U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: September 30, 2003
Bream Ventures, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
98-0232018
(IRS Employer Identification No.)
Bream Ventures, Inc.
522-625 Howe Street
Vancouver, B.C. V6C 276
Phone: (604) 209-4213
(Address of principal executive offices)
None
(Former name or former address, if changed since last report)
V6C 276
(Zip Code)
(604) 209-4213
(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days: Yes
__X__ No ____.
The number of shares of the registrant's only class of common stock issued and
outstanding, as of September 30, 2003 was 3,950,000 common shares.
1
PART ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the three-month period ended September
30, 2003 are attached hereto.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with our audited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or our behalf. We disclaim any obligation to update forward
looking statements.
OVERVIEW
History And Organization
Bream Ventures, Inc. (the "Company") was recently incorporated under the laws of
the state of Nevada on March 9, 2001. We have not commenced business operations
and we are considered a pre-exploration stage enterprise. To date, our
activities have been limited to organizational matters, obtaining a mining
engineer's report and the preparation and filing of the registration statement
of which this prospectus is a part. In connection with the organization of our
company, the founding shareholders of our company contributed an aggregate of
$25,000 cash in exchange for 2,500,000 shares of common stock. We have no
significant assets, and we are totally dependent upon equity capitalization, of
which there is no assurance, for the ability to execute on our proposed business
paln.
Proposed Business
On April 9, 2001, we acquired a 15 year mining lease from Desert Pacific
Exploration, Inc., the owner of eight unpatented lode mineral claims, sometimes
referred to as the Panorama Project, located in western Nevada approximately 150
miles south of Reno, Nevada and 48 miles north of Bishop, California. An
unpatented claim is one in which more assessment work is necessary before all
mineral rights can be claimed. We are presently in the pre-exploration stage and
there is no assurance that a commercially viable precious mineral deposit exists
in our property until appropriate geological exploration is done and a final
comprehensive evaluation concludes that there is economic and legal feasibility
to conduct mining operations. Without a final economic feasibility study we
cannot determine economic feasibility. Even assuming this entire offering is
sold, we will not have sufficient funds to pay for a final economic feasibility
study. Consequently, our current exploration plans can only determine if we will
2
be justified to continue exploration.
The exploration program proposed by Bream is designed to determine whether
mining operations would be advisable. It is uncertain at this time the precise
quantity of minerals in the property that would justify actual mining
operations. Some of the factors that would be used to determine whether to
proceed with mining operations would be the data generated by the proposed
exploration program. This data will be evaluated to confirm that a mineral
deposit is sufficiently defined on three or more sides. Another factor would be
investigation into whether a buyer or a market exists for the minerals and the
prevailing market price for the minerals.
Under the terms of the lease, Bream may extend the initial term of 15 years for
one additional period of 15 years provided that all conditions of the lease have
previously been met. Bream has the exclusive possession of the property for
mining purposes during the term of the lease.
The owner of the property on which the claims are located is Desert Pacific
Exploration, Inc. By a lease agreement dated March 9, 2001 (effective April 9,
2001) and amended April 9, 2002, September 25, 2002 and June 9, 2003, the
Company was granted the exclusive right to explore, develop and mine the
Panorama Project mineral property located in Mineral County of the State of
Nevada. The term of the lease is for 20 years with automatic extensions as long
as conditions of the lease are met. During the nine month period ended September
30, 2003, the minimum royalty payments and performance commitments were amended
as follows:
Minimum Advance Royalty Payments:
The owner shall be paid a royalty of 3% of the net smelter
returns from all production. In respect to this royalty, the
Company is required to pay minimum advance royalty payments
of the following:
- - $5,000 upon execution (paid);
- - $1,500 on April 9, 2002 (paid);
- - $2,000 on October 9, 2002 (paid);
- - $1,500 on January 9, 2003 (paid);
- - $1,500 on June 9, 2003 (paid);
- - $14,000 on September 9, 2003;
- - $20,000 on April 9, 2004; and
- - $50,000 on April 9, 2005 and every April 9 thereafter.
