UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2/A
(Amendment No. 2)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
RAZOR RESOURCES INC.
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(Name of small business issuer in its charter)
NEVADA 1000 Applied For
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(State or (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
Razor Resources Inc.
Bing Wong, President/Director
PO BOX 27581, 650 41st Ave West
Vancouver, British Columbia
Canada V5Z 4M4
Telephone: (604) 267-0111
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(Address and telephone number of principal executive offices)
Incorp Sevices Inc.
3155 East Patrick Lane, Suite 1
Las Vegas, Nevada, 89120
Telephone: (702) 866-2500
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(Name, address and telephone number of agent for service)
Approximate date of
proposed sale to the public: as soon as practicable after
the effective date of this
Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. | X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |__|
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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. |__|
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES DOLLAR OFFERING AGGREGATE AMOUNT OF
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE (1) PRICE (2) FEE (2)
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Common Stock $536,300 $0.10 $536,300 $67.95
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(1) Arbitrarily determined by Razor Resources Inc. Board of Directors.
(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 September 22, 2005
PROSPECTUS
RAZOR RESOURCES INC.
5,363,000 SHARES
COMMON STOCK
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The selling shareholders named in this prospectus are offering all of the shares
of common stock offered through this prospectus.
Our common stock is presently not traded on any market or securities exchange.
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The purchase of the securities offered through this prospectus involves a high
degree of risk. SEE SECTION ENTITLED "RISK FACTORS" ON PAGES 6-10
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The selling shareholders will sell our shares at $0.10 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
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The Date of This Prospectus Is: September 22, 2005
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Summary......................................................................................................................8
The Offering:.............................................................................................................9
Summary Financial Information............................................................................................10
Statement of Loss and Deficit............................................................................................10
Risk Factors................................................................................................................10
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.........................................................10
BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF BUSINESS FAILURE...............................11
BECAUSE OF THE SPECULATIVE NATURE OF EXPLORATION OF MINING PROPERTIES, THERE IS A SUBSTANTIAL RISK THAT OUR
BUSINESS WILL FAIL....................................................................... ...............................12
WE NEED TO CONTINUE AS A GOING CONCERN IF OUR BUSINESS IS TO SUCCEED. OUR INDEPENDENT AUDITOR HAS RAISED
DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN...................................................................12
BECAUSE OF THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION, THERE IS A RISK THAT WE MAY INCUR LIABILITY
OR DAMAGES AS WE CONDUCT OUR BUSINESS....................................................................................13
EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON THE MAHATTA PROPERTY, WE MAY NOT BE ABLE TO
SUCCESSFULLY COMMENCE COMMERCIAL PRODUCTION..............................................................................13
THE MINING AND EXPLORATION INDUSTRY IS HIGHLY COMPETITIVE WITH MANY LARGE AND WELL CAPITALIZED FIRMS.....................13
IF WE BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATION OR OTHER LEGAL UNCERTAINTIES, OUR BUSINESS WILL BE
NEGATIVELY AFFECTED......................................................................................................13
BECAUSE OUR DIRECTORS OWN 65.26% OF OUR OUTSTANDING COMMON STOCK, THEY COULD MAKE AND CONTROL CORPORATE
DECISIONS THAT MAY BE DISADVANTAGEOUS TO OTHER MINORITY SHAREHOLDERS.....................................................14
BECAUSE OUR PRESIDENT HAS OTHER BUSINESS INTERESTS, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT
AMOUNT OF TIME TO OUR BUSINESS OPERATIONS, CAUSING OUR BUSINESS TO FAIL..................................................14
IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, SHAREHOLDERS MAY BE UNABLE TO SELL THEIR SHARES.......................15
BECAUSE WE DO NOT INTEND TO PAY ANY DIVIDENDS ON OUR COMMON SHARES, INVESTORS SEEKING DIVIDEND INCOME OR
LIQUIDITY SHOULD NOT PURCHASE SHARES IN THIS OFFERING....................................................................15
SALES OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK INTO THE PUBLIC MARKET BY THE SELLING STOCKHOLDERS
MAY RESULT IN SIGNIFICANT DOWNWARD PRESSURE ON THE PRICE OF OUR COMMON STOCK AND COULD AFFECT THE ABILITY OF
OUR STOCKHOLDERS TO REALIZE ANY CURRENT TRADING PRICE OF OUR COMMON STOCK................................................15
A PURCHASER IS PURCHASING PENNY STOCK WHICH LIMITS HIS OR HER ABILITY TO SELL THE STOCK..................................16
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Forward-Looking Statements..................................................................................................16
Use Of Proceeds.............................................................................................................17
Determination Of Offering Price.............................................................................................17
Dilution....................................................................................................................17
Selling Securityholders.....................................................................................................17
Plan Of Distribution........................................................................................................21
Legal Proceedings...........................................................................................................24
Directors, Executive Officers, Promoters And Control Persons................................................................24
Directors:..................................................................................................................24
Biographical Information....................................................................................................24
Term of Office..............................................................................................................25
Significant Employees.......................................................................................................25
Security Ownership Of Certain Beneficial Owners And Management..............................................................25
Description Of Securities...................................................................................................26
Common Stock................................................................................................................26
Preferred Stock.............................................................................................................26
Dividend Policy.............................................................................................................26
Share Purchase Warrants.....................................................................................................26
Options.....................................................................................................................27
Convertible Securities......................................................................................................27
Interests Of Named Experts And Counsel......................................................................................27
Disclosure Of Commission Position Of Indemnification For Securities Act Liabilities.........................................27
Organization Within Last Five Years.........................................................................................28
Description Of Business.....................................................................................................28
Glossary and Terms..........................................................................................................30
Description, Location and Access............................................................................................31
Mahatta Claim Mineral Property Acquisition Agreement........................................................................33
Infrastructure and Condition of the Property................................................................................33
Mineralization..............................................................................................................33
Property Geology............................................................................................................34
Exploration History.........................................................................................................35
Regional Geophysics and Geochemistry........................................................................................35
Geological Assessment Report: Mahatta Property..............................................................................36
Conclusions.................................................................................................................36
Proposed Budget.............................................................................................................37
Compliance with Government Regulation.......................................................................................38
Employees...................................................................................................................39
Research and Development Expenditures.......................................................................................39
Subsidiaries................................................................................................................39
Patents and Trademarks......................................................................................................39
Reports to Security Holders.................................................................................................39
Plan Of Operations..........................................................................................................40
Description Of Property.....................................................................................................43
Certain Relationships And Related Transactions..............................................................................43
Market For Common Equity And Related Stockholder Matters....................................................................43
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No Public Market for Common Stock........................................................................................43
Stockholders of Our Common Shares........................................................................................44
Rule 144 Shares..........................................................................................................44
Registration Rights......................................................................................................44
Dividends................................................................................................................44
Executive Compensation......................................................................................................45
Summary Compensation Table...............................................................................................45
Stock Option Grants......................................................................................................45
Consulting Agreements....................................................................................................45
Financial Statements........................................................................................................45
Index to Financial Statements:...........................................................................................45
Razor Resources Balance Sheet for the Fiscal Years ended April 30, 2005 to 2002..........................................48
Razor Resources Statement of Operations for the Fiscal Years ended April 30, 2005 to 2002................................49
Razor Resources Statement of Cash Flow for the Fiscal Years ended April 30, 2005 to 2002.................................50
Razor Resources Statement of Stockholder's Equity for the Fiscal Years Ended April 30, 2005 to 2002......................51
Razor Resources Statement of Retained Earnings (Deficit) for the Fiscal Years Ended April 30, 2005 to 2002...............52
Razor Resources Notes to Financial Statement for the Fiscal Year Ended April 30, 2005....................................53
Note 1. ORGANIZATION AND NATURE OF BUSINESS..........................................................................53
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES...................................................................53
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)..........................................................54
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)..........................................................55
Note 3. INCOME TAXES.................................................................................................55
Note 3. INCOME TAXES (cont'd)........................................................................................56
Note 4. FINANCIAL INSTRUMENTS........................................................................................56
Note 7. PENSION AND EMPLOYMENT LIABILITIES...........................................................................56
Note 8. PURCHASE AND SALE AGREEMENT..................................................................................56
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.....................................58
Part II: Information Not Required In The Prospectus.........................................................................66
Indemnification Of Directors And Officers................................................................................66
Other Expenses Of Issuance And Distribution..............................................................................67
Recent Sales of Unregistered Securities..................................................................................67
Regulation S Compliance...............................................................................................69
Exhibits....................................................................................................................70
Signatures..................................................................................................................71
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Summary
Prospective investors are urged to read this prospectus in its entirety.
Razor Resources Inc. ("Razor") intends to be in the business of mineral property
exploration. Razor is an exploration stage company engaged in the acquisition of
mineral claims and exploration of our mineral property. To date, we have not
conducted any exploration on our sole mineral property asset known as the
Mahatta property located southwest of Port Alice, British Columbia on Vancouver
Island. On April 11, 2005, Razor acquired outright, a 100% interest in the
property for a purchase price of $250 consisting of the issuance of 250,000
shares of Razor common stock at a deemed issuance price of $0.001 (based upon
the par value of our common stock). Activities to date have consisted solely of
the staking of mining claims. We have not yet developed our mining property into
a producing mine, nor have we earned revenue from our sole property. Our
property does not contain a known commercially viable deposit suitable for
mining. There is no assurance that any commercially viable mineral deposits
exist on our property. Exploration will be required before a final evaluation as
to the economic feasibility is determined. Our plan of operations is to conduct
mineral exploration activities on the Mahatta mineral claim in order to assess
whether this claim possess commercially viable mineral deposits. Our exploration
program is designed to explore for economically viable mineral deposits,
specifically gold and/or copper.
We have had net losses for each of the years ended April 30, 2002 and 2003,
2004, and 2005, and we had an accumulated deficit as of July 31, 2005. Since the
financial statements for each of these periods were prepared assuming that we
would continue as a going concern, in the view of our independent auditors,
these conditions raise substantial doubt about our ability to continue as a
going concern. Furthermore, since we do not expect to generate any significant
revenues for the foreseeable future, our ability to continue as a going concern
depends, in large part, on our ability to raise additional capital through
equity or debt financing transactions. If we are unable to raise additional
capital, we may be forced to discontinue our business.
Even if the Company is able to raise the funds required to continue operations,
exploration for minerals is a speculative venture necessarily involving
substantial risk. In all probability, the Mahatta property does not contain any
reserves and funds that we spend on exploration will be lost. As well, problems
such as unusual or unexpected formations and other conditions are involved in
mineral exploration and often result in unsuccessful exploration efforts. In
such a case, we would be unable to complete our business plan.
We will not be raising any funds through this offering. The selling shareholders
named in this prospectus are offering all of the shares of common stock offered
through this prospectus. All of the 5,363,000 shares of our common stock
available for resale through this offering were acquired from Razor by our
selling shareholders through various private placements that were exempt from
registration under Regulation S of the Securities Act of 1933. Please refer to
the "Selling Securityholders" section for more details regarding the specific
transactions.
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Our directors and officers are registering for resale all of their shareholdings
in Razor through this offering. The table below quantifies the number of shares
and acquisition prices for each of the officers and directors:
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Security Holdings for Officers, Directors and Beneficial Holders
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Price/ Shares Total Number
Share Shares Owned
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Bing Wong 0.001 2,500,000 2,500,000
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0.001 500,000
0.100 1,000
Rong Xin Yang 501,000
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Drew Simpson 0.001 500,000 500,000
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0.100 21,000
0.001 250,000
Raymond Wei Ming Xu 271,000
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We were incorporated on February 26, 2002 under the laws of the state of Nevada.
Our principal offices are located at PO BOX 27581, 650 - 41st Avenue West,
Vancouver, British Columbia, Canada V5Z 4M4. Our telephone number is
(604)267-0111.
The Offering:
Securities Being Offered Up to 5,363,000 shares of common stock.
Offering Price The selling shareholders will sell our shares at
$0.10 per share until our shares are quoted on the
OTC Bulletin Board, and thereafter at prevailing
market prices or privately negotiated prices. We
determined this offering price based upon the price
of the last sale of our common stock to investors.
Terms of the Offering The selling shareholders will determine when and how
they will sell the common stock offered in this
prospectus.
Termination of the Offering The offering will conclude when all of the 5,363,000
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 5,363,000 shares of our common stock are issued and
And to be Issued 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.
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Use of Proceeds We will not receive any proceeds from the sale of
the common stock by the selling shareholders.
Summary Financial Information
July 31, 2005
(Unaudited)
Cash $14,188
Total Assets $17,188
Liabilities $ 1,400
Total Stockholders' Equity $17,188
Statement of Loss and Deficit
From Incorporation on
February 26, 2002 to July 31, 2005
(Unaudited)
Revenue $ 0
Net Loss and Deficit ($25,512)
Risk Factors
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock could decline due to any
of these risks, and you may lose all or part of your investment.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
Our current operating funds are less than necessary to complete all intended
exploration of the Mahatta property, 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 Mahatta property. We do not have sufficient funds to cover
anticipated administrative and costs and conduct the phase one, two and three
exploration programs on the property with an estimated budget of $5,000, $5,000
and $15,000 respectively. Upon completion of our three phase exploration
program, we will require additional financing in order to determine whether the
property contains economic mineralization and to cover our anticipated
administrative costs. We will also require additional financing if the costs of
the exploration of the Mahatta property are greater than anticipated. Even after
completing all proposed exploration, we will not know if we have a commercially
viable mineral deposit.
We will require additional financing to sustain our business operations if we
are not successful in earning revenues once exploration is complete. We do not
currently have any arrangements for financing and may not be able to find such
financing if required. Obtaining additional financing would be subject to a
number of factors, including the market price for gold and investor acceptance
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of our property and general market conditions. These factors may make the
timing, amount, terms or conditions of additional financing unavailable to us.
