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As filed with the Securities and Exchange Commission on
______________, 2000. Registration No. 333-94835
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM SB-2/A-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ANCONA MINING CORPORATION
(Name of small business issuer in its charter)
Nevada 1081 88-0436055
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(State or Other (Primary Standard (IRS Employer
Jurisdiction of Industrial Identification #)
Organization) Classification Code)
ANCONA MINING CORPORATION Conrad C. Lysiak, Esq.
1040 West Georgia Street 601 West First Avenue
Suite 1160 Suite 503
Vancouver, B.C., Canada V6E 4H1 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. [ ]
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CALCULATION OF REGISTRATION FEE
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Aggregate
Securities Amount To Be Offering Price Offering Registration
To Be Registered Registered Per Share Price Fee (1)
Common Stock: 2,000,000 Shares $0.10 $200,000 $ 100.00
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[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.
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Prospectus
ANCONA MINING CORPORATION
SHARES OF COMMON STOCK
No Minimum - 2,000,000 Maximum
Prior to this offering, there has been no public market for the
common stock.
We are offering up to a total of 2,000,000 shares of common stock
on a best efforts, no minimum, 2,000,000 shares maximum. The offering
price is $0.10 per share. There is no minimum number of shares that we
have to sell. There will be no escrow account. All money received
from the offering will be immediately used by us and there will be no
refunds. The offering will be for a period of 90 days from the
effective date and may be extended for an additional 90 days if we so
choose to do so.
Investing in the common stock involves risks. See "Risk Factors"
starting at page 6.
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Price Aggregate Proceeds
Per Share Offering Price to Us
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Common Stock $0.10 $200,000 $150,000
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Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus is _________________, 2000.
<PAGE> 4
TABLE OF CONTENTS
Page No.
SUMMARY OF PROSPECTUS . . . . . . . 5
RISK FACTORS . . . . . . . . . 6
RISKS ASSOCIATED WITH OUR COMPANY . . . . 6
RISKS ASSOCIATED WITH THIS OFFERING . . . 8
USE OF PROCEEDS . . . . . . . . 10
DETERMINATION OF OFFERING PRICE . . . . . 11
DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES . . 11
PLAN OF DISTRIBUTION; TERMS OF THE OFFERING . . . 12
BUSINESS . . . . . . . . . . 14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . 18
MANAGEMENT . . . . . . . . 21
EXECUTIVE COMPENSATION . . . . . . . 22
PRINCIPAL STOCKHOLDERS . . . . . . 23
DESCRIPTION OF SECURITIES . . . . . . 24
CERTAIN TRANSACTIONS AND RELATED TRANSACTIONS. . . 25
LITIGATION . . . . . . . . . 25
EXPERTS . . . . . . . . . . 26
LEGAL MATTERS . . . . . . . . . 26
FINANCIAL STATEMENTS . . . . . . . 26
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SUMMARY OF PROSPECTUS
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This summary provides an overview of selected information
contained in this prospectus. It 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
We are an exploration company. We own one property. We
intend to explore for gold on our property. We incorporated in
the State of Nevada on September 7, 1999 and we have not generated any
revenues from operations. See the "Business" section for a more
detailed description of our business operations.
On September 8, 1999 we issued 5,000,000 shares of common stock
to Hugh Grenfal and Sergei Stetsenko, our officers and directors
pursuant to the exemption from registration contained in Section 4(2)
of the Securities Act of 1933.
Our administrative office is located at 1040 West Georgia
Street, Suite 1160, Vancouver, British Columbia, Canada V6E 4H1,
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 June 30.
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 90 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."
Use of Proceeds . . We will use the proceeds to pay for
offering expenses, research and
exploration. 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."
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We will sell the shares in this offering through Hugh Grenfal,
Jr., one of our officers and directors.
We are not listed for trading on any exchange or an automated
quotation system. Because we are not listed for trading on any
exchange or automated quotation system, you may not be able to resell
your shares.
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RISK FACTORS
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Please consider the following risk factors before deciding to
invest in the common stock.
Risks Associated with our company:
1. We lack an operating history.
We were incorporated in September 1999 and we have not started our
proposed business operations or realized any revenues. We have no
operating history upon which an evaluation of our future success or
failure can be made. Our net loss since inception is $294,522. Our
ability to achieve and maintain profitability and positive cash flow is
dependent upon
* our ability to locate a profitable mineral property
* our ability to generate revenues
* our ability to reduce exploration costs.
Based upon current plans, we expect to incur operating losses in future
periods. This will happen because there are expenses associated with
the research and exploration of our mineral properties. We cannot
guarantee that we will be successful in generating revenues in the
future. Failure to generate revenues will cause us to go out of
business.
2. We have no known ore reserves and we cannot guarantee we will
find any gold or if we find gold that production will be profitable.
We have no known ore reserves. We have not identified any gold
on the property and we cannot guaranty we will ever find any gold.
Even if we find that there is gold on our property, we cannot guaranty
that we will be able to recover the gold. Even if we recover gold, we
cannot guaranty that we will make a profit.
3. We must complete this offering to raise money for
exploration.
We are in the very early exploration state and need the proceeds
from our offering to start exploring for gold. Since there is no
minimum and no refunds on sold shares, you may be investing in a
company that will not have the funds necessary to commence its
operations.
<PAGE> 7
4. Weather interruptions in the province of British Columbia may
affect and delay our proposed exploration operations.
