U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
Commission File No. 333-105008
TWIN VENTURES LTD.
(Exact name of small business issuer as specified in its charter)
Delaware 87-0700927
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6418 NE Agate Beach Lane
Bainbridge Island, Washington 98110-1000
(Address of Principal Executive Offices)
(206) 842-2026
(Issuer's telephone number)
N/A
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the issuer was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [ X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of May 14, 2004: 9,257,000 shares of common stock outstanding, $0.001
par value.
Part I-- FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
Item 3. Control and Procedures
Part II-- OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signature
Item 1. Financial Information
- -----------------------------
BASIS OF PRESENTATION
The accompanying reviewed financial statements are presented in accordance with
generally accepted accounting principles for interim financial information and
the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting only of normal
occurring accruals) considered necessary in order to make the financial
statements not misleading, have been included. Operating results from inception
(November 6, 2002) and three months ended March 31, 2004 are not necessarily
indicative of results that may be expected for the year ending December 31,
2004. The financial statements are presented on the accrual basis.
TWIN VENTURES LTD.
(an exploration stage company)
FINANCIAL STATEMENTS
As Of March 31, 2004
BALANCE SHEET F-1
STATEMENT OF OPERATIONS F-2
STATEMENT OF STOCKHOLDERS' EQUITY F-3
STATEMENT OF CASH FLOWS F-4
FINANCIAL STATEMENT FOOTNOTES F-5
TWIN VENTURES LTD.
(an exploration stage company)
BALANCE SHEET
As of March 31, 2004 and December 31, 2003
ASSETS
------
CURRENT ASSETS 3/31/2004 12/31/2003
- -------------- --------------- ---------------
Cash $ 54 $ 76
--------------- ---------------
Total Current Assets 54 76
--------------- ---------------
TOTAL ASSETS $ 54 $ 76
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
- -------------------
Accounts payable $ 2,650 $ 1,800
Accrued expenses & short term contract payable 4,825 4,825
--------------- ---------------
Total Current Liabilities 7,475 6,625
LONG-TERM LIABILITIES
- ---------------------
Contract payable - the "Ritz Claim" 15,000 15,000
--------------- ---------------
TOTAL LIABILITIES 22,475 21,625
--------------- ---------------
STOCKHOLDERS' EQUITY
- --------------------
Common Stock, $.0001 par value
Authorized: 50,000,000
Issued: 27,200,000 and 27,257,000, respectively 2,726 2,726
Additional paid in capital 129,524 129,524
Preferred stock, $.0001 par value
Authorized: 10,000,000 Issued: none -- --
Stock subscription receivable -- --
Accumulated deficit during exploration stage (154,673) (153,799)
--------------- ---------------
Total Stockholders' Equity (22,423) (21,549)
--------------- ---------------
TOTAL LIABILITIES AND EQUITY $ 52 $ 76
=============== ==============
F-1
TWIN VENTURES LTD.
(an exploration stage company)
STATEMENT OF OPERATIONS
For the three months ending March 31, 2004 and 2003,
and from inception (November 6, 2002) through December 31, 2003
FROM
3/31/2004 3/31/2003 INCEPTION
--------------- ------------------------------
REVENUE $ - $ - $ -
- -------
COST OF SERVICES - - -
- ----------------
--------------- ------------------------------
GROSS PROFIT OR (LOSS) - - -
- ----------------------
GENERAL AND ADMINISTRATIVE EXPENSES 874 680 121,173
- -----------------------------------
GENERAL EXPLORATION - - 33,500
- -------------------
--------------- ------------------------------
OPERATING INCOME (874) (680) (154,673)
- ----------------
--------------- ------------------------------
ACCUMMULATED DEFICIT $ (874) $ (680) $ (154,673)
- --------------------
=============== ==============================
Earnings (loss) per share, basic and diluted $ (0) $ (0)
- --------------------------------------------
Weighted average number of common shares 27,257,000 27,242,750
- ----------------------------------------
The accompanying notes are an integral part of these financial statements.
