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As filed with the Securities Registration No.
and Exchange Commission on ____________________
____________________________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BLACK MOUNTAIN GOLD, INC.
(Name of small business issuer in its charter)
Nevada 1081 36-4349220
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(State or Other (Primary Standard (IRS Employer
Jurisdiction of Industrial Identification #)
Organization) Classification Code)
BLACK MOUNTAIN GOLD, INC. Conrad C. Lysiak, Esq.
528 Fon du Lac Drive 601 West First Avenue, Suite 503
East Peoria, Illinois 61611 Spokane, Washington 99201
(309) 699-8725 (509) 624-1475
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(Address and telephone of (Name, address and telephone
registrant's executive office) number of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this
Registration Statement.
If this Form is filed to register additional common stock for an
offering under Rule 462(b) of the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering.
If this Form is a post-effective amendment filed under Rule 462(c) of
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 under Rule 462(d) of
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 under Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Securities Offering Aggregate
to be Amount to be Price Offering Registration
registered Registered Per Share Price Fee [1]
Shares of
Common Stock: 10,000,000 $ 5.00 $ 50,000,000 $13,200.00
One share
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TOTAL REGISTRATION FEE $ 50,000,000 $13,200.00
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[1] Estimated solely for purposes of calculating the registration
fee under Rule 457(c).
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON 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 DATES AS THE
COMMISSION, ACTING UNDER SAID SECTION 8(a), MAY DETERMINE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE
THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN
ANY STATE IN WHICH OFFERS, SOLICITATIONS OR SALES WOULD BE UNLAWFUL
BEFORE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
THE STATES.
<PAGE> 3
Prospectus
BLACK MOUNTAIN GOLD, INC.
Shares of Common Stock
No Minimum - 10,000,000 Shares Maximum
Before this offering, there has been no public market for the
common stock.
We are offering up to a total of 10,000,000 shares of common
stock. There is no minimum number of shares that we have to sell.
There will be no escrow account. All money received from the
offering will be immediately used by us and there will be no refunds.
The offering will be for a period of up to 270 days from the
effective date.
Investing in our common stock involves risks. See "Risk
Factors" starting at page 6.
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Price Aggregate Proceeds
Per Share Offering Price to Us
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Shares $5.00 $50,000,000 $44,371,800
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Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or determined if this prospectus is truthful or complete. It's
illegal to tell you otherwise.
The date of this prospectus is ____________________, 2000.
<PAGE> 4
TABLE OF CONTENTS
Page No.
Summary of Prospectus . . . . . . . 5
Risk Factors . . . . . . . . . 6
Risks Associated with Our Company . . . . 6
Risks Associated with this Offering . . . . 8
Use of Proceeds . . . . . . . . 9
Determination of Offering Price . . . . . 10
Capitalization . . . . . . . . . 11
Dilution of the Price You Pay for Your Shares . . . 11
Plan of Distribution; Terms of the Offering . . . 14
Business . . . . . . . . . . 16
Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . 28
Management . . . . . . . . . . 30
Executive Compensation . . . . . . . 32
Principal Shareholders . . . . . . . 33
Description of Securities . . . . . . . 34
Certain Transactions . . . . . . . 36
Litigation . . . . . . . . . . 36
Experts . . . . . . . . . . 36
Legal Matters . . . . . . . . . 36
Financial Statements . . . . . . . . 37
<PAGE> 5
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SUMMARY OF OUR OFFERING
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This summary highlights important information about our business
and about this offering. Because it is a summary, it doesn't contain
all the information you should consider before investing in the
common stock. So please read the entire prospectus.
Our Business
We are an exploration company. We own 38 properties. We intend
to explore for gold on our properties.
Our administrative office is located at 528 Fon du Lac Drive,
East Peoria, Illinois 61611, telephone (309) 699-8725. Our fiscal
year end is December 31.
The Offering
Following is a brief summary of this offering:
Securities being offered . . . Up to 10,000,000 shares of
common stock.
Offering price per share . . $ 5.00
Offering period . . . . The shares of common stock
are being offered for a
period not to exceed 270
days.
Net proceeds to our company . . Approximately $44,371,800.
Use of proceeds . . . . We will use the proceeds to
pay for offering expenses,
research and exploration.
Number of shares of common stock
outstanding before the offering . 9,550,000
Number of shares of common stock
outstanding after the offering . 19,550,000
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RISK FACTORS
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Please consider the following risk factors before deciding to
invest in our common stock
Risks Associated with Our Company:
1. We expect losses to continue, and the failure to generate
revenues could cause us to go out of business.
We were incorporated in February 2000 and we have not started
our proposed business operations or realized any revenues. We have no
operating history upon which an evaluation of our future success or
failure can be made. Our net loss since inception is $209,941. Our
ability to achieve and maintain profitability and positive cash flow
is dependent upon
* our ability to locate a profitable mineral property
* our ability to generate revenues
* our ability to reduce exploration stage costs.
Based upon current plans, we expect to incur operating losses in
future periods. This will happen because there are expenses
associated with the research and exploration of our mineral
properties. We cannot guarantee that we will be successful in
generating revenues in the future. Failure to generate revenues will
cause us to go out of business.
2. We are subject to risks inherent in the establishment of a
new business enterprise.
We are subject to risks inherent in the establishment of a new
business enterprise including limited capital resources, possible
delays in the exploration of our properties, and possible cost
overruns. If we are not able to address these events, should they
occur, we may have to curtail or suspend our operations.
3. We have no known mineral reserves and if we cannot find any
we will have to cease operations.
We have no mineral reserves. If we do not find a mineral
reserve containing gold or if we cannot develop the mineral reserve,
either because we do not have money to do it or because it will not
be economically feasible to do it, we will have to cease operations
an you will loose your investment.
4. Weather interruptions in the state of Arizona may affect and
delay our proposed exploration operations.
Our proposed exploration work can only be performed
approximately ten months out of the year. This is because extreme
heat in July and August prevent exploration.
<PAGE> 7
5. Because we are small and do not have much capital, we must
limit our exploration.
Because we are small and do not have much capital, we must limit
our exploration. There are other larger exploration companies that
could and probably would spend more time and money exploring our
property.
6. We will have to suspend our exploration plans if we do not
have access to all of the supplies and materials we need.
Competition and unforeseen limited sources of supplies in the
industry could result in occasional spot shortages of supplies, and
equipment like bulldozers and excavators that we might need to
conduct exploration. We have not attempted to locate or negotiate
with any suppliers of products, equipment or materials. We will
attempt to locate products, equipment and materials after this
offering is complete. If we cannot find the products and equipment
we need, we will have to suspend our exploration plans until we do
find the products and equipment we need.
7. People we do business with may not be year 2000 compliant.
We are year 2000 compliant. We do not know if people we will be
doing business with in the future are year 2000 compliant. If
someone we do business with is not year 2000 compliant, the services
or products he furnishes to us could be interrupted. If the services
or products are interrupted, we may have to suspend operations while
he corrects his year 2000 compliance.
8. We may not have enough money to complete our exploration .
We may not have enough money to complete the exploration of our
property. If it turns our that we have not raised enough money to
complete our exploration program, we will try to raise additional
funds from a second public offering, a private placement or loans.
At the present time, we have not made any plans to raise additional
money and there is no assurance that we would be able to raise
additional money in the future. If we need additional money and
can't raise it, we will have to suspend or cease operations.
9. Our officers and directors have conflicts of interest in
that they are officers and directors of other mining companies.
Our officers and directors have conflicts of interest in that
they are officers and directors of other mining companies. In the
future, if we decide to acquire a mining property which is also
sought by one of the companies which Messrs. Runyon, Roemer or
Steeves are officers or directors, a direct conflict of interest
could result.
<PAGE> 8
Risks Associated with This Offering:
10. Because we may be a penny stock, you may not be able to
resell our shares.
Our common stock may be defined as a "penny stock" under the
Securities and Exchange Act of 1934, and its rules. Because we may be
a penny stock, you may be unable to resell our shares. This is
because the Exchange Act and the penny stock rules impose additional
sales practice and disclosure requirements on broker-dealers who sell
our securities to persons other than accredited investors. As a
result, fewer broker/dealers may not be willing to make a market in
our stock.
11. After this offering, control of the company will remain
with Messrs. Runyon, Roemer and Steeves which may inhibit a change of
control.
Even if we sell all 10,000,000 shares of common stock in this
offering, Messrs. Runyon, Roemer and Steeves will still own or
control 6,750,000 shares and will continue to control us. As a
result, after completion of this offering, regardless of the number
of shares we sell, Messrs. Runyon, Roemer and Steeves will be able to
elect all of our directors and control our operations and your
ability to cause a change in the course of our operations is
eliminated. Our articles of incorporation do not provide for
cumulative voting. Cumulative voting is a process that allows a
shareholder to multiply the number of shares he owns times the number
of directors to be elected. That number is the total votes a person
can cast for all of the directors. Those votes can be allocated in
any manner to the directors being elected. Cumulative voting, in
some cases, will allow a minority group to elect at least one
director to the board.
12. Messrs. Runyon, Roemer and Steeves's control can have a
depressive effect on the market price of stock.
Because Messrs. Runyon, Roemer and Steeves will control us after
the offering, regardless of the number of shares sold, the value
attributable to the right to vote is gone. This could result in a
reduction in the market value to the shares you own because of the
ineffective voting power.
13. Messrs. Runyon, Roemer and Steeves will receive a
substantial benefit from your investment.
Messrs. Runyon, Roemer and Steeves, our officers and directors,
will receive a substantial benefit from your investment. They are
supplying the property to be explored which is valued at $110,025.
You, on the other hand, will be providing all of the cash for our
operations. As a result, if we cease operations for any reason, you
will loose your investment while Messrs. Runyon, Roemer and Steeves
will loose only approximately $110,025.
<PAGE> 9
14. Because there is no public trading market for our common
stock, you may not be able to resell your shares.
There is currently no public trading market for our common
stock. Therefore there is no central place, like a stock exchange
or electronic trading system, to resell your shares. If you do want
to resell your shares, you will have to locate a buyer and negotiate
your own sale. Therefore, you may not be able to resell your shares.
15. There is no minimum number of shares that must be sold and
we will not refund any funds to you.
There is no minimum number of shares that must be sold in this
offering, even if we raise a nominal amount of money. Any money we
receive will be immediately appropriated by us. We may not raise
enough money to start or complete exploration. No money will be
refunded to you under any circumstances.
16. You may be investing in a company that does not have
adequate funds to conduct its operations.
Because there is no minimum number of shares that must be sold
and we will not refund any funds to you, it is possible that we may
not raise enough funds to conduct our operations. If that happens,
you will suffer a loss in the amount of your investment.
17. Sales of common stock by our officers and directors will
likely cause the market price for the common stock to drop.
A total of 6,750,000 shares of stock were issued to our officers
and directors or entities controlled by them. They paid an average
price of $0.024 per share. They will likely sell a portion of their
stock if the market price goes above $5.00. If they do sell their
stock into the market, the sales may cause the market price of the
stock to drop.
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USE OF PROCEEDS
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Our offering is being made on a best efforts - no minimum basis.
