SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended January 31, 2000
----------------
[] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
----------- ----------------
Commission file number 0-25553
--------------------------------
EXPLORE TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
NEVADA 88-0419476
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
Suite 505 -1155 Robson St., Vancouver, B.C. V6E 1B5
(Address of Principal Executive Offices, Including Postal Code)
(604) 689-1659
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Exchange on Which Registered
------------------- ------------------------------------
None None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock
- - ---------------------------------------------------------
(Title of Each Class)
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
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Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.
- - --------------------------------------------------------------------
State issuers revenues for its most recent fiscal year. Nil
--------------
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.)
$ 12,718,750.00
- - --------------------------------------------------------------------
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
6,050,000
- - -----------------------------------------
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EXPLORE TECHNOLOGIES,INC.
FORM 10 -KSB
TABLE OF CONTENTS
Item 1. DESCRIPTION OF BUSINESS 4
Item 2. DESCRIPTION OF PROPERTY 7
Item 3. LEGAL PROCEEDINGS 7
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 7
Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 7
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 8
Item 7. FINANCIAL STATEMENTS 10
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE. 19
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT 19
Item 10. EXECUTIVE COMPENSATION 21
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 21
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 22
Item 13. EXHIBITS, AND REPORTS ON FORM 8-K. 23
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Item 1. DESCRIPTION OF BUSINESS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Form 10-K under "Item 1. Business", "Item 2.
Properties", "Item 3. Legal Proceedings", and "Item 7. Management's Discussions
and Analysis of Financial Condition and Results of Operations" and elsewhere
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"). Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
Explore Technologies, Inc. a company organized under the laws of Nevada (the
"Company") to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: general economic and business
conditions; competition; success of operating initiatives; the success (or lack
thereof) with respect to the Company's exploration and development operations on
its properties; the Company's ability to raise capital and the terms thereof;
the acquisition of additional properties; changes in business strategy or
development plans; future rental revenues; exploration and other property
write-downs as hereinafter defined; the continuity, experience and quality of
the Company's management; changes in or failure to comply with government
regulations or the lack of government authorization to continue the Company's
projects; and other factors referenced in the Form 10-K. The use in this Form
10-K of such words as "believes", "plans", "anticipates", "expects", "intends",
and similar expressions are intended to identify forward-looking statements, but
are not the exclusive means of identifying such statements. The success of the
Company is dependent on the efforts of the Company, its employees and many other
factors including, primarily, its ability to raise additional capital and
establishing the economic viability of any of its exploration properties.
General Information
The Company was formerly an exploration stage company engaged in the
acquisition, exploration and development of mineral properties. The Company had
an interest in the properties described below under the heading "Mineral
Property Option Agreement", designated below as the "Miranda Property". The
Company had intended to carry out exploration work on the Miranda Property in
order to ascertain whether the Miranda Property possessed commercially
developable quantities of gold and other precious minerals. The Company's board
of directors determined that further exploration of the Miranda Property is not
commercially viable at present and decided on April 25, 2000 to abandon its
interest in the Miranda Property.
The Company is presently in negotiations with Cashsurfers, Inc. ("Cashsurfers")
for the acquisition of an Internet based technology business known as
"Cashsurfers.com" (the "Cashsurfer.com Business"). At present there is no
assurance that the Company will enter into any definitive merger agreement for
this acquisition. If the Company does enter into a definitive agreement, there
is no assurance that the acquisition will be completed. In addition, it is
anticipated that any acquisition will be conditional upon the Company achieving
additional equity financing. The Company does not have any present arrangements
for additional equity financing and there is no assurance that additional equity
financing could be obtained.
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Mineral Property Option Agreement
By an agreement made as of December 22, 1998, 1999 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 at the time of execution was $1,000 US.
The Option was 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.
In addition, until the Company had secured a 50% interest in the Miranda
Property, the Company was obligated to cover all property acquisition costs due
under the Underlying Agreement, as discussed below.
