SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
|_| Preliminary Proxy Statement
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
Aquistar Ventures (USA) Inc.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1. Amount Previously Paid: -----------------------------------------------
2. Form, Schedule or Registration Statement No.: -------------------------
3. Filing Party: ---------------------------------------------------------
4. Date Filed: -----------------------------------------------------------
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NOTICE ANNUAL MEETING OF SHAREHOLDERS
To be held on
DECEMBER 18, 2000
Aquistar Ventures (USA) Inc.
Suite 314-837 West Hastings Street
Vancouver, BC Canada
December 8, 2000
Pursuant to a vote of the Board of Directors, an Annual Meeting of Shareholders
of Aquistar Ventures (USA) Inc., is hereby called to be held on December 18,
2000 at 10:00 a.m. PST. At #1750-750 West Pender Street, Vancouver, British
Columbia, for the following purposes:
1. To elect the Board of Directors for the following year; and
2. To ratify the retention of the CPA; and
3. The ratification of such other business as may properly come before the
meeting or any adjournment thereof.
All shareholders are invited to attend the meeting, although only shareholders
of record at the close of business on November 3, 2000 will be entitled to vote.
THOSE WHO CANNOT ATTEND THE ANNUAL MEETING OF THE SHAREHOLDERS ARE URGED TO
SIGN, DATE, AND OTHERWISE COMPLETE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE. ANY SHAREHOLDER GIVING A PROXY HAS THE RIGHT TO REVOKE
IT ANY TIME BEFORE IT IS VOTED.
BY THE ORDER OF THE BOARD OF DIRECTORS:
Alfredo De Lucrezia
Director/President
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PROXY STATEMENT
This statement is furnished in connection with the solicitation of proxies by
Aquistar Ventures (USA) Inc., a Nevada Corporation (the "Company"), for use at
the Annual Meeting of Shareholders of the Company to be held at #1750-750 West
Pender Street, Vancouver, British Columbia, at 10:00 a.m. PST, on December 18,
2000, and at any and all adjournments of such meeting.
If the enclosed proxy is properly executed and returned in time to be voted upon
at the meeting, the shares represented will be voted in accordance with the
instructions contained therein. Executed proxies that contain no instructions
will be voted for management's proposal; for each nominated Director named on
this proxy, for the CPA named on this proxy, and each other proposal therein
specified, unless a contrary choice is specified.
Shareholders who execute proxies for the Annual Meeting may revoke their proxies
at any time prior to their exercise, buy delivering written notice of revocation
to the Company, by delivering a duly executed proxy bearing a later date, or by
attending the meeting and voting in person.
The cost of the meeting, including the cost of preparing and mailing the Proxy
Statement and Proxy, will be borne by the Company. The Company may, in
addition, use the services of its directors, officers and employees to solicit
proxies, personally or by telephone, but at no additional salary or
compensation. The Company will also request banks, brokers and others who hold
shares of the Company in nominee names, to distribute proxy soliciting materials
to beneficial owners and will reimburse such banks and brokers for reasonable
out of pocket expenses which they may incur in so doing.
The Company's executive offices are located at Suite 314-837 West Hastings
Street, Vancouver, BC Canada.
OTHER BUSINESS
The Board of Directors is not aware of any business to come before the meeting
other than those matters described above in this proxy statement. If, however,
any other matters should properly come before the meeting, it is intended that
holders of proxies will act in accordance with their judgement on such matters.
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SHAREHOLDER PROPOSALS
Shareholders who wish to present proposals for action at the 2001 Annual Meeting
of Shareholders should submit their proposals in writing to the Secretary of the
Company at the address of the Company set forth on the first page of this
Information/Proxy Statement. The Secretary must receive proposals no later than
May 31, 2001, for inclusion in next year's proxy statement.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
Only shareholders of record at the close of business on November 3, 2000 will be
entitled to vote at the Annual Meeting. On the record date, November 3, 2000,
the Company had outstanding 15,463,008 shares of its $.001 par value Common
Stock. Each issued Common Share entitles its record owner to one vote on each
matter to be voted upon at the meeting. There are no cumulative voting rights.
The presence, in person or by proxy, of at least 7,886,134 shares will
constitute a quorum.
DESCRIPTION OF MATTERS
TO BE ACTED ON AT THE MEETING
As set forth in the Notice of Meeting:
Proposal 1: To elect Directors to the Board of Directors until the next Annual
Meeting of Shareholders.
Alfredo De Lucrezia. Mr. Alfredo De Lucrezia has been a Director of the Company
since February 2, 1999 and President of the Company since September 10, 1999.
Mr. De Lucrezia has a Business Administration Diploma from Capilano College, of
Vancouver, British Columbia. Since 1988, Mr. De Lucrezia has been the President
and Owner of Tony's Painting and Decorating, a private British Columbia company,
which has been in operation since 1988. Mr. De Lucrezia is also Co-Owner of
Gala Events, a private British Columbia company, which has been in operation
since 1995. Mr. De Lucrezia does the accounting and manages both of his private
companies. Mr. De Lucrezia is currently a Director and Chief Financial Officer
of Orex Ventures Inc., a public company listed on the Canadian Venture Exchange.
Mr. De Lucrezia is currently the President and a Director
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of Solaia Ventures Inc., a public company listed on the Canadian Venture
Exchange. During the period 1995 through 1998 Mr. De Lucrezia provided investor
relations services for several public junior resource companies listed on the
Vancouver Stock Exchange, including Canasia Industries Corp., Golden Temple
Mining Corp. and International Croesus Ventures Corp.
Maurizio Grande. Mr. Maurizio Grande has been a Director of the Company since
September 10, 1999. Mr. Grande is the President and Co-Owner of Marble Art
Canada, a private company in the business of the manufacture and sale of granite
and marble products, since 1979. Mr. Grande has also been involved in the real
estate and development business for the past 10 years.
Georgeos Polyhronopo. Mr. Georgeos Polyhronopo has been a Director of the
Company since September 15, 1999. Mr. Polyhronopous is currently the President
and Chief Executive Officer of Global SmartCards, Inc. He has 10 years
experience in corporate development, and has managed multiple projects. Mr.
Polyhronopous has been directly involved in taking several companies "Public"
from seed funding to Initial Prospectus Offering. He has worked as an
Investment Banker and Broker. Mr. Polyhronopous closely follows technological
developments and trends, as they relate to both the Telecommunications Industry
and the Internet and World Wide Web. He is a Professional Member of the
National Association of Certified Valuation Analysts. From 1998 to present Mr.
Polyhronopous has been a Director of Enterprise Solutions, Telemax
Communications, which is a provider of enterprise solutions, such as:
educational institutions; public utilities; community, city, state and federal
offices; media relations; and medical facilities. From 1997 to present Mr.