The net proceeds to us after deducting offering expenses of
$8,492,080 will be $41,507,920 if all of the shares are sold. The
first $128,200 raised will be used offering expenses. We will use
the net proceeds as follows:
25% 50% 75% 100%
Amount raised $12,500,000 $25,000,000 $37,500,000 $50,000,000
Allocation
Offering expenses $ 1,503,200 $ 2,873,200 $ 4,253,200 $ 5,628,200
Exploration $10,000,000 $10,250,000 $12,500,000 $16,250,000
Equipment $ 246,800 $11,121,800 $19,996,800 $27,371,800
Working capital $ 750,000 $ 750,000 $ 750,000 $ 750,000
<PAGE> 10
Exploration expenditures consist of consulting services, costs
of obtaining geologic literature, and costs of obtaining personal
interviews with geologists, mining engineers and others familiar with
the properties. Exploration expenditures also include the cost of
mapping, geophysical testing, geochemical testing, and digging
trenches, pits and tunnels.
Equipment expenditures consist of mining, milling and laboratory
equipment.
Working capital is the cost related to operating our office. It
is comprised of expenses for telephone service, mail, stationary,
accounting, acquisition of office equipment and supplies, and the
salary for secretary and office workers, if needed.
We have allocated a wide range of money for exploration. That
is because we do not know how much will ultimately be needed for
exploration. If we are successful in immediately finding gold, we
will stop exploring and go on to develop the property. Costs of
exploring will then cease. On the other hand if we do not
immediately find gold, we will continue to explore for gold on the
property. If we have to continue to explore for gold, the costs of
exploration will increase.
While we currently intend to use the proceeds of this offering
substantially in the manner set forth above, we reserve the right to
reassess and reassign the use if, in the judgement of our board of
directors, changes are necessary or advisable. At present, no
material changes are contemplated. Should there be any material
changes in the above projected use of proceeds in connection with
this offering, we will issue an amended prospectus reflecting the
same.
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DETERMINATION OF OFFERING PRICE
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The price of the shares we are offering was arbitrarily
determined in order for us to raise up to a maximum of $50,000,000 in
this offering. The offering price bears no relationship whatsoever to
our assets, earnings, book value or other criteria of value. Among
the factors considered were:
* our lack of operating history
* the proceeds to be raised by the offering
* the amount of capital to be contributed by purchasers in
this offering in proportion to the amount of stock to be
retained by our existing Stockholders, and
* our relative cash requirements.
<PAGE> 11
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CAPITALIZATION
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The following table sets forth our capitalization at August 31,
2000, historical basis and as adjusted to reflect the sale of the
shares.
This table should be read in conjunction with the section
entitled, Management's Discussion and Analysis of Financial Condition
and Results of Operations our Financial Statements and Notes; and
other financial and operating data included elsewhere in this
prospectus.
09/30/00 As Adjusted After Offering
Actual 25% 50% 75% 100%
Stockholder's Equity:
Convertible Preferred Stock
50,000,000 shares authorized
$0.001 par value,
10,000,000 shares
issued $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
Common Stock: 50,000,000
shares authorized,
par value $0.001
9,550,000 issued and
outstanding plus
shares from
offering $ 9,550
12,050,000 issued and
outstanding $ 12,050
14,550,000 issued and
outstanding $ 14,550
17,050,000 issued and
outstanding $ 17,050
19,550,000 issued and
outstanding $ 19,550
Additional Paid-in
Capital $ 534,610 $11,528,910 $22,651,410 $33,773,910 $44,869,410
Common Stock
Subscribed $ (76,366) $ (76,366) $ (76,366) $ (76,366) $ (76,366)
Deficit accumulated
during the
exploration
stage $(209,941) $ (209,931) $ (209,941) $ (209,941) $ (209,941)
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TOTAL STOCKHOLDERS'
EQUITY
(deficit) $ 267,853 $11,264,653 $22,389,653 $33,514,653 $44,639,653
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DILUTION OF THE PRICE YOU PAY FOR YOUR SHARES
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Dilution represents the difference between the offering price
and the net tangible book value per share immediately after
completion of this offering. Net tangible book value is the amount
that results from subtracting total liabilities and intangible assets
from total assets. Dilution arises mainly as a result of our
arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a
result of the lower book value of the shares held by our existing
stockholders.
<PAGE> 12
As of August 31, 2000, the net tangible book value of our shares
of common stock was $257,853 or approximately $0.03 per share based
upon 9,550,000 shares outstanding.
Upon completion of this offering, in the event all of the shares
are sold, the net tangible book value of the 19,550,000 common shares
to be outstanding will be $44,629,653, or approximately $2.28 per
common share. The net tangible book value of the shares held by our
existing stockholders will be increased by $2.25 per share without
any additional investment on their part. You will incur an immediate
dilution from $5.00 per share to $2.28 per share.
Upon completion of this offering, in the event 75% of the shares
are sold, the net tangible book value of the 17,050,000 common shares
to be outstanding will be $33,504,653, approximately $1.97 per share.
The net tangible book value of the shares held by our existing
stockholders will be increased by $1.94 per share without any
additional investment on their part. You will incur an immediate
dilution from $5.00 per share to $1.97 per share.
Upon completion of this offering, in the event 50% of the shares
are sold, the net tangible book value of the 14,550,000 shares to be
outstanding will be $22,379,653, or approximately $1.53 per share.
The net tangible book value of the shares held by our existing
stockholders will be increased by $1.50 per share without any
additional investment on their part. You will incur an immediate
dilution from $5.00 per share to $1.53 per share.
Upon completion of this offering, in the event 25% of the shares
are sold, the net tangible book value of the 12,505,000 shares to be
outstanding will be $11,254,653, or approximately $1.53 per share.
The net tangible book value of the shares held by our existing
stockholders will be increased by $1.50 per share without any
additional investment on their part. You will incur an immediate
dilution from $5.00 per share to $0.93 per share.
After completion of this offering, if 10,000,000 shares are
sold, you will own approximately 51.15% of the total number of shares
then outstanding shares for which you will have made a cash
investment of $50,000,000, or $5.00 per share. Our existing
stockholders will own approximately 48.85% of the total number of
shares then outstanding, for which they have made contributions of
cash and/or services and/or other assets, totaling $544,160, or
approximately $0.06 per share.
After completion of this offering, if 7,500,000 shares are sold,
you will own approximately 43.99% of the total number of shares then
outstanding shares for which you will have made a cash investment of
$37,500,000 or $5.00 per share. Our existing stockholders will own
approximately 56.01% of the total number of shares then outstanding,
for which they have made contributions of cash and/or services and/or
other assets, totaling $544,160, or approximately $0.06 per share.
<PAGE> 13
After completion of this offering, if 5,000,000 shares are sold,
you will own approximately 34.36% of the total number of shares then
outstanding shares for which you will have made a cash investment of
$25,000,000 or $5.00 per share. Our existing stockholders will own
approximately 65.64% of the total number of shares then outstanding,
for which they have made contributions of cash and/or services and/or
other assets, totaling $544,160, or approximately $0.06 per share.
After completion of this offering, if 2,500,000 shares are
sold, you will own approximately 20.75% of the total number of shares
then outstanding shares for which you will have made a cash
investment of $12,500,000, or $5.00 per share. Our existing
stockholders will own approximately 79.25% of the total number of
shares then outstanding, for which they have made contributions of
cash and/or services and/or other assets, totaling $544,160, or
approximately $0.06 per share.
The following table compares the differences of your investment
in our shares with the investment of our existing stockholders.
Existing Stockholders
Price per share . . . . . . . $ 0.06
Net tangible book value per share before offering . $ 0.03
Net tangible book value per share after offering $ 2.28
Increase to present stockholders in net tangible book
value per share after offering . . . . $ 2.25
Capital contributions . . . . . . $ 544,160
Number of shares outstanding before the offering 9,550,000
Number of shares after offering
held by existing stockholders . . . . 9,550,000
Percentage of ownership after offering . . . 48.85%
Purchasers of Shares in this Offering if all Shares Sold
Price per share . . . . . . . $ 5.00
Dilution per share . . . . . . . $ 2.72
Capital contributions . . . . . . $50,000,000
Number of shares after offering held
by public investors . . . . . . 10,000,000
Percentage of ownership after offering . . . 51.15%
Purchasers of Shares in this Offering if 75% of Shares Sold
Price per share . . . . . . . $ 5.00
Dilution per share . . . . . . . $ 3.03
Capital contributions . . . . . . $37,500,000
Number of shares after offering held
by public investors . . . . . . 7,500,000
Percentage of ownership after offering . . . 43.99%
<PAGE> 14
Purchasers of Shares in this Offering if 50% of Shares Sold
Price per share . . . . . . . $ 5.00
Dilution per share . . . . . . . $ 3.47
Capital contributions . . . . . . $25,000,000
Number of shares after offering held
by public investors . . . . . . 5,000,000
Percentage of ownership after offering . . . 34.36%
Purchasers of Shares in this Offering if 25% of Shares Sold
Price per share . . . . . . . $ 5.00
Dilution per share . . . . . . . $ 4.07
Capital contributions . . . . . . $12,500,000
Number of shares after offering held
by public investors . . . . . . 20.75%
Percentage of ownership after offering . . .
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PLAN OF DISTRIBUTION; TERMS OF THE OFFERING
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We are offering up to a total of 10,000,000 shares of common
stock on a best efforts, no minimum, 10,000,000 shares of common
stock maximum. The offering price is $5.00 per share. There is no
minimum number of shares of common stock that we have to sell. There
will be no escrow account. All money received from the offering will
be immediately used by us and there will be no refunds. The offering
will be for a period of up to 270 days from the effective date.
There is no minimum number of shares of common stock that must
be sold in this offering. Any money we receive will be immediately
appropriated by us for the uses set forth in the Use of Proceeds
section of this prospectus. No funds will be placed in an escrow
account during the offering period and no money will be returned once
the subscription has been accepted by us.
We will sell the shares in this offering through our officers
and directors. They will receive no commission from the sale of any
shares. They will not register as a broker-dealer under Section 15
of the Securities Exchange Act of 1934 in reliance upon Rule 3a4-1.
Rule 3a4-1 sets forth those conditions under which a person
associated with an issuer may participate in the offering of the
issuer's securities and not be deemed to be a broker-dealer. The
conditions are that:
1. The persons are not subject to a statutory disqualification,
as that term is defined in Section 3(a)(39) of the Act, at the time
of his participation; and,
2. The persons are not compensated in connection with his
participation by the payment of commissions or other remuneration
based either directly or indirectly on transactions in securities;
and
<PAGE> 15
3. The persons are not at the time of their participation, an
associated person of a broker-dealer; and,
4. The persons meet the conditions of Paragraph (a)(4)(ii) of
Rule 3a4-1 of the Exchange Act, in that they (A) primarily perform,
or are intended primarily to perform at the end of the offering,
substantial duties for or on behalf of the Issuer otherwise than in
connection with transactions in securities; and (B) are not a broker
or dealer, or an associated person of a broker or dealer, within the
preceding twelve (12) months; and (C) do not participate in selling
and offering of securities for any Issuer more than once every twelve
(12) months other than in reliance on Paragraphs (a)(4)(i) or
(a)(4)(iii).
