-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QZqUcbRa/vZ7KeepcR7ToIz6zatIA1hoEiZbc6EhjX1xgwR/KZ98odCQH9xDUKlN pVCmmm8QxTu298mNUuYAWQ== 0001165527-06-000022.txt : 20061107 0001165527-06-000022.hdr.sgml : 20061107 20060127141302 ACCESSION NUMBER: 0001165527-06-000022 CONFORMED SUBMISSION TYPE: SB-2/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20060127 DATE AS OF CHANGE: 20060630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CANTOP VENTURES, INC. CENTRAL INDEX KEY: 0001328769 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 202414965 FILING VALUES: FORM TYPE: SB-2/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-128697 FILM NUMBER: 06556938 BUSINESS ADDRESS: STREET 1: 1045 PEPPER LANE CITY: FERNLEY STATE: NV ZIP: 89408 BUSINESS PHONE: (604) 805-6340 MAIL ADDRESS: STREET 1: 1045 PEPPER LANE CITY: FERNLEY STATE: NV ZIP: 89408 SB-2/A 1 g1078.txt AMENDMENT NO. 1 TO FORM SB-2 As filed with the Securities and Exchange Commission on January 27, 2006 Registration No. 333-128697 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM SB-2/A AMENDMENT NO. 1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CANTOP VENTURES INC. (Name of small business issuer in its charter) NEVADA 1000 20-2414965 (State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.) Cantop Ventures Inc. Christopher Paterson, President 564 Wedge Lane Fernley, NV 89408 Telephone: (604) 805-6340 Facsimile: (604) 224-5674 (Address and telephone number of principal executive offices) Robert C. Harris 564 Wedge Lane Fernley, NV 89408 (Name, address and telephone number of agent for service) Approximate date of proposed sale to the public: as soon as practicable after the effective date of this Registration Statement. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [X] 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 Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [ ] CALCULATION OF REGISTRATION FEE ================================================================================ TITLE OF EACH PROPOSED PROPOSED CLASS OF MAXIMUM MAXIMUM SECURITIES DOLLAR OFFERING AGGREGATE AMOUNT OF TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION REGISTERED REGISTERED SHARE (1) PRICE (2) FEE (2) - -------------------------------------------------------------------------------- Common Stock $45,000 $0.01 $45,000 $5.30 ================================================================================ (1) Based on the last sales price on July 27, 2005 (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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE. ================================================================================ SUBJECT TO COMPLETION, DATED JANUARY 26, 2006 PROSPECTUS CANTOP VENTURES INC. 4,500,000 SHARES COMMON STOCK ---------- The selling shareholders named in this prospectus are offering all of the shares of common stock offered through this prospectus. Our common stock is presently not traded on any market or securities exchange. ---------- The purchase of the securities offered through this prospectus involves a high degree of risk. SEE SECTION ENTITLED "RISK FACTORS" ON PAGES 4-8. 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 STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. The selling shareholders will sell our shares at $0.01 per share until our shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices. We determined this offering price based upon the price of the last sale of our common stock to investors. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. ---------- THE DATE OF THIS PROSPECTUS IS: JANUARY 26, 2006 TABLE OF CONTENTS PAGE ---- Summary ..................................................................... 3 Risk Factors ................................................................ 4 - If we do not obtain additional financing, our business will fail .............................................................. 4 - Because we have not commenced business operations, we face a high risk of business failure ..................................... 5 - Because of the speculative nature of exploration of mining properties, there is substantial risk that our business will fail .............................................................. 6 - We need to continue as a going concern if our business is to succeed Our independent auditor has raised doubt about our ability to continue as a going concern ............................ 6 - Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business ................................ 6 - Even if we discover commercial reserves of precious metals on the Copper Road I - VI claim, we may not be able to successfully obtain commercial production ......................... 6 - If we become subject to burdensome government regulation or other legal uncertainties, our business will be negatively affected .......................................................... 6 - Because our president has other business interests, he may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to fail .......... 7 - If a market for our common stock does not develop, shareholders may be unable to sell their shares ................... 7 - A purchaser is purchasing penny stock which limits the ability to sell stock ............................................. 8 Use of Proceeds ............................................................. 8 Determination of Offering Price ............................................. 8 Dilution .................................................................... 8 Selling Securityholders ..................................................... 9 Plan of Distribution ........................................................ 13 Legal Proceedings ........................................................... 15 Directors, Executive Officers, Promoters and Control Persons ................ 15 Security Ownership of Certain Beneficial Owners and Management .............. 16 Description of Securities ................................................... 17 Interest of Named Experts and Counsel ....................................... 18 Disclosure of Commission Position of Indemnification for Securities Act Liabilities ............................................................. 18 Organization Within Last Five Years ......................................... 19 Description of Business ..................................................... 19 Plan of Operations .......................................................... 24 Description of Property ..................................................... 25 Certain Relationships and Related Transactions .............................. 25 Market for Common Equity and Related Stockholder Matters .................... 25 Executive Compensation ...................................................... 26 Financial Statements ........................................................ 27 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ........................................................ 27 2 SUMMARY PROSPECTIVE INVESTORS ARE URGED TO READ THIS PROSPECTUS IN ITS ENTIRETY. We are in the business of mineral property exploration. We are currently in the start-up phase of operations. To date, we have not conducted any exploration on our sole mineral property asset, known as the Copper Road I - VI claim, located Approx 2 Kilometers East of Deep Water Bay (N.T.S. 92K/03W) Quadra Island of British Columbia. Pursuant to a Mineral Property Purchase Agreement dated March 3, 2005, we acquired a 100% undivided right, title and interest in and to the property. The owner of the Copper Road I - VI claim and the grantor of the purchase is Larry Sostad of Vancouver, British Columbia. Mr. Sostad is currently our Trustee and is holding the Copper Road I - VI property in his name for our benefit. Our objective is to conduct mineral exploration activities on the Copper Road I - - VI claim in order to assess whether it possesses economic reserves of minerals such as gold, copper and silver. We have not yet identified any economic mineralization on the property. Our proposed exploration program, which is broken down into four phases, is designed to search for an economic mineral deposit. The four phases encompass compilation and analysis of previous exploration data, investigation of anomalous areas, localized general and detailed magnetometer and soil surveys, and testing diamond drilling of targets delineated within the potential exploration sites. Exploration for minerals is a speculative venture necessarily involving substantial risk. In all probability, the Copper Road I - VI claim does not contain any reserves and funds that we spend on exploration will be lost. We were incorporated on February 22, 2005 under the laws of the state of Nevada. Our principal offices are located at 564 Wedge Lane, Fernley, NV 89408 Our telephone number is (604) 805-6340. THE OFFERING: SECURITIES BEING OFFERED Up to 4,500,000 shares of common stock. OFFERING PRICE The selling shareholders will sell our shares at $0.01 per share until our shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices. We determined this offering price based upon the price of the last sale of our common stock to investors. TERMS OF THE OFFERING The selling shareholders will determine when and how they will sell the common stock offered in this prospectus. TERMINATION OF THE OFFERING The offering will conclude when all of the 4,500,000 shares of common stock have been sold, the shares no longer need to be registered to be sold or we decide to terminate the registration of the shares. 3 SECURITIES ISSUED AND TO BE ISSUED 8,500,000 shares of our common stock are issued and outstanding as of the date of this prospectus. All of the common stock to be sold under this prospectus will be sold by existing shareholders. USE OF PROCEEDS We will not receive any proceeds from the sale of the common stock by the selling shareholders. Our stock is currently not traded on any market or exchange. At present, any shareholder wishing to sell his or her shares must do so in a private transaction with the purchaser. Accordingly, there is very little liquidity for our shares. SUMMARY FINANCIAL INFORMATION BALANCE SHEET July 31, 2005 ------------- Cash $22,034.00 ---------- Total Assets $22,034.00 ---------- Liabilities $4,342.00 ---------- Total Stockholders' Equity $17,692.00 ========== STATEMENT OF OPERATIONS From Incorporation on February 22, 2005 to July 31, 2005 ---------------------------------- Revenue $ 0 Net Loss and Deficit $ (9,808) ======== Our auditors have issued a going concern opinion, which is set forth in Note 1 to the audited Financial Statements included in this Registration Statement. RISK FACTORS An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL. Our current operating funds are less than necessary to complete all intended exploration of the Copper Road I - VI claim, and therefore we will need to obtain additional financing in order to complete our business plan. We currently 4 do not have any operations and we have no income. As well, we will not receive any funds from this registration. Our business plan calls for significant expenses in connection with the exploration of the Copper Road I - VI claim. Our current exploration program consists of four phases. The estimated cost for phases one and two is $6,300 for each phase. The estimated cost to complete phases three and four are $12,600 and $29,400 respectively, as outlined in detail in the table on pages 21-22 of this registration statement. While we have sufficient funds to conduct the phase one and two exploration programs on the property with estimated budgets of U.S. $6,300 for each phase, we will require additional financing in order to determine whether the property contains economic mineralization and to cover our anticipated administrative costs. We will also require additional financing if the costs of the exploration of the Copper Road I - VI claim are greater than anticipated. Even after completing all proposed exploration, we will not know if we have a commercially viable mineral deposit. Further, if we complete our current exploration program and are successful in identifying mineral deposits, substantial funds will be required on further drilling and engineering studies to ascertain whether we have commercially viable mineral deposit or reserve. We will require additional financing to sustain our business operations if we are not successful in earning revenues once exploration is complete. We do not currently have any arrangements for financing and may not be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including the market price for gold, investor acceptance of our property and general market conditions. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF BUSINESS FAILURE. We have not yet commenced exploration on the Copper Road I - VI claim. Accordingly, we have no way to evaluate the likelihood that our business will be successful. We were incorporated on February 22, 2005 and to date have been involved primarily in organizational activities and the acquisition of the purchase of a mineral property. We have not earned any revenues as of the date of this prospectus. Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. WE EXPECT TO INCUR SIGNIFICANT LOSSES IN THE FORESEEABLE FUTURE. Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues. For example, completion of exploration phases one and two are estimated to cost us $12,600. If we receive positive results from phases one and two, we expect to incur additional costs estimated of $12,600 to complete exploration phase three and 5 $29,400 for completion of phase four. We do not expect to receive any income while conducting the above-mentioned exploration phases. We threrefore expect to incur significant losses into the foreseeable future. BECAUSE OF THE SPECULATIVE NATURE OF EXPLORATION OF MINING PROPERTIES, THERE IS A SUBSTANTIAL RISK THAT OUR BUSINESS WILL FAIL. The search for valuable minerals as a business is extremely risky. The likelihood of our mineral property containing economic mineralization or reserves of gold is extremely remote. Exploration for minerals is a speculative venture necessarily involving substantial risk. In all probability, the Copper Road I - VI claim does not contain any reserves and funds that we spend on exploration will be lost. As well, problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan. WE NEED TO CONTINUE AS A GOING CONCERN IF OUR BUSINESS IS TO SUCCEED. OUR INDEPENDENT AUDITOR HAS RAISED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN. The report of our independent accountant to our audited financial statements for the period ended July 31, 2005 indicates that there are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such factors identified in the report are that we have an accumulated deficit since inception, we are likely to incur further losses in the development of our business and that we are dependent upon obtaining adequate financing and generating profitable operations. BECAUSE OF THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION, THERE IS A RISK THAT WE MAY INCUR LIABILITY OR DAMAGES AS WE CONDUCT OUR BUSINESS. The search for valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position. EVEN IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON THE COPPER ROAD I - - VI CLAIM, WE MAY NOT BE ABLE TO SUCCESSFULLY COMMENCE COMMERCIAL PRODUCTION. The Copper Road I - VI claim does not contain any known bodies of mineralization. If we complete our current exploration program and are successful in identifying mineral deposits, substantial funds will be required on further drilling and engineering studies to ascertain whether we have commercially viable mineral deposit or reserve. In addition, if our exploration programs are successful in establishing gold of commercial tonnage and grade, we will require additional funds in order to place the property into commercial production. We may not be able to obtain such financing. IF WE BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATION OR OTHER LEGAL UNCERTAINTIES, OUR BUSINESS WILL BE NEGATIVELY AFFECTED. There are several governmental regulations that materially restrict mineral property exploration and development. Under Canadian mining law, to engage in certain types of exploration will require work permits, the posting of bonds, 6 and the performance of remediation work for any physical disturbance to the land. While these current laws will not affect our current exploration plans, if we proceed to commence drilling operations on the Copper Road I - VI property, we will incur modest regulatory compliance costs. In addition, the legal and regulatory environment that pertains to the exploration of ore is uncertain and may change. Uncertainty and new regulations could increase our costs of doing business and prevent us from exploring for ore deposits. The growth of demand for ore may also be significantly slowed. This could delay growth in potential demand for and limit our ability to generate revenues. In addition to new laws and regulations being adopted, existing laws may be applied to mining that have not as yet been applied. These new laws may increase our cost of doing business with the result that our financial condition and operating results may be harmed. BECAUSE MANAGEMENT HAS NO TECHNICAL EXPERIENCE IN MINERAL EXPLORATION, OUR BUSINESS HAS A HIGHER RISK OF FAILURE. None of our officers or directors has any technical training or experience in the field of geology and specifically in the areas of exploring for, starting and operating a mine. As a result, we may not be able to recognize and take advantage of potential acquisition and exploration opportunities in the sector without the aid of qualified geological consultants. As well, with no direct training or experience in these areas, our management may not be fully aware of the specific requirements related to working in this industry. Their decisions and choices may not take into account standard engineering or managerial approaches mineral exploration companies commonly use. Consequently, our operations, earnings and ultimate financial success may suffer irreparable harm due to management's lack of training and experience in this industry. BECAUSE OUR PRESIDENT HAS OTHER BUSINESS INTERESTS, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATIONS, CAUSING OUR BUSINESS TO FAIL. Our president, Mr. Christopher Paterson only spends approximately 25% of his business time providing his services to us. While Mr. Paterson presently possesses adequate time to attend to our interests, it is possible that the demands on Mr. Paterson from his other obligations could increase with the result that he would no longer be able to devote sufficient time to the management of our business. IF A MARKET FOR OUR COMMON STOCK DOES NOT DEVELOP, SHAREHOLDERS MAY BE UNABLE TO SELL THEIR SHARES. There is currently no market for our common stock and no certainty that a market will develop. We currently plan to apply for listing of our common stock on the over the counter bulletin board upon the effectiveness of the registration statement, of which this prospectus forms a part. Our shares may never trade on the bulletin board. If no market is ever developed for our shares, it will be difficult for shareholders to sell their stock. In such a case, shareholders may find that they are unable to achieve benefits from their investment. 7 A SIGNIFICANT NUMBER OF RESTRICTED SHARES MAY BECOME AVAILABLE TO THE PUBLIC IN MAY, 2006. There are currently 4,000,000 restricted shares outstanding that may, under Rule 144, be available for sale to the public in May, 2006. Hence, the possible sale of those restricted shares may, in the future, dilute the percentage of free-trading shares held by a shareholder or subsequent purchaser of these securities, and may have a depressive effect on the price of our securities. A PURCHASER IS PURCHASING PENNY STOCK WHICH LIMITS HIS OR HER ABILITY TO SELL THE STOCK. The shares offered by this prospectus constitute penny stock under the Exchange Act. The shares will remain penny stock for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, thus limiting investment liquidity. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in our company will be subject to rules 15g-1 through 15g-10 of the Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock. Please refer to the "Plan of Distribution" section for a more detailed discussion of penny stock and related broker-dealer restrictions. FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in the "Risk Factors" section and elsewhere in this prospectus. USE OF PROCEEDS We will not receive any proceeds from the sale of the common stock offered through this prospectus by the selling shareholders. DETERMINATION OF OFFERING PRICE The selling shareholders will sell our shares at $0.01 per share until our shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices. We determined this offering price, based on the information provided by Mr. Sookochoff in the geology report, and upon the price of the last sale of our common stock to investors. DILUTION The common stock to be sold by the selling shareholders is common stock that is currently issued and outstanding. Accordingly, there will be no dilution to our existing shareholders. 8 SELLING SECURITYHOLDERS The selling shareholders named in this prospectus are offering all of the 4,500,000 shares of common stock offered through this prospectus. These shares were acquired from us in private placements that were exempt from registration under Regulation D of the Securities Act of 1933 and/or Regulation S of the Securities Act of 1933 and pursuant to a mineral property purchase agreement. The shares include the following: 1. 2,000,000 shares of our common stock that the selling shareholders acquired from us in an offering that was exempt from registration under Regulation D of the Securities Act of 1933 and/or Regulation S of the Securities Act of 1933 and was completed on July 3, 2005; and 2. 2,500,000 shares of our common stock that the selling shareholders acquired from us in an offering that was exempt from registration under Regulation D of the Securities Act of 1933 and/or Regulation S of the Securities Act of 1933 and was completed on July 27, 2005. The following table provides as of the date of this prospectus, information regarding the beneficial ownership of our common stock held by each of the selling shareholders, including: 1. the number of shares owned by each prior to this offering; 2. the total number of shares that are to be offered for each; 3. the total number of shares that will be owned by each upon completion of the offering; and 4. the percentage owned by each upon completion of the offering.
Total Number of Shares to Total Shares Percent Be Offered For Owned Upon Owned Upon Name Of Shares Owned Selling Completion Completion Selling Prior to This Shareholders of this of This Stockholder Offering Account Offering Offering - ----------- -------- ------- -------- -------- Carolyn Roberts 250,000 250,000 Nil Nil 63-52A Street Delta, BC V4M2Z6 William Roberts 250,000 250,000 Nil Nil 63-52A Street Delta, BC V4M2Z6 Lori Kliman 250,000 250,000 Nil Nil 1506-989 Richards St Vancouver, BC V6B6R6 James Etherington 250,000 250,000 Nil Nil 909-1068 Hornby St Vancouver, BC V6Z2Y7 Beulah Harriot 250,000 250,000 Nil Nil 217-330 E. 7th Avenue Vancouver, BC V7T4K5 Todd Czarnecki 250,000 250,000 Nil Nil 6352 Caminito Luisito San Diego, CA 92111
9
Total Number of Shares to Total Shares Percent Be Offered For Owned Upon Owned Upon Name Of Shares Owned Selling Completion Completion Selling Prior to This Shareholders of this of This Stockholder Offering Account Offering Offering - ----------- -------- ------- -------- -------- Terri Proctor 250,000 250,000 Nil Nil 1457 Pacific St Redlands, CA 92373 Janet Eisele 250,000 250,000 Nil Nil 6051 Las Nubes Drive Las Vegas, NV 89142 John Kovacevic 100,000 100,000 Nil Nil 5773 Seaview Rd W. Vancouver, BC V7W1P9 Stuart Omsen 100,000 100,000 Nil Nil 853 West 17th Ave Vancouver, BC V5Z1V3 Paul Rickman 100,000 100,000 Nil Nil 2574 Byron Rd N. Vancouver, BC V7H1M2 Stephen Rickman 100,000 100,000 Nil Nil 1506-121 W. 15th St N. Vancouver, BC V7M1R8 George Rickman 100,000 100,000 Nil Nil 786 Edgewood Rd N. Vancouver, BC V7R1Y4 James Ward 100,000 100,000 Nil Nil 2144 Whitman Ave N. Vancouver, B.C. V7H2C5 Adrian Crawford 100,000 100,000 Nil Nil 1-1155 Melville St Vancouver, B.C. V6E4C4 Beverley Paterson 100,000 100,000 Nil Nil 17365 SW 13th St Pembroke Pines, FL 33029
10
Total Number of Shares to Total Shares Percent Be Offered For Owned Upon Owned Upon Name Of Shares Owned Selling Completion Completion Selling Prior to This Shareholders of this of This Stockholder Offering Account Offering Offering - ----------- -------- ------- -------- -------- Dan Perko 100,000 100,000 Nil Nil 701-183 Keefer Pl Vancouver, B.C. V6B6B9 Meredith Powel 100,000 100,000 Nil Nil 507-1383 Marina Side Crescent Vancouver, B.C. V6Z2W9 Shanon Rickman 100,000 100,000 Nil Nil 415-3608 Deercrest Dr. N. Vancouver, B.C. V7G2S8 Tom Byrne 100,000 100,000 Nil Nil 1107-1250 Burnaby St Vancouver, BC V6E1P6 Don Histed 100,000 100,000 Nil Nil 343-2655 Cranberry Dr. Vancouver, BC V6K4V5 Carol Dahlberg 100,000 100,000 Nil Nil 842 Cedros Ave Solana Beach, CA 92075 Ben Bohl 100,000 100,000 Nil Nil 842 Cedros Ave Solana Beach, CA 92075 Diane McDaniel 100,000 100,000 Nil Nil 2263 E. Mercer Ln Phoenix, AZ 85028 Danny Love 100,000 100,000 Nil Nil 76 F Street Chula Vista, CA 91910 Barbara Daly 100,000 100,000 Nil Nil 2961 Columbia St. #16 San Diego, CA 92103
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Total Number of Shares to Total Shares Percent Be Offered For Owned Upon Owned Upon Name Of Shares Owned Selling Completion Completion Selling Prior to This Shareholders of this of This Stockholder Offering Account Offering Offering - ----------- -------- ------- -------- -------- Laurel O'Neill 100,000 100,000 Nil Nil PO Box 17724 San Diego, CA 92177 Edith Reyes 100,000 100,000 Nil Nil 2640 Tablerock Ave Chula Vista, CA 91914 Vanesa Trester 50,000 50,000 Nil Nil 404-1850 W. 8th Ave Vancouver, B.C. V6J5G3 Patti Ransom 50,000 50,000 Nil Nil 401-1107 Homer St Vancouver, BC V6B2Y1 Tina Marie Steen 50,000 50,000 Nil Nil 583 E. 27th Ave Vancouver, B.C. V5V2K7 Michelle Boey 50,000 50,000 Nil Nil 504-2288 Pine St Vancouver, BC V6J5G4 Barb Dean 50,000 50,000 Nil Nil 2345 Cotswold Crescent Unit 21 Burlington, ON L7P4S4 Robert Stoikos 50,000 50,000 Nil Nil 5233 Thornburn Dr. Burlington, ON L7L6R3 Jenna Kelly 50,000 50,000 Nil Nil 102-1812 W. 7th Ave Vancouver, BC V6J1S8 Laura Homiston 50,000 50,000 Nil Nil 1222 1/2Locust St San Diego, CA 92106
12
Total Number of Shares to Total Shares Percent Be Offered For Owned Upon Owned Upon Name Of Shares Owned Selling Completion Completion Selling Prior to This Shareholders of this of This Stockholder Offering Account Offering Offering - ----------- -------- ------- -------- -------- Karen Neudecker 50,000 50,000 Nil Nil 313 Glen Creek Dr. Bonita, CA 91902 Melissa Granados 50,000 50,000 Nil Nil 3752 Mykonos Ln Suite 107 San Diego, CA 92130
Each of the above shareholders beneficially owns and has sole voting and investment over all shares or rights to the shares registered in his or her name. The numbers in this table assume that none of the selling shareholders sells shares of common stock not being offered in this prospectus or purchases additional shares of common stock, and assumes that all shares offered are sold. The percentages are based on 8,500,000 shares of common stock outstanding on the date of this prospectus. None of the selling shareholders: (1) has had a material relationship with us other than as a shareholder at any time within the past three years; (2) has ever been one of our officers or directors; or (3) is a broker-dealer or affiliate of a broker dealer. Shareholder, Beverly Paterson, is the owner of 100,000 shares. She is the mother of our President and Director, Christopher Paterson. PLAN OF DISTRIBUTION There is presently no public market for our common stock. We anticipate applying for trading of our common stock on the over the counter bulletin board ("OTCBB") upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares will have a market value or that a market for our securities can be sustained if developed. To be listed on the over the OTCBB, we must engage a market maker, who will apply for quotation on our behalf. We have not yet engaged a market maker. It is typical for this process to take anywhere from three to six months from the time a market maker is engaged until a company is listed on the OTCBB. Quotation on the OTCBB may result in increased liquidity of our shares. The selling shareholders may sell some or all of their common stock in one or more transactions, including block transactions. 13 The selling shareholders will sell our shares at $0.01 per share until our shares are quoted on the OTC Bulletin Board, and thereafter at prevailing market prices or privately negotiated prices. We determined this offering price arbitrarily based upon the price of the last sale of our common stock to investors. The shares may also be sold in compliance with the Securities and Exchange Commission's Rule 144. We are bearing all costs relating to the registration of the common stock. These are estimated to be $6,553.30. The selling shareholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the common stock. The selling shareholders must comply with the requirements of the Securities Act and the Exchange Act in the offer and sale of the common stock. In particular, during such times as the selling shareholders may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable law and may, among other things: 1. Not engage in any stabilization activities in connection with our common stock; 2. Furnish each broker or dealer through which common stock may be offered, such copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and 3. Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Exchange Act. The Securities Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the Commission, which: * contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; * contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties; * contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask price; * contains a toll-free telephone number for inquiries on disciplinary actions; * defines significant terms in the disclosure document or in the conduct of trading penny stocks; and * contains such other information and is in such form (including language, type, size, and format) as the Commission shall require by rule or regulation; 14 The broker-dealer also must provide, prior to proceeding with any transaction in a penny stock, the customer: * with bid and offer quotations for the penny stock; * details of the compensation of the broker-dealer and its salesperson in the transaction; * the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and * monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling those securities. LEGAL PROCEEDINGS We are not currently a party to any legal proceedings. The name and address for the agent for service of process in Nevada is Robert C. Harris, 564 Wedge Lane, Fernley, NV 89408. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS Our executive officers and directors and their respective ages as of the date of this prospectus are as follows: DIRECTORS: Name of Director Age - ---------------- --- Christopher Paterson 39 Robert Roth 34 EXECUTIVE OFFICERS: Name of Officer Age Office - --------------- --- ------ Christopher Paterson 39 President, CEO, Secretary, Treasurer and Director BIOGRAPHICAL INFORMATION Set forth below is a brief description of the background and business experience of our executive officer and director for the past five years. MR. CHRISTOPHER PATERSON has acted as our President, CEO, Secretary and Treasurer since our incorporation on February 22, 2005. From 2000 to present, Mr. Paterson acted as a Business Consultant and investor. 15 After receiving his degree in Marketing in 1987 Mr. Paterson went on to work for John Tann Ltd. (UK) the Oldest and most established Security Equipment Manufacturer in the world, where he held various positions in Sales and Marketing until 1994. He then worked for Honeywell Ltd. where he was responsible for the financial and large commercial portfolios for the company until 1998. With his proven management skills and vast business experience, including the funding of Mining and Exploration companies, he is positioned to capitalize on the opportunities present in this growing sector. Mr. Paterson does not have any professional training or technical credentials in the exploration, development and operation of mines. Mr. Paterson intends to devote approximately 25% of his business time to our affairs. MR. ROBERT ROTH received his Masters in Business Administration from Cal Poly San Luis Obispo, in 1998. Since that date, Mr. Roth has assisted companies in the areas of marketing, product management, process management, usability, public relations, advertising, customer retention, communications and graphic design. From May, 1998 to present, Mr. Roth has worked with such companies as: SimpleNet, Broadcast.com, Yahoo!, NetIdentity, NamePlanet, ThatYear, and Infommersion. Mr. Roth has experience as a member of the board of directors for the following organizations: iLounge San Diego Conference Planning Committee, San Diego iMarketers, NIRSA. TERM OF OFFICE Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officer is appointed by the board of directors and will hold office until removed by the board. SIGNIFICANT EMPLOYEES We have no significant employees other than the officer and director described above. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding common stock as of the date of this prospectus, and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly. Amount of Title of Name and address beneficial Percent Class of beneficial owner ownership of class ----- ------------------- --------- -------- COMMON Christopher Paterson 2,000,000 24.84% STOCK President, CEO Secretary and Treasurer Director 200 - 675 West Hastings St. Vancouver, BC V6B 1N2 CANADA 16 Amount of Title of Name and address beneficial Percent Class of beneficial owner ownership of class ----- ------------------- --------- -------- Robert Roth 2,000,000 24.84% Director 6354 Caminito del Cervato San Diego, CA 92111 COMMON All officers and directors 4,000,000 49.68% STOCK as a group that consists of shares two persons The percent of class is based on 8,500,000 shares of common stock issued and outstanding as of the date of this prospectus. DESCRIPTION OF SECURITIES GENERAL Our authorized capital stock consists of 120,000,000 shares of common stock at a par value of $0.001 per share. COMMON STOCK As of September 28, 2005, there were 8,500,000 shares of our common stock issued and outstanding that are held by 40 stockholders of record. Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock. PREFERRED STOCK We do not have an authorized class of preferred stock. DIVIDEND POLICY We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future. 17 SHARE PURCHASE WARRANTS We have not issued and do not have outstanding any warrants to purchase shares of our common stock. OPTIONS We have not issued and do not have outstanding any options to purchase shares of our common stock. CONVERTIBLE SECURITIES We have not issued and do not have outstanding any securities convertible into shares of our common stock or any rights convertible or exchangeable into shares of our common stock. INTEREST 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 common stock 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 registrant. Nor was any such person connected with the registrant as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee. The financial statements included in this prospectus and the registration statement have been audited by Moen and Company, Chartered Accountants, to the extent and for the periods set forth in their report appearing elsewhere in this document and in the registration statement filed with the SEC, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting. DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES Our directors and officers are indemnified as provided by the Nevada Revised Statutes and our Bylaws. These provisions provide that we shall indemnify a director or former director against all expenses incurred by him by reason of him acting in that position. The director may also cause us to indemnify an officer, employee or agent in the same fashion. We have been advised that in the opinion of the Securities and Exchange Commission 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 property for indemnification against such liabilities is asserted by our director, officer, 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 the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court's decision. 18 ORGANIZATION WITHIN LAST FIVE YEARS We were incorporated on February 22, 2005 under the laws of the state of Nevada. On that date, Christopher Paterson was appointed as our director. As well, Mr. Paterson was appointed as our president, CEO, secretary and treasurer. On May 4, 2005, Mr. Paterson appointed a second director, Robert Roth, to our board of directors. DESCRIPTION OF BUSINESS IN GENERAL We intend to commence operations as an exploration stage company. We will be engaged in the acquisition, and exploration of mineral properties with a view to exploiting any mineral deposits we discover that demonstrate economic feasibility. We own a 100% undivided right, title and interest in and to a mineral claim known as the Copper Road I - VI claim. There is no assurance that a commercially viable mineral deposit exists on the property. Further, exploration for minerals is a speculative venture necessarily involving substantial risk. In all probability, the Copper Road I - VI claim does not contain any reserves and funds that we spend on exploration will be lost. In addition, our auditors have issued a going concern opinion, which is set forth in Note 1 to the audited Financial Statements included in this Registration Statement. Our plan of operation is to conduct exploration work on the Copper Road I - VI claim in order to ascertain whether it possesses economic quantities of gold. There can be no assurance that an economic mineral deposit exists on the Copper Road I - VI claim until appropriate exploration work is done and an economic evaluation based on such work concludes that production of minerals from the property is economically feasible. Even if we complete our proposed exploration programs on the Copper Road I - VI claim 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. Mineral property exploration is typically conducted in phases. Each subsequent phase of exploration work is recommended by a geologist based on the results from the most recent phase of exploration. We have not yet engaged a geologist to oversee our exploration phases. Accordingly, we have not yet commenced the initial phase of exploration on the Copper Road I - VI claim. Once we have completed each phase of exploration, we will make a decision as to whether or not we proceed with each successive phase based upon the analysis of the results of that program. Our directors will make this decision based upon the recommendations of the independent geologist who oversees the program and records the results. We intend to commence phase one of our exploration program in the Spring, 2006, weather permitting. We anticipate that phase one shall take approximately one month to complete. Phases two and three should each take two months to complete. Phase four is anticipated to take four months until completion. 19 DESCRIPTION, LOCATION AND ACCESS The Copper Road I - VI claim property is located on Quadro Island, which is between Vancouver Island and the British Columbia mainland, within three kilometres off the east coast of Vancouver Island. The coordinates of the property are 125(degree) 18' 05" W Longitude and 50(degree) 11' 05" N Latitude in the Nanaimo Mining Division, within Map Sheet NTS 082K03W. The property is accessible by ferry from the city of Campbell River to Quathiaski Cove on Quadra Island, then inland by road approximately 21 kilometres. Facilities and skilled population Campbell River are readily available and will provide all the necessary services needed for property exploration. According to the report provided by Mr. Sookochoff, sufficient water for all phases of the exploration program could be available from numerous water courses within the confines of the property. THE COPPER ROAD I - VI PROPERTY PURCHASE AGREEMENT On March 3, 2005, we entered into an agreement with Larry Solstad of Vancouver, British Columbia, whereby he sold a 100% undivided right, title and interest in and to the Copper Road I - VI mineral claim for $3,500. The Copper Road I - VI claim consists of one mineral claim comprising a six cell claim block with an area of approximately 150 hectacres. The property includes a mineralized shear zone from which historic production of some 4,736 tonnes of mineralized material was reportedly mined from which approximately 87,181 grams silver, 716 grams gold, and 182,729 kilograms of copper were recovered. There are no conditions we must meet to retain title to the property. INFRASTRUCTURE AND CONDITION OF THE PROPERTY The Copper Road I - VI claim is free of mineral workings. There is no equipment or other infrastructure facilities located on the property. There is no power source located on the property. We will need to use portable generators if we require a power source for exploration of the Copper I - VI claim. MINERALIZATION The Copper Road I - VI claim mineralization is descried in the 1963 Minister of Mines Report as comprised of quartz and copper sulfides occurring in variable amounts within the shear zone (a tabular zone of rock which has been crushed due to "shearing" along a fault or zone of weakness). Historic production was obtained from two main mineralized "shoots" hosted by a shear zone indicated to have a width of up to nine metres and to extend for 1,400 metres along strike (the direction of a vein or rock formation measured on a level surface). Mineralization, although sparse in drill hole intersections testing an IP anomaly 1,000 feet distant, has been defined to a depth of 200 feet. Mineralization is comprised of quartz, calcite, bornite, chalcocite, chalcopyrite, native copper and malachite. The complete text of the 1963 Minister of Mines Report can be found on the Ministry of Energy, Mines and Petroleum Resources' website at http://www.em.gov.bc.ca/dl/gsbpubs/annualreports/ar_1963.pdf. 20 EXPLORATION HISTORY Previous exploration included diamond drilling and geophysical surveys from which estimates of mineral reserves were 115,000 tons copper and silver grading 2.8% Cu and 0.5oz Ag per ton by Anaconda by H. Wahl, P.Eng., (1983) and 60,000 tons of +2% copper subject to confirmation by drilling and underground exploration (Wahl, 1983). Metallurgical tests completed in 1998 indicated that a recovery of 91% of the copper could be achieved. It was stated that the good cupper recover by flotation suggests that an all-flotation procedure may be a viable process for recovery. GEOLOGICAL ASSESSMENT REPORT: COPPER ROAD I - VI CLAIM We commissioned Mr. Laurence Sookochoff to prepare a geological report on the Copper Road I - VI claim. Mr. Sookochoff holds bachelor if science degree in geology from the University of British Columbia and has practiced his profession as a geologist for over 38 years. He is a member of the Association of Professional Engineers and Geoscientists of the Province of British Columbia. The report summarizes the results of prior exploration and makes recommendations for further exploration. CONCLUSIONS In his report, Mr. Sookochoff concludes that the Copper Road I - VI claim has the potential to host significant amounts of mineralization and that further exploration of the property is warranted. Mr. Sookochoff recommends a four phase exploration program to further delineate the mineralized system currently recognized on the Copper Road I - VI claim. The program would consist of compiling and analyzing previous exploration data, investigation of anomalous areas along the shear zone, a geological review, and geophysical surveying using both magnetic and electromagnetic instrumentation in detail over the area of the showings and in a regional survey. Geophysical surveying is the search for mineral deposits by measuring the physical property of near-surface rocks, and looking for unusual responses caused by the presence of mineralization. Electrical, magnetic, gravitational, seismic and radioactive properties are the ones most commonly measured. Geophysical surveys are applied in situations where there is insufficient information obtainable from the property surface to allow informed opinions concerning the merit of properties. PROPOSED BUDGET Approximate costs for the recommended two phase program are as following: Phase I Compilation of previous exploration data; Analysis of the data, compilation map And investigate the anomalous areas along The shear zone that are indicated to contain mineralization TOTAL PHASE I COSTS: $6,300.00 21 Phase II Localized general magnetometer and soil Surveys over the prime indicated anomalous zones TOTAL PHASE II COSTS: $6,300.00 Phase III Detailed magnetometer and soil surveys. TOTAL PHASE III COSTS: $12,600.00 Phase IV Test diamond drilling of the targets delineated within the potential exploration sites. TOTAL PHASE IV COSTS: $29,400.00 ---------- GRAND TOTAL EXPLORATION COSTS: $54,600.00 ========== 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 beyond completion of the currently planned work programs. 