Polyhronopous, is the Co-founder and Corporate Secretary of Infobuild Networks,
whereby he provided investors for the financing of the company; structured and
prepared the Offering for the company; negotiated the licensing of certain
technologies; and developed the World Wide Web for the company at
www.infobuild.com. From 1989 to 1996 Mr. Polyhronopous was the Managing
Director of Capcom Equities Inc., where he was responsible for facilitating
mergers and acquisitions for private and public development stage and micro-cap
companies and provided strategic financing advice and the development of public
market strategies. From 1989 to 1996 Mr. Polyhronopous was a Broker and
Investment Banker for Osler Inc. where he was involved in the securities
industry in Vancouver, British Columbia, Canada.
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Proposal 2: The approval of the independent CPA selected by management will
also be sought.
A vote in favor of this proposal will give the Board of Directors the authority
to retain the accounting firm of Morgan & Company as the Company's independent
auditors for the fiscal year ending June 30, 2001. Morgan & Company has acted
as the Company's CPA since February 2, 1999.
Proposal 3: To ratify such other business as may properly come before the
meeting or any adjournment thereof.
Description of Business
(a) Business Development
Aquistar Ventures (USA) Inc. (the "Company") was organized as a Nevada
corporation on February 2, 1999, to explore for and, if possible, develop
mineral properties primarily in the Province of Ontario, Canada, through its
wholly owned subsidiary, Aquistar Ventures Inc. ("Aquistar Canada").
Aquistar Canada was incorporated under the laws of the Province of British
Columbia, Canada, on April 13, 1995. Aquistar Canada's head office is Suite
314 - - 837 West Hastings Street, Vancouver, British Columbia, V6C 1B6.
(b) Business of Issuer
The Company and Aquistar Canada were organized for the purpose of engaging in
the acquisition, exploration and development of mineral properties, primarily
in the Province of Ontario, Canada. The Company currently has a working capital
deficiency of approximately <$77,099> as at September 30, 2000. The Company
intends to raise additional funds from public financings or private placements
during the next twelve (12) month period in order to complete exploration and
development on its properties, make option payments, and to generally meet its
future corporate obligations. There can be no assurance that the Company will
obtain such additional financing on a timely basis.
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The Company entered into share exchange agreements dated March 31, 1999 and
April 26, 1999 with Aquistar Canada, the Company's wholly owned subsidiary, and
the shareholders of Aquistar Canada, whereby the Company agreed to purchase all
of the 15,200,008 outstanding common shares of Aquistar Canada in exchange for
15,200,008 common shares of the Company, at an ascribed value of $0.02(us), to
the shareholders of Aquistar Canada. Accordingly, Aquistar Canada is a wholly
owned subsidiary of the Company. See the section headed "Subsidiaries" herein.
The Company by way of its subsidiary, Aquistar Canada, has an option to acquire
an interest in the property described below under the heading "Sutton Option
Agreement". The Company intends to carry out exploration work on the Sutton
Property in order to ascertain whether the Sutton Property possesses
commercially developable quantities of gold and other precious minerals.
Sutton Option Agreement
Pursuant to an agreement dated December 2, 1997, as amended June 7, 1999
(collectively the "Sutton Option Agreement") with Mike Sutton of P.O. Box 534,
Kirkland Lake, Ontario, Biralger Resources Ltd. of P.O. Box 1376, 126 Willow
Road, Atikokan, Ontario, and Tim Hansen of 9 Parkland Avenue, Fernie, British
Columbia (collectively the "Optionors"), Aquistar Canada was granted an option
(the "Option") to acquire a 100% interest in the Property, subject to a 2.5% net
smelter return (the "NSR") royalty in favour of the Optionors (NSR royalty is
the actual proceeds received by Aquistar Canada from any mint, smelter, refinery
or the purchaser from the sale of concentrates, metals (including bullion) or
products from the Property). The Option may be exercised by the cash payment of
an aggregate of CDN$202,000 to the Optionors, and by exploration expenditures of
an aggregate CDN$210,000 on the Property, as follows:
(a) CDN$17,000 payable upon signing the letter of intent, which sum has been
paid;
(b) CDN$35,000 payable 13 months from the date the Company's common shares are
listed on the NASD Bulletin Board or a stock exchange (the "Listing Date");
(c) CDN$25,000 payable 8 months after the Listing Date;
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(d) CDN$25,000 payable 8 months following item (c) payment date;
(e) CDN$30,000 payable 12 months following item (d) payment date;
(f) CDN$30,000 payable 12 months following item (e) payment date;
(g) CDN$40,000 payable 12 months following item (f) payment date;
(h) incurring CDN$100,000 on exploration expenditures on the Property on or
before December 2, 2000; and
(i) incurring CDN$110,000 upon a recommendation by a qualified geologist to
conduct the Phase 2 work program.
If Aquistar Canada does not fulfil its obligations as set out above, the Option
shall terminate and Aquistar Canada will forfeit to the Optionors any interest
in the Sutton Option Agreement free and clear of all encumbrances. Any monies
already paid by Aquistar Canada will be non-refundable.
At any time on or before the first anniversary following commencement of
commercial production on the Property, Aquistar Canada shall have the right to
purchase from the Optionors for the sum of CDN$500,000 per 0.5%, up to a maximum
of 1.5% of the Optionors' 2.5% NSR royalty, allowing the Optionors to retain a
minimum NSR royalty of 1%.
To keep the Sutton Option Agreement and the Property in good standing, Aquistar
Canada must fulfil the obligations as set out above and file assessment work on
the claims before their respective due dates as set out above.
The consideration under the Sutton Option Agreement was determined by arms
length negotiations between Aquistar Canada and the Optionors. The Optionors
are at arm's length to the Company and Aquistar Canada.
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Description of Sutton Property
Aquistar Canada's optioned property consists of 21 mineral claims (29 units) and
is situated southwesterly of the Town of Kirkland Lake and northeasterly of the
Town of Matachewan, in the Matachewan Mining District of the Larder Lake Mining
Division, in the Province of Ontario (approximately 48 degrees, 02 North
Latitude and 80 degrees, 31 West Longitude) (the "Property").
Location and Access
Matachewan is connected to Kirkland Lake and Highway #11 North, by Highway #66
and to Elk Lake by Highway #65. The claims located in Holmes and Alma Townships
are situated about 7 miles northeasterly of the Town of Matachewan and 28 miles
southwesterly of the Town of Kirkland Lake.
Access to the Property is obtained via Highway #65 westerly from Kirkland Lake
for 28 miles and then northerly along the Separation Lake logging road for 3.1
miles, beyond Jeans Pond.
The following is a table detailing the status of the Property:
a) Holmes Township
Claim Number Units Due Date
==========================================
1047198 1 unit June 20, 2002
1047208 " August 29, 2002
1047209 " August 29, 2002
1048454 " August 29, 2001
1048455 " August 29, 2002
1048456 " August 29, 2002
1048457 " August 29, 2001
1048458 " August 29, 2002
1048459 " August 29, 2002
1112092 " August 15, 2001
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b) Alma Township
Claim Number Units Due Date
======================================
1132175 1 unit May 9, 2001
1132176 " May 9, 2001
1132177 " May 9, 2001
1132178 " May 9, 2001
1132179 " May 9, 2001
1132180 " May 9, 2001
1132181 " May 9, 2001
1212277* 7 units August 17, 2000
1203417 2 units August 15, 2001
1203418 1 unit August 15, 2000
1206259 2 units April 18, 2001
(the above mineral claims being collectively referred to as the "Claims").
