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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
ABBOTT MINES LIMITED
(Name of small business issuer in its charter)
Nevada 1081 88-0467845
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(State or Other (Primary Standard (IRS Employer
Jurisdiction of Industrial Identification #)
Organization) Classification Code)
ABBOTT MINES LIMITED Conrad C. Lysiak, Esq.
1160 1040 West Georgia St. 601 West First Avenue, Suite 503
Vancouver, B.C., Canada V6E 4H1 Spokane, Washington 99201
(604) 605-0885 (509) 624-1475
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(Address and telephone of (Name, address and telephone
registrant's executive office) number of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this
Registration Statement.
If this Form is filed to register additional common stock for an
offering 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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Aggregate
Securities Amount To Be Offering Price Offering Registration
To Be Registered Registered Per Share Price Fee [1]
Common Stock: 2,000,000 Shares $0.10 $200,000 $ 100.00
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[1] Estimated solely for purposes of calculating the registration
fee 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
ABBOTT MINES LIMITED
Shares of Common Stock
No Minimum - 2,000,000 Maximum
Before this offering, there has been no public market for the
common stock.
We are offering up to a total of 2,000,000 shares of common
stock on a best efforts, no minimum, 2,000,000 shares maximum. The
offering price is $0.10 per share. There is no minimum number of
shares that we have to sell. There will be no escrow account. All
money received from the offering will be immediately used by us and
there will be no refunds. The offering will be for a period of 90
days from the effective date and may be extended for an additional 90
days if we so choose to do so.
Investing in 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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Common Stock $0.10 $200,000 $150,000
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Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or determined if this prospectus is truthful or complete. It's
illegal to tell you otherwise.
The date of this prospectus is ____________________.
<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 . . . . . . . . . 10
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. . . 20
Management . . . . . . . . . . 22
Executive Compensation . . . . . . . 24
Principal Shareholders . . . . . . . 25
Description of Securities . . . . . . . 26
Certain Transactions . . . . . . . 27
Litigation . . . . . . . . . . 27
Experts . . . . . . . . . . 27
Legal Matters . . . . . . . . . 28
Financial Statements . . . . . . . . 29
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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 stage company. We own one property. We
intend to explore for gold on our property.
Our administrative office is located at 1160-1040 West Georgia
Street, Vancouver, British Columbia, Canada V6E 4H1, telephone (604)
605-0885 and our registered statutory office is located at 5844 South
Pecos Road, Suite D, Las Vegas, Nevada 89120. Our fiscal year end is
June 30.
The Offering
Following is a brief summary of this offering:
Securities being offered . . . Up to 2,000,000 shares of
common stock, par value
$0.00001.
Offering price per share . . $ 0.10
Offering period . . . . The shares are being offered
for a period not to exceed 90
days, unless extended by our
board of directors for an
additional 90 days.
Net proceeds to our company . . Approximately $150,000.
Use of proceeds . . . . We will use the proceeds to
pay for offering expenses,
research and exploration.
Number of shares outstanding
before the offering . . . 5,000,000
Number of shares outstanding
after the offering . . . 7,000,000
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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 June 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 $275,138. 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 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 province of British Columbia
may affect and delay our proposed exploration operations.
Our proposed exploration work can only be performed
approximately five to six months out of the year. This is because
rain and snow cause roads leading to our claims to be impassible
during four months of the year. When roads are impassible, we are
unable to work and generate income.
<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, like
dynamite, 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 locates products, equipment and materials after
this offering is complete. If we cannot find the products and
equipment we need, we will have to suspend our exploration plans
until we do find the products and equipment we need.
7. 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. In 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 Mr. Muzylowski or Mr. Civelli
are officers or directors, a direct conflict of interest could
result.
<PAGE> 8
Risks Associated with This Offering:
10. Because we are a penny stock, you may not be able to
resell our shares.
Our common stock is defined as a "penny stock" under the
Securities and Exchange Act of 1934, and its rules. Because we are a
penny stock, you may be unable to resell our shares. 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 are willing to make a market in our
stock.
11. After this offering, control of the company will remain
with Messrs. Muzylowski and Civelli which may inhibit a change of
control.
Even if we sell all 2,000,000 shares of common stock in this
offering, Messrs. Muzylowski and Civelli will still own 5,000,000
shares and will continue to control us. As a result, after
completion of this offering, regardless of the number of shares we
sell, Messrs. Muzylowski and Civelli 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. Muzylowski and Civelli's control can have a
depressive effect on the market price of stock.
Because Messrs. Muzylowski and Civelli 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. Muzylowski and Civelli will receive a substantial
benefit from your investment.
Messrs Muzylowski and Civelli, our only shareholders will
receive a substantial benefit from your investment. They are
supplying the property to be explored which is valued at $135, cash
of $133 and a loan of $11,400 which has to be repaid. You, on the
other hand, will be providing all of the cash for our operations. AS
a result, if we cease operations for any reason, you will lose your
investment while Messrs Muzylowski and Civelli will lose only
approximately $11,668.
<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 by our officers and directors will likely
cause the market price for the common stock to drop.
A total of 5,000,000 shares of stock were issued to our two
officers and directors. They paid an average price of $0.055 .
They will likely sell a portion of their stock if the market price
goes above $0.10. If they do sell there 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 $50,000
will be $150,000 if all of the shares are sold. The first $50,000
raised will be used offering expenses. We will use the net proceeds
as follows:
Amount raised $ 50,000 $100,000 $150,000 $200,000
Allocation
Offering expenses $ 50,000 $ 50,000 $ 50,000 $ 50,000
Exploration $ 0 $ 50,000 $ 100,000 $ 140,000
Working capital $ 0 $ 0 $ 0 $ 10,000
<PAGE> 10
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 total of $200,000 in this
offering. The offering price bears no relationship whatsoever to our
assets, earnings, book value or other criteria of value. Among the
factors considered were:
* our lack operating history
* the proceeds to be raised by the offering
* the amount of capital to be contributed by purchasers in
this offering in proportion to the amount of stock to be
retained by our existing Stockholders, and
* our relative cash requirements.