Our officers and directors are not subject to disqualification,
are not being compensated, and are not associated with a broker-
dealer. Our officers and directors are and will continue to be our
officers and directors at the end of the offering and have not been
during the last twelve months and are currently not broker/dealers or
associated with broker/dealers. Our officers and directors have not
during the last twelve months and will not in the next twelve months
offer or sell securities for another corporation.
Only after our registration statement is declared effective by
the SEC, we intend to advertise, through tombstones, and hold
investment meetings in various states where the offering will be
registered. We will not utilize the Internet to advertise our
offering. We will also distribute the prospectus to potential
investors at the meetings and to our friends and relatives who are
interested in us and a possible investment in the offering.
Offering Period and Expiration Date
This offering will start on the date of this prospectus and
continue for a period of up to 270 days.
Procedures for Subscribing
If you decide to subscribe for any shares in this offering, you
must
1. execute and deliver a subscription agreement
2. deliver a check or certified funds to us for acceptance or
rejection.
All checks for subscriptions must be made payable to "BLACK MOUNTAIN
GOLD, INC."
<PAGE> 16
Right to Reject Subscriptions
We have the right to accept or reject subscriptions in whole or
in part, for any reason or for no reason. All monies from rejected
subscriptions will be returned immediately by us to the subscriber,
without interest or deductions. Subscriptions for securities will be
accepted or rejected within 48 hours after we receive them.
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BUSINESS
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General
We were incorporated in the State of Nevada on February 23,
2000. We are engaged in the acquisition and exploration of mining
properties. We maintain our statutory registered agent's office at
5844 South Pecos Road, Suite D, Las Vegas, Nevada 89120 and our
business office is located at 528 Fon du Lac Drive, East Peoria,
Illinois 61611. Our telephone number is (309) 699-8725. Our offices
are leased from Dale Runyon and Doris M. Runyon Dynasty Trust on a
month to month basis and our monthly rental is $500.00.
Background
We acquired 38 properties containing 152 association placer
mining claims in La Paz, Maricopa and Yuma Counties, Arizona.
To date we have not performed any work on our property. We are
presently in the exploration stage and there is no assurance that
commercially viable mineralized material, or a reserve, exists on our
property. We will not be able to make such a determination until
exploration is done and a comprehensive evaluation concludes economic
and legal feasibility.
Location and Access
The claims comprising our property are as follows:
Group 1 Claims:
1. Black Mountain (Black Rock); T.3 N., R.13W, G&SR Meridian. 8-160
acre claims or 1,280 acres.
2. Coyote Peak; T.2 N., R.13 W, G&SR Meridian. 16-160 acre claims
or 2,560 acres.
3. Coyote Well; T.2 N., R.14 W., G&SR Meridian. 8-160 acre claims
or 1,280 acres.
4. Charco Tank; T.3 N., R.14 W., G&SR Meridian. 8-160 acre claims
or 1,280 acres.
5. Mike; T.2 N., R.12 W., G&SR Meridian. 4-160 acre claims or 640
acres.
6. Little Horn; T.1 N., R.13 W., G&SR Meridian. 4-160 acre claims
or 640 acres.
<PAGE> 17
The above Group 1 Claims contain a total of 7,680 acres.
Location and access
The Group 1 claims are located in Las Paz County, Arizona, about
50 miles east of Blyth, California south of exit 53 on the Interstate
highway 10 going to Phoenix. Various gravel/dirt roads go south into
the claim group area.
Physiography
The claim groups are located south of the Little Harquahala
Mountains and northwest and west of the Eagletail Mountains. Coyote
Peak is on the western side of the claim group. Elevations range from
1,285 feet on the desert floor to 3,186 in the Eagletail Mountains.
The area contains the Upper Bouse Wash which is dry most of the time.
The vegetation is very sparse and the climate is typical of the
Arizona desert.
Geology
The area is largely Quaternary alluvium consisting of gravels,
sand, silt, and clays at depth. The outcrops consist of the
following:
* Quaternary Basalt
* Quaternary Dikes and Plugs
* Cretaceous Andesites
* Cretaceous Kofa Volcanics
* Mesozoic Granites
* Mesozoic Schists
* Paleozoic Limestones, Shales, Siltstones, and Sandstones.
Numerous precious metal outcrops and small mine adits exist in the
area. Presently there are no operating mines in the district.
Group 2 Claims
The Group 2 claims consist of five sub-groups of claims as
follows:
1. Winchester; T.6 N., T.12 W. G&SR Meridian. 4-160 acre claims or
640 acres.
2. Low Mountain; T.7 N., R.12 W., G&SR Meridian. 4-160 acre claims
or 640 acres.
3. Happy Camp; T.7 N., R.11 W., G&SR Meridian. 4-150 acre claims or
640 acres.
4. Socorro Peak; T.6 N., R.11 W., G&SR Meridian. 4-160 acre claims.
5. Salome; T.6 N., R.13 W., G&SR Meridian. 4-160 acre claims or 640
acres.
<PAGE> 18
The above Group 2 claims contain a total of 3,200 acres.
Location and access
The Group 2 claims are located in McMullen Valley near Wenden,
La Paz County, Arizona. Wenden is on state highway 60 northeast of
Salome, Arizona. A paved road going north of Wenden gives access to
most of the claim area.
Physiography
Many of the claims are on the south slopes of the Harcuvar
Mountains. One of the old mines in the claim area is the Bonanza
Mine. The elevations range from 2,025 feet to 4,618 at Harcuvar Peak.
The area is arid and some vegetation exists. Numerous dry washes
drain southeast from Harcuvar Mountain. The climate is arid and a
higher-desert environment.
Geology
There is considerable Quaternary alluvium consisting of coarse
gravels, sands, and silts. The abundant outcrops consist of the
following:
* Laramide granite
* PreCambrian schist.
There are various old mine shafts and adits but there are no
mining operations in the immediate area at present.
Group 3 Claims
The Group 3 Claims consist of four sub-groups of claims as
follows:
1. Meltop; T.2 S.,R.3 W., G&SR Meridian. 4-160 acre claims or 640
acres.
2. Rainbow; T.3 S., R.1 W., G&SR Meridian. 4-160 acre claims or 640
acres.
3. Mobile; T.3 S., R.1 E., G&SR Meridian. 4-160 acre claims of 640
acres.
4. Rainbow Valley; T.3 S., R.2 W., G&SR Meridian. 4-160 acre claims
or 640 acres.
The above Group 3 Claims contain a total of 2,560 acres.
Location and access
The Group 3 Claims are located about 25 miles northeast of Gila
Bend, Maricopa County, Arizona along state highway 85 in the Little
Rainbow Valley on the northeast flanks of the Maricopa Mountains.
<PAGE> 19
Physiography
The location of the claims parallels the dry Waterman Wash which
trends northwest and lies between the Sierra Estrella Mountains and
the Maricopa Mountains. The elevation in the claim area ranges from
1,129 feet to 2,340 feet of elevation. This arid desert environment
supports very little vegetation.
Geology
There is abundant Quaternary gravels, sand, and silt in the
claim area. The outcrops consist of the following:
* PreCambrian granite
* PreCembrian schists.
In addition, there are some old workings around a quartz intrusion
taking the form of a stock-work.
Group 4 Claims
The Group 4 claims consist of two sub-groups of claims as
follows:
1. Lost Horse Peak; T.7 S., R.1 W., G&SR Meridian 12-160 acre
claims or 1,920 acres.
2. Getzwell; T.7 S., R.2 W., G&SR Meridian. 8-160 acre claims or
1,280 acres.
The above Group 4 Claims contain a total of 3,200 acres.
Location and access
These Group 4 Claims are located about 20-miles east of Gila
Bend, Arizona in Maricopa County, along Interstate 8 on the south
side. Numerous dirt roads access the claim area. The claims are on
the northeast flanks of the Sand Tank Mountains.
Physiography
The claims are situated along numerous washes such as the Sand
Tank Wash. There are various small wells in the area. The elevations
range from 2,031 feet to 2,441 feet at Round Butte. Bender Wash
(which is dry) also dissects the claim area. Sparse vegetation exists
in this arid desert environment.
Geology
Quaternary gravels, sand, silt, and clays at depth are abundant
in the area, with some limited outcrops of the following:
<PAGE> 20
* Quaternary basalt
* Laramide granite
* Cretaceous sauceda volcanics.
Group 5 Claims
The Group 5 Claim consist of one sub-group of claims as follows:
1. Vekol Valley; T.8. S., R.1 E., G&SR Meridian. 4-160 acre claims
or 640 acres.
Location and access
This Group 5 Claim is located about 28-miles east of Gila Bend,
Arizona in Maricopa County along Interstate 8 at exit 44. The claim
is south of the Interstate 8 along a main dirt road that goes south
through the claim group. The road and claims parallel Vekol Wash
which is normally dry.
Physiography
The location of the claim is between the White Hills and Black
Mountain. The elevations range from 2,000 feet to 3,307 at Black
Mountain. There is scrub vegetation along the Vekol Valley and Vekol
Wash. Otherwise, the climate is typical of the Arizona desert.
Geology
Quaternary gravels, sand, sift, and clays at depth are found in
the washes and mainly on these claims. The major outcrops are as
follows:
* PreCambrian schist.
Group 6 Claims
The Group 6 Claims consist of three sub-groups of claims as
follows:
1. Red Raven; T.3 S., R.12 W., G&SR Meridian. 4-160 acre claims or
640 acres.
2. Red Raven 11, T.4 S., R.12 W., G&SR Meridian. 4-160 acre claims
of 640 acres.
3. Palomas; T.2 S., R.13 W., G&SR Meridian. 8-160 acre claims or
1,280 acres.
The above Group 6 Claims contain a total of 2,560 acres.
<PAGE> 21
Location and access
The Group 6 Claims are accessed by a dirt road going northwest
from Hyder, Arizona in Yuma County. The claims are in the Palomas
Plain and Hoodoo Wash. The Hyder road goes north of Interstate 8 at
Dateline, Arizona.
Physiography
These claims are situated along the Palomas Plain with
elevations ranging from 1,568 feet to 1,720 feet in elevation. Hoodoo
and Red Raven Washes are dry and the main feature in the claim area.
This desert environment features an arid climate with very sparse
vegetation and little water.
Geology
Quaternary gravel, sand, silt, and clay at depth are the
principal geologic feature along the washes. The few outcrops are as
follows:
* Quaternary basalt
* Laramide sandstone, shale, and conglomerate
* Cretaceous Kofa volcanics
* Mesozoic gneiss.
Group 7 Claims.
The Group 7 Claims consist of two sub-groups of claims as
follows:
1. Bosque; T.5 S., R.3 W., G&SR Meridian. 8-160 acre claims or
1,280 acres.
2. SRF 11; T.6 S., R.3 W., G&SR Meridian. 4-160 acre claims or 640
acres.
The above Group 7 Claims contain a total of 1,920 acres.
Location and access
The Group 7 Claims are located about seven miles east of Gila
Bend, Arizona in Maricopa County along Interstate 8. Numerous dirt
roads access the claim areas. The claims are along the southwest
slope of the Maricopa Mountains.
