<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2/A
AMENDMENT NO. 1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ENCORE VENTURES, INC.
(Name of small business issuer in its charter)
NEVADA 98-0218912
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
William Iny
5709 Hudson Street
Vancouver, British Columbia V6M 2Z2
--------------------------- -------
(Name and address of principal (Zip Code)
executive offices and agent
for service of process)
Registrant's telephone number, including area code: (604) 880-9721
Approximate date 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 securities for an
offering pursuant to Rule 462(b) 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(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,
check the following box. |__|
CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------
TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES OFFERING AGGREGATE AMOUNT OF
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED UNIT (1) PRICE (2) FEE (2)
--------------------------------------------------------------------------
Common Stock 1,880,000 shares $0.50 $940,000 $248
-------------------------------------------------------------------------
(1) Based on last sales price on April 28, 2000
(2) Estimated solely for the purpose of calculating the registration
fee in accordance with Rule 457 under the Securities Act.
THE 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 SECTION 8(a), MAY DETERMINE.
COPIES OF COMMUNICATIONS TO:
Michael A. Cane, Esq.
2300 W. Sahara Blvd.,
Suite 500 - Box 18
Las Vegas, NV 89102
(702) 312-6255
<PAGE>
SUBJECT TO COMPLETION, Dated September 13, 2000
PROSPECTUS
ENCORE VENTURES, INC.
1,880,000 SHARES
COMMON STOCK
----------------
The selling shareholders named in this prospectus are offering all of
the shares of our common stock offered through this prospectus. See
the section entitled "Selling Shareholders." The shares were
acquired by the selling shareholders directly from us in three
private offerings that were exempt from registration under the US
securities laws. See the section entitled "Description of
Securities."
We will not determine the offering price of the common stock, nor how
it is sold. The offering price and method of sale will each be
determined by market factors and the independent decisions of the
selling shareholders.
Our common stock is presently not traded on any market or securities
exchange.
----------------
The purchase of the securities offered through this prospectus
involves a high degree of risk. See section entitled "Risk Factors"
on pages 4 - 8.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
----------------
The Date Of This Prospectus Is: September 13, 2000
-1-
<PAGE>
TABLE OF CONTENTS
PAGE
----
Summary .............................................................. 3
Risk Factors ......................................................... 4
Use of Proceeds ...................................................... 9
Determination of Offering Price ...................................... 9
Dilution ............................................................. 9
Selling Shareholders ................................................. 9
Plan of Distribution ................................................. 15
Legal Proceedings .................................................... 16
Directors, Executive Officers, Promoters and Control Persons ......... 16
Security Ownership of Certain Beneficial Owners and Management ....... 17
Description of Securities ............................................ 18
Interests of Named Experts and Counsel ............................... 19
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities ......................................... 20
Organization Within Last Five Years .................................. 20
Description of Business .............................................. 20
Plan of Operation .................................................... 25
Description of Property .............................................. 26
Certain Relationships and Related Transactions ....................... 26
Market for Common Equity and Related Stockholder Matters ............. 27
Executive Compensation ............................................... 28
Index to Financial Statements ........................................ 29
Financial Statements ................................................. F-1
Changes in and Disagreements with Accountants Disclosure ............. 30
Available Information ................................................ 30
-2-
<PAGE>
SUMMARY
The following summary is only a shortened version of the more
detailed information, exhibits and financial statements appearing
elsewhere in this prospectus. Prospective investors are urged to
read this prospectus in its entirety.
Encore Ventures, Inc.
We are in the business of mineral exploration; although, to date, we
have relied upon the mineral exploration of others and have not yet
conducted such exploration ourselves. We have acquired an option to
acquire a 90% interest in four mineral claims located in the Watson
Lake Mining District in the Yukon Territories. Our objective is to
conduct mineral exploration activities on these mineral claims in
order to assess whether they possess commercially exploitable
reserves of molybdenum and tungsten. Our plan is to carry out an
exploration program on the Watson Lake mineral claims in order to
make an assessment of the commercial potential of these mineral
claims. We have not, nor has any predecessor, identified any
commercially exploitable reserves. Our proposed exploration program
is designed to explore for commercially exploitable deposits.
Encore Ventures, Inc. is a Nevada corporation incorporated on
September 14, 1999. Our principle offices are located at 5709 Hudson
Street, Vancouver, BC, Canada, V6M 2Z2.
The Offering
Securities Being Offered Up to 1,880,000 shares of common stock. See
section entitled "Description of Securities to be
Registered."
Securities Issued
And to be Issued There are 3,380,000 shares of our common
stock issued and outstanding as of the date of
this prospectus. Existing shareholders will
sell all of the shares or our common stock to be
sold under this prospectus. See section entitled
"Description of Securities to be Registered."
Use of Proceeds We will not receive any proceeds from the
sale of the common stock by the selling
shareholders. See section entitled "Use of
Proceeds."
-3-
<PAGE>
RISK FACTORS
An investment in our common stock involves a high degree of risk.
You should carefully consider the risks described below and the other
information in this prospectus and any other filings we may make with
the United States Securities and Exchange Commission in the future
before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could
be seriously harmed. The trading price of our common stock could
decline due to any of these risks, and you may lose all or part of
your investment.
RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL
If We Do Not Obtain Additional Financing, Our Business Will Fail
We had cash in the amount of $$47,474as of July 31, 2000. We
currently do not have any operations and we have no income. Our
business plan calls for significant expenses in connection with the
development and exploration of our optioned mineral claims. We may
require additional financing in order to complete these activities if
the costs of the exploration and development of our optioned mineral
claims are greater than anticipated. In addition, we may require
additional financing to sustain our business operations if we are not
successful in earning revenues once exploration and development is
complete. We do not currently have any arrangements for financing
and we can provide no assurance to investors that we will be able to
find such financing if required. Obtaining additional financing
would be subject to a number of factors, including market prices for
molybdenum and tungsten, investor acceptance of our property, and
investor sentiment. These factors may make the timing, amount, terms
or conditions of additional financing unavailable to us.
The only source of future funds presently available to us is through
the sale of equity capital. Any sale of share capital will result in
dilution to existing shareholders. The only other alternative for the
financing of further exploration would be the offering by us of an
interest in our properties to be earned by another party or parties
carrying out further exploration or development thereof, which is not
presently contemplated.
Time Constraints and Capital Expenditure Requirements of the Watson
Lake Option, May Become Unattainable and Thereby Cause Us to Lose the
Option
We are obligated to incur exploration expenditures on our optioned
mineral claims in order to exercise the option and obtain a 90%
interest in the mineral claims. While our existing cash reserves are
sufficient to enable us to complete phase one of the geological work
program recommended on our optioned mineral claims, we will require
substantial additional capital to fund the continued exploration of
our optioned mineral claims in order to exercise the option. The
projected cost of completion of phase one of the recommended work
program is $25,000. The projected cost of completion of phase two of
the recommended work program is $175,000. The Phase One project costs
include a property survey to identify the drill target and locate
drill sites suitable to test the target. Phase two costs include
3000 feet of core drilling. If we do not meet the exploration
expenditures required by the option agreement, then we will forfeit
our interest in the optioned mineral claims and will have no interest
in the optioned mineral claims. In addition, other events or
circumstances that are not presently anticipated may reduce the time
period for which the funds will be sufficient. We have no agreements
-4-
<PAGE>
for additional financing and we can provide no assurance to investors
that additional funding will be available to us on acceptable terms,
or at all, to continue operations, to fund new business opportunities
or to execute our business plan.
Because We Have Only Recently Commenced Business Operations, We Face
A High Risk of Business Failure
We were incorporated in September 1999 and to date have been involved
primarily in organizational activities and the acquisition of the
optioned mineral claims. We have not earned any revenues as of the
date of this prospectus. Potential investors should be aware of the
difficulties normally encountered by new mineral exploration
companies and the high rate of failure of such enterprises. The
likelihood of success must be considered in light of the problems,
expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we
plan to undertake. These potential problems include, but are not
limited to, unanticipated problems relating to exploration and
development, and additional costs and expenses that may exceed
current estimates. There is no history upon which to base any
assumption as to the likelihood that we will prove successful, and
there can be no assurance that we will generate any operating
revenues or ever achieve profitable operations. If we are
unsuccessful in addressing these risks, our business will most likely
fail.
Because We Have Only Recently Commenced Business Operations, We
Expect to Incur Operating Losses For The Foreseeable Future
We have never earned revenues and we have never been profitable.
Prior to completion of our exploration stage, we anticipate that we
will incur increased operating expenses without realizing any
revenues. We therefore expect to incur significant losses into the
foreseeable future. We recognize that if we are unable to generate
significant revenues from the exploration and development of our
optioned mineral claims, we will not be able to achieve profitability
or continue operations.
Because of the Speculative Nature of Exploration of Mining
Properties, There is Substantial Risk that This Business Will Fail
We can provide investors with no assurance that the mineral claims
that we have optioned contain commercially exploitable reserves of
molybdenum or tungsten. Exploration for minerals is a speculative
venture necessarily involving substantial risk. The expenditures to
be made by us in the exploration of the optioned mineral properties
may not result in the discovery of commercial quantities of ore.
Hazards such as unusual or unexpected formations and other conditions
are involved in mineral exploration and development and often result
in unsuccessful exploration efforts. We may also become subject to
liability for pollution, cave-ins or hazards against which we cannot
insure or against which we may elect not to insure. The payment of
such liabilities may have a material adverse effect on our financial
position.
If We Discover Commercial Reserves Of Precious Metals On Our Optioned
Mineral Properties, We Can Provide No Assurance That We Will Be Able
To Successfully Place The Mineral Claims Into Commercial Production
-5-
<PAGE>
The optioned mineral properties do not contain any known bodies of
ore. If our exploration programs are successful in establishing ore
of commercial tonnage and grade, we will require additional funds in
order to place the mineral claims into commercial production. In
such an event, we may be unable to do so.