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CAPITALIZATION
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The following table sets forth our capitalization at July 31,
2000, on a 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.
<PAGE> 11
07/31/00 As Adjusted After Offering
Actual 25% 50% 75% 100%
Stockholder's Equity:
Common Stock: 100,000,000
shares authorized,
par value $0.00001
5,000,000 issued and
outstanding $ 50
5,500,000 issued and
outstanding $ 55
6,000,000 issued and
outstanding $ 60
6,500,000 issued and
outstanding $ 65
7,000,000 issued and
outstanding $ 70
Additional Paid-in
Capital $ 274,950 $ 274,945 $ 324,940 $ 374,935 $ 424,930
Deficit accumulated
during the
exploration stage $(275,138) $(275,138) $(275,138) $(275,138) $(275,138)
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TOTAL STOCKHOLDERS'
EQUITY (deficit) $ (138) $ (138) $ 49,862 $ 99,862 $ 149,862
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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.
As of July 31, 2000, the net tangible book value of our shares
of common stock was a deficit of $(138) or approximately NIL per
share based upon 5,000,000 shares outstanding.
Upon completion of this offering, in the event all of the shares
are sold, the net tangible book value of the 7,000,000 shares to be
outstanding will be $149,862, or approximately $0.02 per share. The
net tangible book value of the shares held by our existing
stockholders will be increased by $0.02 per share without any
additional investment on their part. You will incur an immediate
dilution from $0.10 per share to $0.02 per share.
<PAGE> 12
Upon completion of this offering, in the event 75% of the shares
are sold, the net tangible book value of the 6,500,000 shares to be
outstanding will be $99,862, or approximately $0.02 per share. The
net tangible book value of the shares held by our existing
stockholders will be increased by $0.02 per share without any
additional investment on their part. You will incur an immediate
dilution from $0.10 per share to $0.02 per share.
Upon completion of this offering, in the event 50% of the shares
are sold, the net tangible book value of the 6,000,000 shares to be
outstanding will be $49,862, or approximately $0.01 per share. The
net tangible book value of the shares held by our existing
stockholders will be increased by $0.01 per share without any
additional investment on their part. You will incur an immediate
dilution from $0.10 per share to $0.01 per share.
Upon completion of this offering, in the event 25% of the shares
are sold, the net tangible book value of the 5,500,000 shares to be
outstanding will be $(138), or approximately NIL per share. The net
tangible book value of the shares held by our existing stockholders
will be increased by NIL per share without any additional investment
on their part. You will incur an immediate dilution from $0.10 per
share to $0.01 per share.
After completion of this offering, if 2,000,000 shares are sold,
you will own approximately 28.57% of the total number of shares then
outstanding shares for which you will have made a cash investment of
$200,000, or $0.10 per share. Our existing stockholders will own
approximately 71.43% of the total number of shares then outstanding,
for which they have made contributions of cash and/or services and/or
other assets, totaling $275,000, or approximately $0.055 per share.
After completion of this offering, if 1,500,000 shares are sold,
you will own approximately 23.08% of the total number of shares then
outstanding shares for which you will have made a cash investment of
$150,000, or $0.10 per share. Our existing stockholders will own
approximately 76.92% of the total number of shares then outstanding,
for which they have made contributions of cash and/or services and/or
other assets, totaling $275,000, or approximately $0.055 per share.
After completion of this offering, if 1,000,000 shares are sold,
you will own approximately 16.67% of the total number of shares then
outstanding shares for which you will have made a cash investment of
$100,000, or $0.10 per share. Our existing stockholders will own
approximately 83.33% of the total number of shares then outstanding,
for which they have made contributions of cash and/or services and/or
other assets, totaling $275,000, or approximately $0.055 per share.
<PAGE> 13
After completion of this offering, if 500,000 shares are sold,
you will own approximately 9.09% of the total number of shares then
outstanding shares for which you will have made a cash investment of
$50,000, or $0.10 per share. Our existing stockholders will own
approximately 90.91% of the total number of shares then outstanding,
for which they have made contributions of cash and/or services and/or
other assets, totaling $275,000, or approximately $0.055 per share.
The following table compares the differences of your investment
in our shares with the investment of our existing stockholders.
Existing Stockholders
Price per share . . . . . . . $ 0.055
Net tangible book value per share before offering . $ -0-
Net tangible book value per share after offering $ 0.02
Increase to present stockholders in net tangible book
value per share after offering . . . . $ 0.02
Capital contributions . . . . . . $ 275,000
Number of shares outstanding before the offering 5,000,000
Number of shares after offering
held by existing stockholders . . . . 5,000,000
Percentage of ownership after offering . . . 71.43%
Purchasers of Shares in this Offering if all Shares Sold
Price per share . . . . . . . $ 0.10
Dilution per share . . . . . . . $ 0.08
Capital contributions . . . . . . $ 200,000
Number of shares after offering held
by public investors . . . . . . 2,000,000
Percentage of ownership after offering . . . 28.57%
Purchasers of Shares in this Offering if 75% of Shares Sold
Price per share . . . . . . . $ 0.10
Dilution per share . . . . . . . $ 0.08
Capital contributions . . . . . . $ 150,000
Number of shares after offering held
by public investors . . . . . . 1,500,000
Percentage of ownership after offering . . . 23.08%
Purchasers of Shares in this Offering if 50% of Shares Sold
Price per share . . . . . . . $ 0.10
Dilution per share . . . . . . . $ 0.09
Capital contributions . . . . . . $ 100,000
Number of shares after offering held
by public investors . . . . . . 1,000,000
Percentage of ownership after offering . . . 16.67%
<PAGE> 14
Purchasers of Shares in this Offering if 25% of Shares Sold
Price per share . . . . . . . $ 0.10
Dilution per share . . . . . . . $ 0.10
Capital contributions . . . . . . $ 50,000
Number of shares after offering held
by public investors . . . . . . 500,000
Percentage of ownership after offering . . . 9.09%
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PLAN OF DISTRIBUTION; TERMS OF THE OFFERING
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Offering Will Be Sold By One of Our Officers
We are offering up to a total of 2,000,000 shares of common
stock on a best efforts, no minimum, 2,000,000 shares maximum. The
offering price is $0.10 per share. There is no minimum number of
shares that we have to sell. There will be no escrow account. All
money received from the offering will be immediately used by us and
there will be no refunds. The offering will be for a period of 90
days from the effective date and may be extended for an additional 90
days if we so choose to do so.
