.
In May 2008, the FASB issued SFAS No. 162, "THE HIERARCHY OF GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES" ("SFAS No. 162"). SFAS No. 162 identifies
the sources of accounting principles and the framework for selecting the
principles used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with generally
accepted accounting principles (the GAAP hierarchy). SFAS No. 162 will
become effective 60 days following the SEC's approval of the Public Company
Accounting Oversight Board amendments to AU Section 411, "The Meaning of
Present Fairly in Conformity With Generally Accepted Accounting
Principles." The Company does not expect the adoption of SFAS No. 162 will
have a material effect on our financial position, results of operations or
cash flows.
In June 2008, the FASB ratified EITF No. 07-5, "Determining Whether an
Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock"
("EITF No. 07-5"). EITF No. 07-5 provides that an entity should use a
two-step approach to evaluate whether an equity-linked financial instrument
(or embedded feature) is indexed to its own stock, including evaluating the
instrument's contingent exercise and settlement provisions. It also
clarifies the impact of foreign currency denominated strike prices and
market-based employee stock option valuation instruments on the evaluation.
EITF No. 07-5 is effective for fiscal years beginning after December 15,
2008. We adopted EITF No. 07-5 effective on January 1, 2009 and the
adoption had no material effect on our financial position, results of
operations or cash flows.
In April 2009, the FASB issued FSP FAS 157-4, Determining Fair Value When
the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly ,
provides guidelines for making fair value measurements more consistent with
the principles presented in FASB Statement No. 157 ("SFAS 157"), Fair Value
Measurements . FSP FAS 157-4 reaffirms what SFAS 157 states is the
objective of fair value measurement, to reflect how much an asset would be
sold for in an orderly transaction at the date of the financial statements
under current market conditions. Specifically, it reaffirms the need to use
judgment to ascertain if a formerly active market has become inactive and
in determining fair values when markets have become inactive. The Company
does not expect this pronouncement to have a material impact on its results
of operations, financial position, or cash flows
In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim
Disclosures about Fair Value of Financial Instruments, enhances consistency
in financial reporting by increasing the frequency of fair value
disclosures. This relates to fair value disclosures for any financial
instruments that are not currently reflected on the balance sheet at fair
value. FSP FAS 107-1 and APB 28-1 now require that fair value disclosures
be made on a quarterly basis, providing qualitative and quantitative
information about fair value estimates for all those financial instruments
not measured on the balance sheet at fair value. The Company does not
expect this pronouncement to have a material impact on its results of
operations, financial position, or cash flows.
27
QUARTZ VENTURES, INC.
(An Exploration Stage Company)
Notes To The Financial Statements
April 30, 2009
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, Recognition and
Presentation of Other-Than-Temporary Impairments , provides additional
guidance designed to create greater clarity and consistency in accounting
for and presenting impairment losses on securities. This FSP is intended to
bring greater consistency to the timing of impairment recognition and to
provide greater clarity to investors about the credit and noncredit
components of impaired debt securities that are not expected to be sold.
This FSP also requires increased and timelier disclosures sought by
investors regarding expected cash flows, credit losses, and an aging of
securities with unrealized losses. The Company does not expect this
pronouncement to have a material impact on its results of operations,
financial position, or cash flows.
Other recent accounting pronouncements issued by the FASB (including its
Emerging Issues Task Force), the AICPA, and the SEC did not, or are not
believed by management to, have a material impact on the Company's present
or future financial statements.
3. MINERAL INTERESTS
On January 15, 2007, the Company entered into a purchase and sale agreement
to acquire a 100% interest in two mineral claims located in the Alberni
Mining Division, BC for total consideration of $8,000. The mineral interest
is held in trust for the Company by the vendor of the property. Upon
request from the Company the title will be recorded in the name of the
Company with the appropriate mining recorder. The property is good standing
as at April 30, 2009.
4. COMMON STOCK
The total number of common shares authorized that may be issued by the
Company is 75,000,000 shares with a par value of one tenth of one cent
($0.001) per share and no other class of shares is authorized. As of April
30, 2009 and April 30, 2008 the company has issued and outstanding
5,440,000 shares of common stock.
During the year ended April 30, 2006, the Company issued 5,440,000 shares
of common stock for total cash proceeds of $33,000. At April 30, 2009,
there were no outstanding stock options or warrants.
5. LOANS PAYABLE-SHAREHOLDER
As at April 30, 2009, a major shareholder loaned $23,500 to the Company,
bearing no interest and with no specific terms of repayments. Subsequent to
April 30, 2009 there was a change in ownership, refer to Note 7 Subsequent
Event
28
QUARTZ VENTURES, INC.