The most likely source of future funds presently available to us is through the
sale of equity capital. Any sale of share capital will result in dilution to
existing shareholders. The only other anticipated alternative for the financing
of further exploration would be our sale of a partial interest in the Mahatta
property to a third party in exchange for cash or exploration expenditures,
which is not presently contemplated.
WE LACK AN OPERATING HISTORY AND HAVE LOSSES WHICH WE EXPECT TO CONTINUE INTO
THE FUTURE. AS A RESULT, WE MAY HAVE TO SUSPEND OR CEASE OPERATIONS.
We were incorporated on February 26, 2002, and we have not started our proposed
business operations or realized any revenues. We have no operating history upon
which an evaluation of our future success or failure can be made. Our net loss
since inception is $25,512, as of July 31, 2005. Our cash on hand as of July 31,
2005 (our most recent interim accounting period) is $14,188.00.
Based upon current plans, we expect to incur operating losses in future periods.
This will happen because there are expenses associated with the research and
exploration of our mineral properties. As a result, we may not generate revenues
in the future. Failure to generate revenues will cause us to suspend or cease
operations.
BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF
BUSINESS FAILURE.
We have not yet commenced exploration on the Mahatta property. Accordingly, we
have no way to evaluate the likelihood that our business will be successful. We
were incorporated on February 26, 2002 and to date have been involved primarily
in organizational activities and the acquisition of our mineral property. We
have not earned any revenues as of the date of this prospectus. Potential
investors should be aware of the difficulties normally encountered by new
mineral exploration companies and the high rate of failure of such enterprises.
The likelihood of success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
exploration of the mineral properties that we plan to undertake. These potential
problems include, but are not limited to, unanticipated problems relating to
exploration, and additional costs and expenses that may exceed current
estimates.
Prior to completion of our exploration stage, we anticipate that we will incur
increased operating expenses without realizing any revenues. We therefore expect
to incur significant losses into the foreseeable future. We recognize that if we
are unable to generate significant revenues from development of the Mahatta
property and the production of minerals from the claims, we will not be able to
earn profits or continue operations.
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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 claims containing economic mineralization or reserves
is extremely remote. Exploration for minerals is a speculative venture
necessarily involving substantial risk. In all probability, the Mahatta property
does not contain any reserves and funds that we spend on exploration will be
lost. As well, problems such as unusual or unexpected formations and other
conditions are involved in mineral exploration and often result in unsuccessful
exploration efforts. In such a case, we would be unable to complete our business
plan.
WE NEED TO CONTINUE AS A GOING CONCERN IF OUR BUSINESS IS TO SUCCEED. OUR
INDEPENDENT AUDITOR HAS RAISED DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING
CONCERN.
The independent accountant's report to our audited financial statements for the
period ended April 30, 2005 indicates that since we have incurred losses since
our inception and we are dependant upon adequate financing to fulfill our
exploration activities, there is substantial doubt about our ability to continue
as a going concern. Our ability to continue as a going concern depends upon our
ability to generate profitable operations and obtain the necessary financing to
meet our obligations and repay our liabilities. If we are not able to continue
as a going concern, it is likely investors will lose all of their investment.
OUR MANAGEMENT DOES NOT HAVE ANY TECHNICAL TRAINING IN THE FIELD OF MINERAL
EXPLORATION AND IS INEXPERIENCED IN EXPLORATION, AS WELL AS STARTING AND
OPERATING A MINE. CONSEQUENTLY, OUR OPERATIONS, EARNINGS AND ULTIMATE FINANCIAL
SUCCESS COULD SUFFER IRREPARABLE HARM.
Due to the lack of direct training and experience in these areas, our management
may not be fully aware of many of the specific requirements related to working
within the mining industry. In addition, we will also have to rely on the
expertise and services of qualified personnel for the surveying, exploration,
and excavation of our mineral claims. If we are unable to contract such services
at reasonable costs, we may have to suspend or cease operations. Decisions and
choices made by our management due to their inexperience in this industry may
not take into account standard engineering or managerial approaches that mineral
exploration companies commonly use. Consequently, our operations, earnings and
ultimate financial success could suffer irreparable harm.
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BECAUSE OF THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION, THERE IS A RISK
THAT WE MAY INCUR LIABILITY OR DAMAGES AS WE CONDUCT OUR BUSINESS.
The search for valuable minerals involves numerous hazards. As a result, we may
become subject to liability for such hazards, including pollution, cave-ins and
other hazards against which we cannot insure or against which we may elect not
to insure. The payment of such liabilities may have a material adverse effect on
our financial position. While insurance policies could reduce the possibility of
an incident resulting in Razor having to cease operations, Razor's limited
financial resources could mean that the payment of such insurance premiums would
reduce the funds available for exploration activities. In order to preserve
limited capital, Razor does not currently have any insurance policies to cover
these potential liabilities.
BECAUSE WE HAVE NOT ALLOCATED ANY MONEY FOR RECLAMATION OF THE MINING CLAIM, WE
MAY BE SUBJECT TO FINES IF THE MINING CLAIM IS NOT RESTORED TO ITS ORIGINAL
CONDITION UPON TERMINATION OF OUR ACTIVITIES.
We have not allocated any funds for reclamation of the mining claim. As such, if
we terminate our operations and do not restore the mining claim to its original
condition we could be subject to fines under the Health, Safety and Reclamation
Code for Mines in British Columbia.
EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON THE MAHATTA
PROPERTY, WE MAY NOT BE ABLE TO SUCCESSFULLY COMMENCE COMMERCIAL PRODUCTION.
The Mahatta property does not contain any known bodies of mineralization. If our
exploration programs are successful in establishing gold of commercial tonnage
and grade, we will require additional funds in order to place the property into
commercial production. We may not be able to obtain such financing.
THE MINING AND EXPLORATION INDUSTRY IS HIGHLY COMPETITIVE WITH MANY LARGE AND
WELL CAPITALIZED FIRMS.
We believe that most of our competitors have greater resources than us. We
expect to compete with many mining and exploration companies for qualified
geological and environmental experts to assist us in our exploration of mining
prospects, as well as any other consultants, employees and equipment that we may
require in order to conduct our operations. We cannot give any assurances that
we will be able to compete without adequate financial resources.
BECAUSE WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MAY HAVE TO LIMIT OUR
EXPLORATION ACTIVITY WHICH MAY RESULT IN A LOSE OF YOUR INVESTMENT.
Because we are small and do not have much capital, we must limit our exploration
activity. As such we may not be able to complete an exploration program that is
as thorough as we would like. In that event, an existing ore body may go
undiscovered. Without an ore body, we cannot generate revenues and you will lose
your investment.
IF WE BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATION OR OTHER LEGAL
UNCERTAINTIES, OUR BUSINESS WILL BE NEGATIVELY AFFECTED.
There are several governmental regulations that materially restrict mineral
property exploration and development. Under Canadian mining law, to engage in
certain types of exploration will require work permits, the posting of bonds,
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and the performance of remediation work for any physical disturbance to the
land. While these current laws will not affect our current exploration plans, if
we proceed to commence drilling operations on the Mahatta property, we will
incur modest regulatory compliance costs.
In addition, the legal and regulatory environment that pertains to the
exploration of ore is uncertain and may change. Uncertainty and new regulations
could increase our costs of doing business and prevent us from exploring for ore
deposits. The growth of demand for ore may also be significantly slowed. This
could delay growth in potential demand for and limit our ability to generate
revenues. In addition to new laws and regulations being adopted, existing laws
may be applied to mining that have not as yet been applied. These new laws may
increase our cost of doing business with the result that our financial condition
and operating results may be harmed.
BECAUSE OUR DIRECTORS OWN 65.26% OF OUR OUTSTANDING COMMON STOCK, THEY COULD
MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO OTHER
MINORITY SHAREHOLDERS.
Our directors own approximately 65.26% of the outstanding shares of our common
stock. Individual director stockholding and percentage ownership of outstanding
common shares is as follows: 1)Bing Wong - 2,500,000 shares representing 46.62%,
2)Rong Xin Yang 501,000 shares representing 9.32%, and 3)Drew Simpson 500,000
shares representing 9.32%. Accordingly, they will have a significant influence
in determining the outcome of all corporate transactions or other matters,
including mergers, consolidations, and the sale of all or substantially all of
our assets. They will also have the power to prevent or cause a change in
control. The interests of our directors may differ from the interests of the
other stockholders and thus result in corporate decisions that are
disadvantageous to other shareholders.
BECAUSE OUR PRESIDENT AND SECRETARY RONG XIN YANG 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. Bing Wong spends approximately 16 hours per week or 40% of
his business time providing his services to us. Mr. Rong Xin Yang spends
approximately 8 hours per week or 20% of his time providing his services to us.
While our officers presently possesses adequate time to attend to our interests,
it is possible that the demands on them from other obligations could increase
with the result that they would no longer be able to devote sufficient time to
the management of our business.
BECAUSE WE HAVE LIMITED CAPITAL AND FINANCIAL RESOURCES, WE DO NOT HAVE ANY FULL
TIME ACCOUNTING STAFF OR FINANCIAL CONTROLLERS. CONSEQUENTLY, OUR OPERATIONS,
EARNINGS AND ULTIMATE FINANCIAL SUCCESS COULD SUFFER IRREPARABLE HARM.
We do not have plans to hire any full time accounting staff until the company's
capitalization and operations warrants the increased costs. The Company's
successful operations will be highly reliant on the expertise and services of
qualified personnel for the handling of all internal financial matters. If our
14
officers and directors are not able to handle these responsibilities until such
time as we are able to contract such services at reasonable costs, we may have
to suspend or cease operations.
BECAUSE WE DO NOT HAVE ANY WRITTEN AGREEMENTS WITH OUR OFFICERS AND DIRECTORS,
THERE CAN BE NO ASSURANCE THAT THE COMPANY WILL BE ABLE TO RETAIN THERE SERVICES
GOING FORWARD, CAUSING OUR BUSINESS TO FAIL.
We are dependant upon our officers and directors for their continued services,
but we do not have any written agreements with any of our employees.
IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, SHAREHOLDERS MAY BE UNABLE TO
SELL THEIR SHARES.
There is currently no market for our common stock and no certainty that a market
will develop. We currently plan to apply for listing of our common stock on the
over the counter bulletin board upon the effectiveness of the registration
statement, of which this prospectus forms a part. Our shares may never be quoted
on the over the counter bulletin board (OTCBB). We may also encounter
difficulties in finding a market maker to handle our common stock. 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.
BECAUSE WE DO NOT INTEND TO PAY ANY DIVIDENDS ON OUR COMMON SHARES, INVESTORS
SEEKING DIVIDEND INCOME OR LIQUIDITY SHOULD NOT PURCHASE SHARES IN THIS
OFFERING.
We do not currently anticipate declaring and paying dividends to our
shareholders in the near future. It is our current intention to apply net
earnings, if any, in the foreseeable future to increasing our working capital.
Prospective investors seeking or needing dividend income or liquidity should,
therefore, not purchase our common stock. We currently have no revenues and a
history of losses, so there can be no assurance that we will ever have
sufficient earnings to declare and pay dividends to the holders of our shares,
and in any event, a decision to declare and pay dividends is at the sole
discretion of our board of directors, who currently do not intend to pay any
dividends on our common shares for the foreseeable future.
SALES OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK INTO THE PUBLIC
MARKET BY THE SELLING STOCKHOLDERS MAY RESULT IN SIGNIFICANT DOWNWARD PRESSURE
ON THE PRICE OF OUR COMMON STOCK AND COULD AFFECT THE ABILITY OF OUR
STOCKHOLDERS TO REALIZE ANY CURRENT TRADING PRICE OF OUR COMMON STOCK.
Sales of a substantial number of shares of our common stock in the public market
could cause a reduction in the market price of our common stock, when and if
such market develops. When this registration statement is declared effective,
the selling stockholders may be reselling up to 100.0% of the issued and
outstanding shares of our common stock. As a result of such registration
statement, a substantial number of our shares of common stock which have been
issued may be available for immediate resale when and if a market develops for
15
our common stock, which could have an adverse effect on the price of our common
stock. As a result of any such decreases in price of our common stock,
purchasers who acquire shares from the selling stockholders may lose some or all
of their investment.
Any significant downward pressure on the price of our common stock as the
selling stockholders sell the shares of our common stock could encourage short
sales by the selling stockholders or others. Any such short sales could place
further downward pressure on the price of our common stock.
UPON COMPLETION OF THIS OFFERING, OUR DIRECTORS AND OFFICERS MAY SELL ALL OF THE
SHARES THAT THEY COLLECTIVELY OWN. THIS POSES A SIGNIFICANT POTENTIAL CONFLICT
OF INTEREST RISK TO THE NEW SHAREHOLDERS, ACQUIRING SHAREHOLDING IN RAZOR
THROUGH THIS OFFERING.
If the directors and officers dispose of their entire collective shareholdings
in the Company, they may not have similarily aligned interests as the new
investors whom acquired their shares through this offering.
OUR DIRECTORS AND OFFICERS ACQUIRED THEIR SHAREHOLDINGS AT SIGNIFICANTLY LOWER
SHARE PRICES THAN THE SHARE PRICE OF THIS OFFERING.
If the directors and officers sell all of their shareholdings, they will no
longer be exposed to the risk of a loss of investment as will the new
shareholders whom acquired shares through this offering. If the business were to
fail subsequent to the officers and directors having disposed of all of their
shareholdings, then it would be the new shareholders that would suffer the
financial losses. Our directors and officers acquired all of their shares at
$0.001/share. With the exception of Rong Xin Yang, who acquired 1000 of his
501,000 shares at $0.10/share.
