SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 0-25825
TIBERON RESOURCES LTD.
(Name of small business issuer in its charter)
NEVADA 91-1921237
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11930 MENUAL BOULEVARD N.E., #107, ALBUQUERQUE, NEW MEXICO 87112
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (505) 289-8235
Securities registered under Section 12(b) of the Exchange Act: NONE
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, $0.001 PAR VALUE
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to the filing requirements for the past 90 days. Yes X No
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.[ ]
Issuer's revenues for its most recent fiscal year. $00.00
Aggregate market value of the voting stock held by non-affiliates
of the registrant as of March 26, 2000: $35,000
Number of shares outstanding of registrant's Common Stock, $0.001 par value,
as of March 26, 2000: 8,050,000
Documents incorporated by reference: NONE
Transitional Small Business Disclosure Format (check one): Yes No X
Exhibit index on consecutive page ____ Page 1 of ___ Pages
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Tiberon Resources Ltd. (the "Company") was organized under the laws of the State
of Nevada on April 10, 1998, to acquire mining claims and explore for minerals
in Manitoba, Canada.
MINING CLAIMS
On April 28, 1998, the Company and Carey Whitehead, a non-affiliate, entered
into an Agreement (the "Agreement") whereby the Company acquired Falcon claims
25, 26 and 27 (the "Mining Claims"). In return, the Company agreed to pay Mr.
Whitehead a total of $50,000, of which $25,000 was due on September 28, 1999,
and the remaining $25,000 was due by April 28, 2000. In addition, the Company
was required to fund a $40,000 work program by September 28, 1999, and an
additional $50,000 work program by April 28, 2000. The Company was also required
to pay a 2.5% royalty on the net smelter return to Mr. Whitehead.
On March 28, 2000, the Company received an extension of time from Mr. Whitehead
within which to comply with the payments and capital expenditures. Pursuant to
the extension, the Company is now required to pay Mr. Whitehead $25,000 on
September 28, 2000, and the remaining $25,000 on September 28, 2001. The $40,000
work program must now be funded by September 28, 2000, with an additional
$50,000 by September 28, 2001.
The Mining Claims are exploration property and do not have any proven mineral
reserves. Should mineral reserves be discovered on the property, it is
anticipated that the minerals would be predominately nickel-copper-cobalt
sulfides which would be removed from the raw ore and concentrated sulfides. A
facility to reduce these minerals to their primary elements could be constructed
on or near the property, or if the sulfides are of sufficient size, they could
be shipped and sold.
The Company has not retained a geologist to explore the mining claims.
Management anticipates that Mr. Halterman, the Company's sole director, will
perform the exploration programs. See Part III Item 9. Directors, Executive
Officers, Promoters and Control Persons; Compliance with Section 16(a) of the
Exchange Act. It is anticipated that Mr. Halterman will charge between $350 and
$500 per day, plus expenses. If Mr. Halterman does not perform the exploration,
the Company does not anticipate any difficulties in retaining a geologist, at
similar rates. Should economically feasible mineral deposits exist, the Company
will require additional capital and expertise to develop the property. This may
include some form of a joint venture.
PRINCIPAL PRODUCTS OR SERVICES AND MARKETS
Management believes the Company's target market is either refiners of
nickel-copper-cobalt sulfide or end users of the primary metals. There are many
individuals and companies which compete within this target market. Russia is the
largest producer of nickel followed closely by Canada. However, the nickel
market, similar to other primary metal markets, has declined significantly over
the last several years. Nickel prices are at a ten (10) year low and have been
predicted to stay near this level for the next several years. The long-term
outlook appears to be more positive. Companies within Japan and the United
States are in the process of creating electric vehicles which are powered by
nickel-metal hydride, nickel-cardmium, or sodium-nickel batteries. This might
increase the demand for nickel. Management believes that open markets and
trading exchanges would be used to sell and delivery the metals which are not
encumbered under contractual agreements.
COMPETITIVE BUSINESS CONDITIONS, COMPETITIVE POSITION IN THE INDUSTRY
There are also many individuals and companies which are engaged in the mining
business, which is a highly competitive and speculative business atmosphere.
Some of which are very large, established mining companies with substantial
capabilities and long earning records. The Company may be at a competitive
disadvantage in acquiring mining properties or in purchasing, leasing, or
obtaining mining equipment since it must compete with these individuals and
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companies, most of which have greater financial resources and larger technical
staffs than the Company. There can be no assurance that the Company will be
successful in prospecting for or acquiring additional mining claims or leases,
or in arranging for their exploration or development.
PRICE FLUCTUATIONS
The mineral industry has experienced from time to time shortages of certain
supplies and materials necessary in the exploration for and evaluation of
mineral deposits. The prices at which such supplies and materials are available
have also greatly increased. There is a possibility that planned operations may
be subject to such shortages and that further price escalations will increase
the costs to the Company. The Company might have to manufacture its own mining
and processing equipment.
The prices of minerals are controlled by the world market, with significant
emphasis on the United States and Canadian markets; thus, competitive pricing
behaviors are considered unlikely; however, competition in the mineral industry
exists in the form of competition to acquire the most promising acreage blocks
and obtaining the most favorable prices for transporting the product. The
Company is relatively small compared to other mineral exploration companies and
may have difficulty acquiring additional acreage and/or projects and arranging
for the transportation of product, in the event the Company is successful in its
exploration efforts.
GOVERNMENTAL REGULATIONS AND ENVIRONMENTAL LAWS
At this time, the Company does not offer or sell any products or services;
however, it is required to obtain permits for exploratory activities.
Compliance with environmental quality requirements and reclamation laws imposed
by the Canadian governmental authorities may also necessitate significant
capital outlays, materially affect the Company's ability to generate revenues,
or cause material changes in the Company's intended activities. Regulatory
compliance will depend upon the stage of mining process. The planning stage
could require archeological and rare and endangered species clearances. Should
the Mining Claims contain economically feasible mineral deposits, then an
Environmental Base Line Survey, an Environmental Assessment, and an
Environmental Impact Statement could have to be created. This could also include
compliance with the clean water and air regulations. Should the Company commence
mining activities, then the Company could have to comply with governmental
requirements relating to hazardous substance use and control, air emission
standards, waste water discharge, ambient noise levels, and employee safety. No
assurance can be given that environmental standards imposed by any governmental
authority will not be changed or become more stringent, thereby possibly
materially and adversely affecting the proposed activities of the Company. At
this time, the Company is not able to estimate the cost of compliance with all
applicable governmental regulations.
Various federal, state and local laws and regulations covering the discharge of
materials into the environment, or otherwise relating to the protection of the
environment, may affect the Company's operations and costs through their effect
on mineral exploration, development and production operations. Environmental
laws and regulations have changed substantially and rapidly over the last 20
years, and the Company anticipates that there will be continuing changes. Laws
and regulations protecting the environment have generally become more stringent
in recent years, and may in certain circumstances impose "strict liability,"
rendering a corporation liable for environmental damages without regard to
negligence or fault on the part of such corporation. Such laws and regulations
may expose the Company to liability for the conduct of operations or conditions
caused by others, or for acts of the Company which were in compliance with all
applicable laws at the time such acts were performed. Increasingly strict
environmental restrictions and limitations have resulted in increased operating
costs for the Company and other businesses throughout Canada, and it is possible
that the costs of compliance with environmental laws and regulations will
continue to increase. The modification of existing laws or regulations or the
adoption of new laws or regulations relating to environmental matters could have
a material adverse effect on the Company's operations. In addition, the
Company's existing and proposed operations could result in liability for fires,
blowouts, spills, discharge of hazardous materials into surface and subsurface
aquifers and other environmental damage, any one of which could result in
personal injury, loss of life, property damage or destruction or suspension of
operations.
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It is not anticipated that the Company will be required in the near future to
expend amounts that are material in relation to its total capital expenditures
program by reason of environmental laws and regulations, but inasmuch as such
laws and regulations are frequently changed, the Company is unable to predict
the ultimate cost of compliance.
The Company believes it is presently in compliance with all applicable
environmental laws, rules or regulations; however, continued compliance (or
failure to comply) and future legislation may have an adverse impact on the
Company's present and contemplated business operations.
The foregoing is only a brief summary of some of the existing environmental
laws, rules and regulations to which the Company's business operations are
subject, and there are many others, the effects of which could have an adverse
impact on the Company. Future legislation in this area will no doubt be enacted
and revisions will be made in current laws. No assurance can be given as to what
effect these present and future laws, rules and regulations will have on the
Company's current and future operations.
RELIANCE ON WATER
Water is essential in all phases of the exploration and development of mineral
properties. It is used in such processes as exploration drilling, leaching,
placer mining, dredging, testing, and hydraulic mining. The Company has not
determined the availability of water for any of the properties it has acquired,
and it has not determined the cost of compliance with any water quality
restrictions. Furthermore, any water that may be found will be subject to
acquisition pursuant to state, federal and foreign water law, and its use will
be subject to regulation pursuant to local, state, federal and foreign water
quality standards. Both the lack of available water and the cost of complying
with water quality restrictions may make an otherwise viable project
economically impossible to complete. If the Mining Claims warrant development,
such a determination will be made while planning a development program. At this
time, management does not expect any significant difficulties with respect to
this matter.
