UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES ACT OF
1934 (FEE REQUIRED) For the fiscal year ended December 31, 1999
-------------------------
( ) TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transaction period from to
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Commission File number 0-30142
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ZEB ORO EXPLORATIONS INC.
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(Exact name of Company as specified in charter)
Nevada 98-0205944
- -------------------------------------------- --------------------------
State or other jurisdiction of incorporation (I.R.S. Employee I.D. No.)
or organization
825-1200 West 73rd Avenue
Vancouver, British Columbia, Canada V6P 6G5
- ---------------------------------------- --------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code 1-604-267-1100
--------------------------
Securities registered pursuant to section 12 (b) of the Act:
Title of each share Name of each exchange on which registered
None None
- ------------------- -----------------------------------------
Securities registered pursuant to Section 12 (g) of the Act:
None
- ------------------
(Title of Class)
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 a shorter
period that the Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
(1) Yes [X] No [ ] (2) Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year: $ -0-
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State the aggregate market value of the voting stock held by nonaffiliates of
the Company. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specific date within the past 60 days.
As at December 31, 1999, the aggregate market value of the voting stock held by
nonaffiliates is undeterminable and is considered to be 0.
(THE COMPANY INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
LAST FIVE YEARS)
Not applicable
(APPLICABLE ONLY TO CORPORATE COMPANYS)
As of December 31, 1999, the Company has 11,025,000 shares of common stock
issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the part
of this Form 10-KSB (eg., Part I, Part II, etc.) into which the documents is
incorporated:
(1) Any annual report to security holders;
(2) Any proxy or other information statement;
(3) Any prospectus filed pursuant to Rule 424 (b) or (c) under the
Securities act of 1933.
NONE
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TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PART 1
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<S> <C>
ITEM 1. DESCRIPTION OF BUSINESS 4
ITEM 2. DESCRIPTION OF PROPERTY 4
ITEM 3. LEGAL PROCEEDINGS 6
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS 6
PART II
- -------
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 7
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
ITEM 7. FINANCIAL STATEMENTS 8
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 8
PART III
- --------
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT 9
ITEM 10. EXECUTIVE COMPENSATION 12
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT 12
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 13
PART IV
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ITEM 13. EXHIBITS 15
</TABLE>
3
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PART 1
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ITEM 1. DESCRIPTION OF BUSINESS
================================================================================
HISTORY AND ORGANIZATION
Zeb Oro Explorations Inc. (the "Company"), a Nevada corporation, was
incorporated on March 4, 1999. The Company has no subsidiaries and no affiliated
companies. The Company's executive offices are located at 825 - 1100 West 73rd
Avenue, Vancouver, British Columbia, Canada, V6P 6G5.
The Company's Articles of Incorporation currently provide that the
Company is authorized to issue 200,000,000 shares of common stock, par value
$0.001 per share. As at December 31, 1999 there were 11,025,000 shares
outstanding.
The Company is in the exploration stage and is seeking a quotation on
the OTC Bulletin Board. It has filed a Form 211 with the NASD but is in the
process of clearing all deficiencies in its filing.
The Company is engaged in the exploration, and if warranted, the
development of mineral properties. The Company presently has the mineral rights
to a mineral claim called "Zeb Oro" located in the Zeballos area of British
Columbia, Canada.
To date, the Company has undertaken certain exploration activities on
its mineral claim as more fully described in Item 6 Management's Discussion and
Analysis or Plan of Operations on page 7 below.
================================================================================
ITEM 2. DESCRIPTION OF PROPERTIES
================================================================================
The Zeb Oro mineral is situated just north of the town of Zeballos,
which is located on the West Coast of Vancouver Island about 300 kilometres (189
miles) northwest of Victoria, British Columbia. The geographic center of the Zeb
Oro property is located at 126(degree)49'55" West Longitude and 50(degree)02'28"
North Latitude on N.T.S. mapsheet 92 L/2. This location may also be described as
being in U.T.M. zone 09 (Universal Transverse Mercantor grid system stated in
metric used by the military to determine a precise location) with coordinates
Northing 5545200N and Easting 655300E. The claim's southeast corner is in the
Zeballos river valley about two kilometers (1.2 miles) downstream of its
junction with the Nomash River.
