UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT #1 TO
FORM SB-2
FILE NUMBER: 333-131041
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ANCOR RESOURCES 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.
Ancor Resources Inc.
2328 Heather Street
Vancouver, B.C. V5Z 4R6
Telephone: 604-838-1926
Facsimile: 604-742-9993
--------------------------------------------------------------
(Address and telephone number of principal executive offices)
Empire Stock Transfer Inc.
7251 West Lake Mead Blvd Suite 300
Las Vegas, Nevada, 89128
Telephone: 702-562-4091
Facsimile: 702-562-4081
--------------------------------------------------------------
(Name, address and telephone number of agent for service)
Approximate date of as soon as practicable after the effective
date of this
proposed sale to the public: 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
<page>
<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 $412,500 $0.10 $412,500 $44.14
- ------------------------ ---------------------- ---------------------- ---------------------- ---------------------
</table>
(1) Based on the last sales price on February 1, 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 March 17, 2006
2
<page>
PROSPECTUS
ANCOR RESOURCES INC.
4,125,000 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 6-8
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. We cannot ensure that our shares will be
quoted on the OTC Bulletin Board.
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: March 17, 2006
3
<page>
Table Of Contents
<table>
<caption>
Page
<s> <c>
Summary 5
Risk Factors 6
-1 If we do not obtain additional financing, our business will fail 6
-2 Because we have not commenced business operations, we face a high risk of business failure 6
-3 Because of the speculative nature of exploration of mining properties, there is substantial risk that
our business will fail 7
-4 Because our continuation as a going concern is in doubt, we will be forced to cease business operations
unless we can generate profit in the future. 7
-5 Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur
liability or damages, which could hurt our financial position and possibly result in the failure of our 7
business.
-6 Even if we discover commercial reserves of precious metals on the Panther claim, we may not be able to
successfully obtain commercial production 7
-8 Because our directors have other business interests, they may not be able or willing to devote a
sufficient amount of time to our business operations, causing our business to fail 8
-9 Because our directors have no technical experience in mineral exploration, our business has a high risk
of failure 8
-10 If a market for our common stock does not develop, shareholders may be unable to sell their shares and
will incur losses as a result 8
-11 A purchaser is purchasing penny stock which limits the ability to sell stock 8
Use of Proceeds 8
Determination of Offering Price 9
Dilution 9
Selling Securityholders 9
Plan of Distribution 11
Legal Proceedings 13
Directors, Executive Officers, Promoters and Control Persons 13
Security Ownership of Certain Beneficial Owners and Management 14
Description of Securities 15
Interest of Named Experts and Counsel 16
Disclosure of Commission Position of Indemnification for Securities Act Liabilities 16
Organization Within Last Five Years 16
Description of Business 16
Compliance with Government Regulation 19
Plan of Operations 21
Description of Property 22
Certain Relationships and Related Transactions 22
Market for Common Equity and Related Stockholder Matters 22
Executive Compensation 23
Financial Statements 24
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 51
</table>
4
<page>
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 Panther
mineral claim located twenty-two kilometers southeast of Port Alberni, Vancouver
Island, British Columbia, Canada. We acquired the property from Laurence
Stephenson for $2,015.
Our objective is to conduct mineral exploration activities on the Panther claim
in order to assess whether it possesses economic reserves of copper and gold. We
have not yet identified any economic mineralization on the Panther claim. Our
proposed exploration program is designed to search for an economic mineral
deposit.
We were incorporated on October 11, 2004, under the laws of the state of Nevada.
Our principal offices are located at 2328 Heather Street, Vancouver, British
Columbia Canada V5Z 4R6. Our telephone number is (604) 838-1926.
The Offering:
Securities Being Offered Up to 4,125,000 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 cannot ensure 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.
Terms of the Offering The selling shareholders will determine when
and how they will sell the common stock
offered in this prospectus.
Termination of the Offering The offering will conclude when all of the
4,125,000 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 8,125,000 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
<page>
Summary Financial Information
Balance Sheet
February 28, 2005 November 30,
(audited) 2005
(unaudited)
Cash $25,864 $23,382
Total Assets $25,864 $23,382
Liabilities $ 3,015 $ 7,008
Total Stockholders' Equity $22,849 $16,374
Statement of Operations
From Incorporation on
October 11, 2004 to Novemer 30, 2005
(unaudited)
Revenue
$0
Net Loss and Deficit ($9,526)
Risk Factors
An investment in our common stock involves a high degree of risk. The following
is a discussion of all of the material risks relating to the offering and our
business. 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 Panther 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 Panther claim. While we have sufficient funds to conduct the
recommended phase one and two exploration programs on the claim, which are
estimated to cost $5,000 each, we will need additional funds to complete any
additional recommended exploration. 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 Panther claim. Accordingly, we have
no way to evaluate the likelihood that our business will be successful. We were
incorporated on October 11, 2004 and to date have been involved primarily in
organizational activities and the acquisition of an interest in the Panther
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
6
<page>
new mineral exploration companies and the high rate of failure of such
enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.
Prior to completion of our exploration stage, we anticipate that we will incur
increased operating expenses without realizing any revenues. We therefore expect
to incur significant losses into the foreseeable future. We recognize that if we
are unable to generate significant revenues from development of the Panther
claim 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 is extremely remote. Exploration for minerals is a speculative venture
necessarily involving substantial risk. In all probability, the Panther 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.
Because our continuation as a going concern is in doubt, we will be forced to
cease business operations unless we can generate profit in the future.
The report of our independent accountant to our audited financial statements
dated July 29, 2005 for the period ended February 28, 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, which could hurt our financial position
and possibly result in the failure of 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 Panther claim,
we may not be able to successfully commence commercial production.
The Panther claim does not contain any known bodies of mineralization. If our
exploration programs are successful in establishing copper and gold of
commercial tonnage and grade, we will require additional funds in order to place
the Panther claim into commercial production. We may not be able to obtain such
financing.
7
<page>
Because our directors have other business interests, they may not be able or
willing to devote a sufficient amount of time to our business operations,
causing our business to fail.
Our president, Mr. Michael Sweeney, intends to devote approximately 20% of his
business time providing his services to us and our directors Mr. Jim Callaghan
devoting approximately 20% and Mr. Allan Beaton devoting 10% of their business
time. While our directors presently possess adequate time to attend to our
interests, it is possible that the demands on our directors from their other
obligations could increase with the result that they would no longer be able to
devote sufficient time to the management of our business.
If a market for our common stock does not develop, shareholders may be unable to
sell their shares and will incur losses as a result.
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.
