UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
SMALL BUSINESS ISSUERS
UNDER SECTION 12 (b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
Galaxy Investments, Inc.
..............................................
(Name of Small Business Issuer in its charter)
Colorado Applied for
.......................... ........................
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
Suite 604-750 West Pender Street
Vancouver, British Columbia, Canada V6C 2T7
........................................ ........................
(Address of principal executive offices)
Registrant's Telephone Number: (604) 689-0188
Securities to be registered pursuant to section 12 (b) of the Act:
Name of each exchange on which
Title of each class to be registered each class is to be registered:
[NONE] [NONE]
Securities to be registered pursuant to section 12 (g) of the Act:
Name of each exchange on which
Title of each class to be registered each class is to be registered:
Common stock
par value $0.001
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TABLE OF CONTENTS
PAGE
PART I
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ITEM 1. DESCRIPTION OF BUSINESS..............................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS...........................................7
ITEM 3. PROPERTIES...........................................................8
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......8
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.........9
ITEM 6. EXECUTIVE COMPENSATION..............................................10
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................10
ITEM 8. DESCRIPTION OF SECURITIES...........................................10
PART II
_______
ITEM 1. LEGAL PROCEEDINGS...................................................12
ITEM 2. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS.....................................12
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.......................12
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.............................12
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS...........................13
PART III
________
ITEM 1. INDEX TO EXHIBITS...................................................14
ITEM 2. DESCRIPTION OF EXHIBITS.............................................15
PART IV
_______
ITEM 1. FINANCIAL STATEMENTS................................................15
ITEM 2. FINANCIAL STATEMETNS................................................15
ITME 3. FINANCIAL STATEMENTS AND EXHIBITS...................................15
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FORWARD LOOKING STATEMENTS
Galaxy Investments, Inc. (the "Company") cautions readers that certain important
factors (including without limitation those set forth in this Form 10-SB) may
affect the Company's actual results and could cause such results to differ
materially from any forward-looking statements that may be deemed to have been
made in this Form 10-SB registration statements, or that are otherwise made by
or on behalf of the Company. For this purpose, any statement contained in the
Registration Statement that are not statements of historical fact, may be deemed
to be forward-looking statements. Without limiting the generality of the
foregoing, words such as "may", "expect", "believe", "anticipate", "intend",
"could", "estimate", or "continue", or the negative other variations therefor
comparable terminology, are intended to identify forward-looking statements.
PART I
______
ITEM 1. DESCRIPTION OF BUSINESS
Business
(a) Business Development
Galaxy Investments, Inc. (the "Company") was organized as a Colorado Corporation
on December 17, 1999, to explore for and, if possible, develop mineral
properties primarily in the Province of British Columbia, Canada, and other
parts of Canada.
(b) Business of the Company
The Company was organized for the purpose of engaging in the acquisition,
exploration and development of mineral properties, primarily in the Province of
British Columbia, Canada. The Company currently has working capital of
approximately $1,285 at July 31, 2000. The Company intends to raise additional
funds from public financing or private placements during the next twelve (12)
month period in order to complete exploration and development on its properties,
make option payments, and to generally meet its future corporate obligations.
There can be no assurance that the Company will obtain such additional financing
on a timely basis.
The Company has an option to acquire an interest in the property described
herein, under the heading "Option Agreement". The Company intends to carry out
exploration work on the mineral claim know as Treadwell #1, located in the
Kamloops Mining division, in order to ascertain whether the Property possesses
commercially developable quantities of gold and other precious minerals.
Option Agreement
By virtue of an Option Agreement dated July 15, 2000, the Company acquired an
option to purchase mineral claims known as "Treadwell #1-Tenure #360262" located
in the Kamloops Mining Division on Cannell Creek British Columbia. The claims
have an expiration date of October 13, 2001. The claims have not been proven to
have a commercially minable ore reserve.
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The terms of the purchase to vest 100% in the claims includes total payments of
$40,000, the issuance of 100,000 shares of the Company and by completing work
commitments totaling $500,000 on the claims on the dates in the following
schedule. The property is subject to a royalty of one percent of the net
smelter returns with a right to acquire the rights to the royalty after the
start of commercial production.