F-2
TWIN VENTURES LTD.
(an exploration stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
As of March 31, 2004
ADDITIONAL
COMMON PAR PAID IN ACCUM. TOTAL
STOCK VALUE CAPITAL DEFICIT EQUITY
--------------------------------------------------------------------------
Incorporation, October 6, 2002 - $ - $ - $ - $ -
Common stock subscribed for cash 3,200,000 320 15,680 16,000
during December 2002 at $0.005
per share on private placement
Stock subscription receivable (2,500)
on December 2002 private
placement
Stock issued for services 24,000,000 2,400 99,600 102,000
for the fair value of the
services to be provided
at a per share price of $0.003
Net income (loss) (145,920) (145,920)
--------------------------------------------------------------------------
Balance, December 31, 2002 27,200,000 $ 2,720 $115,280 $ (145,920) $ (30,420)
Common stock issued for cash 57,000 6 14,244 14,250
during March 2003 at $0.25
per share on private placement
Stock subscription received 2,500
Net income (loss) (7,879) (7,879)
--------------------------------------------------------------------------
Balance, December 31, 2003 27,257,000 $ 2,726 $129,524 $ (153,799) $ (21,549)
Net income (loss) (874) (874)
--------------------------------------------------------------------------
Balance, March 31, 2004 27,257,000 $ 2,726 $129,524 $ (154,673) $ (22,423)
==========================================================================
The accompanying notes are an integral part of these financial statements.
F-3
TWIN VENTURES LTD.
(an exploration stage company)
STATEMENTS OF CASH FLOWS
For the three months ending March 31, 2004 and 2003,
and from inception (November 6, 2002) through March 31, 2004
FROM
CASH FLOWS FROM OPERATING ACTIVITIES 3/31/2004 3/31/2003 INCEPTION
- ------------------------------------
--------------- ------------------------------
Net income (loss) $ (874) $ (680) $ (154,673)
--------------- ------------------------------
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation - - 744
Compensation in the form of stock - - 102,000
Mineral rights expensed - 2,500 16,000
Increase (Decrease) in accounts payable 846 700 2,650
Increase (Decrease) in accrued expenses - (10,000) 4,825
Increase (Decrease) in contract payable - (2,500) 15,000
--------------- ------------------------------
Total adjustments to net income 846 (9,300) 141,219
--------------- ------------------------------
Net cash provided by (used in) operating activities (28) (9,980) (13,454)
--------------- ------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------
Cash paid for web site design - (744) (744)
Cash paid for mineral rights - (2,500) (16,000)
--------------- ------------------------------
Net cash flows provided by (used in) investing activities - (3,244) (16,744)
--------------- ------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------
Proceeds from stock issuance - 16,750 30,250
--------------- ------------------------------
Net cash provided by (used in) financing activities - 16,750 30,250
--------------- ------------------------------
CASH RECONCILIATION
- -------------------
Net increase (decrease) in cash (28) 3,526 52
Cash - beginning balance 80 80 -
--------------- ------------------------------
CASH BALANCE END OF PERIOD $ 52 $ 3,606 $ 52
=============== ==============================
The accompanying notes are an integral part of these financial statements.
F-4
NOTE 1 - OPERATIONS AND BASIS OF PRESENTATION
----------------------------------------
Twin Ventures Ltd. (the Company), a exploration stage company, was incorporated
on November 6, 2002 in the State of Delaware and is headquartered in Bainridge
Island, Washington. The Company is an exploration stage mining and mineral
company. On November 21, 2002 the Company became actively engaged in acquiring
mineral properties, raising capital, and preparing properties for production.
The Company did not have any significant mining operations or activities from
inception; accordingly, the Company is deemed to be in the exploration stage.
For purposes of recording the Company's mineral claims in Canada, the Company
acquired New Heights Capital Corporation (a Canadian corporation) and
transferred the claims listed in the following paragraph into the subsidiary in
exchange for 100% of the subsidiary's outstanding stock.