Physiography
These claims parallel the numerous washes in the area that trend
to the northwest (and flow to the northwest). Elevations range from
1,131 feet to 2,060 feet. Bender Wash drains the area and flows to
the northwest. The desert environment is arid and sparse vegetation
exists along some of the washes.
<PAGE> 22
Geology
Quaternary gravel, sand, silt, and clays at depth are present
along the washes. The outcrops in the area are as follows:
* Quaternary basalt
* PreCambrian granite.
Group 8 Claims,
The Group 8 claims consist of two sub-groups of claims as
follows:
1. Cactus Valley; T.1 S., R.11 W., G&SR Meridian. 2-160 acre claims
or 320 acres.
2. Cactus Valley; T.2 S., R.11 W., G&SR Meridian. 2-160 acre claims
or 320 acres.
The above Group 8 Claims contain a total of 640 acres.
Location and access
These Group 8 Claims are located near Clanton Well which is
north of Hyder, Arizona in Yuma County. Various dirt roads go north
from Hyder to the claim area which is about 17-miles north.
Physiography
The claims are located south of Cemetery Ridge and around
Clanton Well and the Clanton Hills. The elevations range from 1,399
feet to 1,575 feet and the climate is arid and the vegetation very
sparse. This is a typical Arizona desert environment with dry washes
dissecting the area.
Geology
Quaternary gravels, sand, silt, and clay at depth cover much of
the claim area. The outcrops present in the area are as follows:
* Quaternary basalt.
* Tertiary sandstone, shale, and conglomerates.
* Cretaceous Andesites
* Cretaceous Kofa volcanics
* Mesozoic gneiss
* PreCembrian schist.
GROUP 9 CLAIMS.
The Group 9 Claim consist of one sub-group of claims as follows:
1. Peoria; T.6 S.,R.4 W., G&SR Meridian. 4-160 acre claims of 640
acres.
<PAGE> 23
Location and access
The Group 9 Claim is located about eight miles south of Gila
Bend, Arizona in Maricopa County. The main feature in the claim area
is the Quilotosa Wash.
Physiography
The claim is parallel to the Sauceda Wash and in the Quilotosa
Wash system that drains to the northwest from the Sand Tank and
Sauceda Mountains to the south. The elevations range from 1,200 feet
to 800 feet along the wash system. Scrub vegetation is found in the
washes, that are normally dry.
Geology
Quaternary gravels, sand, silt, and clay at depth are the only
material in the claim area, although the detritus sources to the
south consist of various granitic and volcanic rocks, as well as
tactites and intrusives.
Group 10 Claims
The Group 10 claim consist of one sub-group as follows:
A). LaPosa; T.1 S., R.19 W., G&SR Meridian. 8-160 acre claims or
1,280 acres.
Location and access
The claim is just to the west of state highway 95 about 25-miles
south of Quartzite, Arizona in Yuma County (see map). Dirt roads give
access to the claims. The claim is between the Chocolate and the
Castle Dome Mountains.
Physiography
This claim is at the foot of the Castle Dome Mountains in a dry
wash zone. The Tweed Mine is just to the northwest of the claims. The
elevations range from 1,200 to 2,822 feet of elevation. The area is
arid desert with sparse vegetation.
Geology
The wash and main claim area consists of Quaternary gravels,
sand, silt, and some clays at depth. The outcrops are Cretaceous
Andesites. The Tweed Mine is the only old mine in the claim area, but
it is not in production.
<PAGE> 24
Our Proposed Exploration Program
We must conduct exploration to determine what amount of
minerals, if any, exist on our properties and if any minerals which
are found can be economically extracted and profitably processed.
Our exploration program is designed to economically explore and
evaluate our properties.
We do not claim to have any minerals or reserves whatsoever at
this time on any of our properties.
We intend to implement an exploration program and intend to
proceed in the following three phases:
Phase 1 will begin with research of the available geologic
literature, personal interviews with geologists, mining engineers and
others familiar with the prospect sites. We have recently begun this
phase of the exploration process on our properties.
When the research is completed, our initial work will be
augmented with geologic mapping, geophysical testing and geochemical
testing of our claims. When available, existing workings, like
trenches and prospect pits, will be examined. If an apparent
mineralized zone is identified and narrowed down to a specific area
by the studies, we will to begin trenching the area.
Trenches are generally approximately 150 ft. in length and 10-20 ft.
wide. These dimensions allow for a thorough examination of the
surface of the vein structure types generally encountered in the
area. They also allow easier restoration of the land to its pre-
exploration condition when we conclude our operations. Once
excavation of a trench is completed, samples are taken and then
analyzed for economically potential minerals that are known to have
occurred in the area. Careful interpretation of this available data
collected from the various tests aid in determining whether or not
the prospect has current economic potential and whether further
exploration is warranted.
Phase 1 will take about 3 months and cost up to $200,000.
Phase 2 involves an initial examination of the results of Phase
1 trench samples and geophysical work in order to conduct additional
trenching and more advanced geophysical work. The geophysical work
gives a general understanding of the location and extent of
mineralization at depths that are unreachable by surface excavations
and provides a target for more extensive trenching and core drilling.
Trenching identifies the continuity and extent of mineralization, if
any, below the surface. After a thorough analysis of the data
collected in Phase 2, we will decide if the property warrants a Phase
3 study.
Phase 2 will take about 3 months and cost up to $200,000.
<PAGE> 25
Phase 3 is aimed at precisely defining the depth, the width, the
length, the tonnage and the value per ton of any mineral body.
Phase 3 will take about 6 months and cost up to $300,000.
We intend to contact other companies about the properties if we
find mineralized materials, in order to explore joint venture
possibilities. As of the date hereof, we have not identified or
contacted any joint venture candidates and there is not assurance we
will ever contact any other companies about joint venturing with us
in the development of our properties.
Competitive Factors
The gold mining industry is fragmented. We compete with other
exploration companies looking for gold. We are one of the smallest
exploration companies in existence. We are an infinitely small
participant in the gold mining market. While we compete with other
exploration companies, there is no competition for the exploration or
removal or mineral from our property. Readily available gold
markets exist in United States and around the world for the sale of
gold. Therefore, we will be able to sell any gold that we are able
to recover.
Mining and environmental matters.
Overview
We, like other mining companies doing business in the United
States, are subject to a variety of federal, state and local
statutes, rules and regulations designed to protect the quality of
the air and water in the vicinity of its mining operations and the
preservation of certain archeological sites. These include
"permitting" or pre-operating approval requirements designed to
ensure the environmental integrity of a proposed mining facility,
operating requirements designed to mitigate the effects of discharges
into the environment during mining operations, and reclamation or
post-operation requirements designed to remediate the lands affected
by a mining facility once commercial mining operations have ceased.
These laws also set forth limitations on the generation,
transportation, storage and disposal of solid and hazardous waste.
Federal legislation and implementing regulations adopted and
administered by the Environmental Protection Agency, the Forest
Service, the Bureau of Land Management, the Fish and Wildlife
Service, the Army Corps of Engineers and other agencies in
particular, legislation such as the federal Clean Water Act, the
Clean Air Act, the National Environmental Policy Act and the
Comprehensive Environmental Response, Compensation and Liability Act,
have a direct bearing on domestic mining operations. These federal
initiatives are often administered and enforced through state
agencies operating under parallel state statutes and regulations.
Although mines continue to be approved for development in the United
States, the cost and uncertainty associated with the permitting
process could have a material affect on mining the properties.
<PAGE> 26
The Clean Water Act.
The federal Clean Water Act is the principal federal
environmental protection law regulating mining operations. The Act
imposes limitations on waste water discharges into waters of the
United states, including discharges from point sources such as mine
facilities. In order to comply with the Clean Water act, we will be
required to obtain one or more permits which will control the level
of effluent discharges from future proposed mining and processing
operations.
The Clean Air Act.
The federal Clean Air Act limits the ambient air discharge of
certain materials deemed to be hazardous and establishes a federal
air quality permitting program for such discharges. Hazardous
materials are defined in enabling regulations adopted under the Act
to include metals and toxic solvents such as cyanide which is used in
heap leach recovery processes. The Act also imposes limitations on
the level of particulate matter generated from mining operations, and
we may be required to adopt dust control techniques in all phases of
mining in order to comply with these limitations.
The National Environmental Policy Act.
The National Environmental Policy Act requires all governmental
agencies to consider the impact on the human environment of major
federal actions as therein defined. Because our mining properties
are located on federal lands, mining operations on those lands could
be conditioned on the preparation, review and approval of an
environmental impact statement outlining in detail the environmental
effects of such operations and the Company's efforts to ameliorate
such effects.
The Comprehensive Environmental Response, Compensation and Liability
Act.
The federal Comprehensive Environmental, Response, Compensation
and Liability Act imposes clean-up and reclamation responsibilities
with respect to unlawful discharges into the environment, and
establishes significant criminal and civil penalties against those
persons who are primarily responsible for such discharges.
Arizona environmental laws and regulations.
Arizona has adopted counterparts to the Environmental Policy Act
and the Metal Mine Reclamation Act, both of which are administered by
the Department of Lands. Arizona also adopted the Air Quality Act
and Water Quality Act, which parallel to a large extent the
provisions of the Clean Air Act and Clean Water Act.
<PAGE> 27
Compliance with statutory environmental quality requirements
may: necessitate significant capital outlays; materially affect our
earning power; or may cause material changes in the Company's
intended activities. No assurance can be given that environmental
standards imposed by either federal, state or local governments will
not be changed or become more stringent, thereby possibly materially
adversely affecting our proposed activities.
We will secure all necessary permits for exploration and, if
development is warranted on the property, will file final plans of
operation before we start any mining operations. We anticipate no
discharge of water into active stream, creek, river, lake or any
other body of water regulated by environmental law or regulation. No
endangered species will be disturbed. Restoration of the disturbed
land will be completed according to law. All holes, pits and shafts
will be sealed upon abandonment of the property. It is difficult to
estimate the cost of compliance with the environmental law since the
full nature and extent of our proposed activities cannot be
determined until we start our operations and know what that will
involve from an environmental standpoint.
We are in compliance with the all laws and will continue to
comply with the laws in the future. We believe that compliance with
the laws will not adversely affect our business operations.
Employees
Initially, we intend to use the services of subcontractors for
manual labor exploration work on our properties. Our only technical
employees will be our officers and consultants that we may hire.
Employees and Employment Agreements
At present, we have no employees, other than our officers, who
were compensated for their services. Our officers do not have
employment agreements with us. We presently do not have pension,
health, annuity, insurance, stock options, profit sharing or similar
benefit plans; however, we may adopt plans in the future. There are
presently no personal benefits available to any employees.
<PAGE> 28
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
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This section of the prospectus includes a number of forward-
looking statements that reflect our current views with respect to
future events and financial performance. Forward-looking statements
are often identified by words like: believe, expect, estimate,
anticipate, intend, project and similar expressions, or words which,
by their nature, refer to future events. You should not place
undue certainty on these forward-looking statements, which apply only
as of the date of this prospectus. These forward-looking statements
are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical results or our
predictions.