Access is by an all weather road which follows the Zeballos River and
connects Zeballos to the Island highway at Mukwilla Lake. The road crosses the
southeast corner
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of the property seven kilometres (4.3 miles) north of the town of Zeballos from
here steep footpaths follow creeks to higher ground in the northwest area of the
claim.
The terrain is mountainous and rugged. Elevations range from 20 meters
(75 feet) in the Zeballos River valley to above 1,030 meters (Mt. Lukwa 3,749
feet) at some of the local peaks within the mining camp. Many of the creeks flow
down waterfalls in narrow canyons and there are many unscalable bluffs which
make foot traverses difficult. The area is considered coastal rainforest and
total annual precipitation is high, rarely less than 500 centimeters (200
inches.). Forests of yellow cedar and hemlock populate the mountaintops and
Douglas fir and red cedar grow well in the river valleys, however, much of the
main drainages were logged in the 1940's.
The claim was staked on February 11, 1999 before the Company was
incorporated. The name of the Company was derived from the claim itself.
The property geology in the general area can be described as follows.
On the Zeb Oro claim there are more than six sheared-vein showings of limited
extent containing minor amounts of gold and base metals. The shears zones are
generally less than one metre wide, strike 052 to 090 degrees, and dip steeply
north or south. The quartz veins within the shears are usually 5 to 30
centimetres wide and mineralized with pyrite-arsenopyrite and lesser amounts of
pyrrhotite, sphalerite and galena. Coast intrusive phases, ranging in
composition from diorite to granodiorite, host most of the veins on the property
or are spatially related to gold-quartz veining in intruded volcanic rocks of
the Bonanza Group.
The Maquinna Vein is one of the more developed showings on the property
and has been traced on surface and underground for over 640 metres. Locally the
vein is ribboned and ranges up to 1 metre in width with values up to 21.3
grams/tonne. Many of the veins on the property are oriented in directions of
maximum shear stress (090(degree)) and as such there is a predominance of broken
quartz fragments and gouge within the shears. Directly south (250 m),
chalcopyrite-magnetite mineralization hosted in a silicified lens of Quatsino
limestone has been explored by a series of open cuts and a short adit. These
showings, formerly known as the Blackbird/Jack O'Spades property, represent
skarn replacement mineralization.
The Company undertook an exploration program on its mineral claim in
October 1999 which comprised prospecting the claim to re-locate old showings,
old workings and determining the geological structure for future work programs.
No trenching or the establishment of geochemical grid was done during this
exploration program. Nevertheless, the Company will be undertaking a further
exploration program in the latter part of the spring of 2000 when a geochemical
grid will be established and subsequent soil samples will be taken and assayed
for their mineral content.
5
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================================================================================
ITEM 3. LEGAL PROCEEDINGS
================================================================================
There are no legal proceedings to which the Company is a party or to which its
property is subject, nor to the best of management's knowledge are any material
legal proceedings contemplated.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
================================================================================
No matters were submitted to a vote of shareholders of the Company during the
period from March 4, 1999 (date of inception) to December 31, 1999.
6
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PART II
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ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
================================================================================
During the past year there has been no established trading market for the
Company's common stock. Since its inception, the Company has not paid any
dividends on its common stock, and the Company does not anticipate that it will
pay dividends in the foreseeable future. As at December 31, 1999 the Company had
39 shareholders; two of these shareholders are officers and directors of the
Company.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
================================================================================
OVERVIEW
The Company was incorporated on March 4, 1999 under the laws of the State of
Nevada. The Company's Articles of Incorporation currently provide that the
Company is authorized to issue 200,000,000 shares of common stock, par value
$0.001 per share. As at December 31, 1999 there were 11,025,000 shares
outstanding. The Company is in the exploration stage. There is no assurance that
reserves exist on its mineral claim until further exploration work has been done
and economic evaluation based on such work concludes economic feasibility.