On November 21, 2002, the Company acquired mineral claims (the "Ritz Claims")
located in the Lillooet Lake Region of Southwest British Columbia, Canada. The
property consists twenty unpatented two post mineral claims and one unpatented
four post mineral claim representing forty units that have been staked and
recorded in the Lillooet mining division. The Company has not commenced economic
production and is therefore still considered to be in the exploration stage.
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of the mineral properties and
other assets and the satisfaction of liabilities in the normal course of
business. The Company has incurred losses of from inception to March 31, 2003.
The Company has not realized economic production from its mineral properties as
of March 31, 2003. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management continues to actively seek
additional sources of capital to fund current and future operations. There is no
assurance that the Company will be successful in continuing to raise additional
capital, establishing probable or proven reserves, or determining if the mineral
properties can be mined economically. These financial statements do not include
any adjustments that might result from the outcome of these uncertainties.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------
Revenue and Cost Recognition
- ----------------------------
The Company uses the accrual basis of accounting for financial statement
reporting. Revenues and expenses are recognized in accordance with Generally
Accepted Accounting Principles for the industry. Certain period expenses are
recorded when obligations are incurred.
Use of Estimates
- ------------------
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities, and
disclosure of contingent liabilities at the date of the financial statements,
and the reported amount of revenues and expenses during the reporting period.
Actual results could differ from those results.
Accounts Receivable, deposits, Accounts Payable and accrued Expenses
- --------------------------------------------------------------------
Accounts receivable have historically been immaterial and therefore no allowance
for doubtful accounts has been established. Normal operating refundable Company
deposits are listed as Other Assets. Accounts payable and accrued expenses
consist of trade payables created from the normal course of business.
F-5
Mineral Properties and Mining Equipment
- ---------------------------------------
Mineral properties and mining equipment include land and mining equipment
carried at cost. Mining equipment including mill facilities is depreciated using
the straight-line method over estimated useful lives of 5 to 15 years, or the
units-of-production method based on estimated tons of ore reserves if the
equipment is located at a producing property with a shorter economic life.
Mining equipment not in service is not depreciated.
During 1997, the Securities and Exchange Commission (SEC) staff reconsidered
existing accounting practices for mineral expenditures by United States junior
mining companies. They now interpret generally accepted accounting policy for
junior mining companies to permit capitalization of acquisition and exploration
costs only after persuasive engineering evidence is obtained to support
recoverability of these costs (ideally upon determination of proven and/or
probable reserves based upon dense drilling samples and feasibility studies by a
recognized independent engineer). Although the Company has obtained samples, and
an independent engineer has deemed the properties may contain platinum group
metals, management has chosen to follow the more conservative method of
accounting by expending all mineral costs, for which there is no feasibility
study.
Land Options
- -------------
As noted above, since the Company interprets generally accepted accounting
policies to permit capitalization of acquisition costs including leases and land
options only after persuasive engineering evidence has been obtained to support
recoverability of these costs, these costs will be expensed.
Non-mining Property and Equipment
- ---------------------------------
Property and equipment purchased by the Company are recorded at cost.
Depreciation is computed by the straight-line method based upon the estimated
useful lives of the respective assets. Expenditures for repairs and maintenance
are charged to expense as incurred as are any items purchased which are below
the Company's capitalization threshold of $1,000.
For assets sold or otherwise disposed of, the cost and related accumulated
depreciation are removed from accounts, and any related gain or loss is
reflected in income for the period.
Reclamation and Environmental Costs
- -----------------------------------
Reclamation costs and related accruals are based on the Company's interpretation
of environmental and regulatory requirements. Minimum standards for mine
reclamation have been established by various governmental agencies. Reclamation,
site restoration, and closure costs for each producing mine are accrued over the
life of the mine using the units-of-production method. Ongoing reclamation
activities are expensed in the period incurred.
Income Taxes
- -------------
The Company accounts for income taxes using the liability method which requires
recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Deferred tax assets and liabilities are determined based on the
difference between the financial statements and tax basis of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.
