SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
<P>
FORM 8-K12G3
<P>
CURRENT REPORT
<P>
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
<P>
Date of Report (Date of earliest event reported):
September 12, 2000
<P>
SIERRA GIGANTE RESOURCES INC.
<P>
(Exact Name of Registrant as Specified in Its Charter)
<P>
Nevada
( State or Other Jurisdiction of Incorporation)
<P>
<TABLE>
<S> <C>
88-395714
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(Commission File Number) ( IRS Employer Identification No.)
<P>
Suite 1000-355 Burrard St. Vancouver B.C. Canada V3H-3M5
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
<P>
(604) 608-6169
<P>
(Registrant's Telephone Number, Including Area Code)
<P>
ANMORE MANAGEMENT INC.
128 APRIL RD.
PORT MOODY, BRITISH COLUMBIA, CANADA V3H-3M5
<P>
(Former Name or Former Address,
if Changed Since Last Report)
<P>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
<P>
Pursuant to an Agreement and Plan of Merger
(the"Acquisition Agreement") effective September 12,
2000, Sierra Gigante Resources Inc. , a Nevada
corporation ( the "Company"), acquired one hundred
percent (100%) of all the issued and outstanding shares
of common stock ("Common Stock") $ .0001 par value of
Anmore Management Inc. , a Delaware corporation
("Anmore") , from Gerald Ghini , representing all of the
shareholder(s) issued and outstanding common stock of
Anmore, for $90,000.00 US and 10,000 shares of $.001 par
value common stock of the Company (the "Acquisition").
<P>
The Acquisition was approved by the Board of Directors
and a majority of the shareholders of both Anmore and the
Company on September 12, 2000. The Acquisition is
intended to qualify as a reorganization within the
meaning of Section 368 (a) (1) (A) of the Internal
Revenue Code of 1986, as amended ("IRC").
<P>
Upon effectiveness of the Acquisition, pursuant to Rule
12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission ( the "Commission"),
the Company elected to become the successor issuer to
Anmore for Reporting purposes under the Securities
Exchange Act of 1934 (the "Act") and elects to report
under the Act effective September 12, 2000.
<P>
As of the effective date of the Acquisition Agreement,
Anmore shall assume the name of the Company. The
Company's officers and directors will become the officers
and directors of Anmore. As of the Effective Date, Mr.
Ghini shall have resigned as an officer and director of
Anmore.
<P>
No subsequent changes in the officers, directors and five
percent sharehoders of the Company are presently known.
The following table sets forth information regarding the
beneficial ownership of the shares of the Common Stock (
the only class of shares previously issued by the
Company) at September 12, 2000 by (i) each person known
by the Company to be the beneficial owner of more than
five percent (5%) of the Company's outstanding shares of
Common Stock, (ii) each director of the Company, (iii)
the executive officers of the Company, and (iv) by all
directors and executive officers of the Company as a
group , prior to and upon completion of this Offering.
Each person named in the table, has sole voting and
investment power with respect to all shares shown as
beneficially owned by such person and can be contacted at
the address of the Company.
<P>
Security Ownership of Certain Beneficial Owners and
Management
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<P>
(a) Security Ownership of Certain Beneficial Owners
The Company currently has a total of 11,724,397 shares
issued and outstanding. The table below lists the
current beneficial ownership of the Company's voting
securities by each person known by the Company to be the
beneficial owner of more than 5% of such securities.
Unless otherwise indicated, the shareholders listed
possess sole voting and investment power with respect to
the shares shown.
<TABLE>
<S> <C> <C> <C>
Title of Class Name and Address of Amount and Nature
Beneficial Owner of Beneficial Owner Percent of Class(2)
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Common Ray Merry (1)
709 Carleton Drive,
Port Moody, BC,
Canada, V3H 3K7 6,500,000 55.44%
</TABLE>
<P>
(1) Officer and Director of the Company
<P>
The balance of the Company's outstanding Common Shares of
5,224,397 are held by 77 persons plus an unknown number
of shareholders holding shares through Cede & Co.
<P>
(b) Security Ownership of Management
<P>
The following table sets forth the beneficial ownership
for each class of equity securities of the Company
beneficially owned by all directors and officers of the
Company.
<TABLE>
<S> <C> <C> <C>
Title of Class Name and Address of Amount and Nature
Beneficial Owner of Beneficial Owner Percent of Class(2)
--------------------------------------------------------------------------------------
Common Ray Merry (1) 6,500,000 55.44%
709 Carleton Drive,
Port Moody, BC,
Canada, V3H 3K7
<P>
Common David S. Wiggins (2) 500,000 4.26%
C/o National Title Loans,
2419 Kirkwood Highway,
Wilmington, Delaware,
USA, 19805
<P>
Common Dr. William G. Davenport 0 0
7551 Manitoba Street,
Vancouver, BC,
Canada, V5X 4S9
<P>
all Officers and 7,000,000 59.70%
Directors
as a Group (3 persons)
</TABLE>
<P>
(1) Officer and Director of the Company
(2) Director of the Company
<P>
Directors, Executive Officers, Promoters and Control
Persons
----------------------------------------------------
<P>
The directors, officers and significant employees of the
Company are as follows:
<TABLE>
<S> <C> <C>
Name Age Position
Raymond Merry 43 President, Chief Executive Officer and Director
David S. Wiggins 55 Director
Dr. William G. Davenport 56 Director
Marino Middleton 55 Consultant
</TABLE>
<P>
The above listed officers and directors will serve until
the next annual meeting of the shareholders or until
their death, resignation, retirement, removal, or
disqualification, or until their successors have been
duly elected and qualified. Vacancies in the existing
Board of Directors are filled by majority vote of the
remaining Directors. Officers of the Company serve at
the will of the Board of Directors. There is no family
relationship between any executive officer and director
of the Company.
<P>
Management Team
<P>
Raymond Merry, President, Chief Executive Officer and
Director Mr. Merry has served as the Company's
President, CEO and as a Director since his appointment on
July 1, 1998.
<P>
Mr. Merry has over 20 years of successful entrepreneur
experience in a variety of business settings. He was
President/owner of Eye to Eye Optical Ltd. from
1979 to 1984. In this capacity, he was responsible
for marketing, sales and general management functions.
Over the last fifteen years, Mr. Merry has been involved
with Canadian public companies in the acquisition of
mining properties. He has been involved in raising
investment capital for numerous projects and has
experience with international investments. He was a
director of Bookergold Explorations Ltd. from July 19,
1996 to September 9, 1998. Mr. Merry brings an extensive
knowledge of business management and expertise to the
Company.
<P>
David S. Wiggins, Director Mr. Wiggins was appointed to
the Board of Directors of the Company on June 16, 1999.
<P>
Mr. Wiggins has been a successful entrepreneur for over
35 years. His experience encompasses administrative and
consultative skills which he honed through his various
businesses and associations. Mr. Wiggins commenced with
providing management services to various nursing homes
and small companies as owner of Wiggins Associates in
Havertown, PA. Next, he was a Partner for Sharpe-
Wiggins, Ltd., where he was a consultant specializing in
assisting small to midsize companies in corporate
planning, development and management. Mr. Wiggins moved
on and became a Partner for E.J. Stewart Video, Inc.,
where he was a financial planner responsible for
financial decisions, structuring corporate financing,
budget forecasts and implementations, payroll, conducting
marketing concepts development and strategic positioning
functions for the company. In addition, Mr. Wiggins has
executed complete organizational structures which include
market research, strategic positioning, system formation,
human resource management, advertising and financial
planning. From 1997 to the present, Mr. Wiggins has been
the owner of National Title Loans in Wilmington, DE,
where his company is an established loan business which
specializes in personal and automotive loans. From 1982
to 1996, he worked for Commonwealth Auto Auctions. He
worked as a partner at Commonwealth where his duties
included market research, positioning, system formation,
hiring, advertising and financial planning.
<P>
Mr. Wiggins brings forth an extensive background in
entrepreneurship, administrative and consultative skills
to the management team of the Company.
<P>
Dr. William G. Davenport, Director Dr. Davenport was
appointed to the Board of Directors of the Company on
March 29, 2000.
<P>
Dr. Davenport has a Ph.D. in psychology from the
University of Newcastle in Australia. He has authored
numerous articles in signal detection and decision-
making. Dr. Davenport has managed, owned, operated and
supervised the construction of numerous nursing homes in
the Greater Vancouver region and is President of both
High West Homes Ltd. and Argosy Limited (from 1980 to the
present date), and was a Vice President and Principal of
Capital Development Corporation from 1991 until 1994.
Both companies provide financing structures for the
development of health care centers, nursing homes,
retirement facilities and multi- family housing units.
Dr. Davenport's firm has been involved in financing and
investment structures for international projects.
<P>
Dr. Davenport holds a securities license and has
extensive experience in financing of private and public
companies. Prior to his financial career, Dr. Davenport
held a senior position with the Government of British
Columbia, Ministry of Advanced Education and was an
instructor at both the University of British Columbia and
Simon Fraser University. Dr. Davenport brings a wide
range of business and financial experience to the Board
of Directors of Sierra Gigante.
<P>
Marino Middleton, B.A.M.A., Consultant On March 14,
2000, Mr. Middleton signed an agreement with the Company
to act as a consultant.
<P>
Mr. Middleton is also the President of Isoplus Quality
Systems, Ltd., a software development and management
consulting firm. He has been a Professor for several
years and is presently an adjunct professor for The
University of New Brunswick, Canada, faculty of business
and Central Michigan University, Faculty of Business
instructing undergraduate and MBA programs. He has
taught and consulted for various colleges (i.e. British
Columbia Institute of Technology, Vancouver Community
College, Malaspina University College and the University
of British Columbia). Mr. Middleton worked for the
Ministry of Advanced Education as an Assistant Director
of Program Research and Curriculum Development for 9
years prior to his teaching and corporate career. He has
published internationally in the areas of decision
theory, risk taking and perception. Mr. Middleton's firm
was a leader in developing software for implementation of
ISO 9000 standards in Fortune 500 firms and laboratories
and consulting firms. Mr. Middleton's company has also
developed software for safety management (ISM) utilized
in ships and ISO 14000 for environmental management.
Currently his firm is specializing in e-commerce,
management, government funding and Scientific Tax-Credit
consulting.
<P>
The Directors named above will serve until the next
annual meeting of the shareholders of the Company in the
year 2001. Directors will be elected for one-year terms
at each annual shareholder's meeting. Officers hold their
positions at the appointment of the Board of Directors.
<P>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
<P>
Pursuant to the Acquisition Agreement, the Company
acquired one hundred (100%) of the issued and outstanding
shares of common stock (Common Stock) of Anmore from
Gerald Ghini, representing all of the shareholder(s)
issued and outstanding Common Stock of Anmore, for
$90,000.00 US and 10,000 shares of $.001 par value common
stock of the Company. In evaluating the Acquisition,
Anmore used criteria such as the value of the Company's
business relationships, goodwill, the Company's ability
to compete in the Internet business to business auction
industry, the Company's current and anticipated business
operations and the background of the Company's officers
and directors in the B to B industry. No material
relationship exists between the selling shareholders of
Anmore or any of its affiliates, any director or officer
of Anmore and the Company. The consideration exchanged
pursuant to the Acquisition Agreement was negotiated
between Anmore and the Company in an arm's-length
transaction. The consideration paid derived from the
Company's cash on hand and treasury stock.
<P>
The Company
<P>
Description of Business
-----------------------
<P>
Business Development
<P>
Sierra Gigante Resources, Inc. (the "Company") is a
Nevada corporation incorporated on June 3, 1998. From the
date of its incorporation until March 14, 2000 the
Company was engaged in the business of acquisition and
exploration of mineral properties.
<P>
The Company initially had one mineral property, located
in the Fish Springs Mining District, in Utah (the "Crypto
Property"), which was explored for zinc, copper, silver
and lead. Pursuant to an option agreement dated April 20,
1999 (the "Option Agreement") the Company acquired an
option to earn an undivided 100% interest to acquire the
Crypto Property by making cash option payments totaling
Cdn$500,000 and expending a minimum of Cdn$1,500,000 in
exploration expenditures on the Crypto Property over a
four year period of which Cdn$200,000 in exploration
expenditures were required to be made by October 20,
2000. In July, 2000 the Company terminated the Option
Agreement subsequent to having paid Cdn$50,000 as an
initial payment and having incurred part of the required
exploration expenditures to be made by October 20, 2000.