Our proposed exploration work can only be performed approximately
five to six months out of the year. This is because rain and snow
cause roads leading to our claims to be impassible during four months
of the year. When roads are impassible, we are unable to work and
generate income.
5. Because we are small and do not have much capital, we must
limit our exploration.
Because we are small and do not have much capital, we must limit
our exploration. There are other larger exploration companies that
could and probably would spend more time and money in exploring our
property.
6. We may not have access to all of the supplies and materials we
need.
Competition and unforeseen limited sources of supplies in the
industry could result in occasional spot shortages of supplies, such as
dynamite, and certain equipment such as bulldozers and excavators that
we might need to conduct exploration. We have not attempted to locate
or negotiate with any suppliers of products, equipment or materials.
We will attempt to locates products, equipment and materials after this
offering is complete. If we cannot find the products and equipment we
need, we will have to suspend our exploration plans until we do find
the products and equipment we need.
7. We must find and develop an ore reserve to be successful.
Our success depends on finding and developing an ore reserve. If
we don't find an ore reserve containing gold or we cannot develop the
ore reserve, either because we do not have the money to do it or
because it is not economically feasible to do it, we will cease
operations and you will lose your investment.
8. People we do business with may not be year 2000 compliant.
We are year 2000 compliant. We do not know if people we will be
doing business with in the future are year 2000 compliant. If someone
we do business with is not year 2000 compliant, the services or
products he furnishes to us could be interrupted. If the services or
products are interrupted, we may have to suspend operations while he
corrects his year 2000 compliance or we obtain services or products
from others.
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9. We may not have enough money to complete our exploration.
We may not have enough money to complete our exploration of our
property. If it turns our that we have not raised enough money to
complete our exploration program, we will try to raise additional funds
from a second public offering, a private placement or loans. At the
present time, we have not made any plans to raise additional money and
there is no assurance that we would be able to raise additional money
in the future. In we need additional money and can't raise it, we will
have to suspend or cease operations.
Risks associated with this offering:
10. Because we are a penny stock, you may not be able to
sell our shares.
Our common stock is defined as a "penny stock" under the
Securities and Exchange Act of 1934, and its rules. Because we are a
penny stock, you may be unable to resell our shares. Also, the
Exchange Act and the penny stock rules impose additional sales practice
and disclosure requirements on broker-dealers who sell our securities
to persons other than certain accredited investors. As a result, fewer
broker/dealers are willing to make a market in our stock and it may
effect the level of news coverage you receive.
11. After this offering, control of the company will remain with
Messrs. Grenfal and Stetsenko.
Even if we sell all 2,000,000 shares of common stock in this
offering, Messrs. Grenfal and Stetsenko will still own 5,000,000 shares
and will continue to control us. As a result, after completion of this
offering, regardless of the number of shares we sell, Messrs. Grenfal
and Stetsenko will be able to elect all of our directors and control
our operations. Our articles of incorporation do not provide for
cumulative voting. Cumulative voting is a process that allows a
shareholder to multiply the number of shares he owns times the number
of directors to be elected. That number is the total votes a person
can cast for all of the directors. Those votes can be allocated in any
manner to the directors being elected. Cumulative voting, in some
cases, will allow a minority group to elect at least one director to
the board.
12. Benefits to Messrs. Grenfal and Stetsenko.
Messrs. Grenfal and Stetsenko, our only shareholders will receive
a substantial benefit from your investment. They are supplying the
property to be explored which is valued at $2,644, cash of $820 and a
loan of $17,541 which has to be repaid. You, on the other hand, will
be providing all of the cash for our operations. As a result, if we
cease operations for any reason, you will lose your investment while
Messrs Grenfal and Stetsenko will lose only approximately $21,000.
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13. Messrs. Grenfal and Stetsenko's control can have a depressive
effect on the price of stock.
Because Messrs. Grenfal and Stetsenko will control us after the
offering, regardless of the number of shares sold, your ability to
cause a change in the course of our operations is eliminated. As such,
the value attributable to the right to vote is gone. This could
result in a reduction in value to the shares you own because of the
ineffective voting power.
14. There is no public trading market for our common stock.
There is currently no public trading market for our common stock.
Therefore there is no central place, such as stock exchange or
electronic trading system, to resell your shares. If you do want to
resell your shares, you will have to locate a buyer and negotiate your
own sale.
15. There is no minimum number of shares that must be sold and we
will not refund any funds to you.
There is no minimum number of shares that must be sold in this
offering, even if we raise a nominal amount of money. Any money we
receive will be immediately appropriated by us. We may not raise
enough money to start or complete exploration. No money will be
refunded to you under any circumstances.
16. Sales of common by our officers and directors will likely
cause the market price for the common stock to drop.
A total of 5,000,000 shares of stock were issued to our two
officers and directors. They paid an average price of $0.055 . They
will likely sell a portion of their stock if the market price goes
above $0.10. If they do sell their stock into the market, the sales
may cause the market price of the stock to drop.
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, 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.
