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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FILE NO: 333-118262
Amendment #4
AZZORO INC.
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(Exact name of Registrant as specified in its charter)
NEVADA 1000 77-0622733
- ---------------------- ------------------- ---------------------
(State or other jurisdiction Standard Industrial IRS Employer
of incorporation or Classification Identification Number
organization)
AZZORO INC.
Ted Burylo, President
455 Granville Street, Suite 500,
Vancouver, British Columbia
Canada V6C 1T1
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(Name and address of principal (Zip Code)
executive offices)
Registrant's telephone number,
including area code: (604) 209-4522
Fax: (604) 681-7622
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Approximate date of commencement of Proposed sale to the public:
as soon as practicable after the effective date of this
Registration Statement.
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.
|--|
<page>
CALCULATION OF REGISTRATION FEE
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TITLE OF AMOUNT TO PROPOSED PROPOSED AMOUNT OF
EACH CLASS BE MAXIMUM MAXIMUM REGISTRATION
OF REGISTERED OFFERING AGGREGATE FEE (2)
SECURITIES PRICE PER OFFERING
TO BE SHARE (1) PRICE (2)
REGISTERED
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Common Stock 2,710,000 shares $0.20 $542,000 $66.14
(1) Based on the last sales price on April 19, 2004.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT 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 December 16, 2005
Agent for service of process: Empire Stock Transfer Inc.
7251 West Lake Mead Boulevard Suite 300
Las Vegas, NV 89128
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PROSPECTUS
AZZORO INC.
2,710,000 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 - 9.
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. We determined this offering price based
upon the price of the last sale of our common stock to investors.
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: December 16, 2005
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<page>
Table Of Contents
PAGE
Summary ....................................................... 5
Risk Factors .................................................. 6
- If we do not obtain additional financing, our business
will fail ................................................ 6
- Because we have not commenced business operations, we face
a high risk of business failure .......................... 6
- Because of the speculative nature of exploration of mining
properties, there is substantial risk that our business
will fail ................................................ 7
- We need to continue as a going concern if our business is
to succeed. Our independent auditor has raised doubt about
our ability to continue as a going concern................ 7
- 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 ....................... 7
- Even if we discover commercial reserves of precious metals
on the Surprise Lake property, we may not be able to
successfully commence commercial production .............. 7
- Because our directors own 64.9% of our outstanding stock,
they could control and make corporate decisions that may
be disadvantageous to other minority stockholders ......... 8
- Because our president and secretary 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.............................. 8
- Because our management has only limited experience in
mineral exploration, our business has a higher risk of
failure................................................... 8
- If a market for our common stock does not develop,
shareholders may be unable to sell their shares ......... 8
- A purchaser is purchasing penny stock which limits the
sell the ability to stock ................................ 8
Forward-Looking Statements..................................... 9
Use of Proceeds ............................................... 9
Determination of Offering Price ............................... 9
Dilution ...................................................... 9
Selling Shareholders .......................................... 9
Plan of Distribution .......................................... 13
Legal Proceedings ............................................. 14
Directors, Executive Officers, Promoters and Control Persons.. 14
Security Ownership of Certain Beneficial Owners and Management 16
Description of Securities ..................................... 16
Interest of Named Experts and Counsel ......................... 17
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities .................................... 18
Organization Within Last Five Years ........................... 18
Description of Business ....................................... 18
Plan of Operations ............................................ 22
Description of Property ....................................... 22
Certain Relationships and Related Transactions ................ 23
Market for Common Equity and Related Stockholder Matters ...... 23
Executive Compensation ........................................ 24
Financial Statements .......................................... 25
Changes in and Disagreements with Accountants ................. 50
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Summary
Prospective investors are urged to read this prospectus in its entirety.
We intend to be in the business of mineral property exploration. To date, we
have not conducted any exploration on our sole mineral property, the Surprise
Lake property, also known as the Short claims, located in British Columbia,
Canada. We own a 100% interest in the eight mineral claims comprising the
Surprise Lake property. We purchased these claims from Peter Burjoski of Atlin,
British Columbia for a cash payment of $5,000.
Our objective is to conduct mineral exploration activities on the Surprise Lake
property in order to assess whether it possesses economic reserves of gold,
tungsten and molybdenum. We have not yet identified any economic mineralization
on the property. Our proposed exploration program is designed to search for an
economic mineral deposit.
There is currently no public market for our common stock and no certainty that a
market will develop. 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.
We were incorporated on January 15, 2004 under the laws of the state of Nevada.
Our principal offices are located at 455 Granville Street, Suite 500, Vancouver,
British Columbia, Canada. Our telephone number is (604) 209-4522.
The Offering:
Securities Being Offered Up to 2,710,000 shares of common stock.
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
2,710,000 shares of common stock have been sold,the
shares no longer need to be registered to be sold
or we decide to terminate the registration of the
shares.
Securities Issued and to
be Issued 7,710,000 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 September 30, 2005 March 31, 2005 March 31, 2004
(unaudited) (audited) (audited)
Cash $14,966 $22,429 $26,371
Total Assets $14,966 $22,429 $26,371
Liabilities $4,280 $7,111 $2,930
Total Stockholders' Equity $10,686 $15,318 $23,441
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Statement of Loss and Deficit
From Incorporation on January 15, 2004 to September 30, 2005 (unaudited)
Revenue $ 0
Net Loss ($23,314)
Risk Factors
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock 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 Surprise Lake property, and therefore we will need to obtain
additional financing in order to complete our business plan. As of December 16,
2005, we had cash in the amount of $13,453. We currently do not have any
operations and we have no income. As well, we will not receive any funds from
this registration.
Our business plan calls for significant expenses in connection with the
exploration of the Surprise Lake property. While we have sufficient funds to
conduct most of the initial exploration on the property, estimated to cost
$15,000, we will require additional financing, likely in excess of $2,000,000,
in order to determine whether the property contains economic mineralization
and an additional $15,000 to cover our anticipated administrative costs over
the next year. We will also require additional financing if the costs of the
exploration of the Surprise Lake property are greater than anticipated.
Even after completing all proposed exploration, we will not know if we
have a commercially viable mineral deposit. We will need to commission a
feasibility study, prepared by a professional geologist, which will determine
whether mining operations are justified based on the costs to erect mining
facilities on the property and the current sale prices of the mineralization
discovered. We estimate that the cost of such a feasibility study would be
$250,000.
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 may not 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, tungsten and
molybdenite, and 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. 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 Surprise
Lake 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 Surprise Lake property.
Accordingly, we have no way to evaluate the likelihood that our business will be
successful. We were incorporated on January 15, 2004 and to date 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
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prospectus. Potential investors should be aware of the difficulties normally
encountered by new mineral exploration companies and the high rate of failure of
such enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.
Prior to completion of our exploration stage, we anticipate that we will incur
increased operating expenses without realizing any revenues. We therefore expect
to incur significant losses into the foreseeable future. We recognize that if we
are unable to generate significant revenues from development of the Surprise
Lake 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 it is doubtful that we will generate any operating
revenues or ever achieve profitable operations. If we are unsuccessful in
addressing these risks, our business will most likely fail. If we determine that
the Surprise Lake property does not contain any reserves and that we are unable
to complete our business plan with respect to the claims, we intend to acquire
an interest or interests in additional mineral claims for exploration purposes.
Additional acquisitions will depend upon our ability to raise additional funding
through our sale of common stock.
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. The
likelihood of our mineral claims containing economic mineralization or reserves
is extremely remote. Exploration for minerals is a speculative venture
necessarily involving substantial risk. In all probability, the Surprise Lake
property does not contain any reserves and funds that we spend on exploration
will be lost. As well, 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.
WE NEED TO CONTINUE AS A GOING CONCERN IF OUR BUSINESS IS TO SUCCEED. OUR
INDEPENDENT AUDITOR HAS RAISED DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING
CONCERN.
The Independent Auditor's Report to our audited financial statements for the
period ended March 31, 2004 and 2005 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 that we have no source of
revenue and our dependence upon obtaining adequate financing. If we are not
able to continue as a going concern, it is likely investors will lose all of
their investment.
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.
EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON THE SURPRISE LAKE
PROPERTY, WE MAY NOT BE ABLE TO SUCCESSFULLY COMMENCE COMMERCIAL PRODUCTION.
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The Surprise Lake property does not contain any known bodies of mineralization.
If our exploration programs are successful in establishing gold, tungsten and
molybdenum of commercial tonnage and grade, we will require additional funds in
order to place the property into commercial production. We may not be able to
obtain such financing.
BECAUSE OUR DIRECTORS OWN 64.9% OF OUR OUTSTANDING COMMON STOCK, THEY COULD MAKE
AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO OTHER MINORITY
SHAREHOLDERS.
Our directors own approximately 64.9% 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 OUR PRESIDENT AND SECRETARY 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. Ted Burylo spends approximately 50% his business time
providing his services to us. Our secretary, Mr. Jeff Murdock spends only about
10% of his business time providing his services to us. While Mr. Burylo and Mr.
Murdock presently possess adequate time to attend to our interests, it is
possible that the demands on Mr. Burylo and Mr. Murdock from their other
obligations could increase with the result that they would no longer be able to
devote sufficient time to the management of our business.
BECAUSE MANAGEMENT HAS ONLY LIMITED EXPERIENCE IN MINERAL EXPLORATION, OUR
BUSINESS HAS A HIGHER RISK OF FAILURE.
