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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT #3 TO
FORM SB-2
Securities Commission File Number: 333-119823
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
DYNAMIC GOLD CORP.
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(Exact name of Registrant as specified in its charter)
NEVADA 1000 Applied For
- ------------- --------------------------- ----------------
(State or other Standard Industrial IRS Employer
jurisdiction of Classification Identification
incorporation or Number
organization)
DYNAMIC GOLD CORP.
Tim Coupland, President
675 West Hastings Street, Suite 200
Vancouver, British Columbia
Canada V6B 1N2
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(Name and address of principal (Zip Code)
executive offices)
Val-U-Corp Services Inc.
1802 N Carson Street, Suite 212
Carson City, Nevada, USA
Telephone: 775-887-8853 89701
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(Name, address and telephone (Zip Code)
number of agent for service)
Registrant's telephone number,
including area code: (604)681-3131
Fax:(604)801-5499
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Approximate date of
proposed sale to the public: as soon as practicable after
the effective date of this
Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |__|
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following. |__|
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES OFFERING AGGREGATE AMOUNT OF
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE (1) PRICE (2) FEE (2)
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Common Stock 4,515,000 $0.20 $903,000 $114.41
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(1) Based on the last sales price on June 25, 2004
(2) Estimated solely for the purpose of calculating the registration
fee in accordance with Rule 457 under the Securities Act.
No exchange or over-the-counter market exists for our common stock. The offering
price was arbitrarily established by management and does not reflect market
value, asserts or any established criteria of valuation.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
SUBJECT TO COMPLETION, DATED March 16, 2005
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PROSPECTUS
DYNAMIC GOLD CORP.
4,515,000 SHARES
COMMON STOCK
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The selling shareholders named in this prospectus are offering all of the shares
of common stock offered through this prospectus.
Our common stock is presently not traded on any market or securities exchange.
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THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. SEE SECTION ENTITLED "RISK FACTORS" ON PAGES 6 - 10.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The selling shareholders will sell our shares at $0.20 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices. There is no assurance of when, if ever,
our stock will be listed on an exchange.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
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The Date Of This Prospectus Is: March 16, 2005
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Table Of Contents
PAGE
Summary .......................................................................5
Risk Factors ..................................................................7
- If we do not obtain additional financing, our business
will fail ................................................................7
- Because we have not commenced business operations, we face
a high risk of business failure ..........................................7
- The probability of an individual mineral exploration
prospect, such as the Sobeski Lake Gold property,
containing reserves is extremely remote. As a result, you
could lose your entire investment.........................................8
- Because of the speculative nature of exploration of mining
properties, there is substantial risk that our business
will fail ................................................................8
- Because of the inherent dangers involved in mineral
exploration, there is a risk that we may incur liability or
damages as we conduct our business .......................................8
- Our independent auditor believes there is substantial
doubt that we will continue as a going concern. If we do
not continue as a going concern, you will lose your investment.......... 9
- Because our directors own 52.54% of our outstanding stock,
they could control and make corporate decisions that may
be disadvantageous to other minority stockholders ....................... 9
- Because the claims comprising the Sobeski Lake Gold property
are not registered in our name, we may incur significant
expenses in resolving any title disputes..................................9
- Because our directors have other business interests, they
May not be able or willing to devote a sufficient amount of
Time to our business operations, causing our business to
fail......................................................................9
- If a market for our common stock does not develop,
shareholders may be unable to sell their shares .........................10
Forward-Looking Statements....................................................10
Use of Proceeds ..............................................................10
Determination of Offering Price ..............................................10
Dilution .....................................................................10
Selling Shareholders .........................................................10
Plan of Distribution .........................................................15
Legal Proceedings ............................................................17
Directors, Executive Officers, Promoters and Control Persons..................17
Security Ownership of Certain Beneficial Owners and Management................19
Description of Securities ....................................................20
Interest of Named Experts and Counsel ........................................21
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities ...................................................22
Organization Within Last Five Years ..........................................22
Description of Business ......................................................22
Plan of Operations ...........................................................29
Description of Property ......................................................31
Certain Relationships and Related Transactions ...............................31
Market for Common Equity and Related Stockholder Matters .....................32
Executive Compensation .......................................................33
Financial Statements .........................................................34
Changes in and Disagreements with Accountants ................................51
Available Information ........................................................51
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Summary
Prospective investors are urged to read this prospectus in its entirety.
We were incorporated in the State of Nevada on January 21, 2004. Our principal
offices are located at 675 West Hastings Street, Suite 200 Vancouver, British
Columbia, Canada, V6B 1N2. Our telephone number is (604) 681-3131.
Our company intends to commence operations in the business of mineral property
exploration. To date, we have not conducted any exploration on our sole mineral
claims interest, the Sobeski Lake Gold property located in the Red Lake Mining
District in the province of Ontario, Canada. We have the right to explore for
and extract minerals from the four claims comprising the Sobeski Lake Gold
property. The registered owner of the mineral claims, Dan Patrie Exploration
Ltd., holds these rights trust for us. We do not own any real property interest
in the land covered by the claims.
As an exploration stage corporation, we are engaged in the search for mineral
deposits (reserves). We are not a development stage company involved in the
preparation of an established commercially minable deposit for its extraction or
a production stage company engaged in the exploitation of a mineral deposit.
We acquired our interest in and to four mineral claims, known as Sobeski Lake
Gold property, located in the Red Lake Mining District in the province of
Ontario, Canada, for a $3,500 cash payment. Dan Patrie Exploration Ltd. remains
the registered owner of the mineral claims.
Our objective is to conduct mineral exploration activities on the Sobeski Lake
Gold property in order to assess whether it possesses economic gold reserves. We
have not yet identified any economic mineralization on the property. "Economic
mineralization" means that we have discovered sufficient gold content in the
rocks on the property so that operating a mine to extract the gold from the
surrounding rock would likely produce a profit. Our proposed exploration program
is designed to search for an economic mineral deposit.
We have been operating at a loss since our inception and have not yet commenced
business operations. Our independent accountant has issued a opinion that
expresses doubt about of ability to continue as a going concern. In order to
fund future operations, we will be relying upon the sale of additional
securities in our capital, as well as management loans.
The Offering:
Securities Being Offered Up to 4,515,000 shares of common stock.
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Offering Price The selling shareholders will sell our shares at
$0.20 per share until our shares are quoted on the
OTC Bulletin Board, and thereafter at prevailing
market prices or privately negotiated prices. We
determined this offering price based upon the price
of the last sale of our common stock to investors.
Terms of the Offering The selling shareholders will
determine when and how they will sell the common
stock offered in this prospectus.
Termination of the Offering The offering will conclude when all
of the 4,515,000 shares of common stock have been
sold, the shares no longer need to be registered to
be sold or we decide at any time to terminate the
registration of the shares at our sole discretion.
In any event, the offering shall be terminated no
later than two years from the effective date of
this registration statement.
Securities Issued
And to be Issued 9,515,000 shares of our common stock
are issued and outstanding as of the date of this
prospectus. All of the common stock to be sold
under this prospectus will be sold by existing
shareholders.
Use of Proceeds We will not receive any proceeds from
the sale of the common stock by the selling
shareholders.
Summary Financial Information
Balance Sheet
December 31, 2004
Cash $23,048
Total Assets $23,408
Liabilities $10,443
Total Stockholders' Equity $12,605
Statement of Operations
From Incorporation on
January 21, 2004 to December 31 2004
Revenue $ 0
Net Loss ($17,895)
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Risk Factors
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information
in this prospectus before investing in our common stock. These constitute
all of the material risks relating to such an investment. If any of the
following risks occur, our business, operating results and financial condition
could be seriously harmed. The trading price of our common stock could decline
due to any of these risks, and you may lose all or part of your investment.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
Our current operating funds are less than necessary to complete all intended
exploration of the Sobeski Lake Gold property, and therefore we will need to
obtain additional financing in order to complete our business plan. As of March
15, 2005, we had cash in the amount of $22,152. We currently do not have any
operations and we have no income.
Our business plan calls for significant expenses in connection with the
exploration of the Sobeski Lake Gold property. We have sufficient funds to
conduct an initial phase of exploration on the property estimated to cost
$5,000. However, we will require additional financing of $210,000 to complete
the balance of the recommended stage one work program and for the stage two
drill program and significant additional funding in order to determine whether
the property contains economic mineralization. We will also require additional
financing if the costs of the exploration of the Sobeski Lake Gold property are
greater than anticipated.
We will require additional financing to sustain our business operations if we
are not successful in earning revenues once exploration is complete. We do not
currently have any arrangements for financing and we can provide no assurance to
investors that we will be able to find such financing if required. Obtaining
additional financing would be subject to a number of factors, including the
market price for gold, investor acceptance of our property and general market
conditions. These factors may make the timing, amount, terms or conditions of
additional financing unavailable to us.
The most likely source of future funds presently available to us is through the
sale of equity capital or loans from our directors. Any sale of share capital
will result in dilution to existing shareholders. The only other anticipated
alternative for the financing of further exploration would be our sale of a
partial interest in the Sobeski Lake Gold property to a third party in exchange
for cash or exploration expenditures, which is not presently contemplated.
BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF
BUSINESS FAILURE.
We have not yet commenced exploration on the property. Accordingly, we have no
way to evaluate the likelihood that our business will be successful. To date, we
have been involved primarily in organizational activities and the acquisition of
our mineral property. We have not earned any revenues as of the date of this
prospectus.
Potential investors should be aware of the difficulties normally encountered by
new mineral exploration companies and the high rate of failure of such
enterprises. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.
-7-
Prior to completion of our exploration stage, we anticipate that we will incur
increased operating expenses without realizing any revenues. If our exploration
programs are successful in establishing minerals of commercial tonnage and
grade, we will require additional funds in order to further develop the
property.
We expect to incur significant losses into the foreseeable future. We recognize
that if we are unable to generate significant revenues from development of the
Sobeski Lake Gold property and the production of minerals from the claims, we
will not be able to earn profits or continue operations.
There is no history upon which to base any assumption as to the likelihood that
we will prove successful, and we can provide investors with no assurance that we
will generate any operating revenues or ever achieve profitable operations. If
we are unsuccessful in addressing these risks, our business will most likely
fail.
THE PROBABILITY OF AN INDIVIDUAL MINERAL EXPLORATION PROSPECT, SUCH AS THE
SOBESKI LAKE GOLD PROPERTY, CONTAINING RESERVES IS EXTREMELY REMOTE. AS A
RESULT, YOU COULD LOSE YOUR ENTIRE INVESTMENT.
Very few exploration stage mineral properties, such as the Sobeski Lake Gold
property contain sufficient quantities of mineralization to constitute a
reserve. A "reserve" is that part of a mineral deposit which could be
economically and legally extracted or produced.