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
Securities and Exchange Act of 1934, and its rules. 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. As a result, fewer broker/dealers are willing to make a market in
our stock.
Please refer to the "Plan of Distribution" section for a more detailed
discussion of penny stock and related broker-dealer restrictions.
Forward-Looking Statements
This prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
16
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. The price of the shares of this offering
was arbitrarily determined. There is no relationship whatsoever between this
price and our assets, earnings, book value or any other objective criteria of
value.
The factors considered in determining the selling price were:
- the lack of a quotation for our shares on any market
- our lack of operating history and lack of earnings
- our existing limited cash resources
The lack of a quotation on any market, our lack of operating history and
earnings, and our limited cash resources lead us to arbitrarily determine the
price of the shares we are offering at $0.10/share.
The most recent sale to Raymond Wei Ming was a transfer of shares done at a
deemed value of the par value of our common stock at $0.001/share.
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 securityholders named in this prospectus are offering all of the
5,363,000 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. 3,500,000 shares of our common stock that the selling shareholders
acquired from us in an offering that was exempt from registration under
Regulation S of the Securities Act of 1933 and was completed on March
28, 2002; and
2. 1,250,000 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 May 28,
2002; and
3. 363,000 shares of our common stock that the selling shareholders
acquired from us in an offering that was exempt from registration under
17
Regulation S of the Securities Act of 1933 and was completed on March
15, 2005.
4. 250,000 shares of our common stock that the selling shareholder
acquired from us in an offering that was exempt from registration under
Regulation S of the Securities Act of 1933 and was completed on April
11, 2005.
Our officers and directors, namely Bing Wong, Rong Xin Yang, and Drew Simpson
will be conducting their offering of shares at the fixed price of $0.10/share
for the duration of the offering and are underwriters of the offering.
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.
- ---------------------------------------------------------------------------------------------------------------------------
Name of Selling Stockholder Price Per Shares Owned Total Shares to be Total Shares Owned Percent Owned
Share Prior to this Offered for Upon Completion of Upon
Offering Selling this Offering Completion of
Shareholders this Offering
Account
- ---------------------------------------------------------------------------------------------------------------------------
Bing Wong 0.001 2,500,000 2,500,000 0 0
11940 Old Yale Rd.
Surrey, BC
V3V 3X3
- ---------------------------------------------------------------------------------------------------------------------------
Rong Xin Yang 0.001 500,000 500,000 0 0
3375 Napier St.
Vancouver, BC
V5K 2X4
- ---------------------------------------------------------------------------------------------------------------------------
Drew Simpson 0.001 500,000 500,000 0 0
4859 Prince Edward St.
Vancouver, BC
- ---------------------------------------------------------------------------------------------------------------------------
Steve Zivin 0.001 250,000 250,000 0 0
6238 172nd St.
Surrey, BC
V3S 5W2
- ---------------------------------------------------------------------------------------------------------------------------
Korri Lymme Parrott 0.001 250,000 250,000 0 0
6238 172nd St.
Surrey, BC
V3S 5W2
- ---------------------------------------------------------------------------------------------------------------------------
Randy White 0.001 250,000 250,000 0 0
3287 Highland Blvd.
North Van. BC
V7R 2X7
- ---------------------------------------------------------------------------------------------------------------------------
Richard Xiao 0.001 250,000 250,000 0 0
849 E.38th Ave.
Vancouver, BC
V5W 1J2
- ---------------------------------------------------------------------------------------------------------------------------
18
- ---------------------------------------------------------------------------------------------------------------------------
Name of Selling Stockholder Price Per Shares Owned Total Shares to be Total Shares Owned Percent Owned
Share Prior to this Offered for Upon Completion of Upon
Offering Selling this Offering Completion of
Shareholders this Offering
Account
- ---------------------------------------------------------------------------------------------------------------------------
Josh Easton 0.001 250,000 250,000 0 0
Suite 408-1950 Robson
Vancouver,BC
- ---------------------------------------------------------------------------------------------------------------------------
Chun Yan Wang 0.1 1,000 1,000 0 0
849 E.38th Ave.
Vancouver, BC
V5W 1J2
- ---------------------------------------------------------------------------------------------------------------------------
Zhen Liang Wang 0.1 1,000 1,000 0 0
220 E.55th Ave.
Vancouver, BC
V5X 1M9
- ---------------------------------------------------------------------------------------------------------------------------
Feng Xiao Lou 0.1 1,000 1,000 0 0
220 E.55th Ave.
Vancouver, BC
V5X 1M9
- ---------------------------------------------------------------------------------------------------------------------------
Xiao Zhou 0.1 1,000 1,000 0 0
5379 Wales
Vancouver, BC
V5R 3M7
- ---------------------------------------------------------------------------------------------------------------------------
Istvan Szekely 0.1 1,000 1,000 0 0
12328 Industrial Road
Surrey, BC
V3V 3S3
- ---------------------------------------------------------------------------------------------------------------------------
Pei Hua Wong 0.1 1,000 1,000 0 0
301-9130 Capella Drive
Burnaby, BC
V3J 7K3
- ---------------------------------------------------------------------------------------------------------------------------
Angie Hu 0.1 1,000 1,000 0 0
780-5900 No. 3 Rd.
Richmond, BC
V6X 3P7
- ---------------------------------------------------------------------------------------------------------------------------
Teddy San Mah 0.1 21,000 21,000 0 0
311 E. 46th Ave.
Vancouver, BC
V5W 1Z7
- ---------------------------------------------------------------------------------------------------------------------------
Fay Ming Wong 0.1 21,000 21,000 0 0
305-2533 Penticton St.
Vancouver, BC
V5M 4T8
- ---------------------------------------------------------------------------------------------------------------------------
James Lam 0.1 21,000 21,000 0 0
123 W.43rd St.
Vancouver, BC
- ---------------------------------------------------------------------------------------------------------------------------
Richard Wong 0.1 21,000 21,000 0 0
6521 Bonsor Ave. Appt 2303
Burnaby, BC
V5H 4N3
- ---------------------------------------------------------------------------------------------------------------------------
19
- ---------------------------------------------------------------------------------------------------------------------------
Name of Selling Stockholder Price Per Shares Owned Total Shares to be Total Shares Owned Percent Owned
Share Prior to this Offered for Upon Completion of Upon
Offering Selling this Offering Completion of
Shareholders this Offering
Account
- ---------------------------------------------------------------------------------------------------------------------------
Cid Ney Chong Wong 0.1 21,000 21,000 0 0
301-9130 Capella Dr.
Burnaby, BC
V3J 7K3
- ---------------------------------------------------------------------------------------------------------------------------
Manny O Wong 0.1 21,000 21,000 0 0
3698 Napier St.
Vancouver, BC
- ---------------------------------------------------------------------------------------------------------------------------
Alvin Yip Fay 0.1 21,000 21,000 0 0
1668 E. 34th Ave.
Vancouver, BC
V5P 1A1
- ---------------------------------------------------------------------------------------------------------------------------
Oy Hee Mah 0.1 21,000 21,000 0 0
2691 McGill St.
Vancouver, BC
V5K 1H2
- ---------------------------------------------------------------------------------------------------------------------------
Blair Staiuk 0.1 21,000 21,000 0 0
11085 Canyon Crescent
Delta, BC
- ---------------------------------------------------------------------------------------------------------------------------
Gen Lin Wu 0.1 1,000 1,000 0 0
4782 Inverness St.
Vancouver, BC
V5V 4X6
- ---------------------------------------------------------------------------------------------------------------------------
Henry Ho 0.1 21,000 21,000 0 0
2460 Ancaster Ave.
Vancouver, BC
V5P 2N7
- ---------------------------------------------------------------------------------------------------------------------------
Fay Au Yeung 0.1 21,000 21,000 0 0
111-7750-128th St.
Surrey, Bc
V3W 0R6
- ---------------------------------------------------------------------------------------------------------------------------
Rong Xin Yang 0.1 1,000 1,000 0 0
3375 Napier St.
Vancouver, BC
V5K 2X4
- ---------------------------------------------------------------------------------------------------------------------------
Marnie Akings 0.1 25,000 25,000 0 0
2222 St. Johns Street
Port Moody, BC
- ---------------------------------------------------------------------------------------------------------------------------
Shao You Xiang 0.1 25,000 25,000 0 0
145-3-406 Yanjiang Ave.
Yichang City, Hubei, China
443000
- ---------------------------------------------------------------------------------------------------------------------------
Chen Ming 0.1 25,000 25,000 0 0
2-403 No.51 Building,
Phosphate Plant Fulin Group,
Yichang, China
443002
- ---------------------------------------------------------------------------------------------------------------------------
20
- ---------------------------------------------------------------------------------------------------------------------------
Name of Selling Stockholder Price Per Shares Owned Total Shares to be Total Shares Owned Percent Owned
Share Prior to this Offered for Upon Completion of Upon
Offering Selling this Offering Completion of
Shareholders this Offering
Account
- ---------------------------------------------------------------------------------------------------------------------------
Fred Marla 0.1 1,000 1,000 0 0
135 Springfield Drive
Aldergrove, BC
V4W 3K8
- ---------------------------------------------------------------------------------------------------------------------------
Ken Wong 0.1 1,000 1,000 0 0
606 Powell St.
Vancouver, BC
V6A 1H4
- ---------------------------------------------------------------------------------------------------------------------------
Li Shao Juan 0.1 25,000 25,000 0 0
Admin. Office of Finance
Bureau of Xiantao City,
Hubei, China
433000
- ---------------------------------------------------------------------------------------------------------------------------
Raymond Wei Ming Xu 0.1 21,000 21,000 0 0
- ---------------------------------------------------------------------------------------------------------------------------
Raymond Wei Ming Xu 0.001 250,000 250,000 0 0
- ---------------------------------------------------------------------------------------------------------------------------
The named party beneficially owns and has sole voting and investment over all
shares or rights to these shares. The numbers in this table assume that none of
the selling shareholders purchases additional shares of common stock, and
assumes that all shares offered are sold. The percentages are based on 5,363,000
shares of common stock outstanding on the date of this prospectus.
Bing Wong, Rong Xin Yang, and Drew Simpson are all directors of Razor. Bing Wong
is also the President and Rong Xin Yang holds office as Secretary of Razor.
Raymond Wei Ming Xu acquired his shares as payment for his 100% interest in the
Mahatta property. Otherwise, none of the selling shareholders:
(1) has had a material relationship with us other than as a shareholder at
any time within the past three years; or
(2) has ever been one of our officers or directors; or
(3) has ever had a family relationship with one of our officers or
directors.
None of the selling shareholders is a broker-dealer or affiliate of a broker
dealer.
Plan Of Distribution
The selling shareholders may sell some or all of their common stock in one or
more transactions, including block transactions.
The selling shareholders will sell our shares at $0.10 per share until our
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market
prices or privately negotiated prices. We determined this offering price
arbitrarily based upon the price of the last sale of our common stock to
21
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 $7,000. For greater detail regarding why the Company is
bearing the costs relating to the registration of the common stock, please refer
to "Plan of Operations". 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 may sell some or all of their common stock in one or
more transactions, including block transactions. Such sales may be private
transactions whereby they sell our stock to individuals or groups or in
transactions conducted through the facilities of a stock exchange or quotation
system, if such a quotation or listing occurs.
The selling shareholders may pledge all or a portion of the securities owned as
collateral for margin accounts or in loan transactions, and the securities may
be resold pursuant to the terms of such pledges, margin accounts or loan
transactions. Upon default by such selling shareholders, the pledge in such loan
transaction would have the same rights of sale as the selling shareholders under
this prospectus. The selling shareholders may also enter into exchange traded
listed option transactions, which require the delivery of the securities listed
under this prospectus. If our securities are qualified for quotation on the over
the counter bulletin board, the selling shareholders may also transfer
securities owned in other ways not involving market makers or established
trading markets, including directly by gift or other transfer without
consideration, and upon any such transfer the transferee would have the same
rights of sale as such selling shareholders under this prospectus.
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.
Regulation M deems it unlawful for us, a selling security holder or any other
distribution participant to bid for, purchase, or attempt to induce any person
to bid for or purchase, our shares of common stock during the period beginning
on the later of five business days prior to the determination of the offering
price or such time that a person becomes a distribution participant, and ending
upon such person's completion of participation in the distribution. In order to
22
ensure compliance with this regulation, we will advise each selling security
holder of the regulation and advise our transfer agent not to process any share
transfers during the restricted period.
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:
* contains a description of the nature and level of risk in the market for
penny stocks in both public offerings and secondary trading;
* contains a description of the broker's or dealer's duties to the customer
and of the rights and remedies available to the customer with respect to a
violation of such duties;
* contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" prices for penny stocks and the significance of
the spread between the bid and ask price;
* contains a toll-free telephone number for inquiries on disciplinary
actions;
* defines significant terms in the disclosure document or in the conduct of
trading penny stocks; and
* contains such other information and is in such form (including language,
type, size, and format) as the Commission shall require by rule or
regulation;
The broker-dealer also must provide, prior to proceeding with any transaction in
a penny stock, the customer:
* with bid and offer quotations for the penny stock;
* details of the compensation of the broker-dealer and its salesperson in
the transaction;
* the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market
for such stock; and
* monthly account statements showing the market value of each penny stock
held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
those securities.
23
Legal Proceedings
We are not currently a party to any legal proceedings. Our address for service
of process in Nevada is 1 East Liberty Street, Suite 424, Reno, Nevada 89504.
Directors, Executive Officers, Promoters And Control Persons
Our executive officers and directors and their respective ages as of the date of
this prospectus are as follows:
Directors:
Name of Director Age
Bing Wong 71
Rong Xin Yang 35
Drew Simpson 55
Executive Officers:
Name of Officer Age Office
- --------------------- ----- -------
Bing Wong 71 President
Rong Xin Yang 35 Secretary
Biographical Information
Set forth below is a brief description of the background and business experience
of each of our executive officers and directors for the past five years.
