Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by referenced in Part III of this Form 10-KSB or any amendment to this Form 10-KSB [ ]
State issuer's revenues for its most fiscal year June 30, 2004: $-0-.
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity. As of September 8, 2004, the value was $3,186,600.
State the number of shares outstanding of each of the issuer's classes of common equity, as of September 8, 2004: 30,311,000.
We make forward-looking statements in this document. Our forward-looking statements are subject to risks and uncertainties. You should note that many factors, some of which are described in this section or discussed elsewhere in this document, could affect our company in the future and could cause our results to differ materially from those expressed in our forward-looking statements. Forward-looking statements include those regarding our goals, beliefs, plans or current expectations and other statements regarding matters that are not historical facts. For example, when we use the words "believe," "expect," "anticipate" or similar expressions, we are making forward-looking statements. We are not required to release publicly the results of any revisions to these forward-looking statements we may make to reflect future events or circumstances.
-2-
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
General
We were incorporated in the State of Nevada on September 7, 1999. We are engaged in the acquisition and exploration of mining properties. We maintain our statutory registered agent's office at 101 Convention Center Drive, Suite 700, Las Vegas, Nevada 89109 and our business office is located at 1040 West Georgia Street, Suite 1160, Vancouver, British Columbia, Canada V6E 4H1. Our telephone number is (604) 605-0885.
Background
We are a mining exploration company. No commercially viable mineral deposit exists on our property. Further exploration of property has concluded and no mineralized material was found.
In September 1999, Hugh Grenfal our president and a member of the board of directors, acquired one mineral property containing three mining claims in British Columbia, Canada by arranging the staking of the same through a third party. Canadian jurisdictions allow a mineral explorer to claim of portion of available Crown lands as its exclusive area for exploration by depositing posts or other visible markers to indicate a claimed area. The claimed area is called a claim and the process of posting the area is known as staking. Mr. Grenfal paid the unrelated third party $1,353 to stake the claims. The claims are recorded in Mr. Grenfal's name for tax purposes, however, title to the claims has been conveyed to us by an unrecorded deed.
The claims were recorded in Mr. Grenfal's name to avoid paying additional fees, however, title to the claims were conveyed to us by an unrecorded warranty deed. Under British Columbia provincial law, if the deed was recorded in our name, we would have to pay a minimum of $500.00 and file other documents since we are a foreign corporation in Canada. We decided that if gold was discovered on the property and it is economical to remove the gold, we would record the deed, pay the additional fees, and file as a foreign corporation. Since mineralized material was not found, the unrecorded deed will not be recorded.
Accordingly, the title to the property is superior to all other unrecorded deeds. Should Mr. Grenfal transfer title to another person and that deed is recorded prior to recordation of our deed, that person will have superior title and we will have none. If that event occurs, however, Mr. Grenfal will be liable to us for monetary damages for breach of his warranty of title.
Location and Access
The property is located 181 miles east of Vancouver, near Beaverdell on the West Kettle River. The property is located within the West Kettle River Valley, south from the village of Beaverdell, in south central British Columbia, Canada. Highway 33 runs through the center of the property and several secondary roads and trails provide access to most parts of the property.
-3-
Plant and Equipment
We do not own a plant or any equipment. If we have discovered mineralized material we intended to hire independent third party contractors to mine the property. There is no source of power on the property. Power for operations would have been generated from gasoline generators. There is no equipment on the property.
Physiography
The property is situated within the Monashee Mountains of the Southern Interior Physiographic Region, and elevations range from 2,500 feet along the West Kettle River to 5,100 feet at the extreme western edge of the property.
Slopes within the claim area are generally steep except for the bottom of the West Kettle River Valley and the height of land within the property. Vegetation consists mainly of fir; larch and pine, much of it mature second growth. Some of the area has been recently logged or burned over. There is relatively little underbrush, and open grassy areas are not uncommon. Outcrops are fairly sparse except locally on the east flanks of ridges, where small bluffs with talus aprons occur.
The climate features warm summers and mild winters. The West Kettle Valley is fairly dry in the summers, although not as dry as the Okanagan Valley to the west. Average yearly precipitation is 20 inches. A snow pack of 3-5 feet begins to accumulate in November and lingers in places into May. The moderate climate in the project area allows for possible year round exploration.
The process by which the features of the property and the minerals it may contain were determined by Mr. Grenfal through personal observations.
Property Geology
The major type of rock found on the property is quartz. Gold, silver and copper are found in quartz veins. We have determined that there are quartz veins on the property, but there is no economic gold, silver or copper in the quartz veins.
Our Exploration Program
We conducted exploration to determine what amount of minerals, if any, existed on our properties and if any minerals which are found can be economically extracted and profitably processed. We found that no significant mineralized material existed on our property.
Our exploration program was designed to economically explore and evaluate our properties. We do not have any ores or reserves whatsoever at this time on any of our properties. We completed an exploration program and proceeded in the following phases:
Phase 1 began with research of the available geologic literature, personal interviews with geologists, mining engineers and others familiar with the prospect sites.
-4-
When the research was completed, our initial work was augmented with geological mapping and testing the subsurface of our claims. When available, existing workings, such as trenches, prospect pits, shafts or tunnels were examined. Samples were taken with no favorable results. No mineralized zone was identified.
Phase 1 took about three months and cost about $4,200.
Were Phase 1 to have been encouraging, Phase 2 would have involved an initial examination of the underground characteristics of any vein structure identified by Phase 1. Phase 2 would have aimed at identifying any mineral deposits of potential economic importance.
Regulations
Our mineral exploration program was subject to the Canadian Mineral Tenure Act Regulation. This act sets forth rules for
|
* |
locating claims |
|
* |
posting claims |
|
* |
working claims |
|
* |
reporting work performed |
We were subject to the British Columbia Mineral Exploration Code which told us how and where we can explore for minerals. We must comply with these laws in order to operate our business. We believe that our exploration caused no damage and that we have complied with all relevant regulations.
