Attached files
file | filename |
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EX-5.1 - EXHIBIT 5.1 - Good Hemp, Inc. | ex51.htm |
EX-23.1 - EXHIBIT 23.1 - Good Hemp, Inc. | ex231.htm |
EX-23.2 - EXHIBIT 23.2 - Good Hemp, Inc. | ex232.htm |
As
filed with the Securities and Exchange Commission on January 19, 2010
Registration
Statement No. 333-159561
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1/A
(Amendment
No. 3)
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
KEYSER RESOURCES
INC.
(Name of
registrant specified in its Charter)
Nevada
|
1000
|
N/A
|
(State
or Other Jurisdiction of
|
(Primary
Standard Industrial
|
(IRS
Employer
|
Incorporation
or Organization)
|
Classification
Code Number)
|
Identification
Number)
|
61
Sherwood Circle NW
Calgary
Alberta T3R 1R3
Telephone:
(403) 455-7185 Facsimile: (403) 455-7185
(Address
and telephone number of principal executive offices and principal place of
business)
EastBiz.com,
Inc.
|
5348
Vegas Drive
|
Las
Vegas, Nevada 89108
|
Telephone:
(702) 871-8678
|
(Name,
address and telephone number of agent for service)
|
Copies
to:
|
Darrin
Ocasio
|
Peter
DiChiara
|
Sichenzia
Ross Friedman Ference LLP
|
61
Broadway
|
New
York, New York 10006
|
Telephone:
(212) 930-9700
|
Facsimile:
(212) 930-9725
|
Approximate
date of proposed sale to the public: From time to time after this Registration
Statement becomes effective.
If any
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, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
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. o
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. o
Indicate
by a check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer o
|
Accelerated Filer o
|
Non-accelerated Filer o
|
Smaller Reporting Company x
|
(Do not
check if a smaller reporting company)
CALCULATION
OF REGISTRATION FEE
Title
of Each Class of
Securities
To Be
Registered
|
Amount
to be
registered
|
Proposed
Maximum
Offering
Price per Unit (1)
|
Proposed
Maximum
Aggregate
Offering Price
|
Amount
of
Registration
Fee (2)
|
Shares
of Common
Stock,
Par Value $0.001
|
2,765,000
|
$0.05
|
$138,250
|
$8.08
|
(1)
|
Estimated
in accordance with Rule 457 of the Securities Act of 1933 solely for
the purpose of computing the amount of the registration
fee. Our common stock is not traded on any national exchange
and the offering price is based on the price at which shares of the
registrant's common stock were sold to investors in a private placement
completed in December 2008. The price at which the shares were
sold in the December 2008 private placement was arbitrarily determined and
bears no relationship to the registrant's book value, assets, past
operating results, financial condition or any other established criteria
of value. The price of $0.05 is a fixed price at which the
selling security holders may sell their shares until our common stock is
quoted on the OTC Bulletin Board, at which time the shares may be sold at
prevailing market prices or at privately negotiated prices. There can be
no assurance that a market maker will agree to file the necessary
documents with the Financial Industry Regulatory Authority, which operates
the OTC Bulletin Board, that such an application for quotation will be
approved or that our common stock ever will trade. The
registrant makes no representation as to the price at which its common
stock may trade.
|
(2)
|
This
fee was calculated in accordance with Rule 457(o) under the Securities
Act of
1933, as amended, and paid with our initial
filing.
|
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 this registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. The selling
stockholders may not sell these securities until the registration statement is
filed with the Securities and Exchange Commission and becomes effective. This
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any state where the sale is not
permitted.
SUBJECT
TO COMPLETION, DATED JANUARY 19,
2010
Prospectus
KEYSER
RESOURES INCORPORATED
2,765,000
Shares of Common Stock
This
prospectus relates to the resale of up to 2,765,000 shares of common stock,
$0.001 par value per share, of Keyser Resources Incorporated that may be
sold from time to time by the selling stockholders identified in this
prospectus. These persons, together with their transferees, are
referred to throughout this prospectus as “selling stockholders.”
We are
not selling any shares of our common stock in this offering and therefore will
not receive any proceeds from this offering.
Our
common stock does not presently trade on any exchange or electronic
medium. The selling stockholders and/or their registered
representatives have agreed to sell their shares of common stock at a fixed
price of $0.05 until such time as our common stock is admitted to quotation, if
ever, on the Over-the-Counter Bulletin Board, or OTC Bulletin Board, an
electronic quotation system for equity securities overseen by the Financial
Industry Regulatory Authority or another exchange or electronic medium and
thereafter at prevailing market prices or privately negotiated
prices. As a result of such activities, the selling stockholders may
be deemed to be underwriters as that term is defined in the federal securities
laws.
We have
not applied for listing to trade on any public market nor has a market maker
applied to have our common stock admitted to quotation on the OTC Bulletin
Board. We will seek to identify a market maker to file an application
to have our common stock admitted to quotation on the OTC Bulletin
Board. We can not, however, assure you that our common stock ever
will be quoted on the OTC Bulletin Board or trade on any other public market or
electronic medium.
We will
pay all of the expenses incident to the registration of the shares offered under
this prospectus, except for sales commissions and other expenses of selling
stockholders applicable to the sales of their shares.