RISKS RELATED TO OUR MARKET AND STRATEGY
If We Are Unable To Hire And Retain Key Personnel, We May Not Be Able
To Implement Our Business Plan And Our Business Will Fail
Our success will be largely dependent on our ability to hire highly
qualified personnel. This is particularly true in highly technical
businesses such as mineral exploration. These individuals may be in
high demand and we may not be able to attract the staff we need. In
addition, we may not be able to afford the high salaries and fees
demanded by qualified personnel, or may lose such employees after
they are hired. Currently, we have not hired any key personnel. Our
failure to hire key personnel when needed would have a significant
negative effect on our business.
If We Do Not Obtain Clear Title to the Mining Properties, Our Business
May Fail
While we have obtained geological reports with respect to the
optioned mineral properties, this should not be construed as a
guarantee of title. The properties may be subject to prior
unregistered agreements or transfers or native land claims, and title
may be affected by undetected defects. Our optioned mining
properties have not been surveyed and therefore, the precise
locations and areas of the properties may be in doubt.
Ownership transfers for the claims are being held by the Company and
will be filed in the normal course of business. Such transfers are
valid in perpetuity and we are not aware of any problems that would
prevent us from obtaining clear title.
If We Are Not Able to Effectively Respond to Competitors, Our Business
May Fail
The mining industry, in general, is intensively competitive and we
can provide no assurance to investors even if commercial quantities
of ore are discovered that a ready market will exist for the sale of
any ore found. Numerous factors beyond our control may affect the
marketability of any substances discovered. These factors include
market fluctuations, the proximity and capacity of natural resource
markets and processing equipment, government regulations, including
regulations relating to prices, taxes, royalties, land tenure, land
use, importing and exporting of minerals and environmental
protection. The exact effect of these factors cannot be accurately
predicted, but the combination of these factors may result in our not
receiving an adequate return on invested capital.
-6-
<PAGE>
RISKS RELATED TO LEGAL UNCERTAINTY
If We Become Subject To Burdensome Government Regulation Or Other
Legal Uncertainties, Our Business Will Be Negatively Effected
To date, there are several governmental regulations that have
materially restricted the use and development of ore. In addition,
the legal and regulatory environment that pertains to the exploration
of ore is uncertain and may change. Uncertainty and new regulations
could increase our costs of doing business and prevent us from
exploring or developing ore deposits. The growth of demand for ore
may also be significantly slowed. This could delay growth in
potential demand for and limit our ability to generate revenues. In
addition to new laws and regulations being adopted, existing laws may
be applied to mining that have not as yet been applied. These new
laws may increase our cost of doing business with the result that our
financial condition and operating results may be harmed.
RISKS RELATED TO THIS OFFERING
Because Our President, Mr. William Iny, Owns 44.4% Of Our Outstanding
Common Stock, Investors May Find That Future Corporate Decisions Are
Controlled By Mr. Iny Who May Use This Control To Advance His Own
Interests At The Expense Of Other Stockholders
Mr. William Iny, our director and President, owns approximately 44.4%
of the outstanding shares of our common stock. Accordingly, he will
have a significant influence in determining the outcome of all
corporate transactions or other matters, including mergers,
consolidations and the sale of all or substantially all of our
assets, and also the power to prevent or cause a change in control.
The interests of Mr. Iny may differ from the interests of the other
stockholders. Factors that could cause the interests of Mr. Iny to
differ from the interest of other stockholders include the impact of
a corporate transaction on Mr. Iny's business time and the ability
of Mr. Iny to continue to manage our business.
Mr. Iny is presently required to spend 15% of his business time on
business management services for our company. While Mr. Iny
presently possesses adequate time to attend to our interests, it is
possible that the demands on Mr. Iny from his other obligations could
increase with the result that he would no longer be able to devote
sufficient time to the management of our business. In addition, Mr.
Iny may not possess sufficient time for our business if the demands
of managing our business increased substantially beyond current
levels. Competing demands on Mr. Iny's business time may cause Mr.
Iny to have differing interests in approving significant corporate
transactions than other stockholders.
Moreover, because Mr. Iny spends approximately 60% of his time on
business activities not involving Encore Ventures, Inc., it is
possible that Mr. Iny's other interests could be in conflict with the
best interests of Encore and its other shareholders. Because Mr. Iny
has substantial influence over Encore, these conflicts of interest
could potentially lead him to take actions that have a materially
adversely affect on the interests of Encore and its other
shareholders.
If A Market For Our Common Stock Develops, Our Stock Price May Be
Volatile.
There is currently no market for our common stock and we can provide
no assurance to investors that a
-7-
<PAGE>
market will develop. We currently plan to apply for listing of our
common stock on the over the counter bulletin board upon the
effectiveness of the registration statement of which this prospectus
forms a part. However, we can provide investors with no assurance
that our shares will be traded on the bulletin board or, if traded,
that a public market will materialize. If a market does develop,
however, we anticipate that the market price of our common stock
will be subject to wide fluctuations in response to several factors,
including:
(1) actual or anticipated variations in our results of
operations;
(2) our ability or inability to generate new revenues;
(3) increased competition; and
(4) conditions and trends in the mining industry.
Further, if our common stock is traded on the NASD over the counter
bulletin board, our stock price may be impacted by factors that are
unrelated or disproportionate to our operating performance. These
market fluctuations, as well as general economic, political and
market conditions, such as recessions, interest rates or
international currency fluctuations may adversely affect the market
price of our common stock.
We can provide no assurance to investors that our common stock will
be traded on the over the counter bulletin board.
If the Selling Shareholders Sell a Large Number of Shares All at Once
or In Blocks, The Market Price of Our Shares Would Most Likely
Decline.
The selling shareholders are offering 1,880,000 shares of our common
stock through this prospectus. The selling shareholders are not
restricted in the price they can sell the common stock. Our common
stock is presently not traded on any market or securities exchange,
but should a market develop, shares sold at a price below the current
market price at which the common stock is trading may cause that
market price to decline. The outstanding shares of common stock
covered by this prospectus represent 55.6% of the common shares
outstanding as of the date of this prospectus.
If Our Stock Price Drops Significantly, We May Become Subject To
Securities Litigation That Would Result In A Harmful Diversion Of Our
Business Resources
In the past, following periods of volatility in the market price of a
particular company's stock, securities class action litigation has
been brought against that company. Any litigation arising from the
volatility in the price of our common stock could have an adverse
effect on our business, financial condition and results of
operations.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve
risks and uncertainties. We use words such as "anticipate,"
"believe," "plan," "expect," "future," "intend" and similar
expressions to identify such forward-looking statements. You should
not place too much reliance on these forward-looking statements. Our
actual results could differ materially from those anticipated in
these forward-looking statements for many reasons, including the
risks faced by us described in the "Risk Factors"
-8-
<PAGE>
section and elsewhere in this prospectus.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock
offered through this prospectus by the selling shareholders.
DETERMINATION OF OFFERING PRICE
We will not determine the offering price of the common stock. The
offering price will be determined by market factors and the
independent decisions of the selling shareholders. See section
entitled "Selling Shareholders".
DILUTION
The common stock to be sold by the selling shareholders is common
stock that is currently issued and outstanding. Accordingly, there
will be no dilution to our existing shareholders.
SELLING SHAREHOLDERS
The selling shareholders named in this prospectus are offering all of
the 1,880,000 shares of common stock offered. The shares include the
following:
(A) 1,500,000 shares of our common stock that the selling
shareholders acquired from us in an offering completed on
January 19, 2000 that was exempt from registration under
Regulation S of the Securities Act of 1933;
(B) 280,000 shares of our common stock that the selling
shareholders acquired from us in an offering completed on
February 16, 2000 that was exempt from registration under
Regulation S of the Securities Act of 1933; and
(C) 100,000 shares of our common stock that the selling
shareholders acquired from us in an offering completed on
April 28, 2000 that was exempt from registration under
Regulation S of the Securities Act of 1933.
The following table provides as of September 13, 2000, information
regarding the beneficial ownership of our common stock held by each
of the selling shareholders, including:
(A) the number of shares owned by each prior to this offering;
(B) the total number of shares that are to be offered for each;
(C) the total number of shares that will be owned by each upon
completion of the offering;
-9-
<PAGE>
(D) the percentage owned by each; and
(E) the identity of the beneficial holder of any entity that
owns the shares.
To the best of our knowledge, the named party in this table
beneficially owns and has sole voting and investment power over all
shares or rights to these shares. Also in calculating the number of
shares that will be owned upon completion of this offering, we have
assumed that none of the selling shareholders sells shares of common
stock not being offered in this prospectus or purchases additional
shares of common stock, and have assumed that all shares offered are
sold. We have based the percentage owned by each on 3,380,000 shares
of common stock outstanding on September 13, 2000.
-10-
<PAGE>
Total Number Total
Of Shares To Be Shares Percent
Offered For To Be Owned Owned Upon
Shares Owned Selling Upon Comple- Completion
Name and Address Of Prior To This Shareholders tion Of This Of This
Selling Stockholder Offering Account Offering Offering
------------------- ------------- --------------- ------------ -----------
Danny Carroll 150,000 150,000 NIL NIL
475 West 18th Avenue
Vancouver, BC
V6Y 2A4
Douglas Judd 150,000 150,000 NIL NIL
2821 - 25th Street S.W.
Calgary, AB T3E 1Y1
Douglas Judd, Jr. 150,000 150,000 NIL NIL
7515 Fleetwood Drive S.E.
Calgary, AB
Dawn Dore 150,000 150,000 NIL NIL
10330 Meadow Road
Winfield, BC V4V 1Z6
Haggis Ventures Inc. 150,000 150,000 NIL NIL
P.O. Box 48461
Bentall Centre
Vancouver, BC
V7X 1A2
Beneficial owner:
James Watt
Josephine Iny 150,000 150,000 NIL NIL
#3-6162 Willow Street
Vancouver, BC V5Z 3S6
Kerrie Iny 150,000 150,000 NIL NIL
#10-6663 Sussex Avenue
Burnaby, BC V5H 3C5
B. Norine Judd 150,000 150,000 NIL NIL
2821 - 25th Street S.W.
Calgary, AB T3E 1Y1
Steve Bekropoulos 150,000 150,000 NIL NIL
2833 - 40 Street S.W.