(An Exploration Stage Company)
Notes To The Financial Statements
April 30, 2009
- --------------------------------------------------------------------------------
6. INCOME TAXES
As of April 30, 2009, the Company ha ss carry forwards of approximately
$60,000 that may be available to reduce future years' taxabd net operating
lo2029. Future tax benefits which may arise as a result of these losses
have not been recognized inle income through tements, as their realization
is determined not likely to occur and accordingly, the Company has these
financial stan allowance for the deferred tax asset relating to these tax
loss carry-forwards. Components of d recorded a valuatios of April 30, 2009
are as follows:
Non current:
Net operating loss carryforward $ 20,100
Valuation allowance (20,100)
--------
Net deferred tax asset $ --
========
In June 2006, the FASB issued FASB . 48, Accounting for Uncertainty in
Income Taxes-an interpretation of FASB Statement No. Interpretation NoN 48
prescribes a recognition threshold and measurement attribute for the
financial statement 109 ("FIN 48"). FIurement of a tax position taken or
expected to be taken in a tax return. FIN 48 also provides guirecognition
and meason, classification, treatment of interest and penalties, and
disclosure of such positions. Efdance on derecogniti 2007, the Company
adopted the provisions of FIN 48, as required. As a result of implementing
Ffective January 1, n no adjustment to the Company's financial statements
and the adoption of FIN 48 did not have a maIN 48, there has bee Company's
financial statements for the year ended April 30, 2009. terial effect on
the
7. SUBSEQUENT EVENT
APPOINTMENT OF PRINCIPAL OFFICERS
Effective on June 4, 2009, the Board of Directors (the "Board") of Quartz
Ventures Inc., a Nevada corporation (the "Company") accepted the
resignation of Fred DaSilvia as the President/Chief Executive
Officer/Treasurer/Secretary/Chief Financial Officer and as a member of the
Company's Board of Directors. The shareholders of the Company pursuant to
written consent of shareholders dated June 4, 2009 removed Rick Shykora as
a member of the Company's Board of Directors. Effective as of June 4, 2009,
the Board of Directors accepted the consent of George Polyhronopoulos to
act as the President/Chief Executive Officer/Treasurer/Secretary/Chief
Financial Officer and as a member of the Board of Directors. In accordance
with a written consent of resolutions of the Board of Directors unanimously
signed by all the members of the Board of Directors of the Company, Mr.
Polyhronopoulos was duly appointed as the President/Chief Executive
Officer/Secretary/Treasurer/Chief Financial Officer and a member of the
Board of Directors. Therefore, as of the date of this Current Report, the
Company's Board of Directors is comprised of Georgios Polyhronopoulos.
CHANGES IN CONTROL OF THE COMPANY
Effective on June 4, 2009, there was a change in control of the Company. In
accordance with a verbal arrangement between the Company and a certain
shareholder, Glenn Ennis, who is the record holder of an aggregate of
3,000,000 shares of restricted common stock (55.1% of the total issued and
outstanding), Mr. Ennis returned to the Company the 3,000,000 shares of
common stock for $3,000. The share certificate issued to Mr. Ennis was
cancelled and the 3,000,000 shares of common stock were returned to
treasury.
Effective as of June 4, 2009, Mr. Polyhronopoulos acquired an aggregate of
3,000,000 shares of restricted common stock of the Company in consideration
of $25,000 in accordance with the terms and provisions of a subscription
agreement. The shares were acquired under the transactional exemption of
Section 4(2) of the Securities Act of 1933, as amended.
29
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no disagreements related to accounting principles or practices,
financial statement disclosure, internal controls or auditing scope or procedure
during the two fiscal years and interim periods, including the interim period up
through the date the relationship ended.
ITEM 9A(T). CONTROLS AND PROCEDURES
MANAGEMENT'S REPORT ON DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed under the SECURITIES
EXCHANGE ACT OF 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to our management, including our president (who is acting as our
principal executive officer and our principal financial officer and principle
accounting officer) to allow for timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, our
management recognizes that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the
desired control objectives, and our management is required to apply its judgment
in evaluating the cost-benefit relationship of possible controls and procedures.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation. Projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
As of April 30, 2009, the end of our fiscal year covered by this report, we
carried out an evaluation, under the supervision and with the participation of
our president (who is acting as our principal executive officer and our
principal financial officer and principle accounting officer), of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, our president (who is acting as our
principal executive officer and our principal financial officer and principle
accounting officer) concluded that our disclosure controls and procedures were
effective as of the end of the period covered by this annual report.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
control procedures. The objectives of internal control include providing
management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition, and that
transactions are executed in accordance with management's authorization and
recorded properly to permit the preparation of consolidated financial statements
in conformity with accounting principles generally accepted in the United
States. Our management assessed the effectiveness of our internal control over
financial reporting as of April 30, 2009. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO") in INTERNAL CONTROL-INTEGRATED
FRAMEWORK. Our management has concluded that, as of April 30, 2009, our internal
control over financial reporting is effective in providing reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with US generally
accepted accounting principles. Our management reviewed the results of their
assessment with our Board of Directors.