Selling
stockholders may sell their shares directly or through agents or broker-dealers
acting as agents on behalf of the selling stockholders. The selling
stockholders may engage brokers, dealers, or agents who may receive commissions,
or discounts from the selling stockholders. See “Selling
Stockholders” and “Plan of Distribution” in this prospectus.
An
investment in our common stock is speculative and involves a high degree of
risk. Investors should carefully consider the risk factors and
other uncertainties described in this prospectus before purchasing our common
stock. See “Risk Factors” beginning on page
4.
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 the prospectus. Any representation to the contrary is a criminal
offense.
The
date of this prospectus is January [*], 2010
Table
of Contents
Special
Note Regarding Forward-Looking Statements
|
1
|
Prospectus
Summary
|
2
|
Risk
Factors
|
4
|
Use
of Proceeds
|
8
|
Determination
of Offering Price
|
8
|
Dilution
|
8
|
Selling
Shareholders
|
9
|
Plan
of Distribution
|
10
|
Description
of Securities
|
12
|
Legal
Matters
|
13
|
Experts
|
13
|
Description
of Business
|
14
|
Legal
Proceedings
|
19
|
Description
of Property
|
19
|
Market
For Our Common Stock and Other Related Stockholder
Matters
|
23
|
Management's
Discussion and Analysis
|
23
|
Quantitative
and Qualitative Disclosures About Market Risk
|
25
|
Management
|
26
|
Security
Ownership of Certain Beneficial Owners and
Management
|
27
|
Executive
Compensation
|
27
|
Changes
In and Disagreements with Accountants
|
28
|
Financial
Statements
|
F-1
|
AVAILABLE
INFORMATION
This
prospectus constitutes a part of a registration statement on Form S-1 (together
with all amendments and exhibits thereto, the “Registration Statement”) filed by
us with the SEC under the Securities Act of 1933, as amended (the “Securities
Act”). As permitted by the rules and regulations of the SEC, this
prospectus omits certain information contained in the Registration Statement,
and reference is made to the Registration Statement and related exhibits for
further information with respect to Keyser Resources Incorporated and the
securities offered hereby. Any statements contained herein concerning
the provisions of any document filed as an exhibit to the Registration Statement
or otherwise filed with the SEC are not necessarily complete, and in each
instance reference is made to the copy of such document so filed. Each such
statement is qualified in its entirety by such reference.
You
should rely only on the information contained in this prospectus. We have not
authorized anyone to provide you with information different from that which is
contained in this prospectus. This prospectus may be used only where it is legal
to sell these securities. The information in this prospectus may only be
accurate on the date of this prospectus, regardless of the time of delivery of
this prospectus or of any sale of securities.
REPORTS
TO SECURITY HOLDERS
Upon
effectiveness of this Prospectus, we will be subject to the reporting and other
requirements of the Exchange Act and we intend to furnish our shareholders
annual reports containing financial statements audited by our independent
auditors and to make available quarterly reports containing unaudited financial
statements for each of the first three quarters of each year.
The
public may read and copy any materials that we file with the SEC at the SEC’s
Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public
may obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC. The address of that site is
www.sec.gov.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains “forward-looking statements.” Such forward-looking
statements concern the Company's anticipated results and developments in the
Company's operations in future periods, planned exploration and development of
its properties, plans related to its business and other matters that may occur
in the future. These statements relate to analyses and other information that
are based on forecasts of future results, estimates of amounts not yet
determinable and assumptions of management.
Any
statements that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, using words or phrases such as
“believes” or “does not believe”, "expects" or "does not expect", "is expected",
"anticipates" or "does not anticipate", "plans", "estimates" or "intends", or
stating that certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved) are not statements of historical fact
and may be forward-looking statements. Forward-looking statements are subject to
a variety of known and unknown risks, uncertainties and other factors which
could cause actual events or results to differ from those expressed or implied
by the forward-looking statements, including, without limitation, risks related
to:
·
|
risks
and uncertainties relating to the interpretation of sampling results, the
geology, grade and continuity of mineral
deposits;
|
·
|
risks
and uncertainties that results of initial sampling and mapping will not be
consistent with our expectations;
|
·
|
the
potential for delays in exploration
activities;
|
·
|
the
substantial risk that no commercially viable gold or copper deposits will
be found as a result of the speculative nature of mineral property
exploration
|
·
|
risks
related to the inherent uncertainty of cost estimates and the potential
for unexpected costs and expenses;
|
·
|
failure
to make required payments or expenditures that could lead to the loss
of title to the mineral
claim
|
·
|
risks
related to failure to obtain adequate financing on a timely basis and on
acceptable terms for our planned exploration
program;
|
·
|
other
risks and uncertainties related to our mineral property, mining business
and business strategy.
|
This list
is not exhaustive of the factors that may affect our forward-looking statements.
Some of the important risks and uncertainties that could affect forward-looking
statements are described further under the sections titled "Risk Factors",
"Description of the Business" and "Management's Discussion and Analysis" of this
prospectus. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, believed, estimated or expected.
Forward-looking statements speak only as of the date made. Except as required by
law, we disclaim any obligation subsequently to revise any forward-looking
statements to reflect events or circumstances after the date of such statements
or to reflect the occurrence of anticipated or unanticipated
events.