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. We cannot ensure 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
4,125,000 shares of common stock offered through this prospectus. These shares
were acquired from us in private placements that were exempt from registration
under Regulation S of the Securities Act of 1933. The shares include the
following:
1. 2,400,000 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;
2. 1,700,000 shares of our common stock that the selling shareholders acquired
from us in an offering that was exempt from registration under Regulation S
of the Securities Act of 1933 and was completed on January 25, 2005;
3. 25,000 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 February 1 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
Shares Owned Offered for Owned Upon Upon Completion
Prior to this Selling Completion of of this Offering
Name of Selling Stockholder Offering Shareholders this Offering
Account
<s> <c> <c> <c> <c>
Joe Perri
2243 Folkstone Way, Suite 210 300,000 300,000 Nil Nil
West Vancouver, BC V7T 2Y7
David Darmadi 300,000 300,000 Nil Nil
663 East 7th Street
North Vancouver, BC V7J 1S5
Velummylum Thamaraimanala 300,000 300,000 Nil Nil
1205 East 60th Avenue
Vancouver, BC V5X 2A6
Philippehe Le Floc'h 300,000 300,000 Nil Nil
908 Berkley Road, Suite 232
North Vancouver, BC V7H 1Y2
</table>
9
<page>
<table>
<s> <c> <c> <c> <c>
Tommas Perry
4356 Mountain Hwy 300,000 300,000 Nil Nil
North Vancouver, BC V7K 2K2
Paul Frederick Horton 300,000 300,000 Nil Nil
1144 St. Georges Avenue, Suite 203
North Vancouver, BC V7L 3H8
Jeyananthan Navaratnam 300,000 300,000 Nil Nil
339 East 7th Avenue, Suite 301
Vancouver, BC V5T 1M9
Bette Richardson 300,000 300,000 Nil Nil
4428 West 4th Avenue
Vancouver, BC V6R 2Y3
Frank Cerney 100,000 100,000 Nil Nil
2914 Argo Place
Burnaby, BC V3H 7G3
Wolfgang Shales 100,000 100,000 Nil Nil
1338 Homer Street, Suite 305
Vancouver, BC V6B 6A7
Roya Haifi 100,000 100,000 Nil Nil
8200 Park Road, Suite 201
Richmond, BC V6Y 2Y8
Patrick Santalucia 100,000 100,000 Nil Nil
3643 William Street
Vancouver, BC V5K 2Y6
Adrian Karasz 100,000 100,000 Nil Nil
1364 Walnut Street
Vancouver, BC V6J 3R3
Alexander Friio 100,000 100,000 Nil Nil
1482 Lynwood Avenue
Port Coquitlam, BC V3B 5K6
Tony Mobilio 100,000 100,000 Nil Nil
2560 East Georgia Street
Vancouver, BC V5K 2J7
Andrew Burke 100,000 100,000 Nil Nil
2155 West 7tth Avenue, Suite 303
Vancouver, BC V6K 1X9
Martin Palin 100,000 100,000 Nil Nil
1688 Robson Street, Suite 206
Vancouver, BC V6G 1C7
Kyle Paracy 100,000 100,000 Nil Nil
265 Seymour River Place
North Vancouver, BC V7H 1S6
Adam Reznik 100,000 100,000 Nil Nil
20804 97th Avenue
Langley, BC V1M 3Z1
</table>
10
<page>
<table>
<s> <c> <c> <c> <c>
Dallas Seckler 100,000 100,000 Nil Nil
19108 McMyn Road
Pitt Meadows, BC V3Y 2J2
Natalie Karam 100,000 100,000 Nil Nil
1010 Wenda Crescent, PO Box 448
Garibaldi Highlands, BC V0N 1T0
Robert Rodda 100,000 100,000 Nil Nil
1150 Denman Street
Vancouver ,BC V6G 2M9
Vanessa Foster 100,000 100,000 Nil Nil
Union Steamship Marina
PO Box 265 RR1, Bowen Island, BC V0N
1G0
Jim Patterson 100,000 100,000 Nil Nil
1228 Marinaside Crescent, Suite 805
Vancouver, BC V6J 3W4
Michael Loveless 100,000 100,000 Nil Nil
1240 Doran Road
North Vancouver, BC V7K 1M7
Andrea Picchi 5,000 5,000 Nil Nil
334 9th Street East
North Vancouver, BC V7L 2B2
Barbara San Severino 5,000 5,000 Nil Nil
440 Macbeth Crescent
West Vancouver, BC V7T 1V7
Giovan Picchi 5,000 5,000 Nil Nil
B-220 Wooddale Road
North Vancouver, BC V7N 1S5
Dian Hansen 5,000 5,000 Nil Nil
3365 Spruce Road
Roberts Creek, BC V0N 2W2
Colette Perry 5,000 5,000 Nil Nil
4356 Mountain Hwy
North Vancouver, BC V7K 2K2
</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 4,125,000 shares of common stock outstanding on the
date of this prospectus.
None of the selling shareholders:
(1) has had a material relationship with us other than as a shareholder at any
time within the past three years;
(2) has ever been one of our officers or directors; or
11
<page>
(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. Such sales may occur in private
transactions arranged by each selling shareholder in accordance with resale
exemptions in applicable jurisdictions or through the facilities of the OTC
Bulletin Board, if we successfully obtain a quotation for our stock, of which
there is no guarantee.
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 cannot ensure that our shares will be
quoted on the OTC Bulletin Board.
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 $10,500. 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:
1 contains a description of the nature and level of risk in the market for
penny stocks in both public offerings and secondary trading;
2 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;
3 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;
4 contains a toll-free telephone number for inquiries on disciplinary
actions;
5 defines significant terms in the disclosure document or in the conduct of
trading penny stocks; and
6 contains such other information and is in such form (including language,
type, size, and format) as the Commission shall require by rule or
regulation;
12
<page>
The broker-dealer also must provide, prior to proceeding with any transaction in
a penny stock, the customer:
1 with bid and offer quotations for the penny stock;
2 details of the compensation of the broker-dealer and its salesperson in the
transaction;
3 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
4 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, Nevada,
89128.
Directors, Executive Officers, Promoters And Control Persons
Our executive officers and directors and their age as of the date of this
prospectus is as follows:
Directors:
Name of Director Age
- ---------------------------------------- ----------
Michael Sweeney 41
- ---------------------------------------- ----------
Jim Callaghan 48
- ---------------------------------------- ----------
Allan J. Beaton 56
Executive Officers:
Name of Officer Age Office
- ----------------------------------- ----- ------------------------------------
Michael Sweeney 41 President and Chief Executive Officer
- ----------------------------------- ----- ------------------------------------
Jim Callaghan 48 Secretary and Treasurer
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. Michael Sweeney has acted as our president, chief executive officer and as a
director since our incorporation on October 11, 2004. Mr. Sweeney has been the
general manager of the Orange Hotel located in Vancouver since November 1989.
Mr. Sweeney does not have any professional training or technical credentials in
the exploration, development and operation of mines.
13
<page>
Mr.Sweeney intends to devote approximately 20% of his business time to our
affairs.
Mr. Jim Callaghan has acted as a director, secretary and treasurer since our
incorporation on October 11, 2004. Mr. Callaghan has been a purser with Air
Canada since October 1979.
Mr. Callaghan does not have any professional training or technical credentials
in the exploration, development and operation of mines.
Mr. Callaghan intends to devote approximately 20% of his business time to our
affairs.
Mr. Allan J. Beaton has acted as a director since July 27, 2005. Mr. Beaton is a
graduate of the Nova Scotia Technical College (Dalhousie) with a degree in
mining engineering. Mr. Beaton has been the principal of A.J. Beaton Mining, a
geological consulting company since 1987. He has also been president of Uganda
Gold Mining Ltd., an Alberta and British Columbia reporting company involved in
mineral exploration since 1998.
Mr. Beaton intends to devote approximately 10% of his business time to our
affairs.
Term of Office
Our directors are appointed for a one-year term to hold office until the next
annual general meeting of our shareholders or until removed from office in
accordance with our bylaws. Our officers are appointed by our board of directors
and hold office until removed by the board.
Significant Employees
We have no significant employees other than the officers and directors described
above.
Security Ownership Of Certain Beneficial Owners And Management
The following table provides the names and addresses of each person known to us
to own more than 5% of our outstanding common stock as of the date of this
prospectus, and by the officers and directors, individually and as a group.
Except as otherwise indicated, all shares are owned directly.
<table>
<caption>
Amount of
Title of Class Name of beneficial owner beneficial Percent of class
ownership
- ----------------------- ------------------------------------------------------- ----------------- -----------------
<s> <c> <c> <c>
Common stock Michael Sweeney 3,000,000 36.92%
- ----------------------- ------------------------------------------------------- ----------------- -----------------
Common stock Jim Callaghan 1,000,000 12.31%
- ----------------------- ------------------------------------------------------- ----------------- -----------------
Common stock Allan J. Beaton Nil 0%
Common stock All officers and directors as a group that consists 4,000,000 49.23%
of three people
</table>
The percent of class is based on 8,125,000 shares of common stock issued and
outstanding as of the date of this prospectus.
14
<page>
Description Of Securities
General
Our authorized capital stock consists of 75,000,000 shares of common stock at a
par value of $0.001 per share.
Common Stock
As of March 17, 2006, there were 8,125,000 shares of our common stock issued
and outstanding that are held by thirty-two 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.
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.
15
<page>
Interests Of Named Experts And Counsel
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant. Nor was any such person
connected with the registrant as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
The financial statements included in this prospectus and the registration
statement have been audited by Staley, Okada & Partners, 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 directors and officers are indemnified as provided by the Nevada Revised
Statutes and our Bylaws. These provisions provide that we shall indemnify a
director or former director against all expenses incurred by him by reason of
him acting in that position. The directors may also cause us to indemnify an
officer, employee or agent in the same fashion.
We have been advised that in the opinion of the Securities and Exchange
Commission indemnification for liabilities arising under the Securities Act is
against public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless in
the opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction. We will then be governed by the
court's decision.
Organization Within Last Five Years
We were incorporated on October 11, 2004 under the laws of the state of Nevada.
On that date, Michael Sweeney and Jim Callaghan were appointed as our directors.
As well, Mr. Sweeney was appointed as our president and chief executive officer
while Mr. Callaghan was appointed as our secretary and treasurer. On July 27,
2005, Mr. Allan J. Beaton was appointed as a director.
