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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
EXPLORE TECHNOLOGIES, INC.
(Exact name of Company as specified in its charter)
NEVADA 88-0419476
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 505, 1155 Robson Street
Vancouver, British Columbia, Canada V6E 1B5
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
604-689-1659
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Shares, par value $0.001 per share
(Title of class)
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TABLE OF CONTENTS
Page
COVER PAGE............................................... 1
TABLE OF CONTENTS........................................ 2
PART I................................................... 3
DESCRIPTION OF BUSINESS.................................. 3
DESCRIPTION OF PROPERTY.................................. 12
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES.. 12
REMUNERATION OF DIRECTORS AND OFFICERS................... 14
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITYHOLDERS ............................... 15
INTEREST OF MANAGEMENT AND OTHERS IN
CERTAIN TRANSACTIONS ................................... 15
DESCRIPTION OF SECURITIES................................ 15
PART II ............................................... 16
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS ............ 16
LEGAL PROCEEDINGS........................................ 16
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ........... 17
RECENT SALES OF UNREGISTERED SECURITIES ................. 17
INDEMNIFICATION OF DIRECTORS AND OFFICERS ............... 17
PART F/S ................................................ 19
FINANCIAL STATEMENTS .................................... 19A
PART III ................................................ 20
INDEX TO EXHIBITS ....................................... 20
SIGNATURES .............................................. 21
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PART I
The issuer has elected to follow Form 10-SB, Disclosure
Alternative 2.
Item 6. Description of Business
Organization
Explore Technologies, Inc. (the "Company") was organized as a
Nevada corporation on December 18, 1998.
Business
The Company is a natural resource company engaged in the
acquisition, exploration and development of mineral properties.
The Company has an option to acquire an interest in the properties
described below under the heading "Miranda Property Option
Agreement". The Company intends to carry out exploration work on
the Miranda Property in order to ascertain whether the Miranda
Property possesses commercially developable quantities of gold and
other precious minerals.
Miranda Property Option Agreement
By an agreement made as of December 22, 1998 between the Company
and Miranda Industries Inc. of Suite 505 - 1155 Robson Street,
Vancouver, British Columbia ("Miranda"), the Company acquired
from Miranda the option (the "Option") to acquire a 50% interest
in certain mineral claims situated in the State of Nevada (the
"Miranda Property"). The consideration paid by the Company to
Miranda for the grant of the Option was $1,000 US.
The Option is exercisable by the Company incurring the following
property exploration expenditures on the Miranda Property:
1. initial exploration expenditures in the amount of
$10,000 US by December 31, 1999; and
2. cumulative exploration expenditures in the amount of
$150,000 US by December 31, 2001.
Property exploration expenditures include all reasonable and
necessary monies expended on or in connection with the
exploration and development of the Miranda Property determined in
accordance with generally accepted accounting principles. In
addition, until the Company shall have secured a 50% interest in
the Miranda Property, the Company is obligated to make all
payments to Larry McIntosh pursuant to the Underlying Option
Agreement as required to enable Miranda to exercise the
Underlying Option to acquire the Miranda property from McIntosh,
as discussed below.
Upon the Company acquiring a 50% interest in the Miranda Property
by exercise of the Option, the Company and Miranda will enter
into a joint venture for the purpose of further exploring and
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developing and, if economically and politically feasible,
constructing and operating a mine on the Miranda Property.
The Company's Option is subject to an underlying option agreement
dated the 20th day of November, 1997 (the "Underlying Option
Agreement") between Miranda and Larry McIntosh of P.O. Box 1388,
Gardnerville, Nevada ("McIntosh") whereby Miranda acquired the
option to acquire the Miranda Property from McIntosh (the
"Underlying Option") by staking the mining claims comprising the
Miranda Property and making the following payments to McIntosh,
totalling $138,500 US, by the dates indicated below:
1. $ 2,500 US by November 20, 1998;
2. $ 7,000 US by November 20, 1999;
3. $ 9,000 US by November 20, 2000;
4. $10,000 US by November 20, 2001;
5. $10,000 US by November 20, 2002;
6. $20,000 US by November 20 of each of the years 2003 through
2007.
Miranda has represented to the Company that the mineral claims
comprising the Miranda Property have been staked and the initial
payment of $2,500 made to McIntosh, each as required to maintain
the Underlying Option in good standing. As stated above, until
the Company shall have secured a 50% interest in the Miranda
Property, the Company has agreed to make the necessary payments
to McIntosh in order to maintain the Underlying Option in good
standing. Upon completion of all payments required under the
Underlying Option, McIntosh will transfer to Miranda a 100%
interest in the Miranda Property and the claims comprising the
Miranda Property will be registered in the name of Miranda.
In addition, Miranda will be required to pay to McIntosh a
royalty equal to 2.5% of net smelter returns on the gross
proceeds received by the Company from the sale of any ore from
the mining of the Property, less costs of transportation,
refining and insurance costs. Upon payment of the total sum of
$500,000 US, the royalty will be reduced to 1.0% of net smelter
returns. Upon exercise of the Option by the Company, the Company
and Miranda will be obligated to pay this royalty to McIntosh in
equal shares as joint venture partners.
Miranda Property
The eleven lode claims comprising the Miranda Property have been
located and filed by Miranda on land administered by the U.S.
Bureau of Land Management. The claims are named Dune 1 - 8 and
22 - 24 and they are situated in sections 3, 4, 9, and 10 of T16N
and R32E.
