Attached files
As filed with the Securities and Exchange Commission on February 16, 2010
Registration No. 333-______
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
KOPR RESOURCES CORP.
(Exact name of registrant as specified in its charter)
Delaware 1000 41-2252162
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
670 Kent Avenue
Teaneck, NJ 07666
(201) 410-9400
(Address, including zip code and telephone number,
including area code, of registrant's principal executive offices)
Andrea Schlectman
KOPR RESOURCES CORP.
670 Kent Avenue
Teaneck, NJ 07666
(201) 410-9400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications to:
Kristen A. Baracy
Synergy Law Group, LLC
730 West Randolph Street, 6th Floor
Chicago, IL 60661
(312) 454-0015
Approximate Date of Commencement of Proposed Sale to Public: As soon as
practicable after the effective date of this Registration Statement
If any of the securities being registered on this Form as to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum Amount of
Title of Each Class of Amount to be Offering Price Aggregate Registration
Securities to be Registered Registered Per Unit(1) Offering Price Fee(2)
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Common Stock 1,000,000 $0.01 $10,000 $1.00
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(1) This price was arbitrarily determined by the Company.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED [DATE], 2010
PRELIMINARY PROSPECTUS
KOPR RESOURCES CORP.
1,000,000 SHARES OF COMMON STOCK
This prospectus relates to the offering (the "Offering") of up to 1,000,000
shares of common stock of KOPR RESOURCES CORP., (the "Company"), in a
self-underwritten direct public offering, without any participation by
underwriters or broker-dealers. The shares will be sold through the efforts of
our sole officer and director. The offering price is $0.01 per share (the
"Offering Price"). The offering period will begin on the date the Company's
registration statement is declared effective (the "Effective Date") by the
Securities and Exchange Commission (the "SEC"). The Company will offer the
Shares on a best efforts basis, and there will be no minimum amount required to
close the Offering. All proceeds from sale of the Shares are non-refundable
except as may be required by applicable laws. No arrangements have been made to
place funds into escrow or any similar account. Upon receipt, offering proceeds
will be deposited into our operating account and used to conduct our business
and operations. Prior to this Offering, there has been no public market for the
common stock.
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
You should rely only on the information contained in this Prospectus and the
information we have referred you to. We have not authorized any person to
provide you with any information about this Offering, the Company, or the shares
of our Common Stock offered hereby that is different from the information
included in this Prospectus. If anyone provides you with different information,
you should not rely on it.
The date of this prospectus is [Date], 2010
TABLE OF CONTENTS
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 5
Forward Looking Statements................................................ 12
Use of Proceeds........................................................... 13
Determination of Offering Price........................................... 14
Plan of Distribution...................................................... 14
Description of Securities................................................. 15
Experts................................................................... 16
Interests of Named Experts and Counsel.................................... 16
Description of Business................................................... 17
Description of Property................................................... 21
Legal Proceedings......................................................... 21
Market For Common Equity And Related Stockholder Matters.................. 21
Beneficial Ownership...................................................... 22
Selected Financial Data................................................... 22
Management's Discussion and Analysis or Plan of Operation................. 22
Off-Balance Sheet Arrangements............................................ 24
Changes In and Disagreements with Accountants............................. 24
Directors and Officers.................................................... 24
Executive Compensation.................................................... 25
Certain Relationships and Related Transactions............................ 25
Director Independence..................................................... 25
Organization Within Last Five Years....................................... 26
Disclosure of Commission Position on Indemnification...................... 26
Where You Can Find More Information....................................... 26
Financial Statements...................................................... F-1
2
PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS AND
MAY NOT CONTAIN ALL OF THE INFORMATION YOU SHOULD CONSIDER BEFORE INVESTING IN
THE SHARES. YOU ARE URGED TO READ THIS PROSPECTUS IN ITS ENTIRETY, INCLUDING THE
INFORMATION UNDER "RISK FACTORS. UNLESS THE CONTEXT INDICATES OTHERWISE, THE
WORDS "WE," "US" "OUR" OR THE "COMPANY" REFER TO KOPR RESOURCES CORP.
OVERVIEW
This Prospectus relates to the offering of shares by KOPR RESOURCES CORP., a
Delaware corporation. The Company proposes to raise $10,000 (the "Offering
Amount") through the sale of 1,000,000 shares of Company common stock without
par value (each a "Share" and collectively the "Shares") at the price of $0.01
per Share (the "Offering") as more fully described in "PLAN OF DISTRIBUTION." No
arrangements have been made to place funds into escrow or any similar account.
Upon receipt, offering proceeds will be deposited into our operating account and
used to conduct our business and operations. The Report of the independent
registered public accounting firm which audited the Company's financial
statements for the period ended October 31, 2009 contains an opinion that there
is substantial doubt about the Company's ability to continue as a going concern
because the Company has an accumulated deficit of $81,681 as of October 31, 2009
and further losses are anticipated in the development of its business. See "Risk
Factors" beginning on page 5.
THE COMPANY
KOPR RESOURCES CORP. was incorporated under the laws of the state of Delaware on
July 23, 2007. The Company's principal offices are located at 670 Kent Avenue,
Teaneck, NJ 07666. Our telephone number there is (201) 410-9400. Our fax number
is (732) 612-1141.
The Company is a mining exploration stage company engaged in the acquisition and
exploration of mineral properties, primarily for copper and other metals. The
Company has staked a claim on certain property located in the Osoyoos Mining
Division of British Columbia, Canada. This property consists of one claim held
by Reza Mohammed (the "Trustee") under Declaration of Trust dated November 28,
2007 in favor of the Company and is located about 15 km north of the town of
Keremeos in south central British Columbia. We refer to this claim as the
"Property" or the "Claim" throughout this Prospectus. We are presently in the
exploration stage at the Property. We have not generated revenue from mining
operations.
We received our initial funding of $10,000 through the sale of common stock to
our sole officer and director who purchased 1,500 shares of our common stock at
approximately $6.66 per share on July 23, 2007. Our sole officer and director,
Andrea Schlectman, paid $5,000 on our behalf for the cost of the mining claim on
the Claim property located in central British Columbia, and on June 1, 2008,
2,500,000 shares of our common stock were issued to Mr. Schlectman in exchange
for the cash paid out. The Claim is the one property in our portfolio, on which
the proceeds of the offering will be spent. Our financial statements from
inception (July 23, 2007) through October 31, 2009 report no revenues and a net
loss of $81,681. Our independent auditor has issued an audit opinion which
includes a statement expressing substantial doubt as to our ability to continue
as a going concern.
We have purchased a mineral claim and geological report on the Claim Property.
In doing extensive internet research into the mining industry and other public
mining companies, Ms. Schlectman contacted Mr. Mohammed Reza though his public
company, Action Minerals, to inquire about available mining properties and was
sold the beneficial interest in the Property by Mr. Reza who owns the Property
as Trustee. We have not yet commenced any exploration activities on the Claim.
We plan to explore for minerals on the Property. The Property may not contain
any mineral reserves and funds that we spend on exploration will be lost. Even
if we complete our current exploration program and are successful in identifying
a mineral deposit, we will be required to expend substantial funds to bring our
claim to production. Ms. Schlectman, our sole officer and director, has not
personally visited the Property but is relying upon her discussions with the
geologist and his recommendations based upon his expertise and experience in
mining operations in Western Canada.
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THE OFFERING
Securities Being Offered The Company is offering for sale
1,000,000 shares of its common stock.
Initial Offering Price The Offering Price is $0.01 per Share.
The Offering Price was determined
arbitrarily by the Company.
Terms of the Offering The Shares will be sold through the
efforts of our sole officer and director
beginning on the date this registration
statement is declared effective by the
SEC.
Offering Period The Shares may be sold following the
Effective Date of the Company's
Registration Statement. We may, in our
sole and absolute discretion, terminate
the Offering prior to the end of the
Offering Period for any reason
whatsoever.
Minimum Number of Shares
to be Sold in the Offering None
Risk Factors The securities offered hereby involve a
high degree of risk and should not be
purchased by investors who cannot afford
the loss of their entire investment. See
"Risk Factors" beginning on page 5.
Common Stock Issued And Outstanding
Before Offering 2,501,500 shares of our common stock are
issued and outstanding as of the date of
this Prospectus.
Common Stock Issued And Outstanding
After Offering Upon completion of the Offering, we will
have 3,501,500 shares of common stock
issued and outstanding if we sell all of
the Shares offered in this Offering.
Use of Proceeds The Company will use the net proceeds
from the Offering substantially for
general corporate purposes primarily in
the area of general working capital to
continue exploration of the Property for
potential development.
SUMMARY FINANCIAL INFORMATION
Balance Sheet Data October 31, 2009
------------------ ----------------
Cash and Cash Equivalents $ 12,295
Total Current Assets $ 12,795
Current Liabilities $ 79,476
Total Stockholders' Deficiency $(66,681)
From Incorporation on
July 23, 2007 to
Statements of Operations October 31, 2009
------------------------ ----------------
Revenue $ --
Net Loss $ 81,681
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS AND UNCERTAINTIES DESCRIBED BELOW AND
THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE DECIDING WHETHER TO INVEST IN
THE SHARES WE ARE OFFERING. THE RISKS DESCRIBED BELOW ARE NOT THE ONLY ONES WE
WILL FACE. ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US OR THAT
WE CURRENTLY DEEM IMMATERIAL MAY ALSO IMPAIR OUR FINANCIAL PERFORMANCE AND
BUSINESS OPERATIONS. IF ANY OF THESE RISKS ACTUALLY OCCUR, OUR BUSINESS AND
FINANCIAL CONDITION OR RESULTS OF OPERATION MAY BE MATERIALLY ADVERSELY
AFFECTED, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE AND YOU MAY LOSE
ALL OR PART OF YOUR INVESTMENT. WE MAKE VARIOUS STATEMENTS IN THIS SECTION WHICH
CONSTITUTE "FORWARD-LOOKING" STATEMENTS. .
RISKS RELATING TO OUR COMPANY
OUR ONLY MINING PROPERTY IS ONE MINING CLAIM, THE FEASIBILITY OF WHICH HAS NOT
BEEN ESTABLISHED AS WE HAVE NOT COMPLETED EXPLORATION OR OTHER WORK NECESSARY TO
DETERMINE IF IT IS COMMERCIALLY FEASIBLE TO ACQUIRE AND DEVELOP THE PROPERTY.
We are currently an exploration stage mining company. Our only mining asset is
one mining claim on the Property. The Property does not have any proven or
probable reserves. A "reserve," as defined by the SEC, is that part of a mineral
deposit which could be economically and legally extracted or produced at the
time of the reserve determination. A reserve requires a feasibility study
demonstrating with reasonable certainty that the deposit can be economically
extracted and produced. We have not carried out any feasibility study with
regard to the Property. As a result, we currently have no reserves and there are
no assurances that we will be able to prove that there are reserves on the
Property.
WE MAY NEVER FIND COMMERCIALLY VIABLE COPPER OR OTHER RESERVES.
Mineral exploration and development involve a high degree of risk and few
properties that are explored are ultimately developed into producing mines. We
cannot assure you that any future mineral exploration and development activities
will result in any discoveries of proven or probable reserves as defined by the
SEC since such discoveries are remote. Further, we cannot provide any assurance
that, even if we discover commercial quantities of mineralization, a mineral
property will be brought into commercial production. Development of our mineral
properties will follow only upon obtaining sufficient funding and satisfactory
exploration results.
WE WILL REQUIRE SIGNIFICANT ADDITIONAL CAPITAL TO CONTINUE OUR EXPLORATION
ACTIVITIES, AND, IF WARRANTED, TO DEVELOP MINING OPERATIONS.
Exploration activities and, if warranted, development of the Property will
involve significant expenditures. We will be required to raise significantly
more capital in order to fully develop the Property for mining production
assuming that economically viable reserves exist. There is no assurance that the
exploration will disclose potential for mineral development and no assurance
that any such development would be financially productive. Our ability to obtain
necessary funding depends upon a number of factors, including the price of
copper and other base metals and minerals which we are able to mine, the status
of the national and worldwide economy and the availability of funds in the
capital markets. If we are unable to obtain the required financing for these or
other purposes, our exploration activities would be delayed or indefinitely
postponed, and this would likely, eventually, lead to failure of our Company.
