UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM 10-SB
General Form For Registration of Securities of
Small Business Issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Eurasia Gold Fields, Inc.
(Name of Small Business Issuer in its Charter)
Florida 98-0190293
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1505-1060 Alberni Street, Vancouver, B.C., Canada, V6E 4K2
(Address of principal executive offices) Zip Code
(604) 687-4432
(Issuer's Telephone Number)
Securities to be Registered under Section 12(b) of the Act: None
Securities to be Registered under Section 12(g) of the Act: Common stock, $.001
par value per share
Page 1 of 64.
Index to exhibits is on Page 29.
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Eurasia Gold Fields, Inc.
Registration Statement on Form 10 SB
Amendment No. 1
Part I Page
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Item 1. Description of Business 3
A. General 3
B. Risk Factors Related to the Company's Business 4
Item 2. Management's Discussion and Analysis or Plan of Operation 10
Item 3. Description of Property 14
Item 4. Security Ownership of Certain Beneficial Owners and
Management 18
Item 5. Directors, Executive Officers, Promoter and Control Persons 20
Item 6. Executive Compensation 20
Item 7. Certain Relationships and Related Transactions 21
Item 8. Description of Securities 22
Part II
Item 1. Market Price and Dividends on the Registrants' Common Equity
and other Shareholder Matters 23
Item 2. Legal Proceeding 23
Item 3. Changes in and Disagreements with Accountants 23
Item 4. Recent Sales of Unregistered Securities 23
Item 5. Indemnification of Directors and Officers 24
Part F/S
Item 1. Index to Exhibits 28
Part III
Item 1. Index to Exhibits 29
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ITEM 1. DESCRIPTION OF BUSINESS
A GENERAL
Eurasia Gold Fields, Inc. (the "Company" or "Eurasia") was incorporated
under the laws of the State of Florida on May 20, 1995, under the name
"Snak-N-Pop Vending, Inc.". Since its incorporation, the Company's activities
have been limited primarily to the sale of shares for working capital purposes.
It redirected its business efforts in late 1997 following a change of control,
which occurred on November 25, 1997, to the acquisition, exploration and, if
warranted the development of mineral resource properties. The Company changed
its name to Eurasia Gold Fields, Inc. on March 2, 1998 to more fully reflect its
business activities.
Since its redirection, the Company's activities have been limited primarily
to the acquisition of rights to certain mineral properties and the
implementation of preliminary exploration programs on these properties in which
it has acquired an interest. See "Item 3. Description of Property."
The Company is engaged in the location, acquisition, exploration and, if
warranted, development of mineral resource properties. All of the mineral
properties in which the Company has an interest or a right to acquire an
interest in are currently in the exploration stage. None of the properties
contain any known reserves. The Company's primary objective is to explore for
gold, silver, base metals and industrial minerals and, if warranted, to develop
those existing mineral properties. Its secondary objective is to locate,
evaluate, and acquire other mineral properties, and to finance their exploration
and development either through equity financing, by way of joint venture or
option agreements or through a combination of both.
Currently, the Company's activities are centred in the Republic of
Buriatia, Russian Federation and the United States of America.
The Company is in the process of assessment of its properties for
exploration and, over the course of the next twelve months, plans to initiate
warranted exploration programs to further explore and develop each property
held.
The company is in the development stage and has a limited operating
history. No representation is made, nor is any intended, that the Company will
be able to carry on its activities profitably. Moreover, the likelihood of the
success of the Company must be considered in the light of the expenses,
difficulties, and delays frequently encountered in connection with mineral
resource exploration and development and with the formation of a new business.
The Company encounters strong competition from other exploration and mining
companies in connection with the acquisition of properties producing, or capable
of producing, gold, silver and base minerals. The Company also competes with
other companies both within and outside the mining industry in connection with
the recruiting and retention of qualified employees knowledgeable in mining
operations. Precious and base metals are worldwide commodities and, accordingly,
the Company will sell its future production at world market prices.
All of the Company's exploration activities in the Russian Federation are
subject to regulation by governmental agencies under one or more of the various
environmental laws. These laws address emissions to the air, discharges to
water, management of wastes, management of hazardous substances, protection of
natural resources, protection of antiquities and reclamation of lands which are
disturbed. The Company believes that it is in substantial compliance with
applicable environmental regulations. Russian environmental laws and regulations
presently have no material adverse impact on the Company's results of operations
or financial condition and the Company believes that it is substantially in
compliance with the regulations, promulgated by
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Russian legislation. Many of the regulations also require permits to be obtained
for the Company's activities; these permits are normally subject to public
review processes resulting in public approval of the activity. While these laws
and regulations govern how the Company conducts many aspects of its business,
management of the Company does not believe that they have a material adverse
effect on its results of operations or financial condition at this time. The
Company's projects are evaluated considering the cost and impact of
environmental regulation on the proposed activity. New laws and regulations are
evaluated, as they develop to determine the impact on, and changes necessary to,
the Company's operations. It is possible that future changes in these laws or
regulations could have a significant impact on some portion of the Company's
business, causing those activities to be economically re-evaluated at that time.
The Company has not declared or paid dividends on its shares since
incorporation and does not anticipate doing so in the near future.
The Company does not currently file reports with the Securities and
Exchange Commission.
As of October 1, 1999, there were four full-time and two part-time
employees.
The Company's common stock is traded on the NASD's OTC Bulletin Board.
The Company's Registered office is located at Law of Offices of Eric. P.
Littman, P.A., 7695 S.W. 104th Street, Offices at Pinecrest, Suite 210, Miami,
Florida 33156, and the Corporate office is located at Suite 1505-1060 Alberni
Street, Vancouver, British Columbia, Canada, V6E 4K2.
B. RISK FACTORS RELATED TO THE COMPANY'S BUSINESS
1. General Risks
A. Recently Organized Company
The Company was only recently organized and has no operating history.
The Company is faced with the following financial and operating
difficulties (1) obtaining financing, either through debt or equity, (2)
attracting experienced management, (3) not only the acquiring of rights to
prospective mineral properties, but the eventual development of mineral
properties (4) developing cash flow (5) lack of revenues. The Company,
therefore, must be considered promotional and in its early formative and
development stage. Prospective investors should be aware of the
difficulties normally encountered by a new enterprise. There is nothing at
this time upon which to base an assumption that the Company's business plan
will prove successful, and there is no assurance that the Company will be
able to operate profitably. The Company has limited assets and has had no
revenues to date.
B. Experience of Management
Although the Company's management ("Management") has general business
experience, prospective investors should be aware that Management has
limited experience in the mining industry and in particular with respect to
the acquisition, exploration and development of mineral resource
properties. See "Directors and Officers."
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C. Potential future 144 Sales
Of the 50,000,000 shares of the Company's common stock authorized,
there are presently issued and outstanding 12,100,000, all but
approximately 5,040,000 shares are "restricted securities" as that term is
defined under the Act, and in the future may be sold in compliance with
Rule 144 of the Act, pursuant to a registration statement filed under the
Act, or other applicable exemptions from registration thereunder. Currently
there are 7,060,000 restricted shares. The shares are held by
non-affiliates of the Company and will be freely tradable without volume
restrictions after said shares have been held by the holders for two years.
Of the 7,060,000 restricted shares, non-affiliates own 7,060,000 shares,
which will become freely tradable after March 31, 2000. Rule 144 provides,
in essence, that a person holding restricted securities for a period of one
(1) year may sell those securities in unsolicited brokerage transactions or
in transactions with a market maker, in an amount equal to one percent (1%)
of the Company's outstanding common stock every three (3) months.
Additionally, Rule 144 requires that an issuer of securities make available
adequate current public information with respect to the issuer. Such
information is deemed available if the issuer satisfies the reporting
requirements of Section 13 or 15(d) of the Exchange Act and of Rule 15c2-11
thereunder. Rule 144 also permits, under certain circumstances, the sale
over a period without any quantity limitation and whether or not there is
adequate current public information available. Investors should be aware
that sales under Rule 144, or pursuant to a registration statement filed
under the Act, may have a depressive effect on the market price of the
Company's securities in any market that may develop for such shares.
Holders of the Company's common stock do not have pre-emptive rights.
Investors should be aware of the fact that issuance of new shares by the
Company will lead to the dilution of existing shareholder's interest.
D. Penny Stock Rules
The Company's common stock is a "penny stock". Under Rule 15g-9 under
the Exchange Act, a broker or dealer may sell a "penny stock" (as defined
in Rule 3a51-1) to or affect the purchase of a penny stock by any person
unless:
(1) Such sale or purchase is exempt from Rule 15g-9; or
(2) Prior to the transaction the broker or dealer has (a) approved the
person's account for transaction in penny stocks in accordance with
Rule 15g-9 and (b) received from the person a written agreement to the
transaction setting forth the identity and quantity of the penny stock
to be purchased.
The Commission adopted regulations that generally define a penny stock
to be any equity security other than a security excluded from such
definition by Rule 3a51-1. Such exemptions include, but are not limited to
(a) an equity security issued by an issuer that has (i) net tangible assets
of at least $2,000,000, if such issuer has been in continuous operations
for at least three years, (ii) net tangible assets of at least $5,000,000,
if such issuer has been in continuous operation for less than three years,
or (iii) average revenue of at least $6,000,000, for the preceding three
years; (b) except for purposes of Section 7(b) of the Exchange Act and Rule
419, any security that has a price of $5.00 or more; and (c) a security
that is
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authorized or approved for authorization upon notice of issuance for
quotation on the NASDAQ Stock Market, Inc.'s Automated Quotation System.
It is likely that the Company's common stock will be subject to the
regulations on penny stocks; consequently, the market liquidity for the
Company's common stock may be adversely affected by such regulations
limiting the ability of broker/dealers to sell the Company's common stock
and the ability of purchasers in the offering to sell their securities in
the secondary market.
2. Risk Factors of the Company's Mining Business
Resource exploration and development is a speculative business,
characterised by a number of significant risks including, among other
things, unprofitable efforts resulting not only from the failure to
discover mineral deposits, but also from finding mineral deposits which,
though present, are insufficient in quantity and quality to return a profit
from production. The marketability of minerals acquired or discovered by
the Company may be affected by numerous factors which are beyond the
control of the Company and which cannot be accurately predicted, such as
market fluctuations, the proximity and capacity of mining facilities,
mineral markets and processing equipment, and such other factors as
government regulations, including regulations relating to royalties,
allowable production, importing and exporting of minerals, and
environmental protection; any combination of these factors may result in
the Company not receiving an adequate return of investment capital.
A. Exploration and Development Risks
All of the Company's properties are in the exploration stages
only and are without a known body of commercial ore. Development of
these properties will only follow if satisfactory exploration results
are obtained. Mineral exploration and development involves a high
degree of risk and few properties which are explored are ultimately
developed into producing mines. There is no assurance that the
Company's mineral exploration and development activities will result
in any discoveries of commercial bodies of ore. The long-term
profitability of the Company's operations will be in part directly
related to the cost and success of its exploration programs, which may
be affected by a number of factors.
Substantial expenditures are required to establish ore reserves
through drilling, to develop metallurgical processes to extract the
metal from the ore and, in the case of new properties, to develop the
mining and processing facilities and infrastructure at any site chosen
for mining. Although substantial benefits may be derived from the
discovery of a major mineralised deposit, no assurance can be given
that minerals will be discovered in sufficient quantities and grades
to justify commercial operations or that the funds required for
development can be obtained on a timely basis. Estimates of reserves,
mineral deposits and production costs can also be affected by such
factors as environmental permitting regulations and requirements,
weather, environmental factors, unforeseen technical difficulties,
unusual or unexpected geological formations and work interruptions. In
additions, the grade of ore ultimately mined may differ from that
indicated by drilling results. Short term factors relating to the
reserves, such as the need for orderly development of ore bodies or
the processing of new or different grades, may also have and adverse
effect on mining operations and on the results of operations. Material
changes in ore reserves, grades, stripping ratios or recovery rates
may affect the economic viability of any project. Reserves are
reported as general indicators of
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mine life. Reserves should not be interpreted as assurances of mine
life or of the profitability of current or future operations.
B. Operating Hazards and Risks
Mineral exploration involves many risks, which even a combination
of experience, knowledge and careful evaluation may not be able to
overcome. Operations in which the Company has a direct or indirect
interest will be subject to all the hazards and risks or unexpected
formations, cave-ins, pollution, all of which could result in work
stoppages, damages to property, and possible environmental damages.
The Company does not have general liability insurance covering its
operations and does not presently intend to obtain liability insurance
as to such hazards and liabilities. Payment of any liabilities as a
result could have a materially adverse effect upon the Company's
financial condition.
C. Lack of Cash Flow and Additional Funding Requirements
None of the Company's properties has commenced commercial
production and the Company has no history of earnings or cash flow
from its operations. The company feels that its current cash position
is strong enough to fund its 1999 capital requirements. The further
exploration and the potential development of any ore deposits found on
the Company's exploration license depends upon the Company's ability
to obtain financing through any or all of the joint venturing of
properties, debt financing, equity financing or other means. There is
no assurance that the Company will be successful in obtaining the
required financing. Failure to obtain additional financing on a timely
basis could cause the Company to forfeit its interest in such
properties and reduce or terminate its operations. The Company has no
understanding or agreements with any person regarding such additional
funding requirements. The Company's auditor has indicated in its
report that "the Company has incurred a loss from operations since it
began operations." See "Part F/S. Financial Statements." Even if the
results of exploration are encouraging, the Company may not have
sufficient funds to conduct the further exploration that may be
necessary to determine whether or not a commercially mineable deposit
exists on any property. While the Company may attempt to generate
additional working capital through the operation, development, sale or
possible joint venture development of its properties, there is no
assurance that any such activity will generate funds that will be
available for operations.