The Miranda Property is located in the Stillwater Range about 2
miles (3.2 km) West of Sand Springs Pass on U.S. Highway 50 and
30 highway miles east of Fallon on U.S. 50 (48 km) in Churchill
County, Nevada. The property is approximately one half mile (0.8
km) north of the highway. The property is located approximately 23
miles (37 km) north of the Rawhide mine and 38 miles (61 km)
south-southwest of Fondaway Canyon.
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Geological Report
The Company has obtained a geological report on the Miranda
Property prepared by John Rice, Consulting Geologist of P.O. Box
20074, Reno, Nevada 89515 (the "Geological Report"). The
Geological Report is attached hereto as Exhibit 6. The Geological
Report summarizes the exploration history of the Miranda Property,
the regional geology of the Miranda Property and provides
conclusions and recommendations for a work program on the
Miranda Property. These results of the Geological Report are
summarized below.
The Company has delivered copies of the Geological Report to the
purchasers of the Company's common stock pursuant to the
Company's offering of 5,000,000 shares of common stock at a
price of $0.01 per share and the Company's offering of 50,000 shares
of common stock at a price of $0.10 per share. See Part II -
Item 4 - "Recent Sales of Unregistered Securities".
Exploration History of the Miranda Property
The Miranda Property is an early stage exploration property
located in the Sand Springs Mining District, of Churchill County,
Nevada. The District has seen a long history of production
starting in 1905 and continuing until the mid-1960's.
Pegasus Gold Corporation had an exploration program on the
Miranda Property in 1992-1993. Their program consisted of
collecting 108 rock chip samples, cursory geologic mapping, and
drilling 13 reverse circulation drill holes. They intersected
anomalous gold in one drill hole and anomalous copper in two
other drill holes. Pegasus never followed up these anomalies.
Cordex Exploration also explored the area briefly, though did not
acquire it. Miranda became interested in the property in
September 1997. Miranda's program consisted of detailed geologic
mapping, rock chip and soil sampling, and conducting a ground
magnetometer survey.
Lithologies existing at the Miranda property include a Triassic
limestone overlain by an interbedded unit of phyllite, schist,
and metaconglomerate. Overlying the metasediments are Teritary
ryholite tuffs and extensive basalt flows. The limestone and
metasediments are intruded by a Cretaceous diorite. At the
contact of the limestone and diorite, in the western part of the
property, there is a major north-northeast striking shear zone.
The shear zone cuts the diorite and limestone and to the south of
these units it cuts the overlying ryholite.
The Miranda Property represents an opportunity of discovering a
skarn-hosted gold deposit near the contact of the Triassic
limestone and a Cretaceous diorite. In addition to the skarn
mineralization, there are numerous high-grade gold-bearing quartz
+/- tourmaline veins which cut the lower limestone unit and the
diorite. These discontinuous vein structures strike north-
northeast and dip steeply west. The limestone and diorite that
host these two styles of mineralization are located at the site
of a major north-northeast striking shear zone. Immediately
to the south of the limestone and diorite, the rocks are in fault
contact with an overlying Tertiary rhyolite. The rhyolite has
been downdropped a minimum of 400-500 feet (120-150 meters).
This block has been intersected by shearing but has not been cut
by north-northeast striking quartz +/- tourmaline veining. This
rhyolite
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block is also the host for at least one northwest
striking epithermal quartz vein structure. This vein is weakly
anomalous in gold but is strongly anomalous in mercury. This
northwest striking vein and the north-northeast striking shear
zone represents another target on the property.
Regional Geography
The Stillwater Range trends northerly through the center of
Churchill County, from Sand Springs Summit on U.S. 50 into
Pershing County. The range contains several units of deformed
Mesozoic rocks separated by thrust faults and is the center of a
large complex of Cretaceous mafic igneous rocks and a succession
of volcanic and intrusive rocks of Cenozoic age (Willden and
Speed, 1974). Fold axes in the layered Cenozoic rocks trend
northward.
The principal rock units in the Sand Springs Range, the
continuation of the Stillwater Range south of the highway, are
volcanic sedimentary rocks of Triassic and Jurassic age,
Cretaceous granitic rocks, and Tertiary volcanic rocks. The Sand
Springs Range contains the largest exposed pluton in Churchill
County, a composite body of granodiorite and quartz monzonite
radiometrically dated at 76-80 m.y. (Nevada Bureau of Mines,
1964). Tertiary volcanic rocks overlie the intrusive complex in
the vicinity of Sand Springs Summit.
Geological Work Program
Miranda completed an exploration work program on the Miranda
Property consisting of the following:
1. Rock Chip Samples
Miranda collected 34 rock chip samples during their studies of
the area. The highest gold assays were in samples collected from
the quartz +/- tourmaline veins. Assay results from the quartz
+/- tourmaline veins ranged from 7 ppb Au to a high of 7,367 ppb
Au (0.21 oz Au/t). Six of the 13 (46%) quartz +/- tourmaline
veins contained greater than 1,000 ppb gold. The highest gold
value in skarn was 2,211 ppb. Two out of seven (28%) skarn
samples contained greater than 500 ppb gold. Two of the
epithermal quartz veins in the southwestern part of the property
contained 272 ppb Au and 296 ppb Au but were strongly anomalous
in mercury containing 14.994 ppm and 34.940 ppm respectively.