F-6
The Company's management determines if a valuation allowance is necessary to
reduce any tax benefits when the available benefits are more likely than not to
expire before they can be used.
Inventory
- ---------
Inventory is stated at net realizable value.
Stock Based Compensation
- --------------------------
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," (SFAS 123), which is effective for periods beginning after
December 15, 1995. SFAS 123 requires that companies either recognize
compensation expense for grants of stock, stock options, and other equity
instruments based on fair value or provide pro-forma disclosure of the effect on
net income and earnings per share in the Notes to the Financial Statements. The
Company has adopted SFAS 123 in accounting for stock-based compensation.
Cash and Cash Equivalents, and Credit Risk
- ---------------------------------------------
For purposes of reporting cash flows, the Company considers all cash accounts
with maturities of 90 days or less and which are not subject to withdrawal
restrictions or penalties, as cash and cash equivalents in the accompanying
balance sheet.
The portion of deposits in a financial institution that insures its deposits
with the FDIC up to $100,000 per depositor in excess of such insured amounts are
not subject to insurance and represent a credit risk to the Company.
Foreign Currency Translation and Transactions
- ---------------------------------------------
The Company's functional currency is the US dollar. No material translations or
transactions have occurred. Upon the occurrence of such material transactions or
the need for translation adjustments, the Company will adopt Financial
Accounting Standard No. 52 and other methods in conformity with Generally
Accepted Accounting Principles.
Earnings Per Share
- --------------------
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128 (SFAS 128), "Earnings Per
Share". SFAS 128 replaces the presentation of primary earnings per share with a
presentation of basic earnings per share based upon the weighted average number
of common shares for the period.
Leases
- ------
The Company accounts for leases in accordance with Generally Accepted Accounting
Principles which require operating leases to be expensed and capital leases to
be capitalized and amortized over the lease term. Leased mining properties under
capital leases are expensed until such time that an engineering study has been
completed showing proven mining reserves.
F-7
NOTE 3 - AFFILIATES AND RELATED PARTIES
---------------------------------
Significant relationships with (1) companies affiliated through common ownership
and/or management, and (2) other related parties are as follows:
The Company has ownership of the "Ritz Claims" which was purchased from a
director of the Company. The purchase requires services to the Company from the
Director per the purchase agreement dated November 21, 2002. See Footnote #5 for
a description of this Project.
The Company has an informal month-to-month operating lease for office space with
the Company's President in the amount of $200 per month. The lease covers the
use of phone, space, office equipment and furniture.
The Company has stock-based compensation agreements with an officer and 2
directors of the Company as disclosed in Footnote No. 7.
NOTE 4 - MINERAL PROPERTIES AND MINING EQUIPMENT
-------------------------------------------
The Company's net investment in mineral properties and mining equipment includes
the "Ritz Claim" as described in footnote #1. All costs related to the claim
have been expended in accordance with Generally Accepted Accounting Principles
for the industry.
NOTE 5 - INCOME TAXES
-------------
The Company has available net operating loss carryforwards for financial
statement and federal income tax purposes for the years ending December 31, 2002
and 2003. These loss carryforwards expire if not used by the year 2022 and 2023.
The Company's management has decided a valuation allowance is necessary to
reduce any tax benefits because the available benefits are more likely than not
to expire before they can be used. The value of these tax benefits is $29,184
and $1,576, respectively.
NOTE 6 - LONG-TERM DEBT
--------------
On November 21, 2002, the Company entered into an agreement with Mr. Garth
Barton for the purchase of mining property, the "Ritz Claim", located in the
Lillooet Lake Region of Southwest British Columbia, Canada. The "Ritz Claim" is
title to forty (40) mineral claim units that are unpatented. The total purchase
price of the claim is $33,500 due per terms of the contract with advance
royalties of $25,000 to be paid annually commencing 36 months from the date of
signature of the agreement. The property is subject to a royalty agreement.