In all probability, the Sobeski Lake Gold property does not contain any reserves
and all funds that we intend to spend on its exploration will be ultimately
lost.
BECAUSE OF THE SPECULATIVE NATURE OF EXPLORATION OF MINING PROPERTIES, THERE IS
A SUBSTANTIAL RISK THAT OUR BUSINESS WILL FAIL.
The search for valuable minerals as a business is extremely risky. We can
provide investors with no assurance that our mineral claims contain economic
mineralization of gold.
Exploration for minerals is a speculative venture necessarily involving
substantial risk. Our exploration of the Sobeski Lake Gold property may not
result in the discovery of commercial quantities of mineralization. Problems
such as unusual or unexpected formations and other conditions are involved in
mineral exploration and often result in unsuccessful exploration efforts. In
such a case, we would be unable to complete our business plan.
BECAUSE OF THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION, THERE IS A RISK
THAT WE MAY INCUR LIABILITY OR DAMAGES AS WE CONDUCT OUR BUSINESS.
The search for valuable minerals involves numerous hazards. As a result, we may
become subject to liability for such hazards, including pollution, cave-ins and
other hazards against which we cannot insure or against which we may elect not
to insure. The payment of such liabilities may have a material adverse effect on
our financial position.
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OUR INDEPENDENT AUDITOR BELIEVES THERE IS SUBSTANTIAL DOUBT THAT WE WILL
CONTINUE AS A GOING CONCERN. IF WE DO NOT CONTINUE AS A GOING CONCERN, YOU WILL
LOSE YOUR INVESTMENT.
The Independent Auditor's Report to our audited financial statements for the
period ended June 30, 2004, indicates that there are a number of factors that
raise substantial doubt about our ability to continue as a going concern. Such
factors identified in the report are our net loss position, our failure to
attain profitable operations and our dependence upon obtaining adequate
financing. If we are not able to continue as a going concern, it is likely
investors will lose their investments.
BECAUSE OUR DIRECTORS OWN 52.54% OF OUR OUTSTANDING COMMON STOCK, THEY COULD
MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO OTHER
MINORITY SHAREHOLDERS.
Our directors own approximately 52.54% of the outstanding shares of our common
stock. Accordingly, they will have a significant influence in determining the
outcome of all corporate transactions or other matters, including mergers,
consolidations, and the sale of all or substantially all of our assets. They
will also have the power to prevent or cause a change in control. The interests
of our directors may differ from the interests of the other stockholders and
thus result in corporate decisions that are disadvantageous to other
shareholders.
BECAUSE THE CLAIMS COMPRISING THE SOBESKI LAKE GOLD PROPERTY ARE NOT REGISTERED
IN OUR NAME, WE MAY INCUR SIGNIFICANT EXPENSES IN RESOLVING ANY TITLE DISPUTES.
The claims comprising the Sobeski Lake Gold are registered in the name of Dan
Patrie Exploration Ltd., the company that sold the claims to us. This company
holds these claims in trust for us. If the company becomes bankrupt or transfers
the claims to a third party, we may incur significant legal expenses in
enforcing our interest in the claims in Ontario courts. In such circumstances,
we will have to lead evidence in court that demonstrates our interest in the
claims. We would achieve this by providing the court with a copy of our
agreement with the Dan Patrie Exploration Ltd. whereby we acquired the claims.
We may have the claims registered in our name by applying for extra-provincial
registration with the Ontario provincial government and by filing an application
for transfer of title with the Ontario Ministry of Northern Development and
Mines. However, we do not presently intend to register the claims in this manner
due to the expense involved. The cost of registration would be about $2,000.
BECAUSE OUR DIRECTORS HAVE OTHER BUSINESS INTERESTS, THEY MAY NOT BE ABLE OR
WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATIONS,
CAUSING OUR BUSINESS TO FAIL.
Our president, Mr. Tim Coupland and our secretary, Mr. Brian Game, respectively
devote 25% and 10% of their business time to our affairs.
It is possible that the demands on Messrs. Coupland and Game from their other
obligations could cause either of them to be unable to devote sufficient time to
the management of our business. In addition, Mr. Tim Coupland and Mr. Brian Game
may not possess sufficient time for our business if the demands of managing our
business increased substantially beyond current levels.
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IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, SHAREHOLDERS MAY BE UNABLE TO
SELL THEIR SHARES.
There is currently no market for our common stock and we can provide no
assurance that a market will develop. We currently plan to apply for listing of
our common stock on the over the counter bulletin board upon the effectiveness
of the registration statement, of which this prospectus forms a part. However,
we can provide investors with no assurance that our shares will be traded on the
bulletin board or, if traded, that a public market will materialize. If no
market is ever developed for our shares, it will be difficult for shareholders
to sell their stock. In such a case, shareholders may find that they are unable
to achieve benefits from their investment.
Forward-Looking Statements
This prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results are most likely to differ materially from those anticipated in
these forward-looking statements for many reasons, including the risks faced by
us described in the "Risk Factors" section and elsewhere in this prospectus.
Use Of Proceeds
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling shareholders.
Determination Of Offering Price
The selling shareholders will sell our shares at $0.20 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices. We determined this offering price, based
upon the price of the last sale of our common stock to investors. There is no
assurance of when, if ever, our stock will be listed on an exchange.
Dilution
The common stock to be sold by the selling shareholders is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to our
existing shareholders.
Selling Shareholders
The selling shareholders named in this prospectus are offering all of the
4,515,000 shares of common stock offered through this prospectus. These shares
were acquired from us in private placements that were exempt from registration
under Regulation S of the Securities Act of 1933. The shares include the
following:
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1. 2,500,000 shares of our common stock that five selling shareholders
acquired from us in an offering that was exempt from registration under
Regulation S of the Securities Act of 1933 and was completed on
May 27, 2004;
2. 2,000,000 shares of our common stock that 20 selling shareholders
acquired from us in an offering that was exempt from registration
under Regulation S of the Securities Act of 1933 and was completed on
June 13, 2004; and
3. 15,000 shares of our common stock that 15 selling shareholders acquired
from us in an offering that was exempt from registration under Regulation
S of the Securities Act of 1933 and was completed on June 25, 2004.
The following table provides as of the date of this prospectus, information
regarding the beneficial ownership of our common stock held by each of the
selling shareholders, including:
1. the number of shares owned by each prior to this offering;
2. the total number of shares that are to be offered for each;
3. the total number of shares that will be owned by each upon
completion of the offering; and
4. the percentage owned by each upon completion of the offering.
Total Number
Of Shares To Total Shares Percentage of
Be Offered For to Be Owned Shares owned
Name Of Shares Owned Selling Upon Upon
Selling Prior To This Shareholders Completion Of Completion of
Stockholder Offering Account This Offering This Offering
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Robert Fedun 500,000 500,000 Nil Nil
193 Aquarius Mews
Suite 2901
Vancouver, BC
Dr. Douglas Coupland 500,000 500,000 Nil Nil
586 Barnham Place
West Vancouver, BC
David Lorne 500,000 500,000 Nil Nil
1184 Denman St.
Suite 101
Vancouver, BC
Mark Foreman 500,000 500,000 Nil Nil
2531 Borden Cres.
Prince George, BC
Larry Ilich 500,000 500,000 Nil Nil
1635 53 A St.
Delta, BC
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<page>
Total Number
Of Shares To Total Shares Percentage of
Be Offered For to Be Owned Shares owned
Name Of Shares Owned Selling Upon Upon
Selling Prior To This Shareholders Completion Of Completion of
Stockholder Offering Account This Offering This Offering
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Ruby Nishi 100,000 100,000 Nil Nil
3980 Regent St
Richmond, BC
Ann Marie Cederholm 100,000 100,000 Nil Nil
2010 Sandown Pl.
North Vancouver, BC
Allan Feldman 100,000 100,000 Nil Nil
1207 Beach Grove Rd
Delta, BC
Farshad Shirvani 100,000 100,000 Nil Nil
2062 William Ave
North Vancouver, BC
Jeremy Ross 100,000 100,000 Nil Nil
1046 Addesby St.
North Vancouver, BC
William Koble 100,000 100,000 Nil Nil
833 East 5th St.
North Vancouver, BC
Jason Schweigel 100,000 100,000 Nil Nil
4088 West 38th Ave
Vancouver, BC
Steven Feldman 100,000 100,000 Nil Nil
1768 West 8th Ave
Suite 504
Vancouver, BC
Robert Young 100,000 100,000 Nil Nil
744 West Hastings St
Suite 709
Vancouver, BC
Heather Conley 100,000 100,000 Nil Nil
1360 Hornby St
Suite 307
Vancouver, BC
Kim Aimetz 100,000 100,000 Nil Nil
916 Queens St
Victoria, BC
Douglas Coupland 100,000 100,000 Nil Nil
3397 Craigend Dr.
West Vancouver, BC
-12-
<page>
Total Number
Of Shares To Total Shares Percentage of
Be Offered For to Be Owned Shares owned
Name Of Shares Owned Selling Upon Upon
Selling Prior To This Shareholders Completion Of Completion of
Stockholder Offering Account This Offering This Offering
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Tyler Ross 100,000 100,000 Nil Nil
1066 Heywood St
North Vancouver, BC
Joe Abinante 100,000 100,000 Nil Nil
2970 Princess St
Suite 401
Coquitlam, BC
Frank Underhill 100,000 100,000 Nil Nil
1140 Pendrell St
Vancouver, BC
Jordan Hood 100,000 100,000 Nil Nil
4479 West 5th Ave
Vancouver, BC
Carol Nicholson 100,000 100,000 Nil Nil
953 Denman St.
Vancouver, BC
Frances Nicholson 100,000 100,000 Nil Nil
1133 Fergusson Rd.
Delta, BC
Aaron Silverman 100,000 100,000 Nil Nil
930 Gilford St
Suite 306
Vancouver, BC
Stan Green 100,000 100,000 Nil Nil
4343 West 11th Ave
Vancouver, BC
Alex Inunza 1,000 1,000 Nil Nil
935 Marine Dr
Suite 1807
West Vancouver, BC
Chelsea Banys 1,000 1,000 Nil Nil
6577 Helgesen Rd
Sooke, BC
Brian Crowe 1,000 1,000 Nil Nil
6450 199th Street
Suite 18
Langley, BC
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<page>
Total Number
Of Shares To Total Shares Percentage of
Be Offered For to Be Owned Shares owned
Name Of Shares Owned Selling Upon Upon
Selling Prior To This Shareholders Completion Of Completion of
Stockholder Offering Account This Offering This Offering
- --------------------------------------------------------------------------------