The Company can reduce the net smelter return royalty to 0.75% by payment of a
buy-out price of $3,000,000. Advance royalty payments made to the date of the
buy-out will be applied to reduce the buy-out price. The Company is currently
negotiating new terms to the agreement. In the event that the Company terminates
the lease after September 1 of any year, it is required to pay all federal and
state mining claim maintenance fees for the next assessment year. The Company is
required to perform reclamation work on the property as required by federal,
state and local law for disturbances resulting from the Company's activities on
the property.
Under applicable federal, state, and county laws and regulations, annual mining
claim maintenance or rental fees are required to be paid by Bream for the
unpatented mining claims which constitute all or part of the leased property,
beginning with the annual assessment work period of September 1, 2002 to
September 1, 2003. Bream must timely and properly pay the federal, state, and
county annual mining claim maintenance or rental fees, and must execute and
3
record or file, as applicable, proof of payment of the federal, state, and
county annual mining claim maintenance or rental fees and the landlord's
intention to hold the unpatented mining claims. Annual maintenance fees are due
on the claims by August 31. Federal fees are $100 per claim per year payable to
the Department of the Interior, Bureau of Land management. State fees are $5.50
per year per claim payable to the county recorder. If Bream does not terminate
the agreement before June 1 of any subsequent lease year, Bream will be
obligated either to pay the federal, state, and local annual mining claim
maintenance or rental fees for the property due that year or to reimburse the
landlord.
Bream also has the right to buy out the landlord's interest in exchange for a
payment of $3,000,000 from which royalty payments made up to the time of the
buyout may be deducted. If a buyout occurs, Bream must also pay the landlord a
perpetual 0.75% royalty on all minerals recovered from the property.
The lease may be terminated at any time by Bream provided that we give written
notice 30 days prior to relinquishing the leased property. In the event bream
desires to terminate the agreement after June 1 of any year, we are responsible
for all federal, state, and county maintenance and filing fees for the next
assessment year regarding the leased property. In addition, we must deliver to
the landlord in reproducible form all data generated or obtained for the leased
property, whether factual or interpretive. Finally, we must quitclaim to the
landlord all claims located or acquired by us.
Our business activities to date have been restricted to obtaining a report from
our mining engineer, Edward P. Jucevic and preparing our public offering. Mr.
Jucevic's report details the geological and mining history of the claims leased
by Bream, including the land status, climate, geology and mineralization. Mr.
Jucevic believes that based upon previous mining activity in the area,
sufficient evidence exists to warrant further exploration on the leased property
which could then lead to actual mining operations.
The property leased by Bream covers lands credited with sporadic, but high grade
gold, silver, and minor mercury production dating to the early 1900's. The
claims cover three discrete gold-bearing areas, none of which has been
thoroughly evaluated. Four neighboring unevaluated targets within the leased
claims are recommended for acquisition by staking. Mr. Jucevic believes that
precious metal mineralization is hosted in several areas within the claims.
There is a reasonable potential that additional exploration and drilling will
outline important mineral reserves. A two phase exploration and drilling program
has been proposed. Phase 1, including a recommendation to stake four neighboring
targets, with estimated costs of $60,000, followed by a Phase 2 with estimated
costs of $60,000. The purpose of our offering is to finance the implementation
of Phase I.
Location and Access
The project is located in western Nevada, Mineral County, approximately 150
miles south of Reno and 48 miles north of Bishop, California. Access to the
property from Bishop, California, is via highway US 6, north for a distance of
48.2 miles to the CCC Ranch Road. Turn north on a northerly trending gravel road
for 0.3 miles to the property.