* This mineral claim was initially claim number 1222064 which expired in
July, 1999. Subsequently, in August, 1999, the Company re-staked this mineral
claim under number 1212277.
Geological Report
Aquistar Canada obtained an engineering report on the Sutton Property, dated
July 1, 1997, prepared by John R. Poloni, B.Sc., P. Eng. of #13 - 6380 121st
Street, Surrey, British Columbia (the "Report"). The Report summarizes the
exploration and development history of the Property, the geology of the Property
and the proposed exploration and development program for the Property. The
results of the Report are summarized below and the text portion of the Report
are reproduced in full as an Exhibit to the Company's Registration Statement.
Upon request, the Report is available for inspection at the registered and
records office of Aquistar Canada located at #1750 - 750 West Pender Street,
Vancouver, British Columbia, V6C 2T8.
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The following is only a summary of the Report. Interested persons are advised
to read the full Report.
Exploration and Development History
The Property consists of mineral claims situated in Holmes and Alma Townships
covering the contact area between Archean mafic to intermediate volcanic rocks
and syenitic rocks. Two major structural features, the Galer Lake - Fort
Matachewan and the Sutton faults zones are covered by the claims. Historical
exploration dating back to 1914 when a mineral showing was discovered near Galer
Lake by the Brookbank brothers and continuing to the 1990's has outlined
approximately ten sites of prime interest requiring further work. Three of
these, Sites #3, #6 and #10 indicating potential extensions of target areas, are
located on strike but beyond property boundaries.
Site #7 has received the greatest amount of exploration activity. Drill hole
intercepts from two zones have returned values of 6.5m at 0.034 Au oz/T, 1.1
metres at 0.064 Au oz/T, 1.1 metres at 0.053 Au oz/T, and 4.4 metres at 0.025
Au oz/T including 0.15 metres at 0.102 Au oz/T. Site #7 is described as a
cherty quartz zone about 120 metres wide containing the Sutton Break.
Site #4 is the edge of a deformation zone which returned an assay of 0.545
Au oz/T in outcrop. Drill hole intercepts of 0.035 Au oz/T for 2.26 metres and
0.056 Au oz/T for 0.7 metres were obtained from quartz-ankerite veining.
The property has very little rock exposure except in certain trenches and road
cuts, as glacial drift and outwash is extensive in the Matachewan area
Geophysical surveys of Magnetometer, and Gradient Induced Polarization and
Resistivity have been completed. The Magnetometer survey outlined three areas
of massive highs, one in Alma Township in the easterly claim block, a second in
Cairo Township in the westerly claim block and a third along the south east
boundary of the claims. In the easterly claim block a southwesterly trending
zone of magnetic low responses corresponds with the Galer Lake - Fort Matachewan
Fault zone.
The Gradient IP and Resistivity surveys define potential chargeability and
resistivity responses which relate to subsurface geology, possible lithologic
changes, fault-fracture
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structures, geochemical alteration, and disseminated sulphides which are known
in certain areas to be associated with potentially economic gold mineralization.
Zones A and B as defined by Quantec are of the highest priority as they appear
to correspond to Site #7 and Site #4, respectively. The significance of all
I.P. anomalies will be better defined when combined with other geoscientific
information as part of future work.
Geology, Mineral Deposits and Reserves
The General Geology of the Holmes-Burt-Alma map area is of Precambrian age.
Metamorphic equivalents of volcanic flows and tuffs, mainly mafic to
intermediate in composition, with lesser amounts of felsic flows constitute
the oldest group of rocks. These rocks which are equivalent in age to the
Kirkland Lake area Keewatin-type volcanic rocks, have been intruded by syenitic
and granitic rocks presumably of Algoman age.
Sedimentary rocks, consisting of quartzite and greywacke with lesser slate,
argillite, conglomerate, and arkose, Cobalt in age, and gently folded, cover
about one-third of the map area.
Local Geology
Aquistar Canada's property is underlain by Archean - Matachewan syenitic and
metavolcanic and sedimentary rocks which have been intruded by diabase dikes.
The claims in Alma Township cover the syenitic complex, as indicated by sparse
outcrop. Geophysical surveys suggest that the Galer Lake - Fort Matachewan and
the Sutton fault zones extend across the claims.
In the eastern part of the property the contact between the syenitic complex and
the mafic to intermediate volcanic rocks is exposed along the access road near
Site #2.
Dikes of Matachewan diabase are found frequently in the Holmes, Burt, Alma,
Cairo Township areas. One such dike is exposed along the southeast shore of
Holmes Lake. Others have been mapped between Tully and Geraldine Lakes and east
of Dixon Lake. Mike Sutton noted a diabase dike was discovered in the Ontario
Prospectors Assistance Program 1990 surveys. Numerous faults, shear zones and
topographic lineaments are found in the Matachewan map-area. North-south
trending major faults are the Mistinikon
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Lake fault, the Montreal River-Whiskeyjack Creek fault, the Montreal River-
Narrow Lake fault, the McNaughton Lake fault and the Browning Lake fault. Major
shear zones occur in the vicinity of the former gold producers and along Highway
#66.
The Galer Lake-Fort Matachewan fault was initially mapped on the Holmes map
sheet in 1996. This fault extends westward through the southeastern part of
Alma Township into Cairo Township and to the West Montreal River near Fort
Matachewan. The shear zone along Highway #66 appears parallel to sub-parallel
to the Galer Lake-Fort Matachewan fault.
The Sutton Break or fault zone parallels the Galer Lake-Fort Matachewan fault to
the north. This fault is exposed in a road cut and has been traced across the
Property by geophysical surveys.
In the cases of both shear zones and faults, the south side moved east and
either or both may be the western extension of the Kirkland Lake - Larder Lake
fault zone. This fault zone is the most important structural feature relating
to numerous base and precious metals deposits in the Kirkland Lake, Noranda -
Val d'Or areas of Ontario and Quebec.
On Aquistar Canada's property, the Galer Lake - Fort Matachewan and the Sutton
fault zones are exposed and are known to host gold bearing silicified zones of
potential economic significance.
On the Royal Oak Mines Matachewan project, the gold zones are mainly hosted by
a sill-like body of syenite which has intruded between lithologies of the
Temiskaming Group of greywackes and minor interbedded conglomerate to the north
and the Archean-Age Larder Lake Group comprising mainly mafic and ultramafic
volcanic flows, tuffs and derived sediments to the south. The Larder Lake Group
of volcanics forms the hanging wall of the mineralization. The syenite hosted
gold mineralization is associated with stockwork type narrow quartz veins to a
maximum of 3-4 inches that are enclosed in pyritized alteration haloes. Pyrite
is mostly restricted to the alteration haloes but can occur as medium to coarse
grained patches or disseminated grains. Occasionally visible gold can be seen,
particularly in the narrower, grey quartz veinlets which are generally less than
1 inch in thickness. Where the quartz veining and stringers are sufficiently
abundant, "bleaching" can occur, consisting of silica, carbonate and albite
alteration.