1
PROSPECTUS
SUMMARY
The
following is a summary of some of the information contained in this
prospectus. In addition to this summary, we urge you to read the more
detailed information, including the financial statements and related notes
thereto and the “Risk Factors” section, included elsewhere in this
prospectus. Unless the context otherwise requires, any reference to
“our company,” “we,” “us,” or, “our” refers to Keyser Resources Incorporated, a
Nevada corporation.
Corporate
History
We are a
start-up exploration stage company without significant operations and we are in
the business of gold and copper exploration. Keyser Resources Incorporated was
incorporated in the State of Nevada on November 26, 2007. On the
date of our incorporation, we appointed Maurice Bidaux as our
Director. Mr. Bidaux was then appointed President, Principal
Financial Officer, Principal Accounting Officer and Secretary of our
company. Our principal office is located at 61 Sherwood Circle NW,
Calgary Alberta T3R 1R3. Our telephone number is (403) 455-7185.
Our
Business
On June
11, 2008 we signed an option agreement with Bearclaw Capital Corporation
(“Bearclaw”) to acquire 90% interest in the Rey Lake Property, which is located
in the Nicola Mining Division of British Columbia, 45 kilometers north-west of
Merrit, British Columbia, Canada. There is no assurance that a
commercially viable deposit exists on this mineral claim. Exploration will be
required before a final evaluation as to the economic and legal feasibility of
the mineral claim is determined.
The
agreement with Bearclaw allows Keyser to acquire the 90% interest in the Rey
Lake Property by making exploration expenditures totaling CDN$150,000
(approximately US$156,000 using current translation rates) through September 30,
2010 and paying CDN $12,500 (approximately US$ 13,000) cash (of which CDN $5,000
(approximately US$ 5,200) has been paid) to Bearclaw by September 30,
2010. The agreement with Bearclaw was amended on September 28, 2009
to extend a requirement for an interim exploration milestone from September 30,
2009 to July 31, 2010. The option agreement required that Bearclaw
transfer title to us within 30 days of signing the agreement. On our
request, Bearclaw transferred title to our President, Mr. Maurice Bidaux, who
has executed a trust agreement and has agreed to hold the claim in trust for us
(since British Columbia laws prevent a Nevada corporation from holding title
directly). If we do not make the exploration expenditures, we will forfeit our
right to exercise the option.
Plan
of Operation
Our plan
of operations is to carry out exploration of the Rey Lake Property. Our specific
exploration plan for the Rey Lake Property, together with information regarding
the location and access, history of operations, present condition and geology,
is presented in this prospectus under the heading “Description of Properties.”
Our exploration program is preliminary in nature in that its completion will not
result in a determination that the property contains commercially exploitable
quantities of mineralization.
We
anticipate that we will require additional financing in order to pursue full
exploration of the Rey Lake Property. We do not have sufficient financing to
undertake full exploration of the Rey Lake Property at present and there is no
assurance that we will be able to obtain the necessary financing.
Further
exploration beyond the scope of our planned exploration activities will be
required before a final evaluation as to the economic and legal feasibility of
mining of the Rey Lake Property is determined. There is no assurance that
further exploration will result in a final evaluation that a commercially viable
mineral deposit exists on any of our mineral properties. It is too early for us
to estimate how long it will take us and how much it will cost us to determine
whether there is a commercially viable mineral deposit on the Rey Lake
Property.
We have
no revenues, have achieved losses since inception, have been issued a going
concern opinion by our auditors and rely upon the sale of our securities to fund
operations. We will not generate revenues even if our exploration program
indicates that a mineral deposit may exist on the Rey Lake Property.
Accordingly, we will be dependent on future additional financing in order to
maintain our operations and continue our exploration activities.
We have
not commenced any work on the Rey Lake Property. Maurice Bidaux is our sole
director and officer and had no previous experience in mineral exploration or
operating a mining company before November 2007. Our business plan may fail due
to our management’s lack of experience in this industry.
2
Private
Placement
To date,
in addition to an issuance to Mr. Maurice Bidaux of 3,000,000 shares of common
stock at $0.001 per share for cash proceeds of $3,000, we have raised $81,025
through two private placements completed in April 2008 and December
2008. The following table summarizes the date of offering, the price
per share paid, the number of shares sold and the amount raised for these
private placements. All of these issuances were made to non-US investors
pursuant to exemptions contained in Regulation S of the Securities Act of
1933.
Closing
Date of Offering
|
Price
Per Share Paid
|
Number
of Shares Sold
|
Amount
Raised
|
April
28, 2008
|
$0.015
|
1,635,000
|
$24,525
|
December
24, 2008
|
$0.05
|
1,130,000
|
$56,500
|
Mr.
Bidaux owns 52.0% of our issued and outstanding common stock as at January 15, 2010 . Since Mr. Bidaux owns a majority of our
outstanding shares and he is the sole director and officer of our company he has
the ability to elect directors and control the future course of our company.
Investors may find the corporate decisions made by Mr. Bidaux are inconsistent
with the interests of other stockholders. There are many other factors,
described in detail under the section of Risk Factors, which may adversely
affect our ability to begin and sustain profitable operations.