The Company's Option was subject to an Underlying Agreement dated the 20th day
of November, 1997 (the "Underlying Agreement") between Miranda and Larry
McIntosh of P.O. Box 1388, Gardnerville, Nevada ("McIntosh") whereby Miranda
acquired an undivided 100% right, title and interest in the Miranda Property
from McIntosh (the "Underlying Agreement") by staking the mining claims
comprising the Miranda Property, and making the following payments to McIntosh,
totalling $138,500 by the dates indicated below:
1. $2,500 by November 20, 1998;
2. $2,500 by November 20, 1999;
3. $4,500 by May 20, 2000;
4. $9,000 by November 20, 2000;
5. $10,000 by November 20, 2001;
6. $10,000 by November 20, 2002;
7. $20,000 by November 20, of each of the years 2003 through 2007.
The Company incurred $10,000 in exploration expenditures on the Miranda
Property in 1999 which were applied towards the exercise of the Option. The
board of directors determined that further exploration of the Miranda Property
was not commercially viable at present and decided on April 24, 2000 to abandon
its interest in the Miranda Property. The Company has given notice to Miranda
that it will not be advancing the payment on the Miranda Property due on May 20,
2000. Miranda has in turn given notice to McIntosh under the Underlying
Agreement that Miranda will not be making the payment of $4,500 due on May 20,
2000. Accordingly, the Company's interest in the Miranda Property will lapse on
May 20, 2000 when the payment under the Underlying Agreement is due and payable
to McIntosh. Miranda's interest in the Miranda Property will also lapse on May
20, 2000.
Cashsurfers.com Internet Based Business
The Company is presently in negotiations with Cashsurfers, Inc., a California
corporation, for the execution of a definitive merger agreement which will
govern the merger of the Company with Cashsurfers. The definitive merger
agreement has not been signed as of the date hereof and the Company has not
entered into any letter of intent or letter of intent with Cashsurfers. While
the specific terms of the merger will not be finalized until execution of the
merger agreement, the Company anticipates that the merger agreement will contain
the following general provisions:
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1. The Company will issue approximately 12,000,000 shares of the Company's
common stock to the shareholders of Cashsurfers on completion of the
merger;
2. The Company will file a registration statement on Form S-4 with the
Securities and Exchange Commission in order to qualify the issue of the
shares of the Company's common stock on completion of the merger;
3. The merger would be subject to approval by the shareholders of each of
the Company and Cashsurfers;
4. The Company would be obligated to raise in excess of $2,000,000 by the
private placement of the Company's common stock as a condition of
completion of the merger. The proceeds of the private placement would be
used to fund the operation and development of the Cashsurfers.com
Business.
The Company intends to publish a news release upon execution of the merger
agreement. In addition, the Company will be required to file a Form 8-K with
the Securities and Exchange Commission which will disclose the material terms of
the merger agreement.
There is no assurance that the Company will enter into a merger agreement for
the acquisition of the Cashsurfer.com Business. If a merger agreement is
entered into, there is no assurance that the conditions of the merger will be
satisfied, including approval of the merger by the shareholders of the Company
and Cashsurfers and completion of the required private placement financing by
the Company. If the Company is not successful in entering into a merger
agreement, then the Company will not have any active business operations or
properties. In this event, the Company plans to pursue the acquisition of an
Internet or technology based business. If the Company does enter into a
definitive agreement, there is no assurance that the acquisition will be
completed. In addition, any acquisition will be conditional upon the Company
achieving additional equity financing. The Company does not have any present
arrangements for additional equity financing and there is no assurance that
additional equity financing could be obtained.
The Cashsurfers.com Business
CashSurfers.com enlists Internet users and pays them to view advertising on
their "CashBar Navigator" located at their Website. Cashsurfers.com earns
revenue from advertisers both directly and through member activities on and via
the CashBar Navigator. The CashBar Navigator also acts as a way of encouraging
members to participate in affiliate programs, which in turn generate revenue for
Cashsurfers.com. Cashsurfers.com provides links to its members that allow them
to move to other Websites that contain content of interest to them. In this
respect, it functions as a "portal", an Internet site which collects links to
information and services and arranges them for the convenience of its visitors.
Cashsurfers.com also generates revenue from collaborative advertising programs
in which members go to linked content or advertiser Websites through the portal
page or a banner ad on the CashBar Navigator. CashSurfers members receive
"points" for the time they spend on-line. The members can increase the number
of points that they earn in a variety of ways and can also receive points for
the activities of members they recruit (on a four-tiered multi-level marketing
model). Once a month, CashSurfers calculates 60% of its gross advertising
revenue and pays this amount out to its members, proportionally based on the
number of points that each member has accumulated over the month.