We are a start-up, exploration stage company and have not yet
generated or realized any revenues from our business operations.
Our auditors have issued a going concern opinion. This means
that our auditors believe there is doubt that we can continue as an
on-going business for the next twelve months unless we obtain
additional capital to pay our bills. This is because we have not
generated any revenues and no revenues are anticipated until we begin
removing and selling minerals. Accordingly, we must raise cash from
sources other than the sale of minerals found on our property. That
cash must be raised from other sources. Our only other source for
cash at this time is investments by others in our company. We must
raise cash to implement our project and stay in business.
To meet our need for cash we are attempting to raise money from
this offering. There is no assurance that we will be able to raise
enough money through this offering to stay in business. What ever
money we do raise, will be applied first to exploration and then to
development, if development is warranted. If we do not raise all of
the money we need from this offering, we will have to find
alternative sources, like a second public offering, a private
placement of securities, or loans from our officers or others. We
have discussed this matter with our officers, however, our officers
are unwilling to make any commitment to loan us any money at this
time. At the present time, we have not made any arrangements to
raise additional cash, other than through this offering. If we need
additional cash and can't raise it we will either have to suspend
operations until we do raise the cash, or cease operations entirely.
We will be conducting research in connection with the
exploration of our property. We do intend to buy mining, milling and
laboratory equipment. We do not expect a change in our number of
employees.
<PAGE> 29
No Operating History; Need for Additional Capital
There is no historical financial information about our company
upon which to base an evaluation of our performance. We are an
exploration company and have not generated any revenues from
operations. We cannot guarantee we will be successful in our business
operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital
resources, possible delays in the exploration of our properties, and
possible cost overruns due to price and cost increases in services.
To become profitable and competitive, we conduct into the
research and exploration of our properties before we start
production of any minerals we may find. We are seeking equity
financing to provide for the capital required to implement our
research and exploration phases.
We have no assurance that future financing will be available to
us on acceptable terms. If financing is not available on
satisfactory terms, we may be unable to continue, develop or expand
our operations. Equity financing could result in additional dilution
to existing shareholders.
Results of Operations
From Inception on February 23, 2000.
We just recently acquired our first property and are planning
the research and exploration stage of our mining operations on that
property at this time.
Since inception, we have used our common stock to raise money
for our property acquisition and for corporate expenses.
Liquidity and Capital Resources
As of the date of this registration statement, we have yet to
generate any revenues from our business operations.
We issued 9,500,000 shares of common stock and 10,000,000
shares of class A preferred stock pursuant to Section 4(2) of the
Securities Act of 1933 in February 2000. The shares of common stock
and preferred stock were issued in exchange for securities and mining
claims valued at $466,794.
We also issued 50,000 common shares for a loan fee of $1,000.
The shares were issue pursuant to Section 4(2) Securities Act.
One of our officers and directors, Dale Runyon through Dynasty
Trust, an entity he controls, loaned us $60,000.
As of August 31, 2000, our total assets were $329,353 and our
total liabilities were $61,500.
<PAGE> 30
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MANAGEMENT
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Officers and Directors
Each of our directors is elected by the stockholders to a term
of one year and serves until his or her successor is elected and
qualified. Each of our officers is elected by the board of directors
to a term of one (1) year and serves until his or her successor is
duly elected and qualified, or until he or she is removed from
office. The board of directors has no nominating, auditing or
compensation committees.
The names, addresses, ages and positions of our present officers
and directors are set forth below:
Name and Address Age Positions
Dale L. Runyon 73 Chairman of the Board of Directors
528 Fon Du Lac Dr.
East Peoria, IL 61611
Roger D. Roemer 57 President an a member of the Board
6343 McLean Road of Directors
Minier, IL 61759
Richard G. Steeves 61 Secretary/Treasurer, Chief
1911 E. Meadowlake Dr. Financial Officer and a member of
Mahumet, IL 61853 the Board of Directors
The persons named above have held their offices/positions since
inception of our company and are expected to hold their
offices/positions until the next annual meeting of our stockholders.
Background of Officers and Directors
Dale L. Runyon - Chairman of the Board of Directors of the Company.
Mr. Runyon is a founder of the Company and since inception a
member of the Board of Directors. From March 1999 to November 1999,
Mr. Runyon was the secretary/treasurer and director of WindStar
Resources, Inc. formerly Turtleback Mountain Gold, Inc., an Arizona
corporation engaged in the business of mining. WindStar has since
changed its business and corporate name to Nexland, Inc. Since 1978,
Mr. Runyon has been a business consultant in the mining industry. As
a consultant, he assists companies with economic analysis of
potential mining properties and, in general, supervises "turnkey
projects" from start to finish. Since 1986, Mr. Runyon has been the
Chairman of the Board and Chief Executive Officer of Phoenix
International Mining, Inc., a Nevada corporation. Since 1987, Mr.
Runyon has been the Chairman of the Board and Chief Executive Officer
of Maxam Gold Corporation, a Nevada corporation, involved in the
business of mining. Mr. Runyon received a B.A. from Knox College and
is a retired Colonel in the United States Army.
<PAGE> 31
Roger D. Roemer - President and a member of the Board of Directors
Mr. Roemer is a founder, and since inception, its President and
a member of the Board of Directors. From 1966 to July 1997, Mr.
Roemer was a member of the security staff of Caterpillar, Inc. Since
July 1998, Mr. Roemer has been manager of Hidden Valley Mining, LLC
#1, an Arizona limited liability corporation controlled by Dale
Runyon, our Chairman of the Board of Directors.
Richard G. Steeves - Secretary/Treasurer, Chief Financial Officer and
a member of the Board of Directors
Mr. Steeves is a founder, and since inception, its
Secretary/Treasurer, Chief Financial Officer and a member of the
Board of Directors. Mr. Steeves was a member of the Board of
Directors of Nexland, Inc., formerly known as WindStar Resources,
Inc., formerly known as Turtleback Mountain Gold, Inc. from November
1996 to July 2000 and its Secretary/Treasurer and Chief Financial
Officer from November 1997 to August 2000. Since July 1998, Mr.
Steeves has been Secretary and a member of the Board of Directors of
Maxam Gold Gold Corporation, a Nevada corporation engaged in the
business of mining. Since July 1998, Mr. Steeves has been Secretary
and a member of the Board of Directors of Phoenix International,
Inc., a Nevada corporation engaged in the business of mining. From
July 1978 to August 1993, Mr. Steeves was the controller and division
manager of Southland Distribution Center. Southland Distribution
Center, a Texas corporation, is an operator of a convenience store
chain ("Seven-Eleven"). Since April 1993, Mr. Steeves has been the
President and a member of the Board of Directors of Sandaz
Corporation, a Nevada corporation. Sandaz Corporation is a natural
resources company. Since April 1993, Mr. Steeves has been the
President and a member of the Board of Directors of RGS Services,
Inc., an Illinois corporation. RGS Services, Inc. consults with
companies on business management, transportation and taxes. Mr.
Steeves received a B.A. from Hampton Institute, Hampton, Virginia.
Conflicts of Interest
We believe that Messrs. Runyon, Roemer and Steeves will be
subject to conflicts of interest. The conflicts of interest arise
from Messrs. Runyon, Roemer and Steeves's relationships with other
mining corporations. In the future, Messrs. Runyon, Roemer and
Steeves will continue to be involved in the mining business for other
entities and such involvement could create conflicts of interest. At
the present time, we do not foresee a direct conflict of interest
because we do not intend to acquire any additional mining properties.
The only conflicts that we foresee are Messrs. Runyon, Roemer and
Steeves's devotion of time to mining projects that do not involve us.
<PAGE> 32
Specifically, Mr. Runyon is an officer and director of Maxam
Gold Corporation and Phoenix International Mining, Inc. which are
engaged in the mining business. Mr. Roemer is a manager of Hidden
Valley Mining LLC #1 which is engaged in the mining business. Mr.
Steeves is an officer and director of Maxam Gold Corporation, Phoenix
International Mining, Inc., and Sandaz Corporation which are engaged
in the mining business. Presently, none of the foregoing operate
mines or receive royalties from properties operated by others.
--------------------------------------------------------------------
EXECUTIVE COMPENSATION
--------------------------------------------------------------------
Messrs. Runyon, Roemer and Steeves, our officers and directors,
were compensated in shares of common stock in the amount of $-0- for
their services and there are no plans to compensate them in the near
future, unless and until we begin to realize revenues and for our
business operations.
Indemnification
Pursuant to the Articles of Incorporation and Bylaws of the
corporation, we may indemnify an officer or director who is made a
party to any proceeding, including a law suit, because of his
position, if he acted in good faith and in a manner he reasonably
believed to be in our best interest. In certain cases, we may advance
expenses incurred in defending any such proceeding. To the extent
that the officer or director is successful on the merits in any such
proceeding as to which such person is to be indemnified, we must
indemnify him against all expenses incurred, including attorney's
fees. With respect to a derivative action, indemnity may be made only
for expenses actually and reasonably incurred in defending the
proceeding, and if the officer or director is judged liable, only by
a court order. The indemnification is intended to be to the fullest
extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the
Securities Act of 1933, as amended, which may be permitted to
directors or officers pursuant to the foregoing provisions, we are
informed that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy, as
expressed in the Act and is, therefore, unenforceable.
<PAGE> 33
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PRINCIPAL STOCKHOLDERS
--------------------------------------------------------------------
The following table sets forth, as of the date of this
prospectus, the total number of shares owned beneficially by each of
our directors, officers and key employees, individually and as a
group, and the present owners of 5% or more of our total outstanding
shares. The table also reflects what such ownership will be assuming
completion of the sale of all shares in this offering, which we can't
guarantee. The stockholder listed below has direct ownership of his
shares and possesses sole voting and dispositive power with respect
to the shares.
Name and Address Number of Number Percentage of
Beneficial Shares Before of Shares of Ownership
Owner [1] Offering After Offering After Offering
Dale L. Ruynon [2] 7,775,000 7,775,000 81.41%
528 Fon Du Lac Dr.
East Peoria, IL
Roger D. Roemer 375,000 375,000 3.93%
6343 McLean Rd.
Minier, IL
Richard G. Steeves 150,000 150,000 1.57%
1911 E. Meadowlake Dr.
Mahumet, IL
All Officers and Directors
as a Group (3) 8,300,000 8,300,000 86.91%
[1] The persons named above may be deemed to be a "parent" and
"promoter" of our company, within the meaning of such terms
under the Securities Act of 1933 by virtue of his/its direct
and indirect stock holdings. Messrs. Runyon, Roemer and Steeves
are the only "promoters" of our company.
[2] Includes shares owned by Mr. Runyon and shares owned by the
following entities which Mr. Runyon controls: Baragan Mountain
Mining LLC; Black Mountain Mining LLC; Bosque Mining LLC; Cactus
Valley Corp.; Charco Tank Mining LLC; Coyote Peak Mining LLC;
Getz Well Mining LLC; Hidden Valley Mining, LLC; Little Horn
Mining LLC; Llost Horse Peak Mining LLC; Maxam Gold Corporation;
Meltop Mining LLC; Mike Mining LLC; Peoria Precious Metals;
Phoenix International Mining Inc.; RFS Mining LLC; Tank Mountain
Gold, Inc,; and Uranco Mining LLC. Also, includes shares owned
by the following entities which Mr. Runyon is a trustee: Dynasty
Trust; Lost Horse Peak Trust; and Uranco Trust.