Environmental Law
We were also subject to the Health, Safety and Reclamation Code for Mines in British Columbia. This code deals with environmental matters relating to the exploration and development of mining properties. Its goals are to protect the environment through a series of regulations effecting
|
1. |
Health and Safety |
|
2. |
Archaeological Sites |
|
3. |
Exploration Access |
We are in compliance with the foregoing act and will continue to comply with the act in the future. Because of our proposed limited operations, we believe the costs and effects associated with complying with the environmental laws will not have a material adverse affect upon our operations. At the present time we cannot estimate the costs of complying with the environmental laws.
Exploration
Exploration work was carried out on the Amex, Marmot and Wombat claim. Field work was conducted between July 29 and August 3, 2001. The entire exploration program focused on assessing the potential for gold, silver, lead and zinc mineralization within the boundaries of our properties.
-5-
Geological mapping and sampling of seven rock chip samples were conducted within the May Audit. The adit is 25 feet deep with a small chamber at the end of the tunnel. In an effort to detect traces of economic minerals of interest to us on our property, a total of 114 soil samples and 2 rock samples were collected at regular intervals and spacing, over a targeted grid area of 984 feet by 1,312 feet. Samples have been submitted to the Cominco Exploration Laboratory for analysis for gold and 32 other elements. Results failed to outline strike extensions to the May Adit mineralization.
Employees
We used the services of a subcontractor for manual labor exploration work on our properties. Our only employees were Hugh Grenfal and Sergei Stetsenko, our officers and directors. No fees have been paid to them for this work and none is currently contemplated. Madman Mining Company Limited of Vancouver, Canada was the contractor responsible for the 2001 work.
Employees and Employment Agreements
At present, we have no employees, other than Messrs. Grenfal and Stetsenko, our officers and directors, who were compensated for their services. Messrs. Grenfal and Stetsenko do not have employment agreements with us. Messrs. Grenfal and Stetsenko are not full-time employees and devote approximately 25% of their time to our operations. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any employees.
Related Events
On March 30, 2001, the Securities and Exchange Commission declared our Form SB-2 Registration Statement effective, SEC File no. 333-94835. We offered up to 2,000,000 shares at $0.10 per share.
On June 20, 2001, we completed our public offering by raising $106,220 and sold 1,062,200 shares at our offering price of $0.10. There was no underwriter. These shares were subsequently split to yield 5,311,000 shares.
From the effective date of the registration statement to the ending date of the reporting period, June 30, 2004, no underwriting discounts nor commissions, finders' fees and similar expenses (direct or indirect) were paid. The gross proceeds of the offering were $106,220. Funds were spent in accordance with the Use of Proceeds section of the prospectus and as recorded in the quarterly filings. All funds received from the pubic offering have been spent.
With November 18, 2002, as record date, Ancona Mining Corporation issued a stock dividend of four new shares for each one held. For example, a shareholder owning 100 shares on November 18, 2002 would have received 400 additional shares, to give him or her a total of 500.
-6-
Status of Our Exploration Program
We have completed the exploration of our property. Management evaluated the results and decided to discontinue exploration. Please see above "Background" et seq. for details.
Risk Factors
- Because our auditors have issued a going concern opinion and because our officers and directors will not loan any money to us, we have to suspend or cease operations.
- We have losses which we expect to continue into the future. As a result we have to cease operations.
- We do not have ore reserves and have ceased operations.
- We did not find mineralized material we have ceased operations.
- We have completed our exploration and as a result have ceased operations.
- Because the SEC imposes additional sales practice requirements on brokers who deal in our shares which are penny stocks, some brokers may be unwilling to trade them. This means that you may have difficulty in reselling your shares and may cause the price of the shares to decline.
Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an ongoing business for the next twelve months. Because our officers and directors are unwilling to loan or advance any additional capital to us, we have to cease operations since we did not find gold in paying quantities.
We were incorporated in September 1999 and we have completed our exploration business operations and did not realize any revenues. Our net loss since inception is $401,278. Failure to generate revenues has caused us to cease operations.
We have no known ore reserves and have ceased operations.
We did not find mineralized material and have ceased operations.
We have completed the exploration of our property. We have not made any plans to raise additional money. As a result we will have to ceased our operations on our claims.
Our shares qualify as penny stocks and are covered by Section 15(g) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell our securities in the aftermarket. For sales of our securities, the broker/dealer must make a special suitability determination and receive from you a written agreement prior to making a sale to you. Because of the imposition of the foregoing additional sales practices, it is possible that brokers will not want to make a market in our shares. This could prevent you from reselling your shares and may cause the price of the shares to decline.
-7-
- Because Messrs. Grenfal and Stetsenko own more than 50% of the outstanding shares, they are able to decide who will be directors and you will not be able to elect any directors.
- Messrs. Grenfal and Stetsenko's control prevents you from causing a change in the course of our operations.
- Our officers and directors will probably sell some of their shares if the market price of the stock goes above $0.10. This will cause the price of our common stock to fall which will reduce the value of your investment.
Messrs. Grenfal and Stetsenko own 25,000,000 shares and control us. As a result, Messrs Grenfal and Stetsenko are able to elect all of our directors and control our operations.
Because Messrs. Grenfal and Stetsenko control us, your ability to cause a change in the course of our operations is eliminated. As such, the value attributable to the right to vote is gone. This could result in a reduction in value to the shares you own because of the ineffective voting power.
A total of 25,000,000 shares of stock were issued to our two officers and directors. They will likely sell a portion of their stock if the market price goes above $0.10. If they do sell their stock into the market, the sales may cause the market price of the stock to drop.
ITEM 2. DESCRIPTION OF PROPERTIES.