The Company has not declared or paid dividends on its shares
since incorporation and does not anticipate doing so in the
foreseeable future.
D. Dividends
The Company has not declared or paid dividends on its shares
since incorporation and does not anticipate doing so in the
foreseeable future. As a result, the Company will no be attractive to
investors who are interested in earning dividends.
E. Title Risks
The Company has not obtained an opinion of counsel as to title to
its properties nor has it obtained title insurance. Any of the
Company's properties may be subject to prior unregistered agreements
of transfer.
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F. Conflicts of Interest
Certain of the directors of the Company are directors of other
mineral resource companies and, to the extent that such other
companies may participate in ventures in which the Company may
participate, the directors of the Company may have a conflict of
interest in negotiating and concluding terms regarding the extent of
such participation. Jorge L. Lacasa as well as being president and a
director of the Company is also a director of Cigma Metals
Corporation. Agustin Gomez de Segura as well as being a director of
the Company is also president and a director of Cigma Metals
Corporation. David Jenkins as well as being a director of the Company
is president and a director of Aurora Gold Corporation and president
and a director of Patagonia Gold Corporation. In the event that such a
conflict of interest arises at a meeting of the directors of the
Company, a director who has such a conflict will abstain from voting
for or against the approval of such participation or such terms. In
appropriate cases, the Company will establish a special committee of
independent directors to review a matter in which several directors,
or Management, may have a conflict. From time to time several
companies may participate in the acquisition, exploration and
development of natural resource properties thereby allowing for their
participating in larger programs, permitting involvement in a greater
number of programs and reducing financial exposure with respect to any
one program. It may also occur that a particular company will assign
all or a portion of its interest in a particular program to another of
these companies due to the financial position of the company making
the assignment. In determining whether the Company will participate in
a particular program and the interest therein to be acquired by it,
the directors will primarily consider the potential benefits to the
Company, the degree of risk to which the Company may be exposed and
its financial position at that time. Other than as indicated, the
Company has no other procedures or mechanisms to deal with conflicts
of interest.
G. Competition and Agreements with Other Parties
The mineral resources industry is intensely competitive and the
Company competes with many companies that have greater financial
resources and technical facilities than itself. Significant
competition exists for the limited number of mineral acquisition
opportunities available in the Company's sphere of operations. As a
result of this competition, the Company's ability to acquire
additional attractive gold mining properties, on terms it considers
acceptable, may be adversely affected.
The Company may be unable in the future to meet its share of
costs incurred under agreements to which it is a party and the Company
may have its interests in the properties subject to such agreements
reduced as a result. Furthermore, if other parties to such agreements
do not meet their share of such costs, the Company may be unable to
finance the costs required to complete the recommended programs.
H. Fluctuating Mineral Prices
The mining industry in general is intensely competitive and there
is no assurance that, even if commercial quantities of mineral
resources are developed, a profitable market will exist for the sale
of such minerals. Factors beyond the control of the Company may affect
the marketability of any minerals discovered. Moreover, significant
price movements in mineral prices over short periods of time
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may be affected by numerous factors beyond the control of the Company,
including international economic and political trends, expectations of
inflation, currency exchange fluctuations (specifically, the U.S.
dollar relative to other currencies), interest rates and global or
regional consumption patterns, speculative activities and increased
production due to improved mining and production methods. The effect
of these factors on the price of minerals and, therefore, the economic
viability of any of the Company's projects cannot accurately be
predicted. As the Company is in the development stage, the above
factors have had no material impact on operations or income.
I. Environmental Regulation
All phases of the Company's operations in the Republic of
Buriatia, Russian Federation are subject to environmental regulations.
Environmental legislation in the Republic of Buriatia, Russian
Federation is evolving in a manner which will require stricter
standards and enforcement, increased fines and penalties of
non-compliance, more stringent environmental assessments of proposed
projects and a heightened degree of responsibility for companies and
their officers, directors and employees. Although the Company believes
it is in compliance with all applicable environmental legislation,
there is no assurance that future changes in environmental regulation,
if any, will not adversely affect the Company's operations.
J. Adequate Labour and Dependence Upon Key Personnel
The Company will depend upon recruiting and maintaining qualified
personnel to staff its operations. The Company believes that such
personnel are currently available at reasonable salaries and wages in
the geographic areas in which the Company intends to operate. There
can be no assurance, however, that such personnel will always be
available in the future. In addition, it cannot be predicted whether
the labour staffing at any of the Company's projects will be
unionised. The success of the operations and activities of the Company
is dependent to a significant extent on the efforts and abilities of
its Management. The loss of services of any of its Management could
have a material adverse effect on the Company.
K. No Employment Agreements with Management
The Company currently has no employment agreements with
Management and does not maintain, nor does it intend to obtain, key
man life insurance on any member of its Management.
L. Political Risks
There are significant political risks involving the Company's
investment in the Republic of Buriatia, Russian Federation. These
risks include political, economic and social uncertainties in such
countries. A change in policies by the government of Russia could
adversely affect the Company's interest by, among other things, change
in laws, regulations, or the interpretations thereof, confiscatory
taxation, restriction on currency conversions, imports and sources of
supplies, or the expropriation of private enterprises. Although
management of the Company does not believe that the political factors
described above have affected the Company's activities to date, these
factors may make it more difficult for the
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Company to raise funds for the development of its mineral interests in
such developing countries.
M. Year 2000 Risks
Currently the Company does not rely on any computer programs that
will materially impact the operations of the Company in the event of a
Year 2000 disruption. However, like any other Company, advances and
changes in available technology can significantly impact its business
and operation. Consequently, although the Company has not identified
any specific year 2000 issue, the "Year 2000" problem creates risk for
the Company from unforeseen problems in its own computer systems and
from third parties, including but not limited to financial
institutions, with whom it transacts business. Such failures of the
Company and/or third parties computer systems could have a material
impact on the Company's ability to conduct its business. See "Item 2.
Management's Discussion and Analysis or Plan of Operation."
Item 2. MANAGEMENT'S' DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
A GENERAL
The Company is a mineral exploration company based in Vancouver,
Canada and Moscow, Russia and is engaged in the exploration of precious
metals. The Company was incorporated under the laws of the State of Florida
on May 19, 1995, under the name "Snak-N-POP Vending, Inc." and is a
development stage company. The Company had limited operations for the years
ended December 31, 1995, 1996 and 1997.
Since commencement of its exploration operations in 1997, the Company
has conducted exploration and undertaken a review of its mining properties
in the Republic of Buriatia, Russian Federation.
The management of the Company has developed the following exploration
objectives: to acquire properties with large scale potential, to minimize
capital costs on leases or concessions, to acquire of properties adjacent
or in close proximity to recent discoveries of large scale mineral
reserves, to be the first-in staking where possible, to secure repatriation
on mineral rights and royalties and to establish joint ventures and/or
partnerships with established companies that possess the resources to
complete mine development. All of the Company's properties are in the
preliminary exploration stage without any presently known body of ore.
The Company had no material revenues during fiscal 1995, 1996, 1997
and 1998. Income during fiscal 1998 and 1997 was the result of interest
earned on funds raised, as the Company has no mineral properties in
production. All funds raised in fiscal 1998 and 1997 were used in the
exploration and development of the Company's properties.
The Company believes that for the current fiscal year ended December
31, 1999 all capital requirements necessary to develop existing properties
and to further develop the Company through the possible acquisition or
joint venturing of additional mineral properties either in the exploration
or development stage will be funded with present cash and cash equivalents.
Additional employees will be hired on a consulting basis as required by the
exploration projects.
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B FINANCING
In Fiscal 1997, the Company raised $300,000 through the issuance
of 3,000,000 common shares at a price of $0.01 per share. The Company
also issued 7,000,000 restricted common shares ($1,050,000) upon
signing a letter of agreement whereby the Company acquired two Limited
Liability mining companies (Arkhei and Kitoi) which have licenses for
the exploration and development of two mineral concession (Tainskoye
property and the Zun Ospinskoye Property) located in the Okinsky
district of the Republic of Buriatia, Russian Federation.
In Fiscal 1998, the Company raised $700,000 through the issuance
of 2,000,000 common shares at a price of $0.35 per share.
Funds raised in fiscal 1998 and 1997 were used in the exploration
and development of the Company" properties.
C FINANCIAL INFORMATION
(a) Period January 1 to September 20, 1999 (Fiscal 1999) versus Nine
Months Ended September 30, 1998 (Fiscal 1998)
Net loss for the period January 1 to September 20, 1999
decreased by $165,650 to $125,822 over the nine months ended
September 30, 1998, due to the following:
(1) Consulting fees decreased by $11,232 to $11,568 (September
30, 1998 - $22,800)
(2) Office and miscellaneous expenses decreased by $33,201 to
$5,392 (September 30, 1998 - $38,593)
(3) Legal costs decreased by $19,764 to $0 (September 30, 1998 -
$19,764)
(4) Transfer agent, listing and filing fees decreased by $8, 255
to $581 (September 30,1998 - $8,836)
(5) Travel expenses decreased by $30,820 to $0 (September 30,
1998 - $30,820)
(6) Exploration expenses decreased by $107,869 to $81,820
(September 30, 1998 - $189,689)
(7) Management fees increased by $4,933 to $6,621 (September 30,
1998 - $1,688)
(8) Shareholder relations, advertising and promotion expenses
increased by $20,403 to $20,431 (September 30, 1998 - $28)
(9) Interest income decreased by $14,919 to $9,003 (September
30, 1998 - $23,922)
(b) Twelve Months Ended December 31, 1998 (Fiscal 1998) versus Twelve
Months Ended December 31, 1997 (Fiscal 1997).
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Net loss for the twelve months ended December 31, 1998
increased by $308,104 to $307,466 (twelve months ended December
31, 1997 - income $638), due primarily to the Company having
limited operations in fiscal 1997.
Exploration expenditures increased by $189,867 to $189,867
(December 31, 1997 - $Nil)
(c) Twelve Months Ended December 31, 1997 ("Fiscal 1997") versus
Twelve Months Ended December 31, 1996 ("Fiscal 1996").
Net income in Fiscal 1997 increased by $638 (December 31,
1996 - $Nil), due primarily to the company having limited
operations in Fiscal 1997 and 1996.
(d) Twelve Months Ended December 31, 1996 ("Fiscal 1996") versus
Eight Months Ended December 31, 1995 ("Fiscal 1995").
The company had an eight-month fiscal period in 1995 without
any financial activity other than as related to organizational
expenses.
D FINANCIAL CONDITION AND LIQUIDITY
For the fiscal years ended December 31, 1998 and 1997, the
Company met its capital requirements through proceeds of the sale of
common stock of the Company.
At September 20, 1999, the Company had cash and cash equivalents
of $388,115 (December 31, 1998 - $519,229, December 31, 1997 -
$290,638) and working capital of $563,214 (December 31, 1998 -
$666,145; December 31, 1997 - $300,638). Total liabilities as of
September 20, 1999 were $7,000 (December 31, 1998 - $12,292; December
31, 1997 - $0)
The Company feels that its current cash position is strong enough
to fund capital requirements in fiscal 1999. In the event that a
production decision is made on one of the properties or the Company
acquires additional mineral properties either directly, through joint
ventures, or through the acquisition of operating entities, it is the
Company's intention to raise additional capital either through equity
offerings and/or debt borrowings.
Management of the Company is committed to further develop the
Company through the possible acquisition or joint venturing of
additional mineral properties either in the exploration or development
stage. Additional employees will be hired on a consulting basis as
required by the exploration projects.
None of the Company's properties has commenced commercial
production and the Company has no history of earnings or cash flow
from its operations. While the Company may attempt to generate
additional working capital through the operation, development, sale or
possible joint venture development of its properties, there is no
assurance that any such activity will generate funds that will be
available for operations.
The Company has not declared or paid dividends on its shares
since incorporation and does not anticipate doing so in the
foreseeable future.
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E YEAR 2000 ISSUES.
The company utilizes software and related technologies in its
business that will be affected by the "Year 2000 computer problem",
which is common to many corporations and governmental entities. This
problem concerns the inability of information systems, primarily
computer software programs and certain hardware, to properly recognize
and process date-sensitive information as the Year 2000 approaches.
Absent corrective actions, computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than
2000. This could result in system failure or miscalculation causing
disruptions to various activities and organizations.
The Company has modified and tested all the critical applications
along with all non-critical applications of its information technology
("IT"), the result of which is that all such applications have been
either modified or replaced and are now Year 2000 compliant. The
Company used an independent consultant to oversee the Year 2000
project as well, as to perform certain remediation efforts.
In-addition, progress on the Year 2000 project is also monitored by
senior management, and reported to the Board of Directors. The total
amount of the payments made to-date and to be made hereafter to such
independent consultant are not expected to be material. Based on the
Company's analysis to date, the Company believes that its material
non-IT systems are either Year 2000 compliant, or do not need to be
made Year 2000 compliant in order to continue to function in
substantially the same manner in the Year 2000. Contingency plans are
being developed for all major components in case of system failures
surrounding the Year 2000. The Company's Year 2000 compliance work has
not caused, nor does the Company expect that it will cause, a deferral
on the part of the Company of any material IT or non-IT projects.