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USE OF PROCEEDS
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Our offering is being made on a "best efforts - no minimum
basis." The net proceeds to us after deducting offering expenses of
$50,000 will be $150,000 if all of the shares are sold. The first
$50,000 raised will be used offering expenses. We will use the net
proceeds as follows:
Amount raised $ 50,000 $100,000 $150,000 $200,000
Allocation
Offering expenses $ 50,000 $ 50,000 $ 50,000 $ 50,000
Exploration $ 0 $ 50,000 $ 100,000 $ 140,000
Working capital $ 0 $ 0 $ 0 $ 10,000
Exploration expenditures consist of consulting services, costs of
obtaining geologic literature, and costs of obtaining personal
interviews with geologists, mining engineers and others familiar with
the properties. Exploration expenditures also include the cost of
mapping, geophysical testing, geochemical testing, and digging
trenches, pits and tunnels. We are not going to spend any sums of
money or implement our exploration program until this offering is
completed.
We have allocated a wide range of money for exploration. That is
because we do not know how much will ultimately be needed for
exploration. If we are successful in immediately finding gold, we will
stop exploring and go on to develop the property. Costs of exploring
will then cease. On the other hand if we do not immediately find gold,
we will continue to explore for gold on the property. If we have to
continue to explore for gold, the costs of exploration will increase.
Working capital is the cost related to operating our office. It
is comprised of expenses for telephone service, mail, stationary,
accounting, acquisition of office equipment and supplies, and the
salary of for one secretary, if needed.
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 lack 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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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, 2000, the net tangible book value of our shares of
common stock was a deficit of $(19,522) or approximately $(0.004) per
share based upon 5,000,000 shares outstanding.
Upon completion of this offering the net tangible book value of
the 7,000,000 shares to be outstanding, assuming all shares are sold,
will be $130,478, or approximately $0.02. The net tangible book value
of the shares held by our existing stockholders will be increased by
$0.024 per share without any additional investment on their part. You
will incur an immediate dilution from $0.10 per share to $0.02 per
Share.
After completion of this offering, you will own approximately
28.57% of the total number of shares then outstanding shares 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
$275,000, or approximately $0.055 per share.
<PAGE> 12
The following table compares the differences of your investment in
our shares with the investment of our existing stockholders.
EXISTING STOCKHOLDERS
Price per share . . . . . . . . $ 0.055
Net tangible book value per share before offering . . $ (0.004)
Net tangible book value per share after offering . $ 0.02
Increase to present stockholders in net tangible book
value per share after offering . . . . . $ 0.024
Capital contributions . . . . . . . $ 275,000
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 . . . . 71.43%
PURCHASERS OF SHARES IN THIS OFFERING
Price per share . . . . . . . . . $ 0.10
Dilution per share . . . . . . . . $ 0.08
Net tangible book value per share after the offering . $ 0.02
Capital contributions . . . . . . . $ 200,000
Number of shares after offering
held by public investors . . . . . . 2,000,000
Percentage of ownership after offering . . . . 28.57%
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PLAN OF DISTRIBUTION; TERMS OF THE OFFERING
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Offering Will Be Sold By One of Our Officers
We are offering up to a total of 2,000,000 shares of common stock
on a best efforts, no minimum, 2,000,000 shares maximum. The offering
price is $0.10 per share. There is no minimum number of shares that we
have to sell. There will be no escrow account. All money received
from the offering will be immediately used by us and there will be no
refunds. The offering will be for a period of 90 days from the
effective date and may be extended for an additional 90 days if we so
choose to do so.
There is no minimum number of shares that must be sold in this
offering. Any money we receive will be immediately appropriated by us
for the uses set forth in the Use of Proceeds section of this
prospectus. No funds will be placed in an escrow account during the
offering period and no money will be returned once the subscription has
been accepted by us.
<PAGE> 13
We will sell the shares in this offering through Hugh Grenfal,
Jr., one of our officers and directors. Mr. Grenfal will receive no
commission from the sale of any shares. Mr. Grenfal will not register
as a broker-dealer pursuant to Section 15 of the Securities Exchange
Act of 1934 in reliance upon Rule 3a4-1. Rule 3a4-1 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. The conditions are that:
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. We will also distribute
the prospectus to potential investors at the meetings and to our
friends and relatives who are interested in us and a possible
investment in the offering.
Offering period and expiration date
This offering will commence on the date of this prospectus and
continue for a period of 90 days. We may extend the offering period
for an additional 90 days, or unless the offering is completed or
otherwise terminated by us.
Procedures for purchasing shares
If you decide to purchase any shares in this offering, you must
1. execute and deliver a subscription agreement. A subscription
agreement is your acceptance of our offer to sell you shares of common
stock. We will review your executed subscription agreement and decide
if we will accept your offer to buy or our shares. If we do, the
subscription agreement will be signed by us and a copy will be returned
to you.
<PAGE> 14
2. deliver a check or certified funds to us for acceptance or
rejection.
All checks for the purchase of shares must be made payable to "ANCONA
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 will be
accepted or rejected within 48 hours after we receive them.
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BUSINESS
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General
We were incorporated in the State of Nevada on September 7, 1999.
We are engaged in the acquisition and exploration 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 1040 West Georgia Street, Suite 1160, Vancouver, British
Columbia, Canada V6E 4H1. Our telephone number is (604) 605-0885.
Background
We are an exploration stage company. There is no assurance
that a commercially viable mineral deposit exists on our property.
Further exploration will be required before a final evaluation as to
the economic and legal feasibility is determined.