There is no minimum number of shares that must be sold in this
offering. Any money we receive will be immediately appropriated by
us for the uses set forth in the Use of Proceeds section of this
prospectus. No funds will be placed in an escrow account during the
offering period and no money will be returned once the subscription
has been accepted by us.
We will sell the shares in this offering through Carlo Civelli,
one of our officers and directors. Mr. Civelli will receive no
commission from the sale of any shares. Mr. Civelli 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 person is 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 person is 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
3. The person is not at the time of their participation, an
associated person of a broker-dealer; and,
<PAGE> 15
4. The person meets the conditions of Paragraph (a)(4)(ii) of
Rule 3a4-1 of the Exchange Act, in that he (A) primarily performs, or
is 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) is 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).
Mr. Civelli is not subject to disqualification, is not being
compensated, and is not associated with a broker-dealer. Mr.
Civelli is and will continue to be one of our officers and directors
at the end of the offering and has not been during the last twelve
months and is currently not a broker/dealer or associated with a
broker/dealer. Mr. Civelli has 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 90 days. We may extend the offering period
for an additional 90 days, or unless the offering is completed or
otherwise terminated by us.
Procedures for 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 "ABBOTT MINES
LIMITED."
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.
<PAGE> 16
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BUSINESS
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General
We were incorporated in the State of Nevada on June 26, 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 1160 - 1040 West Georgia Street, Vancouver, British
Columbia, Canada V6E 4H1. Our telephone number is (604) 605-0885.
Our offices are leased from Callinan Mines Ltd. on a month to month
basis and our monthly rental is $-0-.
Background
In July 2000, Mike Muzylowski our President and a member of the
board of directors, acquired one mineral property containing one
mining claims in British Columbia, Canada by arranging the staking of
the same through a third party. Mr. Muzylowski paid $1,344 to stake
the claims. The claims are recorded in Mr. Muzylowski's name to a
avoid paying additional fees, however, title to the claims has been
conveyed to us by an unrecorded deed. An unrecorded deed is one
which title to the property has been transferred to us, but the deed
has not been filed with the British Columbia office of records.
Title to the property is superior to all other unrecorded deeds.
Should Mr. Muzylowski transfer title to another person and that deed
is recorded before recording our deed, that person will have superior
title and we will have none. If that event occurs, however, Mr.
Muzylowski will be liable to us for monetary damages for breach of
his warranty of title. Under British Columbia provincial law, if
the deed is recorded in our name, we will have to pay a minimum of
$500.00 and file other documents since we are a foreign corporation
in Canada. We have decided that if gold is discovered on the property
and it is economical to remove the gold, we will record the deed, pay
the additional tax, and file as a foreign corporation. We are in
possession of the unrecorded deed and the decision to record or not
record the deed is solely within our province.
To date we have not performed any work on our property. We are
presently in the exploration stage and there is no assurance that a
commercially viable mineral deposit, a reserve, exists in our
property until further exploration is done and a comprehensive
evaluation concludes economic and legal feasibility.
Location and Access
The Montana property consists of 1 claim totaling approximately
1,250 acres. The property is located approximately 180 east of
Vancouver, British Columbia, Canada and eleven miles east of
Beaverdell, British Columbia, Canada in south-central Brtish
Columbia. There is a gravel access road to the property.
<PAGE> 17
Physiography
Elevations range from 2,650 feet along Canyon Creek to 4,050
feet on ridges adjacent to Fourth of July Creek. Slopes are gentle
except in the Canyon Creek Valley. A moderate climate allows for
exploration work to be carried out on a year round basis and there is
ample timber and water on site for all phases of exploration.
Property Geology
The major type of rock found on the property is quartz. Gold,
silver and copper are found in quartz veins. We have determined that
there are quartz veins on the property. We have not determined if
there is any gold, silver or copper in the quartz veins.
MAP SUPPLIED SUPPLEMENTALLY.
Our Proposed Exploration Program
We must conduct exploration to determine what amount of
minerals, if any, exist on our properties and if any minerals which
are found can be economically extracted and profitably processed.
Our exploration program is designed to economically explore and
evaluate our properties.
We do not claim to have any 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, prospect pits, shafts or tunnels will be examined. If an
apparent mineralized zone is identified and narrowed down to a
specific area by the studies, we will to begin trenching the area.
Trenches are generally approximately 150 ft. in length and 10-20 ft.
wide. These dimensions allow for a thorough examination of the
surface of the vein structure types generally encountered in the
area. They also allow 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.
<PAGE> 18
Phase 1 will take about 3 months and cost up to $20,000.