NUMBER OF TOTAL EMPLOYEES AND NUMBER OF FULL-TIME EMPLOYEES
The Company has no employees, other than its sole officer, Mr. Reg Handford, and
its sole director, Mr. Leroy Halterman, both of whom are serving without
compensation. It is anticipated that the Company will have employees in the
future. As President, Secretary and Treasurer of the Company, Mr. Handford is
responsible for conducting the day-to-day operations of the Company. Since the
Company's inception, Mr. Handford has spent approximately eighty (80) hours on
organizing documentation, property acquisitions and seeking capital for the
Company.
The Company's officers and directors may become involved with other companies
that have a business purpose similar to that of the Company. As a result,
potential conflicts of interest may arise in the future. If such a conflict does
arise and officers or directors of the Company are presented with business
opportunities under circumstances where there may be a doubt as to whether the
opportunity should belong to the Company or another exploration company they are
affiliated with, they will disclose the opportunity to all such companies.
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RISK FACTORS
In addition to those described above, the Company's proposed business is subject
to numerous risk factors, including the following:
LIMITED OPERATING HISTORY AND MINIMAL ASSETS.
We have had a limited operating history and have no significant assets or
financial resources. We have had no operations other than to negotiate the
Agreement to acquire the Mining Claims. We have not commenced our work program,
and there is no assurance that proven mineral reserves exist. As such,
investment in our securities should be considered as the placing of funds at
high risks in an new or "start-up" venture with all the unforeseen costs,
expenses, problems and difficulties to which such ventures are subject.
ACCUMULATED LOSSES.
From inception through December 31, 1999, the Company incurred an accumulated
net loss of $34,943. To date the Company's operations have not generated
sufficient operating cash flows to provide working capital for the Company's
ongoing overhead, the funding of its mining property acquisitions and the
exploration and development of these properties. The Company will, in all
likelihood, incur operating expenses without corresponding revenues, at least
until mineral reserves are located, if at all. This may result in the Company
incurring a net operating loss that will increase continuously. There can be no
assurances that the Company will be able to successfully develop any properties
and achieve profitability from its operations.
MINIMAL PUBLIC MARKET.
As of March 26, 2000, there has been no reported trading of the Company's common
stock. The market, if any, is minimal or non-existent. There can be no
assurances that a market will develop. Consequently, a holder of the Company's
Common Stock may not be able to liquidate his or her investment in the event of
an emergency and shares of the Company's common stock may not be accepted as
collateral for loans.
EXPLORATION AND PRODUCTION RISKS.
The business of exploring for and mining mineral reserves involves a substantial
risk of investment loss which even a combination of experience, knowledge and
careful evaluation may not be able to overcome. Exploratory drilling involves
the risk that the holes will be unproductive or that, although productive, the
holes will not result in mineral reserves. Other hazards, such as unusual or
unexpected geological formations, pressures, fires, blowouts, loss of
circulation of drilling fluids or other conditions may substantially delay or
prevent completion of any exploratory drill. Adverse weather conditions can also
hinder drilling operations. As with any exploratory mining property, there can
be no assurance that mineral reserves will be located or produced from the
properties in which the Company may obtain an interest, either directly or
indirectly, including the Mining Claims. In addition, the marketability of
mineral reserves which may be acquired or discovered will be affected by
numerous factors beyond the control of the Company. These factors include the
proximity and capacity of processing equipment, market fluctuations of prices,
taxes, royalties, land tenure, and environmental protection, to name a few. The
extent of these factors cannot be accurately predicted, but any one or a
combination of these factors may result in the Company not receiving an adequate
return on invested capital. There is no assurance that mineral reserves in
commercial quantities will be discovered by the Company.
SPECULATIVE NATURE OF THE MINERAL INDUSTRY.
Exploration for minerals is highly speculative and involves greater risks than
many other businesses. The search for valuable minerals often results in the
failure to discover mineralization or the discovery of mineralization which will
not return a profit over the costs incurred. The Company's operations will be
subject to all of the operating hazards and risks normally incident to exploring
for and developing mineral properties.
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FINANCING RISKS.
As of December 31, 1999, the Company had cash of $1,229, and had anticipated
exploration and development expenditures, completion costs and ongoing overhead
for the remainder of the 2000 calendar year totaling not less than approximately
$65,000.
The Company has relied on the sale of its equity capital to fund the acquisition
of the Mining Claims and working capital. It has no assurance that additional
funding will be available to it to fund the acquisition, exploration or
development of the Mining Claims. There can be no assurance that the Company
will be able to obtain adequate financing in the future or that the terms of
such financing will be favorable to the Company. Failure to generate operating
cash flow or obtain additional financing could result in the Company losing its
interest in the Mining Claims, or delay or indefinite postponement of further
exploration and development of any new projects in which the Company acquires an
interest.
UNINSURABLE RISKS.
Although management believes the Company will acquire and maintain appropriate
insurance coverage in accordance with standard industry practice, the Company
has yet to acquire such insurance. The Company may suffer losses before
obtaining insurance, from uninsurable hazards, or from hazards which insurance
does not insure against because of high premium costs or other reasons. By
drilling exploratory holes, the Company may become subject to liability for
pollution, fire, explosion, blow-outs, cratering and other events against which
it cannot insure or against which it may elect not to insure. Such events could
result in substantial damage to the Mining Claims, equipment, and other property
and personal injury. The payment of any such liabilities may have a material,
adverse effect on the Company's financial position.
NO ASSURANCE OF TITLES.
It is the practice of the Company in acquiring exploratory properties and mining
claims not to undergo the expense of retaining lawyers to examine the title to
the mineral interest to be placed under the claim. Rather, the Company will rely
upon the judgment its management and third parties who perform the field work in
examining records in the appropriate governmental office before attempting to
place under claim a specific mineral interest. This practice is widely followed
in the exploration of mineral reserves. It does happen, as a result of such
examinations, that certain curative work must be done to correct deficiencies in
the marketability of the title, and such curative work entails expense. The work
might include obtaining affidavits of heirship or causing an estate to be
administered. IT DOES HAPPEN, FROM TIME TO TIME, THAT THE LEGAL EXAMINATIONS
REVEAL THAT EXPLORATORY PROPERTIES AND MINING CLAIMS ARE WORTHLESS, HAVING BEEN
PURCHASED IN ERROR FROM A PERSON WHO IS NOT THE OWNER OF THE MINERAL INTEREST
DESIRED. IN SUCH INSTANCES, THE AMOUNT PAID FOR SUCH EXPLORATORY PROPERTY AND
MINING CLAIM IS GENERALLY LOST. To date, the Company has not lost any titles to
exploratory properties or mining claims, and the Company is not aware of any
facts that may subject the Mining Claims to being lost as a result of faulty
titles.
ENVIRONMENTAL REGULATIONS.
In general, the exploration and proposed mining activities of the Company are
subject to certain federal, state and local laws and regulations relating to
environmental quality and pollution control. Such laws and regulations increase
the costs of these activities and may prevent or delay the commencement or
continuance of a given operation. Compliance with these laws and regulations has
not had a material effect on the Company's operations or financial condition to
date. Specifically, the Company is subject to legislation regarding emissions
into the environment, water discharges, and storage and disposition of hazardous
wastes. In addition, legislation has been enacted which requires mining sites to
be abandoned and reclaimed to the satisfaction of state authorities. However,
such laws and regulations are frequently changed and the Company is unable to
predict the ultimate cost of compliance. Generally, environmental requirements
do not appear to affect the Company any differently or to any greater or lesser
extent than other companies in the industry.
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The Company believes that its operations comply, in all material respects, with
all applicable environmental regulations.
GOVERNMENTAL REGULATIONS.
Mineral exploration, development and production are subject to various types of
regulation by local, state and federal agencies. Legislation affecting the
mining industry is under constant review for amendment and expansion. Also,
numerous departments and agencies, both federal and state, are authorized by
statute to issue and have issued rules and regulations binding on the mining
industry and its individual members, some of which carry substantial penalties
for failure to comply. The regulatory burden on the mining industry increases
the Company's cost of doing business and, consequently, affects its
profitability. There is no assurance that laws and regulations enacted in the
future will not adversely affect the mining industry. However, since these
regulations generally apply to all exploratory and mining companies, management
of the Company believes that these regulations should not put the Company at a
material disadvantage with respect to other exploratory and mining companies.
Mining claims rights may be held by individuals or corporations and, in certain
circumstances, by governments having jurisdiction over the area in which such
mineral rights are located. As a general rule, parties holding such mineral
rights grant licenses or leases to third parties to facilitate the exploration
and development of these mineral rights. The terms of the leases and licenses
are generally established to require timely development. Notwithstanding the
ownership of mineral rights, the government of the jurisdiction in which mineral
rights are located generally retains authority over the manner of development of
those rights.
COPPER, NICKEL AND COBALT PRICES.
In recent decades, there have been periods of both worldwide overproduction and
underproduction of various minerals, including copper, nickel and cobalt. Such
conditions have resulted in periods of excess supply of, and reduced demand for,
these minerals on a domestic and worldwide basis. The excess or short supply of
these minerals placed pressures on prices and has resulted in dramatic price
fluctuations. If mineral reserves are located within the Mining Claims, of which
there can be no assurance, it may not be commercially feasible to commence
mining operations.
COMPETITION.