Cashsurfers.com intends to increase the number of users who access its site in a
number of ways. These include improvement of the hard-ware and software, the use
of existing members for increased marketing activities and the provision of as
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many sources of interesting content as possible to increase the amount of
exposure to advertising and collaborative advertising activities that these
visitors receive, therefore increasing the potential revenue available from
advertisers.
As of March 2000, CashSurfers.com had approximately 371,000 members and acquires
members at the rate of 7,000 to 10,000 per day.
Item 2. DESCRIPTION OF PROPERTY
The Company does not own or lease any 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 $750.00 US per month. The services include
reception, secretarial services, accounting services, investor relations and
general office services.
Item 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company or any of
its subsidiaries is a party or to which any of their property is subject.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During this period covered by the Form 10-KSB, the Company did not submit any
matters to the Company's security holders to be voted upon.
Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
The Company trades on the OTC BB under the symbol XPOR. The Company was first
quoted on the Bulletin Board October 19, 1999. The high and low bid price for
the Company's common stock as quoted on the OTC BB is as follows:
- - -----------------------------------------------------------
Month Ending: High Low Close Volume
- - -----------------------------------------------------------
January, 2000 $2.00 $1.3750 $1.4375 16,500
- - -----------------------------------------------------------
February, 2000 $3.00 $1.6250 $2.750 28,500
- - -----------------------------------------------------------
March, 2000 $2.75 $2.70 $2.75 10,100
- - -----------------------------------------------------------
As at April 26, 2000 there were 44 registered shareholders of the Company's
common stock.
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.
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 was completed pursuant to Rule 504 of Regulation D of
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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 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.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Plan of Operations
The Company had cash on hand in the amount of $9,602 as of January 31, 2000.
The Company will require additional funding in the event that the Company is
successful in entering into the merger agreement for the acquisition of the
Cashsurfer.com Business. The proceeds of the funding will be used to fund the
Company's operations pending closing of the merger and to provide working
capital for the Cashsurfer.com Business. The Company anticipates that in excess
of $2,000,000 will be required to fund the operations of the Cashsurfer.com
Business over the next twelve months. The Company anticipates that additional
funding will be in the form of equity financing from the sale of the Company's
common stock. There is no assurance that the Company will be able to achieve
additional sales of its common stock. The Company believes that debt financing
will not be an alternative for funding the Cashsurfer.com Business. The Company
does not have any arrangements in place for future equity financing of the
Company.
If the Company is not successful in acquiring the Cashsurfer.com Business, the
Company will require additional funding in order to finance its continuing
obligations as a reporting issuer under the Securities Exchange Act of 1934.
The Company anticipates that it will require funds of approximately $50,000 over
the next twelve months to fund these obligations. The Company has no
arrangements in place for future equity financing in order to fund these
obligations.
Results of Operations.
For the Year Ended January 31, 2000
The Company was in the exploration stage and has no revenues from operations in
Fiscal 1999. None of its mineral properties were proven to be commercially
developable and as a result, the Company did not generated any revenue from
these activities. The Company capitalizes expenditures associated with the
direct acquisition, evaluation and exploration of mineral properties. When an
area is disproved or abandoned, the acquisition costs and related deferred
expenditures are written-off.
The Company's previous mineral properties and interests consisted primarily of
gold exploration properties or prospects which the Company believed had the
potential for commercial gold recoveries. The Company had not recorded any
write-offs as of January 31, 2000.
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The Company's general and administrative expenses were $46,422 for the period
ending January 31, 2000. This was the Company's first year of operations. These
expenses were associated with acquiring mineral properties and obtaining capital
financings and the costs associated with becoming an Exchange Issuer under the
Securities Exchange Act of 1934.
- - -------------------------------
The Company anticipates that general and administrative expenses will increase
in fiscal 2000 if the Company is successful in acquiring the Cashsurfers
Business.
Liquidity and Capital Resources.
