UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CRAWFORD LAKE MINING INC.
---------------------------
(Name of small business issuer in its charter)
NEVADA 1000 Applied For
- -------------------------- ----------------------------- --------------------
State or jurisdiction of Primary Standard Industrial I.R.S. Employer
incorporation or organization Classification Code Number Identification No.
Crawford Lake Mining Inc.
4372 Greta Street
Burnaby, BC V5J 1N8
Telephone: 604-435-1141
Facsimile: 604-435-0301
--------------------------------------------------------------
(Address and telephone number of principal executive offices)
Empire Stock Transfer Inc.
7251 West Lake Mead Blvd Suite 300
Las Vegas, NV 89128
Telephone: 702-562-4091
Facsimile: 702-562-4081
--------------------------------------------------------------
(Name, address and telephone number of agent for service)
Approximate date of
proposed sale to the public: as soon as practicable after the effective date of
this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box.
| X |
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please 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 box. | |
1
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<table>
<caption>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
TITLE OF EACH CLASS OF DOLLAR AMOUNT TO BE PROPOSED MAXIUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE (2)
REGISTERED SHARE (1) PRICE (2)
- ------------------------ ---------------------- ---------------------- ---------------------- ---------------------
Common Stock $278,000 $0.10 $278,000 $32.72
- ------------------------ ---------------------- ---------------------- ---------------------- ---------------------
</table>
(1) Based on the last sales price on January 21, 2005.
(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 January 13, 2006
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<page>
PROSPECTUS
CRAWFORD LAKE MINING INC.
2,780,000 SHARES
COMMON STOCK
----------------
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.
----------------
The purchase of the securities offered through this prospectus involves
a high degree of risk. SEE SECTION ENTITLED "RISK FACTORS" ON PAGES 6-10
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The selling shareholders will sell our shares at $0.10 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices. There is no guarantee that our shares
will be quoted on the OTC Bulletin Board. 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.
----------------
The Date Of This Prospectus Is: January 13, 2006
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Table Of Contents
<table>
<caption>
Page
<s> <c>
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 Little Bonanza Property, we may not be
able to successfully obtain commercial production 7
- - If we become subject to burdensome government regulation or other legal uncertainties, our business will
be negatively affected 7
- - Because our sole director owns 55.73% of our outstanding stock, they could control and make corporate
decisions that may be disadvantageous to other minority stockholders 7
- - Because our president has other business interests, he may not be able or willing to devote a sufficient
amount of time to our business operations, causing our business to fail 8
- - Because management has no technical experience in mineral exploration, our business has a high 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 ability to sell stock 8
Use of Proceeds 8
Determination of Offering Price 8
Dilution 9
Selling Securityholders 9
Plan of Distribution 11
Legal Proceedings 12
Directors, Executive Officers, Promoters and Control Persons 12
Security Ownership of Certain Beneficial Owners and Management 13
Description of Securities 13
Interest of Named Experts and Counsel 14
Disclosure of Commission Position of Indemnification for Securities Act Liabilities 14
Organization Within Last Five Years 14
Description of Business 14
Plan of Operations 18
Description of Property 19
Certain Relationships and Related Transactions 19
Market for Common Equity and Related Stockholder Matters 19
Executive Compensation 20
Financial Statements 21
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 39
</table>
4
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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 exploration target, the Little
Bonanza mineral claim located approximately 30 kilometers northeast of the City
of Sudbury in the Scadding Township of Ontario, Canada. We acquired a 100%
right, interest and title in and to the claim for a cash payment of $7,000,
which we paid to the vendor, Klondike Bay Resources.
Our objective is to conduct mineral exploration activities on the Little Bonanza
claim in order to assess whether it possesses economic reserves of gold, copper,
nickel, platinum and palladium. We have not yet identified any economic
mineralization on the Little Bonanza claim. Our proposed exploration program is
designed to search for an economic mineral deposit.
We were incorporated on October 18, 2004 under the laws of the state of Nevada.
Our principal offices are located at 470 Granville Street, Suite 1120,
Vancouver, British Columbia Canada V6C 1V5. Our telephone number is (604)
435-0301.
The Offering:
Securities Being Offered Up to 2,780,000 shares of common stock.
Offering Price The selling shareholders will sell our shares
at $0.10 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
2,780,000 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 6,280,000 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.
5
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Summary Financial Information
Balance Sheet
October 31, 2005
(unaudited)
Cash $16,732
Total Assets $16,732
Liabilities $6,250
Total Stockholders' Equity $10,482
Statement of Operations
From Incorporation on
October 18, 2004 to October 31, 2005
(unaudited)
Revenue $ 0
Net Loss and Deficit ($23,218)
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 Little Bonanza claim, and therefore we will need to obtain
additional financing in order to complete our business plan. We currently do not
have any operations and we have no income. 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 Little Bonanza claim. While we have sufficient funds to
conduct the recommended phase one program at an estimated cost of $5,000 and a
portion of the phase two exploration program at an estimated cost of $15,000, we
will need additional funds in order to complete recommended exploration on the
Little Bonanza claim. Even after completing these two phases of exploration, we
will not know if we have a commercially viable mineral deposit.
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.
BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF
BUSINESS FAILURE.
We have not yet commenced exploration on the Little Bonanza claim. Accordingly,
we have no way to evaluate the likelihood that our business will be successful.
We were incorporated on October 18, 2004 and to date have been involved
primarily in organizational activities and the acquisition of the Little Bonanza
claim. We have not earned any revenues as of the date of this prospectus.
Potential investors should be aware of the difficulties normally encountered by
new mineral exploration companies and the high rate of failure of such
enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.
6
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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 Little
Bonanza Property and the production of minerals from the claim, 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.
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 claim containing economic mineralization or reserves
of gold, copper, nickel, platinum and palladium is extremely remote. Exploration
for minerals is a speculative venture necessarily involving substantial risk. In
all probability, the Little Bonanza claim 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 SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE
AS A GOING CONCERN.
The report of our independent accountant to our audited financial statements for
the period ended April 30, 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 LITTLE BONANZA
CLAIM, WE MAY NOT BE ABLE TO SUCCESSFULLY COMMENCE COMMERCIAL PRODUCTION.
The Little Bonanza claim does not contain any known bodies of mineralization. If
our exploration programs are successful in establishing gold of commercial
tonnage and grade, we will require additional funds in order to place the Little
Bonanza claim into commercial production. We may not be able to obtain such
financing.
BECAUSE OUR SOLE DIRECTOR OWNS 55.73% OF OUR OUTSTANDING COMMON STOCK, HE COULD
MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO OTHER
MINORITY SHAREHOLDERS.
Our director owns approximately 55.73% of the outstanding shares of our common
stock. Accordingly, he 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. He will
also have the power to prevent or cause a change in control. The interests of
our director may differ from the interests of the other stockholders and thus
result in corporate decisions that are disadvantageous to other shareholders.
7
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BECAUSE OUR PRESIDENT HAS OTHER BUSINESS INTERESTS, HE 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. John Fiddick, intends to devote approximately 15% of his
business time providing his services to us. While Mr. Fiddick presently
possesses adequate time to attend to our interests, it is possible that the
demands on Mr. Fiddick from his other obligations could increase with the result
that he would no longer be able to devote sufficient time to the management of
our business.