The contract payment schedule calls for $13,500 to be paid upon delivery of a
summary geological report and transfer of property title. The $13,500 was paid
per the contract. On February 28, 2003 a payment of $2,500 was made per contract
schedule. Twelve months from the date of title registration, $2,500 becomes due
with another $2,500 due twenty four months from such date. No later than thirty
six months from the date of signature on the contract, the balance of payment is
due for a total purchase price of $33,500.
NOTE 7 - SHAREHOLDERS' EQUITY
---------------------
Preferred Stock
- ---------------
The Company has authorized ten million (10,000,000) shares of preferred stock
with a par value of $.0001, none of which have been issued.
F-10
Common Stock
- ------------
The Company has authorized fifty million (50,000,000) shares of common stock
with a par value of $.0001.
Common Stock Subscribed and Issued for Cash
- -------------------------------------------
During December, 2002, the Company undertook an offering exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933 to raise
$16,000 in the issuance of 3,200,000 shares of common stock for the purpose of
the acquisition and exploration of mining properties. The Company's management
considers this offering to be exempt under the Securities Act of 1933. A
receivable for stock subscribed was recorded in the equity section of the
financial statements at December 31, 2002 for cash amounts that had not yet been
received by the Company. During the first quarter of 2003 the cash outstanding
from stock subscribed was received and the stock subscribed was converted by
memo to common stock and the stock certificates issued.
During March 2003, the Company undertook a Regulation D Rule 506 private
placement offering to raise $14,250 for the issuance of 57,000 shares of common
stock for the purpose of mineral exploration. The Company's management considers
this offering to be exempt under the Securities Act of 1933.
Common Stock Recorded as Compensation
- ----------------------------------------------
The Company does not have an employee stock compensation package set up at this
time. The stock compensation that has been granted falls under Rule 144.
Compliance with Rule 144 is discussed in the following paragraph.
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, would equal approximately 280,380 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.
F-11
The Company records stock issued for services and future services at the fair
value of the stock issued, if known, or the fair value of the services if the
fair value of the stock is not determined and no value is contemplated in the
contract. The stock is recorded as issued in the equity section of the financial
statements when a contract for services is entered into for stock compensation.
On November 8, 2002, the Company entered into a service agreement with Mr. David
Deering, the President of the Company, for a 12 month term which is renewable by
both parties after the twelve month term. The agreement called for the issuance
of twenty million (20,000,000) common shares of stock for the value of such
services, $85,000. The value of the shares was established by the fair value of
the services to be provided as a fair trading value of the stock had not been
established. The number of shares issued was based on the price the shares were
sold in the Company's first private placement with a 15% discount since such
shares were restricted in accordance with Rule 144 of the Securities Act of
1933. Due to the uncertainty of the Company's ability to continue as a going
concern, the amounts were recorded as an expense when the shares were issued.
On November 8, 2002, the Company entered into a service agreement with Mr. Brian
Bisset, a Director of the Company, for a 12 month term which is renewable by
both parties after the twelve month term. The agreement called for the issuance
of two million (2,000,000) common shares of stock for the value of such
services, $8,500. The value of the shares was established by the fair value of
the services to be provided as a fair trading value of the stock had not been
established. The number of shares issued was based on the price the shares were
sold in the Company's first private placement with a 15% discount since such
shares were restricted in accordance with Rule 144 of the Securities Act of
1933. Due to the uncertainty of the Company's ability to continue as a going
concern, the amounts were recorded as an expense when the shares were issued.
On November 8, 2002, the Company entered into a service agreement with Mr.
Andrew Norins, a Director of the Company, for a 12 month term which is renewable
by both parties after the twelve month term. The agreement called for the
issuance of two million (2,000,000) common shares of stock for the value of such
services, $8,500. The number of shares issued was based on the price the shares
were sold in the Company's first private placement with a 15% discount since
such shares were restricted in accordance with Rule 144 of the Securities Act of
1933. Due to the uncertainty of the Company's ability to continue as a going
concern, the amounts were recorded as an expense when the shares were issued.
The value of the shares was established by the fair value of the services to be
provided as a fair trading value of the stock had not been established.
