U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GRAY CREEK MINING INC.
(Exact name of Registrant as specified in its charter)
NEVADA 1000 APPLIED FOR
(State or other jurisdiction ofStandard Industrial ClassificationIRS Employer
ID Number
incorporation or organization)
GRAY CREEK MINING INC.
Alan J. Cox, President
313 - 6688 Willington Ave.
Burnaby, British Columbia,
Canada V5H 2V8
(Name and address of principal executive offices)
(604) 434-8539 (604) 839-9290
Registrant's telephone numberRegistrant's fax number,
Val-U-Corp Services, Inc.
1802 N. Carson Street, Suite 212
Carson City, NV 89701
(Name and Address of Agent for Service)
Approximate date of commencement of proposed sale to the public:
As soon as practicable, after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |__|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following. |__|
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TITLE OF AMOUNT TO PROPOSED PROPOSED AMOUNT OF
EACH CLASS BE MAXIMUM MAXIMUM REGISTRATION
OF REGISTERED OFFERING AGGREGATE FEE (2)
SECURITIES PRICE PER OFFERING
TO BE SHARE (1) PRICE (2)
REGISTERED
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Common Stock $22,500 $0.01 $22,500 $2.41
(1) Based on the last sales price on Oct 14, 2006.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act.
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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
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PROSPECTUS
GRAY CREEK MINING INC.
2,250,000 SHARES OF COMMON STOCK
The selling shareholders named in this prospectus are offering all of the
shares of common stock offered through this prospectus.
Our common stock is presently not traded on any market or securities exchange.
The purchase of the securities offered through this prospectus involves a high
degree of risk. SEE SECTION ENTITLED "RISK FACTORS" ON PAGES 8 - 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 $0.01 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.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
THE DATE OF THIS PROSPECTUS IS: August 15, 2007
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TABLE OF CONTENTS
PAGE
SUMMARY ....................................................... 6
RISK FACTORS .................................................. 7
- IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS
WILL FAIL ................................................ 7
- BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE
A HIGH RISK OF BUSINESS FAILURE .......................... 7
- BECAUSE OF THE SPECULATIVE NATURE OF EXPLORATION OF MINING
PROPERTIES, THERE IS SUBSTANTIAL RISK THAT OUR BUSINESS
WILL FAIL ................................................ 8
- 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................ 8
- 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 ....................... 8
- EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS
ON THE SWAKUM MOUNTAIN PROPERTY, WE MAY NOT BE ABLE TO
SUCCESSFULLY COMMENCE COMMERCIAL PRODUCTION .............. 8
- BECAUSE OUR PRESIDENT AND SECRETARY HAVE OTHER BUSINESS
INTERESTS, THEY MAY NOT BE ABLE OR WILLING TO DEVOTE A
SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATIONS,
CAUSING OUR BUSINESS TO FAIL.............................. 8
- BECAUSE OUR MANAGEMENT HAS ONLY LIMITED EXPERIENCE IN
MINERAL EXPLORATION, OUR BUSINESS HAS A HIGHER RISK OF
FAILURE................................................... 8
- IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP,
SHAREHOLDERS MAY BE UNABLE TO SELL THEIR SHARES ......... 9
- A PURCHASER IS PURCHASING PENNY STOCK WHICH LIMITS THE
SELL THE ABILITY TO STOCK ................................ 9
FORWARD-LOOKING STATEMENTS..................................... 9
USE OF PROCEEDS ............................................... 9
DETERMINATION OF OFFERING PRICE ............................... 9
DILUTION ...................................................... 9
SELLING SHAREHOLDERS .......................................... 9
PLAN OF DISTRIBUTION .......................................... 12
LEGAL PROCEEDINGS ............................................. 13
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS .. 13
BIOGRAPHICAL INFORMATION ...................................... 13
TERM OF OFFICE ................................................ 14
SIGNIFICANT EMPLOYEES ......................................... 14
CONFLICTS OF INTEREST ......................................... 14
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 14
DESCRIPTION OF SECURITIES ..................................... 14
INTEREST OF NAMED EXPERTS AND COUNSEL ......................... 15
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES .................................... 16
ORGANIZATION WITHIN LAST FIVE YEARS ........................... 16
DESCRIPTION OF BUSINESS ....................................... 16
DESCRIPTION, LOCATION AND ACCESS .............................. 16
SWAKUM MOUNTAIN PROPERTY STAKING AND PURCHASE AGREEMENT ....... 17
EXPLORATION HISTORY ........................................... 17
GEOLOGICAL ASSESSMENT: REPORT PROPERTY......................... 17
CONCLUSIONS ................................................... 17
COST PROPOSAL FOR PHASE ONE ................................... 17
COMPLIANCE WITH GOVERNMENT REGULATION ......................... 18
EMPLOYEES ..................................................... 19
RESEARCH AND DEVELOPMENT EXPENDITURES ......................... 19
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SUBSIDIARIES .................................................. 19
PATENTS AND TRADEMARKS ........................................ 19
REPORTS TO SECURITY HOLDERS ................................... 19
PLAN OF OPERATIONS ............................................ 20
RESULTS OF OPERATIONS FOR PERIOD ENDING APRIL 30, 2007 ........ 20
DESCRIPTION OF PROPERTY ....................................... 20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ................ 21
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS ...... 21
NO PUBLIC MARKET FOR COMMON STOCK ............................. 21
STOCK HOLDERS OF OUR COMMON SHARES ............................ 21
RULE 144 SHARES ............................................... 21
REGISTRATION RIGHTS ........................................... 22
DIVIDENDS ..................................................... 22
EXECUTIVE COMPENSATION ........................................ 22
SUMMARY COMPENSATION TABLE .................................... 22
ANNUAL COMPENSATION TABLE ..................................... 22
STOCK OPTION GRANTS ........................................... 22
CONSULTING AGREEMENTS ......................................... 22
FINANCIAL STATEMENTS .......................................... 23
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ................. 32
5
SUMMARY
PROSPECTIVE INVESTORS ARE URGED TO READ THIS PROSPECTUS IN ITS ENTIRETY.
We intend to be in the business of mineral property exploration. To date, we
have not conducted any exploration on our sole mineral property, the Swakum
Mountain property, located in British Columbia, Canada. We own a 100% interest
in three mineral claims comprising the Swakum Mountain property. We purchased
these claims from David Heyman of Langley, British Columbia for a cash payment
of $8,000.
Our objective is to conduct mineral exploration activities on the Swakum
Mountain property in order to assess whether it possesses economic reserves of
gold and silver. We have not yet identified any economic mineralization on the
property. Our proposed exploration program is designed to search for an
economic mineral deposit.
There is currently no public market for our common stock and no certainty that
a market will develop. 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.
We were incorporated on August 10, 2006 under the laws of the state of
Nevada. Our principal offices are located at 6688 Willingdon Avenue, suite
313, Burnaby, British Columbia, Canada. Our telephone number is (604) 434-8539.
THE OFFERING:
SECURITIES BEING OFFEREDUp to 2,250,000 shares of common stock.
OFFERING PRICE The selling shareholders will sell the shares at $0.01
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 2,250,000
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 5,250,000 shares of our common stock are issued and
outstanding as of the date of this prospectus. All of
the common stock to be sold under this prospectus will
be sold by existing shareholders.
USE OF PROCEEDS We will not receive any proceeds from the sale of the
common stock by the selling shareholders.
SUMMARY FINANCIAL INFORMATION
Balance Sheet April 30, 2007
(audited)
Cash $17,326
Total Assets $25,326
Liabilities $0
Total Stockholders' Equity $25,326
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STATEMENT OF LOSS AND DEFICIT
From Incorporation on August 10, 2006 to April 30, 2007 (audited)
Revenue $0
Net Loss $174
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.