None of our directors has any technical training in the field of geology and
specifically in the areas of exploring for, starting and operating a mine. As a
result, we may not be able to recognize and take advantage of potential
acquisition and exploration opportunities in the sector without the aid of
qualified geological consultants. As well, with no direct training or
experience, our management may not be fully aware of the specific requirements
related to working in this industry. Their decisions and choices may not be well
thought out and our operations, earnings and ultimate financial success may
suffer irreparable harm as a result.
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 no certainty 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. Our shares may never trade on
the bulletin board.
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.
A PURCHASER IS PURCHASING PENNY STOCK WHICH LIMITS HIS OR HER ABILITY TO SELL
THE STOCK.
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The shares offered by this prospectus constitute penny stock under the Exchange
Act. The shares will remain penny stock for the foreseeable future. The
classification of penny stock makes it more difficult for a broker-dealer to
sell the stock into a secondary market, thus limiting investment liquidity. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in our company will be subject to rules 15g-1 through 15g-10 of the
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
Please refer to the "Plan of Distribution" section for a more detailed
discussion of penny stock and related broker-dealer restrictions.
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 may 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.
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
2,710,000 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:
1. 2,700,000 shares of our common stock that the 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 March 31, 2004;
and
2. 10,000 shares of our common stock that the 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 April 19, 2004.
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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
<table>
<caption>
Name of Selling Shares owned Total Number of Total Shares Percent Owned
Stockholder Prior To This Shares To Be Owned Upon Upon Completion
Offering Offered For Selling Completion Of This Offering
Shareholders of this
Account Offering
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<s> <c> <c> <c> <c>
James Thiede
550 Beatty Street Suite 412
Vancouver, B.C. 100,000 100,000 Nil Nil
David Anderson
955 Burrard Street
Vancouver, B.C 100,000 100,000 Nil Nil
Kevin Klassen
50 West Cordova St Suite 201
Vancouver, B.C. 100,000 100,000 Nil Nil
Sharon Lee-White
50 West Cordova St Suite 528
Vancouver, B.C. 100,000 100,000 Nil Nil
Peter Burjoski
Box 176
Atlin, B.C 100,000 100,000 Nil Nil
Jonathan Shea
2726 Alder Street Suite 304
Vancouver, B.C. 200,000 200,000 Nil Nil
William Butler
2341 York Avenue Suite 29
Vancouver, B.C. 100,000 100,000 Nil Nil
William McCormack
2050 Rupert Street Suite 121
Vancouver, B.C. 100,000 100,000 Nil Nil
Lorne Wenn
340 8th Street Suite 306
New Westminster, B.C. 100,000 100,000 Nil Nil
</table>
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<table>
<caption>
Name of Selling Shares owned Total Number of Total Shares Percent Owned
Stockholder Prior To This Shares To Be Owned Upon Upon Completion
Offering Offered For Selling Completion Of This Offering
Shareholders of this
Account Offering
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<s> <c> <c> <c> <c>
Parvin Selseleh
7478 Sandborne Ave.
Burnaby, B.C. 100,000 100,000 Nil Nil
Chris Roger
7576 17th Avenue
Burnaby, B.C. 100,000 100,000 Nil Nil
G.E. Fenwick
755 Abbott Street Suite 365
Vancouver, B.C. 100,000 100,000 Nil Nil
Shahram Fasihy
7478 Sandborne Ave.
Burnaby, B.C. 100,000 100,000 Nil Nil
Michelle Janes
1435 Nelson Street Suite 209
Vancouver, B.C. 100,000 100,000 Nil Nil
Marni Ziegler
7576 17th Avenue
Burnaby, B.C. 100,000 100,000 Nil Nil
Hailey Wenn
2715 Blackwood Street
Victoria, B.C. 100,000 100,000 Nil Nil
Lara Wenn
2715 Blackwood Street
Victoria, B.C. 100,000 100,000 Nil Nil
Ben McCormack
3350 East 5th Avenue
Vancouver, B.C. 100,000 100,000 Nil Nil
Guy Lawson
340 8th Street
New Westminster, B.C. 100,000 100,000 Nil Nil
Ron Teti
4101 Rose Crescent
West Vancouver, B.C. 100,000 100,000 Nil Nil
</table>
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<table>
<caption>
Name of Selling Shares owned Total Number of Total Shares Percent Owned
Stockholder Prior To This Shares To Be Owned Upon Upon Completion
Offering Offered For Selling Completion Of This Offering
Shareholders of this
Account Offering
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<s> <c> <c> <c> <c>
Elaheh Fasihy
7478 Sandborne Ave
Burnaby, B.C. 100,000 100,000 Nil Nil
Seyed Mostafa Fasihi
7478 Sandborne Ave
Burnaby, B.C. 100,000 100,000 Nil Nil
E. Edwards
7576 17th Avenue
Burnaby, B.C. 100,000 100,000 Nil Nil
Brian Glaum
5145 Sperling Avenue
Burnaby, B.C. 100,000 100,000 Nil Nil
Randy Pesto
5189 Norfolk Street
Burnaby, B.C. 100,000 100,000 Nil Nil
Harold McDougall
450 Cordova Street, Suite 231
Vancouver, B.C. 100,000 100,000 Nil Nil
William McMillan
1435 Nelson Street Suite 209
Vancouver, B.C. 5,000 5,000 Nil Nil
Frank Kramaric
518 Richards Street Suite 315
Vancouver, B.C. 5,000 5,000 Nil Nil
</table>
The named party beneficially owns and has sole voting and investment 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 7,710,000 shares of common
stock outstanding on the date of this prospectus.
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; or
(2) has ever been one of our officers or directors.
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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. The shares may also be sold in compliance with the Securities and
Exchange Commission's Rule 144.
The selling shareholders may also sell their shares directly to market makers
acting as principals, brokers or dealers, who may act as agent or acquire the
common stock as principal. Any broker or dealer participating in such
transactions as agent may receive a commission from the selling shareholders,
or, if they act as agent for the purchaser of such common stock, from such
purchaser. The selling shareholders will likely pay the usual and customary
brokerage fees for such services. Brokers or dealers may agree with the selling
shareholders to sell a specified number of shares at a stipulated price per
share and, to the extent such broker or dealer is unable to do so while acting
as agent for the selling shareholders, to purchase, as principal, any unsold
shares at the price required to fulfill the respective broker's or dealer's
commitment to the selling shareholders.
Brokers or dealers who acquire shares as principals may thereafter resell such
shares from time to time in transactions in a market or on an exchange, in
negotiated transactions or otherwise, at market prices prevailing at the time of
sale or at negotiated prices, and in connection with such re-sales may pay or
receive commissions to or from the purchasers of such shares. These transactions
may involve cross and block transactions that may involve sales to and through
other brokers or dealers. 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. 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 $15,000. 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 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 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
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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;
* 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;
* 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 proceeding with any transaction in
a penny stock, the customer:
* with bid and offer quotations for the penny stock;
* details of 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 7251 West Lake Mead Boulevard, Suite 300, Las Vegas, NV
89128.
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:
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Name of Director Age
- ---------------- ---
Ted Burylo 64
Jeff Murdock 36
Executive Officers:
Name of Officer Age Office
- --------------------- --- -------
Ted Burylo 64 President, Chief Executive
Officer, Treasurer, Principal
Accounting Officer
and a Director
Jeff Murdock 36 Secretary and a Director
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. Ted Burylo has acted as our president, chief executive officer treasurer and
as a director since our incorporation on January 15, 2004. He is an independent
businessman that provides consulting services to junior venture companies. From
March 2001 to January 2003, Mr. Burylo acted as online marketing executive for
Stockscape Network Group, Inc., a private investor relations consulting and
marketing firm for publicly trading companies.
Since August 2002 and October 2003 respectively, Mr. Burylo has acted as a
director of Algorithm Media Inc. and Bellhaven Ventures Inc., both of which are
reporting issuers in Alberta and British Columbia. Algorithm Media Inc. is
involved in the operation of a music recording studio. Bellhaven Ventures Inc.
is involved in the exploration of mineral properties.
Mr. Burylo does not have any professional training or technical credentials in
the exploration, development and operation of mines.
Mr. Burylo intends to devote 50% of his business time per week to our affairs.
Mr. Jeff Murdock has acted as our secretary and as a director since January 21,
2004. Since March 1999 has acted as a corporate communications services
consultant for Iciena Ventures Inc., an Alberta and British Columbia reporting
company that is involved in silver and diamond property exploration.
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.
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Conflicts of Interest
We do not have any written procedures in place to address conflicts of interest
that may arise in our directors between our business and their other business
activities.
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.
Except as otherwise indicated, all shares are owned directly.
Title of Class Name and address Amount of beneficial Percent of
of beneficial owner ownership class
Common Stock Ted Burylo 2,500,000 32.43%
President, Chief
Executive Officer,
Principal Accounting
Officer, Director
455 Granville Street
Suite 500
Vancouver, B.C.
Common Stock Jeff Murdock 2,500,000 32.43%
Secretary and Director
1422 East 3rd Avenue
Suite 201
Vancouver, B.C.,
V5N 5R5
Common Stock All officers and
directors as a group
that consists of two
people 5,000,000 64.86%
The percent of class is based on 7,710,000 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 December 16, 2005, there were 7,710,000 shares of our common stock issued
and outstanding that are held by 30 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. Two persons present and being, or representing by proxy, shareholders
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.
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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.
Nor was any such person connected with the registrant as a promoter, managing
or principal underwriter, voting trustee, director, officer, or employee.
The financial statements included in this prospectus and the registration
statement have been audited by Dale Matheson Carr-Hilton LaBonte, 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.