<P>
Prior to terminating the Option Agreement the Company
acquired 90 unpatented mineral claims adjacent to the
Crypto Property but subsequently divested itself of such
claims after it decided to terminate the Option
Agreement.
<P>
Since March 14, 2000, the Company has been developing and
implementing an e-commerce web site featuring an auction
service which will emphasize industrial goods and
services, under the working-title name "B2B
AuctionWorld". The web site will have a "self-listing"
capability and will feature "virtual malls" on a country-
by-country basis, allowing users to list, bid on and
purchase items from within their countries of origin.
The Company is presently seeking funding to implement the
e-commerce web site it intends to develop to foster a
large and growing commerce-oriented auction web site.
<P>
Effective May 18, 1999 the Company's Common Stock was
cleared for an unpriced quotation on the National
Quotation Bureau's "Pink Sheets". The Company was
issued a ticker symbol "SGIG". Prior to this filing,
trading in the Company's Common Stock has been limited to
this market.
<P>
The Company intends to apply to list its Common Stock for
trading on the OTC Electronic Bulletin Board operated by
the National Association of Securities Dealers Inc.
("NASD") on a voluntary basis, because the primary
attraction of the Company as an e-commerce corporation
will be its status as a public company. Any business
transactions or development will likely result in a
significant issuance of shares and substantial dilution
to the present stockholders of the Company.
<P>
Acquisition of Industrial E-Commerce Auction Website
<P>
On March 14, 2000, the Company and its president, Raymond
Merry ("Merry") entered into an Assignment Agreement
("Agreement") with a British Columbia company, Isoplus
Quality Systems Ltd. ("Isoplus") and its principal,
Marino Middleton ("Middleton"). Isoplus had developed an
e-commerce business concept which featured an internet
website which would specialize in industrial auctions,
have a self-listing capability, (whereby users would be
able to list, purchase and sell items without requiring
direct involvement by the website owner) and would allow
for the creation of regional "virtual industrial malls"
whereby products for sale could be featured on
independent country-specific locations (the "Business").
<P>
Under the terms of the Agreement, Isoplus and Middleton
assigned all of their right, title and interest in and to
the Business, together with any related materials (i.e.,
documentation, business plans, copyright and trademark
rights, software, domain name, website ownership, etc.)
to the Company, in return for the following
consideration:
<P>
(a) the transfer to Middleton of 500,000
restricted shares in the capital stock of
the Company from the personal holdings of
Murray McClaren, a private shareholder in
the Company;
<P>
(b) retaining Middleton as a consultant to the
Company; and
<P>
(c) the issuance of 50,000 incentive stock
options, exercisable over a 2-year period,
at a price of $0.40 per option to Middleton.
<P>
The Company and Merry have, to date, completed the
transfer of 500,000 shares to Middleton, issued the
incentive stock options and appointed Middleton as the
Operations Manager of the Company.
Competition
<P>
E-Commerce Industrial Auction Industry - The market for
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business-to-business trading over the Internet is new,
rapidly evolving and intensely competitive, and the
Company expects competition to intensify in the future.
Barriers to entry are relatively low, and current and new
competitors can launch new sites at a relatively low cost
using commercially available software. The Company has
identified and expects to compete with a number of other
companies involved with industrial auctions, particularly
companies and websites such as: (1) Free Markets Assets
Exchange, (2) Bliquid.com, (3) Floorspace.com, (4)
Industrial Auctions U.S., (5) Auctions Industrial
Exchange + Mart, (6) Trade Yard, (7) Imark.com, (8) e-
SASA, (9) BigEquip.Com, (10) AuctionIndia.com, and (11)
Metal link. Among these competitive auction sites, one
particular site exclusively covers India; another covers
the United Kingdom, Canada, Hong Kong, Singapore,
Malaysia and the United States but is not in real-time or
has self-listing capabilities; the auction site based in
the United States is in real-time but not self-listing
and is basically listings. Furthermore, there exists two
specialty sites focused on management, repair and
operations and another that specializes in metalworks.
The Company believes that a particular site,
"Bliquid.com" which is based in the U.S., is comparable
to the Company's proposed website for its self-listing
capabilities and real-time operations, however the
Company's website will operate in real-time and have
self-listing capabilities operating in at least six (6)
languages on a selected country-by-country basis
worldwide. In addition, companies that control access to
transactions through network access or Web browsers could
promote the Company's competitors or charge substantial
fees for inclusion.
<P>
In the e-commerce business sector, there are many
competitors which have longer company operating
histories, larger customer bases and greater brand
recognition in other business and Internet markets than
the Company. Some of these competitors also have
significantly greater financial, marketing, technical and
other resources. In addition, companies may receive
investments from or enter into other commercial
relationships with larger, well established and well
financed companies, with a result that these competitors
may be able to devote more resources to marketing and
promotional campaigns, adopt more aggressive pricing
policies and devote substantially more resources to web
site and systems development than the Company may be able
to. Increased competition may result in reduced
operating margins, loss of market share and diminished
value of the Company's products. In order to respond to
changes in the competitive environment, the Company may,
from time to time, make pricing, service or marketing
decisions or acquisitions that could harm the Company's
business.
<P>
Trademarks and Proprietary Rights
<P>
The Company regards copyrights, service marks,
trademarks, trade secrets and similar intellectual
property as critical to its success, and intends to rely
on trademark and copyright law, trade secret protection
and confidentiality and/or license agreements with its
employees, customers and others to protect its
proprietary rights. The Company plans to pursue the
registration of its trademarks and service marks in the
U.S. and internationally. Effective trademark, service
mark, copyright and trade secret protection may not be
available in every country in which the Company intends
to commence business operations. There can be no
assurance that steps which may be taken by the Company to
protect its proprietary rights will be adequate or that
third parties will not infringe or misappropriate the
Company's copyrights, trademarks, trade dress and similar
proprietary rights. In addition, there can be no
assurance that other parties will not assert infringement
claims against the Company. The Company expects to be
subject to legal proceedings and claims from time to time
in the ordinary course of its business, including claims
of alleged infringement of the trademarks and other
intellectual property rights of third parties by the
Company. Such claims, even if not meritorious, could
result in the expenditure of significant financial and
managerial resources. The Company is not currently aware
of any legal proceedings pending against it.
<P>
Government Regulation
<P>
E-Commerce Industrial Auction Industry
---------------------------------------
<P>
The Company may be subject to the same federal, state and
local laws as other companies conducting business on the
Internet. Currently, there are relatively few laws
specifically directed towards online services. However,
due to the increasing popularity and use of the Internet
and online services, it is possible that laws and
regulations will be adopted with respect to the Internet
or online services. These laws and regulations could
cover issues such as online contracts, user privacy,
freedom of expression, pricing, fraud, content and
quality of products and services, taxation, advertising,
intellectual property rights and information security.
Applicability to the Internet of existing laws governing
issues such as property ownership, copyrights and other
intellectual property issues, taxation, libel, obscenity
and personal privacy is uncertain. The vast majority of
these laws was adopted prior to the advent of the
Internet and related technologies and, as a result, do
not contemplate or address the unique issues of the
Internet and related technologies. Those laws that do
reference the Internet, such as the recently passed
Digital Millennium Copyright Act, have not yet been
---------------------------------
interpreted by the courts and their applicability and
reach are therefore uncertain. In addition, numerous
states, including the State of California, have
regulations regarding how "auctions" may be conducted and
the liability of "auctioneers" in conducting such
auctions. No legal determination has been made with
respect to the applicability of the California
regulations to the Company's business to date and little
precedent exists in this area. One or more states may
attempt to impose these regulations upon us in the
future, which could have material adverse effects on the
Company's business.
<P>
Several states have proposed legislation that would limit
the uses of end-user information gathered online or
require online services to establish privacy policies.
The Federal Trade Commission also has recently started a
proceeding with one online service regarding the manner
in which end-user information is collected from users and
provided to third parties. Changes to existing laws or
the passage of new laws intended to address these issues
could directly affect the way the Company does business
or could create uncertainty in the marketplace. This
could reduce demand for the services of the Company or
increase the cost of doing business as a result of
litigation costs or increased service delivery costs, or
could otherwise harm the Company's business.
<P>
Research and Development
<P>
From June 3, 1998, the date of incorporation of the
Company, to May 31, 1999 the Company expended $28,052 on
account of exploration costs and between June 1, 1999 and
May 31, 2000 the Company expended $122,400 on account of
exploration costs. The Company has, as of the date of
this filing, made expenditures of approximately $30,000
in respect to its e-commerce auction business.
<P>
Employees
<P>
As of the date of this filing, the Company has one full-
time and one part-time employee. Within the next twelve
months of operations, the Company expects to increase its
employees to approximately five full-time and two part-
time employees. All of the Company's employees will be
employed in the Company's internet e-commerce operations.
<P>
Risk Factors
<P>
The Company's business is subject to numerous risk
factors, including the following:
<P>
The Company has a limited operating history and the
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Company has not paid any dividends on its shares since
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incorporation. The only present source of future funds
--------------
available to the Company is through the sale of its
equity shares. The sale of additional equity capital by
the Company will cause dilution to existing shareholders
of the Company. Failure to obtain additional financing
on a timely basis could cause the Company to forfeit its
interest in such properties and reduce or cease its
operations. The Company has no history of earnings on
which investors may rely. The Company has paid no
dividends on its shares since incorporation and does not
anticipate doing so in the foreseeable future.
There is currently only a limited trading market for the
--------------------------------------------------------
Company's securities. As of the date of this filing,
---------------------
there is a limited market for the Company's securities as
unpriced quotations on the National Quotation Bureau's
"Pink Sheets". The Company intends to apply to list its
Common shares for trading on the OTC Electronic Bulletin
Board Market operated by the National Association of
Securities Dealer's Inc. ("NASD") in the United States.
However, there can be no assurance that the Company's
application will be approved nor can there be any
assurance that any market will develop for the Company's
securities in the future or, if developed, that it will
continue.
The adoption of new "penny stock" rules may have a
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potential adverse effect on the market for the Company's
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securities. The Securities and Exchange Commission has
-----------
adopted a Rule which established the definition of a
"penny stock", for the purposes relevant to the Company,
as any equity security that has a market price of less
than US $5.00 per share or with an exercise price of less
than US $5.00 per share, subject to certain exceptions.
For any transaction involving a penny stock, unless
exempt, the rules require: (i) that a broker or dealer
approve a person's account for transactions in penny
stocks; and (ii) the broker or dealer receive from the
investor a written agreement to the transaction, setting
forth the identity and quantity of the penny stock to be
purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must
(i) obtain financial information and investment
experience and objectives of the person; and (ii) make a
reasonable determination that the transactions in penny
stocks are suitable for that person and that person has
sufficient knowledge and experience in financial matters
to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver,
prior to any transaction in a penny stock, a disclosure
schedule prepared by the Commission relating to the penny
stock market, which in highlight form, (i) sets forth the
basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor
prior to the transaction. Disclosure also has to be made
about the risks of investing in penny stocks in both
public offerings and in secondary trading, and about
commissions payable to both the broker-dealer and the
registered representative, current quotations for the
securities and the rights and remedies available to an
investor in cases of fraud in penny stock transactions.
Finally, monthly statements have to be sent disclosing
recent price information for the penny stock held in the
account and information on the limited market in penny
stocks.
<P>
If the Company's securities become subject to the rules
summarized above on penny stocks, the market liquidity
for the Company's securities could be severely adversely
affected.
<P>
The Company's success is dependent on the continued
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services of key officers, employees, consultants and
----------------------------------------------------
other persons. The Company depends on a number of key
--------------
officers, employees, consultants and other persons, the
loss of any one of whom could have an adverse affect on
the Company. The Company does not carry any key man life
insurance on any of its key officers, employees or
consultants and does not intend to acquire same in the
immediate future. The Company's success also depends on
its ability to attract and retain additional qualified
employees. There can be no assurance that the Company
will be able to attract and retain key personnel. The
loss of the services of any of the key personnel, the
inability to attract or retain qualified personnel in the
future, or delays in hiring required personnel, could
have a material adverse affect on the Company's business,
results of operations and financial condition.
<P>
Limited Operating History Revenue and Minimal Assets may
--------------------------------------------------------
Result in Losses and Difficulty in Obtaining Financing.
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The Company has had limited operating history, has
received no revenue from operations and has minimal
assets. The Company will, in all likelihood, sustain
operating expenses in excess of revenues until it is
better established and will therefore require additional
funding to continue operations and to have sufficient
working capital to sustain operations. Because the
Company has minimal assets it may be difficult or even
impossible for the Company to obtain debt financing at
this stage in the Company's development. No assurances
can be given that the Company will operate profitably in
the future or that it will be able to obtain further
financing.
