<PAGE> 1
As filed with the Securities and Exchange Commission on
______________, 1999. Registration No. ________________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PAXTON MINING CORPORATION
(Name of small business issuer in its charter)
Nevada 1081 Applied For
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(State or Other (Primary Standard (IRS Employer
Jurisdiction of Industrial Classifi- Identification #)
Organization) cation Code)
Paxton Mining Corporation Conrad C. Lysiak, Esq.
400 Burrard Street, Suite 1950 601 West First Avenue, Suite 503
Vancouver, B.C., Canada V6C 3A6 Spokane, Washington 99201
(604) 605-0885 (509) 624-1475
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(Address and telephone of (Name, address and telephone
registrant's executive office) number of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this
Registration Statement.
If this Form is filed to register additional Common Stock for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering.
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE> 2
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Securities Amount To Be Offering Price Aggregate Registration
To Be Registered Registered Per Share Offering Price Fee (1)
<S> <C> <C> <C> <C>
Common Stock: 2,000,000 Shares $0.10 $200,000 $ 100.00
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</TABLE>
[1] Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c).
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL
THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR
SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE> 3
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PROSPECTUS
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2,000,000 SHARES OF COMMON STOCK
PAXTON MINING CORPORATION
We are offering up to a total of 2,000,000 shares of Common Stock
on a best efforts-no minimum" basis, (the "Shares"), at an initial
public offering price of $0.10 per Share (the "Offering"). No
fractional Shares may be purchased. There is no minimum number of
shares which we must sell in this Offering and we will commence the
Offering on the effective date of this Prospectus and continue for a
period of 180 days, unless we extend for an additional 90 days, or
until we complete the Offering, whichever occurs sooner. (See
"Offering.")
THE PURCHASE OF SHARES IN THIS OFFERING IS HIGHLY RISKY AND YOU
SHOULD VERY CAREFULLY AND THOROUGHLY READ THE RISK FACTORS SECTION OF
THIS PROSPECTUS.
These securities have not been approved or disapproved by the
Securities and Exchange Commission (the "Commission") or the securities
division of any state, nor has the Commission or any state passed upon
the accuracy or adequacy of this Prospectus. Any representation to the
contrary is a criminal offense.
Prior to this Offering, there has been no public market for our
Common Stock and there is no assurance that a public market will result
following the sale of the Shares being offered in this Prospectus, or
that any Shares purchased in this Offering can be sold at or near the
offering price, or at all.
The information in this Prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This Prospectus is not an offer to sell the Shares and it is
not a solicitation of an offer to buy the Shares in any state where the
offer or sale is not permitted.
<TABLE>
<CAPTION>
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Price Per Aggregate Proceeds to Us
Share Offering Price [1][2]
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<S> <C> <C> <C>
Common Stock $0.10 $200,000 $150,000
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</TABLE>
The date of this Prospectus is _________________, 1999.
<PAGE> 4
[1] Hugh Grenfal Jr. and Robert Jarva our officers and directors, will
act as our sales agents in this Offering, but he will receive no
commissions for any Shares they sell. They also will not register
as a broker-dealer pursuant to Section 15 of the Securities
Exchange Act of 1934, as amended, in reliance upon Rule
3a4-1,which sets forth those conditions under which a person
associated with an Issuer may participate in the Offering of the
Issuer's securities and not be deemed to be a broker-dealer.
[2] We calculated the net proceeds we will receive from this Offering
after deducting $50,000 as the estimated costs for filing,
printing, legal, accounting and other miscellaneous expenses
relating to the Offering, which we will pay out of the proceeds of
this Offering.
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AVAILABLE INFORMATION
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We have filed this registration statement on Form SB-2, of which
this Prospectus is a part, with the Securities and Exchange Commission
(the "Commission"). This registration statement, or any part, may be
inspected and copied at the public reference facilities maintained by
the Commission at 450 Fifth Street N.W., Washington D.C., 20549. Copies
of all materials may be obtained from the Public Reference Section of
the Commission's Washington D.C. office at prescribed rates. The
Commission also maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that
file electronically with the Commission at http://www.sec.gov.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Some discussions in this Prospectus may contain forward-looking
statements that involve risks and uncertainties. A number of important
factors could cause our actual results to differ materially from those
expressed in any forward-looking statements made by us in this
Prospectus. Such factors include, but are not limited to, those
discussed in "Risk Factors," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business," as well
as those discussed elsewhere in this Prospectus. Forward-looking
statements are often identified by words like: believe, expect,
estimate, anticipate, intend, project and similar expressions, or words
which, by their nature, refer to future events.
<PAGE> 5
TABLE OF CONTENTS
Page No.
SUMMARY OF PROSPECTUS. . . . . . . . . . . . . . . . . . 6
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . 7
RISKS ASSOCIATED WITH OUR COMPANY:
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . 13
DETERMINATION OF OFFERING PRICE . . . . . . . . . . . . 14
CAPITALIZATION. . . . . . . . . . . . . . . . . . . . . 14
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES . . . . . 15
PLAN OF DISTRIBUTION; TERMS OF THE OFFERING . . . . . . 17
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . 18
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . 23
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . 28
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . 29
PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . . . . . 30
DESCRIPTION OF SECURITIES. . . . . . . . . . . . . . . . 31
CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . 32
LITIGATION . . . . . . . . . . . . . . . . . . . . . . . 32
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . 33
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . 33
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . 33
<PAGE> 6
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SUMMARY OF PROSPECTUS
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This summary provides an overview of selected information
contained in this Prospectus and does not contain all the information
you should consider before making a decision to purchase the Shares we
are offering. You should very carefully and thoroughly read the more
detailed information in this Prospectus, and particularly the Risk
Factors section, review our financial statements and review all other
information that is incorporated by reference in this Prospectus.
Summary Information about Our Company
Our company was incorporated in the State of Nevada on June 19,
1999 and we are engaged in the exploration and development of a mining
property. See the "Business" section for a more detailed description of
our business operations.
On June 20, 1999, we sold 5,000,000 shares of common stock to Hugh
Grenfal and Robert Jarva, our officers and directors pursuant to
exemption from registration contained in Section 4(2) of the Securities
Act of 1933.
Our administrative office is located at 400 Burrard Street, Suite
1950, Vancouver, British Columbia, Canada V6C 3A6, telephone (604) 605-
0885 and our registered statutory office is located at 5844 South Pecos
Road, Suite D, Las Vegas, Nevada 89120. Our fiscal year end is December
31.
The Offering
Following is a brief summary of this Offering. Please see the
"Plan of Distribution; Terms of the Offering" in this Prospectus for a
more detailed description of the terms of the Offering.)
Securities Being Offered . . Up to 2,000,000 Shares of Common
Stock, par value $0.00001.
Offering Price per Share . . $ 0.10
Offering Period . . . The Shares are being offered for a
period not to exceed 180 days,
unless extended by our Board of
Directors for an additional 90
days.
Net Proceeds to Our Company . Approximately $150,000 (See "Use of
Proceeds".)
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Use of Proceeds . . . We intend to use the proceeds to
pay for offering expenses, research
and exploration and to generally
expand our business operations. See
"Use of Proceeds".
Number of Shares Outstanding
Before the Offering: . . 5,000,000 See "Description of
Securities".
Number of Shares Outstanding
After the Offering: 7,000,000 See "Description of
Securities".
Summary Financial Data
The following table provides selected financial data about our
Company from inception on June 19, 1999 to June 30, 1999. For detailed
historical financial information, see the Financial Statements attached
to this Prospectus as an Exhibit.
Balance Sheet Data:. On June 30, 1999
Cash $ 100
Total assets $ 362
Total liabilities $ 12,000
Shareholders' equity $ (11,638)
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RISK FACTORS
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AN INVESTMENT IN THESE SECURITIES INVOLVES AN EXCEPTIONALLY HIGH
DEGREE OF RISK AND IS EXTREMELY SPECULATIVE IN NATURE. IN ADDITION TO
THE OTHER INFORMATION REGARDING OUR COMPANY CONTAINED IN THIS
PROSPECTUS, YOU SHOULD CONSIDER MANY IMPORTANT FACTORS IN DETERMINING
WHETHER TO PURCHASE THE SHARES BEING OFFERED. THE FOLLOWING RISK
FACTORS ARE SOME OF THE POTENTIAL AND SUBSTANTIAL RISKS WHICH COULD BE
INVOLVED IF YOU DECIDE TO PURCHASE SHARES IN THIS OFFERING.
RISKS ASSOCIATED WITH OUR COMPANY:
1. We Have No Operating History.
Our Company was incorporated in June 1999 and we have not yet
commenced our proposed business operations or realized any revenues. We
have no operating history upon which an evaluation of our future
prospects can be made. Such prospects must be considered in light of
the substantial risks, expenses and difficulties encountered by new
entrants into the competitive mining industry. The mining business is,
by nature, extremely speculative. Our ability to achieve and maintain
<PAGE> 8
profitability and positive cash flow is highly dependent upon a number
of factors, including our ability to locate a profitable mineral
property and generate revenues, while reducing exploration and
development costs. Based upon current plans, we expect to incur
operating losses in future periods as we incur significant expenses
associated with the research, exploration and development of our
mineral properties. We cannot guarantee that we will be successful in
realizing revenues or achieving or sustaining positive cash flow in the
future and any such failure could have a material adverse effect on our
business, financial condition and results of operations. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business."
2. Speculative Nature of the Mineral Exploration Industry;
Exploration Stage; No Known Ore Reserves; and Uncertain Validity
of Unpatented Mining Claims.
Gold, silver and strategic metals exploration is highly
speculative in nature, involving many risks which even a combination of
scientific knowledge and experience cannot overcome, often resulting in
unproductive efforts. We are in the very early exploration stage and
are dependent on the proceeds to be realized from the sale of Common
Stock in this Offering for the funds necessary to carry out our planned
exploration and development program. We cannot guarantee that our
explorations will be successful, that any production will be obtained,
or that production, if obtained, will be profitable. Although we
believe there is a sufficient basis to engage in exploration on our
property, it may not result in the discovery of any known ore reserves.
We do not claim any known ore reserves on our properties. The validity
of unpatented mining claims, depends, to a large extent, upon numerous
circumstances and factual matters (many of which are discoverable of
record or by other available means) and is subject to many
uncertainties of existing law and its applications. While we believe
our property could contain minerals, further exploration and mineral
assessments performed by government agencies may indicate that our
claims are not sufficiently mineralized and may later be abandoned or
determined to be invalid because of insufficient mineralization. See
"Business."
3. Industry Conditions; Economic Factors.
Our continued existence is highly dependent upon the condition of
the mineral exploration and development industry. Currently, the price
of gold is at its lowest point in the last 20 years. The economic
viability of that market, in turn, is highly dependent on, among many
other factors, political issues and general economic conditions. During
periods of economic downturn or slow economic growth, coupled with
eroding consumer confidence or rising inflation, the price and/or sale
of precious metals could be severely impacted. Such factors would
likely have an immediate effect on our business operations and/or
<PAGE> 9
profitability. Currently, the mining industry is depressed and mineral
values have been very low over the last several years, making it
difficult to conduct operations profitably. See "Business."
4. Transportation Difficulties and Weather Interruptions.
While some mining concerns operate 12 months per year, our
proposed exploration and development work can only be performed for
approximately 8 months out of The year (under normal circumstances) due
to rain and snowfall in British Columbia, where our property is
located. Also, the existing roads leading to our property is
rough-graded dirt and, during rainy weather, is sometimes unusable or
washed out. Such factors would likely have an immediate adverse effect
on our operations and/or profitability. See "Business."
5. Government Regulation, Permits and Environmental Impact.
Any mineral exploration programs undertaken by us will be subject
to extensive Canadian laws, rules and regulations. Various governmental
permits are required for our proposed operations. We are not assured of
receiving such permits as and when we need them for our operations, or
at all. In addition, existing, as well as future legislation and
regulations could cause additional expense, capital expenditures,
restrictions and delays in the development of our properties. The
extent to which future legislation and/or regulations might affect our
operations cannot be predicted. There is no assurance environmental or
safety standards more stringent than those presently in effect may not
be enacted, which could adversely affect our exploration program. Also,
the industry often finds itself in conflict with the interests of
private environmental groups which often have an adverse effect on the
mining industry. See "Business."
6. Competition.
There is intense competition in the mineral exploration and
development industry in which we operate. All of our competitors have
greater financial and other resources, better distribution networks
and/or greater name recognition than us. We don't know whether we will
be able to successfully compete in this industry. See "Business."
7. Supply Factors.
Competition and unforeseen limited sources of supplies in the
industry could result in occasional spot shortages of supplies of
certain products, equipment or materials we may use in our operations.
We cannot guarantee we will be able to obtain certain products,
equipment and/or materials which we require, without interruption, as
and when needed, or on terms favorable to us. See "Business."
<PAGE> 10
8. Risk Factors Affecting Our Operating Results and Potential
Fluctuations in Revenues.
Our success depends on a number of factors, many of which are
beyond our control. These factors include the rates of and costs
associated with the exploration and development of our properties;
capital expenditures and other costs relating to the expansion of our
business operations; fluctuations in the price of minerals; changes in
operating expenses; changes in our exploration and development
strategy; personnel changes; the introduction of alternative mining
technologies; the effect of other potential property acquisitions;
increased competition in our current and prospective markets; and other
general economic factors. Our operating results, cash flows and
liquidity may fluctuate significantly in the future. Our revenues will
depend on our ability to successfully identify, produce and market any
minerals located on our properties, assuming minerals are located, of
which there is no assurance. To the extent that revenues are below
expectations, we may be unable or unwilling to reduce expenses
proportionately, and operating results, cash flow and liquidity are
likely to be adversely affected. Due to these and other factors, our
operating results and/or growth rate may be below the expectations of
our management and investors, which could materially adversely affect
the value of any Shares you purchase in this Offering. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business."