NOTE 8 - ACQUISITIONS
------------
On November 21, 2002, the Company entered into an agreement with Mr. Garth
Barton for the purchase of mining property, the "Ritz Claim", located in the
Lillooet Lake Region of Southwest British Columbia, Canada. The "Ritz Claim" is
title to forty (40) mineral claim units that are unpatented. The total purchase
price of the claim is $33,500 due per terms of the contract with advance
royalties of $25,000 to be paid annually commencing 36 months from the date of
signature of the agreement. Failure to pay the advance royalties will cause a
reversion of the property within 10 days of such failure. The property is
subject to a 2 1/2% Net Smelter Royalty (NSR) and a 7 1/2% Gross Rock Royalty
(GRR). 1 1/2% of the NSR can be acquired for $1.0 million within 12 months from
the commencement of commercial production. Mr. Barton is required to keep the
claims in good standing for at least 18 months from the date of the agreement.
In addition, Mr. Barton will provide geological consulting services for the
claims and will maintain the claims in good standing for a period of 36 months
with fees advanced by the Company prior to the anniversary dates from signature
of the agreement. Said fees are to be deducted from the total cost.
F-12
On April 22, 2003, the Company acquired the outstanding common share (one common
share) of New Heights Capital Corporation, an inactive Canadian corporation, for
the purpose of recording the Company's Canadian "Ritz Claim" in a Canadian
corporation as required. The "Ritz Claim" was transferred to the subsidiary in
exchange for the subsidiary's outstanding common share of stock. New Heights
Capital Corporation is a wholly owned Canadian subsidiary of the Company.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
-------------------------------
The Company's "Ritz Claims" will revert back to the seller within no less than a
10 day period if the Company fails to make the $25,000 annual advance royalty
payments per the sales contract commencing 36 months from the date of the
contract.
Management is not aware of any contingent matters that could have a material
adverse effect on the Company's financial condition, results of operations, or
liquidity.
NOTE 10 - LITIGATION, CLAIMS AND ASSESSMENTS
----------------------------------
From time to time in the normal course of business the Company will be involved
in litigation. The Company's management has determined any asserted or
unasserted claims to be immaterial to the financial statements.
NOTE 11 - GOING CONCERN
-------------
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in the notes to the
financial statements, the Company has experienced losses from inception. The
Company's financial position and operating results raise substantial doubt about
its ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
F-13
Item 2. Management's Discussion and Analysis of Financial Conditions and Results
of Operations
- --------------------------------------------------------------------------------
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of our results of
operations and financial condition. The discussion should be read in conjunction
with our financial statements and notes thereto appearing in this prospectus.
The accompanying financial statements have been prepared assuming that we will
continue as a going concern. As discussed in the notes to the financial
statements, we have experienced losses from inception. Our financial position
and operating results raise substantial doubt about its ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
The following discussion and analysis contains forward-looking statements, which
involve risks and uncertainties. Our actual results may differ significantly
from the results, expectations and plans discussed in these forward-looking
statements.
The following discussion and analysis contains forward-looking statements, which
involve risks and uncertainties. Our actual results may differ significantly
from the results, expectations and plans discussed in these forward-looking
statements.
Overview
- --------
Since our inception, our operations have been devoted primarily to identifying,
purchasing and completing the initial exploration work on a mineral property. We
intend to grow through exploration and of the Lillooet Lake property and the
identification and acquisition of other properties with mineral exploration.
This property does not have any known reserves and our proposed program is
exploratory in nature. Because of uncertainties surrounding our exploration, we
anticipate incurring exploration stage losses in the foreseeable future. Our
ability to achieve our business objectives is contingent upon our success in
raising additional capital until adequate revenues are realized from operations.
We are an exploration stage company and there is no assurance that a
commercially viable mineral deposit exists on any of our property. The property
is without any known reserves and the proposed program is exploratory in nature
and therefore further exploration will be required before a final evaluation as
to the economic and legal feasibility is determined. Reserves are measurable
zones of minerals over a certain area and mineral deposits are reserves that can
be economically exploited.