Even if financing is available, it may be on terms that are not favorable to us,
in which case, our ability to become profitable or to continue operating would
be adversely affected. If we are unable to raise funds to continue our
exploration and feasibility work on the Property, or if commercially viable
reserves are not present, the market value of our securities will likely
decline, and our investors may lose some or all of their investment.
WE HAVE INCURRED LOSSES SINCE OUR INCORPORATION IN 2007 AND MAY NEVER BE
PROFITABLE WHICH RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A
GOING CONCERN.
Since the Company was incorporated July 23, 2007, we have had nominal operations
and incurred operating losses. As of October 31, 2009, our accumulated deficit
since inception is $81,681. As we are just beginning exploration activities on
the Property, we expect to incur additional losses in the foreseeable future,
5
and such losses may be significant. To become profitable, we must be successful
in raising capital to continue with our exploration activities, discover
economically feasible mineralization deposits and establish reserves,
successfully develop the Property and finally realize adequate prices on our
minerals in the marketplace. It could be years before we receive any revenues
from copper and mineral production, if ever. Thus, we may never be profitable.
Even if we do achieve profitability, we may not be able to sustain or increase
profitability on a long-term basis. These circumstances raise substantial doubt
about our ability to continue as a going concern as described in note 1 of the
notes to financial statements on page F-7. If we are unable to continue as a
going concern, investors will likely lose all of their investments in the
Company.
BECAUSE WE HAVE NOT YET COMMENCED BUSINESS OPERATIONS, EVALUATING OUR BUSINESS
IS DIFFICULT.
We were incorporated on July 23, 2007, and to date have been involved primarily
in organizational activities. We have not earned revenues as of the date of this
Prospectus and have incurred total losses of $81,681 from inception to October
31, 2009.
Accordingly, you cannot evaluate our business or our future prospects due to our
lack of operating history. To date, our business development activities have
consisted solely of organizational activities. Potential investors should be
aware of the difficulties normally encountered by development stage companies
and the high rate of failure of such enterprises. In addition, there is no
guarantee that we will commence business operations. Even if we do commence
operations, at present, we do not know when.
Furthermore, prior to completion of our exploration stage, we anticipate that we
will incur increased operating expenses without realizing any revenues. We
therefore expect to incur significant losses into the foreseeable future. We
recognize that if we are unable to generate significant revenues from
development of the Claim and any production of minerals from the Claim, we will
not be able to earn profits or continue operations.
VERY FEW MINERAL PROPERTIES ARE ULTIMATELY DEVELOPED INTO PRODUCING MINES.
The business of exploration for minerals and mining involves a high degree of
risk. Few properties that are explored are ultimately developed into producing
mines. At present, the Claim has no known body of commercial mineralization.
Most exploration projects do not result in the discovery of commercially
mineable deposits of mineralization.
Substantial expenditures are required for the Company to establish
mineralization reserves through drilling, to develop metallurgical processes, to
extract the metal from the ore and, in the case of new properties, to develop
the mining and processing facilities and infrastructure at any site chosen for
mining.
Although substantial benefits may be derived from the discovery of a major
mineral deposit, we cannot assure you that the Company will discover minerals in
sufficient quantities to justify commercial operations or that it can obtain the
funds required for development on a timely basis. The economics of developing
precious and base metal mineral properties is affected by many factors including
the cost of operations, variations in the grade of ore mined, fluctuations in
metal markets, costs of processing equipment and other factors such as
government regulations, including regulations relating to royalties, allowable
production, importing and exporting of minerals and environmental protection.
HISTORICAL PRODUCTION OF MINERALS AT PROPERTIES IN THE AREA OF THE CLAIM MAY NOT
BE INDICATIVE OF THE POTENTIAL FOR FUTURE DEVELOPMENT OR REVENUE.
Historical production of metals and minerals from mines in the area of the Claim
cannot be relied upon as an indication that the Claim will have commercially
feasible reserves. Investors in our securities should not rely on historical
operations of mines in the area of the Claim as an indication that we will be
able to place the Property into commercial production. We expect to incur losses
unless and until such time as the Property enters into commercial production and
produces sufficient revenue to fund our continuing operations.
6
FLUCTUATING COPPER, METAL AND MINERAL PRICES COULD NEGATIVELY IMPACT OUR
BUSINESS PLAN.
The potential for profitability of our copper and other metal and mineral mining
operations and the value of the Property will be directly related to the market
price of copper and the metals and minerals that we mine. Historically, copper
and other mineral prices have widely fluctuated, and are influenced by a wide
variety of factors, including inflation, currency fluctuations, regional and
global demand and political and economic conditions. Fluctuations in the price
of copper and other minerals that we mine may have a significant influence on
the market price of our common stock and a prolonged decline in these prices
will have a negative effect on our results of operations and financial
condition.
RECLAMATION OBLIGATIONS ON THE PROPERTY AND OUR MINING OPERATIONS, IF ANY, COULD
REQUIRE SIGNIFICANT ADDITIONAL EXPENDITURES.
We are responsible for the reclamation obligations related to any exploratory
and mining activities located on the Property. Since we have only begun
exploration activities, we cannot estimate these costs at this time. We may be
required to file for a reclamation bond for any mining operations which we
conduct, and the cost of such a bond will be significant. We do not currently
have an estimate of the total reclamation costs for mining operations on the
Property. The satisfaction of current and future bonding requirements and
reclamation obligations will require a significant amount of capital. There is a
risk that we will be unable to fund these additional bonding requirements, and
further, that increases to our bonding requirements or excessive actual
reclamation costs will negatively affect our financial position and results of
operation.
TITLE TO MINERAL PROPERTIES CAN BE UNCERTAIN, AND WE ARE AT RISK OF LOSS OF
OWNERSHIP OF OUR PROPERTY.
Our ability to explore and mine the Property depends on the validity of title to
the Property. The Property consists of a mining claim. Unpatented mining claims
are effectively only a lease from the government to extract minerals; thus an
unpatented mining claim is subject to contest by third parties or the
government. These uncertainties relate to such things as the sufficiency of
mineral discovery, proper posting and marking of boundaries, failure to meet
statutory guidelines, assessment work and possible conflicts with other claims
not determinable from descriptions of record. Since a substantial portion of all
mineral exploration, development and mining now occurs on unpatented mining
claims, this uncertainty is inherent in the mining industry. We have not
obtained a title opinion on the Property. Thus, there may be challenges to the
title to the Property which, if successful, could impair development and/or
operations.
OUR ONGOING OPERATIONS ARE SUBJECT TO ENVIRONMENTAL RISKS, WHICH COULD EXPOSE US
TO SIGNIFICANT LIABILITY AND DELAY, SUSPENSION OR TERMINATION OF OUR OPERATIONS.
Mining exploration and exploitation activities are subject to national,
provincial and local laws, regulations and policies, including laws regulating
the removal of natural resources from the ground and the discharge of materials
into the environment. These regulations mandate, among other things, the
maintenance of air and water quality standards and land reclamation. They also
set forth limitations on the generation, transportation, storage and disposal of
solid and hazardous waste. Exploration and exploitation activities are also
subject to national, provincial and local laws and regulations which seek to
maintain health and safety standards by regulating the design and use of
exploration methods and equipment.
National and provincial agencies may initiate enforcement activities against our
Company. The agencies involved, generally, can levy significant fines per day of
each violation, issue and enforce orders for clean-up and removal, and enjoin
ongoing and future activities. Our inability to reach acceptable agreements with
agencies in question would have a material adverse effect on us and our ability
to continue as a going concern.
Environmental and other legal standards imposed by national, provincial or local
authorities are constantly evolving, and typically in a manner which will
require stricter standards and enforcement, and increased fines and penalties
for non-compliance. Such changes may prevent us from conducting planned
activities or increase our costs of doing so, which would have material adverse
effects on our business. Moreover, compliance with such laws may cause
substantial delays or require capital outlays in excess of those anticipated,
thus causing an adverse effect on us. Additionally, we may be subject to
liability for pollution or other environmental damages that we may not be able
7
to or elect not to insure against due to prohibitive premium costs and other
reasons. Unknown environmental hazards may exist on the Property or upon
properties that we may acquire in the future caused by previous owners or
operators, or that may have occurred naturally.
WEATHER INTERRUPTIONS IN THE AREA OF THE PROPERTY MAY DELAY OR PREVENT
EXPLORATION.
The terrain of the Property is of mainly steep to moderate relief and occupies
the western slope of a mountain with an elevation of 1760 meters in British
Columbia, Canada. The area is subject to extreme winter conditions which may
delay or prevent exploration of the Property during the winter months.
OUR INDUSTRY IS HIGHLY COMPETITIVE, ATTRACTIVE MINERAL LANDS ARE SCARCE AND WE
MAY NOT BE ABLE TO OBTAIN QUALITY PROPERTIES OR RECRUIT AND RETAIN QUALIFIED
EMPLOYEES.
We compete with many companies in the mining industry, including large,
established mining companies with capabilities, personnel and financial
resources that far exceed our limited resources. In addition, there is a limited
supply of desirable mineral lands available for claim-staking, lease or
acquisition in British Columbia, and other areas where we may conduct
exploration activities. We are at a competitive disadvantage in acquiring
mineral properties, since we compete with these larger individuals and
companies, many of which have greater financial resources and larger technical
staffs. Likewise, our competition extends to locating and employing competent
personnel and contractors to prospect, develop and operate mining properties.
Many of our competitors can offer attractive compensation packages that we may
not be able to meet. Such competition may result in our Company being unable not
only to acquire desired properties, but to recruit or retain qualified employees
or to acquire the capital necessary to fund our operation and advance our
properties. Our inability to compete with other companies for these resources
would have a material adverse effect on our results of operation and business.
BECAUSE MARKET FACTORS IN THE MINING BUSINESS ARE OUT OF OUR CONTROL, WE MAY NOT
BE ABLE TO MARKET ANY MINERALS THAT MAY BE FOUND. The mining industry, in
general, is intensely competitive and we can provide no assurance to investors
that even if minerals are discovered, a ready market will exist from the sale of
any ore found. Numerous factors beyond our control may affect the marketability
of metals. These factors include market fluctuations, the proximity and capacity
of natural resource markets and processing equipment, government regulations,
including regulations relating to prices, taxes, royalties, land tenure, land
use, importing and exporting of minerals and environmental protection. The exact
effect of these factors cannot be accurately predicted, but the combination of
these factors may result in our not receiving an adequate return on invested
capital.
WE DEPEND ON OUR CHIEF EXECUTIVE OFFICER AND THE LOSS OF THIS INDIVIDUAL COULD
ADVERSELY AFFECT OUR BUSINESS.
Our Company is completely dependent on Andrea Schlectman, our President, Chief
Executive Officer and Director. As of the date of this prospectus, Andrea
Schlectman was our sole officer and director. The loss of Ms. Schlectman's
services and her knowledge of the Property would significantly and adversely
affect our business. We have no life insurance on the life of Andrea Schlectman.
MANAGEMENT HAS ONLY LIMITED EXPERIENCE IN RESOURCE EXPLORATION.
The Company's management, while experienced in business operations, has only
limited experience in resource exploration. Our sole director and officer of the
Company has no significant technical training or experience in resource
exploration or mining. The Company relies on the opinions of consulting
geologists that it retains from time to time for specific exploration projects
or property reviews. As a result of management's inexperience, there is a higher
risk of the Company being unable to complete its business plan. To date, the
only mining consultant retained by the Company is George Coetzee who prepared an
assessment report on the Property which is identified as Exhibit 99.1 to the
Company's registration statement on Form S-1.
8
THE NATURE OF MINERAL EXPLORATION AND PRODUCTION ACTIVITIES INVOLVES A HIGH
DEGREE OF RISK AND THE POSSIBILITY OF UNINSURED LOSSES THAT COULD MATERIALLY AND
ADVERSELY AFFECT OUR OPERATIONS.
Exploration for minerals is highly speculative and involves greater risk than
many other businesses. Many exploration programs do not result in the discovery
of economically feasible mineralization. Few properties that are explored are
ultimately advanced to the stage of producing mines. We are subject to all of
the operating hazards and risks normally incident to exploring for and
developing mineral properties such as, but not limited to:
* economically insufficient mineralized material;
* fluctuations in production costs that may make mining uneconomical;
* labor disputes;
* unanticipated variations in grade and other geologic problems;
* environmental hazards;
* water conditions;
* difficult surface or underground conditions;
* industrial accidents; personal injury, fire, flooding, cave-ins and
landslides;
* metallurgical and other processing problems;
* mechanical and equipment performance problems; and
* decreases in revenues and reserves due to lower gold and mineral
prices.