In September 1999, Hugh Grenfal our President and a member of the
board of directors, acquired one mineral property containing three
mining claims in British Columbia, Canada by arranging the staking of
the same through a third party. Canadian jurisdictions allow a
mineral explorer to claim of portion of available Crown lands as its
exclusive area for exploration by depositing posts or other visible
markers to indicate a claimed area. The claimed area is called a claim
and the process of posting the area is known as staking. Mr. Grenfal
paid the unrelated third party $1,353 to stake the claims. The
claims are recorded in Mr. Grenfal's name for tax purposes, however,
title to the claims has been conveyed to us by an unrecorded deed. To
date we have not performed any work on our property.
<PAGE> 15
The claims are recorded in Mr. Grenfal's name to a avoid
paying additional fees, however, title to the claims has been conveyed
to us by an unrecorded warranty deed. Under British Columbia
provincial law, if the deed is recorded in our name, we will have to
pay a minimum of $500.00 and file other documents since we are a
foreign corporation in Canada. We have decided that if gold is
discovered on the property and it is economical to remove the gold, we
will record the deed, pay the additional tax, and file as a foreign
corporation.
Accordingly, the title to the property is superior to all other
unrecorded deeds. Should Mr. Grenfal transfer title to another person
and that deed is recorded prior to recordation of our deed, that person
will have superior title and we will have none. If that event occurs,
however, Mr. Grenfal will be liable to us for monetary damages for
breach of his warranty of title.
Location and Access
The property is located 290 kilometers east of Vancouver, near
Beaverdell on the West Kettle River. The property is located
within the West Kettle River valley, south from the village of
Beaverdell, in south central British Columbia, Canada. Highway 33 runs
through the center of the property and several secondary roads and
trails provide access to most parts of the property
Physiography
The property is situated within the Monashee Mountains of the
Southern Interior Physiographic Region, and elevations range from 2,500
feet along the West Kettle River to 5100 feet at the extreme western
edge of the property.
Slopes within the claim area are generally steep except for the
bottom of the West Kettle River valley and the height of land within
the property. Vegetation consists mainly of fir; larch and pine, much
of it mature second growth. Some of the area has been recently logged
or burned over. There is relatively little underbrush, and open grassy
areas are not uncommon. Outcrops are fairly sparse except locally on
the east flanks of ridges, where small bluffs with talus aprons occur.
The climate features warm summers and mild winters. The West
Kettle Valley is fairly dry in the summers, although not as dry as the
Okanagan valley to the west. Average yearly precipitation is 20
inches. A snow pack of 3-5 feet begins to accumulate in November and
lingers in places into May. The moderate climate in the project area
allows for year round exploration.
The process by which the features of the property and the
minerals it may contain were determined by Mr. Grenfal through personal
observations.
<PAGE> 16
Property Geology
The major type of rock found on the property is quartz. Gold,
silver and copper are found in quartz veins. We have determined that
there are quartz veins on the property. We have not determined if
there is any gold, silver or copper in the quartz veins.
MAP SUPPLIED SUPPLEMENTALLY.
Our Proposed Exploration Program
We must conduct exploration 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.
Our exploration program is designed to economically explore and
evaluate our properties.
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 mapping and testing the subsurface 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 will
to begin trenching the area. Trenches are 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 restoration
of the property as a result of our exploration. Once excavation
of a trench is completed we will take samples and analyze them
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 has
current economic potential and whether further exploration is
warranted.
Phase 1 will take about 3 months and cost about $20,000.
Phase 2 involves an initial examination of the underground
characteristics of the vein structure that was identified by Phase 1 of
exploration. Phase 2 is aimed at identifying any mineral deposits of
potential economic importance. The methods employed are
<PAGE> 17
* more extensive trenching
* more advanced geophysical work
* drift driving
Drift driving is the process of constructing a tunnel to take samples
of mineralized material for testing. Later, the tunnel can be
used for extraction of the mineralized material. The
geophysical work gives a general understanding of the location and
extent of mineralization at depths that are unreachable by surface
excavations and provides a target for more extensive trenching and core
drilling. Trenching identifies the continuity and extent of
mineralization, if any, below the surface. After a thorough analysis of
the data collected in Phase 2, we will decide if the property warrants
a Phase 3 study.
Phase 2 will take about 3 months and cost about $20,000.
Phase 3 is aimed at outlining some mineralized material and a
tonnage and establish an average grade of mineralized material. This is
accomplished through extensive drift driving. Mineralized material is
not a proven mineralized material until it has been technically,
economically and legally proven. Mineralized material is a mineralized
body which has been delineated by appropriately spaced drilling and/or
underground sampling to support a sufficient tonnage and average grade
of metals. Such a deposit does not qualify as a reserve, until a
comprehensive evaluation based upon unit cost, grade, recoveries, and
other material factors conclude legal and economic feasibility.
Phase 3 will take about 6 months and cost about $80,000.
We do not intend to interest other companies in the property if we
find mineralized materials. We intend to try to develop the reserves
ourselves.
Regulations
Our mineral exploration program is subject to the Canadian Mineral
Tenure Act Regulation. This act sets forth rules for
* locating claims
* posting claims
* working claims
* reporting work performed
We are also subject to the British Columbia Mineral Exploration
Code which tells us how and where we can explore for minerals. We must
comply with these laws in order to operate our business. Compliance
with these rules and regulations will not effect our operations.
<PAGE> 18
Environmental Law
We are also subject to the Health, Safety and Reclamation Code for
Mines in British Columbia. This code deals with environmental matters
relating to the exploration and development of mining properties. Its
goals are to protect the environment through a series of regulations
effecting:
1. Health and Safety
2. Archaeological Sites
3. Exploration Access
We are in compliance with the foregoing act and will continue to
comply with the act in the future. Because of our proposed limited
operations, we believe the costs and effects associated with complying
with the environmental laws will not have a material adverse affect
upon our operations. At the present time we cannot estimate the costs
of complying with the environmental laws.