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 environment 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; - An assessment of all material to be left on the surface will need to be environmentally benign; 22 - Ground water 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. EMPLOYEES We have no employees as of the date of this prospectus other than our director. RESEARCH AND DEVELOPMENT EXPENDITURES We have not incurred any other research or development expenditures since our incorporation. SUBSIDIARIES We do not have any subsidiaries. PATENTS AND TRADEMARKS We do not own, either legally or beneficially, any patents or trademarks. REPORTS TO SECURITY HOLDERS Although we are not required to deliver a copy of our annual report to our security holders, we will voluntarily send a copy of our annual report, including audited financial statements, to any registered shareholder who requests it. We will not be a reporting issuer with the Securities and Exchange Commission until our registration statement on Form SB-2 is declared effective. We have filed a registration statement on Form SB-2, under the Securities Act of 1933, with the Securities and Exchange Commission with respect to the shares of our common stock offered through this prospectus. This prospectus is filed as a part of that registration statement, but does not contain all of the information contained in the registration statement and exhibits. Statements made in the registration statement are summaries of the material terms of the referenced contracts, agreements or documents of the company. We refer you to our registration statement and each exhibit attached to it for a more detailed description of matters involving the company, and the statements we have made in this prospectus are qualified in their entirety by reference to these additional materials. You may inspect the registration statement, exhibits and schedules filed with the Securities and Exchange Commission at the Commission's principal office in Washington, D.C. Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, 100 F Street NE, Washington, D.C. 20002. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The Securities and Exchange Commission also maintains a web site at http://www.sec.gov that contains reports, proxy statements and information regarding registrants that file electronically with the Commission. Our registration statement and the referenced exhibits can also be found on this site. 23 PLAN OF OPERATIONS Our plan of operation for the twelve months following the date of this prospectus is to complete the recommended phase one and two exploration programs on the Copper Road I - VI claim. We anticipate that the cost of these programs will be approximately $12,300. We anticipate commencing the phase one program in Winter of 2005 and completing it within three months of commencement. We anticipate commencing the phase two program in the Spring of 2006 and completing it within four months of commencement. We have not retained a geologist to conduct this exploration work. Further, exploration for minerals is a speculative venture necessarily involving substantial risk. In all probability, the Copper Road I - VI claim does not contain any reserves and funds that we spend on exploration will be lost. In the next 12 months, we also anticipate spending an additional $4,000.00 on administrative expenses, including fees payable in connection with the filing of this registration statement and complying with reporting obligations. Total expenditures over the next 12 months are therefore expected to be $16,600.00. We have the cash on hand necessary to cover anticipated costs of the phase one and two exploration programs. We will require additional funding in order to cover all of our anticipated administrative expenses and to proceed with additional exploration work on the property beyond the first two recommended phases. Further, if we complete our current exploration program and are successful in identifying mineral deposits, substantial funds will be required on further drilling and engineering studies to ascertain whether we have commercially viable mineral deposit or reserve. We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding. We do not have any arrangements in place for any future equity financing. RESULTS OF OPERATIONS FOR THE PERIOD FROM INCEPTION THROUGH JULY 31, 2005 We have not earned any revenues from our incorporation on February 22, 2005 to July 31, 2005. We do not anticipate earning revenues unless we enter into commercial production on the Copper Road I - VI claim, which is doubtful. We have not commenced the exploration stage of our business and can provide no assurance that we will discover economic mineralization on the property, or if such minerals are discovered, that we will enter into commercial production. We incurred operating expenses in the amount of $9,808.00 for the period from our inception on February 22, 2005 to July 31, 2005. These operating expenses were comprised of: accounting and audit fees, bank charges, mineral property costs and resource expenditure, and incorporation costs. We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities. For these reasons our auditors believe that there is substantial doubt that we will be able to continue as a going concern. 24 DESCRIPTION OF PROPERTY We do not possess any interest in real property. Our interest in the Copper Road I - VI mineral claim only provides us with the right to explore for and extract minerals from the property area. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Our president, Mr. Christopher Paterson, provides management services and office premises to us free of charge. From our inception on February 22, 2005 to July 31, 2005, the management services were valued at $3,500.00 and the donated office premises were valued at $1,000.00. These amounts were charged to operations. Otherwise, none of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us: * Any of our directors or officers; * Any person proposed as a nominee for election as a director; * Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; * Our sole promoter, Christopher James Paterson; * Any member of the immediate family of any of the foregoing persons. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS NO PUBLIC MARKET FOR COMMON STOCK There is presently no public market for our common stock. We anticipate applying for trading of our common stock on the over the counter bulletin board upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize. STOCKHOLDERS OF OUR COMMON SHARES As of the date of this registration statement, we have 34 registered shareholders. RULE 144 SHARES A total of 4,000,000 shares of our common stock are available for resale to the public after May 4, 2006, in accordance with the volume and trading limitations of Rule 144 of the Act. In general, under Rule 144 as currently in effect, a person who has beneficially owned shares of a company's common stock for at least one year is entitled to sell within any three month period a number of shares that does not exceed the greater of: 1. 1% of the number of shares of the company's common stock then outstanding which, in our case, will equal 85,000 shares as of the date of this prospectus; or 25 2. the average weekly trading volume of the company's common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about the company. Under Rule 144(k), a person who is not one of the company's affiliates at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. Hence, the possible sale of those restricted shares may, in the future, dilute the percentage of free-trading shares held by a shareholder or subsequent purchaser of these securities, and may have a depressive effect on the price of our securities. As of the date of this prospectus, persons who are our affiliates hold all of the 4,000,000 shares that may be sold pursuant to Rule 144. REGISTRATION RIGHTS We have not granted registration rights to the selling shareholders or to any other persons. DIVIDENDS There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend: 1. we would not be able to pay our debts as they become due in the usual course of business; or 2. our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution. We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The table below summarizes all compensation awarded to, earned by, or paid to our executive officer by any person for all services rendered in all capacities to us for the fiscal period from our inception on February 22, 2005 to July 31, 2005 and the subsequent period to the date of this prospectus. ANNUAL COMPENSATION
Restricted Other Stock Options/ LTIP Other Name Title Year Salary Bonus Comp. Awarded SARs(#) payouts($) Comp - ---- ----- ---- ------ ----- ----- ------- ------- ---------- ---- Christopher Pres. CEO 2005 $0 0 0 0 0 0 0 Paterson Sec. Tres.
26 STOCK OPTION GRANTS We have not granted any stock options to the executive officers since our inception. CONSULTING AGREEMENTS We do not have any employment or consulting agreement with Mr. Paterson. We do not pay him any amount for acting as director. FINANCIAL STATEMENTS INDEX TO FINANCIAL STATEMENTS: 1. Auditors' Report; 2. Audited financial statements for the period ending July 31, 2005, including: a. Report of Independent Registered Public Accounting Firm; b. Balance Sheet; c. Statement of Operations; d. Statement of Cash Flows; e. Statement of Stockholders' Equity; and f. Notes to the Financial Statements CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE We have had no changes in or disagreements with our accountants. 27 CANTOP VENTURES, INC. (A NEVADA CORPORATION) (AN EXPLORATION STAGE COMPANY) FINANCIAL STATEMENTS JULY 31, 2005 (AS RESTATED) F-1 MOEN AND COMPANY CHARTERED ACCOUNTANTS
Securities Commission Building Member: PO Box 10129, Pacific Centre Canadian Institute of Chartered Accountants Suite 1400 - 701 West Georgia Street Institute of Chartered Accountants of British Columbia Institute of Management Accountants (USA) (From 1965) Vancouver, British Columbia Canada V7Y 1C6 Registered with: Public Company Accounting Oversight Board (USA) (PCAOB) Telephone: (604) 662-8899 Canadian Public Accountability Board (CPAB) Fax: (604) 662-8809 Canada - British Columbia Public Practice Licence Email: moenca@telus.net - ---------------------------------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Directors of Cantop Ventures, Inc. We have audited the accompanying balance sheet of Cantop Ventures, Inc. as of July 31, 2005 and the related statements of operations, retained earnings (deficit), cash flows and stockholders' equity for the period from the date of inception on February 22, 2005, to July 31, 2005. 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. 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 evaluation 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 Cantop Ventures Inc. as of July 31, 2005 and the results of its operations and its cash flows for the period from inception on February 22, 2005 to July 31, 2005 in conformity with U.S. generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, conditions exist which raise substantial doubt about the Company's ability to continue as a going concern unless it is able to generate sufficient cash flows to meet its obligations and sustain its operations. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ "Moen and Company" Vancouver, British Columbia, Canada ("Signed") Chartered Accountants September 14, 2005, and double-dated December 9, 2005, as to note 8 F-2 CANTOP VENTURES, INC. (A Nevada Corporation) (An Exploration Stage Company) BALANCE SHEET At July 31, 2005 (Expressed in US Dollars) - -------------------------------------------------------------------------------- July 31, 2005 -------- (As Restated, Note 8) ASSETS Current Assets Cash $ 22,034 -------- Total Assets $ 22,034 -------- LIABILITIES Current Liabilities Accounts payable and accrued liabilities $ 3,642 Due to related party (Note 7) 700 -------- Total Liabilities 4,342 -------- STOCKHOLDERS' EQUITY Common Stock (Note 4) 120,000,000 shares authorized, consisting of 100,000,000 common shares, with a $0.001 par value, and 20,000,000 preferred shares with a $0.001 par value. 8,500,000 common shares issued and outstanding Par value 8,500 Additional Paid in Capital 27,000 -------- 35,500 Common stock subscription unpaid (Note 5) (3,500) Deficit Accumulated During The Exploration Stage (14,308) -------- Total Stockholders' Equity 17,692 -------- Total Liabilities and Stockholders' Equity $ 22,034 ======== Approved on Behalf of the Board: Subsequent Events: Note 5 __________, Director and Chief Executive Officer __________, Director and Chief Financial Officer The accompanying notes are an integral part of these financial statements F-3 CANTOP VENTURES, INC. (A Nevada Corporation) (An Exploration Stage Company) STATEMENT OF OPERATIONS (Expressed in US Dollars) - -------------------------------------------------------------------------------- From February 22, 2005 (Inception) to July 31, 2005 ----------- (As Restated, Note 8) Revenue $ -- ----------- Expenses Accounting and audit fees 3,642 Management Services 3,500 Office Rent 1,000 Bank charges 66 Mineral property costs and resource expenditure 5,500 Incorporation costs 600 ----------- Total Expenses 14,308 ----------- Net loss for the period $ (14,308) ----------- Basic and diluted loss per share (0.01) =========== Basic and Diluted Weighted average number of shares outstanding 3,284,277 =========== The accompanying notes are an integral part of these financial statements F-4 CANTOP VENTURES, INC. (A Nevada Corporation) (An Exploration Stage Company) STATEMENT OF RETAINED EARNINGS (DEFICIT) (Expressed in US Dollars) - -------------------------------------------------------------------------------- From February 22, 2005 (Inception) to July 31, 2005 ----------- (As Restated, Note 8) Retained earnings, beginning of the period $ -- Net loss for the period 14,308 -------- Retained earnings (Deficit), end of period $(14,308) ======== The accompanying notes are an integral part of the financial statements F-5 CANTOP VENTURES, INC. (A Nevada Corporation) (An Exploration Stage Company) STATEMENT OF CASH FLOWS (Expressed in US Dollars) - -------------------------------------------------------------------------------- From February 22, 2005 (Inception) to July 31, 2005 ----------- (As Restated, Note 8) Operating Activities Net loss for the period $(14,308) Change in non-cash working capital balance related to operations Donated Services Expensed (Note 8) 4,500 Accounts payable and accrued liabilities 3,642 -------- Net cash used in operating activities (6,166) -------- Net cash from investing activities -- -------- Financing Activities Capital stock issued 31,000 Capital stock subscription unpaid (Note 5) (3,500) Due to related party 700 -------- Net cash from financing activities 28,200 -------- Increase (decrease) in cash during the period 22,034 Cash, beginning of the period -- -------- Cash, end of the period $ 22,034 ======== Supplemental Disclosure Interest paid -- Income taxes paid -- The accompanying notes are an integral part of these financial statements F-6 CANTOP VENTURES, INC. (A Nevada Corporation) (An Exploration Stage Company) STATEMENT OF STOCKHOLDERS' EQUITY (Expressed in US Dollars) (As Restated, Note 8) - --------------------------------------------------------------------------------