The Company has identified critical suppliers, as well as other
essential service providers, and has surveyed their Year 2000
compliancy. Based on expected compliance dates expressed by some of
these critical suppliers and other service providers, additional
follow-up will be required to fully assess their state of readiness
for the Year 2000. These follow-up activities will occur throughout
1999. For other suppliers and service providers, risk assessments and
contingency plans, where necessary were developed. The Company has
taken the above steps to address issues surrounding suppliers and
service providers; however the Company has no direct ability to
influence other parties' compliance actions. The Company believes it
has taken the necessary actions to mitigate the effect of the Year
2000 risks, however, there can be no assurance that any of the
Company's vendors or others, with whom it transacts business, will be
Year 2000 compliant prior to such date. The company is unable to
predict the ultimate effect that the Year 2000 problem may have upon
the Company, in that there is no way to predict the impact that the
problem will have nation-wide or world-wide and how the Company will
in turn be affected, and, in addition, the company cannot predict the
number and nature of its vendors and customers who will fail to become
Year 2000 compliant prior to January 1, 2000. Significant Year 2000
difficulties on the part of vendors or customers could have a material
adverse impact upon the Company's operating results and financial
condition.
Contingency plans for the Year 2000 related business
interruptions are being developed and will include, but not be limited
to, the development of emergency backup recovery procedures, replacing
automated processes with manual processes, identification of
alternative suppliers. The Company's Year 2000 efforts are ongoing and
its overall plan, as well as the consideration of contingency plans,
will continue to evolve as new information becomes available. While
the Company is taking steps it believes to be necessary to prevent any
major interruption to its business activities that will depend in
part, upon the ability of third parties to be Year 2000 compliant.
13
<PAGE>
F NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, Statement of Financial Accounting Standards No. 133
(SFAS 133), "Accounting for Derivative Instruments and Hedging
Activities" was issued. SFAS 133 established accounting and reporting
standards for derivative instruments, including certain derivative
instruments embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. It requires that an entity
recognise all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair
value. SFAS 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999, however, earlier application of all of
the provisions of this statement is encouraged as of the beginning of
any fiscal quarter.
Historically, the Company has not entered into derivatives
contracts either to hedge existing risks or for speculative purposes.
Accordingly, the Company does not expect adoption of the new standards
on January 1, 2000 to affect its financial statements.
In April 1998, Statement of Position 98-5 (SOP 98-5), "Reporting
on the Costs of Start-up Activities" was issued. SOP 98-5 provides
guidance on the financial reporting of start-up costs and
organizations costs. It requires costs of start-up and organizational
expenses to be expensed as incurred, as well as the recognition of a
cumulative effect of a change in accounting principle for retroactive
application of the standard. SOP 98-5 is effective for fiscal years
beginning after December 15, 1998, although earlier application is
encouraged. The Company does not anticipate that adoption of the new
standard will significantly affect costs capitalized in 1998 and
year's prior.
Item 3. DESCRIPTION OF PROPERTY
All of the Company's properties are in the preliminary
exploration stage and do not contain any known body of ore.
(A) Acquisition of Property Interests or Options to acquire Property
Interests
The Company is currently a 100% owner of two mining companies
which have licenses for exploration and development of two mineral
concessions located in the Okinsky district of the Republic of
Buriatia, Russian Federation: Tainskoye Property and Zun Ospinskoye
Property.
Tainskoye Property exploration and development rights are owned
by the Limited Liability Company "ARKHEI", organized under Russian
Federation Law, while the Zun Ospinskoye Property exploration and
development rights are owned by its 100% subsidiary: a Limited
Liability mining Company "KITOI", organized under the Russian Law. The
Company on December 26, 1997 entered into an Agreement (hereinafter
referred to as the Acquisition Agreement) under which it acquired 100%
of the shares of "ARKHEI" Limited Liability Company, and consequently
its subsidiary "KITOI" and all the exploration and development rights
of both "ARKHEI" and "KITOI". These are the rights on the Zun
Ospinsloye Mining Property and the rights on the Tainskoye Mining
Property, defined below. Upon the signature of the Acquisition
Agreement, the former owners of "ARKHEI" issued an indemnity letter,
by which both ARKHEI" and "KITOI" are declared without any debt or
liability on the date of acquisition by the Company and if any
liability or obligation with third parties is to be found after the
acquisition date, the former owners will irrevocably assume it in
full.
14
<PAGE>
(I) Zun Ospinskoye Property, Republic of Buriatia, Russian Federation
The license for the exploration and development on the Zun
Ospinskoye goldfield was issued on August 1st, 1997 under the
number UDE 00179 type BP, to the Limited Liability Mining Company
"KITOI", constituted November 11th, 1996 and registered under
N196 with registered address at 671030 Orlik, Okinsky district,
Republic of Buriatia, Russian Federation. "KITOI" was formed with
the purpose of exploration and development of mining properties
in the Russian Federation.
Previous to the Acquisition Agreement with Eurasian Goldfields
Inc. the Limited Liability Company "ARKHEI" acquired the 100% of
the shares of the Limited Liability Mining Company "KITOI". The
acquisition of "ARKHEI" encompasses mineral claims located within
the limits of the Zun Ospinskoye concession, ("The Zun Ospinskoye
Property") and provides the Company with a 100% undivided
interest in the Zun Ospinskoye mineral concession.
(II) Tainskoye Property, Republic of Buriatia, Russian Federation
The license for the exploration and development of the Tainskoye
goldfield was issued on March 8th, 1997 under the number UDE 140
type BP, to the Limited Liability Company "ARKHEI", constituted
on February 26th, 1997, and registered under number 18, with the
registered address at 671030 Orlik, Okinsky district, Republic of
Buriatia, Russian Federation. "ARKHEI" was formed with the
purpose of exploration and development of mineral resources in
the Russian Federation. The acquisition of "ARKHEI" encompasses
mineral claims located within the limits of the Tainskoye
concession ("The Tainskoye Property") and provides the Company
with a 100% undivided interest in the Tainskoye Mineral
concession.
(B) Property Descriptions
(I) The Zun Ospinskoye Property
Zun Ospinskoye property is an advanced exploration stage property
with a known economic grades and an established resource, albeit
a small one to date. The property is located in the Okinsky
district of the Republic of Buriatia, 150 km west of Lake Baikal
and 105 km east of Orlik, the administrative centre of the
Okinsky District. Gravel and dirt roads connect the property with
the town of Orlik.
The topography is very rugged with the main showing occurring at
the top of a hill at 2600-m ASL. The regional geology consists of
Lower Palaeozoic granites, Archean gneiss, Mid-Proterozoic
schists, carbonates, and ophiolites including serpentinite, and
talc-carbonates. These rock types are common in other major gold
belts in the world, including the prolific Timmins - Porcupine
Belt in Canada.
On the property itself, biotite-hornblende granite is locally
overlain by basalts. Mineralization is associated with a series
of shear zones, veins and stockworks that occur within the
granite and locally along the contact of the granite and the
ophiolite-carbonate sequence. The system is exposed over a 1.5-2
km strike length with a width of up to 80 m, although the
mineralization explored to date is more commonly 1.5-2 m in
width. An adit has exposed up to 5 individually steeply dipping
veins, all of which are reported to contain economic values.
15
<PAGE>
Only one vein has been explored to date in any detail although
other zones are reported on the property. Previous exploration in
the 1970's and 1980's by local Geocom includes trenching, 16
drill holes and an adit under the main zone. The average depth of
the drill holes is reported to be 130 m. In 1996 and 1997 an
exploration program was conducted in order to transfer the
resources of gold and silver into "industrial" reserves (category
C1 and C2). A surface drilling program consisting of two holes,
200m and 1980m, confirmed the presence of gold
Typical samples from the main vein include grab assays ranging
from 4 g/t up to 26 g/t Au. The vein has a potential strike
length of 2 km if in fact it extends beneath the basalt cover as
indicated by geophysical results, which are reported to indicate
a conductive source on the strike with the vein exposure. Russian
reports indicate that C1 + C2 resources are 423,700 tonnes at 9.2
g/t Au and 260.9 g/t Ag. Total potential, P1 + P2 resources are
estimated at 3,274,000 tonnes at 7.5 g/t Au, 200 g/t Ag. The ore
also contains an average 1% lead, 0.4 % zinc and 0.3 % copper.
Initial metallurgy results indicate 60% recovery rate using only
gravity separation.
Additional trenching and drilling is required to further explore
the veins.
"KITOI", a Limited Liability mining Company was granted a mineral
resources license on August 1, 1997. The license provides for the
search, exploration and production of underground gold and silver
within the limits of the Zun Ospinskoye field. The right to use
the lands above the concession was received from the
Administration of the Okinsky District on November 30th, 1996.
The concession is classified under the category of "gorni otvod"
(mountain concession) and expires on May 26th, 2018. Through an
agreement-dated December 26, 1997, the Company acquired "KITOI",
which owns the license.
(II) The Tainskoye Property
The property is located in the Okinsky district of the Republic
of Buriatia, 160 km west of Lake Baikal and 115 km east of Orlik,
the administrative centre of the Okinsky District. Gravel and
dirt roads connect the property with the town of Orlik.
The topography is very rugged with heights up to 3200 m. The
regional geology consists of Lower Palaeozoic granites, Archean
gneiss, Mid-Proterozoic schists, carbonates, and ophiolites
including serpentinite, and talc-carbonates. These rock types are
common in other major gold belts in the world, including the
prolific Timmins - Porcupine Belt in Canada.
The mineralised lode is hosted by Palaeozoic granite and its
contacts with Proterozoic serpentinites and carbonates. The
Mineralization consists of both grey quartz veins containing 3-5%
sulphides, including varying amounts of pyrrhotite, pyrite,
chalcopyrite and sphalerite and altered granites, (metasomatites)
which are now composed of quartz - mica rocks containing quartz
veinlets and sulphides.
Previous exploration in the 1980's consisted of sampling and
minor trenching. Only one vein out of the 9 found to date has
been explored to any extent. Exposure is not very good and the
vein has only been sampled in 5 locations over a 400-m strike
length as exposed on the top of the hill. Additional trenching on
this and other veins was conducted in the summer of 1997.
16
<PAGE>
Assay results from the main vein range from 4.6 g/t Au, 27.0 g/t
over 1 m to 116.6 g/t Au, 141.4 g/t Ag over 0.8 m. The widest
exposure observed to date returned 10.56 g/t Au, 24.1 g/t Ag over
1.8 m. Preliminary metallurgical results indicate recoveries of
80-99% using gravity and gravity-flotation-cyanidation methods.
Russian reports indicate a potential resource, P1 + P2 based on
the scarce data to date, of 350,000 tonnes at 21.3 g/t Au, 149.9
g/t Ag (218,000 ounces of gold).
Additional geological mapping, sampling, geophysics and a
drilling program will be required to further explore the
property.
"ARKHEI", a Limited Liability mining Company was granted a
mineral resources license on March 8, 1997. The license provides
for the search, exploration and production of underground gold
and silver within the limits of the Tainskoye field. The right to
use the lands above the concession was received from the
Administration of the Okinsky District on March 13, 1996. The
concession is classified under the category of "gorni otvod"
(mountain concession) and expires on March 28, 2022. Through an
agreement-dated December 26, 1997, the Company acquired "ARKHEI",
which owns the license.
(C) Exploration Activities and Anticipated Capital Expenditures
The Company has been conducting preliminary exploration work on
all of its properties since May 1998.
The Company has retained the services of Stewart Wallis to
evaluate the mineral concessions on the Company's behalf. In August
1999 the Company retained MRDI Canada, a division of H.A. Simons Ltd.
to act as mineral consultant for the Company.
There are no long-term agreements or understandings regarding the
continuation of these consulting relationships.
The Company will retain independent mineral consultants on an as
when needed basis.
Consultants and advisors will be employed by the Company based on
their technical expertise, familiarity with the subject matter,
ability to speak the language of the country in which the Company's
property interests are located; knowledge of local mining laws,
ordinances and geology.
The Company estimates that approximately $200,000 will be
required from July 1999 through December 31, 1999 in order to complete
its preliminary assessment of its properties.
The Company feels that its current cash position is strong enough
to fund all capital requirements in fiscal 1999. In the event that a
production decision is made on one of the properties or the Company
acquires additional mineral properties either directly, through joint
ventures, or through the acquisition of operating entities, it is the
Company's intention to raise additional capital either through equity
offerings and/or debt borrowings. No assurance can be given that such
financing will be available when required by the Company. The amount
of funds that may be available to the Company may be less than that
required by the Company and will be affected by factors, such as
general market and economic conditions that are beyond the Company's
control. The Company has no (i)
17
<PAGE>
understandings or agreements with any person regarding such financing
and (ii) present intentions to effectuate a merger or other business
combination
Notwithstanding the foregoing, if an appropriate opportunity
presents itself to joint venture the continual exploration and if
warranted, the development of its properties the Company intends to
fully explore the viability of any such opportunities.
D Office Facilities
As of October 1, 1999 there are no long term agreements or
commitments with respect to the Company's offices located at 1505 -
1060 Alberni Street, Vancouver, British Columbia, Canada, V6E 4K2. The
office is rented on a month-to-month basis at a cost of $900 per
month. The Company is required to give 30 days notice prior to
vacancy.
Item 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's common stock as of September 20,
1999 by (i) each person who is known by the Company to own
beneficially more than five percent (5%) of the Company's outstanding
common stock; (ii) each of the Company's directors and officers; and
(iii) all directors and officers of the Company as a group. As at
September 20, 1999 there were 12,100,000 shares of common stock issued
and outstanding.