Calgary, AB T3E 3J7
Madeleine Zebaida 150,000 150,000 NIL NIL
3303 Don Mills Road,
#2201
Willowdale, ON
M2J 4T6
-11-
<PAGE>
-Table continued-
Total Number Total
Of Shares To Be Shares Percent
Offered For To Be Owned Owned Upon
Shares Owned Selling Upon Comple- Completion
Name and Address Of Prior To This Shareholders tion Of This Of This
Selling Stockholder Offering Account Offering Offering
------------------- ------------- --------------- ------------ -----------
Shaun Ledding 70,000 70,000 NIL NIL
6335 Thunderbird
Crescent
Vancouver, BC
V6T 2G9
Michael Piek 70,000 70,000 NIL NIL
218-1236 West 8th
Ave.
Vancouver, BC
V6H 3Y9
Patrick Power 70,000 70,000 NIL NIL
#2004, 1323 Homer St.
Vancouver, BC
V6B 5T1
Nicholas Hobbins 70,000 70,000 NIL NIL
1604-S4 Street S.E.
Calgary, AB T2A 1W8
Rody Daniel 5,000 5,000 NIL NIL
63036-2604
Kensington Rd N.W.
Calgary, AB T2N 4S5
Julie Judd 5,000 5,000 NIL NIL
7515 Fleetwood Drive SE
Calgary, AB T2H 0X2
Noelle Allen 5,000 5,000 NIL NIL
343-1220 8th Avenue NE
Calgary, AB T2E 0S6
Maria Denis 5,000 5,000 NIL NIL
#315 21 Dover Point SE
Calgary, AB
David B. McQuaig 5,000 5,000 NIL NIL
#950-550 6th Avenue SW
Calgary, AB T2P 0S2
-12-
<PAGE>
-Table continued-
Total Number Total
Of Shares To Be Shares Percent
Offered For To Be Owned Owned Upon
Shares Owned Selling Upon Comple- Completion
Name and Address Of Prior To This Shareholders tion Of This Of This
Selling Stockholder Offering Account Offering Offering
------------------- ------------- --------------- ------------ -----------
Peter C. Wallis 5,000 5,000 NIL NIL
308, 4-14th Street NW
Calgary, AB T2P 2N7
Thomas Yingling 5,000 5,000 NIL NIL
4601 Savoy Street
Delta, BC V4K 1P4
Grayson Hand 5,000 5,000 NIL NIL
414-1859 Spyglass Pl.
Vancouver, BC
V6B 4K6
Leonard A. Zaseybida 5,000 5,000 NIL NIL
604-734 7th Ave SW
Calgary, AB
Chris Huneault 5,000 5,000 NIL NIL
1331 18th Ave
Calgary, AB T2M 0W5
Dino Pezzente 5,000 5,000 NIL NIL
243 Brookmere Bay SW
Calgary, AB T2W 2R8
Darryl Severtson 5,000 5,000 NIL NIL
195 Covington Close NE
Calgary, AB T3K 4L9
Lynn Severtson 5,000 5,000 NIL NIL
195 Covington Close NE
Calgary, AB T3K 4L9
Steve Christakis 5,000 5,000 NIL NIL
8411 Hawkview Manor
Rd NW
Calgary, AB T3G 2Y1
-13-
<PAGE>
-Table continued-
Total Number Total
Of Shares To Be Shares Percent
Offered For To Be Owned Owned Upon
Shares Owned Selling Upon Comple- Completion
Name and Address Of Prior To This Shareholders tion Of This Of This
Selling Stockholder Offering Account Offering Offering
------------------- ------------- --------------- ------------ -----------
Heather E. Christakis 5,000 5,000 NIL NIL
8411 Hawkview Manor
Rd NW
Calgary, AB T3G 2Y1
Fox Creek 5,000 5,000 NIL NIL
Investments Ltd.
(Rob Reukl -
Beneficial owner)
21 Falcon,
P.O. Box 1135
Manitovwadge,
Ontario P0T 2C0
Bill Sakkalis 5,000 5,000 NIL NIL
7056 Gray Ave
Burnaby, BC V5S 3Y8
Collin Foli 5,000 5,000 NIL NIL
2336 Thompson Ave
P.O. Box #1827
Rossland, BC
V0G I4O
Byron Foli 5,000 5,000 NIL NIL
3235 Trafalgar
Street
Vancouver, BC
V6L 2L5
Nick Bekos 5,000 5,000 NIL NIL
2525 Woodview
Drive SW,
Suite 306
Calgary, AB
T2W 4N4
-------------------------------------------------------------------------------
To our knowledge, none of the selling shareholders except Steve
Bekropoulos:
(1) has had a material relationship with Encore other than as a
shareholder as noted above at any time within the past three
years; or
(2) has ever been an officer or directors of Encore.
The following selling shareholders are related to the directors or
officers as follows:
-14-
<PAGE>
1. Dawn Dore is the daughter of William Iny.
2. Josephine Iny is the mother of William Iny.
3. Madeleine Zebaida is the aunt of William Iny.
4. Danny Carroll is the nephew of William Iny.
5. Kerrie Iny is the daughter of William Iny.
6. Nicholas Hobbins is the son-in-law of Steven Bekropoulos.
7. Maria Denis is the daughter of Steven Bekropoulos.
8. Nick Bekos is the brother of Steven Bekropoulos.
PLAN OF DISTRIBUTION
The selling shareholders have not informed us of how they plan to
sell their shares. However, they may sell some or all of their
common stock in one or more transactions, including block
transactions:
(1) on such public markets or exchanges as the common stock may
from time to time be trading;
(2) in privately negotiated transactions;
(3) through the writing of options on the common stock;
(4) in short sales; or
(5) in any combination of these methods of distribution.
The sales price to the public may be:
(1) the market price prevailing at the time of sale;
(2) a price related to such prevailing market price; or
(3) such other price as the selling shareholders determine from
time to time.
The shares may also be sold in compliance with the Securities and
Exchange Commission's Rule 144.
The selling shareholders may also sell their shares directly to
market makers acting as principals or brokers or dealers, who may act
as agent or acquire the common stock as a principal. Any broker or
dealer participating in such transactions as agent may receive a
commission from the selling shareholders, or, if they act as agent
for the purchaser of such common stock, from such purchaser. The
selling shareholders will likely pay the usual and customary
brokerage fees for such services. Brokers or dealers may agree with
the selling shareholders to sell a specified number of shares at a
stipulated price per share and, to the extent such broker or dealer
is unable to do so acting as agent for the selling shareholders, to
purchase, as principal, any unsold shares at the price required to
fulfill the respective broker's or dealer's commitment to the selling
shareholders. Brokers or dealers who acquire shares as principals may
thereafter resell such shares from time to time in transactions in a
market or on an exchange, in negotiated transactions or otherwise, at
market prices prevailing at the time of sale or at negotiated prices,
and in connection with such re-sales may pay or receive commissions
to or from the purchasers of such shares. These transactions may
involve cross and block transactions that may involve sales to and
through other brokers or dealers. If applicable, the selling
shareholders also may have distributed, or may distribute, shares to
one or more of their partners who are unaffiliated with us.
-15-
<PAGE>
Such partners may, in turn, distribute such shares as described above.
We can provide no assurance that all or any of the common stock offered
will be sold by the selling shareholders.
We are bearing all costs relating to the registration of the common
stock. Any commissions or other fees payable to brokers or dealers
in connection with any sale of the common stock, however, will be
borne by the selling shareholders or other party selling such common
stock.
The selling shareholders must comply with the requirements of the
Securities Act of 1933 and the Securities Exchange Act of 1934 in the
offer and sale of their common stock. In particular, during such
times as the selling shareholders may be deemed to be engaged in a
distribution of the common stock, and therefore be considered to be
an underwriter, they must comply with applicable law and may, among
other things:
(1) not engage in any stabilization activities in connection
with our common stock;
(2) furnish each broker or dealer through which common stock
may be offered, such copies of this prospectus, as amended
from time to time, as may be required by such broker or
dealer; and
(3) not bid for or purchase any of our securities or attempt to
induce any person to purchase any of our securities other
than as permitted under the Securities Exchange Act.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our executive officer and directors and their respective ages as of
September 13, 2000 is as follows:
Directors:
Name of Director Age
-------------------- ----
William Iny 51
Steven Bekropoulos 44
Executive Officers:
Name of Officer Age Office
-------------------- ---- -------
William Iny 51 President, Secretary and Treasurer
Set forth below is a brief description of the background and business
experience of Mr. Iny and Mr. Bekropoulos for the past five years.
-16-
<PAGE>
Mr. William Iny is our president, secretary and treasurer and is one
of our directors. Mr. Iny was appointed as a director and as
president, secretary and treasurer on September 23, 1999. Mr. Iny
has been the president of ABRA Management Corporation since 1981.
ABRA Management is a private company that provides corporate
governance, communications, administrative and consulting services to
public companies. ABRA Management's most recent contract was with
Leigh Resource Corporation, a public company traded on the Canadian
Venture Exchange, in the capacity of corporate communications
manager. In addition, Mr. Iny was previously the president of
Consolidated Excellerated Resources Inc., a public company engaged in
the business of mineral exploration whose shares are traded on the
Canadian Venture Exchange, from November 1993 until May 2000. Mr.
Iny has been a director of Solitaire Minerals Corporation, a public
company whose shares are traded on the Canadian Venture Exchange,
since April 2000. Solitaire Minerals is also in the business of
mineral exploration. Mr. Iny is also presently a director and
secretary of Pacific Capital Venture Partners, a private company
engaged in the purchase and sale of mineral resource properties. Mr.
Iny has been involved with Pacific Capital Venture Partners since
April 2000. Mr. Iny provides his services to us on a part-time
basis. Mr. Iny presently devotes approximately 15% of his time to
our business; the remaining percentage of Mr. Iny's time is spent
administering Solitaire Minerals, 50%, and PCVP Inc., 10%. Mr. Iny
has 25% of his time currently available.