BECAUSE OUR SOLE DIRECTOR HAS NO TECHNICAL EXPERIENCE IN MINERAL EXPLORATION,
OUR BUSINESS HAS A HIGHER RISK OF FAILURE.
Our sole director has no 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. His 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.
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 $0.10 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices. There is no guarantee that our shares
will be quoted on the OTC Bulletin Board. We determined this offering price,
based upon the price of the last sale of our common stock to investors.
8
<page>
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 Securityholders
The selling shareholders named in this prospectus are offering all of the
2,780,000 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 and pursuant to a mineral
Little Bonanza Property purchase agreement. The shares include the following:
1. 1,200,000 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 December 24, 2004;
2. 1,500,000 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 January 10, 2005;
3. 80,000 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 January 21, 2005;
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>
Total Number of
Shares to be Total Shares Percent Owned Upon
Shares Owned Prior Offered for Owned Upon Completion of this
to this Offering Selling Completion of Offering
Shareholders this Offering
Name of Selling Stockholder Account
- -------------------------------------------- -------------------- -------------------- ------------------- --------------------
<s> <c> <c> <c> <c>
Bobby-Ann Trask 300,000 300,000 Nil Nil
6759 Willingdon Avenue, Suite 1505
Burnaby, BC V5H 3Y9
Alan Cox 300,000 300,000 Nil Nil
6688 Willingdon Avenue, Suite 313
Burnaby, BC V5H 2V8
Amy J. Young 300,000 300,000 Nil Nil
4329 Greta Street
Burnaby, BC V5J 1N9
Robert J. Schumann 300,000 300,000 Nil Nil
6656 Lambert Crescent
Delta, BC V4E 1R8
Layne M. Osterman 100,000 100,000 Nil Nil
1305 West 12th Avenue, Suite 303
Vancouver, BC V6H 1M3
Saroj Nagin 100,000 100,000 Nil Nil
3753 Price Street
Burnaby, BC V5G 2K9
Mark Frendo 100,000 100,000 Nil Nil
7155 MacPherson Avenue, Suite 56
Burnaby, BC
</table>
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<table>
<caption>
<s> <c> <c> <c> <c>
Mahangu Patel 100,000 100,000 Nil Nil
7763 Goodland Street
Burnaby, BC V5E 2H7
Donna M. White 100,000 100,000 Nil Nil
4329 Greta Street
Burnaby, BC V5J 1N9
Rene Dickenscheid 100,000 100,000 Nil Nil
1683 Renfrew Street
Vancouver, BC V5K 4C9
Kevin Mullins 100,000 100,000 Nil Nil
7092 McKay Avenue
Burnaby, BC V5J 3S4
Anand Nagin 100,000 100,000 Nil Nil
1200 Alberni Street, Suite 602
Vancouver, BC V6E 1A6
Giuseppe Mandarino 100,000 100,000 Nil Nil
506 Linton Street
Coquitlam, BC V3J 6J2
Anna Mandarino 100,000 100,000 Nil Nil
506 Linton Street
Coquitlam, BC V6E 6J2
Patrick McGrath 100,000 100,000 Nil Nil
540 Helmcken Street, Suite 610
Vancouver, BC V6B 2E8
Maureen H. Hoechsmann 100,000 100,000 Nil Nil
4382 Greta Street
Burnaby, BC V5J 1N8
Pete F. Hoechsmann 100,000 100,000 Nil Nil
4382 Greta Street
Burnaby, BC V5J 1N8
David Trask 100,000 100,000 Nil Nil
3431 West 24th Avenue
Vancouver, BC V6S 1L3
Sofia Conte 100,000 100,000 Nil Nil
9830 Whalley Ring Rd, Suite 706
Surrey, BC V3T 5S7
Darrell Shuel 10,000 10,000 Nil Nil
16723 Highway, 3A
Kootenay Bay, BC V0B 1E0
Terry Fiddick 10,000 10,000 Nil Nil
16388 Jacobson Road
Crawford Bay, BC V0B 1E0
Gary Sly 10,000 10,000 Nil Nil
16380 Jacobson Road
Crawford Bay, BC V0B 1E0
Jennifer Lee Newcomen 10,000 10,000 Nil Nil
14850 Highway 3A
Gray Creek, BC V0B 1S0
Anne Reed 10,000 10,000 Nil Nil
6540 E. Hastings Street, Ste 629
Burnaby, BC V5B 4Z5
Beecham Y. Pearson 10,000 10,000 Nil Nil
867 Hamilton Street, Suite 1906
Vancouver, BC V6B 6B7
Campbell H. Pearson 10,000 10,000 Nil Nil
867 Hamilton Street, Suite 1906
Vancouver, BC V6B 6B7
Tina Santarelli 10,000 10,000 Nil Nil
1007 Winslow Avenue
Coquitlam, BC V3J 2E9
</table>
Each of the above shareholders beneficially owns and has sole voting and
investment over all shares or rights to the shares registered in his or her
name. 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 6,280,000 shares of common stock outstanding on the
date of this prospectus.
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None of the selling shareholders:
(1) has had a material relationship with us other than as a shareholder at any
time within the past three years;
(2) has ever been one of our officers or directors; or
(3) is a broker-dealer or affiliate of a broker dealer.
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 $0.10 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.
We are bearing all costs relating to the registration of the common stock. These
are estimated to be $12,500. 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
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:
o contains a description of the nature and level of risk in the market for
penny stocks in both public offerings and secondary trading;
o 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;
o 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;
o contains a toll-free telephone number for inquiries on disciplinary
actions;
o defines significant terms in the disclosure document or in the conduct of
trading penny stocks; and
o contains such other information and is in such form (including language,
type, size, and format) as the Commission shall require by rule or
regulation;
11
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The broker-dealer also must provide, prior to proceeding with any transaction in
a penny stock, the customer:
o with bid and offer quotations for the penny stock;
o details of the compensation of the broker-dealer and its salesperson in the
transaction;
o 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
o 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 Blvd, Suite 300, Las Vegas, NV
89128.
Directors, Executive Officers, Promoters And Control Persons
Our executive officer and director and his age as of the date of this prospectus
is as follows:
Directors:
Name of Director Age
- ---------------------------------------- ----------------
John Fiddick 64
Executive Officers:
Name of Officer Age Office
- ----------------------- ---------------- ---------------------------------------
John Fiddick 64 President, Secretary, Treasurer and
Chief Executive Officer
Biographical Information
Set forth below is a brief description of the background and business experience
of our executive officer and director for the past five years.
Mr. John Fiddick has acted as our president, secretary, treasurer, chief
executive officer and as a director since our incorporation on October 18, 2004.
From October 1984 to present, Mr. Fiddick has acted as a commercial account
manager for the Vancouver Main Branch of the Bank of Montreal, a Canadian
chartered bank.
Mr. Fiddick does not have any professional training or technical credentials
in the exploration, development and operation of mines.
Mr.Fiddick intends to devote approximately 15% of his business time to our
affairs.