Phase 2 involves an initial examination of the underground
characteristics of the vein structure that was identified by Phase 1
of exploration. Phase 2 is aimed at identifying any mineral deposits
of potential economic importance. The methods employed are
* more extensive trenching
* more advanced geophysical work
* drift driving
Drift driving is the process of constructing a tunnel to take samples
of minerals for testing. Later, the tunnel can be used for mining
minerals . 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 $20,000.
Phase 3 is aimed at precisely defining the depth, the width, the
length, the tonnage and the value per ton of any mineral body.
This is accomplished through extensive drift driving. Phase 3 will
take about 6 months and cost up to $80,000.
We do not intend to interest other companies in the property if
we find mineralized materials. We intend to try to develop the
reserves ourselves.
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 out property. Readily available gold
markets exist in Canada and around the world for the sale of gold.
Therefore, we will be able to sell any gold that we are able to
recover.
Regulations
Our mineral exploration program is subject to the Canadian
Mineral Tenure Act Regulation. This act sets forth rules for
* locating claims
* posting claims
* working claims
* reporting work performed
<PAGE> 19
We are also subject to the British Columbia Mineral Exploration
Code which tells us how and where we can explore for minerals. We
must comply with these laws to operate our business. Compliance
with these rules and regulations will not adversely affect our
operations.
Environmental Law
We are also subject to the Health, Safety and Reclamation Code
for Mines in British Columbia. This code deals with environmental
matters relating to the exploration and development of mining
properties. Its goals are to protect the environment through a
series of regulations affecting:
1. Health and Safety
2. Archaeological Sites
3. Exploration Access
We are responsible to provide a safe working environment, not
disrupt archaeological sites, and conduct our activities to prevent
unnecessary damage to the property.
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 act and will continue to comply
with the act in the future. We believe that compliance with the act
will not adversely affect our business operations in the future.
Employees
Initially, we intend to use the services of subcontractors for
manual labor exploration work on our properties. Our only technical
employees will be Mike Muzylowski and Carlo Civelli, our officers and
directors.
Employees and Employment Agreements
At present, we have no employees, other than Messrs. Muzylowski
and Civelli, our officers and directors, who were compensated for
their services. Messrs. Muzylowski and Civelli 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> 20
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
--------------------------------------------------------------------
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 states are
subject to certain risks and uncertainties that could cause actual
results to differ materially from historical results or out
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 are not going to buy or sell any
plant or significant equipment. We do not expect a change in our
number of employees.
<PAGE 21
Limited Operating History; Need for Additional Capital
There is no historical financial information about our company
upon which to base an evaluation of our performance. We are an
exploration stage company and have not generated any revenues from
operations. We cannot guarantee we will be successful in our business
operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital
resources, possible delays in the exploration 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 June 26, 2000
We just recently acquired our first property and are commencing
the research and exploration stage of our mining operations on that
property at this time.
Since inception, we have used our common stock to raise money
for our property acquisition, for corporate expenses and to repay
outstanding indebtedness. Net cash provided by financing activities
from inception on June 26, 2000 to July 31, 2000 was $1,069, as a
result of proceeds received from advances and receipt of stock
subscriptions. In addition a related party paid expenses in the
amount of $11,400 directly to providers, and must be paid back.
Liquidity and Capital Resources
As of the date of this registration statement, we have yet to
generate any revenues from our business operations.
We issued 5,000,000 shares of common stock through a Section
4(2) offering in June 2000. This was accounted for as a compensation
expense of $273,523 and advances and reimbursement expenses of
$1,477.
Since our inception, Mr. Muzylowski, has paid expenses for us
in the total sum of $11,400, which included organizational and
start-up costs and operating capital. The loans do not bear interest
and have not been paid as of the date hereof. There are no documents
reflecting the loan and they are not due on a specific date. Mr.
Muzylowski will accept repayment from us when money is available.
<PAGE> 22
As of July 31, 2000, our total assets were $11,262 and our total
liabilities were $11,400.
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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 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
Mike Muzylowski 65 President, Treasurer, Principal
7225 Hudson Street Accounting Officer and a member of
Vancouver, B.C. the Board of Directors
Canada V6P 4K9
Carlo Civelli 52 Secretary and a member of the
Seefeldstrasse 214 Board of Directors
8034 Zurich
Switzerland
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
Mike Muzylowski has been our President, Treasurer, Principal
Accounting Officer and a member of our board of directors since
inception. Since December 1994, Mr. Muzylowski has been President
and Chief Executive Officer of Callinan Mines Limited and since June
1995 a member of its board of directors. Callinan Mines Limited is
located in Vancouver, British Columbia. From September 1991 to May
1999, Mr. Muzylowski was Chairman and a director of Tan Range
Exploration Corporation located in Tanzania, Africa. Tan Range
Exploration Corporation is engaged in the business of mineral
exploration. Since October 1989, Mr. Muzylowski has been a director
of Napier International Technologies Inc. located in Vancouver,
British Columbia. Napier International's stock is traded on the
Frankfurt Stock Exchange and the Toronto Stock Exchange. Since July
1987, Mr. Muzylowski has been a director of Williams Creek
Exploration Limited located in British Columbia. Williams Creek
Exploration's stock is traded on the VSE-CDNX Stock Exchange. Since
May 1990, Mr. Muzylowski has been a director of KRL Resources Corp.
<PAGE> 23
located in British Columbia and Canada. KRL Resources Corp. is
engaged in the business of mineral exploration and its stock is
traded on the VSE-CDNX Exchange. Since August 1990, Mr. Muzylowski
has been a director of Firestone Ventures, Inc. is located in
Vancouver, British Columbia. Firestone Ventures is engaged in the
business of mineral exploration and its stock is traded on the VSE-
CDNX Exchange. From November 1989 to December 1991 and since January
1992, Mr. Muzylowski has been a director of Goldbelt Resources Ltd.
located in Vancouver, British Columbia. Goldbelt Resouces is engaged
in the business of mineral exploration and its stock is traded on the
VSE-CDNX Exchange. Since January 1993, Mr. Muzylowski has been a
director of Winspear Resources Ltd. Winspear Resources is located in
Vancouver, British Columbia. Windspear Resources is engaged in the
business of diamond exploration and development and its stock is
traded on the Toronto Stock Exchange. Since June 1994, Mr.