Mr. Bing Wong has acted as our president, chief executive officer, secretary,
treasurer and a director since our incorporation on February 26, 2002. Mr. Wong
has been a self-employed businessman since 1952, with widely diversified
operating experience from real estate development, grocery stores, hotels,
liquor stores, and the restaurant industry. Mr. Wong currently serves as an
officer and director in the following private companies:
1. Beta Enterprises Ltd.
2. Bing's Enterprises Ltd.
3. Wong Bros. Construction Co. Ltd.
4. Versailles Steak and Lobster House (1983) Ltd.
Mr. Rong Xin Yang has acted as our secretary and a director since our
incorporation February 26, 2002. He graduated from the University of WLLY in
1991 with a Bachelor of Computer Science. Since 1991, he has worked in computer
systems service positions in a diverse range of industries including
high-technology and fashion. Then in May of 1998 he founded Sunnywell Technology
Inc. and continues to act as the president and owner of Sunnywell.
Mr. Drew Simpson has acted as a director since our incorporation February 26,
2002. Mr. Simpson has been working as a consultant within the gold mining
industry since 1996. He has wide ranging practical field experience, from gold
extraction, recover, and storage to mine site management and camp setup. Mr.
24
Simpson is currently working as a consultant to two companies in the gold mining
industry:
1. Coast Explorations Ltd. - 1996 to present
2. Mirador Mining Ltd. - 1997 to present
Mr. Simpson has consulted with Coast Explorations in developing and managing
their alluvial extraction Atlin, BC property. He also works with Mirador Mining
on their alluvial extraction gold property located in Zimbabwe.
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.
Amount of
Title of Name and address beneficial Percent
Class of beneficial owner ownership of class
- --------------------------------------------------------------------------------
Common Bing Wong 2,500,000 46.62%
Stock President and Director
11940 Old Yale Rd.
Surrey, BC V3V 3X3
Common Rong Xin Yang 501,000 9.32%
Stock Secretary and Director
3375 Napier St.
Vancouver, BC V5K 2X4
Common Drew Simpson 500,000 9.32%
Stock Director
4859 Prince Edward St.
Vancouver, BC
Common Raymond Wei Ming Xu 271,000 5.05%
Stock Beneficial Owner of 5% or more
3216 Oak Street
Vancouver, BC
Common All officers, directors, and 3,772,000 70.33%
Stock beneficial owners as a group
that consists of four people
25
The percent of class is based on 5,363,000 shares of common stock issued and
outstanding as of the date of this prospectus.
Description Of Securities
General
Our authorized capital stock consists of 70,000,000 shares of common stock at a
par value of $0.001 per share and 5,000,000 shares of preferred stock with par
value of $0.001.
Common Stock
As of September 22, 2005, there were 5,363,000 shares of our common stock issued
and outstanding held by 28 stockholders of record. Holders of our common stock
are entitled to one vote for each share on all matters submitted to a
stockholder vote. Holders of common stock do not have cumulative voting rights.
Therefore, holders of a majority of the shares of common stock voting for the
election of directors can elect all of the directors. Two persons present and
being, or representing by proxy, shareholders are necessary to constitute a
quorum at any meeting of our stockholders. A vote by the holders of a majority
of our outstanding shares is required to effectuate certain fundamental
corporate changes such as liquidation, merger or an amendment to our articles of
incorporation.
Holders of common stock are entitled to share in all dividends that the board of
directors, in its discretion, declares from legally available funds. In the
event of 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 have authorized capital stock of 5,000,000 shares of preferred stock with par
value of $0.001.
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.
26
Options
We have not issued and do not have outstanding any options to purchase shares of
our common stock.
Convertible Securities
We have not issued and do not have outstanding any securities convertible into
shares of our common stock or any rights convertible or exchangeable into shares
of our common stock.
Interests Of Named Experts And Counsel
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency
basis, or had, or is to receive, in connection with the offering, a substantial
interest, direct or indirect, in the registrant. Nor was any such person
connected with the registrant as a promoter, managing or principal underwriter,
voting trustee, director, officer, or employee.
Erwin and Thompson LLP, our legal counsel, has provided an opinion on the
validity of our common stock.
The financial statements included in this prospectus and the registration
statement have been audited by Moen and Company, Chartered Accountants, to the
extent and for the periods set forth in their report appearing elsewhere in this
document and in the registration statement filed with the SEC, and are included
in reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
Disclosure Of Commission Position Of Indemnification For Securities Act
Liabilities
Our 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.
27
Organization Within Last Five Years
We were incorporated on February 26, 2002 under the laws of the state of Nevada.
On that date, Bing Wong, Rong Xin Yang, and Drew Simpson were appointed as our
directors. As well, Mr. Wong was appointed as our president and Mr. Yang was
appointed as our secretary.
Description Of Business
In General
Razor Resources Inc. ("Razor") intends to be in the business of mineral property
exploration. Razor is an exploration stage company engaged in the acquisition of
mineral claims and exploration of our mineral property. To date, we have not
conducted any exploration on our sole mineral property asset known as the
Mahatta property located southwest of Port Alice, British Columbia on Vancouver
Island. On April 11, 2005, Razor acquired outright, a 100% interest in the
property for a purchase price of $250 consisting of the issuance of 250,000
shares of Razor common stock at a deemed issuance price of $0.001 (based upon
the par value of our common stock). Activities to date have consisted solely of
the staking of mining claims. We have not yet developed our mining property into
a producing mine, nor have we earned revenue from our sole property. Our
property does not contain a known commercially viable deposit suitable for
mining. There is no assurance that any commercially viable mineral deposits
exist on our property. Exploration will be required before a final evaluation as
to the economic feasibility is determined. Our plan of operations is to conduct
mineral exploration activities on the Mahatta mineral claim in order to assess
whether this claim possess commercially viable mineral deposits. Our exploration
program is designed to explore for economically viable mineral deposits,
specifically gold and/or copper.
Our plan of operation is to conduct exploration work on the Mahatta property in
order to ascertain whether it possesses economic quantities of gold and or
copper. Due to our limited capital and corporate resources we plan to
concentrate our exploration efforts on the Mahatta property. At this time we
have no further plans beyond exploring the potential of the Mahatta property.
There can be no assurance that economic mineral deposits or reserves exist on
the Mahatta property until appropriate exploration work is done and an economic
evaluation based on such work concludes that production of minerals from the
property is economically feasible.
We must explore for and find mineralized material and determine if it is
economically feasible to remove the mineral reserves. Economically feasible
means that the costs associated with the removal of the mineralized material
will not exceed the price at which we can sell the mineralized material. We do
not claim to have any minerals or reserves whatsoever at this time on our only
property.
We have had net losses for each of the years ended April 30, 2002 and 2003,
2004, and 2005, and we had an accumulated deficit as of July 31, 2005. Since the
financial statements for each of these periods were prepared assuming that we
would continue as a going concern, in the view of our independent auditors,
these conditions raise substantial doubt about our ability to continue as a
going concern. Furthermore, since we do not expect to generate any significant
28
revenues for the foreseeable future, our ability to continue as a going concern
depends, in large part, on our ability to raise additional capital through
equity financing transactions. If we are unable to raise additional capital, we
may be forced to discontinue our business.
Even if we complete our proposed exploration programs on the Mahatta property
and they are successful in identifying a mineral deposit, we will have to spend
substantial funds on further drilling and engineering studies before we will
know if we have a commercially viable mineral deposit.
At this stage, it would be impossible for us to determine with any degree of
certainty an estimate for the future costs of exploration required to determine
the potential for an economic mineral deposit. Firstly we must conduct our three
phase exploration program in order to determine if our Mahatta property will
even warrant the further drilling and engineering studies required to determine
any possible commercial viability. In is crucial to be clear that our currently
planned three phase exploration program is an early stage preliminary
investigation to discover any mineralization on our Mahatta property.
The most likely source of future funds presently available to us is through the
sale of equity capital. Any sale of share capital will result in dilution to
existing shareholders. The only other anticipated alternative for the financing
of further exploration would be advances from related parties and joint venture
or sale of a partial interest in the Mahatta Property to a third party in
exchange for cash or exploration expenditures, which is not presently
contemplated.
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 Mahatta claim. Once we have completed each phase of
exploration, we will make a decision as to whether or not we proceed with each
successive phase based upon the analysis of the results of that program. Our
directors will make this decision based upon the recommendations of the
independent geologist who oversees the program and records the results.
The search for valuable minerals as a business is extremely risky. The
likelihood of our mineral claims containing economic mineralization or reserves
is extremely remote. Exploration for minerals is a speculative venture
necessarily involving substantial risk. In all probability, the Mahatta property
does not contain any reserves and funds that we spend on exploration will be
lost. As well, problems such as unusual or unexpected formations and other
conditions are involved in mineral exploration and often result in unsuccessful
exploration efforts. In such a case, we would be unable to complete our business
plan.
We were incorporated on February 26, 2002 under the laws of the state of Nevada.
Our principal offices are located at PO BOX 27581, 650 - 41st Avenue West,
Vancouver, British Columbia, Canada V5Z 4M4. Our telephone number is
(604)267-0111.
29
The following information is provided in compliance with "Guide 7 of Industry
Guides Under the Securities Act and the Exchange Act" for issuers engaged or to
be engaged in significant mining operations.
Glossary and Terms
The following are the definitions of some of the highly technical and geological
terms which follow below.
Andesite: A type of rock that typically formed through the relatively rapid
crystallization of a lava. Andesite was named after the Andes Mountains of South
America.
Assay: A chemical test performed on a sample of ores or minerals to determine
the amount of valuable metals contained.
Basalt: A type of rock composed chiefly of calcic plagioclase and clinopyroxene,
although nepheline, olivine, orthopyroxene, or quartz may be present. Basalt is
the fine-grained equivalent of gabbro. Basalts typically have low viscosity and
therefore occur in lava flows.
Breccia/Brecciation: A rock type, formed from recrystallised fragments of other
rocks.
Clast: Rock fragments formed in a sequence of sedimentary rocks.
Development: Work carried out for the purpose of opening up a mineral deposit
and making the actual ore extraction possible.
Diamond Drill: A rotary type of rock drill that cuts a core of rock that is
recovered in long cylindrical sections, two centimeters or more in diameter.
Diorite: An intrusive igneous rock.
Exploration: Work involved in searching for ore, usually by drilling or driving
a drift.
Gabbro: A coarse-grained, dark, igneous rock.
Geodiscal Nature: intricacies in the geological structure of the earth;
variances in size and shape of the structure of the earth.
Geophysical Survey: Indirect methods of investigating the subsurface geology
using the applications of physics including electric, gravimetric, magnetic,
electromagnetic, seismic, and radiometric principles.
Grade: The average assay of a ton of ore, reflecting metal content.
Mineralization: The presence of economic minerals in a specific area or
geological formation.
Reclamation: The restoration of a site after mining or exploration activity is
completed.
30
Reserves: That part of a mineral deposit which could be economically and legally
extracted or produced at the time of the reserve determination.
Skarn: Name for the metamorphic rocks surrounding an igneous intrusive where it
comes in contact with a limestone or dolomite formation.
Triassic: the earliest of the three geologic periods comprised in the Mesozoic
era.
Tertiary: the earlier of the two geologic periods in the Cenozoic era
Vein: A mineralized zone having a more or less regular development in length,
width and depth which clearly separates it from neighboring rock.
Description, Location and Access
The claim is located southwest of Port Alice, British Columbia on Vancouver
Island. Access is provided to the claims off the main Port Alice to Mahatta
logging road and via the logging roads and access trails off the main Mahatta
Creek Road. The property is accessible 16 kilometers up the Mahatta Creek
logging road from Mahatta Camp on Quatsino Sound. Roads are logging roads that
are in relatively new condition, although not actively in use now, they were in
use last summer. All roads are gravel to the main highway approximately 30 - 40
kilometers away. Four wheel drive access is only needed around the actual
property area but not required for gaining access. We will be able to access the
property year round, with no weather restrictions. The Mahatta claim is centered
on longitude 127" 40'W and latitude 50" 26' N. Please see Figure 1 below for
Mahatta Property location.
Figure 1 - Mahatta Claim filed as Exhibit 99.1 and incorporated by reference
herein.
The claims lie south of the old Island Copper Mine leases and south-southwest of
the Yreka mine on Neroutsos Inlet. The Island Copper mine site has had final
reclamation completed. The open pit was flooded in May 1996 and reclamation work
31
continued for two years. A saw mill and lumber kiln, utilizing mine buildings
and facilities, are being established at the mine site.
Permitting for initial exploration work has already been obtained. Razor has
acquired outright, a 100% interest in the property for the issuance of 250,000
common shares of Razor at a deemed issuance price of $0.001 per share (based
upon the par value of our common stock). The entire Property consists of 1
unpatented mineral claim, consisting of 24 units staked and recorded online as
per the new British Columbia Regulations. If a mining claim is "unpatented", it
means that the owner must complete exploration work on the property in order to
keep it in good standing. The parameters delineating the interests Razor
Resources Corp. is found below and the claims are displayed on Figure 3.