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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. These provisions provide that we shall indemnify a
director or former director against all expenses incurred by him by reason of
him acting in that position. The directors may also cause us to indemnify an
officer, employee or agent in the same fashion.
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 a court of appropriate jurisdiction. We will then be governed by the
court's decision.
Organization Within Last Five Years
We were incorporated on January 15, 2004 under the laws of the state of Nevada.
On that date, Ted Burylo was appointed as president, secretary, chief executive
officer, principle accounting officer and director. Mr. Burylo acts as our sole
promoter. Mr. Murdock was appointed as our secretary and a director on January
21, 2004. Concurrently, Ted Burylo resigned as our secretary.
Mr. Burylo has not received, and has no agreement to receive, anything of value,
directly or indirectly, from us.
Description Of Business
In General
We intend to commence operations as an exploration stage company. We will be
engaged in the acquisition and exploration of mineral properties with a view to
exploiting any mineral deposits we discover that demonstrate economic
feasibility. We own a 100% interest in eight contiguous lode mineral claims
collectively known as the Surprise Lake property and also referred to as the
Short claims. There is no assurance that a commercially viable mineral deposit
exists on the property. Further exploration will be required before a final
evaluation as to the economic and legal feasibility is determined.
Our plan of operation is to conduct exploration work on the Surprise Lake
property in order to ascertain whether it possesses economic quantities of gold,
tungsten and molybdenite. There can be no assurance that economic mineral
deposits or reserves exist on the Surprise Lake property until appropriate
exploration work is done and an economic evaluation based on such work concludes
that production of minerals from the property is economically feasible.
Even if we complete our proposed exploration programs on the Surprise Lake
property and they are successful in identifying a mineral deposit, we will have
to spend substantial funds on further drilling and engineering studies before we
will know if we have a commercially viable mineral deposit.
Description, Location and Access
The Surprise Lake Property is located approximately 22 miles northeast of Atlin,
British Columbia at the north end of Surprise Lake. Atlin is located on the east
shore of Atlin Lake in northwestern British Columbia and is approximately 61
miles south of Jakes Corner, Yukon on the Alaska Highway and approximately 113
miles from Whitehorse, Yukon. A community air strip enables air access by small
planes into Atlin. The south end of Surprise Lake may be accessed by local roads
that are passable by wheeled vehicles in the summer months and by snowmobiles in
winter. The north end of the lake can be reached by circuitous routes comprising
placer miners' roads.
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Surprise Lake is about 16 miles long, varies in width from about 0.62 miles to
1.86 miles across and is oriented north-northeasterly in a sub-alpine valley.
The nearby terrain is typically post-glacial and features gentle slopes and
poplar thickets of willow brush and berry bushes, sparse evergreen stands and
poplar thickets. The lake is at an elevation of 3,090 feet and surrounding
mountain ranges rise to about 6,561 feet. The claims are located in the valley
bottom of upper Pine Creek that enters the north end of Surprise Lake.
The Atlin area enjoys a favorable climate with warm summers, cold winters and
only slight precipitation, equally in the form of rain and snow. Permafrost is
present in sheltered areas, but is not a serious impediment to mining
operations.
Surprise Lake Property Staking and Purchase Agreement
On January 29, 2004, we entered into an agreement with Mr. Peter Burjoski of
Atlin, British Columbia, whereby he agreed stake and sell to us a total of eight
mineral claims located approximately 22 miles northeast of Atlin, British
Columbia in an area having the potential to contain gold, tungsten and
molybdenum mineralization or deposits. In order to acquire a 100% interest in
these claims, we paid $5,000 to Mr. Burjoski.
Exploration History
The Atlin mining district, inclusive of the Surprise Lake property, achieved
recognition in 1898 with the discovery of placer gold. The term placer refers to
the natural tendency of heavy minerals to sink in moving water. Gold, due to its
high density and coupled with the effect of gravity, will naturally concentrate
and settle in areas of moving streams and lakes where other, lighter substances
have been carried away by the flow of water and other moving particles.
Following the 1898 discovery, several government geological reconnaissance
missions were sent to the Atlin area where attention was focused on placer mines
and the interpretation of glacial history as a guide to prospective areas of
gold accumulation.
Although mining exploration in this area was most active from 1898 through 1910,
it has been continuous through the present time. During the 1970s, technical
surveys and drillings were conducted on molybdenum deposits west of Surprise
Lake. A regional geochemical survey of Atlin was completed in 1977 and
geochemists of the Geological Survey of Canada conducted field studies in
selected parts of the Atlin district as part of the focused geological
initiative.
In recent years, staff of the Geological Survey Branch have undertaken a number
of focused initiatives in the area, particularly with respect to potential
mineralized areas located in a northwesterly trending belt that lies immediately
east of Atlin Lake and nearby placer mining areas.
Geological Assessment Report: Surprise Lake Property
We have obtained a geological summary report on the Surprise Lake property that
was prepared by Mr. Erik A. Ostensoe, a professional geologist, of Vancouver,
British Columbia. The report discusses the geology of the area surrounding and
particular to the Surprise Lake property, and makes a recommendation for further
exploration work.
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In his report, Mr. Ostensoe concludes that the Surprise Lake property has the
potential to host skarn mineral deposits. A skarn is broadly defined as a
concentration of volcanic rocks that are found alongside and host occurrences of
ore. Since skarns are often associated with mineralization, they are generally
targets for mineral exploration.
Conclusions
Mr. Ostensoe, the author of the geological report on the Surprise Lake property,
believes that the area has potential for skarn occurrences of gold, tungsten and
molybdenum. Since placer gold in nearby streams has not been related to any
source, he recommends that all drainages in and near the claims be prospected by
panning techniques. Further exploration for placer gold bearing channels may
involve the use of seismic refraction surveys to locate and delineate buried
channels. Heavy equipment may be required to excavate and access the gravels
therein. Investigation of possible bedrock sources related to anomalous
geochemical results may require one or more geophysical surveys. 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.
An initial examination could be completed in about two to three weeks. Costs
including wages, camp, access, transportation and contingencies are estimated to
be less than $15,000.
Compliance with Government Regulation
We will be required to comply with all regulations, rules and directives of
governmental authorities and agencies applicable to the exploration of minerals
in Canada generally, and in the Province of British Columbia, specifically.
The governmental agencies responsible for overseeing the exploration of minerals
in Canada are primarily the Ministry of Natural Resources Canada and the
Ministry of the Environment. In British Columbia, the responsible government
agency is the Ministry of Energy, Mines and Petroleum Resources.
Under these laws, prior to production, we have the right to explore the
property, subject only to a notice of work which may entail posting a bond. In
addition, production of minerals in the Province of British Columbia will
require prior approval of applicable governmental regulatory agencies. We can
provide no assurance to investors that such approvals will be obtained. The cost
and delay involved in attempting to obtain such approvals cannot be known at
this time.
We have budgeted for regulatory compliance costs in the proposed work program
recommended by the geological report. Such costs will be less than $500 and
will consist of having any significant soil or rock that is moved during the
exploration process returned to its original location. Soil and rock movement
during proposed exploration is anticipated to be negligible.
We will have to sustain the cost of reclamation and environmental mediation
for all exploration (and development) work undertaken. The amount of these
costs is not known at this time as we do not know the extent of the exploration
program that will be undertaken beyond completion of the recommended work
program. However, it is anticipated that such costs will not exceed $20,000 for
future exploration phases. Because there is presently no information on the
size,tenor, or quality of any resource or reserve at this time, it is impossible
to assess the impact of any capital expenditures on earnings, our competitive
position or us in the event a potentially economic deposit is discovered.
If we enter into production, the cost of complying with permit and regulatory
environment laws will be greater than in phase one because the impact on the
project area is greater. Permits and regulations will control all aspects of any
production program if the project continues to that stage because of the
potential impact on the environment. Examples of regulatory requirements
include:
- Water discharge will have to meet water standards;
- Dust generation will have to be minimal or otherwise re-mediated;
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- Dumping of material on the surface will have to be re-contoured and
re-vegetated;
- An assessment of all material to be left on the surface will need to
be environmentally benign;
- Ground water will have to be monitored for any potential contaminants;
- The socio-economic impact of the project will have to be evaluated and
if deemed negative, will have to be re-mediated; and
- There will have to be an impact report of the work on the local fauna
and flora.
During the exploration phase, a bond will need to be provided covering possible
land disturbance. In the case of normal fieldwork, this should be minimal. The
costs of compliance with environmental regulations in the production phase are
variable and cannot be determined at this time.
Employees
We have no employees as of the date of this prospectus other than our two
directors.
Research and Development Expenditures
We have not incurred any other research or development expenditures since our
incorporation.
Subsidiaries
We do not have any subsidiaries.
Patents and Trademarks
We do not own, either legally or beneficially, any patents or trademarks.
Reports to Security Holders
Although we are not required to deliver a copy of our annual report to our
security holders, we will voluntarily send a copy of our annual report,
including audited financial statements, to any registered shareholder who
requests it. We will not be a reporting issuer with the Securities & Exchange
Commission until our registration statement on Form SB-2 is declared effective.
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.
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Copies of all or any part of the registration statement may be obtained from
the Public Reference Section of the Securities and Exchange Commission, 100
F 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.
Plan Of Operations
Our plan of operation for the twelve months following the date of this
prospectus is to complete the recommended exploration program on the Surprise
Lake property consisting of panning techniques, a seismic refraction survey,
excavation, and one or more of an electromagnetic, magnetic, resistivity and
induced polarization survey. We anticipate that the program will cost
approximately $15,000. To date, we have not commenced exploration on the
Surprise Lake property.