Exploration stage expenses from inception through September 30, 2003 were
$33,500 general exploration costs related to the mineral rights of the
exploration property and $117,276 of general and administrative costs related
mainly to stock compensation for services of $102,000, bank charges, accounting
charges of $2,500, legal charges of $7,500 and office/web site costs for a total
expense of $150,776 as captioned in the financial statement's statement of
operations. Included in the exploration expense was $16,000 of cash paid on the
initial payment for the property and no money was spent on further evaluation of
the property. These fees were in furtherance of Phase I to purchase and evaluate
a property. Fees were incurred in the start-up costs of our company as well as
the fees to prepare our audited financial statements and this registration
statement These fees were included in the general and administrative expense as
discussed earlier in this paragraph.
Plan of Operation
- -----------------
We have completed phase one of a four step plan to evaluate our initial minerals
prospect for exploration. Even if we complete all four phases, all we can hope
to have accomplished is to be able to identify targets for further exploration
which will consist of trenching, drilling and feasibility studies which will be
the most expensive parts of the exploration process. Phase one consisted of
identifying an area with promising geological properties, purchasing the initial
60 units of the Ritz property, securing a geological report on the property and
completing the initial rock and silt samples on the prospect. We plan to
complete phase two and three during the next 12 months. If we get positive
results in phase two and three we will be required to seek additional capital as
recommended by the consultant's report. We will attempt to raise capital from
sale of our common stock, loans from investors, shareholders or management,
and/or joint venture partners. However, there are currently no negotiations or
arrangements for future financing at this point in time. Management will use its
best efforts to raise the additional funds to carry out the planned exploration
program but there is significant risk that we may not secure the necessary
funding. The following table details the remaining 3 steps to our initial
exploration of the Ritz property:
Phase II: Geological Traverses
Senior Geologist 3 day @ $300 per day $900.00
Filing Fee $300.00
1 Geo-technician 3 days at $150.00 $450.00
(a Geo-technician is a person trained in the
methods and procedures to collect geological,
geochemical and geophysical data under the
supervision of a qualified degree accredited
geologist)
Equipment Rental 4 wheel drive @ $50.00 per day $150.00
Assays 60 @ $10.00 each $600.00
Food, Fuel etc $200.00
Report $600.00
TOTAL $3,200.00
Phase III
Follow-up Geochemical sampling and detailed $5,000.00
geological mapping
TOTAL $5,000.00
Phase IV Airborne EM Survey
Airborne EM Survey 100 line kilometers @ $150 $15,000.00
per km
Follow-up geological surveys $25,000.00
TOTAL $40,000.00
If we are successful in completing the 3 additional steps of exploration,
management will access the results to determine the advisability of exploration
of the property. If management determines the results merit further exploration
the plan is to raise additional capital, and/or seek an industry partner to pay
the further costs of operations. There is no assurance we will be successful in
raising the funds or finding a joint venture partner in order to complete
further exploration. We could be forced to abandon the property of sell it for a
significant loss if we are unable to secure the necessary capital.
If mineralization if not found on the property or if we can not recover the
metals profitably, then we intend to pursue other properties for exploration.
The purchase and explorations of such properties will depend on our ability to
raise additional capital. If we are unable to raise additional capital, then we
may need to cease operations if there is no mineral found on the property or if
the metals can not be recovered profitably.
Capital Resources and Liquidity.
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As of March 31, 2004, we had approximately $54 in cash. The planned exploration
expenditures of phase two and three are estimated to cost $8,200 and an
additional $2,500 payment is due on the Lake Lillooet Property pursuant to the
Mineral Claims Agreement on May 15, 2004 which is 12 months from the title
registration on such claims. During the next 12 months our general and
administrative expenses are expected to average $200 per month for the next 12
months. We have no plans to pay salaries to our officers or employees during the
next 12 months. We do not believe we will have sufficient cash to meet our
minimum exploration, including phase two and phase three, and operating costs
for the next 12 months unless we are successful in raising additional capital.