The
Offering
Common
Stock Offered by
the
Selling Stockholders
|
2,765,000
shares of common stock
|
|
Common
Stock Outstanding
as
of January 15, 2010
|
5,765,000
shares of common stock
|
|
Offering
Price
|
The
shares may be offered and sold from time to time by the selling
stockholders and/or their registered representatives at a fixed price of
$0.05 until such shares are admitted to quotation, if ever, on the OTC
Bulletin Board or another exchange or electronic medium and
thereafter at prevailing market prices or privately negotiated
prices.
|
|
Use
of Proceeds
|
We
will not receive any of the proceeds from sales of the shares offered by
the selling stockholders.
|
|
Dividend
Policy
|
We
intend to retain all available funds and any future earnings, if any, for
use in our business operations. Accordingly, we do not
anticipate paying any cash dividends on our common stock in the
foreseeable future.
|
|
Fees
and Expenses
|
We
will pay all of the expenses incident to the registration of such shares,
except for sales commissions and other expenses of selling
stockholders.
|
|
Market
Information
|
Our
common stock is not currently listed on any national securities exchange
and is not quoted on any over-the-counter market. We will seek to identify
a market maker to file an application with the Financial Industry
Regulatory Authority, Inc. for our common stock to be admitted for
quotation on the OTC Bulletin Board after the effective date of this
registration statement. We have not yet identified a market
maker that has agreed to file such application. We can not
assure you that a public market for our common stock will develop in the
future.
|
|
Risk
Factors
|
An
investment in our common stock is highly speculative and involves a high
degree of risk. Investors should carefully consider the risk
factors and other uncertainties described in this prospectus before
purchasing our common stock. See “Risk Factors” beginning on
page 4.
|
3
RISK
FACTORS
You
should carefully consider the risks described below together with all of the
other information included in this prospectus before making an investment
decision with regard to our securities. The statements contained in or
incorporated into this offering that are not historic facts are forward-looking
statements that are subject to risks and uncertainties that could cause actual
results to differ materially from those set forth in or implied by
forward-looking statements. If any of the following risks actually occurs, our
business, financial condition or results of operations could be harmed. In that
case, the trading price of our common stock could decline, and you may lose all
or part of your investment.
RISKS
RELATED TO OUR BUSINESS
Because
of the speculative nature of mineral property exploration, there is substantial
risk that no commercially viable gold, copper or mineral deposits will be found
and our business will fail.
Exploration
for gold, copper and minerals is a speculative venture involving substantial
risk. Rey Lake mineral property may not contain commercially viable deposits.
The exploration program that we will conduct on our claim may not result in the
discovery of commercial viable deposits. Problems such as unusual and unexpected
rock formations and other conditions commonly occur in exploration which often
results in unsuccessful exploration efforts. In such a case, we may be unable to
complete our business plan and you could lose your entire investment in this
offering.
Because
market factors in the mining business are out of our control, we may not be able
to market any minerals that may be found.
The
mining industry, in general, is intensely competitive and, even if gold is
discovered, a ready market will exist for the sale of any gold found. Numerous
factors beyond our control may affect the marketability of gold. These factors
include market fluctuations, the proximity and capacity of natural resource
markets and processing equipment, government regulations, including regulations
relating to prices, taxes, royalties, land tenure, land use, importing and
exporting of minerals and environmental protection. The exact effect of these
factors cannot be accurately predicted, but the combination of these factors may
result in our not receiving an adequate return on invested capital and you may
lose your entire investment in this offering.
Because
of the inherent dangers involved in gold exploration, there is a risk that we
may incur liability or damages as we conduct our business.
The
search for gold 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. We
currently have no such insurance nor do we expect to get such insurance for the
foreseeable future. If a hazard were to occur, the costs of rectifying the
hazard may exceed our asset value and cause us to liquidate all our assets
resulting in the loss of your entire investment in this offering.
Because
access to our mineral claim is often restricted by inclement weather, we will be
delayed in our exploration and any future mining efforts.
Surface
exploration and drilling access, according to the Rey Lake Geologist Report (as
defined under "Experts") was, to our Rey Lake mineral property is most favorable
between April 1 and October 31 of each year due to snow in the area at other
times of the year. As a result, any attempts to visit, test, or explore the
property are largely limited to these few months of the year when weather
permits such activities. These limitations can result in significant delays in
exploration efforts, as well as mining and production in the event that
commercial amounts of minerals are found. Such delays can result in our
inability to meet deadlines for exploration expenditures as defined by the
Province of British Columbia. This could cause our business venture to fail and
the loss of your entire investment in this offering unless we can meet
deadlines.
4
As
we undertake exploration of our mineral claim, we will be subject to government
regulations that may increase the anticipated time and cost of our exploration
program.
There are
several governmental regulations that materially restrict the exploration of
minerals. We will be subject to the mining laws and regulations as contained in
the Mineral Tenure Act of the Province of British Columbia as we carry out our
exploration program. We may be required to obtain work permits, post bonds and
perform remediation work for any physical disturbance to the land in order to
comply with these regulations. There is a risk that new regulations could
increase our time and costs of doing business and prevent us from carrying out
our exploration program.
If
we do not find a joint venture partner for the continued development of our
mineral claim, we may not be able to advance exploration work, which could cause
our business to fail.