Employees
Initially, we intend to use the services of subcontractors for
manual labor exploration work on our properties. Our only technical
employees will be Hugh Grenfal and Sergei Stetsenko, our officers and
directors.
Employees and Employment Agreements
At present, we have no employees, other than Messrs. Grenfal and
Stetsenko, our officers and directors, who were compensated for their
services. Messrs. Grenfal and Stetsenko do not have employment
agreements with us. Messrs. Grenfal and Stetsenko are not full-time
employees and devote approximately 25% of their time our operations.
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.
----------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
---------------------------------------------------------------------
We are a start-up, exploration stage company and have not yet
generated or realized any revenues from our business operations.
<PAGE> 19
Our auditors have issued a going concern opinion. This means that
our auditors believe there is doubt that we can continue as an on-going
business for the next twelve months unless we obtain additional capital
to pay our bills. This is because we have not generated any revenues
and no revenues are anticipated until we begin removing and selling
minerals. Accordingly, we must raise cash from sources other than the
sale of minerals found on our property. That cash must be raised from
other sources. Our only other source for cash at this time is
investments by others in our company. We must raise cash in order to
implement our project and stay in business.
In order to meet our need for cash we are attempting to raise
money from this offering. There is no assurance that we will be able
to raise enough money through this offering to stay in business. What
ever money we do raise, will be applied first to exploration and then
to development, if development is warranted. If we do not raise all of
the money we need from this offering, we will have to find alternative
sources, such as a second public offering, a private placement of
securities, or loans from our officers or others. We have discussed
this matter with our officers, however, our officers are unwilling to
make any commitment to loan us any money at this time. At the present
time, we have not made any arrangements to raise additional cash, other
than through this offering. If we need additional cash and can't raise
it we will either have to suspend operations until we do raise the
cash, or cease operations entirely.
We will be conducting research in connection with the exploration
of our property. We are not going to buy or sell any plant or
significant equipment. We do not expect a change in our number of
employees.
Phase 1 involves research, examination of the property, and
trenching. Phase 1 will take about 3 months and cost about $20,000.
We have not commenced Phase I. We anticipate that the proceeds of this
offering will be use to cover the costs of each phase of the
exploration plan.
Phase 2 involves an initial examination of the underground
characteristics of the vein structure that was identified by Phase 1 of
exploration. Phase 2 will take about 3 months and cost about $20,000.
Phase 3 is aimed at precisely defining the depth, the width, the
length, the tonnage and the value per ton of any mineralized
material. Phase 3 will take about 6 months and cost about
$80,000.
<PAGE> 20
Limited Operating History; Need for Additional Capital
There is no historical financial information about our company
upon which to base an evaluation of our performance. We are an
exploration stage company and have not generated any revenues from
operations. We cannot guarantee we will be successful in our business
operations. Our business is subject to 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, and possible cost overruns due to price and cost increases
in services.
To become profitable and competitive, we conduct into the research
and exploration of our properties before we commence production of any
minerals we may find. We are seeking equity financing in order to
provide for the capital required to implement our research and
exploration phases.
We have no assurance that future financing will be available to us
on acceptable terms. If such financing is not available on
satisfactory terms, we may be unable to continue, develop or expand our
operations. Equity financing could result in additional dilution to
existing shareholders.
RESULTS OF OPERATIONS
From Inception on September 7, 1999
We just recently acquired our first property 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, for corporate expenses and to repay
outstanding indebtedness. Net cash provided by financing activities
from inception on September 7, 1999 to June 30, 2000 was $133, as a
result of proceeds received from advances from directors.
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 through a Section 4(2)
offering in September 1999. This was accounted for as a compensation
expense of $271,536 and advances and reimbursement expenses of $3,464.
As of June 30, 2000 our total assets were $3,112 and our total
liabilities were $22,634.
<PAGE> 21
-----------------------------------------------------------------------
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:
Name and Address Age Position(s)
Hugh Grenfal, Jr. 30 President, Treasurer, Chief
3337 West 30th Ave. Financial Officer and a member
Vancouver, B.C. of the Board of Directors
Canada V6S 1W3
Sergei Stetsenko 29 Secretary and a member of the Board
704 - 1155 Beach Ave. of Directors
Vancouver, B.C.
Canada V6E 1V2
The persons named above have held their offices/positions since
inception of our company and are expected to hold their
offices/positions until the next annual meeting of our stockholders.
Background of Officers and Directors
Hugh Grenfal, Jr. has been our President, Treasurer,
Chief Financial Officer and a member of our board of directors since
inception. From January 1991 to June 1996 , Mr. Grenfal was President
of Booker Gold Explorations Ltd., an 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. From June 1999 to March 2000, Mr. Grenfal was President of
Paxton Mining Corporation located in Vancouver, British Columbia.
Paxton Mining Corporation was an exploration company. Since
September 1999, Mr. Grenfal has been President of Palal Mining
Corporation located in Vancouver, British Columbia. Palal Mining
Corporation is an exploration company. Since September 1999,
Mr. Grenfal has been President of Camden Mining Corporation located in
Vancouver, British Columbia. Camden Mining Corporation is an
exploration company. Mr. Grenfal is currently not a full-time
employee with another entity.