The exploratory and mining industries are intensely competitive and the Company
competes with other companies which have greater resources. Many of such
companies not only explore for and mine for copper, nickel and cobalt, but also
carry on distribution operations and market the minerals and other products on a
worldwide basis. Such companies may be able to pay more for productive mineral
properties and exploratory prospects to define, evaluate, bid for and purchase a
greater number of properties and prospects than the Company's financial or human
resources permit. The Company's ability to acquire additional properties and to
discover reserves in the future will be dependent upon its ability to evaluate
and select suitable properties and to consummate transactions in a highly
competitive environment. There is no assurance that the Company will be able to
effectively compete against such companies.
RISKS ASSOCIATED WITH MANAGEMENT OF GROWTH.
Because of its small size, the Company desires to grow rapidly in order to
achieve certain economies of scale. Although there is no assurance that this
rapid growth will occur, to the extent that it does occur, it will place a
significant strain on the Company's financial, technical, operational and
administrative resources. As the Company expands its activities and increases
the number of projects it is evaluating or in which it is participating, there
will be additional demands on the Company's financial, technical and
administrative resources. The failure to continue to upgrade the Company's
technical, administrative, operating and financial control systems or the
occurrence of unexpected expansion difficulties, including the recruitment and
retention of geologists and engineers, could have a material adverse effect on
the Company's business, financial condition and results of operations.
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DEPENDENCE UPON KEY PERSONNEL.
The success of the Company's operations and activities 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. The Company has not obtained "key man" insurance for any of its
management.
ADEQUATE LABOR.
In the event the Company needs to employ additional personnel, it will need to
recruit qualified personnel to staff its operations. The Company believes that
such personnel currently are available at reasonable salaries and wages in the
geographic areas in which the Company operates. There can be no assurance,
however, that such personnel will be available in the future. In addition, it
cannot be predicted whether the labor staffing at any of the Company's projects
will be unionized, which may result in potentially higher operating costs.
DIVIDEND RISKS.
The Company has not paid any dividends on its common shares and does not intend
to pay dividends on its common shares in the immediate future. Any decision to
pay dividends on its common shares in the future will be made by the board of
directors on the Company on the basis of earnings, financial requirements and
other such conditions that may exist at that time.
AUTHORIZATION OF PREFERRED STOCK.
The Company is authorized to issue up to 1,000,000 shares of preferred stock,
$0.01 par value per share. As of the date of this filing, no shares of preferred
stock have been issued. The Company's preferred stock may bear such rights and
preferences, including dividend and liquidation preferences, as our board of
directors may fix and determine from time to time. Any such preferences may
operate to the detriment of the rights of the holders of our common stock.
SCARCITY OF AND COMPETITION FOR MINING PROPERTIES AND MINERAL RESERVES.
The Company is and will continue to be an insignificant participant in the
business of exploration and mining of mineral reserves. A large number of
established and well-financed entities, including international mining
conglomerates, are active participants in the exploration and mining of mineral
reserves. Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than the Company and,
consequently, we will be at a competitive disadvantage in identifying possible
mining properties and successfully completing exploration activities. Moreover,
we will also compete in with numerous other small public and private companies.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY.
While exploring for mineral reserves, management will only be devoting part-time
efforts to the business of the Company. The officers and directors of the
Company do not have written employment agreements with the Company and are not
expected to have one in the foreseeable future. The Company has not obtained key
man life insurance on Messrs. Handford and Halterman. Notwithstanding the
limited experience and time commitment of management, the loss of the services
of Messrs. Handford and Halterman would adversely affect development of the
Company's business and its likelihood of continuing operations.
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CONFLICTS OF INTEREST - GENERAL.
The officer and director of the Company may participate in business ventures
which could be deemed to compete directly with the Company. Additional conflicts
of interest and non-arms length transactions may also arise in the event that
the Company's officer and director are involved in the management of any firm
with which the Company transacts business. The officer and director of the
Company may have a conflict of interest in negotiating and concluding terms
relating to the extent of such participation. In the event that such a conflict
of interest arises at a meeting of the board of directors, a director who has
such a conflict will disclose the nature and extent of his interest to the board
of directors and abstain from voting for or against the approval of such a
participation or such terms.
In accordance with the laws of the State of Nevada, the directors of the Company
are required to act honestly and in good faith with a view to the best interests
of the Company. In determining whether or not the Company will participate in a
particular program, exploration or mining endeavor, the director will primarily
consider the degree of risk to which the Company may be exposed and its
financial position at that time.
LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION.
The Company has neither conducted, nor have others made available to it, results
of market research indicating that market demand exists for the copper, nickel
and cobalt mined in Manitoba, Canada. Moreover, we do not have, and do not plan
to establish, a marketing organization. Even in the event demand is identified
the minerals, there is no assurance we will be successful in our operations.
LACK OF DIVERSIFICATION.
The Company's business is limited to the exploration and mining of minerals. The
Company's inability to diversify its activities into a number of areas may
subject the Company to economic fluctuations within the exploration and mining
industries and, therefore, increase the risks associated with our operations.
"PENNY" STOCK REGULATION OF BROKER-DEALER SALES OF COMPANY SECURITIES.
For transactions covered by Rule 15g-9 under the Securities Exchange Act of
1934, a broker-dealer must furnish to all investors in penny stocks, a risk
disclosure document required by the rule, make a special suitability
determination of the purchaser and have received the purchaser's written
agreement to the transaction prior to the sale. In order to approve a person's
account for transactions in penny stock, the broker or dealer must (i) obtain
information concerning the person's financial situation, investment experience
and investment objectives; (ii) reasonably determine, based on the information
required by paragraph (i) that transactions in penny stock are suitable for the
person and that the person has sufficient knowledge and experience in financial
matters that the person reasonably may be expected to be capable of evaluating
the rights of transactions in penny stock; and (iii) deliver to the person a
written statement setting forth the basis on which the broker or dealer made the
determination required by paragraph (ii) in this section, stating in a
highlighted format that it is unlawful for the broker or dealer to effect a
transaction in a designated security subject to the provisions of paragraph (ii)
of this section unless the broker or dealer has received, prior to the
transaction, a written agreement to the transaction from the person; and stating
in a highlighted format immediately preceding the customer signature line that
the broker or dealer is required to provide the person with the written
statement and the person should not sign and return the written statement to the
broker or dealer if it does not accurately reflect the person's financial
situation, investment experience and investment objectives and obtain from the
person a manually signed and dated copy of the written statement.
A penny stock means any equity security other than a security (i) registered, or
approved for registration upon notice of issuance on a national securities
exchange that makes transaction reports available pursuant to 17 CFR 11Aa3-1
(ii) authorized or approved for authorization upon notice of issuance, for
quotation on the Nasdaq NMS ; (iii) that has a price of five dollars or more or
. . . . (iv) whose issuer has net tangible assets in excess of $2,000,000
demonstrated by financial statements dated less than fifteen months previously
that the broker or dealer has reviewed and has a
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reasonable basis to believe are true and complete in relation to the date of the
transaction with the person. Consequently, the rule may affect the ability of
broker-dealers to sell the Company's securities.
FORWARD LOOKING STATEMENTS.
Because management desires to take advantage of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), the Company
cautions readers regarding forward looking statements found in this registration
statement and in any other statement made by, or on the behalf of the Company,
whether or not in future filings with the Securities and Exchange Commission.
Forward looking statements are statements based not on historical information
and which relate to future operations, strategies, financial results or other
developments. Forward looking statements are necessarily based upon estimates
and assumptions that are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond the
Company's control and many of which, with respect to future business decisions,
are subject to change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed
in many forward looking statements made by or on behalf of the Company. The
Company disclaims any obligation to update forward looking statements. Readers
should also understand that under Section 27A(b)(2)(D) of the Securities Act of
1933, as amended, and Section 21E(b)(2)(D) of the Securities Exchange Act of
1934, as amended, the "safe harbor" provisions of the PSLRA do not apply to
statements made in connection with an initial public offering.
ITEM 2. DESCRIPTION OF PROPERTY.
MINING CLAIMS
Pursuant to a written report by Leonard Gal, M.Sc. P. Geo., which was created on
behalf of the Company and dated April 23, 1998, the Company received the
following recommendations and description of the Mining Claims:
"The Falcon 25-27 claim group is composed of three contiguous claims
covering 35 hectares, located 34 km east - northeast of Winnipeg,
Manitoba, Canada. These claims cover parts of the eastern periphery of
a large geophysical anomaly (magnetic and gravity), presently being
explored by ProAm Explorations Corporation in the Selkirk area.