Robb Perkinson 1,000 1,000 Nil Nil
8563 Ansell Place
West Vancouver, BC
Paul Dickson 1,000 1,000 Nil Nil
1489 Marine Dr.
Suite 149
West Vancouver, BC
Roy Nicholson 1,000 1,000 Nil Nil
280 East 5th Ave.
Vancouver, BC
Craig Douglas 1,000 1,000 Nil Nil
4336 Elgin Street
Vancouver, BC
Ray Vyas 1,000 1,000 Nil Nil
2225 East 38th Ave.
Vancouver, BC
Sharon Larkin 1,000 1,000 Nil Nil
2593 East Broadway
Vancouver, BC
John Shirvani 1,000 1,000 Nil Nil
231 West 22nd St
North Vancouver, BC
Bob Allam 1,000 1,000 Nil Nil
801 East 6th Ave
Vancouver, BC
Ruth Feldman 1,000 1,000 Nil Nil
221 Wellington House
Apt 5A
Winnipeg, Manitoba
Heidi Streu 1,000 1,000 Nil Nil
1821 Grant Ave.
Suite 1
Winnipeg, Manitoba
Lori Scot 1,000 1,000 Nil Nil
159 Pentland St
Winnipeg, Manitoba
-14-
<page>
Total Number
Of Shares To Total Shares Percentage of
Be Offered For to Be Owned Shares owned
Name Of Shares Owned Selling Upon Upon
Selling Prior To This Shareholders Completion Of Completion of
Stockholder Offering Account This Offering This Offering
- --------------------------------------------------------------------------------
Nancy Feibel 1,000 1,000 Nil Nil
301 Forrest Ave.
Winnipeg, Manitoba
The named parties above beneficially own and have sole voting and investment
power over all shares or rights to these shares. The numbers in this table
assume that none of the selling shareholders sells shares of common stock not
being offered in this prospectus or purchases additional shares of common stock,
and assumes that all shares offered are sold. The percentages are based on
9,515,000 shares of common stock outstanding on the date of this prospectus.
Douglas Coupland is the brother and Dr. Douglas Coupland is the father of Tim
Coupland, our president, CEO, treasurer and director.
Other than as described above, none of the selling shareholders:
(1) has had a material relationship with us other than as a
shareholder at any time within the past three years;
(2) has ever been one of our officers or directors; or
(3) are broker-dealers or affiliates of broker-dealers.
Plan Of Distribution
The selling shareholders may sell some or all of their common stock in one or
more transactions, including block transactions.
The selling shareholders will sell our shares at $0.20 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices. We determined this offering price
arbitrarily based upon the price of the last sale of our common stock to
investors. There is no assurance of when, if ever, our stock will be listed on
an exchange.
If applicable, the selling shareholders may distribute shares to one or more of
their partners who are unaffiliated with us. Such partners may, in turn,
distribute such shares as described above. If these shares being registered for
resale are transferred from the named selling shareholders and the new
shareholders wish to rely on the prospectus to resell these shares, then we must
first file a prospectus supplement naming these individuals as selling
shareholders and providing the information required by Item 507 of Regulation
S-B concerning the identity of each selling shareholder and he or her
relationship to us. There is no agreement or understanding between the selling
shareholders and any partners with respect to the distribution of the shares
being registered for resale pursuant to this registration statement.
-15-
We can provide no assurance that all or any of the common stock offered will be
sold by the selling shareholders.
We are bearing all costs relating to the registration of the common stock. These
are estimated to be $17,500. The costs of this offering will be paid for from
cash on hand, advances from our directors and principal shareholders, Tim
Coupland and Brian Game and from future equity financings. We do not have any
arrangements for shareholder loans or equity financings. The selling
shareholders, however, will pay any commissions or other fees payable to brokers
or dealers in connection with any sale of the common stock.
The selling shareholders must comply with the requirements of the Securities Act
and the Securities Exchange Act in the offer and sale of the common stock. In
particular, during such times as the selling shareholders may be deemed to be
engaged in a distribution of the common stock, and therefore be considered to be
an underwriter, they must comply with applicable law and may, among other
things:
1. Not engage in any stabilization activities in connection with our common
stock;
2. Furnish each broker or dealer through which common stock may be offered,
such copies of this prospectus, as amended from time to time, as may be
required by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under the
Securities Exchange Act.
The Securities Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the Commission, which:
* contains a description of the nature and level of risk in the market for
penny stocks in both public offerings and secondary trading;
* contains a description of the broker's or dealer's duties to the customer
and of the rights and remedies available to the customer with respect to a
violation of such duties or other requirements
* contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" prices for penny stocks and the significance of
the spread between the bid and ask price;
* contains a toll-free telephone number for inquiries on disciplinary
actions;
-16-
* defines significant terms in the disclosure document or in the conduct of
trading penny stocks; and
* contains such other information and is in such form (including language,
type, size, and format) as the Commission shall require by rule or
regulation;
The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, the customer with:
* bid and offer quotations for the penny stock;
* the compensation of the broker-dealer and its salesperson in the
transaction;
* the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market
for such stock; and
* monthly account statements showing the market value of each penny stock
held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
those securities.
Legal Proceedings
We are not currently a party to any legal proceedings. Our address for service
of process in Nevada is 1802 N. Carson Street, Suite 212, Carson City, Nevada,
89701.
Directors, Executive Officers, Promoters And Control Persons
Our executive officers and directors and their respective ages as of the date of
this prospectus are as follows:
Directors:
Name of Director Age
- ----------------------- -----
Mr. Tim Coupland 44
Mr. Brian Game 40
Executive Officers:
Name of Officer Age Office
- --------------------- ----- -------
Tim Coupland 44 President, Chief
Executive Officer,
Principal Financial
Officer, Treasurer
& director
Brian Game 40 Secretary & director
-17-
Biographical Information
Set forth below is a brief description of the background and business experience
of each of our executive officers and directors for the past five years.
Mr. Tim Coupland has acted as our President, chief executive officer, Treasurer
and as a director since our incorporation on January 21, 2004.
Mr. Coupland graduated from Simon Fraser University in 1983 with a Bachelor of
Arts degree in geography. Since 1996, Mr. Coupland has acted as president,
secretary and sole director of T8X Capital Ltd., a private British Columbia
company involved in public company structuring and reorganization, preparing
business plans and completing due diligence reviews of companies. From November
1996 to May 1997, Mr. Coupland provided investor relations services to CKD
Ventures Ltd., a British Columbia reporting company involved in mineral property
exploration whose shares traded on the Vancouver Stock Exchange. Since September
2000, he has also acted as President and a director of Alberta Star Development
Corp. ("Alberta Star"), a reporting issuer in British Columbia, Alberta and the
United States that is involved in mineral property exploration and development.
Since Mr. Coupland's involvement with the company, Alberta Star has been
involved in the exploration of the Longtom gold/uranium property in the
Northwest Territories and the Dixie Lake Gold property in Ontario. In excess of
$1,000,000 has been spent on the exploration of each of these properties,
including multiple drilling programs. Both of the projects are in the
exploration stage and contain no reserves.
Mr. Coupland will devote approximately 12 hours of his business time to our
affairs each week.
Mr. Coupland does not possess any professional or technical credentials relating
to mineral exploration, mine development or mining.
Mr. Brian Game has acted as our secretary and as a director since our
incorporation on January 21, 2004.
Mr. Game obtained a Bachelor of Science degree in Geology from the University
of British Columbia in 1985. Mr. Game has worked as a self-employed geological
consultant since 1988 and is a Fellow of the Geological Association of Canada
and a registered professional geologist with the Association of Professional
Engineers and Geoscientists of British Columbia.
Mr. Game will devote approximately ten hours of his business time to our
affairs each week.
Conflict of Interest
Both of our directors are involved in non-company business ventures that involve
mineral properties and exploration. As our present business plan is focused
entirely on the Sobeski Lake Gold property, there is no expectation of any
conflict between our business interests and those of our directors. However,
possible conflicts may arise in the future if we seek to acquire interests in
additional mineral properties.
-18-
Our bylaws provide that each officer who holds another office or possesses
property whereby, whether directly or indirectly, duties or interests might be
created in conflict with his duties or interests as our officer shall, in
writing, disclose to the president the fact and the nature, character and extent
of the conflict and abstain from voting with respect to any resolution in which
the officer has a personal interest. For example, if we propose to enter into a
transaction in which our president, Tim Coupland, has a direct interest, he must
disclose this interest to our other director, Brian Game, at the board meeting
to consider the transaction. Mr. Coupland must then abstain from voting on the
resolution to approve the transaction. Accordingly, in order for us to approve
the transaction, Mr. Game would have to approve it. In making this decision, Mr.
Game is required to act in the best interests of shareholders.
Term of Office
Our directors are appointed for a one-year term to hold office until the next
annual general meeting of our shareholders or until removed
from office in accordance with our bylaws. Our officers are appointed by our
board of directors and hold office until removed by the board.
Significant Employees
We have no significant employees other than the officers and directors described
above.
Security Ownership Of Certain Beneficial Owners And Management
The following table provides the names and addresses of each person known to us
to own more than 5% of our outstanding common stock as of the date of this
prospectus, and by the officers and directors, individually and as a group as at
March 16, 2005. Except as otherwise indicated, all shares are owned directly.
Amount of
Title of Name and address beneficial Percent
Class of beneficial owner ownership of class
- --------------------------------------------------------------------------------
Common Tim Coupland 3,500,000 36.78%
Stock President, Chief
Executive Officer, Principal Financial Officer,
Treasurer, And Director
675 West Hastings St. Suite 200
Vancouver, BC V6B 1N2
Canada
Common Brian Game 1,500,000 15.76%
Stock Secretary
And Director
675 West Hastings St. Suite 200
Vancouver, BC V6B 1N2
Canada
-19-
Amount of
Title of Name and address beneficial Percent
Class of beneficial owner ownership of class
- --------------------------------------------------------------------------------
Common Robert Fedun 500,000 5.25%
Stock 193 Aquarius Mews
Suite 2901
Vancouver, BC V6Z 2Z2
Canada
Common Dr. Douglas Coupland 500,000 5.25%
Stock 586 Barnham Place
West Vancouver, BC V7S 1T7
Canada
Common David Lorne 500,000 5.25%
Stock 1184 Denman St.
Suite 101
Vancouver, BC V6G 2M9
Canada
Common Mark Foreman 500,000 5.25%
Stock 2531 Borden Cres.
Prince George, BC V2L 2X4
Canada
Common Larry Ilich 500,000 5.25%
1635 53 A St.
Delta, BC V4M 3G3
Canada
Common All Officers and Directors 5,000,000 52.54%
Stock as a Group that consists of shares
two people
The percent of class is based on 9,515,000 shares of common stock issued and
outstanding as of the date of this prospectus.
Description Of Securities
General
Our authorized capital stock consists of 75,000,000 shares of common stock at a
par value of $0.001 per share.
Common Stock
As of March 16, 2005, there were 9,515,000 shares of our common stock issued
and outstanding that are held by 42 stockholders of record.