Deficit Accumulated Common Shares Additional Common During the ---------------------- Paid-in Shares Exploration Number Par Value Capital Subscription Stage Total ------ --------- ------- ------------ ----- ----- @ $0.001 per share Balance February 22, 2005 (Date of Inception) -- $ -- $ -- $ -- $ -- $ -- Capital stock issued for cash - March, 2005 at $0.001 2,000,000 2,000 -- -- -- 2,000 - June, 2005 at $0.001 3,500,000 3,500 -- -- -- 3,500 - July, 2005 at $0.001 500,000 500 -- -- -- 500 - July, 2005 at $0.01 2,500,000 2,500 22,500 -- -- 25,000 Capital stock subscription (3,500) -- (3,500) Donated Services (Note 8) 4,500 4,500 Net loss for the period from May 26, 2004 (inception) to July 31, 2005 -- -- -- -- (14,308) (14,308) ---------- ------ -------- ------- -------- -------- Balance, July 31, 2005 8,500,000 $8,500 $ 27,000 $(3,500) $(14,308) $ 17,692 ========== ====== ======== ======= ======== ========
The accompanying notes are an integral part of these financial statements F-7 CANTOP VENTURES, INC. (A Nevada Corporation) (An Exploration Stage Company) NOTES TO THE FINANCIAL STATEMENTS July 31, 2005 (As Restated, Note 8) - -------------------------------------------------------------------------------- Note 1 NATURE AND CONTINUANCE OF OPERATIONS Cantop Ventures Inc. (the "Company") was incorporated under the law of the State of Nevada on February 22, 2005. The Company is an Exploration Stage Company as defined by Statement of Financial Accounting Standard ("SFAS") No. 7. The Company has acquired a mineral property located in the Province of British Columbia, Canada, and has not yet determined whether this property contains reserves that are economically recoverable. The recoverability of amounts from 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 has adopted July 31 as its fiscal year-end. Going Concern These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America applicable to a going concern which assume that the Company will realize its assets and discharge its liabilities in the normal course of business. The Company has incurred losses since inception of $9,808 to July 31, 2005 and might not have sufficient operating funds for the next twelve months. These factors create doubt as to the ability of the Company to continue as a going concern. Realization values may be substantially different from the carrying values as shown in these financial statements should the Company be unable to continue as a going concern. Management is in the process of identifying sources for additional financing to fund the ongoing development of the Company's business. Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES MINERAL PROPERTY COSTS The Company is in the exploration stage since its incorporation and inception on February 22, 2005 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property acquisition and 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. USE OF ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with US 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-8 CANTOP VENTURES, INC. (A Nevada Corporation) (An Exploration Stage Company) NOTES TO THE FINANCIAL STATEMENTS July 31, 2005 (As Restated, Note 8) - -------------------------------------------------------------------------------- Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (cont'd) FOREIGN CURRENCY TRANSLATION The Company's functional and reporting currency is the United States dollar. The financial statements of the Company are translated to United States dollars in accordance with SFAS No. 52 "Foreign Currency Translation". Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. There is no foreign currency translation adjustment to July 31, 2005. 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. The Company's operations are in Canada and virtually all of its assets and liabilities are giving rise to significant exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company's operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk. ENVIRONMENTAL COSTS Environmental expenditures that relate to current operations are charged to operations 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 charged to operations. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, 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 a plan of action based on the then known facts. 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, and is reduced to Nil by a valuation reserve. F-9 CANTOP VENTURES, INC. (A Nevada Corporation) (An Exploration Stage Company) NOTES TO THE FINANCIAL STATEMENTS July 31, 2005 (As Restated, Note 8) - -------------------------------------------------------------------------------- Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (cont'd) BASIC AND DILUTED NET LOSS PER SHARE The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share". SFAS No. 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 using the treasury stock 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. STOCK-BASED COMPENSATION In December 2002, the Financial Accounting Standards Board issued Financial Accounting Standard No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure" ("SFAS No. 148"), an amendment of Financial Accounting Standard No. 123 "Accounting for Stock-Based Compensation" ("SFAS No. 123"). The purpose of SFAS No. 148 is to: (1) provide alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation, (2) amend the disclosure provisions to require prominent disclosure about the effects on reported net income of an entity's accounting policy decisions with respect to stock-based employee compensation, and (3) to require disclosure of those effects in interim financial information. The disclosure provisions of SFAS No. 148 were effective for the Company for the year ended July 31, 2005. The Company has elected to continue to account for stock-based employee compensation arrangements in accordance with the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees", ("APB No. 25") and comply with the disclosure provisions of SFAS No. 123 as amended by SFAS No. 148 as described above. In addition, in accordance with SFAS No. 123 the Company applies the fair value method using the Black-Scholes option-pricing model in accounting for options granted to consultants. Under APB No. 25, compensation expense for employees is recognized based on the difference, if any, on the date of grant between the estimated fair value of the Company's stock and the amount an employee must pay to acquire the stock. Compensation expense is recognized immediately for past services and pro-rata for future services over the option-vesting period. To July 31, 2005 the Company has not granted any stock options. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with SFAS No. 123 and the conclusions reached by the Emerging Issues Task Force in Issue No. 96-18. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by EITF 96-18. F-10 CANTOP VENTURES, INC. (A Nevada Corporation) (An Exploration Stage Company) NOTES TO THE FINANCIAL STATEMENTS July 31, 2005 (As Restated, Note 8) - -------------------------------------------------------------------------------- Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (cont'd) STOCK-BASED COMPENSATION (cont'd) The Company has also adopted the provisions of the Financial Accounting Standards Board Interpretation No.44, Accounting for Certain Transactions Involving Stock Compensation - An Interpretation of APB Opinion No. 25 ("FIN 44"), which provides guidance as to certain applications of APB 25. FIN 44 is generally effective July 1, 2000 with the exception of certain events occurring after December 15, 1998. 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 July 31, 2005, the Company has no items that represent other comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements. CASH AND CASH EQUIVALENTS Cash represents funds on deposit with the Company's banker. CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Company to credit risk consist principally of cash. Cash is deposited with a high quality credit institution. Note 3 MINERAL PROPERTY Pursuant to a mineral property purchase agreement dated March 3, 2005, the Company acquired a 100% undivided right, title and interest in the Copper Road I - -VI mineral claim, located approximately 2 kilometres East of Deep Water Bay, Quadra Island of British Columbia, Canada for $3,500. During the period ended July 31, 2005 the company incurred $2,000 in resource property expenditures that are expensed in the statement of operations. The Tenure Number ID is 504841 that expires January 25, 2006. The property is in the name of Larry Ralph W. Sostad held by him in trust for the company. F-11 CANTOP VENTURES, INC. (A Nevada Corporation) (An Exploration Stage Company) NOTES TO THE FINANCIAL STATEMENTS July 31, 2005 (As Restated, Note 8) - -------------------------------------------------------------------------------- Note 3 MINERAL PROPERTY- (cont'd) Pursuant to an Evaluation Report dated June 13, 2005, related to the aforementioned property by Sookochoff Consultant Inc., that firm recommended an exploration program as follows: Recommended An Exploration Program & Estimated Cost
Canadian U.S. Dollars Dollars Equivalent ------- ---------- Phase I Compilation of previous exploration data; analysis of the data, @ 0.84 Compilation map and investigate the anomalous areas along the ---------- ---------- Shear zone that are indicated to contain mineralization $ 7,500.00 $ 6,300.00 Phase II Localized general magnetometer and soil surveys over the prime indicated anomalous zones 7,500.00 6,300.00 Phase III Detailed magnetometer and soil surveys 15,000.00 12,600.00 Phase IV Test diamond drilling of the targets delineated within the Potential exploration sites 35,000.00 29,400.00 ---------- ---------- Total Estimated Cost $65,000.00 $54,600.00 ========== ==========
In order to carry out the exploration program the Company will require to raise funding. Note 4 SHARE CAPITAL The authorized Common Stock that may be issued by the Company is 100,000,000 shares of stock with a par value of one tenth of one cent ($0.001) per share and the authorized Preferred Stock is 20,000,000 shares of stock with a par value of one tenth of one cent ($0.001) per share and no other class of shares is authorized. During the period from February 22, 2005 (Inception) to July 31, 2005 the Company issued 8,500,000 common shares for total cash proceeds of $31,000. Subsequent to the year end the Company received $3,500 common stock subscription outstanding as at July 31, 2005. At July 31, 2005 there are no outstanding stock options and no outstanding warrants. F-12 CANTOP VENTURES, INC. (A Nevada Corporation) (An Exploration Stage Company) NOTES TO THE FINANCIAL STATEMENTS July 31, 2005 (As Restated, Note 8) - -------------------------------------------------------------------------------- Note 5 SUBSEQUENT EVENTS (a) The Company is in the process of completion of an SB-2 Registration Statement for filing to register 4,500,000 shares of common stock for resale by existing shareholders of the Company with the United States Securities and Exchange Commission. The Company will not receive any proceeds from the resale of these shares of common stock by the selling stockholders. (b) Subsequent to July 31, 2005, the company received $3,500 for stock subscriptions unpaid at July 31, 2005. Note 6 INCOME TAXES The Company has losses forward for income tax purposes to July 31, 2005. There are no current or deferred tax expenses for the period ended July 31, 2005, due to the Company's loss position. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company's ability to generate taxable income within the net operating loss carryforward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes. The income tax effect of temporary differences comprising the deferred tax assets and deferred tax liabilities on the accompanying consolidated balance sheets is a result of the following: July 31, 2005 ------------- Deferred tax assets $ 4,865 Valuation allowance $(4,865) Net deferred tax assets $ -- A reconciliation between the statutory federal income tax rate and the effective income rate of income tax expense for the period ended July 31, 2005 is as follows: July 31, 2005 ------------- Statutory federal income tax rate -34.00% Valuation allowance 34.00% Effective income tax rate 0.00% The benefit of a potential reduction in future income taxes has not been recorded as an asset at July 31, 2005 as it is reduced to nil by a valuation allowance, due to uncertainty of the application of losses. Note 7 RELATED PARTIES A director advanced $100 to the Company and incurred incorporation and related costs on behalf of the Company of $600. The amount owing to the director of $700 as at July 31, 2005 is unsecured, bear no interest, and has no specific repayment date. F-13 CANTOP VENTURES, INC. (A Nevada Corporation) (An Exploration Stage Company) NOTES TO THE FINANCIAL STATEMENTS July 31, 2005 (As Restated, Note 8) - -------------------------------------------------------------------------------- Note 8 RESTATEMENT OF FINANCIAL STATEMENTS Additional Paid In Capital For Services During the year, Christopher Paterson as president provided management services and office premises free of charge, and are valued at $3,500 and $ 1,000, respectively, for a total of $4,500 that has been expensed and added to Additional Paid-In Capital. F-14 Until ______________, all dealers that effect transactions in these securities whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer's obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS INDEMNIFICATION OF DIRECTORS AND OFFICERS Our officer and director are indemnified as provided by the Nevada Revised Statutes (the "NRS") and our bylaws. Under the NRS, director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a company's articles of incorporation that is not the case with our articles of incorporation. Excepted from that immunity are: (1) a willful failure to deal fairly with the company or its shareholders in connection with a matter in which the director has a material conflict of interest; (2) a violation of criminal law (unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful); (3) a transaction from which the director derived an improper personal profit; and (4) willful misconduct. Our bylaws provide that we will indemnify our directors and officers to the fullest extent not prohibited by Nevada law; provided, however, that we may modify the extent of such indemnification by individual contracts with our director and officers; and, provided, further, that we shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless: (1) such indemnification is expressly required to be made by law; (2) the proceeding was authorized by our Board of Directors; (3) such indemnification is provided by us, in our sole discretion, pursuant to the powers vested us under Nevada law; or (4) such indemnification is required to be made pursuant to the bylaws. II-1 Our bylaws provide that we will advance all expenses incurred to 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, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was our director or officer, or is or was serving at our request as a director or executive officer of another company, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request. This advanced of expenses is to be made upon receipt of an undertaking by or on behalf of such person to repay said amounts should it be ultimately determined that the person was not entitled to be indemnified under our bylaws or otherwise. Our bylaws also provide that no advance shall be made by us to any officer in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made: (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding; or (b) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision- making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to our best interests. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION Securities and Exchange Commission registration fee $ 5.30 Transfer Agent Fees $ 900.00 Accounting fees and expenses $2,400.00 Legal fees and expenses $3,000.00 Edgar filing fees $ 250.00 --------- Total $6,555.30 ========= All amounts are estimates other than the Commission's registration fee. We are paying all expenses of the offering listed above. No portion of these expenses will be borne by the selling shareholders. The selling shareholders, however, will pay any other expenses incurred in selling their common stock, including any brokerage commissions or costs of sale. RECENT SALES OF UNREGISTERED SECURITIES We completed an offering of 4,000,000 shares of our common stock at a price of $0.001 per share to our president and director, Christopher Paterson, and director Robert Roth on May 4, 2005. The total amount received from this offering was $4,000. These shares were issued pursuant to Section 4(2) of the Securities Act. Appropriate legends were affixed to the stock certificates representing these shares. We completed an offering of 2,000,000 shares of our common stock at a price of $0.001 per share to a total of eight purchasers on July 3, 2005. The total II-2 amount received from this offering was $2,000.00. We completed this offering pursuant to Rule 504 of Regulation D and Regulation S of the Securities Act. The purchasers were as follows: Name of Shareholder Number of Shares Reg D / Reg S ------------------- ---------------- ------------- Carolyn Roberts 250,000 Reg S William Roberts 250,000 Reg S Lori Kliman 250,000 Reg S James Etherington 250,000 Reg S Beulah Harriot 250,000 Reg S Todd Czarnecki 250,000 Reg D Terri Proctor 250,000 Reg D Janet Eisele 250,000 Reg D We completed an offering of 2,500,000 shares of our common stock at a price of $0.01 per share to a total of 30 shareholders on July 27, 2005. The total amount received from this offering was $25,000. We completed this offering pursuant to Regulation D and Regulation S of the Securities Act. The purchasers were as follows: Name of Shareholder Number of Shares Reg D / Reg S ------------------- ---------------- ------------- John Kovacevic 100,000 Reg S Stuart Omsen 100,000 Reg S Paul Rickman 100,000 Reg S Stephen Rickman 100,000 Reg S George Rickman 100,000 Reg S James Ward 100,000 Reg S Adrian Crawford 100,000 Reg S Beverley Paterson 100,000 Reg D Dan Perko 100,000 Reg S Meredith Powel 100,000 Reg S Shanon Rickman 100,000 Reg S Tom Byrne 100,000 Reg S Don Histed 100,000 Reg S Carol Dahlberg 100,000 Reg D Ben Bohl 100,000 Reg D Diane McDaniel 100,000 Reg D Danny Love 100,000 Reg D Barbara Daly 100,000 Reg D Laurel O'Neill 100,000 Reg D Edith Reyes 100,000 Reg D Vanesa Trester 50,000 Reg S Patti Ransom 50,000 Reg S Tina Marie Steen 50,000 Reg S Michelle Boey 50,000 Reg S Barb Dean 50,000 Reg S Robert Stoikos 50,000 Reg S Jenna Kelly 50,000 Reg S Laura Homiston 50,000 Reg D Karen Neudecker 50,000 Reg D Melissa Granados 50,000 Reg D II-3 REGULATION S COMPLIANCE Each offer or sale pursuant to Regulation S was made in an offshore transaction; Neither we, a distributor, any respective affiliates nor any person on behalf of any of the foregoing made any directed selling efforts in the United States; Offering restrictions were, and are, implemented; No offer or sale was made to a U.S. person or for the account or benefit of a U.S. person; Each purchaser of the securities certifies that it was not a U.S. person and was not acquiring the securities for the account or benefit of any U.S. person; Each purchaser of the securities agreed to resell such securities only in accordance with the provisions of Regulation S, pursuant to registration under the Act, or pursuant to an available exemption from registration; and agreed not to engage in hedging transactions with regard to such securities unless in compliance with the Act; The securities contain a legend to the effect that transfer is prohibited except in accordance with the provisions of Regulation S, pursuant to registration under the Act, or pursuant to an available exemption from registration; and that hedging transactions involving those securities may not be conducted unless in compliance with the Act; and We are required, either by contract or a provision in its bylaws, articles, charter or comparable document, to refuse to register any transfer of the securities not made in accordance with the provisions of Regulation S pursuant to registration under the Act, or pursuant to an available exemption from registration; provided, however, that if any law of any Canadian province prevents us from refusing to register securities transfers, other reasonable procedures, such as a legend described in paragraph (b)(3)(iii)(B)(3) of Regulation S have been implemented to prevent any transfer of the securities not made in accordance with the provisions of Regulation S. REGULATION D AND RULE 504 COMPLIANCE All sales of securities pursuant to Regulation D were part of the same offering. No sales of securities were made more than six months before the start of the Regulation D offerings or made more than six months after completion of the Regulation D offerings. We did not, nor did any person acting on our behalf, offer or sell the securities by any form of general solicitation or general advertising. Pursuant to the limitations on resale contained in Regulation D, we exercised reasonable care to assure that purchasers were not underwriters within the meaning of section 2(11) of the Act by inquiring of each and every purchaser the following: (1) that each purchaser was purchasing the securities for the purchaser's own account for investment purposes and not with a view towards distribution, and (2) that each purchaser had no arrangement or intention to sell the securities. Further, written disclosure was provided to each purchaser prior to the sale that the securities have not been registered under the Act II-4 and, therefore, cannot be resold unless the securities are registered under the Act or unless an exemption from registration is available. All securities sold pursuant to Regulation D contained a restrictive legend on the share certificate stating that the securities have not been registered under the Act and setting forth or referring to the restrictions on transferability and sale of the securities. EXHIBITS Exhibit Number Description ------ ----------- 3.1 * Articles of Incorporation 3.2 * Bylaws 5.1 * Legal opinion regarding tradability of stock to be provided prior to the effective date 10.1 * Mineral Property Purchase Agreement dated March 3, 2005 10.2 Mineral Claim Title letter 23.1 Consent of Moen and Company, Chartered Accountants 23.2 Consent of counsel 99.1 Wahl Report (1983) - ---------- * Previously filed THE UNDERSIGNED REGISTRANT HEREBY UNDERTAKES: 1. To file, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to: (a) include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (b) reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information set forth in this registration statement; and notwithstanding the forgoing, 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 the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration Statement; and (c) 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 herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-5 3. To remove from registration by means of a post-effective amendment any of the securities being registered hereby which remain unsold at the termination of the offering. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a property for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling person sin connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue. 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 for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, in Vancouver, British Columbia, Canada on January 25, 2006. CANTOP VENTURES INC. By: /s/ Christopher Paterson ------------------------------ Christopher Paterson President, Chief Executive Officer, Secretary, Treasurer and Director In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated: SIGNATURE CAPACITY IN WHICH SIGNED DATE - --------- ------------------------ ---- /s/ Christopher Paterson President, CEO January 25, 2006 - --------------------------- Secretary, Treasurer, Christopher Paterson Principal Accounting Officer, Principal Financial Officer and Director II-6 EX-10.2 3 ex10-2.txt MINERAL CLAIM TITLE LETTER Exhibit 10.2 March 2, 2005 Cantop Ventures, Inc. 1045 Pepper Lane Fernley, Nevada 89408 Dear Mr. Paterson: Re: Copper Road I - VI Mineral Claim I hereby confirm that I hold titled to a 100% interest in the Copper Road I-VI Mineral Claim, Tenure No. 504801, located on Quadra Island in the Nanaimo Mining Division, in trust for you. Yours truly, /s/ Larry Sostad EX-23.1 4 ex23-1.txt CONSENT OF MOEN AND COMPANY Exhibit 23.1 MOEN AND COMPANY CHARTERED ACCOUNTANTS
Securities Commission Building Member: PO Box 10129, Pacific Centre Canadian Institute of Chartered Accountants Suite 1400 - 701 West Georgia Street Institute of Chartered Accountants of British Columbia Institute of Management Accountants (USA) (From 1965) Vancouver, British Columbia Canada V7Y 1C6 Registered with: Public Company Accounting Oversight Board (USA) (PCAOB) Telephone: (604) 662-8899 Canadian Public Accountability Board (CPAB) Fax: (604) 662-8809 Canada - British Columbia Public Practice Licence Email: moenca@telus.net - ---------------------------------------------------------------------------------------------------------
January 26, 2006 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" and to the use of our report dated September 14, 2005 and double-dated December 9, 2005, as to note 8 covering the audited financial statements for the fiscal year ended July 31, 2005, included in the Registration Statement on Form SB-2 of Cantop Ventures Inc. Yours very truly, MOEN AND COMPANY, Chartered Accountants /s/ "MOEN AND COMPANY" - ------------------------------- EX-23.2 5 ex23-2.txt CONSENT OF KAREN A. BATCHER, ESQ. Exhibit 23.2 Batcher Zarcone & Baker, LLP 4252 Bonita Road, #151 Bonita, CA 91902 (619) 475-7882 January 25, 2006 Board of Directors Cantop Ventures, Inc. 564 Wedge Lane Fernley, NV 89408 Re: Legal Opinion Pursuant to SEC Form SB-2 Registration Statement - Cantop Ventures, Inc. Dear Gentlemen: I hereby consent to the reference to my name in the Registration Statement under the caption "Legal Matters" and to the use of my legal opinion dated September 29, 2005 as an exhibit to the Registration Statement. In giving this consent, I do hereby admit that I come within the category of a person whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the general rules and regulations thereunder. Sincerely, BATCHER ZARCONE & BAKER, LLP /s/ Karen A. Batcher, Esq.. --------------------------------- EX-99.1 6 ex99-1.txt WAHL REPORT Exhibit 99.1 COPPER ROAD PROPERTY NTS 92K - 3W, NANAIMO M.D. QUADRA ISLAND, BRITISH COLUMBIA EVALUATION REPORT FOR NETWORK I 555 West Hastings Street, Suite 700 Vancouver, B.C. V6B 4N5 COVER PHOTO: Copper Road, View West from Shaft PREPARED BY: H. WAHL, P.ENG.B.C. RR4 S12 C4 GIBSONS, B.C. VON IVO LIST OF FIGURES FIG. 1 GENERAL LOCATION MAP, scale 1:250,000 FIG. 2 DETAILED LOCATION MAP, 1:50,000 FIG. 3 GENERAL GEOLOGY,QUADRA ISLAND B.C.D.M. 1956-57, Scale as shown FIG. 4 QUADRA ISLAND, AEROMAGNETIC MAP B.C.D.M. 1956-57, Scale as shown FIG. 5 FIELD SKETCH, COPPER ROAD PROPERTY Scale 1 cm = 2 meters FIG. A COPPER ROAD, DRILL PLAN AND LONGITUDINAL SECTION, PORTION OF ORIGINAL, AS PROVIDED BY WESTMIN RESOURCES, Scale 1" =100 feet (in-pocket) FIGURE 1 MAP SHOWING THE GENERAL LOCATION OF THE COPPER ROAD PROPERTY FIGURE 2 MAP SHOWING A DETAILED LOCATION OF THE COPPER ROAD PROPERTY SUMMARY The Copper Road Deposit is situated on the west side of Quadra Island, British Columbia within the Triassic Karmutsen formation. Previous production from the East Zone aggregated 5,064 DST grading 3.66% Cu, 0.51 oz/T Ag, and 0.018 oz/T Au. The property was formerly explored by Anaconda and Western Mines. Some 36 angle core holes have defined a 4,500 foot long by +/- 20 foot wide chloritized shear zone striking roughly east-west with a near vertical dip. Exploration to date has defined two bornite-chalcopyrite shoots totalling some 120,000 tons grading 2.6% Cu and 0.47 oz/T Ag. While the drilling has been performed by responsible operators, there is a degree of uncertainty attached to the reserve estimates, as no drill cores, drill logs, or cross-sections are available to confirm the true thicknesses of mineralized intercepts. The East Shoot is the most significant of the two zones having a possible high grade core of +/- 14,000 tons grading 6% Cu. (Feeder Zone?) This zone is open at depth and might ultimately contain some 60,000 tons of material in a grade range of 2% Cu or better. The Copper Road deposit could develop into a small, stand-alone high-grade copper operation (+/- 100 Tpd) or supply feed to a larger milling operation based upon Network's Gowlland Bay properties, located 10 km south of Copper Road. A two-stage program is recommended totalling $800,000. Stage One ($120,000) consists of check drilling (3 NQ angle holes for +/- 1,800 feet) to verify zone thickness, grade, and test downward continuity. Success here (at least 5 feet true thickness of + 2% Cu), would then warrant a $680,000 underground exploration and development program to gain entry to the high grade East Shoot, test mining characteristics and costs, and provide bulk samples for mill tests. The deposit has many favourable geological and locational aspects suggestive of relatively low cost mining for this type of deposit. As a regional exploration option, the company is advised to consider an INPUT/GRADIOMETER airborne survey over their land holdings to search for large, sub-surface strata bound disseminated/massive, basalt-hosted chalcocite deposits, within the flat-lying Karmutsen stratigraphy. INTRODUCTION & BACKGROUND At the request of Mr. Felix Reyes of Network 1, a site visit was made to the Copper Road property on Quadra Island, via helicopter from Campbell River on March 28, 1997. 