Muzylowski has been a director of Paccom Ventures (formerly from as
Pacific Vangold Mines Ltd.). Paccom Ventures is located in Vacouver,
British Columbia and its stock is traded on the Montreal Exchange.
Since January 1997, Mr. Muzylowski has been a director of Cypress
Minerals Corp. located in Vancouver, British Columbia. Cypress
Minerals Corp. is engaged in the business of mineral exploration and
its stock is traded on the VSE-CDNX Exchange. Since November 1996,
Mr. Muzylowski has been a director of United America Enterprises Ltd.
United America Enterprises is located in Vancouver, British
Columbia. United America Enterprises is engaged in the business of
health and medicine and its stock is traded on the VSE-CDNX Exchange.
Since July 1998, Mr. Muzylowski has been a director of Westfort
Energy Ltd. Westfort Energy is located in Calgary, Alberta. Westfort
Energy is engaged in the business of oil and gas exploration and
development and its stock is traded on the Toronto Stock Exchange.
From February 1998 to January 1999, Mr. Muzylowski was a director of
Thunderbird Projects Ltd. Thunderbird Projects is located in
Vancouver, British Columbia. Thunderbird Projects is engaged in the
business of mineral exploration and its stock is traded on the CDNX
Exchange. Since June 2000, Mr. Muzylowski has been President,
Treasurer and a director of Keystone Mines Limited, a Vancouver,
British Columbia mining corporation.
Carlo Civelli has been our Secretary and a member of our board
of directors since inception. Since 1980, Mr. Civelli has been a
managing director of Clarion Finanz AG located in Zurich, Switerland.
Clarion Finanz is engaged in the business of investment banking and
money management. Since March 1993, Mr. Civelli has been a director
of Spatilizer Audio Labs located in Los Angeles, California.
Spatilizer Audio is engaged in the business of automotive sound
systems. Since May 1994, MR. Civelli has been a director of Namibian
Minerals located in London, England. Namibian Minerals is engaged in
the business of diamond mining. Since February 1998, Mr. Civelli has
been a director of Callinan Mines Limited located in Vancouver,
British Columbia. Mr. Civelli is currently a full-time employee
with Clarion Finanz. Since June 2000, Mr. Civelli has been
Secretary and a director of Keystone Mines Limited, a Vancouver,
British Columbia mining corporation.
<PAGE> 24
Conflicts of Interest
We believe that Mike Muzylowski and Carlo Civelli will be
subject to conflicts of interest. The conflicts of interest arise
from Messrs. Muzylowski and Civelli's relationships with other mining
corporations. In the future, Messrs. Muzylowski and Civelli will
continue to be involved in the mining business for other entities and
their 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. Muzylowski and Civelli's
devotion of time to mining projects that do not involve us.
Specifically, Mike Muzylowski is an officer and director of
Callinan Mines Ltd., Williams Creek Exploration Limited, KRL
Resources Corp., Cypress Minerals Corp., Goldbelt Resources Ltd., and
Keystone Mines Ltd. all of which are engaged in the mining business.
Mr. Civelli is a director of Callinan Mines Ltd., Namibian Minerals
and Keystone Mines Ltd. all of which are engaged in the mining
business. Presently, none of the foregoing operate mines or receive
royalties from properties operated by others with the exception of
Callinan Mines Ltd. which receives CDN$149,000 annually from a copper
zinc mine in Flin Flon, Manitoba operated by Hudson Bay & Smelting
Co. Neither we nor our officers are affiliated with Hudson Bay &
Smelting Co. In the future, however, corporations could begin
operating mines.
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EXECUTIVE COMPENSATION
--------------------------------------------------------------------
Messrs. Muzylowski and Civelli, our officers and directors,
were compensated in shares of common stock in the amount of $273,523
for their services and there are no plans to compensate them in the
near future, unless and until we begin to realize revenues and become
profitable in our business operations.
Indemnification
Under our Articles of Incorporation and Bylaws of the
corporation, we may indemnify an officer or director who is made a
party to any proceeding, including a law suit, because of his
position, if he acted in good faith and in a manner he reasonably
believed to be in our best interest. We may advance expenses
incurred in defending a proceeding. To the extent that the officer
or director is successful on the merits in a proceeding as to which
he 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.
<PAGE> 25
Regarding indemnification for liabilities arising under the
Securities Act of 1933, which may be permitted to directors or
officers under Nevada law, we are informed that, in the opinion of
the Securities and Exchange Commission, indemnification is against
public policy, as expressed in the Act and is, therefore,
unenforceable.
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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 their ownership will be
assuming completion of the sale of all shares in this offering . 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
Mike Muzylowski 2,500,000 2,500,000 35.71%
7225 Hudson Street
Vancouver, B.C.
Canada V6P 4K9
Carlo Civelli 2,500,000 2,500,000 35.71%
Seefeldstgrasse 214
8034 Zurich
Switzerland
---------------------
All Officers and
Directors as a
Group (2 persons) 5,000,000 5,000,000 71.43%
[1] The persons named above may be deemed to be a parent and
promoter of our company by virtue of his/its direct and
indirect stock holdings. Messrs. Muzylowski and Civelli are the
only promoters of our company.
Future Sales by Existing Stockholders
A total of 5,000,000 shares of common stock were issued to the
existing stockholders, all of which are restricted securities, as
defined in Rule 144 of the Rules and Regulations of the SEC
promulgated under the Securities Act. Under Rule 144, the shares
can be publicly sold, subject to volume restrictions and
restrictions on the manner of sale, commencing one year after their
acquisition.