Claim Status
Bream has obtained a mining lease on eight valid unpatented lode mining claims
on file with the United States Bureau of Land Management (BLM) records in Reno,
Nevada in the name of Desert Pacific Exploration, Inc. The claims are filed with
the BLM as follows:
4
Claim Name NMC Number Mineral County Book and Page
Hound Dog 2 763966 Book 169 Page 46
Hound Dog 9 763972 Book 169 Page 52
Ule 19 763991 Book 169 Page 71
Panorama 5 763994 Book 169 Page 74
Panorama 6 763995 Book 169 Page 75
Panorama 7 763996 Book 169 Page 76
Vol 32 763950 Book 169 Page 30
Little Ule 8 763960 Book 169 Page 40
The leased property is comprised of approximately 160 acres. The owner of record
is Desert Pacific Exploration, Inc. of which Herb Duerr is the sole shareholder.
Rental fees assessed by the BLM and intent to hold fees assessed by the State of
Nevada and Mineral County have been paid through August 31, 2002. The
surrounding land is owned by the United States Forest Service and is open for
staking. Mr. Jucevic recommends that we may need to stake at least 35 additional
claims to cover the strike and provide an adequate buffer on either side of the
mineralized zone.
At present, there are no plans to locate these additional 35 claims. We will not
locate additional claims unless it should become necessary in order to protect
the claims we have already leased. Should the additional 35 claims be staked at
some future date, the estimated cost of the work plus filing fees would be
approximately $8,400, broken down as follows: staking fees $90 per claim,
federal filing fees $135 per claim, state filing fees $14 per claim plus a map
fee of $15. The risk in not pursuing additional claims now is that a third party
may stake this peripheral ground. If at some future time it was decided to
expand the size of the currently leased claim, an agreement would have to be
negotiated with that third party in which we might be required to pay a rental
or royalty fee for minerals recovered on these additional claims.
Climate And Local Resources
The claims leased by Bream are located at elevations ranging from 5900 to 7950
feet in gently rolling hills covered with sagebrush and Pinion pines. The
climate is temperate with moderate snow cover from December to March. No
perennial streams exist on the property. However, groundwater is plentiful.
Power lines are located about three miles east of the property. The closest
population center is Bishop, located about 48 miles to the south.
History Of The Claims
Mr. Jucevic has examined the available literature on the claims from which he
has developed the following history. The earliest known mining activity on the
claims was conducted in 1863 when gold, silver and lead were discovered.
Production of precious metals occurred on the claims from 1910 to 1913.
Production was achieved again from 1931 to 1933 in some of the claims and
processing occurred on the property. Exploration for mercury occurred in the
late 1940's when a few flasks of mercury were sold from the claims. Tungsten
exploration was carried out on the claims in the late 1950's with little
encouragement.
Recent exploration efforts on the claims started in 1979. At least seven
5
separate targets in diverse settings were defined by this work. Between 1979 and
1984 at least 32 shallow air track holes were drilled, defining an area of
altered volcanic rock on one side of the property. Large geochemical sampling
programs defined at least seven separate mineralized environments on the claims.
The property was mapped, sampled and drilled between 1997 and 1998. Two
additional areas with significant gold values were identified. The drilling
tested five target areas, with encouraging results from three. Testing of the
one claim area was unsatisfactory because the drill could not gain access to
test the structure. Drilling on another claim intersected gold starting at the
surface. Drilling on another claim confirmed previous evidence of precious
minerals.
Our Proposed Exploration Program
We must conduct exploration to determine what amount of minerals, if any, exist
on our properties. The goal of our exploration program is to determine if
selected exploration targets warrant follow-up work through compilation leading
to either a geophysical survey and/or soil sampling survey. If these techniques
produce favorable indications, then exploration drilling will be conducted, the
scope of which is dependent upon the available budget.
We do not claim to have any minerals or reserves whatsoever at this time on any
of our claims. We intend to implement an exploration program and to proceed in
the following two phases:
Phase I will involve staking of open ground surrounding Hound Dog Hill, VOL and
Panorama claim target areas. We will then initiate drilling for soil sample
areas of potential interest. We will then drill 8 angle holes 300 feet long
across mineralized fault zones. Samples will be assayed for gold, silver,
arsenic, mercury, bismuth, and copper on 5 foot intervals. The cost of Phase I
will is estimated to be $60,000 and will take approximately two months to
complete.