Holders of our common stock are entitled to one vote for each share on all
matters submitted to a stockholder vote. Holders of common stock do not have
cumulative voting rights. Therefore, holders of a majority of the shares of
common stock voting for the election of directors can elect all of the
directors. Holders of our common stock representing a majority of the voting
power of our capital stock issued, outstanding and entitled to vote, represented
in person or by proxy, are necessary to constitute a quorum at any meeting of
our stockholders. A vote by the holders of a majority of our outstanding shares
is required to effectuate certain fundamental corporate changes such as
liquidation, merger or an amendment to our articles of incorporation.
-20-
Holders of common stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available funds. In the
event of a liquidation, dissolution or winding up, each outstanding share
entitles its holder to participate pro rata in all assets that remain after
payment of liabilities and after providing for each class of stock, if any,
having preference over the common stock. Holders of our common stock have no
pre-emptive rights, no conversion rights and there are no redemption provisions
applicable to our common stock.
Preferred Stock
We do not have an authorized class of preferred stock.
Dividend Policy
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
Share Purchase Warrants
We have not issued and do not have outstanding any warrants to purchase shares
of our common stock.
Options
We have not issued and do not have outstanding any options to purchase shares of
our common stock.
Convertible Securities
We have not issued and do not have outstanding any securities convertible into
shares of our common stock or any rights convertible or exchangeable into shares
of our common stock.
Interests Of Named Experts And Counsel
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant or any of its parents or
subsidiaries. Nor was any such person connected with the registrant or any of
its parents or subsidiaries as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
Joseph I. Emas, our legal counsel, has provided an opinion on the validity of
our common stock.
The financial statements included in this prospectus and the registration
statement have been audited by Amisano Hanson, Chartered Accountants, to the
extent and for the periods set forth in their report appearing elsewhere in this
document and in the registration statement filed with the SEC, and are included
in reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
-21-
Disclosure Of Commission Position Of Indemnification For
Securities Act Liabilities
Our directors and officers are indemnified as provided by the Nevada Revised
Statutes and our Bylaws. We have been advised that in the opinion of the
Securities and Exchange Commission indemnification for liabilities arising under
the Securities Act is against public policy as expressed in the Securities Act,
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities is asserted by one of our directors, officers, or
controlling persons in connection with the securities being registered, we will,
unless in the opinion of our legal counsel the matter has been settled by
controlling precedent, submit the question of whether such indemnification is
against public policy to court of appropriate jurisdiction. We will then be
governed by the court's decision.
Organization Within Last Five Years
We were incorporated on January 21, 2004 under the laws of the state of Nevada.
On that date, Tim Coupland and Brian Game were appointed as our directors. As
well, Mr. Coupland was appointed as our president, chief executive officer,
principal financial officer and treasurer, while Mr. Game was appointed as our
secretary.
Description Of Business
In General
We intend to commence operations as an exploration stage company. As such, there
is no assurance that a commercially viable mineral deposit exists on our sole
mineral property interest, the Sobeski Lake Gold property. Further exploration
will be required before a final evaluation as to the economic and legal
feasibility of the Sobeski Lake Gold property is determined. Economic and legal
feasibility refers to a formal evaluation completed by an engineer or geologist
which confirms that the property can be successfully operated as a mine.
We are not a blank check company subject to Rule 419. We have no intention to
merge with or acquire another company in the foreseeable future.
We will be engaged in the acquisition, and exploration of mineral properties
with a view to the exploitation any mineral deposits we discover that
demonstrate economic feasibility. Exploitation of a mineral deposit occurs when
the company overseeing production processes rock from the property in order to
remove and sell gold contained in the rock.
Because we are an exploration stage company, in the event that we discover
mineral deposits on the Sobeski Lake Gold property, we will not have the
capability to remove and refine those minerals. When exploration stage companies
discover mineral deposits, which are a rare occurrence, they typically sell
their interest in the property to larger development or production stage mining
companies, or they enter into a joint venture arrangement. The larger companies
are then responsible for operating the property as a mine. If we discover a
mineral deposit on the Sobeski Lake Gold property, we anticipate entering into a
similar arrangement with a more advanced mining company.
-22-
We acquired our right and interest in and to the four mineral claims, known
collectively as the Sobeski Lake Gold, located in the Red Lake Mining District,
in the province of Ontario, Canada for a cash payment of $3,500. The former
owner of the claims, Dan Patrie Exploration Ltd., remains the registered owners
of the property. It holds a 100% interest in the property in trust for us.
Our plan of operation is to determine whether this Sobeski Lake Gold property
contains reserves that are economically recoverable. The recoverability of
amounts from the property will be dependent upon discovering economically
recoverable reserves and obtaining the necessary financing to prove gold content
on the property sufficient enough to justify operating the property as a mine by
processing rock in order to remove and sell the gold found in the rock.
As an exploration stage corporation, we are engaged in the search for mineral
deposits (reserves). We are not a development stage company involved in the
preparation of an established commercially minable deposit for its extraction or
a production stage company engaged in the exploitation of a mineral deposit.
Mineral Property Exploration
Mineral property exploration is typically conducted in phases. Each subsequent
phase of exploration work is recommended by a geologist based on the results
from the most recent phase of exploration. The initial two phases of an
exploration program generally involve geochemical and geophysical surveys of a
property. Subsequent exploration phases typically involve drilling.
Geochemical exploration involves gathering soil samples or pieces of rock from
the property areas with the most potential to host economically significant
mineralization based on past exploration results. All samples gathered will be
sent to a laboratory where they are crushed and analysed for metal content.
Geophysical surveying is the search for mineral deposits by measuring the
physical property of near-surface rocks, and looking for unusual responses
caused by the presence of mineralization. Electrical, magnetic, gravitational,
seismic and radioactive properties are the ones most commonly measured. Drilling
involves extracting a long cylinder of rock from the ground to determine amounts
of metals at different depths. Pieces of the rock obtained, known as drill core,
are analysed for mineral content.
We have not yet commenced the initial phase of exploration on the Sobeski Lake
Gold property. Once we have completed each phase of exploration, we will make a
decision as to whether or not we proceed with each successive phase based upon
the analysis of the results of that program. Our directors will make this
decision based upon the recommendations of the independent geologist who
oversees the program and records the results, as well as upon the
recommendations of Brian Game, our director who is a professional geologist.
Even if we complete the currently recommended exploration programs on the
Sobeski Lake Gold property and they are successful, we will need to spend
substantial additional funds on further drilling and engineering studies before
we will ever know if there is a commercially viable mineral deposit (a reserve)
on the property.
-23-
Sobeski Lake Gold Property Purchase Agreement
We acquired the mineral claims located at Sobeski Lake in the Red Lake Mining
district of northwestern Ontario, Canada from Dan Patrie Exploration Ltd., a
private company owned by Dan Patrie on June 16, 2004. We paid the owner $3,500
in order to acquire a 100% interest in the mineral claims. Mr. Patrie and his
company are both at arm's length to us. There are no other underlying agreements
or interests in the mineral claims.
Title to the Sobeski Lake Gold Property
The Sobeski Lake Gold Property consists of four mineral claims. A "mineral
claim" refers to a specific section of land over which a title holder owns
rights to explore for and extract minerals from the ground. Such rights may be
transferred or held in trust. The claims will be held in trust by Dan Patrie
Exporation Ltd. on behalf of Dynamic Gold Corp. under prospector license #36646
in the name of Dan Patrie Exploration Ltd., registered in the Province of
Ontario, Canada. We do not own any real property interest in the land covered by
the claims.
If the trustee becomes bankrupt or transfers the claims to a third party, we may
incur significant legal expenses in enforcing our interest in the claims in
Ontario courts.
The registration of the claims in the name of a trustee does not impact a third
party's ability to commence an action against us respecting the Sobeski Lake
Gold property or to seize the claims after obtaining judgment.
The business purpose of us having the title to the Sobeski Lake Gold property
held in trust is to avoid expenses we would incur in registering the claims in
our corporate name.
Specifics of the four mineral claims are as follows:
Property Name Claim Number No. of Claims Units Date of Expiry
- ------------- ------------------- ---------------
Sobeski Lake Area 3004508 7 Feb 16, 2006
Sobeski Lake Area 3004509 9 Nov 14, 2005
Sobeski Lake Area 3004510 4 Nov 14, 2005
Sobeski Lake Area 3004511 4 Nov 14, 2005
All of the above claims were recorded two years prior to their respective dates
of expiry.
In order to keep the claims comprising the Sobeski Lake Gold property in good
standing, we must incur at least $6.00 per hectare in exploration work on the
claims prior to the dates of expiry noted above. The expiry date is thereby
extended for an additional two years. As the total area of the claims is 386
hectares, we must spend $2,316 on exploration in order to meet this requirement.
If we fail to incur these exploration expenses by the expiry dates, title to the
mineral claims reverts to the government. These exploration expenditure
requirements are obligations imposed by the government.
-24-
Description, Location and Access
The Sobeski Lake Gold property is located in the Red Lake Mining District of
northwestern Ontario. The district is at the west end of the Uchi - Red Lake
greenstone belt and is accessed by Highway 105 of the Ontario road system. The
four claims are situated approximately 22 kilometers northeast of Balmertown and
30 kilometers northeast of Red Lake. Red Lake is a long-established mining and
resort town with a population of about 3,000. It is located on Highway 105, 175
kilometers north of Vermilion Bay on the Trans-Canada Highway. A full service
airport with daily service from Kenora and Winnipeg is located 10 kilometers
north of the town, near Balmertown, the site of Placer Dome's Campbell Red Lake
gold mine and Goldcorp Inc.'s Red Lake gold mine. Red Lake provides most
services and supplies required in support of mining and exploration work, as
well as a ready supply of experienced exploration personnel. We have not entered
into any agreement or negotiations, preliminary or otherwise, with any personnel
or geologists to help us with the exploration of the Sobeski Lake Gold property.
Access to the claims from Red Lake is northerly by Highway 125 to Balmertown (10
kilometers), then by Nungasser Road to its intersection with a seasonal logging
road about 5 kilometers away. An easterly logging road then leads to the
property about four kilometers away. A logging road is a dirt road created by
forestry companies for the purpose of removing timber from an area. Such roads
are often difficult to traverse in wet or winter weather conditions.
A side road suitable only for small four wheel drive vehicles in summer and
snowmobiles in winter is followed for about 2 kilometers to the west side claim
line. The narrow side road continues easterly across the claims.
The Sobeski Lake Gold property is free of any mineral workings as there is no
known history of previous work having been completed on the claims. Accordingly,
there is no equipment located on the claims and no power source located on the
claims. We will need to use portable generators if we require a power source for
exploration of the property.
To date, we have not incurred any exploration expenditures on the Sobeski Lake
Gold property. The property is without known reserves and our proposed
exploration is exploratory in nature.