Table 1. Razor Resources Corp.Claims
------------------------------------
- --------------------------------------------------------------------------------
Tenure Record Expiry Date
Claim Name Units # (MM/YY) Map Sheet
- --------------------------------------------------------------------------------
MAHATTA 24 510120 April 03/06 MO92L05E
- --------------------------------------------------------------------------------
TOTAL 24 UNITS 1223 acres
- --------------------------------------------------------------------------------
In British Columbia, each unit's size may vary with the geodiscal nature of the
province and consist of approximately 20 hectares
All claims staked in British Columbia require $1.62 per acre worth of assessment
work to be undertaken in Year 1 through 3, followed by $3.24 per acre per year
thereafter. There are no known environmental concerns or parks designated for
any area contained within the claims and logging operations have been very
active in the recent past. Klaskino Inlet is used extensively for recreational
pursuits however it has no official designation. Klaskino Inlet is in the
immediate vicinity of the Mahatta property. As the government has permitted
extensive logging operations in the area of the Mahatta property and in the
Klaskino Inlet region, we do not expect nearby recreational pursuits to impact
our operations. In fact, public access to the area is by logging road only. The
property has no encumbrances. As advanced exploration proceeds there may be
bonding requirements for reclamation.
The area of the Mahatta claim is an active logging region with plenty of heavy
equipment and operators available for hire. Most live in Port Alice, Port
MacNeil or Port Hardy. All these population centres totalling almost 20,000
people are within a one hour drive of the project and provide all amenities
including police, hospitals, groceries, fuel, helicopter services, hardware and
other necessary items. Drilling companies and assay facilities are located in
Campbell River on the island or in Vancouver.
The topography and relief is fairly rugged extending from 200 metres to over 700
metres in elevation. The forested slopes are actively being logged with some
areas of re-growth typical of this area British Columbia. There is a mix of
cedar, hemlock, spruce trees with alder, willow and cottonwood on old roads and
poorly drained areas. Undergrowth brush is typical with salal, devil's club and
32
assorted berry bushes. Climate is also typical of the upper Vancouver Island
area and is such that the lower and middle elevations will be workable year
round with little difficulty. Higher ground may require snow machines or similar
track mounted vehicles. The most snow occurs in late January. All the major
river drainages flow year round as do many subsidiary creeks.
Mahatta Claim Mineral Property Acquisition Agreement
On April 11, 2005, we entered into an agreement with RAYMOND WEI MING Xu of
Vancouver, British Columbia, whereby he sold us the 100% undivided right, title
and interest in and to the Mahatta claim for a payment price of 250,000 shares
of Razor Resources common stock at a deemed issue price of $0.001 per share
(based upon the par value of our common stock). Please refer to "Exhibit 4.0"
for further details regarding the Mahatta Property acquisition.
Infrastructure and Condition of the Property
The Mahatta claim is free of mineral workings. There is no equipment or other
infrastructure facilities located on the property. There is no power source
located on the property. We will need to use portable generators if we require a
power source for exploration of the Mahatta claim.
The area of the Mahatta claim is an active logging region with plenty of heavy
equipment and operators available for hire. Most live in Port Alice, Port
MacNeil or Port Hardy. All these population centres totalling almost 20,000
people are within a one hour drive of the project and provide all amenities
including police, hospitals, groceries, fuel, helicopter services, hardware and
other necessary items. Drilling companies and assay facilities are located in
Campbell River on the island or in Vancouver.
All claims staked in British Columbia require $1.62 per acre worth of assessment
work to be undertaken in Year 1 through 3, followed by $3.24 per acre per year
thereafter. There are no known environmental concerns or parks designated for
any area contained within the claims and logging operations have been very
active in the recent past. Klaskino Inlet is used extensively for recreational
pursuits however it has no official designation. The property has no
encumbrances. As advanced exploration proceeds there may be bonding requirements
for reclamation.
Mineralization
This area is part of the Insular belt of the Cordillera of volcanics,
crystalline rocks and minor sediments of the geological province of Wrangallia
and represents its western most portion. This terrain is the trailing edge of
the Wrangallia geologic province as it was being rafted on to the North American
Craton.
The eastern portion of Vancouver Island is underlain by the Palaeozoic Sicker
Group sediments and Upper Triassic basalts with minor carbonates and clastic
sediments, which in turn are overlain by the Lower Jurassic Bonanza Group of
andesitic to rhyodacitic volcanic flows, tuffs and breccias. This later unit
which underlies the subject property of this report has been intruded by the
Early -Middle Jurassic Island Plutonic Suite (granodiorite - monzonite -
33
diorite) which is coeval or late stage part of the volcanic island arc sequence.
In the area of the inlet an inlier of the Parson Bay Formation Calcareous
sediments form a geographical high to the north of the inlet.
Three types of deposits are associated with these rock units and the indicated
geological environment underlying the claim group. A intrusive into the
overlying Bonanza Volcanics, copper molybdenum deposit as mined to the north at
the Island Copper Mine, a volcanic belt related oxide sulphide phase iron
formation gold zone and a skarnified precious metal - base metal contact zone,
all have elements of their host geology present on the property.
Property Geology
The geology of the area of the property is based on preliminary identification
of some outcrops and interpreting the regional mapping completed by the
government as it relates to the claim areas. Road cuts investigated by the
author displayed outcrops of intrusives in contact with volcanics. The Summary
Regional Geology report is shown below (Figure 3).
Figure 3 - Mahatta Claim, Summary Report 2005, Regional Geology filed as Exhibit
99.2 and incorporated by reference herein.
On the property the sediments of the Parson Bay Formation (Vancouver Group) form
a west plunging syncline surrounded by basaltic and andesitic flows of the
Karmutsen Formation (also Vancouver Group). At the nose of the fold two small
sections of calcareous sediments of limited extent have been altered to skarn by
a nearby diorite intrusion. The skarn contains small pods of pyrite and
chalcopyrite. Minor chalcopyrite and pyrite occur in quartz veins. Assessment
Report 2652 also reports weak disseminated and fracture controlled chalcopyrite
and pyrite in diorite and Bonanza Group sediments.
34
Exploration History
The Mahatta zone was first discovered in the 1960's. The area of the claim has
had one showing reported that was discovered in the 1960's (Minfile 092L176).
The area has been surveyed by government airborne magnetic survey, regional
government mapping parties have detailed the area and a government regional
geochem survey has been completed over the staked claims.
Regional Geophysics and Geochemistry
The area of the claims has been covered by a Geological Survey of Canada
airborne magnetometer survey (Figure 5), which highlighted certain, highly
anomalous magnetic features associated with the property.
Figure 5 - Mahatta Claim, Summary Report 2005, Regional Geochem filed as Exhibit
99.3 and incorporated by reference herein.
The immediate area of the claims is located on the east end of a putter club
shape magnetic high associated with a structural break in the geophysical
signature.
Regional government stream sediment and till sampling geochemical surveying was
completed which identifies the Property as an area of anomalous base metal and
indicator values. It should be noted that anomalous values, correlate with the
magnetic flexure associated with the property identified from the 1972
government airborne geophysical survey.
National geochemical reconnaissance surveys completed by the Geological Survey
of Canada and the British Columbia Ministry of Energy Mines and Petroleum
Resources on stream sediment samples and till samples have published values in
Cu, As and Au for the drainages and the tills in the vicinity of the Property
(Figures 4). As well minor zinc values in the area are also noted for both
35
survey type samples and mercury is anomalous in the stream sediment sample.
The sample density is of such a scale that it is a positive indication only and
not a definitive indicator. Samples from further down would be required in order
to determine if there are any more definitive indications.
Geological Assessment Report: Mahatta Property
We commissioned Mr. William G. Timmins to prepare a geological report on the
Mahatta property. Mr. Timmins is a graduate of the Provincial Institute of
Mining, Haileybury Ontario (1956) and attended Michigan Technological University
1962 - 1965, Geology, and was licensed by the Professional Engineers Association
of B.C. (geological discipline) in 1969 and has practiced his profession as a
geologist for over 39 years. He is a member of the Association of Professional
Engineers and Geoscientists of the Province of British Columbia. The report
summarizes the results of prior exploration and makes recommendations for
further exploration.
Competitive Environment
The mineral mining industry is fragmented. We compete with other exploration
companies looking for mineral deposits. We are an infinitely small participant
in the mineral mining market. However, while we compete with other exploration
companies, there is no competition for the exploration or removal of mineral
from the Mahatta Property.
We hold no material patents, licenses, franchises or concessions.
Conclusions
Mr. Timmins recommends a three phase exploration program to further delineate
the mineralized system currently recognized on the Mahatta Claim. Mr. Timmins
was commissioned on or about November 15, 2004 to prepare a geology report on
our Mahatta claim.
The program would consist of air photo interpretation of the structures,
geological review, both regionally and detailed on the area of the main showings
followed with geological mapping and geophysical surveying using both magnetic
and electromagnetic instrumentation in detail over the area of the showings and
in a regional survey. Geophysical surveying is the search for mineral deposits
by measuring the physical property of near-surface rocks, and looking for
unusual responses caused by the presence of mineralization. Electrical,
magnetic, gravitational, seismic and radioactive properties are the ones most
commonly measured. Geophysical surveys are applied in situations where there is
insufficient information obtainable from the property surface to allow informed
opinions concerning the merit of properties.
The geochemical portion of the initial phase program will consist of our
consulting geologist and his assistant gathering chip samples and grab samples
from property areas with the most potential to host economically significant
mineralization based on past exploration results. Grab samples are soil samples
36
or pieces of rock that appear to contain precious metals such as gold and
silver, or industrial metals such as copper and nickel. All samples gathered
will be sent to a laboratory where they are crushed and analysed for metal
content.
Trenching involves removing surface soil using a backhoe or bulldozer. Samples
are then taken from the bedrock below and analysed for mineral content.
The assay chemical tests will then be performed on all samples of ores or
minerals from each of the three phases to determine the amount of valuable
metals contained.
The effort of this exploration work is to define and enable interpretation of a
follow-up diamond drill program, so that the known mineralization and the whole
property can be thoroughly evaluated with the most up to date exploration
techniques.
The following initial three phase exploration program has been estimated by Mr.
Timmins to cost $25,000. We believe this to be a reasonable estimate based upon
Mr. Timmins expertise and his 39 years of experience in the field of geology.
However, there can be no assurances made that we will be able to contract the
required services to conduct the three phases of this program at the budgeted
rates. To partially mitigate for this risk, Mr. Timmins has budgeted $2000 in
contingencies out of the $25,000 total three phase budget.
Proposed Budget
Approximate costs for the recommended three phase program are as follows:
Budget - Phase I
- ----------------
1. Senior Geologist 4 days @ $500/day $2,000
2. Geological technician 4 days @ $250/day $1,000
3. Equipment rental 1 4 wheeldrive vehicle @$85/day $ 340
Fuel, Food, Field Supplies $ 800
Assays 15 @ $20 each $ 300
Report $ 500
Filing Fees $ 60
Subtotal $5,000
Budget - Phase II
- -----------------
1. Follow-up Geochem and Detailed Geology sampling $3,000
2. Assays 75 @ $20 per assay $1,500
3. Contingency $500
Subtotal $5,000
Budget - Phase III
- ------------------
4. Follow-up trenching and Geology mapping, sampling $7,000
5. Assays 150 @ $20 per assay $3,000
37
6. Reporting and Supervision $3,500
7. Contingency $1,500
Subtotal $15,000
GRAND TOTAL EXPLORATION COSTS - Phase I, II & III $25,000
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 Mahatta claim. Once we have completed each phase of
exploration, we will make a decision as to whether or not we proceed with each
successive phase based upon the analysis of the results of that program. Our
directors will make this decision based upon the recommendations of the
independent geologist who oversees the program and records the results.
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.
The estimated reclamation and environmental mediation costs associated with our
initial three phase exploration program is less than $1000.
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;
- 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;
38
- 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.
Employees
We have no employees as of the date of this prospectus other than our two
officers. At this time, we do not have any employee agreements with the
executive officers or directors of the Company.
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.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to our
stockholders.
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
39
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, N.E., Washington, D.C. 20549. Please
call the Commission at 1-800-SEC-0330 for further information on the operation
of the public reference rooms. The Securities and Exchange Commission also
maintains a web site at http://www.sec.gov that contains reports, proxy
statements and information regarding registrants that file electronically with
the Commission. Our registration statement and the referenced exhibits can also
be found on this site.
Plan Of Operations
We have had net losses for each of the years ended April 30, 2002 and 2003,
2004, and 2005, and we had an accumulated deficit as of July 31, 2005. Since the
financial statements for each of these periods were prepared assuming that we
would continue as a going concern, in the view of our independent auditors,
these conditions raise substantial doubt about our ability to continue as a
going concern. Furthermore, since we do not expect to generate any significant
revenues for the foreseeable future, our ability to continue as a going concern
depends, in large part, on our ability to raise additional capital through
equity financing transactions. If we are unable to raise additional capital, we
may be forced to discontinue our business.
Our plan of operation for the twelve months following the date of this
prospectus is to complete the recommended phase one, two and three exploration
programs on the Mahatta property. We anticipate that the cost of these programs
will be approximately $25,000. We anticipate commencing the phase one program in
the fall of 2005 and completing it within one month of commencement. We
anticipate commencing the phase two program in the fall of 2005 and completing
it within one month of commencement. We anticipate commencing the phase three
program in the late fall of 2005 and completing it within 3 months of
commencement. We have not retained a geologist to conduct this exploration work.
In the next 12 months, we also anticipate spending an additional $40,000 on
professional fees and administrative expenses, including fees payable in
connection with the filing of this registration statement and complying with
reporting obligations.
Total expenditures over the next 12 months are therefore expected to be $65,000.
We therefore do not have the cash on hand sufficient to fund total anticipated
operational costs for the next 12 months.
In order to establish access to more significant capital and in an effort to
develop a secondary market for our common shares Razor will bear all of the
costs of this offering and registering our common shares for resale by our
current shareholders.