Description Of Business
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% interest in one
mineral claim known as the Panther claim located twenty-two kilometers southeast
of Port Alberni, Vancouver Island, British Columbia, Canada. We purchased this
claim from Laurence Stephenson.
There is no assurance that a commercially viable mineral deposit exists on the
Panther 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 Panther claim. Once we have completed each phase of
16
<page>
exploration, we will make a decision as to whether or not we proceed with each
successive phase based upon the analysis of the results of that program. Our
directors will make this decision based upon the recommendations of the
independent geologist who oversees the program and records the results.
Our plan of operation is to conduct exploration work on the Panther claim in
order to ascertain whether it possesses economic quantities of copper and gold.
There can be no assurance that an economic mineral deposit exists on the Panther
claim until appropriate exploration work is completed.
Even if we complete our proposed exploration programs on the Panther 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.
Panther claim Purchase
On January 28, 2005, we entered into a Mineral Property Staking and Purchase
Agreement with Laurence Stephenson whereby we purchased a 100% interest in the
Panther mineral claim for $2,015.
Description, Location and Access
The Panther claim is located in the approximately 22 kilometers southeast of
Port Hardy, British Columbia on Vancouver Island, just south of Father and Son
Lake in the Alberni Mining District. Local access to the property is accessable
by vehicle, six kilometers via a logging road located off Port Alberni's main
road.
Climate and Topography
The climate consists of mild springs with some precipitation, warm to hot
summers and cold, wet winters with snowfall mainly in January at the higher
elevations.
The property lies in a forested area with elevations ranging from 800 meters
to1,000 meters. The topography is rugged along the higher elevations. The slopes
are actively being logged and re-growth is found in other areas. Vegetation
consists of a mix of cedar, hemlock, spruce trees as well as alder, willow and
cottonwood trees along the poorly drained areas. Undergrowth brush is typical
with devil's club, salal and other assorted berry bushes.
Title to the Panther claim
The Panther claim consists of one mineral claim comprising 24 units. A "mineral
claim" 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
Panther claim is registered in the name of the claim vendor.
Claims details are as follows:
Claim Name Record Number Expiry Date
- ---------------- ---------------- ----------------------
Panther 510012 April 1, 2006
The claim is in good standing until April 1, 2006. This means that the claim
will expire on April 1, 2006 and we complete at least $100 worth of exploration
work on the claim by that date. In subsequent years, we must spend at least $200
on the claim to extend the expiry date by one year.
17
<page>
Mineralization
There are two styles of mineralization present in the Mineral Creek fault
representing the types of mineralization to be expected. A fault is a fracture
caused by movement of rock under the earth's surface. First, gold occurs in the
wide area of cataclastic rock spread out in bedded volcaniclastic and aphyric
rocks adjacent to the fault. Cataclastic rock is angular fragmented powdered
rock formed by the crushing and shearing from movement of the earth's crust.
Volcaniclastic rock is volcanic rock formed by pre-existing rock and Aphyric
rock is basalt (volcanic igneous rock made of iron and magnesium), containing
plagioclase phenocrysts (large crystals set in volacanic igneous rock containing
calcium, sodium, aluminum, silicon, and oxygen).
Secondly, gold occurs in quartz veins containing minor pyrite and arsenopyrite
minerals. Pyrite is a common mineral containing mainly iron disulfide that is
pale yellow in color, also referred to as "fool's gold". Arsenopyrite is a steel
grey to silver white sulphide mineral and is the principle ore of arsenic. These
veins are possibly from the Tertiary age, which refers to 65.5 million years
ago.
Major shear structures appear to be closely associated with the mineralized
zones and felsic intrusives are proximal to, if not intermixed, with most of the
showings. Felsic intrusives are light-colored igneous rocks with an abundance of
light-colored minerals that mineralized from molten lava beneath the earth's
crust.
There are possibly two other deposit types. One is skarn, which refers to
metamorphic rocks surrounding an igneous intrusive rock that is formed by
thermal metamorphism and metasomatism when it comes in contact with magmatic
intrusive carbonate-rich rocks such as limestone and dolostone. Limestone is
sedimentary rock made mostly of calcium carbonate (calcite) and dolostone
sedimentary rock is composed primarily of calcium, magnesium, carbon and oxygen
(dolomite). Thermal metamorphism refers to the changes over time in the
composition and structure of rocks caused by pressure and high temperatures.
Metasomatism refers to the process by which a rock's overall chemical
composition changes during metamorphism because of reactions with hot water that
bring in or remove elements. Typical skarn minerals include magnetite (a
naturally magnetic mineral mostly made of iron oxide) and silicate minerals such
as pyroxene (containing iron, magnesium, and calcium), garnet (containing
aluminum, iron, magnesium and calcium), idocrase or vesuvianite (containing
magnesium, and calcium), wollastonite (containing iron, magnesium and
manganese), actinolite (containing iron, magnesium, and calcium), epidote
(containing aluminum, iron, magnesium and calcium).
The second possible deposit type being many layers of sulphide minerals within
the volcanic rock. Sulphide mineral groups contain sulphur combined with any
metal or metals.
Exploration History
Little exploration work had been done the Panther claim. The property was
explored in the mid-late 1930's and early 1940's. Several showings and
occurrences of mineralization were mined at the north of the property. The
Panther property was again mined post war but no exploration or mining on the
property has occurred since.
Geological Report
We retained Mr. William G. Timmins, a professional geologist, to complete an
evaluation of the Panther claim and to prepare a geology report on the claim.
Mr. Timmins is a professional geologist who graduated from the Provincial
Institute of Mining of Haileybury Ontario (1956) and attended Michigan
Technological University (1962-1965). Mr. Timmins has been continuously employed
as a geologist since he completed his education. He is a member of the
Association of Professional Engineers and Geoscientists of the Province of
British Columbia.
18
<page>
Mr. Timmins recommends an initial exploration program consisting of two phases.
The first phase would consist of geological mapping, sampling and prospecting.
Geological mapping involves plotting previous exploration data relating to a
property area on a map in order to determine the best property locations to
conduct subsequent exploration work. 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. Prospecting is the act of
searching for mineral or ore deposits.
We intend to commence the phase one program in the spring of 2006 and expect
that the program will take two to three months to complete. We will pay for the
costs of the phase one program from existing cash on hand. Phase one is
estimated cost is approximately $5,000.
The second phase would consist of a geophysical survey and detailed sampling.
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. This exploration will focus on areas on the
property that are identified in phase one as containing mineralization. We will
gather additional rock samples from the property surface from these areas and
have our consulting geologist determine whether there is a geological
explanation to explain the patterns of mineralization found on the property.
We intend to commence the phase two program in the summer of 2006 and expect
that the program will take two months to complete. We have sufficient funds on
hand to cover phase two exploration costs. Phase two is estimated cost is
approximately $5,000.
Compliance with Government Regulation
We will be required to comply with all regulations, rules and directives of
governmental authorities and agencies applicable to the exploration of minerals
in Canada generally, and in British Columbia specifically.
We will have to sustain the cost of reclamation and environmental mediation for
all exploration and development work undertaken. The amount of these costs is
not known at this time as we do not know the extent of the exploration program
that will be undertaken beyond completion of the currently planned work
programs. Because there is presently no information on the size, tenor, or
quality of any resource or reserve at this time, it is impossible to assess the
impact of any capital expenditures on earnings or our competitive position in
the event a potentially economic deposit is discovered.
If we enter into production, the cost of complying with permit and regulatory
environment laws will be greater than in the exploration phases because the
impact on the project area is greater. Permits and regulations will control all
aspects of any production program if the project continues to that stage because
of the potential impact on the environment. Examples of regulatory requirements
include:
- - Water discharge will have to meet water standards;
- - Dust generation will have to be minimal or otherwise re-mediated;
19
<page>
- - Dumping of material on the surface will have to be re-contoured and
re-vegetated;
- - An assessment of all material to be left on the surface will need to be
environmentally benign;
- - Ground water will have to be monitored for any potential contaminants;
- - The socio-economic impact of the project will have to be evaluated and if
deemed negative, will have to be re-mediated; and
- - There will have to be an impact report of the work on the local fauna and
flora.
Because there will not be any appreciable disturbance to the land during the
phase one and two exploration programs on the Panther claim, we will not have to
seek any government approvals prior to conducting exploration.
Employees
We have no employees as of the date of this prospectus other than our directors.
Research and Development Expenditures
We have not incurred any other research or development expenditures since our
incorporation.
Subsidiaries
We do not have any subsidiaries.
Patents and Trademarks
We do not own, either legally or beneficially, any patents or trademarks.