2 The writer is familiar with this shear-zone copper deposit, having reported twice previously on the subject, the last for Black Marlin Resources in 1983. Network I has acquired by recent staking the mineral rights covering the Copper Road zone, as well as some 10 other high grade chalcocite deposits situated some 10 kms southeasterly, just north of Gowliand Harbour. The company is interested in developing the indicated copper resource into a small high-grade mining operation. Since the writer's last visit, there has been no material changes to the property, other than continued deterioration of the access road. The majority of the data concerning the property are in imperial measure, thus this usage will be continued. LOCATION AND ACCESS (FIGS.1,2) NTS 92K-3W, Nanaimo Mining Division, Quadra Island, Latitude 50012', Longitude 125018' The property is easily accessible from Campbell River, Vancouver Island via a 15 minute ferry trip to Quathiaski Cove. An 11 mile paved/gravel road extends to Granite Bay. From here the route turns west to Deepwater Bay for 0.75 miles, then north along a logging road (now washed out) to the claims. History: 1953: Golden Contact Mines drilled eight shallow holes totalling 948 feet around the shaft area. 1963: Optioned by Anaconda who drilled 11,740 feet indicating reserves of 115,000 tons grading 2.8% Cu and 0.5 ounces of silver. From 1962 to 1969 the property was lease-mined by Mr. Robert J. Bennett of Campbell River, who sank a 100 foot shaft and shipped a total of 5,064 DST to Brittania Beach, which graded 3.66% Cu, 0.51 oz/T Ag, and 0.018 oz/T Au. A total of some 972 feet of shallow U/G development was completed during the lease period (MMAR's). 1969: The property was optioned by Western Mines who conducted geological, geochemical and geophysical surveys, and drilled eight surface core holes totalling 3 4,737 feet. The property has been idle since 1970. PROPERTY & OWNERSHIP (FIG.2) The Copper Road property is currently covered by the undernoted mineral tenures (4 post). Claim Name Tag/No. Record No. Record Date Units - ---------- ------- ---------- ----------- ----- Copper Road-1 233239 346223 29 May 1996 18 Copper Road-2 233140 346224 29 May 1996 8 Total: 26 units --------------------- The registered owner is Elisa M. Reyes. Current assessment regulations require work or cash-in-lieu of $100/unit in each of the first three years of tenure, increasing to $200/unit thereafter. The claim posts and boundary lines of the subject claims were not inspected by the writer and accuracy of location is considered the responsibility of Network 1. AVAILABILITY OF INFORMATION: Through the passage of time, records at previous drilling have become dispersed. Westmin Resources kindly gave permission to examine all their property records, which includes the drill plan and longitudinal section, the main item on which this report is based. There is some doubt whether the mineralized intervals portrayed on this map are true thicknesses or core lengths. Because of this the recommendations herein are designed to resolve this unknown. GENERAL GEOLOGY (FIG.3): The Copper Road zone occurs within basalts and andesites of the Triassic Karmutsen Formation, which trends northwesterly across the western side of Quadra Island. These rocks are dominantly massive andesite-basalt flows with intermittent amygdaloidal units. Formational gradients are flat to gently eastward. To the east, the volcanics are in fault contact with the younger Triassic Quatsino Formation, a well crystallized bluish limestone with occasional white recrystallized zones. 4 FIGURE 3 MAP SHOWING THE GENERAL GEOLOGY OF THE COPPER ROAD PROPERTY FIGURE 4 MAP SHOWING COPPER ROAD PROPERTY vs REGIONAL AEROMAGNETICS STRUCTURE AND MINERALIZATION The Copper Road property is a shear zone in basic volcanics which-has been traced for some 4,500 feet along a topographic depression. The structure strikes 280(degree) and dips vertically or nearly so. The zone of shearing is generally about 20 feet wide and characterized by intense chloritization of the sheared basalts. The north or hanging wall of the zone is a clean slip surface, while the footwall is more "hackly" with random quartz sulphide stringers. This zone of shearing has been impregnated with chalcopyrite and bornite bearing quartz veins, wherein locally rich shoots of massive chalcopyrite and bornite are developed. Copper sulphides are apparently dominant as there is little recorded data on the presence of accompanying pyrite or pyrrhotite. The overall potential of the shear to a vertical depth of 500 feet has been fairly well defined by the 36 holes drilled to date. This work has indicated two "ore" shoots referred to as East and West, but has not defined the downdip potential of what may be the "Feeder Zone." This could represent a former flat-lying channel in flow tops, which controlled the initial mineralization, and is now tipped on end, Alternatively, it may mark the zone of ingress for hydrothermal quartz-sulphide solutions entering or traversing the already existent vertical shear. RESULTS OF SURFACE SAMPLING (FIG.5) TABLE I Copper Road: Rock sample descriptions 28 March 1997 CRR-1: Grab, west end open cut on shear, north side. Oxidized surface rock, quartz-rich, mostly malachite, some remnant Cpy. Assay: Cu 5.168% Au <0.001, Ag 0.12 (opt) CRR-2: 0+4 m east of #1, grab, south side shear, Qtz rich, mostly oxidized to malachite. Remnant fresh Brnt. and Cpy as rich blebs. Assay: Cu 13.34% Au Nil Ag 2.33 (opt) CRR-3: 0+5 m east of #2, South wall, quartz with heavy concentrations bornite, west edge open slope. malachite Assay: Cu 13.815% Au .002, Ag 4.03 (opt) CRR-4: North wall, opposite #3. Oxidized, abundant malachite and azurite, plus seal brown limonites after Cpy. - Slight argillic appearance. Assay: Cu 4.068% Au <001, Ag .98 (opt) 5 FIGURE 5 FIELD SKETCH OF COPPER ROAD PROPERTY CRR-5: West end second open slope, strong shearing 2 m wide. qtz-chlorite schist with abundant malachite. Assay: Cu 2.375%, Au <001, Ag 0.20 (opt) CRR-6: Shaft, north side, sheared quartz-chlorite rock, abundant malachite Assay: Cu 5.391 %, Au <001, Ag 1.1 (opt) CRR-7: 75 m east of shaft, exposed shear zone, quartz veins, low sulphide. Quartz-chlorite schist, weak malachite, odd bleb Cpy, seal brown limonite spots after Cpy. Assay: Cu 0.219%, Au <001, Ag <01 (opt) CRR-8: From ore dump, 50-60 m north of shaft. Breccia, basalt fragments to several cms. in white quartz matrix, malachite stained. Original disseminations and blebs of Cpy and Brnt. Assay: Cu 2.265% Au <001, Ag 0.47 (opt) Assays performed by Acme Analytical Laboratories Ltd., Vancouver, B.C. MINERAL RESERVES (FIG. A) It should be mentioned that mineralized intervals plotted on the available information may not be the true zone thickness. However, it may be significant that grade and tonnage calculations reported by Western Mines are comparable to the results calculated by the writer. Nonetheless, the above proviso should be remembered, until clarified. Mineral reserves were calculated by two standard methods: the triangular block method and the contour method. In both methods, a cut-off grade of 1% Cu and a minimum width of 5 feet were employed. Since the spacing between drill holes used to calculate tonnages and grade varies 70 to 200 feet, the material estimated should be classed as drill indicated. Differing values for precious metal content (Ag) were observed so these were not included in the present estimate. Silver values observed in the Western data ranged from trace to 5.21 oz/T. The average for the East Shoot amounted to 1 oz/T Ag, while 0.53 ozJT was the average for the West Shoot. The only data for gold was the analysis for the 5,000 tons shipped which graded 0.018 oz/T Au. Future sampling should be directed to closer checks on the precious metals content. 6 CALCULATED TONNAGES (Drill indicated) The undernoted reserve estimate was done originally in 1981. Since there is no new information this data is still current. EAST SHOOT Tons %Cu oz/TAq ---- --- ------ 39,800 2.94 1.00 Western, no dilution 40,417 3.49 ? HJW, 10% dilution @ 0% Cu 46,700 3.69 ? HJW contour method, 10% dilution @ 0% Cu WEST SHOOT Tons %Cu oz/TAg ---- --- ------ 75,700 2.77 0.53 Western, no dilution 81,778 2.11 HJW, 10% dilution @ 0% Cu 84,750 1.77 ? HJW contour method, 10% dilution @ 0% Cu TOTAL ZONE Tons %Cu oz/T Ag ---- --- ------- 115,500 2.83 0.47 Western, no dilution 122,195 2.57 - HJW, 10% dilution @ 0% Cu 131,450 2.45 - HJW contour method, 10% dilution @ % Cu THE EAST SHOOT AREA is considered the most significant in terms of a potential small scale, higher grade mining venture. Using the contour method, there appears to be a high grade core zone of some +/-14,000 tons grading 6% Cu, which could be important in terms of a quick pay-back of investment. This zone appears to extend upward to the shaft area from which the original high grade shipments were mined. Additionally, the grade contours are very suggestive that a "feeder" zone may extend beyond the present limits of the East Shoot at depth (FIG.A). Using dimensions of 600 feet x 200 feet x 5 foot true thickness, there could exist some 60,000 tons of +2% Cu material, subject to confirmatory drilling and underground exploration. This area may also include an extension of the higher grade core area mentioned above. 7 VALUATION OF IN-PLACE MINERAL RESOURCE The current in-place value of 120,000 tons grading 2.6% Cu is some $8.6 million Canadian dollars based upon $US 1.00 lb/Cu and $1.38 $C $US 1.00. Additional value contribution from Au-Ag remains to be determined. Whether this material can be recovered at a profit is unknown at this time. There does appear to be sufficient value in place to warrant underground development with a view to confirming potential mining, milling, and operating costs related to a small scale operation. DISCUSSION OF ONWARD EXPLORATION AND DEVELOPMENT - --SCENARIO I The Copper Road deposit shows potential to develop into a small (100 Tpd) high grade copper mining operation with a potential quick payback from the high grade East Zone core material. - There are a number of favorable features which are considered significant. I. Extraction and Dilution: Mineralized material should break cleanly form the hanging wall. Dilution has been calculated (C) 0% Cu, but stringer mineralization is present in the footwall, which should contribute some values. The zone has vertical geometry which should allow open sloping, and very competent wall rocks which should eliminate timbering. 2. Drilling Versus U/G Development: The previous drilling has pretty well delineated the near surface mineralization. The potential for tonnage and grade expansion lies at depth. The depth at which the zone requires testing (600 to 80 feet below surface) is very near or close to the cost effective point, where underground exploration makes better financial and technical sense than drilling. 3. Infrastructure and access: The property has an excellent location respecting transportation and communications. The concentrate loading facility for Western Mines Ltd. is situated about I mile north of the ferry terminal at Campbell river. There is good opportunity to move product either by road, barge or ship. The surface disposition surrounding the property is Timberwest T.F.L. #2, so that a mining operation should be compatible with current land usage. 4. Access to Reserves: The East Shoot has an excellent topographic lie vis a vis gaining entry by an adit drive. The terrain, after a gradual slope northward, drops 8 steeply, so that an adit could be collared about 1,000 feet north of the 700 foot level to enter the zone at that elevation. This would provide 500 to 600 feet of backs and tap directly into the high grade core. lt would also offer the possibility to discover any non-outcropping mineralized shears that might exist north of the known zone. Alternatively, development by ramp/decline in the footwall may also offer advantages. Upon successful conclusion of Phase I, independent mining engineering authority should be consulted to determine the best method of U/G access. - --SCENARIO 2 Whether the Copper Road will function as a small high grade stand-alone operation requires the execution of the recommended program. The property could also operate as a feed source for a larger milling operation based upon the Gowlland Bay properties 10 km to the south. Previous exploration and drilling in this area has identified the undernoted reserves, occurring primarily as chalcocite. LOCATION AND TONNAGE of the VARIOUS SHOWINGS: Geological Report on the Pomeroy and Contact Groups for Prince Stewart Mines Ltd. (NPL) by E. Percy Sheppard, P,Eng. 29 January 1973 Name Claim Proven Grade Indicated Grade% - ---- ----- ------ ----- --------- ------ Pomeroy 1 Copper Hill 2 16,500 3.67 260,000 3.50 Pomeroy 2 Evelyn 3 (N) 5,000 2.70 17,000 2.70 Pomeroy 2 " (5) 25,300 2.11 90,000 2.11 Pomeroy 3 & 4 972,400 1.22 472,000 1.62 Beaver I Bit 2 19,375 1.74 open Doe Copper Cliff 25,125 3.05 112,500 1.70 Butte Cliff 2 -- 40,000 1.40 Copper Cliff Adit Copper Cliff -- 300,000 3.05 Hall Trenches Colleen 1 5,000 3.45 50,000 2.40 Copper Bell 1 & 2 112,000 2.55 700,000 2.55 --------- --------- 1,180,700 2,041,500 Tons: 1,180,700 @ 1.65% 2,041,500 @ 2.44% Cu/ton Cu/ton 9 REGIONAL EXPLORATION POTENTIAL Given the known copper mineralization, the rough and "brushy" nature of the terrain, the fact that no significant modern exploration has been performed on the Quadra volcanic belt, an airborne INPUT/GRADIOMETER survey is strongly recommended to evaluate the Network I land package. A basic 200 meter, E-W line spacing is suggested. The geologic setting of mafic volcanics with intercalated limestone and sedimentary layers, having flat to shallow dips suggests potential for large stratiform deposits of disseminated or massive type, plus much larger Copper Road-type shear zone deposits A number of major faults are apparent based upon topography and the existing low sensitivity aeromagnetics (FIG.4). It should be noted that all the Gowliand area drilling was completed at depths less than 100 feet below surface. On the basis of comparative similarities the undernoted are potential target types: Kennecott, Alaska: Both strata-bound and discordant ore zones in lower dolomite beds of Triassic Chitistone limestone at contact of altered basalts. Gentle stratigraphic dips. Average ore grade 12.4% Cu as chalcocite. Production of 1.2 billion pounds Cu plus substantial Ag. Sustut Copper, B.C.: Mineralized zone of 60 MI @ 1.25% Cu. Bornite, Chalcopyrite, chalcocite and native Cu in conformable zone within gently dipping upper Triassic mafic volcanics. 47 Zone, Coppermine River NWT: Shear zone deposit in Proterozoic mafic volcanics 4.16 Mt (C) 2.96% Cu dominantly as chalcocite. Deposit is 1500' long x 35' wide drilled to 600'; open at depth and to southwest. CONCLUSIONS The Copper Road deposit is a high grade shear zone controlled feature occurring in Triassic Karmutsen basalts. The zone strikes roughly E-W, is some 4,500 feet long by present definition, and contains two drill-indicated mineralized lenses, which constitute the mineral reserves. The gross value of material-in-place amounts to an estimated $8.6 M dollars based upon current metal prices and exchange rates. The East Shoot appears the most attractive of the two zones by virtue of a potential highgrade core, which could be significant in terms of a rapid investment pay-back. The deposit has many favourable features related to gaining underground access to the indicated higher grade zone, and extraction of material The East Shoot is open at depth and the chance may exist to more than double reserves. 