Term of Office
Our sole director is 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 sole officer is appointed by our board of
directors and hold office until removed by the board.
12
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Significant Employees
We have no significant employees other than the officers and directors described
above.
Security Ownership Of Certain Beneficial Owners And Management
The following table provides the names and addresses of each person known to us
to own more than 5% of our outstanding common stock as of the date of this
prospectus, and by the officers and directors, individually and as a group.
Except as otherwise indicated, all shares are owned directly.
<table>
<caption>
Amount of
Title of Class Name and address beneficial Percent of class
of beneficial owner ownership
- ----------------------- ------------------------------------------------------- ----------------- -----------------
<s> <c> <c> <c>
Common stock John Fiddick 3,500,000 55.73%
Common stock All officers and directors as a group that consists 3,500,000 55.73%
of one person
</table>
The percent of class is based on 6,280,000 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 January 13, 2006, there were 6,280,000 shares of our common stock issued
and outstanding that are held by 28 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.
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.
13
<page>
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.
Cane Clark LLP has provided us with an opinion regarding the valid issuance of
our common stock.
The financial statements included in this prospectus and the registration
statement have been audited by HLB Cinnamon Jang Willoughby & Company, 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.
Disclosure Of Commission Position Of Indemnification For Securities Act
Liabilities
Our director and officer is 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 October 18, 2004 under the laws of the state of Nevada.
On that date, Mr. John Fiddick was appointed as our sole director. As well, Mr.
Fiddick was appointed as our president, secretary, treasurer and chief executive
officer.
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. We own a 100% beneficial interest
in one mineral claim known as the Little Bonanza claim. There is no assurance
that a commercially viable mineral deposit exists on the Little Bonanza claim.
We do not have any current plans to acquire interests in additional mineral
properties, though we may consider such acquisitions in the future.
Mineral property exploration is typically conducted in phases. Each subsequent
phase of exploration work is recommended by a geologist based on the results
from the most recent phase of exploration. We have not yet commenced the initial
phase of exploration on the Little Bonanza claim. Once we have completed each
phase of exploration, we will make a decision as to whether or not we proceed
with each successive phase based upon the analysis of the results of that
program. Our director will make this decision based upon the recommendations of
the independent geologist who oversees the program and records the results.
14
<page>
Our plan of operation is to conduct exploration work on the Little Bonanza claim
in order to ascertain whether it possesses economic quantities of gold, copper,
nickel and platinum. There can be no assurance that an economic mineral deposit
exists on the Little Bonanza claim until appropriate exploration work is
completed.
Even if we complete our proposed exploration programs on the Little Bonanza
claim and we 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.
Little Bonanza Claim Purchase Agreement
On January 31, 2005, we entered into a mineral purchase and sale agreement with
Klondike Bay Resources, a private company owned by Terry Loney of Garson,
Ontario, whereby he sold to us a 100% right, interest and title in one mineral
claim, located in the Sudbury mining division of Ontario, Canada. We acquired
this interest in the Little Bonanza claim by paying Klondike Bay Resources
$7,000.
Description, Location and Access
The Little Bonanza claim is located approximately 30 kilometres northeast of the
City of Greater Sudbury, within the Scadding township which lies near the
northern boundary of the Algonquin Lake Nipissing eco-region and at the eastern
boundary of McLennan Township. Access to the property can be made by travelling
east from the community of Skead for approximately three kilometers to Bonanza
Lake, then east about one kilometer onto the claim. Alternatively, access can be
made via the Wanapitei River by boat which passes through the eastern boundary
of the claim.
Climate and Topography
The property lies in a forested and glaciated area dominated by a mixture of
sugar maple wood, yellow birch, poplar, eastern hemlock, eastern white pine and
red pine trees. The wet regions comprise of red maple, black ash, white spruce,
tamarack and eastern white cedar trees. There are ridged and uneven rock
outcrops covered in glacier debris and rocks. There is a mixture of wildlife
including the white-tailed deer, wolves, lynxes, moose, black bears, chipmunks,
squirrels, beavers, snowshoe hare and rabbit.
The humid climate is cool with an average annual temperature of 3.5 degrees
Celsius. Average summer temperature ranges from 11.8 degrees Celsius to 23.1
degrees Celsius. In winter the average ranges from -16 degrees Celsius to -6.9
degrees Celsius. The average precipitation is 872 mm and the average depth of
0.40 metres can accumulate over the winter.
Title to the Little Bonanza Claim
The Little Bonanza property consists of one claim block comprising of twelve
unpatented mining claim units covering 192 hectares. A "mining claim block"
refers to a specific section of land over which a title holder owns rights to
explore the ground and subsurface, and extract minerals. Title to the Little
Bonanza claim is registered in the name of Klondike Bay Resources.
Claim details are as follows:
Claim Name Record Number Expiry Date
- --------------------- ------------------- -------------------------
Little Bonanza S3018927 January 27, 2007
The claim was created on January 27, 2005 and is in good standing until January
27, 2007. This means that the claim will expire on January 27, 2006 unless we
complete at least $4,800 worth of exploration work on the claim by that date. If
this required exploration work is incurred, then the deadline is extended to
January 27, 2008. In subsequent years, we must spend at least $200 on the claim
to extend the expiry date by one year.
15
<page>
Mineralization
Rock exposure on the Little Bonanza property is limited to about 15% to 20%. The
balance of the property is cover with soil, which is up to several meters thick.
The Little Bonanza claim is underlain with several rock types including
Nipissing Gabbro, a dark, coarse-grained, intrusive igneous rock chemically
equivalent to basalt. It is a plutonic rock, formed when molten magma is trapped
beneath the Earth's surface and cools slowly into a hard, coarsely crystalline
mass. The claim also includes Sudbury Dyke Swarm and folded Huronian Sediments
Huronian Sediments pertains to certain non-fossiliferous rocks on the borders of
Lake Huron from the Archaean age (2.5 billion years ago). The youngest rocks in
the area are the olivine-magnetite types found in vertical dykes.
Olivine-magnetite rocks are silicate minerals containing iron and magnesium
which form at high temperature. Silicate minerals contain silicon and oxygen and
are glass green in color.
Exploration History
No known exploration has been conducted on the area covered by the Little
Bonanza claim.
Geological Report
We retained Mr. Scott Jobin-Bevans, a Ph.D. and professional geologist, to
complete an evaluation of the Little Bonanza claim and to prepare a geology
report on the claim.
Based on his review, Mr. Jobin-Bevans concludes that the Little Bonanza claim
warrants further exploration due to the geochemistry and inferred geological
continuity, as well as the lack of previous exploration.
Mr. Jobin-Bevans recommends an initial exploration program consisting of two
phases. The first phase would consist of geological mapping and sampling.
Geological mapping involves plotting previous exploration data relating to a
property on a map in order to determine the best property locations to conduct
subsequent exploration work. Geochemical sampling involves gathering rock and
soil samples from property areas with the most potential to host economically
significant mineralization. All samples gathered are sent to a laboratory where
they are crushed and analysed for metal content.
The first phase is estimated to cost $5,000 as described below.