Reports to Security Holders
Although we are not required to deliver a copy of our annual report to our
security holders, we will voluntarily send a copy of our annual report,
including audited financial statements, to any registered shareholder who
requests it. We will not be a reporting issuer with the Securities 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. 20549. Please call
the Commission at 1-800-SEC-0330 for further information on the operation of the
public reference rooms. The Securities and Exchange Commission also maintains a
web site at http://www.sec.gov that contains reports, proxy statements and
information regarding registrants that file electronically with the Commission.
This site contains information statements and other information regarding
issuers that file electronically with the Commission. Our registration statement
and the referenced exhibits can also be found on this site.
20
<page>
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 Panther claim consisting of a
geological mapping, geochemical sampling, geophysical surveying and prospecting.
We anticipate that these exploration programs will cost approximately $10,000.
To date, we have not commenced exploration on the Panther claim.
We plan to commence the phase one exploration program on the Panther claim in
the spring of 2006. The program should take approximately two to three months to
complete. We will then undertake the phase two work program during the summer of
2006. This program will take approximately two months to complete. We do not
have any verbal or written agreement regarding the retention of any qualified
engineer or geologist for these exploration programs, though Mr. William G.
Timmins has indicated that he will oversee all exploration if he is available.
Our budgets for the phase one and two exploration programs are as follows:
Budget - Phase 1
Senior Geologist - 4 days @ $500/day $ 2,000
Geological technician 4 days @ $250/day $ 1,000
Equipment rental - 1-4 wheeldrive vehicles @$85/day $ 340
Fuel, Food, Field Supplies $ 800
Assays 15 @ $20 each $ 300
Report $ 500
Filing Fees $ 60
----------
Total Phase I US$ 5,000
----------
Budget - Phase 2
Follow-up Geochem and Detailed Geology sampling $ 3,000
Assays 75 @ $20 per assay $ 1,500
Contingency $ 500
----------
Total Phase II US$ 5,000
----------
Grand Total - Phase I and II US$ 10,000
We will finance the cost of the phase one and two exploration programs from cash
on hand.
After the completion of the phase two exploration program, we will have our
consulting geologist prepare a report discussing the results and conclusions of
the first two phases of exploration. We will also ask him to provide us with a
recommendation for additional exploration work on the Panther claim, which will
include a proposed budget.
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 anticipated exploration expenses, we
will require additional funding in order to proceed with any additional
recommended exploration on the Panther 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.
21
<page>
Results Of Operations For The Period From Inception Through November 30, 2005
We have not earned any revenues from our incorporation on October 11, 2004 to
November 30, 2005. We do not anticipate earning revenues unless we enter into
commercial production on the Panther 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 Panther claim, or if such
minerals are discovered, that we will enter into commercial production.
We incurred operating expenses in the amount of $9,526 for the period from our
inception on October 11, 2004 to November 30, 2005. These operating expenses
were comprised of mineral property acquisition costs of $2,015, professional
expenses of $6,668, organizational costs of $500, transfer agent fees of $225
and office and sundry fees of $118.
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 have the right to explore for and extract minerals from the Panther mineral
claim. We do not own any real property interest in the Panther 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 promoters, Michael Sweeney and Jim Callaghan;
* 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 thirty-two registered
shareholders.
22
<page>
Rule 144 Shares
A total of 4,000,000 shares of our common stock are available for resale to the
public 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 81,250 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 4,000,000 shares that may be sold pursuant to Rule 144.
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 11, 2004 to November
30, 2005 and the subsequent period to the date of this prospectus.
23
<page>
<table>
<caption>
Annual Compensation
Restr Options/SARS LTP
Other Stock (#) payouts ($)
Name Title Year Salary Bonus Comp. Awarded
- ------------------ --------------- ------- ---------- ---------- ---------- ------------ ------------- ------------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Michael Sweeney President 2004 $0 0 0 0 0 $0
CEO, & 2005 $0 0 0 0 0 $0
Director
- ------------------ --------------- ------- ---------- ---------- ---------- ------------ ------------- ------------
Jim Callaghan Director, 2004 $0 0 0 0 0 $0
Secretary 2005 $0 0 0 0 0 $0
Treasurer
- ------------------ --------------- ------- ---------- ---------- ---------- ------------ ------------- ------------
Allan J. Beaton Director 2005 $0 0 0 0 0 $0
</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 directors or
officers. We do not pay Mr. Sweeney, Mr. Callaghan or Mr. Beaton any amount for
acting as directors 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
February 28, 2005 and interim unaudited financial statements for
the period November 30, 2005, including:
a. Balance Sheets;
b. Statements of Operations;
c. Statement of Stockholders' Equity;
d. Statements of Cash Flows; and
e. Notes to Financial Statements
24
<page>
================================================================================
Staley, Okada & Partners Suite 400-899 West Pender Street
Chartered Accountants Vancouver, BC Canada V6C 3B2
Tel 604 694-6070
Fax 604 585-8377
info@staleyokada.com
www.staleyokada.com
Report of Independent Registered Public Accounting Firm
- --------------------------------------------------------------------------------
To the Stockholders of Ancor Resources Inc.:
We have audited the accompanying balance sheet of Ancor Resources Inc. (the
"Company") as at February 28, 2005 and the related statements of changes in
stockholders' equity, operations and cash flows for the period from inception
(October 11, 2004) to February 28, 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 the audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as at February 28,
2005, and the results of its operations and its cash flows for the period from
inception (October 11, 2004) to February 28, 2005, in conformity with United
States generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is dependent upon financing to continue
operations, had suffered a loss from operations. These matters raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are discussed in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
"Staley, Okada & Partners"
Vancouver, B.C., Canada STALEY, OKADA & PARTNERS
July 29, 2005 CHARTERED ACCOUNTANTS
25
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
(Audited)
FEBRUARY 28, 2005
(Stated in U.S. Dollars)
26
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
BALANCE SHEET
(Audited)
FEBRUARY 28, 2005
(Stated in U.S. Dollars)
<table>
<caption>
- ----------------------------------------------------------------------------------------------------------------------
<s> <c>
ASSETS
Current
Cash $ 25,864
======================================================================================================================
LIABILITIES
Current
Accounts payable and accrued liabilities $ 2,515
Due to related party (Note 4) 500
-----------------
3,015
-----------------
STOCKHOLDERS' EQUITY
Common Stock (Note 5)
Authorized:
75,000,000 shares with a par value of $0.001
Issued and Outstanding:
8,125,000 shares 8,125
Additional paid-in capital 17,775
Deficit Accumulated During The Exploration Stage (3,051)
-----------------
Equity - Statement 4 22,849
-----------------
$ 25,864
======================================================================================================================
</table>
Nature And Continuance Of Operations (Note 1)
The accompanying notes are an integral part of these financial statements
27
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
STATEMENT OF OPERATIONS
(Audited)
PERIOD FROM OCTOBER 11, 2004 (INCEPTION) TO FEBRUARY 28, 2005
(Stated in U.S. Dollars)
<table>
<caption>
- --------------------------------------------------------------------------------------------------------------------
<s> <c>
General and administrative expenses
Office and sundry $ 36
Professional fees 500
Mineral property costs 2,015
Organizational costs 500
--------------------
Loss For The Period $ 3,051
====================================================================================================================
Basic And Diluted Loss Per Share $ (0.001)
====================================================================================================================
Weighted Average Number Of Shares Outstanding 3,900,536
====================================================================================================================
</table>
The accompanying notes are an integral part of these financial statements
28
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Audited)
PERIOD FROM OCTOBER 11, 2004 (INCEPTION) TO FEBRUARY 28, 2005
(Stated in U.S. Dollars)
<table>
<caption>
Cash Resources Provided By (Used In)
- --------------------------------------------------------------------------------------------------------------------
<s> <c>
Operating Activities
Loss for the period $ (3,051)
Change in non-cash working capital balance related to operations:
Accounts payable and accrued liabilities 3,015
----------------
(36)
----------------
Financing Activities
Capital stock issued 25,900
----------------
25,900
----------------
Net Increase In Cash 25,864
Cash, Beginning Of Period -
----------------
Cash, End Of Period $ 25,864
====================================================================================================================
Supplementary Disclosure Of Cash Flow Information
Cash paid for:
Interest $ -
Income taxes $ -
====================================================================================================================
</table>
The accompanying notes are an integral part of these financial statements
29
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
(Audited)
PERIOD FROM OCTOBER 11, 2004 (INCEPTION) TO FEBRUARY 28, 2005
(Stated in U.S. Dollars)
<table>
<caption>
DEFICIT
ACCUMULATED
COMMON SHARES ADDITIONAL DURING THE
----------------------------
PAR PAID-IN EXPLORATION
NUMBER VALUE CAPITAL STAGE TOTAL
-------------- ------------- --------------- ------------------- -------------
<s> <c> <c> <c> <c> <c>
Balance, October 11, 2004 (Date of inception) - $ - $ - $ - $ -
Capital stock issued for cash:
November 2004 at $0.001 4,000,000 6,400 - - 4,000
January 2005 at $0.001 2,400,000 2,400 - - 2,400
January 2005 at $0.01 1,700,000 1,700 15,300 - 17,000
February 2005 at $0.10 25,000 25 2,475 - 2,500
Net loss for the period - - - (3,051) (3,051)
-------------- ------------- --------------- ------------------- ---------------
Balance, February 28, 2005 8,125,000 $ 8,125 $ 17,775 $ (3,051) $ 22,849
============== ============= =============== =================== ===============
</table>
The accompanying notes are an integral part of these financial statements
30
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Audited)
FEBRUARY 28, 2005
(Stated in U.S. Dollars)
1. NATURE AND CONTINUANCE OF OPERATIONS
The Company was incorporated in the State of Nevada on October 11, 2004.