Any of these risks can materially and adversely affect, among other things, the
development of properties, production quantities and rates, costs and
expenditures and production commencement dates. We currently have no insurance
to guard against any of these risks. If we determine that capitalized costs
associated with any of our mineral interests are not likely to be recovered, we
would incur a write-down of our investment in these interests. All of these
factors may result in losses in relation to amounts spent which are not
recoverable.
OUR OPERATIONS ARE SUBJECT TO PERMITTING REQUIREMENTS WHICH COULD REQUIRE US TO
DELAY, SUSPEND OR TERMINATE OUR OPERATIONS ON OUR MINING PROPERTY.
Our operations, including our planned exploration activities on the Property,
require permits from the provincial and national governmental agencies. We may
be unable to obtain these permits in a timely manner, on reasonable terms or at
all. If we cannot obtain or maintain the necessary permits, or if there is a
delay in receiving these permits, our timetable and business plan for
exploration of the Property will be adversely affected.
MINERAL EXPLORATION INVOLVES A HIGH DEGREE OF RISK AGAINST WHICH THE COMPANY IS
NOT CURRENTLY INSURED.
Unusual or unexpected rock formations, formation pressures, fires, power
outages, labor disruptions, flooding, cave-ins, landslides and the inability to
obtain suitable or adequate machinery, equipment or labor are risks involved in
the operation of mines and the conduct of exploration programs. The Company has
relied on and will continue to rely upon consultants and others for exploration
expertise.
It is not always possible to fully insure against such risks, and the Company
may decide not to take out insurance against such risks as a result of high
premiums or other reasons. Should such liabilities arise, they could reduce or
9
eliminate any future profitability and result in increasing costs and a decline
in the value of the Company's shares. The Company does not currently maintain
insurance against environmental risks relating to the Claim.
BECAUSE WE HOLD ALL OF OUR CASH RESERVES IN UNITED STATES DOLLARS, WE MAY
EXPERIENCE WEAKENED PURCHASING POWER IN CANADIAN DOLLAR TERMS AND MAY NOT BE
ABLE TO AFFORD TO CONDUCT OUR PLANNED EXPLORATION PROGRAM.
We hold all of our cash reserves in United States dollars. Due to foreign
exchange rate fluctuations, the value of these United States dollar reserves can
result in both translation gains and losses in Canadian dollar terms. If there
is a significant decline in the US dollar versus the Canadian Dollar, our US
dollar purchasing power in Canadian dollars would also significantly decline. If
a there is a significant decline in the US dollar we would not be able to afford
to conduct our planned exploration program. We have not entered into derivative
instruments to offset the impact of foreign exchange fluctuations.
IT MAY BE DIFFICULT TO ENFORCE JUDGMENTS AGAINST US.
The primary assets of the Company are located outside of the United States. As a
result, it may be difficult or impossible for you to enforce in courts outside
the United States judgments obtained in the United States courts based upon the
civil liability provisions of the United States federal securities laws against
us.
MINING ACCIDENTS OR OTHER MATERIAL ADVERSE EVENTS AT OUR MINING LOCATIONS MAY
REDUCE OUR PRODUCTION LEVELS.
At any one of our various mines, production may fall below historic or estimated
levels as a result of mining accidents, such as a pit wall failure in an open
pit mine, or cave-ins or flooding at underground mines. In addition, production
may be unexpectedly reduced at a location if, during the course of mining,
unfavorable ground conditions or seismic activity are encountered, ore grades
are lower than expected, the physical or metallurgical characteristics of the
ore are less amenable to mining or treatment than expected, or our equipment,
processes or facilities fail to operate properly or as expected.
THE COSTS TO MEET OUR REPORTING AND OTHER REQUIREMENTS AS A PUBLIC COMPANY
SUBJECT TO THE SECURITIES EXCHANGE ACT OF 1934 WILL BE SUBSTANTIAL AND MAY
RESULT IN US HAVING INSUFFICIENT FUNDS TO EXPAND OUR BUSINESS OR EVEN TO MEET
ROUTINE BUSINESS OBLIGATIONS.
Upon becoming a public entity, subject to the reporting requirements of the
Securities Exchange Act of 1934, we will incur ongoing expenses associated with
professional fees for accounting, legal and a host of other expenses for annual
reports and proxy statements. We estimate that these costs will range up to
$50,000 per year for the next few years and will be higher if our business
volume and activity increases but lower during the first year of being public
because our overall business volume will be lower, and we will not yet be
subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.
These obligations will reduce our ability and resources to fund other aspects of
our business and may prevent us from meeting our normal business obligations.
RISKS ASSOCIATED WITH OUR COMMON STOCK
THE OFFERING PRICE OF THE SHARES IS ARBITRARY.
The Offering Price of the Shares has been determined arbitrarily by the Company
and bears no relationship to the Company's assets, book value, potential
earnings or any other recognized criteria of value. The Offering Price may not
reflect the market price of the Shares after the Offering.
THE COMPANY HAS A LACK OF DIVIDEND PAYMENTS.
The Company has no plans to pay any dividends in the foreseeable future.
CERTAIN COMPANY ACTIONS AND THE INTERESTS OF STOCKHOLDERS MAY DIFFER.
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The voting control of the Company could discourage others from initiating a
potential merger, takeover or another change-of-control transaction that could
be beneficial to stockholders. As a result, the value of stock could be harmed.
Purchasers should be aware that as of the date of the offering there is only one
stockholder of the Company.
THE COMPANY'S MANAGEMENT TEAM WILL HAVE BROAD DISCRETION OVER THE USE OF
PROCEEDS.
The Company's management will retain broad discretion as to the allocation of
the proceeds of this Offering, and the Company may not be able to invest these
proceeds to yield a significant return.
PURCHASERS WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL BOOK VALUE DILUTION.
The price of the Shares offered hereunder is expected to be substantially higher
than the net tangible book value of each outstanding share of stock. Investors
who purchase Shares in this Offering will suffer immediate and substantial
dilution.
THE COMPANY IS SUBJECT TO RIGHTS OF PREFERRED STOCKHOLDERS INCLUDING MANDATORY
REDEMPTION.
The Company has authorized 75,000,000 shares of blank check preferred stock none
of which is currently outstanding. Upon issuance of any preferred stock in the
future, the rights attached to the preferred shares could affect the Company's
ability to operate, which could force the Company to seek other financing. Such
financing may not be available on commercially reasonable terms or at all and
could cause substantial dilution to existing stockholders.
CURRENTLY, THERE IS NO PUBLIC MARKET FOR OUR SECURITIES, AND WE CANNOT ASSURE
YOU THAT ANY PUBLIC MARKET WILL EVER DEVELOP AND IT IS LIKELY TO BE SUBJECT TO
SIGNIFICANT PRICE FLUCTUATIONS.
Currently, there is no public market for our stock and our stock may never be
traded on any exchange, or, if traded, a public market may not materialize. Even
if we are successful in developing a public market, there may not be enough
liquidity in such market to enable shareholders to sell their stock.
Our common stock is unlikely to be followed by any market analysts, and there
may be few or no institutions acting as market makers for the common stock.
Either of these factors could adversely affect the liquidity and trading price
of our common stock.
Until our common stock is fully distributed and an orderly market develops in
our common stock, if ever, the price at which it trades is likely to fluctuate
significantly. Prices for our common stock will be determined in the marketplace
and may be influenced by many factors, including the depth and liquidity of the
market for shares of our common stock, developments affecting our business,
including the impact of the factors referred to elsewhere in these Risk Factors,
investor perception of the Company, and general economic and market conditions.
No assurances can be given that an orderly or liquid market will ever develop
for the shares of our common stock.
OUR COMMON STOCK WILL BE SUBJECT TO "PENNY STOCK" RULES WHICH MAY BE DETRIMENTAL
TO INVESTORS.
The SEC has adopted regulations which generally define "penny stock" to be any
equity security that has a market price (as defined) of less than $5.00 per
share or an exercise price of less than $5.00 per share. Such securities are
subject to rules that impose additional sales practice requirements on
broker-dealers who sell them. For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchaser of
such securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior to the
transaction, of a disclosure schedule prepared by the SEC relating to the penny
stock market. The broker-dealer also must disclose the commissions payable to
both the broker-dealer and the registered representative, current quotations for
the securities and, if the broker-dealer is the sole market-maker, the
broker-dealer must disclose this fact and the broker-dealer's presumed control
over the market. Finally, among other requirements, monthly statements must be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks. As the Shares immediately
11
following this Offering will likely be subject to such penny stock rules,
purchasers in this Offering will in all likelihood find it more difficult to
sell their Shares in the secondary market.
ONE SHAREHOLDER OWNS ALL OF OUR OUTSTANDING COMMON STOCK, WHICH LIMITS OTHER
SHAREHOLDERS' ABILITY TO INFLUENCE THE OUTCOME OF ANY SHAREHOLDER VOTE.
Our sole officer and director beneficially owns 100% of our outstanding common
stock as of the date of this prospectus. Under our Certificate of Incorporation
and the laws of the State of Delaware, the vote of a majority of the shares
voting at a meeting at which a quorum is present is generally required to
approve most shareholder action. As a result, our sole shareholder is able to
control the outcome of shareholder votes, including votes concerning the
election of directors, amendments to our Certificate of Incorporation or
proposed mergers or other significant corporate transactions.
WE HAVE NEVER PAID A DIVIDEND ON OUR COMMON STOCK AND WE DO NOT ANTICIPATE
PAYING ANY IN THE FORESEEABLE FUTURE.
We have not paid a cash dividend on our common stock to date, and we do not
intend to pay cash dividends in the foreseeable future. Our ability to pay
dividends will depend on our ability to successfully develop one or more
properties and generate revenue from operations. Notwithstanding, we will likely
elect to retain earnings, if any, to finance our growth. Future dividends may
also be limited by bank loan agreements or other financing instruments that we
may enter into in the future. The declaration and payment of dividends will be
at the discretion of our Board of Directors.
WE HAVE NOT VOLUNTARILY IMPLEMENTED VARIOUS CORPORATE GOVERNANCE MEASURES, IN
THE ABSENCE OF WHICH, SHAREHOLDERS MAY HAVE MORE LIMITED PROTECTIONS AGAINST
INTERESTED DIRECTOR TRANSACTIONS, CONFLICTS OF INTEREST AND SIMILAR MATTERS.
Recent U. S. legislation, including the Sarbanes-Oxley Act of 2002, has resulted
in the adoption of various corporate governance measures designed to promote the
integrity of the corporate management and the securities markets. Some of these
measures have been adopted in response to legal requirements. Others have been
adopted by companies in response to the requirements of national securities
exchanges, such as the NYSE or The NASDAQ Stock Market, on which their
securities are listed. Among the corporate governance measures that are required
under the rules of national securities exchanges and NASDAQ are those that
address board of directors' independence, audit committee oversight and the
adoption of a code of ethics. We have not yet adopted any of these corporate
governance measures and, since our securities are not listed on a national
securities exchange or NASDAQ, we are not required to do so. It is possible that
if we were to adopt some or all of these corporate governance measures,
shareholders would benefit from somewhat greater assurances that internal
corporate decisions were being made by disinterested directors and that policies
had been implemented to define responsible conduct. For example, in the absence
of audit, nominating and compensation committees comprised of at least a
majority of independent directors, decisions concerning matters such as
compensation packages to our senior officers and recommendations for director
nominees may be made by a majority of directors who have an interest in the
outcome of the matters being decided. Prospective investors should bear in mind
our current lack of corporate governance measures in formulating their
investment decisions.
THE COMPANY WILL DEPOSIT OFFERING PROCEEDS INTO ITS OPERATING ACCOUNT UPON
RECEIPT AND USE THEM TO CONDUCT ITS BUSINESS AND OPERATIONS, AND PROCEEDS ARE
GENERALLY NON-REFUNDABLE.
Subscription funds submitted by subscribers will be deposited into the Company's
operating account upon receipt and used to conduct the Company's business and
operations. All proceeds from the sale of the Shares are non-refundable except
as may be required by applicable laws.