Upon completion of Phase I, we will determine the cost effectiveness of
proceeding to Phase II. In making this determination, we will undertake to have
our data from Phase I independently verified for accuracy by an independent
registered engineer to confirm the existence of mineral deposits. In addition,
we will make investigations into whether a buyer or a market exists for our
mineral products and analyze whether the minerals can be extracted by us for a
profit.
Phase I would be considered successful if assay results provide sufficient
justification to develop drill targets. These drill targets could be areas of
elevated gold and/or silver values. Success in the planned Phase I shallow
drilling program would be demonstrated by the intersection of anomalous precious
metal assays from the targeted areas along the known precious metal structures
in the claims. Silver assays of 100 parts per million or greater and/or gold
assays of 1.0 parts per million or greater over a five foot drill hole interval
would be considered elevated. These same assay values from surface rock chip
samples would be considered elevated.
Phase II will consist of drilling of 9 angle holes averaging 300 feet across to
determine the extent, depth and dip of ore discovered in Phase I. It is
anticipated that Phase II will cost $60,000 and will also take approximately two
months to complete. Phase Two would be considered successful if the planned
drilling intersected economic precious metal values with a minimum equivalent
value of 0.10 ounces per ton gold over a ten foot interval in at least one of
the drill holes in the program.
6
Competitive Factors
The mineral industry is fragmented. We compete with other exploration companies
looking for a variety of mineral reserves. We may be one of the smallest
exploration companies in existence. Although we will be competing with other
exploration companies, there is no competition for the exploration or removal of
minerals from our property. Readily available markets exist in North America and
around the world for the sale of minerals. Therefore, we intend to develop
mining claims to the production point in which major mining production companies
would seriously consider pursuing the property as a valuable and significant
acquisition.
Regulations
We will secure all necessary permits for exploration and, if development is
warranted on the property, will file final plans of operation before we start
any mining operations. We anticipate no discharge of water into active stream,
creek, river, lake or any other body of water regulated by environmental law or
regulation. No endangered species will be disturbed. Restoration of the
disturbed land will be completed according to law. All holes, pits and shafts
will be sealed upon abandonment of the property. It is difficult to estimate the
cost of compliance with the environmental law since the full nature and extent
of our proposed activities cannot be determined until we start our operations
and know what that will involve from an environmental standpoint.
Before any type of mineral exploration or land disturbance occurs on the leased
claims or on existing roads leading to the leased claims, we must submit to the
overseeing federal agency a "Notice of Intent" describing the nature of the
proposed work, the duration of the work, the estimated amount of land
disturbance, the type of equipment to be used and a reclamation plan. Then a
field examination will be conducted by federal agency personnel, including
examination by wildlife, water, archaeological specialists. Once the federal
agency is satisfied that all disturbances will be minimal and any other concerns
are mitigated, a reclamation bond must be filed before receiving approval to
conduct the work program.
The initial drill program outlined in Phase I will be conducted on Bureau of
Land Management lands. The BLM will require the submittal of a plan of operation
which would be used as the basis for the bonding requirement, water permit and
reclamation program. The reclamation program could include both surface
reclamation and drill hole plugging and abandonment. The amount of the bonding
would be based upon an estimate by the BLM related to the cost of reclamation if
done by an independent contractor. It is estimated the bonding requirement would
be $5000.00. The water permit and fee is included in the reclamation cost which
is estimated to be $1000.00.
The estimate for Phase II reclamation and bonding is based on the assumption
that we have completed the Phase I reclamation and that the $5000.00 Phase I
bond is still in place. Based upon this assumption, it is estimated that an
additional bond of $5,000.00 would be required for Phase II for a total bonding
requirement of $10,000.00.
We would be subjected to the B.L.M. rules and regulations governing mining on
federal lands including a draft environmental impact statement or EIS, public
hearings and a final EIS. The final EIS would address county and state needs and
requirements and would cover issues and permit requirements concerning: air
quality, heritage resources, geology, energy, noise, soils, surface and ground
water, wetlands, use of hazardous chemicals, vegetation, wildlife, recreation,
land use, socioeconomic impact, scenic resources, health and welfare,
7
transportation and reclamation. Bonding requirements for mining are developed
from the final EIS.