<P>
Without Further Financing the Company may Cease to be a
--------------------------------------------------------
Going Concern. The Company will need additional working
--------------
capital to be successful in its planned activity and
continuation of the Company as a going concern is
dependent upon obtaining the working capital necessary.
Management of the Company has developed a strategy which
it believes will accomplish the objective of obtaining
further funding through additional equity funding and
long term financing, which will enable the Company to
operate in the future. Although Management believes it
will be able to obtain such funding for the Company there
is no assurance they will be successful in order to keep
the Company operating as a going concern.
<P>
New and Developing Technologies/Market Conditions may
-----------------------------------------------------
Result in Projections not Being Achieved
----------------------------------------
The e-Commerce marketplace and in particular auctions
conducted over the Internet have been identified by
management as significant emerging market segments with
substantial projected growth potential. Should these
market segments not develop in the manner expected, or
should they fail to develop as quickly as anticipated,
the Company's business, sales, finances and operating
results could be materially and adversely affected
resulting in the Company being less profitable than
anticipated.
<P>
Lack of Experience of Management Could Lessen
---------------------------------------------
Profitability
-------------
Management of the Company has only limited business
experience in running an operating e-commerce company.
In implementing a successful marketing plan for the
Company's services, management lacks experience which
could result in the Company being less efficient with its
use of funds than if management had more experience.
Additional management skills and knowledge will be
required to operate the Company's business profitably if
sales volumes and revenues increase, and the number of
employees increase. Although management intends to
acquire more experienced personnel in the future as the
Company grows, until that occurs the Company may be less
profitable.
<P>
Risk of Obsolescence
---------------------
Unless the Company can continue to successfully develop
and upgrade its products, the products may become
obsolete compared with other Internet auction businesses
which are introduced to the market place. Because
technology evolves rapidly it is important for e-commerce
providers to be constantly refining and upgrading their
products to remain competitive. Although management
believes that the Company's personnel have the required
talent to cause the web-site to remain competitive, there
is no assurance that the web-site and the products
provided will not become obsolete.
<P>
Competition May Result in Lower Market Share and Lower
---------------------------------------------------------
Profitability. The market for e-commerce is intensely
competitive, evolving and subject to rapid technological
change. Intensity of competition is likely to increase
in the future. Increased competition from new
competitors is likely to result in loss of market share,
which could negatively impact the Company's business.
Competitors vary in size, and in scope and breadth of the
products and services offered and the Company may receive
competition from several major competitors. In addition,
because there are relatively low barriers to entry in
this market, additional competition from other
established and emerging companies may develop.
<P>
Many current and potential competitors have longer
operating histories, significantly greater financial,
technical, marketing and other resources than the
Company. As well, many other companies have significantly
greater name recognition and a larger base of customers.
Many competitors have well-established relationships with
clients and potential clients, and have extensive
knowledge of the industry. Current and potential
competitors have established or may establish cooperative
relationships among themselves or with third parties to
increase the ability of their products to address
customer needs. Accordingly, it is possible that new
competitors, or alliances among competitors, may emerge
and rapidly acquire significant market share which may
result in lower usage of the Company's services resulting
in the Company being less profitable.
<P>
Plan of Operation
<P>
General Plan of Operation
<P>
E-commerce Industrial Auction Industry
---------------------------------------
Management believes that it can capitalize on the
emerging importance of E-commerce focused on industrial
goods and services. The two main areas for growth in
industrial e-commerce are online auctions and shopping
cart model virtual stores in which purchases can be made
directly off the web following the grocery store shopping
cart model. It is the intention of the Company to attain
these two e-commerce areas on the Internet because at
this point in time there are very few businesses
exploiting these areas in industrial goods and services.
The Company's focus on industrial goods and services for
auctions and virtual stores was made because industrial
products and services usually have higher sales tags and
the accompanying commissions on auctions and sales will
commensurately be higher which management believes it
can capitalize on.
<P>
The Company intends to operate their industrial auction
site as a free, 24-hour, self-listing site set up on a
country-by-country basis for selected countries
worldwide. The Company will initially target the regions
of Canada and the United States for its industrial
auction site services. The Company's shopping cart
virtual store set-up for clients will also be a free
service. On both the auction and virtual shop industrial
items sold, the Company expects to collect a commission
fee of up to 5% of the value of the sale. Furthermore,
the Company's virtual stores will be marketing free web
pages for industrial customers and will be set up by its
staff in collaboration with its customers. The Company
will require their client Company's sales inventory and
price lists, logo and other pertinent information to set
up their respective stores thus allowing Buyers to
purchase online.
<P>
E-Commerce Industry Overview
-----------------------------
<P>
United States business-to-business ("B2B") e-commerce
will hit $2.7 trillion in 2004, as more than 90% of firms
interviewed described plans to buy and sell on the
Internet, according to a report titled "e-Market places
Boost B2B Trade" by Forrester Research (the "Forrester
------------------
Report").
<P>
According to the Forrester Report, the B2B growth will
also be accelerated by the rapid development of e-
Marketplace new models for conducting e-commerce,
including auctions, aggregators, bid systems and
exchanges. By 2004, Forrester expects these e-
Marketplaces to capture 53% of all online business trade.
<P>
"United States businesses are universally preparing to
buy and sell online, leveraging the Net to build deeper
relationships with their business partner," states Steven
J. Kafka, an e-Business Trade analyst at Forrester. "But
the rampant growth of online trade through these one-to-
one business connections will taper off after 2001, as
firms more actively participate in e-Marketplaces to
connect with a wider universe of buyers and sellers."
<P>
Over the next two years, e-Marketplaces will spring up
within most industries, attacking outdated business
practices and inefficient trading relationships,
according to the Forrester Report. To determine where
Net marketplaces will thrive, Forrester Research has
created the e-Marketplace Opportunity Index (eMOI), which
estimates the level of e-Marketplace trade with an
industry based on two characteristics: 1) product fit
identifying the impact of product standardization,
perishability and high transaction volumes; and 2)
industry readiness modeling the influence of structural
items like fragmentation, distribution channel complexity
and unpredictability of supply or demand. Using the
eMOI, Forrester Research predicts that e-Marketplaces
will ultimately account for between 45% and 74% of e-
commerce in a supply chain.
<P>
The largest impact will be in the computing and
electronics, shipping and warehousing and utilities
industries where more than 70% of online trade will go
through e-Marketplaces, Forrester predicts. By contrast
heavy industries and aerospace and defense will find less
than 50% of their e-commerce flowing through e-
Marketplaces. As firms hook into e-Marketplaces and
adopt more dynamic trading practices, existing business
practices and supply chain relationship will get pulled
apart, according to the report. In place of today's
sequential industry connections, Forrester expects the
exploding number of new interconnections will create a
new market structure e-Business Networks in which
partners can switch allegiances without cost, information
and best practices spread easily and market feedback
flows in real time.
<P>
"Although the majority of firms expect to be drawn into
e-Marketplaces, they're still not exactly sure how
they'll participate," Kafka stated, "What is clear, is
that large companies should treat their participation in
e-Marketplaces as strategic assets and suppliers must
prepare themselves for new rules in these dynamic
marketplaces."
<P>
For its report, Forrester Research interviewed 80
purchasing and sales executives from Fortune 1,000 firms.
Forrester's business e-commerce forecast is based on a
model of business-to-business trade in 13 hard-goods
supply chains and draws upon data from the US Government,
industry sources and interviews and Forrester's own
research. Forrester Research defines B2B e-commerce as
inter-company trade in which the final order is placed
over the Internet.
<P>
Description of Products and Services
------------------------------------
<P>
Sierra Gigante has purchased the rights to use the domain
name "B2Bauctionworld.net," and reserved the corporation
name of "B2B Auction World, Inc.," with the Registrar of
Companies in the Province of British Columbia, Canada and
the State of Nevada. Presently, a website is being
designed to carry out the functions presented in the
Company's concept of providing an industrial online
auction and virtual shopping cart site. Sierra Gigante
has contracted with Isoplus Quality Systems, Ltd., to
design and host its website who have completed the front-
end preliminary page layout. Many of the links on the
website are not operative and the page is for
demonstration purposes only until final completion. The
Company's preliminary page may be found at
http://www.b2bauctionworld.net.
<P>
The Company expects to derive additional revenues by the
provision of financial services related to both auction
and sales activities. These services include escrow
accounts and loans. The Company will broker these
services to financial organizations for a fee.
Currently, the Company does not have any affiliations
with any financial organizations to provide such products
and services, and is currently negotiating with certain
financial organizations to establish its network of
affiliations.
<P>
Status of Online Product Service
---------------------------------
<P>
Sierra Gigante's website has gone through preliminary
front-end design for a few screens and may be found at
the site www.b2bauctionworld.net. Further design work on
-----------------------
the Company's front-end and back-end (database
characteristics) linkages on its website still have to be
established. Preliminary discussions with the University
of British Columbia database personnel have been carried
out and they will likely be contracted to assist in the
development of the back-end database and linkage to the
back end of the site. Extensive coding will likely be
contracted to a software development arm of the Ministry
of Astrophysics, Chinese Academy of Sciences, Beijing,
China with which Isoplus Quality Systems has a working
relationship. In addition, the Company will contract
server and database services with a large provider such
as Telus in British Columbia. It is expected that the
site will be operational within the next 4 to 6 months.
Global operation of Sierra Gigante's website is expected
to be implemented in 12 months of the start-up date. The
Company's services of both auction and virtual stores
will be provided for the following categories in the
table below.
<P>
<TABLE>
Industrial Categories Table
<S> <C> <C>
Air Moving/Blowing Audio Visual Automotive
Aviation-Related Boilers/Furnaces Building/Plant Maintenance
Can & Cap Equipment Cements Ceramics & Tiles
Chemical Processing Compressors/Air & Gas Computer/peripheral
Construction/Earth Moving Electrical Power Electronic
Environmental Fluid/Hydraulic Power Food/Beverage Processing
General Machinery Laboratory Leather
Machine Tools Material Handling Medical
Metalworking Mining/Mineral Processing Office/Furniture
Oil/Gas Drilling Packaging Paints/Varnish
Plastic/Rubber/Paper Printing Pumps
Refrigeration/Air Conditioning/
Warm Air Ships/Boats/Maritime Textile
Testing/Inspection Woodworking Valves/Controls
RESOURCES Other
. Wood
. Coal
. Iron Ore
. Minerals
. Oil
. Water
</TABLE>
<P>
The Company has contacted Trade Commission offices in a
number of countries to obtain names of firms interested
in acting as marketing agents in their respective
countries. Management expects this process will continue
until all selected countries are targeted. Once the
Company has the names of interested parties, Sierra
Gigante will follow up and select the best candidates to
carry its marketing efforts. It is expected that
internal marketing and sales personnel are still required
to be retained for the US and Canada.
<P>
The Company has completed a front end model page which
can be found at http://www.b2cauctionworld.net . The
Company is presently linking up its various databases on
a development page. It has already developed, linked and
tested the registration and category listings on its
auction component and fully developed its industrial mall
shopping cart model component. Completion of the
development is expected to be within 8 to 10 weeks with
on line status shortly thereafter.
<P>
Other Opportunities
<P>
In addition, the Company believes that there are numerous
opportunities to acquire other businesses with
established bases, compatible operations, experience with
additional or emerging services and technologies, and
experienced management. The Company believes that these
acquisitions, if successful, will result in synergistic
opportunities, and may increase the Company's revenue and
income growth.
<P>
The Company intends to seek opportunities to acquire
businesses, services and/or technologies that it believes
will complement its business operations. In addition,
the Company may seek to acquire certain component
technologies that may provide opportunities to accelerate
its exploration, service and development efforts.
<P>
Employees
<P>
As of the date of this filing, the Company has one full-
time and one part-time employee. Within the next twelve
months of operations, the Company expects to increase its
employees to approximately five full-time and two part-
time employees. All of the Company's employees will be
employed in the Company's Internet e-commerce operations.
<P>
Funding Requirements for the next twelve months
<P>
The Company anticipates that it will require funding for
the continued development of its e-commerce operations
over the next twelve-months.