Mineralization and Rock Formation
The Sobeski Lake Gold property is located in an area of altered volcanic rocks
that have the potential to host economic gold mineralization. Property sites
favorable for mineralization commonly are in proximity to relatively thin beds
of sedimentary rock, particularly tuff beds (layers of volcanic ash). Canadian
Shield rocks, like those found on the property, are commonly profoundly altered
from their original characteristics.
Exploration History
There is no known history of previous work having been completed on the actual
Sobeski Lake Area property but the entire district has been actively explored by
prospectors, airborne surveys, and by detailed geological mapping by government
agencies.
-25-
Geological Report: Sobeski Lake Gold Property
We have obtained a geological report on the Sobeski Lake Gold property that was
prepared by Mr. Erik A. Ostensoe, a professional geologist from Vancouver,
British Columbia. The geological report summarizes the results of exploration in
the area of the Sobeski Lake Gold property and makes a recommendation for
further exploration work.
We acquired the four claims of the Sobeski Lake project due to their proximity
to the large block of claims that has been under exploration by Planet Resources
Ltd. That ground, in joint venture with Goldcorp., has been examined by
prospecting, geophysical surveys, both airborne and ground-based, and by diamond
drilling.
Stage 1
- -------
The first stage of exploration that Mr. Ostensoe recommends consists of data
acquisition, grid preparation and surveys and can be broken down into two
phases:
Phase 1
Mr. Ostensoe recommends engaging a technically trained person to
thoroughly search the geological data base in order to assemble the
available historical information relevant to the Sobeski Lake area.
This would involve reviewing data filed with the Geological Survey of
Canada, the Ontario Department of Mines and the Ministry of Natural
Resources.
He then recommends that based upon this review, we should pursue an
exploration program of prospecting. This would involve determining the
extent, distribution and geology of outcrops. Outcrops are exposed rock
on the surface of the property that is not covered by soil. These
outcrops are analysed to determine whether they potentially containing
gold mineralization based on the rock types.
This preliminary Phase I reconnaissance work requires approximately one
week of field work by a two person crew. The whole phase, including the
initial compilation and the later presentation to management, is
estimated to cost $5,000. Our current cash on hand will cover the cost
of this program. We anticipate commencing this phase of exploration in
the spring of 2005, when weather conditions permit. The entire phase,
including the interpretation of data, should take a total of one to two
months.
Phase 2
Upon completion of Phase I, Mr Ostensoe recommends pursuing a field
program of prospecting, as well as geochemical and geophysical
surveying to determine the extent and distribution of mineralization
which may indicate the potential presence of a gold reserve.
Geochemical surveys involve a consulting geologist gathering samples of
soil and rock from property areas with the most potential to host
economically significant mineralization. All samples gathered will be
sent to a laboratory where they are crushed and analysed for metal
content.
-26-
Geophysical surveying is the search for mineral deposits by measuring
the physical property of near-surface rocks, and looking for unusual
responses caused by the presence of mineralization. Electrical,
magnetic, gravitational, seismic and radioactive properties are the
ones most commonly measured. Geophysical surveys are applied in
situations where there is insufficient information obtainable from the
property surface to allow informed opinions concerning the merit of
properties.
Mr. Ostensoe's report recommends that a budget of $10,000 for phase
two. He recommends that the geochemical portion of the program be
completed in the summer, when rock exposure is maximized due to melting
of all snow on the property. He recommends that the geophysical portion
of the exploration be conducted in the winter when the property surface
is frozen so that it can be easily traversed.
We will need to raise additional financing to cover the anticipated the
cost of this program. We anticipate commencing this phase in the late
spring or early summer of 2005. The entire phase, including the
interpretation of data, will take until the winter of 2005, when the
geophysical portion is completed.
Stage 2
- -------
Results from the Stage 1 exploration programs will allow us to choose specific
property areas that are more likely to host a mineral deposit. Such areas will
then be tested by meaning of drilling techniques which provide subsurface
information concerning the underlying rock formations.
Drilling involves extracting a long cylinder of rock from the ground to
determine amounts of metals at different depths. Pieces of the rock obtained,
known as drill core, are analysed for mineral content.
Drilling programs commonly include about five to eight initial drill holes, with
a follow up stage, if warranted, of a further six to eight holes. The cost of
the Stage 2 drilling work will be based entirely upon the results of the
programs from Stage 1 and cannot be accurately forecast. However, we expect that
such a program will cost a minimum of $200,000. A follow up drill program would
likely cost an additional $300,000. We will not determine the exact number and
location of drill holes until we have completed Stage 1.
The drilling program will likely be commenced in spring or summer of 2006 and
will take approximately two months to complete.
We do not have an agreement with Mr. Ostensoe, or any other geologist, to
provide geological services for planned exploration work on the Sobeski Lake
Gold property.
Compliance with Government Regulation
We will be required to conduct all mineral exploration activities in accordance
with the Mining Act of Ontario. While we do not require any authorization to
proceed with the initial two phases of the recommended exploration program, we
will be required to obtain work permits from the Ontario Ministry of Northern
Development and Mines for the drilling program and any subsequent exploration
-27-
work that results in a physical disturbance to the land if the program calls for
the disturbance of more than 10,000 square meters of the property surface, or
such areas that would total that amount when combined. A work permit is also
required for the erection of structures on the property. There is no charge to
obtain a work permit under the Mining Act. We have not applied for a work permit
for the drilling phase of our proposed exploration program, as the application
requires that we disclose details of the planned exploration. We will not be
able to determine this until we have the results from Stage 1 of our exploration
program. We anticipate that we can obtain a work permit within one month from
filing an application.
When our exploration program proceeds to the drilling stage, we may be required
to post small bonds if the rights of a private land owner may be affected. We
may also be required to file statements of work with the Ministry of Northern
Development and Mines. We will also be required to undertake remediation work on
any exploration that results in physical disturbance to the land. The cost of
remediation work will vary according to the degree of physical disturbance.
However, for the drilling programs that we have planned, we do not expect
remediation costs to exceed $10,000. We have budgeted for regulatory compliance
costs in our proposed exploration program. We will need to raise additional
funds in order to proceed with any drilling and to cover the costs of
remediation.
The amount of these costs is not known at this time as we do not know the extent
of the exploration program that will be undertaken beyond completion of the
recommended exploration program. Because there is presently no information on
the size, tenor, or quality of any minerals or reserve at this time, it is
impossible to assess the impact of any capital expenditures on earnings or our
competitive position.
An environmental review is not required under the Environmental Assessment Act
to proceed with the recommended exploration program on our mineral claims.
In order to keep the four mineral claims comprising the Sobeski Lake Gold
property in good standing, we must incur at least $6.00 per hectare in
exploration work on the claims prior to November 14, 2005 with respect to three
of the claims, and prior to February 16, 2006 with respect to one of the claims.
The expiry date is thereby extended for an additional two years. As the total
area of the claims is 386 hectares, we must spend $2,316 on exploration in order
to meet this requirement.
Employees
We have no employees as of the date of this prospectus other than our two
directors.
Research and Development Expenditures
We have incurred a total of $375 in connection with Mr. Ostensoe's preparation
of a geological report concerning the Sobeski Lake Gold property. We have not
incurred any other research or development expenditures since our incorporation.
-28-
Competition
While the mineral property exploration business is competitive, we do not
anticipate having any difficulties retaining qualified personnel to conduct
exploration on the Sobeski Lake Gold property.
Despite competition amongst gold producers, there is a strong market for any
gold that is removed from the Sobeski Lake Gold property. While it is unlikely
that we will discover a mineral deposit on the property, if we do, the value of
the property will be influenced by the market price for gold. This price, to
some degree, is influenced by the amount of gold sold by advanced gold
production companies.
There are a large number of mineral exploration companies such as us that look
to acquire interests in properties and conduct exploration on them. Given the
large number of unexplored or under explored mineral properties that are
currently available for acquisition, we do not expect competition to have a
material impact on our business operations.
In the mineral exploration sector, our competitive position is insignificant.
There are numerous mineral exploration companies with substantially more capital
and resources that are able to secure ownership of mineral properties with a
greater potential to host economic mineralization. We are not able to complete
with such companies. Instead, we will attempt to acquire properties without
proven mineral deposits that may have the potential to contain mineral deposits.
Subsidiaries
We do not have any subsidiaries.
Patents and Trademarks
We do not own, either legally or beneficially, any patents or trademarks.
Plan Of Operation
Our plan of operation for the twelve months following the date of this
prospectus is to complete the recommended stage one exploration program on the
Sobeski Lake Gold property. We have enough funds on hand to complete the first
phase of stage one. According to his geology report, Mr. Ostensoe estimates that
the first phase, consisting of a geological data review and prospecting, will
cost approximately $5,000 and will take about one to two months to complete. We
anticipate commencing this first phase in the spring of 2005 when weather
conditions on the property are suitable for exploration. This exploration will
be completed by a two-person crew, including a qualified geologist.
We will then commence the second phase of exploration in late spring or early
summer of 2005. This phase will consist of further prospecting and geochemical
and geophysical surveying and is estimated to cost $10,000. This exploration
will be completed by a two or three-person crew, including a qualified
geologist. We anticipate that the geochemical portion of the program will be
completed in the summer, when rock exposure is maximized due to melting of all
snow on the property. The geophysical portion of the exploration will be
conducted in the winter when the property surface is frozen so that it can be
easily traversed. We therefore expect Phase II to be completed by December 2005.
-29-
We do not have any arrangement with a qualified geologist to oversee these
programs. However, subject to availability, we intend to retain Mr. Ostensoe.
He will be responsible for hiring any additional personnel needed for the
exploration programs.
As well, we anticipate spending an additional $25,000 on administrative fees,
including professional fees payable in connection with the filing of this
registration statement and complying with reporting obligations.
Total expenditures over the next 12 months are therefore expected to be
approximately $40,000.
Our cash reserves are not sufficient to meet our obligations for the next
twelve-month period. As a result, we will need to seek additional funding in the
near future. We currently do not have a specific plan of how we will obtain such
funding. However, we anticipate that additional funding will be in the form of
equity financing from the sale of our common stock. As well, our management is
prepared to provide us with short-term loans, although no such arrangement has
been made.
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 equity financing.
If we do not secure additional funding for exploration expenditures, we may
consider seeking an arrangement with a joint venture partner that would provide
the required funding in exchange for receiving a part interest in the Sobeski
Lake Gold property. We have not undertaken any efforts to locate a joint venture
partner. There is no guarantee that we will be able to locate a joint venture
partner who will assist us in funding exploration expenditures upon acceptable
terms.
If we are unable to arrange additional financing or find a joint venture partner
for the Sobeski Lake Gold property, our business plan will fail and operations
will cease.
Results Of Operations For Period Ending September 30, 2004
We have not earned any revenues from our incorporation on January 21, 2004 to
December 31, 2004. We have not commenced the exploration stage of our business
and can provide no assurance that we will discover economic mineralization on
the property.