Budget - Phase I
Type of Work Est. Cost (US$)
Geological Review $500
Geological Mapping and Sampling $2,500
Report Writing/Consulting $1,500
Operating Supplies $500
----------------
Sub-Total: $5,000
The second phase would consist of a geographical survey and a follow-up of the
initial stage. Geophysical surveying is the search for mineral deposits by
measuring the physical property of near-surface rocks, and looking for unusual
responses caused by the presence of mineralization. Electrical, magnetic,
gravitational, seismic and radioactive properties are the ones most commonly
measured. Geophysical surveys are applied in situations where there is
insufficient information obtainable from the property surface to allow informed
opinions concerning the merit of properties.The second phase would cost
approximately $15,000 as outlined below.
16
<page>
Budget - Phase II
Type of Work Est. Cost (US$)
Geographical Survey $7,500
(Targets for Drilling)
Follow-up Mapping and sampling $3,500
Report Writing/Consulting $3,000
Operating Supplies $1,000
---------------
Sub-Total: $15,000
TOTAL $US: $20,000
Compliance with Government Regulation
We will be required to conduct all mineral exploration activities in accordance
with the Mining Act of Ontario. While we do not require any authorization to
proceed with the initial two phases of the recommended exploration program, we
will be required to obtain work permits from the Ontario Ministry of Northern
Development and Mines for any subsequent drilling program and any other
exploration work that results in a physical disturbance to the land if the
program calls for the disturbance of more than 10,000 square meters of the
property surface, or such areas that would total that amount when combined. A
work permit is also required for the erection of structures on the property.
There is no charge to obtain a work permit under the Mining Act.
When our exploration program proceeds to the drilling stage, we may be required
to post small bonds if the rights of a private land owner may be affected. We
anticipate that the cost of a bond for such a program would not exceed $5,000.
We may also be required to file statements of work with the Ministry of Northern
Development and Mines. Such statements would be filed following the completion
of the exploration and would cost approximately $500. The filing of statements
of work would not have any impact on the timing or completion of our exploration
program. We will also be required to undertake remediation work on any
exploration that results in physical disturbance to the land. The cost of
remediation work will vary according to the degree of physical disturbance.
We will not incur any regulatory compliance costs in the first two phases of
proposed exploration. The amount of these costs for subsequent exploration
phases is not known at this time as we do not know the extent of the exploration
program that will be undertaken beyond completion of the recommended exploration
programs. Because there is presently no information on the size, tenor, or
quality of any minerals or reserve at this time, it is impossible to assess the
impact of any capital expenditures on earnings or our competitive position.
Employees
We have no employees as of the date of this prospectus other than our sole
director.
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.
17
<page>
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 and 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. 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 NE, Washington, D.C. 20002. 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 next twelve months is to complete the recommended
phase one and two exploration programs on the Little Bonanza claim consisting of
a geological mapping and geochemical sampling. We anticipate that these
exploration programs will cost approximately $5,000 and $15,000 respectively. To
date, we have not commenced exploration on the Little Bonanza claim.
We plan to commence the phase one exploration program on the Little Bonanza
claim in the spring of 2006. The program should take approximately one to two
months to complete. We will then undertake the phase two work program during the
summer of 2006. This program will take approximately one to three months to
complete. We do not have any verbal or written agreement regarding the retention
of any qualified engineer or geologist for this exploration program.
As well, we anticipate spending an additional $15,000 on administrative fees,
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 $35,000.
While we have enough funds to cover the phase one exploration program and a
portion of the phase two program, we will require additional funding in order to
proceed with any additional recommended exploration on the Little Bonanza claim.
We anticipate that additional funding will be in the form of equity financing
from the sale of our common stock or from director loans. We do not have any
arrangements in place for any future equity financing or loans.
Results Of Operations For The Period From Inception Through October 31, 2005
We have not earned any revenues from our incorporation on October 18, 2004 to
October 31, 2005. We do not anticipate earning revenues unless we enter into
commercial production on the Little Bonanza claim, 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 Little Bonanza claim, or if
such minerals are discovered, that we will enter into commercial production.
We incurred operating expenses in the amount of $23,218 for the period from our
inception on October 18, 2004 to October 31, 2005. These operating expenses were
comprised of donated rent costs of $2,000, donated services costs of $4,000,
mineral property costs of $7,000, office and general expenses of $334 and
professional fees of $9,884.
18
<page>
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 the mineral exploration rights relating to the Little Bonanza mineral
claim. We do not own any real property interest in the Little Bonanza claim or
any other property.
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, John Fiddick;
* 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.
Stockholders of Our Common Shares
As of the date of this registration statement, we have 28 registered
shareholders.
Rule 144 Shares
A total of 3,500,000 shares of our common stock are available for resale to the
public after December 21, 2005 in accordance with the volume and trading
limitations of Rule 144 of the Act. In general, under Rule 144 as currently in
effect, a person who has beneficially owned shares of a company's common stock
for at least one year is entitled to sell within any three month period a number
of shares that does not exceed the greater of:
1. 1% of the number of shares of the company's common stock then outstanding
which, in our case, will equal 62,800 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 3,500,000 shares that may be sold pursuant to Rule 144.
19
<page>
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 from our inception on October 18, 2004 to October
31, 2005 and the subsequent period to the date of this prospectus.
Annual Compensation
<table>
<caption>
Restr Options/SARS LTP payouts
Other Stock (#) ($)
Name Title Year Salary Bonus Comp. Awarded
- ------------------ ---------- --------- ---------- ----------- ---------- ------------ ------------ ---------------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
John Fiddick Pres, 2005 $0 0 0 0 0 $0
Sec,
Treas,
CEO, &
Dir
</table>
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 our director or
officer. We do not pay Mr. Fiddick any amount for acting as a director of the
Company.
Financial Statements
Index to Financial Statements:
1. Report of Independent Registered Public Accounting Firm;
2. Audited financial statements for the period ending April 30, 2005 and
unaudited interim financial statements for the period ended October 31,
2005, including:
a. Balance Sheets;
b. Statements of Operations;
c. Statements of Stockholders' Equity;
d. Statements of Cash Flows; and
e. Notes to Financial Statements
20
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Index
Report of Independent Registered Public Accounting Firm.................F-1
Balance Sheet...........................................................F-2
Statement of Operations.................................................F-3
Statement of Cash Flows.................................................F-4
Statement of Stockholders' Equity.......................................F-5
Notes to the Financial Statements.......................................F-6
21
<page>
HLB
Cinnamon Jang Willoughby & Company
Chartered Accountants
A Partnership of Incorporated Professionals
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders of Crawford Lake Mining Inc.
(a Pre-exploration Stage Corporation):
We have audited the balance sheet of Crawford Lake Mining Inc. as at
April 30, 2005 and the statements of operations, cash flows, and stockholders'
equity from the date of inception, October 18, 2004 to April 30, 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 audit.
We conducted our audit 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 these
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.
In our opinion, these financial statements present fairly, in all
material respects, the financial position of the company as at April 30, 2005
and the results of its operations and it's cash flows for the period then ended
in conformity with generally accepted accounting principles in the United
States.