In September 1999, Hugh Grenfal, our president and a member of the board of directors, acquired one mineral property containing three mining claims in British Columbia, Canada. The claims are recorded in Mr. Grenfal's name for tax purposes, however, title to the claims has been conveyed to us by an unrecorded deed. We have completed our exploration and did not find mineralized material. We have ceased operations. To date we have not performed any work on our property. The property is located 181 kilometers east of Vancouver, near Beaverdell on the West Kettle River.
Our offices are located at 1040 West Georgia Street, Suite 1160, Vancouver, British Columbia, Canada V6E 4H1. Our telephone number is (604) 605-0885. We lease our office space from Callinan Mines Ltd. on a month to month basis and our monthly rental is determined by usage. During the fiscal year ending June 30, 2004, due to our minimal operations we only paid $411.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any pending litigation and none is contemplated or threatened.
ITEM 4. SUBMISSION OR MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to the shareholders during 2004.
-8-
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.
An extremely limited market exists for our securities and there is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Our shares were listed for trading on the Bulletin Board owned by the National Association of Securities Dealers, Inc. on September 25, 2002, under the symbol "ANAG." As trading is thin and sporadic, a shareholder may therefore be unable to resell the securities referred to herein should he or she desire to do so. Furthermore, it is unlikely that a lending institution will accept our securities as pledged collateral for loans unless a regular trading market develops.
At September 25, 2004, we had 51 shareholders of record of our common stock, including shares held by brokerage clearing houses, depositories or otherwise in unregistered form. The beneficial owners of such shares are not known to us. Our company's securities are traded over-the-counter on the Bulletin Board operated by the National Association of Securities Dealers, Inc. under the symbol "ANAG" on September 25, 2002. The table shows the high and low trades of our company's common stock for 2003 and 2004:
|
Quarter ended |
||
|
2002 |
High Trade |
Low Trade |
|
September 30 |
0.04 |
0.04 |
|
December 31 |
0.04 |
0.04 |
|
2003 |
||
|
March 31 |
1.50 |
0.10 |
|
June 30 |
2.10 |
0.25 |
|
September 30 |
0.60 |
0.60 |
|
December 31 |
0.75 |
0.60 |
|
2004 |
||
|
March 31 |
0.90 |
0.60 |
|
June 30 |
1.00 |
0.62 |
The shares trade infrequently. There is usually a large gap between the bid and the offer price. If there is no bid or the bid is well below your purchase price you may suffer a loss of liquidity of your investment. The Company and its affiliates do not make or arrange any market for the Company's shares.
There are no plans, proposals, arrangements or understandings with any person with regard to the development of a trading market in any of our securities.
We have no outstanding options or warrants, or other securities convertible into, common equity. 25,000,000 shares were issued to our officers, directors and others, and may only be resold in compliance with Rule 144 of the Securities Act of 1933.
-9-
Dividends
We have not declared any cash dividends, nor do we intend to do so. We are not subject to any legal restrictions respecting the payment of dividends, except that they may not be paid to render us insolvent. Dividend policy will be based on our cash resources and needs and it is anticipated that all available cash will be needed for our operations in the foreseeable future.
Section 15(g) of the Securities Exchange Act of 1934
Our company's shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser's written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our securities and also may affect your ability to sell your shares in the secondary market.
Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as "bid" and "offer" quotes, a dealers "spread" and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes of fraud in penny stock transactions; and, the NASD's toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Cautionary Statement Regarding Forward-looking Statements
Some discussions in this report may contain forward-looking statements that involve risks and uncertainties. A number of important factors could cause our actual reports to differ materially from those expressed in any forward-looking statements made by us in this report. Such factors include, those discussed in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business," as well as those discussed elsewhere in this report. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events.
Financial Condition, Liquidity and Capital Resources
Since inception on September 7, 1999, we have been engaged in exploration and acquisition of mineral properties. Our company's principal capital resources have been acquired through issuance of common stock and from shareholder loans.
-10-
At June 30, 2004, we have a working capital deficit of $20,982 compared to a working capital deficit of $13,583 at June 30, 2003. This change is primarily the result of the increase in the amount due to the President of the Company for expenses paid on behalf of the Company.
At June 30, 2004, our company had total assets of $1,616 versus $4,502 a year before.
At June 30, 2004, we had total liabilities of $21,674 which compares to $15,356 at June 30, 2003; the increase was from advances from directors.
Our company has had no revenues from inception. Our Company has no long-term debt.
We will not be conducting any product research or development. We do not expect to purchase or sell any significant equipment. We do not expect any significant changes in the number of our employees.
We have inadequate cash reserves to maintain offices and operations during the next twelve months ending June 30, 2004. We have insufficient cash to maintain operations and have ceased operations.
Results of Operations
Our Company posted losses of $9,204 for the year ending June 30, 2004. The principal component of the loss was professional fees.
Critical accounting policies
We have identified the policies below as critical to our business operations and the understanding of our results of operations. See also the notes to the financial statements. Note that our preparation of this Annual Report on Form 10-KSB and the Quarterly Reports on Form 10-QSB requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.
(1) Functional currency and treatment of foreign currency translation. Due to the majority of our financial operations being based in the United States, the US Dollar is both the functional and the reporting currency, although our main asset (a mineral property) is in Canada. Books and records and bank accounts are maintained in US Dollars; any assets or items of value reckoned in Canadian Dollars are translated into US dollars at the exchange rate in effect at the year end. Income and expense items are translated at the exchange rate prevailing when the transaction occurred. The resulting translation adjustments are recorded within other comprehensive income.
(2) The Company has been in the exploration stage since its formation in September 7, 1999 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition, exploration and development of mining properties. Mineral exploration costs are charged to operations as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve.
-11-
Contractual commitments
We have no contractual commitments.