Purchase price;
$ 2,500 cash and 2,000 common shares as initial payment
7,500 cash and 8,000 common shares by July 31, 2001
10,000 cash and 40,000 common shares by July 31, 2002
20,000 cash and 50,000 common shares by July 31, 2003
work commitments;
$ 25,000 in work by July 31, 2001
50,000 in work by July 31, 2002
100,000 in work by July 31, 2003
150,000 in work by July 31, 2004
175,000 in work by July 21, 2005
A cumulative total of $500,000, in addition to the cash and shares to be issued
pursuant to Section 3.1.1 of the Option Agreement will vest the Company a 100%
interest in the property. Any amount spent by the Company in any year in excess
of the minimum amount shall be applied as a credit on account of the minimum
amount to be spent in the future.
Prior to acquiring its 100% interest in the Property, the Company shall have the
right to terminate this Agreement by giving written notice to Richard Simpson
("Simpson"), the Optioner of the mineral claims, of such termination in which
event this agreement shall terminate and the Company shall be under no further
obligation or liability to Simpson except to transfer its interest in the
Property to Simpson. If the Company terminates this agreement, sufficient
assessment work will have been recorded against the Property in order that it
will be in good standing under the British Columbia Mining Act for not less than
3 years following the date of termination.
If the Company defaults in its cash or share payments or work commitments
stipulated in Sections 3.1.1 and 4.1 of the Options Agreement, subject to force
majeure, and such default has not been remedied within sixty (60) days after
receipt of written notice of default from Simpson, or if it elects to terminate
the option, it will retransfer the Property to Simpson free and clear of any
liens, charges, hypothecs, encumbrances and royalties, within five (5) business
days of termination of this agreement.
Company's Plan of Operation
The Company intends to raise funds from public financings during the next twelve
(12) month period, in order to proceed with the necessary exploration on the
Property.
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RISK FACTORS
____________
1. Exploration Stage. The Company is in the Exploration Stage and is engaged
in the search for mineral deposits (reserves) which are not in either the
Development Stage or Production Stage. It is a new company with a limited
operating history. It faces all of the risks inherent in a new business. The
Company's prospects, given the nature of its business, must be considered in
light of the risks, expenses and difficulties frequently encountered by
companies in the early stages of their development. There can be no assurance
that the Company will achieve or sustain profitability or positive cash flows
from operating activities in the future.
2. Competition and Marketing. The mining industry, in general, is intensively
competitive and there is not any assurance that even if commercial quantities of
ore are discovered, a ready market will exist for sale of same. Numerous
factors beyond the control of the Company may affect the marketability of any
substances discovered. These factors include market fluctuations, the proximity
and capacity of natural resource markets and processing equipment, government
regulations, including regulations relating to prices, taxes, royalties, land
tenure, land use, importing and exporting of minerals and environmental
protection. The exact effect of these factors cannot be accurately predicted,
but the combination of these factors may result in the Company not receiving an
adequate return on invested capital.
3. Title Matters. The Company has obtained industry standard title opinions
with respect to its mineral properties, which can not be construed as a
guarantee of title. The properties may be subject to unregistered agreements,
transfers or claims and title may be adversely affected by undetected defects.
4. Compliance with Government Regulation. The Company will be required to
comply with all regulations, rules and directives of governmental authorities
and agencies applicable to the exploration of minerals in Canada, generally, and
in the Province of British Columbia, specifically. The future operations of the
Company may require permits from various federal, provincial and local
governmental authorities and will be governed by laws and regulations governing
prospecting, development, mining, production, export, taxes, labor standards,
occupational health, waste disposal, land use, environmental protection, mine
safety and other matters. There can be no guarantee that the Company will be
able to obtain all necessary permits and approvals that may be required to
undertake exploration activity or commence construction or operation of mine
facilities on the Company's properties.
All phases of the Company's operations are subject to environmental regulation
in the jurisdiction in which it operates. There is no assurance that future
changes in environmental regulation, if any, will not have an adverse effect on
the Company's operations.