If the
results of our Phase Two exploration program are successful, we may try to enter
into a joint venture agreement with a partner for the further exploration and
possible production of our Rey Lake Property. We would face competition in
finding a joint venture partner, from other junior mineral resource exploration
companies who have properties that the joint venture partner may deem to be more
attractive in terms of potential return and investment cost. In addition, if we
entered into a joint venture agreement, we would likely assign a percentage of
our interest in the Rey Lake claim to the joint venture partner. If we are
unable to enter into a joint venture agreement with a partner, our operations
may fail and you may lose your entire investment in this offering.
If
we do not obtain additional financing, our business plan will fail.
Our
current operating funds are estimated to be sufficient to complete the first
phase of our exploration program on the Rey Lake mineral property. However, we
will need to obtain additional financing in order to complete our business plan.
Our business plan calls for significant expenses in connection with the
exploration of our mineral claim. We have not made arrangements to secure any
additional financing.
If
we do not obtain clear title to the mineral claim, our business may
fail.
Under
British Columbia law, title to a British Columbia mineral claim can only be held
by individuals or British Columbia corporations. Since we are a Nevada
corporation we are not legally allowed to hold claims in British Columbia. Our
mineral claim is being held in trust for us by our President, a Canadian
resident. If we confirm economically viable deposits of gold on our mineral
claim we will incorporate a British Columbia subsidiary to hold title to the
mineral claim and our President will transfer the claim to the subsidiary. Until
we can confirm viable gold deposits, our President is holding the claim in trust
for us by means of a trust agreement. However, there could be situations such as
the death of our President that could prevent us from obtaining clear title to
the mineral claim. If we are unable to obtain clear title to the mineral claim
our business will likely fail and you will lose your entire investment in this
offering.
Our
failure to make required payments or expenditures could cause us to lose title
to the mineral claim.
The Rey
Lake mineral property has an expiry date of September 30, 2010 and in order to
maintain the tenure in good standing it will be necessary for us to either
perform and record valid exploration work with value of approximately $150,000
for the 100 hectares of the claim) through September 30, 2010 or pay the
equivalent sum to the Province of British Columbia in lieu of work. Failure to
perform and record valid exploration work or pay the equivalent sum to the
Province of British Columbia on the anniversary dates will result in forfeiture
of title to the claim.
5
Because
we have only recently commenced business operations, we face a high risk of
business failure and this could result in a total loss of your
investment.
We have
not yet begun the initial stages of exploration of our mineral claim, and thus
have no way to evaluate the likelihood of whether we will be able to operate our
business successfully. We were incorporated on November 26, 2007 and to date
have been involved primarily in organizational activities, obtaining financing
and staking our mineral claim. We have not earned any revenues and as of January 15, 2010 , we have never
achieved profitability. We expect to incur operating losses for the foreseeable
future.
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 the light of 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 have no history upon which to base any assumption as to the likelihood that
our business will prove successful, will generate any operating revenues or ever
achieve profitable operations. If we are unsuccessful in addressing these risks
our business will likely fail and you will lose your entire investment in this
offering.
Because
our management has no experience in the mineral exploration business we may make
business decisions that are not advantageous to us, and this could cause our
business to fail.
Our
President has no previous experience operating an exploration or a mining
company and because of this lack of experience he may make mistakes. Our
management lacks the technical training and experience with exploring for,
starting, or operating a mine. With no direct training or experience in these
areas our management may not be fully aware of the many specific requirements
related to working in this industry. Our management's decisions and choices may
not take into account standard engineering or managerial approaches that mineral
exploration companies commonly use. Consequently, our operations, earnings, and
ultimate financial success could suffer irreparable harm due to our management's
lack of experience in this industry.
Because
our sole director and officer owns the majority of our common stock, he has the
ability to override the interests of the other stockholders, which could prevent
us from becoming profitable.
Our
President, Maurice Bidaux, owns 52.0% of our outstanding common stock and serves
as our sole director and officer. Because Mr. Bidaux owns more than 50% of our
issued common stock, he will be able to elect all of our directors and control
our operations. He may have an interest in pursuing acquisitions, divestitures
and other transactions that involve risks. For example, he could cause us to
make acquisitions that increase our indebtedness or to sell revenue generating
assets. He may from time to time acquire and hold interests in businesses that
compete directly or indirectly with us. If he fails to act in our best interests
or fails to perform adequately to manage us, you may have difficulty in removing
him as director, which could prevent us from becoming profitable.
There
is substantial doubt as to whether we will continue operations. If we
discontinue operations, you could lose your investment.
The
following factors raise substantial doubt regarding the ability of our business
to continue as a going concern: (i) the losses we incurred since our inception;
(ii) our lack of operating revenues as at January 15, 2010 ; and (iii) our dependence on the
sale of equity securities and receipt of capital from outside sources to
continue in operation. We anticipate that we will incur increased expenses
without realizing enough revenues. We therefore expect to incur significant
losses in the foreseeable future. The financial statements do not include any
adjustments that might result from the uncertainty about our ability to continue
our business. If we are unable to obtain additional financing from outside
sources and eventually produce enough revenues, we may be forced to sell our
assets, curtail or cease our operations. If this happens, you could lose all or
part of your investment.
6
RISKS
RELATED TO OUR COMMON STOCK
There
is no liquidity and no established public market for our common stock and it may
prove impossible to sell your shares.