The highest copper value of 1.2% came from skarn. All together,
18 of the 34 samples (54%) contained greater than 100 ppb gold
and 4 of the 34 samples (12%) contained greater than 0.1% Cu.
The quartz +/- tourmaline veins contain the highest gold values
and the skarn contains moderate gold anomalies. Neither of these
areas had strongly anomalous mercury. Mercury was most anomalous
in the volcanic hosted epithermal zone to the southwest.
2. Soil Samples
Gold anomalies in the soil samples were confined to the soil
lines that were over the metasedimentary rocks and the diorite
which were the norther 2 lines (10600N, 11200N). These 2
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lines had the highest copper and arsenic anomalies. Gold, copper,
and arsenic anomalies ranged from 52-540 ppb, 112-1835 ppm, and
102-1351 ppm respectively. Contours of these elements trend
northeast. Mercury exhibits the best anomalies over the entire
soil grid. Highs are between 0.5 - 5 ppm and when contoured they
form a strong north-northeast trending mercury zone that
correlates with the shear zone that strikes the same direction.
3. Magnetometer Survey
A magnetometer survey was conducted during December 1997. A
total of 19 line miles (30 km) was surveyed. The lines were
oriented N65W and were spaced 200 feet (60 meters) apart.
Station spacing on the lines was 50 feet (15 meters).
The magnetometer survey primarily picked-up the post-mineral
basalt flows that cover parts of the rhyolite tuffs and the
metasediments throughout the project area. In particular,
neither the diorite intrusive or the skarn alteration areas were
magnetically anomalous. They had no more than a 60 gamma
increase over the surrounding area. The major northwest striking
fault that separates the diorite and limestone from the ryholite
tuff to the south shows as a weak magnetic low. Associated with
this low is a high soil mercury anomaly. There is also a weak
low on the southern part of the property which strikes northwest.
There is also a mercury anomaly associated with this magnetic
low.
Overall, the results of the magnetic survey show none to weak
responses over rocks that on the surface are mineralized and
altered. It would be hard to pick out targets based on the
magnetics alone.
Conclusion and Recommendations of Geological Report
Evaluation of the Miranda Property has resulted in the discovery
of two gold-bearing areas in the western and southwestern part of
the claim block. In the western area, high-grade gold is hosted
in the quartz +/- tourmaline veins hosted in the diorite and
limestone and skarn mineralized zones in the limestone adjacent
to the diorite. The target for this style of mineralization
would be the skarn mineralization in the limestone at the diorite
contact. This target is a near surface target and could be
tested with drill holes of less than 300 feet (90 meters).
The southwestern target would be along the southern trend of the
shear zone under the rhyolite tuff cover. This target would
extend from the northwest striking fault contact of the diorite
and limestone with the rhyolite to the south near the
intersection of the northwest striking epithermal quartz vein.
This target has low gold in rock chip samples but has strongly
anomalous mercury in rock and soil. The low gold geochem anomaly
and the downdropped displacement along the northwest fault
suggests that mineralized rock is deeper and that drill testing
this target will require drilling in excess of 500 feet (150
meters).
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The copper anomalies intersected in Pegasus' drill holes
PSS-12-93 and PSS-13-93 were not followed-up. The intercepts in
the two holes are along a north-northeast strike and it would be
a straight forward proposition to test this anomalous zone along
trend.
Skarn mineralization has been previously tested by drilling, but
only two drill holes were located in what appears to be the best
target of the area. One of those holes (PSS-94-4) intersected 10
feet (3 meters) of 0.14 ounces Au/ton. This mineralized intercept
was never followed up. The second drill hole (PSS-94-1) did not
intersect any significant mineralization. This leaves the skarn
mineralized target and the quartz +/- tourmaline vein zone open for
discovery. The rhyolite tuff covered target has never been drill
tested and it is likely that it has never been explored.
Positive results from Miranda's exploration program suggests that
there is evidence of a skarn-hosted gold deposit on the property
and that untested drill targets remain and need to be tested.
The following table summarizes the costs involved in a
three-phased trench and drill program at the Miranda Property, as
recommended in the Geological Report. The first phase involves a
trenching program that will be used to locate and justify a
two-phased drilling program.
- ------------------------------------------------------------------
Work Program Proposed by Geological Report
- ------------------------------------------------------------------
Phase I Cost/unit Total Description
- ------- --------- ------ ---------------
Geologist 10 days $300 $3,000 Permitting and
the work
Expenses 6 days $80 $480 Room and Board
6 days $50 $300 Backhoe
$3,240 Trenches
Assaying 50 samples $25 $1,250 Reporting
$700 Final Report
Contingency $900 Road reclaim,
------ revegetation
Total Phase I $9,870
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- ------------------------------------------------------------------
Phase II Cost/unit Total Description
- --------- --------- ----- -------------
Geologist 10 days $300 $3,000 Drill site
location,
supervision
Permitting 1 day $300 $300 BLM permitting
Road Work 2 days $1,200 $2,400 Road
construction,
reclamation
Drilling 3,000 feet $10 $30,000 Drilling
Assays 600 samples $10 $6,000 Au, Ag, Cu
Land/Claim $1,800 Maintenance fee
Reporting 5 days $250 $1,250 Final report
--------
Sub-Total $44,750
Contingency 5% $2,237
--------
Total Phase II $46,987
- -----------------------------------------------------------------
Phase III Cost/unit Total Description
- ---------- --------- ------- -----------------
Geologist 20 days $300 $6,000 Drill Supervision
Drilling 6,000 feet $10 $60,000 Drilling
Assays 1,200 samples $10 $12,000 Au, Ag, Cu
Reporting 5 days $250 $1,250 Final Report
Reclamation 2 days $1,200 $2,400 Road reclaim,
------- revegetation
Sub-Total $81,650
Contingency 5% $4,082
-------
Total Phase III $85,732
- ------------------------------------------------------------------
Company's Plan of Operation
The Company has determined to proceed with Phase One of the
exploration program on the Miranda Property. The Company has
raised sufficient funds from prior offerings of its securities,
as set forth in Item 4 of Part II of this Registration Statement,
to proceed with Phase One of the exploration
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program. The Company will assess whether to proceed with Phase
Two of the exploration program upon completion of Phase One and an
evaluation of the results of the Phase One program.
