UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended August 31, 2009
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file # 000-53310
CASTMOR RESOURCES LTD.
(Exact Name of Registrant as Specified in its Charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
98-0471928
(I.R.S. Employer Identification number)
4620 MANILLA ROAD SE, SUITE 10
CALGARY, ALBERTA T2G 4B7
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: 403.561.8907
Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Act: Common stock,
$0.0001 par value per share
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company in Rule 12b-2 of the Act (Check one):
[ ] Large Accelerated Filer [ ] Accelerated Filer
[ ] Non-accelerated Filer [ X ] Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
As of November 25, 2009, the registrant had 12,435,000 shares of its Common
Stock outstanding.
FORWARD LOOKING STATEMENTS
Certain statements made in this Annual Report are "forward-looking statements"
(within the meaning of the Private Securities Litigation Reform Act of 1995)
regarding the plans and objectives of management for future operations. Such
statements involve known and unknown risks, uncertainties and other factors that
may cause actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. The forward-looking
statements made in this Report are based on current expectations that involve
numerous risks and uncertainties. The Company's plans and objectives are based,
in part, on assumptions involving the growth and expansion of business.
Assumptions relating to the foregoing involve judgments with respect to, among
other things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although the
Company believes that its assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could prove inaccurate and, therefore,
there can be no assurance that the forward-looking statements made in this
Report will prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements made in this Report, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the objectives and plans of the Company will be achieved.
As used in this annual report, the terms "we", "us", "our", "Company" and
"Castmor" means Castmor Resources Ltd., unless otherwise indicated.
PART I
ITEM 1. BUSINESS.
We were incorporated in the State of Nevada on June 27, 2005. Our office is
located at 4620 Manilla Road SE, Suite 10, Calgary, Alberta T2G 4B7. We have
no subsidiaries. Our telephone number is 403.561.8907. Our facsimile number is
403.451.1661.
We are an exploration stage company in that we are engaged in the search for
mineral deposits that are not in either the development or production stage,
with a view to exploiting any mineral deposits we discover that demonstrate
economic feasibility. Since we are an exploration stage company, there is no
assurance that commercially exploitable reserves of valuable minerals exist on
our property. We need to do further exploration before a final evaluation of
the economic and legal feasibility of our future exploration is determined.
To date, our activities have been limited to organizational matters, acquiring
our mineral claims, obtaining a geology report and the preparation and filing of
our information circular and our registration statement. Our assets are limited
to our mineral claims, the acquisition of which have been recorded as an expense
in our financial statements in accordance with our accounting policy. We have
not commenced exploration of our claims.
By a Transfer of Mineral Disposition dated November 7, 2005, from a
non-affiliated third party, we acquired a 100% interest in the White Bear Arm
Property: two non-contiguous mineral exploration licenses (license numbers
011117M and 011300M) comprising 17 claims located along southeastern coastal
Labrador, approximately 13 kilometers northeast of the community of
Charlottetown in Labrador, Canada, having a total area of 425 hectares (1,054.8
acres). One of the licenses (license number 011300M), comprising eight claims,
was inadvertently allowed to expire and was cancelled on January 24, 2007. We
reacquired a 100% interest in the same eight claims under a new mineral license
(license number 013632M) by a Transfer of Mineral Disposition dated July 16,
2007, from a non-affiliated third party.
Due to higher than anticipated fuel prices last year, we were unable to initiate
our planned exploration program for the White Bear Arm Property. By summer of
2009, we had insufficient capital resources to initiate the exploration program
or to maintain our mineral license. In July of 2009, we forfeited our rights to
the White Bear Arm Property. As a result, we do not presently have any mineral
interests.
We are presently looking for suitable mineral resource properties to acquire for
the purpose of conducting exploration and development. There can be no
assurance that we will be able to locate such properties, or that if we locate
them, that they will contain commercially exploitable mineral reserves. We will
be required to obtain additional funding to acquire and explore any additional
mineral properties. Such funding will likely be in the form of equity financing
from the sale of our common stock. There is no assurance, however, that we will
be able to raise sufficient funding from the sale of our common stock. The
risky nature of this enterprise and lack of tangible assets places debt
financing beyond the credit-worthiness required by most banks or typical
investors of corporate debt until such time as an economically viable mine can
be demonstrated. We do not have any arrangements in place for any future equity
financing. If we are unable to secure additional funding, we will cease or
suspend operations. We have no plans, arrangements or contingencies in place in
the event that we cease operations.
COMPETITIVE FACTORS
The mining industry is highly fragmented and we will be competing with many
other exploration companies looking for minerals. We are one of the smallest
exploration companies and are an infinitely small participant in the mineral
exploration business. While we will generally compete with other exploration
companies, there is no competition for the exploration of minerals from our
claims.
We are a junior mineral exploration company. We compete with other junior
mineral exploration companies for financing from a limited number of investors
that are prepared to make investments in junior mineral exploration companies.
The presence of competing junior mineral exploration companies may impact on our
ability to raise additional capital in order to fund our exploration programs if
investors are of the view that investments in competitors are more attractive
based on the merit of the mineral properties under investigation and the price
of the investment offered to investors.
We will also be competing with other junior and senior mineral companies for
available resources, including, but not limited to, professional geologists,
camp staff, mineral exploration supplies and drill rigs.
REGULATIONS
Mineral exploration is usually subject to substantial government regulation. We
will secure all necessary permits for exploration, if applicable, and if
development is warranted on the property, we will file final plans of operation
before we start any mining operations. We anticipate no discharge of water into
active stream, creek, river, lake or any other body of water regulated by
environmental law or regulation. Restoration of the disturbed land will be
completed according to law. All holes, pits and shafts will be sealed upon
abandonment of the property. It is difficult to estimate the cost of compliance
with the environmental law since the full nature and extent of our proposed
activities cannot be determined until we start our operations and know what that
will involve from an environmental standpoint.
Exploration stage companies are not required to discuss environmental matters
except as they relate to exploration activities. The only "cost and effect" of
compliance with environmental regulations in Canada is returning the surface to
its previous condition upon abandonment of the property.
EMPLOYEES
We currently have no employees other than our two officers and directors, who
have not been paid for their services. We do not have any employment agreements
with our directors and officers. We do not presently have pension, health,
annuity, insurance, stock options, profit sharing or similar benefit plans;
however, we may adopt plans in the future. There are presently no personal
benefits available to our officers and directors.