Name of Shares of Common Approximate
Beneficial Stock Beneficially Percentage
Owner Owned Owned
----- ----- -----
Golden Country Consortium Ltd. 1,000,000 8.3%
Pasea Estate
Road Town, Torola
B.V.I.
Publix Overseas Ltd. 1,000,000 8.3%
Pasea Estate
Road Town, Tortola
B.V.I
Bars Ltd. 920,000 7.6%
Rubliovskoye Shosse 16/4
Moscow, Russia
Boavista Securities Ltd. 905,000 7.5%
12 Harcourt Road Central
Hong Kong
Redbridge Minerals (Overseas) Ltd. 900,000 7.4%
5 Costis Palomas Street
Nicosia, Cyprus
18
<PAGE>
Alanco Development Inc. 855,000 7.1%
Bank of America Bldg.
Panama City,
Panama
Seal Overseas Ltd. 850,000 7.0%
140-142 Austin Road
Kowloon, Hong Kong
Barrington Ltd. 800,000 6.6%
12 Remy Oliver Street
Fort Louis, Mauri
Kastalia Ltd. 750,000 6.2%
12 Remy Oliver Street,
Fort Louis,
Mauri
Finiss Investments Ltd. 630,000 5.2%
8 Acroplis Avenue
Nicosia, Cyprus
Officers and Directors
----------------------
Jorge L. Lacasa 7,500 *
Valle de Laciana 31
D-28034 Madrid, Spain
Augustin Gomez de Segura 7,500 *
Raimundo F. Villaverde 26,
E-28003 Madrid, Spain
David E. Jenkins Nil *
1505-1060 Alberni Street
Vancouver, B.C. Canada V6E 4K2
Officers and Directors (3 persons) 15,000 *
(1) To the best of the Company's knowledge, none of the above companies
are affiliated except as follows: Jorge L. Lacasa is affiliated with
Alanco Development Inc. and Augustin Gomez de Segura is affiliated
with Publix Overseas Ltd.
o Less than 1%.
19
<PAGE>
Item 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTER AND CONTROL PERSONS
The following persons are the directors and executive officers of the
Company:
Name Position
---- --------
Jorge L. Lacasa President and Director since November 25, 1997
Augustin Gomez de Segura Director since November 25, 1997
David E. Jenkins Director and Secretary since November 25, 1997
All directors and officers of the Company are elected annually to
serve for one year or until their successors are duly elected and
qualified.
Management's business experience during the past five years is as
follows:
Jorge L. Lacasa, President and Director
1984 to current, president of Alanco Development Inc., a project
finance company which has financed more than 30 industrial projects in
China and the Commonwealth of Independent States ("CIS"). Advisor to the
European Bank for Reconstruction and Development ("EBRD") and several
Investment funds and advisor to several Spanish banks on China and
Commonwealth of Independent States countries.
Agustin Gomez de Segura, Director
1990 to current, Director and Manager of several trading and
development companies, specializing in the Eastern Europe and Russian
markets and Manager of two investment funds. 1995 to 1998, member of the
board of Allna Moscow Bank. 1980 and 1990, was the Eastern Area Manager of
Labtest (USA) and Labtam (Australia), a group of companies specializing in
scientific research instruments and information technology.
David E. Jenkins, Director & Secretary
Mr. Jenkins is the president of Aurora Gold Corporation. He is also
President of Datalogic Marketing Corporation, a business consulting firm,
specializing in venture capital. Prior to forming Datalogic Marketing
Corporation, Mr. Jenkins served as an investment advisor for Paine Webber,
Inc. and Blythe Eastman Dillon Inc. from 1983 to 1989.
Item 6. EXECUTIVE COMPENSATION
(A) General
The following table sets forth information concerning the compensation
of the named executive officers for each of the registrant's last three
completed fiscal year:
20
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
------------------------------------ -----------------------------------------------------
Awards Payments
-----------------------------------------------------
Securities
Other Under- All
Annual Restricted Lying other
Name And Compen- Stock Options/ LTIP Compen-
Principal Position Year Salary Bonuses Sation Award(s) SARs Payouts sation
($) ($) ($) ($) (=) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jorge L. Lacasa 1998 -0- -0- -0- None None None -0-
--------------------------------------------------------------------------------------------------------
1997 -0- -0- -0- None None None -0-
--------------------------------------------------------------------------------------------------------
1996 -0- -0- -0- None None None -0-
- ------------------------------------------------------------------------------------------------------------------------------------
Agustin Gomez de 1998 -0- -0- -0- None None None -0-
--------------------------------------------------------------------------------------------------------
Segura 1997 -0- -0- -0- None None None -0-
--------------------------------------------------------------------------------------------------------
1996 -0- -0- -0- None None None -0-
- ------------------------------------------------------------------------------------------------------------------------------------
David Jenkins 1998 -0- -0- -0- None None None -0-
--------------------------------------------------------------------------------------------------------
1997 -0- -0- -0- None None None -0-
--------------------------------------------------------------------------------------------------------
1996 -0- -0- -0- None None None -0-
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
None of the Company's officers and directors is currently party
to an employment agreement with the Company. As of September 30, 1999
$0 salary has been paid or is owing to Jorge L. Lacasa, Agustin Gomez
de Segura or David Jenkins. Directors and/or officers will receive
expense reimbursement for expenses reasonably incurred on behalf of
the Company.
(B) Options/SAR Grants Table
No options have been awarded
(C) Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value
Table
No options have been awarded
(D) Long-Term Incentive Plan ("LTIP") Awards Table
The Company does not have a Long-term Incentive Plan.
Item 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The proposed business of the Company raises potential conflicts
of interests between the Company and certain of its officers and
directors.
Certain of the directors of the Company are directors of other
mineral resource companies and, to the extent that such other
companies may participate in ventures in which the Company may
participate, the directors of the Company may have a conflict of
interest in negotiating and concluding terms regarding the extent of
such participation. In the event that such a conflict of interest
arises at a meeting of the directors of the Company, a director
21
<PAGE>
who has such a conflict will abstain from voting for or against the
approval of such participation or such terms. In appropriate cases the
Company will establish a special committee of independent directors to
review a matter in which several directors, or Management, may have a
conflict. From time to time several companies may participate in the
acquisition, exploration and development of natural resource
properties thereby allowing for their participation in larger
programs, involvement in a greater number of programs and reduction of
the financial exposure with respect to any one program. It may also
occur that a particular company will assign all or a portion of its
interest in a particular program to another of these companies due to
the financial position of the company making the assignment. In
determining whether the Company will participate in a particular
program and the interest therein to be acquired by it, the directors
will primarily consider the potential benefits to the Company, the
degree of risk to which the Company may be exposed and its financial
position at that time. Other than as indicated, the Company has no
other procedures or mechanisms to deal with conflicts of interest. The
Company is not aware of the existence of any conflict of interest as
described herein.
During the period January 1 to September 20, 1999, salaries and
wages aggregating, $0 (December 31, 1998 - $0, December 31, 1997 - $0)
were paid or are payable to directors or corporations controlled by
directors in connection with managerial, engineering and
administrative services provided.
In addition, directors and/or officers will receive expense
reimbursement for expenses reasonably incurred on behalf of the
Company.
The Company believes that had amounts been paid they would have
been comparable to amounts that would have been paid to at arms length
third party providers of such services.
Item 8. DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue 50,000,000 shares of common
stock, of which 12,100,000 shares were issued and outstanding as of
the date of this Memorandum. Each outstanding share of common stock
entitles the holder to one vote, either in person or by proxy, on all
matters that may be voted upon by the owners thereof at meetings of
the stockholders.
The holders of common stock (i) have equal rights to dividends
from funds legally available therefor, when, and if, declared by the
Board of Directors of the Company; (ii) are entitled to share rateably
in all of the assets of the Company available for distribution to the
holders of common stock upon liquidation, dissolution or winding up of
the affairs of the Company; (iii) do not have pre-emptive,
subscription or conversion rights, and (iv) are entitled to one
non-cumulative vote per share on all matters on which stockholders may
vote at all meetings of stockholders.
The holders of shares of common stock of the Company do not have
cumulative voting rights, which means that the holders of more than
50% of such outstanding shares, voting for the election of directors,
can elect all directors of the Company if they so choose and, in such
event, the holders of the remaining shares will not be able to elect
any of the Company's directors. The present officers and directors of
the Company own less than 1% of the outstanding shares of the Company.
22
<PAGE>
PART II
Item 1. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER STOCKHOLDER MATTERS
(a) The common stock of the Company has been quoted on the OTC
Bulletin Board since March 7, 1998. The following table sets
forth high and low bid prices for the common stock for the
calendar quarters indicated as reported by the OTC Bulletin Board
from March 7, 1998 through September 20, 1999. These prices
represent quotations between dealers without adjustment for
retail mark-up, mark-down or commission and may not represent
actual transactions.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
First Quarter Second Quarter Third Quarter Fourth Quarter
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 - High 3.1875 2.875 3.250 N/A
----------------------------------------------------------------------------------------------------
1999 - Low 2.5625 1.625 2.031 N/A
----------------------------------------------------------------------------------------------------
1998 - High 2.5 2.6875 2.8125 3.5
----------------------------------------------------------------------------------------------------
1998 - Low 1.46875 2.25 2 2.125
----------------------------------------------------------------------------------------------------
1997 - High N/A N/A N/A N/A
----------------------------------------------------------------------------------------------------
1997 - Low N/A N/A N/A N/A
----------------------------------------------------------------------------------------------------
</TABLE>
(b) As of September 20, 1999, there were 22 holders of record of the
common stock.
(c) The Company has not declared any dividends since inception, and
has no present intention of paying any cash dividends on its
common stock in the foreseeable future. The payment by the
Company of dividends, if any, in the future, rests within the
discretion of its Board of Directors and will depend, among other
things, upon the Company's earnings, its capital requirements and
its financial condition, as well as other relevant factors.
(d) No matters were submitted to a Vote of the shareholders during
the last fiscal quarter.
Item 2. LEGAL PROCEEDINGS
The Company is not a party to any litigation, and has no
knowledge of any pending or threatened litigation against it.
Item 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None.
Item 4. RECENT SALES OF UNREGISTERED SECURITIES
In the last two years the Company issued the following securities
without registration under the Securities Act of 1933, as Amended (the
"Act").
(1) In December 1997, the Company issued 7,000,000 shares in
connection with its acquisition of certain exploration,
development and production licenses
23
<PAGE>
in Republic of Buriatia, Russian Federation. The issuance of
the stock was an exempt transaction pursuant to Section 4(2)
of the Securities Act.
The issuance of the stock pursuant to 4(2) were to private
entities in exchange for assets. Pursuant Section 4(2), as
the number of shareholders was to a limited group of
sophisticated investors, issuance of the stock to them in
private exchange was an exempt transaction not involving a
public underwriting.
From December 1997 - January 1998 the Company issued a total
of 5,000,000 of its common stock pursuant to Section 3(b)
Regulation D Rule 504 of the Act. These securities were sold
as follows:
(1) In December 1997, the Company issued 3,000,000 shares at a
price of $0.10 per share for an aggregate consideration of
$300,000 pursuant to Rule 504 of Regulation D.
(2) In January 1998, the Company issued 2,000,000 shares at a
price of $0.35 per share for an aggregate consideration of
$700,000 pursuant to Rule 504 of Regulation D.
Except for 5,000,000 shares issued pursuant to Rule 504, such
shares are "restricted securities," as that term is defined in the
rules and regulations promulgated under the Securities Act of 1933, as
amended, subject to certain restrictions regarding resale.
Certificates evidencing all of the above-referenced securities have
been stamped with a restrictive legend and will be subject to stop
transfer orders.
The Registrant believes that each of the above-referenced
transaction was exempt from registration under the Act, pursuant to
Section 4(2) of the Act and the rules and regulations promulgated
thereunder as a transaction by an issuer not involving any public
offering.
Item 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Except as hereinafter set forth there is no charter provision,
bylaw, contract, arrangement or statute under which any officer or
director of the Registrant is insured or indemnified in any manner
against any liability which he may incur in his capacity as such.
Statutory indemnification of Directors and Officers
The Company's Bylaws provide for the indemnification of officers
and directors. Each director and officer of the Corporation shall be
indemnified by the Corporation against all costs and expenses actually
and necessarily incurred by him or her in connection with the defense
of any action, suit or proceeding in which he or she may be involved
or to which he or she may be made party by reason of his or her being
or having been such director or officer, except in relation to matters
as to which he or she shall be finally adjudged in such action, suit
or proceeding to be liable for negligence or misconduct in the
performance of duty.
Section 607.0850 of the Florida Business Corporations Act,
provides for the indemnification of the Company's officers, directors
and corporate employees and agents under certain circumstances as
follows:
24
<PAGE>
Indemnification of Officers, Directors, Employee and Agents; Insurance
(a) A corporation may indemnify 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 (other than an action by or in
the right of the corporation) by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fee), judgements, fines and
amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding, by judgement,
order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal
action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgement in its favour by reason of the fact that he
if or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection with the defence or
settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person if fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such
court shall deem proper.
(c) To the extent that a director, officer, employee or agent of
a corporation has been successful on the merits or otherwise in
defence of any action, suit or proceeding referred to in
subsections (a) and (b) of this section, or in defence of any
claim, issue or matter therein, he shall be indemnified against
expenses (including attorney's fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has
met the applicable standard of conduct set forth in subsections
(a) and (b) of this section. Such determination shall be made (1)
by the board of directors by a majority vote of a quorum
consisting of the directors who were not parties to such action,
suit or proceeding, or (2) if such a quorum is not obtainable,
or, even, if obtainable a
25
<PAGE>
quorum of disinterested directors so directs, by independent
legal counsel in written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer
or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of any undertaking by or on
behalf of such director to repay such amount if it shall
ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section.