The Company is an Exploration Stage Company as defined by Statement of
Financial Accounting Standard ("SFAS") No. 7. The Company has acquired a
mineral property located in the Province of British Columbia, Canada and
has not yet determined whether this property contains reserves that are
economically recoverable. The recoverability of property expenditures will
be dependent upon the discovery of economically recoverable reserves,
confirmation of the Company's interest in the underlying property, the
ability of the Company to obtain necessary financing to satisfy the
expenditure requirements under the property agreement and upon future
profitable production or proceeds for the sale thereof.
These financial statements have been prepared on a going concern basis. The
Company has incurred losses since inception resulting in an accumulated
deficit of $3,051 since inception and further losses are anticipated in the
development of its business raising substantial doubt about the Company's
ability to continue as a going concern. Its ability to continue as a going
concern is dependent upon the ability of the Company to generate profitable
operations in the future and/or to obtain the necessary financing to meet
its obligations and repay its liabilities arising from normal business
operations when they come due. Management has plans to seek additional
capital through a private placement and public offering of its common
stock. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets, or the amounts of
and classification of liabilities that might be necessary in the event the
Company cannot continue in existence.
The ability of the Company to emerge from the exploration stage is
dependent upon, among other things, obtaining additional financing to
continue operations, explore and develop the mineral properties and the
discovery, development and sale of ore reserves.
In response to these problems, management has planned the following
actions:
- - The Company intends to apply for a SB-2 Registration Statement.
- - Management intends to raise additional funds through public or
private placement offerings.
These factors, among others, raise substantial doubt about the Company's
ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
31
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Audited)
FEBRUARY 28, 2005
(Stated in U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Presentation
The financial statements of the Company have been prepared in
accordance with the United States generally accepted accounting
principles and are expressed in U.S. dollars. The Company's fiscal year
end is February 28.
b) Cash and Cash Equivalents
Cash and equivalents include cash. The Company considers all highly
liquid instruments with maturity of three months or less at the time of
issuance to be cash equivalents.
c) Mineral Property Costs
The Company has been in the exploration stage since its formation on
October 11, 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 charged to operations 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.
d) Use of Estimates and Assumptions
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.
The Company's periodic filings with the Securities and Exchange
Commission include, where applicable, disclosures of estimates,
assumptions, uncertainties and markets that could affect the financial
statements and future operations of the Company.
32
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Audited)
FEBRUARY 28, 2005
(Stated in U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e) Foreign Currency Translation
The Company's functional currency is the Canadian dollar and its
reporting currency is the United States dollar. The financial
statements of the Company are translated to United States dollars in
accordance with SFAS No. 52 "Foreign Currency Translation". Monetary
assets and liabilities denominated in foreign currencies are translated
using the exchange rate prevailing at the balance sheet date.
Revenue and expense items are translated at the average rate of
exchange prevailing during the year.
Adjustments arising from such translations are deferred until
realization and are included as a separate component of shareholders'
equity as a component of comprehensive income or loss. Therefore,
translation adjustments are not included in determining net income but
reported as other comprehensive income.
No significant realized exchange gain or losses were recorded in the
period ended February 28, 2005.
f) Concentrations of Credit Risk
The Company's financial instruments that are exposed to concentrations
of credit risk primarily consist of its cash and related party
payables. The Company places its cash and cash equivalents with
financial institutions of high credit worthiness. At times, its cash
and cash equivalents with a particular financial institution may exceed
any applicable government insurance limits. The Company's management
also routinely assesses the financial strength and credit worthiness of
any parties to which it extends funds, and as such, it believes that
any associated credit risk exposures are limited.
g) Financial Instruments
The carrying value of cash, accounts payable and accrued liabilities,
and due to related parties approximates their fair value because of the
short maturity of these instruments. The Company's operations are in
Canada and virtually all of its assets and liabilities are giving rise
to significant exposure to market risks from changes in foreign
currency rates. The Company's financial risk is the risk that arises
from fluctuations in foreign exchange rates and the degree of
volatility of these rates. Currently, the Company does not use
derivative instruments to reduce its exposure to foreign currency risk.
33
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Audited)
FEBRUARY 28, 2005
(Stated in U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
h) Derivative Financial Instruments
The Company has not, to the date of these financials statements,
entered into derivative instruments to offset the impact of foreign
currency fluctuations.
i) Environmental Expenditures
The operations of the Company have been, and may in the future, be
affected from time to time in varying degrees by changes in
environmental regulations, including those for future reclamation and
site restoration costs. Both the likelihood of new regulations and
their overall effect upon the Company vary greatly and are not
predictable. The Company's policy is to meet or, if possible, surpass
standards set by relevant legislation, by application of technically
proven and economically feasible measures.
Environmental expenditures that relate to ongoing environmental and
reclamation programs are charged against earnings as incurred or
capitalized and amortized depending on their future economic benefits.
Estimated future reclamation and site restoration costs, when the
ultimate liability is reasonably determinable, are charged against
earnings over the estimated remaining life of the related business
operation, net of expected recoveries.
j) Federal Income Taxes
Deferred income taxes are reported for timing differences between items
of income or expense reported in the financial statements and those
reported for income tax purposes in accordance with SFAS Number 109,
"Accounting for Income Taxes", which requires the use of the
asset/liability method of accounting for income taxes. Deferred income
taxes and tax benefits are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases, and for tax loss and credit carry-forwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The Company provides for deferred
taxes for the estimated future tax effects attributable to temporary
differences and carry-forwards when realization in more likely than
not.
34
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Audited)
FEBRUARY 28, 2005
(Stated in U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
k) Basic and Diluted Net Loss Per Share
The Company computes net 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 loss available to
common shareholders (numerator) by the weighted average number of
shares outstanding (denominator) during the period. Diluted EPS gives
effect to all potentially dilutive 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 potentially dilutive shares if their effect is
anti dilutive.
l) Stock Based Compensation
The Company accounts for stock based employee compensation arrangements
in accordance with the provisions of Accounting Principles Board
Opinion No. 25 - "Accounting for Stock Issued to Employees" (APB No.
25) and complies with the disclosure provisions of Statement of
Financial Accounting Standards No. 123 - "Accounting for Stock Based
Compensation" (SFAS No. 123). Under APB No. 25, compensation expense is
recognized based on the difference, if any, on the date of grant
between the estimated fair value of the Company's stock and the amount
an employee must pay to acquire the stock. Compensation expense is
recognized immediately for past services and rateably for future
services over the option vesting period.
m) 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 February 28, 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.
35
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Audited)
FEBRUARY 28, 2005
(Stated in U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
n) Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standard (SFAS) No. 123R,
"Share Based Payment." SFAS 123R is a revision of SFAS No. 123
"Accounting for Stock-Based Compensation", and supersedes APB Opinion
No. 25, "Accounting for Stock Issued to Employees" and its related
implementation guidance. SFAS 123R establishes standards for the
accounting for transactions in which an entity exchanges its equity
instruments for goods or services. It also address 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 primarily focuses 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 does not address the accounting for employee share
ownership plans, which are subject to AICPA Statement of Position 93-6.