As of April 30, 2007, we had cash in the amount of $17,326. 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 Swakum Mountain property. While we have sufficient funds to
conduct the initial exploration on the property, estimated to cost $8,500, we
may require additional financing in order to determine whether the property
contains economic mineralization. We will also require additional financing if
the costs of the exploration of the Swakum Mountain property are greater than
anticipated.
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 silver, and investor
acceptance 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
Swakum Mountain property to a third party in exchange for cash or exploration
expenditures, which is not presently contemplated.
BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF
BUSINESS FAILURE.
We have not yet commenced exploration on the Swakum Mountain property.
Accordingly, we have no way to evaluate the likelihood that our business will
be successful. We were incorporated on August 10, 2006 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
Swakum Mountain property and the production of minerals from the claims, we
will not be able to earn profits or continue operations.
There is no history upon which to base any assumption as to the likelihood that
we will prove successful, and it is doubtful that we will generate any
operating revenues or ever achieve profitable operations. If we are
unsuccessful in addressing these risks, our business will most likely fail.
If we determine that the Swakum Mountain property does not contain any reserves
and that we are unable to complete our business plan with respect to the
claims, we intend to
7
acquire an interest or interests in additional mineral claims for exploration
purposes. Additional acquisitions will depend upon our ability to raise
additional funding through our sale of common stock.
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 Swakum Mountain
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 Auditor's Report to our audited financial statements for the
period ended April 30, 2007 indicates that there are a number of factors that
raise substantial doubt about our ability to continue as a going concern. Such
factors identified in the report are that we have no source of revenue and our
dependence upon obtaining adequate financing. If we are not able to continue as
a going concern, it is likely investors will lose all of their investment.
BECAUSE OF THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION, THERE IS A
RISK THAT WE MAY INCUR LIABILITY OR DAMAGES 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.
EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON THE SWAKUM
MOUNTAIN PROPERTY, WE MAY NOT BE ABLE TO SUCCESSFULLY COMMENCE COMMERCIAL
PRODUCTION.
The Swakum Mountain property does not contain any known bodies of
mineralization. If our exploration programs are successful in establishing
zinc, copper and silver 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.
BECAUSE OUR PRESIDENT AND SECRETARY 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. Alan J. Cox spends approximately 30% his business time
providing his services to us. Our secretary and treasurer, Mr. Todd Halfnight
spends only about 25% of his business time providing his services to us. While
Mr. Cox and Mr. Halfnight presently possess adequate time to attend to our
interests, it is possible that the demands on Mr. Cox and Mr. Halfnight from
their other obligations could increase with the result that they would no
longer be able to devote sufficient time to the management of our business.
BECAUSE MANAGEMENT HAS ONLY LIMITED EXPERIENCE IN MINERAL EXPLORATION, OUR
BUSINESS HAS A HIGHER RISK OF FAILURE.
None of our directors has any technical training in the field of geology and
specifically in the areas of exploring for, starting and operating a mine. As a
result, we may not be able to recognize and take advantage of potential
acquisition and exploration opportunities in the sector without the aid of
qualified geological consultants. As well, with no direct training or
experience, our management may not be fully aware of the specific requirements
related to working in this industry. Their decisions and choices may not be
well thought out and our operations, earnings and ultimate financial success
may suffer irreparable harm as a result.
8
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 trade on the bulletin board. If no market is ever developed for our
shares, it will be difficult for shareholders to sell their stock. In such a
case, shareholders may find that they are unable to achieve benefits from their
investment.
A PURCHASER IS PURCHASING PENNY STOCK WHICH LIMITS HIS OR HER ABILITY TO SELL
THE STOCK.
The shares offered by this prospectus constitute penny stock under the Exchange
Act. The shares will remain penny stock for the foreseeable future. The
classification of penny stock makes it more difficult for a broker-dealer to
sell the stock into a secondary market, thus limiting investment liquidity. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in our company will be subject to rules 15g-1 through 15g-10 of the
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
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
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 the shares at $0.01 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.
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 SHAREHOLDERS
The selling shareholders named in this prospectus are offering all of the
2,250,000 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 offering was completed on
October 14, 2006;
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
9
4. the percentage owned by each upon completion of the offering.
TOTAL
NUMBER
OF SHARES
OFFERED FOR TOTAL SHARES
SELLING OWNED UPON PERCENT
OWNED STOCKHOLDER SHARES OWNED SHARE- COMPLETION UPON
COMPLETION PRIOR TO THIS HOLDERS OF THIS OF THIS
OFFERING OFFERING ACCOUNT OFFERING OFFERING
Alexis Phillips
16380 Jacobson Road 100,000 100,000 Nil Nil
Crawford Bay, BC
Sheida Madadi Kahkesh
521 Foster Avenue,
Suite 604 100,000 100,000 Nil Nil
Coquitlam, BC V3J 2L5
Colleen Vogt
7063 McKay Avenue 100,000 100,000 Nil Nil
Burnaby, BC V5J 3S3
Gail Schumann
6656 Lambert Cres. 100,000 100,000 Nil Nil
Delta, BC V4E 1R8
William Hopping
1000 Brunette Avenue,
Suite 310 100,000 100,000 Nil Nil
Coquitlam, BC V3K 1E3
Janice Mullin
7092 McKay Avenue 100,000 100,000 Nil Nil
Burnaby, BC
Elipio Orme
1166 Melville Street,
Suite 1501 50,000 50,000 Nil Nil
Vancouver, BC V6E 4P5
Sarda Patel
7763 Goodlad Street 50,000 50,000 Nil Nil
Burnaby, BC V5E 2H7
Rebecca Godin
1166 Melville Street,
Suite 1501 50,000 50,000 Nil Nil
Vancouver, BC V6E 4P5
Brent Zaluski
2949 Laurel Street 100,000 100,000 Nil Nil
Vancouver, BC V5Z 3T4
Penny Fiddick
14724 110A Avenue 100,000 100,000 Nil Nil
Surrey, BC V3R 2B7
Trisha Takahashi
6528 Denbigh Avenue,
Suite 51 100,000 100,000 Nil Nil
Burnaby, BC V5H 3R8
William Chapman
336 E. 1st Avenue,
Suite 102 100,000 100,000 Nil Nil
Vancouver, BC V5T 4R6
Alan Rendle
4365 Faithwood Road 100,000 100,000 Nil Nil
Victoria, BC V8X 4Y6
Kathy Warren
4322 Greta Street 100,000 100,000 Nil Nil
Burnaby, BC V5J 1N8
Julia Parente
1026 Queens Avenue,
Suite 703 100,000 100,000 Nil Nil
New Westminster, BC V3M 6B2
Wayne Smith
24168 - 116 Avenue 50,000 50,000 Nil Nil
Maple Ridge, BC
10
TOTAL
NUMBER
OF SHARES
OFFERED FOR TOTAL SHARES
SELLING OWNED UPON PERCENT
OWNED STOCKHOLDER SHARES OWNED SHARE- COMPLETION UPON
COMPLETION PRIOR TO THIS HOLDERS OF THIS OF THIS
OFFERING OFFERING ACCOUNT OFFERING OFFERING
Leslie Jones
24168 - 116 Avenue 50,000 50,000 Nil Nil
Maple Ridge, BC
Michelle Moss
15151 Anderson Road 50,000 50,000 Nil Nil
Gray Creek, BC V0B 1S0
Diane Trudel Heinze
16327 Cedar Road 50,000 50,000 Nil Nil
Crawford Bay, BC V0B 1E0
Galadriel Rael
16357 Hwy. 3A 50,000 50,000 Nil Nil
Crawford Bay, BC
Sam Galpin
1026 Queens Avenue,
Suite 703 50,000 50,000 Nil Nil
New Westminster, BC V3M 6B2
Lea Belcourt
16345 Cedar Road 50,000 50,000 Nil Nil
Crawford Bay, BC
Elisa Shaw
1240 E. 12th Avenue 50,000 50,000 Nil Nil
Vancouver, BC
Giulio Santarelli
1007 Winslow Avenue 50,000 50,000 Nil Nil
Coquitlam, BC V3J 2E9
Robert Marcheterre
15293 Hwy 3A 50,000 50,000 Nil Nil
Gray Creek, BC V0B 1S0
Peter Choat
Box 179 50,000 50,000 Nil Nil
Tahsis, BC V0P 1X0
Peter Larsen
1533 Eastman Avenue 50,000 50,000 Nil Nil
Riondel, BC V0B 2B0
Bob Carter
16305 Waverly Road 100,000 100,000 Nil Nil
Crawford Bay, BC
Sabine Boker
16670 Crawford
Creek Road 100,000 100,000 Nil Nil
Crawford Bay, BC V0B 1E0
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 sells shares of common stock not being offered in
this prospectus or purchases additional shares of common stock, and assumes
that all shares offered are sold. The percentages are based on 5,250,000
shares of common stock outstanding on the date of this prospectus.