We do not intend to hire additional employees at this time. All of the work on
the property will be conducted by unaffiliated independent contractors that we
will hire. The independent contractors will be responsible for surveying,
geology, engineering, exploration, and excavation. The geologists will evaluate
the information derived from the exploration and excavation and the engineers
will advise us on the economic feasibility of removing the mineralized material.
ITEM 1A. RISK FACTORS.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.
ITEM 2. PROPERTIES.
We do not presently own or lease any property.
ITEM 3. LEGAL PROCEEDINGS
Neither Castmor Resources, nor any of its officers or directors is a party to
any material legal proceeding or litigation and such persons know of no material
legal proceeding or contemplated or threatened litigation. There are no
judgments against Castmor Resources or its officers or directors. None of our
officers or directors have been convicted of a felony or misdemeanor relating to
securities or performance in corporate office.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's shareholders during the
fiscal year ended August 31, 2009.
PART II
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
Our stock is presently traded on the NASD over-the-counter bulletin board under
the trading symbol "CASL". As of August 31, 2009, there were 53 owners of
record of our common stock. Trading of our stock is sporadic and does not
constitute an established public market for our shares.
For the periods indicated, the following table sets forth the high and low bid
prices per share of common stock. The following quotations obtained from Yahoo!
Finance reflect the high and low bids for our shares of common stock based on
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.
- --------------------------------------------------------
QUARTER ENDED HIGH LOW
- --------------------------------------------------------
August 31, 2009 $0.25 $0.25
May 31, 2009 $0.25 $0.25
February 28, 2009 $0.25 $0.25
November 30, 2008 $0.25 $0.25
- --------------------------------------------------------
DIVIDEND POLICY
Our Board of Directors may declare and pay dividends on outstanding shares of
common stock out of funds legally available there for in our sole discretion;
however, to date no dividends have been paid on common stock and we do not
anticipate the payment of dividends in the foreseeable future.
RECENT SALES OF UNREGISTERED SECURITIES
From September 28, 2007 to November 28, 2007, we issued 1,205,000 free-trading
shares of our common stock at a price of $0.05 per share to 47 investors for
gross proceeds of $120,250 in reliance upon an exemption from registration under
Regulation A, promulgated under the Securities Act of 1933. Our Offering
Statement on Form 1-A was declared qualified by the Securities and Exchange
Commission (Commission File No. 024-10187) on September 28, 2007. No shares
were sold to residents of the United States.
PENNY STOCK REGULATION
Our shares must comply with the Penny Stock Reform Act of 1990, which may
potentially decrease our shareholders' ability to easily transfer their shares.
Broker-dealer practices in connection with transactions in "penny stocks" are
regulated. Penny stocks generally are equity securities with a price of less
than $5.00. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and monthly account statements showing the market value of each penny stock held
in the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that must comply with the
penny stock rules. Since our shares must comply with such penny stock rules,
our shareholders will in all likelihood find it more difficult to sell their
securities.
ITEM 6. SELECTED FINANCIAL DATA
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Due to insufficient capital, we abandoned our mineral interests in the White
Bear Arm Property in July 2009. We are presently looking for alternative
mineral resource properties to acquire for the purpose of conducting exploration
and development. There can be no assurance that we will be able to locate such
properties, or that if we locate them, that they will contain commercially
exploitable mineral reserves. We will be required to obtain additional funding
to acquire and explore any additional mineral properties. Such funding will
likely be in the form of equity financing from the sale of our common stock.
There is no assurance, however, that we will be able to raise sufficient funding
from the sale of our common stock. The risky nature of this enterprise and lack
of tangible assets places debt financing beyond the credit-worthiness required
by most banks or typical investors of corporate debt until such time as an
economically viable mine can be demonstrated. We do not have any arrangements
in place for any future equity financing. If we are unable to secure additional
funding, we will cease or suspend operations. We have no plans, arrangements or
contingencies in place in the event that we cease operations.
RESULTS OF OPERATIONS
Our business is in the early stage of development. Since inception on June 27,
2005 we have not earned any revenue and we have not identified any commercially
exploitable reserves of valuable minerals. We do not anticipate earning revenue
unless we enter into commercial production of mineral resource property. We do
not presently have any interests in any mineral resource property. We are
presently in the exploration stage of our business and we can provide no
assurance that we will discover commercially exploitable reserves of valuable
minerals, or that if such resources are discovered that we will commercially
produce them.
We incurred operating expenses in the amount of $28,906 for the year ended
August 31, 2009. These operating expenses included: (a) professional fees of
$18,340; (b) a write-off of our $8,069 mineral deposit; (c) consulting fees of
$965; (d) office expenses of $944; and (d) other miscellaneous expenses of $588.
LIQUIDITY AND CAPITAL RESOURCES
Since inception on June 27, 2005 our activities have been financed from the
proceeds of share subscriptions and a promissory note for $15,000 issued to a
non-affiliated third party on July 31, 2007. The promissory note accrued
interest at the rate of 20% per annum, calculated semi-annually, and was due and
payable on July 31, 2008. The note plus accrued interest in the amount $2,336
was paid in full on May 1, 2008.
As of August 31, 2009 we had total assets of $17,707 comprised entirely of cash.
We have sufficient working capital to maintain our present level of operations
for the next 12 months. Due to insufficient capital, we have abandoned our
claims to the White Bear Arm Property. We do not presently have any mineral
interests.
We anticipate that any additional funding that we require will be in the form of
equity financing from the sale of our common stock. There is no assurance,
however, that we will be able to raise sufficient funding from the sale of our
common stock. The risky nature of this enterprise and lack of tangible assets
places debt financing beyond the credit-worthiness required by most banks or
typical investors of corporate debt until such time as an economically viable
mine can be demonstrated. We do not have any arrangements in place for any
future equity financing. If we are unable to secure additional funding, we will
cease or suspend operations. We have no plans, arrangements or contingencies in
place in the event that we cease operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.
ITEM 8. FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
CASTMOR RESOURCES LTD.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS FOR THE YEARS ENDED AUGUST 31, 2009 AND AUGUST 31, 2008
Report of Independent Registered Public Accounting Firm
Balance Sheets
Statements of Stockholders Equity
Statements of Operations and Comprehensive Loss
Statements of Cash Flows
Notes to Financial Statements
CHANG LEE LLP
Chartered Accountants
606-815 Hornby Street
Vancouver, B.C., V6Z 2E6
Tel: 604-687-3776
Fax: 604-688-3373
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
CASTMOR RESOURCES LTD.