9. Our Dependence On and Ability to Attract Key Personnel.
Our business operations will be highly dependent upon our ability
to attract and maintain key employees and management personnel with
experience in the research, exploration, development and production of
minerals. The process of hiring employees with the combination of
skills and attributes required to carry out our business strategy is
extremely competitive and time-consuming. We cannot guarantee that we
will be able to identify and/or hire qualified personnel as and when
they are needed for our operations. The loss of the services of key
personnel, or the inability to attract qualified personnel, could
materially adversely affect our business, financial condition and
results of operations. See "Management."
10. Year 2000 Computer Problems.
Many existing computer programs use only two digits to identify a
year in the date field, e.g., "98" instead of "1998." These programs
were designed and developed without considering the impact of the
upcoming change in the century, i.e., Year 2000. If not corrected, many
computer applications could fail or create erroneous results by or at
the Year 2000. The Securities and Exchange Commission has issued Staff
Legal Bulletin No. 5 indicating the Year 2000 problem affects
<PAGE> 11
virtually all companies and organizations. We have made assessments and
corrections to our equipment regarding the Year 2000 issues and have
determined which 2000 issues may adversely affect our business,
operations (including operating systems) and/or financial condition.
These Year 2000 issues could also affect our relationships with
customers, suppliers and other parties with whom we do business. We
have instituted a Year 2000 remediation program and contingency plans;
however, there could be many other unknown factors which could affect
our business operations and/or financial condition. A material
consideration in this regard would be the cost of remediation programs
and/or contingency plans to correct unforseen problems. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operations-Year 2000 Compliance."
RISKS ASSOCIATED WITH THIS OFFERING:
11. The Risks of Buying Low-Priced Stocks.
Our Common Stock is defined as a "penny stock" under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"),
and rules of the Securities and Exchange Commission . The Exchange Act
and such penny stock rules generally impose additional sales practice
and disclosure requirements on broker-dealers who sell our securities
to persons other than certain "accredited investors" (generally,
institutions with assets in excess of $5,000,000 or individuals with
net worth in excess of $1,000,000 or annual income exceeding $200,000,
or $300,000 jointly with spouse), or in transactions not recommended by
the broker-dealer. For transactions covered by the penny stock rules,
a broker-dealer must make a suitability determination for each
purchaser and receive the purchaser's written agreement prior to the
sale. In addition, the broker-dealer must make certain mandated
disclosures in penny stock transactions, including the actual sale or
purchase price and actual bid and offer quotations, the compensation to
be received by the broker-dealer and certain associated persons, and
deliver certain disclosures required by the Securities and Exchange
Commission. Consequently, the penny stock rules may affect the ability
of broker-dealers to make a market in or trade our shares and may also
affect your ability to resell any Shares you may purchase in this
Offering in the public markets.
12. Control of Our Company After the Offering.
If all the Shares we are offering in this Prospectus are sold,
which we can't guarantee, you, the purchasers, will own approximately
28.57% of our outstanding Common Stock and our existing Stockholders
will own approximately 71.43%. After completion of this Offering,
regardless of the number of Shares we sell, our existing Stockholders
will be in a position to elect all of our directors, appoint officers
and control our business affairs and operations. Our Articles of
<PAGE> 12
Incorporation do not provide for cumulative voting. Our existing
Stockholders do not intend to purchase any Shares in this Offering. See
"Principal Stockholders," "Certain Transactions" and "Description of
Securities."
13. Possible Issuance of Additional Shares; Further Dilution of Your
Investment
If all the Shares we are offering in this Prospectus are sold,
which we can't guarantee, there will still be 93,000,000 shares of
Common Stock which our Board of Directors will have authority to issue.
There are presently no commitments or contracts to issue any additional
shares to any persons. However, the issuance of any of these additional
shares will reduce the amount of your control in our Company and will
result in further dilution of the book value of your Shares. See
"Dilution of the Price You Pay for Your Shares," "Use of Proceeds,"
"Business," "Description of Securities," "Certain Transactions" and
"Financial Statements."
14. Conflicts of Interest.
This Offering will result in certain benefits to Hugh Grenfal Jr.
and Robert Jarva who are our only officers and directors, who own
shares of Common Stock and would, therefore, benefit from any increase
in the value and liquidity of the Common Stock resulting from the
creation of a public trading market for the Common Stock following this
Offering. There is no assurance that a public trading market will ever
develop for our stock. See "Principal Stockholders" and "Dilution of
the Price You Pay for Your Shares."
15. Possible Restrictions on the Resale of Your Shares.
All of our Common Stock issued and outstanding are restricted
securities and cannot be resold publicly, except in compliance with the
registration or exemption from registration requirements of the
applicable state securities laws, rules and regulations. See "Plan of
Distribution; Terms of the Offering."
16. We Cannot Assure a Public Trading Market for the Shares.
There is currently no active trading in our Common Stock and we
cannot guarantee you that an active trading market in our Shares will
develop in the near future, even if this Offering is successfully
completed; or, if a trading market is developed, that it can or will be
sustained for any period of time. There is a high risk that you not be
able to be resell any Shares you purchase in this Offering at or near
the Offering price, and in fact, we cannot guarantee that you will be
able to sell your Shares at all in the future. "See "Plan of
Distribution; Terms of the Offering."
<PAGE> 13
17. You Will Incur Immediate and Substantial Dilution.
Our existing Stockholders acquired their shares at a cost
substantially less than that which you will pay for Shares you purchase
in this Offering. Accordingly, any investment you make in these Shares
will result in the immediate and substantial dilution of the net
tangible book value of those Shares. See "Dilution of the Price you Pay
for Your Shares" and "Financial Statements."
18. We Do Not Pay Cash Dividends on Our Common Stock.
No cash dividends have been paid on our Common Stock to date and
we do not anticipate paying cash dividends to Stockholders in the
foreseeable future. Any income we receive from operations will be
reinvested and devoted to our future business operations and/or to
expansion. See " Description of Securities."
19. Impact of Potential Future Sales of our Common Stock.
A total of 5,000,000 shares of our Common Stock were issued prior
to this Offering and are held by our officers and directors who hold
such shares as "restricted securities", as that term is defined in Rule
144 promulgated under the Securities Act of 1933, as amended. These
securities may only be sold in compliance with Rule 144 which provides,
in essence, that officers and directors and others holding restricted
securities may each sell, in brokerage transactions, an amount equal to
1% of our total outstanding Common Stock every three (3) months. In
addition, Rule 144 provides that shares may not be sold until they have
been held for a period of at least one (1) year from the date they were
fully paid for. These 5,000,000 shares of restricted Common Stock have
been issued and are fully paid for. Furthermore, persons holding
restricted securities for two (2) years, who are not"affiliates" of our
Company, as that term is defined in Rule 144, may sell their securities
pursuant to Rule 144 without any restrictions and/or limitations on the
number of shares sold.
The sale of any of these restricted securities may, in the future,
have a depressive effect on the price of our Common Stock in the
over-the-counter market, assuming there is such a market. See
"Principal Stockholders" and "Certain Transactions."
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USE OF PROCEEDS
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We have estimated the net proceeds from this Offering to be
approximately $150,000, assuming all Shares are sold, which we can't
guarantee, after deducting $50,000, for estimated offering expenses,
including legal and accounting fees. We expect to use the proceeds for
exploration and working capital.
<PAGE> 14
While we currently intend to use the proceeds of this Offering
substantially in the manner set forth above, we reserve the right to
reassess and reassign such use if, in the judgement of our Board of
Directors, such changes are necessary or advisable. At present, no
material changes are contemplated. Should there be any material changes
in the above projected use of proceeds in connection with this
Offering, we will issue an amended Prospectus reflecting the same.
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DETERMINATION OF OFFERING PRICE
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The price of the Shares we are offering was arbitrarily determined
in order for us to raise up to a total of $200,000 in this Offering.
The Offering price bears no relationship whatsoever to our assets,
earnings, book value or other criteria of value. Among the factors
considered were our limited operating history, the proceeds to be
raised by the Offering, the amount of capital to be contributed by
purchasers in this Offering in proportion to the amount of stock to be
retained by our existing Stockholders, and our relative cash
requirements. See "Plan of Distribution; Terms of the Offering."
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CAPITALIZATION
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The following table sets forth our capitalization at June 30,
1999, (i) on a historical basis and (ii) as adjusted to reflect the
sale of the Shares we are offering in this Prospectus at an assumed
initial public offering price of $0.10 per share, and the application
of the estimated net proceeds we will receive, assuming sale of all
Shares, which we cannot guarantee. See "Use of Proceeds."
This table should be read in conjunction with the section
entitled, "Management's Discussion and Analysis of Financial Condition
and Results of Operations" our Financial Statements and Notes; and
other financial and operating data included elsewhere in this
Prospectus.
<PAGE> 15
June 30, 1999 As Adjusted
Actual After Offering
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Stockholder's Equity:
Common Stock:
100,000,000 shares authorized,
par value $0.00001
5,000,000 issued and outstanding $ 50
7,000,000 issued and outstanding $ 70
Additional Paid-in Capital
Deficit accumulated during the $ 11,594 $ 161,574
development stage $ (23,282) $ (23,282)
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TOTAL STOCKHOLDERS' EQUITY (deficit) $ (11,638) $ 138,362
========= =========
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DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
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"Dilution" represents the difference between the Offering price
and the net tangible book value per Share immediately after completion
of this Offering. "Net tangible book value" is the amount that results
from subtracting total liabilities and intangible assets from total
assets. Dilution arises mainly as a result of our arbitrary
determination of the offering price of the Shares being offered.
Dilution of the value of the Shares you purchase is also a result of
the lower book value of the shares held by our existing Stockholders.
See "Principal Stockholders."
As of June 30, 1999, the net tangible book value of our shares of
Common Stock (total assets, excluding intangible assets, less total
liabilities, excluding contingent liabilities) was a deficit of
$(11,638) or approximately $(0.002) per share (based upon 5,000,000
shares outstanding).
Upon completion of this Offering, but without taking into account
any change in such net tangible book value after completion of this
Offering, other than that resulting from the sale of Shares in this
Offering, the net tangible book value of the 7,000,000 Shares to be
outstanding, assuming all Shares are sold, which we can't guarantee,
will be $138,362, or approximately $0.02. Accordingly, the net tangible
book value of the Shares held by our existing Stockholders (5,000,000
shares) will be increased by $0.018 per Share, assuming sale of all of
the Shares, which we can't guarantee, without any additional investment
on their part, and you, the purchasers of Shares in this Offering, will
incur an immediate dilution (a reduction in net tangible book value per
Share from the Offering price of $0.10 per Share) of $0.08 per Share.
<PAGE> 16
After completion of this Offering, you will own approximately
28.57% of the total number of shares then outstanding shares of our
Common Stock, for which you will have made a cash investment of
$200,000, or $0.10 per Share. Our existing Stockholders will own
approximately 71.43% of the total number of shares then outstanding,
for which they have made contributions of cash and/or services and/or
other assets, totaling $11,644, or approximately $0.002 per share.
Please see our Financial Statements attached to this Prospectus. Our
existing Stockholders have advised they do not intend to purchase any
Shares in this Offering.
The following table compares the differences of your investment in
our Shares with the investment of our existing Stockholders, assuming
a successful completion of this Offering, of which there can be no
assurance.
EXISTING STOCKHOLDERS
<TABLE>
<S> <C>
Price per Share . . . . . . . . . . . . . . . . . . . .$ 0.002
Net tangible book value per Share before Offering . . .$ (11,638)
Net tangible book value per Share After Offering. . . .$ 138,362
Increase to present Stockholders in net tangible book
value per Share after Offering . . . . . . . . . . . .$ 0.018
Capital contributions . . . . . . . . . . . . . . . . .$ 11,644
Number of Shares Outstanding before the Offering. . . .5,000,000
Number of Shares after Offering held by
Existing Stockholders . . . . . . . . . . . . . . . .5,000,000
Percentage of ownership after Offering . . . . . . . .73.43%
</TABLE>
PURCHASERS OF SHARES IN THIS OFFERING
<TABLE>
<S> <C>
Price per Share. . . . . . . . . . . . . . . . . . . . $ 0.10
Dilution per Share . . . . . . . . . . . . . . . . . . $ 0.08
Capital contributions. . . . . . . . . . . . . . . . . $ 200,000
Number of Shares after Offering held by
Public Investors . . . . . . . . . . . . . . . . . . 2,000,000
Percentage of ownership after Offering . . . . . . . . 28.57%
</TABLE>
<PAGE> 17
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PLAN OF DISTRIBUTION; TERMS OF THE OFFERING
- ---------------------------------------------------------------------
Offering Will Be Sold By Our Officers and Directors
We intend to sell the Shares in this Offering through Robert
Jarva, one of our officers and directors, who will receive no
commission from the sale of any Shares. They will not register as a
broker-dealer pursuant to Section 15 of the Securities Exchange Act of
1934, as amended, in reliance upon Rule 3a4-1, which sets forth those
conditions under which a person associated with an Issuer may
participate in the Offering of the Issuer's securities and not be
deemed to be a broker-dealer.
1. None of such persons are subject to a statutory
disqualification, as that term is defined in Section 3(a)(39) of the
Act, at the time of his participation; and,
2 None of such persons are compensated in connection with his or
her participation by the payment of commissions or other remuneration
based either directly or indirectly on transactions in securities; and
3. None of such persons are, at the time of his participation, an
associated person of a broker-dealer; and
4. All of such persons meet the conditions of Paragraph (a)(4)(ii)
of Rule 3a4-1 of the Exchange Act, in that they (A) primarily perform,
or are intended primarily to perform at the end of the Offering,
substantial duties for or on behalf of the Issuer otherwise than in
connection with transactions in securities; and (B) are not a broker or
dealer, or an associated person of a broker or dealer, within the
preceding twelve (12) months; and (C) do not participate in selling and
offering of securities for any Issuer more than once every twelve (12)
months other than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).