Panning involves placing loose soil and water in a container shaped like a
frying pan. Through movement of the soil in the water, heavier minerals, such as
gold, are separated from lighter material in the soil. The technique is used to
determine the whether valuable minerals are present in surface soil on the
property. Panning is usually conducted by a geologist or his assistant.
Seismic refraction surveys are used in mineral exploration to define flat to
moderately-dipping deposits by determine soil and rock mass. A geologist uses a
machine known as a seismograph in order to determine distances of certain rocks
from sound emitted by the seismograph. The results provide the geologist with
information concerning the distance of rock formations underneath the earth's
surface.
Excavation will involve removing the surface soil using a backhoe or bulldozer.
Our consulting geologist will then take rock and soil samples from the bedrock
below and analyze them for mineral content.
Electromagnetic surveys involve measuring whether or not rocks on the surface
and subsurface of the property conduct electricity. Copper and gold are
excellent conductors of electricity. Areas of high conductivity are targets for
follow-up exploration.
Magnetic surveys involve searching for changes in the magnetic field over
property areas. Magnetic anomalies may be a result of accumulations of certain
magnetic rocks such as phrrhotite, hematite and magnetite. These rock types are
often found alongside base metals such as copper, zinc and nickel, or precious
metals such as gold and silver.
Resistivity surveying involves measuring the flow of electrical current through
subsurface layers of rock. The results help detect lateral and vertical changes
in subsurface electrical properties.
Induced polarization surveys measure various electrical responses to the passage
of alternating currents of different frequencies.
For each of the above surveys, the geologist and an assistant use hand held
equipment that provides readings that can indicate the potential for certain
types of mineral deposits to be present.
In the next 12 months, we also anticipate spending an additional $15,000 on
professional fees and administrative expenses, including 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 $30,000.
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. We may also seek to obtain
short-term loans from our directors, although no such arrangement has been made.
At this time, we cannot provide investors with any assurance that we will be
able to raise sufficient funding from the sale of our common stock or through a
loan from our directors to meet our obligations over the next twelve months. We
do not have any arrangements in place for any future equity financing.
As well, in order to determine whether the Surprise Lake property contains
economic mineralization, it is likely that we will have to spend in excess of an
additional $2,000,000. We would expect to incur these expenses over five years
following the completion of the proposed exploration discussed above.
Such funds would either be raised through the sale of our
common stock or by approaching a joint venture partner, likely a larger mineral
exploration and development company, to provide the required funding in
consideration of an interest in the property. We have not undertaken any efforts
to locate a joint venture partner.
Even once we have completed all proposed exploration on the Surprise Lake
property, we will need to commission a feasibility study, prepared by a
professional geologist, which will determine whether mining operations are
justified based on the costs to erect mining facilities on the property and the
current sale prices of the mineralization discovered. We estimate that the cost
of such a feasibility study would be $250,000. This study would be completed
following our completion of the additional $2,000,000 in exploration that would
be necessary to determine whether the property contains economic mineralization,
or in approximately six years.
We do not expect to earn any revenue from operations until we have either
commenced mining operations on the Surprise Lake property or have sold an
interest in the property to a third party. Before this occurs, we expect that we
will have to complete current recommended exploration on the property, as well
as additional exploration recommended by a geologist.
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on the small business issuer's
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources that
are material to investors.
Results Of Operations For Period Ending September 30, 2005
We have not earned any revenues from our incorporation on January 15, 2004 to
September 30, 2005. We do not anticipate earning revenues unless we enter into
commercial production on the Surprise Lake property, which is doubtful. We have
not commenced the exploration stage of our business and can provide no assurance
that we will discover economic mineralization on the property, or if such
minerals are discovered, that we will enter into commercial production.
We incurred operating expenses in the amount of $23,314 for the period from our
inception on January 15, 2004 to September 30, 2005. These operating expenses
were comprised of $7,000 for mineral property expenditures, $14,070 in
accounting and audit fees, $1,035 in office and miscellaneous fees and $1,209 in
filing fees.
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.
Description Of Property
We own a 100% interest in eight lode mineral claims comprising the Surprise Lake
property. We do not own or lease any property other than the Surprise Lake
property.
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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, Ted Burylo;
* Any member of the immediate family of any of the foregoing persons.
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. As well,
there is no assurance that our stock may be resold at the offered price if and
when an active secondary market might develop. Even if developed, a public
market for our securities may not be sustained.
We have not taken any steps to engage a market-marker to apply for quotation on
the OTC Bulletin Board on our behalf. If we are able to engage a market-maker,
we anticipate that it will take approximately two months for our securities to
be quoted on the OTC Bulletin Board following submission of the application.
However, there is no guarantee that our application will be approved. Even if we
obtain an OTC Bulletin Board quotation, there is no assurance that there will be
a liquid market for our stock.
Stockholders of Our Common Shares
As of the date of this registration statement, we have 30 registered
shareholders.
Rule 144 Shares
A total of 2,500,000 shares of our common stock are available for resale to the
public after January 20, 2005 and a total of 2,500,000 shares of our common
stock are available for resale to the public after January 23, 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 our common stock then outstanding which,
in our case, will equal 76,100 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.
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.
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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 March 31, 2004 and subsequent to that period
to the date of this prospectus.
Annual Compensation
Restricted Options/ LTIP Other
Other Stock * SARs payouts Comp
Name Title Year Salary Bonus Comp. Awarded (#) ($)
- ----------------------------------------------------------------------------
Ted Pres., CEO 2005 $0 0 0 0 0 0
Burylo & Director 2004 $0 0 0 0 0 0
Jeff Sec. and 2005 $0 0 0 0 0 0
Murdock Director 2004 $0 0 0 0 0 0
Stock Option Grants
We have not granted any stock options to the executive officers since our
inception.
Consulting Agreements
We do not have any employment or consulting agreement with Mr. Burylo or Mr.
Murdock. We do not pay them any amount for acting as a director.
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Financial Statements
Index to Financial Statements:
1. Report of Independent Registered Public Accounting Firm;
2. Audited financial statements for the period ending March 31, 2005 and 2004,
including:
a. Balance Sheets;
b. Statements of Operations;
c. Statements of Cash Flows;
d. Statements of Stockholders' Equity; and
e. Notes to the Financial Statements
3. Interim financial statements for the period ending September 30, 2005,
including:
a. Balance Sheets;
b. Statements of Operations;
c. Statements of Cash Flows;
d. Statements of Stockholders' Equity; and
e. Notes to the Financial Statements
-25-
<page>
AZZORO INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
March 31, 2005 and 2004
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BALANCE SHEETS
STATEMENTS OF OPERATIONS
STATEMENTS OF CASH FLOWS
STATEMENT OF STOCKHOLDERS' EQUITY
NOTES TO THE FINANCIAL STATEMENTS
-26-
<page>
[DALE MATHESON Partnership of: Robert J Burkart, Inc. James F Carr-Hilton, Ltd.
[CARR-HILTON LABONTE Alvin F Dale, Ltd. Peter J Donaldson, Inc. R.J. LaBonte, Ltd.
- ------------------- Robert J Matheson, Inc. Fraser G Ross, Ltd.
[CHARTERED ACCOUNTANTS LOGO]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of Azzoro Inc.
We have audited the balance sheets of Azzoro Inc. (an exploration stage company)
as at March 31, 2005 and March 31, 2004 and the statements of operations,
stockholders' equity and cash flows for the year ended March 31, 2005, the
period from inception on January 15, 2004 to March 31, 2004 and the period from
inception on January 15, 2004 to March 31, 2005. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform an audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at March 31, 2005 and March
31, 2004 and the statements of operations, stockholders' equity and cash flows
for the year ended December 31, 2005, the period from inception on January 15,
2004 to March 31, 2004 and the period from inception on January 15, 2004 to
March 31, 2005 in conformity with accounting principles generally accepted in
the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, to date the Company has reported losses since inception of
operations and requires additional funds to meet its obligations and fund the
costs of its operations. These factors raise doubt about the Company's ability
to continue as a going concern. Management's plans in this regard are described
in Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
"Dale Matheson Carr-Hilton LaBonte"
CHARTERED ACCOUNTANTS
Vancouver, B.C.
July 4, 2005
-27-
<page>
AZZORO INC.