We incurred operating expenses in the amount of $17,895 for the period from our
inception on January 21, 2004 to December 31, 2004. These operating expenses
were comprised of accounting and audit fees of $7,241, mineral property costs of
$3,875 relating to the purchase of the Sobeski Lake Gold property and the
preparation of a geological report, legal fees of $5,000, filing fees of $1,426,
office and miscellaneous costs of $156 and bank charges of $197.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue exploration activities. For these reasons our auditors
believe that there is substantial doubt that we will be able to continue as a
going concern.
-30-
<page>
Liquidity and Capital Resources
As of March 15, 2005 we had cash on hand of $22,152. We will utilize $5,000 of
these funds to cover anticipated costs involved with the Phase I exploration
program that are proposed for the Sobeski Lake Gold property.
We will require additional funding in order to cover all anticipated
administration costs and to proceed with the phase two of stage one exploration
program that is estimated to cost $10,000, as well as the stage two drilling
program on the property, estimated to cost $200,000.
We expect that we will need to raise additional funds for operations commencing
in the spring of 2005 and continuing on an ongoing basis thereafter. We expect
that we will need to raise an additional $10,000 by the summer of 2005 in order
to cover ongoing administrative expenses. We will also need to raise an
additional $15,000 to cover administrative expenses prior to the end of 2005.
We anticipate that additional funding will be required in the form of equity
financing from the sale of our common stock. Such shares will be sold through
private placements. However, we cannot be assured that we will be able to raise
sufficient funding from the sale of our common stock to fund these costs. We do
not have any arrangements in place for any future equity financing.
In addition, our management is prepared to provide us with short-term loans,
although no such arrangement has been made. Management has not agreed to provide
such funding and are not legally obligated to do so. Our preference is to raise
funds through the sale of our equity rather than through director loans.
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.
Description Of Property
We acquired an interest in and to the four mineral claims, known as the Sobeski
Lake Gold property, located in the Red Lake Mining District in the province of
Ontario, Canada. Dan Patrie Exploration Ltd. holds a 100% interest in the
mineral claims in trust for us. This property comprises four claims with an
approximate area of 386 hectares. Our property interest in the claims is limited
to mineral exploration and extraction rights. We do not have any real property
interest in the claims.
We do not own or lease any property other than the Sobeski Lake Gold property.
Our president, Mr. Tim Coupland, provides office space to us free of charge.
-31-
<page>
Certain Relationships And Related Transactions
None of the following parties has, since our date of incorporation, had any
material interest, direct or indirect, in any transaction with us or in any
presently proposed transaction that has or will materially affect us:
* Any of our directors or officers;
* Any person proposed as a nominee for election as a director;
* Any person who beneficially owns, directly or indirectly, shares carrying
more than 10% of the voting rights attached to our outstanding shares of
common stock;
* our sole promoter, Mr. Tim Coupland; and
* Any relative or spouse of any of the foregoing persons who has the same
house as such person.
Market For Common Equity And Related Stockholder Matters
No Public Market for Common Stock
There is presently no public market for our common stock. We anticipate applying
for trading of our common stock on the over the counter bulletin board upon the
effectiveness of the registration statement of which this prospectus forms a
part. However, we can provide no assurance that our shares will be traded on the
bulletin board or, if traded, that a public market will materialize.
Stockholders of Our Common Shares
As of the date of this registration statement, we have 42 registered
shareholders.
Rule 144 Shares
A total of 3,500,000 shares of our common stock are available for
resale to the public after May 18, 2005, and an additional 1,500,000 shares are
available for resale after May 19, 2005, in accordance with the volume and
trading limitations of Rule 144 of the Act. In general, under Rule 144 as
currently in effect, a person who has beneficially owned shares of a company's
common stock for at least one year is entitled to sell within any three month
period a number of shares that does not exceed the greater of:
1. 1% of the number of shares of the company's common stock then outstanding
which, in our case, will equal 95,150 shares as of the date of this
prospectus; or
2. the average weekly trading volume of the company's common stock during the
four calendar weeks preceding the filing of a notice on Form 144 with respect
to the sale.
Sales under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about the
company.
Under Rule 144(k), a person who is not one of the company's affiliates at any
time during the three months preceding a sale, and who has beneficially owned
the shares proposed to be sold for at least two years, is entitled to sell
shares without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144.
-32-
<page>
As of the date of this prospectus, persons who are our affiliates hold all of
the 5,000,000 shares that may be sold pursuant to Rule 144.
Stock Option Grants
To date, we have not granted any stock options.
Registration Rights
We have not granted registration rights to the selling shareholders or to any
other persons.
Dividends
There are no restrictions in our articles of incorporation or bylaws that
prevent us from declaring dividends. The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:
1. we would not be able to pay our debts as they become due in the usual course
of business; or
2. our total assets would be less than the sum of our total liabilities plus
the amount that would be needed to satisfy the rights of shareholders who
have preferential rights superior to those receiving the distribution.
We have not declared any dividends, and we do not plan to declare any dividends
in the foreseeable future.
Executive Compensation
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or
paid to our executive officers by any person for all services rendered in all
capacities to us for the fiscal period ended June 30, 2004 and subsequent to
that period to the date of this prospectus.
Annual Compensation
Other Restricted Options/ LTIP Other
Stock * SARs payouts Comp
Name Title Year Salary Bonus Comp. Awarded (#) ($)
- -----------------------------------------------------------------------
Tim Pres., 2004 $0 0 0 0 0 0
Coupland CEO, Treasurer,
Principal Financial
Officer & Dir.
Brian Sec., 2004 $0 0 0 0 0 0
Game & Dir.
Stock Option Grants
We have not granted any stock options to the executive officers since our
inception.
-33-
<page>
Consulting Agreements
We do not have any employment or consulting agreement with Mr. Coupland or
Mr. Game. We do not pay them any amount for acting as directors.
Financial Statements
Index to Financial Statements:
1. Independent Auditor's Report;
2.Audited financial statements for the period from January 21, 2004 (inception)
to June 30, 2004, including:
a. Balance Sheet;
b. Statement of Operations;
c. Statement of Cash Flows;
d. Statement of Stockholders' Equity; and
e. Notes to Financial Statements
3. Interim financial statements for the period ending December 31, 2004
including:
a. Interim Balance Sheets;
b. Interim Statement of Operations;
c. Interim Statements of Cash Flows;
d. Statement of Stockholders' Equity; and
e. Notes to Financial Statements
-34-
DYNAMIC GOLD CORP.
(A Pre-exploration Stage Company)
REPORT AND FINANCIAL STATEMENTS
December 31, 2004
(Stated in US Dollars)
----------------------
-35-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders,
Dynamic Gold Corp.
(A Pre-exploration Stage Company)
We have audited the accompanying balance sheet of Dynamic Gold Corp. (A
Pre-exploration Stage Company) as of June 30, 2004 and the related statements of
operations, stockholders' equity and cash flows for the period from January 21,
2004 (Date of Incorporation) to June 30, 2004. These financial statements are
the responsibility of the company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform an audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, these financial statements referred to above present fairly, in
all material respects, the financial position of Dynamic Gold Corp. as of June
30, 2004 and the results of its operations and its cash flows for the period
from January 21, 2004 (Date of Incorporation) to June 30, 2004, in conformity
with accounting principles generally accepted in the United States of America.
The accompanying financial statements referred to above have been prepared
assuming that the company will continue as a going concern. As discussed in Note
1 to the financial statements, the company is in the development stage, and has
no established source of revenue and is dependent on its ability to raise
capital from shareholders or other sources to sustain operations. These factors,
along with other matters as set forth in Note 1, raise substantial doubt that
the company will be able to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Vancouver, Canada /s/ Amisano Hanson
August 11, 2004 CHARTERED ACCOUNTANTS
-36-
<page>
DYNAMIC GOLD CORP.
(A Pre-exploration Stage Company)
BALANCE SHEET
June 30, 2004
(Stated in US Dollars)
----------------------
ASSETS
------
Current
Cash $ 26,768
==============
LIABILITIES
-----------
Current
Accounts payable and accrued liabilities $ 6,535
--------------
STOCKHOLDERS' EQUITY
--------------------
Capital stock
Authorized:
75,000,000 common shares, par value $0.001 per share
Issued and outstanding:
9,515,000 common shares 9,515
Additional paid in capital 20,985
Deficit accumulated during the pre-exploration stage ( 10,267)
--------------
20,233
--------------
$ 26,768
==============
Nature and Continuance of Operations - Note 1
SEE ACCOMPANYING NOTES
-37-
DYNAMIC GOLD CORP.
(A Pre-exploration Stage Company)
STATEMENT OF OPERATIONS
for the period January 21, 2004 (Date of Incorporation) to June 30, 2004
(Stated in US Dollars)
--------------------
Expenses
Accounting and audit fees $ 3,035
Bank charges 76
Legal fees 3,500
Office and miscellaneous 156
Mineral property costs 3,500
--------------
Net loss for the period $ ( 10,267)
==============
Basic and diluted loss per share $ ( 0.00)
==============
Weighted average number of shares outstanding 2,205,528
==============
SEE ACCOMPANYING NOTES
-38-
SEE ACCOMPANYING NOTES
DYNAMIC GOLD CORP.
(A Pre-exploration Stage Company)
STATEMENTS OF CASH FLOWS
for the period January 21, 2004 (Date of Incorporation) to June 30, 2004
(Stated in US Dollars)
--------------------
Cash Flows used in Operating Activities
Net loss for the period $ ( 10,267)
Adjustments to reconcile net loss to net cash used by operating
activities
Accounts payable and accrued liabilities 6,535
---------------
Net cash used in operating activities ( 3,732)
---------------
Cash Flows from Financing Activity
Issuance of common shares 30,500
---------------
Net cash from financing activity 30,500
---------------
Increase in cash during the period 26,768
Cash, beginning of the period -
--------------
Cash, end of the period $ 26,768
==============
Supplemental disclosure of cash flow information Cash paid for:
Interest $ -
==============
Income taxes $ -
==============
SEE ACCOMPANYING NOTES
-39-
DYNAMIC GOLD CORP.
(A Pre-exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY for the
period January 21, 2004 (Date of Incorporation) to June 30, 2004
(Stated in US Dollars)
----------------------
Deficit
Accumulated
Additional During the
Common Shares Paid-in Pre-exploration
---------------------------------
Number Par Value Capital Stage Total
------ --------- ------- ----- -----
Capital stock issued for cash
- at $0.001 7,500,000 $ 7,500 $ - $ - $ 7,500
- at $0.01 2,000,000 2,000 18,000 - 20,000
- at $0.20 15,000 15 2,985 - 3,000
Net loss for the period ended
June 30, 2004 - - - ( 10,267) ( 10,267)
--------- ------------ ------------- ------------ ----------
Balance, June 30, 2004 9,515,000 $ 9,515 $ 20,985 $ ( 10,267) $ 20,233
========= ============ ============= ============ ==========
SEE ACCOMPANYING NOTES
-40-
DYNAMIC GOLD CORP.