FORWARD LOOKING STATEMENTS
THIS PROSPECTUS CONTAINS PROJECTIONS AND STATEMENTS RELATING TO COMPANY THAT
CONSTITUTE "FORWARD-LOOKING STATEMENTS." THESE FORWARD-LOOKING STATEMENTS MAY BE
IDENTIFIED BY THE USE OF PREDICTIVE, FUTURE-TENSE OR FORWARD-LOOKING
12
TERMINOLOGY, SUCH AS "INTENDS," "BELIEVES," "ANTICIPATES," "EXPECTS,"
"ESTIMATES," "MAY," "WILL," OR SIMILAR TERMS. SUCH STATEMENTS SPEAK ONLY AS OF
THE DATE OF SUCH STATEMENT, AND THE COMPANY UNDERTAKES NO ONGOING OBLIGATION TO
UPDATE SUCH STATEMENTS. THESE STATEMENTS APPEAR IN A NUMBER OF PLACES IN THIS
PROSPECTUS AND INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF OR CURRENT
EXPECTATIONS OF THE COMPANY, AND ITS RESPECTIVE DIRECTORS, OFFICERS OR ADVISORS
WITH RESPECT TO, AMONG OTHER THINGS: (1) TRENDS AFFECTING THE COMPANY'S
FINANCIAL CONDITION, RESULTS OF OPERATIONS OR FUTURE PROSPECTS, (2) THE
COMPANY'S BUSINESS AND GROWTH STRATEGIES AND (3) THE COMPANY'S FINANCING PLANS
AND FORECASTS. POTENTIAL INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING
STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE SIGNIFICANT
RISKS AND UNCERTAINTIES, AND THAT, SHOULD CONDITIONS CHANGE OR SHOULD ANY ONE OR
MORE OF THE RISKS OR UNCERTAINTIES MATERIALIZE OR SHOULD ANY OF THE UNDERLYING
ASSUMPTIONS OF THE COMPANY PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS
FACTORS, SOME OF WHICH ARE UNKNOWN. THE FACTORS THAT COULD ADVERSELY AFFECT THE
ACTUAL RESULTS AND PERFORMANCE OF THE COMPANY INCLUDE, WITHOUT LIMITATION, THE
COMPANY'S INABILITY TO RAISE ADDITIONAL FUNDS TO SUPPORT OPERATIONS AND CAPITAL
EXPENDITURES, THE COMPANY'S INABILITY TO EFFECTIVELY MANAGE ITS GROWTH, THE
COMPANY'S INABILITY TO ACHIEVE GREATER AND BROADER MARKET ACCEPTANCE IN EXISTING
AND NEW MARKET SEGMENTS, THE COMPANY'S INABILITY TO SUCCESSFULLY COMPETE AGAINST
EXISTING AND FUTURE COMPETITORS, THE COMPANY'S RELIANCE ON INDEPENDENT
MANUFACTURERS AND SUPPLIERS, DISRUPTIONS IN THE SUPPLY CHAIN, THE COMPANY'S
INABILITY TO PROTECT ITS INTELLECTUAL PROPERTY, OTHER FACTORS DESCRIBED
ELSEWHERE IN THIS PROSPECTUS, OR OTHER REASONS. POTENTIAL INVESTORS ARE URGED TO
CAREFULLY CONSIDER SUCH FACTORS. ALL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO
THE COMPANY OR PERSONS ACTING ON ITS BEHALF ARE EXPRESSLY QUALIFIED IN THEIR
ENTIRETY BY THE FOREGOING CAUTIONARY STATEMENTS AND THE "RISK FACTORS" DESCRIBED
HEREIN.
USE OF PROCEEDS
Assuming 1,000,000 Shares are subscribed for in this Offering, and after netting
anticipated Offering expenses, the net proceeds from the sale of the Shares will
be approximately $4,550. The Company intends to use the net proceeds from the
Offering substantially for general corporate purposes and working capital to be
used primarily in the areas of pursuing exploration of the Claim, including
assessment, mapping and sampling, exploitation of the mineral reserves, if any,
discovered thereon, and sales of the minerals and/or metals, if any, mined from
the reserves. Set forth below is the Company's proposed use of proceeds assuming
the sale of all of the Securities offered hereunder.
Use Amount
--- ------
Working Capital $ 850
Exploration of the Claim $3,500
Exploitation of Mineral Reserves $ 100
Sales of Minerals and/or Metals $ 100
WORKING CAPITAL
The Company plans to hire employees and/or engage consultants with technical
expertise to explore the Claim and mine the reserves if any are discovered.
Working capital will support personnel costs as well as the general
administration and management of the Company's start-up phase.
EXPLORATION OF THE CLAIM
The Company anticipates continuing its exploration efforts with respect to the
Claim. Proceeds of this Offering will support the Company's ongoing continued
exploration of the Claim.
EXPLOITATION OF MINERAL RESERVES
If commercially viable metal or mineral reserves are found on the Property, the
Company intends to mine the reserves. The funds generated from this Offering
will support the Company's development of the mineral reserves if any are found
on the Property.
13
SALES OF MINERALS AND/OR METALS
If the Company successfully mines any minerals or metals discovered on the
Property, it will explore sales opportunities for such products. The Company
intends to use a portion of the proceeds from this Offering to develop such
sales opportunities.
Because of the number and variability of factors that determine the use of the
net proceeds from this Offering, we cannot assure you that the actual uses of
the net proceeds from this Offering will not vary substantially from our
currently planned uses. Our management will retain broad discretion in the
allocation and use of the net proceeds of this Offering, and investors will be
relying on the judgment of our management regarding the application of these net
proceeds. Pending the uses described above, we will invest the net proceeds from
this Offering in short-term, interest-bearing, investment-grade securities. We
cannot predict whether this investment of the net proceeds will yield a
favorable return.
DETERMINATION OF OFFERING PRICE
Prior to this Offering, there has been no market for our common stock. The
Offering Price of the Shares offered hereunder was arbitrarily determined by the
Company and bears no direct relationship to the value of our assets, book value,
net worth, historical or prospective earnings, actual results of operations,
trading price of our stock, or any other recognized criteria of value. The
Offering Price of the Shares should not be considered as an indication of the
actual or trading value of a share of our common stock.
PLAN OF DISTRIBUTION
GENERAL
There is no public market for our common stock. Therefore, the current and
potential market for our common stock is limited and the liquidity of our shares
may be severely limited. To date, we have made no effort to obtain listing or
quotation of our securities on a national stock exchange or association. We have
not identified or approached any broker/dealers with regard to assisting us to
apply for such listing. We are unable to estimate if or when we expect to
undertake this endeavor. No market may ever develop for our common stock, or if
developed, such market may not be sustained in the future. Accordingly, the
Shares should be considered totally illiquid, which inhibits investors' ability
to sell their Shares. The market price of the Shares of common stock is likely
to be highly volatile and may be significantly affected by factors such as
actual or anticipated fluctuations in the Company's operating results,
announcements of technological innovations, new products and/or services or new
contracts by the Company or its competitors, developments with respect to
copyrights or proprietary rights, adoption of new accounting standards or
regulatory requirements affecting the insurance business, general market
conditions and other factors. In addition, the stock market from time to time
experiences significant price and volume fluctuations that may adversely affect
the market price for the Company's common stock.
THE OFFERING
The Company is offering to sell up to 1,000,000 Shares pursuant to the terms of
this Prospectus in a self-underwritten direct public offering, without any
participation by underwriters or broker-dealers. The Offering Price is $0.01 per
Share. The Offering Period will begin on the Effective Date. The Company is
offering the Shares on a best efforts basis, and there will be no minimum amount
required to close the Offering. If all the Shares are not sold, there is the
possibility that the amount raised may be minimal and might not even cover the
costs of the Offering which the Company estimates at $5,450.
No arrangements have been made to place funds into escrow or any similar
account. Upon receipt, offering proceeds will be deposited into our operating
account and used to conduct our business and operations. All proceeds from sale
of the Shares are non-refundable except as may be required by applicable laws.
If an investor's subscription is accepted by Company, the subscription funds,
together with any interest earned on the funds, will be immediately drawn upon
and used by the Company.
14
The affiliates, officers, directors, employees and stockholders of the Company
reserve the right at their option to purchase Shares, but all such purchases
shall be without discount and at the full Offering Price per Share.
Shares will be sold through the efforts of the sole officer and director of the
Company. There will be no participation by underwriters or broker-dealers. The
Shares will be qualified or registered for sale under the "blue sky" laws of the
states in which the Shares are offered and/or sold.
EXPENSES OF OFFERING
The Company will pay all of the costs and expenses in connection with the
Offering, including but not limited to all expenses incurred to prepare,
reproduce or print this Prospectus, legal expenses, accounting and audit
expenses and other expenses incurred in qualifying the Offering for sale under
federal securities laws and applicable state securities, or "blue sky," laws. It
is estimated that the expenses of the Offering will not exceed $5,450.
SUBSCRIPTION PROCEDURES
If after carefully reviewing and studying this Prospectus, you desire to
purchase Shares, you must do the following:
(1) Complete, execute, date and deliver to us the Subscription Agreement
which accompanies this Prospectus.
(2) Forward the Subscription Agreement to Carol McMahan, Synergy Law
Group, LLC, 730 West Randolph, Suite 600, Chicago, IL 60661, with a
check payable to "KOPR RESOURCES CORP." in an amount equal to the
total purchase price for the number of Shares you desire to purchase.
You may make subscription payments by wire transfer in an amount equal
to the total purchase price for the number of Shares you desire to
purchase by obtaining wire instructions from Carol McMahan at (312)
454-0015. All wire transfers should be accompanied by a facsimile
notification of the wire to the attention of Carol McMahan at (312)
454-0261.
No arrangements have been made to place funds into escrow or any similar
account. Upon receipt, offering proceeds will be deposited into our operating
account and used to conduct our business and operations.
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. We will return all monies from rejected subscriptions
to the subscriber without interest or deduction.
DESCRIPTION OF SECURITIES
The following statements are qualified in their entirety by reference to the
detailed provisions of our Certificate of Incorporation, as amended, and
By-Laws. The Shares registered pursuant to the registration statement of which
this Prospectus is a part are shares of common stock, all of the same class and
entitled to the same rights and privileges as all other shares of common stock.
CAPITAL STOCK
The authorized capital stock of the Company is 150,000,000 shares of common
stock, with a par value of $0.001 per share, and 75,000,000 shares of blank
check preferred stock, with a par value of $0.001 per share.
As of the date of this prospectus, there are 2,501,500 shares of common stock
issued outstanding. There is no preferred stock outstanding.
As of the date of this prospectus, there is one (1) holder of record of the
Company's common stock, who is an affiliate of the Company.
15
OPTIONS AND WARRANTS
There are no outstanding options or warrants or other securities that are
convertible into our common stock.
VOTING RIGHTS
Each shareholder is entitled to one (1) vote for each share of voting stock.
DIVIDEND POLICY
We intend to retain and use any future earnings for the development and
expansion of our business and do not anticipate paying any cash dividends in the
foreseeable future.
TRANSFER AGENT
The registrar and transfer agent for our common stock will be Empire Stock
Transfer Inc. upon completion of this Offering. Its address and telephone number
are Empire Stock Transfer Inc., 1859 Whitney Mesa Drive, Henderson, NV 89014,
(702) 818-5898. Until the present time, we have acted as our own registrar and
transfer agent.
PENNY STOCK REGULATION
The SEC has adopted regulations which generally define "penny stock" to be any
equity security that has a market price (as defined) of less than $5.00 per
share or an exercise price of less than $5.00 per share. Such securities are
subject to rules that impose additional sales practice requirements on
broker-dealers who sell them. For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchaser of
such securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior to the
transaction, of a disclosure schedule prepared by the SEC relating to the penny
stock market. The broker-dealer also must disclose the commissions payable to
both the broker-dealer and the registered representative, current quotations for
the securities and, if the broker-dealer is the sole market-maker, the
broker-dealer must disclose this fact and the broker-dealer's presumed control
over the market. Finally, among other requirements, monthly statements must be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks. As the Shares immediately
following this Offering will likely be subject to such penny stock rules,
purchasers in this Offering will in all likelihood find it more difficult to
sell their Shares in the secondary market.