We intend to advertise and hold investment meetings in various
states where the Offering will be registered and will distribute the
Prospectus to potential investors at the meetings and to our friends
and relatives who are interested in our Company and a possible
investment in the Offering.
We are offering the Shares subject to prior sale and subject to
approval of certain matters by our legal counsel.
Offering Period and Expiration Date
This Offering will commence on the date of this Prospectus and
continue for a period of 180 days, unless we extend the Offering period
for an additional 90 days, or unless the Offering is completed or
otherwise terminated by us (the "Expiration Date").
<PAGE> 18
Procedures for Subscribing
If you decide to subscribe for any Shares in this Offering, you
will be required to execute a Subscription Agreement and tender it,
together with a check or certified funds, to us for acceptance or
rejection.
All checks for subscriptions should be made payable to "Paxton
Mining Corporation."
Right to Reject Subscriptions
We have the right to accept or reject subscriptions in whole or in
part, for any reason or for no reason. All monies from rejected
subscriptions will be returned immediately by us to the subscriber,
without interest or deductions. Subscriptions for securities shall be
accepted or rejected within 48 hours after we receive them.
- ---------------------------------------------------------------------
BUSINESS
- ---------------------------------------------------------------------
General
Our Company was incorporated in the State of Nevada on June 10,
1999. We are engaged in the acquisition, exploration and development of
mining properties. We maintain our statutory registered agent's office
at 5844 South Pecos Road, Suite D, Las Vegas, Nevada 89120 and our
business office is located at 400 Burrard Street, Suite 1950,
Vancouver, British Columbia, Canada V6C 3A6. Our telephone number is
(604) 605-0885. See "Business - Office Facilities."
Description of Properties
In June 1999, we, through Hugh Grenfal our President and a member
of the Board of Directors entered into an Option to Purchase Agreement
with James Thom, an unrelated third party, to acquire 100% of the
rights, titles and interests in and to a total of two unpatented mining
claims in the Twelve Mile Creek, Kalso Area, Slocan Mining Division,
British Columbia, Canada, in exchange for US$10.00 in cash. On June 20,
1999, the Company, through Mr. Hugh Grenfal, our President, exercised
the option and acquired the mining claims. The claims are recorded in
Mr. Grefal's name for tax purposes, however, title to the claims has
been conveyed to the Company via an unrecorded deed.
The existing roads leading to our property are rough-graded dirt
and, during rainy weather, are sometimes inaccessible or washed out. To
date, we have not performed any geological work on any of our claims.
<PAGE> 19
Location and Access
The property is located at the north end of the Kokanee Range in
the Selkirk Mountains, on the lower reaches of Twelve Mile Creek, a
tributary of the Kaslo River. It lies to the immediate south of Highway
31A, approximately 17 kilometers to the northwest of Kaslo.
The Utica mine road runs through the eastern part of the property.
This gravel road leads to the now abandoned Utica mine site, adjoining
to the south of the claim group. However, the bridge crossing the Kaslo
River has been removed and a washout 2 kilometers up from Highway 31A
make the road impassable to vehicles. Numerous overgrown logging roads
traverse the eastern portion of the claim group. A foot trail runs
northwest from the Utica mine road towards the showings in the center
of the claims.
At present the Kaslo River can be crossed either by wading or by
canoe. A helicopter can also provides access to the claims for
preliminary exploration. Any advanced stages of exploration and
development of the property would require the emplacement of a sturdy
bridge crossing the Kaslo River and access roads to the showings.
Physiography
The property lies between the elevations of 1,066 meters and 2,130
meters. The main areas of interest lie between approximately 1,200
meters and 1,800 meters. Slopes are in the range of 200 to 400, with
occasional bluffs. Vegetation is moderate to heavy at lower elevations,
particularly in areas of glacial cover. Higher elevations are more
lightly vegetated, with many areas of outcrop. There is ample timber
and water within the property to support all phases of exploration.
The property is snow free from June through November providing a
five to six month exploration season.
The property is within easy commuting distance of Kaslo. Kaslo
offers full facilities of a small town having a hotel, motel, bank and
supermarket. Nelson, which is one hour and a half to the south, is the
nearest major center.
History of Previous Work
Exploration in the area dates back to the turn of the century when
native guides led a group of prospectors northwest from the Ainsworth
Camp. The group subsequently located a high grade silver - lead
showing which was staked as the Noble Five claim. This discovery
initiated a staking rush in the area which led to the discovery and
development of a vast number of mineral deposits with over 300
properties having reached some form of production. Production records
show Silver, Lead, Zinc, Cobalt, Gold and Platinum Group Minerals
Elements were produced from these properties.
<PAGE> 20
It should be noted that the British Columbia government production
records are incomplete as it was common practice for the miners in the
1910 to 1930 period to ship their ore south down Kootenay Lake and the
Kootenai River directly to mills at Coeur d'Alene in Idaho for
smelting.
The area saw a resurgence of activity during World War II as the
demand for Zinc and other base metals increased. Production in the
region has continued continuously through to the 1970s. Since that time
production has been mainly limited to custom miners and Teasers high
grading tailings and reserves of the old producers.
The claims adjoin the Utica Mine to the west. The Utica mine
produced in excess of 50,000 tons of high grade silver and lead ore.
Zinc is also reported in the mines production records.
The original showings on the Arch Silver Property were discovered
in the early 1900s. The majority of the development work was done in
the 1910 - 1926 period. The recorded production from the property is
less than 30 tons of hand cobbed Silver - Lead ore from three of the
six showings.
Regional Geology
The Arch property occurs within the central section of the
Kootenay Arc. The Arc is composed of a band of sedimentary, volcanic
and metamorphic rocks that extend from northern Washington State where
they strike northeasterly, to north of Revelstoke where they strike
northwesterly. The age of the rocks varies form Precambrian to
Jurassic.
The Milford Group is the lowest member of the stratigraphic
sequence exposed in the vicinity, and is of Mississippian to Permian
age. From the base the rocks consist of conglomerate, amygdaloidal
metabasaltic flows, limestone phyllite, sandstone and chert. This
sequence is itself underlain by rocks of the Lardeau Group.
The oldest rocks on the property are those of the Kaslo Group
which occur near the northeast comer of the property. These rocks are
thought to. be of upper Permian to lower Triassic in age and overlay
the Milford Group. The Kaslo Group rocks consist of mafic volcanic
breccia, andesite, basalt, chlorite schist, tuffaceous argiillite, talc
and serpentinite. Sills and small plugs of gabbro or diorite that
probably are of this group occur throughout the older sediments.
The Slocan Group is the youngest and is Upper Triassic in age.
this group consists of undifferentiated slate, argillite, limestone,
quartzite and tuffaceous sediments with some dolomite.
<PAGE> 21
Property Geology
The Slocan Group covers most of the property and outcrops locally
as slate, limestone and argillite. The sediments were observed to have
a predominant strike of northwest with variable southwesterly dips.
These rocks are cut by both concordant and discordant dykes which
appear to be mostly felsic. The Slocan Group sediments are highly
metamorphosed in areas where they come into contact with the
intrusives.
The Nelson Batholith occurs along the southern edge of the
property and along two northwesterly trends within the center of the
property, and is of Jurrasic age. This batholith was observed during
the most recent examination of the property as consisting
of unaltered porphyritic granite with smaller stocks of quartz diorite.
Dyke-shaped intrusives trend northwesterly and north-northwesterly
through the northern balf of the property. The petrology of these dykes
varies from granite to quartz diorite and is of unknown age.
Our Proposed Exploration Program
Previous exploration work on adjacent properties has indicated
that mineral occurrences exist in the area of our properties; however,
further exploration and development is needed to determine what amount
of minerals, if any, exist on our properties and if any minerals which
are found can be economically extracted and profitably processed.
We believe there are numerous valuable unexplored and sometimes
unclaimed prospects in the area where our properties are located. Our
exploration program will be designed to economically explore, evaluate
and acquire properties which, in our opinion, may merit exploration.
We do not claim to have any ores or reserves whatsoever at this
time on any of our properties.
We intend to implement an exploration program and intend to
proceed in the following three phases:
Phase 1 will begin with research of the available geologic
literature, personal interviews with geologists, mining engineers and
others familiar with the prospect sites. We have recently begun this
Phase of the exploration process on our properties.
When the research is completed, our initial work will be augmented
with geologic mapping, geophysical testing and geochemical testing of
our claims. When available, existing workings, such as trenches,
prospect pits, shafts or tunnels will be examined. If an apparent
mineralized zone is identified and narrowed down to a specific area by
the studies, we intend to begin trenching the area. Trenches are
<PAGE> 22
generally approximately 150 ft. in length and 10-20 ft. wide. These
dimensions allow for a thorough examination of the surface of the vein
structure types generally encountered in the area. They also allow for
efficient reclamation, re-contouring and re-seeding of disturbed areas
Once excavation of a trench is completed, a channel of samples are
taken and then analyzed for economically potential minerals that are
known to have occurred in the area. Careful interpretation of this
available data collected from the various tests aid in determining
whether or not the prospect, as viewed by our experts, has current
economic potential and whether further exploration is warranted.
Phase 2 will involve an initial examination of the underground
characteristics of the vein structure that was identified by Phase 1 of
exploration. Phase 2 will be aimed at identifying any mineral deposits
of potential economic importance. The methods which will be employed
are more extensive trenching, more advanced geophysical work and
ultimately drift driving to aid in the determination of subsurface
characteristics of the structure. The geophysical work is designed to
give a general understanding of the location and extent of
mineralization at depths that are unreachable by surface excavations
and provide a target for more extensive trenching and core drilling.
The trenching will identify the continuity and extent of
mineralization, if any, below the surface. After a thorough analysis of
the data collected in Phase 2, a determination will be made as to
whether or not the properties warrant a Phase 3 study.
Phase 3 will be aimed at precisely defining the depth, the width,
the length, the tonnage and the value per ton of any ore body, assuming
any are located on our properties, so that they can be considered
proven ore bodies within the stringent industry standards. This is
accomplished through extensive drift driving. An ore body is not a
proven ore body until it has been technically, economically and legally
proven.
Environmental Regulations
Environmental laws and regulations relating to public lands in
Canada are expected to be tightly enforced. We intend to explore and,
when required, develop all of our properties in strict compliance with
all environmental requirements applicable to the mineral processing and
mining industry. We will secure all the necessary permits for
exploration and, if development is warranted on any property, will file
final Plans of Operation prior to the commencement of any mining
operations. We anticipate no discharge of water into any active stream,
creek, river, lake or any other body of water regulated by
environmental law or regulation. No significant endangered species will
be disturbed. Re-contouring and re-vegetation of disturbed surface
areas will be completed pursuant to all Canadian provincial and local
legal requirements. Any portals, adits or shafts will be sealed upon
abandonment of a property. It is difficult to estimate the cost effects
<PAGE> 23
of compliance with environmental laws inasmuch as the methods and
procedures of exploration within public lands are similar to those
methods and procedures already adopted by us as a matter of our Company
policy.
Government Regulations
We will be subject to all the laws, rules and regulations which
govern the mineral processing and mining industry in Canada. We intend
to fully comply with all environmental, health and safety laws, rules,
regulations and statutes.
Employees
Initially, we intend to use the services of subcontractors for all
exploration work on our properties. Our only direct employees will be
Hugh Grenfal and Robert Jarva, our officers and directors.
Employees and Employment Agreements
At present, we have no employees, other than Derick Sinclair, our
sole officer and director, who is not compensated for his services and
does not have an employment agreement with us. We presently do not have
pension, health, annuity, insurance, stock options, profit sharing or
similar benefit plans; however, we may adopt such plans in the future.
There are presently no personal benefits available to any employees.
Legal Proceeding
We are not involved in any pending legal proceeding.
- ---------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- ---------------------------------------------------------------------
This registration statement contains forward-looking statements
that involve risks and uncertainties. The statements contained in this
registration statement that are not purely historical are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934, including without limitation statements regarding our
expectations, projections, beliefs, intentions or strategies regarding
the future. All forward-looking statements included in this document
are based on information available to us on the date hereof, and we
assume no obligation to update any such forward-looking statements. Our
actual results may differ materially as a result of certain factors,
including those set forth in the "Risk Factors" section of this
registration statement. Potential investors should consider carefully
the following factors, as well as the more detailed information
<PAGE> 24
contained elsewhere in this registration statement, before making a
decision to invest in our Common Stock. The following discussion and
analysis should be read in conjunction with our Financial Statements
and Notes attached to this Prospectus.
Selected Financial Data
We are a start-up, development stage company and have not yet
generated or realized any revenues from our business operations.
The following historical financial data from inception on June 19,
1999 was derived from our financial statements, audited by Williams &
Webster, P.S., independent certified public accountants (the "Financial
Statements").