We will require additional funding in order to cover total expenditures over the
next 12 months and to proceed with any additional recommended exploration work
40
on the property if warranted by the results of our current three phase
exploration program. We anticipate that additional funding will be required in
the form of equity financing from the sale of our common stock. However, we
cannot provide investors with any assurance that we will be able to raise
sufficient funding from the sale of our common stock to fund any shortfalls in
working capital and exploration expenses. We believe that debt financing will
not be an alternative for funding the complete exploration program. We do not
have any arrangements in place for any future equity financing.
The most likely source of future funds presently available to us is through the
sale of equity capital. Any sale of share capital will result in dilution to
existing shareholders. The only other anticipated alternative for the financing
of further exploration would be advances from related parties and joint venture
or sale of a partial interest in the Mahatta Property to a third party in
exchange for cash or exploration expenditures, which is not presently
contemplated.
The success of Razor Resources is critically dependent upon finding mineralized
material. If we don't find mineralized material or we cannot remove mineralized
material, either because we do not have the money to do it or because it is not
economically feasible to do it, we will cease operations and you will lose your
investment. Mineralized material or deposit is a mineralized body which has been
delineated by appropriate drilling and/or underground sampling to support a
sufficient tonnage and average grade of metal(s). Under SEC standards, such a
deposit does not qualify as a reserve until a comprehensive evaluation, based
upon unit cost, tonnage, grade, price, recoveries costs and other factors,
concludes economic feasibility.
We do not claim to have any minerals or reserves whatsoever at this time on our
only property.
All Canadian lands and minerals which have not been granted to private persons
are owned by either the federal or provincial governments in the name of Her
Majesty. Ungranted minerals are commonly known as Crown minerals. Ownership
rights to Crown minerals are vested by the Canadian Constitution in the province
where the minerals are located. In the case of the Company's property, that is
the province of British Columbia. In the 19th century the practice of reserving
the minerals from fee simple Crown grants was established. Legislation now
ensures that minerals are reserved from Crown land dispositions. The result is
that the Crown is the largest mineral owner in Canada, both as the fee simple
owner of Crown lands and through mineral reservations in Crown grants. Most
privately held mineral titles are acquired directly from the Crown. The
Company's Mahatta Property is an example of such an acquisition. Accordingly,
fee simple title to the Company's Property resides with the Crown. The Company's
claim is a mining lease issued pursuant to the British Columbia Mineral Act. The
lessee has exclusive rights to mine and recover all of the minerals contained
within the surface boundaries of the lease continued vertically downward.
According to the Mineral Tenure Act of British Columbia, a mineral claim may be
held for one year and thereafter from year to year. In order to maintain a
mineral lease the holder of the lease must, on or before the anniversary date,
spend CAN$100, or approximately $84 USD, each year per unit leased during the
41
first three 1 year terms; and CAN$200, or approximately $168 USD, each year per
unit for subsequent 1 year terms. The required expenditure can be in the form of
expenditures on exploration or can be in the form of a direct payment to the
Province of British Columbia. If in any year, the required exploration work
expenditure is not completed and filed with the Province prior to the lease
expiry date, or if a payment is not made to the Province of British Columbia in
lieu of the required work prior to the lease expiry date, the mineral claims
will lapse. A maximum of ten years of work credit may be filed on a claim.
Razor's Mahatta Property is one mineral lease each consisting of 24 units. The
Mahatta lease expires on April 3, 2006. The extension of the lease for another 1
year period therefore requires an expenditure of CAN$2400 or approximately $2016
USD for exploration work, plus a payment of a recording fee for each claim, or a
direct payment of the same amount to the Province of British Columbia. After 3
years, the required expenditure will be CAN$4800 or $4032 USD for exploration
work, plus a payment of a recording fee for each claim, or a direct payment of
the same amount to the Province of British Columbia.
Results Of Operations For The Period From Inception Through July 31, 2005
We have not earned any revenues from our incorporation on February 26, 2002 to
April 30, 2005. During the three month period ending July 31, 2005 we earned
$3000 in consulting revenues, this was a one time arrangement and we do not
anticipate a material recurrence of this source of revenues. We do not
anticipate earning revenues unless we enter into commercial production on the
Mahatta property, which is doubtful. We have not commenced the exploration stage
of our business and can provide no assurance that we will discover economic
mineralization on the property, or if such minerals are discovered, that we will
enter into commercial production.
We incurred operating expenses in the amount of $14,197 for the period from our
inception on February 26, 2002 to April 30, 2005. These operating expenses were
comprised of $574 in filing fees, $6,120 in audit fees, $6,750 in management
fees, $353 in bank maintenance and service charges, $150 in registered fees and
$250 in mineral property costs. The management fees of $6,750 since inception
relate to costs associated with this filing and sporadically incurred general
administrative functions on a contracted as needed basis.
We incurred operating expenses in the amount of $14,315 for the three month
period ending July 31, 2005. These operating expenses were comprised of $165 in
filing fees, $12,000 in professional fees, $1,000 in management fees, $150 in
bank maintenance and services charges, and $1,000 in facilities costs. The
facilities costs are for our monthly lease of a full service outsourced office
facility which included reception service, photocopier, and sufficient space for
our 12 month plan of operations. The professional fees included expenses related
to this filing and accounting fees.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue exploration activities. For these reasons our auditors
believe that there is substantial doubt that we will be able to continue as a
going concern.
42
Description Of Property
On April 11, 2005, we entered into an agreement with Raymond Wei Ming Xu of
Vancouver, British Columbia, whereby he sold us the 100% undivided right, title
and interest in and to the Mahatta claim for a payment price of 250,000 shares
of Razor Resources common stock at a deemed issue price of $0.001 per share
(based upon the par value of our common stock). Please refer to "Exhibit 4.0"
for the attached Mahatta Property Purchase and Sale Agreement and any addition
details regarding the terms of the property agreement.
The entire Property is 1223 acres, consists of 1 unpatented mineral claim,
consisting of 24 units staked and recorded online as per the new British
Columbia Regulations. Mineral claims in British Columbia are "unpatented",
meaning that the owner must complete exploration work on the property in order
to keep it in good standing (for a more detailed discussion please refer to
"Plan of Operations" above).
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;
* Any member of the immediate family of any of the foregoing persons.
Since Raymond Wei Ming Xu was an arms-length party at the time of the Mahatta
Property Purchase and Sale Agreement, the transaction terms were not subject to
any related party biases. In this manner the terms were as fair and equitable as
could have been achieved with another unrelated third party.
Please refer to "Exhibit 4.0" for the attached Mahatta Property Purchase and
Sale Agreement and any addition details regarding the terms of the property
agreement.
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.
43
Stockholders of Our Common Shares
As of the date of this registration statement, we have 34 registered
shareholders.
Rule 144 Shares
A total of 5,363,000 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 53,630 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 3,772,000
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.
44
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 February 15, 2002 to April 30,
2005 and the subsequent period to the date of this prospectus.
Annual Compensation
Restricted Options/ LTIP Other
Other Stock SARs payouts Comp
Name Title Year Salary Bonus Comp. Awarded (#) ($)
- --------------------------------------------------------------------------------
Bing Pres. 2005 $0 0 0 0 0 0
Wong Dir.
- --------------------------------------------------------------------------------
Rong Sec. 2005 $0 0 0 0 0 0
Xin Dir.
Yang
- --------------------------------------------------------------------------------
Drew Dir. 2005 $0 0 0 0 0 0
Simpson
- --------------------------------------------------------------------------------
Stock Option Grants
We have not granted any stock options to the executive officers since our
inception.
Consulting Agreements
We do not have any employment or consulting agreement with Mr. Wong, Mr. Yang,
or Mr. Simpson. We do not pay them any amount for acting as directors.
Financial Statements
Index to Financial Statements:
1. Auditors' Report;
2. Audited financial statements for the period ending April 30, 2005, and
unaudited interim financial statements for the three month period ending July
31, 2005 including:
a. Report of Independent Registered Public Accounting Firm;
b. Balance Sheet;
45
c. Statement of Operations;
d. Statement of Cash Flows;
e. Statement of Stockholders' Equity;
f. Statement of Retained Earnings (Deficit); and
g. Notes to the Financial Statements
46
MOEN AND COMPANY
CHARTERED ACCOUNTANTS
Member: Securities Commission Building
Canadian Institute of Chartered Accountants PO Box 10129, Pacific Centre
Institute of Chartered Accountants of British Columbia Suite 1400 - 701 West Georgia Street
Institute of Management Accountants (USA) (From 1965) Vancouver, British Columbia
Canada V7Y 1C6
Registered with:
Public Company Accounting Oversight Board (USA) (PCAOB)
Canadian Public Accountability Board (CPAB) Telephone: (604) 662-8899
Canada - British Columbia Public Practice Licence Fax: (604) 662-8809
Email: moenca@telus.net
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Shareholders and Directors of
Razor Resources Inc. (A Nevada Company) (An Exploration Stage Enterprise)
We have audited the accompanying balance sheets of Razor Resources Inc. (A
Nevada Company) (An Exploration Stage Enterprise) as of April 30, 2002, 2003,
2004, 2005 and the related statements of operations, retained earnings
(deficit), cash flows and changes in stockholders' equity (deficit) for the
years ended April 30, 2002, 2003 2004, 2005 and accumulated for the period from
date of inception on February 15, 2002 to April 30, 2005. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluation the overall financial statement presentation. We believe that our
audits provide 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 Razor Resources Inc. (A Nevada
Company) (An Exploration Stage Enterprise) as of April 30, 2002, 2003, 2004,
2005 and the results of its operations and its cash flows accumulated for the
period from inception on February 15, 2002 to April 30, 2005 in conformity with
U.S. 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, conditions exist which raise substantial doubt about the
Company's ability to continue as a going concern unless it is able to generate
sufficient cash flows to meet its obligations and sustain its operations. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty
"Moen and Company"
Vancouver, British Columbia, Canada ("Signed")
Chartered Accountants
June 22, 2005
47
Razor Resources Balance Sheet for the Fiscal Years ended April 30, 2005 to 2002.
ASSETS As At April 30
---------------------------------------------
2005 2004 2003 2002
---------------------------------------------
Current Assets
Cash 29,903 500 3,997 3,723
- ------------------------------------------------------------------------------------------------------------------
Total Assets 29,903 500 3,997 3,723
==================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued 2,800
- ------------------------------------------------------------------------------------------------------------------
Total current liabilities 2,800 0
- ------------------------------------------------------------------------------------------------------------------
Stockholders' Equity
Capital Stock
Authorized: 70,000,000 common shares
with a par value of $0.001 per share
Issued and fully paid: 5,363,000 common shares
at a par value of $0.001 per share 5,363 4,764 4,755 3,750
Additional paid-in capital 35,937 1,386 495
Deficit, accumulated during
the exploration stage (note 2) -14,197 -5,650 -1,253 -27
- ------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 27,103 500 3,997 3,723
- ------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity 29,903 500 3,997 3,723
==================================================================================================================
Approved on Behalf of the Board:
/s/ Bing Wong (Signed)
- --------------------------------------------------------
48
Razor Resources Statement of Operations for the Fiscal Years ended April 30,
2005 to 2002.
Period From
Date of
Inception on
February 15
2002 to Fiscal Year End April 30
April 30, --------------------------------------------------
2005 FY2005 FY2004 FY2003 FY2002
----------------------------------------------------------------
General and Administration Expenses
Filing fees 574 324 250
Auditing fees 6,120 2,800 3,320
Management fees 6,750 5,000 1,000 750
Registered fees 150 150
Mineral Property cost 250 250
Bank maintenance and service charge 353 173 77 76 27
- -----------------------------------------------------------------------------------------------------------------------
Total General and Administration Expense 14,197 8,547 4,397 1,226 27
- -----------------------------------------------------------------------------------------------------------------------
Net Loss for the Period -14,197 -8,547 -4,397 -1,226 -27
=======================================================================================================================
Net loss per share
Basic -0.00 -0.00 -0.00 -0.00
=======================================================================================================================
Diluted -0.00 -0.00 -0.00 -0.00
=======================================================================================================================
Weighted average number of common
shares used to compute loss per share
Basic and Diluted 5,363,000 5,363,000 4,764,000 4,755,000 3,750,000
49
Razor Resources Statement of Cash Flow for the Fiscal Years ended April 30, 2005
to 2002.
Period From
Date of
Inception on
February 15
2002 to Fiscal Year End April 30
April 30, ----------------------------------------------
2005 2005 2004 2003 2002
------------------------------------------------------------
Cash Provided by (Used for)
Operating Activities
Loss for the period -14,197 -8,547 -4,397 -1,226 -27
Accounts payable and accrued 2,800 2,800
- -------------------------------------------------------------------------------------------------------------------
-11,397 -5,747 -4,397 -1,226 -27
- -------------------------------------------------------------------------------------------------------------------
Financing Activities
Capital stock subscribed 5,363 599 9 1,005 3,750
Additional paid-in capital 35,937 34,551 891 495
- -------------------------------------------------------------------------------------------------------------------
41,300 35,150 900 1,500 3,750
- -------------------------------------------------------------------------------------------------------------------
Cash Increase
During the period 29,903 29,403 -3,497 274 3,723
Cash
Beginning of the period 500 3,997 3,723
- -------------------------------------------------------------------------------------------------------------------
Cash
End of the period 29,903 29,903 500 3,997 3,723
===================================================================================================================
50
Razor Resources Statement of Stockholder's Equity for the Fiscal Years Ended
April 30, 2005 to 2002.