Such expenses including attorneys' fees incurred by other
employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement expenses provided by, or
granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those
seeking indemnification or advancement expenses may be entitled
under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity or arising
out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under this
section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting
corporation, any constituent corporation including (any
constituent of a constituent) absorbed in a consolidation or
merger which, if separate existence had continued, would have had
power and authority to indemnify its directors, officers and
employees or agents so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is
or was serving at the request of such constituent corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall
stand in the same position under this section with respect to the
resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, reference to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving
at the request of the corporation" shall include any services as
a director, officer, employee or agent of the corporation which
imposes duties on, or involve services by, such director,
officer, employee, or agent with respect to any employee benefit
plan, its participants, or beneficiaries; and a person who acted
in good faith and in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to
in this section.
26
<PAGE>
The Securities and Exchange Commission's Policy on Indemnification
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to any provisions contained in its Certificate of
Incorporation, or by-laws, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defence of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
27
<PAGE>
PART F/S
FINANCIAL STATEMENTS
EURASIA GOLD FIELDS, INC.
Audited Financial Statements:
Report of the Independent Accountants F2
Consolidated Balance Sheets as at September 20, 1999,
December 31, 1998 and 1997 F3
Consolidated Statements of Stockholders' Equity from May 22, 1995
(inception) to September 20, 1999 F4
Consolidated Statement of Operations F5
Consolidated Statements of Cash Flows F6
Notes to Consolidated Financial Statements
September 20, 1999, December 31, 1998 and 1997 F7
28
<PAGE>
EURASIA GOLD FIELDS, INC.
(A development stage enterprise)
(formerly Snak-N-Pop Vending, Inc.)
Consolidated Financial Statements
September 20, 1999, December 31, 1998 and 1997
(Expressed in US Dollars)
Index
Report of Independent Accountants
Consolidated Balance Sheets
Consolidated Statements of Stockholders' Equity
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
F1
<PAGE>
MOORE STEPHENS
ELLIS FOSTER LTD.
CHARTERED ACCOUNTANTS
1650 West 1st Avenue
Vancouver, BC Canada V6J 1G1
Telephone: (604) 737-8117 Facsimile: (604) 714-5916
E-Mail: [email protected]
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
EURASIA GOLD FIELDS, INC. (formerly Snak-N-Pop Vending, Inc.)
(A development stage enterprise)
We have audited the consolidated balance sheets of Eurasia Gold Fields, Inc. and
subsidiaries ("Company"). (A development stage enterprise) (formerly Snak-N-Pop
Vending, Inc.) as at September 20, 1999, December 31, 1998 and 1997, the
consolidated statements of stockholders' equity for the periods from May 22,
1995 (inception) to September 20, 1999, the consolidated statements of
operations and cash flows for the periods from May 22, 1995 (inception) to
September 20, 1999 and for the periods ended September 20, 1999, December 31,
1998 and 1997. These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform an audit
to obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at September 20,
1999, December 31, 1998 and 1997 and the results of its operations and its cash
flows for the period from May 22, 1995 (inception) to September 20, 1999 and for
the periods ended September 20, 1999, December 31, 1998 and 1997 in conformity
with generally accepted accounting principles in the United States.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and the satisfaction of liabilities in
the normal course of business. As discussed in Note 1 to the consolidated
financial statements, the Company has incurred a loss from operations and lacks
liquidity which raises substantial doubt about its ability to continue as a
going concern. The continued operations of the Company as a going concern is
dependent upon its ability to obtain necessary financing to complete the
development. Management's plans concerning these matters are described in Note
1. These consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Vancouver, Canada "MOORE STEPHENS ELLIS FOSTER LTD."
September 23, 1999 Chartered Accountants
- --------------------------------------------------------------------------------
MS An independently owned and operated member of Moore Stephens North America
Inc. Members in principal cities throughout North America.
Moore Stephens North America Inc. is a member of Moore Stephens International
Limited, members in principal cities throughout the world.
F2
<PAGE>
EURASIA GOLD FIELDS, INC.
(A development stage enterprise)
(formerly Snak-N-Pop Vending, Inc.)
Consolidated Balance Sheets
(Expressed in US Dollars)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
September 20 December 31
---------------------------------
1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C>
Current
Cash and cash equivalents $ 388,115 $ 519,229 $ 290,638
Marketable securities 182,099 159,208 --
Non-trade accounts receivable -- -- 10,000
- -----------------------------------------------------------------------------------------------------------------------------------
570,214 678,437 300,638
Non-current
Mineral property costs 7,000 7,000 7,000
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets $ 577,214 $ 685,437 $ 307,638
===================================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current
Accounts payable and accrued
liabilities $ 7,000 $ 12,292 $ --
- -----------------------------------------------------------------------------------------------------------------------------------
Stockholders' Equity
Share capital
Authorized:
50,000,000 common shares at par
value of $0.001 each
Issued:
12,100,000 (1998 - 12,100,000;
1997 - 10,100,000) 12,100 12,100 10,100
Additional paid in capital 999,900 999,900 301,900
Deficit accumulated during the
development stage (437,650) (311,828) (4,362)
Accumulated other comprehensive loss (4,136) (27,027) --
- -----------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity 570,214 673,145 307,638
- -----------------------------------------------------------------------------------------------------------------------------------
Total liability and stockholders' equity $ 577,214 $ 685,437 $ 307,638
===================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
APPROVED BY THE BOARD: /s/ Jorge L. Lacasa /s/ Agustin Gomez De Segura
-------------------------- ---------------------------
Director Director
F3
<PAGE>
EURASIA GOLD FIELDS, INC.
(A development stage enterprise) (formerly Snak-N-Pop Vending, Inc.)
Consolidated Statements of Stockholders' Equity
From May 22, 1995 (inception) to September 20, 1999
(Expressed in US Dollars)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
other Total
Common stock Additional compre- Stock-
----------------------- paid-in Accumulated hensive holders'
Shares Amount capital Deficit income equity
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Issued for debt 100 $ 100 $ 4,900 $ -- $ -- $ 5,000
Net loss for the period -- -- -- (5,000) -- (5,000)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1996 100 100 4,900 (5,000) -- --
Stock split 1,000:1 August 14, 1997 99,900 -- --
Issuance of common stock
For mineral properties December 8, 1997 7,000,000 7,000 -- -- -- 7,000
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 10,100,000 10,100 301,900 (4,362) -- 307,638
Issuance of common stock for cash January 12, 1998 2,000,000 2,000 698,000 -- -- 700,000
Net loss for the year -- -- -- (307,466) -- (307,466)
Net change in unrealized loss on investments -- -- -- -- (27,027) (27,027)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 12,100,000 12,100 999,900 (311,828) (27,027) 673,145
Net loss for the period -- -- -- (125,822) -- (125,822)
Net change in unrealized loss on investments -- -- -- -- 22,891 22,891
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, September 20, 1999 12,100,000 $ 12,100 $ 999,900 $ (437,650) $ (4,136) $ 570,214
===================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F4
<PAGE>
EURASIA GOLD FIELDS, INC.
(A development stage enterprise)
(formerly Snak-N-Pop Vending, Inc.)
Consolidated Statement of Operations
(Expressed in US Dollars)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
May 22, 1995
inception) January 1 January 1 January 1
to
September 1999 to 1998 to 1997 to
20
1999 September 20 December December
31 31
(cumulative) 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
General and administrative expenses
Consulting $ 34,368 $ 11,568 $ 22,800 $ --
Interest, bank charges and
foreign exchange 5,701 440 5,131 130
Office and miscellaneous,
net of recoveries 47,891 5,392 37,499 --
Professional fees:
- Legal 19,764 -- 19,764 --
- Accounting 21,853 4,853 17,000 --
Rent and other 4,212 1,781 2,431 --
Management fees 10,267 6,621 3,646 --
Shareholder relations, advertising
and promotion 20,846 20,431 415 --
Transfer agents, listing and filing fees 9,572 581 8,991 --
Travel 30,820 -- 30,820 --
Telephone 2,462 1,338 1,124 --
- -----------------------------------------------------------------------------------------------------------------------------------
207,756 53,005 149,621 130
Less: Interest income (41,793) (9,003) (32,022) (768)
- -----------------------------------------------------------------------------------------------------------------------------------
165,963 44,002 117,599 (638)
Exploration expenses 271,687 81,820 189,867 --
- -----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) for the period $ (437,650) $ (125,822) $ (307,466) 638
===================================================================================================================================
Other comprehensive income (loss)
Unrealized gain (loss) on securities
available for sale $ (4,136) $ 22,891 (27,027) --
===================================================================================================================================
Comprehesive income (loss) for the period $ (441,786) $ (102,931) $ (334,493) 638
===================================================================================================================================
Loss per share
Basic and diluted $ -- $ (0.01) $ (0.03) $ --
===================================================================================================================================
Weighted average common
shares outstanding
Basic and diluted 12,100,000 12,039,560 554,458
===================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F5
<PAGE>
EURASIA GOLD FIELDS, INC.
(A development stage enterprise)
(formerly Snak-N-Pop Vending, Inc.)
Consolidated Statement of Cash Flows
(Expressed in US Dollars)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
May 22, 1995
(inception) to January 1 January 1 January 1
September 20 1999 to 1998 to 1997 to
1999 September 20 December 31 December 31
(cumulative) 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash flows from (used in)
operating activities
Net loss for the period $ (437,650) $ (125,822) $ (307,466) $ 638
Changes in assets and liabilities
-- decrease (increase) in accounts
receivable -- -- 10,000 (10,000)
-- increase (decrease) in accounts payable 7,000 (5,292) 12,292 --
- -----------------------------------------------------------------------------------------------------------------------------------
(430,650) (131,114) (285,174) (9,362)
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flows from (used in)
investing activities
Purchase of securities available for sale (186,235) -- (186,235) --
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flows from (used in)
financing activities
Proceeds from issuance of common stock 1,005,000 -- 700,000 300,000
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash for the period 388,115 (131,114) 228,591 290,638
Cash and cash equivalents, beginning of period -- 519,229 290,638 --
- -----------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 388,115 $ 388,115 $ 519,229 $ 290,638
===================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
F6
<PAGE>
EURASIA GOLD FIELDS, INC.
(A development stage enterprise)
(formerly Snak-N-Pop Vending, Inc.)
Notes to Consolidated Financial Statements
September 20, 1999, December 31, 1998 and 1997
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
1. Nature of Business and Going Concern
The Company was formed on May 22, 1995 as Snak-N-Pop Vending, Inc. under
the laws of the State of Florida. The Company changed its name to Eurasia
Gold Fields, Inc. on February 4, 1998. The Company is in the business of
exploration and development of mineral properties. The Company has not yet
determined whether its properties contain mineral resources that may be
economically recoverable.
These consolidated financial statements have been prepared with generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business. The general business
strategy of the Company is to acquire mineral properties either directly or
through the acquisition of operating entities. The continued operations of
the Company and the recoverability of mineral property costs is dependent
upon the existence of economically recoverable reserves, or proceeds from
the disposition thereof, confirmation of the Company's interest in the
underlying mineral claims, the ability of the Company to obtain necessary
financing to complete the development and upon future profitable
production. Management's plans in this regard are to raise equity financing
as required. These consolidated financial statements do not include any
adjustments that might result from this uncertainty.
2. Significant Accounting Policies
(a) Basis of Consolidation
These consolidated financial statements include the accounts of the
Company and its wholly-owned Russian subsidiaries, Kitoi, Arkhei and
RDDM, all of which are limited liability companies. All inter-company
transactions and balances have been eliminated.
(b) Principles of Accounting
These financial statements are stated in US Dollars and have been
prepared in accordance with accounting principles generally accepted
in the United States.
F7
<PAGE>
EURASIA GOLD FIELDS, INC.
(A development stage enterprise)
(formerly Snak-N-Pop Vending, Inc.)
Notes to Consolidated Financial Statements
September 20, 1999, December 31, 1998 and 1997
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
2. Significant Accounting Policies (continued)
(c) Mineral Properties and Exploration Expenses
Exploration costs are charged to operations as incurred as are normal
development costs until such time that proven reserves are discovered.
From that time forward, the Company will capitalize all costs to the
extent that future cash flow from reserves equals or exceeds the costs
deferred. As at September 20, 1999, December 31, 1998 and 1997, the
Company did not have proven reserves. Cost of initial acquisition of
mineral rights and concessions are capitalized until the properties
are abandoned or the right expires.
Exploration activities conducted jointly with others are reflected at
the Company's proportionate interest in such activities.
(d) Foreign Currency Transactions
The Company, Kitoi, Arkhei and RDDM maintain their accounting records
in their functional currencies i.e., U.S. dollars, Russian ruble,
Russian ruble and Russian ruble respectively. They translate foreign
currency transactions into their functional currency in the following
manner.
At the transaction date, each asset, liability, revenue and expense is
translated into the functional currency by the use of the exchange
rate in effect at that date. At the period end, monetary assets and
liabilities are translated into functional currency by using the
exchange rate in effect at that date. The resulting foreign exchange
gains and losses are included in operations.
(e) Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
F8
<PAGE>
EURASIA GOLD FIELDS, INC.