Recent accounting pronouncements
In December 2003, the United States Securities and Exchange Commission issued Staff Accounting Bulletin No. 104, "Revenue Recognition" ("SAB 104"), which supersedes SAB 101, "Revenue Recognition in Financial Statements." The primary purpose of SAB 104 is to rescind accounting guidance contained in SAB 101 related to multiple element revenue arrangements, which was superseded as a result of the issuance of EITF 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables." While the wording of SAB 104 has changed to reflect the issuance of EITF 00-21, the revenue recognition principles of SAB 101 remain largely unchanged by the issuance of SAB 104. The adoption of SAB 104 did not have a material impact on the Company's financial statements.
ITEM 7. FINANCIAL STATEMENTS.
TABLE OF CONTENTS
|
Index |
|
|
Independent Auditors' Report |
F-1 |
|
Balance Sheets |
F-2 |
|
Statements of Operations |
F-3 |
|
Statements of Cash Flows |
F-4 |
|
Statement of Stockholders' Equity (Deficit) |
F-5 |
|
Notes to the Financial Statements |
F-6 |
-12-
Independent Auditors' Report
To the Stockholders and Directors
of Ancona Mining Corporation
(An Exploration Stage Company)
We have audited the accompanying balance sheets of Ancona Mining Corporation (An Exploration Stage Company) as of June 30, 2004 and 2003 and the related statements of operations, cash flows and stockholders' deficit for the period from September 1, 1999 (Date of Inception) to June 30, 2004 and the years ended June 30, 2004 and 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the Standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the aforementioned financial statements present fairly, in all material respects, the financial position of Ancona Mining Corporation (An Exploration Stage Company), as of June 30, 2004 and 2003, and the results of its operations and its cash flows for the period from September 1, 1999 (Date of Inception) to June 30, 2004, and the years ended June 30, 2004 and 2003, in conformity with generally accepted accounting principles used in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not generated any revenue and has incurred start-up losses to date. These factors 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/ "Manning Elliott" |
|
CHARTERED ACCOUNTANTS |
|
Vancouver, Canada |
|
September 8, 2004 |
F-1
-13-
|
Ancona Mining Corporation(An Exploration Stage Company) |
||
|
Balance Sheets |
||
|
(expressed in U.S. dollars) |
||
|
June 30, |
June 30, |
|
|
2004 |
2003 |
|
|
$ |
$ |
|
|
ASSETS |
||
|
Current Assets |
||
|
Cash |
692 |
1,362 |
|
Deposits |
- |
411 |
|
|
|
|
|
Total Current Assets |
692 |
1,773 |
|
Property and Equipment (Note 3) |
924 |
1,417 |
|
Mineral Properties (Note 4) |
- |
1,312 |
|
|
|
|
|
Total Assets |
1,616 |
4,502 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
||
|
Current Liabilities |
||
|
Accounts payable |
3,655 |
2,711 |
|
Accrued liabilities |
5,800 |
8,110 |
|
Due to related parties (Note 5(b)) |
12,219 |
4,535 |
|
|
|
|
|
Total Liabilities |
21,674 |
15,356 |
|
|
|
|
|
Contingency (Note 1) |
||
|
Stockholders' Deficit |
||
|
Common Stock, 100,000,000 shares authorized with a par value of |
||
|
$0.00001; 30,311,000 shares issued and outstanding |
303 |
303 |
|
Additional Paid-In Capital |
380,917 |
380,917 |
|
Deficit Accumulated During the Exploration Stage |
(401,278) |
(392,074) |
|
|
|
|
|
Total Stockholders' Deficit |
(20,058) |
(10,854) |
|
|
|
|
|
Total Liabilities and Stockholders' Deficit |
1,616 |
4,502 |
(The accompanying notes are an integral part of these financial statements)
F-2
-14-
|
Ancona Mining Corporation |
|||
|
(An Exploration Stage Company) |
|||
|
Statements of Operations |
|||
|
(expressed in U.S. dollars) |
|||
|
Accumulated from |
|||
|
September 7, 1999 |
|||
|
Year Ended |
(Date of Inception) |
||
|
June 30, |
to June 30, |
||
|
2004 |
2003 |
2004 |
|
|
$ |
$ |
$ |
|
|
Revenue |
- |
- |
- |
|
|
|
|
|
|
Expenses |
|||
|
Consulting |
- |
- |
271,536 |
|
Depreciation |
493 |
493 |
1,541 |
|
General and administration |
45 |
591 |
21,575 |
|
Investor relations |
- |
- |
9,346 |
|
Mining exploration and claim costs |
1,312 |
1,332 |
6,870 |
|
Professional fees |
6,918 |
13,720 |
79,030 |
|
Rent (Note 5(a)) |
411 |
911 |
7,250 |
|
Transfer agent and filing fees |
25 |
1,155 |
4,130 |
|
|
|
|
|
|
Total Expenses |
9,204 |
18,202 |
401,278 |
|
|
|
|
|
|
Net Loss for the Period |
(9,204) |
(18,202) |
(401,278) |
|
|
|
|
|
|
Net Loss Per Share - Basic and Diluted |
- |
- |
|
|
|
|
|
|
|
Weighted Average Shares Outstanding |
30,311,000 |
30,311,000 |
|
|
|
|
|
|
(The accompanying notes are an integral part of these financial statements)
F-3
-15-
|
Ancona Mining Corporation |
|||
|
(An Exploration Stage Company) |
|||
|
Statements of Cash Flows |
|||
|
(expressed in U.S. dollars) |
|||
|
For the Period from |
|||
|
September 7, 1999 |
|||
|
Year Ended |
(Date of Inception) |
||
|
June 30, |
to June 30, |
||
|
2004 |
2003 |
2004 |
|
|
$ |
$ |
$ |
|
|
Cash Flows To Operating Activities |
|||
|
Net loss |
(9,204) |
(18,202) |
(401,278) |
|
Adjustments to reconcile net loss to net cash used in |