Essentially the entire geophysical anomaly and the surrounding ground
has been staked by various parties. The geophysical feature is thought
to represent an ultramafic / mafic complex in the Precambrian rocks
underlying the Phanerozoic cover, based on geophysical and limited
drill hole data. The magnetic and gravity responses of the anomaly
bear many similarities to those of the Sudbury basin in Ontario. The
exploration target based on the geophysical data, as well as limited
core drilling into the Precambrian basement, is magmatic copper nickel
(+ cobalt) such as at Sudbury, Thompson, Manitoba or Voisey's Bay,
Labrador. Potential for platinum group elements (PGE) and/or chromite
similar to the layered ultramafic complexes of Bushveld in South
Africa or Stillwater in Montana also exists. The Falcon 25-27 claims
cover the southern flank of a moderate positive magnetic anomaly, and
are approximately 10km east-southeast of a strong magnetic high
feature that likely represents an offshoot or satellitic node of the
main geophysical feature at Selkirk. The gravity data for the Falcon
25-27 claims is quite uniform, although it is based on a 1950s
government - produced map with very few data points. It is considered
that there is some potential on the Falcon 25-27 claims to host
magmatic Ni-Cu, PGE- chromite or other deposits hosted by ultramafic -
mafic complexes below the Paleozoic cover rocks. In addition,
volcanogenic massive sulphide or iron formation hosted gold deposits
may occur within the greenstone belt that is thought to form the
basement rocks in the area. A program of existing data compilation, to
precede detailed airborne magnetic and ground gravity surveys is
recommended to outline initial targets. Follow up work might include
advanced ground geophysical methods, leading to the refinement of
initial targets that would then be tested by drilling.
10
<PAGE>
INTRODUCTION
This report summarizes the exploration and economic potential of the
Falcon 25-27 claims located near Beausejour, Manitoba, Canada. Tiberon
Resources Ltd. has acquired the Falcon 25-27 claims from Mr. Carey
Whitehead. The Falcon 25-27 claims cover parts of the peripheral flank
of a large scale (36km x 20km) elliptical gravity anomaly, with a
coincident fringing ring of magnetic highs. The source of these
anomalies is in the Precambrian basement rocks underlying 100-200m of
Phanerozoic cover. The main part of the geophysical feature centered
29km to the west, is held by ProAm Explorations Corporation, who are
presently carrying out a drill program. The exploration model cited by
ProAm Explorations Corporation is an ultramafic - mafic lopolithic
intrusion within a greenstone belt. This model fits the observed
gravity, magnetic and limited drill hole data. The exploration target
is magmatic Ni-Cu-Co deposits (Sudbury, Voisey's Bay), and/or chromite
- platinum group element deposits (Bushveld, Stillwater). The
greenstone belt has further potential to host VMS or iron formation
gold deposits. As well, there are indications of mineralization within
the Phanerozoic rocks in the area. The Falcon 25-27 claims of Tiberon
Resources Ltd. are positioned at the flanks of this large anomaly, and
cover magnetic features that are possibly related to the large scale
magnetic and gravity anomalies.
LOCATION AND ACCESS
The Falcon 25-27 claims are centered 25km southeast of Selkirk and
approximately 34 kilometers east-northeast of Winnipeg, Manitoba,
Canada. The town of Beausejour is close to the claims. The proximity
to smaller towns and the major city of Winnipeg assures an excellent
transportation and power infrastructure, and a supplies and services
base. Exploration can thus continue all year round in a cost -
effective manner. Winnipeg is the hub of rail transport in central
Canada, with connections to the U.S. are also in place. The Falcon
25-27 claims are located within surveyed prairie lands. North-south
and east-west aligned section roads, 1 mile apart, afford road access
to virtually all parts of the claims. The location of the Falcon 25-27
claims is presented in Figure 1.
PROPERTY DESCRIPTION
The Falcon 25-27 claim group comprises 3 claims with a total area of
35 ha. The Falcon claims were staked by Mr. Carey Whitehead, and were
subsequently acquired by Tiberon Resources Ltd. The terms of the
acquisition are beyond the scope of this report. On April 22, 1998 a
check with the Manitoba Department of Mines showed that the registered
holder of the claims was Mr. Carey Whitehead. The claims are "map
staked" through application to the Manitoba Government. The claim
units are based on the survey system of sections, townships and
ranges. Each claim unit or section covers one square mile (259 ha).
However, the actual mineral title granted by the government in each
section is generally less than the full section, as title is held in
many cases by private landowners. In some instances, only a "road
allowance" of 80 feet (24m) surrounding the section roads on all sides
of the section is granted. The table below outlines the area of
granted mineral title on each claim, as well as the location and
expiry date of each claim. The claims are in good standing for two
years (plus 60 days) beyond the recording date.
CLAIM NAME LICENCE # SIZE NTS SHEET EXPIRY DATE
(HA)
Falcon #25 SV8821 15 621-01SW Dec 28, 1999
621-02SE
Falcon #26 SV8820 10 621-02SE Dec 28, 1999
Falcon #27 SV8819 10 621-02SE Dec 28, 1999
11
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CONCLUSIONS
The Falcon 25-27 claims are located near the eastern margin of a
large-scale geophysical feature currently being explored by ProAm
Explorations Corporation. The elliptical gravity high, and ring like
fringing magnetic highs surrounding a central elliptical low, bear
many similarities to the Sudbury basin. Geophysical modeling and
limited drill hole information suggests that the geophysical anomaly
is the result of an ultramafic - mafic lopolith complex intruding a
greenstone belt. The exploration target is magmatic Ni - Cu - Co, PGE,
or chromite deposits. There is also potential, indicated by drill hole
data, that the surrounding greenstone belt may host VMS, iron
formation gold or other deposits. Finally, there are local indications
of mineralization within the Paleozoic cover rocks. The Falcon 25-27
claims are in close proximity to the geophysical feature. Some
interesting magnetic anomalies are present adjacent to the Falcon
25-27 claims including a satellitic high possibly related to the main
geophysical feature. Such highs could represent satellite bodies off
the main anomaly, or outboard extensions (or "offsets"), as are known
in the Sudbury basin. A comparison between the geophysical features of
the Sudbury basin and the main feature in the Selkirk area would
suggest that the Selkirk feature is about half the size. The larger
Sudbury basin hosts at least 39 deposits, past-producing and producing
mines within mafic - ultramafic intrusives, as well as several
polymetallic deposits in the central part of the basin. Seventeen
mines in the Sudbury basin collectively produced Cu and Ni valued at
1.8 billion dollars (Cdn) in 1996. The Selkirk anomaly is theorized to
be related to the westward projection of a major suture zone on the
Canadian Shield that hosts several deposits and ultramafic rocks where
exposed. Limited drill hole data suggests that a greenstone belt lies
under the Paleozoic sediments in the Selkirk area. This belt is
unexplored, and the coupling with a large geophysical feature that
likely represents a major ultramafic - mafic intrusive complex makes
this an attractive area for exploration.
RECOMMENDATIONS FOR EXPLORATION
A first phase exploration program is recommended to explore the Falcon
25-27 claims for mineralization hosted in Precambrian basement rocks.
Potential for magmatic Ni-Cu-Co, or PGE - chromite deposits exists.
The Falcon 25-27 claims are near the flank of a major geophysical
feature that is thought to represent an ultramafic-mafic lopolithic
intrusion within a greenstone belt. The main anomaly is being actively
explored by ProAm Explorations Corporation. Magnetic highs observed
adjacent to the Falcon 25-27 claims are possibly related to the main
geophysical feature, and thus an ultramafic - mafic body could
underlie the claims, beneath the Paleozoic cover. Potential also
exists in a greenstone belt to host polymetallic VMS deposits, banded
iron formation gold or other precious metal deposits.
The recommended exploration program includes the compilation and
analysis of all existing geological and geophysical data. This should
be followed by a low level, detailed airborne magnetic survey. Flight
lines should be spaced at approximately 200m. A detailed gravity
survey should be performed by measurements at ground stations on 1/4
to 1/2 mile centers. Airborne gravity surveys are possible, but very
expensive. Upon completion of the initial geophysical surveys, first
order targets may be followed up with detailed ground geophysics. A
variety of advanced deep searching methods and modeling techniques may
be used, with the consultation of a geophysicist. Possibilities might
include TEM or magnetotelluric surveys. Analysis of airborne magnetic
data and gravity data, with or without ground survey follow up, could
lead to the establishment of drill targets. A second phase of core
drilling on these targets should then be initiated. Vertical holes can
be drilled through the Paleozoic and into the Precambrian basement.
Some cost savings might be gained if the Paleozoic rocks are drilled
by reverse circulation methods, with core drilling reserved for the
Precambrian rocks. Down hole geophysical methods should be employed in
each drill hole to gain additional information.
Because the Falcon 25-27 claims cover a fairly small area, it is
recommended that the owners/operators approach other exploration
concerns operating in the area and on adjacent claims
12
<PAGE>
to pool their resources in contracting for airborne surveys and
gravity surveys. Combining the surveys with neighboring properties
would save on mob - demob costs, analytical and modeling studies, as
well as the premiums paid on airborne surveys for short flight lines.
COST ESTIMATE OF RECOMMENDED EXPLORATION PROGRAM
A possible exploration budget for Phase I (geophysics) and Phase II
(drilling) on the Falcon 25-27 claims is outlined below.
PHASE I (AIRBORNE MAGNETIC SURVEY, GROUND GRAVITY SURVEY)
AIRBORNE (FIXED WIRING) MAGNETIC SURVEY approximately 45 line km (E-W
orientation) at $14.75 per
line km $ 664
Mob - demob 2,500
Data modeling, reproduction and presentation 2,500
GRAVITY SURVEY
21 stations at $200 per station, including
data processing, report, etc. 4,200
Geological, Geophysical consulting 3,500
Ground geophysical surveys (on recommendation of geophysicist) 7,500
Contingencies, miscellaneous 3,000
------
TOTAL PHASE I $23,864
=======
*Due to the relatively small size of the Falcon 25-27 Claims, it would
be practical and cost effective only if the airborne survey were
combined with neighboring properties. Pooling projects will save
mob-demob charges, data processing, as well as the considerable
premiums paid for short flight lines (flight lines less than 10km are
charged a premium). The costs involved in land access negotiations
with surface rights holders are also not included in Phase I or II
estimates, but once again, pooling resources with neighboring
operators is expected to reduce costs and expedite exploration
efforts.