None of the selling shareholders:
(1) has had a material relationship with us other than as a shareholder at
any time within the past
three years;
(2) has ever been one of our officers or directors; or
(3) has the right to acquire any shares with sixty days from options,
warrants, rights, conversion privileges, or
similar obligations.
11
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 $0.01 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 investors. The shares may also be sold in compliance with the Securities
and
Exchange Commission's Rule 144.
The selling shareholders may also sell their shares directly to market makers
acting as principals, brokers or dealers, who may act as agent or acquire the
common stock as principal. Any broker or dealer participating in such
transactions as agent, may receive a commission from the selling shareholders,
or, if they act as agent for the purchaser of such common stock, from such
purchaser. The selling shareholders will likely pay the usual and customary
brokerage fees for such services. Brokers or dealers may agree with the selling
shareholders to sell a specified number of shares at a stipulated price per
share and, to the extent such broker or dealer is unable to do so while acting
as agent for the selling shareholders, to purchase, as principal, any unsold
shares at the price required to fulfill the respective broker's or dealer's
commitment to the selling shareholders.
Brokers or dealers who acquire shares as principals may thereafter resell such
shares from time to time in transactions in a market or on an exchange, in
negotiated transactions or otherwise, at market prices prevailing at the time
of sale or at negotiated prices, and in connection with such re-sales may pay
or receive commissions to or from the purchasers of such shares. These
transactions may involve cross and block transactions that may involve sales to
and through other brokers or dealers. If applicable, the selling shareholders
may distribute shares to one or more of their partners who are unaffiliated
with us. Such partners may, in turn, distribute such shares as described
above. We can provide no assurance that all or any of the common stock offered
will be sold by the selling shareholders.
We are bearing all costs relating to the registration of the common stock. The
selling shareholders, however, will pay any commissions or other fees payable
to brokers or dealers in connection with any sale of the common stock.
The selling shareholders must comply with the requirements of the Securities
Act and the Exchange Act in the offer and sale of the common stock. In
particular, during such times as the selling shareholders may be deemed to be
engaged in a distribution of the common stock, and therefore be considered to
be an underwriter, they must comply with applicable law and may, among other
things:
1. Not engage in any stabilization activities in connection with our common
stock;
2. Furnish each broker or dealer through which common stock may be offered,
such copies of this prospectus, as amended from time to time, as may be
required by such broker or dealer; and
3. Not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under the
Exchange Act.
The Securities Exchange Commission has also adopted rules that regulate broker-
dealer practices in connection with transactions in penny stocks. Penny stocks
are generally equity securities with a price of less than $5.00 (other than
securities registered on certain national securities exchanges or quoted on the
Nasdaq system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or system).
The penny stock rules require a broker-dealer, prior to a transaction in a
penny stock not otherwise exempt from those rules, deliver a standardized risk
disclosure document prepared by the Commission, which:
* 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;
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* 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.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings. Our address for service
of process in Nevada is Val-U-Corp Services, Inc., 1802 N Carson St Suite 212,
Carson City, NV 89701
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
Alan J. Cox 45
Todd Halfnight 45
EXECUTIVE OFFICERS:
NAME OF OFFICER AGE OFFICE
Alan J. Cox 45 President, Chief Executive Officer, and Director
Todd Halfnight 45 Treasurer, Secretary and Director
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. ALAN J. COX has acted as our President, C.E.O., Treasurer, Secretary and
director since our incorporation on August 10, 2006 to January 2, 2007. Since
January 2, 2007, Mr. Cox has acted as our President, C.E.O., C.F.O. and
director. Since 1997, Mr. Cox has been self employed in building and life
safety field, specializing in fire detection and signaling systems as an
electrical installer and system designer, on a contract basis. Mr. Cox has
several years personal investment experience focusing on Canadian mining
resource stocks especially involved in the area of precious metal, base metals,
diamonds, and oil sands.
Mr. Cox intends to devote 30% of his business time to our affairs
13
MR. TODD HALFNIGHT has acted as our Treasurer, Secretary, and as a director
since January 2, 2007. Since 2004, he has been a member of a School Planning
Council in Nelson, British Columbia. Mr. Halfnight's duties included organizing
community support and secured funding for arts and athletic facilities
conjoined to a new school project. Since 2004 to 2006, Mr. Halfnight was also a
director of a Community Facilities Committee in Nelson, British Columbia, where
he organized community support and secured funding for arts and athletic
facilities conjoined to a new school project. Since 1993 to 2007, Mr. Halfnight
was an owner of Starbelly Metal Arts involved in designing and manufacturing
unique, sculptural and functional furnishings and architectural features for
custom local markets and for national distribution.
Mr. Halfnight intends to devote 25% of his business time to our affairs.
TERM OF OFFICE
Our directors are appointed for a one-year term to hold office until the next
annual general meeting of our shareholders or until removed from office in
accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board.
SIGNIFICANT EMPLOYEES
We have no significant employees other than the officers and directors
described above.
CONFLICTS OF INTEREST
We do not have any written procedures in place to address conflicts of interest
that may arise in our directors between our business and their other business
activities.
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
NAME AND ADDRESS BENEFICIAL PERCENT OF
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP OWNERSHIP
Common Stock Alan J. Cox 2,000,000 38.10%
President, Chief
Executive Officer
and Director
6688 Willingdon Avenue,
Burnaby, BC, Canada
Common Stock Todd Halfnight
Secretary, Treasurer 1,000,000 19.05%
PO Box 39
Crawford, BC, Canada
Common Stock All officers and directors
as a group that consists
of two people 3,000,000 57.15%
The percent of class is based on 5,250,000 shares of common stock issued and
outstanding as of the date of this prospectus.
DESCRIPTION OF SECURITIES
GENERAL
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Our authorized capital stock consists of 75,000,000 shares of common stock at a
par value of $0.001 per share.
COMMON STOCK
As of the date of this prospectus, there were 5,250,000 shares of our common
stock issued and outstanding held by 32 stockholders of record.