|||
|
operating activities: |
|||
|
Depreciation |
493 |
493 |
1,542 |
|
Stock-based compensation |
- |
- |
272,223 |
|
Write-off of mineral claims |
1,312 |
1,332 |
2,644 |
|
Changes in operating assets and liabilities |
|||
|
Deposits |
411 |
- |
- |
|
Accounts payable and accrued liabilities |
(1,366) |
9,996 |
9,455 |
|
Due to related parties |
7,684 |
4,435 |
12,352 |
|
|
|
|
|
|
Net Cash Used In Operating Activities |
(670) |
(1,946) |
(103,062) |
|
|
|
|
|
|
Cash Flows To Investing Activities |
|||
|
Purchase of property and equipment |
- |
- |
(2,466) |
|
|
|
|
|
|
Net Cash Used In Investing Activities |
- |
- |
(2,466) |
|
|
|
|
|
|
Cash Flows From Financing Activities |
|||
|
Proceeds from sale of common stock |
- |
- |
106,220 |
|
|
|
|
|
|
Net Cash Provided By Financing Activities |
- |
- |
106,220 |
|
|
|
|
|
|
Increase (Decrease) in Cash |
(670) |
(1,946) |
692 |
|
Cash - Beginning of Period |
1,362 |
3,308 |
- |
|
|
|
|
|
|
Cash - End of Period |
692 |
1,362 |
692 |
|
|
|
|
|
|
Non-Cash Investing and Financing Activities |
|||
|
Stock issued in exchange for consulting services |
- |
- |
272,223 |
|
Stock issued in payment of advances |
- |
- |
133 |
|
Stock issued in payment of mining claims |
- |
- |
2,644 |
|
|
|
|
|
|
Supplemental Disclosures |
|||
|
Interest paid |
- |
- |
- |
|
Income taxes paid |
- |
- |
- |
(The accompanying notes are an integral part of these financial statements)
F-4
-16-
|
Ancona Mining Corporation |
|||||
|
(An Exploration Stage Company) |
|||||
|
Statement of Stockholders' Equity (Deficit) (Note 6) |
|||||
|
For the period from September 7, 1999 (date of inception) to June 30, 2004 |
|||||
|
(expressed in U.S. dollars) |
|||||
|
Deficit |
|||||
|
Accumulated |
Total |
||||
|
Additional |
During the |
Stockholders' |
|||
|
Common Stock |
Paid-In |
Exploration |
Equity |
||
|
# of |
Amount |
Capital |
Stage |
(Deficit) |
|
|
Shares |
$ |
$ |
$ |
$ |
|
|
Balance - September 7, 1999 (Date of Inception) |
- |
- |
- |
- |
- |
|
Issuance of stock for services and payment of |
|||||
|
advances at $0.011 per share |
25,000,000 |
250 |
274,750 |
- |
275,000 |
|
Net loss for period |
- |
- |
- |
(294,522) |
(294,522) |
|
|
|
|
|
|
|
|
Balance - June 30, 2000 |
25,000,000 |
250 |
274,750 |
(294,522) |
(19,522) |
|
Issuance of common stock at $0.02 per share |
5,311,000 |
53 |
106,167 |
- |
106,220 |
|
Net loss for the year |
- |
- |
- |
(38,069) |
(38,069) |
|
|
|
|
|
|
|
|
Balance - June 30, 2001 |
30,311,000 |
303 |
380,917 |
(332,591) |
48,629 |
|
Net loss for the year |
- |
- |
- |
(41,281) |
(41,281) |
|
|
|
|
|
|
|
|
Balance - June 30, 2002 |
30,311,000 |
303 |
380,917 |
(373,872) |
7,348 |
|
Net loss for the year |
- |
- |
- |
(18,202) |
(18,202) |
|
|
|
|
|
|
|
|
Balance - June 30, 2003 |
30,311,000 |
303 |
380,917 |
(392,074) |
(10,854) |
|
Net loss for the year |
- |
- |
- |
(9,204) |
(9,204) |
|
|
|
|
|
|
|
|
Balance - June 30, 2004 |
30,311,000 |
303 |
380,917 |
(401,278) |
(20,058) |
(The accompanying notes are an integral part of these financial statements)
F-5
-17-
Ancona Mining Corporation
(An Exploration Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
- Exploration Stage Company
The Company was incorporated in the State of Nevada on September 7, 1999. In September 1999 the Company purchased three mineral claims representing forty-four units, situated in the Greenwood Mining Division in the Province of British Columbia, Canada. The Company's principal business plan is to acquire, explore and develop mineral properties and to ultimately seek earnings by exploiting the mineral claims.
The Company has been in the exploration stage since its formation on September 7, 1999 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition, exploration and development of mining properties. Upon location of a commercial mineable reserve, the Company will actively prepare the site for extraction and enter a development stage. At present, management devotes most of its activities to raise sufficient funds to further explore and develop its mineral properties. Planned principal activities have not yet begun. The ability of the Company to emerge from the exploration stage with respect to any planned principal business activity is dependent upon its successful efforts to raise additional equity financing and/or attain profitable mining operations. Management has plans to seek additional capital through a private placement and public offering of its common stock. There is no guarantee that the Company will be able to complete any of the above objectives. These factors raise substantial doubt regarding the Company's ability to continue as a going concern.
At June 30, 2004, the Company had a working capital deficit of $20,982. A minimum of $2,000 per quarter is needed to cover expenses. Thus in the next year the Company will require $28,982 to cover both new expenses and preserve working capital. This amount would operate the Company but leave little or nothing for exploration. The Company expects to fund itself in the next twelve months by issuing common shares for cash and services.