Mr. Steven Bekropoulos was appointed as one of our directors on March
23, 2000. Mr. Bekropoulos has been as a self-employed businessman
since 1999. Mr. Bekropoulos was the corporate communications manager
of Hyburn Combustion Systems, a company based in Calgary, Alberta from
1998 to 1999. Mr. Bekropoulos was also the owner of City Limits Liquor
Store located in Calgary, Alberta from 1995 to 1997. Mr. Bekropoulos
was a manager of Gator's Sports Pub in Calgary, Alberta from 1985 to
1992.
Term of Office
Our directors are elected for one-year terms, to hold office until
the next annual general meeting of the shareholders, or until removed
from office in accordance with our bylaws. Our officers are
appointed by our board of directors and hold office until removed by
the board.
Significant Employees
We have no significant employees other than the officers and
directors described above.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 13, 2000, the
beneficial ownership of our common stock by each of our officers and
directors, by each person known by us to beneficially own more than
5% of our common stock and by our officers and directors as a group.
Except as otherwise indicated, all shares are owned directly and the
percentage shown is based on 3,380,000 shares of common stock issued
and outstanding on September 13, 2000.
-17-
<PAGE>
Name and address Number of Shares Percentage of
Title of class of beneficial owner of Common Stock Common Stock
-------------- ------------------- ---------------- -------------
Common Stock William Iny 1,500,000 44.4%
5709 Hudson Street
Vancouver, BC V6M 2Z2
Director and President,
Secretary and Treasurer
Common Stock Steven Bekropoulos 150,000 4.4%
2833 - 40 Street S.W.
Calgary, AB T3E 3J7
Director
Common Stock Directors and Officers 1,650,000 48.8%
(2 Persons)
DESCRIPTION OF SECURITIES
General
The securities being offered are the shares of our common stock, par
value $0.001 per share. Under our articles of incorporation, the
total number of shares of all classes of stock that we are authorized
to issue is 100,000,000 shares of common stock, par value $0.001 per
share. As of September 13, 2000, a total of 3,380,000 shares of
common stock were issued and outstanding. All issued and outstanding
shares of our common stock are fully paid and non-assessable.
Common Stock
Holders of common stock have the right to cast one vote for each
share held of record on all matters submitted to a vote of the
stockholders, including the election of directors. Holders of common
stock do not have cumulative voting rights in the election of
directors. Holders of a majority of the voting power of the capital
stock issued and outstanding and entitled to vote, represented in
person or by proxy, are necessary to constitute a quorum at any
meeting of our stockholders, and a vote by the holders of a majority
of such outstanding shares is required to effect certain fundamental
corporate changes such as liquidation, merger or amendment of our
articles of incorporation.
Holders of common stock are entitled to receive dividends pro rata
based on the number of shares held, when, as and if declared by the
board of directors, from funds legally available therefore. In the
event of
-18-
<PAGE>
our liquidation, dissolution or winding up, all assets and
funds remaining after the payment of all debts and other liabilities
shall be distributed, pro rata, among the holders of the common
stock. There are no redemption or sinking fund provisions applicable
to the common stock. All outstanding shares of common stock are
fully paid and non-assessable.
Dividend Policy
We have never declared or paid any cash dividends on our common
stock. We currently intend to retain future earnings, if any, to
finance the expansion of our business. As a result, we do not
anticipate paying any cash dividends in the foreseeable future.
Share Purchase Warrants
We have not issued and do not have outstanding any warrants to
purchase shares of our common stock.
Options
We have not issued and do not have outstanding any options to
purchase shares of our common stock.
Convertible Securities
We have not issued and do not have outstanding any securities
convertible into shares of our common stock or any rights convertible
or exchangeable into shares of our common stock.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or
certified any part of this prospectus or having given an opinion upon
the validity of the securities being registered or upon other legal
matters in connection with the registration or offering of our common
stock was employed on a contingency basis, or had, or is to receive,
in connection with the offering, a substantial interest, direct or
indirect, in the registrant or any of its parents or subsidiaries.
Nor was any such person connected with the registrant or any of its
parents or subsidiaries as a promoter, managing or principal
underwriter, voting trustee, director, officer, or employee.
Michael A. Cane of Cane & Company, LLC, our independent counsel, has
provided an opinion on the validity of our common stock.
-19-
<PAGE>
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
Our directors and officers are indemnified as provided by the Nevada
Revised Statutes and our bylaws. We have been advised that in the
opinion of the Securities and Exchange Commission indemnification for
liabilities arising under the Securities Act is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities is asserted by one of our directors, officers, or
controlling persons in connection with the securities being
registered, we will, unless in the opinion of our legal counsel the
matter has been settled by controlling precedent, submit the question
of whether such indemnification is against public policy to a court
of appropriate jurisdiction. We will then be governed by the court's
decision.
ORGANIZATION WITHIN LAST FIVE YEARS
We are a Nevada corporation incorporated on September 14, 1999.
Our principal executive offices are located at 5709 Hudson Street,
Vancouver, BC, Canada, V6M 2Z2. Our telephone number is (604) 880-
9721.
DESCRIPTION OF BUSINESS
We are an exploration stage company engaged in the acquisition,
exploration and development of mineral properties. We have acquired
the option to earn a 90% interest in the mineral claims described
below under the heading "Option Agreement". These mineral claims are
in the Watson Lake region of the Yukon Territories in the country of
Canada and are referred to by us as the Watson Lake mineral claims.
While we have not yet conducted any mineral exploration, our business
plan is to carry out exploration work on the Watson Lake mineral
claims in order to ascertain whether they possess commercially
developable quantities of molybdenum and tungsten. We can provide no
assurance that a commercially viable mineral deposit, or reserve,
exists in the Watson Lake mineral claims until appropriate
exploratory work is done and a comprehensive evaluation based on such
work concludes legal and economic feasibility.
Option Agreement
We have entered into an option agreement dated January 24, 2000 with
537192 B.C. Ltd. 537192 is not affiliated with us in any way other
than as relates to this option agreement. We selected this project
based on: (a) the commodity (molybdenum); (b) the high-grade nature
of known deposits; and (c) the potential to locate additional high-
grade resources. Under the option agreement, we are granted the
exclusive right and option to acquire a 90% interest in certain
mineral claims in Watson Lake Mining District in the Yukon
Territories for a total consideration of $25,000 US and the
incurrence of exploration and development expenditures on the Watson
Lake mineral claims totaling $200,000 US.
We have completed the following cash payments to 537192 B.C. Ltd
under the option agreement:
-20-
<PAGE>
(1) we paid the sum of $2,500 US upon execution of the option
agreement on January 24, 2000;
(2) we paid an additional amount of $7,500 US upon delivery to
us by 537192 B.C. Ltd of a geological report on the Watson
Lake mineral claims;
(3) we paid an additional amount of $15,000 on February 17,
2000 upon the completion by us of a private placement
financing.
In addition, we must incur expenditures in the exploration of the
Watson Lake mineral claims in the following amounts by the following
dates in order to exercise the option:
(1) $25,000 US by December 31, 2000;
(2) an additional $175,000 US by December 31, 2001.
If we incur any exploration expenditures in excess of $25,000 prior
to December 31, 2000, the amount of these excess exploration
expenditures will be applied to the $175,000 requirement for the year
ending December 31, 2001.
If we acquire a 90% interest in the Watson Lake mineral claims, the
option agreement provides that we will enter into a joint venture
agreement with 537192 B.C. Ltd for the joint exploration and
development of the Watson Lake mineral claims. The total cost to us
to acquire the 90% interest is $225,000. This amount is comprised of
$25,000 for payments made to vendors and $200,000 in exploration
expenditures.
The terms of the joint venture agreement with 537192 B.C. Ltd. have
not been finalized, but the parties have drafted a nearly complete
proposed agreement. Terms will be finalized after completion of the
second phase of exploration, but we anticipate most of the terms will
remain unchanged from the proposed agreement.
Under the proposed terms of the exploration joint venture agreement
with 537192 B.C. Ltd., we have agreed to use our best efforts to
explore and develop the property containing the Watson Lake mineral
claims with the goal of eventually putting the property into
commercial production should both a feasibility report recommending
commercial productions be obtained and a decision to commence
commercial production be made. The feasibility report refers to a
detailed written report of the results of a comprehensive study on
the economic feasibility of placing the property or a portion of the
property into commercial production. Both parties under the proposed
terms agree to associate and participate in a single purpose joint
venture to carry out the project. Beneficial ownership of the
property remains in each party's proportion to its respective
interest. Also, all costs are to be met by each party in proportion
to its interest.
-21-
<PAGE>
Upon formation of the joint venture as proposed, we will be deemed to
have incurred costs of $225,000 and 537192 B.C. Ltd. will be deemed
to have incurred costs of $25,000 in connection with the Watson Lake
property. The respective interests of each party could be increased
or decreased from time to time if any or all of the following events
occur: (1) a party fails to pay its proportionate share of the costs;
(2) a party elects not to participate in the program; and/or (3) a
party elects to pay less than its proportionate share of the costs
for the program. If these terms operate to cause a party's interest
in the property to be reduced to 5% or less, that party will forfeit
its interest to the other party and will receive a royalty equal to
2% of net profits payable within 60 days after the end of each
calendar quarter. The joint venture will terminate if one party's
interest equals 100%.
The proposed joint venture agreement provides for 537192 B.C. Ltd. to
initially act as the operator of the joint venture program. As
compensation for general overhead expenses that it may incur as
operator, the joint venture will pay the operator an amount equal to
10% of all costs in each year, but only 5% of costs paid by the
operator under any contract involving payments in excess of $100,000
in one year. The operator has the full right, power and authority to
do everything necessary or desirable to carry out a program and the
project and to determine the manner of exploration and the
development of the property. A management committee consisting of
one representative of each party will oversee the operator and manage
or supervise the management of the business and affairs of the joint
venture. Each representative may cast that number of votes that is
equal to that party's interest; simple majority prevails and disputes
are referred to arbitration. The proposed joint venture agreement
contemplates that the agreement will stay in effect for so long as
any part of the property or project is held in accordance with the
agreement, unless earlier terminated by agreement of all parties.
Location and Access of the Watson Lake Mineral Claims
The mineral claims comprising the Watson Lake Property consist of
four mineral claims covering approximately 200 acres located in the
Watson Lake Mining District in the Yukon Territories, Canada. The
claims are comprised of the following: (i) mineral claim number
YB92564; (ii) mineral claim number YB92565; (iii) mineral claim
number YB92566; and (iv) mineral claim number YB92567.