The Company is in the exploration stage and is seeking a quotation on the OTC
Bulletin Board. The Company has no revenue to date from the exploration of the
Zeb Oro claim, and its ability to effect its plans for the future will depend on
the availability of financing. Such financing will be required to develop the
Company's mineral property to a stage where a decision can be made by management
as to whether an ore body exists and can be successfully brought into
production. The Company anticipates obtaining such funds from its directors and
officers, financial institutions or by way of the sale of its capital stock in
the future, but there can be no assurance that the Company will be successful in
obtaining additional capital for exploration activities from the sale of its
capital stock or in otherwise raising substantial capital.
The Company performed an exploration program on the Zeb Oro claim from October
19 to November 10, 1999 as follows.
The Company undertook a prospecting program on the claim to re-locate old
showings, old workings and determine the geological structure for future
exploration. No geochemical grid was established on any part of the claim and no
trenching was
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undertaken. This will be done during the exploration program contemplated in the
latter part of the spring of 2000.
During the exploration program the old Maquinna adit was re-located. A large
hemlock tree had blown down and completely caved in the portal. Earlier
trenching activities on strike have either grown over or been covered by old
clear cut logging. Other old workings were not located during this exploration
program due to the subsequent vegetation growth, abandonment or due to the high
water level in October and November. No new showings or gold vein structures
were found.
Subject to financing, a small grid is warranted in the spring to cover the
Maquinna area with the baseline laid out parallel to the Maquinna strike. The
perpendicular lines, on 30 metre spacing on the baseline should be carried
north-west to the bluff and south-east to the Zeballos main road; with stations
flagged at 10 metre stations.
The cost of the exploration program treated as assessment work and was filed
with the Ministry of Mines for British Columbia in November 1999. This
assessment work enabled the Zeb Oro claims to be maintained in good standing
until February 25, 2001.
Liquidity and Capital Resources
As at December 31, 1999, the Company had $340 of assets, and $8,840 of
liabilities, including cash or cash equivalents amounting to $340. The
liabilities of $6,540 are due to an officer and director of the Company. The
individual breakdown of the liabilities are accruals for accounting, audit fee
and transfer agent's fees.
The cost of the recent exploration program was $1,900.
All dollars are stated in United States currency unless otherwise noted.
The Company has no contractual obligations for either lease premises, employment
agreements or work commitments on the Zeb Oro claims and has made no commitments
to acquire any asset of any nature.
Results of Operations
Since inception the Company has purchased the Zeb Oro claim and preformed
exploration work on the claim as more fully described above.
================================================================================
ITEM 7. FINANCIAL STATEMENTS
================================================================================
The financial statements of the Company are included following the signature
page to this Form 10-KSB.
8
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================================================================================
ITEM 8. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
================================================================================
From inception to date, the Company's principal accountant is Andersen Andersen
& Strong, L.C. of Salt Lake City, Utah. The firm's report for the period from
inception to December 31, 1999 did not contain any adverse opinion or
disclaimer, nor were there any disagreements between management and the
Company's accountants.
PART 111
================================================================================
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT
================================================================================
The following table sets forth as of December 31, 1999, the name, age, and
position of each executive officers and directors and the term of office of each
director of the Company.
Term as
Director
Name Age Position Held Since
---- --- ------------- -----
Steven Bruce 41 President and Director 1999
Michael Kennaugh 57 Director 1999
Carol Krushnisky 59 Secretary Treasurer 1999
Each director of the Company serves for a term of one year and until his
successor is elected at the Company's Annual Shareholders' Meeting and is
qualified, subject to removal by the Company's shareholders. Each officer
serves, at the pleasure of the Board of Directors, for a term of one year and
until his successor is elected at the Annual Meeting of the Board of Directors
and is qualified.
Set forth below is certain biographical information regarding each of the
Company's executive officers and directors.