(An exploration stage company)
We have audited the accompanying balance sheets of Castmor Resources Ltd. (an
exploration stage company) as at August 31, 2009 and 2008 and the related
statements of stockholders' equity, operations and comprehensive loss, and cash
flows for the years then ended and for the period from June 27, 2005 (date of
inception) to August 31, 2009. 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 audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform an audit to obtain reasonable assurance whether 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 evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as at August 31,
2009 and 2008 and the results of its operations and its cash flows for the years
then ended and for the period from June 27, 2005 (date of inception) to August
31, 2009, in conformity with accounting principles generally accepted in the
United States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company incurred losses from operations since inception, has not
attained profitable operations and is dependent upon obtaining adequate
financing to fulfil its exploration activities. These factors raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are also discussed in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Vancouver, Canada /s/ Chang Lee LLP
November 25, 2009 Chartered Accountants
CASTMOR RESOURCES LTD.
(An exploration stage company)
Balance Sheets
August 31, 2009
(Expressed in U.S. Dollars)
- --------------------------------------------------------------------------------------------------------------
August 31 August 31
2009 2008
- --------------------------------------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 17,707 $ 41,549
MINERAL RESOURCE SECURITY DEPOSIT - 8,069
- --------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 17,707 $ 49,618
==============================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities 2,623 5,628
- --------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 2,623 5,628
- --------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
SHARE CAPITAL
Authorized:
50,000,000 preferred shares at a par value of $0.0001 per share
Issued and outstanding: Nil
100,000,000 common shares with a par value of $0.0001 per share
Issued and outstanding: 12,435,000 common shares 1,244 1,244
(August 31, 2008: 12,435,000)
ADDITIONAL PAID-IN CAPITAL 78,636 78,636
(DEFICIT) ACCUMULATED DURING THE EXPLORATION STAGE (64,796) (35,890)
- --------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 15,084 43,990
- --------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 17,707 $ 49,618
==============================================================================================================
The accompanying notes are an integral part of these financial statements.
CASTMOR RESOURCES LTD.
(An exploration stage company)
Statements of Stockholders' Equity
For the period from June 27, 2005 (inception) to August 31, 2009
(Expressed in U.S. Dollars)
- ---------------------------------------------------------------------------------------------------------------------------
Deficit
accumulated Total
Additional during stockholders'
Preferred Stock Common Stock paid-in exploration equity
Shares Amount Shares Amount capital stage (deficiency)
- ---------------------------------------------------------------------------------------------------------------------------
Issuance of common stock for settlement
of debt July 16, 2005 ($0.0001 per share) - $ - 10,300,000 $ 1,030 $ - $ - $ 1,030
Loss and comprehensive loss for the period - - - - - (1,914) (1,914)
- ---------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2005 - - 10,300,000 $ 1,030 $ - $ (1,914) $ (884)
- ---------------------------------------------------------------------------------------------------------------------------
Issuance of common stock for cash
October 25, 2005 ($0.02 per share) - $ - 750,000 $ 75 $ 14,925 $ - $ 15,000
Issuance of common stock for settlement
of debt October 31, 2005 ($0.02 per share) - $ - 180,000 $ 18 $ 3,582 $ - $ 3,600
Loss and comprehensive loss for the year - - - - - (9,537) (9,537)
- ---------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2006 - $ - 11,230,000 $ 1,123 $ 18,507 $ (11,451) $ 8,179
- ---------------------------------------------------------------------------------------------------------------------------
Loss and comprehensive loss for the year - - - - - (5,404) (5,404)
- ---------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2007 - $ - 11,230,000 $ 1,123 $ 18,507 $ (16,855) $ 2,775
- ---------------------------------------------------------------------------------------------------------------------------
Issuance of common stock for cash
November 30, 2007 ($0.05 per share) - $ - 1,205,000 $ 121 $ 60,129 $ - $ 60,250
Loss and comprehensive loss for the year - - - - - (5,404) (5,404)
- ---------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2008 - $ - 12,435,000 $ 1,244 $ 78,636 $ (35,890) $ 43,990
- ---------------------------------------------------------------------------------------------------------------------------
Loss and comprehensive loss for the year - - - - - (28,906) (28,906)
- ---------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2009 - $ - 12,435,000 $ 1,244 $ 78,636 $ (64,796) $ 15,084
===========================================================================================================================
The accompanying notes are an integral part of these financial statements
CASTMOR RESOURCES LTD.
(A exploration stage company)
Statements of Operations and Comprehensive Loss
(Expressed in U.S. Dollars)
- -------------------------------------------------------------------------------------------------------
Cumulative from
June 27, 2005
(inception) to Year ended Year ended
August 31, 2009 August 31, 2009 August 31, 2008
- -------------------------------------------------------------------------------------------------------
EXPENSES
Bank charges $ 317 $ 69 $ 173
Consulting fees 1,363 965 -
Interest expense 2,336 - 2,086
Office expenses 7,099 944 1,124
Professional fees 39,014 18,340 14,573
Resource property acquisition and exploration costs 5,000 - -
Transfer expenses 1,598 519 1,079
Write-off mineral deposit 8,069 8,069 -
- -------------------------------------------------------------------------------------------------------
LOSS FROM OPERATIONS 64,796 28,906 19,035
- -------------------------------------------------------------------------------------------------------
NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD $ (64,796) $ (28,906) $ (19,035)
- -------------------------------------------------------------------------------------------------------
BASIC AND DILUTED LOSS PER SHARE $ (0.00) $ (0.00)
=======================================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
- - basic and diluted 12,435,000 12,135,396
=======================================================================================================
The accompanying notes are an integral part of these financial statements
CASTMOR RESOURCES LTD.