Access to the mineral claims is possible by vehicle from Whitehorse,
Yukon via the Alaska Highway south to Johnson's Crossing, a distance
of 75 miles, then northerly on the South Canol Highway for 92 miles
to the Upper Sheep Creek access trail.
Prior Exploration of the Watson Lake Mineral Claims
The Watson Lake mineral claims were identified as being prospective
for deposits of molybdenum and tungsten in 1955. The mineral claims
were acquired in 1956 by Canol Metal Mines Ltd. who conducted
additional exploration consisting of detailed prospecting and hand
trenching. Encouraged by molybdenum assays in the trenching program,
access to the area was improved and extensive localized dozer
trenching completed. Canol Metal Mines Ltd. conducted an exploration
program on the mineral claims in 1959. The exploration and
development work completed by Canol Metal Mines Ltd. included
construction of 12 miles of access road, technical surveys,
construction of underground tunneling, surface and underground drill
testing and preliminary metallurgical testing. Drilling verified the
presence of a somewhat discontinuous, fault controlled mineralized
skarn zone along the contact containing molybdenite, scheelite and/or
powelite and carrying approximately 2% pyrite and pyrrhotite
-22-
<PAGE>
As a result of this program, drill indicated reserves are calculated
to be 15,000 tons of 0.73% Mo and 17,000 tons of 1.06% WO3.
A further exploration program was conducted by Sunstate Resources
Ltd. during the period from 1995 to 1997. This program consisted of
road construction, bulldozer trenching, prospecting, soil sampling
and geological mapping. This exploration traced the favorable host
horizon containing the original deposit for over 2,000 feet to the
north, and located two areas highly anomalous in coppery-molybdenum
and tungsten content. A new showing of molybdenite mineralization in
altered granite was located. An assay from this zone returned a
value of 1.10% Mo. Re-sampling of earlier trench zones confirmed the
original results and suggested that the prospective host horizon
continues to the north (across the ridge crest).
Geological Report and Recommended Work Program
We have obtained a geological property evaluation report on the
Watson Lake mineral claims. The property report was prepared by Mr.
Glen C. Macdonald, Professional Geologist, and is dated January 2000.
Sunstate Resources Ltd paid for the work. Glen Macdonald is a
professional independent consultant and has no affiliation with
either Sunstate Resources Ltd. or Encore.
The geological report summarizes the geology and the prior
exploration of the mineral claims, gives conclusions as to the
results of the prior exploration and makes a recommendation to
conduct further geological exploration on the Watson Lake mineral
claims.
The geological report concludes that the geological environment of
the Watson Lake mineral claims is capable of hosting significant
deposits of molybdenum and tungsten and further exploration to test
indicated extensions to the present resources is warranted. The
geological report recommends that a two phase geological work program
be carried out on the Watson Lake mineral claims. Phase one of this
exploration program consists of a geological survey that would
include prospecting, geological mapping, testing of soil samples and
nighttime ultra-violet lamping. The objective of phase one of the
geological work program is to identify prospective molybdenum and
tungsten mineralization in the geological rock formations present at
the Watson Lake mineral claims for a further drill program that would
be the subject of phase two of the recommended work program. The
projected cost of completion of phase one of the recommended work
program is $25,000. The projected cost of completion of phase two of
the recommended work program is $175,000.
Phase Two of the exploration program involves a drilling program on
the Watson Lake Mineral Claims. Drilling will be completed at
locations identified as recommended drill locations as a result of
the analysis of Phase One of the exploration program. The purpose of
Phase Two will be to determine the extent and concentration of
molybdenum and tungsten mineralization on the Watson Lake Mineral
Claims. A compilation of past exploration efforts has suggested that
a relatively small area needs to be tested for a potentially larger
reserve of higher-grade resource material. It is anticipated that
approximately 3000 feet of core drilling in 5 or 6 drill holes would
be required to test the required area. Note that there is a risk that
we will not be able to come up with sufficient reserves to become
economically viable because we may find that the zones are
discontinuous.
-23-
<PAGE>
Administration
We have entered into a management agreement dated December 1, 1999
with Mr. William Iny, a director and our president. Under the
management agreement, Mr. Iny provides office administration services
to us for a fee of $750 US per month for a one-year term commencing
December 1, 1999 and ending on December 1, 2000. The services include
reception, secretarial services, accounting services, investor
relations and other general office services.
Compliance with Government Regulation
We will be required to comply with all regulations, rules and
directives of governmental authorities and agencies applicable to the
exploration of minerals in Canada generally, and in the Yukon
Territories, specifically. In addition, production of minerals in the
Yukon Territories will require prior approval of applicable
governmental regulatory agencies. We can provide no assurance to
investors that such approvals will be obtained. The cost and delay
involved in attempting to obtain such approvals cannot be known at
this time.
We have budgeted for regulatory compliance costs in the proposed work
program recommended by the geological report. We will have to
sustain the cost of reclamation and environmental mediation for all
exploration (and development) work undertaken. The amount of these
costs is not known at this time as we do not know the extent of the
exploration program that will be undertaken beyond completion of the
recommended work program. Because there is presently no information
on the size, tenor, or quality of any resource or reserve at this
time, it is impossible to assess the impact of any capital
expenditures on us, our earnings or competitive position in the event
a potentially-economic deposit is discovered.
If we enter into production, the cost of complying with permit and
regulatory environment laws will be greater than in phase one because
the impact on the project area is greater. Permits and regulations
will control all aspects of any production program if the project
continues to that stage because of the potential impact on the
environment.
Employees
We have no employees, other than our sole officer, as of the date of
this prospectus.
Our sole officer is Mr. William Iny who is our president, secretary
and treasurer. Mr. Iny is also one of our directors. Mr. Iny
provides his services on a part-time basis as required for our
business pursuant to a management agreement. Mr. Iny presently
commits approximately 15% of his business time to the business of the
Company. We presently pay Mr. Iny a management fee for his
management services in the amount of $750 per month pursuant to the
management agreement.
We do not pay any compensation to our directors solely for serving as
a director on our board of directors.
We conduct our business largely through agreements with consultants
and arms-length third parties.
A possible conflict of interest between an employee and us may be
presented when a new property prospect becomes available for
acquisition. This will usually be determined by the status of our
-24-
<PAGE>
financial position, location of the prospect and a decision by our
board of directors. There may also be a potential time allocation
conflict because of a demanding schedule; however, we anticipate
exercising proper time management planning.
Research and Development Expenditures
We have not incurred any research or development expenditures since
our incorporation.
Subsidiaries
We do not have any subsidiaries.
Patents and Trademarks
We do not own, either legally or beneficially, any patent or
trademark.
Results Of Operations for Three Months ending July 31, 2000
We did not earn any revenues during the three months ended July 31,
2000. We do not anticipate earning revenues until such time as we
have entered into commercial production of our mineral properties.
We are presently in the exploration stage of our development and
there is no assurance that we will discover commercially exploitable
levels of mineral resources on our properties, or if such resources
are discovered, that we will enter into commercial production of our
mineral properties.
We incurred operating expenses in the amount of $13,926 for the three
months ended July 31, 2000. These operating expenses included $1,604
incurred on account of office administration and sundry expenses.
These operating expenses also included $11,662 in professional fees
that were primarily attributable our corporate organization and our
preparing a filing a registration statement under the Securities Act
of 1933. We did not incur any mineral property exploration
expenditures during the three months ended July 31, 2000.
We incurred a loss of $13,926 for the three months ended July 31,
2000.
We had cash of $47,474 as of July 31, 2000 and had working capital of
$45,974 as of July 31, 2000.
PLAN OF OPERATION
Our business plan is to proceed with the exploration of the Watson
Lake mineral claims to determine if they contain commercially
exploitable reserves of molybdenum and tungsten. We have decided to
proceed with phase one of the exploration program recommended by the
geological report. We will assess whether to proceed to phase two
of the recommended geological work program upon completion of an
assessment of the results of phase one of the geological work
program.
We anticipate that phase one of the recommended geological work
program will cost approximately $25,000. We had approximately
$47,474 in cash reserves as of July 31, 2000. We anticipate that we
-25-
<PAGE>
have sufficient funds to complete phase one of the geological work
program. This expenditure will also enable us to meet the
exploration expenditure requirement under the option agreement for
the period through December 31, 2000.
We believe that our cash reserves are also sufficient to meet our
obligations for the next twelve month period to Mr. Iny under his
management agreement and to pay for the legal and accounting expense
of complying with our obligations as a reporting issuer under the
Securities Exchange Act of 1934. These expenses will be in addition
to the cost of completing phase one of the exploration program.
We will require additional funding in the event that we decide to
proceed with phase two of the exploration program. The anticipated
cost of the phase two exploration program is $175,000 which is in
excess of our projected cash reserves remaining upon completion of
phase one of the exploration program. We anticipate that additional
funding will be in the form of equity financing from the sale of our
common stock. However, we cannot provide investors with any
assurance that we will be able to raise sufficient funding from the
sale of our common stock to fund phase two of the exploration
program. We believe that debt financing will not be an alternative
for funding phase two of the exploration program. We do not have any
arrangements in place for any future equity financing.
If we do not complete the required exploration expenditures of
$25,000 by December 31, 2000 or $200,000 in aggregate by December 31,
2001, then our option in will terminate and we will lose all our
rights and interest in the Watson Lake mineral claims. If we do not
secure additional financing to incur the required exploration
expenditures, we may consider bringing in a joint venture partner to
provide the required funding. We have not undertaken any efforts to
locate a joint venture partner. In addition, we can not provide
investors with any assurance that we will be able to locate a joint
venture partner who will assist us in funding the exploration of the
Watson Lake mineral claims. We may also pursue acquiring interests
in alternate mineral properties in the future.