PHASE II (DIAMOND DRILLING)
Reverse Circulation drilling through Phanerozoic, core drilling (NQ)
through Precambrian
Reverse Circulation: 200m at $60/m $12,000
Core drilling: 250m at $90/m 22,500
Drill Mob-demob 2,500
Down hole geophysics (Pulse-EM) 2,000
Analytical charges 500
Geological consulting (drill supervision, core logging, sampling) 3,500
Room, board 1,000
Rentals, travel, communications 2,500
Contingencies, miscellaneous 3,500
-------
TOTAL PHASE II (PER DRILL HOLE) $50,000
=======
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<PAGE>
The Phase II budget is no more than a general estimate of costs that
might be expected to be incurred. The number and depths of drill holes
can not be foreseen at this time. While reverse circulation (RC)
drilling is recommended as a cost saving measure at this time, there
are instances where it might be preferable to core drill the entire
hole. In fact, if aquifers are encountered with flows of greater than
50-60 gallons per minute, RC drilling will be ineffective and core
drilling (with casing) will have to be employed.
Drill holes have intersected aquifers in the Selkirk area, adding to
drill costs, and also presenting environmental difficulties which had
to be addressed to the satisfaction of government authorities and
local stakeholders. Likewise, analytical costs (based on the number of
samples taken) are only a broad estimate, as the basement geology and
any mineralization encountered are largely unknown."
The Company has not retained a geologist to perform the exploration programs.
Management anticipates that Mr. Halterman, the Company's sole director, will
perform the exploration programs. See Part III Item 9. Directors, Executive
Officers, Promoters and Control Persons; Compliance with Section 16(a) of the
Exchange Act. Mr. Halterman's rates for such work vary between $350 to $500 per
day, plus expenses. If Mr. Halterman does not perform the exploration programs,
the Company does not anticipate any difficulties in retaining a qualified
geologist with comparable rates.
PRINCIPAL OFFICES
The Company is currently occupying a minimal amount of office space from its
sole officer, Leroy Halterman, at 11930 Menual Boulevard N.E., # 107,
Albuquerque, New Mexico 87112. The office space is provided to the Company on a
rent free basis.
ITEM 3. LEGAL PROCEEDINGS.
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
MARKET
The Company's common stock was first listed on the "pink sheets" on February 17,
1999. There was no reported trading. On November 20, 1999, the Company's common
stock was cleared to be quoted on the Over-the-Counter Bulletin Board ("OTCBB").
The Company's common stock is quoted as "TBRE". As of March 26, 2000, there has
been no reported trading of the Company's common stock on the OTCBB.
On March 26, 2000, there were 31 record holders of the Company's common stock.
During the last two fiscal years, no cash dividends have been declared on the
Company's common stock and management does not anticipate that dividends will be
paid in the foreseeable future.
14
<PAGE>
RECENT SALES OF UNREGISTERED SECURITIES
Since the Company's inception, it has sold shares of common stock which were not
registered under the Securities Act of 1933, as amended.
On April 11, 1998, the Company sold 8,000,000 shares of Common Stock at a price
of $0.0025 per share in a private offering pursuant to Sections 3(b) and 4(2) of
the Securities Act of 1933, as amended, and Rule 504 of the Regulation D
promulgated thereunder.
In September 1998, the Company sold 50,000 shares of Common Stock at a price of
$0.30 per share in a second private offering pursuant to Sections 3(b) and 4(2)
of the Securities Act of 1933, as amended, and Rule 504 of the Regulation D
promulgated thereunder.
No underwriting discounts or commissions were paid in either offering in that
such transactions did not involve a public offering.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
GENERAL
Since incorporation on April 19, 1998, the Company has been a natural resource
company engaged in the acquisition of mineral properties. As of the filing of
this statement, the Company's sole focus is in Canada. The Company has not
generated any revenues since inception. From inception to the year ended
December 31, 1999, the Company has recorded an accumulated net loss of $34,943.
Working capital at December 31, 1999 was a deficit of $3,938, as compared to
$7,173 for the period ending June 30, 1999, and $20,049 at December 31, 1998.
Management believes that the Company has sufficient working capital to fund the
Company's operations through August 2000.
The Company's primary source of working capital has been through the sale of
common stock. Since incorporation, the Company has received $31,005 net proceeds
from the sale of common stock. In December 1999, the Company borrowed $4,010
from a third party for a term of one year with interest at 5% per annum.
Management anticipates that an additional offering of shares in the amount of
$100,000 will be necessary to provide sufficient operating capital and to fund
the required property payment and work program for the fiscal year 2000.
Management believes that the additional offering should be completed prior to
September 2000. If the initial work program produces a positive result, then the
Company will be required to raise an additional $150,000 by September 2001.
Management believes that it may be necessary for the Company to conduct an
offering of common stock to fund the continued exploration program and property
expense. If additional funding is not obtained, the Company will not be able to
begin or continue its exploration programs and may have to abandon its plans to
explore mining claims.
The Company's ability to continue as a going concern is dependent upon its
ability to generate sufficient cash flow to meet its obligations on a timely
basis, to identify and develop legitimate mineral reserves, obtain additional
financing or refinancing as may be required, and ultimately to attain
profitability. There are no assurances that the Company will be able to obtain
identify legitimate mineral reserves, obtain any such financing or, if the
Company is able to obtain additional financing, that such financing will be on
terms favorable to the Company. The inability to obtain additional financing
when needed will have a material adverse effect on the Company's operating
results.
The Independent Accountant's Report and Note 1 of the Notes to Financial
Statements accompanying this report state that substantial doubt has been raised
about the Company's ability to continue as a going concern. The Company's
present business operations do not generate sufficient revenues to cover its
expenses. The Company would have to obtain other business operations or severely
reduce its expenses to remain viable, and there can be no assurance that the
Company will be able to do so.
15
<PAGE>
IMPACT OF THE YEAR 2000
The Year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date- sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
year 2000 dates is processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something other than a
date. The effects of the Year 2000 issue may be experienced before, on, or after
January 1, 2000, and, if not addressed, the impact on operations and financial
reporting may range from minor errors to significant systems failure which could
affect the Company's ability to conduct normal business operations. Management
believes the Company does not face significant internal risk from computer
failure or errors due to the Year 2000 Issue. It is not possible to be certain
that all aspects of the Year 2000 issue affecting the Company, including those
related to the efforts of customers, suppliers, or other third parties, will be
fully resolved. As of the date of this report, the Company has not experienced
any problems related to the Year 2000.
ITEM 7. FINANCIAL STATEMENTS.
Please refer to the pages beginning with F-1.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not Applicable.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The officers and directors of the Company are as follows:
Leroy Halterman Sole Director since April 10, 1998 (inception).
Reg Handford President, Secretary and Treasurer since
August 20, 1998.
LEROY HALTERMAN, DIRECTOR. Mr. Halterman has been a certified professional
geologist for 21 years. In 1968, Mr. Halterman graduated from the Missouri
School of Mines, Rolla, with a Bachelor of Science degree in Geology. Mr.
Halterman performed additional work at the University of New Mexico from
1969-70, focusing on hydrology and submarine geology. However, Mr. Halterman did
not receive a graduate degree. Since 1985 , Mr. Halterman has been a consulting
geologist for MinSearch, Inc., located in Albuquerque, New Mexico ("MinSearch").
Mr. Halterman's responsibilities at MinSearch included the evaluation of mineral
and petroleum deposits, and ac-cumulations in various geological environments.
Mr. Halterman's evaluations included all phases of the projects from generation
through exploration, reserve estimating, testing, and mine planning. He has
similar experience in petroleum, including prospect generation and exploration,
as well as all phases of well completion and production. His production
specialties include computerized reserve estimation (both volumetic and
decline), production records, and production and transport agreements for both
oil and gas. Mr. Halterman is also the president, director, and a principal
shareholder of Consolidated North American Resources, a private company in the
oil and gas industry, and is the sole officer and director of Rimpac Resources
Ltd., a Nevada corporation engaged in mineral exploration activities.
In addition to consulting, Mr. Halterman has emphasized in natural resource
appraisals, and damage calculations, both of which included environmental
evaluations and site assessments. Environmental problems and potential problems
encompassed in these type of assessments included hazardous material and
chemicals located in abandoned dumps,
16
<PAGE>
mills, mines and other structures, ground and surface water contamination and
pathways, underground storage tanks, and above ground storage tanks, kinetic and
structural hazards, unstable surfaces, induced erosion problems, and explosives.
Within the past six years, Mr. Halterman perfomed a total of 20 natural resource
evaluations and appraisals according to Uniform Appraisal Standards for Federal
Land Acquisitions for such clients as the United States Park Service, the United
States Department of Justice, the Nature Conservatory, Wellington Financial, and
Maximum Resources.