EXPERTS
The financial statements of the Company as of October 31, 2009 and for the
period from July 23, 2007 (inception) through October 31, 2009, included in this
Registration Statement have been audited by Bernstein & Pinchuk LLP, an
independent registered public accounting firm, and have been so included in
reliance upon the report of Bernstein & Pinchuk LLP given on the authority of
such firm as experts in accounting and auditing.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this Prospectus as having prepared or certified
any part of this Prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the Shares was employed on a contingency basis, or
had, or is to receive, in connection with the Offering, a substantial interest,
direct or indirect, in the Company, nor was any such person connected with the
Company as a promoter, managing or principal underwriter, voting trustee,
director, officer or employee.
Our financial statements from inception to the period ended October 31, 2009,
included in this prospectus, have been audited by Bernstein & Pinchuk LLP, 7
Penn Plaza, Suite 830, New York, NY 10001. We include the financial statements
in reliance on their reports, given upon their authority as experts in
accounting and auditing.
16
The Law Office of Synergy Law Group, LLC, 730 West Randolph Street, Suite 600,
Chicago, IL 60661 has passed upon the validity of the shares being offered and
certain other legal matters and is representing us in connection with this
Offering.
George Coetzee, with an office at 1255 West Pender Street, Vancouver, B.C. has
provided us with the geology report referenced as an exhibit hereto.
DESCRIPTION OF BUSINESS
THE COMPANY
We were incorporated on July 23, 2007 in the state of Delaware. We are engaged
in the business of acquisition and exploration of mineral properties, primarily
for copper and other metals. The Company has staked a claim on certain property
located in the Osoyoos Mining Division of British Columbia, Canada. This
property consists of one claim held by Reza Mohammed (the "Trustee") under
Declaration of Trust dated November 28, 2007 in favor of the Company and is
located about 15 km north of the town of Keremeos in south central British
Columbia. We refer to this claim as the "Property" or the "Claim" throughout
this Prospectus. We are presently in the exploration stage at the Property. We
have not generated revenue from mining operations. Our independent auditor has
issued an audit opinion which includes a statement expressing substantial doubt
as to our ability to continue as a going concern. In August of 2007 we engaged
George Coetzee, an exploration and mine geologist, to assess the Property for
mineral occurrences. To date, we have incurred expenses of $5,500 for the
report. The source of information contained in this discussion is our geological
report that is identified as Exhibit 99.1 in our Form S-1 registration
statement.
Our principal offices are located at 670 Kent Avenue, Teaneck, NJ 07666. Our
telephone number is (201) 410-9400.
ACQUISITION OF THE MINERAL CLAIM
The Claim is assigned Tenure Number 541991 and is recorded in the name of Reza
Mohammed. The Claim is in good standing to January 26, 2011.
REQUIREMENTS OR CONDITIONS FOR RETENTION OF TITLE
Title to the property has been granted Reza Mohammed, who holds the claim in
trust for the Company. To obtain a Free Miner's Certificate, which is required
to hold a mining claim in British Columbia, Section 8(1) of the B.C. Mineral
Tenure Act (MTA) stipulates that a corporation must be registered under the
British Columbia Business Corporations Act. Section 8(2) of the MTA stipulates
that an individual applicant must either be a resident of Canada or be
authorized to work in Canada. As the Company is not registered in British
Columbia, the Claim is held in trust for the Company by Mr. Mohammed who is a
Canadian citizen. The Claim was staked using the British Columbia Mineral Titles
Online computer Internet system.
All claims staked in British Columbia require $0.40 per hectare worth of
assessment work to be undertaken in year 1 through 3, followed by $0.80 per
hectare per year thereafter. In order to retain title to the Property,
exploration work costs must be recorded and filed with the British Columbia
Department of Energy Mines and Petroleum Resources ("BCDM"). The BCDM charges a
filing fee, equal to 10% of the value of the work recorded, to record the work.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
At present, we have no employees and no employment agreements. Our President
provides services on a consultant basis. We anticipate that we will be
conducting most of our business through agreement with consultants and third
parties.
17
REPORTS TO SECURITIES HOLDERS
Our financial information will be available to any interested parties or
investors through compliance with the disclosure rules of Regulation S-K for a
smaller reporting company under the Securities Exchange Act. We will comply with
periodic reporting requirements including filing Form 10K annually and Form 10Q
quarterly. In addition, we will file Form 8K and other proxy and information
statements from time to time as required. The public may read and copy any
materials that we file with the Securities and Exchange Commission, ("SEC"), at
the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site
(http://www.sec.gov) that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the SEC.
PROPERTY DESCRIPTION AND LOCATION
The Property consists of one mineral claim held by the Trustee in favor of the
Company and is located in the Osoyoos Mining Division of British Columbia,
Canada covering an area of 505.292 hectares. The Property is located about 15 km
north of the town of Keremeos in south central British Columbia west of Highway
3A North, approximately 473 km east of Vancouver. The Property terrain is of
mainly steep to moderate relief, well forested and occupies the western slope of
a mountain with an elevation of 1760m. The highest mountain peak, at 2235m is
located above 4.5 km northwest of the Property.
The Property covers an area where the location of the Kopr showing has been
documented in MINFILE No. 082EDW050 by the British Columbia Ministry of Energy,
Mines and Petroleum Resources. There has been a limited amount of geological
work conducted over the years on the Property. The only recorded assessment work
was by Apex Exploration and Mining Co. Ltd during 1979 to 1980 in the vicinity
of an old adit which probably dates back to the early 1900s.
The underlying rocks in the Property area consist of a series of Carboniferous
to Triassic volcanic and sedimentary rocks that have been intruded by granitic
Okanagan intrusions. Larger intrusions are composed of granite and grandiorite,
while smaller stocks are composed of diorite and gabbro. Numerous sills, dikes
and apophyses are associated. Carboniferous to Triassic rocks are assigned to
the Shoemaker and Old Tom formations. These rocks form the eastern limb of a
large anticlinal fold with fold axes striking roughly north. The Shoemaker
consists of cherts, greenstone and minor argillite. A showing depicted as a
copper skarn was identified on the Property. A mineralized pyrrhotite copper
skarn zone and a few other small showings have been sampled. Due to dense
forest, the location of the old adit depicted in the MINFILE report remains
unknown.
The Company retained a consultant, George Coetzee, who has worked as an
exploration and mine geologist for 24 years. George Coetzee personally examined
the Property and the immediate surrounding area on August 31 and September 1,
2007. Mr. Coetzee graduated with a BSc (Honors) in Geology from University of
Pretoria in South Africa in 1981 and is a member of the Society of Economic
Geologists. He has worked as an exploration and mine geologist for more than 24
years in South Africa, North America and Mexico. We have a verbal agreement with
Mr. Coetzee to conduct the exploration program. However; there is the
possibility that our Claim does not contain any reserves, resulting in any funds
spent on exploration being lost.
The consultant studied a compilation of published data, maps and reports
available from the British Columbia Governmental geological database. The
consultant examined the geology of the Property and its immediate surrounding
area in August and September of 2007 to locate skarn copper occurrence and to
determine the mode of development and assess the mineral potential of the
Property. The consultant located a copper skarm occurrence but was unable to
locate the adit identified on the British Columbia Government MINFILE database
at the geographical coordinates provided. The adit may have been mismapped or
inaccurately surveyed. The consultant speculates that detail reconnaissance
would reveal the location of the adit and mineralization in the larely dense
wooded terrain.
18
MINERAL PROPERTY EXPLORATION
Mineral property exploration is typically conducted in phases. We have not yet
commenced the initial phase of exploration on the Property. However, our
geologist recommends the exploration work based on the results from his
assessment of the Property. After we have completed each phase of exploration
and analyzed the results, we will make a decision as to whether we will proceed
with each successive phase. The decision will be made based upon the results
obtained in the previous phase. Our goal in exploration of the Property is to
ascertain whether it possesses commercially viable metal or mineral deposits. We
cannot assure you that any economical mineral deposits exist on the Property
until appropriate exploration work is completed. Even if we complete our
proposed exploration program on the Property and we are successful in
identifying a mineral deposit, we will have to spend substantial funds on
further drilling and engineering studies before we will know if we have a
commercially viable mineral deposit.
GEOLOGICAL REPORT
We retained the services of a consultant, George Coetzee, an exploration and
mine geologist, to complete an assessment of the Claim and to prepare an
assessment report on the Claim.
Mr. Coetzee has worked as an exploration and mine geologist for more than 24
years in South Africa, Canada and Mexico. Mr. Coetzee graduated from the
University of Pretoria in South Africa in 1981 with a Bachelor of Science degree
in Geology.
Based on his review, Mr. Coetzee recommends a two-phase program of exploration
on the Property.
The first phase of exploration would include the following:
* Further reconnaissance prospecting entailing silt sampling of all
creeks draining the Property area;
* Geological mapping and examination of all rock outcrops for potential
sulphide mineralization; and
* Ground geological survey over the magnetic anomalies highlighted by a
previous MAG airborne survey as well as new targets identified by the
mapping program.
The first phase is estimated to cost $28,640 as described below
BUDGET - FIRST PHASE
Geologist 10 days @$500 per day $ 5,000
Two Assistants @ $400 per day 3,200
Technologist 6 days @ $300 per day 1,800
Vehicle 10 days @ $100 day 1,000
Rock Samples 30 @ $50 each 1,500
Silt Samples 40 @ $40 1,600
Lodging 10 days @$120 per day per person 3,840
Expenses, food, fuel and field supplies 2,200
Magnetometer Survey 6,000
Report 2,500
-------
$28,640
=======
After the completion of the first phase of the exploration program, we will have
review the results and conclusions and evaluate the advisability of additional
exploration work on the Property The second phase of exploration, if warranted,
would include trenching and a localized geochemical soil sampling program over
the magnetic anomalies and showings and proposed budget of $25,480.
19
BUDGET - SECOND PHASE
Bond $ 5,000
Geologist 7 days @$500 per day 3,500
Assistant 7 days @ $400 per day 1,400
Vehicle 7 days @ $100 day 700
Rock Samples 10 @ $50 each 500
Soil Samples 150 @ $40 6,000
Expenses, food and field supplies 1,200
Report 1,500
Lodging 7 days @$120/day/person 1,680
Trenching 4,000
-------
$25,480
=======
We would need additional financing to cover these exploration costs, although we
currently do not have financing arranged. Further exploration would be subject
to financing.
COMPLIANCE WITH GOVERNMENT REGULATION
We will be required to comply with all regulations, rules and
directives of governmental authorities and agencies applicable to the
exploration of minerals in Canada generally, and in British Columbia
specifically.
We will have to sustain the cost of reclamation and environmental
mediation for all exploration and development work undertaken. The amount of
these costs is not known at this time as we do not know the extent of the
exploration program that will be undertaken. Because there is presently no
information on the size, tenor, or quality of any resource or reserve at this
time, it is impossible to assess the impact of any capital expenditures on
earnings or our competitive position in the event a potentially economic deposit
is discovered.
If we enter into production, the cost of complying with permit and
regulatory environmental laws will be greater than in the exploration phases
because the impact on the project area is greater. Permits and regulations will
control all aspects of any production program if the project continues to that
stage because of the potential impact on the environment. Examples of regulatory
requirements include:
* Water discharge will have to meet water standards;
* Dust generation will have to be minimal or otherwise re-mediated;
* Dumping of material on the surface will have to be re-contoured and
re-vegetated;
* All material to be left on the surface will need to be assessed to
ensure that it is environmentally benign;
* Groundwater will have to be monitored for any potential contaminants;
* The socio-economic impact of the project will have to be evaluated and
if deemed negative, will have to be re-mediated; and
* There will have to be an impact report of the work on the local fauna
and flora.
20
DESCRIPTION OF PROPERTY
We do not hold ownership or leasehold interest in any property other than the
mining claim. To date, our president, Andrea Schlectman, has provided us with
office space and related office services free of charge. There is no obligation
for or guarantee that this arrangement will continue in the future.