<TABLE>
<CAPTION>
Balance Sheet Data June 30, 1999
- ------------------ --------------
<S> <C>
Assets:
Cash $ 100
Mining claims $ 262
Total Assets $ 362
Liabilities: $ 12,000
Stockholder Advances $ 12,000
Total Liabilities $ (11,638)
Total Shareholders' Equity
Statements of Operations Data:
Revenues $ -0-
General and Administrative Expenses $ 23,282
Net Income/Loss $ 23,282
Net Income/Loss per common share $ (0.005)
Weighted average common shares outstanding 5,000,000
</TABLE>
Limited Operating History; Need for Additional Capital
There is little to no historical financial information about our
Company upon which to base an evaluation of our performance or to make
a decision regarding an investment in Shares of our Common Stock. We
are still in the organizational stages and have not yet generated or
realized any revenues from operations. We cannot guarantee we will be
successful in our business operations or will achieve significant
levels of market acceptance for our proposed business. Our business
could be subject to any or all of the problems, expenses, delays and
risks inherent in the establishment of a new business enterprise,
including limited capital resources, possible delays in the exploration
and/or development of our properties, possible cost overruns due to
<PAGE> 25
price and cost increases in raw products and manufacturing processes,
and the absence of an operating history. Therefore, we cannot guarantee
we will be able to achieve or maintain profitable operations. Further,
there is no assurance that we will not encounter unforeseen
difficulties that may deplete our capital resources more rapidly than
anticipated.
To become and remain profitable and competitive, we will likely be
required to make significant investments into the research and
exploration of our properties before we would able to commence
production of any minerals we may find. We are seeking additional
equity financing in order to provide for the capital required to
implement our research and exploration phases and to expand our
business operations.
The timing and total amount of capital requirements cannot be
predicted at this time and we have no assurance that any financing will
be available to us on acceptable terms, as and when we need it, if at
all. If such financing is not available on satisfactory terms, as and
when needed, we may be unable to continue, develop or expand our
operations and our operating results may be adversely affected. Equity
financing could result in additional dilution to existing shareholders.
Results of Operations
From Inception on June 19, 1999
We are a development stage company and have not yet generated or
realized any revenues since inception. We just recently acquired our
first property (two claims) and are commencing the research and
exploration stage of our mining operations on that property at this
time.
Since inception, we have used our Common Stock to raise money for
our property acquisition and to repay outstanding indebtedness. Net
cash provided by financing activities from inception on June 19, 1999
to June 30, 1999 was $11,282, as a result of proceeds received from
sales of our Common Stock.
Liquidity and Capital Resources
As of the date of this registration statement, we have yet to
generate any revenues from our business operations.
We issued 5,000,000 shares of Common Stock at $0.0023 per share
through a Section 4(2) offering in June 1999. The total proceeds we
received from the sale of the shares was $11,282 in cash and one mining
property.
<PAGE> 26
As of June 30, 1999, our total assets were $362 and our total
liabilities were $12,000.
During 1999, we expect to incur additional costs for research and
exploration of our properties and for subcontractors, professional and
legal fees. Additional funding will be required to meet any additional
operating and/or expansion requirements.
We intend to take steps to raise equity capital; however, we
cannot guarantee that any new capital will be available to us or that
adequate funds for operations, whether from our revenues, financial
markets, collaborative or other arrangements with corporate partners or
from other sources, will be available as or when needed, or on terms
satisfactory to us. Our failure to obtain adequate additional financing
may require us to delay, curtail or scale back some or all of our
development programs, sales and marketing efforts and, potentially, to
cease our operations. Any additional equity financing may involve
substantial dilution to our then-existing shareholders.
Year 2000 Compliance
The Year 2000 issue is the result of computer programs using two
digits rather than four to define the applicable year. Date-sensitive
software may recognize a date using "00" as the year 1900 rather than
the year 2000. This could result in system failures or miscalculations,
causing disruptions of operations, including, among others, a temporary
inability to process transactions, send invoices or engage in similar
normal business activities.
Year 2000 State of Readiness
In order to address Year 2000 issues, we have developed and are
implementing a plan to become Year 2000 ready (the "Year 2000 Plan").
The Year 2000 Plan covers (i) the computers and technology which we
will in the research and exploration of our properties. In addition,
the Year 2000 Plan calls for us to identify and assess the systems and
services of our major vendors and other material service providers
("Third Party Providers"), and take appropriate remedial actions and
develop contingency plans where appropriate in connection with such
Third Party Providers. Since we have not yet commenced business
operations, we do not yet have any major vendors; however, we intend to
continue to evaluate and assess the systems of any Third Party
Providers we engage in the future to identify and eliminate Year 2000
issues in order to timely achieve Year 2000 readiness and avoid any
disruption of the services and/or information required to continue our
business operations.
<PAGE> 27
Year 2000 Costs
To date, we have incurred no historical costs associated with our
Year 2000 readiness efforts and the magnitude of any future costs will
depend upon the nature and extent of any problems that are identified.
Year 2000 Risks
Our failure to correct a material Year 2000 problem could result
in a complete failure or degradation of the performance of our
computers, software or other systems, including the disruption of
operations, a temporary inability to operate or engage in normal
business activities. Presently, however, we believe that our most
reasonably likely worst case scenario related to the Year 2000 issue is
associated with potential concerns with Third Party Providers' services
or products. Specifically, we will be heavily dependent on a
significant number of third-party vendors to provide research data and
studies on our properties. A significant Year 2000-related disruption
to one of these vendor's computer software and/or equipment could cause
a considerable delay in our proposed research and explorations which in
turn could materially and adversely affect our results of operations,
liquidity and financial condition. We are not presently aware of any
vendor-related Year 2000 issues that are likely to result in such a
disruption, however, there is no assurance they will not occur in the
future. Although there is inherent uncertainty in the Year 2000 issue,
we expect that as we progress with our Year 2000 Plan, the level of
uncertainty about the impact of the Year 2000 issue on our business
operations will be reduced and we will be better positioned to identify
the nature and extent of our material risks as a result of any Year
2000 disruptions.
Year 2000 Contingency Plans
Due to the current stage of our Year 2000 Plan, we are unable to
fully assess our risks and determine what contingency plans, if any,
need to be implemented. As we progress with our Year 2000 Plan and
identify specific risk areas, we intend to timely implement appropriate
remedial actions and contingency plans.
These estimates and conclusions contain forward-looking statements
and are based on our best estimates of future events. Our expectations
about risks, future costs and the timely completion of our Year 2000
efforts are subject to uncertainties that could cause actual results to
differ materially from what has been discussed above. Factors that
could influence risks, amount of future costs and the effective timing
of remediation efforts include our success in identifying and
correcting potential Year 2000 issues and the ability of third parties
to appropriately address their Year 2000 issues. See "Risk Factors -
The Year 2000 Issue."
<PAGE> 28
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MANAGEMENT
- ---------------------------------------------------------------------
Officers and Directors
Each of our directors is elected by the Stockholders to a term of
one (1) year and serves until his or her successor is elected and
qualified. Each of our officers is elected by the Board of Directors to
a term of one (1) year and serves until his or her successor is duly
elected and qualified, or until he or she is removed from office. The
Board of Directors has no nominating, auditing or compensation
committees.
The name, address, age and position of our present sole officer
and director is set forth below:
<TABLE>
<CAPTION>
Name and Address Age Position(s)
- ----------------- ----- -------------
<S> <C> <C>
Hugh Grenfal 30 President, Treasurer, Chief
3337 West 30th Ave. Financial Officer, and a member
Vancouver, B.C. of the Board of Directors
Canada V6S 1W3
Robert Jarva 36 Secretary and a member of the
2613 Harrier Drive Board of Directors
Coquitlam B.C.
Canada V6E 2A7
</TABLE>
The person named above has held his office/position since
inception of our Company and is expected to hold his office/position
until the next annual meeting of our stockholders.
Background of Officer and Director
Hugh Grenfal has been the President, Treasurer, Chief Financial
Officer and a member of the Board of Directors of the Company since
inception. Mr. Grenfal was President of Booker Gold Explorations Ltd.,
a mining and exploration corporation located in Vancouver, British
Columbia. Since October 1996, Mr. Grenfal has been a Director of
Callinan Mines Ltd., a mining and exploration corporation located in
Vancouver, British Columbia with revenue producing copper and zinc
properties located in Manitoba, Canada.
<PAGE> 29
Robert Jarva has been the Secretary and a member of the Board of
Directors of the Company since inception. From October 1996 to June
1999, Mr. Jarva was a Personal Financial Analyst with Primerica
Financial Services located in Vancouver, British Columbia providing
financial services such as pension and educational plans and life
insurance for individual clients. From January 1993 to October 1996,
Mr. Jarva was employed by D & K Enterprises Ltd. located in Vancouver
British Columbia which was engaged in the hospitality industry. Mr.
Jarva's responsibilities included public relations and funds
supervision.
- ---------------------------------------------------------------------
EXECUTIVE COMPENSATION
- ---------------------------------------------------------------------
Messrs. Grenfal and Jarva, our officers and directors, have not
been compensated for their services and there are no plans to
compensate them in the near future, unless and until we begin to
realize revenues and become profitable in our business operations.
Indemnification
Pursuant to the Articles of Incorporation and Bylaws of the
corporation, we may indemnify an officer or director who is made a
party to any proceeding, including a law suit, because of his position,
if he acted in good faith and in a manner he reasonably believed to be
in our best interest. In certain cases, we may advance expenses
incurred in defending any such proceeding. To the extent that the
officer or director is successful on the merits in any such proceeding
as to which such person is to be indemnified, we must indemnify him
against all expenses incurred, including attorney's fees. With respect
to a derivative action, indemnity may be made only for expenses
actually and reasonably incurred in defending the proceeding, and if
the officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by
the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the
Securities Act of 1933, as amended, which may be permitted to directors
or officers pursuant to the foregoing provisions, we are informed that,
in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy, as expressed in the Act and
is, therefore, unenforceable.
<PAGE> 30
- ---------------------------------------------------------------------
PRINCIPAL STOCKHOLDERS
- ---------------------------------------------------------------------
The following table sets forth, as of the date of this Prospectus,
the total number of shares owned beneficially by each of our directors,
officers and key employees, individually and as a group, and the
present owners of 5% or more of our total outstanding shares. The table
also reflects what such ownership will be assuming completion of the
sale of all Shares in this Offering, which we can't guarantee. The
stockholder listed below has direct ownership of his shares and
possesses sole voting and dispositive power with respect to the shares.
<TABLE>
<CAPTION>
Name and Address Number of Number Percentage of
Beneficial Shares Before of Shares of Ownership
Owner [1] Offering After Offering After Offering
- ------------------ --------- --------- --------------
<S> <C> <C> <C>
Hugh Grenfal 2,500,000 2,500,000 35.71%
3337 West 30th Ave.
Vancouver, B.C.
Canada V6S 1W3
Robert Jarva 2,500,000 2,500,000 35.71%
2613 Harrier Drive
Coquitlam, B.C.
Canada V6E 2A7
- ------------------
All Officers and
Directors as a Group (2) 5,000,000 5,000,000 71.43%
</TABLE>
[1] The persons named above may be deemed to be a "parent" and
"promoter" of our Company, within the meaning of such terms under
the Securities Act of 1933, as amended, by virtue of his/its
direct and indirect stock holdings. Messrs. Grenfal and Jarva are
the only "promoters" of our Company.
Future Sales by Existing Stockholders
A total of 5,000,000 shares of Common Stock have been issued to
the existing Stockholders, all of which are "restricted securities", as
that term is defined in Rule 144 of the Rules and Regulations of the
SEC promulgated under the Act ("Rule 144"). Under Rule 144, such shares
can be publicly sold, subject to volume restrictions and certain
restrictions on the manner of sale, commencing one (1) year after their
acquisition.
<PAGE> 31
Shares purchased in this Offering, which will be immediately
resalable, and sales of all of our other shares after applicable
restrictions expire, could have a depressive effect on the market
price, if any, of our Common Stock and the Shares we are Offering. See
"Dilution of the Price You Pay for Your Shares-Restricted Shares
Eligible for Future Sale."
- ---------------------------------------------------------------------
DESCRIPTION OF SECURITIES
- ---------------------------------------------------------------------
Common Stock
Our authorized capital stock consists of 100,000,000 shares of
Common Stock, par value $0.00001 per share. The holders of our Common
Stock (i) have equal ratable rights to dividends from funds legally
available therefor, when, as and if declared by our Board of Directors;
(ii) are entitled to share ratably in all of our assets available for
distribution to holders of Common Stock upon liquidation, dissolution
or winding up of our affairs; (iii) do not have preemptive,
subscription or conversion rights and there are no redemption or
sinking fund provisions or rights; and (iv) are entitled to one
non-cumulative vote per share on all matters on which stockholders may
vote. All shares of Common Stock now outstanding are fully paid for
and non-assessable and all shares of Common Stock which are the subject
of this Offering, when issued, will be fully paid for and
non-assessable. We refer you to our Articles of Incorporation, By-Laws
and the applicable statutes of the State of Nevada for a more complete
description of the rights and liabilities of holders of our securities.
Non-cumulative Voting
Holders of shares of our Common Stock do not have cumulative
voting rights, which means that the holders of more than 50% of the
outstanding shares, voting for the election of directors, can elect all
of the directors to be elected, if they so choose, and, in such event,
the holders of the remaining shares will not be able to elect any of
our directors. After this Offering is completed, the present
stockholders will own approximately 97% of our outstanding shares. See
"Principal Stockholders" and "Certain Transactions."
Cash Dividends
As of the date of this Memorandum, we have not paid any cash
dividends to stockholders. The declaration of any future cash dividend
will be at the discretion of our Board of Directors and will depend
upon our earnings, if any, our capital requirements and financial
position, our general economic conditions, and other pertinent
conditions. It is our present intention not to pay any cash dividends
in the foreseeable future, but rather to reinvest earnings, if any, in
our business operations.
<PAGE> 32
Reports
After we complete this Offering, we will be subject to certain
reporting requirements and will furnish annual financial reports to our
stockholders, certified by our independent accountants, and may, in our
discretion, furnish unaudited quarterly financial reports.
Stock Transfer Agent
The stock transfer agent for our securities is Pacific Stock
Transfer Company, 5844 South Pecos Road, Suite D, Las Vegas, Nevada
89120 and its telephone number is (702) 361-3033.