STEVEN BRUCE graduated from Simon Fraser University in 1981 with a Bachelor of
Commerce degree in Economics. Since graduation he has been employed with New
Generation Power Corp. as Vice-President and Chief Operational Officer. While
employed with New Generation Power his duties included power contract
negotiation, project financing and administration over all aspects of the
accounting and financial
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functions. Subsequently Mr. Bruce became Vice-President and Chief Financial
Officer of Newgen Environmental Systems Inc., a company listed on the Alberta
Stock Exchange ("Exchange") in Calgary, Alberta, Canada, and specialized in all
aspects of the development of the company and in compliance reporting with the
Exchange. Mr. Bruce has been employed with Newgen Environmental Systems Inc. for
the past 10 years.
CAROL KRUSHNISKY graduated on the Dean's List from Quesnel Secondary High School
before working for two years in Quesnel, British Columbia as a secretarial
assistant to a group of lawyers. Subsequent to this position, Ms. Krushnisky
became assistant to the Regional Engineer of British Columbia before becoming
private secretary to the Minister of Highway of British Columbia, Phil Galaradi.
She was employed in these two positions for a period of five years starting in
1960. After ceasing work for several years due to a family, Ms. Krushnisky
incorporated and became president of Dixie Secretarial Services Ltd., a company
supplying office assistance to various businesses. In conjunction with operating
this company, Ms. Krushnisky accepted a position at Swinton & Company where she
was personal secretary to the senior partners. During this time her main duties
were reviewing of contracts, incorporating both private and public companies and
communications as requested with various clients. For the past 10 years, she has
managed her own business being a distributor for Mary Kay cosmetics. During this
time she has served as director of two public companies listed on the Vancouver
Stock Exchange; British Pacific Investments and Amca Industries Inc. She has
assisted in the formation of other companies both public and private.
MICHAEL J. KENNAUGH graduated from the University of British Columbia in 1978
with a degree in real estate appraisal after having obtained a Bachelor of
Science degree from the University of Victoria where he majored in Urban Land
Geology. In 1979 he became a salesperson for DFH Realty Limited in Victoria,
British Columbia and in 1982 moved to Vancouver to work as a commercial and
residential sales agent for Royal Trust. In 1987 he joined Realty World and a
year later he became an appraiser for Kerr & Kerr Real Estate Appraisers. In
1990 he became head of the appraisal department before starting his own
appraisal firm, Canwest Appraisals Services Ltd. He was president and sole
director of Canwest which specialized in commercial appraisals of land and
businesses. In 1996 he joined Windermere Real Estate Services as a commercial
salesperson before it merged in 1997 with Kennington Green Real Estate Ltd. He
is still employed with Kennington Green Real Estate Services.
To the knowledge of management, during the past five years, no present or former
director, executive officer or person nominated to become a director or an
executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer
appointed by the court for the business or property of such person, or
any partnership in which he was a general partner at or within two
years before the time of such filings;
(2) was convicted in a criminal proceeding or named subject of a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
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(3) was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from or otherwise limiting,
the following activities:
(i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor
broker, leverage transaction merchant, associated person of
any of the foregoing, or as an investment advisor,
underwriter, broker or dealer in securities, or as an
affiliate person, director or employee of any investment
company, or engaging in or continuing any conduct or practice
in connection with such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activities in connection with the purchase or
sale of any security or commodity or in connection with any
violation of federal or state securities laws or federal
commodities laws;
(4) was the subject of any order, judgment, or decree, not subsequently
reversed, suspended, or vacated, of any federal or state authority
barring, suspending or otherwise limiting for more than 60 days the
right of such person to engage in any activity described above under
this Item, or to be associated with persons engaged in any such
activities;
(5) was found by a court of competent jurisdiction in a civil action or by
the Securities and Exchange Commission to have violated any federal or
state securities law, and the judgment in such civil action or finding
by the Securities and Exchange Commission has not been subsequently
reversed, suspended, or vacated.
(6) was found by a court of competent jurisdiction in a civil action or by
the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgment in such civil action or finding by
the Commodity Futures Trading Commission has not been subsequently
reversed, suspended or vacated.
COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE ACT
The Company knows of no director, officer, beneficial owner of more than ten
percent of any class of equity securities of the Company registered pursuant to
Section 12 ("Reporting Person") that failed to file any reports required to be
furnished pursuant to Section 16(a). Other than those disclosed below, the
Company knows of no Reporting Person that failed to file the required reports
during the most recent fiscal year.
The following table sets forth as at December 31, 1999, the name and position of
each Reporting Person that failed to file on a timely basis any reports required
pursuant to Section 16 (a) during the most recent fiscal year.
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Name Position Report to be Filed
- ---- -------- ------------------
Steven Bruce President and Director Form 3
Carol Krushnisky Secretary Treasurer Form 3
Michael Kennaugh Director Form 3
================================================================================
ITEM 10. EXECUTIVE COMPENSATION
================================================================================
CASH COMPENSATION
There was no cash compensation paid to any director or executive officer of the
Company during the fiscal year ended December 31, 1999.
BONUSES AND DEFERRED COMPENSATION
None
COMPENSATION PURSUANT TO PLANS
None
PENSION TABLE
None
OTHER COMPENSATION
None
COMPENSATION OF DIRECTORS
None
TERMINATION OF EMPLOYMENT
There are no compensatory plans or arrangements, including payments to be
received from the Company, with respect to any person named in Cash
Consideration set out above which would in any way result in payments to any
such person because of his resignation, retirement, or other termination of such
person's employment with the Company or its subsidiaries, or any change in
control of the Company, or a change in the person's responsibilities following a
change in control of the Company.
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================================================================================
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
================================================================================
The following table sets forth as at December 31, 1999, the name and address and
the number of shares of the Company's common stock, with a par value of $0.001
per share, held of record or beneficially by each person who held of record, or
was known by the Company to own beneficially, more than 5% of the issued and
outstanding shares of the Company's common stock, and the name and shareholdings
of each director and of all officers and directors as a group.
<TABLE>
<CAPTION>
Name and Address Amount
of Beneficial Nature of of Beneficial Percent
Owner Ownership(1) Ownership of Class
----- ------------ --------- --------
<S> <C> <C> <C>
STEVEN BRUCE Direct 2,500,000 22.68%
825-1200 West 73rd Avenue
Vancouver, BC
Canada, V6P 6G5
MICHAEL KENNAUGH Direct 2,500,000 22.68%
42-2951 Panorama Drive
Coquitlam, BC
Canada, V3E 2W3
CAROL KRUSHNISKY Direct NIL 0.00%
1070 Eden Crescent
Delta, BC
Canada, V3E 1W7
All Officers and Directors Direct 5,000,000 45.36%
as a Group (3 persons)
</TABLE>
(1) All shares owned directly are owned beneficially and of record, and
such shareholder has sole voting, investment and dispositive power,
unless otherwise noted.
================================================================================
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
================================================================================
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Except as indicated below, there were no material transactions, or series of
similar transactions, since inception of the Company and during the period from
March 4, 1999
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(date of inception) to December 31, 1999, or any currently proposed
transactions, or series of similar transactions, to which the Company was or is
to be a party, in which the amount involved exceeds $60,000, and in which any
director or executive officer, or any security holder who is known by the
Company to own of record or beneficially more than 5% of any class of the
Company's common stock, or any member of the immediate family of any of the
foregoing persons, has an interest.
INDEBTEDNESS OF MANAGEMENT
There were no material transactions, or series of similar transactions, since
the beginning of the Company's last fiscal year, or any currently proposed
transactions, or series of similar transactions, to which the Company was or is
to be a part, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to the
Company to own of record or beneficially more than 5% of the common shares of
the Company's capital stock, or any member of the immediate family of any of the
foregoing persons, has an interest.
TRANSACTIONS WITH PROMOTERS
The Company does not have promoters and has had no transactions with any
promoters.
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PART IV
================================================================================
ITEM 13. EXHIBITS AND REPORTS
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(a) (1) FINANCIAL STATEMENTS.