Holders of our common stock are entitled to one vote for each share on all
matters submitted to a stockholder vote. Holders of common stock do not have
cumulative voting rights. Therefore, holders of a majority of the shares of
common stock voting for the election of directors can elect all of the
directors. Two persons present and being, or representing by proxy,
shareholders are necessary to constitute a quorum at any meeting of our
stockholders. A vote by the holders of a majority of our outstanding shares is
required to effectuate certain fundamental corporate changes such as
liquidation, merger or an amendment to our articles of incorporation.
Holders of common stock are entitled to share in all dividends that the board
of directors, in its discretion, declares from legally available funds. In the
event of a liquidation, dissolution or winding up, each outstanding share
entitles its holder to participate pro rata in all assets that remain after
payment of liabilities and after providing for each class of stock, if any,
having preference over the common stock.
Holders of our common stock have no pre-emptive rights, no conversion rights
and there are no redemption provisions applicable to our common stock.
PREFERRED STOCK
We do not have an authorized class of preferred stock.
DIVIDEND POLICY
We have never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business. As a result, we do not anticipate paying any cash dividends in
the foreseeable future.
SHARE PURCHASE WARRANTS
We have not issued and do not have outstanding any warrants to purchase shares
of our common stock.
OPTIONS
We have not issued and do not have outstanding any options to purchase shares
of our common stock.
CONVERTIBLE SECURITIES
We have not issued and do not have outstanding any securities convertible into
shares of our common stock or any rights convertible or exchangeable into
shares of our common stock.
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.
Dennis H. Johnston, Esq., has provided an opinion on the valid issuance of our
common stock.
The financial statements included in this prospectus and the registration
statement have been audited by George Stewart, Certified Public Accountant to
the extent and for the periods set forth in their report appearing elsewhere in
this
15
document and in the registration statement filed with the SEC, and are included
in reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Our directors and officers are indemnified as provided by the Nevada Revised
Statutes and our Bylaws. These provisions provide that we shall indemnify a
director or former director against all expenses incurred by him by reason of
him acting in that position. The directors may also cause us to indemnify an
officer, employee or agent in the same fashion.
We have been advised that in the opinion of the Securities and Exchange
Commission indemnification for liabilities arising under the Securities Act is
against public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities is asserted by one of our directors, officers, or controlling
persons in connection with the securities being registered, we will, unless in
the opinion of our legal counsel the matter has been settled by controlling
precedent, submit the question of whether such indemnification is against
public policy to a court of appropriate jurisdiction. We will then be governed
by the court's decision.
ORGANIZATION WITHIN LAST FIVE YEARS
We were incorporated on August 10, 2006 under the laws of the state of Nevada.
On that date, Alan J. Cox was appointed as President, Secretary, Treasurer,
Chief Executive Officer, and director. On January 2, 2007 Mr. Cox resigned as
Secretary and Treasurer and Todd Halfnight was appointed as our Secretary and
Treasurer, and also as a director.
No promoter has received, or has an agreement to receive, anything of value,
directly or indirectly, from us.
DESCRIPTION OF BUSINESS
IN GENERAL
We intend to commence operations as an exploration stage company. We will be
engaged in the acquisition and exploration of mineral properties with a view to
exploiting any mineral deposits we discover that demonstrate economic
feasibility. We own a 100% interest in one mineral claim known as the Swakum
Mountain property. There is no assurance that a commercially viable mineral
deposit exists on the property. Further exploration will be required before a
final evaluation as to the economic and legal feasibility is determined.
Our plan of operation is to conduct exploration work on the Swakum Mountain
property in order to ascertain whether it possesses economic quantities of gold
and silver. There can be no assurance that economic mineral deposits or
reserves exist on the Swakum Mountain 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.
Even if we complete our proposed exploration programs on the Swakum Mountain
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.
DESCRIPTION, LOCATION AND ACCESS, LOCAL RESOURCES AND INFRASTRUCTURE
The project area lies within the Thompson Plateau physiographic division of the
southern interior of B.C. in moderately rolling terrain between elevations of
1,200 and 1,700 meters above sea level. Access is via the Coquihalla Highway to
a point about 20 km north of Merritt and from there via forest roads which lead
west from the highway to the property area. An alternative route is the forest
road leading north from Nicola along Shuta Creek.
The property lies within the Interior Plateau climate zone, a region where mean
temperatures range between -5 to -15 degrees Celsius in the winter and from 20
to 30 degrees Celsius in the summer months. Total monthly precipitation varies
from a low of about 20mm during March, the driest month, to over 50 mm in July.
Snow may be expected from October through March with between 40 and 50 cm
occurring in each of December and January. The area is drained by a complex
system of intermittent streams flowing north and east to Clapperton Creek and
south to Shuta Creek - both tributaries of the Nicola River. Forest cover
consists mainly of pine with minor deciduous groves in drainage areas.
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There is no plant or equipment on the property.
The nearest community with some basic services is Merritt. The City of Merritt
is a regional population centre with some services and amenities for
industrial, educational and leisure activities.
Water required for exploration and development of the claim is available from
several creeks and fresh water lakes located in the area.
SWAKUM MOUNTAIN PROPERTY STAKING AND PURCHASE AGREEMENT
On November 29, 2006, we entered into an agreement with Mr. David Heyman of
Langley, British Columbia, whereby he agreed stake and sell to us one mineral
claim located approximately 17 kilometers north of Merritt, British Columbia in
an area having the potential to contain gold and silver mineralization or
deposits. In order to acquire a 100% interest in these claims, we paid $8,000
to Mr. Heyman.
REQUIREMENTS OR CONDITIONS FOR RETENTION OF TITLE
Title to the property has already been granted to the company. The claim was
staked using the British Columbia Mineral Titles Online computer Internet
system. All claims staked in British Columbia require $0.40 per hectare worth
of assessment work to be undertaken in year 1 through 3, followed by $0.80 per
hectare per year thereafter. In order to retain title to the property
exploration work costs must be recorded and filed with the British Columbia
Department of Energy Mines and Petroleum Resources ("BCDM"). The BCDM charges a
filing fee, equal to 10% of the value of the work recorded, to record the work.
EXPLORATION HISTORY
Early interest in the Swakum Mountain area dates to the late 19th century
with the staking of the Peacock Group by Mr. Thomas Hunter. In 1916, copper,
gold and silver mineralization was discovered on what later became the Lucky
Mike, Alameada, Thelma, Sunchine, Lee, Lo and other claims. In the following
few years a number of additional prospects were discovered in the area and
limited tests shipments were made from several properties including the Lucky
Mike (also known as the Last Chance), Thelma and Alameada (also referred to as
the Alameda).
GEOLOGICAL ASSESSMENT REPORT: SWAKUM MOUNTAIN PROPERTY
We have obtained a geological summary report on the Swakum Mountain property
that was prepared by T.L. Saddlier-Brown, P. Geo., a member of the Association
of Professional Engineers and Geoscientists of British Columbia. He holds a
Bachelor of Science degree in geology. The report discusses the geology of the
area surrounding and particular to the Swakum Mountain property, and makes a
recommendation for further exploration work.
CONCLUSIONS
T.L. Sadlier-Brown, the author of the geological report on the Swakum Mountain
property, concludes that Swakum Moutain property presents a new opportunity for
the application of modern exploration methods in the area and, accordingly, a
multi disciplinary exploration program is considered to be warranted.
An estimate of the cost of the proposed initial review and field examination is
US$8,500. Provision of an additional budget of US$80,000 is recommended for the
contingent exploration work that would be required to complete in-fill survey
work over the property. Costs are summarized in following Table.