"Employers Accounting for Employee Stock Ownership Plans". SFAS 123R
requires a public entity to measure the cost of employee services
received in exchange for an award of equity instruments based on the
grant-date fair value of the award (with limited exceptions). That cost
will be recognized over the period during which an employee is required
to provide service in exchange for the award - the requisite service
period (usually the vesting period). SFAS 123R requires that the
compensation cost relating to share-based payment transactions be
recognized in financial statements. That cost will be measured based on
the fair value of the equity or liability instruments issued. The scope
of SFAS 123R includes a wide range of share-based compensation
arrangements including share options, restricted share plans,
performance-based awards, share appreciation rights, and employee share
purchase plans. Public entities (other than those filing as small
business issuers) will be required to apply SFAS 123R as of the first
interim or annual reporting period that begins after June 15, 2005.
Public entities that file as small business issuers will be required to
apply SFAS 123R in the first interim or annual reporting period that
begins after December 15, 2005. For non-public entities, SFAS 123R must
be applied as of the beginning of the first annual reporting period
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.
Effective March 1, 2005 the Company has adopted policy SFAS No. 123R.
36
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Audited)
FEBRUARY 28, 2005
(Stated in U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
n) Recent Accounting Pronouncements (Continued)
In December 2004, FASB issued SFAS No. 153, "Exchanges of Non-monetary
Assets - An Amendment of APB Opinion No. 29. The guidance in APB
Opinion No. 29, "Accounting for Non-monetary Transactions", is based on
the principle that exchanges of non-monetary 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 Option No. 29 to eliminate the exception for
non-monetary exchanges of similar productive assets and replaces it
with a general exception for exchanges of non-monetary assets that do
not have commercial substance. A non-monetary 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 non-monetary 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 of the
Company's results of operations or financial position.
3. MINERAL PROPERTY
Pursuant to a mineral property staking and purchase agreement (the
"Agreement") dated January 28, 2005, the Company has agreed to acquire a
100% undivided right, title and interest in a gold/silver/copper mineral
claim unit known as the Panther claim (the "Claims"), located in the
Alberni Mining Division of British Columbia, Canada for a cash payment
of $2,015 (paid subsequent). Payment of the purchase price is
dependent upon the Company receiving confirmation that the claims
have been staked and recorded as well as receipt of a technical
report on the claims prepared by a qualified professional geologist.
Since the Company has not established the commercial feasibility of
the mineral claims, the acquisition costs have been expensed.
4. DUE TO RELATED PARTY
Included in accounts payable is $500 due to a director for initial
organizational costs. The amount is non-interest bearing and carries no
specific terms of repayment.
37
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Audited)
FEBRUARY 28, 2005
(Stated in U.S. Dollars)
5. COMMON STOCK
a) Authorized Stock
The total number of authorized common stock that may be issued by the
Company is 75,000,000 shares of stock with a par value of one tenth of
one cent ($0.001) per share.
b) Share Issuance
During the period from October 11, 2004 (Inception) to February 28,
2005, the Company issued 8,125,000 common shares for total cash
proceeds of $25,900.
At February 28, 2005, there were no issued and outstanding stock
options or warrants.
6. INCOME TAXES
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
for future years. As at the year ended February 28, 2005, the Company has a tax
loss of $3,051 to offset future years taxable income expiring in fiscal 2025.
As at February 28, 2005, the estimated components of the net deferred tax asset,
the statutory tax rate, the effective tax rate and the elected amount valuation
allowance are scheduled below:
<table>
<caption>
2005
<s> <c>
Cumulative Net Operating Loss (from inception to February 28, 2005) $ 3,051
Statutory Tax Rate - (combined federal and state tax rate) 34%
Deferred Tax Asset 1,037
Valuation Allowance (1,037)
Net Deferred Tax Asset $ -
</table>
38
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOVEMBER 30, 2005
(Stated in U.S. Dollars)
39
<page>
Statement 1
ANCOR RESOURCES INC.
(An Exploration Stage Company)
INTERIM BALANCE SHEET
NOVEMBER 30, 2005
(Stated in U.S. Dollars)
<table>
<caption>
- ------------------------------------------------------------------------------------------------------------------------
NOVEMBER 30, FEBRUARY 28,
2005 2005
(Unaudited) (Audited)
- ------------------------------------------------------------------------------------------------------------------------
<s> <c> <c>
ASSETS
Current
Cash $ 23,382 $ 25,864
========================================================================================================================
LIABILITIES
Current
Accounts payable and accrued liabilities $ 6,508 $ 2,515
Due to related party (Note 4) 500 500
-----------------------------------------
7,008 3,015
-----------------------------------------
STOCKHOLDERS' EQUITY
Capital Stock
Authorized:
75,000,000 common shares with a par value of $0.001
Issued and outstanding:
8,125,000 common shares 8,125 8,125
Additional paid-in capital 17,775 17,775
Deficit Accumulated During the Exploration Stage - Statement 4 (9,526) (3,051)
-----------------------------------------
Total Stockholders' Equity - Statement 4 16,374 22,849
-----------------------------------------
$ 23,382 $ 25,864
========================================================================================================================
</table>
Nature and Continuance of Operations (Note 1)
On behalf of the Board:
"Michael Sweeney" , Director
- ---------------------------------------
"Jim Callaghan" , Director
- ---------------------------------------
The accompanying notes are an integral part of these financial statements
40
<page>
Statement 2
ANCOR RESOURCES INC.
(An Exploration Stage Company)
INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
(Stated in U.S. Dollars)
<table>
<caption>
Period
Three Months Nine Months from Inception,
Ended November 30, Ended November 30, October 11, 2004
2005 2004 2005 2004 to November 30, 2005
------------------------------------------------------------------
<s> <c> <c> <c> <c> <c>
Expenses
Exploration expenses $ - $ - $ - $ - $ 2,015
Office and sundry 19 7 82 7 118
Organizational costs - - - - 500
Professional fees 6,008 - 6,168 - 6,668
Transfer agent fees 225 - 225 - 225
--------- ---------- ----------- ----------- ----------------
6,252 7 6,475 7 9,526
--------- ---------- ----------- ----------- ----------------
Loss for the Period (6,252) (7) (6,475) (7) (9,526)
--------- ---------- ----------- ----------- ----------------
Loss per Share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============ ========== =========== ============
Weighted Average Outstanding
Number of Shares 8,125,000 160,000 8,125,000 160,000
=============== ============== ================ ===============
</table>
The accompanying notes are an integral part of these financial statements
41
<page>
Statement 3
ANCOR RESOURCES INC.
(An Exploration Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
(Stated in U.S. Dollars)
<table>
<caption>
- -----------------------------------------------------------------------------------------------------------------------
Period From
Inception,
October 11,
Nine Months Ended 2004 to
November 30 November 30
2005 2004 2005
- -----------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c>
Cash Flows from Operating Activities
Loss for the period $ (6,475) $ (7) $ (9,526)
Changes in non-cash working capital items
Accounts payable and accrued liabilities 3,993 - 7,008
-------------------------------------------------------
(2,482) (7) (2,518)
-------------------------------------------------------
Cash Flows from Financing Activity
Issue of share capital - 4,000 25,900
-------------------------------------------------------
Increase (Decrease) in Cash and Cash Equivalents During the
Period (2,482) 3,993 (23,382)
Cash and Cash Equivalents, Beginning of Period
25,864 - -
-------------------------------------------------------
Cash and Cash Equivalents, End of Period $ 23,382 $ 3,993 $ 23,382
=======================================================================================================================
Supplementary Disclosure of Cash Flow Information
Cash paid for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
=======================================================================================================================
</table>
The accompanying notes are an integral part of these financial statements
42
<page>
Statement 4
ANCOR RESOURCES INC.
(An Exploration Stage Company)
INTERIM STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
PERIOD FROM OCTOBER 11, 2004 (INCEPTION) TO NOVEMBER 30, 2005
(Stated in U.S. Dollars)
<table>
<caption>
Deficit
Accumulated Stock-
Common Shares Additional During the Holders'
----------------------------
Paid-In Exploration Equity
Number Par Value Capital Stage Total
-------------- ------------- --------------- ------------------- --------------
<s> <c> <c> <c> <c> <c>
Balance - October 11, 2004 (Date of inception) - $ - $ - $ - $ -
Common shares issued for cash:
November 2004 at $0.001 4,000,000 4,000 - - 4,000
January 2005 at $0.001 2,400,000 2,400 - - 2,400
January 2005 at $0.01 1,700,000 1,700 15,300 - 17,000
February 2005 at $0.10 25,000 25 2,475 - 2,500
Net loss for the period - - - (3,051) (3,051)
-------------- ------------- --------------- ------------------- --------------
Balance - February 28, 2005 8,125,000 8,125 17,775 (3,051) 22,849
Net loss for the period - - - (6,475) (6,475)
-------------- ------------- --------------- ------------------- --------------
Balance - November 30, 2005 8,125,000 $ 8,125 $ 17,775 $ (9,526) $ 16,374
============== ============= =============== =================== ==============
</table>
The accompanying notes are an integral part of these financial statements
43
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOVEMBER 30, 2005
(Stated in U.S. Dollars)
1. NATURE AND CONTINUANCE OF OPERATIONS
The Company was incorporated in the State of Nevada on October 11, 2004.