This annual report does not include an attestation report of our company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by our company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit our company to provide only management's
report in this annual report.
30
INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS
Internal control over financial reporting has inherent limitations which include
but is not limited to the use of independent professionals for advice and
guidance, interpretation of existing and/or changing rules and principles,
segregation of management duties, scale of organization, and personnel factors.
Internal control over financial reporting is a process which involves human
diligence and compliance and is subject to lapses in judgment and breakdowns
resulting from human failures. Internal control over financial reporting also
can be circumvented by collusion or improper management override. Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements on a timely basis, however these inherent limitations
are known features of the financial reporting process and it is possible to
design into the process safeguards to reduce, though not eliminate, this risk.
Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and
presentation. Projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal controls over financial reporting
that occurred during the three month period ended April 30, 2009 that have
materially or are reasonably likely to materially affect, our internal controls
over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
All directors of our company hold office until the next annual meeting of the
security holders or until their successors have been elected and qualified. The
officers of our company are appointed by our board of directors and hold office
until their death, resignation or removal from office. Our directors and
executive officers, their ages, positions held, and duration as such, are as
follows:
Position Held Date First
Name with the Company Age Elected or Appointed
---- ---------------- --- --------------------
Georgios President, Chief Executive 51 June 4, 2009
Polyhronopoulos Officer, Treasury,
Secretary, Chief Financial
Officer and Director
BUSINESS EXPERIENCE
The following is a brief account of the education and business experience during
at least the past five years of each director, executive officer and key
employee of our company, indicating the person's principal occupation during
that period, and the name and principal business of the organization in which
such occupation and employment were carried out.
GEORGE POLYHRONOPOULOS - PRESIDENT, CHIEF EXECUTIVE OFFICER, TREASURY,
SECRETARY, CHIEF FINANCIAL OFFICER AND DIRECTOR
Since 2003, Mr. Polyhronopoulos has been the President and sole shareholder of
Aegean Capital Management. Additionally, since 2002, he has been the President
of Exo Performance Armor Ltd.
31
Mr. Polyhronopoulos graduated from Kitsilano Secondary School in 1972.
FAMILY RELATIONSHIPS
There are no family relationships between any of our directors, executive
officers and proposed directors or executive officers.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
None of our directors, executive officers, promoters or control persons has been
involved in any of the following events during the past five years:
1. any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending
criminal proceeding, excluding traffic violations and other minor
offences;
3. being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; or
4. being found by a court of competent jurisdiction in a civil action,
the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended, or
vacated.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our executive
officers and directors and persons who own more than 10% of our common stock to
file with the Securities and Exchange Commission initial statements of
beneficial ownership, reports of changes in ownership and annual reports
concerning their ownership of our common stock and other equity securities, on
Forms 3, 4 and 5 respectively. Executive officers, directors and greater than
10% shareholders are required by the SEC regulations to furnish us with copies
of all Section 16(a) reports that they file.
Based solely on our review of the copies of such forms received by us, or
written representations from certain reporting persons, we believe that during
fiscal year ended April 30, 2009, all filing requirements applicable to our
officers, directors and greater than 10% percent beneficial owners were complied
with, with the exception of the following:
Number of Transactions Failure to File
Number of Late Not Reported on Required
Name Reports a Timely Basis Forms
---- ------- -------------- -----
Georgios Polyhronopoulos 1 (1) 1 (1) 1 (1)
- ----------
(1) The executive officer, director or holder of 10% or more of our common
stock filed a late Form 3 -Initial Statement of Beneficial Ownership of
Securities.
CODE OF ETHICS
Our company has not yet adopted a Code of Ethics.
32
AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that it does not have a member of its
audit committee that qualifies as an "audit committee financial expert" as
defined in Item 407(d)(5)(ii) of Regulation S-K.