- Summary of Significant Accounting Principles
a) Year End
The Company's year end is June 30.
b) Basis of Accounting
These financial statements are prepared in conformity with accounting principles generally accepted in the United States and are presented in U.S. dollars.
c) Use of Estimates
The preparation of financial statements in conformity with U.S. 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 reporting period. Actual results could differ from those estimates.
F-6
-18-
Ancona Mining Corporation
(An Exploration Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
- Summary of Significant Accounting Principles (continued)
d) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.
e) Property and Equipment
Property and equipment is stated at cost. Amortization is computed using the straight-line method over five years.
f) Long-Lived Assets
In accordance with Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets", the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes an impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.
g) Foreign Currency Transactions/Balances
The Company's functional and reporting currency is the United States dollar. Occasional transactions occur in Canadian currency, and management has adopted SFAS No. 52, "Foreign Currency Translation". Monetary assets and liabilities denominated in foreign currencies are translated into United States dollars at rates of exchange in effect at the balance sheet date. Non-monetary assets, liabilities and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction.
h) Exploration and Development Costs
The Company has been in the exploration stage since its formation in September 7, 1999 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition, exploration and development of mining properties. Mineral exploration costs are charged to operations as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve.
F-7
-19-
Ancona Mining Corporation
(An Exploration Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
- Summary of Significant Accounting Principles (continued)
i) Basic and Diluted Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share" (SFAS 128). SFAS 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.
j) Financial Instruments
The carrying value of cash, accounts payable, accrued liabilities, and due to related parties approximate fair value due to the relatively short maturity of these instruments.
k) Comprehensive Loss
SFAS No. 130, "Reporting Comprehensive Income," establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at June 30, 2004 and 2003, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.
l) Income Taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109 as of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
m) Recent Accounting Pronouncements
In December 2003, the United States Securities and Exchange Commission issued Staff Accounting Bulletin No. 104, "Revenue Recognition" ("SAB 104"), which supersedes SAB 101, "Revenue Recognition in Financial Statements." The primary purpose of SAB 104 is to rescind accounting guidance contained in SAB 101 related to multiple element revenue arrangements, which was superseded as a result of the issuance of EITF 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables." While the wording of SAB 104 has changed to reflect the issuance of EITF 00-21, the revenue recognition principles of SAB 101 remain largely unchanged by the issuance of SAB 104. The adoption of SAB 104 did not have a material impact on the Company's financial statements.
F-8
-20-
Ancona Mining Corporation
(An Exploration Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
- Property and Equipment
June 30,
June 30,
2004
2003
Accumulated
Net Carrying
Net Carrying
Cost
Depreciation
Value
Value
$
$
$
$
Office furniture
2,466
1,542
924
1,417
- Mineral Properties
In September 1999, the Company, through its President, acquired 100% of the rights, titles and interests in three mining claims (Marmot, Wombat and AMAX) representing forty-four units in the Greenwood Mining Division of British Columbia. The President conveyed title to the claims via an unrecorded deed. During 2003, the Wombat claims were allowed to lapse. The Company received Portable Assessment Credits (PAC) from an arm's length company in exchange for the AMAX mining claim. The PAC was used to extend the validity of the Marmot claim, which represents fifteen units, until May 11, 2005.
- Related Party Transactions/Balances
a) The Company occupies office space provided by a company where the President of the Company was previously a vice president and a director. Monthly rental is determined by usage. At June 30, 2004, the Company was indebted to this company for $911, which is non-interest bearing, unsecured and due on demand. Due to the minimal operations of the Company, $411 has been charged for the year ended June 30, 2004 (2003 - $911).
b) The President of the Company is owed $12,119 at June 30, 2004 for payment of expenses on behalf of the Company. This amount is non-interest bearing, unsecured and due on demand. The remaining $100 is owed to a director.
- Common Stock
During 2003, the Company's Board of Directors approved a four for one split of common shares. The Company issued four additional common shares for each one common share outstanding effective as of the period date of November 18, 2002. All per share amounts have been retroactively adjusted to reflect the stock split.
- Income Taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has incurred net operating losses of $126,000 which commence expiring in 2019. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
F-9
-21-
Ancona Mining Corporation
(An Exploration Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
- Income Taxes (continued)
The components of the net deferred tax asset at June 30, 2004 and 2003, and the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are indicated below:
|
2004 |
2003 |
|
|
Net Operating Loss |
7,892 |
16,870 |
|
Statutory Tax Rate |
34% |
34% |
|
Effective Tax Rate |
- |
- |
|
Deferred Tax Asset |
2,683 |
5,736 |
|
Valuation Allowance |
(2,683) |
(5,736) |
|
Net Deferred Tax Asset |
- |
- |
F-10
-22-
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
There have been no changes of accountants during the two most recent fiscal years.
ITEM 8A. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures: Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required.
(b) Changes in Internal Control over Financial Reporting: There were no changes in the Company's internal control over financial reporting identified in connection with the Company evaluation of these controls as of the end of the period covered by this report that could have significantly affected those controls subsequent to the date of the evaluation referred to in the previous paragraph, including any correction action with regard to significant deficiencies and material weakness.
There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any significant deficiencies or material weaknesses of internal controls that would require corrective action.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The name, age and position held by each of the directors and officers of our Company are as follows:
|
Name |
Age |
Position(s) |
|
Hugh Grenfal, Jr. |
35 |
President, Chief Executive Officer, Treasurer, Chief Financial officer and a member of the board of directors |
|
Sergei Stetsenko |
34 |
Secretary and a member of the board of directors |
-23-
All directors have a term of office expiring at our next annual general meeting, unless re-elected or earlier vacated in accordance with our Bylaws. All officers have a term of office lasting until their removal or replacement by the board of directors.