<PAGE> 22
Sergei Stetsenko has been our Secretary and a member of
the board of directors since inception. From December 1994 to June
1996, Mr. Stetsenko was the operations manager of Booker Gold
Explorations Ltd. His responsibilities included overseeing and
implementation of exploration programs and a member of the Hearne Hill
copper deposit discovery team. From October 1996 to the present, Mr.
Stetsenko was the operations manager of exploration for Callinan Mines
Limited. Since September 1999, Mr. Stetsenko has been Secretary of
Palal Mining Corporation located in Vancouver, British Columbia.
Palal Mining was an exploration company. Since September 1999, Mr.
Stetsenko has been Secretary of Camden Mining Corporation located in
Vancouver, British Columbia. Camden Mining Corporation is an
exploration company. Mr. Stetsenko is currently not a full-time
employee with another entity.
Conflicts of Interest
We believe that Hugh Grenfal and Sergei Stetsenko will be subject
to conflicts of interest. The conflicts of interest arise from Messrs.
Grenfal and Stetsenko's relationship with other mining and
exploration corporations. In the future, Messrs. Grenfal and
Stetsenko will continue to be involved in the mining and
exploration business for other entities and such involvement could
create conflicts of interest. At the present time, we do not foresee
a direct conflict of interest because we do not intend to acquire any
additional properties. The only conflict that we foresee is Messrs.
Grenfal and Stetsenko's devotion of time to projects that do not
involve us.
Specifically, Hugh Grenfal is an officer and director of Callinan
Mines Ltd., Palal Mining Corporation, and Camden Mining Corporation,
all of which are engaged in the mining or exploration
business. Mr. Stetsenko is the operations manager of Callinan Mines
Limited and an officer and director of Palal Mining Corporation and
Camden Mining Corporation, all of which are engaged in the mining or
exploration business. Presently, none of the foregoing
operate mines or receive royalties from properties operated by others
with the exception of Callinan Mines Ltd. which receives CDN$149,000
from a copper zinc mine in Flin Flon, Manitoba operated by Hudson Bay
& Smelting Co. Neither we nor our officers are affiliated with Hudson
Bay & Smelting Co. In the future, however, such corporations could
begin operating mines.
---------------------------------------------------------------------
EXECUTIVE COMPENSATION
----------------------------------------------------------------------
Messrs. Grenfal and Stetsenko, our officers and directors, were
compensated in shares of common stock in the amount of $135,768
each 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.
<PAGE> 23
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. We may also 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.
-----------------------------------------------------------------------
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.
Name and Address Number of Number Percentage of
Beneficial Shares Before of Shares of Ownership
Owner [1] Offering After Offering After Offering
Hugh Grenfal 2,500,000 2,500,000 35.71%
3337 West 30th Ave.
Vancouver, B.C.
Canada V6S 1W3
Sergei Stetsenko 2,500,000 2,500,000 35.71%
704 - 1155 Beach Ave.
Vancouver, B.C.
Canada V6E 1V2
------------------
All Officers and Directors
as a Group (2) 5,000,000 5,000,000 71.43%
<PAGE> 24
[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 Stetsenko
are the only "promoters" of our company.
Future Sales by Existing Stockholders
A total of 5,000,000 shares of common stock were 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 Securities Act. 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.
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:
* have equal ratable rights to dividends from funds legally
available therefor, when, as and if declared by our board of
directors;
* 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;
* do not have preemptive, subscription or conversion rights and
there are no redemption or sinking fund provisions or rights;
and
* are entitled to one non-cumulative vote per share on all
matters on which stockholders may vote.
We refer you to our Articles of Incorporation, Bylaws and the
applicable statutes of the State of Nevada for a more complete
description of the rights and liabilities of holders of our securities.
<PAGE> 25
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."
Cash Dividends
As of the date of this prospectus, 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.
Reports
After we complete this offering, we will be subject to certain
reporting requirements and will furnish annual financial reports to you
certified by our independent accountants, and may, in our discretion,
furnish unaudited quarterly financial reports.
Stock Transfer Agent
Our 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 RELATIONSHIPS AND RELATED TRANSACTIONS
-----------------------------------------------------------------------
In September 1999, we issued a total of 5,000,000 shares of
restricted common stock to Hugh Grenfal and Sergei Stetsenko, officers
and directors of our company. This was accounted for as a compensation
expense of $271,536 and advances and reimbursement expenses of $3,464.
-----------------------------------------------------------------------
LITIGATION
----------------------------------------------------------------------
We are not a party to any pending litigation and none is
contemplated or threatened.
<PAGE> 26
---------------------------------------------------------------------
EXPERTS
----------------------------------------------------------------------
Our financial statements for the period from inception to
September 10, 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 1940,
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 September 10,
1999 immediately follows:
INDEPENDENT AUDITOR'S REPORT F-1
FINANCIAL STATEMENTS
Balance Sheet F-2
Statement of Operations and Accumulated Deficit F-3
Statement of Stockholders' Equity F-4
Statement of Cash Flows F-5
NOTES TO FINANCIAL STATEMENTS F-6
<PAGE> 27
Board of Directors
Ancona Mining Corporation
Las Vegas, Nevada
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheet of Ancona Mining
Corporation, (an exploration stage enterprise), as of June 30, 2000,
and the related statements of operations and accumulated deficit,
stockholders' equity (deficit) and cash flows for the period from
September 7, 1999 (inception) to June 30, 2000. 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 Ancona
Mining Corporation, as of June 30, 2000, and the results of its
operations and its cash flows for the period from September 7, 1999
(inception) to June 30, 2000, 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 exploration stage since its
inception on September 7, 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.