- ---------------------------------------------------------------------
CERTAIN TRANSACTIONS
- ---------------------------------------------------------------------
In June 1999 a total of 5,000,000 shares of restricted Common
Stock were issued to Hugh Grenfal and Robert Jarva, officers and
directors of our Company, in exchange for $262 and one mining property
consisting of two claims.
Since inception of our Company, Mr. Grenfal, advanced loans to us
in the total sum of $12,000, which were used for organizational and
start-up costs and operating capital. The loans do not bear interest
and have not been paid as of the date hereof.
In June 1999, we entered into an Option to Purchase Agreement with
James Thom, an unrelated third party, and acquired 100% of the rights,
titles and interests in and to a total of two unpatented mining claims
in consideration of $10.00. In addition, the Option Agreement requires
us to complete a minimum of CDN$80,000 in exploration and development
work on the properties on or before September 1, 1999. On March 16,
1999, we exercised the Option and acquired the mining claims.
- ---------------------------------------------------------------------
LITIGATION
- ---------------------------------------------------------------------
We are not a party to any pending litigation and, to the best of
our knowledge, none is contemplated or threatened.
<PAGE> 33
- ---------------------------------------------------------------------
EXPERTS
--------------------------------------------------------------------
Our financial statements for the period from inception to June 30,
1999, included in this Prospectus have been audited by Williams and
Webster, P.C., Independent Certified Public Accountants, Seafirst
Financial Center, 601 West Riverside Avenue, Suite 1970, Spokane,
Washington 99201, as set forth in their report included in this
Prospectus.
- ---------------------------------------------------------------------
LEGAL MATTERS
- ---------------------------------------------------------------------
Conrad C. Lysiak, Attorney at Law, 601 West First Avenue, Suite
503, Spokane, Washington 99201, telephone (509) 624-1475 has acted as
legal counsel for our Company.
- ---------------------------------------------------------------------
FINANCIAL STATEMENTS
- ---------------------------------------------------------------------
Our fiscal year end is June 30. We will provide audited financial
statements to our stockholders on an annual basis; the statements will
be prepared by an Independent Certified Public Accountant.
Our audited financial statement from inception to June 30, 1999
immediately follows:
PAXTON MINING CORPORATION
TABLE OF CONTENTS
June 30, 1999
INDEPENDENT AUDITOR'S REPORT F-1
FINANCIAL STATEMENTS
Balance Sheet F-2
Statement of Operations and Accumulated Deficit F-3
Statement of Stockholders' Equity (Deficit) F-4
Statement of Cash Flows F-5
NOTES TO FINANCIAL STATEMENTS F-6 - F-8
<PAGE> 34
WILLIAMS & WEBSTER PS
Certified Public Accountants
Seafirst Financial Center
W 601 Riverside, Suite 1940
Spokane, WA 99201
(509) 838-5111
Board of Directors
Paxton Mining Corporation
Las Vegas, Nevada
Independent Auditor's Report
We have audited the accompanying balance sheet of Paxton Mining
Corporation, (a development stage enterprise), as of June 30, 1999, and
the related statements of operations and accumulated deficit,
stockholders' equity (deficit) and cash flows for the period from June
10, 1999 (inception) to June 30, 1999. These financial statements are
the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Paxton
Mining Corporation, as of June 30, 1999, and the results of its
operations and its cash flows for the period from June 10, 1999
(inception) to June 30, 1999, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2,
the Company has been in the development stage since its inception on
June 10, 1999. Realization of a major portion of the assets is
dependent upon the Company's ability to meet its future financing
requirements, and the success of future operations. These factors
raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans regarding those matters also are
described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
August 13, 1999
F-1
<PAGE> 35
PAXTON MINING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
June 30, 1999
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS
Cash $ 100
---------
Total Current Assets 100
---------
OTHER ASSETS
Mining claims 262
---------
TOTAL ASSETS $ 362
=========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Loans to a related party $ 12,000
---------
Total Current Liabilities 12,000
COMMITMENTS AND CONTINGENCIES -
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock,100,000,000 shares
authorized, $0.00001 par value;
5,000,000 shares issued and outstanding 50
Additional paid-in-capital 11,594
Deficit accumulated during the
development stage (23,282)
---------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (11,638)
---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 362
=========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
F-2
<PAGE> 36
PAXTON MINING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
For the Period Ended June 30, 1999
<TABLE>
<S> <C>
REVENUES $ -
---------
EXPENSES
Consulting services provided by directors 10,000
Filing fees 400
Legal and professional 11,600
Office expense 31
Transfer agent -
Mining exploration expense 1,251
---------
TOTAL EXPENSES 23,282
---------
NET LOSS FROM OPERATIONS (23,282)
INCOME TAXES -
---------
NET LOSS (23,282)
ACCUMULATED DEFICIT, BEGINNING BALANCE -
---------
ACCUMULATED DEFICIT, ENDING BALANCE $ (23,282)
=========
NET LOSS PER COMMON SHARE $ (0.0047)
=========
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES OUTSTANDING 5,000,000
=========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
F-3
<PAGE> 37
PAXTON MINING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Period Ended June 30, 1999
<TABLE>
<CAPTION>
Total
Common Stock Additional Stockholders'
Number Paid-In Accumulated Equity
of Shares Amount Capital Deficit (Deficit)
<S> <C> <C> <C> <C> <C>
Issuance of common
stock for services
at $.0023 per share 5,000,000 $ 50 $ 11,594 $ - $ 11,644
Loss for year ending,
June 30, 1999 - - - (23,282) (23,282)
--------- ---- -------- --------- ---------
Balance
June 30, 1999 5,000,000 $ 50 $ 11,594 $ (23,282) $ (11,638)
========= ==== ======== ========= =========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
F-4
<PAGE> 38
PAXTON MINING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
For the Period Ended June 30, 1999
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (23,282)
Adjustments to reconcile net loss
to net cash used by operating activities:
Payment of expenses from issuance of stock 11,282
---------
Net cash (used) in operating activities (12,000)
CASH FLOWS FROM INVESTING ACTIVITIES -
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of stock for cash to open
checking account 100
Proceeds from short-term loan payable 12,000
---------
Net cash provided by financing activities 12,100
Change in cash 100
Cash, beginning of period -
---------
Cash, end of period $ 100
=========
Supplemental disclosures:
Interest paid $ -
=========
Income taxes paid $ -
=========
NON-CASH TRANSACTIONS
Stock issued in payment of consulting
and other expenses $ 11,282
</TABLE>
The accompanying notes are an integral part of these financial
statements.
F-5
<PAGE> 39
PAXTON MINING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1999
NOTE 1 ORGANIZATION AND DESCRIPTION OF BUSINESS
Paxton Mining Corporation (hereinafter "the Company") was incorporated
on June 10, 1999 under the laws of the State of Nevada for the purpose
of acquiring, exploring and developing mining properties. The Company
maintains offices in Las Vegas, Nevada and in Vancouver, British
Columbia. The Company's fiscal year end is June 30.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Paxton Mining
Corporation is presented to assist in understanding the Company's
financial statements. The financial statements and notes are
representations of the Company's management which is responsible for
their integrity and objectivity. These accounting policies conform to
generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.
Development Stage Activities
The Company has been in the development stage since its formation in
June 1999 and has not yet realized any revenues from its planned
operations. It is primarily engaged in the acquisition, exploration
and development of mining properties.
Going Concern
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.
As shown in the accompanying financial statements, the Company incurred
a net loss of $23,282 for the year ended June 30, 1999 and had no
sales. The future of the Company is dependent upon its ability to
obtain financing and upon future profitable operations from the
development of its mineral properties. Management has plans to seek
additional capital through a private placement of its common stock.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts
and classification of liabilities that might be necessary in the event
the Company cannot continue in existence.
Accounting Method
The Company's financial statements are prepared using the accrual method
of accounting.
F-6
<PAGE> 40
PAXTON MINING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1999
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Loss Per share
Loss per share was computed by dividing the net loss by the weighted
average number of shares outstanding during the period. The weighted
average number of shares was calculated by taking the number of shares
outstanding and weighting them by the amount of time that they were
outstanding.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
short-term debt securities purchased with a maturity of three months or
less to be cash equivalents.
Provision for Taxes
At June 30, 1999, the Company had net operating loss of approximately
$23,000. No provision for taxes or tax benefit has been reported in
the financial statements, as there is not a measurable means of
assessing future profits or losses.
Use of Estimates
The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of
estimates and assumptions regarding certain types of assets,
liabilities, revenues, and expenses. Such estimates primarily relate
to unsettled transactions and
events as of the date of the financial statements. Accordingly, upon
settlement, actual results may differ from estimated amounts.
Impaired Asset Policy
In March 1995, the Financial Accounting Standards Board issued a
statement titled "Accounting for Impairment of Long-lived Assets."
This standard is effective for years beginning after December 15,
1995. In complying with this standard, the Company reviews its long-
lived assets quarterly to determine if any events or changes in
circumstances have transpired which indicate that the carrying value
of its assets may not be recoverable. The Company does not believe
any adjustments are needed to the carrying value of its assets at
June 30, 1999.
F-7
<PAGE> 41
PAXTON MINING CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1999
NOTE 3 COMMON STOCK
On June 20, 1999, 5,000,000 shares of common stock were issued to
officers and directors in payment of their services, valued at $10,000
and payment of $1,282 in expenses pursuant to exemption from
registration contained in Section 4 (2) of the Securities Act of 1933.
In June, 1999 the Company, through Hugh Grenfal, President and a member
of the Board of Directors entered into an Option to Purchase Agreement
with an unrelated third party, to acquire 100% of the rights, titles
and interests in and to a total of three unpatented mining claims in
the Twelve Mile Creek, Kalso Area, Slocan Mining Division, B.C. Canada
in exchange for $10 in cash. The Company, through Mr. Grenfal,
exercised the option and acquired the mining claims. The claims are
recorded in Mr. Grenfal's name for tax purposes, however, title to the
claims has been conveyed to the Company via an unrecorded deed.
NOTE 4 RELATED PARTIES
The Company occupies office space provided by Hugh Grenfal, the
President of the Company, in his capacity as Vice President and
Director of Callinan Mines Limited at no charge. The value of this
space is not considered materially significant for financial reporting
purposes.
Hugh Grenfal, the President of the Company, has advanced monies to the
Company to open a checking account and in payment of expenses. These
have been recorded as short-term loans, bearing no interest and having
no specific due date.
NOTE 5 YEAR 2000 ISSUES
Like other companies, Paxton Mining Corporation could be adversely
affected if the computer systems the Company, its suppliers or
customers use do not properly process and calculate date-related
information and data from the period surrounding and including January
1, 2000. This is commonly known as the "Year 2000" issue.
Additionally, this issue could impact non-computer systems and devices
such as production equipment and elevators, etc. At this time, because
of the complexities involved in the issue, management cannot provide
assurance that the Year 2000 issue will not have an impact on the
Company's operations. Any costs associated with Year 2000 compliance
are expensed when incurred.
F-8<PAGE> 42
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The only statute, charter provision, bylaw, contract, or other
arrangement under which any controlling person, director or officer
of the Registrant is insured or indemnified in any manner against any
liability which he may incur in his capacity as such, is as follows:
1. Article XII of the Articles of Incorporation of the Company,
filed as Exhibit 3.1 to the Registration Statement.
2. Article XI of the Bylaws of the Company, filed as Exhibit
3.2 to the Registration Statement.
3. Nevada Revised Statutes, Chapter 78.
The general effect of the foregoing is to indemnify a control
person, officer or director from liability, thereby making the Company
responsible for any expenses or damages incurred by such control
person, officer or director in any action brought against them
based on their conduct in such capacity, provided they did not
engage in fraud or criminal activity.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering (assuming all Shares are
sold), all of which are to be paid by the Registrant, are as follows:
SEC Registration Fee $ 100.00
Printing Expenses 6,500.00
Accounting Fees and Expenses 5,000.00
Legal Fees and Expenses 25,000.00
Blue Sky Fees/Expenses 5,000.00
Transfer Agent Fees 3,000.00
Miscellaneous Expenses 5,400.00
-----------
TOTAL $ 50,000.00
===========
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Registrant has sold the
following securities which were not registered under the
Securities Act of 1933, as amended.
Name and Address Date Shares Consideration
- ---------------- ---- ------ -------------
Hugh Grenfal 6/20/99 2,500,000 Services and
3337 W. Thirtieth Avenue $641 in Cash
Vancouver, British Columbia
Canada V7S 1W3
<PAGE> 43
Robert Jarve 6/20/99 2,500,000 Services and
2613 Harrier Drive $641 in Cash
Coquitlam, British Columbia
Canada V6E 2A7
ITEM 27. EXHIBITS.
The following Exhibits are filed as part of this Registration
Statement, pursuant to Item 601 of Regulation K. All Exhibits have
been previously filed unless otherwise noted.
Exhibit No. Document Description
- ------------ --------------------
3.1 Articles of Incorporation.
3.2 Bylaws.
4.1 Specimen Stock Certificate.
5.1 Opinion of Conrad C. Lysiak, Esq. regarding the legality
of the Securities being registered.
10.1 Keno Mining Mining Claim.
10.2 Marble Arch Mining Claim.
10.3 Bill of Sale.
10.4 Statement of Trustee.
23.1 Consent of Williams & Webster, P.S., Certified Public
Accountants.
23.2 Consent of Conrad C. Lysiak, Esq.
27.1 Financial Data Schedule.
99.1 Subscription Agreement.
ITEM 28. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
<PAGE> 44
a. To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
b. To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement(or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement;
c. To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any change to such information
in the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
<PAGE> 45
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing of this Form SB-2 Registration
Statement and has duly caused this Form SB-2 Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized,
in Vancouver, British Columbia, on this 31st day of August, 1999.