From 1983 to 1985, Mr. Halterman was the Vice President of Exploration for
Goldsill Mining and Milling, Inc., a corporation located in Denver, Colorado.
Mr. Halterman was responsible for coordination, evaluation, acquisition, and
management of the company's exploration programs and budgets for both precious
metals and petroleum. The company focused its precious metals efforts in
Saskatchewan, Canada, and in Arizona, Montana and Nevada. Prior to becoming the
Vice President, Mr. Halterman was responsible for a district office engaged in
the exploration and acquisition of commercial uranium deposits. He was
thereafter promoted to Minerals Manager, and was responsible for overseeing the
company's precious metals programs and budgets in the Western United States and
locations in Canada. Mr. Halterman began working with Goldsill Mining and
Milling, Inc. in 1979.
From 1975 to 1979, Mr. Halterman was the Senior Exploration Geologist for
Philips Petroleum Corporation. He was responsible for generating, recommending,
acquiring, and administering uranium prospects in New Mexico, Arizona, Colorado,
Utah, Nevada, California and Texas. From 1968 to 1975, Mr. Halterman was a
Geologist for Gulf Oil Corporation. His duties included geologic evaluation of
uranium, coal base and precious metal prospects.
Mr. Halterman is a member of the American Association of Petroleum Geologists
and the Society for Mining, Metallurgy and Exploration.
REG HANDFORD, PRESIDENT, SECRETARY AND TREASURER. Mr. Handford has been a
self-employed management consultant for junior development companies since
October 1991. Mr. Handford assists these companies with financial consulting,
and has supervised of a team of programmers writing bingo software to run under
Windows(TM) NT. Since August 1998, he has been the sole officer and director of
Minas Novas Gold Corp., a development stage mining company located in Vancouver,
British Columbia. From June 1975 to October 1991, Mr. Handford was a salesman
for Cararim Investment Corp., located in Vancouver, British Columbia
("Cararim"). Mr. Handford worked as a financial advisor for Cararim.
In 1966, Mr. Handford graduated from the University of British Columbia, with an
undergraduate degree in mathematics. Mr. Handford received a masters degree in
mathematics from the Simon Fraser University in 1971.
Mr. Halterman and Mr. Handford may be deemed to be the "promoters" and "parents"
of the Company within the meaning of the Rules and Regulations promulgated under
the Act.
The term of office of each director of the Company ends at the next annual
meeting of the Company's stockholders or when the director's successor is
elected and qualified. No date for the next annual meeting of stockholders is
specified in the Company's Bylaws, nor has a meeting been fixed by the Board of
Directors. The term of office of each officer of the Company ends at the next
annual meeting of the Company's Board of Directors, which is expected to take
place immediately after the next annual meeting of stockholders, or when such
officer's successor is elected and qualified.
CONFLICTS OF INTEREST
Members of the Company's management are associated with other firms involved in
a range of business activities. Consequently, there are potential inherent
conflicts of interest in their acting as officers and directors of the Company.
Insofar as the officers and directors are engaged in other business activities,
management anticipates they will devote only a minor amount of time to the
Company's affairs.
The officers and directors of the Company are now and may in the future become
shareholders, officers or directors of other companies which may be formed for
the purpose of engaging in business activities similar to those conducted by the
Company. Accordingly, additional direct conflicts of interest may arise in the
future with respect to such individuals
17
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acting on behalf of the Company or other entities. Moreover, additional
conflicts of interest may arise with respect to opportunities which come to the
attention of such individuals in the performance of their duties or otherwise.
The Company does not currently have a right of first refusal pertaining to
opportunities that come to management's attention insofar as such opportunities
may relate to the Company's business operations.
The officers and directors are, so long as they are officers or directors of the
Company, subject to the restriction that all opportunities contemplated by the
Company's plan of operation which come to their attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that
they are affiliated with on an equal basis. A breach of this requirement will be
a breach of the fiduciary duties of the officer or director. If the Company or
the companies in which the officers and directors are affiliated with both
desire to take advantage of an opportunity, then said officers and directors
would abstain from negotiating and voting upon the opportunity. However, all
directors may still individually take advantage of opportunities if the Company
should decline to do so. Except as set forth above, the Company has not adopted
any other conflict of interest policy with respect to such transactions.
The Company does not have any standing audit, nominating, or compensation
committees of the Board of Directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% percent shareholders are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms they file. Leroy Halterman
and Reg Handford were each required to file an Initial Statement of Beneficial
Ownership of Securities on Form 3 at the time of the registration of the
Company's securities under Section 12(g) of the Exchange Act. Messrs. Halterman
and Handford filed their Form 3 on June 18, 1999. Messrs. Halterman and Handford
were not required to file a report on Form 5 for the fiscal year ended December
31, 1999. There are no shareholders owning 10% or more of the Company's common
stock.
ITEM 10. EXECUTIVE COMPENSATION.
The following table sets forth information for Reg Handford, the sole Officer of
the Company during the fiscal years ended December 31, 1998 and 1999. No
disclosure need be provided for any executive officer, other than the CEO, whose
total annual salary and bonus for the last completed fiscal year did not exceed
$100,000. Accordingly, no other executive officers of the Company are included
in the table.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------------------------------------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND COMPEN- AWARD(S) OPTIONS / LTIP COMPEN-
PRINCIPAL POSITION YEAR SALARY($) BONUS($) SATION ($) ($) SARS ($) PAYOUTS ($) SATION ($)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Reg Handford, 1999 -0- -0- -0- -0- -0- -0- -0-
President and Chief 1998 -0- -0- -0- -0- -0- -0- -0-
Executive Officer
</TABLE>
The Company does not have any employment contracts with any of its officers or
directors. Such persons are employed by the Company on an at will basis, and the
terms and conditions of employment are subject to change by the Company. At
December 31, 1998 and 1999, none of the Named Executive Officers held any
options to acquire shares of the Company's stock.
18
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STOCK OPTION PLANS
The Company has not adopted a Stock Option Plan.
OPTION/SAR/LTIP AWARDS
Since its inception, the Company has not granted any Stock Options, Stock
Appreciation Rights or Long Term Incentive Plan payouts.
EMPLOYMENT AGREEMENTS
There are no employment agreements between the Company and its officer and
director.
DIRECTORS' COMPENSATION
The Company does not compensate its director.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information, as of March 26, 2000, with respect
to the beneficial ownership of the Company's common stock by each person known
by the Company to be the beneficial owner of more than five percent of the
outstanding Common Stock and by directors and officers of the Company, both
individually and as a group:
- --------------------------------------------------------------------------------
NAME AND ADDRESS OF OWNER NUMBER OF SHARES PERCENT OF
OWNED CLASS (1)
- --------------------------------------------------------------------------------
Lillian de Leveaux
Abney Trading S A 700,000 8.69%
94 Dowdeswell Street
P.O. Box N-31114
Nassau, Bahamas
- --------------------------------------------------------------------------------
Sheila Andrews
Blue Cotil 700,000 8.69%
Samares Inner Road
St. Clement, Jersey, C. I.
- --------------------------------------------------------------------------------
Madeline Gray
Aurora Marketing Limited 700,000 8.69%
P.O. Box N-10741
Oakes Field
Nassau, Bahamas
- --------------------------------------------------------------------------------
Isaac Collie 7.45%
Breadstone Investments Ltd 600,000
21 East Drive, Garston
Watford, Herts, WD2 6AH
United Kingdom
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
NAME AND ADDRESS OF OWNER NUMBER OF SHARES PERCENT OF
OWNED CLASS (1)
- --------------------------------------------------------------------------------
Shelly Johnson
But Sup But International 700,000 8.69%
P.O. Box N-7521
Suite 61 Grosvenor Close
Shirely Street
Nassau, Bahamas
- --------------------------------------------------------------------------------
Cede & Co.
Box 20 Bowling Green Station 600,000 7.45%
New York, New York 10004
Ian Fox
- --------------------------------------------------------------------------------
Derb Engineering 700,000 8.69%
#700-1190 Melville Street
Vancouver, B.C. V6E 3W1
Canada
- --------------------------------------------------------------------------------
Phyllis Grant
#103-1140 Castle Crescent 700,000 8.69%
Pot Coquitlam, B.C.
Canada
- --------------------------------------------------------------------------------
Janeen Curtis
Liberty Holdings Limited 700,000 8.69%
#13 St. Thomas Road
P.O. Box N-7964
Nassau, Bahamas
- --------------------------------------------------------------------------------
Ruth Pearce
25 Steyne Street 700,000 8.69%
Bognor Regis
Sussex, United Kingdom POS 1TJ
- --------------------------------------------------------------------------------
Andres Robinson
22 Le Bernage, Longueville 500,000 6.21%
St. Thomas, Jersey, C.I.
- --------------------------------------------------------------------------------
Leroy Halterman
Tiberson Resources Ltd. 0 -
11930 Menaul Blvd. N.E. # 107
Albuquerque, New Mexico 87112
- --------------------------------------------------------------------------------
Reg Handford
Tiberon Resources Ltd. 0 -
11930 Menaul Blvd. N.E., # 107
Albuquerque, New Mexico 87112
- --------------------------------------------------------------------------------
Officers and Directors as a group 0 -
(2 persons)
- --------------------------------------------------------------------------------
(1) This table is based on 8,050,000 shares of Common Stock outstanding
on March 26, 2000. Where the persons listed on this table have the right to
obtain additional shares of common stock within 60 days from March 26, 2000,
these additional shares are deemed to be outstanding for the purpose of
computing the percentage of class owned by such persons, but are not deemed to
be outstanding for the purpose of computing the percentage of any other person.