<P>
The Company's present working capital will not be
sufficient to fund the Company's proposed plan of
operations for the next twelve months and accordingly,
the Company will be required to conduct additional share
issuances to raise further capital. Such further stock
issuances will increase outstanding shares, and further
dilute existing shareholders' interests. Since the
Company's common stock is currently subject to the
existing rules on penny stocks, the market liquidity for
the Company's securities can be severely adversely
affected.
<P>
Consulting Agreement
<P>
On August 1, 2000 the Company entered into an agreement
with "The Rowe Group" ("TRG") to provide the Company with
strategic business development, management consulting,
marketing and sales management, coordinating strategic
alliances and crisis management services. The duration
of the contract is approximately six (6) months ending
February 1, 2001 and is renewable upon mutual agreement
of both parties. The contract may be cancelled during
the first six (6) month term upon written notice from one
party to the defaulting party; the defaulting party has
thirty (30) days to rectify any deficiency. In addition,
the agreement may be cancelled after six (6) months by
either party for any reason upon written notification
from one party to the other.
<P>
In exchange for consulting services, the Company will
compensate TRG a monthly retainer of $5,000 USD during
the initial six (6) month period of August 1, 2000 to
February 1, 2001; reimbursement of out-of-pocket expenses
up to $500 USD without advance approval from the Company
and more than $500 USD with the advance approval from the
Company. In addition, the Company has agreed to grant
TRG the option to purchase 400,000 shares of the
Company's stock at $0.30 per share exercisable within 12
months of the date of this contract; 50% on signing, 25%
in three months and 25% in six months.
<P>
On August 1, 2000, the option to purchase the Company's
common stock was further delineated to specify the terms
of their agreement. "The Rowe Group" will have the
option to purchase 400,000 shares at $0.30 per share.
The purchase of said options shall be exercisable as
follows:
<P>
(a) TRG may exercise its option to purchase up
to 200,000 shares of the Company's common
stock at $0.30 per share upon execution of
this option agreement.
<P>
(b) TRG may exercise its option to purchase up
to an additional 100,000 shares of the
Company's common stock at $0.30 per share on
or after November 1, 2000.
<P>
(c) TRG may exercise its option to purchase up
to an additional 100,000 shares of the
Company's common stock at $0.30 per share on
or after February 1, 2001. See Item 3 below.
<P>
Description of Property
-----------------------
<P>
Facilities
<P>
The Company's headquarters and facilities are located at
355 Burrard Street, Suite #1000, Vancouver, BC Canada V6C
2G8.
If additional facilities are needed, the Company believes
that suitable expansion space is available to meet its
future needs at commercially reasonable terms.
Currently, the Company's office provides sufficient work
space to commence with initial operations. The office
consists of 850 square feet leased to the Company at the
rate of approximately $4.00 (Can.) per square foot or
$3424.00 (Can.) per month including goods and services
tax.
<P>
Investment Policies
<P>
Management believes that by diversifying its business
operations to include an investment in the business-to-
business E-commerce sector, it can capitalize on a market
niche focused on industrial products and services which
allows for greater profit potential with regard to the
capital outlays for such products and services.
<P>
Legal Proceedings
<P>
The Company is not a party to any current legal
proceedings, nor are any legal proceedings currently
pending or threatened against the Company.
<P>
EXECUTIVE COMPENSATION
----------------------
<P>
The following table is a summary of the compensation paid
to the President and Chief Executive Officer (one person)
of the Company, the four highest paid executive officers
and the four highest paid employees (not serving as
Executive Officers) for the past fiscal years (the "Named
Executive Officers"):
<P>
<TABLE>
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Compensation Long Term Compensation
------------------- -------------------------
Awards Pay-outs
-------------------------------------
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name and Compensa- Award(s) Options Payouts Compen-
Principal tion ($) SAR's ($) sation
Position Year Salary Bonus ($) (#) ($)
------------------------------------------------------------------------------------------
Raymond Merry, 1998(1) -0- -0- -0- -0- -0- -0- -0-
President,
CEO 1999(2) 20,000 -0- -0- -0- -0- -0- -0-
<P>
David S. Wiggins
Director 1998(1) -0- -0- -0- -0- -0- -0- -0-
1999(2) NIL -0- -0- -0- -0- -0- -0-
</TABLE
<P>
(1) For the period from June 3, 1998 (inception) to
May 31, 1999.
<P>
(2) For the fiscal year June 1, 1999-May 31, 2000.
Mr. Merry's salary of $4,000 per month commenced January
1, 2000 and has been accrued but not paid.
<P>
In additional to the base salary, annual bonuses may be
paid based on profitability and performance of the
Company. These bonuses will be set, from time to time,
by the Board of Directors.
<P>
Management's salary will be based upon the performance of
the Company. Management's performance bonuses will be
decided by a disinterested majority of the Board of
Directors of the Company. In addition, management's base
salaries can be increased by the Board of Directors of
the Company based on the attainment of financial and
other performance guidelines set by the Company.
<P>
There were no grants of stock options to the Named
Executive Officers during the period from June 3, 1998 to
May 31, 1999. However, subsequent to the Company's May
31, 1999 fiscal year-end, the Company granted stock
options to the Named Executive Officers on August 2, 1999
pursuant to a stock option plan . The Company's Board of
Directors instituted a formal stock option plan on August
2, 1999, in which a total of 783,311 shares of Common
Stock of the Company were reserved for issuance under the
Company's 1999 Stock Option Plan (the "Plan"). The Plan
was adopted and approved by the Company's Board of
Directors on August 2, 1999, and provided for a grant to
the Company's officers, directors and key employees and
consultants options to purchase Common Stock at a
purchase price of $0.10 per share of Common Stock.
Pursuant to the Plan the Company granted Ray Merry an
option to purchase 383,311 shares at an exercise price of
$0.10 per share and granted David S. Wiggins an option to
purchase 100,000 shares at an exercise price of $0.10 per
share. The Plan expired by its own terms (as adopted by
the Board of Directors) on August 2, 2000, and
accordingly there are no stock options outstanding as of
the date of this filing.
<P>
There were no long term incentive plans ("LTIP") in place
for any Named Executive Officer of the Company during the
most recently completed financial year.
<P>
During the most recently completed financial year there
was no arrangement, standard or otherwise, for cash or
non-cash compensation, pursuant to which directors were
compensated by the Company in their capacity as directors
except for the granting of incentive stock options.
<P>
There are no plans or arrangements for the compensation
of the Named Executive Officers in the event of their
termination of employment or a change of responsibilities
following a change of control.
<P>
Pursuant to a consulting agreement dated March 14, 2000
between Marino Middleton and the Company, Mr. Middleton
is paid Cdn$50.00 per hour for services rendered.
<P>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTION
----------------------------------------------
<P>
There are no related party transactions, or any other
transactions or relationships required to be disclosed
pursuant to Item 404 of Regulation S-B apart from the
following:
<P>
(a) Marino Middleton Consulting Agreement. On
---------------------
March 14, 2000, the Company entered into a Consulting
Agreement with Marino Middleton. The Consulting
Agreement is for an initial six-month term, and may be
extended for further six-month terms on the mutual
agreement of the parties. Under the terms of the
Consulting Agreement, Mr. Middleton provides the Company
with computer-related services, including, but not
limited to, website design, software and database
application design and implementation, market research
and promotion, co-ordination of staffing and employees
and such further and other services as the parties may
agree to. Mr. Middleton is compensated on an hourly rate
for such services as he may be called upon to provide, at
the rate of Cdn$50.00 per hour.
<P>
(b) Marino Middleton Assignment Agreement. On
---------------------
March 14, 2000, the Company entered into an Assignment
Agreement with Isoplus Quality Systems Ltd., and its'
principal Marino Middleton whereby the Company was
assigned all of Isoplus and Middleton's right, title and
interest in and to the e-commerce industrial auction
website concept and related programming and documentation
(see Item 1 "Description of Business" for full
details).
<P>
None of the directors, executive officers nor any member
of the immediate family of any director or executive
officer has been indebted to the Company since its
inception.
<P>
DESCRIPTION OF SECURITIES
-------------------------
<P>
The Company's authorized capital stock consists of
25,000,000 shares of Common Stock, $0.001 par value per
share. There are 11,724,397 Common Shares issued and
outstanding as of the date of this filing.
<P>
The holders of the Common Stock: (i) have equal rights
to dividends from funds legally available therefore,
ratably when as and if declared by the Board of Directors
of the Company; (ii) are entitled to share ratably in all
assets of the Company available for distribution to
holders of Common Stock upon liquidation, dissolution, or
winding up of the affairs of the Company; (iii) do not
have preemptive, subscription or conversion rights and
there are no redemption or sinking fund provisions
applicable thereto; (iv) are entitled to one non-
cumulative vote per share of Common Stock, on all matters
which stockholders may vote on at all meetings of
Shareholders; (v) all of the shares of Common Stock, now
outstanding are fully paid and non-assessable; and (vi)
the holders of Common Stock have no conversion,
preemptive or other subscription rights. There is no
cumulative voting for the election of directors.
<P>
MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
<P>
(a) Market Information
------------------
<P>
The Company's Common Stock is cleared for an unpriced
quotation on National Quotation Bureau's "Pink Sheets".
Currently, trading in the Company's Common Stock on this
market has been limited. The Company intends to apply to
list its Common Stock for trading on the OTC Electronic
Bulletin Board Market operated by the National
Association of Securities Dealer's Inc. ("NASD").
However, there is no assurance that any market will
develop or, if such a market does develop, that it will
continue.
<P>
Summary of the Closing Bid Prices for the Quarter Ended:
</TABLE>
<TABLE>
<S> <C> <C>
Date High Low
June 30, 1999 N/A N/A
September 30, 1999 N/A N/A
December 31, 1999 .40 .25
March 29, 2000 .25 .25
June 31, 2000 .40 .125
</TABLE>
<P>
The Securities and Exchange Commission adopted Rule 15g-
9, which established the definition of a "penny stock,"
for purposes relevant to the Company, as any equity
security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per
share, subject to certain exceptions. For any
transaction involving a penny stock, unless exempt, the
rules require: (i) that a broker or dealer approve a
person's account for transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a
written agreement to the transaction, setting forth the
identity and quantity of the penny stock to be purchased.
In order to approve a person's account for transactions
in penny stocks, the broker or dealer must (i) obtain
financial information and investment experience and
objectives of the person; and (ii) make a reasonable
determination that the transactions in penny stocks are
suitable for that person and that person has sufficient
knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny
stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule
prepared by the Commission relating to the penny stock
market, which, in highlight form, (i) sets forth the
basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor
prior to the transaction. Disclosure also has to be made
about the risks of investing in penny stock in both
public offering and in secondary trading, and about
commissions payable to both the broker-dealer and the
registered representative, current quotations for the
securities and the rights and remedies available to an
investor in cases of fraud in penny stock transactions.
Finally, monthly statements have to be sent disclosing
recent price information for the penny stock held in the
account and information on the limited market in penny
stocks.
<P>
There can be no assurances that the Company will qualify
its securities for listing on NASD or some other national
exchange, or be able to maintain the maintenance criteria
necessary to insure continued listing. The failure of
the Company to qualify its securities or to meet the
relevant maintenance criteria after such qualification in
the future may result in the discontinuance of the
inclusion of the Company's securities on a national
exchange. In such event, trading, if any, in the
Company's securities may then continue in the National
Quotation Bureau's "Pink Sheets". As a result, a
shareholder may find it more difficult to dispose of, or
to obtain accurate quotations as to the market value of,
the Company's securities.
<p>
(b) Holders.
--------
<P>
There are approximately 77 holders of the Company's
Common Stock, not including shareholders who hold their
shares in the name of Cede & Co.
<P>
As of the date of this Registration Statement,
approximately 9,500,000 shares of the Company's Common
Stock are restricted pursuant to Rule 144 promulgated
under the Securities Act of 1933, as amended. In
general, under Rule 144, a person (or persons whose
shares are aggregated), who has satisfied a one year
holding period, under certain circumstances, may sell
within any three-month period a number of shares which
does not exceed the greater of one percent of the then
outstanding Common Stock or the average weekly trading
volume during the four calendar weeks prior to such sale.
Rule 144 also permits, under certain circumstances, the
sale of shares without any quantity limitation by a
person who has satisfied a two-year holding period and
who is not, and has not been for the preceding three
months, an affiliate of the Company.
<P>
None of the outstanding restricted shares are currently
available for resale pursuant to Rule 144.
<P>
(c) Dividends.
----------
<P>
The Company has not paid any dividends to date and has no
plans to do so in the immediate future.