There is
presently no public market in our shares. We intend to contact an authorized OTC
Bulletin Board market maker for sponsorship of our securities. Such
sponsorship, however, may not be approved and our stock may not be quoted on the
OTC Bulletin Board for sale. Even if our shares are quoted for sale, buyers may
be insufficient in numbers to allow for a robust market, and it may prove
impossible to sell your shares.
If
the selling shareholders sell a large number of shares all at once or in blocks,
the value of our shares would most likely decline.
The
selling shareholders are offering 2,765,000 shares of our common stock through
this prospectus. They must sell these shares at a fixed price of $0.05 until
such time as they are quoted on the OTC Bulletin Board or other quotation system
or stock exchange. Our common stock is presently not traded on any market or
securities exchange, but should a market develop, shares sold at a price below
the current market price at which the common stock is trading will cause that
market price to decline. Moreover, the offer or sale of large numbers of shares
at any price may cause the market price to fall. The number of shares being
registered by this prospectus represent approximately 48% of the common shares
currently outstanding.
Because
the SEC imposes additional sales practice requirements on brokers who deal in
our shares which are penny stocks, some brokers may be unwilling to trade them.
This means that you may have difficulty reselling your shares and this may cause
the price of the shares to decline.
A penny
stock is generally a stock that is not listed on a national securities exchange
or NASDAQ, is listed in the "pink sheets" or on the OTC Bulletin Board, has a
price per share of less than $5.00, and is issued by a company with net tangible
assets less than $5 million.
The penny
stock trading rules impose additional duties and responsibilities upon
broker-dealers and salespersons effecting purchase and sale transactions in
Common Stock and other equity securities, including determination of the
purchaser's investment suitability, delivery of certain information and
disclosures to the purchaser, and receipt of a specific purchase agreement
before effecting the purchase transaction.
Many
broker-dealers will not effect transactions in penny stocks, except on an
unsolicited basis, in order to avoid compliance with the penny stock trading
rules. In the event our Common Stock becomes subject to the penny stock trading
rules:
·
|
such
rules may materially limit or restrict the ability to resell our Common
Stock, and
|
·
|
the
liquidity typically associated with other publicly traded equity
securities may not exist.
|
Because
of the significant restrictions on trading penny stocks, a public market may
never emerge for our securities. If this happens, you may never be able to
publicly sell your shares.
7
As
our sole director and officer and our assets are located in Canada, investors
may be limited in their ability to enforce US civil actions against our director
or our assets. You may not be able to receive compensation for damages to the
value of your investment caused by wrongful actions by our
director.
Our
assets are located in Canada and our director is a resident of Canada.
Consequently, it may be difficult for United States investors to affect service
of process within the United States on our director. A judgment of a
US court predicated solely upon such civil liabilities may not be enforceable in
Canada by a Canadian court if the US court in which the judgment was obtained
did not have jurisdiction, as determined by the Canadian court, in the matter.
There is substantial doubt whether an original action could be brought
successfully in Canada against any of our future assets or our director
predicated solely upon such civil liabilities. You may not be able to recover
damages as compensation for a decline in your investment.
We
do not intend to pay dividends and there will be less ways in which you can make
a gain on any investment in us.
We have
never paid any cash dividends and currently do not intend to pay any dividends
for the foreseeable future. To the extent that we require additional funding
currently not provided for in our financing plan, our funding sources may likely
prohibit the payment of a dividend. Because we do not intend to declare
dividends, any gain on an investment in us will need to come through
appreciation of the stock’s price.
USE OF
PROCEEDS
The
shares of common stock offered by this prospectus are being registered for the
account of the selling stockholders named in this prospectus. We will
not receive any proceeds from the sale of the common stock offered through this
prospectus by the selling stockholders. We will pay all of the
expenses incident to the registration of the shares except for sales commissions
and other expenses of selling stockholders.
DETERMINATION OF
OFFERING PRICE
The
selling shareholders will sell at an initial price of $0.05 per share until our
shares are quoted on the OTC Bulletin Board and thereafter at prevailing market
prices or privately negotiated prices. The $0.05 per share initial price of our
common stock was determined by our Board of Directors.
Since our
shares are not listed or quoted on any exchange or quotation system, the
offering price of the shares of common stock was arbitrarily
determined. The offering price was determined by the price at which
shares were sold to our shareholders in our private placement which was
completed in November 2008 and does not necessarily bear any relationship to our
book value, assets, past operating results, financial condition or any other
established criteria of value. The price of our shares of common
stock is not based on past earnings, nor is the price of the shares of our
common stock indicative of current market value for the assets owned by us. No
valuation or appraisal has been prepared for our business. You cannot be sure
that a public market for any of our securities will develop.
We intend
to apply to the OTC Bulletin Board for the trading of our common stock. If our
common stock becomes listed on the OTC Bulletin Board and a market for the stock
develops, the actual price of the shares sold herein by the selling shareholders
will be determined by prevailing market prices at the time of sale or by private
transactions negotiated by the selling shareholders named in this
Prospectus.