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Magnetometer Survey
A magnetometer survey was completed over the established grid during April -
May, 1997. Forty-five line kilometers were covered in the program with readings
being taken at 50 meter intervals along the line, which were established at 100
meter spacing.
The main magnetic features are massive as defined from a general background of
about 57,800 gammas. The highest magnetic feature is about 800 metres in width,
open to the north and east, with an average value about 1,000 gammas above
background, located east of line 1200 E towards Galer Lake.
A wide area 2000 metres long and about 900 metres wide with values about 400
gammas above background is located centered between tie lines 1600N and 2200N
open to the north and southwest.
An area of elevated magnetic highs is seen between lines 600E and 1200E along
the south margins of the claims. Between this area of magnetic highs and the
massive area to the north is a southwesterly trending zone of magnetic lows
which corresponds to the location of the Galer Lake - Fort Matachewan fault
zone.
Induced Polarization Survey
During the period May 6 - 22, 1997 Quantec IP Incorporated undertook induced
polarization and resistivity surveys over the property completing and submitting
a report in July, 1997.
The objectives of the surveys were to locate and delineate potential gold
(copper) bearing sulphide mineralization within shear hosted silicified
structures or green carbonate, vertical or sub vertical, associated with the
Fort Matachewan - Larder Lake -Cadillac break system or a splay of that system,
similar to the Royal Oak Young Davidson - Consolidated Matachewan deposit. The
target model is based on the type where less than 5% disseminated gold bearing
pyrite, with or without chalcopyrite, appears within or along structurally
controlled shears in quartz carbonate altered mafic to ultramafic intrusives and
volcanics.
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As described by Quantec IP Incorporated, the survey coverage over the property
has systematically explored the claims extending coverage beyond outcrop areas
into overburden cover. Chargeability anomalies have been categorized as strong,
weak and questionable and also classified according to resistivity association
of high, low, nil/contact type.
Proposed Exploration and Development Program
The Report states that follow-up surveys are required which will include
detailed magnetic coverage with the more advanced "walking mag" continuous
profiling method, further assessment and definition of the gradient IP and
resistivity anomalies utilizing the multiple-gradient "realsection" technique,
trenching, geochemistry, soil and/or vegetation, and diamond drilling.
(a) Proposed Budget for Phase 1
Camp costs, field supplies $ 4,000
Walking Magnetometer survey 8,000
Geochemical Survey - soil, vegetation 9,000
Trenching - utilizing backhoe 10,000
IP "Realsection" multiple gradient surveys 35,000
Transportation, truck, airfares, etc. 4,000
Drill testing of targets - NQ thin wall
- - 900 metres @ $80.00/metre 72,000
Report and Engineering 20,000
Contingencies 20,000
Total Phase 1: CDN$182,000
Phase 2 of the Report is contingent on the results of Phase 1 and will include
further drill testing on the Property, as required, estimated to cost
CDN$300,000.
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Company's Plan of Operation
The Company intends to raise funds from public and private financings during the
next twelve (12) month period, in order to proceed with the Phase 1 exploration
program on the Property. The Company will assess whether to proceed with Phase
2 of the exploration program upon completion of Phase 1 and an evaluation of the
results of the Phase 1 exploration program.
Description of Property
The Company has an option to acquire a 100% interest in the Property, as
described in detail in Item 1 of this Registration Statement under the "Sutton
Option Agreement".
The Company does not own or lease any property other than:
1. its option to acquire an interest in the Sutton Property; and
2. the renting or leasing of office space for the Company's corporate
headquarters in Vancouver, B.C., Canada. The Company presently leases its
office space for CDN$750 per month.
Legal Proceedings
There are no current or pending material legal proceedings to which the Company
is or is likely to be a party or of which any of its property is or is likely to
be the subject of.
Submission of Matters to a Vote of Security Holders
The Company did not submit any matters to a vote of Security Holders.
Market for Common Equity and Related Stockholder Matters
(a) Market information - At year end, there was no public trading market for
the Company's Common Stock. Subsequently, the Company's Company's Registration
Statement became effective and as of October 31, 2000, the Company's Common
Stock was approved for listing on the NASD Bulletin Board under the symbol AQVV.
The trading range has been a low of $1.25(us) and high of $2.25(us).
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There are no outstanding options or warrants to purchase, or securities
convertible into, shares of Common Stock.
As of the date hereof, there are 15,463,008 shares of Common stock that could be
sold pursuant to Rule 144 under the Securities Act of 1933, as amended, and the
Company has not agreed to register any shares of Common Stock under the
Securities Act of 1933 for sale by security holders. None of the holders of the
Company's common shares have any right to require the Company to register its
common shares pursuant to the Securities Act of 1933.
(b) Holders - As of the date of this registration statement, there were
approximately thirty-two (32) holders of record of the Company's Common Stock.
(c) Dividends - The Company has not declared any cash dividends for the last
2 fiscal years and in the subsequent interim period ended September 30, 1999.
There are no dividend restrictions in the Company.
Management's Discussion and Analysis or Plan of Operation
The Company and its subsidiary, Aquistar Canada, are in the business of
acquiring and exploring mineral properties and do not have any source of revenue
at this time.
(a) Plan of Operation.
As at the financial period ended June 30, 2000, the Company incurred a net loss
of $47,147 and as at that date, the Company's current liabilities exceeded its
current assets by $77,099.
For the next 12 months, management of the Company plans to satisfy its cash
requirements by raising additional funds by way of private placements and/or
a public offering, to satisfy working capital needs and Phase 1 of the work
program intended for the Property. The Company will assess whether to proceed
with Phase 2 of the exploration program upon completion of Phase 1 and an
evaluation of the results of the Phase 1 exploration program.
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The Company does not expect any significant changes in the number of its
employees within the next 12 months.
Please refer to the disclosure on the Company's proposed development and
exploration program of the property under the section "Business of the Issuer"
above.
(b) Management Discussion and Analysis of Financial Condition and Results of
Operations.
The discussion and analysis in this section is based on the consolidated
financial statements of the Company and its subsidiary, Aquistar Canada , and
includes the accounts of both companies.
(1) Full Fiscal Years ended June 30, 1998, June 30, 1999 and June 30, 2000.
From the date of the incorporation to June 30, 1999, the Company raised $335,362
through the issuance of 15,463,008 common shares, as follows: in February, 1999
the Company completed an offering of 250,000 common shares at a price of $0.001
per share; in March, 1999 the Company completed an offering of 13,000 common
shares at a price of $0.05 per share; in March, 1999 and April, 1999 the Company
issued 14,720,008 and 480,000 common shares, respectively, in connection with
share exchange agreements for the acquisition of Aquistar Canada, at an ascribed
value of $Nil.
The Company incurred no exploration costs as at June 30, 1998, $Nil as at June
30, 1999 and $Nil as at June 30, 2000.