The Company's Property may in the future, be the subject of aboriginal peoples'
land claims. The legal basis of land claim is a matter of considerable legal
complexity and the impact of a land claims settlement cannot be predicted with
any degree of certainty, and no assurance can be given that a broad recognition
of aboriginal rights by way of a negotiated settlement or judicial pronouncement
would not have an adverse effect on the Company's activities.
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Although the Company has investigated title to the Property in which it has an
interest and, to the best of its knowledge, title to the properties are in good
standing, this should not be construed as a guarantee of title and there is no
guarantee that title to such properties will not be challenged or impugned. The
Company's Property interest may be subject to prior unregistered agreements or
transfers, native land claims or title may be affected by undetected defects.
5. Exploration Risk. Exploration for minerals is a speculative venture
necessarily involving substantial risk. There is not any certainty that the
expenditures to be made by the Company in the acquisition of the interests
described herein will result in discoveries of commercial quantities of ore.
Hazards such as unusual or unexpected formations and other conditions are
involved in mineral exploration and development. The Company may become subject
to liability for pollution, cave-ins or hazards against which it cannot insure
or against which it may elect not to insure. The payment of such liabilities
may have a material adverse effect on the Company's financial position.
6. No Known Bodies of Ore. There are no known bodies of ore on the Company's
properties. The business plan of the Company is to raise funds to carry out
further exploration with the objective of establishing ore of commercial tonnage
and grade. If the Company's exploration programs are successful, additional
funds will be required for the development of economic reserves and to place
them in commercial production. The only source of future funds presently
available to the Company is through the sale of equity capital. The only
alternative for the financing of further exploration would be the offering by
the Company of an interest in its properties to be earned by another party or
parties carrying out further exploration or development thereof, which is not
presently contemplated.
7. Year 2000. The year 2000 issue arises with respect to the Company's
operations because many computerized systems use 2 digits rather than 4 digits
to identify a year. Date sensitive systems may recognize the year 2000 as 1900
or some other date, resulting in errors when information is processed using the
year 2000 date. In addition, similar problems may arise in some systems which
use certain dates in 1999 to represent something other than a date. The
effects of the year 2000 issue may be experienced before, on, or after January
2, 2000 and if not addressed, the impact on operations and financial reporting
may range from minor errors to significant system failure which could affect the
Company's ability to conduct normal business operations. It is not possible to
be certain that all aspects of the year 2000 issue affecting the Company,
including those related to the efforts of customers, suppliers or other third
parties, will be fully resolved.
Exploration and Development Expenditures
________________________________________
As of the date of this Registration Statement, the Company has not expended any
capital towards the expiration and development of any mineral properties.
Employees
_________
The Company has no paid or full-time employees. The Company conducts its
business through agreements with consultants and arms-length third parties.
None of the directors or officers are paid a salary for acting as a director
or officer. The Company may, however, pay fees to directors and
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officers for work provided on a consulting fee basis. The Company estimates
that each director devotes two (2) hours of their time per month to the affairs
of the Company.
Patents and Trademarks
The Company does not own, either legally or beneficially, any patent or
trademark.
(c) Reports to security holders
The Company will send an annual report, together with audited Financial
Statements of the Company to security holders.
The Company does not presently file reports with the Securities and Exchange
Commission.
Any member of the public may read and copy any materials the Company files with
the Securities and Exchange Commission at the Securities and Exchange
Commission's Public Reference Room at Fifth Street, NW, Washington, D.C. 20549.
The public may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The Securities and Exchange Commission
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC at http://www.sec.gov.
ITEM 2. MANAGEMENT DISCUSSIOIN AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company is in the business of acquiring and exploring mineral properties and
does not have a source of revenue at this time.
(a) Plan of Operation.
As at the financial period ended July 31, 2000, the Company incurred a net loss
of $7,715.00 and as at that date, the Company's current assets exceeded its
current liabilities by $1,215.00.
For the next 12 months, management of the Company plans to satisfy its cash
requirements by raising additional funds by way of private placements and/or a
public offering, to satisfy working capital needs.
The Company does not expect any significant changes in the number of its
employees within the next 12 months.
(b) Management Discussion and Analysis of Financial Condition and Results of
Operations.