Total
Price Common stock Additional Stockholders'
per -------------------------- paid-in Deficit Equity
Share Shares Par value capital accumulated (Deficit)
- ----------------------------------------------------------------------------------------------------------------------------
Balance, February 26, 2002
Shares issued (April 19, 2002) 0.001 3,750,000 3,750 3,750
Net loss for the period from date of
inception on February 15, 2002
to April 30, 2002 -27 -27
- ----------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 2002. 3,750,000 3,750 -27 3,723
Shares issued (May 28, 2002) 0.001 750,000 750 750
Shares issued (November 13, 2002) 0.001 250,000 250 250
Shares issued (November 21, 2003) 0.1 5,000 5 495 500
Net loss for the year ended April 30, 2003 -1,226 -1,226
- ----------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 2003. 4,755,000 4,755 495 -1,253 3,997
Shares issued (August 7, 2003) 0.1 9,000 9 891 900
Net loss for the year ended April 30, 2004 -4,397 -4,397
- ----------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 2004. 4,764,000 4,764 1,386 -5,650 500
Shares issued (October 27, 2004) 0.1 9,000 9 891 900
Shares issued (February 22, 2005) 0.1 100,000 100 9,900 10,000
Shares issued (March 15, 2005) 0.1 240,000 240 23,760 24,000
Shares subscription,
shares unissued (April 11, 2005) 0.001 250,000 250 250
Net loss for the year ended April 30, 2005 -33,297 -33,297
- ----------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 2005 5,363,000 5,363 35,937 -38,947 2,353
============================================================================================================================
51
Razor Resources Statement of Retained Earnings (Deficit) for the Fiscal Years
Ended April 30, 2005 to 2002.
Accumulated for
the Period From
Date of
Inception on
February 15,
2002, to Fiscal Year End April 30
April 30, ----------------------------------------------
2005 2005 2004 2003 2002
---------------------------------------------------------------
Retained Earnings (Deficit) - (5,650) (1,253) (27) -
Beginning of the period
Net Loss for the period (14,197) (8,547) (4,397) (1,226) (27)
- ------------------------------------------------------------------------------------------------------
Retained Earnings (Deficit),
End of the period (14,197) (14,197) (5,650) (1,253) (27)
======================================================================================================
52
Razor Resources Notes to Financial Statement for the Fiscal Year Ended April 30,
2005.
Note 1. ORGANIZATION AND NATURE OF BUSINESS
(a) Razor Resources Inc. was incorporated on February 26, 2002 under
the Company Act of the State of Nevada, U.S.A., to pursue
mineral exploration. The inception date is February 15, 2002.
The fiscal year end of the Company is April 30.
(b) GOING CONCERN
These financial statements have been prepared in accordance with
generally accepted accounting principles in the United States of America
applicable to a going concern which assume that the Company will realize
its assets and discharge its liabilities in the normal course of
business. The Company has incurred losses since inception of $14,197 to
April 30, 2005. This factor creates doubt as to the ability of the
Company to continue as a going concern. Realization values may be
substantially different from the carrying values as shown in these
financial statements should the Company be unable to continue as a going
concern. Management is in the process of identifying sources for
additional financing for working capital and to fund the ongoing
development of the Company's business, and management proposes to
develop plans to continue the business as a going concern.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying financial statements of Razor Resources, Inc. have been
prepared in accordance with accounting principles generally accepted in
the United States of America (USGAAP).
Exploration stage company
Razor Resources, Inc. is an exploration stage company as it does not
have an established commercial deposit and is not in the production
stage.
Use of estimates
The preparation of financial statements in conformity with USGAAP
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 dates of the financial statements and the
reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
53
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Cash
Cash consists of funds on deposit with the company's banker.
Income Taxes
Provisions for income taxes are based on taxes payable or refundable for
the current year and deferred taxes on temporary differences between the
amount of taxable income and pretax financial income and between the tax
bases of assets and liabilities and their reported amounts in the
financial statements. Deferred tax assets and liabilities are included
in the financial statement at currently enacted income tax rates
applicable to the period in which the deferred tax assets and
liabilities are expected to be realized or settled as prescribed in FASB
Statement No. 109, Accounting for Income Taxes. As changes in tax laws
or rate are enacted, deferred tax assets and liabilities are adjusted
through the provision for income taxes.
Compensated absences
Employees of the corporation are entitled to paid vacations, sick days
and other time off depending on job classification, length of service
and other factors. It is impractical to estimate the amount of
compensation for future absences, and accordingly, no liability has been
recorded in the accompanying financial statements. The corporation's
policy is to recognize the costs of compensated absences when paid to
employees.
Net profit per share
The Company adopted Statement of Financial Accounting Standards No. 128
that requires the reporting of both basic and diluted earnings per
share. Basic earnings per share is computed by dividing net income
available to common shareowners by the weighted average number of common
shares outstanding for the period. Diluted earnings per share reflect
the potential dilution that could occur if securities or other contacts
to issue common stock were exercised or converted into common stock. In
accordance with FASB 128, any anti-dilutive effects on net loss per
share are excluded.
Disclosure about fair value of financial instruments
The Company has financial instruments, none of which are held for
trading purposes. The Company estimates that the fair value of all
financial instruments at April 30, 2002, 2003, 2004 and 2005 as defined
in FASB 107, does not differ materially from the aggregate carrying
values of its financial instruments recorded in the accompanying balance
sheet.
54
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
The estimated fair value amounts have been determined by the Company
using available market information and appropriate valuation
methodologies. Considerable judgment is required in interpreting market
data to develop the estimates of fair value, and accordingly, the
estimates are not necessarily indicative of the amounts that the Company
could realize in a current market exchange.
Concentration of credit risk
Financial instruments that potentially subject the Company to a
significant concentration of credit risk consist primarily of cash and
cash equivalents which are not collateralized. The
Company limits its exposure to credit loss by placing its cash and cash
equivalents with high credit quality financial institutions.
Mineral property acquisition costs and deferred exploration expenditures
Mineral property acquisition costs are expensed. Exploration costs and
mine development costs to be incurred, including those to be incurred in
advance of commercial production and those incurred to expand capacity
of proposed mines, are expensed as incurred while the Company is in the
exploration stage. Mine development costs to be incurred to maintain
production will be expensed as incurred. Depletion and amortization
expense related to capitalized mineral properties and mine development
costs will be computed using the units-of-production method based on
proved and probable reserves.
a) US GAAP requires that whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable, the entity shall estimate the future cash flows
expected to result from the use of the asset and its eventual
disposition. If the sum of the discounted future cash flows is
less than the carrying amount of the asset, an impairment loss
(difference between the carrying amount and fair value) should
be recognized as a component of income from continuing
operations before income taxes.
b) Where properties are disposed of, the sales proceeds are,
firstly, applied as a recovery of mineral property acquisition
costs, and secondly, as a gain or loss recorded in current
operations.
Note 3. INCOME TAXES
The Company has losses that total $14,197 for income tax purposes that
may be carried forward to be applied against future taxable income. The
benefit of a potential reduction in future income taxes has not been
recorded as an asset at April 30, 2005 as it is reduced to nil by a
valuation allowance, due to uncertainty of the application of losses.
55
Note 3. INCOME TAXES (cont'd)
The income tax effect of temporary differences comprising the deferred
tax assets and deferred tax liabilities on the accompanying consolidated
balance sheets is a result of the following:
April 30,
2005 2004 2003 2002
------------- -------------
Deferred tax $ 4,827 $ 1,921 $ 426 $ 9
assets
Valuation $ (4,827) $ (1,921) $ (426) $ (9)
allowance
---------------------------------------------------------------------------
Net deferred tax $ 0 $ 0 $ 0 $ 0
assets
===========================================================================
A reconciliation between the statutory federal income tax rate
and the effective income rate of income tax expense for the
years ended April 30, 2005 and 2002, 2003, 2004 is as follows:
2005 2004 2003 2002
------------------------------------------------------
Statutory federal income tax rate 34.0% 34.0% 34.0% 34.0%
Valuation allowance (34.0%) (34.0%) (34.0%) (34.0%)
Effective income tax rate 0.0% 0.0% 0.0% 0.0%
Note 4. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and accounts payable
and accrued. It is management's opinion that the Company is not exposed
to significant interest, currency or credit risks arising from these
financial instruments. The fair value of these financial statements
approximates their carrying values.
Note 7. PENSION AND EMPLOYMENT LIABILITIES
The Company does not have liabilities as at April 30, 2005, for pension,
post-employment benefits or post-retirement benefits. The Company does
not have a pension plan.
Note 8. PURCHASE AND SALE AGREEMENT
On April 11, 2005, the Company acquired, on an arms length basis, from
Raymond Wei Min Xu, a 100% interest in a 1223 acre mineral claim
referred to as "Mahatta", in the Nanaimo Mining Devision, southwest of
Port Alice, British Columbia, Canada, with "Tenure" 510120 and the
expiry date of April 3, 2006. The value is $250 and the consideration
was 250,000 common shares, from treasury, at a price of $0.001 per share
for total consideration of $250.
56
Razor Resources Unaudited Balance Sheet for the Three Months ended July 31,
2005.
- ---------------------------------------------------------------------------------------------------------
July 31, April 30,
ASSETS 2005 2005
- ---------------------------------------------------------------------------------------------------------
(Unaudited) (Audited)
(Prepared by
Management)
Current Assets
Cash 14,188 29,903
Accounts Receivable 3,000
- ---------------------------------------------------------------------------------------------------------
Total Assets 17,188 29,903
=========================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities 1,400 2,800
- ---------------------------------------------------------------------------------------------------------
Total current liabilities 1,400 2,800
- ---------------------------------------------------------------------------------------------------------
Stockholders' Equity
Capital Stock
Authorized: 70,000,000 common shares
with a par value of $0.001 per share
Issued and fully paid: 5,363,000 common shares
at a par value of $0.001 per share 5,363 5,363
Additional paid-in capital 35,937 35,937
Deficit, accumulated during
the exploration stage (note 2) -25,512 -14,197
- ---------------------------------------------------------------------------------------------------------
Total stockholders' equity 15,788 27,103
- ---------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity 17,188 29,903
=========================================================================================================
Approved on Behalf of the Board:
/s/ Bing Wong (Signed)
- --------------------------------------------------
57
Razor Resources Unaudited Statement of Operations for the Three Months ended
July 31, 2005.
Accumulated
for
the Period (Unaudited
From Prepared by
Date of Management)
Inception on Three Months Three Months
February 15 Ended Ended
2002 to July 31 July 31
July 31, -------------------------------------
2005 2005 2004
--------------- -------------------------------------
Revenues
Consulting Income 3,000 3,000
- ------------------------------------------------------------------------------------------------------------
General and Administration Expenses
Filing fees 739 165
Professional fees 18,120 12,000
Management fees 7,750 1,000
Registered fees 150
Facilities Costs 1,000 1,000
Mineral Property cost 250 0
Bank maintenance and service charge 503 150 18
- ------------------------------------------------------------------------------------------------------------
Total General and Administration Expense 28,512 14,315 18
- ------------------------------------------------------------------------------------------------------------
Net Loss for the Period -25,512 -11,315 -18
============================================================================================================
Net loss per share
Basic -0.00 -0.00
============================================================================================================
Diluted -0.00 -0.00
============================================================================================================
Weighted average number of common
shares used to compute loss per share
Basic and Diluted 5,363,000 4,764,000
58
Razor Resources Unaudited Statement of Cash Flow for the Three Months Ended July
31, 2005.
Accumulated
for
the Period (Unaudited
From Prepared by
Date of Management)
Inception on Three Months
February 15 Ended
2002 to July 31
July 31, ---------------------------------
2005 2005 2004
--------------- ---------------------------------
Cash Provided by (Used for)
Operating Activities
Loss for the period -25,512 -11,315 -18
Accounts Receivable -3,000 -3,000
Accounts payable and accrued liabilities 1,400 -1,400
- ------------------------------------------------------------------------------------------------------
-27,112 -15,715 -18
- ------------------------------------------------------------------------------------------------------
Financing Activities
Capital stock subscribed 5,363
Additional paid-in capital 35,937
- ------------------------------------------------------------------------------------------------------
41,300
- ------------------------------------------------------------------------------------------------------
Cash Increase
During the period 14,188 -15,715 -18
Cash
Beginning of the period 29,903 500
- ------------------------------------------------------------------------------------------------------
Cash
End of the period 14,188 14,188 482
======================================================================================================
59
Razor Resources Unaudited Statement of Stockholder's Equity for the Three Months
Ended July 31, 2005.
Total
Price Common stock Additional Stockholders'
per --------------------- paid-in Deficit Equity
Share Shares Par value capital accumulated (Deficit)
- ---------------------------------------------------------------------------------------------------------------------------------
Balance, February 26, 2002
Shares issued (April 19, 2002) 0.001 3,750,000 3,750 3,750
Net loss for the period from date of
inception on February 15, 2003
to April 30, 2002 -27 -27
- ---------------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 2002. 3,750,000 3,750 -27 3,723
Shares issued (May 28, 2002) 0.001 750,000 750 750
Shares issued (November 13, 2002) 0.001 250,000 250 250
Shares issued (November 21, 2003) 0.1 5,000 5 495 500
Net loss for the year ended April 30, 2003 -1,226 -1,226
- ---------------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 2003. 4,755,000 4,755 495 -1,253 3,997
Shares issued (August 7, 2003) 0.1 9,000 9 891 900
Net loss for the year ended April 30, 2004 -4,397 -4,397
- ---------------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 2004. 4,764,000 4,764 1,386 -5,650 500
Shares issued (October 27, 2004) 0.1 9,000 9 891 900
Shares issued (February 22, 2005) 0.1 100,000 100 9,900 10,000
Shares issued (March 15, 2005) 0.1 240,000 240 23,760 24,000
Shares subscription,
shares unissued (April 11, 2005) 0.001 250,000 250 250
Net loss for the year ended April 30, 2005 -8,547 -8,547
Net loss for three months ended
July 31,2005 -11,315 -11,315
- ---------------------------------------------------------------------------------------------------------------------------------
Balance, July 31, 2005 5,363,000 5,363 35,937 -25,512 15,788
=================================================================================================================================
60
Razor Resources Unaudited Statement of Retained Earnings (Deficit) for the Three
Months Ended July 31, 2005.