No exploration expenditure write-offs were made during the fiscal years ended
June 30, 1998, June 30, 1999 and June 30, 2000.
General and administrative expenses were $27,471 as at June 30, 1998, $39,312 as
at June 30, 1999 and $47,147 as at June 30, 2000.
The year 2000 issue arises with respect to the Company's operations because many
computerized systems use 2 digits rather than 4 digits to identify a year. Date
sensitive systems may recognize the year 2000 as 1900 or some other date,
resulting in errors when
17
<PAGE>
information is processed using the year 2000 date. 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 2, 2000 and if not addressed, the
impact on operations and financial reporting may range from minor errors to
significant system failure which could affect the Company's ability to conduct
normal business operations. 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.
Financial Statements
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 and 1999
(Stated in U.S. Dollars)
18
<PAGE>
AUDITORS' REPORT
To the Shareholders
Aquistar Ventures (U.S.A.) Inc.
We have audited the consolidated balance sheets of Aquistar Ventures (U.S.A.)
Inc. (an exploration stage company) as at June 30, 2000 and 1999 and the
consolidated statements of operations and deficit, cash flows and stockholders'
equity for the periods ended June 30, 2000, 1999 and 1998. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with United States and Canadian generally
accepted auditing standards. Those standards require that we plan and perform an
audit to obtain reasonable assurance whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at June 30, 2000 and
1999 and the results of its operations, cash flows and changes in stockholders'
equity for the periods ended June 30, 2000, 1999 and 1998 in accordance with
United States generally accepted accounting principles.
Without qualifying our opinion we draw attention to Note 1 to the consolidated
financial statements. The Company incurred a net loss of $47,147 during the
year ended June 30, 2000 and as at that date, the Company's current liabilities
exceeded its current assets by $77,099. These factors, along with other matters
as set forth in Note 1, raise substantial doubt that the Company will be able to
continue as a going concern.
Vancouver, B.C.
September 25, 2000 Chartered Accountants
19
<PAGE>
Comments by Auditors on United States - Canada Difference
In Canada, reporting standards for auditors do not permit the addition of an
explanatory paragraph when the financial statements account for, disclose and
present in accordance with generally accepted accounting principles conditions
and events that cast substantial doubt on the Company's ability to continue as
a going concern. Although our audit was conducted in accordance with both
United States and Canadian generally accepted auditing standards, our report to
the shareholders dated September 25, 2000 is expressed in accordance with United
States reporting standards which require a reference to such conditions and
events in the auditors' report.
Vancouver, B.C.
September 25, 2000 Chartered Accountants
20
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)
_______________________________________________________________________________
JUNE 30
2000 1999
_______________________________________________________________________________
ASSETS
Current
Cash $ 1,299 $ 1,286
Goods and services tax recoverable 423 1,324
_____________________
1,722 2,610
Mineral Property (Note 4) 12,445 12,445
Office Equipment, at cost less accumulated amortization 1,383 1,731
_____________________
$ 15,550 $ 16,786
===============================================================================
LIABILITIES
Current
Accounts and advances payable $ 78,821 $ 32,862
_____________________
SHAREHOLDERS' DEFICIENCY
Share Capital
Authorized:
50,000,000 common shares, par value $0.001
per share at June 30, 2000 and 1999
Issued And Outstanding
15,463,008 common shares at June 30, 2000 and 1999 335,362 335,362
Additional Paid In Capital 10,038 10,038
Contributed Surplus 5,509 5,509
Cumulative Translation Adjustment (721) (673)
Accumulated Deficit (413,459) (366,312)
______________________
(63,271) (16,076)
$ 15,550 $ 16,786
===============================================================================
Approved by the Board of Directors:
______________________________ ___________________________
21
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(Stated in U.S. Dollars)
<TABLE>
<CAPTION>
___________________________________________________________________________________________________________________
INCEPTION
APRIL 13, 1995
YEAR ENDED TO
JUNE 30 JUNE 30
________________________
2000 1999 1998 2000
<S> <C> <C> <C> <C>
___________________________________________________________________________________________________________________
Expenses
Amortization $ 348 $ 433 $ 541 $ 1,998
Professional fees 14,572 10,950 3,072 36,019
Management fees 20,270 19,852 17,968 96,204
Office and sundry 2,492 467 604 9,316
Rent 7,601 7,610 5,286 30,026
Travel and business promotion - - - 6,898
Share issue costs - - 13,039 34,921
Exploration expenditures 1,864 - - 191,835
Write off abandoned mineral property - - - 5,857
____________________________________________________________________
Loss For The Period (47,147) (39,312) (40,510) $ 413,074
===========
Accumulated Deficit, Beginning Of Period (366,312) (326,615) (286,105)
_____________________________________________________
(413,459) (365,927) (326,615)
Net Asset Deficiency Of Legal Parent At
Date Of Reverse Take-Over Transaction - (385) -
______________________________________________________
Accumulated Deficit, End Of Period $ (413,459) $ (366,312) $ (326,615)
================================================================================================
Loss Per Share $ (0.01) $ (0.01) $ (0.02)
================================================================================================
Weighted Average Number Of Shares Outstanding 15,463,008 15,060,427 2,322,001
================================================================================================
</TABLE>
22
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
<TABLE>
<CAPTION>
___________________________________________________________________________________________________________________
INCEPTION
APRIL 13, 1995
YEAR ENDED TO
JUNE 30 JUNE 30
________________________ _________________
2000 1999 1998 2000
<S> <C> <C> <C> <C>
___________________________________________________________________________________________________________________
Cash Flows From Operating Activities
Loss for the period $ (47,147) $ (39,312) $ (40,510) $(413,074)
_____________________________________________________________
Adjustments To Reconcile Loss To Net Cash Used By
Operations Activities
Write off abandoned mineral property - - - 5,857
Amortization 348 433 541 1,998
Change in Goods and Services Tax recoverable 901 (530) 5,857 (423)
Change in accounts and advances payable 45,959 (9,795) 18,232 78,821
__________________________________________________________
Total Adjustments 47,208 (9,892) 24,630 86,253
__________________________________________________________
Net Cash Used In Operating Activities 61 (49,204) (15,880) (326,821)
__________________________________________________________
Cash Flows From Investing Activities
Mineral property - - - (18,302)
Office equipment - - - (3,380)
Net asset deficiency of legal parent at date of __________________________________________________________
reverse take-over transaction - (385) - (385)
__________________________________________________________
- (385) - (22,067)
Cash Flows From Financing Activities
Issue of share capital - 47,083 9,151 345,400
Contributed surplus - 5,509 - 5,509
__________________________________________________________
- 52,592 9,151 350,909
__________________________________________________________
Effect Of Exchange Rate Changes On Cash (48) (2,738) 1,883 (722)
__________________________________________________________
Increase (Decrease) In Cash 13 265 (4,846) 1,299
Cash, Beginning Of Period 1,286 1,021 5,867 -
__________________________________________________________
Cash, End Of Period $ 1,299 $ 1,286 $ 1,021 $ 1,299
===================================================================================================================
</TABLE>
23
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
(Stated in U.S. Dollars)
Supplemental Disclosure of Non-Cash Financing And Investing Activities:
Effective March 31, 1999, the Company acquired 100% of the issued and
outstanding shares of Aquistar Ventures Inc. by issuing 14,983,008 common shares
at an ascribed value of $Nil.