20
<PAGE>
CHANGES OF CONTROL
As of the date of this annual report, there are no arrangements known to the
Company which may at a subsequent date result in a change of control of the
Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Other than as disclosed below, none of the present directors, officers or
principal shareholders of the Company, nor any family member of the foregoing,
nor, to the best of the information and belief of the present management of the
Company, any of the former directors, senior officers or principal shareholders
of the Company, nor any family member of such former directors, officers or
principal shareholders, have or have had any material interest, director or
indirect, in any transaction, within the two years prior to the date of this
report, or in any proposed transaction which has materially affected or will
materially affect the Company. Management believes the following transactions
are as fair to the Company and similar to terms which could be obtained from
unrelated third parties.
1. Leroy Halterman may provide geological services to the Company in
furtherance of its exploration program, for which it is anticipated
that he would receive compensation. Mr. Halterman's rates for such work
vary between $350.00 to $500.00 per day, plus expenses.
2. During the period from April 10, 1998 (inception) to December 31, 1998,
associates of the sole officer and director of the Company advanced the
Company $5,000 for a legal retainer which was reimbursed to the
associates through the issuance of 2,000,000 shares of common stock.
Messrs. Halterman and Handford may be deemed to be "promoters" of the Company
within the meaning of the rules and regulations promulgated under the Securities
Act of 1933, as amended. Messrs. Halterman and Handford have not received
anything of value from the Company.
21
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
<TABLE>
<CAPTION>
REGULATION CONSECUTIVE
S-B NUMBER EXHIBIT PAGE NUMBER
<S> <C> <C>
3.1 Articles of Incorporation (1)<F1> N/A
3.2 Bylaws (1)<F1> N/A
10.1 Agreement between the Company and Carey Whitehead dated April 28, N/A
1998 relating to Falcon claims 25, 26 and 27, located in
Manitoba, Canada (1)<F1>
10.2 Agreement for extension of time between the Company and Carey ___
Whitehead dated March 28, 2000 relating to Falcon claims 25, 26, and 27,
located in Manitoba, Canada.
11 Statement re: Computation of Per Share Earnings See
Financial
Statements
27 Financial Data Schedule 38
- ---------------------------
<FN>
<F1>
(1) Incorporated by reference to the exhibits filed with the Company's Form
10-SB dated April 19, 1999.
</FN>
</TABLE>
22
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TIBERON RESOURCES LTD.
Dated: April 13, 2000 By: /s/Reg Handford, President
-------------------------------
Reg Handford, President
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
President, Secretary and Treasurer
(Sole Executive Officer)
/s/ Reg Handford April 13, 2000
- ------------------------------
Reg Handford
Director
(Sole Director)
/s/ Leroy Halterman April 13, 2000
- ------------------------------
Leroy Halterman
</TABLE>
23
<PAGE>
Tiberon Resources Ltd.
As of and for the year ended
December 31, 1999,
and for the periods
April 10, 1998 (inception) to
December 31, 1998 and 1999
F-1
<PAGE>
Tiberon Resources Ltd.
As of and for the year ended December 31, 1999,
and for the periods April 10, 1998 (inception) to
December 31, 1998 and 1999
Table of Contents
PAGE
----
Report of Independent Auditors 1
Balance Sheet 2
Statements of Operations 3
Statement of Changes in Stockholders' Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6-10
F-2
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Tiberon Resources Ltd.
Albuquerque, NM
We have audited the accompanying balance sheet of Tiberon Resources Ltd. as of
December 31, 1999, and the related statements of operations, stockholders'
deficit, and cash flows for the year ended December 31, 1999 and the periods
from April 10, 1998 (inception) to December 31, 1998 and 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about 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 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, the financial statements referred to above present fairly, in
all material respects, the financial position of Tiberon Resources Ltd. as of
December 31, 1999, and the results of its operations, and its cash flows for the
year ended December 31, 1999 and the periods from April 10, 1998 (inception) to
December 31, 1998 and 1999 in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from operations
and has a working capital deficit and a stockholders' deficit. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to these matters are also discussed in
Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Stark Tinter & Associates, LLC
/s/ Stark Tinter & Associates, LLC
Denver, Colorado
March 25, 2000
F-3
<PAGE>
Tiberon Resources Ltd.
Balance Sheet
December 31, 1999
ASSETS
Current assets:
Cash $ 1,229
----------------
$ 1,229
================
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities:
Accounts payable $ 1,157
Loan payable 4,010
================
5,167
Stockholders' (deficit):
Preferred stock, $0.01 par value,
1,000,000 undesignated shares authorized 0
Common stock, $0.001 par value,
50,000,000 shares authorized,
8,050,000 shares issued and outstanding 8,050
Additional paid in capital 22,955
Accumulated deficit (34,943)
================
Total stockholders' (deficit) (3,938)
----------------
$ 1,229
================
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
Tiberon Resources Ltd.
Statements of Operations
<TABLE>
<CAPTION>
April 10, 1998 April 10, 1998
(inception) (inception)
Year Ended Through Through
December 31, December 31, December 31,
1999 1998 1999
================== ================ =================
<S> <C> <C> <C>
Revenue $ 0 $ 0 $ 0
Costs and expenses:
General and administrative 24,471 8,558 33,029
Amortization 1,018 180 1,198
------------------ ---------------- -----------------
Loss from operations (25,489) (8,738) (34,227)
------------------ ---------------- -----------------
Other income (expense):
Foreign currency transaction gain (loss) 484 (1,200) (716)
================== ================ =================
484 (1,200) (716)
------------------ ---------------- -----------------
Net (loss) $ (25,005) $ (9,938) $ (34,943)
================== ================ =================
Per share information:
Weighted average number
of common shares outstanding - basic and diluted 8,050,000 5,091,887 6,805,714
================== ================ =================
Net (loss) per common share - basic and diluted $ (0.00) $ (0.00) $ (0.01)
================== ================ =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
Tiberon Resources Ltd.
Statement of Stockholders' Deficit
For the Period April 10, 1998 (inception) through December 31, 1999
<TABLE>
<CAPTION>
Common Stock Additional Accumulated
Shares Amount Paid in Capital Deficit Total
=====================================================================================
<S> <C> <C> <C> <C> <C>
Balance, April 10, 1998 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
Issuance of stock for
repayment of advances
at $0.0025 per share 2,000,000 2,000 3,000 0 5,000
Issuance of stock for
cash at $0.0025 per share
(net of issuance costs) 6,000,000 6,000 6,547 12,547
Issuance of stock for
cash at $0.30 per share
(net of issuance costs) 50,000 50 13,408 13,458
Net (loss) for the period ended
December 31, 1998 0 0 0 (9,938) (9,938)
---------- ---------- ------------ ----------- -------------
Balance, December 31, 1998 8,050,000 8,050 22,955 (9,938) 21,067
Net (loss) for the year ended
December 31, 1999 0 0.00 0.00 (25,005) (25,005)
---------- ---------- ------------ ----------- -------------
Balance, December 31, 1999 8,050,000 $ 8,050 $ 22,955 $ (34,943) $ (3,938)
========== ========== ============ =========== =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
Tiberon Resources Ltd.
Statements of Cash Flows
<TABLE>
<CAPTION>
April 10, 1998 April 10, 1998
(inception) (inception)
Year Ended Through Through
December 31, December 31, December 31,
1999 1998 1999
------------------ -------------------- ------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) $ (25,005) $ (9,938) $ (34,943)
Adjustments to reconcile net (loss) to net
cash used in operating activities:
Amortization 1,018 180 1,198
(Increase) decrease in prepaid expenses 757 (757) 0
Increase in accounts payable 1,157 0.00 1,157
------------------- ------------------- ------------------
Net cash (used in) operating activities (22,073) (10,515) (32,588)
------------------- ------------------- ------------------
Cash flows from investing activities:
Organization costs 0 (1,198) (1,198)
------------------- ------------------- ------------------
Net cash (used in) investing activities 0 (1,198) (1,198)
------------------- ------------------- ------------------
Cash flows from financing activities:
Proceeds from loan 4,010 0 4,010
Proceeds from stock issuance, net of
issuance costs 0 26,005 26,005
Proceeds from advances 0 5,000 5,000
------------------- ------------------- ------------------
Net cash provided by financing activities 4,010 31,005 35,015
------------------- ------------------- ------------------
Net increase (decrease) in cash (18,063) 19,292 1,229
Beginning cash 19,292 0 0
------------------- ------------------- -------------------
Ending cash $ 1,229 $ 19,292 $ 1,229
=================== =================== ===================
Supplemental cash flow information:
Cash paid for: interest 0 0 0
income taxes 0 0 0
Non-cash investing and financing activities:
Issuance of common stock as repayment of
advances $ 0 $ 5,000 $ 5,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
Tiberon Resources Ltd.
Notes to Financial Statements
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Company was incorporated on April 10, 1998, in the State of Nevada. The
Company has entered into an agreement to purchase mineral property claims
located in Manitoba, Canada. The Company is in the exploration stage and intends
to invest in mineral properties.