/s/ Williams & Webster, P.S.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
July 31, 2000
F-1
<PAGE> 28
ANCONA MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
BALANCE SHEET
June 30, 2000
ASSETS
CURRENT ASSETS
Cash $ 57
-----------
Total Current Assets 57
OTHER ASSETS
Security deposit 411
Mining claims 2,644
-----------
Total Other Assets 3,055
-----------
TOTAL ASSETS $ 3,112
===========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 1,758
Accounts payable, related parties 20,876
-----------
Total Current Liabilities 22,634
-----------
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 274,950
Deficit accumulated during exploration stage (294,522)
-----------
Total Stockholders' Equity (Deficit) (19,522)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 3,112
===========
The accompanying notes are an integral part of these financial
statements.
F-2
<PAGE> 29
ANCONA MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
For the Period from September 7, 1999 (Inception)
to June 30, 2000
REVENUES $ -
------------
EXPENSES
Consulting services provided by directors 271,536
Professional fees 21,336
Rent 821
General and administrative expenses 719
Mining exploration expense 110
------------
Total Expenses 294,522
------------
LOSS FROM OPERATIONS (294,522)
INCOME TAXES -
------------
NET LOSS $ (294,522)
============
NET LOSS PER COMMON SHARE,
BASIC AND DILUTED $ (0.06)
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES OUTSTANDING,
BASIC AND DILUTED 5,000,000
============
The accompanying notes are an integral part of these financial
statements.
F-3
<PAGE> 30
ANCONA MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Period from September 7, 1999 (Inception)
to June 30, 2000
Deficit
Accumulated Total
Common Stock Additional During Stockholders'
Number Paid-In Exploration Equity
of Shares Amount Capital Stage (Deficit)
Issuance of common
stock for expenses,
mining claims, and
in payment of advances
at approximately
$0.055 per share 5,000,000 $ 50 $ 274,950 $ - $ 275,000
Loss for period ending,
June 30, 2000 - - - (294,522) (294,522)
---------- ----- ----------- ----------- ----------
Balance,
June 30, 2000 5,000,000 $ 50 $ 274,950 $ (294,522)$ (19,522)
========== ===== =========== =========== ==========
The accompanying notes are an integral part of these financial
statements.
F-4
<PAGE> 31
ANCONA MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
For the Period from September 7, 1999 (Inception)
to June 30, 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (294,522)
Increase in accounts payable 22,634
Increase in deposits (411)
Expenses paid by issuance of stock 272,223
------------
Net cash used by operating activities (76)
------------
CASH FLOWS FROM INVESTING ACTIVITIES -
------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from advances 133
------------
Net cash provided by financing activities 133
------------
Change in cash 57
Cash, beginning of period -
------------
Cash, end of period $ 57
============
SUPPLEMENTAL DISCLOSURES:
Interest paid, in cash $ -
============
Income taxes paid, in cash $ -
============
NON-CASH TRANSACTIONS
Stock issued in exchange for expenses paid $ 272,223
Stock issued in payment of advances $ 133
Stock issued in exchange for mining claims $ 2,644
The accompanying notes are an integral part of these financial
statements.
F-5
<PAGE> 32
ANCONA MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Ancona Mining Corporation (hereinafter "the Company") was
incorporated on September 7, 1999 under the laws of the State of
Nevada for the purpose of acquiring, exploring and developing mining
properties. The Company's fiscal year end is June 30.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies 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.
Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
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.
Exploration Stage Activities
The Company has been in the exploration stage since its formation in
September 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. Upon location of a commercial
minable reserve, the Company expects to actively prepare the site for
its extraction and enter a development stage.
Foreign Currency Valuation
Management has elected to value foreign currency transactions on the
date the transaction concludes. The conversion is calculated by
multiplying the foreign currency value by the exchange rate at the
close of the nearest trading day.
F-6
<PAGE> 33
ANCONA MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
Concentration of Risk
The Company maintains its cash accounts in primarily one commercial
bank in Vancouver, British Columbia, Canada. The Company's cash
account is a business checking account maintained in U.S. dollars,
which totaled $57 as of June 30, 2000. This account is not insured.
Derivative Instruments
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This
standard establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It requires
that an entity recognize all derivatives as either assets or
liabilities in the balance sheet and measure those instruments at
fair value.
At June 30, 2000, the Company has not engaged in any transactions
that would be considered derivative instruments or hedging
activities.
Impaired Asset Policy
In March 1995, the Financial Accounting Standards Board issued a
statement titled "Accounting for Impairment of Long-lived Assets."
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 determines
impairment by comparing the undiscounted future cash flows estimated
to be generated by its assets to their respective carrying amounts.
The Company does not believe any adjustments are needed to the
carrying value of its assets at June 30, 2000.
Exploration Costs
In accordance with generally accepted accounting principles, the
Company will expense exploration costs as incurred.
F-7
<PAGE> 34
ANCONA MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
For the Period from September 7, 1999 (Inception)
to June 30, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Compensated Absences
Currently, the Company has no employees; therefore, no policy
regarding compensated absences has been established. The Company
will establish a policy to recognize the costs of compensated
absences at the point in time that it has employees.