"Cinnamon Jang Willoughby & Company"
Chartered Accountants
Burnaby, BC
January 13, 2006
MetroTower II - Suite 900 - 4720 Kingsway, Burnaby, BC Canada V5H 4N2.
Telephone: +1 604 435 4317. Fax: +1 604 435 4319.
HLB Cinnamon Jang Willoughby & Company is a member of
International. A world-wide organziation of accounting firms and business
advisors.
F-1
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Balance Sheet
(Expressed in US dollars)
<table>
<caption>
April 31,
2005
$
<s> <c>
ASSETS
Current Assets
Cash 20,656
Prepaid expenses -
- ----------------------------------------------------------------------------------------------------------------
Total Assets 20,656
================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable 500
Accrued liabilities 3,900
- ----------------------------------------------------------------------------------------------------------------
Total Liabilities 4,400
- ----------------------------------------------------------------------------------------------------------------
Commitments and Contingencies (Notes 1)
Stockholders' Equity
Common Stock, 75,000,000 shares authorized, $0.001 par value
6,280,000 shares issued and outstanding (Note 5) 6,280
Additional Paid in Capital (Note 5) 21,420
Donated Capital (Note 3) 2,400
Deficit Accumulated During the Exploration Stage (13,844)
- ----------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity (Deficit) 16,256
- ----------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity (Deficit) 20,656
================================================================================================================
</table>
F-2
(The accompanying notes are an integral part of the financial statements)
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Statement of Operations
(Expressed in US dollars)
<table>
<caption>
From
October 18, 2004
(Date of Inception)
to April 30,
2005
$
<s> <c>
Revenue -
- ----------------------------------------------------------------------------------------------------------------
Expenses
Donated rent (Note 3) 800
Donated services (Note 3) 1,600
Mineral property costs 7,000
Office and general 44
Professional fees 4,400
- ----------------------------------------------------------------------------------------------------------------
13,844
- ----------------------------------------------------------------------------------------------------------------
Net Loss For the Period (13,844)
================================================================================================================
Net Loss Per Share - Basic -
================================================================================================================
Weighted Average Shares Outstanding 4,041,000
================================================================================================================
</table>
F-3
(The accompanying notes are an integral part of the financial statements)
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Statement of Cash Flows
(Expressed in US dollars)
<table>
<caption>
From
October 18, 2004
(Date of Inception)
to April 30,
2005
$
<s> <c>
Cash Flows Provided By Operating Activities
Net loss for the period (13,844)
Adjustments to reconcile net loss to cash:
Donated services and expenses 2,400
Change in operating assets and liabilities:
Increase in accounts payable and accrued liabilities 4,400
- ----------------------------------------------------------------------------------------------------------------
Net Cash Used By Operating Activities (7,044)
- ----------------------------------------------------------------------------------------------------------------
Cash Flows Provided By Financing Activities
Proceeds from the issuance of common stock 27,700
- ----------------------------------------------------------------------------------------------------------------
Net Cash Flows Provided By Financing Activities 27,700
- ----------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Cash 20,656
Cash - Beginning of Period -
- ----------------------------------------------------------------------------------------------------------------
Cash - End of Period 20,656
================================================================================================================
Non-Cash Financing Activities -
================================================================================================================
Supplemental Disclosures
Interest paid -
Income taxes paid -
================================================================================================================
</table>
F-4
(The accompanying notes are an integral part of the financial statements)
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Statement of Stockholders' Equity (Deficit)
From October 18, 2004 (Date of Inception) to April 30, 2005
(Expressed in US dollars)
<table>
<caption>
Deficit
Accumulated
Additional During the
Paid-in Donated Exploration
Common
Stock Amount Capital Capital Stage Total
# $ $ $ $ $
<s> <c> <c> <c> <c> <c> <c>
Balance - October 18, 2004 (Date of
Inception) - - - - - -
Shares issued for cash at $0.001 per
share 4,700,000 4,700 - - - 4,700
Shares issued for cash at $0.01 per
share 1,500,000 1,500 13,500 - - 15,000
Shares issued for cash at $0.10 per
share 80,000 80 7,920 - - 8,000
Donated services and rent - - - 2,400 - 2,400
Net loss for the period - - - (13,844) (13,844)
- ------------------------------------------------------------------------------------------------------------------------------
Balance - April 30, 2005 6,280,000 6,280 21,420 2,400 (13,844) 16,256
==============================================================================================================================
</table>
F-5
(The accompanying notes are an integral part of the financial statements)
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
April 30, 2005
1. Exploration Stage Company
The Company was incorporated in the State of Nevada on October 18, 2004.
The Company has acquired a 100% interest in one mineral claim consisting of
12 units located in Ontario, Canada.
The Company is an Exploration Stage Company, as defined by Statement of
Financial Accounting Standard ("SFAS") No.7, "Accounting and Reporting by
Development Stage Enterprises". The Company's principal business is the
acquisition and exploration of mineral resources. The Company has not
presently determined whether its properties contain mineral reserves that
are economically recoverable.
These financial statements have been prepared on a going concern basis,
which implies the Company will continue to realize its assets and discharge
its liabilities in the normal course of business. The Company has never
generated revenues since inception and has never paid any dividends and is
unlikely to pay dividends or generate earnings in the immediate or
foreseeable future. The continuation of the Company as a going concern is
dependent upon the continued financial support from its shareholders, the
ability of the Company to obtain necessary equity financing to continue
operations and to determine the existence, discovery and successful
exploitation of economically recoverable reserves in its resource
properties, confirmation of the Company's interests in the underlying
properties, and the attainment of profitable operations. As at April 30,
2005, the Company has a working capital deficiency of $16,256, and has
accumulated losses of $13,844 since inception. These financial statements
do not include any adjustments to the recoverability and classification of
recorded asset amounts and classification of liabilities that might be
necessary should the Company be unable to continue as a going concern.
These factors raise substantial doubt regarding the Company's ability to
continue as a going concern.
The Company will be filing an SB-2 Registration Statement with the United
States Securities and Exchange Commission to register 6,280,000 shares of
common stock for resale by existing shareholders of the Company. The
Company did not receive any proceeds from the resale of shares of common
stock by the selling stockholders.
2. Summary of Significant Accounting Policies
a) Basis of Presentation
These financial statements and related notes are presented in
accordance with accounting principles generally accepted in the United
States, and are expressed in US dollars. The Company's fiscal year-end
is April 30.
b) Use of Estimates
The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
c) Basic and Diluted Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with
SFAS No. 128, "Earnings per Share". SFAS No. 128 requires presentation
of both basic and diluted earnings per share (EPS) on the face of the
income statement. Basic EPS is computed by dividing net income (loss)
available to common shareholders (numerator) by the weighted average
number of shares outstanding (denominator) during the period. Diluted
EPS gives effect to all dilutive potential common shares outstanding
during the period using the treasury stock method and convertible
preferred stock using the if-converted method. In computing Diluted
EPS, the average stock price for the period is used in determining the
number of shares assumed to be purchased from the exercise of stock
options or warrants. Diluted EPS excludes all dilutive potential shares
if their effect is anti dilutive.
d) Comprehensive Loss
SFAS No. 130, "Reporting Comprehensive Income," establishes standards
for the reporting and display of comprehensive loss and its components
in the financial statements. As at April 30, 2005, the Company has no
items that represent a comprehensive loss and, therefore, has not
included a schedule of comprehensive loss in the financial statements.