PAXTON MING CORPORATION
BY: /s/ Hugh Grenfal
Hugh Grenfal, President
KNOW ALL MEN BY THESE PRESENT, that each person whose signature
appears below constitutes and appoints Hugh Grenfal, as true and lawful
attorney-in-fact and agent, with full power of substitution, for his
and in his name, place and stead, in any and all capacities, to sign
any and all amendment (including post-effective amendments) to this
registration statement, and to file the same, therewith, with the
Securities and Exchange Commission, and to make any and all state
securities law or blue sky filings, granting unto said attorney-in-fact
and agent, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in about the premises,
as fully to all intents and purposes as he might or could do in person,
hereby ratifying the confirming all that said attorney-in-fact and
agent, or any substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Form SB-2 Registration Statement has been signed by the following
persons in the capacities and on the dates indicated:
Signature Title Date
/s/ Hugh Grenfal President, Treasurer, August 31, 1999
Hugh Grenfal Chief Financial Officer
and a member of the
Board of Directors
/s/ Robert Jarva Secretary and a member August 31, 1999
Robert Jarva of the Board of Directors
<PAGE> 46
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
PAXTON MINING CORPORATION
* * * * *
FIRST
The name of the corporation is PAXTON MINING CORPORATION
SECOND
Its principal office in the state of Nevada is located at
5844 South Pecos Road, Suite D, Las Vegas, Nevada 89120 The name and
address of its resident agent is Pacific Corporate Services, 5844 South
Pecos Road, Suite D, Las Vegas, Nevada 89120.
THIRD
The purpose or purposes for which the corporation is
organized:
To engage in and carry on any lawful business
activity or trade, and any activities necessary, convenient,
or desirable to accomplish such purposes, not forbidden by
law or by these articles of incorporation.
FOURTH
The amount of the total authorized capital stock of the
corporation is One Thousand Dollars ($1,000.00) consisting of One
Hundred Million (100,000,000) shares of common stock of the par value
of $0.00001 each.
FIFTH
The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be
increased or decreased in such manner as shall be provided by the
bylaws of this corporation.
There will be two initial members of the Board of Directors
and their names and addresses are:
NAME POST-OFFICE ADDRESS
Hugh Grenfal Jr. 3337 West 30th Avenue
Vancouver, British Columbia V6S 1W3
Robert Jarva 2613 Harrier Drive
Port Coquitlam, British Columbia V6E 2A7
The number of members of the Board of Directors shall not be
less than two nor more than thirteen.
<PAGE> 47
SIXTH
The capital stock, after the amount of the subscription
price, or par value, has been paid in shall not be subject to
assessment to pay the debts of the corporation.
SEVENTH
The name and addresses of each of the incorporators signing
the Articles of Incorporation are as follows:
NAME POST-OFFICE ADDRESS
Conrad C. Lysiak 601 West First Avenue
Suite 503
Spokane, Washington 99201
EIGHTH
The corporation is to have perpetual existence.
NINTH
In furtherance, and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized:
Subject to the bylaws, if any, adopted by the stockholders,
to make, alter or amend the bylaws of the corporation.
To fix the amount to be reserved as working capital over and
above its capital stock paid in, to authorize and cause to be executed
mortgages and liens upon the real and personal property of this
corporation.
By resolution passed by a majority of the whole board, to
designate one (1) or more committees, each committee to consist of one
(1) or more of the directors of the corporation, which, to the extent
provided in the resolution or in the bylaws of the corporation, shall
have and may exercise the powers of the board of directors in the
management of the business and affairs of the corporation, and may
authorize the seal of the corporation to be affixed to all papers which
may require it. Such committee or committees shall have such name or
names as may be stated in the bylaws of the corporation or as may be
determined from time to time by resolution adopted by the board of
directors.
When and as authorized by the affirmative vote of
stockholders holding stock entitling them to exercise at least a
majority of the voting power given at a stockholders' meeting called
for that purpose, or when authorized by the written consent of the
holders of at least a majority of the voting stock issued and
outstanding, the board of directors shall have power and authority at
any meeting to sell, lease or exchange all of the property and assets
of the corporation, including its good will and its corporate
franchises, upon such terms and conditions as its board of directors
deem expedient and for the best interests of the corporation.
<PAGE> 48
TENTH
Meeting of stockholders may be held outside the State of
Nevada, if the bylaws so provide. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside the
State of Nevada at such place or places as may be designated from time
to time by the board of directors or in the bylaws of the corporation.
ELEVENTH
This corporation reserves the right to amend alter, change or
repeal any provision contained in the Articles of Incorporation, in the
manner now or hereafter prescribed by statute, or by the Articles of
Incorporation, and all rights conferred upon stockholders herein are
granted subject to this reservation.
TWELFTH
The corporation shall indemnify its officers, directors,
employees and agents to the full extent permitted by the laws of the
State of Nevada.
I, THE UNDERSIGNED, being the incorporator hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Nevada, do make and file these Articles
of Incorporation, hereby declaring and certifying that the facts herein
stated are true, and accordingly have hereunto set my hand this 8th day
of June, 1999.
/s/ Conrad C. Lysiak
CONRAD C. LYSIAK
STATE OF WASHINGTON )
)
COUNTY OF SPOKANE )
On this 8th day of June, 1999, before me, a Notary Public,
personally appeared CONRAD C. LYSIAK, who severally acknowledged that
he executed the above instrument.
/s/ Judy Terese Lysiak
Notary Public, residing in the State of
Washington, residing in Spokane.
My Commission Expires:
October 9, 2002
<PAGE> 49
EXHIBIT 3.2
BYLAWS
OF
PAXTON MINING CORPORATION
I. SHAREHOLDER'S MEETING.
.01 Annual Meetings.
The annual meeting of the shareholders of this Corporation, for
the purpose of election of Directors and for such other business
as may come before it, shall be held at the registered office of
the Corporation, or such other places, either within or without
the State of Nevada, as may be designated by the notice of the
meeting, on the first week in June of each and every year, at
1:00 p.m., commencing in 2000, but in case such day shall be a
legal holiday, the meeting shall be held at the same hour and
place on the next succeeding day not a holiday.
.02 Special Meeting.
Special meetings of the shareholders of this Corporation may be
called at any time by the holders of ten percent (10%) of the
voting shares of the Corporation, or by the president, or by the
Board of Directors or a majority thereof. No business shall be
transacted at any special meeting of shareholders except as is
specified in the notice calling for said meeting. The Board of
Directors may designate any place, either within or without the
State of Idaho, as the place of any special meeting called by the
president or the Board of Directors, and special meetings called
at the request of shareholders shall be held at such place in the
State of Idaho, as may be determined by the Board of Directors and
placed in the notice of such meeting.
.03 Notice of Meeting.
Written notice of annual or special meetings of shareholders
stating the place, day, and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which the
meeting is called shall be given by the secretary or persons
authorized to call the meeting to each shareholder of record
entitled to vote at the meeting. Such notice shall be given not
less than ten (10) nor more than fifty (50) days prior to the date
of the meeting, and such notice shall be deemed to be delivered
when deposited in the United States mail addressed to the
shareholder at his/her address as it appears on the stock transfer
books of the Corporation.
.04 Waiver of Notice.
Notice of the time, place, and purpose of any meeting may be
waived in writing and will be waived by any shareholder by his/her
attendance thereat in person or by proxy. Any shareholder so
waiving shall be bound by the proceedings of any such meeting in
all respects as if due notice thereof had been given.
<PAGE> 50
.05 Quorum and Adjourned Meetings.
A majority of the outstanding shares of the Corporation entitled
to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders. A majority of the shares
represented at a meeting, even if less than a quorum, may adjourn
the meeting from time to time without further notice. At such
adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally notified. The
shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
.06 Proxies.
At all meetings of shareholders, a shareholder may vote by proxy
executed in writing by the shareholder or by his/her duly
authorized attorney in fact. Such proxy shall be filed with the
secretary of the Corporation before or at the time of the
meeting. No proxy shall be valid after eleven (11) months from
the date of its execution, unless otherwise provided in the proxy.
.07 Voting of Shares.
Except as otherwise provided in the Articles of Incorporation or
in these Bylaws, every shareholder of record shall have the right
at every shareholder's meeting to one (1) vote for every share
standing in his/her name on the books of the Corporation, and the
affirmative vote of a majority of the shares represented at a
meeting and entitled to vote thereat shall be necessary for the
adoption of a motion or for the determination of all questions and
business which shall come before the meeting.
II. DIRECTORS.
.01 General Powers.
The business and affairs of the Corporation shall be managed by
its Board of Directors.
.02 Number, Tenure and Qualifications.
The number of Directors of the Corporation shall be not less than
one nor more than five. Each Director shall hold office until the
next annual meeting of shareholders and until his/her successor
shall have been elected and qualified. Directors need not be
residents of the State of Idaho or shareholders of the
Corporation.
.03 Election.
The Directors shall be elected by the shareholders at their annual
meeting each year; and if, for any cause the Directors shall not
have been elected at an annual meeting, they may be elected at a
special meeting of shareholders called for that purpose in the
manner provided by these Bylaws.
<PAGE> 51
.04 Vacancies.
In case of any vacancy in the Board of Directors, the remaining
Director, whether constituting a quorum or not, may elect a
successor to hold office for the unexpired portion of the terms of
the Director whose place shall be vacant, and until his/her
successor shall have been duly elected and qualified.
.05 Resignation.
Any Director may resign at any time by delivering written notice
to the secretary of the Corporation.
.06 Meetings.
At any annual, special or regular meeting of the Board of
Directors, any business may be transacted, and the Board may
exercise all of its powers. Any such annual, special or regular
meeting of the Board of Directors of the Corporation may be held
outside of the State of Idaho, and any member or members of the
Board of Directors of the Corporation may participate in any such
meeting by means of a conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other at the same time;
the participation by such means shall constitute presence in
person at such meeting.
A. Annual Meeting of Directors.
Annual meetings of the Board of Directors shall be held
immediately after the annual shareholders' meeting or at such
time and place as may be determined by the Directors. No
notice of the annual meeting of the Board of Directors shall
be necessary.
B. Special Meetings.
Special meetings of the Directors shall be called at any time
and place upon the call of the president or any Director.
Notice of the time and place of each special meeting shall be
given by the secretary, or the persons calling the meeting,
by mail, radio, telegram, or by personal communication by
telephone or otherwise at least one (1) day in advance of the
time of the meeting. The purpose of the meeting need not be
given in the notice. Notice of any special meeting may be
waived in writing or by telegram (either before or after such
meeting) and will be waived by any Director in attendance at
such meeting.
C. Regular Meetings of Directors.
Regular meetings of the Board of Directors shall be held at
such place and on such day and hour as shall from time to
time be fixed by resolution of the Board of Directors. No
notice of regular meetings of the Board of Directors shall be
necessary.
<PAGE> 52
.07 Quorum and Voting.
A majority of the Directors presently in office shall constitute
a quorum for all purposes, but a lesser number may adjourn any
meeting, and the meeting may be held as adjourned without further
notice. At each meeting of the Board at which a quorum is
present, the act of a majority of the Directors present at the
meeting shall be the act of the Board of Directors. The Directors
present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of
enough Directors to leave less than a quorum.
.08 Compensation.
By resolution of the Board of Directors, the Directors may be paid
their expenses, if any, of attendance at each meeting of the Board
of Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as Director.
No such payment shall preclude any Director from serving the
Corporation in any other capacity and receiving compensation
therefor.
.09 Presumption of Assent.
A Director of the Corporation who is present at a meeting of the
Board of Directors at which action on any corporate matter is
taken shall be presumed to have assented to the action taken
unless his/her dissent shall be entered in the minutes of the
meeting or unless he/she shall file his/her written dissent to
such action with the person acting as the secretary of the meeting
before the adjournment thereof or shall forward such dissent by
registered mail to the secretary of the Corporation immediately
after the adjournment of the meeting. Such right to dissent shall
not apply to a Director who voted in favor of such action.
.10 Executive and Other Committees.
The Board of Directors, by resolution adopted by a majority of the
full Board of Directors, may designate from among its members an
executive committee and one of more other committees, each of
which, to the extent provided in such resolution, shall have and
may exercise all the authority of the Board of Directors, but no
such committee shall have the authority of the Board of Directors,
in reference to amending the Articles of Incorporation, adoption
a plan of merger or consolidation, recommending to the
shareholders the sale, lease, exchange, or other disposition of
all of substantially all the property and assets of the
dissolution of the Corporation or a revocation thereof,
designation of any such committee and the delegation thereto of
authority shall not operate to relieve any member of the Board of
Directors of any responsibility imposed by law.
<PAGE> 53
.11 Chairman of Board of Directors.
The Board of Directors may, in its discretion, elect a chairman of
the Board of Directors from its members; and, if a chairman has
been elected, he/she shall, when present, preside at all meetings
of the Board of Directors and the shareholders and shall have such
other powers as the Board may prescribe.
.12 Removal.
Directors may be removed from office with or without cause by a
vote of shareholders holding a majority of the shares entitled to
vote at an election of Directors.
III. ACTIONS BY WRITTEN CONSENT.
Any corporate action required by the Articles of Incorporation, Bylaws,
or the laws under which this Corporation is formed, to be voted upon or
approved at a duly called meeting of the Directors or shareholders may
be accomplished without a meeting if a written memorandum of the
respective Directors or shareholders, setting forth the action so
taken, shall be signed by all the Directors or shareholders, as the
case may be.
IV. OFFICERS.
.01 Officers Designated.