<PAGE> 26
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.
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DESCRIPTION OF SECURITIES
--------------------------------------------------------------------
Common Stock
Our authorized capital stock consists of 100,000,000 shares of
common stock, par value $0.00001 per share. The holders of our common
stock:
* have equal ratable rights to dividends from funds legally
available 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 that
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 71.43% of our outstanding shares.
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.
<PAGE> 27
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.
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CERTAIN TRANSACTIONS
--------------------------------------------------------------------
In June 2000, we issued a total of 5,000,000 shares of
restricted common stock to Mike Muzylowski and Carlo Civelli,
officers and directors of our company. This was accounted for as a
compensation expense of $273,523 and advances and reimbursement
expenses of $1,477.
Since our inception, Mr. Muzylowski, advanced loans to us in the
total sum of $11,400, which were used for organizational and start-up
costs and operating capital. The loans do not bear interest and have
not been paid as of the date hereof. There are no documents
reflecting the loan and they are not due on a specific date . Mr.
Muzylowski will accept repayment from us when money is available.
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LITIGATION
--------------------------------------------------------------------
We are not a party to any pending litigation and none is
contemplated or threatened.
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EXPERTS
--------------------------------------------------------------------
Our financial statements for the period from inception to June
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.
<PAGE> 28
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LEGAL MATTERS
--------------------------------------------------------------------
Conrad C. Lysiak, Attorney at Law, 601 West First Avenue, Suite
503, Spokane, Washington 99201, telephone (509) 624-1475 has acted as
legal counsel for our company.
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FINANCIAL STATEMENTS
--------------------------------------------------------------------
Our fiscal year end is June 30. We will provide audited
financial statements to our stockholders on an annual basis; the
statements will be prepared by an Independent Certified Public
Accountant.
Our audited financial statement from inception to July 31, 2000
and June 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> 29
Board of Directors
Abbott Mines Limited
Vancouver, BC CANADA
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Abbott Mines Limited
(an exploration stage enterprise), as of July 31, 2000 and June 30,
2000, and the related statements of operations, stockholders' equity
(deficit) and cash flows for the one month period ended July 31, 2000,
the period from June 26, 2000 (inception) to June 30, 2000, and for the
period from June 26, 2000 (inception) to July 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits
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 audits provide 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 Abbott
Mines Limited (an exploration stage enterprise) as of July 31, 2000 and
June 30, 2000, and the results of its operations and its cash flows for
the one month period ended July 31, 2000, the period from June 26, 2000
(inception) to June 30, 2000, and for the period from June 26, 2000
(inception) to July 31, 2000, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. As discussed in Note
2, the Company has been in the exploration stage since its inception on
June 26, 2000. Realization of a major portion of the assets is
dependent upon the Company's ability to meet its future financing
requirements, and the success of future operations. These factors
raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans regarding those matters also are
described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Williams & Webster, P.S.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
August 30, 2000
F-1
<PAGE> 30
ABBOTT MINES LIMITED
(AN EXPLORATION STAGE ENTERPRISE)
BALANCE SHEETS
July 31, June 30,
2000 2000
ASSETS
CURRENT ASSETS
Cash $ 127 $ -
----------- ----------
Total Current Assets 127 -
----------- ----------
OTHER ASSETS
Mining claims 135 -
Prepaid expenses 11,000 679
----------- ----------
Total Current Assets 11,135 679
----------- ----------
TOTAL ASSETS $ 11,262 $ 679
=========== ==========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Related party payables $ 11,400 $ 400
----------- ----------
Total Current Liabilities 11,400 400
----------- ----------
COMMITMENTS AND CONTINGENCIES - -
----------- ----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, 100,000,000 shares authorized,
$0.00001 par value; 5,000,000 shares issued
and outstanding 50 50
Additional paid-in-capital 274,950 274,950
Stock subscriptions receivable - (798)
Deficit accumulated during
exploration stage (275,138) (273,923)
----------- ----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (138) 279
----------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 11,262 $ 679
=========== ==========
The accompanying notes are an integral part of these financial
statements.
F-2
<PAGE> 31
ABBOTT MINES LIMITED
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
From From
June 26, June 26,
For the 2000 2000
Month (Inception)(Inception)
Ended to to
July 31, June 30, July 31,
2000 2000 2000
REVENUES $ - $ - $ -
----------- ---------- ---------
EXPENSES
Consulting services provided by
directors - 273,523 273,523
Mining exploration expense 1,218 - 1,218
Filing fees - 400 400
Office expense 6 - 6
----------- ---------- ---------
TOTAL EXPENSES 1,224 273,923 275,147
----------- ---------- ---------
LOSS FROM OPERATIONS (1,224) (273,923) (275,147)
----------- ---------- ---------
OTHER INCOME (EXPENSE):
Miscellaneous 9 - 9
----------- ---------- ---------
TOTAL OTHER INCOME 9 - 9
----------- ---------- ---------
LOSS BEFORE INCOME TAXES (1,215) (273,923) (275,138)
INCOME TAXES - - -
----------- ---------- ---------
NET LOSS $ (1,215)$ (273,923)$(275,138)
=========== ========== =========
NET LOSS PER COMMON SHARE,
BASIC AND DILUTED $ - $ (0.05)$ (0.06)
=========== ========== =========
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES OUTSTANDING,
BASIC AND DILUTED 5,000,000 5,000,000 5,000,000
=========== ========== =========
The accompanying notes are an integral part of theses financial
statements.