COST PROPOSAL (IN U.S. FUNDS)
PHASE I
Data acquisition and review, map
proparation & interpretation $3,500
Field examination: $3,200
Geochemical analyses & assays (rock & soil) $400
Travel and field expenses $600
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Planning and supervision $ 800
Sub-total $ 8,500
PHASE II
Geology & supervision $11,000
Provision for geochemical survey
(including analyses & LOA) $25,000
Provision for geophysical surveys
(including LOA) $24,500
Miscellneous Travel and field expenses $ 5,000
Data evaluation, interpretation and
report preparation $ 4,500
Contingency allowance (15%) $10,000
Sub-total $80,000
GRAND TOTAL $88,500
COMPETITION
We do not compete directly with anyone for the exploration or removal of
minerals from our property as we hold all interest and rights to the claim.
Readily available commodities markets exist in Canada and around the world
for the sale of minerals. Therefore, we will likely be able to sell any
minerals that we are able to recover.
We will be subject to competition and unforeseen limited sources of supplies
in the industry in the event spot shortages arise for supplies such as
dynamite, and certain equipment such as bulldozers and excavators that we
will need to conduct exploration. If we are unsuccessful in securing the
products, equipment and services we need we may have to suspend our exploration
plans until we are able to do so.
BANKRUPTCY OR SIMILAR PROCEEDINGS
There has been no bankruptcy, receivership or similar proceeding.
REORGANIZATIONS, PURCHASE OR SALE OF ASSETS
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course
of business.
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 the Province of British Columbia, specifically. The
governmental agencies responsible for overseeing the exploration of minerals in
Canada are primarily the Ministry of Natural Resources Canada and the Ministry
of the Environment. In British Columbia, the responsible government agency is
the Ministry of Energy, Mines and Petroleum Resources.
Under these laws, prior to production, we have the right to explore the
property, subject only to a notice of work which may entail posting a bond. In
addition, production of minerals in the Province of British Columbia will
require prior approval of applicable governmental regulatory agencies. We can
provide no assurance to investors that such approvals will be obtained. The
cost and delay involved in attempting to obtain such approvals cannot be known
at this time.
We have budgeted for regulatory compliance costs in the proposed work program
recommended by the geological report. Such costs will be less than $500 and
will consist of having any significant soil or rock that is moved during the
exploration process returned to its original location. Soil and rock movement
during proposed exploration is anticipated to be negligible.
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 recommended work
program. However, it is anticipated that such costs will not exceed $5,000 for
future exploration phases. 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, our
competitive position or us in the event a potentially economic deposit is
discovered.
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If we enter into production, the cost of complying with permit and regulatory
environment laws will be greater than in phase one and phase two 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;
- 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.
During the exploration phase, a bond will need to be provided covering possible
land disturbance. In the case of normal fieldwork, this should be minimal. The
costs of compliance with environmental regulations in the production phase are
variable and cannot be determined at this time.
EMPLOYEES
We have no employees as of the date of this prospectus other than our two
officers.
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.
NEED FOR GOVERNMENT APPROVAL FOR ITS PRODUCTS OR SERVICES
We are not required to apply for or have any government approval for our
products or services.
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 & Exchange
Commission until our registration statement on Form SB-2 is declared effective.
We have filed a registration statement on form SB-2 under the Securities Act of
1933 with the Securities and Exchange Commission with respect to the shares of
our common stock offered through this prospectus. This prospectus is filed as a
part of that registration statement, but does not contain all of the
information contained in the registration statement and exhibits. Statements
made in the registration statement are summaries of the material terms of the
referenced contracts, agreements or documents of the company. We refer you to
our registration statement and each exhibit attached to it for a more detailed
description of matters involving the company, and the statements we have made in
this prospectus are qualified in their entirety by reference to these
additional materials. You may inspect the registration statement, exhibits
19
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.W., 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.
MANAGEMENT'S DISCUSSION AND ANALYSIS
PLAN OF OPERATIONS
Our plan of operation for the twelve months following the date of this
prospectus is to complete the recommended exploration program on the Swakum
Mountain property consisting of initial review and field examination. In
addition, geophysical and geochemical surveys will be performed on the
property. And finally, the date will be evaluated, interpreted and prepared
in a report. We anticipate that the program will cost approximately $88,500.
To date, we have not commenced exploration on the Swakum Mountain property.
In the next 12 months, we also anticipate spending an additional $15,000 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
approximately $103,500.
Our cash reserves are not sufficient to meet our obligations for the next
twelve-month period. As a result, we will need to seek additional funding in
the near future. We currently do not have a specific plan of how we will obtain
such funding; however, we anticipate that additional funding will be in the
form of equity financing from the sale of our common stock. We may also seek to
obtain short-term loans from our directors, although no such arrangement has
been made. At this time, we cannot provide investors with any assurance that
we will be able to raise sufficient funding from the sale of our common stock
or through a loan from our directors to meet our obligations over the next
twelve months. We do not have any arrangements in place for any future equity
financing.
We do not expect to earn any revenue from operations until we have either
commenced mining operations on the Swakum Mountain property or have sold an
interest in the property to a third party. Before this occurs, we expect that
we will have to complete current recommended exploration on the property, as
well as additional exploration recommended by a geologist.
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on the small business issuer's
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources
that are material to investors.
RESULTS OF OPERATIONS FOR THE PERIOD ENDING APRIL 30, 2007
We have not earned any revenues from our incorporation on August 10, 2006 to
April 30, 2007. We do not anticipate earning revenues unless we enter into
commercial production on the Swakum Mountain 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 $174 for the period from our
inception on August 10, 2006 to April 30, 2007. These operating expenses were
comprised of office expense and miscellaneous 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.
DESCRIPTION OF PROPERTY
20
We own a 100% interest in the mineral claim comprising the Swakum Mountain
property. We do not own or lease any property other than the Swakum Mountain
property.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None of the following parties has, since our date of incorporation, had any
material interest, direct or indirect, in any transaction with us or in any
presently proposed transaction that has or will materially affect us:
* Any of our directors or officers;
* Any person proposed as a nominee for election as a director;
* Any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to our
outstanding shares of common stock;
* Any member of the immediate family of any of the foregoing persons.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
NO PUBLIC MARKET FOR COMMON STOCK
There is presently no public market for our common stock. We anticipate
applying for trading of our common stock on the over the counter bulletin board
upon the effectiveness of the registration statement of which this prospectus
forms a part. However, we can provide no assurance that our shares will be
traded on the bulletin board or, if traded, that a public market will
materialize. As well, there is no assurance that our stock may be resold at the
offered price if and when an active secondary market might develop. Even if
developed, a public market for our securities may not be sustained.
We have not taken any steps to engage a market-marker to apply for quotation on
the OTC Bulletin Board on our behalf. If we are able to engage a market-maker,
we anticipate that it will take approximately two months for our securities to
be quoted on the OTC Bulletin Board following submission of the application.
However, there is no guarantee that our application will be approved. Even if
we obtain an OTC Bulletin Board quotation, there is no assurance that there
will be a liquid market for our stock.
STOCKHOLDERS OF OUR COMMON SHARES
As of the date of this registration statement, we have 32 registered
shareholders.
RULE 144 SHARES
A total of 2,000,000 shares of our common stock are available for resale to the
public after August 30, 2007, and an additional 1,000,000 shares of our common
stock are available for resale to the public after October 5, 2007, 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 our common stock then outstanding which, in
our case, will equal 52,500 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.
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As of the date of this prospectus, persons who are our affiliates hold all of
the 3,000,000 shares that may be sold pursuant to Rule 144.
REGISTRATION RIGHTS
We have not granted registration rights to the selling shareholders or to any
other persons.