<PAGE> 34
Future Sales by Existing Stockholders
A total of 9,550,000 shares of common stock and 10,000,000
shares of preferred stock were issued to the existing stockholders,
all of which are "restricted securities," as that term is defined in
Rule 144 of the Rules and Regulations of the SEC promulgated under
the Securities Act. Under Rule 144, such shares can be publicly
sold, subject to volume restrictions and certain restrictions on the
manner of sale, commencing one (1) year after their acquisition.
Shares purchased in this offering, which will be immediately
resalable, and sales of all of our other shares after applicable
restrictions expire, could have a depressive effect on the market
price, if any, of our common stock and the shares we are offering.
--------------------------------------------------------------------
DESCRIPTION OF SECURITIES
--------------------------------------------------------------------
Common Stock
Our authorized capital stock consists of 50,000,000 shares of
common stock, par value $0.001 per share. The holders of our common
stock:
* have equal ratable rights to dividends from funds legally
available if and when declared by our board of directors;
* are entitled to share ratably in all of our assets
available for distribution to holders of common stock upon
liquidation, dissolution or winding up of our affairs;
* do not have preemptive, subscription or conversion rights
and there are no redemption or sinking fund provisions or
rights; and
* are entitled to one non-cumulative vote per share on all
matters on which stockholders may vote.
All shares of common stock now outstanding are fully paid for and
non-assessable and all shares of common stock which are the subject
of this offering, when issued, will be fully paid for and
non-assessable. We refer you to our Articles of Incorporation, Bylaws
and the applicable statutes of the State of Nevada for a more
complete description of the rights and liabilities of holders of our
securities.
Non-cumulative Voting
Holders of shares of our common stock do not have cumulative
voting rights, which means that the holders of more than 50% of the
outstanding shares, voting for the election of directors, can elect
all of the directors to be elected, if they so choose, and, in such
event, the holders of the remaining shares will not be able to elect
any of our directors. After this offering is completed, the present
stockholders will own approximately 70.68% of our outstanding
shares. See "Principal Stockholders."
<PAGE> 35
Cash Dividends
As of the date of this prospectus, we have not paid any cash
dividends to stockholders. The declaration of any future cash
dividend will be at the discretion of our board of directors and will
depend upon our earnings, if any, our capital requirements and
financial position, our general economic conditions, and other
pertinent conditions. It is our present intention not to pay any cash
dividends in the foreseeable future, but rather to reinvest earnings,
if any, in our business operations.
Preferred Shares
We are authorized to issue up to 50,000,000 preferred shares,
par value $0.001 per share. Currently, 10,000,000 shares of class A
preferred stock are outstanding. The relative rights, preferences,
designations, rates, conditions, privileges, limitations, dividend
rates, conversion rights, preemptive rights, voting rights, rights
and terms of redemption, liquidation preferences, and sinking terms
of the preferred stock shall be determined by our directors. The
10,000,000 class A preferred shares outstanding are non-voting, non-
cumulative, and are convertible into shares of common stock on the
basis of one share of preferred stock for one share of common stock.
Reports
After we complete this offering, we will not be required to
furnish you with an annual report. Further, we will not voluntarily
send you an annual report. We will be required to file reports with
the SEC under section 15(d) of the Securities Act. The reports will
be filed electronically. The reports we will be required to file are
Forms 10-KSB, 10-QSB, and 8-K. You may read copies of any materials
we file with the SEC at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. You may obtain information on
the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC also maintains an Internet site that will
contain copies of the reports we file electronically. The address
for the Internet site is www.sec.gov.
Stock Transfer Agent
Our stock transfer agent for our securities is Pacific Stock
Transfer Company, 5844 South Pecos Road, Suite D, Las Vegas, Nevada
89120 and its telephone number is (702) 361-3033.
<PAGE> 36
--------------------------------------------------------------------
CERTAIN TRANSACTIONS
--------------------------------------------------------------------
We issued 8,300,000 shares of common stock to our officers,
directors and entities controlled by Dale Runyon, our President in
consideration of securities and mining claims valued at $349,387.51.
Mr. Runyon controls the following entities which are shareholders of
the company: Baragan Mountain Mining LLC; Black Mountain Mining LLC;
Bosque Mining LLC; Cactus Valley Corp.; Charco Tank Mining LLC;
Coyote Peak Mining LLC; Getz Well Mining LLC; Hidden Valley Mining,
LLC; Little Horn Mining LLC; Llost Horse Peak Mining LLC; Maxam Gold
Corporation; Meltop Mining LLC; Mike Mining LLC; Peoria Precious
Metals; Phoenix International Mining Inc.; RFS Mining LLC; Tank
Mountain Gold, Inc,; and Uranco Mining LLC. Also, includes shares
owned by the following entities which Mr. Runyon is a trustee:
Dynasty Trust; Lost Horse Peak Trust; and Uranco Trust.
We issued 50,000 common shares to one of our officers for a loan
fee of $1,000.
One of our officers and directors, Dale Runyon through Dynasty
Trust, an entity he controls, loaned us $60,000. Since our
inception, Mr. Runyon, advanced loans to us in the total sum of
$60,000, which were used for organizational and start-up costs and
operating capital. The loans bear interest at a rate of 12% and have
not been paid as of the date hereof.
--------------------------------------------------------------------
LITIGATION
--------------------------------------------------------------------
We are not a party to any pending litigation and none is
contemplated or threatened.
--------------------------------------------------------------------
EXPERTS
--------------------------------------------------------------------
Our financial statements for the period from inception to
September 30, 2000, included in this prospectus have been audited by
Williams and Webster, P.C., Independent Certified Public Accountants,
Seafirst Financial Center, 601 West Riverside Avenue, Suite 1940,
Spokane, Washington 99201, as set forth in their report included in
this prospectus.
--------------------------------------------------------------------
LEGAL MATTERS
--------------------------------------------------------------------
Conrad C. Lysiak, Attorney at Law, 601 West First Avenue, Suite
503, Spokane, Washington 99201, telephone (509) 624-1475 has acted as
our legal counsel.
<PAGE> 37
--------------------------------------------------------------------
FINANCIAL STATEMENTS
--------------------------------------------------------------------
Our accounting year end is December 31. We will provide audited
financial statements to our stockholders on an annual basis. The
statements will be prepared by an Independent Certified Public
Accountant.
Our audited financial statement from inception to September 30,
2000 immediately follows:
INDEPENDENT AUDITOR'S REPORT F-1
FINANCIAL STATEMENTS
Balance Sheet F-2
Statement of Operations F-3
Statement of Stockholders' Equity F-4
Statement of Cash Flows F-5
NOTES TO THE FINANCIAL STATEMENTS F-6
<PAGE> 38
Board of Directors
Black Mountain Gold, Inc.
East Peoria, Illinois
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheet of Black Mountain
Gold, Inc. (an exploration stage company) as of August 31, 2000 and
the related statements of operations, cash flows, and stockholders'
equity for the period from February 23, 2000 (inception) through
August 31, 2000. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Black
Mountain Gold, Inc. as of August 31, 2000, and the results of its
operations and its cash flows for the period from February 23, 2000
(inception) to August 31, 2000, in conformity with generally accepted
accounting principles.
As discussed in Note 2, the Company has been in the exploration stage
since its inception and has no revenues. The Company's continued
viability is dependent upon the Company's ability to meet its future
financing requirements and the success of future operations. These
factors raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans regarding those
matters are described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/ Williams & Webster, P.S.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
September 28, 2000
F-1
<PAGE> 39
BLACK MOUNTAIN GOLD, INC.
(AN EXPLORATION STAGE ENTERPRISE)
BALANCE SHEET
August 31, 2000
ASSETS
CURRENT ASSETS
Cash $ 19,409
Trading securities - at fair value 29,700
------------
Total Current Assets 49,109
------------
OTHER ASSETS
Mining claims 110,025
Investment warrants 170,219
------------
Total Other Assets 280,244
TOTAL ASSETS $ 329,353
============
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,500
Related party notes payable 60,000
------------
Total Current Liabilities 61,500
COMMITMENTS AND CONTINGENCIES -
------------
STOCKHOLDERS' EQUITY
Convertible preferred stock, 50,000,000
shares authorized, $0.001 par value;
10,000,000 shares issued and outstanding 10,000
Common stock, 50,000,000 shares authorized,
$0.001 par value; 9,550,000 shares issued
and outstanding 9,550
Additional paid-in capital 534,610
Common stock subscribed (76,366)
Deficit accumulated during exploration stage (209,941)
------------
Total Stockholders' Equity 267,853
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 329,353
============
The accompanying notes are an integral part of these financial
statements.
F-2
<PAGE> 40
BLACK MOUNTAIN GOLD, INC.
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
For the Period from
February 23, 2000
(Inception) to
August 31, 2000
REVENUES $ -
-------------
EXPENSES
Contract services 23,178
Related party contract services 4,477
Professional fees 20,049
Mining claims expense 16,000
Rent expense 1,500
Other general and administrative expenses 9,566
-------------
Total Expenses 74,770
-------------
LOSS FROM OPERATIONS (74,770)
-------------
OTHER INCOME(EXPENSE)
Loss on fair market value of securities (28,954)
Realized losses on trading securities (106,217)
-------------
Total other income(expense) (135,171)
-------------
TOTAL LOSS BEFORE INCOME TAX (209,941)
INCOME TAXES -
-------------
NET LOSS $ (209,941)
=============
NET LOSS PER COMMON SHARE,
BASIC AND DILUTED $ (0.02)
=============
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES OUTSTANDING,
BASIC AND DILUTED 9,550,000
=============
The accompanying notes are an integral part of these financial
statements.
F-3
<PAGE> 41
BLACK MOUNTAIN GOLD, INC.
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY
Preferred Stock Common Stock
Number Number
of Shares Amount of Shares Amount
Issuance of preferred and common
stock for trading securities,
warrants and cash at
approximately $0.02 per share 10,000,000 $ 10,000 5,000,000 $ 5,000
Issuance of common stock in
exchange for securing mining
claims at approximately
$0.02 per share - - 4,500,000 4,500
Issuance of common stock as
loan fee at $0.02 per share - - 50,000 50
Loss for period ending,
August 31, 2000 - - - -
---------- -------- --------- -------
Balance, August 31, 2000 10,000,000 $ 10,000 9,550,000 $ 9,550
========== ======== ========= =======
The accompanying notes are an integral part of these financial
statements.
F-4a
<PAGE> 42
BLACK MOUNTAIN GOLD, INC.
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
Accumulated
Additional Common During Total
Paid-In Stock Exploration Stockholders'
Capital Subscribed Stage Equity
Issuance of preferred and common
stock for trading securities,
warrants and cash at
approximately $0.02 per share$ 428,135 $ (76,366) $ - $ 366,769
Issuance of common stock in
exchange for securing mining
claims at approximately
$0.02 per share 105,525 - - 110,025
Issuance of common stock as
loan fee at $0.02 per share 950 - - 1,000
Loss for period ending,
August 31, 2000 - - (209,941) (209,941)
--------- --------- ----------- ---------
Balance, August 31, 2000 $ 534,610 $ (76,366) $ (209,941)$ 267,853
========= ========= =========== =========
The accompanying notes are an integral part of these financial
statements.