F-3
<PAGE> 32
ABBOTT MINES LIMITED
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
Deficit
Accumulated Total
Common Stock Additional During the Stock Stockholders'
Number Paid-In Exploration Subscriptions Equity
of Shares Amount Capital Stage Receivable (Deficit)
Issuance of
common stock
for services
and in payment
of advances at
approximately
$0.055 per
share 5,000,000 $ 50 $ 274,950 $ - $ (798) $ 274,202
Loss for period
ending, June
30, 2000 - - - (273,923) - (273,923)
--------- ----- --------- ---------- ------ ----------
Balance, June
30, 2000 5,000,000 50 274,950 (273,923) (798) 279
Payment of
subscriptions
receivable - - - - 798 798
Loss for period
ended, 7-31-00 - - - (1,215) - (1,215)
--------- ----- --------- ---------- ------ ----------
Balance
(deficit),
July 31,
2000 5,000,000 $ 50 $ 274,950 $ (275,138) $ - $ (138)
========= ===== ========= ========== ====== ==========
The accompanying notes are an integral part of these financial
statements.
F-4
<PAGE> 33
ABBOTT MINES LIMITED
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
From From
June 26, June 26,
For the 2000 2000
Month (Inception) (Inception)
Ended to to
July 31, June 30, July 31,
2000 2000 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,215) $ (273,923) $ (275,138)
Increase in related parties payable 11,000 400 11,400
Increase in prepaid expenses (10,321) (679) (11,000)
Increase in mining claims (135) - (135)
Payment of expenses from issuance
of stock - 274,729 274,729
--------- ---------- ---------
Net cash provided (used) in
operating activities (671) 527 (144)
--------- ---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
--------- ---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Stock subscriptions (sold) paid 798 (798) -
Proceeds from advances - 271 271
--------- ---------- ---------
Net cash provided (used) by
financing activities 798 (527) 271
--------- ---------- ---------
Change in cash 127 - 127
Cash, beginning of period - - -
--------- ---------- ---------
Cash, end of period $ 127 $ - $ 127
========= ========== =========
Supplemental disclosures:
Interest paid $ - $ - $ -
========= ========== =========
Income taxes paid $ - $ - $ -
========= ========== =========
Non-cash transactions:
Stock issued in payment of
consulting and other expenses $ - $ 274,729 $ 274,729
========= ========== =========
Stock issued in payment
of advances $ - $ 136 $ 136
========= ========== =========
Stock issued in payment of mining
claims $ - $ 135 $ 135
========= ========== =========
The accompanying notes are an integral part of these financial
statements.
F-5
<PAGE> 34
ABBOTT MINES LIMITED
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Abbott Mines Limited (hereinafter "the Company") was incorporated on
June 26, 2000 under the laws of the State of Nevada for the purpose
of acquiring, exploring and developing mining properties. The
Company maintains offices in Vancouver, British Columbia. The
Company's fiscal year end is June 30.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to
assist in understanding the financial statements. The financial
statements and notes are representations of the Company's management
which is responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of
the financial statements.
Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
Exploration Stage Activities
The Company has been in the exploration stage since its formation in
June 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 will actively prepare the site for
extraction and enter a development stage.
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.
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.
F-6
<PAGE> 35
ABBOTT MINES LIMITED
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Foreign Currency Valuation
Management has elected to value foreign currency transactions on the
date the transaction concludes. The conversion is calculated by
multiplying the foreign currency value by the exchange rate at the
close of the nearest trading day.
Concentration of Risk
The Company maintains its cash accounts in primarily one commercial
bank in Vancouver, British Columbia, Canada. The Company's cash
account is a business checking account maintained in U.S. dollars,
which totaled $127 as of July 31, 2000. This account is not insured.
Derivative Instruments
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This
standard establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It requires
that an entity recognize all derivatives as either assets or
liabilities in the consolidated balance sheet and measure those
instruments at fair value.
At July 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 reviews its long-lived
assets quarterly to determine if any events or changes in
circumstances have transpired which indicate that the carrying value
of its assets may not be recoverable. The Company does not believe
any adjustments are needed to the carrying value of its assets at
July 31, 2000.
Exploration Costs
In accordance with generally accepted accounting principles, the
Company expenses exploration costs as incurred.
F-7
<PAGE> 36
ABBOTT MINES LIMITED
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Compensated Absences
Currently, the Company has no employees; therefore, no policy
regarding compensated absences has been established. The Company
will establish a policy to recognize the costs of compensated
absences at the point in time that it has employees.
Provision for Taxes
At July 31, 2000, the Company had accumulated net operating losses of
approximately $275,000. No provision for taxes or tax benefit has
been reported in the financial statements, as there is not a
measurable means of assessing future profits or losses.
Basic and Diluted Loss Per share
Loss per share was computed by dividing the net loss by the weighted
average number of shares outstanding during the period. The weighted
average number of shares was calculated by taking the number of
shares outstanding and weighting them by the amount of time that they
were outstanding. Basic and diluted loss per share were the same, as
there were no common stock equivalents outstanding.
Going Concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern.
As shown in the accompanying financial statements, the Company
incurred a net loss of $275,138 for the period of June 26, 2000
(inception) to July 31, 2000 and had no sales. The future of the
Company is dependent upon its ability to obtain financing and upon
future successful exploration for and profitable operations from the
development of mineral properties.
Management has plans to seek additional capital through a private
placement and public offering of its common stock. The financial
statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts
and classification of liabilities that might be necessary in the
event the Company cannot continue in existence.
NOTE 3 - PREPAID EXPENSES
During July 2000, Company's management advanced cash for the purposes
of retaining legal and accounting services in the amounts of $10,000
and $1,000, respectively. See Note 6.