DIVIDENDS
There are no restrictions in our articles of incorporation or bylaws that
prevent us from declaring dividends. The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:
1. We would not be able to pay our debts as they become due in the usual
course of business; or
2. Our total assets would be less than the sum of our total liabilities plus
the amount that would be needed to satisfy the rights of shareholders who
have preferential rights superior to those receiving the distribution.
We have not declared any dividends, and we do not plan to declare any dividends
in the foreseeable future.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below summarizes all compensation awarded to, earned by, or paid to
our executive officers by any person for all services rendered in all
capacities to us for the fiscal period ended April, 2007 and subsequent to that
period to the date of this prospectus.
ANNUAL COMPENSATION
OTHER RESTRICTED OPTIONS/ LTIP OTHER
STOCK * SARS PAYOUTS COMP
NAME TITLE YEAR SALARY BONUS COMP. AWARDED (#) ($)
________________________________________________________________________
Alan J Pres., CEO 2006 $0 0 0 0 0 0
Cox & Director 2005 $0 0 0 0 0 0
Todd Sec., Treas.,2006 $0 0 0 0 0 0
Halfnight & Director 2005 $0 0 0 0 0 0
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. Halfnight or Mr.
Cox. We do not pay them any amount for acting as an officer or director.
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FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS:
1. Report of Independent Registered Public Accounting Firm;
2. Audited financial statements for the period ending April 30, 2007,
including:
a. Balance Sheets;
b. Statements of Operations;
c. Statements of Cash Flows;
d. Statements of Stockholders' Equity; and
e. Notes to the Financial Statements
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GRAY CREEK MINING, INC.
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEET
___________________________________________________________________________
AS OF
APRIL 30,
2007
___________
ASSETS
CURRENT ASSETS
Cash $ 17,326
TOTAL CURRENT ASSETS 17,326
OTHER ASSETS
Mining Land 8,000
TOTAL OTHER ASSETS 8,000
TOTAL ASSETS $ 25,326
____________
____________
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Officers Advances Payable $ 0
____________
TOTAL CURRENT LIABILITIES -
____________
TOTAL LIABILITIES -
____________
STOCKHOLDERS' EQUITY
Common stock, ($0.001 par value, 75,000,000 shares
authorized; 5,250,000 shares issued and outstanding
as of April 30, 2007 5,250
Additional paid-in capital 20,250
Deficit accumulated during exploration stage (174)
TOTAL STOCKHOLDERS' EQUITY 25,326
TOTAL LIABILITIES & ____________
STOCKHOLDERS' EQUITY $ 25,326
____________
____________
GRAY CREEK MINING, INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATIONS
____________________________________________________________________________
AUGUST 10, 2006
(INCEPTION)
THROUGH
APRIL 30,
2007
__________________
REVENUES
Revenues $ -
__________________
TOTAL REVENUES -
GENERAL & ADMINISTRATIVE EXPENSES 174
TOTAL GENERAL & ADMINISTRATIVE EXPENSES (174)
__________________
NET INCOME (LOSS) $ (174)
__________________
__________________
BASIC EARNING (LOSS) PER SHARE $ (0.00)
__________________
__________________
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,152,644
__________________
__________________
GRAY CREEK MINING, INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM AUGUST 10, 2006 (INCEPTION) THROUGH APRIL 30, 2007
Deficit
Common Common Additional Accumulated
Stock Stock Paid-in During Total
Amount Capital Exploration
Stage
BALANCE, AUGUST 10, 2006 - $ - $ - $ - $ -
Stock issued for cash on
October 5, 2006
@ $0.001 per share 3,000,000 $ 3,000 3,000
Stock issued for cash on
October 14, 2006
@ $0.01 per share 2,250,000 2,250 20,250 22,500
Net loss, April 30, 2007 (174) (174)
BALANCE, APRIL 30, 2007 5,250,000 $ 5,250 $ 20,250 $ (174) $ 25,326
GRAY CREEK MINING, INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF CASH FLOWS
____________________________________________________________________
AUGUST 10, 2006
(INCEPTION)
THROUGH
APRIL 30,
2007
_________________
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (174)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Changes in operating assets and liabilities:
_________________
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES (174)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase Mining Property (8,000)
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES (8,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock $ 5,250
Additional paid-in capital 20,250
_________________
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES 25,500
_________________
NET INCREASE (DECREASE) IN CASH 17,326
CASH AT BEGINNING OF PERIOD -
_________________
CASH AT END OF YEAR $ 17,326
_________________
_________________
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during year for:
Interest $ -
_________________
_________________
Income Taxes $ -
_________________
_________________
GRAY CREEK MINING, INC.
(An Exploration Stage Company)
Notes to Financial Statements
APRIL 30, 2007
(Stated in U.S. Dollars)
1. NATURE AND CONTINUANCE OF OPERATIONS
Gray Creek Mining Inc., ("the Company") was incorporated under the laws of the
State of Nevada on August 10, 2006, with an authorized capital of 75,000,000
common shares with a par value of $0.001. The Company's year end is April 30th.
The Company is in the exploration stage of its resource business. During the
year ended April 30, 2007 the Company commenced operations by issuing shares
and acquiring a mineral property located in the Province of British Columbia,
Canada. The Company has not yet determined whether this property contains
reserves that are economically recoverable. The recoverability of costs
incurred for acquisition and exploration of the property will be dependent upon
the discovery of economically recoverable reserves, confirmation of the
Company's interest in the underlying property, the ability of the Company to
obtain necessary financing to satisfy the expenditure requirements under the
property agreement and to complete the development of the property and upon
future profitable production or proceeds for the sale thereof.
These financial statements have been prepared on a going concern basis which
assumes the Company will be able to realize its assets and discharge its
liabilities in the normal course of business for the foreseeable future. The
Company has incurred losses since inception resulting in an accumulated deficit
of $174 as of April 30, 2007 and further losses are anticipated in the
development of its business raising substantial doubt about the Company's
ability to continue as a going concern. The ability to continue as a going
concern is dependent upon the Company generating profitable operations in the
future and/or to obtain the necessary financing to meet its obligations and
repay its liabilities arising from normal business operations when they come
due. Management intends to finance operating costs over the next twelve months
with existing cash on hand and loans from directors and or private placement of
common stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and
are present in U.S. dollars.
Exploration Stage Company
The Company complies with the Financial Accounting Standards Board Statement
No. 7, it's characterization of the Company as an exploration stage enterprise.
Mineral Interests
Mineral property acquisition, exploration and development costs are expensed as
incurred until such time as economic reserves are quantified. To date, the
Company has not established any proven or probable reserves on its mineral
properties. The Company has adopted the provisions of SFAS No. 143 "Accounting
for Asset Retirement Obligations" which establishes standards for the initial
measurement and subsequent accounting for obligations associated with the sale,
abandonment, or other disposal of long -lived tangible assets arising from the
acquisition, construction or development and for normal operations of such
assets. As at April 30, 2007, any potential costs relating to the retirement of
the Company's mineral property has not yet been determined.
GRAY CREEK MINING, INC. (NOTES TO FINANCIALS) PAGE TWO
Use of Estimates and Assumptions
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 during the period. Actual results
could differ from those estimates.
Foreign Currency Translation
The financial statements are presented in United States dollars. In accordance
with Statement of Financial Accounting Standards No. 52 "Foreign Currency
Translation," foreign denominated monetary assets and liabilities are
translated into their United States dollar equivalents using foreign exchange
rates which prevailed at the balance sheet date. Non monetary assets and
liabilities are translated at the exchange rates prevailing on the transaction
date. Revenue and expenses are translated at average rates of exchange during
the year. Gains or losses resulting from foreign currency transactions are
included in results of operations.