24
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Stated in U.S. Dollars)
<TABLE>
<CAPTION>
Common Stock
___________________________________
Additional Cumulative
Number Paid-in Contributed Translation Accumulated
of Shares Amount Capital Surplus Adjustment Deficit Total
<S> <C> <C> <C> <C> <C> <C> <C>
___________________________________________________________________________________________
Issuance of common stock 1 $ 1 $ - $ - $ - $ - $ 1
Net loss - - - - - (3,643) (3,643)
___________________________________________________________________________________________
Balance, June 30, 1995 1 1 - - - (3,643) (3,642)
Issuance of common stock 1,700,000 179,975 - - - - 179,975
Translation adjustment - - - - (489) - (489)
Net loss - - - - - (136,164) (136,164)
___________________________________________________________________________________________
Balance, June 30, 1996 1,700,001 179,976 - - (489) (139,807) 39,680
Issuance of common stock 600,000 109,190 - - - - 109,190
Translation adjustment - - - - 670 - 670
Net loss - - - - - (146,298) (146,298)
___________________________________________________________________________________________
Balance, June 30, 1997 2,300,001 289,166 - - 181 (286,105) 3,242
Issuance of common stock 50,000 9,151 - - - - 9,151
Translation adjustment - - - - 1,883 - 1,883
Net loss - - - - - (40,510) (40,510)
_________________________________________________________________________________________
Balance, June 30, 1998 2,350,001 298,317 - - 2,064 (326,615) (26,234)
</TABLE>
25
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Stated in U.S. Dollars)
<TABLE>
<CAPTION>
Common Stock
___________________________________
Additional Cumulative
Number Paid-in Contributed Translation Accumulated
of Shares Amount Capital Surplus Adjustment Deficit Total
<S> <C> <C> <C> <C> <C> <C> <C>
___________________________________________________________________________________________
Issuance of common stock 240,000 42,074 - - - - 42,074
Cancellation of common stock (750,000) (5,509) - - - - (5,509)
Contributed surplus - - - 5,509 - - 5,509
Increase in issued common
stock due to 8 for 1
stock split 12,880,007 - - - - - -
Exchange of stock to acquire
subsidiary
Aquistar Ventures Inc. (14,720,008) - - - - - -
Aquistar Ventures
(U.S.A.) Inc.
14,983,008 - - - - - -
Net asset deficiency of
legal parent at date of
reverse take-over
transaction - - - - - (385) (385)
Issuance of common stock 480,000 480 10,038 - - - 10,518
Translation adjustment - - - - (2,737) - (2,737)
Net loss - - - - - (39,312) (39,312)
_________________________________________________________________________________________
Balance, June 30, 1999 15,463,008 335,362 10,038 5,509 (673) (366,312) (16,076)
Translation adjustment - - - - (48) - (48)
Net loss - - - - - (47,147) (47,147)
__________________________________________________________________________________________
Balance, June 30, 2000 15,463,008 $335,362 $ 10,038 $ 5,509 $ (721) $ (413,459) $(63,271)
==========================================================================================
</TABLE>
26
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 and 1999
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
Exploration Stage Activities
The Company is in the process of exploring its mineral property and has not
yet determined whether the property contains ore reserves that are
economically recoverable.
The recoverability of amounts shown as mineral property is dependent upon
the discovery of economically recoverable reserves, confirmation of the
company's interest in the underlying mineral claims and the ability of the
Company to obtain the necessary financing to place the property into
production, and upon future profitable operations, none of which is assured.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance
with generally accepted accounting principles in the United States. Because
a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period
necessarily involves the use of estimates which have been made using careful
judgement.
The financial statements have, in management's opinion, been properly
prepared within reasonable limits of materiality and within the framework of
the significant accounting policies summarized below:
27
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 and 1999
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
a) Consolidation
These financial statements include the accounts of the Company and its
wholly owned Canadian subsidiary Aquistar Ventures Inc.
b) Mineral Property and Related Exploration Expenditures
The Company capitalizes all option payments on mineral properties in
which it has a continuing interest to be amortized over the recoverable
reserves when a property reaches commercial production. On abandonment
of any property, applicable accumulated mineral property costs will be
written off.
Exploration expenditures are expensed as incurred.
To date none of the Company's properties have reached commercial
production.
c) Office Equipment and Amortization
Office equipment is recorded at cost and amortized at a rate of 20% per
annum on the declining balance basis.
d) Income Taxes
The Company has adopted Statement of Financial Accounting Standards
No. 109 - "Accounting for Income Taxes" (SFAS 109). This standard
28
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 and 1999
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
requires the use of an asset and liability approach for financial
accounting and reporting on income taxes. If it is more likely than not
that some portion of all of a deferred tax asset will note be realized,
a valuation allowance is recognized.
e) Foreign Currency Translation
The Company's subsidiary's operations are located in Canada and its
functional currency is the Canadian dollar. The financial statements of
the subsidiary have been translated using the current method whereby the
assets and liabilities are translated at the year end exchange rate,
capital accounts at the historical exchange rate, and revenues and
expenses at the average exchange rate for the period. Adjustments
arising from the translation of the Company's subsidiary's financial
statements are included as a separate component of shareholders' equity.
f) Financial Instruments
The Company's financial instruments consist of cash, Goods and Services
Tax recoverable, and accounts payable.
Unless otherwise noted, it is management's opinion that this Company is
not exposed to significant interest or credit risks arising from these
financial instruments. The fair value of these financial instruments
approximate their carrying values, unless otherwise noted.
29
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 and 1999
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
g) Loss Per Share
The loss per share is calculated using the weighted average number of
common shares outstanding during the period.
3. ACQUISITION OF SUBSIDIARY
Effective March 31, 1999, Aquistar Ventures (U.S.A.) Inc. acquired 100% of
the issued and outstanding shares of Aquistar Ventures Inc. by issuing
14,983,008 common shares. Since the transaction resulted in the former
shareholders of Aquistar Ventures Inc. owing the majority of the issued
shares of Aquistar Ventures (U.S.A.) Inc., the transaction which is referred
to as a "reverse take-over", has been treated for accounting purposes as an
acquisition by Aquistar Ventures Inc. of the net assets and liabilities of
Aquistar Ventures (U.S.A.) Inc. Under this purchase method of accounting,
the results of operations of Aquistar Ventures (U.S.A.) Inc. are included in
these financial statements from March 31, 1999.
Aquistar Ventures (U.S.A.) Inc. had a net asset deficiency at the
acquisition date, therefore the 14,983,008 shares issued on acquisition were
issued at an ascribed value of $Nil with the net asset deficiency of $385
charged to deficit. Aquistar Ventures Inc. is deemed to be the purchaser
for accounting purposes. Accordingly its net assets are included in the
balance sheet at their previously recorded amounts.