F-8
<PAGE> 37
ABBOTT MINES LIMITED
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2000
NOTE 4 - COMMON STOCK
During June 2000, a net total of 5,000,000 shares of common stock
were issued to officers and directors only. There was no public
offering of any securities. The aforementioned shares were issued in
payment of services valued at $273,523 and advances of $1,477. Total
advances include repayment of mining claim recording fees of $135 and
other expenses of $1,342. A portion of the shares were initially
issued in anticipation of payment of expenses on behalf of the
Company by the Company's officers and directors. The unpaid portion
of issued shares were deemed to be a stock subscription and
classified as such on the June 30, 2000 balance sheet. As of July
31, 2000, the subscribed shares were paid in full.
The Company, through Mr. Mike Muzylowski, its president and a member
of the board of directors, acquired 100% of the rights, titles and
interests in one mining claim in the Beaverdell Mining Camp,
Greenwood Mining Division, Beaverdell, British Columbia, Canada.
Payment of $135 was required to record the one mining claim. These
amounts were paid by the shareholders and repaid by the Company in
the form of stock as denoted above. Although the claims are recorded
in Mr. Muzylowski's name for tax purposes, title to the claims has
been conveyed to the Company via an unrecorded deed.
NOTE 5 - RELATED PARTIES
The Company occupies office space provided by Mr. Muzylowski, its
president, in his capacity as president and director of Callinan
Mines Limited at no charge. The value of this space is not
considered materially significant for financial reporting purposes.
Mr. Muzylowski and Mr. Carlo Civelli, both directors of the Company,
have advanced monies to the Company to open a checking account, and
in payment of expenses. The funds advanced were repaid as part of
the original stock issuance transaction. See Note 4.
In addition, Mr. Muzylowski, who has advanced $11,400 in payment of
incorporation, audit fees, attorney's fees, and other incidental
expenses, has agreed to receive reimbursement when the Company has
the appropriate cash flow for such reimbursement. The funds advanced
are uncollateralized and non-interest bearing.
F-9
<PAGE> 38
ABBOTT MINES LIMITED
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2000
NOTE 6 - COMMITMENTS AND CONTINGENCIES
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 $20,000. Of this
amount, $10,000 has been paid and is recorded as a prepaid expense
(see Note 3). The remaining $10,000 will be due when the Company's
registration statement is declared effective by the Securities and
Exchange Commission.
F-10
<PAGE> 39
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The only statute, charter provision, bylaw, contract, or other
arrangement under which any controlling person, director or
officer of the Registrant is insured or indemnified in any manner
against any liability which he may incur in his capacity as such, is
as follows:
1. Article XII of the Articles of Incorporation of the company,
filed as Exhibit 3.1 to the Registration Statement.
2. Article XI of the Bylaws of the company, filed as Exhibit
3.2 to the Registration Statement.
3. Nevada Revised Statutes, Chapter 78.
The general effect of the foregoing is to indemnify a
control person, officer or director from liability, thereby making
the company responsible for any expenses or damages incurred by such
control person, officer or director in any action brought against
them based on their conduct in such capacity, provided they did
not engage in fraud or criminal activity.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering (assuming all shares are
sold), all of which are to be paid by the registrant, are as follows:
SEC Registration Fee . . . . . . $ 100.00
Printing Expenses . . . . . . . 6,500.00
Accounting Fees and Expenses . . . . . 10,000.00
Legal Fees and Expenses . . . . . . 20,000.00
Blue Sky Fees/Expenses . . . . . . 5,000.00
Transfer Agent Fees . . . . . . 3,000.00
Miscellaneous Expenses . . . . . . 5,400.00
------------
TOTAL $ 50,000.00
============
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Registrant has sold the
following securities which were not registered under the
Securities Act of 1933, as amended.
<PAGE> 40
Name and Address Date Shares Consideration
------------------ --------- --------- ----------------
Mike Muzylowski 06/30/00 2,500,000 Services valued at
7225 Hudson Street $136,762 and advances of
Vancouver, British Columbia $738
Canada V6P 4K9
Carlo Civelli 06/30/00 2,500,000 Services valued at
Seefeldstrasse 214 $136,761 and advances of
8034 Zurich $739
Switzerland
We issued the foregoing restricted shares of common stock to
Messrs. Muzylowski and Civelli under Section 4(2) of the Securities
Act of 1933. Messrs. Muzylowski and Civelli are sophisticated
investors, are officers and directors of the company, and where in
possession of all material information relating to the company.
Further, no commissions were paid to anyone in connection with the
sale of the shares and general solicitation was made to anyone.
ITEM 27. EXHIBITS.
The following Exhibits are filed as part of this Registration
Statement, pursuant to Item 601 of Regulation K. All Exhibits have
been previously filed unless otherwise noted.
Exhibit No. Document Description
3.1 Articles of Incorporation.
3.2 Bylaws.
4.1 Specimen Stock Certificate.
5.1 Opinion of Conrad C. Lysiak, Esq. regarding the
legality of the Securities being registered.
10.1 Montana Claim.
10.2 Bill of Sale.
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> 41
ITEM 28. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
a. To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
b. To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
c. To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any change to such information in the registration
statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
<PAGE> 42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing of this Form SB-2
Registration Statement and has duly caused this Form SB-2
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Vancouver, British Columbia, on this
28th day of September 2000.
ABBOTT MINES LIMITED
BY: /s/ Mike Muzylowski
Mike Muzylowski,
President, Chief Executive Officer,
Principal Accounting Officer, Principal
Financial Officer and a member of the
Board of Directors
KNOW ALL MEN BY THESE PRESENT, that each person whose signature
appears below constitutes and appoints Mike Muzylowski, 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/ Mike Muzylowski President, Chief Executive 09/28/00
Mike Muzylowski Officer, Treasurer, Principal
Accounting Officer, Principal
Financial Officer, and a member
of the Board of Directors
/s/ Carlo Civelli Secretary and a member 09/28/2000
Carlo Civelli of the Board of Directors