The
number of shares that may be actually sold by a selling shareholder will be
determined by each selling shareholder. The selling shareholders are under no
obligation to sell all or any portion of the shares offered, nor are the selling
shareholders obligated to sell such shares immediately under this Prospectus. A
shareholder may sell shares at a price different than $0.05 per share depending
on privately negotiated factors such as a shareholder's own cash requirements,
or objective criteria of value such as the market value of our
assets.
DILUTION
All
2,765,000 shares of the common stock to be sold by the selling shareholders are
currently issued and outstanding. Accordingly, they will not cause dilution to
our existing shareholders.
8
SELLING
SHAREHOLDERS
The
following table sets forth certain information regarding the selling
stockholders and the shares offered by them in this prospectus. Beneficial
ownership is determined in accordance with the rules of the SEC. Each
selling stockholder’s percentage of ownership in the following table is based
upon 5,765,000 shares of common stock outstanding as of January 15, 2010 .
Name
of Selling
Shareholder
|
Shares
Owned
Before
the
Offering
(1)
|
Percent
(%)
|
Maximum
Number
of
Shares
Being
Offered
|
Beneficial
Ownership
After
Offering
|
Percentage
of
Shares
Owned
After
the
Offering
is
Complete
|
|||||||||||||||
Tim
Hayward
|
133,333
|
2.3
|
133,333
|
0
|
0
|
|||||||||||||||
Joseph
Babiar
|
166,666
|
2.9
|
166,666
|
0
|
0
|
|||||||||||||||
Caroline
Peacock
|
80,000
|
1.4
|
80,000
|
0
|
0
|
|||||||||||||||
Martin
Kilo
|
146,666
|
2.5
|
146,666
|
0
|
0
|
|||||||||||||||
Michelle
Duncan
|
125,000
|
2.2
|
125,000
|
0
|
0
|
|||||||||||||||
Debra
McDiarmid
|
83,333
|
1.4
|
83,333
|
0
|
0
|
|||||||||||||||
Christian
Wirth
|
166,666
|
2.9
|
166,666
|
0
|
0
|
|||||||||||||||
Howard
Tolley
|
125,000
|
2.2
|
125,000
|
0
|
0
|
|||||||||||||||
Douglas
Klumpp
|
125,000
|
2.2
|
125,000
|
0
|
0
|
|||||||||||||||
Helen
Klassen
|
100,000
|
1.7
|
100,000
|
0
|
0
|
|||||||||||||||
Daryl
Domes
|
83,333
|
1.4
|
83,333
|
0
|
0
|
|||||||||||||||
Gregory
Corcoran
|
166,666
|
2.9
|
166,666
|
0
|
0
|
|||||||||||||||
Todd
Scott
|
133,333
|
2.3
|
133,333
|
0
|
0
|
|||||||||||||||
Terry
Thorpe
|
70,000
|
1.2
|
70,000
|
0
|
0
|
|||||||||||||||
Kelly
Mote
|
50,000
|
+
|
50,000
|
0
|
0
|
|||||||||||||||
Tiffany
Carroll
|
100,000
|
1.7
|
100,000
|
0
|
0
|
|||||||||||||||
Yuvraj
Dhesi
|
70,000
|
1.2
|
70,000
|
0
|
0
|
|||||||||||||||
Kelty
Christensen
|
50,000
|
+
|
50,000
|
0
|
0
|
|||||||||||||||
Frank
Garvin
|
25,000
|
+
|
25,000
|
0
|
0
|
|||||||||||||||
Parveshindera
Sidhu
|
25,000
|
+
|
25,000
|
0
|
0
|
|||||||||||||||
Sarah
Guardado
|
60,000
|
1.0
|
60,000
|
0
|
0
|
|||||||||||||||
Evan
Schindel
|
100,000
|
1.7
|
100,000
|
0
|
0
|
|||||||||||||||
Chad
Verpy
|
60,000
|
1.0
|
60,000
|
0
|
0
|
|||||||||||||||
Roland
Requier
|
60,000
|
1.0
|
60,000
|
0
|
0
|
|||||||||||||||
Tricia
Franks
|
20,000
|
+
|
20,000
|
0
|
0
|
|||||||||||||||
Monika
Maksymik
|
70,000
|
1.2
|
70,000
|
0
|
0
|
|||||||||||||||
Maria
Hluchanova
|
70,000
|
1.2
|
70,000
|
0
|
0
|
|||||||||||||||
Jennifer
Olson
|
30,000
|
+
|
30,000
|
0
|
0
|
|||||||||||||||
Robert
Samuel Grier
|
25,000
|
+
|
25,000
|
0
|
0
|
|||||||||||||||
Ed
Frijters
|
25,000
|
+
|
25,000
|
0
|
0
|
|||||||||||||||
Marnie
Bryks
|
25,000
|
+
|
25,000
|
0
|
0
|
|||||||||||||||
Tri
Lam
|
50,000
|
+
|
50,000
|
0
|
0
|
|||||||||||||||
Hoang
Tran
|
25,000
|
+
|
25,000
|
0
|
0
|
|||||||||||||||
Linda
Tran
|
50,000
|
+
|
50,000
|
0
|
0
|
|||||||||||||||
Kathleen
Noval
|
70,000
|
1.2
|
70,000
|
0
|
0
|
|||||||||||||||
Total
|
2,764,996
|
2,764,996
|
0
|
0
|
+Less
than 1%
9
We are
not aware of any family relationships among selling
shareholders. Except as indicated above, the named shareholders
beneficially own and have sole voting and investment power over all shares or
rights to these shares. 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 5,765,000 shares of common
stock outstanding on January 15,
2010 . The selling shareholders named in this prospectus are
offering a total of 2,765,000 shares of common stock which represents 48%
of our outstanding common stock on January 15, 2010 . Except as indicated above, none of
the selling shareholders or their beneficial owners (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 registered broker-dealer or an affiliate of a registered
broker-dealer
We will
receive no proceeds from the sale of the registered shares; however, we will
receive proceeds from the exercise of options by the selling
stockholders. We have agreed to bear the expenses of registration of
the shares, other than commissions and discounts of agents or broker-dealers and
transfer taxes, if any.