Administration
The Company has entered into a management contract dated December
28, 1998 with Senate Capital Group Inc. whereby Senate Capital
has agreed to provide office administration services to the
Company for a fee of $750 US per month for a one-year term
commencing January 1, 1999. The services include reception,
secretarial services, accounting services, investor relations and
general office services.
Competition and Marketing
The mining industry, in general, is intensively competitive and
there is not any assurance that even if commercial quantities of
ore are discovered, a ready market will exist for sale of same.
Numerous factors beyond the control of the Company may affect the
marketability of any substances discovered. These factors
include market fluctuations, the proximity and capacity of
natural resource markets and processing equipment, government
regulations, including regulations relating to prices, taxes,
royalties, land tenure, land use, importing and exporting of
mminerals and environmental protection. The exact effect of these
factors cannot be accurately predicted, but the combination of these
factors may result in the Company not receiving an adequate return on
invested capital.
Compliance with Government Regulation
The Company will be required to comply with all regulations,
rules and directives of governmental authorities and agencies
applicable to the exploration of minerals in the United States
generally and in the State of Nevada, specifically. In addition,
production of minerals in the State of Nevada will require prior
approval of applicable governmental regulatory agencies. There
can be no assurance that such approvals will be obtained. The
cost and delay involved in attempting to obtain such approvals
cannot be known in advance.
During the exploration phase of the Miranda Property, the
Company will be subject to regulation by the Bureau of Land
Management, a branch of the US Department of the Interior.
The Company has budgeted for regulatory compliance costs in
the proposed work program recommended by the Geological
Report. The Company 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 the Company does not know
the extent of the exploration program it will undertake, beyond
completion of the recommended work program, or if it will
enter into production on the Miranda Property. 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 the Company, its earnings or
competitive position in the event a potentially-economic deposit
is discovered.
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If the Company enters the production phase, the cost of complying
with permit and regulatory environment laws will be greater
because the impact on the project area is greater. Permits and
regulations will control all aspects of the production program
if the project continues to that stage. Examples of regulatory
requirements include:
1. Water discharge will have to meet drinking water standards
(State Water Quality Control Board);
2. Dust generation will have to be minimal or otherwise
re-mediated (State Air Quality Control Board);
3. Dumping of material on the surface will have to be re-contoured
and re-vegetated with natural vegetation (Bureau of Land
Management);
4. An assessment of all material to be left on the surface will
need to be environmentally benign (Bureau of Land Management);
5. Ground water will have to be monitored for any potential
contaminants (State Water Quality Control Board);
6. The socio-economic impact of the project will have to be
evaluated and if deemed negative, will have to be
re-mediated (County Agencies); and
7. There will have to be an impact report of the work on the
local fauna and flora including a study of potentially
endangered species (Bureau of Land Management).
Exploration Risk
Exploration for minerals is a speculative venture necessarily
involving substantial risk. There is not any certainty that the
expenditures to be made by the Company in the acquisition of the
interests described herein will result in discoveries of
commercial quantities of ore. Hazards such as unusual or
unexpected formations and other conditions are involved in
mineral exploration and development. The Company may become
subject to liability for pollution, cave-ins or hazards against
which it cannot insure or against which it may elect not to
insure. The payment of such liabilities may have a material
adverse effect on the Company's financial position.
No Known Bodies of Ore
There are not any known bodies of ore on the Company's
properties. The business plan of the Company is to raise funds
to carry out further exploration with the objective of
establishing ore of commercial tonnage and grade. If the
Company's exploration programs are successful, additional funds
will be required for the development of economic reserves and to
place them in commercial production. The only source of future
funds presently available to the Company is through the sale of
equity capital. The only alternative for the financing of
further exploration would be the offering
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by the Company of an interest in its properties to be earned by
another party or parties carrying out further exploration or
development thereof, which is not presently contemplated.
Research and Development Expenditures
During the past two fiscal years, the Company has not completed
any research or development expenditures. Miranda Industries
Inc., the vendor of the Miranda Property, has completed the
geological exploration program on the Miranda Property, as
discussed above.
Subsidiaries
The Company has no subsidiaries.
Employees
The Company has no paid or full time employees. The Company
conducts its business through agreements with consultants and
arms-length third parties. The only officer of the Company, Peter
Bell, as described below under Item 8, provides his services on a
part-time basis as required for the business of the Company. None
of the directors or officers are paid a salary for acting as a
director or officer. The Company may, however, pay fees to directors
and officers for work provided on a consulting fee basis.
Patents and Trademarks
The Company does not own, either legally or beneficially, any
patent or trademark.