(1) Full Fiscal Year ended July 31, 2000.
From the date of the incorporation to July 31, 2000, the Company raised
$9,000.00 through the issuance of 9,000,000 common shares, as follows: from
February 2000 to June 2000, the Company
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issued 9,000,000 shares of its $.001 par value common stock, at a price of $.001
per share, by virtue of Section 4(2) of the Securities Act of 1933, as amended.
Administrative and property exploration and maintenance costs were $ 7,715.
ITEM 3. PROPERTIES
The Company has an option to acquire a 100% interest in the Property, as
described in detail in Item 1 of this Registration Statement under the section
under the "Option Agreement".
The Company does not own or lease any property other than:
1. Its option to acquire an interest in the Simpson Property; and
2. The renting or leasing of office space for the Company's corporate
headquarters in Vancouver, B.C., Canada. The Company presently leases its
office space for CDN$500.00 per month.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information as of the date hereof, based on
information obtained from the persons named below, with respect to the
beneficial ownership of the Common Stock by (I) each person who is known to the
Company to be the beneficial owner of more than 5 percent of the Company's
Common Stock, and (ii) each Director and Officer, and (iii) all Directors and
Officers of the Company, as a group:
Name and Address of Amount of Beneficial Percentage
Title of Class Beneficial Owner Ownership (1) of Class
Common Stock Terry Amisano 1,000,000 11.11%
7490 Aubrey St.
Burnaby, B.C. V5K 1A6
Common Stock Kevin Hanson 1,000,000 11.11%
3345 Huntleigh Crt.
North Vancouver,
B.C. V7H 1C9
Common Stock Greg Burnett 1,000,000 11.11%
903-456 Moberly Road
Vancouver, B.C. V5Z 4L7
[1] Unless otherwise indicated, this column reflects amounts as to which the
beneficial owner has sole voting power and sole investment power.
[2] No security holder listed above owns any warrants, options or rights.
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ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
The following information sets forth the names of the directors, executive
officers, promoters control persons of the Company, their present positions
with the Company, and their biographical information.
Name Age Office
Gregory C. Burnett* 39 President/CEO/Director
Terry M. Amisano* 45 Secretary-Treasurer/Director
Kevin R. Hanson* 44 Director
* These persons may be deemed "promoters" of the Company as that term is
defined under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
Executive Officers and Directors
Gregory C. Burnett. Mr. Burnett has been the President, CEO and Director of the
Company from inception to the present. Mr. Burnett is the President of Carob
Management Ltd., a private management consulting company. Mr. Burnett is also
President of Orko Gold Corporation, a junior gold exploration company listed on
the Canadian Venture Exchange. In addition, Mr. Burnett serves on the board of
and as a consultant to the following public companies: Pender Capital
Corporation, Ocean Ventures Inc., Starfire Technologies International Inc.,
Commercial Consolidators Corp and Camflo Resources Ltd., all listed on the
Canadian Venture Exchange and East Asia Gold Corporation which is listed on CDN.
Mr. Burnett obtained a Master of Business Administration Degree in 1986, and a
Bachelor of Applied Sciences Degree in Civil Engineering in 1984 from the
University of British Columbia.
Terry M. Amisano. Mr. Amisano has been the Secretary/Treasurer and Director of
the Company from inception to the present. Mr. Amisano has been a Chartered
Accountant since 1985 and co-founded Amisano Hanson, Chartered Accountants in
1991. Mr. Amisano is presently a Director of Commercial Consolidators Corp,
which is listed on the Canadian Venture Exchange. From 1987 to 1990, Mr.
Amisano was a sole proprietor in a public accounting practice. From 1984 to
1986, Mr. Amisano was the Controller for M.E. Pritchard Associates Ltd., a
privately owned company. Mr. Amisano served as an auditor from the Revenue
Canada Taxation in 1983. Mr. Amisano also served as a director of Pender
Capital Corp., an Alberta Stock Exchange listed company, from 1993 to 1995.
Kevin R. Hanson. Mr. Hanson has been a Director of the Company from inception
to the present. Mr. Hanson has been a Chartered Accountant since 1983 and co-
founded Amisano Hanson, Chartered Accountants in 1991. From 1987 to 1990, Mr.