The Company is an Exploration Stage Company as defined by Statement of
Financial Accounting Standard ("SFAS") No. 7. The Company has acquired a
mineral property located in the Province of British Columbia, Canada and
has not yet determined whether this property contains reserves that are
economically recoverable. The recoverability of property expenditures will
be dependent upon the discovery of economically recoverable reserves,
confirmation of the Company's interest in the underlying property, the
ability of the Company to obtain necessary financing to satisfy the
expenditure requirements under the property agreement and upon future
profitable production or proceeds for the sale thereof.
These financial statements have been prepared on a going concern basis. The
Company has incurred losses since inception resulting in an accumulated
deficit of $9,526 and further losses are anticipated in the development of
its business raising substantial doubt about the Company's ability to
continue as a going concern. Its ability to continue as a going concern is
dependent upon the ability of the Company to generate profitable operations
in the future and/or to obtain the necessary financing to meet its
obligations and repay its liabilities arising from normal business
operations when they come due. Management has plans to seek additional
capital through a private placement and public offering of its common
stock. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets, or the amounts of
and classification of liabilities that might be necessary in the event the
Company cannot continue in existence.
The ability of the Company to emerge from the exploration stage is
dependent upon, among other things, obtaining additional financing to
continue operations, explore and develop the mineral properties and the
discovery, development and sale of ore reserves.
In response to these problems, management has planned the following
actions:
- The Company intends to apply for a SB-2 Registration Statement; and
- Management intends to raise additional funds through public or private
placement offerings.
These factors, among others, raise substantial doubt about the Company's
ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
44
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOVEMBER 30, 2005
(Stated in U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Presentation
The financial statements of the Company have been prepared in
accordance with the United States generally accepted accounting
principles and are expressed in U.S. dollars. The Company's fiscal year
end is February 28.
b) Cash and Cash Equivalents
Cash and equivalents include only cash. The Company considers all
highly liquid instruments with maturity of three months or less at the
time of issuance to be cash equivalents.
c) Mineral Property Costs
The Company has been in the exploration stage since its formation on
October 11, 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 charged to operations 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 reserves.
d) Use of Estimates and Assumptions
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.
The Company's periodic filings with the Securities and Exchange
Commission include, where applicable, disclosures of estimates,
assumptions, uncertainties and markets that could affect the financial
statements and future operations of the Company.
45
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOVEMBER 30, 2005
(Stated in U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e) Foreign Currency Translation
The Company's functional currency is the Canadian dollar and its
reporting currency is the United States dollar. The financial
statements of the Company are translated to United States dollars in
accordance with SFAS No. 52 "Foreign Currency Translation". Monetary
assets and liabilities denominated in foreign currencies are translated
using the exchange rate prevailing at the balance sheet date.
Revenue and expense items are translated at the average rate of
exchange prevailing during the year.
Adjustments arising from such translations are deferred until
realization and are included as a separate component of shareholders'
equity as a component of comprehensive income or loss. Therefore,
translation adjustments are not included in determining net income but
reported as other comprehensive income.
No significant realized exchange gains or losses were recorded in the
period ended November 30, 2005.
f) Concentrations of Credit Risk
The Company's financial instruments that are exposed to concentrations
of credit risk primarily consist of its cash and related party
payables. The Company places its cash and cash equivalents with
financial institutions of high credit worthiness. At times, its cash
and cash equivalents with a particular financial institution may exceed
any applicable government insurance limits. The Company's management
also routinely assesses the financial strength and credit worthiness of
any parties to which it extends funds, and as such, it believes that
any associated credit risk exposures are limited.
g) Financial Instruments
The carrying value of cash, accounts payable and accrued liabilities,
and due to related party approximates their fair value because of the
short maturity of these instruments. The Company's operations are in
Canada and virtually all of its assets and liabilities are giving rise
to significant exposure to market risks from changes in foreign
currency rates. The Company's financial risk is the risk that arises
from fluctuations in foreign exchange rates and the degree of
volatility of these rates. Currently, the Company does not use
derivative instruments to reduce its exposure to foreign currency risk.
46
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOVEMBER 30, 2005
(Stated in U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
h) Derivative Financial Instruments
The Company has not, to the date of these financials statements,
entered into derivative instruments to offset the impact of foreign
currency fluctuations.
i) Environmental Expenditures
The operations of the Company have been, and may in the future, be
affected from time to time in varying degrees by changes in
environmental regulations, including those for future reclamation and
site restoration costs. Both the likelihood of new regulations and
their overall effect upon the Company vary greatly and are not
predictable. The Company's policy is to meet or, if possible, surpass
standards set by relevant legislation, by application of technically
proven and economically feasible measures.
Environmental expenditures that relate to ongoing environmental and
reclamation programs are charged against earnings as incurred or
capitalized and amortized depending on their future economic benefits.
Estimated future reclamation and site restoration costs, when the
ultimate liability is reasonably determinable, are charged against
earnings over the estimated remaining life of the related business
operation, net of expected recoveries.
j) Federal Income Taxes
Deferred income taxes are reported for timing differences between items
of income or expense reported in the financial statements and those
reported for income tax purposes in accordance with SFAS Number 109,
"Accounting for Income Taxes", which requires the use of the
asset/liability method of accounting for income taxes. Deferred income
taxes and tax benefits are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases, and for tax loss and credit carry-forwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The Company provides for deferred
taxes for the estimated future tax effects attributable to temporary
differences and carry-forwards when realization in more likely than
not.
47
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOVEMBER 30, 2005
(Stated in U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
k) Basic and Diluted Net Loss Per Share
The Company computes net 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 loss available to
common shareholders (numerator) by the weighted average number of
shares outstanding (denominator) during the period. Diluted EPS gives
effect to all potentially dilutive 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 potentially dilutive shares if their effect is
anti dilutive.
l) Stock-Based Compensation
The Company adopted a change in stock-based compensation policy in the
prior period - please see Note 2o for full disclosure.
m) 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 November 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.
n) Asset Retirement Obligations
The Company accounts for asset retirement obligations in accordance
with the provisions of SFAS No. 143 "Accounting for Asset Retirement
Obligations". SFAS No. 143 requires the Company to record the fair
value of an asset retirement obligation as a liability in the period in
which it incurs a legal obligation associated with the retirement of
tangible long-lived assets that result from the acquisition,
construction, development and/or normal use of the assets.
48
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOVEMBER 30, 2005
(Stated in U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
o) Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standard (SFAS) No. 123R,
"Share Based Payment." SFAS 123R is a revision of SFAS No. 123
"Accounting for Stock-Based Compensation", and supersedes APB Opinion
No. 25, "Accounting for Stock Issued to Employees" and its related
implementation guidance. SFAS 123R establishes standards for the
accounting for transactions in which an entity exchanges its equity
instruments for goods or services. It also addresses transactions in
which an entity incurs liabilities in exchange for goods or services
that are based on the fair value of the entity's equity instruments or
that may be settled by the issuance of those equity instruments. SFAS
123R primarily focuses 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 does not address the accounting for employee share
ownership plans, which are subject to AICPA Statement of Position 93-6.
"Employers Accounting for Employee Stock Ownership Plans". SFAS 123R
requires a public entity to measure the cost of employee services
received in exchange for an award of equity instruments based on the
grant-date fair value of the award (with limited exceptions). That cost
will be recognized over the period during which an employee is required
to provide service in exchange for the award - the requisite service
period (usually the vesting period). SFAS 123R requires that the
compensation cost relating to share-based payment transactions be
recognized in financial statements. That cost will be measured based on
the fair value of the equity or liability instruments issued. The scope
of SFAS 123R includes a wide range of share-based compensation
arrangements including share options, restricted share plans,
performance-based awards, share appreciation rights, and employee share
purchase plans. Public entities (other than those filing as small
business issuers) will be required to apply SFAS 123R as of the first
interim or annual reporting period that begins after June 15, 2005.