(A development stage enterprise)
(formerly Snak-N-Pop Vending, Inc.)
Notes to Consolidated Financial Statements
September 20, 1999, December 31, 1998 and 1997
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
2. Significant Accounting Policies (continued)
(f) Financial Instruments
The respective carrying value of certain on-balance-sheet financial
instruments approximated their fair values. These financial
instruments include cash, marketable securities and accounts payable
and accrued liabilities. Fair values were assumed to approximate
carrying values for these financial instruments, except where noted,
since they are short term in nature and their carrying amounts
approximate fair values or they are receivable or payable on demand.
The Company operates in Russia, which may give rise to currency risks
due to fluctuations in foreign exchange rates. Management is of the
opinion that the Company is not exposed to significant interest and
credit risks arising from these financial instruments.
(g) Income Taxes
The Company has adopted Statement of Financial Accounting Standards
(SFAS") No. 109, which requires the Company to recognize deferred tax
liabilities and assets for the expected future tax consequences of
events that have been recognized in the Company's financial statements
or tax returns. Under this method, deferred tax liabilities and assets
are determined based on the difference between the financial statement
carrying amounts and tax bases of assets using enacted rates in effect
in the years in which the differences are expected to reverse.
(h) Loss Per Share
Loss per share is computed using the weighted average number of shares
outstanding during the year. Effective for the year ended December 31,
1997, the Company adopted SFAS No. 128, "Earnings per share". Diluted
loss per share is equal to the basic loss per share.
(i) Cash Equivalents
Cash equivalents usually consist of highly liquid investments which
are readily convertible into cash with maturities of three months or
less when purchased. The Company has no cash equivalents as at
September 20, 1999.
F9
<PAGE>
EURASIA GOLD FIELDS, INC.
(A development stage enterprise)
(formerly Snak-N-Pop Vending, Inc.)
Notes to Consolidated Financial Statements
September 20, 1999, December 31, 1998 and 1997
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
2. Significant Accounting Policies (continued)
(j) New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities".
SFAS No. 133 requires companies to recognize all derivatives contracts
as either assets or liabilities in the balance sheet and to measure
them at fair value. If certain conditions are met, a derivative may be
specifically designated as a hedge, the objective of which is to match
the timing of gain or loss recognition on the hedging derivative with
the recognition of (i) the changes in the fair value of the hedged
asset or liabilty that are attributable to the hedged risk or (ii) the
earnings effect of the hedged forecasted transaction. For a derivative
not designated as a hedging instrument, the gain or loss is recognized
in income in the period of change. SFAS No. 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000.
Historically, the Company has not entered into derivatives contracts
either to hedge existing risks or for speculative purposes.
Accordingly, the Company does not expect adoption of the new standards
on January 1, 2001 to affect its financial statements.
In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5, "Reporting on the Costs of Start-up
Activities", ("SOP 98-5") which provides guidance on the financial
reporting of start-up costs and organization costs. It requires costs
of start-activities and organization costs to be expensed as incurred.
SOP 98-5 is effective for fiscal years beginning after December 15,
1998 with initial adoption reported as the cumulative effect of a
change in accounting principle. Adoption of this standard has no
material effect on the financial statements.
F10
<PAGE>
EURASIA GOLD FIELDS, INC.
(A development stage enterprise)
(formerly Snak-N-Pop Vending, Inc.)
Notes to Consolidated Financial Statements
September 20, 1999, December 31, 1998 and 1997
(Expressed in US Dollars)
- --------------------------------------------------------------------------------
3. Mineral Properties and Exploration Licences
The Company owns the following mineral concessions located in the Okinski
district of the Republic of Buriatia in southeastern Siberia, Russia:
(a) Zun Ospinskoye Property
The licence for the exploration and development of this property was
issued under the number UDE00179 type BP to Kitoi.
(b) Tainskoye Property
The licence for the exploration and development of this property was
issued under the number UDE140 type BP to Arkhei.
Pursuant to an agreement dated December 9, 1997, the Company acquired these
mineral concessions by issuing 7,000,000 common shares to the vendors. As
the vendors became the controlling shareholders of the Company after the
above-mentioned transactions, the properties are carried at a nominal
amount of $7,000 which is equal to the par value of the shares issued.
4. Non-Cash Investing and Financing Activities
The Company issued 7,000,000 common shares to acquire the mineral
properties as described in Note 3.
5. Related Party Transactions
The following expenses were paid or accrued to a director of the Company.
1999 1998 1997
----------------------------------------------------
Consulting $ 1,000 -- --
----------------------------------------------------
F11
<PAGE>
PART III
Item 1. INDEX TO EXHIBITS
1.1 Articles of Incorporation 29
1.2 By-Laws 32
1.3 Consent of Action of the Majority Shareholders and Sole Director 38
1.4 Articles of Amendment to Snak-N-Pop Vending, Inc. 39
1.5 Articles of Amendment to Snak-N-Pop Vending, Inc. 42
1.6 Certificate of Filing of Articles of Amendment 43
3.1 Asset Purchase Agreement Dated December 8th, 1997 44
27.1 Financial Data Schedule 52
29
ARTICLES OF INCORPORATION
OF
SNAK-N-POP VENDING, INC.
I.
NAME
The name of the corporation shall be Snak-N-Pop, Vending, Inc.
II.
DURATION
The duration of the corporation shall be perpetual.
III.
PURPOSES
The purposes for which the corporation is initially organized is the
transaction of any and all lawful business for which a corporation may be
incorporated under the laws of the State of Florida.
IV.
SHARES OF STOCK
The corporation shall have authority to issue one hundred (100) shares of
common stock having a par value of one dollar ($1.00).
V.
PRINCIPAL OFFICE
The address of the corporation's initial principal office is:
21466 Highland Lakes Boulevard
North Miami Beach, Florida 33179
30
<PAGE>
VI.
DIRECTORS
The corporation shall have one (1) director initially. The number of
directors may be increased from time to time by the by-laws but shall never be
less than ONE. The names and addresses of the initial directors of the
corporation are:
Martin Brodsky, President and Director
21466 Highland Lakes Boulevard
North Miami Beach, Florida 33179
Sharon Brodsky, Vice President
21466 Highland Lakes Boulevard
North Miami Beach, Florida 33179
Keith Brodsky, Secretary
21455 Highland Lakes Boulevard
North Miami Beach, Florida 33179
Seth Brodsky, Treasurer
21499 Highland Lakes Boulevard
North Miami Beach, Florida 33119
VII.
INCORPORATORS
The name and address of the person signing these Articles of Incorporation is:
Martin Brodsky
21466 Highland Lakes Boulevard
North Miami Beach, Florida 33119
VIII.
REGISTERED AGENT
Pursuant to the provision of Section 48.091, Florida
Statutes, the following is the designation of the Registered
Agent on whom service of process may be made:
GARRY J. ALHALEL, ESQ
INGRAHAM BUILIDING, SUITE 1045
25 S.E. 2nd AVENUE
MIAMI, FLORIDA 33131
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IN WITNESS WHEREOF, the undersigned incorporator has executed these
Articles of Incorporation this 19th day of May, 1995.
/s/ Martin Brodsky
----------------------------------------
Martin Brodsky
STATE OF FLORIDA }
COUNTY OF DADE } SS.
Before me the undersigned authority personally appeared MARTIN BRODSKY, who
having been duly sworn upon oath deposes and says that he/she executed the
foregoing Articles of Incorporation for the uses and purposes therein expressed.
WITNESS my hand and official seal in the State and County aforesaid this
19th day of May, 1995.
/s/
----------------------------------------
Notary Public
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BY-LAWS
of
SNAK-N-POP, INC.
ARTICLE 1. MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting
The annual meeting of the shareholders of this corporation shall be held on the
30th day of June of each year or at such other time and place designated by the
Board of Directors of the corporation. Business transacted at the annual meeting
shall include the election of directors of the corporation. If the designated
day shall fall on a Sunday or legal holiday, then the meeting shall be held on
the first business day thereafter.
Section 2. Special Meeting
Special meetings of the shareholders shall be held when directed by the
President or the Board of Directors, or when requested in writing by the holders
of not less than 10% of all the shares entitled to vote at the meeting. A
meeting requested by shareholders shall be called for a date not less than 3 nor
more than 30 days after the request is made, unless the shareholders requesting
the meeting designate a later date. The call for the meeting shall be issued by
the Secretary, unless the President, Board of Directors, or shareholders
requesting the meeting shall designate another person to do so.
Section 3. Place
Meetings of shareholders shall be held at the principal place of business of the
corporation or at such other place as may be designated by the Board of
Directors.
Section 4. Notice
Written notice stating the place, day and hour of the meeting and in the case of
a special meeting, the purpose or purposes for which the meeting is called,
shall be delivered not less than 3 nor more than 30 days before the meeting,
either personally or by first class mail, or by the direction of the President,
the Secretary or the officer or persons calling the meeting to each shareholder
of record entitled to vote at such meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail addressed to the
shareholder at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
Section 5. Notice of Adjourned Meeting
When a meeting is adjourned to another time or place, it shall not be necessary
to give any notice of the adjourned meeting if the time and place to which the
meeting is adjourned are announced at the meeting at which the adjournment is
taken, and at the adjourned meeting any business may be transacted that might
have been transacted on the original date of the meeting. If, however, after the
adjournment the Board of Directors fixes a new record date for the adjourned
meeting, a notice of the adjourned meeting shall be given as provided in this
Article to each shareholder of record on a new record date entitled to vote at
such meeting.
Section 6. Shareholder Quorum and Voting
A majority of the shares entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of shareholders. If a quorum is present,
the affirmative vote of a majority of
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the shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
Section 7. Voting of Shares
Each outstanding share shall be entitled to one vote on each matter submitted to
a vote at a meeting of shareholders.
Section 8. Proxies
A shareholder may vote either in person or by proxy executed in writing by the
shareholder or his duly authorized attorney-in-fact. No proxy shall be valid
after the duration of 11 months from the date thereof unless otherwise provided
in the proxy.
Section 9. Action by Shareholders Without a Meeting
Any action required by law or authorized by these by-laws or the Articles of
Incorporation of this corporation or taken or to be taken at any annual or
special meeting of shareholders, or any action which may be taken at any annual
or special meeting of shareholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorise or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted.
ARTICLE II. DIRECTORS
Section 1. Function
All corporate powers shall be exercised by or under the authority of, and the
business and affairs of the corporation shall be managed under the direction of,
the Board of Directors.
Section 2. Qualification
Directors need not be residents of this state or shareholders of this
corporation.
Section 3. Compensation
The Board of Directors shall have authority to fix the compensation of
directors.
Section 4. Presumption of Assent
A director of the corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken shall be presumed to
have assented to the action taken unless he votes against such action or
abstains from voting in respect thereto because of an asserted conflict of
interest.
Section 5. Number
This corporation shall have a minimum of 1 director but no more than 7.
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Section 6. Election and Term
Each person named in the Articles of Incorporation as a member of the initial
Board of Directors shall hold office until the first annual meeting of
shareholders, and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death. At the first annual
meeting of shareholders and at each annual meeting thereafter the shareholders
shall elect directors to hold office until the next succeeding annual meeting.
Each director shall hold office for a term for which he is elected and until his
successor shall have been elected and qualified or until his earlier
resignation, removal from office or death.
Section 7. Vacancies
Any vacancy occurring in the Board of Directors, including any vacancy created
by reason of an increase in the number of Directors, may be filled by the
affirmative vote of a majority of the remaining directors though less than a
quorum of the Board of Directors. A director elected to fill a vacancy shall
hold office only until the next election of directors by the shareholders.
Section 8. -Removal of Directors
At a meeting of shareholders called expressly for that purpose, any director or
the entire Board of Directors may be removed, with or without cause, by a vote
of the holders of a majority of the shares then entitled to vote at an election
of directors.
Section 9. Quorum and Voting
A majority of the number of directors fixed by these by-laws shall constitute a
quorum for the transaction of business. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
Section 10. Executive and Other Committees
The Board of Directors, by resolution adopted by a majority of the full Board of
Directors, may designate from among its members an executive committee and one
or more other committees each of which, to the extent provided in such
resolution shall have and may exercise all the authority of the Board of
Directors, except as is provided by law.
Section 11. Place of Meeting
Regular and special meetings of the Board of Directors shall be held at the
principal place of business of the corporation or as otherwise determined by the
Directors.
Section 12. Time, Notice and Call of Meetings
Regular meetings of the Board of Directors shall be held without notice on the
first Monday of the calendar month two (2) months following the end of the
corporation's fiscal, or if the said first Monday is a legal holiday, then on
the next business day. Written notice of the time and place of special meetings
of the Board of Directors shall be given to each director by either personal
delivery, telegram or cablegram at least three (3) days before the meeting or by
notice mailed to the director at least 3 days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any director
who signs a waiver of notice either before or after the meeting. Attendance of a
director at a meeting shall constitute a waiver of notice of such meeting and
waiver of any and all objections to the place of the meeting,
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the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose, of any regular or
special meeting of the Board of Directors need be specified in the notice of
waiver of notice of such meeting. A majority of the directors present, whether
or not a quorum exists may adjourn any meeting of the Board of Directors to
another time and place. Notice of any such adjourned meeting shall be given to
the directors who were not present at the time of the adjournment, and unless
the time and place of adjourned meeting are announced at the time of the
adjournment, to the other directors. Meetings of the Board of Directors may be
called by the chairman of the board, by the president of the corporation or by
any two directors.
Members of the Board of Directors may participate in a meeting of such board by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in person at a
meeting.