DESCRIPTION OF PROPERTY
We have an option to acquire a 90% interest in the Watson Lake
mineral claims, as described in the section above entitled
Description of Business. We do not own or lease any property other
than our option to acquire an interest in the Watson Lake mineral
claims.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than set forth in this section below, none of the following
parties has, since our date of incorporation, any material interest,
direct or indirect, in any transaction with us or in any presently
proposed transaction that has or will materially affect us:
* Any of our directors or officers;
* Any person proposed as a nominee for election as a director;
* Any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to our
outstanding shares of common stock;
* Any of our promoters;
* Any relative or spouse of any of the foregoing persons who has
the same house as such person.
-26-
<PAGE>
We have entered into a management agreement with Mr. William Iny, our
president and a director, whereby Mr. Iny provides management
services to us in consideration for the payment of a management fee
of $750 per month. See the section entitled "Description of
Business".
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No Public Market for Common Stock
There is presently no public market for our common stock. We
currently plan to apply for listing of our common stock on the NASD
over the counter bulletin board upon the effectiveness of the
registration statement of which this prospectus forms a part.
However, we can provide investors with no assurance that our shares
will be traded on the bulletin board or, if traded, that a public
market will materialize.
Holders of Our Common Stock
As of the date of this registration statement, we have 34 registered
shareholders.
Registration Rights
We have not granted registration rights to the selling shareholders
or to any other persons.
Dividends
There are no restrictions in our articles of incorporation or bylaws
that restrict us from declaring dividends. The Nevada Revised
Statutes, however, do prohibit us from declaring dividends where,
after giving effect to the distribution of the dividend:
(1) we would not be able to pay our debts as they become due in
the usual course of business; or
(2) our total assets would be less than the sum of our total
liabilities, plus the amount that would be needed to
satisfy the rights of shareholders who have preferential
rights superior to those receiving the distribution.
We have not declared any dividends. We do not plan to declare any
dividends in the foreseeable future.
Rule 144 Shares
A total of 1,500,000 shares of our common stock will be available for
resale to the public after December 21, 2000 in accordance with the
volume and trading limitations of Rule 144 of the Act. In general,
under Rule 144 as currently in effect, a person who has beneficially
owned shares of a company's common stock for at least one year is
entitled to sell within any three month period a number of shares
that does not exceed the greater of:
-27-
<PAGE>
1. 1% of the number of shares of the company's common stock then
outstanding, which equals approximately 38,800 shares in our company
as of the date of this prospectus; or
2. the average weekly trading volume of the company's common stock
during the four calendar weeks preceding the filing of a notice on
form 144 with respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions
and notice requirements and to the availability of current public
information about the company.
Under Rule 144(k), a person who is not one of the company's
affiliates at any time during the three months preceding a sale, and
who has beneficially owned the shares proposed to be sold for at
least 2 years, is entitled to sell shares without complying with the
manner of sale, public information, volume limitation or notice
provisions of Rule 144.
As of the date of this prospectus, Mr. William Iny, our president and
a director and thus one of our affiliates, holds all 1,500,000 shares
that may be sold pursuant to Rule 144 after December 21, 2000.
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below summarizes the compensation earned for services
rendered for the fiscal period ended April 30, 2000 by our president
and our directors. Note that we have only one executive officer who
is also one of our two directors.
Annual Compensation Long Term Compensation
------------------- ----------------------
Other All
Annual Other
Com- Com-
pen- Restricted pen-
sa- Stock Options/* LTIP sa-
Name Title Year Salary Bonus tion Awarded SARs (#)payouts($)tion
---- ----- ---- ------ ----- ------ ------- ------- --------- ----
William President, 1999 $3,750 0 0 0 0 0 0
Iny Secretary, -
Treasurer 2000
and
Director
Steven Director 1999 $ 0 0 0 0 0 0 0
Bekrop- -
Oulos 2000
James Former 1999 $ 0 0 0 0 0 0 0
Watt Director -
2000
Stock Option Grants
We did not grant any stock options to the executive officers during
our most recent fiscal year ended December 31, 1999. We have also
not granted any stock options to the executive officers since
December 31, 1999.
Employment Agreements
We have a management services agreement with Mr. William Iny, our
president, secretary, treasurer
-28-
<PAGE>
and a director. Mr. Iny provides his services to us on a part-time
basis. We pay him a fee of $750.00 per month for these services.
For more information on Mr. Iny, see the section entitled "Directors,
Executive Officers and Significant Employees".
We do not have an employment or consultant agreement with Mr. Steven
Bekropoulos, our director. We did not pay any salary or consulting
fees to Mr. Bekropoulos. For more information on Mr. Bekropoulos,
see the section entitled "Directors, Executive Officers and
Significant Employees".
Mr. James Watt resigned as one of our directors on March 23, 2000. We
did not pay any salary or consulting fee to Mr. Watt and did not have
an employment or consultant agreement with him.
INDEX TO FINANCIAL STATEMENTS
1. Report of Independent Accountants
2. Audited Financial Statements:
a. Balance Sheet as of April 30, 2000
b. Statement of Loss and Deficit for the period ending April 30,
2000
c. Statement of Stockholders Equity for the period ending April
30, 2000
d. Statement of Cash Flows for the period ending April 30, 2000
e. Notes to Audited Financial Statements
3. Un-audited Interim Financial Statements as of July 31, 2000:
a. Balance Sheet
b. Statement of Loss and Deficit
c. Statement of Cash Flows
d. Statement of Stockholders Equity
e. Notes to Financial Statements
-29-
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
APRIL 30, 2000
(Stated in U.S. Dollars)
<PAGE>
------------------------------------
Morgan & Company
------------------------------------
Chartered Accountants
------------------------------------
P.O. Box 10007, Pacific Centre
Suite 1730 - 700 West Georgia Street
Vancouver, B.C. V7Y 1A1
Telephone (604) 687-5841
Fax (604) 687-0075
------------------------------------
AUDITORS' REPORT
To the Shareholders of
Encore Ventures, Inc.
We have audited the balance sheet of Encore Ventures, Inc. (an
exploration stage company) as at April 30, 2000 and the statements
of loss and deficit accumulated during the exploration stage, cash
flows, and stockholders' equity for the period then ended. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with United States and
Canadian generally accepted auditing standards. Those standards
require that we plan and perform an audit to obtain reasonable
assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, these financial statements present fairly, in all
material respects, the financial position of the Company as at
April 30, 2000 and the results of its operations and cash flows
for the period then ended in accordance with United States
generally accepted accounting principles applied on a consistent
basis.
Vancouver, B.C. /s/ Morgan & Company
May 16, 2000 Chartered Accountants
COMMENTS BY INDEPENDENT AUDITORS FOR U.S. READERS
ON CANADA-U.S. REPORTING CONFLICT
In the United States, reporting standards for auditors require the
addition of an explanatory paragraph (following the opinion
paragraph) when the financial statements are affected by
significant uncertainties such as those described in Note 1 of the
financial statements. Our report to the shareholders dated May
16, 2000 is expressed in accordance with Canadian reporting
standards which do not permit a reference to such an uncertainty
in the Auditors' Report when the uncertainty is adequately
disclosed in the financial statements.
Vancouver, B.C. /s/ Morgan & Company
May 16, 2000 Chartered Accountants
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
BALANCE SHEET
APRIL 30, 2000
(Stated in U.S. Dollars)
------------------------------------------------------------------
ASSETS
Current
Cash $ 61,917
Mineral Property (Note 3) 25,000
----------
$ 86,917
==================================================================
LIABILITIES
Current
Accounts payable $ 2,017
----------
SHAREHOLDERS' EQUITY
Share Capital
Authorized:
100,000,000 Common shares, par value
$0.001 per share
Issued and outstanding:
3,380,000 Common shares 3,380
Additional paid in capital 91,120
Deficit Accumulated During The Exploration Stage (9,600)
----------
84,900
----------
$ 86,917
==================================================================
Approved by the Directors:
---------------------------- ---------------------------
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Stated in U.S. Dollars)
------------------------------------------------------------------
PERIOD FROM
DATE OF
ORGANIZATION INCEPTION
SEPTEMBER 14 SEPTEMBER 14
1999 TO 1999 TO
APRIL 30 APRIL 30
2000 2000
------------------------------------------------------------------
Expenses
Office administration and sundry $ 4,066 $ 4,066
Professional fees 5,534 5,534
---------------------------
Net Loss For The Period 9,600 $ 9,600
============
Deficit Accumulated During The
Exploration Stage,
Beginning Of Period -
------------
Deficit Accumulated During The
Exploration Stage,
End Of Period $ 9,600
===================================================
Net Loss Per Share $ 0.01
===================================================
Weighted Average Number Of Shares
Outstanding 1,900,000
===================================================
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Stated in U.S. Dollars)
------------------------------------------------------------------
PERIOD FROM
DATE OF
ORGANIZATION INCEPTION
SEPTEMBER 14 SEPTEMBER 14
1999 TO 1999 TO
APRIL 30 APRIL 30
2000 2000
------------------------------------------------------------------
Cash Flows From Operating Activity
Net loss for the period $ (9,600) $ (9,600)
Adjustments To Reconcile Net Loss
To Net Cash Used By Operating
Activity
Change in accounts payable 2,017 2,017
--------------------------
(7,583) (7,583)
--------------------------
Cash Flows From Investing Activity
Mineral property (25,000) (25,000)
--------------------------
Cash Flows From Financing Activity
Share capital issued 94,500 94,500
--------------------------
Increase In Cash 61,917 61,917
Cash, Beginning Of Period - -
--------------------------
Cash, End Of Period $ 61,917 $ 61,917
=================================================================
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
APRIL 30, 2000
(Stated in U.S. Dollars)
COMMON STOCK
-----------------------------------
ADDITIONAL
PAID-IN
SHARES AMOUNT CAPITAL DEFICIT TOTAL
-------------------------------------------------------
Shares issued for
cash at $0.001 1,500,000 $ 1,500 $ - $ - $ 1,500
Shares issued for
cash at $0.01 1,500,000 1,500 13,500 - 15,000
Shares issued for
cash at $0.10 280,000 280 27,720 - 28,000
Shares issued for
cash at $0.50 100,000 100 49,900 - 50,000
Net loss for
the period - - - (9,600) (9,600)
------------------------------------------------------
Balance,
April 30, 2000 3,380,000 $ 3,380 $ 91,120 $ (9,600) $84,900
======================================================
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A.
on September 14, 1999.
b) Exploration Stage Activities
The Company is in the process of exploring its mineral
property and has not yet determined whether the property
contains ore reserves that are economically recoverable.