Fair Value of Financial Instruments
The carrying value of cash and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is management's opinion the Company is
not exposed to significant interest currency or credit risks arising from these
financial instruments.
Environment Costs
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations, and which do not contribute to current or future
revenue generation, are expensed. Liabilities are recorded when environmental
assessments and/or remedial efforts are probably, and the cost can be
reasonably estimated. Generally, the timing of these accruals coincides with
the earlier of completion of a feasibility study or the Company's commitments
to plan of action based on the then known facts.
Income Taxes
The Company follows the accrual method of accounting for income taxes. Under
this method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences). The effect on the deferred income tax assets and liabilities of
a change in tax rates is recognized in income in the period that includes the
enactment date.
At April 30, 2007 a full deferred tax asset valuation allowance has been
provided and no deferred tax asset has been recorded.
Basic and Diluted Loss Per Share
The Company computes loss per share in accordance with SFAS No. 128. "Earnings
per Share," which requires presentation of both basic and diluted earnings per
share on the face of the statement of operations. Basic loss per share is
computed by dividing net loss available to common shareholders by the weighted
average number of outstanding common shares during the period. Diluted loss
per share gives effect to all dilutive potential common shares outstanding
during the period. Dilutive loss per share excludes all potential common
shares if their effect is anti-dilutive.
The Company has no potential dilutive instruments and, accordingly, basic loss
and diluted loss per share are equal.
GRAY CREEK MINING, INC. (NOTES TO FINANCIALS) PAGE THREE
Stock based Compensation
In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payments," which
replaced SFAS No. 123, "Accounting for Stock-Based Compensation" and superseded
APB Opinion No. 25, "Accounting for Stock Issued to Employees." In January
2005, the Securities and Exchange Commission ("SEC") issued Staff Accounting
Bulletin ("SAB") No. 107, "Share-Based Payment," which provides supplemental
implementation guidance for SFAS No. 123R SFAS No. 123R requires all share
based payments to employees , including grants of employee stock options, to be
recognized in the financial statements based on the grant date fair value of
the award. SFAS No. 123R was to be effective for interim or annual reporting
periods beginning on or after June 15, 2005, but in April 2005, the SEC issued
a rule that will permit most registrants to implement SFAS No. 123R at the
beginning of their next fiscal year, instead of the next reporting period as
required by SFAS No. 123R. The pro0forma disclosures previously permitted
under SFAS No. 123R no longer will be an alternative to financial statement
recognition. Under SFAS No. 123R, the Company must determine the appropriate
fair value model to be used for valuing share-based payments, the amortization
method for compensation costs and the transition method to be used at date of
adoption.
The transition methods include prospective and retroactive adoption options.
Under the retroactive options, prior periods may be restated either as of the
beginning of the year of adoption or for all periods presented. The prospective
method requires that compensation expense be recorded for all unvested stock
options and restricted stock at the beginning of the first quarter of adoption
of SFAS No. 123R, while the retroactive methods would record compensation
expense for all unvested stock options and restricted stock beginning with the
first period restated. The Company adopted the modified prospective approach of
SFAS No 123R for the year ended August 31, 2006. The Company did not record any
compensation expense for the year ended April 30, 2007 because there were no
stock options outstanding prior to the adoption or at April 30, 2007.
Recent Accounting Pronouncements
In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments-an amendment of FASB Statements NO 133 and 140," to
simplify and make more consistent the accounting for certain financial
instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," to permit fair value re-measurement for any
hybrid financial instrument with an embedded derivative that otherwise would
require bifurcation, provided that the whole instrument is accounted for on a
fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the
Impairment of Disposal of Long-Lived Assets," to allow a qualifying special
purpose entity to hold a derivative financial instrument that pertains to a
beneficial interest other than another than another derivative financial
instrument. SFAS No. 155 applies to all financial instruments acquired or
issued after the beginning of an entity's first fiscal year that begins after
September 15, 2006, with earlier application allowed. This standard is not
expected to have a significant effect on the Company's future reported
financial position or results of operations.
In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets," and amendment of FASB Statement NO. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities." This statement requires all separately recognized servicing
assets and servicing liabilities be initially measured at fair value, if
practicable, and permits for subsequent measurement using either fair value
measurement with changes in fair value reflected in earnings or the
amortization and impairment requirements of Statement No. 140. The Subsequent
measurement of separately recognized servicing assets and servicing liabilities
at fair value eliminates the necessity for entities that manage the risks
inherent in servicing assets and servicing liabilities with derivatives to
qualify for hedge accounting treatment and eliminates the characterization of
declines in fair value as impairments or direct write-downs. SFAS No. 156 is
effective for an entity's first fiscal year beginning after September 15, 2006.
This adoption of t his statement is not expected t to have a significant effect
on the Company's future report financial position or results of operations.
GRAY CREEK MINING, INC. (NOTES TO FINANCIALS) PAGE FOUR
3. COMMON STOCK
The total number of common shares authorized that my be issued by the Company
is 75,000,000 shares with a par value of one tenth of one cent ($0.001) per
share and no other class of shares is authorized.
During the year ended April 30, 2007, the company issued 5,250,000 shares of
common stock for total cash proceeds of $25,500. At April 30, 2007, there were
no outstanding stock options or warrants.
4. MINERAL INTERESTS
On November 29, 2006, the Company entered into a purchase and sale agreement to
acquire a 100% interest in one mineral claim located in the mining division
approximately 17 kilometers north of Merritt, British Columbia, Canada for a
total consideration of $8,000.
The mineral interest is held in trust for the Company by the vendor of the
property. Upon request from the Company, the title will be recorded in the name
of the Company with the appropriate mining recorder.
5. INCOME TAXES
As of April 30, 2007, the Company had a net operating loss carry forwards of
approximately $174 that may be available to reduce future years' taxable income
through 2027. Future tax benefits which may arise as a result of these losses
have not been recognized in these financial statements, as their realization is
determined not likely to occur and accordingly, the Company has recorded a
valuation allowance for the deferred tax asset relating to these tax loss carry
forwards.
6. RELATED PARTY TRANSACTIONS
Alan Cox and Todd Halfnight, the officers and directors of the Company may, in
the future, become involved in other business opportunities as they become
available, thus they may face a conflict in selecting between the Company and
their other business opportunities. The company has not formulated a policy for
the resolution of such conflicts.
Alan Cox and Todd Halfnight, the officers and directors of the Company, will
not be paid for any underwriting services that they perform on behalf of the
Company with respect to the Company's upcoming SB-2 offering. He will also not
receive any interest on any funds that he advances to the Company for offering
expenses prior to the offering being closed which will be repaid from the
proceeds of the offering.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
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 and our bylaws.
Under the NRS, director immunity from liability to a company or its
shareholders for monetary liabilities applies automatically unless it is
specifically limited by a company's articles of incorporation that is not the
case with our articles of incorporation. Excepted from that immunity are:
(1) a willful failure to deal fairly with the company or its
shareholders in connection with a matter in which the director has
a material conflict of interest;
(2) a violation of criminal law (unless the director had reasonable
cause to believe that his or her conduct was lawful or no
reasonable cause to believe that his or her conduct was unlawful);
(3) a transaction from which the director derived an improper personal
profit; and
(4) willful misconduct.