(An Exploration Stage Company)
BALANCE SHEETS
March 31, 2005 and 2004
<table>
<caption>
2005 2004
---- ----
<s> <c> <c>
ASSETS
------
CURRENT ASSETS
Cash $ 22,429 $ 26,371
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 7,111 $ 2,930
--------------- ---------------
NATURE AND CONTINUANCE OF OPERATIONS (Note 1)
STOCKHOLDERS' EQUITY
Capital stock (Note 4)
Authorized:
75,000,000 common shares, $0.001 par value,
Issued and outstanding:
7,710,000 common shares (March 31, 2004 - 7,700,000) 7,710 7,700
Additional paid in capital 26,290 24,300
Deficit accumulated during the exploration stage ( 18,682) ( 8,559)
--------------- ---------------
15,318 23,441
--------------- ---------------
$ 22,429 $ 26,371
=============== ===============
</table>
The accompanying notes are an integral part of these financial statements
-28-
<page>
AZZORO INC.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
for the year ended March 31, 2005, for the period from
January 15, 2004 (inception) to March 31, 2004
and for the period from January 15, 2004 (inception) to
March 31, 2005
<table>
<caption>
Year January 15, 2004 January 15, 2004
ended (Inception) to (Inception) to
March 31, March 31, March 31,
2005 2004 2005
---- ---- ----
<s> <c> <c> <c>
Expenses
Accounting and audit fees $ 7,284 $ 2,930 $ 10,214
Filing 685 - 685
Office and miscellaneous 154 629 783
Mineral property costs (Note 3) 2,000 5,000 7,000
--------------- --------------- ---------------
Net loss for the period $ 10,123 $ 8,559 $ 18,682
=============== ================ ===============
Basic loss per share $ 0.00 $ 0.00
=============== ===============
Weighted average number of shares outstanding 7,709,548 5,464,474
=============== ===============
</table>
The accompanying notes are an integral part of these financial statements
-29-
<page>
AZZORO INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
for the year ended March 31, 2005, for the period from
January 15, 2004 (inception) to March 31, 2004
and for the period from January 15, 2004 (inception) to
March 31, 2005
<table>
<caption>
Year January 15, 2004 January 15, 2004
ended (Inception) to March (Inception) to
March 31, 31, March 31,
2005 2004 2005
---- ---- ----
<s> <c> <c> <c>
Operating Activities
Net loss for the period $ ( 10,123) $ ( 8,559) $ ( 18,682)
Change in non-cash working capital balance
related to operations
Accounts payable and accrued
Liabilities 4,181 2,930 7,111
---------------- ---------------- ----------------
Net Cash used in operating activities ( 5,942) ( 5,629) ( 11,571)
---------------- ---------------- ----------------
Financing Activity
Proceeds on sale of common stock 2,000 32,000 34,000
---------------- ---------------- ----------------
Net Cash from financing activity 2,000 32,000 34,000
---------------- ---------------- ----------------
(Decrease) increase in cash during the period (3,942) 26,371 22,429
Cash, beginning of the period 26,371 - -
---------------- ---------------- ----------------
Cash, end of the period $ 22,429 $ 26,371 $ 22,429
================ ================ ================
Supplemental cash flow information:
Interest paid $ - $ - $ -
================= ================= ================
Income taxes paid $ - $ - $ -
================= ================= ================
</table>
The accompanying notes are an integral part of these financial statements
-30-
<page>
AZZORO INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY for
the period January 15, 2004 (Inception) to March 31,
2005
<table>
<caption>
Deficit
Accumulated
Additional During the
Common Shares Paid-in Exploration
----------------------------------
Number Par Value Capital Stage Total
------ --------- ------- ----- -----
<s> <c> <c> <c> <c> <c>
Balance, January 15, 2004 - $ - $ - $ - $ -
Capital stock issued for cash
- at $0.001 per share 5,000,000 5,000 - - 5,000
- at $0.01 per share 2,700,000 2,700 24,300 - 27,000
Net loss for the period - - - ( 8,559) ( 8,559)
------------ ------------- ------------- ------------- -------------
Balance, March 31, 2004 7,700,000 7,700 24,300 ( 8,559) 23,441
Capital stock issued for cash
- at $0.20 per share 10,000 10 1,990 - 2,000
Net loss for the period - - - ( 10,123) ( 10,123)
------------ ------------- ------------- -------------- -------------
Balance, March 31, 2005 7,710,000 $ 7,710 $ 26,290 $ ( 18,682) $ 15,318
============= ============= ============= ============== =============
</table>
The accompanying notes are an integral part of these financial statements
-31-
<page>
AZZORO INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
March 31, 2005
Note 1 Nature and Continuance of Operations
------------------------------------
The Company was incorporated in the State of Nevada on January 15,
2004 and is in the exploration stage. The Company has acquired a
mineral property located in the Province of British Columbia,
Canada and has not yet determined whether this property contains
reserves that are economically recoverable. The recoverability of
costs incurred for acquisition and exploration of the property
will be dependent upon the discovery of economically recoverable
reserves, confirmation of the Company's interest in the underlying
property, the ability of the Company to obtain necessary financing
to satisfy the expenditure requirements under the property
agreement and to complete the development of the property and upon
future profitable production or proceeds for the sale thereof.
These financial statements have been prepared on a going concern
basis which assumes that the Company will be able to realize its
assets and discharge its liabilities in the normal course of
business for the foreseeable future. The Company has incurred
losses since inception resulting in an accumulated deficit of
$18,682 and further losses are anticipated in the development of
its business raising doubt about the Company's ability to continue
as a going concern. The ability to continue as a going concern is
dependent upon the Company generating profitable operations in the
future and/or to obtain the necessary financing to meet its
obligations and repay its liabilities arising from normal business
operations when they come due. Management intends to finance
operating costs over the next twelve months with existing cash on
hand and loans form directors and or private placement of common
stock.
Note 2 Summary of Significant Accounting Policies
------------------------------------------
Basis of Presentation
---------------------
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the
United States of America and are presented in US dollars.
Exploration Stage Company
-------------------------
The Company complies with Financial Accounting Standards Board
Statement No. 7 and Securities and Exchange Commission Act Guide 7
for its characterization of the Company as an exploration stage
enterprise.
-32-
<page>
Azzoro Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
March 31, 2005 - Page 2
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Mineral Property
----------------
Mineral property acquisition, exploration and development costs
are expensed as incurred until such time as economic reserves are
quantified. To date the Company has not established any proven or
probable reserves on its mineral properties. The Company has
adopted the provisions of SFAS No. 143 "Accounting for Asset
Retirement Obligations" which establishes standards for the
initial measurement and subsequent accounting for obligations
associated with the sale, abandonment, or other disposal of
long-lived tangible assets arising from the acquisition,
construction or development and for normal operations of such
assets. The adoption of this standard has had no effect on the
Company's financial position or results of operations. As at March
31, 2005, any potential costs relating to the retirement of the
Company's mineral property interest are not yet determinable.
Use of Estimates and Assumptions
--------------------------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the period.
Actual results could differ from those estimates.
Foreign Currency Translation
----------------------------
The financial statements are presented in United States dollars.
In accordance with Statement of Financial Accounting Standards No.
52, "Foreign Currency Translation", foreign denominated monetary
assets and liabilities are translated into their United States
dollar equivalents using foreign exchange rates which prevailed at
the balance sheet date. Revenue and expenses are translated at
average rates of exchange during the year. Gains or losses
resulting from foreign currency transactions are included in
results of operations.
Fair Value of Financial Instruments
-----------------------------------
The carrying value of cash and accounts payable and accrued
liabilities approximates their fair value because of the short
maturity of these instruments. Unless otherwise noted, it is
management's opinion that the Company is not exposed to
significant interest, currency or credit risks arising from these
financial instruments.
-33-
<page>
Azzoro Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
March 31, 2005 - Page 3
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Environmental Costs
-------------------
Environmental expenditures that relate to current operations are
expensed or capitalized as appropriate. Expenditures that relate
to an existing condition caused by past operations, and which do
not contribute to current or future revenue generation, are
expensed. Liabilities are recorded when environmental assessments
and/or remedial efforts are probable, and the cost can be
reasonably estimated. Generally, the timing of these accruals
coincides with the earlier of completion of a feasibility study or
the Company's commitments to plan of action based on the then
known facts.
Income Taxes
------------
The Company follows the liability method of accounting for income
taxes. Under this method, deferred income tax assets and
liabilities are recognized for the estimated tax consequences
attributable to differences between the financial statement
carrying values and their respective income tax basis (temporary
differences). The effect on deferred income tax assets and
liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
At March 31, 2005 a full deferred tax asset valuation allowance
has been provided and no deferred tax asset benefit has been
recorded.
Basic and Diluted Loss Per Share
--------------------------------
Basic earnings per share includes no dilution and is computed by
dividing income available to common stockholders by the weighted
average number of common shares outstanding for the period.
Dilutive earnings per share reflects the potential dilution of
securities that could share in the earnings of the Company.
Because the Company does not have any potentially dilutive
securities, the accompanying presentation is only of basic loss
per share.
Stock-based Compensation
------------------------
In December 2002, the Financial Accounting Standards Board
("FASB") issued Financial Accounting Standard No. 148, "Accounting
for Stock-Based Compensation - Transition and Disclosure" ("SFAS
No. 148"), an amendment of Financial Accounting Standard No. 123
"Accounting for Stock-Based Compensation" ("SFAS No. 123"). The
purpose of SFAS No. 148 is to: (1) provide alternative methods of
transition for an entity that voluntarily changes to the fair
value based method of accounting for stock-based employee
compensation, (2) amend the disclosure provisions to require
prominent disclosure about the effects on reported net income of
an entity's accounting policy decisions with respect to
stock-based employee compensation, and (3) to require disclosure
of those effects in interim financial information.
-34-
<page>
Azzoro Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
March 31, 2005 - Page 4
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Stock-based Compensation - (cont'd)
------------------------
The Company has elected to account for stock-based employee
compensation arrangements in accordance with the provisions of
Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees", ("APB No. 25") and comply with the
disclosure provisions of SFAS No. 123 as amended by SFAS No. 148
as described above. In addition, in accordance with SFAS No. 123
the Company will apply the fair value method using the
Black-Scholes option-pricing model in accounting for options
granted to consultants. Under APB No. 25, compensation expense for
employees is recognized based on the difference, if any, on the
date of grant between the estimated fair value of the Company's
stock and the amount an employee must pay to acquire the stock.
Compensation expense is recognized immediately for past services
and pro-rata for future services over the option-vesting period.
To March 31, 2005 the Company has not granted any stock options.