<P>
LEGAL PROCEEDINGS
<P>
There is no litigation pending or threatened by or
against the Company.
<P>
RECENT SALES OF UNREGISTERED SECURITIES
<P>
Since it's incorporation on June 3 1998, the Company has
made the following issuances of unregistered securities:
<P>
1.8,000,000 shares of common stock were issued at the
initial meeting of the Company's shareholders following
its incorporation, at a par value of $0.001 to its
founders for cash of $8,000. Accordingly, the issuance
of shares was exempt from the registration requirements
of the Act pursuant to Section 4(2) of the Act. These
shares are restricted pursuant to Rule 144 and were
issued to the following persons:
<P>
Name No. of Shares
Ray Merry 6,500,000
Domenic Del Monte 500,000
Murray McClaren 500,000
Shannon MacQuarrie 500,000
<P>
2. 761,160 shares of common stock were issued by the
Company on August 28, 1998 at a price of approximately
$0.07 per share (See chart below). Such shares were
issued pursuant to an exemption from registration
provided by Regulation D, Rule 504.
<TABLE>
<S> <C> <C> <C>
Name No. of Name No. of
Share Shares
Edward Smith 5,000 Ellen Henderson 8,000
Shannon MacQuarrie 4,000 Elizabeth Rowand 8,000
Tracey Weloy 4,000 Lorenzo Sarra 8,000
Brenda Dowell 4,000 Cesare Gentile 8,000
Alberta Joihnstone 4,000 Dave Weloy 10,000
Margaret MacQuarrie 6,000 Ray Wiseman 8,000
Sandra DiPalma 2,400 Ellen Troobitscoff 5,000
Angilo Bavaro 6,400 Howard T. Garbe 8,000
Patti Mackay 4,000 Carole Milner 8,000
Michael Cafe 4,000 Denise Parker 5,000
Peter Popovich 4,000 Mark Dowell 8,000
Donna McCarthy 4,000 J. Paul Stevenson 10,000
Rob Chuter 4,000 Chris Sampson 8,000
Angella Cottreau 2,000 Bruce MacDonald 8,000
Shane Cottreau 2,000 Bonnie Berg 8,000
Michelle Eckstein 2,000 Darvyn Keating 8,000
Chris Cade 13,360 Gordon Weary 8,000
Bruce Hollingshead 50,000 Erin O'Brien 8,000
Gord Karpinsky 5,000 DM Weary 5,000
Glenn Yamada 12,000 John J. Plourde 8,000
Kenneth D. Hanson 4,000 Steve Horvat 8,000
Guy McKintuck 4,000 Sam Klassen 5,000
Remi Trudel 4,000 Denise Mayo 10,000
Irene Fabbian 4,000 Raquel Mayo 8,000
Ernie Fabbian 4,000 Steven Harris 10,000
Darryl G. Morris 5,000 Cynthia Chan 28,000
Colin R. Anderson 4,000 Tanya Chan 10,000
Dale R. Anderson 4,000 Derek Szeto 8,000
Sergio Zanatta 4,000 Pi-llwa Wong 8,000
Al Hebenton 4,000 Chun Wing Wong 8,000
Glenn Yamada 28,000 Tyron Tsui 8,000
Christina Merry 10,000 Breck Lemke 8,000
Robert J. Parker 25,000 Cyrna Point 8,000
John L. Patrick 10,000 Alex Yim 8,000
Vince DiPalma 8,000 Jerry W, Lemke 8,000
Maria Thompson 5,000 Louise Szeto 8,000
Frank Ludtke 8,000 Joshua Cabrak 8,000
Tony Sarra 10,000 Gertie Quon 8,000
Antonio Marinelli 50,000 Maria Selomenia Showy 8,000
Carlo Minion 6,000 Robert Vermeulen 8,000
Pavel Andrash 8,000 Clara Vermeulen 8,000
Guido Del Monte 8,000 Day Szeto 8,000
Deanna Del Monte 8,000 Silvana Szeto 8,000
Victoria L. Del Monte 8,000 Raymond Chan 8,000
Kay Hardeman 8,000
Mark Henderson 8,000
</TABLE>
<P>
3. 220,236 shares of common stock were issued by the
Company on April 6, 1999 at a price of approximately
$0.25 per share (See chart below). Such shares were
issued pursuant to an exemption from registration
provided by Regulation D, Rule 504.
<P>
(A)71,752 shares of common stock were issued by the
Company on April 6, 1999 at a price of $0.25 per share to
the following persons:
<TABLE>
<S> <C> <C>
Name No. of
Shares
Glen Horn 13,072
Sergio Zanatta 13,072
Tina Winteringham 5,228
Hugh Dan McDonald 9,152
Mary Guthrie and Art Guthrie 12,000
G. Dell Hudson & Norma Hudson 5,228
John Massullo 4,000
William Johnstone 4,000
</TABLE>
(B)148,484 shares of common stock were issued by the
Company on April 6, 1999 at a price of $0.25 per share of
conversion of convertible debentures to the following
persons:
<TABLE>
<S> <C> <C>
Name No. of
Shares
Gord Karpinsky 5,152
Kevin Morneau 10,000
Garnet Best 4,000
James Best and Cari Best 2,000
Bruce Hollingshead 50,000
Glenn Yamada 20,000
Kevin Morneau 10,000
Ed Smith 53,332
</TABLE>
<P>
4. 50,000 shares of common stock were issued by the
Company to Michael Elson on April 6, 1999 at a price of
$0.40 per share for conversion of convertible debentures.
Such shares were issued pursuant to an exemption from
registration provided by Regulation D, Rule 504.
<P>
5. 10,000 shares of common stock were issued by the
Company to David S. Wiggins on April 6, 1999 at a price
of $0.35 per share for conversion of convertible
debentures. Such shares were issued pursuant to an
exemption from registration provided by Regulation D,
Rule 504.
<P>
6. 2,000,000 shares of common stock were issued by
the Company on June 24, 1999 at a price of $0.001 per
share as follows: (1) 529197 BC Ltd. - 1,000,000 shares;
(2) Ken Smith - 500,000 shares and (3) David S. Wiggins -
500,000 shares. Accordingly, the issuance of shares was
exempt from the registration requirements of the Act
pursuant to Section 4(2) of the Act. These shares are
restricted pursuant to Rule 144.
<P>
7. 505,667 shares of common stock were issued by
the Company on March 9, 2000 to American Global
Investment, Inc. at a price of $0.30 per share. Such
shares were issued pursuant to an exemption
from registration provided by Regulation D, Rule 504.
These shares are restricted pursuant to Rule 144.
<P>
8. 100,000 shares of common stock were issued by
the Company to Linzey Capital Inc. on March 16, 2000 at a
price of $0.30 per share. Such shares were issued
pursuant to an exemption from registration provided by
Regulation D, Rule 504. These shares are restricted
pursuant to Rule 144.
<P>
9. 77,334 shares of common stock were issued by the
Company to American Global Investment, Inc. on July 28,
2000 at a price of $0.30 per share. Such shares were
issued pursuant to an exemption from registration
provided by Regulation D, Rule 504. These shares are
restricted pursuant to Rule 144.
<P>
Of the 11,724,397 shares of Common Stock outstanding,
10,000,000 shares which are owned by certain founding
shareholders, key employees and/or consultants are
restricted pursuant to Rule 144 of the Securities Act of
1933. Such shares will not be available for sale in
the open market without registration except in reliance
upon Rule 144 under the Act. In general, under Rule 144
a person (or persons whose shares are aggregated) who has
beneficially owned shares acquired in a non-public
transaction for at least one year, including persons who
may be deemed "affiliates" of the Company, as that term
is defined under the Act, would be entitled to sell
within any three (3) month period, a number of shares
that does not exceed the greater of one percent (1.0%) of
the then outstanding shares of Common Stock, or the
average weekly reported trading volume on all national
recognized securities exchanges during the four (4)
calendar weeks preceding such sale, provided that
certain current public information is then available.
Upon eligibility, if a substantial number of shares owned
by certain founding shareholders, key employees and/or
consultants were sold pursuant to Rule 144 or registered
offering, the market price of the Common Stock could be
adversely affected.
<P>
Each shareholder set forth above was either an
"accredited investor" (as that term is defined in the
1933 Act) or a sophisticated investor, and each
shareholder was provided all information necessary
in order to allow each investor to exercise their
respective business judgment as to the merits of the
investment.
<P>
INDEMNIFICATION OF DIRECTORS AND OFFICERS
<P>
The Company's Articles of Incorporation provide that
officers and directors shall have no personal liability
to the corporation or its stockholders for damages for
breach of fiduciary duty as an officer or director. This
provision does not eliminate or limit the liability of an
officer or director for acts or omissions which involve
intentional misconduct, fraud or a knowing violation of
law or the payment of dividends and/or distributions in
violation of Nevada Revised Statutes. With respect to
matters as to which the Company's officers and directors
and others are determined to be liable for misconduct or
negligence, including gross negligence in the performance
of their duties to the Company, Nevada law provides for
indemnification only to the extent that the court in
which the action or suit is brought determines that such
person is fairly and reasonably entitled to
indemnification for such expenses which the court deems
proper.
<P>
Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to officers, directors or
persons controlling the Company pursuant to the
foregoing, the Company has been informed that in the
opinion of the U.S. Securities and Exchange Commission
such indemnification is against public policy as
expressed in the 1933 Act, and is therefore
unenforceable.
<P>
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
<P>
No court or governmental agency has assumed jurisdiction
over any substantial part of the Company's business or
assets.
<P>
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
<P>
The Company's former accountant, Tim Lilligren, willingly
resigned on May 31, 1999 because he was not qualified
under the required Securities and Exchange Commission
practice guidelines to provide the necessary accounting
statements. The principal accountant's report on the
Company's financial statements for the past two years did
not contain an adverse opinion or disclaimer of opinion
and were not modified as to uncertainty, audit, scope or
accounting principals. The decision to change
accountants was recommended and approved by the board of
directors. There were no disagreements with the former
accountant on any matter of accounting principals or
practices, financial statements disclosure or auditing
scope or procedure. The Company hired the accounting
firm of Elliott, Tulk, Pryce Anderson, Chartered
Accountants to replace the former accountants to act as
principal accountants to audit the Company's financial
statements.
<P>
Finally, Elliott Tulk Pryce Anderson, Chartered
Accountants, prepared the Company's reviewed financial
statements for the quarter ended August 31, 2000 and
unaudited pro forma combined condensed financial
statements contained herein. Elliott Tulk Pryce
Anderson has been retained as the Company's new
accountants.
<P>
ITEM 5. OTHER EVENTS
<P>
SUCCESSOR ISSUER ELECTION. Pursuant to Rule 12g-3(a) of
the General Rules and Regulations of the Securities and
Exchange Commission, the Company elected to become the
successor issuer to Anmore Management Inc. for reporting
purposes under the Securities Exchange Act of 1934 and
elects to report under the Act effective September 12,
2000.
<P>
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
<P>
No directors have resigned due to a disagreement with the
Company since the date of the last annual meeting of
shareholders.
<P>
ITEM 7. FINANCIAL STATEMENTS
<P>
The audited consolidated financial statements for the
year ending May 31, 2000, the year ending May 31, 1999,
and the reviewed financial statements for the quarter
ending August 31, 2000 are filed herewith. We have also
included the unaudited pro forma combined financial
statements for the quarter ending August 31, 2000.
<P>
ITEM 8. CHANGE IN FISCAL YEAR
<P>
There has been no change in the Company's fiscal year.
<P>
SIERRA GIGANTE RESOURCES, INC.
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED AUGUST 31, 2000
PRO FORMA COMBINED CONDENSED FINANCIAL DATA
<P>
To the Board of Directors
<P>
Sierra Gigante Resources
Vancouver B.C. Canada
<P>
The Unaudited Pro Forma Combined Statement of Operations
of the Company for the three-month period ended August
31, 2000 and the year ended May 31, 2000(the "Pro Forma
Statements of Operations") and the Unaudited Pro Forma
Combined Balance Sheet of the Company as of August 31,
2000 and May 31, 2000, have been prepared to illustrate
the estimated effect of the Anmore Management, Inc
Transactions. The Pro Forma Financial Statements do not
purport to be indicative of the results of operations or
financial position of the Company that would have
actually been obtained had such transactions been
completed as of the assumed dates and for the period
presented, or which may be obtained in the future. The
pro forma adjustments are described in the accompanying
notes and are based upon available information and
certain assumptions that the Company believes are
reasonable. The Pro Forma Financial Statements should be
read in conjunction with the separate historical
consolidated financial statements of Sierra Gigante
Resources and Anmore Management, Inc. and the notes
thereto.