The following financial statements are included in this report:
<TABLE>
<CAPTION>
Title of Document Page
- ----------------- ----
<S> <C>
Report of Andersen, Andersen & Strong, Certified Public Accountants 17
Balance Sheet as at December 31, 1999 18
Statement of Operations for the period from March 4, 1999 (Date of
Inception) to December 31, 1999 19
Statement in Changes in Stockholders' Equity for the period from March
4,1999 (Date of Inception) to December 31, 1999 20
Statement of Cash Flows for the period from March 4, 1999 (Date of
Inception) to December 31, 1999 21
Notes to the Financial Statements 22
</TABLE>
(a) (2) FINANCIAL STATEMENT SCHEDULES
The following financial statement schedules are included as part of this report:
None.
(a) (3) EXHIBITS
The following exhibits are included as part of this report by reference:
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed below by the following persons on behalf of the
Company and in its capacities and on the date indicated:
ZEB ORO EXPLORATIONS INC.
Date: February 10, 2000 By: //s// "Carol Krushnisky"
-------------------------------------
Carol Krushnisky, Secretary Treasurer
Date: February 10, 2000 By: //s// "Michael Kennaugh"
-------------------------------------
Michael Kennaugh, Director
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<TABLE>
<CAPTION>
<S> <C>
ANDERSEN ANDERSEN & STRONG, L.C. 941 East 3300 South, Suite 220
Certified Public Accountants and Business Consultants Salt Lake City, Utah, 84106
Member SEC Practice Section of the AICPA Telephone 801-486-0096
Fax 801-486-0098
Board of Directors
Zeb Oro Explorations Inc.
Vancouver B. C. Canada
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheet of Zeb Oro Explorations Inc.
(exploration stage company) at December 31, 1999, and the statement of
operations, stockholders' equity, and cash flows for the period from March 4,
1999 (date of inception) to December 31, 1999. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 made by
management as well as evaluating the overall balance sheet 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 Zeb Oro Explorations Inc. at
December 31, 1999, and the results of operations, and cash flows for the period
from March 4, 1999 (date of inception) to December 31, 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. The Company is in the development
stage and will need additional working capital for its planned activity, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are described in Note 5. These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Salt Lake City, Utah /s/ "Andersen Andersen & Strong"
February 10, 2000
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ZEB ORO EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1999
================================================================================
ASSETS
CURRENT ASSETS
Cash $ 340
-------
Total Current Assets 340
-------
OTHER ASSETS
Mineral claims - Note 3 --
-------
$ 340
-------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related party $ 6,540
Accounts payable 2,300
-------
Total Current Liabilities 8,840
-------
STOCKHOLDERS' EQUITY
Common stock
200,000,000 shares authorized, at $0.001 par
value; 11,025,000 shares issued and outstanding 11,025
Capital in excess of par value 11,475
Deficit accumulated during the development stage (31,000)
-------
Total Stockholders' Equity (8,500)
-------
$ 340
-------
</TABLE>
The accompanying notes are an integral part of these financial statements.
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ZEB ORO EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM MARCH 4, 1999
(DATE OF INCORPORATION) TO DECEMBER 31, 1999
================================================================================
REVENUE $ --
EXPENSES 31,000
-------
NET LOSS $ (31,000)
=======
NET LOSS PER COMMON SHARE
Basic $ (.003)
=======
AVERAGE OUTSTANDING SHARES
Basic 10,619,000
----------
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
ZEB ORO EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MARCH 4, 1999 (DATE OF INCORPORATION)
TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
============================================================================================================
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
<S> <C> <C> <C> <C>
BALANCE MARCH 4, 1999 (date of inception) -- -- -- --
Issuance of common shares for cash at
$.001 - March 14, 1999 5,000,000 5,000 -- --
Issuance of common shares for cash at
$.001 - March 16, 1999 6,000,000 6,000 --
Issuance of common shares for cash at
$.10 - March 27, 1999 25,000 25 2,475 --
Capital contributions - expenses -- -- 9,000 --
Net operating loss for the period from
March 4, 1999 to December 31, 1999 -- -- -- (31,000)
---------- ---------- ---------- ------------
BALANCE, DECEMBER 31, 1999 11,025,000 $ 11,025 $ 11,475 $ (31,000)
========== ========== ========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
ZEB ORO EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM MARCH 4, 1999
(DATE OF INCORPORATION) TO DECEMBER 31, 1999
================================================================================
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (31,000)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Change in accounts payable 8,840
Capital contribution - expenses 9,000
----------
Net Cash From Operations (13,160)
CASH FLOWS FROM INVESTING
ACTIVITIES: --
----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of common stock 13,500
----------
Net Increase in Cash 340
Cash at Beginning of Period --
----------
Cash at End of Period $ 340
==========
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Capital contribution - expenses $ 9,000
==========
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
ZEB ORO EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on March 4,
1999 with authorized common stock of 200,000,000 shares at $0.001 par value.