(An exploration stage company)
Statements of Cash Flows
(Expressed in U.S. Dollars)
- ----------------------------------------------------------------------------------------------------
Cumulative from
June 27, 2005
(inception) to Year ended Year ended
Augusts 31, 2009 August 31, 2009 August 31, 2008
- ----------------------------------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
Net (Loss) for the period $ (64,796) $ (28,906) $ (19,035)
Changes in operating assets and liabilities
- - (increase) decrease in security deposit - 8,069 (4,306)
- - accounts payable and accrued liabilities 2,623 (3,005) 2,751
- ----------------------------------------------------------------------------------------------------
NET CASH (USED IN) OPERATING ACTIVITIES (62,173) (23,842) (20,590)
- ----------------------------------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from promissory note - - (15,000)
Proceeds from issuance of common stock 79,880 - 60,250
- ----------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 79,880 - 45,250
- ----------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 17,707 (23,842) 24,660
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - 41,549 16,889
- ----------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 17,707 $ 17,707 $ 41,549
====================================================================================================
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 2,336 $ - $ 2,336
====================================================================================================
Income taxes paid $ - $ - $ -
====================================================================================================
The accompanying notes are an integral part of these financial statements
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Castmor Resources Ltd. (hereinafter "the Company") was incorporated in the State
of Nevada, U.S.A., on June 27, 2005. The Company's fiscal year end is August
31.
The Company has been in the exploration stage since its formation and has not
yet realized any revenues from its operations. It is primarily engaged in the
acquisition and exploration of mining properties. Upon location of a
commercially minable reserve, the Company expects to actively prepare the site
for its extraction and enter a development stage. In 2005, the Company acquired
mineral interests in two non-contiguous properties located along southeastern
coastal Labrador, approximately 13 kilometers northeast of the community of
Charlottetown, Labrador, Canada. In 2009, the Company abandoned its interest in
these mineral properties.
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 accumulated losses of $64,796 since inception and has no source of
revenue. The future of the Company is dependent upon its ability to obtain
financing and upon future acquisition. These factors create 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 to
fund the ongoing development of the Company's business.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
the generally accepted accounting principles in the United States of America.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period necessarily
involves the use of estimates that have been made using careful judgment. The
financial statements have, in management's opinion been properly prepared within
reasonable limits of materiality and within the framework of the significant
accounting policies summarized below:
Accounting Method
The Company's financial statements are prepared using the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States of America.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid investments and short-term debt instruments with original maturities of
three months or less to be cash equivalents. As at August 31, 2009, there were
no cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses for the reporting period. Actual
results could differ from these estimates.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Concentration of Credit Risk
The Company places its cash and cash equivalents with high credit quality
financial institutions. There is no deposit insurance on the Company's
accounts.
Foreign Currency Transactions
The Company is located and operating outside of the United States of America.
It maintains its accounting records in U.S. Dollars as follows:
At the transaction date each asset, liability, revenue and expense is translated
into U.S. dollars by the use of the exchange rate in effect at that date. At
the period end, monetary assets and liabilities are re-measured by using the
exchange rate in effect at that date. The resulting foreign exchange gains and
losses are included in operations.
Fair Value of Financial Instruments
The Company's financial instruments as defined by Statement of Financial
Accounting Standards No. 107, "Disclosures about Fair Value of Financial
Instruments," include cash and cash equivalents and accounts payable and accrued
liabilities. Fair values were assumed to approximate carrying value for these
financial instruments, except where noted. Management is of the opinion that
the Company is not exposed to significant interest or credit risks arising from
these financial instruments. The Company is operating outside the United States
of America and has significant exposure to foreign currency risk due to the
fluctuation of currency in which the Company operates and U.S. dollars.
Mineral Property Payments and Exploration Costs
The Company expenses all costs related to the acquisition, maintenance and
exploration of mineral claims in which it has secured exploration rights prior
to establishment of proven and probable reserves. When it has been determined
that a mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs incurred to develop such
property are capitalized. Such costs will be amortized using the
units-of-production method over the estimated life of the probable reserve.
Long-lived Assets Impairment
Long-lived assets of the Company are reviewed for impairment whenever events or
circumstances indicate that the carrying amount of assets may not be
recoverable, pursuant to guidance established in SFAS No. 144, Accounting for
the Impairment or Disposal of Long-Lived Assets.
Management considers assets to be impaired if the carrying value exceeds the
future projected cash flows from related operations (undiscounted and without
interest charges). If impairment is deemed to exist, the assets will be written
down to fair value. Fair value is generally determined using a discounted cash
flow analysis.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Assets Retirement Obligations
The Company has adopted SFAS No 143, Accounting for Assets Retirement
Obligations which requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred. SFAS
No. 143 requires the Company to record a liability for the present value of the
estimated site restoration costs with corresponding increase to the carrying
amount of the related long-lived assets. The liability will be accreted and the
asset will be depreciated over the life of the related assets. Adjustments for
changes resulting from the passage of time and changes to either the timing or
amount of the original present value estimate underlying the obligation will be
made. As at August 31, 2009, the Company does not have any asset retirement
obligations.
Costs associated with environmental remediation obligations will be accrued when
it is probable that such costs will be incurred and they can be reasonably
estimated.
Stock-Based Compensation
The Company adopted SFAS No. 123(revised), "Share-Based Payment", to account for
its stock options and similar equity instruments issued. Accordingly,
compensation costs attributable to stock options or similar equity instruments
granted are measured at the fair value at the grant date, and expensed over the
expected vesting period. SFAS No. 123(revised) requires excess tax benefits be
reported as a financing cash inflow rather than as a reduction of taxes paid.
The Company did not grant any stock options during the period ended August 31,
2009.
Comprehensive Income
The Company adopted Statement of Financial Accounting Standards No. 130 (SFAS
130), Reporting Comprehensive Income, which establishes standards for reporting
and display of comprehensive income, its components and accumulated balances.
The Company is disclosing this information on its Statement of Stockholders'
Equity. Comprehensive income comprises equity except those resulting from
investments by owners and distributions to owners. The Company has no elements
of "other comprehensive income" for the period ended August 31, 2009.
Income Taxes
The Company has adopted Statement of Financial Accounting Standards No. 109
(SFAS 109), Accounting for Income Taxes, which requires the Company to recognize
deferred tax liabilities and assets for the expected future tax consequences of
events that have been recognized in the Company's financial statements or tax
returns using the liability method. Under this method, deferred tax liabilities
and assets are determined based on the temporary differences between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect in the years in which the differences are expected to reverse.