<P>
A preliminary allocation of the purchase price has been
made to major categories of assets and liabilities in the
accompanying Pro Forma Financial Statements based on
available information. The actual allocation of purchase
price and the resulting effect on income from operations
may differ significantly from the pro forma amounts
included herein. These pro forma adjustments represent
the Company's preliminary determination of purchase
accounting adjustments and are based upon available
information and certain assumptions that the Company
believes to be reasonable. Consequently, the amounts
reflected in the Pro Forma Financials Statements are
subject to change, and the final amounts may differ
substantially.
<P>
/s/ Elliott, Tulk, Pryce, Anderson
----------------------------------
Chartered Accountants
Vancouver, B.C. Canada
September 12, 2000
<P>
Sierra Gigante Resources, Inc.
(A Development Stage Company)
Pro Forma Consolidated Balance Sheets
As at August 31, 2000
(unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Sierra Gigante Anmore
Resources, Inc. Management Inc. Adjustments Pro Forma
$ $ $ $
<P>
Assets
Current Assets
Cash 17,469 (90,000) (72,531)
Prepaid expenses and other
current assets 28,502 28,502
--------------------------------------------------------------------------------------
45,971 (90,000) (44,029)
<P>
Property, Plant and Equipment 90,479 90,479
Mineral Properties 1 1
--------------------------------------------------------------------------------------
136,451 (90,000) 46,451
======================================================================================
Liabilities and Stockholders' Equity
<P>
Current Liabilities
<P>
Accounts payable 10,591 10,591
Note payable 30,000 30,000
Due to related parties 45,433 45,433
--------------------------------------------------------------------------------------
86,024 86,024
--------------------------------------------------------------------------------------
Stockholders' Equity
Common stock - 25,000,000 shares
authorized at $.001 par value,
11,734,397, issued and
outstanding 11,724 210 (200) 11,734
Additional paid-in capital 435,141 (90,010) 345,131
Stock based compensation -
stock options 31,620 31,620
Deficit accumulated during the
development stage (428,058) (210) 210 (428,058)
--------------------------------------------------------------------------------------
Total Stockholders' Equity 50,427 (90,000) (39,573)
--------------------------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity 136,451 (90,000) 46,451
======================================================================================
<P>
</TABLE>
<TABLE>
Sierra Gigante Resources, Inc.
(A Development Stage Company)
Pro Forma Consolidated Statements of Operations
For the Three Months Ended August 31, 2000
(unaudited)
<S> <C> <C> <C> <C>
Sierra Gigante Anmore Pro Forma
Resources, Inc. Management Inc. Adjustments Pro Forma
(Note 2)
$ $ $ $
Revenues
---------------------------------------------------------------------------------------
Expenses
General and administrative 36,966 36,966
Selling and marketing 1,185 1,185
Product development 16,756 16,756
General exploration 3,321 3,321
---------------------------------------------------------------------------------------
Total Expenses 58,228 58,228
---------------------------------------------------------------------------------------
Net Loss For The Period (58,228) (58,228)
---------------------------------------------------------------------------------------
Basic Net Loss Per Share (0.01) (0.01)
---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
Sierra Gigante Resources, Inc.
(A Development Stage Company)
Pro Forma Consolidated Balance Sheets
As at May 31, 2000
(unaudited)
<S> <C> <C> <C> <C>
Sierra Gigante Anmore Pro Forma
Resources, Inc. Management Inc. Adjustments Pro Forma
(Note 2)
$ $ $ $
Assets
Current Assets
Cash 3,586 (90,000) (86,414)
Prepaid expenses and other
current assets 33,758 33,758
---------------------------------------------------------------------------------------
37,344 (90,000) (52,656)
Property, Plant and
Equipment 103,187 103,187
Mineral Properties 1 1
---------------------------------------------------------------------------------------
140,532 (90,000) 50,532
---------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
<P>
Current Liabilities
Accounts payable 11,036 11,036
Due to related parties 31,841 31,841
---------------------------------------------------------------------------------------
42,877 42,877
---------------------------------------------------------------------------------------
Stockholders' Equity
<P>
Common stock - 25,000,000 shares
authorized at $.001
par value, 11,657,063,
issued and outstanding 11,647 210 (200) 11,657
Additional paid-in capital 412,018 (90,010) 322,008
Common stock paid for
but unissued 12,200 12,200
Stock based compensation
- stock options 31,620 31,620
Deficit accumulated during the
development stage (369,830) (210) 210 (369,830)
---------------------------------------------------------------------------------------
Total Stockholders' Equity 97,655 (90,000) 7,655
---------------------------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity 140,532 (90,000) 50,532
=======================================================================================
</TABLE>
<TABLE>
Sierra Gigante Resources, Inc.
(A Development Stage Company)
Pro Forma Consolidated Statements of Operations
For the Year Ended May 31, 2000
(unaudited)
<S> <C> <C> <C> <C>
Sierra Gigante Anmore Pro Forma
Resources, Inc. Management Inc. Adjustments Pro Forma
(Note 2)
$ $ $ $
Revenues
---------------------------------------------------------------------------------------
Expenses
General and administrative 112,965 112,965
Selling and marketing 24,892 24,892
Product development 7,275 7,275
General exploration 122,400 122,400
---------------------------------------------------------------------------------------
Total Expenses 267,532 267,532
---------------------------------------------------------------------------------------
Net Loss For The Year (267,532) (267,532)
---------------------------------------------------------------------------------------
Basic Net Loss Per Share (0.02) (0.02)
=======================================================================================
</TABLE>
<P>
Sierra Gigante Resources, Inc.
(A Development Stage Company)
Notes to Pro Forma Consolidated Financial Statements
(unaudited)
<P>
1.Pro Forma Transaction
<P>
Pursuant to an Agreement and Plan of Merger (the
"Acquisition Agreement") effective September 12, 2000,
the Company acquired 100% of all the issued and
outstanding shares of common stock of Anmore Management
Inc., a Delaware corporation, for $90,000 and 10,000
shares of the Company valued at a nominal $10. The
Company has paid $5,000 as a down payment and management
is in the process of raising funds to pay the balance.
<P>
The acquisition was approved by the Board of Directors
and a majority of the shareholders of both Anmore
Management Inc. and the Company on September 12, 2000.
<P>
Upon effectiveness of the acquisition, the Company
elected to become the successor issuer to Anmore
Management Inc. for reporting purposes under the
Securities Exchange Act of 1934 ("the Act") and elects to
report under the Act effective September 12, 2000.
<P>
As of the effective date of the Acquisition Agreement,
Anmore Management Inc. shall assume the name of the
Company. The Company's officers and directors will become
the officers and directors of Anmore Management Inc.
<P>
The $90,000 will be treated for accounting purposes, as a
reduction of the additional paid in capital and not as
goodwill as the nature of the transaction was to allow
Sierra Gigante Resources, Inc. to report under the Act by
way of reorganization.
<P>
The Pro Forma Financial Statements are presented to
disclose the effect of the above business combination as
if it had consummated on August 31, 2000 and May 31,
2000.
<P>
2.Pro Forma Adjustment
<P>
The only adjustment is to reduce cash by $90,000 and
reduce stockholders' equity by $90,000.
<P>
Sierra Gigante Resources, Inc.
(A Development Stage Company)
<P>
Index
<TABLE>
<S> <C>
Report of Independent Accountants F 1
<P>
Report of Independent Auditors F 2
<P>
Balance Sheets F-3
<P>
Statements of Operations F-4
<P>
Statement of Stockholders' Equity F-5
<P>
Statements of Cash Flows F-6
<P>
Notes to the Financial Statements F-7 F-13
<P>
</TABLE>
Independent Accountants' Report
<P>
To The Board of Directors
of Sierra Gigante Resources, Inc.
<P>
We have reviewed the accompanying balance sheet of Sierra
Gigante Resources, Inc. (A Development Stage Company) as
of August 31, 2000 and the related statements of
operations and cash flows for the three months ended
August 31, 2000. These financial statements are the
responsibility of the Company's management.
<P>
We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information
consists principally of applying analytical procedures to
financial data and of making inquiries of persons
responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
<P>
Based on our review, we are not aware of any material
modifications that should be made to such condensed
consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
<P>
The accompanying financial statements have been prepared
assuming that the Company will continue as a going
concern. As discussed in Note 1 to the annual financial
statements for the year ended May 31, 2000, certain
conditions raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard
to these matters are also described in Note 1 to the
financial statements.
<P>
We have previously audited, in accordance with generally
accepted auditing standards, the balance sheet of Sierra
Gigante Resources, Inc. as of May 31, 2000 and the
related statements of operations, stockholders' equity,
and cash flows for the year then ended; and in our report
dated July 6, 2000, we expressed an unqualified opinion
on those financial statements and included an explanatory
paragraph concerning matters that raise substantial doubt
about the Company's ability to continue as a going
concern. In our opinion, the information set forth in the
accompanying balance sheet as of May 31, 2000 is fairly
stated, in all material respects, in relation to the
balance sheet from which it has been derived. The
financial statements of Sierra Gigante Resources, Inc. as
of May 31, 1999, and the related statements of
operations, stockholders' equity and cash flows for the
period from June 3, 1998 (date of inception) to the year
ended May 31, 1999 were audited by other auditors, whose
report dated July 29, 1999, expressed an unqualified
opinion on those statements.
<P>
/s/ "Elliott, Tulk, Pryce, Anderson"
<P>
Chartered Accountants
Vancouver, Canada
September 11, 2000
<P>
Report of Independent Auditors
<P>
To The Board of Directors
of Sierra Gigante Resources, Inc.
<P>
We have audited the accompanying balance sheets of Sierra
Gigante Resources, Inc. (A Development Stage Company) as
of May 31, 2000, and the related statements of
operations, stockholders' equity and cash flows for the
year then ended. These financial statements are the
responsibility of the Company's management. Our
responsibility is to express an opinion on these
financial statements based on our audit. The financial
statements of Sierra Gigante Resources, Inc. as of May
31, 1999, and the related statements of operations,
stockholders' equity and cash flows for the period from
June 3, 1998 (date of inception) to the year ended May
31, 1999 were audited by other auditors, whose report
dated July 29, 1999, expressed an unqualified opinion on
those statements.
<P>
We conducted our audit in accordance with generally
accepted auditing standards in the United States. 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 by management,
as well as evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
<P>
In our opinion, the financial statements referred to
above presents fairly, in all material respects, the
financial position of Sierra Gigante Resources, Inc. (A
Development Stage Company), as of May 31, 2000, and the
related statements of operations, stockholders' equity
and cash flows for the year ended May 31, 2000, in
conformity with generally accepted accounting principles
in the United States.
<P>
The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, the
Company has losses from operations since inception, no
source of revenues and insufficient working capital
available to meet purchase/option obligations. These
factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's
plans in regard to these matters are also discussed in
Note 1. These financial statements do not include any
adjustments which might result from the outcome of this
uncertainty.
<P>
/s/ "Elliott, Tulk, Pryce, Anderson"
<P>
Chartered Accountants
Vancouver, Canada
July 6, 2000
<P>
SIERRA GIGANTE RESOURCES, INC.
(A DEVELOPMENT STAGE COMPANY)
<P>
FIANNCIAL STATEMENTS
<P>
Sierra Gigante Resources, Inc.
(A Development Stage Company)
Balance Sheets
<TABLE>
<S> <C> <C> <C>
August 31, May 31, May 31,
2000 2000 1999
$ $ $
(unaudited)
Assets
Current Assets
Cash 17,469 3,586 8,975
Prepaid expenses and other current assets 28,502 33,758 600
-------------------------------------------------------------------------------------
45,971 37,344 9,575
<P>
Property, Plant and Equipment [Note 3] 90,479 103,187 2,121
Mineral Properties [Note 4] 1 1 44,587
136,451 140,532 56,283
-------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
<P>
Current Liabilities
Accounts payable 10,591 11,036 2,110
Note payable [Note 5] 30,000
Due to related parties [Note 6] 45,433 31,841 16,506
-------------------------------------------------------------------------------------
86,024 42,877 18,616
-------------------------------------------------------------------------------------
Contingent Liability [Note 1]
Commitments [Note 4]
Subsequent Event and Pro Forma Information [Notes 10 and 11]
<P>
Stockholders' Equity
Common stock - 25,000,000 shares authorized
at $.001 par value, 11,724,397, 11,647,063 and
9,041,396 issued and outstanding, respectively 11,724 11,647 9,041
Additional paid-in capital 435,141 412,018 130,924
Common stock paid for but unissued 12,200
Stock based compensation - stock options 31,620 31,620
Deficit accumulated during the
development stage (428,058) (369,830) (102,298)
---------------------------------------------------------------------------------------
50,427 97,655 37,667
---------------------------------------------------------------------------------------
136,451 140,532 56,283
=======================================================================================
<P>
(See accompanying notes)
F-3
</TABLE>
<TABLE>
Sierra Gigante Resources, Inc.