F-6
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
April 30, 2005
2. Summary of Significant Accounting Policies (continued)
e) Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of
three months or less at the time of issuance to be cash equivalents.
f) Mineral Property Costs
The Company has been in the exploration stage since its formation on
October 18, 2004 and has not yet realized any revenues from its planned
operations. It is primarily engaged in the acquisition and exploration
of mining properties. Mineral property acquisition and exploration
costs are expensed as incurred. When it has been determined that a
mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs incurred to
develop such property, are capitalized. Such costs will be amortized
using the units-of-production method over the estimated life of the
probable reserve. If mineral properties are subsequently abandoned or
impaired, any capitalized costs will be charged to operations.
g) Financial Instruments
The fair values of cash, accounts payable and accrued liabilities
approximate their carrying values due to the immediate or short-term
maturity of these financial instruments.
h) Income Taxes
Potential benefits of income tax losses are not recognized in the
accounts until realization is more likely than not. The Company has
adopted SFAS No. 109 "Accounting for Income Taxes" as of its inception.
Pursuant to SFAS No. 109 the Company is required to compute tax asset
benefits for net operating losses carried forward. Potential benefit of
net operating losses have not been recognized in these financial
statements because the Company cannot be assured it is more likely than
not it will utilize the net operating losses carried forward in future
years.
i) Foreign Currency Translation
The Company's functional and reporting currency is the United States
dollar. Foreign currency transactions are occasionally undertaken in
Canadian dollars and are translated into United States dollars using
exchange rates at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are re-measured at each
balance sheet date at the exchange rate prevailing at the balance sheet
date. Foreign currency exchange gains and losses are charged to
operations. The Company has not, to the date of these financial
statements, entered into derivative instruments to offset the impact of
foreign currency fluctuations.
j) Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (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.
F-7
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
April 30, 2005
2. Summary of Significant Accounting Policies (continued)
j) Recent Accounting Pronouncements (continued)
In December 2004, the FASB issued SFAS No. 123R, "Share Based Payment"
("SFAS 123R"), which 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 Emerging Issues Task Force 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 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. 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. The adoption of this standard is not
expected to have a material effect on the Company's results of
operations or financial position.
In March 2005, the SEC staff issued Staff Accounting Bulletin No. 107
("SAB 107") to give guidance on the implementation of SFAS 123R. The
Company will consider SAB 107 during implementation of SFAS 123R.
3. Related Party Transactions
During the year ended April 30, 2005 the Company recognized a total of
$1,600 for donated services at $400 per month and $800 for donated rent at
$200 per month beginning January 1, 2005, provided by the President of the
Company.
4. Mineral Properties
The Company entered into an Agreement dated January 31, 2005 with Klondike
Bay Resources ("Klondike") to acquire a 100% interest in one mineral claim
representing 12 units located in Ontario, Canada. To acquire a 100%
interest in these claims, the Company paid $7,000, which was charged to
operations during the period ended April 30, 2005.
5. Common Shares
a) On December 21, 2004 the Company issued 4,700,000 shares of
common stock at a price of $0.001 per share for cash proceeds of
$4,700.
b) On January 10, 2005 the Company issued 1,500,000 shares of common
stock pursuant to Regulation S at a price of $0.01 per share for
cash proceeds of $15,000.
c) On January 21, 2005 the Company issued 80,000 shares of common
stock pursuant to Regulation S at a price of $0.10 per share for
cash proceeds of $8,000.
F-8
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
April 30, 2005
6. Income Tax
The Company has adopted the provisions of SFAS 109, "Accounting for Income
Taxes". Pursuant to SFAS 109 the Company is required to compute tax asset
benefits for net operating losses carried forward. The potential benefit of
net operating losses has not been recognized in the financial statements
because the Company cannot be assured that it is more likely than not that
it will utilize the net operating losses carried forward in future years.
The Company has approximately $11,400 of net operating loss carryforwards
available to offset taxable income in future years which expire through
fiscal 2025. For the period ended April 30, 2005, the valuation allowance
established against the deferred tax assets increased by $3,876.
The components of the net deferred tax asset at April 30, 2005, and the
statutory tax rate, the effective tax rate and the elected amount of the
valuation allowance are indicated below:
2005
$
Net Operating Loss 11,400
Statutory Tax Rate 34%
Effective Tax Rate -
Deferred Tax Asset 3,876
Valuation Allowance (3,876)
- ------------------------------------------------------------
Net Deferred Tax Asset -
============================================================
F-9
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Balance Sheets
(Expressed in US dollars)
<table>
<caption>
October 31, April 30,
2005 2005
$ $
<s> <c> <c>
ASSETS
Current Assets
Cash 16,732 20,656
- ----------------------------------------------------------------------------------------------------------------
Total Assets 16,732 20,656
================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable 1,000 500
Accrued liabilities 5,250 3,900
- ----------------------------------------------------------------------------------------------------------------
Total Liabilities 6,250 4,400
- ----------------------------------------------------------------------------------------------------------------
Commitments and Contingencies (Notes 1)
Stockholders' Equity
Common Stock, 75,000,000 shares authorized, $0.001 par value
6,280,000 shares issued and outstanding (Note 5) 6,280 6,280
Additional Paid in Capital (Note 5) 21,420 21,420
Donated Capital (Note 3) 6,000 2,400
Deficit Accumulated During the Exploration Stage (23,218) (13,844)
- ----------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 10,482 16,256
- ----------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity 16,732 20,656
================================================================================================================
</table>
(The accompanying notes are an integral part of the financial statements)
F-10
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Statements of Operations
(Expressed in US dollars)
<table>
<caption>
From From
For the Six October 18, 2004 October 18, 2004
Months Ended (Date of Inception) (Date of Inception)
October 31, 2005 to April 30, to October 31,
2005 2005 2005
$ $ $
<s> <c> <c> <c>
Revenue - - -
- ------------------------------------------------------------------------------------------------------------------------
Expenses
Donated rent (Note 3) 1,200 800 2,000
Donated services (Note 3) 2,400 1,600 4,000
Mineral property costs - 7,000 7,000
Office and general 290 44 334
Professional fees 5,484 4,400 9,884
- ------------------------------------------------------------------------------------------------------------------------
9,374 13,844 23,218
- ------------------------------------------------------------------------------------------------------------------------
Net Loss For the Period (9,374) (13,844) (23,218)
========================================================================================================================
Net Loss Per Share - Basic - -
========================================================================================================================
Weighted Average Shares Outstanding 6,280,000 4,041,000
========================================================================================================================
</table>
(The accompanying notes are an integral part of the financial statements)
F-11
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Statements of Cash Flows
(Expressed in US dollars)
<table>
<caption>
From From
October 18, 2004 October 18, 2004
For the Six (Date of (Date of
Months Ended Inception) Inception)
October 31, to April 30, to October 31,
2005 2005 2005
$ $ $
<s> <c> <c> <c>
Cash Flows Provided By Operating Activities
Net loss for the period (9,374) (13,844) (23,218)
Adjustments to reconcile net loss to cash:
Donated services and expenses 3,600 2,400 6,000
Change in operating assets and liabilities:
Increase in accounts payable and accrued liabilities 1,850 4,400 6,250
- -------------------------------------------------------------------------------------------------------------------------