Item 7. Description of Property
The Company has an option to acquire a 50% interest in the
Miranda Property, as described in detail in Item 6 of Part I of
this Registration Statement under "Miranda Property Option
Agreement".
The Company does not own or lease any property other than its
option to acquire an interest in the Miranda Property. The Company
has entered into an office administration contract dated December 28,
1998 with Senate Capital Group Inc. whereby Senate Capital has agreed
to provide office administration services to the Company for a fee
of $750 US per month for a one-year term commencing January 1, 1999.
The services include reception, secretarial services, accounting
services, investor relations and general office services.
Item 8. Directors, Executive Officers and Significant Employees
The following information sets forth the names of the directors,
executive officers and significant employees of the Company,
their present positions with the Company, and their biographical
information.
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1. Directors and Officers
Name Age Office Term of Office
- ---------------- --- -------------- --------------
Peter William Bell 63 President/Sec.
Treas./Director One year
Ross William
Johnston Bailey 37 Director One year
Richard Douglas Wilson 41 Director One year
Neil Murray-Lyon 52 Director One year
Mr. Peter William Bell is a director and is President of the
Company. Mr. Bell is a self-employed consultant and is a
director of Current Technology Corporation. Mr. Bell has a
Bachelor of Science Degree in Pharmacy from the University of
Manitoba and a Masters in Business Administration from the
University of Western Ontario. Mr. Bell practiced as a
licensed pharmacist until 1968. Mr. Bell has provided a wide
range of consultant services to health care companies and
organizations. Mr. Bell has been a director and member of a
number of health care companies and professional organizations.
Mr. Bell is a director of Current Technologies Corporation, a
company that is publicly traded on the OTC Bulletin Board.
Current Technologies Corporation markets an electrostatic hair
maintenance and re-growth process. Mr. Bell has been a
director of Current Technologies Corporation since 1992. Mr.
Bell is also a director and is the President of Ezon Healthcare
Corporation, a private company. Ezon Healthcare Corporation is
involved in the development of a graphic labeling system for
pharmaceutical products. Mr. Bell has been a director and the
President of Ezon Healthcare Corporation since 1997.
Mr. Bell was appointed to the Board of Directors of the Company
on December 29, 1998. Mr. Bell will provide services to the
Company on a part-time basis, as required for the business of the
Company. There is no requirement on Mr. Bell to provide a fixed
amount of time in the service of the Company. Consequently, the
amount of time he spends on Company business will depend on the
needs of the Company.
Mr. Ross William Johnston Bailey is a director of the Company and
has a Bachelors Degree in Mechanical Engineering from the
University of Victoria and is enrolled in the Masters in
Business Administration program at Simon Fraser University. Mr.
Bailey has been employed with Ballard Power Systems as a
manufacturing engineer since 1995. Mr. Bailey was appointed
to the Board of Directors of the Company on December 29, 1998.
Richard Douglas Wilson is a director of the Company. Mr. Wilson
is experienced in raising capital for mineral resource companies
through the public market since 1987. Mr.Wilson has been a director
and President of International Chargold Resources Ltd. since 1996.
International Chargold Resources is a company that is publicly
traded on the Vancouver Stock Exchange and that proposes to build
and operate a precious metals refinery in Ghana, West Africa. Mr.
Wilson has also been a director and secretary of Regent Ventures
Ltd. since 1993. Regent Ventures is a company that is publicly
traded on the Vancouver Stock Exchange and that owns a mineral
property in the Yukon
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Territories, Canada. Mr. Wilson was appointed to the Board of
Directors of the Company on December 29, 1998.
Mr. Neil G. Murray-Lyon is a director of the Company and is the
President, Chief Executive Officer, Chief Financial Officer and a
Director of Wotan Capital Inc. He was the Secretary of Colt
Energy Inc. ("Colt"), a junior capital pool corporation that
completed its Major Transaction to become a public oil and gas
company listed on the Alberta Stock Exchange (the "ASE") until
December, 1998 when Colt completed an arrangement with KeyWest
Energy Corporation. He is currently the Chairman and one of the
controlling shareholders of Tokenhouse Capital & Research Inc.,
an investor-relations firm from November, 1994 until July, 1998
when it became an investment company. Mr. Murray-Lyon was also
an independent investor relations consultant from 1987 to 1994.
From October, 1994 to March, 1996, he was the Secretary of
Patshare Capital Inc., a junior capital pool corporation listed
on the ASE that completed its Major Transaction and changed its
name to EveryWare Development Canada Corp. He was also a past
Director of Allrich Energy Group Inc., a junior capital pool
corporation listed on the ASE that completed its Major
Transaction and changed its name to AltaRex Corp. Mr. Murray-Lyon
was appointed to the Board of Directors of the Company on
December 29, 1998.
2. Significant Employees
The Company does not have any significant employees.
Item 9. Remuneration of Directors and Officers
The following table sets forth certain information as to the
Company's three highest paid executive officers and directors for
the fiscal year which will end on January 31, 2000 As indicated
below, the Company does not presently pay any compensation to any
of its officers and directors. The Company may during the course
of the current year decide to compensate its officers and
directors for their services. No other compensation is
anticipate to paid any such officers other than the cash
compensation set forth below.
Summary Compensation Table
Name Position Year Salary
- --------------------------- --------- ----- ------
Peter Bell President 1999 Nil
Ross William Johnston Bailey Director 1999 Nil
Richard Douglas Wilson Director 1999 Nil
Neil Murray-Lyon Director 1999 Nil
The Company does not pay to its directors any compensation for
each director serving on the Company's board of directors.