(A Development Stage Company)
Statements of Operations
<S> <C> <C> <C> <C>
Accumulated
From
June 3, 1998 For the For the June 3, 1998
(Date of Inception) Three Months Year (Date of
To Ended Ended Inception)
August 31, 2000 August 31, 2000 May 31, 2000 To
$ $ $ May 31, 1999
(unaudited) (Unaudited) $
<P>
Revenues
-------------------------------------------------------------------------------------
Expenses
General and Administrative
Accounting and legal 53,874 4,899 42,558 6,417
Bank charges 1,720 615 954 151
Consulting 102,614 12,000 36,846 53,768
Depreciation 1,179 208 832 139
Investor relations 10,380 10,380
Office, telephone and rent 50,042 8,596 29,886 11,560
Transfer agent and regulatory 2,157 268 1,889
--------------------------------------------------------------------------------------
221,966 36,966 112,965 72,035
--------------------------------------------------------------------------------------
Selling and Marketing
Advertising 4,218 4,218
Travel and promotion 24,070 1,185 20,674 2,211
--------------------------------------------------------------------------------------
28,288 1,185 24,892 2,211
--------------------------------------------------------------------------------------
Product Development
Consulting 9,818 3,708 6,110
Depreciation 12,500 12,500
Internet and Web Site 1,713 548 1,165
--------------------------------------------------------------------------------------
24,031 16,756 7,275
--------------------------------------------------------------------------------------
Exploration Costs
General exploration 31,384 3,321 11 28,052
Mineral properties written-off 122,389 122,389
--------------------------------------------------------------------------------------
153,773 3,321 122,400 28,052
--------------------------------------------------------------------------------------
Total Expenses 428,058 58,228 267,532 102,298
--------------------------------------------------------------------------------------
Net Loss For The Year (428,058) (58,228) (267,532) (102,298)
======================================================================================
Basic Net Loss Per Share (0.01) (0.02) (0.01)
======================================================================================
Weighted Average Shares Outstanding 11,673,000 10,976,000 8,720,000
======================================================================================
<P>
Diluted net loss per share has not been disclosed
as the result is anti-dilutive.
<P>
(See accompanying notes)
F-4
</TABLE>
<TABLE>
Sierra Gigante Resources, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
<S> <C> <C> <C> <C>
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit
# $ $ $
--------------------------------------------------------------------------------------
Balance at June 3, 1998
(Date of Inception)
Issuance of Shares:
Rule 144 restricted shares for cash 8,000,000 8,000
Unrestricted shares for cash 761,160 761 52,579
Rule 504 unrestricted shares for cash 71,752 72 18,095
Rule 504 unrestricted shares for
conversion of convertible debentures 208,484 208 60,250
<P>
Net Loss For The Period (102,298)
--------------------------------------------------------------------------------------
Balance at May 31, 1999 9,041,396 9,041 130,924 (102,298)
Issuance of Shares:
Rule 144 restricted shares for cash 2,000,000 2,000
Rule 504 unrestricted shares for
conversion of notes payable 505,667 506 151,194
Rule 504 unrestricted shares for cash 100,000 100 29,900
Previously issued restricted shares
transferred to acquire property [Note 3] 100,000
<P>
Net Loss For The Year (267,532)
--------------------------------------------------------------------------------------
Balance at May 31, 2000 11,647,063 11,647 412,018 (369,830)
Rule 504 unrestricted shares for cash 77,334 77 23,123
Net Loss for the Period (58,228)
--------------------------------------------------------------------------------------
Balance at August 31, 2000 (unaudited) 11,724,397 11,724 435,141 428,058
======================================================================================
<P>
(See accompanying notes)
F-5
</TABLE>
<TABLE>
Sierra Gigante Resources, Inc.
(A Development Stage Company)
Statements of Cash Flows
<S> <C> <C> <C> <C>
Accumulated
From
June 3, 1998 For the For the June 3, 1998
(Date of Inception) Three Months Year (Date of
To Ended Ended Inception)
August 31, 2000 August 31, 2000 May 31, 2000 To
$ $ $ May 31, 1999
(unaudited) (Unaudited) $
--------------------------------------------------------------------------------------
Cash Flows from Operating Activities:
Net loss (428,058) (58,228) (267,532) (102,298)
Adjustment to reconcile net loss to cash
Depreciation and amortization 13,679 12,708 832 139
Mineral properties written off 122,389 122,389
Stock based compensation 31,620 31,620
Changes to non-cash working capital items
Increase in prepaid expenses and other
current assets (28,502) 5,256 (33,158) (600)
Increase in accounts payable 10,591 (445) 8,926 2,110
--------------------------------------------------------------------------------------
Net Cash Used in Operating
Activities (278,281) (40,709) (136,923) (100,649)
--------------------------------------------------------------------------------------
Cash Flows from Financing Activities:
Proceeds from related party loans 45,433 13,592 15,335 16,506
Proceeds from issuance of convertible
debentures 60,458 60,458
Proceeds from notes payable 193,900 30,000 163,900
Proceeds from issuance of shares 122,507 11,000 32,000 79,507
--------------------------------------------------------------------------------------
Net Cash Provided by
Financing Activities 422,298 54,592 211,235 156,471
--------------------------------------------------------------------------------------
Cash Flows to Investing Activities:
Acquisition of property,
plant and equipment (4,158) (1,898) (2,260)
Mineral property costs (122,390) (77,803) (44,587)
--------------------------------------------------------------------------------------
Net Cash Used in
Investing Activities (126,548) (79,701) (46,847)
--------------------------------------------------------------------------------------
Increase (Decrease) in Cash
During the Year 17,469 13,883 (5,389) 8,975
Cash - Beginning of Year 3,586 8,975
--------------------------------------------------------------------------------------
Cash - End of Year 17,469 17,469 3,586 8,975
======================================================================================
Non-Cash Financing Activities
Convertible debentures were
converted into
208,484 shares. 60,458 60,458
The Company acquired property
through the transfer of
500,000 previously issued restricted
shares at a fair value
of $100,000. 100,000 100,000
The Company issued 505,667 shares
at a fair market
value of $0.30 per share to
repay notes payable. 151,700 151,700
Stock based compensation
- stock options [Note 8[b]] 31,620 31,620
======================================================================================
Supplemental Disclosures:
Interest paid
Income taxes paid
======================================================================================
<P>
(See accompanying notes)
F-6
</TABLE>
<P>
Sierra Gigante Resources, Inc.
(A Development Stage Company)
Notes to Financial Statements
<P>
1. Nature of Operations and Continuance of Business
<P>
Sierra Gigante Resources, Inc. (the "Company") was
incorporated on June 3, 1998, in the State of Nevada. The
Company currently has yet to generate any revenues and in
accordance with SFAS #7, is considered a development
stage company. Shares of the Company currently trade on
PinkSheets under the ticker symbol "SGIG". Please see
Note 10 regarding a subsequent merger and reorganization.
<P>
From inception to March 14, 2000 the Company was actively
engaged in the acquisition and exploration of mineral
properties containing gold, silver, copper, zinc and/or
other mineral deposits. The Company operated its
preliminary business as an exploration stage company with
the intent to receive income from property sales, joint
ventures or other business arrangements with larger
companies, rather than developing and placing its
properties into production on its own.
<P>
Pursuant to an Assignment Agreement dated March 14, 2000
and completed May 9, 2000 the Company acquired an
Internet Web Site from Isoplus Quality Systems Ltd. of
Vancouver, BC ("Isoplus"). Isoplus developed an Internet
e-commerce business concept which features an Internet
Web Site specializing in industrial auctions, with self-
listing capability, and allows for the creation of
virtual industrial malls on a country-by-country basis.
The Company intends to develop a compelling environment
to foster a large and growing commerce-oriented auction
Web Site under the brand name "B2Bauctionworld.net". The
Company arranged for 500,000 previously issued restricted
common shares be transferred to Isoplus. The fair value
of the shares was $100,000 at the time of issuance. The
transaction was recorded as additional paid in capital as
the transaction did not result in the issuance of
treasury shares. The sole shareholder of Isoplus also
received a stock option to acquire 50,000 shares at a
price of $0.40 per share expiring two years from date of
grant.
<P>
The Company does not have significant cash or other
material assets, nor does it have an established source
of revenues needed to cover its operating costs and to
allow it to continue as a going concern. The Company has
ongoing overhead expenses and will require significant
capital to execute upon its business plan to bring its
new business to market. These factors raise substantial
doubt as to the ability to continue operations. These
financial statements are prepared using generally
accepted accounting principles applicable to a going
concern which contemplates the realization of assets and
liquidation of liabilities in the normal course of
business. The Company's ability to meet those obligations
and continue as a going concern is dependent upon raising
new capital through issuing debt and/or equity securities
and then to generate revenues and profits.
<P>
2.Summary of Significant Accounting Policies
<P>
Use of Estimates and Assumptions
<P>
The preparation of financial statements requires
management to make estimates and assumptions that affect
the amounts reported in the financial statements and
accompanying notes. Actual results could differ from
those estimates.
<P>
Property, Plant and Equipment
<P>
Office equipment is recorded at cost. Depreciation is
computed on a straight-line basis using an estimated
useful life of five years.
<P>
Internet Web Site is recorded at cost. Amortization is
computed on a straight-line basis using an estimated
useful life of two years.
<P>
Year End
<P>
The Company's fiscal year end is May 31.
<P>
F-7
<P>
2. Summary of Significant Accounting Policies
(continued)
<P>
Basic and Diluted Net Income (Loss) per Share
<P>
The Company computes net income (loss) per share in
accordance with SFAS No. 128, "Earnings per Share" (SFAS
128). SFAS 128 requires presentation of both basic an
diluted earnings per share (EPS) on the face of the
income statement. Basic EPS is computed by dividing net
income (loss) available to common shareholders
(numerator) by the weighted average number of shares
outstanding (denominator) during the period. Diluted EPS
gives effect to all dilutive potential common shares
outstanding during the period including stock options,
using the treasury stock method, and convertible
preferred stock, using the if-converted method. In
computing Diluted EPS, the average stock price for the
period is used in determining the number of shares
assumed to be purchased from the exercise of stock
options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive.
<P>
Mineral Properties
<P>
All costs related to mineral properties with development
potential, including mineral claim acquisition costs and
exploration and development expenditures are deferred
until the related mineral claims are abandoned, sold or
achieve commercial production. At that time, the costs
will be either amortized against income from future
mining operations or written off. All grassroots
exploration costs, which are costs incurred while probing
for prospective development sites, are charged to expense
as incurred.
<P>
During 1997, the Securities and Exchange Commission staff
reconsidered existing accounting practices for mineral
expenditures by United States junior mining companies.
They now interpret generally accepted accounting policy
for junior mining companies to permit capitalization of
acquisition, exploration and development costs only after
persuasive engineering evidence is obtained to support
recoverability of these costs. Up to 1993 a total of 64
holes totalling 85,424 feet were drilled and samples
tested. An independent engineer has deemed the properties
to contain profitable reserves of base metals in excess
of property costs incurred.
<P>
The amount shown for mineral properties and development
represents costs to date and does not necessarily reflect
present or future values. The full recovery of the above
mentioned costs depends on a combination of different
factors, including:
<P>
(i) future metal prices;
(ii) the results of future exploration, and further
discovery and development of reserves; and
(iii) to the extent necessary, the procurement of
additional capital and financing to carry out
future activities. The carrying amount of
mineral properties, proved and unproved, is
evaluated at least annually and reduced if
these properties are impaired.
<P>
Cash and Equivalents
<P>
For the purpose of the statements of cash flows, all
highly liquid investments with the maturity of three
months or less are considered to be cash equivalents.
<P>
Income Taxes
<P>
Income taxes are provided for using the liability method
of accounting in accordance with Statements of Financial
Accounting Standards No. 109 "Accounting for Income
Taxes". A deferred tax asset or liability is recorded for
all temporary differences between financial and tax
reporting. Deferred tax expense (benefit) results from
the net change during the year of deferred tax assets and
liabilities.