10 This report is based upon incomplete technical data as drill cores and/or logs are not available. With this in mind, the following proposals are recommended. RECOMMENDATIONS A two-stage program is recommended. 1. Reserve Confirmation: Confirm and extend the presently indicated reserves by drilling 3 NQ core holes, with dip tests every 100 ft. Success at this stage (at least 5 feet of +2% Cu True thickness) would then justify proceeding with the underground exploration and development program. 2. Underground Development: Whether by adit or ramp, access the mineralized zone (East Shoot) at the 700-foot level. The objective of this work is to gain entry to reserves and establish a transportation corridor, to test-mine several hundreds of tons, check the mined grade, and provide bulk samples for mill testing. Upon completion of this phase, a detailed inquiry should be prepared investigating the feasibility of a small-scale copper mining operation and/or the provision of mill feed for an expanded operation including the Gowlland properties. BUDGET/COST ESTIMATE - COPPER ROAD ZONE Check Drilling: To test for extension of East Shoot high grade zone at 600 feet below surface, confirm grade at 350 feet below surface, and test area between holes 15 and 19. $ 3,000 Preparation of detailed topo map at scale 1:2500 with 10 m contour interval 54,000 Core drilling-1,800 feet NQ (C) $30/foot inclusive contract charges 1,000 Assays 50,000 Road and site preparation, 2 km @ $25,000/km to current code standards 5,000 Engineering and supervision - --------- $ 113,000 7,000 Contingency - --------- $ 120,000 TOTAL ========= 11 Underground Development: Allowance for 1600 feet entry plus preliminary U/C work and sampling $680,000 1600 feet of development(C)$425/ft. inclusive. Recapitulation: $ 120,000 Phase I 680,000 Phase II - --------- 800.000 Grand Total ========= Optional: Regional INPUT/GRADIOMETER survey estimated 260 line kilometres @ $30/km -$78,000. Prepared by Herb Wahl, P.Eng. B.C. 12 CERTIFICATION This is to certify that: 1. I, Herbert J. Wahl, am a resident of British Columbia and live at 1459 Gower Point Road, Gibsons, BC, RR4 S12 C4, VON1VO. 2. I am a graduate of Dartmouth College, Hannover, New Hampshire, with the degree of Bachelor of Arts with Honors in Geology (1957) 3. I am a member of the Association of Professional Engineers of British Columbia and have practiced my profession continuously from 1961 to the present. 4. I have not, directly or indirectly, received or expect to receive any interest, directly or indirectly in the property of Network I, or of any affiliate, or beneficially own, directly or indirectly, any securities of the company or of any affiliate. 5. This report is based on a one-day field examination, upon unpublished data furnished by Network I, upon unpublished data furnished by other companies as listed in this report, and upon information in the public record. 6. Consent is given to submit this report as herein presented to the Vancouver Stock Exchange, Canadian Dealing Network Inc., and/or Montreal Stock Exchange, in support of a Statement of Material Facts. Herb Wahl, P.Eng, B.C. 15 April 1997 /s/ Herb Wahl CORRESP 7 filename7.txt BATCHER, ZARCONE & BAKER, LLP ATTORNEYS AT LAW SOUTH BAY OFFICE KAREN A. BATCHER 4190 BONITA ROAD, SUITE 205 kbatcher@bzblaw.com BONITA, CALIFORNIA 91902 ------------ TELEPHONE: 619.475.7882 ADDITIONAL SAN DIEGO FACSIMILE: 619.789.6262 OFFICES January 27, 2006 Mr. Howard Baik Securities & Exchange Comm. 100 F Street, NE Mail Stop 3561 Washington, D.C. 20549 Re: Cantop Ventures, Inc. Registration Statement on Form SB-2 File No. 333-128697 POST EFFECTIVE AMENDMENT NO.1 Dear Mr. Baik: On behalf of Cantop Ventures, Inc. (the "Company"), we have today filed via the EDGAR system, Post-Effective Amendment No. I (the "Amendment") to the above-captioned Registration Statement in response to the comments in your letter dated October 25, 2005. The responses below are in direct correlation to your numbered comments. SUMMARY, PAGE 3 1. Page 5: As directed, we have included the statement "[i]n all probability, the Copper Road I - VI claim does not contain any reserves and funds that we spend on exploration will be lost" in the Summary section, page 3; Description of Business section on Page 19; and in the Plan of Operations section on Page 24. With respect to your comment asking the Company to disclose why they believe their claim will have no reserves and their reasons for engaging in the business venture if the Company will probably not find reserves, the Company states "In all probability, the Copper Road I - VI claim does not contain any reserves and funds that we spend on exploration will be lost." The Company does not believe that this statement rises to a statement that the Company definitively believes that there WILL PROBABLY BE no reserves, but rather that it is possible that there will be no reserves, and that the exploration for minerals is speculative in nature. Therefore, the Company did not amend the prospectus to add language why they thought there would probably be no reserves. MAILING ADDRESS 4252 BONITA ROAD, #151 * BONITA , CALIFORNIA * 91902 Mr. Howard Baik January 27, 2006 Page 2 2. As directed, we have included statements indicating that, if we are successful, we will have to spend more on exploration, on Pages 5,6 and 24 of the amended prospectus. 3. As directed, we have included a statement in the Summary on page 4, and at beginning of our Description of Business section at Page 19 that the auditors have issued a going concern opinion. 4. As directed, we have included a statement in the Summary section at Page 4 of the amended prospectus that our shares are not currently traded on any market or exchange, and how this affects the liquidity of our shares. 5. As stated at the end of the first paragraph of our Summary section, "we acquired a 100% undivided right, title and interest in and to the property. The owner of the Copper Road I - VI claim and the grantor of the purchase is Larry Sostad of Vancouver, British Columbia." We did, however, add a statement regarding Mr. Sostad's current relationship to the Company. See Page 3. We also included as Exhibit 10.2, a letter from Mr. Sostad confirming that he is holding the property in trust for the Company. RISK FACTORS, PAGE 4 6. As directed, we have included a risk factor on Page 8 entitled A SIGNIFICANT NUMBER OF RESTRICTED SHARES MAY BECOME AVAILABLE TO THE PUBLIC IN MAY, 2006, wherein we explain that the possible sale of these 4 million shares may dilute the percentage of free-trading shares. 7. As directed, we have included in risk factor on Page 7 entitled BECAUSE MANAGEMENT HAS NO TECHNICAL EXPERIENCE IN MINERAL EXPLORATION, OUR BUSINESS HAS A HIGHER RISK OF FAILURE. 8. As directed, we have included, on Page 4 in the risk factor entitled IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL, amounts needed to complete phases three and four, and have referenced the table on (former) page 20 of the prospectus. 9. As directed, we have added a separate risk factor entitled WE EXECT TO INCUR SIGNIFICANT LOSSES IN THE FORESEEABLE FUTURE. See Page 5. 10. The reference to the Mosquito King property was a typographical error and has been corrected to correctly reflect reference to the Copper Road I - VI claim. See Page 7. 11. The initial offering price of $.01 was arbitrarily set based on the fact that the Company had not commenced operations, nor had the Company received Mr. Sookochoff's geological report. In his report, Mr. Sookochoff concluded that the Copper Road I - VI claim has the potential to host significant amounts of mineralization and that further exploration of the property is warranted. Accordingly, the Company believed it was reasonable to increase the offering Mr. Howard Baik January 27, 2006 Page 3 price for its second offering. We have added a statement to this paragraph stating that the latest offering price was based on the above-mentioned information contained in Mr. Sookochoff's report. See Page 8. 12. As directed, we have added a statement at the end of this section which describes Beverly Paterson's relationship to the Company's president, Christopher Paterson. See Page 13. 13. As directed, we have added a statement at the beginning of the section entitled PLAN OF DISTRIBUTION that there is currently no market for any of the shares, and that the Company cannot give any assurance that he shares offered will have a market value, or that a public market for the Company's securities may be sustained even if developed. See Page 13. 14. As directed, we have added a statement at the beginning of the section entitled PLAN OF DISTRIBUTION that the Company anticipates applying for trading the shares on the OTC Bulletin Board. See Page 13. 15. We provide support or have amended the Biographical Information of the Directors as follows: * John Tann Ltd. states on its website "[i]n 1795 near London, Edward Tann and his son founded what is believed to be the world's first firm of safemakers. For over 200 years Tann has provided quality high security equipment to governments, financial institutions and commerce across the globe." The web address for John Tann, Ltd. is www.johntann.com. * We have deleted the statement "[s]ince then, Mr. Paterson has helped many companies meet their financial objectives through his marketing consulting and ability to obtain and structure outside financing." See Page 16. * We have deleted the statement "Mr. Roth has worked for some of the most influential and successful companies in the world." See Page 16. DESCRIPTION OF BUSINESS, (FORMER) PAGE 18 16. The 1963 Minister of Mines Report is approximately 400 pages in length. Therefore, instead of including the printed version of this report, we have included a link to the report on the Ministry of Energy, Mines and Petroleum Resources' website. With respect to the Wahl survey, a true and correct copy of this report has been included as an exhibit to amendment 1 of the prospectus. With respect to the Wall survey, the Company was informed that the reference to the Wall was a typographical error in Mr. Sookochoff's report, and that the reference should have read "Wahl." A copy of his letter is attached for your reference. 17. As directed, we have specified when we plan to commence the initial phase of exploration, that we have not yet engaged a geologist to oversee the exploration phases, and the anticipated time frame to complete each phase of the exploration. See page 19 of the amended prospectus. 18. As directed, we have included statements throughout the amended prospectus that the Company's is currently in the start-up phase of operations (see Page Mr. Howard Baik January 27, 2006 Page 4 3), that the Company anticipates to conduct four phases of exploration (see Pages 3,5 and 24), and when the Company plans to commence its exploration (see Pages 19 and 24). 19. We respond to this comment as follows: * The Company owns 100% undivided right, titled and interest in the Copper Road I - VI Claim. No conditions must be met in order to retain title to this property. A statement to this effect was added to the subsection entitled The Copper Road I-VI Property Purchase Agreement. See Page 20. * In the subsection entitled Infrastructure and Condition of the Property, we state that the property is free from mineral workings (i.e. no work has been completed on the property) and that there is no infrastructure facilities or power source on the property. * In the subsection entitled Infrastructure and Condition of the Property, we state that there is no infrastructure or power source on the property, and that power generators must be used if power is required. * In the subsection entitled Infrastructure and Condition of the Property, we describe the equipment and infrastructure facilities. * In the subsection entitled Infrastructure and Condition of the Property, we state that the claim is free of mineral workings. * Since the Company has not commenced the initial phase of exploration, which is stated in the subsection entitled In General, the property has not incurred any costs to date. * As directed, we have added a statement regarding the source of water in the subsection entitled Infrastructure and Condition of the Property. See Page 20. * As directed, we have added a statement in the subsection entitled In General that the property is currently without known reserves and that the proposed program is exploratory in nature. See Page 19. MINERALIZATION, (FORMER) PAGE 19 20. As directed, we have added definitions for geological terms "shear" and "strike." See Page 20. PLAN OF OPERATIONS (FORMER) PAGE 22 21. We believe that we have outlined all known material risks and uncertainties that will have or are reasonably likely to have a material impact on our revenues in the Risk Factors section of the prospectus. We believe that the disclosed risk factors include those industry-wide factors. We have, however, added a statement that we will require additional financing to complete Phases III and IV of our program, and that the Company anticipates additional funding will be in the form of equity financing from the sale of our common stock or from director loans. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, (FORMER) PAGE 23 22. Moen & Company has revised the financial statements to reflect that the $4,500 of donated services and office space was charged to operations. Mr. Howard Baik January 27, 2006 Page 5 NOTES TO FINANCIAL STATEMENTS, PAGE F-7 23. As directed, the notes to financial statements include a statement that the Company's fiscal year-end is July 31. RECENT SALES OF UNREGISTERED SECURITIES, PAGE II-2 24. The reference to Rule 4 was a typographical error. Accordingly, the prospectus was amended to show that the Company relied on Section 4(2) of the Securities Act with respect to the issuance of these shares. See Page II-2. 25. That Beverly Paterson purchased her shares under Regulation S was a typographical error. The prospectus was amended to correctly reflect that Beverly Paterson purchased her shares pursuant to Regulation D of the Securities Act. See Page II-3. 26. The Company relied on Rule 504 with regard to the issuance of shares to United States residents. The subsection entitled Regulation D and Rule 504 Compliance sets forth the facts relied upon to make the exemption available. See Page II-4. EXHIBITS 27. As directed, we have included as Exhibit 10.2, a letter from Mr. Sostad confirming that he is holding the property in trust for the Company. The Company has stated that it owns "a 100% undivided right, title and interest in and to the property." See Pages 3, 19, 20 and F-11. We are not sure how to further clarify our ownership interest. 28. Consent of Counsel is attached as Exhibit 23.2. 29. As directed, we have amended the language in the Undertakings section on Page II-6. Should the staff have any questions or comments or desire any additional information, please telephone the undersigned at 619) 475-7882. Sincerely, Regards, BATCHER ZARCONE & BAKER, LLP /s/ Karen A. Batcher, Esq. -----END PRIVACY-ENHANCED MESSAGE-----