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Item 10. Security Ownership of Management and Certain Security
Holders
The following table sets forth information as of the date hereof,
based on information obtained from the persons named below, with
respect to the beneficial ownership of the Common Stock by (i)
each person known by the Company to own beneficially 5% or more
of the Common Stock, (ii) each director and officer and (iii) all
directors and officers as a group:
Amount of
Name and Address Beneficial Percent
Title of Class of Beneficial Owner Ownership of Class
- -------------- ------------------- ---------- --------
Common Stock Peter William Bell 1,000,000 16.53%
Common Stock Ross W.J. Bailey 100,000 1.65%
Common Stock Richard Douglas Wilson 100,000 1.65%
Common Stock Neil Murray-Lyon 225,000 3.72%
Common Stock Directors and Officers 1,425,000 23.55%
As a Group
Item 11. Interest of Management and Others in Certain
Transactions
None of the directors or officers of the Company, nor any
proposed nominee for election as a director of the Company, nor
any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to all
outstanding shares of the Company, nor any promoter of the
Company, nor any relative or spouse of any of the foregoing
persons has any material interest, direct or indirect, in any
transaction since the date of the Company's incorporation or in
any presently proposed transaction which, in either case, has or
will materially affect the Company.
Item 12. Description of Securities
Common Stock
The Company has authorized 25,000,000 common shares par value
$0.001 of Common Stock, of which 6,050,000 are currently
outstanding.
Holders of Common Stock have the right to cast one vote for each
share held of record on all matters submitted to a vote of
holders of Common Stock, including the election of directors.
There is no right to cumulate votes for the election of
directors. Stockholders holding a majority of the voting power
of the capital stock issued and outstanding and entitled to vote,
represented in person or by proxy, are necessary to constitute a
quorum at any meeting of the Company's stockholders, and the
vote by the holders of a majority of such outstanding shares is
required to effect certain fundamental corporate changes such as
liquidation, merger or amendment of the Company's Certificate of
Incorporation.
15
<Page 16>
Holders of Common Stock are entitled to receive dividends pro
rata based on the number of shares held, when, as and if declared
by the Board of Directors, from funds legally available therefor,
subject to the rights of holders of any outstanding preferred
stock. In the event of the liquidation, dissolution or winding up
of the affairs of the Company, all assets and funds of the
Company remaining after the payment of all debts and other
liabilities, subject to the rights of the holders of any
outstanding preferred stock, shall be distributed, pro rata,
among the holders of the Common Stock. Holders of Common Stock
are not entitled to pre-emptive or subscription or conversion
rights, and there are no redemption or sinking fund provisions
applicable to the Common Stock. All outstanding shares of Common
Stock are fully paid and non-assessable.
Warrants
The Company does not have any warrants to purchase securities of
the Company outstanding.
Options
The Company does not have any options to purchase securities of
the Company outstanding. The Company may in the future establish
an incentive stock option plan for its directors, officers,
employees and consultants.
Transfer Agent
Pacific Stock Transfer of Las Vegas, Nevada is the transfer agent
for the Shares.
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Stockholder Matters
The Company anticipates applying for a listing on the OTC
Bulletin Board upon effectiveness of this registration statement.
Currently, there is no public market for the Company's stock and
there is no assurance that a public market will materialize.
As of the date of this registration statement, there were
forty-five (45) registered shareholders in the Company. There
are no dividend restrictions in the Company.
None of the holders of the Company's common shares have any right
to require the Company to register its common shares pursuant to
the Securities Act of 1933.
Item 2. Legal Proceedings
There are no legal proceedings pending or threatened against the
Corporation.
16
<Page 17>
Item 3. Changes in and Disagreements with Accountants
The Company has had no changes in or disagreements with its
accountants since its inception in December, 1998.
Item 4. Recent Sales of Unregistered Securities
The Company completed an offering of 1,000,000 common shares at a
price of $0.01 per share on December 29, 1998 pursuant to Rule
504 of Regulation D of the Act, and Section 46(j) of the
Securities Act of British Columbia. All of these shares were sold
to Peter Bell, the President, Secretary/ Treasurer and a Director of
the Company.
The Company completed an offering of 5,000,000 common shares at a
price of $0.01 per share on January 19, 1999 to persons known
to the officers and directors of the Company. The offering wascompleted
pursuant to Rule 504 of Regulation D of the Act which
provides an exemption for issues of stock up to $1,000,000,
in the aggregate, by companies with a specific business plan and that
are not subject to the reporting requirements of the Securities
and Exchange Act of 1934. The offering was also completed
pursuant to exemptions provided by Section 46(j) of the Securities
Act of British Columbia, Section 66(a) of the Securities Act of
Alberta, Sections 35(2) and 73(1)(9) of the Securities Act of
Ontario and Section 3 of the Securities Act of Quebec.
The Company completed an offering of 50,000 common shares at a
price of $0.10 per share on January 25, 1999 to persons known
to the officers and directors of the Company. The offering was
completed pursuant to Rule 504 of Regulation D of the Act which
provides an exemption for issues of stock up to $1,000,000,
in the aggregate, by companies with a specific business plan and that
are not subject to the reporting requirements of the Securities
and Exchange Act of 1934. The offering was also completed
pursuant to exemptions provided by Section 46(j) of the Securities
Act of British Columbia, Section 66(a) of the Securities Act of
Alberta, Sections 35(2) and 73(1)(9) of the Securities Act of
Ontario and Section 3 of the Securities Act of Quebec.