(A Pre-exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2004
(Stated in US Dollars)
----------------------
Note 1 Nature and Continuance of Operations
------------------------------------
The Company was incorporated in the State of Nevada on January 21, 2004 and
is in the pre-exploration stage. The Company has acquired a mineral
property located in the Province of Ontario, Canada and has not yet
determined whether this property contains reserves that are economically
recoverable. The recoverability of amounts from the property will be
dependent upon the discovery of economically recoverable reserves,
confirmation of the Company's interest in the underlying property, the
ability of the Company to obtain necessary financing to satisfy the
expenditure requirements under the property agreement and to complete the
development of the property and upon future profitable production or
proceeds for the sale thereof.
These financial statements have been prepared on a going concern basis. The
Company has incurred losses since inception resulting in an accumulated
deficit of $10,267 and further losses are anticipated in the development of
its business, both of which raise substantial doubt about the Company's
ability to continue as a going concern. Its ability to continue as a going
concern is dependent upon the ability of the Company to generate 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 of the Company intends to file an SB-2 Registration Statement,
which includes a shareholder offering of 4,515,000 common shares at $0.20
per share. This offering is subject to regulatory approval. The costs of
this offering will be paid for from cash on hand and proceeds from advances
from shareholders.
The Company's fiscal year end is June 30 of each year.
Note 2 Summary of Significant Accounting Policies
------------------------------------------
The financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:
Basis of Presentation
---------------------
The financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the
United States of America. Because a precise determination of many
assets and liabilities is dependent upon future events, the
preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful
judgement. Actual results may vary from these estimates.
-41-
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Pre-exploration Stage Company
-----------------------------
The Company complies with Financial Accounting Standard Board
Statement No. 7 and The Securities and Exchange Commission
Exchange Act Guide 7 for its characterization of the Company as
pre-exploration stage.
Mineral Property
----------------
Costs of lease, acquisition, exploration, carrying and retaining
unproven mineral properties are expensed as incurred.
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.
Foreign Currency Translation
----------------------------
The Company's functional currency is Canadian dollars as
substantially all of the operations are in Canada. The Company
uses the United States of America dollar as its reporting currency
for consistency with registrants of the Securities and Exchange
Commission ("SEC") and in accordance with the Statement of
Financial Accounting ("FAS") No. 52.
Assets and liabilities denominated in a foreign currency are
translated at the exchange rate in effect at the year end and
capital accounts are translated at historical rates. Income
statement accounts are translated at the average rates of exchange
prevailing during the year. Translation adjustments from the use
of different exchange rates from period to period are included in
the Comprehensive Income Account in Stockholders' Equity, if
applicable.
Transactions undertaken in currencies other than the functional
currency of the Company are translated using the exchange rate in
effect as of the transaction date. Any exchange gains or losses
are included in other income or expenses on the Statement of
Operations, if applicable.
-42-
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
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 that the Company is not exposed to
significant interest, currency or credit risks arising from these
financial instruments.
Income Taxes
------------
The Company uses the assets and liability method of accounting for
income taxes pursuant to FAS No. 109 "Accounting for Income
Taxes". Under the assets and liability method of FAS 109, deferred
tax assts and liabilities are recognized for the future tax
consequences attributable to temporary differences between the
financial statements carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.
Basic and Diluted Loss Per Share
--------------------------------
The Company reports basic loss per share in accordance with the
FAS No. 128, "Earnings Per Share". Basic loss per share is
computed using the weighted average number of shares outstanding
during the period. Diluted loss per share has not been provided as
it would be anti-dilutive.
New Accounting Standards
------------------------
Management does not believe that any recently issued, but not yet
effective accounting standards if currently adopted could have a
material effect on the accompanying financial statements.
Note 3 Mineral Property
----------------
Sobeski Lake Gold Property
---------------------------
The Company acquired a 100% beneficial, undivided right, title and
interest in and to the four mineral claims, known as Sobeski Lake
Gold Property, located in the Red Lake Mining District in the
province of Ontario, Canada, for a $3,500 cash payment. Dan Patrie
Exploration Ltd., the registered owner of the claims, holds them
in trust for the Company. The Company may have the claims
registered in its name by applying for extra-provincial
registration with the Ontario provincial government and by filing
an application for transfer of title with the Ontario Ministry of
Northern Development and Mines. However, the Company does not
presently intend to register the claims in this manner.
-43-
Note 4 Income Taxes
------------
The significant components of the Company's deferred tax assets are as
follows:
2004
----
Deferred Tax Assets
Non-capital loss carryforward $ 1,540
Less: valuation allowance for deferred tax asset ( 1,540)
---------------
$ -
===============
The amount taken into income as deferred tax assets must reflect
that portion of the income tax loss carryforwards that is likely
to be realized from future operations. The company has chosen to
provide an allowance of 100% against all available income tax loss
carryforwards, regardless of their time of expiry.
At June 30, 2004, the Company has accumulated non-capital losses
totalling $10,267, which are available to reduce taxable income in
future taxation years. These losses expire beginning in 2024. The
potential benefit of these losses, if any, has not been recorded
in the financial statements.
-44-
DYNAMIC GOLD CORP.
(A Pre-exploration Stage Company)
INTERIM FINANCIAL STATEMENTS
December 31, 2004
(Stated in US Dollars)
(Unaudited)
---------
45
<page>
DYNAMIC GOLD CORP.
(A Pre-exploration Stage Company)
INTERIM BALANCE SHEETS
(Stated in US Dollars)
(Unaudited)
---------
<table>
<caption>
December 31, June 30,
2004 2004
---- ----
<s> <c> <c>
ASSETS
Current
Cash $ 23,048 $ 26,768
================ ================
LIABILITIES
Current
Accounts payable and accrued liabilities $ 10,443 $ 6,535
---------------- ----------------
STOCKHOLDERS' EQUITY
Common stock
75,000,000 shares authorized, $0.001 par value,
9,515,000 shares outstanding (June 30, 2004: 9,515,000) 9,515 9,515
Additional paid in capital 20,985 20,985
Deficit accumulated during the exploration stage (17,895) (10,267)
---------------- ----------------
12,605 20,233
---------------- ----------------
$ 23,048 $ 26,768
================ ================
</table>
SEE ACCOMPANYING NOTES
46
<page>
DYNAMIC GOLD CORP.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF OPERATIONS
for the three and six months ended December 31, 2004 and
for the period January 21, 2004 (Date of Incorporation) to December 31, 2004
(Stated in US Dollars)
(Unaudited)
---------
<table>
<caption>
Three months Six months January 21, 2004
ended ended (Date of Incorporation) to
December 31, December 31, December 31,
2004 2004 2004
---- ---- ----
<s> <c> <c> <c>
Expenses
Accounting and audit fees $ 2,385 $ 4,206 $ 7,241
Bank charges 70 121 197
Filing fees 1,426 1,426 1,426
Legal fees 1,500 1,500 5,000
Office and miscellaneous - - 156
Mineral property costs - 375 3,875
------------------- ------------------- -------------------
Net loss for the period $ (5,381) $ (7,628) $ (17,895)
=================== =================== ===================
Basic and diluted loss per share $ (0.00) $ (0.00)
=================== ===================
Weighted average number of shares outstanding 9,515,000 9,515,000
=================== ===================
</table>
SEE ACCOMPANYING NOTES
47
<page>
DYNAMIC GOLD CORP.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
for the six months ended December 31, 2004, and
for the period January 21, 2004 (Date of Incorporation) to December 31, 2004
(Stated in US Dollars)
(Unaudited)
---------
<table>
<caption>
Six months January 21, 2004
ended (Date of Incorporation)
December 31, to December 31,
2004 2004
---- ----
<s> <c> <c>
Operating Activities
Net loss for the period $ (7,628) $ (17,895)
Change in non-cash working capital balance related to operations
Accounts payable and accrued liabilities 3,908 10,443
------------------ -----------------
Net cash used in operating activities (3,720) (7,452)
------------------ -----------------
Financing Activity
Capital stock issued - 30,500
------------------ -----------------
Net cash from financing activity - 30,500
------------------ -----------------
Increase (decrease) in cash during the period (3,720) 23,048
Cash, beginning of the period 26,768 -
------------------ -----------------
Cash, end of the period $ 23,048 $ 23,048
================== =================
Supplemental disclosure of cash flow information Cash paid for:
Interest $ - $ -
================== =================
Income taxes $ - $ -
================== =================
</table>
SEE ACCOMPANYING NOTES
48
<page>
DYNAMIC GOLD CORP.
(A Pre-exploration Stage Company)
INTERIM STATEMENT OF STOCKHOLDERS' EQUITY
for the period January 21, 2004 (Date of Incorporation) to December 31, 2004
(Stated in US Dollars)
(Unaudited)
---------
<table>
<caption>
Deficit
Accumulated
Additional During the
Common Shares Paid-in Exploration
-----------------------------------
Number Par Value Capital Stage Total
------ --------- ------- ----- -----
<s> <c> <c> <c> <c> <c>
Capital stock issued for cash
- at $0.001 7,500,000 7,500 - - 7,500
- at $0.01 2,000,000 2,000 18,000 - 20,000
- at $0.20 15,000 15 2,985 - 3,000
Net loss for the period - - - (10,267) (10,267)
--------------- -------------- -------------- -------------- --------------
Balance, June 30, 2004 9,515,000 9,515 20,985 (10,267) 20,233
Net loss for the period - - - (7,628) (7,628)
--------------- -------------- -------------- -------------- --------------
Balance, December 31, 2004 9,515,000 $ 9,515 $ 20,985 $ (17,895) $ 12,605
=============== ============== ============== ============== ==============
</table>
SEE ACCOMPANYING NOTES
49
<page>
DYNAMIC GOLD CORP.
(A Pre-exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
December 31, 2004
(Stated in US Dollars)
(Unaudited)
---------
Note 1 Interim Financial Statements
----------------------------
While the information presented in the accompanying six months to
December 31, 2004 interim financial statements is unaudited, it
includes all adjustments which are, in the opinion of management,
necessary to present fairly the financial position, results of
operations and cash flows for the interim period presented in
accordance with the accounting principles generally accepted in
the United States of America. In the opinion of management, all
adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included
and all such adjustments are of a normal recurring nature. It is
suggested that these financial statements be read in conjunction
with the Company's June 30, 2004 financial statements.
Operating results for the six months ended December 31, 2004 are
not necessarily indicative of the results that can be expected for
the year ending June 30, 2005.