The Company's primary source of funds since incorporation has been through the
issue of its common stock. The Company did not earn any revenue from its mineral
exploration activities. The Company does not anticipate earning revenues until
some time after the Company completes the acquisition of the Cashsurfer.com
Business or some other revenue generating business.
The Company's cash position at January 31, 2000 was $9,602. At January 31,
2000, the Company had working capital of $7,677.
The Company has not recorded any write-offs as of January 31, 2000.
The Company incurred exploration costs of $ 11,201 for the period ending January
31, 2000.
During the fiscal year ended January 31, 2000, the Company made option payments
on its mineral property totaling $1,000.
At year end, January 31, 2000, the Company has met all its expenditure
requirements under the mineral property option agreement it holds.
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Item 7. FINANCIAL STATEMENTS
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
JANUARY 31, 2000
(Stated in U.S. Dollars)
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AUDITORS' REPORT
To the Shareholders
Explore Technologies, Inc.
We have audited the balance sheets of Explore Technologies, Inc. (an exploration
stage company) as at January 31, 2000 and 1999 and the statements of loss and
deficit accumulated during the exploration stage, cash flows and stockholders'
equity for the year ended January 31, 2000 and the period ended January 31,
1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with 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, 2000 and 1999
and the results of its operations and its cash flows for the periods then ended
in accordance with United States generally accepted accounting principles
applied on a consistent basis.
Vancouver, B.C. /s/Morgan & Company
April 20, 2000 Chartered Accountants
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EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
BALANCE SHEETS
(Stated in U.S. Dollars)
- - -------------------------------------------------------------------------------
JANUARY 31
2000 1999
- - -------------------------------------------------------------------------------
ASSETS
Current
Cash $ 9,602 $ 60,170
Mineral Property (Note 3) 3,500 1,000
--------------------------
$ 13,102 $ 61,170
===============================================================================
LIABILITIES
Current
Accounts payable $ 1,925 $ 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 6,050
Additional paid in capital 58,950 58,950
Deficit Accumulated During The Exploration Stage (53,823) (7,401)
--------------------------
11,177 57,599
--------------------------
$ 13,102 $ 61,170
===============================================================================
Approved by the Directors:
==========================
/s/Peter Bell /s/Richard Wilson
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EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
STATEMENTS OF LOSS AND DEFICIT
(Stated in U.S. Dollars)
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------
PERIOD FROM
DATE OF
ORGANIZATION
INCEPTION
YEAR DECEMBER 18 DECEMBER 18
ENDED 1998 TO 1998 TO
JANUARY 31 JANUARY 31 JANUARY 31
2000 1999 2000
- - -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Expenses
Bank charges $ 276 $ 14 $ 290
Office and sundry 832 154 986
Office facilities and services 9,000 750 9,750
Professional fees 25,113 6,483 31,596
Mineral property maintenance and
exploration expenditures 11,201 - 11,201
--------------------------------------------
Net Loss For The Year 46,422 7,401 $ 53,823
============
</TABLE>
Deficit Accumulated During The Exploration Stage,
Beginning Of Year 7,401 -
-----------------------
Deficit Accumulated During The Exploration Stage,
End Of Year $ 53,823 $ 7,401
==========================================================================
Net Loss Per Share $0.01 $0.01
==========================================================================
Weighted Average Number of Shares Outstanding 6,050,000 2,126,136
==========================================================================
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EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------
PERIOD FROM
DATE OF
ORGANIZATION
INCEPTION
YEAR DECEMBER 18 DECEMBER 18
ENDED 1998 TO 1998 TO
JANUARY 31 JANUARY 31 JANUARY 31
2000 1999 2000
- - -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flow From Operating Activities
Net loss for the year $ (46,422) $ (7,401) $ (53,823)
Adjustments To Reconcile Net Loss To Net
Cash Used By Operating Activity
Change in accounts payable (1,646) 3,571 1,925
-------------------------------------------
(48,068) (3,830) (51,898)
-------------------------------------------
Cash Flow From Investing Activity
Mineral property (2,500) (1,000) (3,500)
-------------------------------------------
Cash Flow From Financing Activity
Share capital issued - 65,000 65,000
-------------------------------------------
Increase (Decrease) In Cash (50,568) 60,170 9,602
Cash, Beginning Of Year 60,170 - -
-------------------------------------------
Cash, End Of Year $ 9,602 $ 60,170 $ 9,602
===============================================================================================
</TABLE>
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EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
JANUARY 31, 2000 AND 1999
(Stated in U.S. Dollars)
Common Stock
----------------------------------
Additional
Paid-in
Shares Amount 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
Net loss for the year - - - (46,422) (46,422)
------------------------------------------------------
Balance, January 31, 2000 6,050,000 $ 6,050 $ 58,950 $(53,823) $(11,177)
======================================================
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EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000 AND 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.