Net Cash Used By Operating Activities (3,924) (7,044) (10,968)
- -------------------------------------------------------------------------------------------------------------------------
Cash Flows Provided By Financing Activities
Proceeds from the issuance of common stock - 27,700 27,700
- -------------------------------------------------------------------------------------------------------------------------
Net Cash Flows Provided By Financing Activities - 27,700 27,700
- -------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Cash (3,924) 20,656 16,732
Cash - Beginning of Period 20,656 - -
- -------------------------------------------------------------------------------------------------------------------------
Cash - End of Period 16,732 20,656 16,732
=========================================================================================================================
Supplemental Disclosures
Interest paid - - -
Income taxes paid - - -
- -------------------------------------------------------------------------------------------------------------------------
</table>
(The accompanying notes are an integral part of the financial statements)
F-12
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Statement of Stockholders' Equity
From October 18, 2004 (Date of Inception) to October 31, 2005
(Expressed in US dollars)
<table>
<caption>
Deficit
Accumulated
Additional During the
Common Paid-in Donated Exploration
Stock Amount Capital Capital Stage Total
# $ $ $ $ $
<s> <c> <c> <c> <c> <c> <c>
Balance - October 18, 2004 (Date of
Inception) - - - - - -
Shares issued for cash at $0.001 per
share 4,700,000 4,700 - - - 4,700
Shares issued for cash at $0.01 per
share 1,500,000 1,500 13,500 - - 15,000
Shares issued for cash at $0.10 per
share 80,000 80 7,920 - - 8,000
Donated services and rent - - - 2,400 - 2,400
Net loss for the period - - - - (13,844) (13,844)
- ------------------------------------------------------------------------------------------------------------------------------
Balance - April 30, 2005 6,280,000 6,280 21,420 2,400 (13,844) 16,256
Donated services and rent - - - 3,600 - 3,600
Net loss for the period - - - - (9,374) (9,374)
- ------------------------------------------------------------------------------------------------------------------------------
Balance - October 31, 2005 6,280,000 6,280 21,420 6,000 (23,218) 10,482
==============================================================================================================================
</table>
(The accompanying notes are an integral part of the financial statements)
F-13
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
October 31, 2005
1. Exploration Stage Company
The Company was incorporated in the State of Nevada on October 18, 2004.
The Company has acquired a 100% interest in one mineral claim consisting of
12 units located in Ontario, Canada.
The Company is an Exploration Stage Company, as defined by Statement of
Financial Accounting Standard ("SFAS") No.7, "Accounting and Reporting by
Development Stage Enterprises". The Company's principal business is the
acquisition and exploration of mineral resources. The Company has not
presently determined whether its properties contain mineral reserves that
are economically recoverable.
These financial statements have been prepared on a going concern basis,
which implies the Company will continue to realize its assets and discharge
its liabilities in the normal course of business. The Company has never
generated revenues since inception and has never paid any dividends and is
unlikely to pay dividends or generate earnings in the immediate or
foreseeable future. The continuation of the Company as a going concern is
dependent upon the continued financial support from its shareholders, the
ability of the Company to obtain necessary equity financing to continue
operations and to determine the existence, discovery and successful
exploitation of economically recoverable reserves in its resource
properties, confirmation of the Company's interests in the underlying
properties, and the attainment of profitable operations. As at October 31,
2005, the Company has working capital of $10,482, and has accumulated
losses of $23,218 since inception. These financial statements do not
include any adjustments to the recoverability and classification of
recorded asset amounts and classification of liabilities that might be
necessary should the Company be unable to continue as a going concern.
These factors raise substantial doubt regarding the Company's ability to
continue as a going concern.
The Company is planning to file an SB-2 Registration Statement with the
United States Securities and Exchange Commission to register 6,280,000
shares of common stock for resale by existing shareholders of the Company.
The Company will not receive any proceeds from the resale of shares of
common stock by the selling stockholders.
2. Summary of Significant Accounting Policies
a) Basis of Presentation
These financial statements and related notes are presented in
accordance with accounting principles generally accepted in the United
States, and are expressed in US dollars. The Company's fiscal year-end
is April 30.
b) Use of Estimates
The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
c) Basic and Diluted Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with
SFAS No. 128, "Earnings per Share". SFAS No. 128 requires presentation
of both basic and diluted earnings per share (EPS) on the face of the
income statement. Basic EPS is computed by dividing net income (loss)
available to common shareholders (numerator) by the weighted average
number of shares outstanding (denominator) during the period. Diluted
EPS gives effect to all dilutive potential common shares outstanding
during the period using the treasury stock method and convertible
preferred stock using the if-converted method. In computing Diluted
EPS, the average stock price for the period is used in determining the
number of shares assumed to be purchased from the exercise of stock
options or warrants. Diluted EPS excludes all dilutive potential shares
if their effect is anti dilutive.
d) Comprehensive Loss
SFAS No. 130, "Reporting Comprehensive Income," establishes standards
for the reporting and display of comprehensive loss and its components
in the financial statements. As at October 31, 2005, the Company has no
items that represent a comprehensive loss and, therefore, has not
included a schedule of comprehensive loss in the financial statements.
F-14
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
October 31, 2005
2. Summary of Significant Accounting Policies (continued)
e) Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of
three months or less at the time of issuance to be cash equivalents.
f) Mineral Property Costs
The Company has been in the exploration stage since its formation on
October 18, 2004 and has not yet realized any revenues from its planned
operations. It is primarily engaged in the acquisition and exploration
of mining properties. Mineral property acquisition and exploration
costs are expensed as incurred. When it has been determined that a
mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs incurred to
develop such property, are capitalized. Such costs will be amortized
using the units-of-production method over the estimated life of the
probable reserve. If mineral properties are subsequently abandoned or
impaired, any capitalized costs will be charged to operations.
g) Financial Instruments
The fair values of cash, accounts payable and accrued liabilities
approximate their carrying values due to the immediate or short-term
maturity of these financial instruments.
h) Income Taxes
Potential benefits of income tax losses are not recognized in the
accounts until realization is more likely than not. The Company has
adopted SFAS No. 109 "Accounting for Income Taxes" as of its inception.
Pursuant to SFAS No. 109 the Company is required to compute tax asset
benefits for net operating losses carried forward. Potential benefit of
net operating losses have not been recognized in these financial
statements because the Company cannot be assured it is more likely than
not it will utilize the net operating losses carried forward in future
years.
i) Foreign Currency Translation
The Company's functional and reporting currency is the United States
dollar. Foreign currency transactions are occasionally undertaken in
Canadian dollars and are translated into United States dollars using
exchange rates at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are re-measured at each
balance sheet date at the exchange rate prevailing at the balance sheet
date. Foreign currency exchange gains and losses are charged to
operations. The Company has not, to the date of these financial
statements, entered into derivative instruments to offset the impact of
foreign currency fluctuations.
j) Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board (FASB)
issued SFAS No. 123R, "Share Based Payment" ("SFAS 123R"), which 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
Emerging Issues Task Force 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 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. 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.