The Company accounts for equity instruments issued in exchange for
the receipt of goods or services from other than employees in
accordance with SFAS No. 123 and the conclusions reached by the
Emerging Issues Task Force in Issue No. 96-18. Costs are measured
at the estimated fair market value of the consideration received
or the estimated fair value of the equity instruments issued,
whichever is more reliably measurable. The value of equity
instruments issued for consideration other than employee services
is determined on the earliest of a performance commitment or
completion of performance by the provider of goods or services as
defined by EITF 96-18.
The Company has also adopted the provisions of the Financial
Accounting Standards Board Interpretation No. 44, Accounting for
Certain Transactions Involving Stock Compensation - An
Interpretation of APB Opinion No. 25 ("FIN 44"), which provides
guidance as to certain applications of APB 25. FIN 44 is generally
effective July 1, 2000 with the exception of certain events
occurring after December 15, 1998.
Recent Accounting Pronouncements
--------------------------------
In December 2004, the FASB issued SFAS No. 153, "Exchanges of
Nonmonetary Assets - An Amendment of APB Opinion No. 29". The
guidance in APB Opinion No. 29, "Accounting for Nonmonetary
Transactions", is based on the principle that exchanges of
nonmonetary assets should be measured based on the fair value of
the assets exchanged. The guidance in that Opinion, however,
included certain exceptions to that principle. SFAS No. 153 amends
Opinion No. 29 to eliminate the exception for nonmonetary
exchanges of similar productive assets and replaces it with a
general exception for exchanges of nonmonetary assets that do not
have commercial substance. A nonmonetary exchange has commercial
substance if the future cash flows of the entity are expected to
change significantly as a result of the exchange. The provisions
of SFAS No. 153 are effective for nonmonetary asset exchanges
occurring in fiscal periods beginning after June 15, 2005. Early
application is permitted and companies must apply the standard
prospectively. The adoption of this
-35-
<page>
Azzoro Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
March 31, 2005 - Page 5
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Recent Accounting Pronouncements - (cont'd)
--------------------------------
standard is not expected to have a material effect on the
Company's results of operations or financial position.
In December 2004, the FASB issued SFAS No. 123R, "Share Based
Payment". SFAS 123R is a revision of SFAS No. 123 "Accounting for
Stock-Based Compensation", and supersedes APB Opinion No. 25,
"Accounting for Stock Issued to Employees" and its related
implementation guidance. SFAS 123R establishes standards for the
accounting for transactions in which an entity exchanges its
equity instruments for goods or services. It also addresses
transactions in which an entity incurs liabilities in exchange for
goods or services that are based on the fair value of the entity's
equity instruments or that may be settled by the issuance of those
equity instruments. SFAS 123R focuses primarily on accounting for
transactions in which an entity obtains employee services in
share-based payment transactions. SFAS 123R does not change the
accounting guidance for share-based payment transactions with
parties other than employees provided in SFAS 123 as originally
issued and EITF Issue No. 96-18, "Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring,
or in Conjunction with Selling, Goods or Services". SFAS 123R does
not address the accounting for employee share ownership plans,
which are subject to AICPA Statement of Position 93-6, "Employers'
Accounting for Employee Stock Ownership Plans". SFAS 123R requires
a public entity to measure the cost of employee services received
in exchange for an award of equity instruments based on the
grant-date fair value of the award (with limited exceptions). That
cost will be recognized over the period during which an employee
is required to provide service in exchange for the award - the
requisite service period (usually the vesting period). SFAS 123R
requires that the compensation cost relating to share-based
payment transactions be recognized in financial statements. That
cost will be measured based on the fair value of the equity or
liability instruments issued. The scope of SFAS 123R includes a
wide range of share-based compensation arrangements including
share options, restricted share plans, performance-based awards,
share appreciation rights, and employee share purchase plans.
Public entities (other than those filing as small business
issuers) will be required to apply SFAS 123R as of the first
interim or annual reporting period that begins after June 15,
2005. Public entities that file as small business issuers will be
required to apply SFAS 123R in the first interim or annual
reporting period that begins after December 15, 2005. Management
is currently evaluating the impact, which the adoption of this
standard will have on the Company's results of operations or
financial position.
Note 3 Mineral Property
----------------
Shorts Claims
-------------
By a mineral property staking and purchase agreement dated January
29, 2004, the Company acquired a 100% undivided right, title and
interest in and to eight mineral claims, known as "Shorts Claims",
located in the province of British Columbia, Canada by the payment
of $5,000. During the year the Company also incurred $2,000 of
mineral property costs. To date the Company has incurred costs of
$7,000 on the Short Claims.
-36-
<page>
Azzoro Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
March 31, 2005 - Page 6
Note 3 Mineral Property - (cont'd)
----------------
Shorts Claims (cont'd)
-------------
The Property is held in trust for the Company. Upon request from
the Company the title will be recorded in the name of the Company
with the appropriate mining recorder. At March 31, 2005 the title
to the Property has not been recorded in the name of the Company.
Note 4 Capital Stock
-------------
The total number of common shares authorized that may be issued by
the Company is 75,000,000 shares with a par value of one tenth of
one cent ($0.001) per share and no other class of shares is
authorized.
During the period from January 15, 2004 (Inception) to March 31,
2004 the Company issued 7,700,000 shares of common stock for total
proceeds of $32,000. During the year ended March 31, 2005 the
Company issued 10,000 shares of common stock for total proceeds of
$2,000. At March 31, 2005 there were no outstanding stock options
or warrants.
Note 5 Income Taxes
------------
The significant components of the Company's deferred tax assets
are as follows:
<table>
<caption>
March 31, March 31,
2005 2004
----- ----
<s> <c> <c>
Deferred Tax Assets
Non-capital loss carryforward $ 2,802 $ 1,284
Less: valuation allowance for deferred tax asset ( 2,802) ( 1,284)
------------- -------------
$ - $ -
============= =============
</table>
There were no temporary differences between the Company's tax and
financial bases that result in deferred tax assets, except for the
Company's net operating loss carryforwards amounting to
approximately $18,700 at March 31, 2005 which may be available to
reduce future year's taxable income. These carryforwards will
expire, if not utilized, commencing in 2025. Management believes
that the realization of the benefits from these deferred tax
assets appears uncertain due to the Company's limited operating
history and continuing losses. Accordingly a full, deferred tax
asset valuation allowance has been provided and no deferred tax
asset benefit has been recorded.
-37-
<page>
AZZORO INC.
(An Exploration Stage Company)
INTERIM FINANCIAL STATEMENTS
September 30, 2005
(Unaudited)
BALANCE SHEETS
INTERIM STATEMENTS OF OPERATIONS
INTERIM STATEMENTS OF CASH FLOWS
STATEMENT OF STOCKHOLDERS' EQUITY
NOTES TO THE INTERIM FINANCIAL STATEMENTS
-38-
<page>
AZZORO INC.
(An Exploration Stage Company)
BALANCE SHEETS
<table>
<caption>
September 30, March 31,
2005 2005
---- ----
(Unaudited)
<s> <c> <c>
ASSETS
------
CURRENT ASSETS
Cash $ 14,966 $ 22,429
----------------- ----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 4,280 $ 7,111
----------------- ----------------
NATURE AND CONTINUANCE OF OPERATIONS (Note 1)
STOCKHOLDERS' EQUITY
Capital stock (Note 4)
Authorized:
75,000,000 common shares, $0.001 par value
Issued and outstanding:
7,710,000 common shares (March 31, 2005 - 7,710,000) 7,710 7,710
Additional paid in capital 26,290 26,290
Deficit accumulated during the exploration stage ( 23,314) ( 18,682)
----------------- -----------------
10,686 15,318
----------------- -----------------
$ 14,966 $ 22,429
----------------- -----------------
</table>
The accompanying notes are an integral part of these interim financial
statements
-39-
<page>
AZZORO INC.
(An Exploration Stage Company)
INTERIM STATEMENTS OF OPERATIONS
for the three months and six months ended
September 30, 2005, and 2004, and for the period
from January 15, 2004 (inception) to September
30, 2005
(Unaudited)
<table>
<caption>
January 15, 2004
Three months ended Six months ended (Inception) to
September 30, September 30, September 30,
2005 2004 2005 2004 2005
---- ---- ---- ---- ----
<s> <c> <c> <c> <c> <c>
Expenses
Accounting and audit fees $ 1,928 $ 1,821 $ 3,856 $ 1,821 $ 14,070
Filing 200 - 524 - 1,209
Office and miscellaneous 142 109 252 155 1,035
Mineral property costs (Note 3) - - - - 7,000
------------ ------------ ------------ ---------- ------------
Net loss for the period $ 2,270 $ 1,930 $ 4,632 $ 1,976 $ 23,314
------------ ------------ ------------ ----------
Basic loss per share $ 0.00 $ 0.00 $ 0.00 $ 0.00
------------ ------------ ------------ ----------
Weighted average number of
shares outstanding 7,710,000 7,710,000 7,710,000 7,709,098
------------ ------------ ------------ ----------
</table>
The accompanying notes are an integral par of these interim financial
statements
-40-
<page>
AZZORO INC.