In addition, we will need to raise additional capital to continue or operations
past 12 months, and there is no assurance we will be successful in raising the
needed capital.
Subsequent Event
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On April 8, 2004, Mr. David Deering, the Company's sole officer and a member of
the Board of Directors since its inception, tendered his resignation as a member
of the Board of Directors and as the sole officer of the Company. Mr. Deering
resigned his positions with the Company due to his inability to continue to
dedicate sufficient time to the Company's business operations due to personal
and other professional commitments. Concurrent with his resignation as an
officer and director of the Company, Mr. Deering returned 18,000,000 common
shares owned by him to treasury in consideration for the payment to him of
$20,000 by the Company. Mr. Graeme F. Scott was appointed to the positions of
President, Chief Executive Officer, Chief Financial Officer and as a member of
the Board of Directors of the Company. As consideration for his acceptance of
these positions, Mr. Deering transferred the additional 2,000,000 common shares
held by him to Mr. Scott. Upon cancellation of the 18,000,000 shares, the total
issued and outstanding common of the Company will be reduced to 9,257,000 common
shares.
On April 23, 2004, Mr. Brian Bisset, one of Company's member of the Board
of Directors since its inception, tendered his resignation as a member of
the Board of Directors of the Company. Mr. Bisset resigned his positions
with the Company due to personal and other professional commitments and
was not due to a disagreement with the Company on any matter relating to
the Company's operations, policies or practices. On the same date Mr.
Victor L. Perkell was appointed as a member of the Board of Directors of
the Company. Concurrent with his resignation as a director of the
Company, Mr. Bisset transferred 2,000,000 common shares owned by him to
Mr. Graeme F. Scott, the Company's President, Chief Executive Officer,
Chief Financial Officer and member of the Board of Directors of the
Company, in consideration for the payment to him of $2,000 by Mr. Scott.
Mr. Andrew Norins, the other member of the Company's Board of Directors
also transferred 2,000,000 common shares in the Capital of the Company,
owned by him to Mr. Graeme F. Scott in consideration for payment to him
of $2,000. Upon the transfer to Mr. Graeme F. Scott of Mr. Bisset's
2,000,000 and Mr. Norins' 2,000,000 common shares, the total issued and
outstanding common shares in the capital stock of the Company will remain
at 9,257,000 common shares.
The Company will continue its work program on the company's Lillooet Lake
property and in the identification and acquisition of other properties
with mineral exploration potential.
Item 3. Controls and Procedures
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(a) Evaluation of disclosure controls and procedures.
Our Chief Executive Officer and Chief Financial Officer (collectively the
"Certifying Officers") maintain a system of disclosure controls and procedures
that is designed to provide reasonable assurance that information, which is
required to be disclosed, is accumulated and communicated to management timely.
Under the supervision and with the participation of management, the Certifying
Officers evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule [13a-14(c)/15d-14(c)]
under the Exchange Act) within 90 days prior to the filing date of this report.
Based upon that evaluation, the Certifying Officers concluded that our
disclosure controls and procedures are effective in timely alerting them to
material information relative to our company required to be disclosed in our
periodic filings with the SEC.
(b) Changes in internal controls.
Our Certifying Officer has indicated that there were no significant changes in
our internal controls or other factors that could significantly affect such
controls subsequent to the date of his evaluation, and there were no such
control actions with regard to significant deficiencies and material weaknesses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
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
Item 6. Exhibits and Reports of Form 8-K.
(a) Exhibits
31.1 Certification of Certifying Officer
32.1 Certification of Certifying Officer
(b) Reports of Form 8-K
On April 13, 2004, the Company filed an 8K based on a change in
control of the Company.
On April 31, 2004, the Company filed an 8K based on a resignation of a
member of the Board of Directors and the appointment of a new member
of the Board of Directors.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TWIN VENTURES LTD.
Date: May 14, 2004 /s/ Grame F. Scott
--------------------------------
Grame F. Scott
President, Chief Executive Officer and
Chief Financial Officer