The adoption of this standard is not expected to have a material effect
on the Company's results of operations or financial position.
F-15
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
October 31, 2005
2. Summary of Significant Accounting Policies (continued)
j) Recent Accounting Pronouncements (continued)
In March 2005, the SEC staff issued Staff Accounting Bulletin No. 107
("SAB 107") to give guidance on the implementation of SFAS 123R. The
Company will consider SAB 107 during implementation of SFAS 123R.
In December 2004, the FASB issued Statement of Financial Accounting
Standards (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 May 2005, the FASB issued SFAS No. 154, "Accounting Changes and
Error Corrections - A Replacement of APB Opinion No. 20 and SFAS No.
3". SFAS 154 changes the requirements for the accounting for and
reporting of a change in accounting principle and applies to all
voluntary changes in accounting principle. It also applies to changes
required by an accounting pronouncement in the unusual instance that
the pronouncement does not include specific transition provisions. SFAS
154 requires retrospective application to prior periods' financial
statements of changes in accounting principle, unless it is
impracticable to determine either the period-specific effects or the
cumulative effect of the change. The provisions of SFAS No. 154 are
effective for accounting changes and correction of errors made in
fiscal years beginning after December 15, 2005. The adoption of this
standard is not expected to have a material effect on the Company's
results of operations or financial position.
3. Related Party Transactions
During the six months ended October 31, 2005 the Company recognized a total
of $2,400 (April 30, 2005 - $1,600) for donated services at $400 per month
and $1,200 (April 30, 2005 - $800) for donated rent at $200 per month,
provided by the President of the Company.
4. Mineral Property
The Company entered into an Agreement dated January 31, 2005 with Klondike
Bay Resources ("Klondike") to acquire a 100% interest in one mineral claim
representing 12 units located in Ontario, Canada. To acquire a 100%
interest in this claim, the Company paid $7,000, which was charged to
operations during the period ended April 30, 2005.
5. Common Shares
a) On December 21, 2004 the Company issued 4,700,000 shares of common
stock at a price of $0.001 per share for cash proceeds of $4,700.
b) On January 10, 2005 the Company issued 1,500,000 shares of common
stock pursuant to Regulation S at a price of $0.01 per share for cash
proceeds of $15,000.
c) On January 21, 2005 the Company issued 80,000 shares of common stock
pursuant to Regulation S at a price of $0.10 per share for cash
proceeds of $8,000.
F-16
<page>
Crawford Lake Mining Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
October 31, 2005
6. Income Tax
The Company has adopted the provisions of SFAS 109, "Accounting for Income
Taxes". Pursuant to SFAS 109 the Company is required to compute tax asset
benefits for net operating losses carried forward. The potential benefit of
net operating losses has not been recognized in the financial statements
because the Company cannot be assured that it is more likely than not that
it will utilize the net operating losses carried forward in future years.
The Company has approximately $11,400 of net operating loss carryforwards
available to offset taxable income in future years which expire through
fiscal 2025. For the fiscal period ended April 30, 2005, the valuation
allowance established against the deferred tax assets increased by $3,876.
The components of the net deferred tax asset at April 30, 2005, and the
statutory tax rate, the effective tax rate and the elected amount of the
valuation allowance are indicated below:
April 30,
2005
$
Net Operating Loss 11,400
Statutory Tax Rate 34%
Effective Tax Rate -
Deferred Tax Asset 3,876
Valuation Allowance (3,876)
- ------------------------------------------------------------
Net Deferred Tax Asset -
============================================================
F-17
<page>
Changes In And Disagreements With Accountants on Accounting and
Financial Disclosure
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 (the "NRS") 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);
(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.
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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 $ 29.90
Transfer Agent fees $ 1,000.00
Accounting and auditing fees and expenses $ 7,000.00
Legal fees and expenses $ 3,000.00
Edgar filing fees $ 1,500.00
----------
Total $12,529.90
==========
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 3,500,000 shares of our common stock at a price of
$0.001 per share to our president, John Fiddick, on December 21, 2004. The total
amount received from this offering was $3,500. These shares were issued pursuant
to Regulation S of the Securities Act.
We completed an offering of 1,200,000 shares of our common stock at a price of
$0.001 per share to a total of four purchasers on December 24, 2004. The total
amount received from this offering was $1,200. These shares were issued pursuant
to Regulation S of the Securities Act. The purchasers in this offering were as
follows:
Name of Subscriber Number of Shares
------------------------------------------------ ----------------------
Bobby-Ann Trask 300,000
Alan Cox 300,000
Amy J. Young 300,000
Robert J. Schumann 300,000
We completed an offering of 1,500,000 shares of our common stock at a price of
$0.01 per share to a total of fifteen purchasers on January 10, 2005. The total
amount received from this offering was $15,000. We completed this offering
pursuant to Regulation S of the Securities Act. The purchasers in this offering
were as follows:
Name of Subscriber Number of Shares
------------------------------------------------ ----------------------
Layne M. Osterman 100,000
Saroj Nagin 100,000
Mark Frendo 100,000
Mahangu Patel 100,000
Donna M. White 100,000
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Rene Dickenschied 100,000
Keving Mullins 100,000
Anand Nagin 100,000
Giuseppe Mandarino 100,000
Anna Mandarino 100,000
Patrick McGrath 100,000
Maureen H. Hoechsmann 100,000
Pete F Hoechsmann 100,000
David Trask 100,000
Sofia Conte 100,000
We completed an offering of 80,000 shares of our common stock at a price of
$0.10 per share to a total of eight purchasers on January 21, 2005. The total
amount received from this offering was $8,000. We completed this offering
pursuant to Regulation S of the Securities Act. The purchasers in this offering
were as follows:
Name of Subscriber Number of Shares
------------------------------------------------ ----------------------
Darrell Shuel 10,000
Terry Fiddick 10,000
Gary Sly 10,000
Jennifer Lee Newcomen 10,000
Anne Reed 10,000
Beecham Y. Pearson 10,000
Campbell H. Pearson 10,000
Tina Santarelli 10,000
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 of Cane Clark LLP
10.1 Mineral property purchase agreement dated January 31, 2005
23.1 Consent of HLB Cinnamon Jang Willoughby & Company
99.1 Location map
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 sin connection with the securities being registered, we will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Securities Act, and
we will be governed by the final adjudication of such issue.
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Signatures
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Vancouver, Province of British Columbia on January 13, 2006.
Crawford Lake Mining Inc.
By: /s/ John Fiddick
------------------------------
John Fiddick
President, Secretary, Treasurer,
Chief Executive Officer and Director
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated:
SIGNATURE CAPACITY IN WHICH SIGNED DATE
/s/ John Fiddick President, Secretary, Treasurer, Chief January 13, 2006
- ----------------- Executive Officer, principal accounting
John Fiddick officer, principal financial officer and
Director
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