Provision for Taxes
At June 30, 2000, the Company had a net operating loss of
approximately $290,000. 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.
Basic and Diluted 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. Basic and diluted loss per share were the same, as
there were no common stock equivalents outstanding.
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 $294,522 for the period ended June 30, 2000
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 and public
offering 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.
F-8
<PAGE> 35
ANCONA MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
For the Period from September 7, 1999 (Inception)
to June 30, 2000
NOTE 3 - COMMON STOCK
On September 10, 1999, 5,000,000 shares of common stock were issued
to officers and directors only. There was no public offering of any
securities. The above referenced shares were issued in payment of
consulting services in the amount of $271,536 and repayment of
expenses of $687, mining claims of $2,644 and advances of $133.
These shares were issued pursuant to exemption from registration
contained in Section 4 (2) of the Securities Act of 1933.
In September 1999, the Company, through Mr. Hugh Grenfal, president
and a member of the Company's board of directors, acquired three
mineral claims in British Columbia, Canada. These claims are
commonly known as the Marmot, Wombat and Amax.
NOTE 4 - LEASES
On March 31, 2000, the Company entered into a lease agreement with
Callinan Mines Limited for a period of approximately three years for
$607 Canadian dollars per month. As of June 30, 2000, this is
equivalent to approximately $410 U.S. per month. The lease expires
on June 29, 2003.
The minimum future lease payments as of June 30, 2000 for the
remaining life of the lease are:
Fiscal Year Ended June 30: Amount
2001 $ 4,926
2002 4,926
2003 4,926
----------
Total minimum lease payments $ 14,778
==========
NOTE 5 - RELATED PARTIES
The Company occupies office space provided by Mr. Grenfal, its
president, in his capacity as vice president and director of Callinan
Mines Limited. On March 31, 2000, the Company entered into a lease
agreement with Callinan for a period of approximately three years. See
Note 4.
The shareholders of the Company paid expenses and advanced funds on
behalf of the Company, and were repaid by issuance of common stock.
See Note 3.
F-9
<PAGE> 36
ANCONA MINING CORPORATION
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
For the Period from September 7, 1999 (Inception)
to June 30, 2000
NOTE 5 - RELATED PARTIES (continued)
In addition, the Company's president has advanced additional monies
in payment of the Company's professional fees. These funds have been
recorded as a related party payable, which totaled $17,541 at June
30, 2000.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
The Company is engaged in the exploration and development of mineral
properties. At present, there are no feasibility studies
establishing proven and probable reserves.
Although the minerals exploration and mining industries are
inherently speculative and subject to complex environmental
regulations, the Company is unaware of any pending litigation or of
any specific past or prospective matters which could impair the value
of its mining claims.
The Company is presently undertaking the required steps to register
as a publicly traded company. In this regard, the Company has signed
a contract with a securities attorney to assist in this matter. The
total fees to be paid to the attorney amount to $25,000. Of this
amount, $12,500 has been paid and is recorded as professional fees.
The remaining $12,500 will be due when the Company's registration
statement is declared effective by the Securities and Exchange
Commission.
F-10
<PAGE> 37
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.
<PAGE> 38
Name and Address Date Shares Consideration
------------------- ------- --------- -----------------------
Hugh Grenfal 9/07/99 2,500,000 Services and $641 in Cash
3337 W. 30th Avenue
Vancouver, British Columbia
Canada V7S 1W3
Sergei Stetsenko 9/07/99 2,500,000 Services and $641 in Cash
704 -1155 Beach Avenue
Vancouver, British Columbia
Canada V6E 1V2
We issued the foregoing restricted shares of common stock to
Messrs. Grenfal and Stetsenko pursuant to Section 4(2) of the
Securities Act of 1933. Messrs. Grenfal and Stetsenko are
sophisticated investors, are officers and directors of the company, and
where in possession of all material information relating to the
company. Further, no commissions were paid to anyone in connection
with the sale of the shares and general solicitation was made to
anyone.
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* Marmot Mining Claim.
10.2* Wombat Mining Claim.
10.3* Bill of Sale.
10.4* Amax Mining Claim.
10.5* Statement of Trustee.
23.3 Consent of Williams & Webster, P.S., Certified Public
Accountants.
23.4 Consent of Conrad C. Lysiak, Esq.
27.2 Financial Data Schedule.
99.1* Subscription Agreement.
* Previously filed.
<PAGE> 39
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. File, during any period in which is offers or sells
securities, a post-effective amendment to this registration statement
to:
(i) Include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the law
of high end of the estimated maximum offering range may be reflect
in the form of prospects filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in the volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in this registration statement.
(iii) Include any additional or changed material information
on the plan of distribution.
2. For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to
be the initial bona fide offering.
3. File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
<PAGE> 40
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 amendment to the Form SB-2
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Vancouver, British Columbia, on this 1st
day of November, 2000.
ANCONA MINING CORPORATION
BY: /s/ Hugh Grenfal, Jr.
Hugh Grenfal, Jr., President, Principal
Executive Officer, Treasurer, and
Principal Accounting Officer
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
amendment to the 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, Jr. President, Principal 11/01/2000
Hugh Grenfal, Jr. Executive Officer, Treasurer,
Principal Accounting Officer,
a member of the Board of
Directors
/s/ Sergei Stetsenko Secretary and a member of the 11/01/2000
Sergei Stetsenko Board of Directors