Accumulated
for
the Period (Unaudited
From Prepared by
Date of Management)
Inception on Three Months
February 15 Ended
2002 to July 31
July 31, ---------------------------------
2005 2005 2004
--------------- ---------------------------------
Retained Earnings (Deficit) -14,197 -5,650
Beginning of the period
Net Loss for the period -25,512 -11,315 -18
- --------------------------------------------------------------------------------------------------------------------------
Retained Earnings (Deficit),
End of the period -25,512 -25,512 -5,668
==========================================================================================================================
61
Razor Resources Notes to Unaudited Interim Financial Statements for the Three
Months Ended July 31, 2005.
Note 1. ORGANIZATION AND NATURE OF BUSINESS
(a) Razor Resources Inc. was incorporated on February 26, 2001
under the Company Act of the State of Nevada, U.S.A., to
pursue mineral exploration. The inception date is February 15,
2002. The fiscal year end of the Company is April 30.
(b) GOING CONCERN
These financial statements have been prepared in accordance
with generally accepted accounting principles in the United
States of America applicable to a going concern which assume
that the Company will realize its assets and discharge its
liabilities in the normal course of business. The Company has
incurred losses since inception of $25,512 to July 31, 2005.
This factor creates doubt as to the ability of the Company to
continue as a going concern. Realization values may be
substantially different from the carrying values as shown in
these financial statements should the Company be unable to
continue as a going concern. Management is in the process of
identifying sources for additional financing for working
capital and to fund the ongoing development of the Company's
business, and management proposes to develop plans to continue
the business as a going concern.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying financial statements of Razor Resources, Inc. have
been prepared in accordance with accounting principles generally
accepted in the United States of America (USGAAP).
Exploration stage company
Razor Resources, Inc. is an exploration stage company as it does not
have an established commercial deposit and is not in the production
stage.
Use of estimates
The preparation of financial statements in conformity with USGAAP
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 dates of the financial statements and the
reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
62
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Cash
Cash consists of funds on deposit with the company's banker.
Income Taxes
Provisions for income taxes are based on taxes payable or refundable
for the current year and deferred taxes on temporary differences
between the amount of taxable income and pretax financial income and
between the tax bases of assets and liabilities and their reported
amounts in the financial statements. Deferred tax assets and
liabilities are included in the financial statement at currently
enacted income tax rates applicable to the period in which the deferred
tax assets and liabilities are expected to be realized or settled as
prescribed in FASB Statement No. 109, Accounting for Income Taxes. As
changes in tax laws or rate are enacted, deferred tax assets and
liabilities are adjusted through the provision for income taxes.
Compensated absences
Employees of the corporation are entitled to paid vacations, sick days
and other time off depending on job classification, length of service
and other factors. It is impractical to estimate the amount of
compensation for future absences, and accordingly, no liability has
been recorded in the accompanying financial statements. The
corporation's policy is to recognize the costs of compensated absences
when paid to employees.
Net profit per share
The Company adopted Statement of Financial Accounting Standards No. 128
that requires the reporting of both basic and diluted earnings per
share. Basic earnings per share is computed by dividing net income
available to common shareowners by the weighted average number of
common shares outstanding for the period. Diluted earnings per share
reflect the potential dilution that could occur if securities or other
contacts to issue common stock were exercised or converted into common
stock. In accordance with FASB 128, any anti-dilutive effects on net
loss per share are excluded.
Disclosure about fair value of financial instruments
The Company has financial instruments, none of which are held for
trading purposes. The Company estimates that the fair value of all
financial instruments at July 31, 2005 as defined in FASB 107, does not
differ materially from the aggregate carrying values of its financial
instruments recorded in the accompanying balance sheet.
63
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
The estimated fair value amounts have been determined by the Company
using available market information and appropriate valuation
methodologies. Considerable judgment is required in interpreting market
data to develop the estimates of fair value, and accordingly, the
estimates are not necessarily indicative of the amounts that the
Company could realize in a current market exchange.
Concentration of credit risk
Financial instruments that potentially subject the Company to a
significant concentration of credit risk consist primarily of cash and
cash equivalents which are not collateralized. The
Company limits its exposure to credit loss by placing its cash and cash
equivalents with high credit quality financial institutions.
Mineral property acquisition costs and deferred exploration
expenditures
Mineral property acquisition costs are expensed. Exploration costs and
mine development costs to be incurred, including those to be incurred
in advance of commercial production and those incurred to expand
capacity of proposed mines, are expensed as incurred while the Company
is in the exploration stage. Mine development costs to be incurred to
maintain production will be expensed as incurred. Depletion and
amortization expense related to capitalized mineral properties and mine
development costs will be computed using the units-of-production method
based on proved and probable reserves.
c) US GAAP requires that whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable, the entity shall estimate the future cash flows
expected to result from the use of the asset and its eventual
disposition. If the sum of the discounted future cash flows is
less than the carrying amount of the asset, an impairment loss
(difference between the carrying amount and fair value) should
be recognized as a component of income from continuing
operations before income taxes.
d) Where properties are disposed of, the sales proceeds are,
firstly, applied as a recovery of mineral property acquisition
costs, and secondly, as a gain or loss recorded in current
operations.
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Note 3. INCOME TAXES
The Company has losses that total $25,512 for income tax purposes that
may be carried forward to be applied against future taxable income. The
benefit of a potential reduction in future income taxes has not been
recorded as an asset at July 31, 2005 as it is reduced to nil by a
valuation allowance, due to uncertainty of the application of losses.
Note 3. INCOME TAXES (cont'd)
The income tax effect of temporary differences comprising the deferred
tax assets and deferred tax liabilities on the accompanying
consolidated balance sheets is a result of the following:
July 31,
2005
-------------------------------------
Deferred tax assets $ 8,674
------------------- - -----
Valuation allowance $ (8,674)
------------------- - -------
Net deferred tax assets $ 0
----------------------- - -------
A reconciliation between the statutory federal income tax rate and the
effective income rate of income tax expense for the years ended July
31, 2005 is as follows:
July 31,
2005
-------------------------------
Statutory federal income tax rate 34.0%
-------
Valuation allowance (34.0%)
-------
Effective income tax rate 0.0%
-------
Note 4. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and accounts
payable and accrued. It is management's opinion that the Company is not
exposed to significant interest, currency or credit risks arising from
these financial instruments. The fair value of these financial
statements approximates their carrying values.
Note 7. PENSION AND EMPLOYMENT LIABILITIES
The Company does not have liabilities as at July 31, 2005, for pension,
post-employment benefits or post-retirement benefits. The Company does
not have a pension plan.
Note 8. PURCHASE AND SALE AGREEMENT
On April 11, 2005, the Company acquired, on an arms length basis, from
Raymond Wei Min Xu, a 100% interest in a mineral claim referred to as
"Mahatta", in the Nanaimo Mining Devision, southwest of Port Alice,
British Columbia, Canada, with " Tenure" 510120 and the expiry date of
April 3, 2006. The value is $250 and the consideration was 250,000
common shares, from treasury, at a price of $0.001per share for total
consideration of $250.
65
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.
66
Our bylaws provide that we will advance all expenses incurred to any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that he is or was our director or
officer, or is or was serving at our request as a director or executive officer
of another company, partnership, joint venture, trust or other enterprise, prior
to the final disposition of the proceeding, promptly following request. This
advanced of expenses is to be made upon receipt of an undertaking by or on
behalf of such person to repay said amounts should it be ultimately determined
that the person was not entitled to be indemnified under our bylaws or
otherwise.
Our bylaws also provide that no advance shall be made by us to any officer in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made: (a) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to the proceeding; or (b) if such quorum is not obtainable, or,
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to the
decision- making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in a manner that
such person did not believe to be in or not opposed to our best interests.
Other Expenses Of Issuance And Distribution
Securities and Exchange Commission registration fee $ 67.95
Transfer Agent Fees $ 1,000.00
Accounting fees and expenses $ 3,000.00
Legal fees and expenses $ 1,500.00
Edgar filing fees $ 1,500.00
-----------
Total $ 7,067.95
===========
All amounts are estimates other than the Commission's registration fee.
We are paying all expenses of the offering listed above. No portion of these
expenses will be borne by the selling shareholders. The selling shareholders,
however, will pay any other expenses incurred in selling their common stock,
including any brokerage commissions or costs of sale.
Recent Sales of Unregistered Securities
We completed an offering of 3,500,000 shares of our common stock at a price of
$0.001 per share to a total of three purchasers on May 28, 2002. The total
amount received from this offering was $3,500. As part of this offering, we
issued 2,500,000 shares of our common stock to Mr. Bing Wong, 500,000 shares to
Ron Xin Yang and 500,000 shares to Mr. Drew Simpson. Mr. Wong is our president
and a director, Mr. Yang is our secretary and a director, and Mr. Simpson is a
director.
67
These shares were issued pursuant to Regulation S of the Securities Act.
Appropriate legends were affixed to the stock certificates representing these
shares.
We completed an offering of 1,250,000 shares of our common stock at a price of
$0.001 per share to a total of five purchasers on May 28, 2002. The total amount
received from this offering was $1,250. We completed this offering pursuant to
Regulation S of the Securities Act. The purchasers were as follows:
Name of Shareholder Number of Shares
Steve Zivin 250,000
Korri Lynne Parrott 250,000
Randy White 250,000
Richard Xiao 250,000
Josh Easton 250,000
We completed an offering of 363,000 shares of our common stock at a price of
$0.10 per share to a total of 27 shareholders on March 15, 2005. The total
amount received from this offering was $10,000. We completed this offering
pursuant to Regulation S of the Securities Act. The purchasers were as follows:
Number of
Name of Shareholder Shares
Chun Yan WANG 1,000
ZHEN Liang Wang 1,000
Feng Xiao LOU 1,000
Xiao ZHOU 1,000
Istvan Szekely 1,000
Pei Hua WONG 1,000
Angie Hu 1,000
Teddy San Mah 21,000
Fay Ming WONG 21,000
James Lam 21,000
Richard Wong 21,000
Cid Ney Chong Wong 21,000
Manny O Wong 21,000
Alvin Yip Fay 21,000
Oy Hee Mah 21,000
Blair Stasiuk 21,000
Raymond Wei Ming Xu 21,000
Gen Lin WU 1,000
Henry Ho 21,000
Fay Au Yeung 21,000
Rong Xin YANG 1,000
Marnie Akins 25,000
SHAO You Xiang 25,000
CHEN Ming 25,000
Fred Malara 1,000
Ken Wong 1,000
LI Shao Juan 25,000
68
We completed an offering of 250,000 shares of our common stock at a price of
$0.001 per share to a total of one shareholder on April 11, 2005. Razor acquired
the Mahatta property as payment for the common shares of this offering. We
completed this offering pursuant to Regulation S of the Securities Act. The
purchasers were as follows:
Number of
Name of Shareholder Shares
Raymond Wei Ming Xu 250,000
Regulation S Compliance
Each offer or sale was made in an offshore transaction;
Neither we, a distributor, any respective affiliates nor any person on behalf of
any of the foregoing made any directed selling efforts in the United States;
Offering restrictions were, and are, implemented;
No offer or sale was made to a U.S. person or for the account or benefit of a
U.S. person;
Each purchaser of the securities certifies that it was not a U.S. person and was
not acquiring the securities for the account or benefit of any U.S. person;
Each purchaser of the securities agreed to resell such securities only in
accordance with the provisions of Regulation S, pursuant to registration under
the Act, or pursuant to an available exemption from registration; and agreed not
to engage in hedging transactions with regard to such securities unless in
compliance with the Act;
The securities contain a legend to the effect that transfer is prohibited except
in accordance with the provisions of Regulation S, pursuant to registration
under the Act, or pursuant to an available exemption from registration; and that
hedging transactions involving those securities may not be conducted unless in
compliance with the Act; and
We are required, either by contract or a provision in its bylaws, articles,
charter or comparable document, to refuse to register any transfer of the
securities not made in accordance with the provisions of Regulation S pursuant
to registration under the Act, or pursuant to an available exemption from
registration; provided, however, that if any law of any Canadian province
prevents us from refusing to register securities transfers, other reasonable
procedures, such as a legend described in paragraph (b)(3)(iii)(B)(3) of
Regulation S have been implemented to prevent any transfer of the securities not
made in accordance with the provisions of Regulation S.
69
Exhibits
Exhibit
Number Description
3.0 (II) Bylaws
10.0 Mineral Property Purchase Agreement dated April 11, 2005
23.1 Consent of Moen & Company, Chartered Accountants
23.2 Consent of William G. Timmins, professional geologist
99.1 Figure 1 - Mahatta Claim
99.2 Figure 3 - Mahatta Claim, Summary Report 2005, Regional Geology
99.3 Figure 5 - Mahatta Claim, Summary Report 2005, Regional Geochem
The undersigned registrant hereby undertakes:
1. To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(a) include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(b) reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information set forth
in this registration statement; and notwithstanding the forgoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the commission pursuant to Rule 424(b) if, in
the aggregate, the changes in the volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration Statement; and
(c) include any additional or changed material information on the plan of
distribution.
2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered hereby which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and controlling
persons pursuant to the provisions above, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other
70
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 September 22, 2005.
Razor Resources Inc.
By:/s/ Bing Wong
------------------------------
Bing Wong
President 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/ Bing Wong President and Director September 22, 2005
- -----------------------
Bing Wong
/s/ Ron Xin Yang Secretary and Director
- ----------------------- September 22, 2005
Ron Xin Yang
/s/ Drew Simpson Director
- ----------------------- September 22, 2005
Drew Simpson
71