F-4b
<PAGE> 43
BLACK MOUNTAIN GOLD, INC.
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
For the Period from
February 23, 2000
(Inception) to
August 31, 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (209,941)
Increase in accounts payable 1,500
Loan bonus paid by issuing common stock 1,000
Loss on fair market value of trading securities 28,954
Loss on sale of trading securities 106,217
------------
Net cash used by operating activities (72,270)
------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of trading securities 81,129
------------
Net cash provided by investing activities 81,129
------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of stock 550
Proceeds from notes payable 10,000
------------
Net cash provided by financing activities 10,550
------------
Change in cash 19,409
Cash, beginning of period -
------------
Cash, end of period $ 19,409
============
SUPPLEMENTAL DISCLOSURES:
Interest paid, in cash $ -
============
Income taxes paid, in cash $ -
============
NON-CASH TRANSACTIONS:
Stock issued in exchange for subscription for
common stock $ 110,025
Common stock subscriptions paid from trading securities
and warrants $ 87,216
Note payable exchanged for trading securities $ 50,000
Loan bonus paid by issuing common stock $ 1,000
The accompanying notes are an integral part of these financial
statements.
F-5
<PAGE> 44
BLACK MOUNTAIN GOLD, INC.
(A EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
August 31, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Black Mountain Gold, Inc. (hereinafter "the Company") was
incorporated on February 23, 2000 under the laws of the State of
Nevada for the purpose of acquiring, exploring and developing mining
properties. The Company's fiscal year end is December 31. Upon
formation, the Company issued its stock and warrants in exchange for
common stock and warrants in a communications company (see Note 3)
and unpatented mining claims in Arizona which are in the process of
being transferred to the Company (see Note 8).
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Black Mountain
Gold, Inc. is presented to assist in understanding the Company's
financial statements. The financial statements and notes are
representations of the Company's management which is responsible for
their integrity and objectivity. These accounting policies conform
to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
Exploration Stage Activities
The Company has been in the exploration stage since its formation in
February 2000 and has not yet realized any revenues from its planned
operations. It is primarily engaged in the acquisition, exploration
and development of mining properties. Upon location of a commercial
minable reserve, the Company expects to actively prepare the site for
its extraction and enter the development stage.
Going Concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern.
As shown in the accompanying financial statements, the Company
incurred a net loss of $209,941 for the period ended August 31, 2000
and had no sales. The future of the Company is dependent upon its
ability to obtain financing and upon future profitable operations
from the development of its mineral properties. Management plans to
identify and develop additional private funding for its operations.
The financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets, or the
amounts and classification of liabilities that might be necessary in
the event the Company cannot continue in existence.
Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
F-6
<PAGE> 45
BLACK MOUNTAIN GOLD, INC.
(A EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
August 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Fair Value of Financial Instruments
The carrying amounts for cash, marketable securities, accounts
receivable, accounts payable, notes payable and accrued liabilities
approximate their fair value.
Basic and Diluted Loss Per Share
Loss per share was computed by dividing the net loss by the weighted
average number of shares outstanding during the period. The weighted
average number of shares was calculated by taking the number of
shares outstanding and weighting them by the amount of time that they
were outstanding. As of August 31, 2000, the Company had 10,000,000
shares of preferred stock outstanding, which is convertible to common
stock at a rate of one preferred share to one share of common stock.
Preferred shares, which may be converted to shares of common stock
twelve months after the Company completes an initial public offering,
are considered anti-dilutive and have not been included as part of
the diluted loss per share calculation at August 31, 2000.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers
all short-term debt securities purchased with a maturity of three
months or less to be cash equivalents.
Provision for Taxes
At August 31, 2000, the Company had a net operating loss of
approximately $209,000. No provision for taxes or tax benefit has
been reported in the financial statements, as there is not a
measurable means of assessing future profits or losses.
Use of Estimates
The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of
estimates and assumptions regarding certain types of assets,
liabilities, revenues, and expenses. Such estimates primarily relate
to unsettled transactions and events as of the date of the financial
statements. Accordingly, upon settlement, actual results may differ
from estimated amounts.
Derivative Instruments
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 122,
"Accounting for Derivative Instruments and Hedging Activities." This
standard establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It requires
that an entity recognizes all derivatives as either assets or
liabilities in the balance sheet and measure those instruments at
fair value.
<PAGE> 46
BLACK MOUNTAIN GOLD, INC.
(A EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
August 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
At August 31, 2000, the Company has not engaged in any transactions
that would be considered derivative instruments or hedging
activities.
Impaired Asset Policy
In March 1995, the Financial Accounting Standards Board issued a
statement titled "Accounting for Impairment of Long-lived Assets."
In complying with this standard, the Company will review its long-
lived assets quarterly to determine if any events or changes in
circumstances have transpired which indicate that the carrying value
of its assets may not be recoverable. The Company does not believe
any adjustments are needed to the carrying value of its assets at
August 31, 2000.
Concentration of Risk
As of August 31, 2000, 100% of investments owned by the Company were
held in one security. The security trades on the NASDAQ market as a
small capitalization security (small cap). Small cap securities, by
their nature, are highly volatile. The fair market value of the
securities as of August 31, 2000 was $29,700. See Note 3.
Investments
The Company's investments are tracked using the average cost method.
Exploration Costs
In accordance with generally accepted accounting principles, the
Company will expense exploration costs as incurred.
Year 2000 Issues
Like other companies, Black Mountain Gold, Inc. could be adversely
affected if the computer systems the Company, its suppliers or
customers use do not properly process and calculate date-related
information and data from the period surrounding and including January
1, 2000. This is commonly known as the "Year 2000" issue.
Additionally, this issue could impact non-computer systems and devices
such as production equipment and elevators, etc. At this time, the
Company does not have any evidence of problems associated with the Year
2000 issue.
NOTE 3 - INVESTMENTS IN SECURITIES
On February 23, 2000, the Company's stockholders were committed to
contribute 37,888 common stock shares of Nexland, Inc. valued at $7 per
share to the Company. As of August 31, 2000, the Company had received
28,000 shares of Nexland, Inc.'s stock.
F-8
<PAGE> 47
BLACK MOUNTAIN GOLD, INC.
(A EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
August 31, 2000
NOTE 3 - INVESTMENTS IN SECURITIES (CONTINUED)
On August 25, 2000, a shareholder exchanged 50,000 additional shares
of Nexland Inc.'s stock for a note payable. See Note 10.
The Company subsequently sold 45,300 shares of Nexland Inc.'s stock
for $81,127, recognizing a loss of $106,219.
Investments in securities are summarized as follows at August 31,
2000:
Change in Fair
Market Value
Value August 31,
2000
Trading securities:
Nexland Common Stock $ (28,954) $ 29,700
---------- -----------
As part of its original capitalization, the Company was to receive
177,369 Nexland, Inc.'s Class A' warrants for the issuance of its
common stock valued at $1 per warrant. As of August 31, 2000, the
Company had received from stock subscription agreements 170,219 of
these warrants. Nexland A' Warrants are exercisable for $1 each for
one common stock share until December 31, 2000, at which time, the
exercisable price will be increased to $2.50. The warrants will
expire on August 16, 2001. The warrants are not tradable on any
recognized market and are presented as other assets until converted
to common stock.
Change in Fair
Market Value
Value August 31,
2000
Other Assets
Nexland A' Warrants $ -0- $ 170,219
============ ==========
NOTE 4 - PREFERRED STOCK
Upon incorporation, the Company authorized 50,000,000 preferred stock
shares, which are convertible and nonparticipating. As of August 31,
2000, 10,000,000 shares of preferred stock were issued and outstanding.
The preferred stock is convertible into 10,000,000 common stock shares
twelve months after the Company completes an initial public offering.
F-9
<PAGE> 48
BLACK MOUNTAIN GOLD, INC.
(A EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
August 31, 2000
NOTE 5 - COMMON STOCK
Upon incorporation, the Company authorized 50,000,000 shares of
common stock. Common stock shares of 9,500,000 were issued in
exchange for a combination of Nexland A' Warrants, Nexland common
stock, and mining claims. The shares were issued pursuant to Rule
144 of the 1933 Securities Act and, thus, they are restricted as to
public transfer for a minimum period of one year. Shares of common
stock that were issued for other than cash have been assigned amounts
equivalent to the fair value of the assets received in exchange. See
Note 8.
On August 25, 2000, 50,000 common stock shares were issued as a bonus
for shareholder loan. See Note 10.
NOTE 6 - COMMON STOCK SUBSCRIPTION RECEIVABLE
The Company entered into stock subscription agreements upon its
formation. In return for receiving shares of the Company's common
and preferred stock and warrants, participating stockholders agreed
to give the Company 37,888 shares of Nexland, Inc.'s common stock,
177,369 Nexland Inc.'s warrants exercisable for Nexland Inc.'s common
stock, and unpatented mining claims. As of August 31, 2000, the
Company had received 28,000 shares of Nexland Inc.'s common stock and
170,219 warrants from these agreements. The subscribed balance of
9,889 shares of Nexland, Inc.'s common stock and 7,150 of warrants
were still to be delivered as of August 31, 2000.
NOTE 7 - OUTSTANDING WARRANTS
At August 31, 2000, the Company had issued A and B warrants to
purchase 3,000,000 shares of the Company's common stock at prices of
$5 and $10 per share, respectively, as part of the contribution of
mining claims to organize the Company. The warrants are exercisable
and will begin to expire December 31, 2002. As of August 31, 2000,
no value had been assigned to the warrants since their exercise price
significantly exceeds the value of the Company's common stock
established upon organization at approximately $0.024 per share.
NOTE 8 - MINING CLAIMS
The Company issued common stock, A and B Warrants in exchange of
receiving unpatented mining claims. These unpatented mining claims
were valued at $110,025 based upon the fair value of the Company's
common stock issued at approximately $0.024 per share. At August 31,
2000, the Company is in the process of receiving title to the mining
claims. See Note 5.
F-10
<PAGE> 49
BLACK MOUNTAIN GOLD, INC.
(A EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
August 31, 2000
NOTE 9 - COMMITMENTS AND CONTINGENCIES
The Company is engaged in the exploration and development of mineral
properties. At present, there are no feasibility studies
establishing proven and probable reserves.
Although the minerals exploration and mining industries are
inherently speculative and subject to complex environmental
regulations, the Company is unaware of any pending litigation or of
any specific past or prospective matters which could impair the value
of its mining claims.
The Company is presently undertaking the required steps to register
as a publicly traded company. In this regard, the Company has signed
a contract with a securities attorney to assist in this matter. The
total fees to be paid to the attorney amount to $25,000. Of this
amount, $15,000 has been paid and is recorded as professional fees.
The remaining $10,000 will be due when the Company's registration
statement is declared effective by the Securities and Exchange
Commission.