Basis of reporting
The Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.
The Company has experienced recurring losses from operations as a result of its
investment in professional and consulting fees necessary to achieve its
operating plan which is long-range in nature. For the year ended December 31,
1999 and for the periods April 10, 1998 (inception) to December 31, 1998 and
1999 the Company realized net losses of $25,005, $9,938 and $34,943,
respectively. At December 31, 1999, the Company has a working capital deficit of
$3,938 and a stockholders' equity deficit of $3,938.
The Company's ability to continue as a going concern is contingent upon its
ability to secure financing, increase ownership equity and attain profitable
operations. In addition, the Company's ability to continue as a going concern
must be considered in light of the problems, expenses and complications
frequently encountered by entrance into established markets and the competitive
environment in which the Company operates.
The Company is pursuing financing for its operations and seeking additional
private placement investments. The Company then intends to invest in mineral
properties and begin operations. Failure to secure such financing or to raise
additional private placement investment may result in the Company depleting its
available funds and not being able pay its obligations or begin operations.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
F-8
<PAGE>
Tiberon Resources Ltd.
Notes to Financial Statements
Exchange Act Guide 7
The Securities and Exchange Commission's Exchange Act Guide 7 "Description of
property by issuers engaged or to be engaged in significant mining operations"
requires that mining companies in the exploration stage should not refer to
themselves as development stage companies in the financial statements, even
though such companies should comply with Financial Accounting Standards Board
Statement No. 7, if applicable. Accordingly the Company has not been referred to
as being a development stage company.
Net loss per common share
The Company follows Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("SFAS No. 128"). Basic earnings per common share ("EPS")
calculations are determined by dividing net loss by the weighted average number
of shares of common stock outstanding during the year. Diluted earnings per
common share calculations are determined by dividing net income by the weighted
average number of common shares and dilutive common share equivalents
outstanding.
Estimates
The preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires the Company's management to
make estimates and assumptions that affect the amounts reported in these
financial statements and accompanying notes. Actual results could differ from
those estimates.
Cash and Cash Equivalents
For purposes of balance sheet classification and the statements of cash flows,
the Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
Revenue Recognition
The Company recognizes revenue when earned.
Financial Instruments
The carrying amounts for the Company's cash and cash equivalents and accounts
and loans payable approximate fair value.
F-9
<PAGE>
Tiberon Resources Ltd.
Notes to Financial Statements
Foreign Currency Exchange and Translation
The functional currency of the Company is the U.S. dollar. The Company also has
a Canadian dollar bank account it uses for some operations. For reporting
purposes, the financial statements are presented in U.S. dollars in accordance
with Statement of Financial Accounting Standards No. 52, Foreign Currency
Translation. The balance sheet is translated into U.S. dollars at the exchange
rates prevailing at the balance sheet date and the statement of operations and
cash flows at the average rates for the relevant periods. The Company does not
use foreign exchange contracts, interest rate swaps, or option contracts.
Foreign currency transaction gains and (losses), for the year ended December 31,
1999, and the periods April 10, 1998 (inception) to December 31, 1998 and 1999
were $484, $(1,200), and $(716), respectively and are included in other income
(expense).
Comprehensive income
The Company follows Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income." SFAS 130 establishes standards for reporting
and displaying comprehensive income, its components and accumulated balances.
SFAS 130 is effective for periods beginning after December 15, 1997. The Company
adopted SFAS 130 in 1998.
Recent Pronouncements
The FASB recently issued Statement No 137, "Accounting for Derivative
Instruments and Hedging Activities-Deferral of Effective Date of FASB Statement
No. 133". The Statement defers for one year the effective date of FASB Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities". The
rule now will apply to all fiscal quarters of all fiscal years beginning after
June 15, 2000. In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," which is required to be adopted
in years beginning after June 15, 1999. The Statement permits early adoption as
of the beginning of any fiscal quarter after its issuance. The Statement will
require the Company to recognize all derivatives on the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value through
income. If the derivative is a hedge, depending on the nature of the hedge,
changes in the fair value of derivatives will either be offset against the
change in fair value of the hedged assets, liabilities, or firm commitments
through earnings or recognized in other comprehensive income until the hedged
item is recognized in earnings. The ineffective portion of a derivative's change
in fair value will be immediately recognized in earnings. The Company has not
yet determined if it will early adopt and what the effect of SFAS No. 133 will
be on the earnings and financial position of the Company.
F-10
<PAGE>
Tiberon Resources Ltd.
Notes to Financial Statements
Note 2. STOCKHOLDERS' EQUITY
During the period from April 10, 1998 to December 31, 1998, 6,000,000 shares of
stock were issued to various investors at $0.0025 per share for cash of $15,000,
pursuant to the Company's Regulation D, Rule 504 offering ("Rule 504"). Issuance
costs were $2,453.
In addition, during September 1998 the Company completed a second Regulation D,
Rule 504 offering and issued 50,000 shares of its $0.001 par value common stock
to various investors at $0.30 per share for cash of $15,000. Issuance costs were
$1,542.
Note 3. COMMITMENTS AND CONTINGENCIES
The Company extended an Agreement on March 28, 2000, to acquire the rights to
mineral claims and explore for copper, nickel and cobalt in Manitoba, Canada.
The agreement is made with an unrelated third party. The terms of the agreement
require the Company to pay a total of $50,000 of which $25,000 is due on
September 28, 2000, and $25,000 is due on September 28, 2001.
The agreement also requires the Company to fund a $40,000 work program by
September 28, 2000, and an additional $50,000 work program by September 28,
2001.
Note 4. RELATED PARTY TRANSACTIONS
During the period from April 10, 1998 to December 31, 1998, associates of the
sole officer and director of the Company advanced the Company $5,000 for a legal
retainer which was reimbursed to the associates through the issuance of
2,000,000 shares of common stock.
Note 5. LOAN PAYABLE
On December 21, 1999, an unrelated party loaned the Company $4,010. The amount
is due one year from the date of the loan. The loan has an interest rate of five
percent.
Note 6. INCOME TAXES
The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109 (FAS 109), "Accounting for Income Taxes", which requires use
of the liability method. FAS 109 provides that deferred tax assets and
liabilities are recorded based on the differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting
purposes, referred to as temporary differences. Deferred tax assets and
liabilities at the end of each period are determined
F-11
<PAGE>
Tiberon Resources Ltd.
Notes to Financial Statements
using the currently enacted tax rates applied to taxable income in the periods
in which the deferred tax assets and liabilities are expected to be settled or
realized.
Income tax provision (benefit) for income taxes differs from the amounts
computed by applying the statutory federal income tax rate of 34% as a result of
the following:
<TABLE>
<CAPTION>
April 10, April 10,
1998 1998
Year (inception) (inception)
Ended through through
December December December
31,1999 31, 1998 31, 1999
--------- ---------- ----------
<S> <C> <C> <C>
Computed "expected" tax provision (benefit) ($8,500) ($3,400) ($11,900)
Valuation allowance 8,500 3,400 11,900
--------- ---------- ----------
$ - $ - $ -
========= ========== ==========
</TABLE>
The net change in valuation allowance for the year ended December 31, 1999 was
$5,100.
The types of temporary differences between the tax basis of assets and their
financial reporting amounts that give rise to a significant portion of the
deferred tax asset are as follows:
Temporary Tax
Difference Effect
---------- ------
Net operating loss carryforward: $35,000 $7,000
========== ======
The net operating loss carry forward will expire in the year 2019.
F-12
Exhibit 10.2
Agreement for extension of time between the Company
and Carey Whitehead dated March 28, 2000 relating to
Falcon claims 25, 26, and 27, located in Manitoba, Canada
<PAGE>
Carey Whitehead
Suite 1902, 1050 Burrard St.
Vancouver, BC V6Z 2Z3
- ------------------------------------------------------
March 28, 2000
RE: NOTIFICATION OF EXTENSION
In reference to the agreement between Carey Whitehead and Tiberon Resources
dated April 28, 1998 specifically paragraph 1. 1.(b), and the notification of
extension letter dated October 28, 1998 , and another dated March 31, 1999, and
a further one dated September 28, 1999. I hereby grant an additional six month
extension to the payment due March 28, 2000. It is now due and payable by
September 28, 2000. In addition, I also grant a further extension to the,
$40,000 work program which was scheduled to be paid by September 28, 1999, and
then by March 28, 2000. It is now due and payable by Septermber 28, 2000.
/s/ Carey Whitehead
- ---------------------------
Carey Whitehead
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET, STATEMENTS OF OPERATIONS, STATEMENTS OF STOCKHOLDERS' DEFICIT, STATEMENTS
OF CASH FLOWS, AND THE NOTES THERETO, WHICH MAY BE FOUND ON PAGES F-1 THROUGH
F-12 OF THE COMPANY'S FORM 10-KSB FOR THE PERIOD ENDED DECEMBER 31, 1999, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 1,229
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,229
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,229
<CURRENT-LIABILITIES> 5,167
<BONDS> 0
0
0
<COMMON> 8,050
<OTHER-SE> (11,988)
<TOTAL-LIABILITY-AND-EQUITY> 1,229
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (25,005)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (25,005)
<INCOME-TAX> 0
<INCOME-CONTINUING> (25,005)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (25,005)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