Item 5. Indemnification of Directors and Officers
The officers and directors of the Company are indemnified as
provided under the Nevada Revised Statutes (the "NRS") and the
Bylaws of the Company.
Under the NRS, director immunity from liability to a corporation
or its shareholders for monetary liabilities applies
automatically unless it is specifically limited by a
corporation's articles of incorporation (which is not the case
with the Company's Articles of Incorporation). Excepted from that
immunity are: (i) a willful failure to deal fairly with the
corporation or its shareholders in connection with a matter in
which the director has a material conflict of interest; (ii) 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); (iii) a transaction from which the director derived an
improper personal profit; and (iv) willful misconduct.
17
<Page 18>
The By-laws of the Company provide that the Company will
indemnify its directors and officers to the fullest extent not
prohibited by the Nevada General Corporation Law; provided,
however, that the Company may modify the extent of such
indemnification by individual contracts with its directors and
officers; and, provided, further, that the Company shall not be
required to indemnify any director or officer in connection with
any proceeding (or part thereof) initiated by such person unless
(i) such indemnification is expressly required to be made by law,
(ii) the proceeding was authorized by the Board of Directors of
the corporation, (iii) such indemnification is provided by the
Company, in its sole discretion, pursuant to the powers vested
in the corporation under the Nevada General Corporation Law or
(iv) such indemnification is required to be made pursuant to the
By-laws.
The By-laws of the Company provide that the Company will advance
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 a director
or officer, of the corporation, or is or was serving at the
request of the corporation as a director or executive officer of
another corporation, partnership, joint venture, trust or other
enterprise, prior to the final disposition of the proceeding,
promptly following request therefor, all expenses incurred by any
director or officer in connection with such proceeding upon
receipt of an undertaking by or on behalf of such person to repay
said amounts if it should be determined ultimately that such
person is not entitled to be indemnified under the By-laws of the
Company or otherwise.
The By-laws of the Company provide that no advance shall be made
by the Company to an officer of the Company (except by reason of
the fact that such officer is or was a director of the Company in
which event this paragraph shall not apply) in any action, suit
or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made
(i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding,
or (ii) 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 the best interests of the Company.
18
<Page 19>
PART F/S
FINANCIAL STATEMENTS
19
<Page 19A>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
JANUARY 31, 1999
(Stated in U.S. Dollars)
<Page 19B>
Morgan & Company
Chartered Accountants
PO Box 10007, Pacific Centre
Suite 1730 - 700 West Georgia Street
Vancouver, B.C. V7Y 1A1
Telephone (604) 687-5841
Fax (604) 687-0075
AUDITORS' REPORT
To the Directors
Explore Technologies, Inc.
We have audited the balance sheet of Explore Technologies, Inc.(an exploration
stage company) as at January 31, 1999 and the statements of loss and deficit
accumulated during the development stage, cash flows and stockholders' equity
for the period then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with United States and Canadian generally
accepted auditing standards. Those standards require that we plan and perform
an audit to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at January 31, 1999 and the
results of its operations and the cash flows for the period then ended in
accordance with United States generally accepted accounting principles.
Vancouver, B.C. /S/ Morgan & Company
February 4, 1999 Chartered Accountants
<Page 19C>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
BALANCE SHEET
JANUARY 31, 1999
(Stated in U.S. Dollars)
- ----------------------------------------------------------------
ASSETS
Current
Cash $ 60,170
Mineral property (Note 3) 1,000
--------
$ 61,170
- ----------------------------------------------------------------
LIABILITIES
Current
Accounts payable $ 3,571
--------
SHAREHOLDERS' EQUITY
Share Capital
Authorized:
25,000,000 Common shares, par value
$0.001 per share
Issued and outstanding:
6,050,000 Common shares 6,050
Additional paid in capital 58,950
Deficit Accumulated During The Exploration
Stage (7,401)
--------
57,599
$61,170
Approved by the Directors:
/s/Peter Bell /s/Rick Wilson
<Page 19D>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Stated in U.S. Dollars)
- ------------------------------------------------------------------------------
Period From Date
Of Organization Inception
December 18, 1998 December 18, 1998
To January 31, 1999 To January 31, 1999
- ------------------------------------------------------------------------------
Expenses
Bank charges $ 14 $ 14
Office and sundry 154 154
Office facilities and services 750 750
Professional fees 6,483 6,483
------- -------
Net Loss For The Period 7,401 $ 7,401
-------
Deficit Accumulated During
The Exploration Stage,
Beginning Of Period -
-------
Deficit Accumulated During
The Exploration Stage,
End Of Period $ 7,401
--------
Net Loss Per Share $0.01
--------
Weighted Average Number
of Shares Outstanding 2,126,136
<Page 19E>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Stated in U.S. Dollars)
- ------------------------------------------------------------------------------
Period From Date
Of Organization Inception
December 18, 1998 December 18, 1998
To January 31, 1999 To January 31, 1999
- ------------------------------------------------------------------------------
Cash Flow From Operating Activities
Net loss for the period $ (7,401) $ (7,401)
Adjustments To Reconcile Net Loss
To Net Cash Used By Operating Activities
Change in accounts payable 3,571 3,571
---------------------------------
(3,830) (3,830)
---------------------------------
Cash Flow From Investing Activities
Mineral property (1,000) (1,000)
---------------------------------
Cash Flow From Financing Activities
Share capital issued 65,000 65,000
---------------------------------
Increase In Cash 60,170 60,170
Cash, Beginning Of Period - -
Cash, End Of Period $ 60,170 $ 60,170
<Page 19F>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS'EQUITY
January 31, 1999
(Stated in U.S. Dollars)
Common Stock
--------------------------------
Additional
Shares Amount Paid-in Capital Deficit Total
------------------------------------------------------
Shares issued for
cash @ $0.01 6,000,000 $6,000 $54,000 $ - $60,000
Shares issued for
cash @ $0.10 50,000 50 4,950 - 5,000
Net loss for the
period - - - (7,401) (7,401)
------------------------------------------------------
Balance, January
31, 1999 6,050,000 $6,050 $58,950 $ (7,401) $57,599
<Page 19G>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1999
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A. on December 18,
1998.