Basic and Diluted Loss Per Share
In accordance with SFAS No. 128 - "Earnings Per Share", the basic loss per
common share is computed by dividing net loss available to common stockholders
by the weighted average number of common shares outstanding. Diluted loss per
common share is computed similar to basic loss per common share except that the
denominator is increased to include the number of additional common shares that
would be outstanding if the potential common shares had been issued and if the
additional common shares were dilutive.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New Accounting Pronouncements
In December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141(revised 2007) ("SFAS 141(R)"), "Business Combinations". SFAS 141 (R)
applies the acquisition method of accounting for business combinations
established in SFAS 141 to all acquisitions where the acquirer gains a
controlling interest, regardless of whether consideration was exchanged.
Consistent with SFAS 141, SFAS 141 (R) requires the acquirer to fair value the
assets and liabilities of the acquiree and record goodwill on bargain purchases,
with main difference the application to all acquisitions where control is
achieved. SFAS 141 (R) is effective for financial statements issued for fiscal
years beginning after December 15, 2008. The adoption of this statement is not
expected to have a material effect on the Company's future financial position or
results of operations
In December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 160 ("SFAS 160"), "Non-controlling Interests in Consolidated Financial
Statements - An amendment of ARB No. 51". SFAS 160 requires companies with non
controlling interests to disclose such interests clearly as a portion of equity
but separate from the parent's equity. The non controlling interest's portion
of net income must also be clearly presented on the Income Statement. SFAS 160
is effective for financial statements issued for fiscal years beginning after
December 15, 2008. The adoption of this statement is not expected to have a
material effect on the Company's future financial position or results of
operations.
In March 2008, the FASB issued FASB Statement No. 161 ("SFAS 161"), "Disclosures
about Derivative Instruments and Hedging Activities". SFAS 161 requires
companies with derivative instruments to disclose information that should enable
financial-statement users to understand how and why a company uses derivative
instruments, how derivative instruments and related hedged items are accounted
for under FASB Statement No. 133 "Accounting for Derivative Instruments and
Hedging Activities" and how derivative instruments and related hedged items
affect a company's financial position, financial performance and cash flows.
SFAS 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008. The adoption of this
statement is not expected to have a material effect on the Company's future
financial position or results of operations.
In May 2008, the FASB issued SFAS No. 162 ("SFAS 162"), "The Hierarchy of
Generally Accepted Accounting Principles". SFAS 162 identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of non-governmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. It is effective 60 days following the SEC's approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, "The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles". The adoption of this statement is not expected to have a material
effect on the Company's financial statements.
In April 2008, the FASB issued FSP No. 142-3, "Determination of the Useful Life
of Intangible Assets" ("FSP 142-3"). FSP 142-3 amends the factors an entity
should consider in developing renewal or extension assumptions used in
determining the useful life of recognized intangible assets under FASB Statement
No. 142, "Goodwill and Other Intangible Assets". This new guidance applies
prospectively to intangible assets that are acquired individually or with a
group of other assets in business combinations and asset acquisitions. FSP 142-3
is effective for financial statements issued for fiscal years and interim
periods beginning after December 15, 2008. Early adoption is prohibited. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.
In May 2008, FASB issued FASB Staff Position ("FSP") APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 clarifies
that convertible debt instruments that may be settled in cash upon either
mandatory or optional conversion (including partial cash settlement) are not
addressed by paragraph 12 of APB Opinion No. 14, "Accounting for Convertible
Debt and Debt issued with Stock Purchase Warrants." Additionally, FSP APB 14-1
specifies that issuers of such instruments should separately account for the
liability and equity components in a manner that will reflect the entity's
nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. FSP APB 14-1 is effective for financial statements issued
for fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. We will adopt FSP APB 14-1 beginning in the first quarter of
2010, and this standard must be applied on a retrospective basis. The adoption
of this statement is not expected to have a material effect on the Company's
financial statements.
In April, 2009, the FASB issued FASB Staff Position No. FAS 157-4 ("FSP FAS
157-4"), "Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly". The FSP provides additional guidance for estimating fair
value in accordance with FASB Statement No. 157, Fair Value Measurements, when
the volume and level of activity for the asset or liability have significantly
decreased. This FSP also includes guidance on identifying circumstances that
indicate a transaction is not orderly. The adoption of this FSP does not believe
to have a material impact on the Company's financial statements.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncements (continued)
In April, 2009, the FASB issued FASB Staff Position No. FAS 107-1 and APB 28-1
("FSP FAS 107-1 and APB 28-1"), Interim Disclosures about Fair Value of
Financial Instruments. The FSP amends SFAS 107, Disclosure about Fair Value of
Financial Instruments, and Accounting Principles Board Opinion No. 28, Interim
Financial Reporting, to require disclosures about fair value of financial
instruments for interim reporting periods of publicly traded companies as well
as in annual financial statements. Adoption of this FSP does not believe to have
a material impact on the Company's financial statements.
On April 1, 2009, the FASB issued FASB Staff Position No. FSP FAS 115-2 and FAS
124-2 ("FSP FAS 115-2 and FAS 124-2"), Recognition and Presentation of
Other-Than-Temporary Impairments. The FSP amends the other-than-temporary
impairment guidance in U.S. GAAP for debt securities to make the guidance more
operational and to improve the presentation and disclosure of
other-than-temporary impairments on debt and equity securities in the financial
statements. This FSP does not amend existing recognition and measurement
guidance related to other-than-temporary impairments of equity securities. The
adoption of this FSP does not believe to have a material impact on the Company's
financial statements.
In June 2009, the FASB issued FASB No. 168 The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles - a
replacement of FASB Statement No. 162 ("SFAS 168"). SFAS 168 establishes the
FASB Accounting Standards Codification as the source of authoritative accounting
principles recognized by the FASB to be applied by non-governmental entities in
the preparation of financial statements in conformity with GAAP in the United
States. SFAS 168 is effective for financial statements issued for interim and
annual periods ending after September 15, 2009.
In June 2009, the FASB issued FASB No. 166, Accounting for Transfers of
Financial Assets - an amendment of FASB Statement No. 140 ("SFAS 166"). SFAS 166
requires additional disclosures about the transfer and derecognition of
financial assets and eliminates the concept of qualifying special-purpose
entities under SFAS 140. SFAS 166 is effective for fiscal years beginning after
November 15, 2009.
Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a future date
are not expected to have a material impact on the Company's financial statements
upon adoption.