NOTE 10 - SHORT TERM NOTES PAYABLE
The Company has recorded notes payable to a related party of $60,000.
This amount is represented by two promissory notes at 12% interest,
and is due on demand. The first note, dated June 13, 2000, was
exchanged for $10,000 cash. The second note, dated August 25, 2000,
was exchanged for 50,000 Nexland Inc.'s common stock shares, valued
at $50,000. A bonus of the Company's 50,000 common stock shares was
attached to the second note. (See Note 5.) These notes are
unsecured and uncollateralized.
NOTE 11 - RELATED PARTIES
On June 1, 2000, the Company began paying $500 a month for office
rent to a related party. At present there is a verbal agreement on a
month to month basis. Negotiations are still underway to formalize
this agreement in writing.
Two promissory notes for $60,000 bearing interest of 12% payable upon
demand are due to a shareholder. See Note 10.
A total of $4,477 was paid to a related party for accounting
services.
F-11
<PAGE> 50
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The only statute, charter provision, bylaw, contract, or other
arrangement under which any controlling person, director or officer
of the Registrant is insured or indemnified in any manner
against any liability which he may incur in his capacity as such, is as
follows:
1. Article XII of the Articles of Incorporation of the company,
filed as Exhibit 3.1 to the Registration Statement.
2. Article XI of the Bylaws of the company, filed as Exhibit 3.2
to the Registration Statement.
3. Nevada Revised Statutes, Chapter 78.
The general effect of the foregoing is to indemnify a control
person, officer or director from liability, thereby making the company
responsible for any expenses or damages incurred by such control
person, officer or director in any action brought against them
based on their conduct in such capacity, provided they did not
engage in fraud or criminal activity.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering (assuming all shares are
sold), all of which are to be paid by the registrant, are as follows:
SEC Registration Fee . . . . . . $ 13,200
Commissions . . . . . . . . $ 5,000,000
Printing Expenses . . . . . . . $ 25,000
Accounting Fees and Expenses . . . . . $ 25,000
Legal Fees and Expenses . . . . . . $ 25,000
Blue Sky Fees/Expenses . . . . . . $ 365,000
Transfer Agent Fees . . . . . . $ 25,000
Miscellaneous Expenses . . . . . . $ 150,800
------------
TOTAL $ 5,628,200
============
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Registrant has sold the
following securities which were not registered under the
Securities Act of 1933, as amended.
<PAGE> 51
Common Shares and Convertible Class "A" Preferred Shares
Name and Address Date Shares Consideration
------------------ --------- ----------------- ----------------
Baragan Mountain LLC 05/17/00 50,000 Common 1,719 "A" Warrants
528 Fon du Lac 100,000 Preferred and 488 Common
East Peoria, IL 61611 Shares of Nexland,
Inc. value $1,719
Robert Brown 06/29/00 200,000 Common 1,550 and 6,450
40100 Brandywine 400,000 Preferred Common Shares of
#404 Nexland, Inc. value
East Peoria, IL 61614 $3,487.50
Joe Bruckman 06/21/00 75,000 Common 3,380 "A" Warrants
204 North Main 150,000 Preferred of Nexland, Inc.
Washington, IL 61571 valued $3,300
Cactus Valley Mining Inc.06/21/00 100,000 Common 4,400 "A" Warrants
528 Fon du Lac 200,000 Preferred of Nexland, Inc.
East Peoria, IL 61611 value $4,400
Aaron Cathart 09/20/00 25,000 Common 1,000 Common Shares
4616 Highway 56 50,000 Preferred of Nexland, Inc.
Chavin, LA 70344 value $760.25
Dynasty Trust 04/26/00 500,000 Common 20,000 Common Shares
Dale L. & Doris Runyon 1,000,000 Preferred of Nexland, Inc.
528 Fon du Lac value $62,500
East Peoria, IL 61611
Byron Farrel 06/21/00 87,500 Common 3,750 "A" Warrants
826 Banyon Court 175,000 Preferred of Nexland, Inc.
Marco Island, FL 34145 value $3,750
Getz Well Mining LLC 06/21/00 100,000 Common 4,400 "A" Warrants
528 Fon du Lac 200,000 Preferred of Nexland, Inc.
East Peoria, IL 61611 value 4,400
Hidden Valley
Mining LLC#1 06/21/00 1,500,000 Common 66,000 "A" Warrants
528 Fon du Lac 3,000,000 Preferred of Nexland, Inc.
East Peoria, IL 61611 value $66,000
Bob Jones 03/09/00 25,000 Common 1,000 common shares
207 N.W. Madison St. 50,000 Preferred of Nexland, Inc.
Rushville, IL 62861 value $7,000
Charlie Knapp 5/31/00 75,000 Common 2,700 "A" Warrant
307 Galesburg Dr. 150,000 Preferred and 600 Common
Knoxville, IL 51448 Shares value $4,425
Maurice &
Julia Littlefield 06/21/00 50,000 Common 2,200 "A" Warrants
2 Quail Covey Road 100,000 Preferred of Nexland, Inc.
Lexington, VA 24450 value $2,200
<PAGE> 52
Common Shares and Convertible Class "A" Preferred Shares
Name and Address Date Shares Consideration
------------------ --------- ------------------- ----------------
Donna Logsdon 06/21/00 25,000 Common 1,100 "A" Warrants
133 N. 4th St. 50,000 Preferred of Nexland, Inc.
Springfield, IL 62702 value $1,100
Maxam Gold Corporation 06/21/00 25,000 Common 1,100 "A" Warrants
528 Fon du Lac 50,000 Preferred of Nexland, Inc.
East Peoria, IL 61611 value $1,100
Louis & Polly Myers 06/21/00 25,000 Common 1,100 "A" Warrants
595 Lime Drive 50,000 Preferred of Nexland, Inc.
Petersburg, IL value $1,100
Phoenix International
Mining Inc. 06/21/00 1,262,500 Common 44,000 "A" Warrants
528 Fon du Lac 2,525,000 Preferred of Nexland, Inc.
East Peoria, IL 61611 value $44,000
Joel & Patricia Postma 08/22/00 25,000 Common 1,100 "A" Warrants
1446 E. Grovers Avenue 50,000 Preferred of Nexland, Inc.
#8 value $1,100
Phoenix, AZ 85022
RGS Services 03/14/00 50,000 Common 2,000 Common Shares
1811 E. Meadow Lake Dr. 100,000 Preferred of Nexland, Inc.
Mahomet, IL 61853 value $14,000
Roger Roemer 06/21/00 125,000 Common 5,500 "A" Warrants
6343 McLean Road 250,000 Preferred of Nexland, Inc.
Miner, IL 61759 value $5,500
Robert Rask 06/21/00 75,000 Common 3,300 "A" Warrants
P. O. Box 144 150,000 Preferred of Nexland, Inc.
Victoria, IL 61485 value $3,300
Lowell Rask 06/21/00 325,000 Common 14,300 "A" Warrants
P. O. Box 98 100,000 Preferred of Nexland, Inc.
Victoria, IL 61485 value $14,300
Harriet Rucker 04/14/00 175,000 Common 7,500 "A" Warrants
1003 W. Centennial Drive 350,000 Preferred and 200 Common
Peoria, IL 61614 Shares value
$8,712.60
Carol Jean Runyon 07/26/00 25,000 Common 1,100 "A" Warrants
1333 N. 92nd St. 50,000 Preferred of Nexland, Inc.
#109 value $1,100
Scottsdale, AZ 85260
Daniel & Karen Runyon 07/05/00 75,000 Common 3,300 "A" Warrants
5713-A Brown Avenue 150,000 Preferred of Nexland, Inc.
Fort Knox, KY 40121 value $ 3,300
<PAGE> 53
Common Shares and Convertible "A" Preferred Shares
Name and Address Date Shares Consideration
---------------- --------- ------------------- ----------------
Raymond Schurwanz 50,000 Common Receivable
807-B Valley Stream Dr. 100,000 Preferred
Wheeling, IL 60090
Frank Shafer 08/21/00 125,000 Common 1,650 Common Shares
R.R. #1, Box 125 250,000 Preferred of Nexland, Inc.
Wyoming, IL 61491 value $2,062.50
Uranco Trust #1 10/17/00 25,000 Common 1,100 "A" Warrants
528 Fon du Lac 50,000 Preferred of Nexland, Inc.
East Peoria, IL 61611 value $1,100
George Wright 09/07/00 25,000 Common 1,000 Common Shares
1101 Center Street 50,000 Preferred of Nexland, Inc.
New Iberia, LA 70560 value $1,000
Christopher Wright 09/07/00 25,000 Common 1,000 Common Shares
1101 Center Street 50,000 Preferred of Nexland, Inc.
New Iberia, LA 70560 value $1,000
<PAGE> 54
ITEM 27. EXHIBITS.
The following Exhibits are filed as part of this Registration
Statement, pursuant to Item 601 of Regulation SB.
Exhibit No. Document Description
3.1 Articles of Incorporation.
3.2 Bylaws.
4.1 Specimen Stock Certificate.
5.1 Opinion of Conrad C. Lysiak, Esq. regarding the legality
of the Securities being registered.
23.1 Consent of Williams & Webster, P.S., Certified Public
Accountants.
23.2 Consent of Conrad C. Lysiak, Esq.
27.1 Financial Data Schedule.
99.1 Subscription Agreement.
<PAGE> 55
ITEM 28. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
1. File, during any period in which is offers or sells
securities, a post-effective amendment to this registration statement
to:
(i) Include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the law
of high end of the estimated maximum offering range may be reflect
in the form of prospects filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in the volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in this registration statement.
(iii) Include any additional or changed material information
on the plan of distribution.
2. For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to
be the initial bona fide offering.
3. File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
<PAGE> 56
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing of this Form SB-2 Registration
Statement and has duly caused this Form SB-2 Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in East
Peoria, Illinois, on this 6th day of November, 2000.
BLACK MOUNTAIN GOLD, INC.
BY: /s/ Roger D. Roemer
Roger D. Roemer
President, Principal Executive Officer,
and a member of the Board of Directors
BY: /s/ Richard Steeves
Richard Steeves
Treasurer, Principal Financial Officer, and
Principal Accounting Officer
KNOW ALL MEN BY THESE PRESENT, that each person whose signature
appears below constitutes and appoints Roger D. Roemer, as true and lawful
attorney-in-fact and agent, with full power of substitution, for his and in
his name, place and stead, in any and all capacities, to sign any and all
amendment (including post-effective amendments) to this registration
statement, and to file the same, therewith, with the Securities and
Exchange Commission, and to make any and all state securities law or blue
sky filings, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite or
necessary to be done in about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying the confirming
all that said attorney-in-fact and agent, or any substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Form
SB-2 Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
/s/ Dale L. Runyon
Dale L. Runyon Chairman of the Board November 6, 2000
of Directors
/s/ Roger D. Roemer President and a member November 6, 2000
Roger D. Roemer of the Board of Directors
Principal Executive
Officer
/s/ Richard G. Steeves
Richard G. Steeves Secretary/Treasurer, November 6, 2000
Principal Financial Officer
Principal Accounting
Officer and a member
of the Board of Directors