30
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 and 1999
(Stated in U.S. Dollars)
3. ACQUISITION OF SUBSIDIARY (Continued)
The acquisition is summarized as follows:
Current Assets
Cash $ 900
Current Liabilities
Accounts payable 1,285
Net Asset Deficiency $ (385)
==========
4. MINERAL PROPERTY
JUNE 30
______________
2000 1999
______________
Sutton Property
The Company has entered into an option agreement
dated December 2, 1997, as amended, which provides
for the acquisition of a 100% interest, subject to
a 2.5% net smelter royalty in 21 unpatented mineral
claims in the Larder Lake Mining Division of Ontario.
In order to earn its interest the Company must make
cash payments and incur exploration expenditures as
follows:
- cash payment of Cdn. $17,000 on execution of the
agreement (paid)
31
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 and 1999
(Stated in U.S. Dollars)
4. MINERAL PROPERTY (Continued)
JUNE 30
______________
2000 1999
______________
- cash payment of Cdn. $35,000 13 months from the
date the Company's common shares are listed for
trading on the NASD Bulletin Board or a stock
exchange (the initial payment date)
- cash payment of Cdn. $25,000 8 months
after the initial date
- cash payment of Cdn. $25,000 16 months
after the initial payment date
- cash payment of Cdn. $30,000 28 months after
the initial payment date
- cash payment of Cdn. $30,000 40 months after
the initial payment date
- Cash payment of Cdn. $40,000 52 months after
the initial payment date
Exploration Expenditures
- a total of Cdn. $210,000, Cdn. $100,000 by
December 2, 2000 and Cdn. $110,000 upon a
32
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 and 1999
(Stated in U.S. Dollars)
4. MINERAL PROPERTY (Continued)
JUNE 30
_______________
2000 1999
_______________
recommendation to conduct the phase
2 work program
Consideration paid to date $ 12,445 $ 12,445
5. RELATED PARTY TRANSACTIONS
During the periods indicated the Company incurred the following amounts with
a related company:
June 30
_____________________________
2000 1999 1998
_____________________________
Management fees $ 20,270 $ 19,852 $ 17,968
=============================
Rent $ 7,601 $ 7,610 $ 5,285
6. INCOME TAXES
No provision for income taxes has been provided in these financial
statements due to the accumulated net losses. At June 30, 2000, the Company
has net operating loss carryforwards, which expire commencing in 2002
totalling approximately $215,000, the benefits of which have not been
recorded.
33
<PAGE>
AQUISTAR VENTURES (U.S.A.) INC.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 and 1999
(Stated in U.S. Dollars)
7. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize
the year 2000 as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In addition, similar
problems may arise in some systems which use certain dates in 1999 to
represent something other than a date. Although the change in date has
occurred it is not possible to conclude that all aspects of the Year 2000
Issue that may affect the entity, including those related to the efforts of
customers, suppliers, or other third parties, have been fully resolved.
34
<PAGE>
Changes in and Disagreements with Accountants
The Company had no changes in or disagreements with Accountants.
Directors, Executive Officers, Promoters and Control Perons; Compliance
with Section 16(a) of the Exchange Act
The following information sets forth the names of the directors, executive
officers, promoters control persons of the Company, their present positions with
the Company, and their biographical information.
1. Directors and Officers
Name Age Office Term of Office
===== === ====== ==============
Alfredo De Lucrezia 32 President, Director One Year
Maurizio Grande 51 Secretary, Treasurer, Director One Year
Georgeos Polyhronopo 41 Director One Year
Mr. Alfredo De Lucrezia has been a Director of the Company since February 2,
1999 and President of the Company since September 10, 1999. Mr. De Lucrezia has
a Business Administration Diploma from Capilano College, of Vancouver, British
Columbia. Since 1988, Mr. De Lucrezia has been the President and Owner of
Tony's Painting and Decorating, a private British Columbia company, which has
been in operation since 1988. Mr. De Lucrezia is also Co-Owner of Gala Events,
a private British Columbia company, which has been in operation since 1995. Mr.
De Lucrezia does the accounting and manages both of his private companies. Mr.
De Lucrezia is currently the President and a Director of Solaia Ventures Inc.,
a public company listed on the Vancouver Stock Exchange. During the period 1995
through 1998 Mr. De Lucrezia provided investor relations services for several
public junior resource companies listed on the Vancouver Stock Exchange,
including Canasia Industries Corp., Golden Temple Mining Corp. and International
Croesus Ventures Corp. Mr. De Lucrezia provides management services to the
Company (refer to Item 9 hereunder for further particulars). There is no
requirement on Mr. De Lucrezia to provide a fixed amount of time in the service
of the Company. Consequently, the amount of time he spends on Company business
will depend on the needs of the Company.
35
<PAGE>
Mr. Maurizio Grande has been a Director of the Company since September 10, 1999.
Mr. Grande is the President and Co-Owner of Marble Art Canada, a private company
in the business of the manufacture and sale of granite and marble products,
since 1979. Mr. Grande has also been involved in the real estate and
development business for the past 10 years. Mr. Grande will provide services to
the Company on a part-time basis, as required for the business of the Company.
There is no requirement on Mr. Grande to provide a fixed amount of time in the
service of the Company. Consequently, the amount of time he spends on Company
business will depend on the needs of the Company.
Mr. Georgeos Polyhronopo has been a Director of the Company since September 15,
1999. Mr. Polyhronopous is currently the President and Chief Executive Officer
of Global SmartCards, Inc. He has 10 years experience in corporate development,
and has managed multiple projects. Mr. Polyhronopous has been directly involved
in taking several companies "Public" from seed funding to Initial Prospectus
Offering. He has worked as an Investment Banker and Broker. Mr. Polyhronopous
closely follows technological developments and trends, as they relate to both
the Telecommunications Industry and the Internet and World Wide Web. He is a
Professional Member of the National Association of Certified Valuation Analysts.
From 1998 to present Mr. Polyhronopous has been a Director of Enterprise
Solutions, Telemax Communications, which is a provider of enterprise solutions,
such as: educational institutions; public utilities; community, city, state and
federal offices; media relations; and medical facilities. From 1997 to present
Mr. Polyhronopous, is the Co-founder and Corporate Secretary of Infobuild
Networks, whereby he provided investors to finance the company; structured and
prepared the Offering for the company; negotiated the licensing of certain
technologies; and developed the World Wide Web for the company at
www.infobuild.com. From 1989 to 1996 Mr. Polyhronopous was the Managing
Director of Capcom Equities Inc., where he was responsible for facilitating
mergers and acquisitions for private and public development stage and micro-cap
companies and provided strategic financing advice and the development of public
market strategies. From 1989 to 1996 Mr. Polyhronopous was a Broker and
Investment Banker for Osler Inc. where he was involved in the securities
industry in Vancouver, British Columbia, Canada. Mr. Polyhronopo will provide
services to the Company on a part-time basis, as required for the business of
the Company. There is no requirement on Mr. Polyhronopo to provide a fixed
amount of time in the service of the Company. Consequently, the amount of time
he spends on Company business will depend on the needs of the Company.