(An Exploration Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
for the three months and six months ended
September 30, 2005, and 2004, and for the period
from January 15, 2004 (inception) to September
30, 2005
(Unaudited)
<table>
<caption>
January 15, 2004
Three months ended (Inception) to
September 30, September 30,
2005 2004 2005
---- ---- ----
<s> <c> <c> <c>
Operating Activities
Net loss for the period $ ( 4,632) $ ( 1,976) $ ( 23,314)
Change in non-cash working capital balance ------------------ ------------------ ------------------
related to operations
Accounts payable and accrued
liabilities ( 2,831) 1,393 4,280
------------------ ------------------ ------------------
Net Cash used in operating activities ( 7,463) ( 583) ( 19,034)
------------------ ------------------ ------------------
Financing Activity
Proceeds on sale of common stock - 2,000 34,000
Net Cash from financing activity - 2,000 34,000
(Decrease) increase in cash during the period ( 7,463) 1,417 14,966
Cash, beginning of the period 22,429 26,371 -
Cash, end of the period $ 14,966 $ 27,788 $ 14,966
----------------- ----------------- ------------------
Supplemental cash flow information:
Interest paid $ - $ - $ -
----------------- ----------------- ------------------
Income taxes paid $ - $ - $ -
----------------- ----------------- ------------------
</table>
The accompanying notes are an integral part of these interim financial
statements
-41-
<page>
AZZORO INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
for the period January 15, 2004 (Inception) to September 30, 2005
(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>
Balance, January 15, 2004 - $ - $ - $ - $ -
----------- -------------- -------------- -------------- ---------------
Capital stock issued for cash
- at $0.001 per share 5,000,000 5,000 - - 5,000
- at $0.01 per share 2,700,000 2,700 24,300 - 27,000
Net loss for the period - - - ( 8,559) ( 8,559)
----------- -------------- -------------- --------------- ---------------
Balance, March 31, 2004 7,700,000 7,700 24,300 ( 8,559) 23,441
---------- -------------- -------------- --------------- ---------------
Capital stock issued for cash
- at $0.20 per share 10,000 10 1,990 - 2,000
Net loss for the period - - - ( 10,123) ( 10,123)
---------- -------------- -------------- --------------- ---------------
Balance, March 31, 2005 7,710,000 7,710 26,290 ( 18,682) 15,318
Net loss for the period - - - ( 4,632) ( 4,632)
---------- -------------- -------------- --------------- ---------------
Balance, September 30, 2005 7,710,000 $ 7,710 $ 26,290 $ ( 23,314) $ 10,686
---------- -------------- -------------- --------------- ---------------
</table>
The accompanying notes are an integral part of these interim financial
statements
-42-
<page>
AZZORO INC.
(An Exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2005
(Unaudited)
Note 1 Nature and Continuance of Operations
The Company was incorporated in the State of Nevada on January 15,
2004 and is in the exploration stage. The Company has acquired a
mineral property located in the Province of British Columbia,
Canada and has not yet determined whether this property contains
reserves that are economically recoverable. The recoverability of
costs incurred for acquisition and exploration of the property
will be dependent upon the discovery of economically recoverable
reserves, confirmation of the Company's interest in the underlying
property, the ability of the Company to obtain necessary financing
to satisfy the expenditure requirements under the property
agreement and to complete the development of the property and upon
future profitable production or proceeds for the sale thereof.
These financial statements have been prepared on a going concern
basis which assumes that the Company will be able to realize its
assets and discharge its liabilities in the normal course of
business for the foreseeable future. The Company has incurred
losses since inception resulting in an accumulated deficit of
$23,314 and further losses are anticipated in the development of
its business raising doubt about the Company's ability to continue
as a going concern. The ability to continue as a going concern is
dependent upon the Company generating profitable operations in the
future and/or to obtain the necessary financing to meet its
obligations and repay its liabilities arising from normal business
operations when they come due. Management intends to finance
operating costs over the next twelve months with existing cash on
hand and loans from directors and or private placement of common
stock.
Unaudited Interim Financial Statements
The accompanying unaudited interim financial statements have been
prepared in accordance with United States generally accepted
accounting principles for interim financial information and with
the instructions to Form 10-QSB of Regulation S-B. They may not
include all information and footnotes required by United States
generally accepted accounting principles for complete financial
statements. However, except as disclosed herein, there have been
no material changes in the information disclosed in the notes to
the financial statements for the period ended March 31, 2005
included in the Company's SB-2 filed with the Securities and
Exchange Commission. The interim unaudited financial statements
should be read in conjunction with those financial statements
included in the Form SB-2. In the opinion of Management, all
adjustments considered necessary for a fair presentation,
consisting solely of normal recurring adjustments, have been made.
Operating results for the six months ended September 30, 2005 are
not necessarily indicative of the results that may be expected for
the year ending March 31, 2006.
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<page>
Azzoro Inc.
(An Exploration Stage Company)
Notes to the Interim Financial Statements
September 30, 2005 - Page 2
(Unaudited)
Note 2 Summary of Significant Accounting Policies
Exploration Stage Company
The Company complies with Financial Accounting Standards Board
Statement ("FASB") No. 7 and Securities and Exchange Commission
Act Guide 7 for its characterization of the Company as an
exploration stage enterprise.
Mineral Property
Mineral property acquisition, exploration and development costs
are expensed as incurred until such time as economic reserves are
quantified. To date the Company has not established any proven or
probable reserves on its mineral properties. The Company has
adopted the provisions of SFAS No. 143 "Accounting for Asset
Retirement Obligations" which establishes standards for the
initial measurement and subsequent accounting for obligations
associated with the sale, abandonment, or other disposal of
long-lived tangible assets arising from the acquisition,
construction or development and for normal operations of such
assets. The adoption of this standard has had no effect on the
Company's financial position or results of operations. As at
September 30, 2005, any potential costs relating to the retirement
of the Company's mineral property interest has not been
determined.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with United
States generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those
estimates.
Foreign Currency Translation
The financial statements are presented in United States dollars.
In accordance with Statement of Financial Accounting Standards No.
52, "Foreign Currency Translation", foreign denominated monetary
assets and liabilities are translated into their United States
dollar equivalents using foreign exchange rates which prevailed at
the balance sheet date. Revenue and expenses are translated at
average rates of exchange during the period. Gains or losses
resulting from foreign currency transactions are included in
results of operations.
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Azzoro Inc.
(An Exploration Stage Company)
Notes to the Interim Financial Statements
September 30, 2005 - Page 3
(Unaudited)
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Fair Value of Financial Instruments
The carrying value of cash and accounts payable and accrued
liabilities approximates their fair value because of the short
maturity of these instruments. Unless otherwise noted, it is
management's opinion that the Company is not exposed to
significant interest, currency or credit risks arising from these
financial instruments.
Environmental Costs
Environmental expenditures that relate to current operations are
expensed or capitalized as appropriate. Expenditures that relate
to an existing condition caused by past operations, and which do
not contribute to current or future revenue generation, are
expensed. Liabilities are recorded when environmental assessments
and/or remedial efforts are probable, and the cost can be
reasonably estimated. Generally, the timing of these accruals
coincides with the earlier of completion of a feasibility study or
the Company's commitments to plan of action based on the then
known facts.
Income Taxes
The Company follows the liability method of accounting for income
taxes. Under this method, deferred income tax assets and
liabilities are recognized for the estimated tax consequences
attributable to differences between the financial statement
carrying values and their respective income tax basis (temporary
differences). The effect on deferred income tax assets and
liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
At September 30, 2005 a full deferred tax asset valuation
allowance has been provided and no deferred tax asset benefit has
been recorded.
Basic and Diluted Loss Per Share
Basic earnings per share includes no dilution and is computed by
dividing income available to common stockholders by the weighted
average number of common shares outstanding for the period.
Dilutive earnings per share reflects the potential dilution of
securities that could share in the earnings of the Company.
Because the Company does not have any potentially dilutive
securities, the accompanying presentation is only of basic loss
per share.
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<page>
Azzoro Inc.
(An Exploration Stage Company)
Notes to the Interim Financial Statements
September 30, 2005 - Page 4
(Unaudited)
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Stock-based Compensation
In December 2002, the FASB issued Financial Accounting Standard
No. 148, "Accounting for Stock-Based Compensation - Transition and
Disclosure" ("SFAS No. 148"), an amendment of Financial Accounting
Standard No. 123 "Accounting for Stock-Based Compensation" ("SFAS
No. 123"). The purpose of SFAS No. 148 is to: (1) provide
alternative methods of transition for an entity that voluntarily
changes to the fair value based method of accounting for
stock-based employee compensation, (2) amend the disclosure
provisions to require prominent disclosure about the effects on
reported net income of an entity's accounting policy decisions
with respect to stock-based employee compensation, and (3) to
require disclosure of those effects in interim financial
information.
The Company has elected to account for stock-based employee
compensation arrangements in accordance with the provisions of
Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees", ("APB No. 25") and comply with the
disclosure provisions of SFAS No. 123 as amended by SFAS No. 148
as described above. In addition, in accordance with SFAS No. 123
the Company will apply the fair value method using the
Black-Scholes option-pricing model in accounting for options
granted to consultants. Under APB No. 25, compensation expense for
employees is recognized based on the difference, if any, on the
date of grant between the estimated fair value of the Company's
stock and the amount an employee must pay to acquire the stock.
Compensation expense is recognized immediately for past services
and pro-rata for future services over the option-vesting period.
To September 30, 2005 the Company has not granted any stock
options or recoded any stock based compensation expense.
The Company accounts for equity instruments issued in exchange for
the receipt of goods or services from other than employees in
accordance with SFAS No. 123 and the conclusions reached by the
Emerging Issues Task Force ("EITF") in Issue No. 96-18. Costs are
measured at the estimated fair market value of the consideration
received or the estimated fair value of the equity instruments
issued, whichever is more reliably measurable. The value of equity
instruments issued for consideration other than employee services
is determined on the earliest of a performance commitment or
completion of performance by the provider of goods or services as
defined by EITF 96-18.