NOTE 3 - MINERAL PROPERTY INTEREST
On October 31, 2005 the Company acquired a 100% interest in two non-contiguous
mineral claims located along southeastern coastal Labrador, approximately 13
kilometers northeast of the community of Charlottetown, Labrador, Canada. The
claims were acquired from a non-affiliated third party for a consideration of
$4,250 CAD which covered an exploration program security deposit and staking and
other related costs of $401 (CAD$450) and $3,199 (CAD$3,800), respectively. The
Company expensed the staking and other related costs of $3,199 in connection
with the acquisition of the mineral claims.
One of the licenses comprising eight claims, was inadvertently allowed to expire
and was cancelled on January 24, 2007. The Company reacquired a 100% interest
in the same eight claims under a new mineral license by a Transfer of Mineral
Disposition dated July 16, 2007, from a non-affiliated third party, for $505
CAD. The Company expensed the entire cost of reacquiring the mineral claims.
Up to August 31, 2009, the Company has paid $8,069 towards a security deposit on
its exploration program. The Company was required to incur total exploration
expenditures of CAD$13,500 for the above noted mineral claims before July 13,
2009. The Company failed to do so, or to pay any further deposit on exploration
activities with the mining division of Labrador Canada. As a result, the
Company has forfeited its mineral claims and wrote off the prepaid security
deposit in the amount of $8,069.
NOTE 4 - PROMISSORY NOTE
On July 31, 2007, the Company issued an unsecured promissory note of $15,000 to
a non affiliated party, bearing an interest rate of 20% per annum, maturing on
July 31, 2008. The note, together with accrued interest of $2,336, was paid in
full on May 1, 2008.
NOTE 5 - PREFERRED AND COMMON STOCK
The Company has 50,000,000 shares of preferred stock authorized and none issued.
The Company has 100,000,000 shares of common stock authorized, of which
12,435,000 shares are issued and outstanding. All shares of common stock are
non-assessable and non-cumulative, with no preemptive rights.
NOTE 5 - PREFERRED AND COMMON STOCK
During the year ended August 31, 2008, the Company sold 1,205,000 shares of
common stock at $0.05 per share through a public offering that was exempt from
registration under Regulation A, promulgated under the Securities Act of 1933.
The gross proceeds of the offering was $60,250. The Company did not issue any
shares during the year ended August 31, 2009.
NOTE 6 - INCOME TAXES
At August 31, 2009, the Company had deferred tax assets of approximately $22,700
principally arising from net operating loss carryforwards for income tax
purposes. As our management cannot determine that it is more likely than not
that we will realize the benefit of the deferred tax asset, a valuation
allowance equal to the deferred tax asset has been established at August 31,
2009. A reconciliation of income taxes at statutory rates with the reported
taxes is as follows:
August 31, 2009 August 31, 2008
Net loss before income taxes $ 28,905 $ 19,034
Income tax recovery at statutory rates of 35% 10,117 6,662
Unrecognized benefits of non-capital losses (10,117) (6,662)
Total income tax recovery $ - $ -
The significant components of the deferred tax asset at August 31, 2009 and 2008
were as follows:
August 31, 2009 August 31, 2008
Net operating loss carryforwards $ 22,700 $ 12,600
Valuation allowance (22,700) (12,600)
Net deferred tax asset $ - $ -
At August 31, 2009, we had net operating loss carryforwards of approximately
$64,800, which expire in the year 2025 through 2029.
NOTE 7 - SEGMENT INFORMATION
The Company currently conducts all of its operations in Canada.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no changes in or disagreements with our independent accountants
since our inception.
ITEM 9A. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As of August 31, 2009, we carried out an evaluation, under the supervision and
with the participation of our management, including our Chief Executive Officer
and Chief Financial Officer (who are one and the same person), of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended. Based solely on the material
weaknesses described below, our Chief Executive Officer and Chief Financial
Officer concluded that, as of August 31, 2009, the Company's disclosure controls
and procedures were not effective:
1. The Company presently has only two officers and no employees. Inasmuch
as there is no segregation of duties within the Company, there is no management
oversight, no one to review control documentation and no control documentation
is being produced.
CHANGES IN DISCLOSURE CONTROLS AND PROCEDURES
Except as described below, there were no changes in disclosure controls and
procedures that occurred during the period covered by this report that have
materially affected, or are reasonably likely to materially effect, our
disclosure controls and procedures.
We will implement the following measures to address the identified material
weaknesses in our disclosure controls and procedures:
1. We will appoint accounting personnel who are able to implement applicable
accounting requirements, policies and procedures applicable to our reporting
obligations.
We will not be implementing any further changes to our disclosure controls and
procedures until there is a significant change in our operations or capital
resources.
LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS
Our management, including our CEO and CFO (who are one and the same person),
does not expect that our disclosure controls and internal controls will prevent
all errors and all fraud. A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of a simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management or board override of the
control.
The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.
CEO AND CFO CERTIFICATIONS
Appearing immediately following the Signatures section of this report there are
Certifications of our CEO and CFO (who are one and the same person). The
Certifications are required in accordance with Section 302 of the Sarbanes-Oxley
Act of 2002 (the Section 302 Certifications). This Item of this report is the
information concerning the Evaluation referred to in the Section 302
Certifications and this information should be read in conjunction with the
Section 302 Certifications for a more complete understanding of the topics
presented.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act Rule
13a-15(f). Our internal control over financial reporting is a process designed
to provide reasonable assurance to our management and board of directors
regarding the reliability of financial reporting and the preparation of the
financial statements for external purposes in accordance with accounting
principles generally accepted in the United States of America.
Our internal control over financial reporting includes those policies and
procedures that (i) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of the Company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with accounting principles generally accepted in the United States of
America, and that receipts and expenditures of the Company are being made only
in accordance with authorizations of management and directors of the Company;
and (iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the Company's assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal controls over financial reporting
may not prevent or detect misstatements. All internal control systems, no matter
how well designed, have inherent limitations, including the possibility of human
error and the circumvention of overriding controls. Accordingly, even effective
internal control over financial reporting can provide only reasonable assurance
with respect to financial statement preparation. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial
reporting as of August 31, 2009. In making this assessment, it used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control-Integrated Framework. Based solely on the
material weaknesses described below, our management has concluded that, as of
August 31, 2009, the Company's internal control over financial reporting was not
effective. Management has identified the following deficiencies that, when
aggregated, may possibly be viewed as a material weakness in our internal
control over financial reporting as of August 31, 2009:
1. We do not have an Audit Committee - While not being legally obligated to
have an audit committee, it is our management's view that such a committee,
including a financial expert member, is an utmost important entity level control
over our financial statements. To date we have not established an audit
committee.