We are in compliance with all laws and will continue to comply with the laws in
the future. We believe that compliance with the laws will not adversely affect
our business operations. Bream anticipates that it will be required to post
bonds in the event the expanded work programs involve extensive surface
disturbance.
Employees
Initially, we intend to use the services of subcontractors for manual labor
exploration work on our properties. Bream will consider hiring technical
consultants as funds from our offering and additional offerings or revenues from
operations in the future permit. At present, our only employee is Mr. England.
Employees and Employment Agreements
At present, we have no employees, other than Mr. England, our president and sole
director who has received no compensation for his services. Mr. England does not
have an employment agreement with us. We presently do not have pension, health,
annuity, insurance, stock options, profit sharing or similar benefit plans;
however, we may adopt plans in the future. There are presently no personal
benefits available to any employees.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
We are a start-up, pre-exploration stage company and have not yet generated or
realized any revenues from our business operations.
Our auditors have issued a going concern opinion. This means that our auditors
believe there is doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated any revenues and no revenues are anticipated until
we begin removing and selling minerals. Accordingly, we must raise cash from
sources other than the sale of minerals found on our property. Our only other
source for cash at this time is investments by others in our company. We must
raise cash to implement our project and stay in business.
To meet our need for cash we are attempting to raise money from equity
offerings. There is no assurance that we will be able to raise enough money
through to stay in business. Whatever money we do raise will be applied first to
exploration and then to development, if development is warranted. If we do not
raise all of the money we need from our offering, we will have to find
alternative sources, like a second public offering, a private placement of
securities, or loans from our officers or others. At the present time, we have
not made any arrangements to raise additional cash, other than through our
offering. If we need additional cash and cannot raise it, we will either have to
suspend operations until we do raise the cash, or cease operations entirely.
We will be conducting research in connection with the exploration of our
property. We are not going to buy or sell any plant or significant equipment. We
do not expect a change in our number of employees.
Limited Operating History; Need for Additional Capital
There is no historical financial information about our company upon which to
base an evaluation of our performance. We are a pre-exploration stage company
and have not generated any revenues from operations. We cannot guarantee we will
8
be successful in our business operations. Our business is subject to risks
inherent in the establishment of a new business enterprise, including limited
capital resources, possible delays in the exploration of our properties, and
possible cost overruns due to price and cost increases in services.
To become profitable and competitive, we conduct research and exploration of our
properties. We are seeking equity financing to provide for the capital required
to implement our research and exploration phases.
We have no assurance that future financing will be available to us on acceptable
terms. If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations. Equity financing could result in
additional dilution to existing shareholders.
Results of Operations
From Inception on March 9, 2001
We just recently acquired our first interest in lode mineral claims. At this
time we have not yet commenced the research and/or exploration or mining
operations on that property. We have paid $5,000 for a mining lease. As of
September 30, 2003 we have experienced operating losses of $89,506 for filing
fees, legal and accounting fees, resource property costs, management fees and
transfer agent fees.
Plan of Operations
Bream's plan of operations for the next twelve months is to undertake Phase I of
the drilling and exploration program. We can commence Phase I assuming at least
50% of the offering is sold. However, the total cost of Phase I is estimated to
be $60,000.00 and therefore can not be completed unless approximately 90% the
offering is sold. We have no plan to engage in any alternative business if Bream
ceases or suspends operations as a result of not having enough money to complete
any phase of the exploration program.
Phase I will involve staking of open ground at a cost of $5,000. Filing fees are
anticipated to be $7,000. We will then initiate drilling for soil sample areas
of potential interest including 8 angle holes 300 feet long across the suspected
areas that indicate the presence of ore. Drilling and assaying costs are
expected to be approximately $34,000. Samples will be assayed for gold, silver,
arsenic, mercury, bismuth, and copper on 5 foot intervals. The cost of
permitting and geological analysis is estimated to be $7,000. In addition, we
anticipate incurring costs of $1,000 for soil and rock sampling and $2,000 for
data compilation fees. The total cost of Phase I will is estimated to be $60,000
and will take approximately two months to complete.