Section 13. Action Without a Meeting
Any action, required to be taken at a meeting of the Board of Directors, or any
action which may be taken at a meeting of the Board of Directors or a committee
thereof, may be taken without a meeting if a consent in writing, setting forth
the action so to be taken, is signed by such number of the directors, or such
number of the members of the committee, as the case may be, as would constitute
the requisite majority thereof for the taking of such actions, is filed in the
minutes of the proceedings of the board or of the committee. Such actions shall
then be deemed taken with the same force and effect as though taken at a meeting
of such board or committee whereat all members were present and voting
throughout and those who signed such action shall have voted in the affirmative
and all others shall have voted in the negative. For informational purposes, a
copy of such signed actions shall be mailed to all members of the board or
committee who did not sign said action, provided however, that the failure to
mail said notices shall in no way prejudice the actions of the board or
committee.
ARTICLE III. OFFICERS
Section 1. Officers
The officers of this corporation shall consist of a president, a secretary and a
treasurer, each of whom shall be elected by the Board of Directors. Such other
officers and assistant officers and agents as may be deemed necessary may be
elected or appointed by the Board of Directors from time to time. Any two or
more offices may be held by the same person.
Section 2. Duties
The officers of this corporation shall have the following duties:
(1) The President shall be the chief executive officer of the corporation, shall
have general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the shareholders and Board of Directors.
(2) The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the shareholders and Board of
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directors, send all notices of all meetings and perform such other duties as may
be prescribed by the Board of Directors or the President.
(3) The Treasurer shall have custody of all corporate funds and financial
records, shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of shareholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers
An officer or agent elected or appointed by the Board of Directors may be
removed by the board whenever in its judgement the best interests of the
corporation will be served thereby. Any vacancy in any office may be filed by
the Board of Directors.
ARTICLE IV. STOCK CERTIFICATES
Section 1. Issuance
Every holder of shares in this corporation shall be entitled to have a
certificate representing all shares to which he is entitled. No certificate
shall be issued for any share until such share is fully paid.
Section 2. Form
Certificates representing shares in this corporation shall be signed by the
President or Vice President and the Secretary or an Assistant Secretary and may
be sealed with the seal of this corporation or a facsimile thereof.
Section 3. Transfer of Stock
The corporation shall register a stock certificate presented to it for transfer
if the certificate is properly endorsed by the holder of record or by his duly
authorized attorney.
Section 4. Lost, Stolen or Destroyed Certificates
If the shareholder shall claim to have lost or destroyed a certificate of shares
issued by the corporation, a new certificate shall be issued upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed, and, at the discretion of the Board of Directors,
upon the deposit of a bond or other indemnity in such amount and with such
sureties, if any, as the board may reasonably require.
ARTICLE V. BOOKS AND RECORDS
Section 1. Books and Records
This corporation shall keep correct and complete books and records of account
and shall keep minutes of the proceedings of its shareholders, Board of
Directors and committee of directors.
This corporation shall keep at its registered office or principal place of
business a record of its shareholders, giving the names and addresses of all
shareholders and the number of the shares held by each.
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Any books, records and minutes may be in written form or in any other form
capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights
Any person who shall have been a holder of record of shares of voting trust
certificates therefor at least six months immediately preceding his demand or
shall be the holder of record of, or the holder of record of voting trust
certificates for, at least five percent of the outstanding shares of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information
Not later than four months after the close of each fiscal year, this corporation
shall prepare a balance sheet showing in reasonable detail the financial
condition of the corporation as of the close of its fiscal year, and a profit
and loss statement showing the results of the operations of the corporation
during the fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to each
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement. The balance sheets and profit
and loss statements shall be filed in the registered office of the corporation
in this state, shall be kept for at least five years, and shall be subject to
inspection during business hours by any shareholder or holder of voting trust
certificates, in person or by agent.
ARTICLE VI. DIVIDENDS
The Board of Directors of this corporation may, from time to time, declare and
the corporation may pay dividends on its shares in cash, property or its own
shares, except when the corporation is insolvent or when the payment thereof
would render the corporation insolvent subject to the provisions of the Florida
Statutes.
ARTICLE VII. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be in circular
form.
ARTICLE VIII. AMENDMENT
These by-laws may be altered, amended or repealed, and new by-laws may be
adopted by a majority vote of the directors of the corporation.
ARTICLE IX. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Each director and officer of the Corporation shall be indemnified by the
Corporation against all costs and expenses actually and necessarily incurred by
him or her in connection with the defense of any action, suit or proceeding in
which he or she may be involved or to which he or she may be made party by
reason of his or her being or having been such director or officer, except in
relation to matters as to which he or she shall be finally adjudged in such
action, suit or proceeding to be liable for negligence or misconduct in the
performance of duty.
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CONSENT OF ACTION OF THE MAJORITY SHAREHOLDER AND
SOLE DIRECTOR OF SNAK-N-POP VENDING, INC.
The undersigned, being the majority shareholders and the sole Director of
SNAK-N-POP VENDING, INC., a Florida corporation (hereinafter the "Company") does
hereby unanimously consent to the following actions taken and done an August 14,
1997.
RESOLVED: Effective August 14, 1997 to amend the Company's Articles of
Incorporation to provide for authorized common stock of 50,000,000 shares, par
value $.001 and other provisions, in the form annexed hereto and to forward
split the common stock 1,000-1.
RESOLVED: To retain the following to assist the Company in applying for a
listing on the OTC Bulletin Board:
Law firm of Eric F. Littman; accounting firm of Barry L. Friedman, P.C.;
Interwest Transfer Co., Inc., as the Company's transfer agent; and J. Alexander
Securities, Inc. to prepare and submit the necessary filings with the NASD.
There being no further business before this Board at this time, the Meeting
was adjourned.
/s/ Seth Brodsky
- ----------------------------------------
Seth Brodsky, Sole Director
39
ARTICLES OF AMENDMENT TO
SNAK-N-POP VENDING, INC.
THE UNDERSIGNED, being the sole director and president of SNAK-N-POP
VENDING, INC., does hereby amend the Articles of Incorporation of SNAK-N-POP
VENDING, INC., effective August 14,1997, as follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation is SNAK-N-POP VENDING, INC.
ARTICLE II
PURPOSE
The Corporation shall be organized for any and all purposes authorized
under the laws of the State of Florida.
ARTICLE III
PERIOD OF EXISTENCE
The period during which the Corporation shall continue is perpetual.
ARTICLE IV
SHARES
The capital stock of this corporation shall consist of 50,000,000 shares of
common stock. $.001 par value.
ARTICLE V
PLACE OF BUSINESS
The address of the principal place of business of this corporation in the
State of Florida shall be 20441 N.E. 30th Avenue, Aventura, FL 33179. The Board
of Directors may at any time and from time to time move the principal office of
this corporation.
ARTICLE VI
DIRECTORS AND OFFICERS
The business of this corporation shall be managed by its Board of
Directors. The number of such directors shall be not be less than one (1) and,
subject to such minimum may be increased or decreased from time to time in the
manner provided in the By-Laws.
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ARTICLE VII
DENIAL OF PRE-EMPTIVE RIGHTS
No shareholder shall have any right to acquire shares or other securities
of the Corporation except to the extent such right may be granted by an
amendment to these Articles of Incorporation or by a resolution of the board of
Directors.
ARTICLE VIII
AMENDMENT OF BYLAWS
Anything in these Articles of Incorporation, the Bylaws, or the Florida
Corporation Act notwithstanding, bylaws shall not be adopted, modified, amended
or repealed by the shareholders of the Corporation except upon the affirmative
vote of a simple majority vote of the holders of all the issued and outstanding
shares of the corporation entitled to vote thereon.
ARTICLE IX
SHAREHOLDERS
9.1. Inspection of Books. The board of directors shall make reasonable
rules to determine at what times and places and under what conditions the books
of the Corporation shall be open to inspection by shareholders or a duly
appointed representative of a shareholder.
9.2. Control Share Acquisition. The provisions relating to any control
Share acquisition as contained In Florida Statutes now, or hereinafter amended,
and any successor provision shall not apply to the Corporation.
9.3. Quorum. The holders of shares entitled to one-third of the votes at a
meeting of shareholder's shall constitute a quorum.
9.4. Required Vote. Acts of shareholders shall require the approval of
holders of 50.01% of the outstanding votes of shareholders.
ARTICLE X
LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
To the fullest extent permitted by law, no director or officer of the
Corporation shall be personally liable to the Corporation or its, shareholders
for damages for breach of any duty owed to the Corporation or its shareholders.
In addition, the Corporation shall have the power, in its By-Laws or in any
resolution of its stockholders or directors, to undertake to indemnify the
officers and directors of this corporation against any contingency or peril as
may be determined to be in the best interests of this corporation, and in
conjunction therewith, to procure, at this corporation's expense, policies of
insurance.
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ARTICLE XI
CONTRACTS
No contract or other transaction between this corporation and any person,
firm or corporation shall be affected by the fact that any officer or director
of this corporation is such other party or is, or at some time in the future
becomes, an officer, director or partner of such other contracting party, or has
now or hereafter a direct or indirect interest in such contract.
I hereby certify that the following was adopted by a majority vote of the
shareholders and directors of the corporation on August 14, 1997 and that the
number of votes cast was sufficient for approval.
IN WITNESS WHEREOF, I have hereunto executed this Amendment to the Articles
of Incorporation on August 14, 1997.
/s/ Seth Brodsky
- ----------------------------------------
Seth Brodsky, Sole Director
The foregoing instrument was acknowledged before me by Seth Brodsky, who is
personally known to me.
/s/ Richard L. Newberg
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Notary Public
My commission expires:
RICHARD LEON NEWBERG
COMMISSION # CC 425858
EXPIRES: DEC 12, 1998
BONDED THRU ATLANTIC BONDING CO., INC.
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ARTICLES OF AMENDMENT TO
SNAK-N-POP, INC.
THE UNDERSIGNED, being the sole director and president of Hollywood
Insurance Place, Inc., does hereby amend the Articles of Incorporation of
Snak-N-Pop, Inc. as follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation is EURASIA GOLD FIELDS, INC.
I hereby certify that the following was adopted by a majority vote of the
shareholders and directors of the corporation on February 4, 1998 and that the
number of votes cast was sufficient for approval.
IN WITNESS WHEREOF, I have hereunto subscribed to and executed this
Amendment to the Articles of Incorporation on February 4th, 1998.
/s/ Jorge Lacasa
- ----------------------------------------
Jorge Lacasa, President
The foregoing instrument was acknowledged before me on February 4, 1998 by
Jorge Lacasa, who is personally known to me.
/s/ Por conocimiento de la firma de
JORGE LACASA
----------------------------------------
y para este solo documento.
BANCO EXTERIOR DE ESPANA
P. de la Castellana 215-MADRID
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FLORIDA DEPARTMENT OF STATE
Sandra B. Mortham
Secretary of State
March 2, 1998
Capital Connection, Inc.
4417 E. Virginia Street
Suite 1
Tallahassee, FL 32302
Re: Document Number P95000040212
The Articles of Amendment to the Articles of Incorporation of SNAK-N-POP
VENDING, INC. which changed its name to EURASIA GOLD FIELDS, INC., a Florida
corporation, were filed on March 2, 1998.
Should you have any questions regarding this matter, please telephone (850)
487-6050, the Amendment Filing Section.
Annette Hogan
Corporate Specialist
Division of Corporations Letter Number: 398A00011475
Division of Corporations - P.O. BOX 6327 -Tallahassee, Florida 32314
44
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT"), NOR REGISTERED UNDER ANY
STATE SECURITIES LAW, AND ARE "RESTRICTED SECUR ITIES" AS THAT TERM IS DEFINED
IN RULE 144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933
ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
ASSET PURCHASE AGREEMENT
AGREEMENT made this 8th day of December, 1997 by and between Eurasia Goldfields,
Inc., a Florida corporation, (the "ISSUER") and Georg H. Schnura, Alanco
Development, Seal Overseas Ltd., Boavista Securities Ltd., Redbridge Minerals
(Overseas Ltd.), Barrington Ltd., Kastalia Ltd., Finiss Investment Ltd., Publix
Overseas Ltd., Golden Country Consortium Ltd. and BARS Ltd., ("SELLER")
In consideration of the mutual promises, convenants, and representations
contained herein and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. ASSETS PURCHASED; LIABILITIES ASSUMED; PURCHASE PRICE.
SELLER agrees to sell to ISSUER and ISSUER agrees to purchase from SELLER,
on the terms and conditions set forth in this Agreement, all of SELLER'S
Russian mineral properties, all of which are set forth in Schedule 1 hereto
(the "Assets"). The purchase price for the Assets shall be 7,000,000 shares
of ISSUER'S common stock, par value $.001 (the "Shares"). The division of
the shares is set forth in Schedule 2.
2. REPRESENTATIONS AND WARRANTIES.
ISSUER represents and warrants to SELLER the following:
i Organization.
ISSUER is a corporation duly organised, validly existing, and in good
standing under the laws of Florida, and has all necessary corporate
powers to own properties and carry on a business, and is duly
qualified to do business and is in good standing in Florida. All
actions taken by the Incorporators, directors and shareholders of
ISSUER have been valid and in accordance with the laws of the State of
Florida.
ii Capital.