2. Insufficient documentation of financial statement preparation and review
procedures - We employ policies and procedures in reconciliation of the
financial statements and the financial information based on which the financial
statements are prepared. Notwithstanding, the controls and policies we employ
are not sufficiently documented.
3. We did not maintain proper segregation of duties for the preparation of
our financial statements - As of August 31, 2008 the majority of the preparation
of financial statements was carried out by one person. Additionally, we
currently only have one officer/director having oversight on all transactions.
This has resulted in several deficiencies including:
a. Significant, non-standard journal entries were prepared and approved by
the same person, without being checked or approved by any other personnel.
b. Lack of control over preparation of financial statements, and proper
application of accounting policies.
4. We lack sufficient information technology controls and procedures - As of
August 31, 2009, we lacked a proper data back up procedure, and while backup did
take place in actuality, we believe that it was not regulated by methodical and
consistent activities and monitoring.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
We have also established and evaluated our internal control over financial
reporting, and there have been no significant changes in our internal controls
or in other factors that could significantly affect those controls subsequent to
the date of their last evaluation. Nor have there have been any changes in our
internal control over financial reporting during the last fiscal quarter.
Except as set out below, we do not intend to implement any changes to our
internal control over financial reporting until there is a significant change in
our level of operations and capital resources:
1. We will engage additional personnel to assist with the preparation of our
financial statements; which will allow for proper segregation of duties, as well
as additional manpower for proper documentation.
2. We will engage in a thorough review and restatement of our information
technology control procedures, in addition to procurement of all hardware and
software that will enable us to maintain proper backups, access, control etc.
This annual report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting. We
are not required to provide an attestation report by our registered public
accounting firm pursuant to the rules of the Securities and Exchange Commission.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
DIRECTORS AND OFFICERS
The following sets forth our directors, executive officers, promoters and
control persons, their ages, and all offices and positions held. Directors are
elected for a period of one year and thereafter serve until their successor is
duly elected by the shareholders. Officers and other employees serve at the
will of the Board of Directors.
- --------------------------------------------------------------------------------
TERM PERIOD SERVED AS
NAME POSITION AGE DIRECTOR/OFFICER
- --------------------------------------------------------------------------------
Fidel Thomas Chief Executive Officer, 43 2007 to present
President,
Chief Financial Officer
and a director
Alfonso Quijada Vice-President, 38 2006 to present
Chief Operating Officer,
Secretary and
a director
================================================================================
Fidel Thomas has been an independent corporate communications and business
development consultant since 2003. His clients include numerous private and
publicly held corporations, including Minco Gold Corp., Minco Silver Corp.,
Trivello Energy Corp., SMS Active Technologies and Visiphor Corp. Originally,
an actor, screen-writer and director, Mr. Thomas was active in the Canadian
entertainment industry from 1997 to 2002, through his production company, Inner
Vision Images Motion Picture Corp., and later, as an officer and director of AMP
Productions, Ltd. from 2003 to 2007. From 2006 to 2009 he was also the Chief
Executive Officer and a director of Pickford Minerals, Inc. Ltd, an exploration
company having mineral interests in Labrador, Canada. Mr. Thomas received a
Bachelor of Sociology from the University of East London in September, 1994. He
earned a Diploma in Media Practice from the University of Central London in
1998. In 2007, he successfully completed a mining professional development
course at the Norman B. Keevil Institute of Mining Engineering at the University
of British Columbia.
Alfonso Quijada has raised millions of dollars for private and public companies,
including $1.8 million for Rhino Films and $2.5 million for an oil refinery in
Bulgaria. From 1994 through to 1998 he was the founder and president of New
World Artist Productions Inc., an international production company, focused
primarily on live-productions and music development in Japan. He was the VP of
Investor Relations for Tri-Gate Entertainment Inc. from 2000 to 2003. From 2002
to 2003, Mr. Quijada also headed up investor relations for TNR Gold Corp. Since
2003, he has served as an independent consultant, advising companies on
corporate development and finance. From 2006 to 2009, Mr. Quijada was also a
director of Pickford Minerals Inc., an exploration company having mineral
interests in Labrador, Canada.
Messrs. Thomas and Quijada are the only "promoters" of our company, as defined
by Rule 405 of the Securities Act.
The address for all our officers and directors is 4620 Manilla Road, SE, Suite
10, Calgary, AB T2G 4B7.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
During the past five years none of our directors, executive officers, promoters
or control persons have:
(1) had any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;
(2) been convicted in a criminal proceeding or subject to a pending criminal
proceeding;
(3) been subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or
(4) been found by a court of competent jurisdiction in a civil action, the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.
COMMITTEES OF THE BOARD
All proceedings of the board of directors for the fiscal year ended August 31,
2009 were conducted by resolutions consented to in writing by our board of
directors and filed with the minutes of the proceedings of our board of
directors. Our company currently does not have nominating, compensation or
audit committees or committees performing similar functions nor does our company
have a written nominating, compensation or audit committee charter. Our board of
directors does not believe that it is necessary to have such committees because
it believes that the functions of such committees can be adequately performed by
the board of directors.
Our company does not have any defined policy or procedure requirements for
shareholders to submit recommendations or nominations for directors. The board
of directors believes that, given the stage of our development, a specific
nominating policy would be premature and of little assistance until our business
operations develop to a more advanced level. Our company does not currently have
any specific or minimum criteria for the election of nominees to the board of
directors and we do not have any specific process or procedure for evaluating
such nominees. The board of directors will assess all candidates, whether
submitted by management or shareholders, and make recommendations for election
or appointment.
A shareholder who wishes to communicate with our board of directors may do so by
directing a written request addressed to our President, Fidel Thomas, at the
address appearing on the first page of this registration statement.
AUDIT COMMITTEE FINANCIAL EXPERT
We do not have a standing audit committee. Our directors perform the functions
usually designated to an audit committee. Our board of directors has determined
that we do not have a board member that qualifies as an "audit committee
financial expert" as defined in Item 407(d)(5) of Regulation S-K, nor do we have
a board member that qualifies as "independent" as the term is used in Item
7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as
amended, and as defined by Rule 4200(a)(14) of the NASD Rules.