Hanson served as the Controller of several resource companies listed on various
stock exchanges, including, Vancouver, Toronto, and NASDAQ. In addition, during
this period Mr. Hanson served as Controller of Clark Consulting Services Inc., a
management company which provided management services to the aforementioned
resources
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companies. From 1980 to 1987, Mr. Hanson was employed with the accounting firm
of Wolrige Mahon & Co., Vancouver, B.C., as an Audit Supervisor.
2. Promoters
The Company does not have any promoters other than the directors or officers of
the Company.
3. Control Persons
Other than the directors or officers of the Company, which are considered
control persons of the Company, there are no persons holding greater than 20% of
the issued and outstanding shares of the Company.
ITEM 6. EXECUTIVE COMPENSATION
The Company as of the fiscal year ended July 31, 2000, did not compensate any of
its Officers or Directors for their services. However, the Company may, during
the course of the current year, decide to compensate its Officers for their
services and to compensate its Directors for serving on the Company's Board of
Directors.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TANSACTIONS
None of the Directors or Officers of the Company, nor any proposed nominee for
election as a Director of the Company, nor any person who beneficially owns,
directly or indirectly, shares carrying more than 10% of the voting rights
attached to all outstanding shares of the Company, nor any promoter of the
Company, nor any relative or spouse of any of the foregoing persons has any
material interest, direct or indirect, in any transaction since the date of the
Company's incorporation or in any presently proposed transaction which, in
either case, has or will materially affect the Company. The Company has not
entered into transactions with any member of the immediate families of the
foregoing persons, nor is any such transaction proposed.
ITEM 8. DESCRIPTION OF SECURITIES
Common Stock
____________
The authorized capital of the Company is One Hundred Million (100,000,000)
common shares of the par value of $0.001 per share. There are currently
9,000,000 common shares issued and outstanding.
Each shareholder of record shall have one vote for each share of common stock
standing in his or her name on the books of the corporation and entitled to
vote, except that in the election of directors he or she shall have the right to
vote such number of shares for as many persons as there are directors to be
elected. Cumulative voting shall not be allowed in the election of directors or
for any other purpose.
No shareholder of the corporation shall have any preemptive or similar right to
acquire any additional unissued or treasure shares of stock, or for other
securities of any class, or for right, warrants, options
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to purchase stock or for scrip, or for securities of any kind convertible into
stock or carrying stock purchase warrants or privileges.
The Board of Directors may, from time to time, distribute to the shareholders in
partial liquidation, out of stated capital or capital surplus of the
corporation, a portion of its assets, in cash or property, subject to the
limitations contained in the statutes of Colorado.
Preferred Stock
_______________
The Company is authorized to issue 25,000,000 shares of Preferred Stock, no par
value, of which no shares have been issued or are outstanding or subscribed for
as of the date of this Registration Statement.
In general, any of the Company's Preferred Stock may be issued in series from
time to time with such designation, rights, preferences and limitations as the
Board of Directors of the Company may determine by resolution. The rights,
preferences and limitations of separate series of Preferred Stock may differ
with respect to such matters as may be determined by the Board of Directors.
This is to include, without limitation, the rate of dividends, method and nature
of payment of dividends, terms of redemption, amounts payable on liquidation,
sinking fund provisions (if any), conversion rights (if any), and voting rights.
The potential exists therefore, that additional preferred stock might be issued
which would grant additional dividend preferences and liquidation preferences to
preferred shareholders. Unless the nature of a particular transaction and
applicable statutes require such approval, the Board of Directors has the
authority to issue these shares without shareholder approval. The issuance of
Preferred Stock may have the effect of delaying or preventing change in control
of the Company without any further action by shareholders.
Dividends
_________
The Company has never paid a cash dividend on its Common Stock nor does the
Company anticipate paying cash dividends on its Common Stock in the near future.
It is the present policy of the Company not to pay cash dividends on the Common
Stock but to retain earnings, if any, to fund growth and expansion. Any payment
of cash dividends of the Common Stock in the future will be dependent upon the
Company's financial condition, results of operations, current and anticipated
cash requirements, plans for expansion, as well as other factors the Board of
Directors deems relevant.