The recoverability of amounts shown as mineral property and
related deferred exploration expenditures is dependent upon
the discovery of economically recoverable reserves,
confirmation of the Company's interest in the underlying
mineral claims and the ability of the Company to obtain
profitable production or proceeds from the disposition
thereof.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the
United States. Because a precise determination of many assets
and liabilities is dependent upon future events, the
preparation of financial statements for a period necessarily
involves the use of estimates which have been made using
careful judgement.
The financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:
a) Mineral Property and Related Deferred Exploration
Expenditures
The Company defers all direct exploration expenditures on
mineral properties in which it has a continuing interest to
be amortized over the recoverable reserves when a property
reaches commercial production. On abandonment of any
property, applicable accumulated deferred exploration
expenditures will be written off. To date none of the
Company's properties have reached commercial production.
At least annually, the net deferred cost of each mineral
property is compared to management's estimation of the net
realizable value, and a write-down is recorded if the net
realizable value is less than the cumulative net deferred
costs.
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
a) Income Taxes
The Company has adopted Statement of Financial Accounting
Standards No. 109 - "Accounting for Income Taxes" (SFAS
109). This standard requires the use of an asset and
liability approach for financial accounting and reporting on
income taxes. If it is more likely than not that some
portion or all of a deferred tax asset will not be realized,
a valuation allowance is recognized.
b) Financial Instruments
The Company's financial instruments consist of cash and
accounts payable.
Unless otherwise noted, it is management's opinion that this
Company is not exposed to significant interest or credit
risks arising from these financial instruments. The fair
value of these financial instruments approximate their
carrying values, unless otherwise noted.
c) Use of Estimates
The preparation of the financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of
the financial statements, and the reported amounts of
revenues and expenses during the reporting period. By their
nature, these estimates are subject to measurement
uncertainty, and the effect on the financial statements of
changes in such estimates in future periods could be
significant.
d) Net Loss Per Share
Net loss per share is based on the weighted average number
of common shares outstanding during the period plus common
share equivalents, such as options, warrants and certain
convertible securities. This method requires primary
earnings per share to be computed as if the common share
equivalents were exercised at the beginning of the period or
at the date of issue and as if the funds obtained thereby
were used to purchase common shares of the Company at its
average market value during the period.
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000
(Stated in U.S. Dollars)
2. MINERAL PROPERTY
The Company has entered into an option
agreement to acquire a 90% interest in a
mineral claim block located in the Watson Lake
Mining District, Yukon Territories, Canada,
for the following consideration:
- cash payments as follows:
- $2,500 upon signing the option agreement (paid)
- $7,500 upon delivery of geologist report (paid)
- $15,000 the earlier of the date which is five business
days after the closing of a private placement raising gross
proceeds of not less than $28,000 and June 30, 2000 (paid)
- exploration expenditures totalling $200,000 by December 31,
2001, $25,000 of which must be expended by December 31, 2000.
Consideration paid to date $ 25,000
==========
4. COMMITMENT
The Company has entered into an agreement with its president to
provide management services for a one year term at $750 per
month, expiring December 31, 2000.
5. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems
use two digits rather than four to identify a year. Date-
sensitive systems may recognize the year 2000 as 1900 or some
other date, resulting in errors when information using year
2000 dates is processed. In addition, similar problems may
arise in some systems which use certain dates in 1999 to
represent something other than a date. Although the change in
date has occurred, it is not possible to conclude that all
aspects of the Year 2000 Issue that may affect the entity,
including those related to customers, suppliers, or other
third parties, have been fully resolved.
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
JULY 31, 2000
(Unaudited)
(Stated in U.S. Dollars)
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
BALANCE SHEET
(Unaudited)
(Stated in U.S. Dollars)
----------------------------------------------------------------------
JULY 31 APRIL 30
2000 2000
----------------------------------------------------------------------
(Unaudited) (Audited)
ASSETS
Current
Cash $ 47,474 $ 61,917
Mineral Property (Note 3) 25,000 25,000
------------------------
$ 72,474 $ 86,917
======================================================================
LIABILITIES
Current
Accounts payable $ 1,500 $ 2,017
------------------------
SHAREHOLDERS' EQUITY
Share Capital
Authorized:
100,000,000 Common shares, par value
$0.001 per share
Issued and outstanding:
3,380,000 Common shares 3,380 3,380
Additional paid in capital 91,120 91,120
Deficit Accumulated During The Exploration
Stage (23,526) (9,600)
------------------------
70,974 84,900
------------------------
$ 72,474 $ 86,917
======================================================================
Nature Of Operations (Note 1)
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Unaudited)
(Stated in U.S. Dollars)
----------------------------------------------------------------------
THREE INCEPTION
MONTHS SEPTEMBER 14
ENDED 1999 TO
JULY 31 JULY 31
2000 2000
----------------------------------------------------------------------
Expenses
Office administration and sundry $ 1,604 $ 5,670
Professional fees 11,662 17,196
Stock transfer services 660 660
--------------------------
Net Loss For The Period 13,926 $ 23,526
===========
Deficit Accumulated During The
Exploration Stage, Beginning Of Period 9,600
----------
Deficit Accumulated During The
Exploration Stage, End Of Period $ 23,526
======================================================
Net Loss Per Share $ 0.01
======================================================
Weighted Average Number Of Shares
Outstanding 3,380,000
======================================================
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
(Stated in U.S. Dollars)
----------------------------------------------------------------------
THREE INCEPTION
MONTHS SEPTEMBER 14
ENDED 1999 TO
JULY 31 JULY 31
2000 2000
----------------------------------------------------------------------
Cash Flows From Operating Activity
Net loss for the period $ (13,926) $ (23,526)
Adjustments To Reconcile Net Loss To Net
Cash Used By Operating Activity
Change in accounts payable (517) 9,968
--------------------------
(14,443) (13,558)
--------------------------
Cash Flows From Investing Activity
Mineral property - (25,000)
--------------------------
Cash Flows From Financing Activity
Share capital issued - 94,500
--------------------------
Increase (Decrease) In Cash (14,443) 55,942
Cash, Beginning Of Period 61,917 -
--------------------------
Cash, End Of Period $ 47,474 $ 55,942
======================================================================
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
JULY 31, 2000
(Unaudited)
(Stated in U.S. Dollars)
COMMON STOCK
-----------------------------------
ADDITIONAL
PAID-IN
SHARES AMOUNT CAPITAL DEFICIT TOTAL
-----------------------------------------------------
Shares issued for
cash at $0.001 1,500,000 $ 1,500 $ - $ - $ 1,500
Shares issued for
cash at $0.01 1,500,000 1,500 13,500 - 15,000
Shares issued for
cash at $0.10 280,000 280 27,720 - 28,000
Shares issued for
cash at $0.50 100,000 100 49,900 - 50,000
Net loss for the
period - - - (9,600) (9,600)
-----------------------------------------------------
Balance, April 30,
2000 3,380,000 3,380 91,120 (9,600) 84,900
Net loss for the
period - - - (13,926) (13,926)
-----------------------------------------------------
Balance, July 31,
2000 3,380,000 $ 3,380 $ 91,120 $(23,526) $ 70,974
=====================================================
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2000
(Unaudited)
(Stated in U.S. Dollars)
1. NATURE OF OPERATIONS
a) Organization
The Company was incorporated in the State of Nevada, U.S.A.
on September 14, 1999.
b) Exploration Stage Activities
The Company is in the process of exploring its mineral
property and has not yet determined whether the property
contains ore reserves that are economically recoverable.
The recoverability of amounts shown as mineral property and
related deferred exploration expenditures is dependent upon
the discovery of economically recoverable reserves,
confirmation of the Company's interest in the underlying
mineral claims and the ability of the Company to obtain
profitable production or proceeds from the disposition
thereof.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the
United States. Because a precise determination of many assets
and liabilities is dependent upon future events, the
preparation of financial statements for a period necessarily
involves the use of estimates which have been made using
careful judgement.
The financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:
a) Mineral Property and Related Deferred Exploration
Expenditures
The Company defers all direct exploration expenditures on
mineral properties in which it has a continuing interest to
be amortized over the recoverable reserves when a property
reaches commercial production. On abandonment of any
property, applicable accumulated deferred exploration
expenditures will be written off. To date none of the
Company's properties have reached commercial production.
At least annually, the net deferred cost of each mineral
property is compared to management's estimation of the net
realizable value, and a write-down is recorded if the net
realizable value is less than the cumulative net deferred
costs.
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2000
(Unaudited)
(Stated in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
b) Income Taxes
The Company has adopted Statement of Financial Accounting
Standards No. 109 - "Accounting for Income Taxes" (SFAS
109). This standard requires the use of an asset and
liability approach for financial accounting and reporting on
income taxes. If it is more likely than not that some
portion or all of a deferred tax asset will not be realized,
a valuation allowance is recognized.
c) Financial Instruments
The Company's financial instruments consist of cash and
accounts payable.
Unless otherwise noted, it is management's opinion that this
Company is not exposed to significant interest or credit
risks arising from these financial instruments. The fair
value of these financial instruments approximate their
carrying values, unless otherwise noted.
d) Use of Estimates
The preparation of the financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of
the financial statements, and the reported amounts of
revenues and expenses during the reporting period. By their
nature, these estimates are subject to measurement
uncertainty, and the effect on the financial statements of
changes in such estimates in future periods could be
significant.
e) Net Loss Per Share
Net loss per share is based on the weighted average number
of common shares outstanding during the period plus common
share equivalents, such as options, warrants and certain
convertible securities. This method requires primary
earnings per share to be computed as if the common share
equivalents were exercised at the beginning of the period or
at the date of issue and as if the funds obtained thereby
were used to purchase common shares of the Company at its
average market value during the period.