Our bylaws provide that we will indemnify our directors and officers to the
fullest extent not prohibited by Nevada law; provided, however, that we may
modify the extent of such indemnification by individual contracts with our
directors and officers; and, provided, further, that we shall not be required
to indemnify any director or officer in connection with any proceeding (or
part thereof) initiated by such person unless:
(1) such indemnification is expressly required to be made by law;
(2) the proceeding was authorized by our Board of Directors;
(3) such indemnification is provided by us, in our sole discretion,
pursuant to the powers vested us under Nevada law; or
(4) such indemnification is required to be made pursuant to the bylaws.
Our bylaws provide that we will advance all expenses incurred to any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was our
director or officer, or is or was serving at our request as a director or
executive officer of another company, partnership, joint venture, trust or
other enterprise, prior to the final disposition of the proceeding, promptly
following request. This advanced of expenses is to be made upon receipt of an
undertaking by or on behalf of such person to repay said amounts should it be
ultimately determined that the person was not entitled to be indemnified under
our bylaws or otherwise.
Our bylaws also provide that no advance shall be made by us to any officer in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made: (a) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to the proceeding; or (b) if such quorum is not obtainable,
or, even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to the
decision- making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in a manner
that such person did not believe to be in or not opposed to our best interests.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee $0.69
Transfer Agent Fees $5,000
Accounting and auditing fees and expenses $7,000
Legal fees and expenses $2,500
Edgar filing fees $500
-----------
Total $15,000.69
===========
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 3,000,000 shares of our common stock at a price of
$0.001 per share. Of these shares, 2,000,000 were issued on August 30, 2006 to
Alan J. Cox, our President, C.E.O. and director. The remaining 1,000,000 shares
were issued on October 5, 2006 to Todd Halfnight, our Secretary, Treasurer, and
director. The total amount received from these offering was $3,000.
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 2,250,000 shares of our common stock at a price of
$0.01 per share to a total of 30 purchasers on October 14, 2006. The total
amount received from this offering was $22,500. We completed this offering
pursuant to Regulation S of the Securities Act. The purchasers were as follows:
NAME OF PURCHASER SHARES
PURCHASED
Alexis Phillips
16380 Jacobson Road 100,000
Crawford Bay, BC
Sheida Madadi Kahkesh
521 Foster Avenue, Suite 604 100,000
Coquitlam, BC V3J 2L5
Colleen Vogt
7063 McKay Avenue 100,000
Burnaby, BC V5J 3S3
NAME OF PURCHASER SHARES
PURCHASED
Gail Schumann
6656 Lambert Cres. 100,000
Delta, BC V4E 1R8
William Hopping
1000 Brunette Avenue, Suite 310 100,000
Coquitlam, BC V3K 1E3
Janice Mullin
7092 McKay Avenue 100,000
Burnaby, BC
Elipio Orme
1166 Melville Street, Suite 1501 50,000
Vancouver, BC V6E 4P5
Sarda Patel
7763 Goodlad Street 50,000
Burnaby, BC V5E 2H7
Rebecca Godin
1166 Melville Street, Suite 1501 50,000
Vancouver, BC V6E 4P5
Brent Zaluski
2949 Laurel Street 100,000
Vancouver, BC V5Z 3T4
Penny Fiddick
14724 110A Avenue 100,000
Surrey, BC V3R 2B7
Trisha Takahashi
6528 Denbigh Avenue, Suite 51 100,000
Burnaby, BC V5H 3R8
William Chapman
336 E. 1st Avenue, Suite 102 100,000
Vancouver, BC V5T 4R6
Alan Rendle
4365 Faithwood Road 100,000
Victoria, BC V8X 4Y6
Kathy Warren
4322 Greta Street 100,000
Burnaby, BC V5J 1N8
Julia Parente
1026 Queens Avenue, Suite 703 100,000
New Westminster, BC V3M 6B2
Wayne Smith
24168 - 116 Avenue 50,000
Maple Ridge, BC
Leslie Jones
24168 - 116 Avenue 50,000
Maple Ridge, BC
Michelle Moss
15151 Anderson Road 50,000
Gray Creek, BC V0B 1S0
Diane Trudel Heinze
16327 Cedar Road 50,000
Crawford Bay, BC V0B 1E0
NAME OF PURCHASER SHARES
PURCHASED
Galadriel Rael
16357 Hwy. 3A 50,000
Crawford Bay, BC
Sam Galpin
1026 Queens Avenue, Suite 703 50,000
New Westminster, BC V3M 6B2
Lea Belcourt
16345 Cedar Road 50,000
Crawford Bay, BC
Elisa Shaw
1240 E. 12th Avenue 50,000
Vancouver, BC
Giulio Santarelli
1007 Winslow Avenue 50,000
Coquitlam, BC V3J 2E9
Robert Marcheterre
15293 Hwy 3A 50,000
Gray Creek, BC V0B 1S0
Peter Choat
Box 179 50,000
Tahsis, BC V0P 1X0
Peter Larsen
1533 Eastman Avenue 50,000
Riondel, BC V0B 2B0
Bob Carter
16305 Waverly Road 100,000
Crawford Bay, BC
Sabine Boker
16670 Crawford Creek Road 100,000
Crawford Bay, BC V0B 1E0
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.
EXHIBITS
Exhibit
Number Description
3.1 Articles of Incorporation
3.2 Bylaws
5.1 Legal Opinion and Consent
10.1 Mineral Property Staking and Purchase Agreement date November 29,
2006
23.1 Consent of George Stewart, Certified Public Accountant
99.1 Claims Location Map
THE UNDERSIGNED REGISTRANT HEREBY UNDERTAKES:
1. To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(a) include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(b) reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information set forth in
this registration statement; and notwithstanding the forgoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the commission pursuant to Rule 424(b) if, in the aggregate, the
changes in the volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration Statement; and
(c) include any additional or changed material information on the plan of
distribution.
2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered hereby which remain unsold at the
termination of the offering.
4. That, for determining our liability under the Securities Act to any
purchaser in the initial distribution of the securities, we undertake
that in a primary offering of our securities pursuant to this
registration statement, regardless of the underwriting method used to
sell the securities to the purchaser, if the securities are offered or
sold to such purchaser by means of any of the following communications,
we will be a seller to the purchaser and will be considered to offer or
sell such securities to such purchaser:
(i) any preliminary prospectus or prospectus that we file relating to
the offering required to be filed pursuant to Rule 424 (Section
230.424 of this chapter);
(ii) any free writing prospectus relating to the offering prepared by
or on our behalf or used or referred to by us;
(iii)the portion of any other free writing prospectus relating to the
offering containing material information about us or our
securities provided by or on behalf of us; and
(iv) any other communication that is an offer in the offering made by
us to the purchaser.
Each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying
on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall
be deemed to be part of and included in the registration statement as of the
date it is first used after effectiveness. Provided, however, that no statement
made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale
prior to such first use, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date of first
use.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by one of our directors,
officers, or controlling persons in the successful defense of any action, suit
or proceeding, is asserted by one of our directors, officers, or controlling
person in 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 August 15, 2007.
GRAY CREEK MINING INC.
/s/ Alan J. Cox
------------------------------
Alan J. Cox, President, Chief
Executive Officer, Chief Financial Officer
and Director
POWER OF ATTORNEY
ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Todd Halfnight, his true and lawful attorney-in-fact
and agent, with full power of substitution and re-substitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all pre-
or post-effective amendments to this registration statement, and to file the
same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any one of them, or their or his substitutes, may lawfully do or
cause to be done by virtue hereof.
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
President, Chief Executive August 15, 2007
Officer, Chief Financial Officer
/s/Alan J. Cox and Director
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Alan J Cox
Secretary, August 15, 2007
/s/ Todd Halfnight Treasurer and Director
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Todd Halfnight