The Officers of the Corporation shall be a president, one or more
vice presidents (the number thereof to be determined by the Board
of Directors), a secretary and a treasurer, each of whom shall be
elected by the Board of Directors. Such other Officers and
assistant officers as may be deemed necessary may be elected or
appointed by the Board of Directors. Any Officer may be held by
the same person, except that in the event that the Corporation
shall have more than one director, the offices of president and
secretary shall be held by different persons.
.02 Election, Qualification and Term of Office.
Each of the Officers shall be elected by the Board of Directors.
None of said Officers except the president need be a Director, but
a vice president who is not a Director cannot succeed to or fill
the office of president. The Officers shall be elected by the
Board of Directors. Except as hereinafter provide, each of said
Officers shall hold office from the date of his/her election until
the next annual meeting of the Board of Directors and until
his/her successor shall have been duly elected and qualified.
.03 Powers and Duties.
The powers and duties of the respective corporate Officers shall
be as follows:
<PAGE> 54
A. President.
The president shall be the chief executive Officer of the
Corporation and, subject to the direction and control of the
Board of Directors, shall have general charge and supervision
over its property, business, and affairs. He/she shall,
unless a Chairman of the Board of Directors has been elected
and is present, preside at meetings of the shareholders and
the Board of Directors.
B. Vice President.
In the absence of the president or his/her inability to act,
the senior vice president shall act in his place and stead
and shall have all the powers and authority of the president,
except as limited by resolution of the Board of Directors.
C. Secretary.
The secretary shall:
1. Keep the minutes of the shareholder's and of the
Board of Directors meetings in one or more books
provided for that purpose;
2. See that all notices are duly given in accordance
with the provisions of these Bylaws or as required
by law;
3. Be custodian of the corporate records and of the
seal of the Corporation and affix the seal of the
Corporation to all documents as may be required;
4. Keep a register of the post office address of each
shareholder which shall be furnished to the
secretary by such shareholder;
5. Sign with the president, or a vice president,
certificates for shares of the Corporation, the
issuance of which shall have been authorized by
resolution of the Board of Directors;
6. Have general charge of the stock transfer books of
the corporation; and,
7. In general perform all duties incident to the
office of secretary and such other duties as from
time to time may be assigned to him/her by the
president or by the Board of Directors.
<PAGE> 55
D. Treasurer.
Subject to the direction and control of the Board of
Directors, the treasurer shall have the custody, control and
disposition of the funds and securities of the Corporation
and shall account for the same; and, at the expiration of
his/her term of office, he/she shall turn over to his/her
successor all property of the Corporation in his/her
possession.
E. Assistant Secretaries and Assistant Treasurers.
The assistant secretaries, when authorized by the Board of
Directors, may sign with the president or a vice president
certificates for shares of the Corporation the issuance of
which shall have been authorized by a resolution of the Board
of Directors. The assistant treasurers shall, respectively,
if required by the Board of Directors, give bonds for the
faithful discharge of their duties in such sums and with such
sureties as the Board of Directors shall determine. The
assistant secretaries and assistant treasurers, in general,
shall perform such duties as shall be assigned to them by the
secretary or the treasurer, respectively, or by the president
or the Board of Directors.
.04 Removal.
The Board of Directors shall have the right to remove any Officer
whenever in its judgment the best interest of the Corporation will
be served thereby.
.05 Vacancies.
The Board of Directors shall fill any office which becomes vacant
with a successor who shall hold office for the unexpired term and
until his/her successor shall have been duly elected and
qualified.
.06 Salaries.
The salaries of all Officers of the Corporation shall be fixed by
the Board of Directors.
V. SHARE CERTIFICATES
.01 Form and Execution of Certificates.
Certificates for shares of the Corporation shall be in such form
as is consistent with the provisions of the Corporation laws of
the State of Idaho. They shall be signed by the president and by
the secretary, and the seal of the Corporation shall be affixed
thereto. Certificates may be issued for fractional shares.
<PAGE> 56
.02 Transfers.
Shares may be transferred by delivery of the certificates
therefor, accompanied either by an assignment in writing on the
back of the certificates or by a written power of attorney to
assign and transfer the same signed by the record holder of the
certificate. Except as otherwise specifically provided in these
Bylaws, no shares shall be transferred on the books of the
Corporation until the outstanding certificate therefor has been
surrendered to the Corporation.
.03 Loss or Destruction of Certificates.
In case of loss or destruction of any certificate of shares,
another may be issued in its place upon proof of such loss or
destruction and upon the giving of a satisfactory bond of
indemnity to the Corporation. A new certificate may be issued
without requiring any bond, when in the judgment of the Board of
Directors it is proper to do so.
VI. BOOKS AND RECORDS.
.01 Books of Accounts, Minutes and Share Register.
The Corporation shall keep complete books and records of accounts
and minutes of the proceedings of the Board of Directors and
shareholders and shall keep at its registered office, principal
place of business, or at the office of its transfer agent or
registrar a share register giving the names of the shareholders in
alphabetical order and showing their respective addresses and the
number of shares held by each.
.02 Copies of Resolutions.
Any person dealing with the Corporation may rely upon a copy of
any of the records of the proceedings, resolutions, or votes of
the Board of Directors or shareholders, when certified by the
president or secretary.
VII. CORPORATE SEAL.
The following is an impression of the corporate seal of this
Corporation:
<PAGE> 57
VIII. LOANS.
Generally, no loans shall be made by the Corporation to its Officers or
Directors, unless first approved by the holder of two-third of the
voting shares, and no loans shall be made by the Corporation secured by
its shares. Loans shall be permitted to be made to Officers, Directors
and employees of the Company for moving expenses, including the cost of
procuring housing. Such loans shall be limited to $25,000.00 per
individual upon unanimous consent of the Board of Directors.
IX. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
.01 Indemnification.
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any proceeding, whether
civil, criminal, administrative or investigative (other than an
action by or in the right of the Corporation) by reason of the
fact that such person is or was a Director, Trustee, Officer,
employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a Director, Trustee, Officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorneys' fees), judgment, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith
and in a manner such person reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect
to any criminal action or proceeding, had no reasonable cause to
believe such person's conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which such person reasonably
believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action proceeding,
had reasonable cause to believe that such person's conduct was
unlawful.
.02 Derivative Action
The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to
procure a judgment in the Corporation's favor by reason of the
fact that such person is or was a Director, Trustee, Officer,
employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a Director, Trustee, Officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including
attorney's fees) and amount paid in settlement actually and
reasonably incurred by such person in connection with the defense
or settlement of such action or suit if such person acted in good
faith and in a manner such person reasonably believed to be in or
<PAGE> 58
not opposed to the best interests of the Corporation, and, with
respect to amounts paid in settlement, the settlement of the suit
or action was in the best interests of the Corporation; provided,
however, that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been
adjudged to be liable for gross negligence or willful misconduct
in the performance of such person's duty to the Corporation unless
and only to the extent that, the court in which such action or
suit was brought shall determine upon application that, despite
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as such court shall deem
proper. The termination of any action or suit by judgment or
settlement shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which such person
reasonably believed to be in or not opposed to the best interests
of the Corporation.
.03 Successful Defense.
To the extent that a Director, Trustee, Officer, employee or Agent
of the Corporation has been successful on the merits or otherwise,
in whole or in part in defense of any action, suit or proceeding
referred to in Paragraphs .01 and .02 above, or in defense of any
claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
.04 Authorization.
Any indemnification under Paragraphs .01 and .02 above (unless
ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that
indemnification of the Director, Trustee, Officer, employee or
agent is proper in the circumstances because such person has met
the applicable standard of conduct set forth in Paragraphs .01 and
.02 above. Such determination shall be made (a) by the Board of
Directors of the Corporation by a majority vote of a quorum
consisting of Directors who were not parties to such action, suit
or proceeding, or (b) is such a quorum is not obtainable, by a
majority vote of the Directors who were not parties to such
action, suit or proceeding, or (c) by independent legal counsel
(selected by one or more of the Directors, whether or not a quorum
and whether or not disinterested) in a written opinion, or (d) by
the Shareholders. Anyone making such a determination under this
Paragraph .04 may determine that a person has met the standards
therein set forth as to some claims, issues or matters but not as
to others, and may reasonably prorate amounts to be paid as
indemnification.
<PAGE> 59
.05 Advances.
Expenses incurred in defending civil or criminal action, suit or
proceeding shall be paid by the Corporation, at any time or from
time to time in advance of the final disposition of such action,
suit or proceeding as authorized in the manner provided in
Paragraph .04 above upon receipt of an undertaking by or on behalf
of the Director, Trustee, Officer, employee or agent to repay such
amount unless it shall ultimately be by the Corporation is
authorized in this Section.
.06 Nonexclusivity.
The indemnification provided in this Section shall not be deemed
exclusive of any other rights to which those indemnified may be
entitled under any law, bylaw, agreement, vote of shareholders or
disinterested Directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who
has ceased to be a Director, Trustee, Officer, employee or agent
and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
.07 Insurance.
The Corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a Director,
Trustee, Officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a Director,
Trustee, Officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any
liability assessed against such person in any such capacity or
arising out of such person's status as such, whether or not the
corporation would have the power to indemnify such person against
such liability.
.08 "Corporation" Defined.
For purposes of this Section, references to the "Corporation"
shall include, in addition to the Corporation, an constituent
corporation (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had
continued, would have had the power and authority to indemnify its
Directors, Trustees, Officers, employees or agents, so that any
person who is or was a Director, Trustee, Officer, employee or
agent of such constituent corporation or of any entity a majority
of the voting stock of which is owned by such constituent
corporation or is or was serving at the request of such
constituent corporation as a Director, Trustee, Officer, employee
or agent of the corporation, partnership, joint venture, trust or
other enterprise, shall stand in the same position under the
provisions of this Section with respect to the resulting or
surviving Corporation as such person would have with respect to
such constituent corporation if its separate existence had
continued.
<PAGE> 60
X. AMENDMENT OF BYLAWS.
.01 By the Shareholders.
These Bylaws may be amended, altered, or repealed at any regular
or special meeting of the shareholders if notice of the proposed
alteration or amendment is contained in the notice of the meeting.
.02 By the Board of Directors.
These Bylaws may be amended, altered, or repealed by the
affirmative vote of a majority of the entire Board of Directors at
any regular or special meeting of the Board.
XI. FISCAL YEAR.
The fiscal year of the Corporation shall be set by resolution of the
Board of Directors.
XII. RULES OF ORDER.
The rules contained in the most recent edition of Robert's Rules or
Order, Newly Revised, shall govern all meetings of shareholders and
Directors where those rules are not inconsistent with the Articles of
Incorporation, Bylaws, or special rules or order of the Corporation.
XIII. REIMBURSEMENT OF DISALLOWED EXPENSES.
If any salary, payment, reimbursement, employee fringe benefit, expense
allowance payment, or other expense incurred by the Corporation for the
benefit of an employee is disallowed in whole or in part as a
deductible expense of the Corporation for Federal Income Tax purposes,
the employee shall reimburse the Corporation, upon notice and demand,
to the full extent of the disallowance. This legally enforceable
obligation is in accordance with the provisions of Revenue Ruling
69-115, 1969-1 C.B. 50, and is for the purpose of entitling such
employee to a business expense deduction for the taxable year in which
the repayment is made to the Corporation. In this manner, the
Corporation shall be protected from having to bear the entire burden of
disallowed expense items.
<PAGE> 61
EXHIBIT 4.1
PAXTON MINING CORPORATION
INCORPORATION UNDER THE LAWS OF THE STATE OF NEVADA
AUTHORIZED SHARES $0.00001 PAR VALUE
NUMBER SHARES
CUSIP
See Reverse
For Certain Definitions
THIS CERTIFIES THAT
Is The Owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF $0.00001 PAR VALUE COMMON
STOCK OF
PAXTON MINING CORPORATION
Transferable only on the books of the Company in person or by
duly authorized attorney upon surrender of this Certificate
properly endorsed. This Certificate is not valid unless
countersigned by the Transfer Agent and Registrar.
IN WITNESS WHEREOF, the said Company has caused this
Certificate to be executed by the facsimile signatures of its
duly authorized officers and to be sealed with the facsimile seal
of the Company.
Dated:
_______________________ _________________________
Secretary SEAL President
<PAGE> 62
PAXTON MINING CORPORATION
TRANSFER FEE: $20.00 PER NEW CERTIFICATE ISSUED
The following abbreviations when used in the inscription on
the face of this certificate, shall be construed as though they
were written out in full according to applicable law or
regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - __________ Custodian ___________ (Minor)
under Uniform Gifts to Minors Act ____________ (State)
Additional abbreviations may also be used though not in the above
list.
For Value Received, _________________ hereby sell, assign and
transfer unto _______________ (Please insert Social Security or
other identifying number of Assignee).
_________________________________________________________________
Please print or typewrite name and address, including zip code of
Assignee)
_________________________________________________________________
_________________________________________________________________
__________________________________________________________ Shares
of the Common Stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint _______________________
attorney-in-fact to transfer the said stock on the books of the
within-named Corporation, with full power of substitution in the
premises.
Dated: _________________
_____________________________________________
Notice: The signatures to this Assignment
must correspond with the name(s) as written
upon the face of the certificate in every
particular, without alteration or enlargement
or any change whatsoever.
<PAGE> 63
Signature(s) Guaranteed:
___________________________
The signature(s) must be guaranteed by an eligible guarantor
institution (Banks, Stockbrokers, Savings and Loan Associations
and Credit Unions with membership in an approved signature
guarantee Medallion Program), pursuant to S.E.C. Rule 17Ad-15.