LEGAL PROCEEDINGS
There are no pending, nor to our knowledge threatened, legal proceedings against
the Company.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
NO PUBLIC MARKET FOR COMMON STOCK
There is no public market for our common stock. Therefore, the current and
potential market for our common stock is limited and the liquidity of our shares
may be severely limited. To date, we have made no effort to obtain listing or
quotation of our securities on a national stock exchange or association. We have
not identified or approached any broker/dealers with regard to assisting us to
apply for such listing. We are unable to estimate if or when we expect to
undertake this endeavor. No market may ever develop for our common stock, or if
developed, may not be sustained in the future. Accordingly, our shares should be
considered totally illiquid, which inhibits investors' ability to sell their
Shares. The market price of the Shares of common stock is likely to be highly
volatile and may be significantly affected by factors such as actual or
anticipated fluctuations in the Company's operating results, announcements of
technological innovations, new products and/or services or new contracts by the
Company or its competitors, developments with respect to copyrights or
proprietary rights, adoption of new accounting standards or regulatory
requirements affecting the business, general market conditions and other
factors. In addition, the stock market from time to time experiences significant
price and volume fluctuations that may adversely affect the market price for the
Company's common stock.
DIVIDENDS
There are no restrictions in our Certificate of Incorporation, as amended, or
By-Laws that prevent us from declaring dividends. Our By-Laws permit the Board
of Directors to establish various reserves before the payment of any dividend.
The Delaware General Corporation Law provides that a corporation may pay
dividends out of its surplus or, if none, out of its net profits for the fiscal
year in which the dividend is declared and/or the preceding fiscal year.
Declaration and payment of dividends is prohibited during any period in which
the capital of the corporation is less than the amount represented by issued and
outstanding stock of all classes having a preference upon the distribution of
assets.
We have not declared any dividends, and we do not plan to declare any dividends
in the foreseeable future.
STOCK OPTIONS AND WARRANTS
To date, we have not granted any stock options, warrants or any other securities
convertible into shares of our common stock, and we have no shares reserved for
issuance under any stock option plan.
RULE 144 SHARES
As of the date of this Prospectus, 2,501,500 shares of common stock are issued
and outstanding.
Upon the date this Registration Statement becomes effective, a total of
2,501,500 shares of our common stock will become available for sale to the
public pursuant to the provisions of Rule 144. The 2,501,500 shares of common
stock outstanding as of the date of this Prospectus are considered "restricted
securities" because they were issued in reliance upon an exemption from the
registration requirements of the Securities Act and not in connection with a
public offering. At the time this registration statement becomes effective, all
of these restricted shares will become available for resale to the public under
Rule 144 under the Securities Act pursuant to amendments to Rule 144. Under Rule
144, an affiliate of a non-reporting company may resell restricted securities
after a one-year holding period, subject to the current public information
requirements, volume limitations, manner of sale requirements and notice of
21
proposed sale requirements, and an affiliate of a reporting company may resell
restricted securities after a six-month holding period subject to the same
requirements.
As of the date of this prospectus, there is one (1) holder of shares of our
common stock.
BENEFICIAL OWNERSHIP
The following table sets forth certain information as of the date of this
prospectus with respect to the beneficial ownership of the outstanding common
stock of the Company by (i) any holder of more than five (5%) percent; (ii) each
of the Company's executive officers and directors; and (iii) the Company's
directors and executive officers as a group. Unless otherwise indicated below,
the persons and entities named in the table have sole voting and sole investment
power with respect to all shares beneficially owned. The percentage of class is
based on 2,501,500 shares of common stock issued and outstanding as of the date
of this Prospectus. The address for the individual identified below is 670 Kent
Avenue, Teaneck, NJ 07666.
Amount of Beneficial Percentage
Name and Address of Beneficial Owner Ownership of Class
------------------------------------ --------- --------
Andrea Schlectman 2,501,500 100%
President, Chief Executive Officer and Director ---------
Directors and Executive Officers as a Group
(1 person) 2,501,500 100%
=========
SELECTED FINANCIAL DATA
The Company was organized on July 23, 2007. Our total current assets as of
October 31, 2009 were $12,795, our current liabilities were $79,476, and our
total stockholder deficiency was $66,681. As of October 31, 2009, the Company
held cash and cash equivalents in the amount of $12,295. From inception through
October 31, 2009 we incurred a net loss of $81,681. The recoverability of costs
incurred for acquisition and exploration of the Property is dependent upon the
Company's discovery of economically recoverable reserves and the Company's
ability to obtain financing sufficient to satisfy the expenditure requirements
and to complete development of the Property and pursue production and sales
thereof.
The notes to the Company's financial statements express substantial doubt about
the Company's ability to continue as a going concern because of the Company's
accumulated deficit since inception of $81,681 and the further losses which are
anticipated in the development of its business. The Company's ability to
continue as a going concern is dependent upon the Company's generation of
profits in the future and/or the ability to obtain financing necessary to meet
its obligations and repay its liabilities.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion of our financial condition and plan of operation should
be read in conjunction with the Company's financial statements, the notes to
those statements and the information included elsewhere in this prospectus. This
discussion includes forward-looking statements that involve risks and
uncertainties. As a result of many factors, such as those set forth under "RISK
FACTORS" and elsewhere in this prospectus, our actual results may differ
materially from those anticipated in these forward-looking statements.
22
OVERVIEW
We are engaged in the business of acquisition and exploration of mineral
properties, primarily for copper and other metals. The Company has staked a
claim on certain property located in the Osoyoos Mining Division of British
Columbia, Canada. This property consists of one claim held by Reza Mohammed (the
"Trustee") under Declaration of Trust dated November 28, 2007 in favor of the
Company and is located about 15 km north of the town of Keremeos in south
central British Columbia. We are presently in the exploration stage at the
Property. We have not generated revenue from mining operations. In August of
2007 we engaged George Coetzee, an exploration and mine geologist, to assess the
Property for mineral occurrences.
Mr. Coetzee, who has worked as an exploration and mine geologist for 24 years,
studied a compilation of published data, maps and reports available from the
British Columbia Governmental geological database. The consultant examined the
geology of the Property and its immediate surrounding area in August and
September of 2007 to locate skarn copper occurrence and to determine the mode of
development and assess the mineral potential of the Property.
PLAN OF OPERATION
Mineral property exploration is typically conducted in phases. Based on our
consultant's studies, Mr. Coetzee recommends a two-phase program of exploration
on the Property.
The first phase of exploration estimated to cost $28,640 would include further
reconnaissance prospecting entailing silt sampling of all creeks draining the
Property area, geological mapping and examination of all rock outcrops for
potential sulphide mineralization and a ground geological survey over the
magnetic anomalies highlighted by a previous MAG airborne survey as well as new
targets identified by the mapping program.
After the completion of the first phase of the exploration program, we will have
review the results and conclusions and evaluate the advisability of additional
exploration work on the Property The second phase of exploration, if warranted,
would include trenching and a localized geochemical soil sampling program over
the magnetic anomalies and showings and a proposed budget of $25,480.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
We have not yet commenced the initial phase of exploration on the Property. We
would need additional financing to cover exploration costs, although we
currently do not have any specific financing arranged. Further exploration would
be subject to financing. Management expects to finance operating costs over the
next twelve months with existing cash on hand, loans and/or the proceeds from
this Offering.
LIQUIDITY AND CAPITAL RESOURCES
We are attempting to raise money from this Offering to generate cash to begin
exploration of the Property. As of October 31, 2009, our total assets were
$12,795, and our total liabilities were $79,476. From inception on July 23, 2007
through October 31, 2009, we incurred a net loss of $81,681. As of October 31,
2009, we held cash and cash equivalents of $12,295.
The Company has no firm cash commitments for capital expenditures and is
expending no capital pending completion of this Offering. The Company expects
that the proceeds from this Offering will be sufficient to support its business
plan for twelve months. Initially, the Company's sole focus will be the
exploration of the Property.
If commercially viable metal or mineral reserves are found on the Property, the
Company intends to mine the reserves. The funds generated from this Offering, to
the extent they exceed exploration costs, will support the Company's development
of the mineral reserves if any are found on the Property.
23
If the Company successfully mines any minerals or metals discovered on the
Property, it will explore sales opportunities for such products. The Company
intends to use a portion of the proceeds from this Offering, to the extent they
exceed exploration costs, to develop such sales opportunities.
The Company is in its exploration stage and has not begun operations. As such,
the Company has no historical periods with which to compare anticipated capital
requirements in the future. The Company will use the proceeds from this Offering
to support its capital requirements. To the best of the Company's knowledge, it
is not aware of any event or future trend which would cause the Company's
anticipated immediate capital requirements to exceed the Offering Amount.
IMPORTANT ASSUMPTIONS
Mineral exploration and development involve a high degree of risk and few
properties that are explored are ultimately developed into producing mines. At
this stage without having conducted the initial exploration phase, we are unable
to determine whether future mineral exploration and development activities will
result in any discoveries of proven or probable reserves. Even if we discover
commercial quantities of mineralization, the mineral property may never be
brought into commercial production. Our development of mineral properties will
occur only upon obtaining sufficient funding and satisfactory exploration
results.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None.
DIRECTORS AND OFFICERS
The directors of the Company hold office for annual terms and will remain in
their positions until successors have been elected and qualified. The officers
are appointed by the board of directors of the Company and hold office until
their death, resignation or removal from office. The ages, positions held, and
duration of terms of the directors and executive officers are as follows:
Name Age Position
---- --- --------
Andrea Schlectman 37 President, Chief Executive Officer and Director
ANDREA SCHLECTMAN, PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
Andrea Schlectman has been President, Secretary, Treasurer, CEO, CFO and sole
Director of the Company since inception. Ms. Schlectman has a Bachelor's Degree
in Sociology and Criminal Justice from William Paterson University, Wayne NJ.
She has been an independent business consultant for the past eight years. Her
experience includes working with management of privately-held companies to
maximize productivity as well as general corporate matters. Ms. Schlectman also
has experience in various industries in the areas of marketing, sales and
finance. For several years she assisted the Regional Sales Manager of Washington
Mutual Financial Services and most recently was involved in sales and marketing
for a charter jet company in New York.
24
TERM OF OFFICE
Our directors are appointed for one-year terms to hold office until the next
annual meeting of our shareholders or until removed from office in accordance
with our By-Laws. Our officers are appointed by our board of directors and hold
office until removed by the board.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and long-term
compensation earned by the Company's principal executive officer, each of our
two most highly compensated executive officers who were serving as executive
officers as of the date of this Prospectus.
Change in
Pension
Value and
Non-Equity Nonqualified
Incentive Deferred
Stock Option Plan Compensation All Other
Salary Bonus Awards Awards Compensation Earnings Compensation Total
Name and Principal Position Year ($) ($) ($) ($) ($) ($) ($) ($)
--------------------------- ---- ------ ----- ------ ------ ------------ -------- ------------ -----
Andrea Schlectman 2009 Nil Nil Nil Nil Nil Nil Nil Nil
President, Chief Executive
Officer and Director
There are no employment agreements or consulting agreements with our current
directors and executive officers. There are no arrangements or plans in which we
provide pension, retirement or similar benefits for directors or executive
officers. We do not have any material bonus or profit sharing plans pursuant to
which cash or non-cash compensation is or may be paid to our directors or
executive officers, except that stock options may be granted at the discretion
of our board of directors from time to time. We have no plans or arrangements in
respect of remuneration received or that may be received by our executive
officers to compensate such officers in the event of termination of employment
(as a result of resignation, retirement, change of control) or a change of
responsibilities following a change of control.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since inception, the following transactions were entered into with our sole
shareholder.
On July 23, 2007, 1,500 shares were issued to our sole shareholder, Andrea
Schlectman, in connection with the organization of the Company. On June 1, 2008,
2,500,000 shares were issued to Andrea Schlectman as reimbursement for Ms.
Schlectman's payment of $5,000 on behalf of the Company for its mining claim. In
each instance, Ms. Schlectman acquired her shares with the intent to hold the
shares for investment purposes and not with a view to further resale or
distribution, except as permitted under exemptions from registration
requirements under applicable securities laws.
Each of the certificates issued to Ms. Schlectman contain a restrictive legend
with respect to the issuance of securities pursuant to exemptions from
registration requirements under the Securities Act.
While the Company is seeking additional funds, the director has loaned monies to
pay for certain expenses incurred. These loan(s) are interest free and there is
no specific time for repayment. The balance due the director as of October 31,
2009 is $16,500.