The authorized capital stock of ISSUER consists of 50,000,000 shares
of common stock, $.001 par value, of which 100,000 are issued and
outstanding. All outstanding shares are fully paid and non-assessable,
free of liens, encumbrances, options, restrictions and legal or
equitable rights of others not a party to this Agreement. At closing,
there will be no outstanding subscriptions, options, rights, warrants,
convertible securities, or other agreements or commitments obligating
ISSUER to issue or to transfer from treasury any additional shares of
its capital stock. None of the outstanding shares of ISSUER are
subject to any stock restriction agreements. All of the shareholders
of ISSUER have valid title to
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such shares and acquired their shares in a lawful transaction and in
accordance with the laws of Florida.
iii Financial Statements.
ISSUER has delivered to SELLER the balance sheet of ISSUER as of
September 30, 1997, and the related statements of income and retained
earnings for the period then ended. The financial statements have been
prepared in accordance with generally accepted accounting principles
consistently followed by ISSUER throughout the periods indicated, and
fairly present the financial position of ISSUER as of the date of the
balance sheet in the financial statements, and the results of its
operations for the periods indicated.
iv Absence of Changes.
Since the date of the financial statements, there has not been any
change in the financial condition or operations of ISSUER, except
changes in the ordinary course of business, which changes have not in
the aggregate been materially adverse.
v Liabilities.
ISSUER does not have any debt, liability, or obligation of any nature,
whether accrued, absolute, contingent, or otherwise, and whether due
or to become due, that is not reflected on the ISSUER'S financial
statement. ISSUER is not aware of any pending, threatened or asserted
claims, lawsuits or contingencies involving ISSUER or its common
stock. There is no dispute of any kind between ISSUER and any third
party; and no such dispute will exist at the closing of this
Agreement. At closing, ISSUER will be free from any and all
liabilities, liens, claims and/or commitments.
vi Ability to Carry Out Obligations.
ISSUER has the right, power, and authority to enter into and perform
its obligations under this Agreement. The execution and delivery of
this Agreement by ISSUER and the performance by ISSUER of its
obligations hereunder will not cause, constitute, or conflict with or
result in (a) any breach of violation or any of the provisions of or
constitute a default under any license, indenture, mortgage, charter,
instrument, articles of incorporation, bylaw, or other agreement or
instrument to which ISSUER or its shareholders are a party, or by
which they may be bound, nor will any consents or authorisations of
any party other than those hereto be required, (b) an event that would
cause ISSUER to be liable to any part, or (c) an event that would
result in the creation or imposition or any lien, charge or
encumbrance on any asset of ISSUER or upon the securities or ISSUER to
be acquired by SHAREHOLDERS.
vii Full Disclosure.
None of the representations and warranties made by the ISSUER, or in
any certificate or memorandum furnished or to be furnished by the
ISSUER, contains or will contain any untrue statement of a material
fact, or omit any material fact the omission of which would be
misleading.
viii Contract and leases.
ISSUER is not currently carrying on any business and is not a party to
any contract, agreement or lease. No person holds a power of attorney
from ISSUER.
ix Compliance with Laws.
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ISSUER has complied with, and is not in violation of any federal,
state, or local statute, law, and/or regulation pertaining to ISSUER.
ISSUER has complied with all federal and state securities laws in
connection with the issuance, sale and distribution of its securities.
x Litigation.
ISSUER is not (and has not been) a party to any suit, action,
arbitration, or legal, administrative, or other proceeding, or pending
governmental investigation. To the best knowledge of the ISSUER, there
is no basis for any such action or proceeding and no such action or
proceeding is threatened against ISSUER and ISSUER is not subject to
or in default with respect to any order, writ, injunction, or decree
of any federal, state, local, or foreign court, department, agency, or
instrumentality.
xi Conduct of Business.
Prior to the closing, ISSUER shall conduct its business in the normal
course, and shall not (1) sell, pledge, or assign any assets (2) amend
its Articles of Incorporation or Bylaws, (3) declare dividends, redeem
or sell stock or other securities, (4) incur any liabilities, (5)
acquire or dispose of any assets, enter into any contract, guarantee
obligations of any third part, or (6) enter into any other
transaction.
(1) Documents. All minutes, consents or other documents pertaining to
ISSUER to be delivered at closing shall be valid and in
accordance with the laws of Florida.
xii Title.
The Shares to be issued to SELLER will be, at closing, free and clear
of all liens, security interest, pledges, charges, claims encumbrances
and restrictions of any kind. None of such Shares are or will be
subject to any voting trust or agreement. No person holds or has the
right to receive any proxy or similar instrument with respect to such
shares, except as provided in this Agreement. The ISSUER is not a
party to any agreement, which offers or grants to any person the right
to purchase or acquire any of the securities to be issued to SELLER.
There is no applicable local, state or federal law, rule, regulation,
or decree, which would, as a result of the issuance of the Shares to
SELLER impair, restrict or delay SELLER'S voting rights with respect
to the Shares.
3. SELLER represents and warrant to ISSUER the following:
i Organization.
SELLER is various entities duly organised, validly existing, and in
good standing under the laws of their respected jurisdictions, has all
necessary corporate powers to own properties and carry on business, and
is duly qualified to do business and is in good standing in their
respected jurisdictions. All actions taken by the Incorporators,
directors and shareholders of SELLER have been valid and in accordance
with the laws of their respected jurisdictions
ii Title to Assets.
SELLER is the owner of the Assets, free and clear of all liens or
other encumbrances. There is no impediment to SELLER'S conveyance of
the Assets, in accordance with the terms of this Agreement.
47
<PAGE>
iii Counsel.
SELLER represents and warrants that prior to Closing, it has been
represented by independent counsel or to have had the opportunity to
retain independent counsel to represent it in this transaction and
that prior to Closing, the law offices of Eric P. Litman, P.A. has
acted as exclusive counsel to the ISSUER and has not represented
SELLER in any manner whatsoever.
4. INVESTMENT INTENT.
The Shares being issued pursuant to this Agreement may be sold, pledged,
assigned, hypothecate or otherwise transferred, with or without
consideration (a "Transfer"), only pursuant to an effective registration
statement under the Act, or pursuant to any exception from registration
under the Act, the availability of which is to be established to the
satisfaction of ISSUER.
5. CLOSING.
The closing of this transaction shall take place at the law offices of Eric
P. Litman, 1428 Brickell Avenue, 8th Floor, Miami, Florida. Unless the
closing of this transaction takes place on or before December 9, 1997, then
either part may terminate this Agreement.
6. DOCUMENTS TO BE DELIVERED AT CLOSING.
i By the ISSUER
(1) Board of Directors Minutes authorising the issuance of
certificates for 7,000,000 Shares, registered in the name of
SELLER.
(2) Such other minutes of ISSUER'S shareholders or directors as may
reasonably be required by SELLER.
(3) An Opinion Letter from ISSUER'S Attorney attesting to the
validity and condition of the ISSUER.
ii By SELLER:
(1) Delivery to the ISSUER of a Bill of Sale of the Assets.
(2) A certificate from a duly authorized officer and director of SELLER,
certifying the due authorization and execution of this Agreement by
SELLER and all shareholders of SELLER.
7. REMEDIES.
i Arbitration.
Any controversy or claim arising out of, or relating to, this
Agreement, or the making, performance, or interpretation thereof,
shall be settled by arbitration in Miami, Dade County, Florida in
accordance with the Rules of the American Arbitration Association then
existing, and judgement on the arbitration award may by entered in any
court having jurisdiction over the subject matter of the controversy.
48
<PAGE>
8. MISCELLANEOUS.
i Captions and Headings. The Article and paragraph headings throughout
this Agreement are for convenience and reference only, and shall in no
way be deemed to define, limit, or add to the meaning or any provision
of this Agreement.
ii No Oral Change This Agreement and any provision hereof, may not be
waived, changed modified, or discharged orally, but only by an
agreement in writing signed by the party against whom enforcement of
any waiver, change, modification, or discharge is sought.
iii Non Waiver. Except as otherwise expressly provided herein, no waiver
of any convenant, condition, or provision of this Agreement shall be
deemed to have been made unless expressed in writing and signed by the
party against whom such waiver is charged; and (i) the failure of any
party to insist in any one or more cases upon the performance of any
of the provisions, convenants, or conditions of this Agreement or to
exercise any option herein contained shall not be construed as a
waiver or relinquishment for the future of any such provision,
convenants, or conditions, (ii) the acceptance of performance of
anything required by this Agreement to be performed with knowledge of
the breach or failure of a covenant, conditions, or provisions hereof
shall not be deemed a waiver of such breach or failure, and (iii) no
waiver by any party of one breach by another party shall be construed
as a waiver with respect to any other or subsequent breach.
iv Time of Essence Time is of the essence of this Agreement and each and
every provision hereof.
v Entire Agreement. This Agreement contains the entire Agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings.
vi Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
vii Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have
been duly given on the date of service if served personally on the
party to whom notice is to be give, or on the third day after mailing
if mailed to the party to whom notice is to be given, by first class
mail, registered or certified, postage prepaid, and properly
addressed, and by fax, as follows:
49
<PAGE>
ISSUER: Eurasia Goldfields Corporation.
Suite 1505, 1060 Alberni Street
Vancouver, BC, Canada V6E 4K2
Copy to: Eric P. Littman, Esquire
1428 Brickell Avenue 8th Floor
Miami, Florida 33131
For the SELLERS: Georg H. Schnura
APTO. Postal 8207
28080, Madrid, Spain
IN WITNESS WHEREOF, the undersigned has executed this Agreement this 9th day of
December 1997.
Eurasia Goldfields, Inc.
By: /s/ David Jenkins By: /s/ Georg Schnura
----------------------------- --------------------------------------
David Jenkins, Director Georg Schnura
By: /s/ Alanco Development Inc.
--------------------------------------
Alanco Development Inc.
By: /s/ Seal Overseas Ltd.
--------------------------------------
Seal Overseas Ltd.
By: /s/ Boavista Securities
--------------------------------------
Boavista Securities
By: /s/ Redbridge Minerals (Overseas Ltd.)
--------------------------------------
Redbridge Minerals (Overseas Ltd.)
By: /s/ Barrington Ltd.
--------------------------------------
Barrington Ltd.
By: /s/ Kastalia Ltd.
--------------------------------------
Kastalia Ltd.
By: /s/ Finiss Investment Ltd.
--------------------------------------
Finiss Investment Ltd.
By: /s/ Publix Overseas Ltd.
--------------------------------------
Publix Overseas Ltd.
By: /s/ Golden Country Consortium Ltd.
--------------------------------------
Golden Country Consortium Ltd.
By: /s/ BARS Ltd.
--------------------------------------
BARS Ltd.
50
<PAGE>
SCHEDULE 1
A description of the subject properties is as follows:
(i) Zun Ospinskoye Property, Republic of Buriatia, Russian Federation
The Licence for the exploration and development of the Zun Ospinskoye
Goldfield was issued on August 1st, 1997 under the number UDE 00179 type
BP, to the Limited Liability Mining Company "KITOI", constituted November
11th, 1996 and registered under N196 with registered address at 671030
Orlik, Okinsky district, Republic of Buriatia, Russian Federation. "KITOI"
was formed with the purpose of exploration and development of mining
properties in the Russian Federation.
Previous to the Acquisition Agreement with Eurasian Goldfileds Inc., the
Limited Liability Company "ARKHEI" acquired the 100% of the shares of the
Limited Liability Mining Company "KITOI". The acquisition of "ARKHEI"
encompasses mineral claims located within the limits of the Zun Ospinski
concession, ("The Zun Ospinskoye Property") and provides the Company with a
100% undivided interest in the Zun Ospinskoye mineral concession.
The Zun Ospinskoye Property is an advanced exploration stage property with
a known economic grades and an established resource, albeit a small one to
date. The property is located in the Okinsky district of the Republic of
Buriatia, 150 km west of Lake Baikal and 105 km east of Orlik, the
administrative centre of the Okinsky district. Gravel and dirt roads
connect the property with the town of Orlik.
(ii) Tainskoye Property, Republic of Buriatia, Russian Federation
The Licence for the exploration and development of the Tainskoye Goldfield
was issued on March 8th, 1997 under the number UDE 140 type BP, to the
Limited Liability Mining Company "ARKHEI", constituted February 26th, 1997
and registered under number 18 with registered address at 671030 Orlik,
Okinsky district, Republic of Buriatia, Russian Federation. "ARKHEI" was
formed with the purpose of exploration and development of mining properties
in the Russian Federation. The acquisition of "ARKHEI" encompasses mineral
claims located within the limits of the Tainskoye concession ("Tainskoye
Property") and provides the Company with a 100% undivided interest in the
Tainskoye mineral concession.
The property is located in the Okinsky district of the Republic of
Buriatia, 160 km west of Lake Baikal and 115 km east of Orlik, the
administrative centre of the Okinsky district. Gravel and dirt roads
connect the property with the town of Orlik.
51
<PAGE>
SCHEDULE 2
SELLERS: Number of shares
- -------- to be issued:
-------------
Georg H. Schnura 300,000
Alanco Development 225,000
Seal Overseas Ltd. 225,000
Boavista Securities Ltd. 250,000
Redbridge Mineras (Overseas Ltd.) 900,000
Barrington Ltd. 800,000
Kastalia Ltd. 750,000
Finiss Overseas Ltd. 630,000
Publix Overseas Ltd. 1,000,000
Golden Country Consortium Ltd. 1,000,000
BARS Ltd. 920,000
-------
Total 7,000,000
52
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<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> SEP-20-1999 DEC-31-1998
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0 0
0 0
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<INCOME-PRETAX> (125,822) (307,466)
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<INCOME-CONTINUING> (125,822) (307,466)
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