Upon completion of Phase I, we will determine the cost effectiveness of
proceeding to Phase II. We will undertake to have our data from Phase I
independently verified for accuracy by an independent registered engineer to
confirm the existence of mineral deposits. In addition, we will make
investigations into whether a buyer or a market exists for our mineral products
and analyze whether the minerals can be extracted by us for a profit.
If all the shares in our offering are sold, it will only be adequate to finance
Phase I. Assuming we decide to proceed with Phase II, we will be required to
obtain additional financing. Phase II will consist of more extensive drilling of
9 angle holes averaging 300 feet across to determine the extent, depth and dip
of ore discovered in Phase I. We anticipate incurring costs of $39,000 for
drilling and assaying in addition to $6,000 for drill site construction in Phase
II. We will also incur costs of $10,000 for a geologist $5,000 for permitting
9
and reclamation. It is anticipated that the total cost of Phase II will be
$60,000. Phase II will take approximately two months to complete.
Liquidity and Capital Resources
As of the date of this report, we have yet to generate any revenues from our
business operations. Since our inception, Mr. England has paid $12,500 in cash
in exchange for 1,250,000 shares of common stock and the remaining two
shareholders have each paid $6,250 for 625,000 shares of common stock each. This
money has been utilized for organizational and start-up costs and as operating
capital. As of March 31, 2003 we had sustained operating losses of $66,977. As
of September 30, 2003, the Company had issued 3,950,000 shares of common stock
in equity offerings.
TEM 3. CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Exchange Act, the Company carried out an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures within the 90 days prior to the filing date
of this report. This evaluation was carried out under the supervision and with
the participation of the Company's management, including the Company's Chief
Executive Officer and Company's Chief Financial Officer. Based upon that
evaluation, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective.
There have been no significant changes in the Company's internal controls or in
other factors, which could significantly affect internal controls subsequent to
the date the Company carried out its evaluation.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in Company reports filed under the Exchange Act is
accumulated and communicated to management, including the Company's Chief
Executive Officer and Chief Financial Officer, to allow timely decisions
regarding required disclosure.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material legal proceedings to which we (or any of our officers and
directors in their capacities as such) is a party or to which our property is
subject and no such material proceedings is known by our management to be
contemplated.
ITEM 2. CHANGES IN SECURITIES - NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
NONE
ITEM 5. OTHER INFORMATION - NONE
10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits - 99.1
(b) Reports on Form 8-K - NONE
SIGNATURE
In accordance with the requirements of the Securities and Exchange Act of 1934,
as amended, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BREAM VENTURES, INC.
Dated: November 19, 2003
/s/ Anthony England
Anthony England
Chief Executive Officer
CERTIFICATIONS*
I, Anthony England, certify that;
1. I have reviewed this quarterly report on Form10-QSB of Bream Ventures, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other facts that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 19, 2003
/s/ Anthony England
Anthony England
Chief Executive Officer
*Provide a separate certification for each principal executive officer and
principal financial officer of the registrant. See Rules 13a-14 and 15d-14. The
required certification must be in the exact form set forth above.
11
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Anthony England, Chief Executive Officer and Chief Financial Officer,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-QSB of
Bream Ventures, Inc. for the quarterly period ended September 30, 2003 fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and that the information contained in the Quarterly Report
on Form 10-QSB fairly presents in all material respects the financial condition
and results of operations of Bream Ventures, Inc. By:
/s/Anthony England
Anthony England
Chief Executive Officer &
Chief Financial Officer
Date: November 18, 2003
12
BREAM VENTURES, INC.