DIRECTOR INDEPENDENCE
Our determination of independence of directors is made using the definition of
"independent director" contained under Rule 4200(a)(15) of the Rules of the
Financial Industry Regulatory Authority ("FINRA"). However, we are not at this
25
time required to have our board comprised of a majority of "independent
directors" because we are not subject to the listing requirements of any
national securities exchange or national securities association.
ORGANIZATION WITHIN LAST FIVE YEARS
We were organized under the laws of the State of Delaware on July 23, 2007 to
engage in the business of acquisition, exploration and development of natural
resource properties. At that time we appointed Andrea Schlectman as sole
director, President and Chief Executive Officer. In connection with our
organization, we issued 1,500 shares of common stock to Andrea Schlectman for
cash proceeds of $10,000. Ms. Schlectman paid $5,000 on our behalf for the cost
of the mining claim, and on June 1, 2008, she was issued 2,500,000 shares of
common stock in exchange for the cash paid out.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our Certificate of Incorporation and By-Laws provide for the indemnification of
Company officers and directors in regard to their carrying out the duties of
their offices. We have been advised that in the opinion of the SEC,
indemnification for liabilities arising under the Securities Act is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful defense
of any action, suit or proceeding) is asserted by one of our directors, officers
or controlling persons in connection with the securities being registered, we
will, unless in the opinion of our legal counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by us is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a Registration Statement on Form S-1 (including
exhibits) under the Securities Act with respect to the shares to be sold in this
Offering. This Prospectus, which forms part of the Registration Statement, does
not contain all the information set forth in the Registration Statement as some
portions have been omitted in accordance with the rules and regulations of the
SEC. For further information with respect to our Company and the Shares offered
in this Prospectus, reference is made to the Registration Statement, including
the exhibits identified therein, and the financial statements and notes filed as
a part thereof. With respect to each such document identified as an exhibit to
the Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved. We are not currently subject to the
informational requirements of the Securities Exchange Act of 1934 (the "Exchange
Act"). Upon the effectiveness of the Registration Statement, we will file
quarterly and annual reports and other information with the SEC as provided by
the Exchange Act. The Registration Statement, such reports and other information
may be inspected and copied at the Public Reference Room of the SEC located at
100 F Street, N. E., Washington, D. C. 20549. Copies of such materials,
including copies of all or any portion of the Registration Statement, may be
obtained from the Public Reference Room of the SEC at prescribed rates. You may
call the SEC at 1-800-SEC-0330 to obtain information on the operation of the
Public Reference Room. Such materials may also be accessed electronically by
means of the SEC's home page on the internet (http://www.sec.gov).
26
KOPR RESOURCES CORP.
TABLE OF CONTENTS
Report of Independent Registered Public Accounting Firm F-2
Financial Statements
Balance Sheets F-3
Statements of Operations F-4
Statements of Changes in Shareholders' Equity (Deficiency) F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7 to F-11
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Kopr Resources Corp.
We have audited the accompanying balance sheets of Kopr Resources Corp. (an
Exploration Stage Company) ("the Company") as of October 31, 2009 and 2008 and
the related statements of operations, stockholder's deficiency and cash flows
for the years then ended and for the period from July 23, 2007 (inception) to
October 31, 2009. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of October 31,
2009 and 2008 and the results of its operations and its cash flows for the years
then ended and for the period from July 23, 2007 (inception) to October 31, 2009
in conformity with accounting principles generally accepted in the United States
of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1, the Company
has incurred significant losses since its inception and has limited capital
resources. These conditions raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regard to these matters
are also discussed in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Bernstein & Pinchuk LLP
----------------------------------
New York, New York
January 28, 2010
F-2
KOPR RESOURCES CORP.
(An Exploration Stage Company)
Balance Sheets
October 31,
---------------------------
2009 2008
-------- --------
ASSETS
Current assets
Cash and cash equivalents $ 12,295 $ 4,379
Prepaid Expense 500 --
-------- --------
Total current assets $ 12,795 $ 4,379
======== ========
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
Current liabilities
Accounts payable $ 62,976 $ 27,485
Loan from director 16,500 --
-------- --------
TOTAL CURRENT LIABILITIES 79,476 27,485
-------- --------
Long term liabilities
STOCKHOLDER'S DEFICIENCY
Preferred stock $0.001 par value 75,000,000 shares authorized; none issued -- --
Common stock $0.001 par value; 150,000,000 shares authorized;
2,501,500 shares issued and outstanding for both years 2,502 2,502
Additional paid-in-capital 12,498 12,498
Deficit accumulated during exploration stage (81,681) (38,106)
-------- --------
TOTAL STOCKHOLDER'S DEFICIENCY (66,681) (23,106)
-------- --------
$ 12,795 $ 4,379
======== ========
See notes to financial statements
F-3
KOPR RESOURCES CORP.
(An Exploration Stage Company)
Statements of Operations
For the Period
July 23, 2007
Years Ended (Inception)
October 31, Through
------------------------------- October 31,
2009 2008 2009
---------- ---------- ----------
Revenues $ -- $ -- $ --
Cost of sales -- -- --
---------- ---------- ----------
Gross margin -- -- --
---------- ---------- ----------
Operating Expense -- -- --
General & administrative expenses 43,575 32,606 81,681
---------- ---------- ----------
LOSS BEFORE INCOME TAX EXPENSE (43,575) (32,606) (81,681)
Income tax expense -- -- --
---------- ---------- ----------
NET LOSS $ (43,575) $ (32,606) $ (81,681)
========== ========== ==========
Loss per share basic and diluted $ (0.02) $ (0.03)
========== ==========
Weighted average number of common shares
outstanding basic and diluted 2,501,500 1,046,582
========== ==========
See notes to financial statements
F-4
Kopr Resources Corp.
(An Exploration Stage Company)
Statements of Changes in Shareholder's Equity (Deficiency)
For the Period from July 23, 2007(Inception) through October 31, 2009
Deficit
Accumulated
Common Stock Additional During Total
--------------------- Paid-in Exploration Stockholders'
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
September 25, 2007 stock issued for cash 1,500 $ 2 $ 9,998 $ -- $ 10,000
Net loss (5,500) (5,500)
----------- -------- -------- --------- ---------
Balance October 31, 2007 1,500 2 9,998 (5,500) 4,500
=========== ======== ======== ========= =========
June 1, 2008 stock issued for cash 2,500,000 2,500 2,500 5,000
Net loss (32,606) (32,606)
----------- -------- -------- --------- ---------
Balance October 31, 2008 2,501,500 2,502 12,498 (38,106) (23,106)
=========== ======== ======== ========= =========
Net loss (43,575) (43,575)
----------- -------- -------- --------- ---------
BALANCE OCTOBER 31, 2009 2,501,500 $ 2,502 $ 12,498 $ (81,681) $ (66,681)
=========== ======== ======== ========= =========
See notes to financial statements
F-5
KOPR RESOURCES CORP.
(An Exploration Stage Company)
Statements of Cash Flows
For the Period
July 23, 2007
Years Ended (Inception)
October 31, Through
--------------------------- October 31,
2009 2008 2009
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(43,575) $(32,606) $(81,681)
Adjustments to reconcile net loss to net
cash used in operating activities
Changes in operating assets and liabilities
Pre-paid expense (500) -- (500)
Accounts payable 35,491 21,985 62,976
-------- -------- --------
NET CASH USED IN OPERATING ACTIVITIES (8,584) (10,621) (19,205)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Loan from director 16,500 -- 16,500
Proceeds from sale of common stock -- 5,000 15,000
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 16,500 5,000 31,500
-------- -------- --------
Net increase (decrease) in cash and cash equivalents 7,916 (10,621) 12,295
Cash and cash equivalents at beginning of period 4,379 10,000 --
-------- -------- --------
Cash and cash equivalents at end of period $ 12,295 $ 4,379 $ 12,295
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ -- $ -- $ --
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
See notes to financial statements
F-6
Kopr Resources Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Stated in U.S. Dollars)
1. NATURE AND CONTINUANCE OF OPERATIONS
Kopr Resources Corp., ("the Company") was incorporated under the laws of the
State of Delaware on July 23, 2007. The Company is in the exploration stage of
its resource business and it was generally inactive during the period July 23,
2007 (inception) to October 31, 2009. During the year ended October 31, 2008 the
Company commenced its limited activities by issuing shares and acquiring a
mineral property located in the Osoyoos Mining Division of British Columbia,
Canada. The Company has not yet determined whether this property contains
reserves that are economically recoverable. The recoverability of costs incurred
for acquisition and exploration of the property will be dependent upon the
discovery of economically recoverable reserves, confirmation of the Company's
interest in the underlying property, the ability of the Company to obtain
necessary financing to satisfy the expenditure requirements under the property
agreement and to complete the development of the property and upon future
profitable production or proceeds for the sale thereof.
The Company's tax reporting year end is October 31.
These financial statements have been prepared on a going concern basis which
assumes the Company will be able to realize its assets and discharge its
liabilities in the normal course of business for the foreseeable future. The
Company has incurred losses since inception resulting in an accumulated deficit
during the exploration stage of $81,681 as of October 31, 2009 and further
losses are anticipated in the development of its business raising substantial
doubt about the Company's ability to continue as a going concern. The ability to
continue as a going concern is dependent upon the Company generating profitable
operations in the future and/or to obtain the necessary financing to meet its
existing obligations and repay its liabilities arising from normal business
operations when they come due. Management intends to finance operating costs
over the next twelve months with existing cash on hand and loans from directors
and or private placement of common stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America. All
amounts are presented in U.S. dollars.
EXPLORATION STAGE COMPANY
The Company complies with Accounting Standards Codification ("ASC") 915-235-50
and Securities and Exchange Commission Act Guide 7 for it's characterization of
the Company as an exploration stage enterprise.
MINERAL INTERESTS
Mineral property acquisition, exploration and development costs are expensed as
incurred until such time as economic reserves are quantified. To date, the
Company has not established any proven or probable reserves on its mineral
properties. The Company has adopted the provisions of SFAS No. 143 "Accounting
F-7
for Asset Retirement Obligations" which establishes standards for the initial
measurement and subsequent accounting for obligations associated with the sale,
abandonment, or other disposal of long -lived tangible assets arising from the
acquisition, construction or development and for normal operations of such
assets. As at October 31, 2009, any potential costs relating to the future
retirement of the Company's mineral property have not yet been determined.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in United States dollars. In accordance
with Statement of Financial Accounting Standards No. 52 "Foreign Currency
Translation," foreign denominated monetary assets and liabilities are translated
into their United States dollar equivalents using foreign exchange rates which
prevailed at the balance sheet date. Non monetary assets and liabilities are
translated at the exchange rates prevailing on the transaction date. Revenue and
expenses are translated at average rates of exchange during the year. Gains or
losses resulting from foreign currency transactions are included in results of
operations.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of cash and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is management's opinion the Company is
not exposed to significant interest currency or credit risks arising from these
financial instruments.
ENVIRONMENT COSTS
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations, and which do not contribute to current or future
revenue generation, are expensed. Liabilities are recorded when environmental
assessments and/or remedial efforts are probably, and the cost can be reasonably
estimated. Generally, the timing of these accruals coincides with the earlier of
completion of a feasibility study or the Company's commitments to plan of action
based on the then known facts.
INCOME TAXES
The Company follows the accrual method of accounting for income taxes. Under
this method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences). The effect on the deferred income tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
At October 31, 2009 a full deferred tax asset valuation allowance has been
provided and no deferred tax asset has been recorded.
F-8
BASIC AND DILUTED LOSS PER SHARE
The Company computes loss per share in accordance with ASC 260-10-45. "Earnings
per Share", (SFAS 128) which requires presentation of both basic and diluted
earnings per share on the face of the statement of operations. Basic loss per
share is computed by dividing net loss available to common shareholders by the
weighted average number of outstanding common shares during the period. Diluted
loss per share gives effect to all dilutive potential common shares outstanding
during the period. Dilutive loss per share excludes all potential common shares
if their effect is anti-dilutive.
The Company has no potential dilutive instruments. Basic loss and diluted loss
per share are equal.