We believe that our board of directors is capable of analyzing and evaluating
our financial statements and understanding internal controls and procedures for
financial reporting. Our board of directors does not believe that it is
necessary to have an audit committee because management believes that the
functions of an audit committees can be adequately performed by the board of
directors. In addition, we believe that retaining an independent director who
would qualify as an "audit committee financial expert" would be overly costly
and burdensome and is not warranted in our circumstances given the stage of our
development and the fact that we have not generated any positive cash flows from
operations to date.
As we generate revenue in the future, we intend to form a standing audit
committee and identify and appoint a financial expert to serve on our audit
committee.
CODE OF ETHICS
The Company has adopted a Code of Ethics for Senior Financial Officers that is
applicable to our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions. A copy of our Code of Ethics for Senior Financial Officers is filed
as an exhibit to this annual report on Form 10-K.
INDEMNIFICATION
Under our Articles of Incorporation and Bylaws of the corporation, we may
indemnify an officer or director who is made a party to any proceeding,
including a law suit, because of his position, if he acted in good faith and in
a manner he reasonably believed to be in our best interest. We may advance
expenses incurred in defending a proceeding. To the extent that the officer or
director is successful on the merits in a proceeding as to which he is to be
indemnified, we must indemnify him against all expenses incurred, including
attorney's fees. With respect to a derivative action, indemnity may be made only
for expenses actually and reasonably incurred in defending the proceeding, and
if the officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by the laws of
the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of
1933, which may be permitted to directors or officers under Nevada law, we are
informed that, in the opinion of the Securities and Exchange Commission,
indemnification is against public policy, as expressed in the Act and is,
therefore, unenforceable.
ITEM 11. EXECUTIVE COMPENSATION
To date we have no employees other than our officers. No compensation has been
awarded, earned or paid to our officers. We have no employment agreements with
any of our officers. We do not contemplate entering into any employment
agreements until such time as we have proven mineral reserves.
There is no arrangement pursuant to which any of our directors has been or is
compensated for services provided as one of our directors.
There are no stock option plans, retirement, pension, or profit sharing plans
for the benefit of our officers or directors. We do not have any long-term
incentive plans that provide compensation intended to serve as incentive for
performance.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDERS MATTERS
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of May 31, 2008 by (i) each person known by us
to be a beneficial owner of more than five percent (5%) of our issued and
outstanding common stock; (ii) each of our Directors and executive officers; and
(iii) all our directors and executive officers as a group.
- --------------------------------------------------------------------------------
NAME NUMBER OF SHARES %
- --------------------------------------------------------------------------------
Fidel Thomas 1,000,000 8
4620 Manilla Road SE, Suite 10
Calgary, Alberta T2G 4B7
Alfonso Quijada 8,300,000 67
4620 Manilla Road SE, Suite 10
Calgary, Alberta T2G 4B7
- --------------------------------------------------------------------------------
Directors and officers as a group (two persons) 9,300,000 75
================================================================================
Unless otherwise noted, we believe that all persons named in the table have sole
voting and investment power with respect to all shares of common stock
beneficially owned by them. For purposes hereof, a person is considered to be
the beneficial owner of securities that can be acquired by such person within 60
days from the date hereof, upon the exercise of warrants or options or the
conversion of convertible securities. Each beneficial owner's percentage
ownership is determined by assuming that any such warrants, options or
convertible securities that are held by such person (but not those held by any
other person) and which can be exercised within 60 days from the date hereof,
have been exercised.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
There has not been any transaction since inception, nor is there any currently
proposed transaction, in which Castmor Resources Ltd. has been or is a
participant involving an amount in excess of $120,000, and in which any related
person had or will have a direct or indirect material interest.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
AUDIT FEES
The aggregate fees billed by Chang Lee LLP for professional services rendered
for the audit of our annual financial statements included in this Annual Report
on Form 10-K for the fiscal year ended August 31, 2008 were $5,250.
The aggregate fees billed by Chang Lee LLP for professional services rendered
for the audit of our annual financial statements included in this Annual Report
on Form 10-K for the fiscal year ended August 31, 2009 will be approximately
$5,000.
AUDIT RELATED FEES
For the fiscal years ended August 31, 2009 and 2008, the aggregate fees billed
for assurance and related services by Chang Lee LLP relating to our quarterly
financial statements which are not reported under the caption "Audit Fees"
above, were $2,462 and $1,575, respectively.
TAX FEES
For the fiscal years ended August 31, 2009 and 2008, the aggregate fees billed
for tax compliance, by Chang Lee LLP were nil.
ALL OTHER FEES
For the fiscal years ended August 31, 2009 and 2008, the aggregate fees billed
by Chang Lee LLP for other non-audit professional services, other than those
services listed above, totaled nil.
Effective May 6, 2003, the Securities and Exchange Commission adopted rules that
require that before Chang & Lee is engaged by us or our subsidiaries to render
any auditing or permitted non-audit related service, the engagement be:
-approved by our audit committee; or
- -entered into pursuant to pre-approval policies and procedures established by
the audit committee, provided the policies and procedures are detailed as to the
particular service, the audit committee is informed of each service, and such
policies and procedures do not include delegation of the audit committee's
responsibilities to management.
We do not have an audit committee. Our entire board of directors pre-approves
all services provided by our independent auditors. The pre-approval process has
just been implemented in response to the new rules. Therefore, our board of
directors does not have records of what percentage of the above fees were
pre-approved. However, all of the above services and fees were reviewed and
approved by the entire board of directors either before or after the respective
services were rendered.
PART IV
ITEM 13. EXHIBITS
EXHIBIT TITLE
3.1 Articles of Incorporation, Castmor Resources Ltd., incorporated by
reference from the Form 10 filed July 7, 2008
3.2 Bylaws, Castmor Resources Ltd., incorporated by reference from the Form
10 filed July 7, 2008
4.1 Form of Stock certificate, Castmor Resources Ltd., incorporated by
reference from the Form 10 filed July 7, 2008
14.1 Code of Ethics for Senior Financial Officers, Castmor Resources Ltd.
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CASTMOR RESOURCES LTD.
Date: November 25, 2009 By:/s/ Fidel Thomas
Fidel Thomas
Chief Executive Officer, President,
Chief Financial Officer and
Principal Accounting Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
/s/ Fidel Thomas Chief Executive Officer, November 25,2009
Fidel Thomas President, Chief Financial Officer,
Principal Accounting Officer & a director
/s/ Alfonso Quijada director November 25, 2009
Alfonso Quijada