Note 2 Continuance of Operations
-------------------------
The financial statements have been prepared using generally
accepted accounting principles in the United States of America
applicable for a going concern which assumes that the Company will
realize its assets and discharge its liabilities in the ordinary
course of business. As at December 31, 2004, the Company has
accumulated losses of $17,895 since its commencement and has yet
to achieve profitable operations. Its ability to continue as a
going concern is dependent upon the ability of the Company to
obtain the necessary financing to meet its obligations and pay its
liabilities arising from normal business operations when the come
due.
The Company was incorporated in the State of Nevada on January 21,
2004.
The Company filed a Form SB-2 Registration Statement prospectus
with the United States Securities and Exchange Commission to
qualify for the sale by existing shareholders of 4,515,000 common
shares at an offering price of $0.20 per share. The Company will
not receive any proceeds from this offering as these shares have
already been issued.
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Changes In And Disagreements With Accountants
We have had no changes in or disagreements with our accountants.
Available Information
We have filed a registration statement on form SB-2 under the Securities Act of
1933 with the Securities and Exchange Commission with respect to the shares of
our common stock offered through this prospectus. This prospectus is filed as a
part of that registration statement, but does not contain all of the information
contained in the registration statement and exhibits. Statements made in the
registration statement are summaries of the material terms of the referenced
contracts, agreements or documents of the company. We refer you to our
registration statement and each exhibit attached to it for a more detailed
description of matters involving the company, and the statements we have made in
this prospectus are qualified in their entirety by reference to these additional
materials. You may inspect the registration statement, exhibits and schedules
filed with the Securities and Exchange Commission at the Commission's principal
office in Washington, D.C. Copies of all or any part of the registration
statement may be obtained from the Public Reference Section of the Securities
and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the Commission at 1-800-SEC-0330 for further information on the operation
of the public reference rooms. The Securities and Exchange Commission also
maintains a web site at http://www.sec.gov that contains reports, proxy
statements and information regarding registrants that file electronically with
the Commission. Our registration statement and the referenced exhibits can also
be found on this site.
Although we are not required to deliver an annual report to security holders, we
will voluntarily send an annual report, including audited financial statements,
to any security holder requesting one.
Upon the effectiveness of our registration statement, we will file reports with
the Securities and Exchange Commission, including annual reports on Form 10-KSB,
interim reports on Form 10-QSB and current reports on Form 8-K.
Until_____________, all dealers that effect transactions in these securities
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealer's obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
Part II
Information Not Required In The Prospectus
Indemnification Of Directors And Officers
Our officers and directors are indemnified as provided by the Nevada Revised
Statutes and our bylaws.
Under the NRS, director immunity from liability to a company or its shareholders
for monetary liabilities applies automatically unless it is specifically limited
by a company's articles of incorporation that is not the case with our articles
of incorporation. Excepted from that immunity are:
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(1) a willful failure to deal fairly with the company or its
shareholders in connection with a matter in which the director
has a material conflict of interest;
(2) a violation of criminal law (unless the director had
reasonable cause to believe that his or her conduct was lawful
or no reasonable cause to believe that his or her conduct was
unlawful);
(3) a transaction from which the director derived an improper
personal profit; and
(4) willful misconduct.
Our bylaws provide that we will indemnify our directors and officers to the
fullest extent not prohibited by Nevada law; provided, however, that we may
modify the extent of such indemnification by individual contracts with our
directors and officers; and, provided, further, that we shall not be required to
indemnify any director or officer in connection with any proceeding (or part
thereof) initiated by such person unless:
(1) such indemnification is expressly required to be made by law;
(2) the proceeding was authorized by our Board of Directors;
(3) such indemnification is provided by us,in our sole discretion,
pursuant to the powers vested us under Nevada law; or
(4) such indemnification is required to be made pursuant to the by
laws.
Our bylaws provide that we will advance all expenses incurred to any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was our director or
officer, or is or was serving at our request as a director or executive officer
of another company, partnership, joint venture, trust or other enterprise, prior
to the final disposition of the proceeding, promptly following request. This
advanced of expenses is to be made upon receipt of an undertaking by or on
behalf of such person to repay said amounts should it be ultimately determined
that the person was not entitled to be indemnified under our bylaws or
otherwise.
Our bylaws also provide that no advance shall be made by us to any officer in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made: (a) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to the proceeding; or (b) if such quorum is not obtainable, or,
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to the
decision- making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to our best interests.
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Other Expenses Of Issuance And Distribution
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee $ 114.41
Transfer Agent Fees $ 1,000.00
Accounting fees and expenses $ 5,000.00
Legal fees and expenses $ 10,000.00
Edgar filing fees $ 1,500.00
-----------
Total $ 17,614.41
===========
All amounts are estimates other than the Commission's registration fee.
We are paying all expenses of the offering listed above. No portion of these
expenses will be borne by the selling shareholders. The selling shareholders,
however, will pay any other expenses incurred in selling their common stock,
including any brokerage commissions or costs of sale.
Recent Sales Of Unregistered Securities
We issued 3,500,000 shares of our common stock to Mr. Tim Coupland on
May 18, 2004. Mr. Coupland is our president, chief executive officer,treasurer,
principal financial officer and a director. Additionally, we issued 1,500,000
shares of our common stock to Mr. Brian Game on May 19, 2004. Mr. Game is our
secretary and a director. Mr. Coupland and Mr. Game acquired these shares at a
price of $0.001 per share for total proceeds to us of $5,000.00. We completed
this offering pursuant to Regulation S of the Securities Act.
We completed an offering of 2,500,000 shares of our common stock at a price of
$0.001 per share to the following five purchasers on May 27, 2004:
Name of Subscriber Number of Shares
------------------ ----------------
Robert Fedun 500,000
Dr. Douglas Coupland 500,000
David Lorne 500,000
Mark Foreman 500,000
Larry Ilich 500,000
The total amount received from this offering was $2,500. We completed this
offering pursuant to Regulation S of the Securities Act.
We completed an offering of 2,000,000 shares of our common stock at a price of
$0.01 per share to the following 20 purchasers on June 13, 2004:
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Name of Subscriber Number of Shares
------------------ ----------------
Ruby Nishi 100,000
Ann Marie Cederholm 100,000
Allan Feldman 100,000
Farshad Shirvani 100,000
Jeremy Ross 100,000
William Koble 100,000
Jason Schweigel 100,000
Steven Feldman 100,000
Robert Young 100,000
Heather Conley 100,000
Kim Aimetz 100,000
Douglas Coupland 100,000
Tyler Ross 100,000
Joe Abinante 100,000
Frank Underhill 100,000
Jordan Hood 100,000
Carol Nicholson 100,000
Frances Nicholson 100,000
Aaron Silverman 100,000
Stan Green 100,000
The total amount received from this offering was $20,000. We completed this
offering pursuant to Regulation S of the Securities Act.
We completed an offering of 15,000 shares of our common stock at a price of
$0.20 per share to the following 15 purchasers on June 25, 2004:
Name of Subscriber Number of Shares
------------------ ----------------
Alex Inunza 1,000
Chelsea Banys 1,000
Brian Crowe 1,000
Robb Perkinson 1,000
Paul Dickson 1,000
Roy Nicholson 1,000
Craig Douglas 1,000
Ray Vyas 1,000
Sharon Larkin 1,000
John Shirvani 1,000
Bob Allam 1,000
Ruth Feldman 1,000
Heidi Streu 1,000
Lori Scot 1,000
Nancy Feibel 1,000
The total amount received from this offering was $3,000. We completed this
offering pursuant to Regulation S of the Securities Act.
Regulation S Compliance
Each offer or sale was made in an offshore transaction;
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Neither we, a distributor, any respective affiliates, nor any person on behalf
of any of the foregoing, made any directed selling efforts in the United States;
Offering restrictions were, and are, implemented;
No offer or sale was made to a U.S. person or for the account or benefit of a
U.S. person;
Each purchaser of the securities certifies that it was not a U.S. person and was
not acquiring the securities for the account or benefit of any U.S. person;
Each purchaser of the securities agreed to resell such securities only in
accordance with the provisions of Regulation S, pursuant to registration under
the Act, or pursuant to an available exemption from registration; and agreed not
to engage in hedging transactions with regard to such securities unless in
compliance with the Act;
The securities contain a legend to the effect that transfer is prohibited except
in accordance with the provisions of Regulation S, pursuant to registration
under the Act, or pursuant to an available exemption from registration; and that
hedging transactions involving those securities may not be conducted unless in
compliance with the Act; and
We are required, either by contract or a provision in its bylaws, articles,
charter or comparable document, to refuse to register any transfer of the
securities not made in accordance with the provisions of Regulation S pursuant
to registration under the Act, or pursuant to an available exemption from
registration; provided, however, that if any law of any Canadian province
prevents us from refusing to register securities transfers, other reasonable
procedures, such as a legend described in paragraph (b)(3)(iii)(B)(3) of
Regulation S have been implemented to prevent any transfer of the securities not
made in accordance with the provisions of Regulation S.
Exhibits
Exhibit
Number Description
3.1* Articles of Incorporation
3.2* Bylaws
5.1* Legal opinion of Joseph I. Emas, with consent to
Use
10.1* Mineral Property Bill of Sale
23.1 Consent of Amisano Hanson, Chartered Accountants
23.2** Consent of Erik A. Ostensoe with consent to use
99.1** Claims location map
* filed as exhibits to our registration statementon Form SB-2 dated October 19,
2004.
** filed as exhibits to our registration statementon Form SB-2 dated December 9,
2004.
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The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement, or most recent
post-effective amendment, which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement; Notwithstanding the forgoing, any increase or
decrease in Volume of securities offered (if the total dollar value
of securities offered would not exceed that which was registered) and
any deviation from the or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
commission pursuant to Rule 424(b)if, in the aggregate, the changes
in the volume and price represent no more than 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(c) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement
or any material change to such information in the registration
statement.
2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered hereby which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and controlling
persons pursuant to the provisions above, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of our directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of our directors, officers, or controlling
person sin connection with the securities being registered, we will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
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Signatures
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Vancouver, Province of British Columbia on March 16, 2005.
Dynamic Gold Corp.
By: /s/ Tim Coupland
------------------------------
Tim Coupland
President, Chief
Executive Officer, Treasurer,
Principal Financial Officer and director
Power of Attorney
ALL MEN BY THESE PRESENT, that each person whose signature appears below
constitutes and appoints Tim Coupland, his true and lawful attorney-in-fact and
agent, with full power of substitution and re-substitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all pre- or
post-effective amendments to this registration statement, and to file the same
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any one
of them, or their or his substitutes, may lawfully do or cause to be done by
virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
/s/ Tim Coupland President, Chief Executive March 16, 2005
- ----------------------- Officer, Treasurer, Principal
Tim Coupland Financial Officer and director
/s/ Brian Game Secretary and director March 16, 2005
- -----------------------
Brian Game
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