(A Pre-exploration Stage Company)
INTERIM BALANCE SHEETS
September 30, 2003 and December 31, 2002
(Stated in US Dollars)
(Unaudited)
(Unaudited) (Audited)
September 30 December 31,
ASSETS 2003 2002
------ ---- ----
Current
Cash $ - $ 544
- 544
Due from related party 1,500 3,000
$ 1,500 $ 3,544
LIABILITIES
Current
Accounts payable and accrued liabilities $ 11,706 $ 6,111
STOCKHOLDERS' DEFICIENCY
Preferred stock, $0.001 par value
10,000,000 shares authorized, none outstanding
Common stock, $0.001 par value
100,000,000 shares authorized
3,590,000 (December 31, 2002: 3,590,000) shares outstanding 3,590 3,590
Additional paid in capital 75,910 75,910
Deficit accumulated during the pre-exploration stage ( 89,706) ( 82,067)
( 10,206) ( 2,567)
$ 1,500 $ 3,544
SEE ACCOMPANYING NOTES
13
BREAM VENTURES, INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF OPERATIONS
for the three and nine months ended
September 30, 2003 and 2002 and for the period March
9, 2001 (Date of Incorporation) to September 30,
2003
(Stated in US Dollars)
(Unaudited)
March 9, 2001
(Date of Incor-
Three months ended Nine months ended poration) to
September 30, September 30, September 30,
2003 2002 2003 2002 2003
---- ---- ---- ---- ----
Expenses
Accounting, audit and legal $ 1,251 $ 6,614 $ 4,595 $ 13,343 $ 49,811
Administrative services - 10,000 - 10,000 15,500
Bank charges (recovery) - 46 44 124 317
Consulting - - - - 5,000
Filing fees - - - 320 2,537
Incorporation costs - - - - 870
Mineral property expenses 1,500 - 3,000 2,457 13,317
Office and miscellaneous - 103 - 203 255
Transfer agent fees - - - - 2,099
Net income (loss) for the period
$ 2,751 $ ( 16,763) $ ( 7,639) $ ( 26,447) $ ( 89,706)
Basic earnings (loss) per
share $ 0.00 $ ( 0.01) $ ( 0.00) $ ( 0.01)
Weighted average number
of shares outstanding 3,590,000 2,500,000 3,590,000 2,500,000
SEE ACCOMPANYING NOTES
14
BREAM VENTURES, INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
for the nine months ended September 30,
2003 and 2002, and for the period March 9, 2001
(Date of Incorporation) to September 30, 2003
(Stated in US Dollars)
(Unaudited)
March 9, 2001
(Date of Incor-
Nine months ended poration) to
September 30, September 30,
2003 2002 2003
---- ---- ----
Cash Flows used in Operating Activities
Net loss for the period $ ( 7,639) $ ( 26,447)$ ( 89,706)
Changes in non-cash working capital
items related to operations
Accounts receivable - 110 -
Accounts payable and accrued liabilities 5,595 6,029 11,706
( 2,044) ( 32,366) ( 78,000)
Cash Flows from Investing Activity
Due from related party 1,500 - ( 1,500)
Cash Flows from Financing Activities
Capital stock subscribed - 54,500 79,500
Advances from shareholder - - -
- 54,500 79,500
Increase (decrease) in cash during the period ( 544) 22,134 -
Cash, beginning of the period 544 392 -
Cash, end of the period $ - $ 22,526 $ -
Supplemental disclosure of cash flow information Cash paid for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
SEE ACCOMPANYING NOTES
15
BREAM VENTURES, INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENT OF STOCKHOLDERS'
DEFICIENCY for the period March 9, 2001 (Date of
Incorporation) to September 30, 2003
(Stated in US Dollars)
(Unaudited)
Deficit
Accumulated
Additional During the
Common Shares Paid-in Pre-exploration
--------------------------------
Number Par Value Capital Stage Total
Capital stock for cash - at $0.01 2,500,000 $ 2,500 $ 22,500 $ - $ 25,000
Net loss for the period ended
December 31, 2001 - - - ( 40,530) ( 40,530)
Balance, as at December 31, 2001 2,500,000 $ 2,500 $ 22,500 $ ( 40,530) $ ( 15,530)
Capital stock issued for cash
- at $0.05 1,090,000 1,090 53,410 - 54,500
Net loss for the year ended
December 31, 2002 - - - ( 41,537) ( 41,537)
Balance, December 31, 2002 3,590,000 3,590 75,910 ( 82,067) ( 2,567)
Net loss for the period ended
September 30, 2003 - - - ( 7,639) ( 7,639)
Balance, as at September 30, 2003 3,590,000 $ 3,590 $ 75,910 $ ( 89,706) $ ( 10,206)
SEE ACCOMPANYING NOTES
16
BREAM VENTURES, INC.