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EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000 AND 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.
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EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000 AND 1999
(Stated in U.S. Dollars)
3. MINERAL PROPERTY
2000 1999
==== ====
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 payments as follows:
- $1,000 upon signing the option agreement
- $2,500 by November 20, 1999
- $4,500 by May 20, 2000
- $9,000 by November 20, 2000
- $10,000 by November 20, 2001
- $10,000 by November 20, 2002
- $20,000 by November 20, of each of the years
2003 to 2007
- 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 $ 3,500 $ 1,000
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>
Page 19
EXPLORE TECHNOLOGIES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000 AND 1999
(Stated in U.S. Dollars)
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Form 3's on the following directors and officers were filed with the Securities
and Exchange Commission as of January 13, 2000.
The directors and officers of the Company, their ages and term of continuous
service is as follows:
Name Age Position with Served as a
Registrant or Director
Officer Since
Peter William Bell 63 President/Sec. December 29, 1998
Treasurer
Ross William Bailey 37 Director December 29, 1998
Richard Douglas Wilson 41 Director December 29, 1998
Neil Murray-Lyon 52 Director December 29, 1998
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 been a director and member of a number of health care
companies and professional organizations. Mr. Bell has provided a wide range of
consultant services to health care companies and organizations. These
consultant services included: sales management and reorganization of sales
force; regional market development and marketing strategy; medical opinion
surveys and market analysis; medical device product market development; business
immigration program presentations; management studies in healthcare
organizations; development and growth of public corporations and reverse
takeovers in public companies.
Mr. Bell is also a director of Current Technology Corporation, a company that is
publicly traded on the OTC Bulletin Board. Current Technology Corporation
markets an electrostatic hair maintenance and re-growth process. Mr. Bell has
been a director of Current Technology 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 also is, and has been since December 1998, the President and a Director
of Explore Technologies, Inc. a public company organized in Nevada. Explore is
a natural resource company engaged in the acquisition, exploration and
development of mineral properties in Nevada, similar to the Company.
<PAGE>
Page 20
Mr. Bell will provide services to the Company on a part-time basis, as required
for the business of the Company. Mr. Bell's services include management and
supervision of the business and director of the Company's exploration
activities. 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 is dependent 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 February 17, 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 Territories,
Canada. Mr. Wilson was appointed to the Board of Directors of the Company on
February 17, 1998.
Neil Murray-Lyon is a director of the Company. Mr. Murray-Lyon is 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.
All of the directors are residents of Canada. All directors are elected annually
by the shareholders and hold office until the next Annual Meeting of
Shareholders. Each officer of the Company holds office at the pleasure of the
Board of Directors. No director or officer of the Company has any family
relationship with any other officer or director of the Company.
<PAGE>
Page 21
Section 16(a) Beneficial Ownership Reporting Compliance
The following persons have failed to file, on a timely basis, the identified
reports required by section 16(a) of the Exchange Act during the most recent
fiscal year.
- - --------------------------------------------------------------------------------
Number Transactions Known Failures
of Late Not Timely To File a Required
Name and Principal Position Reports Reported Form
- - --------------------------------------------------------------------------------
Peter Bell, President, CEO,
Sec/Treas. 1 0 None
Richard Wilson, Director 1 0 None
Ross Bailey, Director 1 0 None
Neil Murray-Lyon 1 0 None
- - --------------------------------------------------------------------------------
Significant Employees
The Company does not have any significant employees, other than its officers and
directors, at this time.
Item 10. EXECUTIVE COMPENSATION
Officers and Directors
The Company did not pay any remuneration to its officers or directors during the
period from its incorporation to January 31, 2000, the date of its annual
financial statements, or from January 31, 2000 to April 30, 2000. 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.