STOCK BASED COMPENSATION
In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payments," which
replaced SFAS No. 123, "Accounting for Stock-Based Compensation" and superseded
APB Opinion No. 25, "Accounting for Stock Issued to Employees." In January 2005,
the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin
("SAB") No. 107, "Share-Based Payment," which provides supplemental
implementation guidance for SFAS No. 123R SFAS No. 123R requires all share based
payments to employees , including grants of employee stock options, to be
recognized in the financial statements based on the grant date fair value of the
award. SFAS No. 123R was to be effective for interim or annual reporting periods
beginning on or after June 15, 2005, but in April 2005, the SEC issued a rule
that will permit most registrants to implement SFAS No. 123R at the beginning of
their next fiscal year, instead of the next reporting period as required by SFAS
No. 123R. The pro-forma disclosures previously permitted under SFAS No. 123R no
longer will be an alternative to financial statement recognition. Under SFAS No.
123R, the Company must determine the appropriate fair value model to be used for
valuing share-based payments, the amortization method for compensation costs and
the transition method to be used at date of adoption.
The transition methods include prospective and retroactive adoption options.
Under the retroactive options, prior periods may be restated either as of the
beginning of the year of adoption or for all periods presented. The prospective
method requires that compensation expense be recorded for all unvested stock
options and restricted stock at the beginning of the first quarter of adoption
of SFAS No. 123R, while the retroactive methods would record compensation
expense for all unvested stock options and restricted stock beginning with the
first period restated. The Company adopted the modified prospective approach of
SFAS No 123R for the period ended October 31, 2009. The Company did not record
any compensation expense for the period ended October 31, 2009 because there
were no stock options outstanding prior to, or at October 31, 2009.
RECENT ACCOUNTING PRONOUNCEMENTS
In September 2009, we adopted the Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") 105-10, "Generally Accepted Accounting
Principles." ASC 105-10 establishes the FASB Accounting Standards
Codification(TM) ("Codification") as the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in conformity with GAAP for SEC
registrants. All guidance contained in the Codification carries an equal level
of authority. The Codification supersedes all existing non-SEC accounting and
reporting standards. The FASB will now issue new standards in the form of
Accounting Standards Updates ("ASUs"). The FASB will not consider ASUs as
authoritative in their own right. ASUs will serve only to update the
Codification, provide background information about the guidance and provide the
bases for conclusions on the changes in the Codification. References made to
FASB guidance have been updated for the Codification throughout this document.
F-9
In June 2009, the FASB issued Statement of Financial Accounting Standards No.
165, "Subsequent Events" (ASC Topic 855). SFAS 165 establishes general standards
of accounting for and disclosure of events that occur after the balance sheet
date but before financial statements are issued or are available to be issued.
SFAS 165 applies to both interim financial statements and annual financial
statements. SFAS 165 is effective for interim or annual financial periods ending
after June 15, 2009. SFAS 165 does not have a material impact on our financial
statements (see Note 1).
In June 2009, the FASB issued Statement of Financial Accounting Standards No.
168, "The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles" (ASC Topic 105). SFAS 168 replaces FASB
Statement No. 162, "The Hierarchy of Generally Accepted Accounting Principles",
and establishes the FASB Accounting Standards Codification ("Codification") as
the source of authoritative accounting principles recognized by the FASB to be
applied by nongovernmental entities in the preparation of financial statements
in conformity with generally accepted accounting principles ("GAAP"). SFAS 168
is effective for interim and annual periods ending after September 15, 2009. The
Company will begin to use the new Codification when referring to GAAP in its
annual report on Form 10-K for the fiscal year ending January 3, 2010. This will
not have an impact on the consolidated results of the Company.
In April 2009, the FASB issued FASB Staff Position 107-1 (ASC Topic 825) and
Accounting Principles Board 28-1 (ASC Topic 270), "Interim Disclosures about
Fair Value of Financial Instruments". FSP 107-1 amends SFAS No. 107,
"Disclosures About Fair Value of Financial Instruments," to require disclosures
about fair value of financial instruments for interim reporting periods of
publicly traded companies as well as in annual financial statements. FSP 107-1
also amends APB Opinion No. 28, "Interim Financial Reporting," to require those
disclosures in summarized financial information at interim reporting periods.
FSP 107-1 is effective for interim reporting periods ending after June 15, 2009.
FSP107-1 does not require disclosures for earlier periods presented for
comparative purposes at initial adoption. In periods after initial adoption,
this FSP requires comparative disclosures only for periods ending after initial
adoption. The Company adopted FSP 107-1 in the second quarter of 2009. FSP 107-1
did not have a material impact on the financial statements.
In April 2009, the FASB issued FASB Staff Position 157-4, "Determining Fair
Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly" (ASC
Topic 820). FSP 157-4 provides additional guidance for estimating fair value in
accordance with SFAS No. 157, "Fair Value Measurements," when the volume and
level of activity for the asset or liability have significantly decreased. FSP
157-4 also includes guidance on identifying circumstances that indicate a
transaction is not orderly. FSP 157-4 is effective for interim and annual
reporting periods ending after June 15, 2009. The Company adopted FSP 157-4 in
the second quarter of 2009. FSP 107-1 did not have a material impact on the
financial statements.
The Company does not expect the adoption of recently issued accounting
pronouncements to have any significant impact on the Company's results of
operations, financial position or cash flow.
As new accounting pronouncements are issued, the Company will adopt those that
are applicable under the circumstances.
3. COMMON STOCK TRANSACTIONS
The total number of common shares authorized that may be issued by the Company
is 150,000,000 shares and 75,000,000 preferred shares each with a par value of
$0.001 per share. No other class of shares is authorized.
F-10
On July 23, 2007, the Company issued 1,500 shares of common stock to the
Director, for total cash proceeds of $10,000.
On June 1, 2008, the Company issued 2,500,000 of common stock to the Director
for total proceeds of $5,000.
At October 31, 2009, there were no shares of preferred stock, stock options or
warrants issued.
4. MINERAL INTERESTS
On November 28, 2007, the Company entered into a purchase and sale agreement to
acquire a 100% interest in one mining claim of approximately 505 hectares
located in the mining division approximately 15 kilometers north of the town of
Keremos, in South Central British Columbia, Canada.
The mineral interest is held in trust for the Company by the vendor of the
property. Upon request from the Company, the title will be changed to the name
of the Company with the appropriate mining recorder. The Claim is assigned
Tenure Number 541991 and is recorded in the name of Reza Mohammed. The Claim is
in good standing to January 26, 2011.
5. INCOME TAXES
As of October 31, 2009, the Company had a net operating loss carry forwards of
approximately $38,100 that may be available to reduce future years' taxable
income through 2029. Future tax benefits which may arise as a result of these
losses have not been recognized in these financial statements, as their
realization is determined not likely to occur and accordingly, the Company has
not recorded a valuation allowance for the deferred tax asset relating to this
tax loss carry forward.
6. RELATED PARTY TRANSACTIONS - LOANS FROM DIRECTORS
On July 31, 2007, in connection with its organization, the Company issued 1,500
shares of common stock to Andrea Schlectman, the sole shareholder, director and
officer of the Company, for consideration of $10,000.
On June 1, 2008, the Company issued 2,500,000 shares of common stock at $.002
per share for a total of $5,000 to Andrea Schlectman as reimbursement for Ms.
Schlectman's payment of $5,000 on behalf of the Company for its mining claim.
Andrea Schlectman may in the future, become involved in other business
opportunities as they may become available, thus she may face a conflict in
selecting between the Company and her other business opportunities. The Company
has not formulated a policy for the resolution of such a conflict.
While the Company is seeking additional funds, the director has loaned monies to
pay for certain expenses incurred. These loan(s) are interest free and there is
no specific time for repayment. The balance due the director as of October 31,
2009 is $16,500.
7. SUBSEQUENT EVENTS
The Company has evaluated events subsequent to October 31, 2009 to assess the
need for potential recognition or disclosure in this report. Such events were
evaluated through January 28, 2010, the date these financial statements were
issued. Based upon this evaluation, it was determined that no subsequent events
occurred that require recognition or disclosure in the financial statements.
F-11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTOR AND OFFICER
The Company's sole director and executive officer is indemnified as provided by
the Delaware General Corporation Law and its Certificate of Incorporation and
ByLaws. The Delaware General Corporation Law provides generally that a
corporation shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by reason of the fact that the person 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
entity against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by the person in
connection with such action if the person acted in good faith and in a manner
the person reasonably believed to be in or not opposed to the best interests of
the corporation and, with respect to any criminal action, had no reasonable
cause to believe the person's conduct was unlawful.
The Company's Certificate of Incorporation eliminates the personal liability of
a director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty except for liability which results from (1) a breach of
the director's duty of loyalty to the corporation or its stockholders; (2) facts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (3) willful or negligent redemption of stock or
payment of dividends in contravention of statute; or (4) any transaction from
which the director derived an improper personal benefit.
We have been advised that in the opinion of the SEC indemnification for
liabilities arising under the Securities Act is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by our sole director, and officer in connection with the
securities being registered, we will, unless in the opinion of our legal counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by us is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all estimated costs and expenses payable by the
Company in connection with the Offering for the securities included in this
registration statement:
SEC registration fee $ 1
Blue Sky fees and expenses 0
Printing and shipping expenses 0
Legal fees and expenses 2,999
Accounting fees and expenses 2,450
Transfer agent and miscellaneous expenses 0
------
Total $5,450
======
All expenses are estimated except the SEC filing fee.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
In connection with the organization of the Company, Andrea Schlectman, the sole
shareholder of the Company, purchased an aggregate of 1,500 shares of Company
common stock on July 23, 2007. On June 1, 2008, 2,500,000 shares were issued to
Andrea Schlectman as reimbursement for Ms. Schlectman's payment of $5,000 on
behalf of the Company for its mining claim.
II-1
The foregoing sales to a director with superior access to all corporate and
financial information of the Company were exempt from the registration
requirements of the Securities Act on the basis that the transactions did not
involve a public offering.
ITEM 27. EXHIBITS
Exhibit No. Description
----------- -----------
3.1 Certificate of Incorporation
3.2 Amended Certificate of Incorporation
3.3 By-Laws
4.1 Specimen common stock certificate
5.1 Opinion of Synergy Law Group, LLC
10.1 Declaration of Trust dated November 28, 2007
10.3 Form of Subscription Agreement
23.1 Consent of Synergy Law Group, LLC (see Exhibit 5.1)
23.2 Consent of Bernstein & Pinchuk LLP for use of their report
99.1 Assessment Report of George Coetzee
ITEM 28. UNDERTAKINGS
We hereby undertake:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) 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 in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; and
(iii) To include any additional or changed material information on the
plan of distribution.
2. That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time 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.
4. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, we have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by 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
II-2
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our 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 Securities Act and will be governed by the final adjudication
of such issue.
5. For determining any liability under the Securities Act of 1933:
(i) we shall treat the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by us under Rule 424(b)(1) or (4) or
497(h) under the Securities Act as part of this registration statement as of the
time the Commission declared it effective. For determining any liability under
the Securities Act of 1933, we shall treat each post-effective amendment that
contains a form of prospectus as a new registration statement for the securities
offered in the registration statement, and that offering of the securities at
that time as the initial bona fide offering of those securities.
(ii) we shall treat each prospectus filed by us pursuant to Rule
424(b)(3) as part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement. Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as
part of a registration statement in reliance on rule 430B relating to an
offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act shall
be deemed to be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after effectiveness or
the date of the first contract of sale of securities in the offering described
in the prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date shall be
deemed to be a new effective date of the registration statement relating to the
securities in the registration statement to which that prospectus relates, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such effective
date, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in
any such document immediately prior to such effective date; or
(iii) we shall treat each prospectus filed pursuant to Rule 424 (b) as
part of a registration statement relating to an offering, other than
registration statement relying on Rule 430B or other than prospectuses filed in
reliance on rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such date of first use.
II-3
SIGNATURES
In accordance with 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 of filing on Form S-1 and authorized this registration
statement to be signed on its behalf by the undersigned in the City of Teaneck,
State of New Jersey on February 12, 2010.
KOPR RESOURCES CORP.
By: /s/ Andrea Schlectman
-----------------------------------------
President and Chief Executive Officer
In accordance with the requirements of the Securities Act, this Registration
Statement was signed by the following person in the capacities and on the dates
stated.
Signature Title Date
--------- ----- ----
/s/ Andrea Schlectman President, Chief Executive Officer and February 12, 2010
-------------------------------- Director (Principal Executive Officer;
Principal Financial and Accounting Officer)
II-