Hugh Grenfal, Jr. has been our president, chief executive officer, treasurer, chief financial officer and a member of our board of directors since inception on September 7, 1999. From January 1991 to June 1996, Mr. Grenfal was President of Booker Gold Explorations Ltd., a mining and exploration corporation located in Vancouver, British Columbia. From October 1996 to December 2001, Mr. Grenfal was a Director of Callinan Mines Limited, a mining and exploration corporation located in Vancouver, British Columbia with revenue producing copper and zinc properties located in Manitoba, Canada. From June 20, 1999 to May 11, 2000, Mr. Grenfal was president of Paxton Mining Corporation located in Vancouver, British Columbia. Paxton Mining Corporation was a mining company. From January 2000 to January 2004, Mr. Grenfal was president of Aberdene Mines Limited located in Vancouver, British Columbia. Aberdene Mines is a mining exploration company. Since September 1999, Mr. Grenfal has been President of Camden Mines Limited located in Vancouver, British Columbia. Camden Mines is a mining exploration company. From September 1999 to February 2002, Mr. Grenfal was president of Palal Mining Corporation located in Vancouver, British Columbia. Palal Mining was an exploration company that has since changed its line of business to hydrocarbon exploration and development and been renamed TexEn Oil and Gas Inc. From July 2000 to September 2001, Mr. Grenfal was president of Raglan Mines Limited located in Vancouver, British Columbia. Raglan Mines Limited is a mining exploration company. Mr. Grenfal is currently not a full time employee with another entity.
Sergei Stetsenko has been our secretary and a member of the board of directors since inception. Since December 2003, Stetsenko has been the president, principal executive officer, treasurer, principal financial officer and a member of the board of directors of Peloton Resources Inc. Peloton Resources is a development stage mining company. From December 1994 to June 1996, Mr. Stetsenko was the operations manager of Booker Gold Explorations Ltd. His responsibilities included overseeing and implementation of exploration programs and a member of the Hearne Hill copper deposit discovery team. From October 1996 to June 2001, Mr. Stetsenko was the operations manager of exploration for Callinan Mines Limited. Callinan Mines is a development stage mining company. Since September 1999, Mr. Stetsenko has been the secretary of Camden Mines Limited located in Vancouver, British Columbia. Camden Mines Limited is an exploration company. Since September 1999, Mr. Stetsenko has been the secretary of Ancona Mining Corporation located in Vancouver, British Columbia. Ancona Mining Corporation is an exploration company. Ancona Mining Corporation has competed a public offering of securities and is in the process of conducting exploration activities on its property. From September 1999 to February 2002, Mr. Stetsenko was the Secretary of Palal Mining Corporation located in Vancouver, British Columbia. Palal Mining Corporation was an exploration company. The mining claims in which Palal Mining intended to conduct its exploration activities were condemned by British Columbia for incorporation into its park system. Mr. Stetsenko has never devoted full time to any of the foregoing endeavors and with respect to Camden and Ancona, Mr. Stetsenko devotes approximately 10% of his time or four hours per week to each. Mr. Stetsenko is currently not a full-time employee with another entity.
Involvement in Certain Legal Proceedings
We have no legal proceedings during the past five years, no present or former director, executive officer or person nominated to become a director or an executive officer has been the subject matter of any legal proceedings, including bankruptcy, criminal proceedings, or civil proceedings. Further, no legal proceedings are known to be contemplated by governmental authorities against any director, executive officer and person nominated to become a director.
-24-
Compliance with Section 16 (a) of the Exchange Act
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us pursuant to Rule 16a-3(e) under the Securities Exchange Act of 1934 during our most recent fiscal year and Forms 5 and amendments thereto furnished to us with respect to our most recent fiscal year, all officers, directors and owners of 10% or more of our outstanding shares have filed all Forms 3, 4 an 5 required by Section 16(a) of the Securities Exchange Act of 1934.
Audit Committee and Charter
We have an audit committee and audit committee charter. Our audit committee is comprised of all of our officers and directors. None of directors are deemed independent. All directors also hold positions as our officers. A copy of our audit committee charter is filed as an exhibit to this report. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit committee.
Audit Committee Financial Expert
We have no financial expert. We believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our limited operations, we believe the services of a financial expert are not warranted.
Code of Ethics
We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.
Disclosure Committee and Charter
We have a disclosure committee and disclosure committee charter. Our disclosure committee is comprise of all of our officers and directors. The purpose of the committee is to provide assistance to the Chief Executive Officer and the Chief Financial Officer in fulfilling their responsibilities regarding the identification and disclosure of material information about us and the accuracy, completeness and timeliness of our financial reports.
ITEM 10. EXECUTIVE COMPENSATION.
The following table sets forth information with respect to compensation paid by the Company to the Chief Executive Officer and the other highest paid executive officers (the "Named Executive Officer") during the three most recent fiscal years.
-25-
Summary Compensation Table
|
Long Term Compensation |
||||||||
|
Annual Compensation |
Awards |
Payouts |
||||||
|
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
(i) |
|
Other |
Restricted |
Securities |
||||||
|
Annual |
Stock |
Underlying |
LTIP |
All Other |
||||
|
Name and Principal |
Salary |
Bonus |
Compen- |
Award(s) |
Options / |
Payouts |
Compen- |
|
|
Position [1] |
Year |
($) |
($) |
sation ($) |
($) |
SARs (#) |
($) |
sation ($) |
|
Hugh Grenfal, Jr. |
2004 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
President & CEO |
2003 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
CFO & Director |
2002 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Sergei Stetsenko |
2004 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Secretary & |
2003 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Director |
2002 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
[1] All compensation received by the officers and directors has been disclosed.
There are no stock option, retirement, pension, or profit sharing plans for the benefit of our officers and directors.
Option/SAR Grants
No individual grants of stock options, whether or not in tandem with stock appreciation rights ("SARs") and freestanding SARs have been made to any executive officer or any director since our inception, accordingly, no stock options have been exercised by any of the officers or directors in fiscal 2004.