Warrants
________
The Company does not have any warrants to purchase securities of the Company
outstanding.
Options
_______
The Company does not have any options to purchase securities of the Company
outstanding. The Company may in the future establish an incentive stock option
plan for its directors, officers, employees and consultants.
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Transfer Agent
Nevada Agency and Trust Company, located at 50 West Liberty, Suite 880, Reno,
Nevada 89501, is the transfer agent for the Company's Common Stock.
PART II
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ITEM 1. LEGAL PROCEEDINGS
There are no current or pending material legal proceedings to which the Company
is or is likely to be a party or of which any of its property is or is likely to
be the subject of.
ITEM 2. MARKET PRICE OF SECURITIES AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND OTHER SHAREHOLDER MATTERS
There is no public trading market for the Company's Common Stock. The Company
intends to apply to have the Common Stock traded on the OTC Bulletin Board upon
effectiveness of this registration statement. No assurance can be given that
such application will be approved, and if approved, that an active trading
market for the Common Stock will materialize or be maintained.
There are no outstanding options or warrants to purchase, or securities
convertible into, shares of Common Stock.
As of the date hereof, there are 3,000,000 shares of Common stock that could be
sold pursuant to Rule 144 under the Securities Act of 1933, as amended, and the
Company has not agreed to register any shares of Common Stock under the
Securities Act of 1933, as amended, for sale by security holders. None of the
holders of the Company's common shares have any right to require the Company to
register its common shares pursuant to the Securities Act of 1933.
Holders - As of the date of this registration statement, there were
approximately thirty-five (35) holders of record of the Company's Common Stock.
Dividends - The Company has not declared any cash dividends since inception.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company has had no changes in or disagreements with its accountants since
its inception on December 17, 1999.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
From February of 2000 through June of 2000, the Company issued 9,000,000 shares
of its $.001 par value Common Stock to thirty-five (35) individuals at an
average price of $.001 per share. The sales
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were made to the Company's officers, directors and to a major extent, to family
members of the Company's officers and directors in reliance upon the exemption
from registration provided by Section 4(2) of the Securities Act of 1933, as
amended.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The By-laws of the Company provide the following provisions:
Third Party Actions. The corporation shall indemnify any person who was or is
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another Corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not of itself create a presumption that the person did not act
in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
Derivative Actions. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
Corporation, partnership, joint venture, trust, or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation, except that no indemnification shall be made
in respect of any claim, issue, or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Corporation unless and only to the extent that the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability and in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
Extent of Indemnification. To the extent that a director, officer, employee or
agent of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in sections 1 and 2 of
this Article VI, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
Determination. Any indemnification under sections 1 and 2 of this Section
(Article VI) (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a
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determination that indemnification of the officer, director and employee or
agent is proper in the circumstances because he has met the applicable standard
of conduct set forth in sections 1 and 2 of this Article VI. Such determination
shall be made (a) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suitor proceeding,
or (b) if such a quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (c) by the affirmative vote of the holders of a majority of the
shares of stock entitled to vote and represented at a meeting called for such
purpose.
Payment in Advance. Expenses incurred in defending a civil or criminal action,
suit or proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the Board of
Directors as provided in Section 4 of this Article VI upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to repay
such amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article VI.
Insurance. The Board of Directors may exercise the Corporation's power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another Corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability hereunder or
otherwise.
Other coverage. The indemnification provided by this Article VI shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under the Articles of Incorporation, these Bylaws, agreement, vote
of stockholders or disinterested directors, the Colorado Corporation Code, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs and personal representatives of such a person.
PART III
________
ITEM 1. INDEX TO EXHIBITS
The following list describes the exhibits filed as part of this Registration
Statement on Form 10-SB:
Exhibit No. Description of Document
___________ _______________________
3(i) Articles of Incorporation of Galaxy Investments,
Incorporated.
3(ii) Bylaws of Galaxy Investments, Incorporated.