(A Pre-exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2003
(Stated in US Dollars)
(Unaudited)
Note 1 Interim Reporting
While the information presented in the accompanying interim three
and nine month financial statements is unaudited, it includes all
adjustments which are, in the opinion of management, necessary to
present fairly the financial position, results of operations and
cash flows for the interim periods presented. All adjustments are
of a normal recurring nature. It is suggested that these financial
statements be read in conjunction with the Company's December 31,
2002 annual financial statements.
Note 2 Continuance of Operations
The financial statements have been prepared using generally
accepted accounting principles in the United States of America
applicable for a going concern which assumes that the Company will
realize its assets and discharge its liabilities in the ordinary
course of business. As at September 30, 2003, the Company has a
working capital deficiency of $11,706, which is not sufficient to
meet its planned business objective or to fund mineral property
expenditures and ongoing operations for the next fiscal year. The
Company has accumulated losses of $89,706 since its commencement.
Its ability to continue as a going concern is dependent upon the
ability of the Company to obtain the necessary financing to meet
its obligations and pay its liabilities arising from normal
business operations when they come due.
Note 3 Commitments
a) Exploration Lease
By a lease agreement dated March 9, 2001 (effective April 9,
2001) and amended April 9, 2002, September 25, 2002 and June
9, 2003, the Company was granted the exclusive right to
explore, develop and mine the Panorama Project mineral
property located in Mineral County of the State of Nevada.
The term of the lease is for 20 years with automatic
extensions as long as conditions of the lease are met.
During the nine month period ended September 30, 2003, the
minimum royalty payments and performance commitments were
amended as follows:
17
Note 3 Commitment - (cont'd)
----------
a) Exploration Lease- (cont'd)
Minimum Advance Royalty Payments:
The owner shall be paid a royalty of 3% of the net smelter
returns from all production. In respect to this royalty, the
Company is required to pay minimum advance royalty payments
of the following:
- - $5,000 upon execution (paid);
- - $1,500 on April 9, 2002 (paid);
- - $2,000 on October 9, 2002 (paid);
- - $1,500 on January 9, 2003 (paid);
- - $1,500 on June 9, 2003 (paid);
- - $14,000 on September 9, 2003;
- - $20,000 on April 9, 2004; and
- - $50,000 on April 9, 2005 and every April 9 thereafter.
The Company can reduce the net smelter return royalty to
0.75% by payment of a buy-out price of $3,000,000. Advance
royalty payments made to the date of the buy-out will be
applied to reduce the buy-out price.
The Company is currently negotiating new terms to the
agreement.
Performance Commitment:
In the event that the Company terminates the lease after
September 1 of any year, it is required to pay all federal
and state mining claim maintenance fees for the next
assessment year. The Company is required to perform
reclamation work on the property as required by federal,
state and local law for disturbances resulting from the
Company's activities on the property.
18
b) Consulting Agreement
Pursuant to an agreement dated October 25, 2002, the Company
engaged GID Financial Solutions, Inc., a Nevada Corporation,
to assist the Company to have its stock quoted for public
trading on the OTC Bulletin Board service or some other
comparable quotation system. The Company will pay $17,500 as
follows:
- $5,000 upon execution of the agreement (paid); and
- $12,500 within five days after a Form 211 filing is deemed cleared
by the NASDR OTC Compliance examiner.