We believe that the members of our board of directors are collectively capable
of analyzing and evaluating our financial statements and understanding internal
controls and procedures for financial reporting. We believe that retaining an
independent director who would qualify as an "audit committee financial expert"
would be overly costly and burdensome and is not warranted in our circumstances
given the early stages of our development and the fact that we have not
generated any material revenues to date. In addition, we currently do not have
nominating, compensation or audit committees or committees performing similar
functions nor do we have a written nominating, compensation or audit committee
charter. Our board of directors does not believe that it is necessary to have
such committees because it believes the functions of such committees can be
adequately performed by our board of directors.
ITEM 11. EXECUTIVE COMPENSATION
The particulars of the compensation paid to the following persons:
(a) our principal executive officer;
(b) each of our two most highly compensated executive officers who were
serving as executive officers at the end of the years ended April 30,
2009 and 2008; and
(c) up to two additional individuals for whom disclosure would have been
provided under (b) but for the fact that the individual was not
serving as our executive officer at the end of the years ended April
30, 2009 and 2008,
who we will collectively refer to as the named executive officers of our
company, are set out in the following summary compensation table, except that no
disclosure is provided for any named executive officer, other than our principal
executive officers, whose total compensation did not exceed $100,000 for the
respective fiscal year:
Change in
Pension
Value and
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- ---- --------- -------- --------- --------- --------------- ----------- --------------- ---------
George
Polyhronopoulos(1) 2009 N/A N/A N/A N/A N/A N/A N/A N/A
President, Chief 2008 N/A N/A N/A N/A N/A N/A N/A N/A
Executive Officer,
Secretary,
Treasurer, Chief
Financial Officer
and Director
Fred DaSilva(2) 2009 N/A N/A N/A N/A N/A N/A N/A N/A
Former President 2008 N/A N/A N/A N/A N/A N/A N/A N/A
and Director
Richard Goodhart(3) 2009 N/A N/A N/A N/A N/A N/A N/A N/A
Former President 2008 N/A N/A N/A N/A N/A N/A N/A N/A
and Director
- ----------
(1) Mr. Polyhronopoulos was appointed Chief Executive Officer, Chief Financial
Officer, Secretary, Treasurer and as a director on June 4, 2009.
33
(2) Mr. DaSilva was appointed Chief Executive Officer, Chief Financial Officer,
Secretary, Treasurer and as a director on January 20, 2009 and resigned on
June 4, 2009.
(3) Mr. Goodhart was appointed Chief Executive Officer, Chief Financial
Officer, Secretary, Treasurer and as a director on July 15, 2008 and
resigned on January 20, 2009.
STOCK OPTION GRANTS TO OUR NAMED EXECUTIVE OFFICERS
Our company did not grant any stock options to any named executive officers
during the year ended April 30, 2009.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
There were no outstanding equity awards granted to any named executive officer
as of April 30, 2009.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
There were no options outstanding, and hence no options exercised, by any named
executive officers during the year ended April 30, 2009.
COMPENSATION OF DIRECTORS
We do not have any agreements for compensating our directors for their services
in their capacity as directors, although such directors are expected in the
future to receive stock options to purchase shares of our common stock as
awarded by our board of directors.
PENSION, RETIREMENT OR SIMILAR BENEFIT PLANS
There are no arrangements or plans in which we provide pension, retirement or
similar benefits for directors or executive officers. We have no material bonus
or profit sharing plans pursuant to which cash or non-cash compensation is or
may be paid to our directors or executive officers, except that stock options
may be granted at the discretion of the board of directors or a committee
thereof.
INDEBTEDNESS OF DIRECTORS, SENIOR OFFICERS, EXECUTIVE OFFICERS AND OTHER
MANAGEMENT
None of our directors or executive officers or any associate or affiliate of our
company during the last two fiscal years, is or has been indebted to our company
by way of guarantee, support agreement, letter of credit or other similar
agreement or understanding currently outstanding.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth, as of August 6, 2009, certain information with
respect to the beneficial ownership of our common shares by each shareholder
known by us to be the beneficial owner of more than 5% of our common shares, as
well as by each of our current directors and executive officers as a group. Each
person has sole voting and investment power with respect to the shares of common
stock, except as otherwise indicated. Beneficial ownership consists of a direct
interest in the shares of common stock, except as otherwise indicated.