4.0 Specimen form of Registrant's common stock.
10.1 Option Agreement between Richard Simpson and Galaxy
Investments, Inc. dated July 15, 2000
14
<PAGE>
ITEM 2. DESCRIPTION OF EXHIBITS
PART IV
_______
ITEM 1. FINANCIAL STATEMENTS
ITEM 2. FINANCIAL STATEMENTS
ITEM 3. FINANCIAL STATEMENTS AND EXHIBITS
GALAXY INVESTMENTS, INC.
FINANCIAL STATEMENTS AND REPORT
OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
July 31, 2000
15
<PAGE>
Andersen Andersen & Strong, L.C. 941 East 3300 South, Suite 202
Salt Lake City, Utah 84105
Telephone 801-486-0095
Board of Directors
Galaxy Investments, Inc.
Vancouver, B.C., Canada
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheet of Galaxy Investments, Inc.
(exploration stage company) at July 31, 2000, and the related statement of
operations, stockholders' equity, and cash flows for the period December l7,
1999 (date of 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 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 balance sheet 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 Galaxy Investments, Inc. at
July 31, 2000, and the results of operations, and cash flows for the period
December 17, 1999 (date of inception) to July 31, 2000 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is in the exploration
stage and will need additional working capital for its planned activity,
which raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are described in Note 5. These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Salt Lake City, Utah /s/Andersen Andersen & Strong
October 8, 2000
F-1
<PAGE>
GALAXY INVESTMENTS, INC.
(Exploration Stage Company)
BALANCE SHEET
July 31, 2000
_______________________________________________________________________________
ASSETS
CURRENT ASSETS
Cash $ 5,285
Total Current Assets 5,285
OTHER ASSETS
Option to purchase mineral claims - Note 3 -
_______
$ 5,285
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related parties $ 2,500
Accounts payable 1,500
Total Current Liabilities 4,000
STOCKHOLDERS' EQUITY
Preferred stock
25,000,000 shares authorized at $0.001
par value; none outstanding -
Common stock
100,000,000 shares authorized, at $0.001 par value;
9,000,000 shares issued and outstanding 9,000
Capital in excess of par value -
Deficit accumulated during the development stage (7,715)
Total Stockholders' Equity 1,285
$ 5,285
F-2
The accompanying notes are an integral part of these financial statements.
<PAGE>
GALAXY INVESTMENTS, INC.
(Exploration Stage Company)
STATEMENT OF OPERATIONS
For the Period December 17, 1999 (date of inception)
to July 31, 2000
_______________________________________________________________________________
REVENUES $ -
EXPENSES 7,715
_______
NET LOSS $(7,715)
=======
NET LOSS PER COMMON SHARE
Basic $ -
_______
AVERAGE OUTSTANDING SHARES
Basic 9,000,000
F-3
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
GALAXY INVESTMENTS, INC.
(Exploration Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period December 17, 1999 (Date of Inception)
to July 31, 2000
_______________________________________________________________________________
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
______ _______ __________ ___________
<S> <C> <C> <C> <C>
Balance December 17, 1999 (date of inception) - $ - $ - $ -
Issuance of common stock for cash at $0.001 9,000,000 9,000 - -
- February, March and June 2000
Operating loss for the period
December 17, 1999 to July 31, 2000 - - - (7,715)
_________ _______ _______ ________
Balance July 31, 2000 9,000,000 $ 9,000 $ - $ (7,715)
========= ======= ======= ========
</TABLE>
F-4
The accompanying notes are an integral part of these financial statements.
<PAGE>
GALAXY INVESTMENTS, INC.
(Exploration Stage Company)
STATEMENT OF CASH FLOWS
For the Period December 17, 1999 (date of inception)
to July 31, 2000
_______________________________________________________________________________
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (7,715)
Adjustments to reconcile net loss to
net cash provided by operating
activities
Change in accounts payable 4,000
________
Net Cash Used in Operations (3,715)
========
CASH FLOWS FROM INVESTING ACTIVITIES -
________
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 9,000
________
Net Increase in Cash 5,285
Cash at Beginning of Period -
________
Cash at End of Period $ 5,285
========
F-5
The accompanying notes are an integral part of these financial statements.