36
<PAGE>
2. Promoters
The Company does not have any promoters other than the directors or officers of
the Company.
3. Control Persons
Other than the directors or officers of the Company, the following may be
considered as control persons of the Company, holding greater than 20% of the
issued and outstanding shares of the Company:
Shareholder # of common % of Issued and
and Address shares held Outstanding
___________________ _____________ _______________
Alexander Ozer 3,120,000 20.18%
614 - 860 W. Hastings Street
Vancouver, British Columbia
Donald Currie 3,520,008 22.76%
1361 Greenbriar Way
N. Vancouver, British Columbia
ITEM 10 Executive Compensation
The following table sets forth certain information as to the Company's three
highest paid executive officers and directors for the fiscal year ended
June 30, 1999.
Summary Compensation Table
Name Position Year Salary
Alfredo De Lucrezia President, Director 1999 CDN$5,000
Maurizio Grande Secretary, Treasurer, Director 1999 Nil
Georgeos Polyhronopo Director 1999 Nil
37
<PAGE>
The Company's Canadian subsidiary, Aquistar Canada, entered into a management
agreement dated May 1, 1999 with Alfredo De Lucrezia, whereby the Aquistar
Canada agreed to pay Mr. De Lucrezia CDN$2,500 per month for providing
management services to the Company and Aquistar Canada.
The Company may during the course of the current year decide to compensate its
Officers and Directors for their services. However, the Company does not
currently pay and does not intend to pay any compensation to the Officers and
Directors serving on the Company's Board of Directors at this time, other than
Mr. De Lucrezia.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of the date hereof, based on
information obtained from the persons named below, with respect to the
beneficial ownership of the Common Stock by (i) each person who is known to the
Company to be the beneficial owner of more than 5 percent of the Company's
Common Stock, and (ii) each Director and Officer, and (iii) all Directors and
Officers of the Company, as a group:
Title of Class Name and Address of Amount of Percentage of Class
Beneficial Owner Beneficial (total outstanding
Ownership(1) is 15,463,008)
- --------------------------------------------------------
Common Stock Veronica Beckett 1,280,000 8.28%
Farlifangstrasse 21
CH - 8126
Zumikon, Switzerland
- --------------------------------------------------------
Common Stock Wagstall Developments Ltd. 2,000,000 12.93%
P.O. Box N8627
Nassau, Bahamas
- --------------------------------------------------------
Common Stock Elvira Cusano 2,400,000 15.52%
Via Nilolo D'Auzzano 79
Firenze, Italy
- --------------------------------------------------------
38
<PAGE>
Common Stock Paolo Stinghi 2,400,000 15.52%
873 E 14th Street
N. Vancouver, British
Columbia
- --------------------------------------------------------
Common Stock Alexander Ozer 3,120,000 20.18%
614 - 860 W. Hastings Street
Vancouver, British Columbia
- --------------------------------------------------------
Common Stock Donald Currie 3,520,008 22.76%
1361 Greenbriar Way
N. Vancouver, British
Columbia
- --------------------------------------------------------
[1] Unless otherwise indicated, this column reflects amounts as to which the
beneficial owner has sole voting power and sole investment power.
[2] No security holder listed above owns any warrants, options or rights.
[3] The officers and directors of the Company do not beneficially own any
common shares of the Company.
Certain Relationships and Related Transactions
None of the Directors or Officers of the Company, nor any proposed nominee for
election as a Director of the Company, nor any person who beneficially owns,
directly or indirectly, shares carrying more than 10% of the voting rights
attached to all outstanding shares of the Company, nor any promoter of the
Company, nor any relative or spouse of any of the foregoing persons has any
material interest, direct or indirect, in any transaction since the date of the
Company's incorporation or in any presently proposed transaction which, in
either case, has or will materially affect the Company. The Company has not
entered into transactions with any member of the immediate families of the
foregoing persons, nor is any such transaction proposed.
39
<PAGE>
Aquistar Ventures (USA) Inc.
The Board of Directors solicits this Proxy
for an Annual Meeting of Shareholders
to be held on December 18, 2000
The undersigned hereby constitutes and appoints Alfedo De Lucrezia with full
power of substitution and revocation, the true and lawful attorney and proxy of
the undersigned at the Annual Meeting of Shareholders (the "Meeting") of
Aquistar Ventures (USA) Inc., (the "Company") to be held December 18, 2000 at
10:00 a.m. PST, at 1750-750 West Pender Street, Vancouver, British Columbia or
any adjournments thereof, to vote the shares of Common Stock of the Company
standing in the name of the undersigned on the books of the Company, or such
shares of Common Stock of the Company as the undersigned may otherwise be
entitled to vote on the record date for Meeting with all powers the undersigned
would possess if personally present at the Meeting, with respect to the matters
set forth below and described in the Notice of the Annual Meeting of
Shareholders dated November 8, 2000, and the accompanying Proxy Statement of the
Company.
1. Election of the Board of Directors until the next
Annual Shareholders Meeting
[ ] For all nominees listed below (except as marked to the contrary)
Vote for Vote against Withhold
the nominee the nominee authority to
vote for the
nominee
1. Alfredo De Lucrezia [ ] [ ] [ ]
2. Maurizio Grande [ ] [ ] [ ]
3. Georgeos Polyhronopo [ ] [ ] [ ]
Support the Board of Directors of Aquistar Ventures (USA) Inc. by approving the
re-election of Mr. Alfredo De Lucrezia, Maurizio Grande and Georgeos Polyhronopo
to the board for the following year's term.
40
<PAGE>
2. Ratify the employment of [ ] For the [ ] Withhold authority [ ] Abstain
the Company's independent to vote for the vote for
Auditor for the fiscal proposal listed the
year ending June 30, 2001 below proposal
listed
below
Approve management's selection of Morgan & Company as the Company's independent
Auditor for the fiscal year ending June 30, 2001.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
THAT MAY PROPERLY COME BEFORE THE MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS LISTED. IF NO
DIRECTIONS ARE GIVEN BY THE PERSON(S) EXECUTING THIS PROXY, THE SHARES WILL BE
VOTED IN FAVOR OF ALL LISTED PROPOSALS.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER, UNLESS OTHERWISE SPECIFIED, THE SHARES WILL BE
VOTED FOR PROPOSALS 1 and 2.
Dated________________, 2000
___________________________
Print Shareholder's Name
___________________________
Shareholder's Signature
________________________
Number of Shares Voted
41
PLEASE SIGN AND RETURN TO THE ADDRESSEE IN THE ENCLOSED STAMPED ENVELOPE.
Please sign exactly as your name appears on the shareholder records of the
Company. If shares are held in the names of more than one person, each joint
owner should sign. Executors, administrators, trustees, guardians, and attorney
should indicate the respective capacities in which they sign. Attorney should
submit powers of attorney.
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