Incentive Stock 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.
Directors
The Directors of the Company did not receive cash compensation by the Company
for their service as directors during the most recently completed fiscal year.
<PAGE>
Page 22
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 26, 2000, the number of Common Stock
and the corresponding percentage ownership of (I) each person who held of
record, or was known by the Company to own beneficially, more than five percent
of the Company's Common Stock, (ii) each director and executive officer of the
Company, and (iii) all directors and executive officers of the Company as a
group. Unless otherwise indicated, the Company believes the following persons
have sole voting and investment power with respect to the number of shares set
forth opposite their names.
- - --------------------------------------------------------------------------------
Name & Address of Beneficial Owner Amount of Beneficial Percent of Class
Ownership
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Peter Bell 1,000,000 16.53%
#105 - 3389 Capilano Road
North Vancouver, B.C.
V7R 4W7
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Ross W.J. Bailey 100,000 1.65%
2641 West 11th Ave.
Vancouver, B.C.
V6K 2L7
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Richard Douglas Wilson 100,000 1.65%
Penthouse 8 - 1060 Alberni Street
Vancouver, B.C.
V6E 2K2
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Neil Murray-Lyon 225,000 3.72%
235 Melville Avenue
Apt # 3
Westmount, PQ
H3Z 2J6
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Directors and Officers As a Group 1,425,000 23.55%
- - --------------------------------------------------------------------------------
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except as disclosed below, 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.
The Company entered into a management contract dated December 28, 1998 with
Senate Capital Group Inc. whereby Senate Capital Group has agreed to provide
office administration services to the Company. Senate Capital Group is a
private company controlled by Mr. Dennis Higgs.
<PAGE>
Page 23
The Company's policy regarding related transactions requires that any director
or officer who has an interest in any transaction to be approved by the board of
directors of the Company disclose the presence and the nature of the interest to
the board of directors prior to any approval of the transaction by the board of
directors. The transaction may then be approved by a majority of the
disinterested directors, provided that an interested director may be counted in
the determining the presence of a quorum at the meeting of the board of
directors to approve the transaction. The Company's policy regarding
compensation for directors and officers is that the board of directors may,
without regard to personal interest, establish the compensation of directors for
services in any capacity.
Item 13. EXHIBITS, AND REPORTS ON FORM 8-K.
Exhibits:
- - ---------
Exhibit 1: Articles of Incorporation*
Exhibit 2: Bylaws*
Exhibit 3: Mineral Property Option Agreement*
Exhibit 4: Agreement with Larry McIntosh*
Exhibit 5: Office Facilities and Service Contract between the Company
and Senate Capital Group Inc.*
* Incorporated by reference from our registration statement on Form 10-SB
originally filed with the commission on March 12, 1999 and as amended on July
13, 1999 (File No. 0-25553)
Financials:
- - ----------
The Company's audited Financial Statements, as described below, are incorporated
as Item 7 of this Form 10-KSB filing
Auditors Report of Morgan Company dated April 20, 2000
Consolidated Balance Sheet for the period ended January 31, 2000
Consolidated Statement of Loss and Deficit for the period ended January 31, 2000
Consolidated Statement of Cash Flows for the period ended January 31, 2000
Notes to Consolidated Financial Statements
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
EXPLORE TECHNOLOGIES, INC.
/s/ Peter Bell
By: -------------------------------
PETER BELL, Director, President
Chief Executive Officer
Date: May 1, 2000
In accordance with the Securities Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
By: /s/ Peter Bell
-------------------------------
Peter Bell, Director, President, and CEO
Date: May 1, 2000
By: /s/ Richard Wilson
-------------------------------
Richard Wilson, Director
Date: May 1, 2000
By: /s/ Ross Bailey
-------------------------------
Ross Bailey, Director
Date: May 1, 2000
By: /s/ Neil Murray-Lyon
-------------------------------
Neil Murray-Lyon, Director
Date: May 1, 2000
<PAGE
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROMT HE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS CONTAINED IN TEH COMPANY'S ANNUAL
REPORT ON FORM 10-KSB FOR THE YEAR ENDED JANUARY 31, 2000 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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