b) Exploration Stage Activities
The Company is in the process of exploring its mineral property and has not
yet determined whether the property contains ore reserves that are
economically recoverable.
The recoverability of amounts shown as mineral property and related deferred
exploration expenditures is dependent upon the discovery of economically
recoverable reserves, confirmation of the Company's interest in the underlying
mineral claims and the ability of the Company to obtain profitable production
or proceeds from the disposition thereof.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States. Because a
precise determination of many assets and liabilities is dependent upon future
events, the preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful judgement.
The financial statements have, in management's opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:
a) Mineral Property and Related Deferred Exploration
Expenditures
The Company defers all direct exploration expenditures on mineral properties
in which it has a continuing interest to be amortized over the recoverable
reserves when a property reaches commercial production. On abandonment of any
property, applicable accumulated deferred exploration expenditures will be
written off. To date none of the Company's properties have reached commercial
production.
At least annually, the net deferred cost of each mineral property is compared
to management's estimation of the net realizable value, and a write-down is
recorded if the net realizable value is less than the cumulative net deferred
costs.
<Page 19H>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1999
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
a) Income Taxes
The Company has adopted Statement of Financial Accounting Standards No. 109 -
"Accounting for Income Taxes" (SFAS 109). This standard requires the use of
an asset and liability approach for financial accounting and reporting on
income taxes. If it is more likely than not that some portion or all of a
deferred tax asset will not be realized, a valuation allowance is recognized.
b) Financial Instruments
The Company's financial instruments consist of cash and accounts payable.
Unless otherwise noted, it is management's opinion that this Company is not
exposed to significant interest or credit risks arising from these financial
instruments. The fair value of these financial instruments approximate their
carrying values, unless otherwise noted.
c) Net Loss Per Share
Net loss per share is based on the weighted average number of common shares
outstanding during the period plus common share equivalents, such as options,
warrants and certain convertible securities. This method requires primary
earnings per share to be computed as if the common share equivalents were
exercised at the beginning of the period or at the date of issue and as
if the funds obtained thereby were used to purchase common shares of the
Company at its average market value during the period.
3. MINERAL PROPERTY
The Company has entered into an option agreement to acquire a 50% interest,
subject to a 2.5% net smelter royalty, in the Sand Springs, Nevada property
for the following consideration:
- - cash payment of U.S. $1,000;
- - exploration expenditures totalling U.S. $150,000 by December 31, 2001, U.S.
$10,000 of which must be expended by December 31, 1999.
Consideration paid to date $ 1,000
<Page 19I>
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1999
(Stated in U.S. Dollars)
4. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information
using year 2000 dates is processed. In addition, similar problems may arise
in some systems which use certain dates in 1999 to represent something other
than a date. The effects of the Year 2000 Issue may be experienced before,
on, or after January 1, 2000, and, if not addressed, the impact on operations
and financial reporting may range from minor errors to significant systems
failure which could affect an entity's ability to conduct normal business
operations. It is not possible to be certain that all aspects of the Year 2000
Issue affecting the entity, including those related to the efforts of
customers, suppliers, or other third parties, will be fully resolved.
<Page 19J>
Morgan & Company
Chartered Accountants
PO Box 10007, Pacific Centre
Suite 1730 - 700 West Georgia Street
Vancouver, B.C. V7Y 1A1
Telephone (604) 687-5841
Fax (604) 687-0075
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion of our audit report dated February 4, 1999,
on the financial statements of Explore Technologies Inc. for the period ended
January 31, 1999 in the Company's Form 10 - SB. We also consent to the
application of such report to the financial information in the Form 10 - SB,
when such financial information is read in conjunction with the financial
statements referred to in our report.
Vancouver, Canada /S/ Morgan & Company
February , 1999 Chartered Accountants
<PAGE 20>
PART III
INDEX TO EXHIBITS
Exhibit 1: Articles of Incorporation
Exhibit 2: By-Laws of the Company
Exhibit 3: Miranda Property Option Agreement
Exhibit 4: Miranda Property Option Agreement with McIntosh
Exhibit 5: Option Facilities and Service Contract
Exhibit 6: Geological Report on the Miranda Property
Exhibit 7: Consent of Geological Consultant to use of Report
20
<PAGE 21>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this Amendment No. 1 to Form 10-SB
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized.
EXPLORE TECHNOLOGIES, INC.
Date: May 21, 1999
By:/S/ Peter Bell
PETER BELL, Director, President
Chief Executive Officer
21