The Company was organized for the purpose of acquiring and exploring mineral
properties. At the report date mineral claims, with unknown reserves, has been
acquired. The Company has not established the existence of a commercially
minable ore reserve and therefore has not reached the development stage and is
considered to be in the exploration stage. note 3
Since its inception the Company has completed Regulation D offerings of
11,025,000 shares of its capital stock for cash.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICILES
Accounting, Methods
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
On December 31, 1999, the Company had a net operating loss carry forward of
$31,000. The tax benefit from the loss carry forward has been fully offset by
valuation reserve because the use of the future tax benefit is undeterminable
since the Company has no operations. The net operating loss will expire in 2020.
Earning (Loss) Per Share
Earnings (loss) per share amounts are computed based on the weighted average
number of shares actually outstanding using the treasury stock method in
accordance with FASB Statement No. 128.
Capitalization of Mineral Claim Costs
Cost of acquisition, exploration, carrying, and retaining unproven properties
are expensed as incurred. Cost incurred in proving and developing a commercially
minable ore reserve ready for production are capitalized and amortized over the
life of the mineral deposit or over a shorter period if the property is shown to
have an impairment in value. Expenditures for mine equipment are capitalized and
depreciated over their useful lives.
22
<PAGE>
ZEB ORO EXPLORATIONS INC.
(EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICILES - CONTINUED
Environmental Requirements
At the report date environmental requirements related to the mineral claims
acquired (note 3) are unknown and therefore an estimate of any future cost
cannot be made.
Financial Instruments
The carrying amounts of financial instruments, including cash, mineral claims,
and accounts payable, are considered by management to be their estimated fair
values. These values are not necessarily indicative of the amounts that the
Company could realize in a current market exchange.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses.
3. MINERAL CLAIMS
The Company has acquired one 15 unit metric mineral claim known as the Zeb Oro
Claim located in the Zeballos mining camp near the town of Zeballos about 300
kilometres northwest of Victoria, British Columbia.
The claims have not been proven to have a commercially minable ore reserve and
therefore all costs for exploration and retaining the properties have been
expensed.
The claims may be retained by the Company by completion of yearly assessment
work of $1,500Cn or by a payment of $1,500Cn. The next assessment work is due on
February 2001.
4. RELATED PARTY TRANSACTIONS
Related parties have acquired 45% of the common stock issued for cash.
5. GOING CONCERN
The Company will need additional working capital to be successful in its planned
activities and continuation of the Company as a going concern is dependent upon
obtaining additional working capital and the management of the Company has
developed a strategy, which it believes will accomplish this objective through
additional equity funding, and long term financing, which will enable the
Company to operate in the coming year.
23
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ANDERSEN ANDERSEN & STRONG, L.C. 941 East 3300 South, Suite 220
Certified Public Accountants and Business Consultants Salt Lake City, Utah, 84106
Member SEC Practice Section of the AICPA Telephone 801-486-0096
Fax 801-486-0098
</TABLE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
ZEB ORO EXPLORATIONS INC.
We hereby consent to the use of our report dated February 10, 2000, for the
period ended December 31, 1999 to be included in the form 10-K in accordance
with Section 12 of the Securities Exchange Act of 1934.
//s// "Andersen Andersen & Strong"
Andersen Andersen and Strong L.L.C.
February 10, 2000
Salt Lake City, Utah
24