<PAGE> 64
EXHIBIT 5.1
CONRAD C. LYSIAK
Attorney and Counselor at Law
601 West First Avenue
Suite 503
Spokane, Washington 99204
(509) 624-1478
FAX (509) 747-1770
August 31, 1999
Securities and Exchange Commission
450 Fifth Avenue N.W.
Washington, D. C. 20549
RE: Paxton Mining Corporation
Gentlemen:
Please be advised that, I have reached the following
conclusions regarding the above offering:
1. Paxton Mining Corporation (the "Company") is a duly and
legally organized and exiting Nevada state corporation, with its
registered office located in Las Vegas, Nevada and its principal
place of business located in Vancouver, British Columbia, Canada.
The Articles of Incorporation and corporate registration fees were
submitted to the Nevada Secretary of State's office and filed with
the office on June 10, 1999. The Company's existence and form is
valid and legal pursuant to the representation above.
2. The Company is a fully and duly incorporated Nevada
corporate entity. The Company has one class of Common Stock at this
time. Neither the Articles of Incorporation, Bylaws, and amendments
thereto, nor subsequent resolutions change the non-assessable
characteristics of the Company's common shares of stock. The Common
Stock previously issued by the Company is in legal form and in
compliance with the laws of the State of Nevada, and when such stock
was issued it was fully paid for and non-assessable. The common
stock to be sold under this Form SB-2 Registration Statement is
likewise legal under the laws of the State of Nevada.
3. To my knowledge, the Company is not a party to any legal
proceedings nor are there any judgments against the Company, nor
are there any actions or suits filed or threatened against it or
its officers and directors, in their capacities as such, other
than as set forth in the registration statement. I know of no
disputes involving the Company and the Company has no claim,
actions or inquires from any federal, state or other government
agency, other than as set forth in the registration statement. I
know of no claims against the Company or any reputed claims
against it at this time, other than as set forth in the
registration statement.
<PAGE> 65
Securities and Exchange Commission
RE: Paxton Mining Corporation
August 31, 1999
Page 2
4. The Company's outstanding shares are all common shares.
There are no liquidation preference rights held by any of the
Shareholders upon voluntary or involuntary liquidation of the
Company.
5. The directors and officers of the Company are indemnified
against all costs, expenses, judgments and liabilities, including
attorney's fees, reasonably incurred by or imposed upon them or any
of them in connection with or resulting from any action, suit or
proceedings, civil or general, in which the officer or director is or
may be made a party by reason of his being or having been such a
director or officer. This indemnification is not exclusive of other
rights to which such director or officer may be entitled as a matter
of law.
6. All tax benefits to be derived from the Company's operations
shall inure to the benefit of the Company. Shareholders will receive
no tax benefits from their stock ownership, however, this must be
reviewed in light of the Tax Reform Act of 1986.
7. By director's resolution, the Company has authorized
the issuance of up to 2,000,000 shares of Common Stock.
The Company's Articles of Incorporation presently provide
the authority to the Company to issue 100,000,000 shares of Common
Stock, $0.00001 par value. Therefore, a Board of Directors'
Resolution which authorized the issuance for sale of up to
2,000,000 of Common Stock, would be within the authority of the
Company's directors and would result in the legal issuance of said
shares.
Yours truly,
/s/ Conrad C. Lysiak
<PAGE> 66
EXHIBIT 10.1
PROVINCE OF BRITISH COLUMBIA Ministry of Energy Mines and Petroleum
Resources
RECORD OF 4 POST CLAIM - MINERAL TENURE ACT
(Section 23)
_______________________________ _____________________________
Mining Division Tenure No.
_______________________________ _____________________________
Gold Commissioner Date of Record
- ---------------------------------------------------------------------
APPLICATION TO RECORD A 4 POST CLAIM
I, James Thom, Name of Locator, Agent for self, #47, 1224 Balmoral
Road, Victoria, British Columbia V8T 1B3, (250) 995-1266, Client No.
141136, hereby apply for record of a 4 Post Claim for the location as
outlined on the attached copy of mineral titles reference map No. 82 F
14/E(095), in the Slocan Mining Division.
ACCESS
Describe how you gained access to the location; include references
to roads, trails, topographic features, permanent landmarks and a
description of the legal post location.
Gaining access to the LCP for Keno is obtained by going west from
Kaslo along highway 31A for 20 km. Crossing the Kaslo river you walk
up 12 mile creek for 3 km until you come across the first switchback on
the road. This is where you find the LCP.
TAG INFORMATION
I have securely fastened the metal identification tag embossed
"LEGAL CORNER POST" to the legal post (or witness post) and impressed
this information on the tag:
LEGAL CORNER POST - TAG NO. 256107
CLAIM NAME KENO
LOCATOR JAMES THOM
FMC NO. 141136
AGENT FOR SELF
FMC NO.
DATE COMMENCED JUNE 5, 1999
TIME 10:00 a.m.
DATE COMPLETED JUNE 6, 1999
TIME 3:00 p.m.
NUMBER OF CLAIM UNITS
N - 3 S - -0- E - -0- W - 6
<PAGE> 67
IDENTIFICATION POSTS NOT PLACED
were 2N, 3N, 3N/1W, 3N/2W, 3N/3W, 3N/4W, 3N/5N, 3N/6W, 1N/6W, 6W, 5W,
4W, 3W, 2W, 1W because snowed out in avalanche conditions, bridge
washed out, river to high to cross.
If a witness post was placed for the legal corner post:
Bearing from witness post to true position of legal corner post is
_____ degrees, at a distance of _____ metres.
Bearing from identification post to witness post _____ degrees, at a
distance of _____ metres.
NOTE: Legal corner post can be witnessed only it is was not feasible to
pace any posts.
ACKNOWLEDGMENT
I have complied with all of the terms and conditions of the
Mineral Tenure Act and Regulation pertaining to the location of 4 post
claims and have attached a plan of the location on which the positions
of the legal corner post and all corner posts (and witness and
identification post is applicable) are indicated.
Do you intend to extracted industrial Minerals from this tenure? NO
/s/ James Thom
Signature of Locator
SEAL
369850
SUB-RECORDED
RECEIVED
JUNE 28, 1999
M.R.# ___ $360.00
VANCOUVER, B.C.
/s/ R.D.
Recording Stamp
<PAGE> 68
EXHIBIT 10.2
PROVINCE OF BRITISH COLUMBIA Ministry of Energy Mines and Petroleum
Resources
RECORD OF 4 POST CLAIM - MINERAL TENURE ACT
(Section 23)
_______________________________ _____________________________
Mining Division Tenure No.
_______________________________ _____________________________
Gold Commissioner Date of Record
- ---------------------------------------------------------------------
APPLICATION TO RECORD A 4 POST CLAIM
I, James Thom, Name of Locator, Agent for self, #47, 1224 Balmoral
Road, Victoria, British Columbia V8T 1B3, (250) 995-1266, Client No.
141136, hereby apply for record of a 4 Post Claim for the location as
outlined on the attached copy of mineral titles reference map No. 82 F
14/E(095), in the Slocan Mining Division.
ACCESS
Describe how you gained access to the location; include references
to roads, trails, topographic features, permanent landmarks and a
description of the legal post location.
Gaining access to the LCP for Marble Arch is obtained by going
west from Kaslo along highway 31A for 20 km. Crossing the Kaslo river
you walk up 12 mile creek for 3 km until you come across the first
switchback on the road. This is where you find the LCP.
TAG INFORMATION
I have securely fastened the metal identification tag embossed
"LEGAL CORNER POST" to the legal post (or witness post) and impressed
this information on the tag:
LEGAL CORNER POST - TAG NO. 236108
CLAIM NAME MARBLE ARCH
LOCATOR JAMES THOM
FMC NO. 141136
AGENT FOR SELF
FMC NO.
DATE COMMENCED JUNE 5, 1999
TIME 3:00 p.m.
DATE COMPLETED JUNE 6, 1999
TIME 3:00 p.m.
NUMBER OF CLAIM UNITS
N - 0 S - 3 E - -0- W - 6
IDENTIFICATION POSTS NOT PLACED
were 1S, 2S, 3S, 3S/1W, 3S/2W, 3S/3W, 3S/4W, 3S/5W, 3S/6W, 2S/6W,
1S/6W, 1S/6W, 6W, 5W, 4W, 3W, 2W cliffed out, grizzled out, bridge
washed out, water to high to cross.
<PAGE> 69
If a witness post was placed for the legal corner post:
Bearing from witness post to true position of legal corner post is
_____ degrees, at a distance of _____ metres.
Bearing from identification post to witness post _____ degrees, at a
distance of _____ metres.
NOTE: Legal corner post can be witnessed only it is was not feasible to
pace any posts.
ACKNOWLEDGMENT
I have complied with all of the terms and conditions of the
Mineral Tenure Act and Regulation pertaining to the location of 4 post
claims and have attached a plan of the location on which the positions
of the legal corner post and all corner posts (and witness and
identification post is applicable) are indicated.
Do you intend to extracted industrial Minerals from this tenure? NO
/s/ James Thom
Signature of Locator
SEAL
369851
SUB-RECORDED
RECEIVED
JUNE 28, 1999
M.R.# ___ $360.00
VANCOUVER, B.C.
/s/ R.G.
Recording Stamp
<PAGE> 70
EXHIBIT 10.3
BRITISH COLUMBIA
Ministry of Employment and Investment
Energy and Minerals Division
Mineral Titles Branch
Mineral Tenure Act
Section 52
BILL OF SALE ABSOLUTE
INDICATE TYPE OF TITLE: Mineral
MINING DIVISION: Slocan
SELLER
I, James Thom, #47 - 1224 Balmoral Road, Victoria, British
Columbia V8T 1B3, (250) 995-1266 - Client Number 141136.
PURCHASER
Hugh Grenfal - Client Number 110359
For an in consideration of the sum of Ten dollars ($10.00) paid to
me, do hereby sell the interest as specified below in the following
mineral titles:
Claim Name of Tenure Percentage of
Lease Type Number Title being Sold
- ------------- ------ ----------------
Keno 369850 100%
Marble Arch 369851 100%
I declare that I have good title to these tenures and every right
to sell the same, in witness whereof I have today signed my legal name.
June 20, 1999
/s/ James Thom
(Signature of Seller)
/s/ illegible
(Signature of Witness)
<PAGE> 71
EXHIBIT 10.4
STATEMENT OF TRUSTEE
I, Hugh Grenfal hold in trust for Paxton Mining Corporation a
100% undivided interest in two mineral claims, namely the Keno
(record #369850) and the Marble Arch (record #369851) located in
the Slocan Mining Division. I will deliver full title on demand to
Paxton Mining Corporation for as long as the claims are in good
standing with the Province of British Columbia.
/s/ Hugh Grenfal
June 30, 1999
<PAGE> 72
EXHIBIT 23.1
WILLIAMS & WEBSTER, P.S.
Certified Public Accountants
601 West Riverside
Suite 1970
Spokane, Washington 99201-0611
(509) 838-8111
FAX (509) 624-5001
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Paxton Mining Corporation
Spokane, Washington
We consent to the use of our report dated August 13, 1999, on the
financial statements of Paxton Mining Corporation as of June 30,
1999, and the period then ended, and the inclusion of our name
under the headings "Experts" in the Form SB-2 Registration
Statement filed with the Securities and Exchange Commission.
/s/ Williams & Webster P.S.
Williams & Webster, P.S.
Spokane, Washington
August 30, 1999
<PAGE> 73
EXHIBIT 23.2
CONRAD C. LYSIAK
Attorney and Counselor at Law
601 West First Avenue
Suite 503
Spokane, Washington 99201
(509) 624-1475
FAX: (509) 747-1770
CONSENT
I HEREBY CONSENT to the inclusion of my name in
connection with the Form SB-2 Registration Statement filed with the
Securities and Exchange Commission as attorney for the registrant,
Paxton Mining Corporation and to the reference to my firm under the
subcaption "Legal Matters."
DATED this 31st day of August, 1999.
Yours truly,
/s/ Conrad C. Lysiak
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at June 30, 1999 and the Consolidated
Statement of Income for the twenty months ended June 30, 1999 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> JUN-30-1999
<CASH> 100
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 100
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 362
<CURRENT-LIABILITIES> 12,0000
<BONDS> 0
0
0
<COMMON> 50
<OTHER-SE> (11,688)
<TOTAL-LIABILITY-AND-EQUITY> 362
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 23,282
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (23,282)
<INCOME-TAX> 0
<INCOME-CONTINUING> (23,282)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (23,282)
<EPS-BASIC> (0.004)
<EPS-DILUTED> (0.004)
</TABLE>
<PAGE> 75
Exhibit 99.1
SUBSCRIPTION AGREEMENT
Paxton Mining Corporation
400 Burrard Street
Suite 1950
Vancouver, British Columbia
Canada V6C 3A6
Dear Sirs:
Concurrent with execution of this Agreement, the undersigned (the
"Purchaser") is purchasing ________________ shares of Common Stock of
Paxton Mining Corporation (the "Company") at a price of $0.10 per Share
(the "Subscription Price")
Purchaser hereby confirms the subscription for and purchase of
said number of Shares and hereby agrees to pay herewith the
Subscription Price for such Shares.
MAKE CHECK PAYABLE TO: Paxton Mining Corporation
Executed this _____ day of ________________, _______, at
_____________________ (Street Address), ___________________ (City),
_________________ (State) ________ (Zip Code).
___________________________________
Signature of Purchaser
___________________________________
Printed Name of Purchaser
___________________________________
Social Security Number/
Tax I.D.
Number of Shares Purchased Total Subscription Price
__________________________ ________________________
Form of Payment: Cash _________________
Check# _________________
Other _________________
ACCEPTED THIS _____ DAY OF ________________, _______.
PAXTON MINING CORPORATION
BY: __________________________________
Title: ___________________________