The Company has also adopted the provisions of the FASB
Interpretation No. 44, Accounting for Certain Transactions
Involving Stock Compensation - An
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<page>
Azzoro Inc.
(An Exploration Stage Company)
Notes to the Interim Financial Statements
September 30, 2005 - Page 5
(Unaudited)
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Interpretation of APB Opinion No. 25 ("FIN 44"), which provides
guidance as to certain applications of APB 25. FIN 44 is generally
effective July 1, 2000 with the exception of certain events
occurring after December 15, 1998.
Recent Accounting Pronouncements
In December 2004, the FASB issued SFAS No. 153, "Exchanges of
Nonmonetary Assets - An Amendment of APB Opinion No. 29". The
guidance in APB Opinion No. 29, "Accounting for Nonmonetary
Transactions", is based on the principle that exchanges of
nonmonetary assets should be measured based on the fair value of
the assets exchanged. The guidance in that Opinion, however,
included certain exceptions to that principle. SFAS No. 153 amends
Opinion No. 29 to eliminate the exception for nonmonetary
exchanges of similar productive assets and replaces it with a
general exception for exchanges of nonmonetary assets that do not
have commercial substance. A nonmonetary exchange has commercial
substance if the future cash flows of the entity are expected to
change significantly as a result of the exchange. The provisions
of SFAS No. 153 are effective for nonmonetary asset exchanges
occurring in fiscal periods beginning after June 15, 2005. Early
application is permitted and companies must apply the standard
prospectively. The adoption of this standard is not expected to
have a material effect on the Company's results of operations or
financial position.
In December 2004, the FASB issued SFAS No. 123R, "Share Based
Payment". SFAS 123R is a revision of SFAS No. 123 "Accounting for
Stock-Based Compensation", and supersedes APB Opinion No. 25,
"Accounting for Stock Issued to Employees" and its related
implementation guidance. SFAS 123R establishes standards for the
accounting for transactions in which an entity exchanges its
equity instruments for goods or services. It also addresses
transactions in which an entity incurs liabilities in exchange for
goods or services that are based on the fair value of the entity's
equity instruments or that may be settled by the issuance of those
equity instruments. SFAS 123R focuses primarily on accounting for
transactions in which an entity obtains employee services in
share-based payment transactions. SFAS 123R does not change the
accounting guidance for share-based payment transactions with
parties other than employees provided in SFAS 123 as originally
issued and EITF Issue No. 96-18, "Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring,
or in Conjunction with Selling, Goods or Services". SFAS 123R does
not address the accounting for employee share ownership plans,
which are subject to AICPA Statement of Position 93-6, "Employers'
Accounting for Employee Stock Ownership Plans". SFAS 123R requires
a public entity to measure the cost of
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<page>
Azzoro Inc.
(An Exploration Stage Company)
Notes to the Interim Financial Statements
September 30, 2005 - Page 6
(Unaudited)
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
employee services received in exchange for an award of equity
instruments based on the grant-date fair value of the award (with
limited exceptions). That cost will be recognized over the period
during which an employee is required to provide service in
exchange for the award - the requisite service period (usually the
vesting period). SFAS 123R requires that the compensation cost
relating to share-based payment transactions be recognized in
financial statements. That cost will be measured based on the fair
value of the equity or liability instruments issued. The scope of
SFAS 123R includes a wide range of share-based compensation
arrangements including share options, restricted share plans,
performance-based awards, share appreciation rights, and employee
share purchase plans.
Recent Accounting Pronouncements - (cont'd)
--------------------------------
Public entities (other than those filing as small business
issuers) will be required to apply SFAS 123R as of the first
interim or annual reporting period that begins after June 15,
2005. Public entities that file as small business issuers will be
required to apply SFAS 123R in the first interim or annual
reporting period that begins after December 15, 2005. Management
is currently evaluating the impact, which the adoption of this
standard will have on the Company's results of operations or
financial position.
FASB has also issued SFAS No. 151 Inventory Cost and 152
Accounting for Real Estate Time Sharing Transactions but they will
not have any relationship to the operations of the Company,
therefore a description and its impact on the Company's operations
for each, have not been disclosed.
In March 2005, the SEC staff issued Staff Accounting Bulletin
No. 107 ("SAB 107") to give guidance on the implementation of SFAS
No. 123R. The Company will consider SAB 107 during the
implementation of SFAS No. 123R.
Note 3 Mineral Property
Shorts Claims
By a mineral property staking and purchase agreement dated January
29, 2004, the Company acquired a 100% undivided right, title and
interest in and to eight mineral claims, known as "Shorts Claims",
located in the province of British Columbia, Canada by the payment
of $5,000. During the year ended March 31, 2005 the Company
incurred $2,000 of mineral property costs. To date the Company has
incurred costs of $7,000 on the Short Claims.
The Property is held in trust for the Company. Upon request from
the Company the title will be recorded in the name of the Company
with the appropriate mining
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<page>
Azzoro Inc.
(An Exploration Stage Company)
Notes to the Interim Financial Statements
September 30, 2005 - Page 6
(Unaudited)
Note 3 Mineral Property - (cont'd)
recorder. At September 30, 2005 the title to the Property has not
been recorded in the name of the Company.
Note 4 Capital Stock
The total number of common shares authorized that may be issued by
the Company is 75,000,000 shares with a par value of one tenth of
one cent ($0.001) per share and no other class of shares is
authorized.
During the period from January 15, 2004 (Inception) to March 31,
2004 the Company issued 7,700,000 shares of common stock for total
proceeds of $32,000. During the year ended March 31, 2005 the
Company issued 10,000 shares of common stock for total proceeds of
$2,000. At September 30, 2005 there were no outstanding stock
options or warrants.
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<page>
Changes In And Disagreements With Accountants
We have had no changes in or disagreements with our accountants.
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:
(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);
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<page>
(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
bylaws.
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.
Other Expenses Of Issuance And Distribution
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee $ 66.14
Transfer Agent Fees $ 1,000.00
Accounting and auditing fees and expenses $ 5,000.00
Legal fees and expenses $ 7,500.00
Edgar filing fees $ 1,500.00
------------
Total $ 15,066.14
============
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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 completed an offering of 5,000,000 shares of our common stock at a price of
$0.001 per share to a total of two purchasers on January 23, 2004. The total
amount received from this offering was $5,000. As part of this offering, we
issued 2,500,000 shares of our common stock to Mr. Ted Burylo on January 20,
2004 and 2,500,000 shares to Mr. Jeff Murdock on January 23, 2004. Mr. Burylo is
our president, chief executive officer and a director. Mr. Murdock is our
secretary and a director.
These shares were issued pursuant to Regulation S of the Securities Act.
Appropriate legends were affixed to the stock certificates representing these
shares.
We completed an offering of 2,700,000 shares of our common stock at a price of
$0.01 per share to a total of 26 purchasers on March 31, 2004. The total amount
received from this offering was $26,000. We completed this offering pursuant to
Regulation S of the Securities Act. The purchasers were as follows:
Name of Shareholder Number of Shares
----------------------- ----------------
James Thiede 100,000
David Anderson 100,000
Kevin Klassen 100,000
Sharon Lee-White 100,000
Peter Burjoski 100,000
Johnathan Shea 200,000
William Butler 100,000
William McCormack 100,000
Lorne Wenn 100,000
Parvin Selseleh 100,000
Chris Roger 100,000
Harold McDougall 100,000
G.E. Fenwick 100,000
Shahram Fasihy 100,000
Michelle Janes 100,000
Marni Ziegler 100,000
Hailey Wenn 100,000
Lara Wenn 100,000
Ben McCormack 100,000
Guy Lawson 100,000
Ron Teti 100,000
Elaheh Fasihy 100,000
Seyed Mostafa Fasihi 100,000
E. Edwards 100,000
Brian Glaum 100,000
Randy Pesto 100,000
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We completed an offering of 10,000 shares of our common stock at a price of
$0.20 per share to a total of two purchasers on April 19, 2004. The total amount
received from this offering was $2,000. We completed this offering pursuant to
Regulation S of the Securities Act. The purchasers were as follows:
Name of Shareholder Number of Shares
------------------- ----------------
William McMillan 5,000
Frank Kramaric 5,000
Regulation S Compliance
Each offer or sale was made in an offshore transaction;
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.
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Exhibits
Exhibit
Number Description
3.1* Articles of Incorporation
3.2* Bylaws
5.1* Legal opinion
10.1* Mineral Property Staking and Purchase Agreement dated
January 29, 2004
23.1 Consent of Dale Matheson Carr-Hilton LaBonte, Chartered
Accountants
* filed as an exhibit to our registration statement on Form SB-2 filed on
August 16, 2004
The undersigned registrant hereby undertakes:
1. To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(a) include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(b) reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information set forth
in this registration statement; and 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 low 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 a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration Statement; and
(c) include any additional or changed material information on the plan of
distribution.
2. 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 in 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 December 16, 2005.
Azzoro Inc.
By: /s/ Ted Burylo
------------------------------
Ted Burylo, President, Chief
Executive Officer, Principal
Accounting Officer and
Director
Power of Attorney
ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Ted Burylo, 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.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
/s/ Ted Burylo President, Chief Executive December 16, 2005
- ----------------------- Officer, Treasurer, Principal
Ted Burylo Accounting Officer, Chief Financial
Officer and Director
/s/ Jeff Murdock Secretary and Director December 16, 2005
- -----------------------
Jeff Murdock
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