<P>
Foreign Currency Translation
<P>
Revenue, expenses and non-monetary balance sheet items in
foreign currencies are translated into U.S. dollars at
the rate of exchange prevailing on the transaction
dates. Monetary balance sheet items are translated at the
rate prevailing at the balance sheet date. The resulting
exchange gain or loss is included in expenses.
<P>
F-8
<P>
2. Summary of Significant Accounting Policies (continued)
<P>
Accounting for Stock-Based Compensation
<P>
SFAS No. 123, "Accounting for Stock-Based Compensation,"
requires that stock awards granted subsequent to January
1, 1995, be recognized as compensation expense based on
their fair value at the date of grant. Alternatively, a
company may account for granted stock awards under
Accounting Principles Board Opinion (APB) No. 25,
"Accounting for Stock Issued to Employees," and disclose
pro forma income amounts which would have resulted from
recognizing such awards at their fair value. The Company
has elected to account for stock-based compensation
expense under APB No. 25 and make the required pro forma
disclosures for compensation expense (see Note 7).
<P>
Financial Instruments
<P>
The fair value of the Company's current assets and
current liabilities were estimated to approximate their
carrying values due to the immediate or short-term
maturity of these financial instruments. The Company
operates in Canada and virtually all of its assets and
liabilities are giving rise to significant exposure to
market risks from changes in foreign currency rates. The
financial risk is the risk to the Company's operations
that arise from fluctuations in foreign exchange rates
and the degree of volatility of these rates. Currently,
the Company does not use derivative instruments to reduce
its exposure to foreign currency risk.
<P>
Product Development Costs
<P>
Product development costs consist of expenses incurred by
the Company in the development and creation of its
B2Bauctionworld Web Site. Product development costs
include compensation and related expenses for programmers
and costs incurred in developing features and
functionality of the service. Product development costs
are expensed as incurred.
<P>
New Accounting Pronouncements
<P>
Effective January 1, 1998, the Company adopted Statement
of Accounting Standards No. 131 (SFAS 131), Disclosures
about Segments of an Enterprise and Related Information.
This statement requires the Company to report
income/loss, revenue, expense and assets by business
segment including information regarding the revenues
derived from specific products and services and about the
countries in which the Company is operating. The
Statement also requires that the Company report
descriptive information about the way that operating
segments were determined, the products and services
provided by the operating segments, differences between
the measurements used in reporting segment information
and those used in the Company's general-purpose financial
statements and changes in the measurement of segment
amounts from period to period. As noted above this
statement establishes standards for reporting and display
and has no material effect on the Company's financial
condition or results of operations.
<P>
3.Property, Plant and Equipment
<TABLE>
<S> <C> <C> <C> <C> <C>
August 31, May 31, May 31,
2000 2000 1999
Accumulated Net Book Net Book Net Book
Cost Amortization Value Value Value
$ $ $ $ $
(unaudited)
<P>
Internet Web Site 100,000 12,500 87,500 100,000
Office equipment 4,158 1,179 2,979 3,187 2,121
---------------------------------------------------------------------------------------
104,158 13,679 90,479 103,187 2,121
=======================================================================================
</TABLE>
<P>
Pursuant to an Assignment Agreement dated March 14, 2000
and completed May 9, 2000 the Company acquired an
Internet Web Site from Isoplus Quality Systems Ltd. of
Vancouver, BC ("Isoplus"). Isoplus developed an Internet
e-commerce business concept which features an Internet
Web Site specializing in industrial auctions, with self-
listing capability, and allows for the creation of
virtual industrial malls on a country-by-country basis.
The Company arranged for 500,000 previously issued
restricted common shares be transferred to Isoplus. The
fair value of the shares was $100,000 at the time of
issuance. The transaction was recorded as additional paid
in capital as the transaction did not result in the
issuance of treasury shares. The sole shareholder of
Isoplus has also received a stock option to acquire
50,000 shares at a price of $0.40 per share expiring two
years from date of grant.
<P>
F-9
<P>
4.Mineral Properties
<TABLE>
<S> <C> <C>
May 31, May 31,
2000 1999
$ $
<P>
Acquisition costs 33,333 33,333
Exploration and title maintenance costs 89,057 11,254
Less written-off to operations (122,389)
---------------------------------------------------------------------------------
1 44,587
=================================================================================
</TABLE>
<P>
On April 20, 1999, the Company entered into a
purchase/option agreement for 100% equity in NPR (USA)
Inc. (NPR). NPR, incorporated in Utah, is the registered
and beneficial owner of a 100% undivided interest in 17
patented and 40 unpatented contiguous mining claims in
the Fish Springs Mining District in Utah. The agreement
calls for the Company to make payments, payable in
Canadian dollars, for the purchase of NPR (USA) Inc.
totalling Cnd$500,000 (US$333,333), and for the Company
to expend a minimum of Cnd$1,500,000 (US$1,000,000) in
exploration expenditures on the property over a four year
period.
The following is a schedule of annual payments to be made
by the Company:
<TABLE>
<S> <C> <C> <C>
Minimum
Equity Exploration
Payments Expenditures
Payment Due Date $ $
<P>
April 20, 1999 (paid) 33,333
October 20, 2000 66,667 133,333
October 20, 2001 100,000 200,000
October 20, 2002 133,333 333,333
October 20, 2003 333,334
-----------------------------------------------------------------
Total 333,333 1,000,000
=================================================================
</TABLE>
<P>
The agreement has a provision that provides for a vesting
of equity based on a proportional amount paid once the
Company has made a minimum of $100,000 in aggregate
equity payments and a minimum of $133,333 in exploration
expenditures.
On July 28, 2000, the Company terminated the
purchase/option agreement as a result, as at May 31,
2000, the Company wrote off $122,389 to operations
leaving a nominal $1 net book value.
<P>
5.Note Payable
<P>
The note payable is unsecured, bears interest at prime
plus 1% and is due on demand.
<P>
6.Due to Related Parties
<P>
Amounts owing to related parties are unsecured, non-
interest bearing and due on demand.
<P>
F-10
<P>
7.Income Taxes
<P>
There is no provision for income taxes due to net loss as
incurred and no state income tax in Nevada, the state of
the Company's domicile. The Company's total deferred tax
asset as of August 31, 2000, May 31, 2000 and 1999, is as
follows:
<TABLE>
<S> <C> <C>
May 31, May 31,
2000 1999
$ $
<P>
Net operating loss 267,532 102,148
Valuation allowance 267,532 102,148
---------------------------------------------------
Net deferred tax asset
===================================================
</TABLE>
<P>
The federal net operating loss carryover will expire in
2018 and 2019.
<P>
8.Stock Option Plan
<P>
(a) On August 2, 1999, the Company reserved 1,104,139
shares pursuant to a stock option plan. On August 2, 1999
the Company granted stock options to certain officers,
directors and employees to acquire 1,104,139 shares at
$0.10 per share expiring August 2, 2000. During the year
the Company extinguished stock options to two directors
to acquire 320,828 shares.
On March 14, 2000 the Company issued to a certain
employee to acquire 50,000 shares at $0.40 per share
expiring March 14, 2002.
<P>
The weighted average number of shares under option and
option price for the year ended May 31, 2000 is as
follows:
<P>
<TABLE>
<S> <C> <C> <C> <C>
August 31, 2000 May 31, 2000
--------------- ------------
(unaudited)
Shares Option Shares Option
under option Price Under option Price
# $ # $
Beginning of period 783,311 .10
Granted 50,000 .40 1,104,139 .10
Exercised
Cancelled 320,828 (.10)
Lapsed (783,311) (.10)
----------------------------------------------------------------------------------
End of period 50,000 .40 783,311 .10
==================================================================================
</TABLE>
<P>
There were no options granted at anytime during fiscal
1999.
The options are granted for services provided to the
Company. Statement of Financial Accounting Standards No.
123 ("SFAS 123") requires that an enterprise recognize,
or at its option, disclose the impact of the fair value
of stock options and other forms of stock based
compensation in the determination of income. The Company
has elected under SFAS 123 to continue to measure
compensation cost on the intrinsic value basis set out in
APB Opinion No. 25. As options are granted at exercise
prices based on the market price of the Company's shares
at the date of grant, no compensation cost is recognized.
However, under SFAS 123, the impact on net income and
income per share of the fair value of stock options must
be measured and disclosed on a fair value based method on
a pro forma basis.
<P>
The fair value of the employee's purchase rights under
SFAS 123, was estimated using the Black-Scholes model:
risk free interest rate was 5.0%, expected volatility of
100%, an expected option life of one year and no expected
dividends.
<P>
F-11
<P>
8.Stock Option Plan (continued)
<P>
If compensation expense had been determined pursuant to
SFAS 123, the Company's net loss and net loss per share
for the following period would have been as follows:
<TABLE>
<S> <C> <C> <C>
August 31, May 31, May 31,
2000 2000 1999
$ $ $
(Unaudited)
Net loss
As reported (58,228) (247,441)
Pro forma (64,928) (273,541)
Basic net loss per share
As reported (.01) (.02)
Pro forma (.01) (.02)
</TABLE>
<P>
(b)Performance Stock Plan
<P>
The Company has allotted 400,000 shares to be issued
pursuant to a Performance Stock Plan approved and
registered May 1, 2000. There are options to acquire
200,000 shares, exercisable at $0.30 per share, currently
granted pursuant to this plan. Upon granting, and
vesting, of these stock options, compensation of $31,620
was recorded during the year ended May 31, 2000.
<P>
9.Segmented Information
<P>
The Company has adopted SFAS No. 131 Disclosure About
Segments of an Enterprise and related information.
The business of the Company is carried on in two industry
segments one being an exploration stage company in
mineral properties and the other being the development
of an E-commerce Web Site specializing in industrial
auction services to individual and corporate subscribers.
<P>
The Company operates in two geographic segments, one
being Canada, located in Vancouver, BC and the other
being the United States, located in Fish Springs, Utah.
<P>
The Company's head office is in Vancouver, BC, Canada.
The head office does not conduct any business
specifically related to mineral properties and the
Internet. Its sole purpose is to provide administration,
investor relations services and services relating to
being a public company. Included in general and
administrative expenses and net loss is $112,965
(1999 - $72,035) relating to such activities. The net
loss relating to general exploration costs in the United
States amounted to $11 (1999 - $28,052). The net loss
relating to Internet activities in Canada amounted to
$7,275 (1999 - $Nil).
<P>
10.Subsequent Event
<P>
Pursuant to an Agreement and Plan of Merger (the
"Acquisition Agreement") effective September 12, 2000,
the Company acquired 100% of all the issued and
outstanding shares of common stock of Anmore Management
Inc., a Delaware corporation, for $90,000 and 10,000
shares of the Company valued at a nominal $10. The
Company has paid $5,000 as a down payment and management
is in the process of raising funds to pay the balance.
<P>
The acquisition was approved by the Board of Directors
and a majority of the shareholders of both Anmore
Management Inc. and the Company on September 12, 2000.
<P>
Upon effectiveness of the acquisition, the Company
elected to become the successor issuer to Anmore
Management Inc. for reporting purposes under the
Securities Exchange Act of 1934 ("the Act") and elects to
report under the Act effective September 12, 2000.
<P>
As of the effective date of the Acquisition Agreement,
Anmore Management Inc. shall assume the name of the
Company. The Company's officers and directors will become
the officers and directors of Anmore Management Inc.
The $90,000 will be treated for accounting purposes, as a
reduction of the additional paid in capital and not as
goodwill as the nature of the transaction was to allow
Sierra Gigante Resources, Inc. to report under the Act by
way of reorganization.
<P>
F-12
<P>
<P>
Index to Exhibits
<P>
2.1 Agreement and Plan of Merger between Anmore
Management Inc. and Sierra Gigante Resources Inc.
dated September 12, 2000.
3.1 Articles of Incorporation of Sierra Gigante
Resources Inc.
3.2 Bylaws of Sierra Gigante Resources, Inc.
17.1 Resignation Letter of Gerald Ghini
27.1 Financial Data Schedule
<P>
SIGNATURES
<P>
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto
duly authorized.
<P>
Sierra Gigante Resources Inc.
a Nevada corporation
<P>
By: /s/ Raymond Merry
-----------------------------
Raymond Merry, President,
CEO and Director
<P>
DATED: September 22, 2000
<P>