<PAGE>
GALAXY INVESTMENTS, INC.
(Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________________________________
1. ORGANIZATION
The Company was incorporated under the laws of the State of Colorado on December
17, 1999 with authorized common stock of 100,000,000 shares at $0.001 par value
and preferred stock of 25,000,000 at $0.001 par value.
The preferred shares may be issued in one or more series with terms at the
discretion of the Board of Directors.
The Company was organized for the purpose of acquiring and developing mineral
properties. At the report date mineral claims, with unknown reserves, have been
acquired. The company has not established the existence of a commercially
minable ore deposit and therefore has not reached the development stage and is
considered to be in the exploration stage.
The Company has completed a private placement offerings of 9,000,000 common
shares.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
__________________
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
_______________
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
____________
On July 31, 2000 the Company had a net operating loss carry forward of
$7,715. The tax benefit from the loss carry forward has been fully offset by
a valuation reserve because the use of the future tax benefit is doubtful since
the Company has no operations. The net operating loss will expire in 2021.
Basic and Diluted Net Income (Loss) Per Share
_____________________________________________
Basic net income (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding. Diluted net income (loss) per
share amounts are computed using the weighted average number of common shares
and common equivalent shares outstanding as if shares had been issued on the
exercise of the preferred share rights unless the exercise becomes antidilutive
and then only the basic per share amounts are shown in the report.
F-6
<PAGE>
GALAXY INVESTMENTS, INC.
(Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
_______________________________________________________________________________
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Capitalization of Mineral Claim Costs
_____________________________________
Cost of acquisition, exploration, carrying and retaining unproven properties are
expensed as incurred. Costs incurred in proving and developing a property
ready for production are capitalized and amortized over the life of the mineral
deposit or over a shorter period if the property is shown to have an impairment
in value. Expenditures for mining equipment are capitalized and depreciated
over their useful life.
Financial Instruments
_____________________
The carrying amounts of financial instruments, including cash, mineral claims,
and accounts payable are considered by management to be their estimated fair
values. These values are not necessarily indicative of the amounts that the
Company could realize in a current market exchange.
Estimates and Assumptions
_________________________
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing these financial statements.
Comprehensive Income
____________________
The Company adopted Statement of Financial Accounting Standards No. 130. The
adoption of this standard had no impact on the total stockholder's equity.
Recent Accounting Pronouncements
________________________________
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
3. OPTION TO PURCHASE MINERAL CLAIMS
On July 15, 2000 the Company acquired an option to purchase mineral claims
known as "Treadwell #1" Tenure #360,262 located in the Kamloops Mining Division
on Cannell Creek, British Columbia. The claims have an expiration date of
October 13, 2001.
The claims have not been proven to have a commercially minable ore reserve and
therefore all costs for exploration and retaining the properties have been
expensed.
F-7
<PAGE>
GALAXY INVESTMENTS, INC.
(Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
_______________________________________________________________________________
3. OPTION TO PURCHASE MINERAL CLAIMS - continued
The terms of the purchase to vest 100% in the claims includes total payments of
$40,000, the issuance of 100,000 shares of the Company and by completing work
commitments totaling $500,000 on the claims on the dates in the following
outline. The property is subject to a royalty of one percent of the net smelter
returns with a right to acquire the rights to the royalty after start of
commercial production.
Purchase price;
$ 2,500 cash and 2,000 common shares as initial payment
7,500 cash and 8,000 common shares by July 31, 2001
10,000 cash and 40,000 common shares by July 31, 2002
20,000 cash and 50,000 common shares by July 31, 2003
work commitments;
$ 25,000 in work by July 31, 2001
50,000 in work by July 31, 2002
100,000 in work by July 31, 2003
150,000 in work by July 31, 2004
175,000 in work by July 21, 2005
4. RELATED PARTY TRANSACTIONS
Related parties have acquired 33% of the outstanding common stock.
5. GOING CONCERN
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital to service its future obligations and the management
of the Company has developed a strategy, which it believes will accomplish this
objective through additional equity funding, and long term financing, which will
enable the Company to operate for the coming year.
F-8