Public entities that file as small business issuers will be required to
apply SFAS 123R in the first interim or annual reporting period that
begins after December 15, 2005. For non-public entities, SFAS 123R must
be applied as of the beginning of the first annual reporting period
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.
Effective March 1, 2005, the Company has adopted policy SFAS No. 123R.
49
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOVEMBER 30, 2005
(Stated in U.S. Dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
o) Recent Accounting Pronouncements (Continued)
In December 2004, FASB issued SFAS No. 153, "Exchanges of Non-monetary
Assets - An Amendment of APB Opinion No. 29. The guidance in APB
Opinion No. 29, "Accounting for Non-monetary Transactions", is based on
the principle that exchanges of non-monetary 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 Option No. 29 to eliminate the exception for
non-monetary exchanges of similar productive assets and replaces it
with a general exception for exchanges of non-monetary assets that do
not have commercial substance. A non-monetary 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 non-monetary 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 of the
Company's results of operations or financial position.
3. MINERAL PROPERTY
Pursuant to a mineral property staking and purchase agreement (the
"Agreement") dated January 28, 2005, the Company has agreed to acquire a
100% undivided right, title and interest in a gold/silver/copper mineral
claim unit (the "Claims"), located in the Alberni Mining Division of
British Columbia, Canada for a cash payment of $2,015 (paid). Payment of
the purchase price is dependent upon the Company receiving confirmation
that the claims have been staked and recorded as well as receipt of a
technical report on the claims prepared by a qualified professional
geologist. Since the Company has not established the commercial feasibility
of the mineral claims, the acquisition costs have been expensed.
4. DUE TO RELATED PARTY
The amount of $500 is due to a director for initial organizational costs.
The amount is non-interest bearing and carries no specific terms of
repayment. The amount has been classified as a current liability as it is
expected to be repaid within the next year.
50
<page>
ANCOR RESOURCES INC.
(An Exploration Stage Company)
NOTES TO INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOVEMBER 30, 2005
(Stated in U.S. Dollars)
5. COMMON STOCK
a) Authorized Stock
The total number of authorized common stock that may be issued by the
Company is 75,000,000 shares of stock with a par value of one tenth of
one cent ($0.001) per share.
b) Share Issaunce
During the prior period from October 11, 2004 (Inception) to February
28, 2005, the Company issued 8,125,000 common shares for total cash
proceeds of $25,900.
At November 30, 2005, there were no outstanding stock options or
warrants.
6. INCOME TAXES
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 for future years. As at the period ended November 30, 2005, the
Company has a tax loss of $9,526 to offset future years taxable income
expiring in fiscal 2025.
As at November 30, 2005, the estimated components of the net deferred tax
asset, the statutory tax rate, the effective tax rate and the elected
amount valuation allowance are scheduled below:
<table>
<caption>
2005
---------------------
<s> <c>
Cumulative Net Operating Loss (from inception to November 30, 2005) $ 9,526
Statutory Tax Rate (combined federal and state tax rate) 34%
Deferred Tax Asset 3,239
Valuation Allowance (3,239)
---------------------
Net Deferred Tax Asset $ -
---------------------
</table>
51
<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.
52
<page>
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 $ 44.14
Transfer Agent fees $ 1,000.00
Accounting and auditing fees and expenses $ 6,500.00
Legal fees and expenses $ 1,500.00
Edgar filing fees $ 1,500.00
----------
Total $10,544.14
==========
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 4,000,000 shares of our common stock at a price of
$0.001 per share to a total of two purchasers on November 11, 2004. The total
amount received from this offering was $4,000. As part of this offering, we
issued 3,000,000 shares of our common stock to Mr. Michael Sweeney, and
1,000,000 shares to Mr. Jim Callaghan. Mr. Sweeney is our president, chief
executive officer and a director. Mr. Callaghan is our secretary, treasurer and
a director. These shares were issued pursuant to Regulation S of the Securities
Act.
We completed an offering of 2,400,000 shares of our common stock at a price of
$0.001 per share to a total of eight purchasers on January 10, 2005. The total
amount received from this offering was $2,400. 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
Joe Perri 300,000
David Darmadi 300,000
Velummylum Thamaraimanala 300,000
Philippehe Le Floc'h 300,000
Tommas Perry 300,000
Paul Frederick Horton 300,000
Jeyananthan Navaratnam 300,000
Bette Richardson 300,000
53
<page>
We completed an offering of 1,700,000 shares of our common stock at a price of
$0.01 per share to a total of seventeen purchasers on January 25, 2005. The
total amount received from this offering was $17,000. 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
Frank Cerney 100,000
Wolfgang Shales 100,000
Roya Haifi 100,000
Patrick Santalucia 100,000
Adrian Karasz 100,000
Alexander Friio 100,000
Tony Mobilio 100,000
Andrew Burke 100,000
Martin Palin 100,000
Kyle Paracy 100,000
Adam Reznik 100,000
Dallas Seckler 100,000
Natalie Karam 100,000
Robert Rodda 100,000
Vanessa Foster 100,000
Jim Patterson 100,000
Michael Loveless 100,000
We completed an offering of 25,000 shares of our common stock at a price of
$0.10 per share to a total of five purchasers on February 1, 2005. The total
amount received from this offering was $2,500. 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
Andrea Picchi 5,000
Barbara San Severino 5,000
Giovan Picchi 5,000
Dian Hansen 5,000
Colette Perry 5,000
Regulation S Compliance
Each offer or sale was made in an offshore transaction;
Neither we, a distributor, any respective affiliates nor any person on behalf of
any of the foregoing made any directed selling efforts in the United States;
Offering restrictions were, and are, implemented;
No offer or sale was made to a U.S. person or for the account or benefit of a
U.S. person;
Each purchaser of the securities certifies that it was not a U.S. person and
was not acquiring the securities for the account or benefit of any U.S. person;
Each purchaser of the securities agreed to resell such securities only in
accordance with the provisions of Regulation S, pursuant to registration under
the Act, or pursuant to an available exemption from registration; and agreed not
to engage in hedging transactions with regard to such securities unless in
compliance with the Act;
54
<page>
The securities contain a legend to the effect that transfer is prohibited except
in accordance with the provisions of Regulation S, pursuant to registration
under the Act, or pursuant to an available exemption from registration; and that
hedging transactions involving those securities may not be conducted unless in
compliance with the Act; and
We are required, either by contract or a provision in its bylaws, articles,
charter or comparable document, to refuse to register any transfer of the
securities not made in accordance with the provisions of Regulation S pursuant
to registration under the Act, or pursuant to an available exemption from
registration; provided, however, that if any law of any Canadian province
prevents us from refusing to register securities transfers, other reasonable
procedures, such as a legend described in paragraph (b)(3)(iii)(B)(3) of
Regulation S have been implemented to prevent any transfer of the securities not
made in accordance with the provisions of Regulation S.
Exhibits
Exhibit
Number Description
3.1 Articles of Incorporation*
3.2 Bylaws*
5.1 Legal opinion with consent to use
10.1 Mineral property agreement dated January 28, 2005*
23.1 Consent of Staley, Okada & Partners, Certified Public
Accountants
99.1 Location map*
* filed as an exhibit to our registration statement on Form SB-2 dated January
13, 2006
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.
4. That, for determining our liability under the Securities
Act to any purchaser in the initial distribution of the
securities, we undertake that in a primary offering of our
55
<page>
securities pursuant to this registration statement, regardless of
the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser
by means of any of the following communications, we will be a
seller to the purchaser and will be considered to offer or sell
such securities to such purchaser:
(i) any preliminary prospectus or prospectus that we file
relating to the offering required to be filed pursuant to
Rule 424 (Section 230.424 of this chapter);
(ii) any free writing prospectus relating to the offering
prepared by or on our behalf or used or referred to by us;
(iii) the portion of any other free writing prospectus relating
to the offering containing material information about us or
our securities provided by or on behalf of us; and
(iv) any other communication that is an offer in the offering
made by us to the purchaser.
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.
Signatures
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Vancouver, Province of British Columbia on March 17, 2006.
Ancor Resources Inc.
By: /s/ Michael Sweeney
------------------------------------
Michael Sweeney
President, 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/ Michael Sweeney President, Chief Executive Officer and March 17, 2006
- --------------------- Director
Michael Sweeney
/s/ Jim Callaghan Director, Secretary, Treasurer, March 17, 2006
- --------------------- principal accounting officer
Jim Callaghan and principal financial officer
/s/ Allan J. Beaton Director March 17, 2006
- --------------------
Allan J. Beaton
56