Name and Address Amount and Nature of Percentage
of Beneficial Owner Beneficial Ownership of Class(1)
------------------- -------------------- -----------
Georgio Polyhronopoulos 3,000,000 55.1%
29115 N 144th Street
Scottsdale AZ 85262
34
Name and Address Amount and Nature of Percentage
of Beneficial Owner Beneficial Ownership of Class(1)
------------------- -------------------- -----------
Directors and Executive Officers
as a Group(1) 3,000,000 55.1%
- ----------
(1) Under Rule 13d-3, 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, 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
August 6, 2009. As of August 6, 2009, there were 5,440,000 shares of our
company's common stock issued and outstanding
CHANGES IN CONTROL
We are unaware of any contract or other arrangement the operation of which may
at a subsequent date result in a change in control of our company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Except as disclosed herein, no director, executive officer, shareholder holding
at least 5% of shares of our common stock, or any family member thereof, had any
material interest, direct or indirect, in any transaction, or proposed
transaction since the year ended April 30, 2009, in which the amount involved in
the transaction exceeded or exceeds the lesser of $120,000 or one percent of the
average of our total assets at the year end for the last three completed fiscal
years.
DIRECTOR INDEPENDENCE
We currently act with one (1) director, consisting of George Polyhronopoulos. We
have determined that we do not have an "independent directors" as defined in
NASDAQ Marketplace Rule 4200(a)(15).
Currently our audit committee consists of our entire board of directors. We
currently do not have nominating, compensation committees or committees
performing similar functions. There has not been any defined policy or procedure
requirements for shareholders to submit recommendations or nomination for
directors.
Our board of directors has determined that it does not have a member of its
audit committee who qualifies as an "audit committee financial expert" as
defined in as defined in Item 407(d)(5)(ii) of Regulation S-K.
From inception to present date, we believe that the members of our audit
committee and the board of directors have been and are collectively capable of
analyzing and evaluating our financial statements and understanding internal
controls and procedures for financial reporting.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The aggregate fees billed for the most recently completed fiscal year ended
April 30, 2009 and for fiscal year ended April 30, 2008 for professional
services rendered by the principal accountant for the audit of our annual
financial statements and review of the financial statements included in our
quarterly reports on Form 10-Q and services that are normally provided by the
35
accountant in connection with statutory and regulatory filings or engagements
for these fiscal periods were as follows:
Year Ended
April 30,
2009 2008
------- -------
Audit Fees $11,500 $11,500
Audit Related Fees 0 0
Tax Fees 0 0
All Other Fees 0 0
------- -------
Total $11,500 $11,500
======= =======
Effective May 6, 2003, the Securities and Exchange Commission adopted rules that
require that before our independent auditors are engaged by us to render any
auditing or permitted non-audit related service, the engagement be:
* approved by our audit committee (which consists of our entire board of
directors); or
* entered into pursuant to pre-approval policies and procedures
established by the board of directors, provided the policies and
procedures are detailed as to the particular service, the board of
directors is informed of each service, and such policies and
procedures do not include delegation of the board of directors'
responsibilities to management.
Our board of directors pre-approves all services provided by our independent
auditors. All of the above services and fees were reviewed and approved by the
board of directors either before or after the respective services were rendered.
Our board of directors has considered the nature and amount of fees billed by
our independent auditors and believes that the provision of services for
activities unrelated to the audit is compatible with maintaining our independent
auditors' independence.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
(1) Financial statements for our company are listed in the index under
Item 8 of this document
(2) All financial statement schedules are omitted because they are not
applicable, not material or the required information is shown in the
financial statements or notes thereto.
(b) Exhibits
Exhibit
Number Description
- ------ -----------
(3) ARTICLES OF INCORPORATION AND BY-LAWS
3.1 Articles of Incorporation (incorporated by reference from our
Registration Statement on Form S-1 filed on August 4, 2008)
36
Exhibit
Number Description
- ------ -----------
3.2 Bylaws (incorporated by reference from our Registration Statement on
Form S-1 filed on August 4, 2008)
(10) MATERIAL CONTRACTS
10.1 Purchase and Sale Agreement dated January 15, 2007 (incorporated by
reference from our Registration Statement on Form S-1 filed on August
4, 2008)
10.2 Form of Private Placement Subscription Agreement (incorporated by
reference from our Registration Statement on Form S-1 filed on August
4, 2008)
(31) RULE 13A-14(D)/15D-14(D) CERTIFICATIONS
31.1* Section 302 Certification
(32) SECTION 1350 CERTIFICATIONS
32.1* Section 906 Certification
- ----------
* Filed herewith.
37
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
QUARTZ VENTURES INC.
/s/ Georgios Polyhronopoulos
---------------------------------------------------------
Georgios Polyhronopoulos
President, Chief Executive Officer, Secretary, Treasurer,
Chief Financial Officer and Director
(Principal Executive Officer, Principal Financial Officer
and Principal Accounting Officer)
Date: August 11, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Georgios Polyhronopoulos President, Chief Executive Officer, August 11, 2009
- ---------------------------------- Secretary, Treasurer, Chief Financial
Georgios Polyhronopoulos Officer and Director
38