<PAGE>
ENCORE VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2000
(Unaudited)
(Stated in U.S. Dollars)
3. MINERAL PROPERTY
The Company has entered into an option
agreement to acquire a 90% interest in a
mineral claim block located in the Watson Lake
Mining District, Yukon Territories, Canada,
for the following consideration:
- cash payments as follows:
- $2,500 upon signing the option agreement (paid)
- $7,500 upon delivery of geologist report (paid)
- $15,000 the earlier of the date which is
five business days after the closing of
a private placement raising gross
proceeds of not less than $28,000 and
June 30, 2000 (paid)
- exploration expenditures totalling
$200,000 by December 31, 2001, $25,000
of which must be expended by December
31, 2000.
Consideration paid to date $ 25,000
=========
4. COMMITMENT
The Company has entered into an agreement with its president to
provide management services for a one year term at $750 per
month, expiring December 31, 2000.
5. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized systems
use two digits rather than four to identify a year. Date-
sensitive systems may recognize the year 2000 as 1900 or some
other date, resulting in errors when information using year
2000 dates is processed. In addition, similar problems may
arise in some systems which use certain dates in 1999 to
represent something other than a date. Although the change in
date has occurred, it is not possible to conclude that all
aspects of the Year 2000 Issue that may affect the entity,
including those related to customers, suppliers, or other
third parties, have been fully resolved.
<PAGE>
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
We have had no changes in or disagreements with our accountants.
AVAILABLE INFORMATION
We have filed a registration statement on Form SB-2 under the
Securities Act with the Securities and Exchange Commission with
respect to the shares of our common stock offered by this prospectus.
This prospectus was filed as a part of that registration statement
but does not contain all of the information contained in the
registration statement and exhibits. Reference is thus made to the
omitted information. Statements made in this prospectus are
summaries of the material terms of contracts, agreements and
documents and are not necessarily complete; however, all information
we considered material has been disclosed. Reference is made to each
exhibit for a more complete description of the matters involved and
these statements are qualified in their entirety by the reference.
You may inspect the registration statement and exhibits and schedules
filed with the Securities and Exchange Commission at the Securities
and Exchange Commission's principle office in Washington, D.C.
Copies of all or any part of the registration statement may be
obtained from the Public Reference Section of the Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Securities and Exchange Commission also maintains a web site
(http://www.sec.gov) that contains this filed registration statement,
reports, proxy statements and information regarding us that we have
filed electronically with the Commission. For more information
pertaining to our company and the common stock offered in this
prospectus, reference is made to the registration statement.
-30-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the Nevada
Revised Statutes and our bylaws.
Under the NRS, director immunity from liability to a company or its
shareholders for monetary liabilities applies automatically unless it
is specifically limited by a company's articles of incorporation that
is not the case with our articles of incorporation. Excepted from
that immunity are:
(1) a willful failure to deal fairly with the company or its
shareholders in connection with a matter in which the
director has a material conflict of interest;
(2) a violation of criminal law (unless the director had
reasonable cause to believe that his or her conduct was
lawful or no reasonable cause to believe that his or her
conduct was unlawful);
(3) a transaction from which the director derived an improper
personal profit; and
(4) willful misconduct.
Our bylaws provide that we will indemnify our directors and officers
to the fullest extent not prohibited by Nevada law; provided,
however, that we may modify the extent of such indemnification by
individual contracts with our directors and officers; and, provided,
further, that we shall not be required to indemnify any director or
officer in connection with any proceeding (or part thereof) initiated
by such person unless:
(1) such indemnification is expressly required to be made by law;
(2) the proceeding was authorized by our Board of Directors;
(3) such indemnification is provided by us, in our sole
discretion, pursuant to the powers vested us under Nevada
law; or
(4) such indemnification is required to be made pursuant to the bylaws.
Our bylaws provide that we will advance all expenses incurred to any
person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was our director or officer, or is or was
serving at our request as a director or executive officer of another
company, partnership, joint venture, trust or other enterprise, prior
to the final disposition of the proceeding, promptly following
request. This advanced of expenses is to be made upon receipt of an
undertaking by or on behalf of such person to repay said amounts
should it be ultimately determined that the person was not entitled
to be indemnified under our bylaws or otherwise.
Our bylaws also provide that no advance shall be made by us to any
officer in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, if a determination is reasonably and
promptly made: (a) by the board of directors by a majority vote of a
quorum consisting of directors who were not parties to the
proceeding; or (b) if such quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the
-31-
<PAGE>
facts known to the decision-making party at the time such determination
is made demonstrate clearly and convincingly that such person acted in bad
faith or in a manner that such person did not believe to be in or not
opposed to our best interests.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee* $248
Federal Taxes $NIL
State Taxes and Fees $NIL
Transfer Agent Fees $1,000
Accounting fees and expenses $5,000
Legal fees and expenses $20,000
Blue Sky fees and expenses $2,000
Miscellaneous $NIL
---------
Total $28,248
========
---------------------------------------------------------------------
* All amounts are estimates other than the Commission's registration
fee.
We are paying all expenses of the offering listed above. No portion
of these expenses will be borne by the selling shareholders. The
selling shareholders, however, will pay any other expenses incurred
in selling their common stock, including any brokerage commissions or
costs of sale.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
We completed the issuance of 1,500,000 shares of our common stock
pursuant to Section 4(2) of the Securities Act of 1933 on December
21, 1999. We received proceeds of $1,500 from the offering. No
commissions or fees were paid in connection with the offering. All
shares were issued to a private company controlled by Mr. William
Iny, our president and a director, at a price of $0.001 per share.
The 1,500,000 shares of common stock are "restricted" shares, as
defined in the Securities Act.
We completed a private placement of 1,500,000 shares of our common
stock pursuant to Regulation S of the 1933 Act on January 19, 2000.
All shares were issued at a price of $0.01 per share. We received
proceeds of $15,000 from the offering. Each purchaser represented to
us that the purchaser was a "Non-U.S. Person" as defined in
Regulation S. We did not engage in a distribution of this offering
in the United States. Each purchaser represented their intention to
acquire the securities for investment only and not with a view toward
distribution. Appropriate legends were affixed to the stock
certificates issued in accordance with Regulation S. All purchasers
were given adequate access to sufficient information about us to make
an informed investment decision. None of the securities were sold
through an underwriter and accordingly, there were no underwriting
discounts or commissions involved. The selling shareholders named in
this prospectus include all of the purchasers who purchased shares
pursuant to this Regulation S offering.
We completed a private placement of 280,000 shares of our common
stock pursuant to Regulation S of the 1933 Act on February 16, 2000.
All shares were issued at a price of $0.10 per share. We received
proceeds of $28,000 from the offering. Each purchaser represented to
us that the purchaser was a "Non-U.S. Person" as defined in
Regulation S. We did not engage in a distribution of this offering
in the United States. Each purchaser represented their intention to
acquire the securities for investment only and not with a view toward
distribution. Appropriate legends were affixed to the stock
certificates issued in accordance with Regulation S. All purchasers
were given adequate access to sufficient information about us to make
an informed investment decision. None of the securities were sold
through an underwriter and accordingly, there were no underwriting
discounts or commissions involved. The selling shareholders named in
this prospectus include all of the purchasers who purchased shares
pursuant to this Regulation S offering.
We completed a private placement of 100,000 shares of our common
stock pursuant to Regulation S of
-32-
<PAGE>
the 1933 Act on April 28, 2000. All shares were issued at a price of
$0.50 per share. We received proceeds of $50,000 from the offering.
Each purchaser represented to us that the purchaser was a "Non-U.S.
Person" as defined in Regulation S. We did not engage in a distribution
of this offering in the United States. Each purchaser represented their
intention to acquire the securities for investment only and not with a
view toward distribution. Appropriate legends were affixed to the stock
certificates issued in accordance with Regulation S. All purchasers
were given adequate access to sufficient information about us to make
an informed investment decision. None of the securities were sold
through an underwriter and accordingly, there were no underwriting
discounts or commissions involved. The selling shareholders named in
this prospectus include all of the purchasers who purchased shares
pursuant to this Regulation S offering.
ITEM 27. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
------------ --------------------
3.1 Articles of Incorporation
3.2 By-Laws
4.1 Share Certificate
5.1 Opinion of Cane & Company, LLC, with consent to use
10.1 Option Agreement
10.2 Management Agreement
23.1 Consent of BDO Dunwoody, LLP
27.1 Financial Data Schedule
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(A) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement to:
-33-
<PAGE>
(1) include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(2) reflect in the prospectus any facts or events arising
after the effective date of this registration statement,
or most recent post-effective amendment, which,
individually or in the aggregate, represent a
fundamental change in the information set forth in this
registration statement; and
(3) include any material information with respect to the
plan of distribution not previously disclosed in this
registration statement or any material change to such
information in the registration statement.
(B) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(C) To remove from registration by means of a post-effective
amendment any of the securities being registered hereby
which remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and
controlling persons pursuant to the provisions above, or otherwise,
we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities,
other than the payment by us of expenses incurred or paid by one of
our directors, officers, or controlling persons in the successful
defense of any action, suit or proceeding, is asserted by one of our
directors, officers, or controlling person sin connection with the
securities being registered, we 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 is against public policy as expressed in the
Securities Act, and we will be governed by the final adjudication of
such issue.
-34-
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form SB-2
and authorized this registration statement to be signed on its behalf
by the undersigned in the City of Vancouver, Province of British
Columbia on September 13, 2000.
ENCORE VENTURES INC.
By: /s/ William Iny
__________________________
William Iny, President
POWER OF ATTORNEY
ALL MEN BY THESE PRESENT, that each person whose signature appears
below constitutes and appoints William Iny, his true and lawful
attorney-in-fact and agent, with full power of substitution and re-
substitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all pre- or post-effective amendments
to this Registration statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be
done in and about the premises, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any one of them, or
their or his substitutes, may lawfully do or cause to be done by
virtue hereof.
In accordance with the requirements of the Securities Act of 1933,
this registration statement has been signed below by the following
persons in the capacities indicated and on the dates stated.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
/s/ William Iny President, Secretary, Treasurer September 13, 2000
--------------- and Chief Executive Officer
William Iny (Principal Executive Officer)
and Director
/s/ Stephen
Bekropoulos Director September 13, 2000
---------------
Stephen Bekropoulos
-35-