Long-Term Incentive Plan Awards
We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance to occur over a period longer than one fiscal year, whether such performance is measured by reference to our financial performance, our stock price, or any other measure.
Compensation of Directors
The directors did not receive any other compensation for serving as members of the board of directors. The Board has not implemented a plan to award options. There are no contractual arrangements with any member of the board of directors.
We do not expect to pay any salaries to any of our officers until such time as we generate sufficient revenues to do so. We do not anticipate paying any salaries to our officers in the near future. We do not intend to pay any additional compensation to our directors. As of the date hereof, we have not entered into employment contracts with any of our officers and we do not intend to enter into any employment contracts until such time as it profitable to do so.
-26-
Indemnification
Pursuant to the articles of incorporation and bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. In certain cases, we may advance expenses incurred in defending any such proceeding. To the extent that the officer or director is successful on the merits in any such proceeding as to which such person is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the state of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of 1933 which may be permitted to directors or officers pursuant to the foregoing provisions, we are informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy, as expressed in the Act and is, therefore unenforceable.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Security Ownership of Certain Beneficial Owners
The following table sets forth, as of September 8, 2004, the beneficial shareholdings of persons or entities holding five percent or more of our common stock, each director individually, each named executive officer and all directors and officers of our company as a group. Each person has sole voting and investment power with respect to the shares of common stock shown, and all ownership is of record and beneficial.
|
Amount and |
|||
|
Name and Address |
Nature of |
Percent of |
|
|
of Beneficial Owner |
Beneficial Owner |
Position |
Class |
|
Hugh Grenfal, Jr. |
12,500,000 |
President, Chief Executive Officer, |
41.24% |
|
Treasurer, Chief Financial Officer and a |
|||
|
member of the Board of Directors |
|||
|
Sergei Stetsenko |
12,500,000 |
Secretary and a member of the Board of |
41.24% |
|
Directors |
|||
|
All officer and |
25,000,000 |
82.48% |
|
|
Directors as a Group |
|||
|
(2 Persons) |
* The persons named above are our parents and promoters within the meaning of such terms under the Securities Act of 1933 by virtue of their direct and indirect stock holdings.
-27-
Changes in Control
To the knowledge of management, there are no present arrangements or pledges of securities of our company which may result in a change in control of our company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In September 1999, we issued a total of 5,000,000 pre-split shares of restricted common stock to Hugh Grenfal and Sergei Stetsenko, officers and directors of our company. This was accounted for as a compensation expense of $271,536 and advances and reimbursement expenses of $3,464.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
Reports on Form 8-K
No Form 8-Ks have been filed since inception.
Exhibits
The following Exhibits are incorporated herein by reference from the Registrant's Form SB-2 Registration Statement filed with the Securities and Exchange Commission, SEC file #333-94835 on January 18, 2001. Such exhibits are incorporated herein by reference pursuant to Rule 12b-32:
|
Exhibit No. |
Document Description |
|
3.1 |
Articles of Incorporation. |
|
3.2 |
Bylaws. |
|
4.1 |
Specimen Stock Certificate. |
|
10.1 |
Marmot Mining Claim. |
|
10.2 |
Wombat Mining Claim. |
|
10.3 |
Bill of Sale. |
|
10.4 |
Amax Mining Claim. |
|
10.5 |
Statement of Trustee. |
|
10.6 |
Unrecorded Warranty Deed |
|
99.1 |
Subscription Agreement. |
The following Exhibits are incorporated herein by reference from the Registrant's Form 10-KSB Annual Report and amendment thereto as filed with the Securities and Exchange Commission, on September 5, 2003. Such exhibits are incorporated herein by reference pursuant to Rule 12b-32:
|
14.1 |
Code of Ethics |
|
99.1 |
Audit Committee Charter |
|
99.2 |
Disclosure Committee Charter |
-28-
The following exhibits are filed with this report:
|
31.1 |
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended. |
|
32.1 |
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer). |
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
(1) Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-QSB's or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:
|
2003 |
$ |
4,310 |
Williams & Webster, P.S. |
|
|
2004 |
$ |
3,725 |
Manning Elliott |
|
|
2003 |
$ |
1,800 |
Manning Elliott |
|
|
2004 |
$ |
-0- |
Williams & Webster, P.S. |
(2) Audit-Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:
|
2003 |
Nil |
Williams & Webster, P.S. |
|
2004 |
Nil |
Manning Elliott |
|
2003 |
-0- |
Manning Elliott |
|
2004 |
-0- |
Williams & Webster, P.S. |
(3) Tax Fees
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:
|
2003 |
Nil |
Williams & Webster, P.S. |
|
2004 |
Nil |
Manning Elliott |
|
2003 |
Nil |
Manning Elliott |
|
2004 |
Nil |
Williams & Webster, P.S. |
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(4) All Other Fees
The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:
|
2003 |
Nil |
Williams & Webster, P.S. |
|
2004 |
Nil |
Manning Elliott |
|
2003 |
Nil |
Manning Elliott |
|
2004 |
Nil |
Williams & Webster, P.S. |
(5) Our audit committee's pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.
(6) The percentage of hours expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full time, permanent employees was 0%.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 22nd day of September, 2004.
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ANCONA MINING CORPORATION |
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(Registrant) |
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BY: |
/s/ Hugh Grenfal, Jr. |
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Hugh Grenfal, Jr., President, Principal Executive Officer, Treasurer, Principal Financial Officer and member of the board of directors |
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities.
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Signatures |
Title |
Date |
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/s/ Hugh Grenfal, Jr. |
President, Principal Executive Officer, |
09/22/2004 |
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Hugh Grenfal, Jr. |
Treasurer, Principal Financial Officer and a |
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member of the board of directors. |
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/s/ Sergei Stetsenko |
Secretary and a member of the board of |
09/22/2004 |
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Sergei Stetsenko |
directors. |
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