PLAN
OF DISTRIBUTION
The
selling stockholders and any of their respective pledgees, donees, assignees,
and other successors-in-interest may, from time to time, sell any or all of
their shares of common stock on any stock exchange, market or trading facility
on which the shares are traded or in private transactions. These
sales will be at the fixed price of $0.05 until the shares are quoted on the OTC
Bulletin Board.
We have
agreed to bear all costs, expenses, and fees of registration of the shares of
our common stock offered by the selling stockholders for
resale. However, any brokerage commissions, discounts, concessions,
or other fees, if any, payable to broker-dealers in connection with any sale of
shares of common stock will be borne by the selling stockholders selling those
shares or by the purchasers of those shares.
On our
being notified by a selling stockholder that any material arrangement has been
entered into with a broker-dealer for the sale of shares through a block trade,
special offering, exchange distribution, or secondary distribution, or a
purchase by a broker or dealer, a supplement to this prospectus will be filed,
if required, pursuant to Rule 424(b) under the Securities Act, disclosing
the following:
·
|
the
name of each such selling stockholder and of any participating
broker-dealer;
|
|
·
|
the
number of securities involved;
|
|
·
|
the
price at which such securities were sold;
|
|
·
|
the
commissions paid or discounts or concessions allowed to any broker-dealer,
where applicable;
|
|
·
|
that
any broker-dealer did not conduct any investigation to verify the
information set out or incorporated by reference in this
prospectus;
|
|
·
|
other
facts material to the transaction.
|
The
selling stockholders may use any one or more of the following methods when
selling shares:
|
·
|
directly
as principals;
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange
|
|
·
|
privately
negotiated transactions
|
|
·
|
short
sales that are in compliance with the applicable laws and regulations of
any state and the United States and not made prior to the
effective date of this registration statement
|
|
·
|
broker-dealers
may agree with the selling stockholders to sell a specified number of such
shares at a stipulated price per share
|
|
·
|
a
combination of any such methods of sale
|
|
·
|
any
other method permitted pursuant to applicable
law
|
10
We are
required to pay expenses incident to the registration, offering, and sale of the
shares under this offering. The selling stockholders may also sell
shares under Rule 144 under the Securities Act, if available, rather than
under this prospectus.
Any sales
of the shares may be effected through the OTC Bulletin Board if our common stock
is admitted to quotation on the OTC Bulletin Board, in private transactions or
otherwise, and the shares may be sold at market prices prevailing at the time of
sale, at prices related to prevailing market prices.
Broker-dealers
engaged by the selling stockholders may arrange for other brokers-dealers to
participate in sales. If the selling stockholders effect sales
through underwriters, brokers, dealers or agents, such firms may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders or the purchasers of the shares for whom they may act as
agent, principal or both in amounts to be negotiated. Those persons
who act as broker-dealers or underwriters in connection with the sale of the
shares may be selected by the selling stockholders and may have other business
relationships with, and perform services for, us. The selling
stockholders do not expect these commissions and discounts to exceed what is
customary in the types of transactions involved.
In the
event that any of the selling stockholders are deemed an affiliated purchaser or
distribution participant within the meaning of Regulation M, then the selling
stockholders will not be permitted to engage in short sales of common stock.
Furthermore, under Regulation M, persons engaged in a distribution of securities
are prohibited from simultaneously engaging in market making and certain other
activities with respect to such securities for a specified period of time prior
to the commencement of such distributions, subject to specified exceptions or
exemptions. In addition, if a short sale is deemed to be a stabilizing activity,
then the selling stockholders will not be permitted to engage in a short sale of
our common stock.
Under the
securities laws of certain states, the shares may be sold in those states only
through registered or licensed brokers or dealers. In addition, in certain
states the shares may not be able to be sold unless our common stock has been
registered or qualified for sale in that state or an exemption from registration
or qualification is available and is complied with.
11
DESCRIPTION OF
SECURITIES
General
Our
authorized capital stock consists of 75,000,000 shares of common stock at a par
value of $0.001 per share.
Common
Stock
As of
January 15, 2010 ,
5,765,000 shares of common stock are issued and outstanding and held by 36
shareholders 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. Therefore, holders of a majority of the shares of common stock
voting for the election of directors can elect all of the directors. Holders of
a majority of shares of common stock issued and outstanding, represented in
person or by proxy, are necessary to constitute a quorum at any meeting of our
stockholders. A vote by the holders of a majority of our outstanding shares is
required to effectuate certain fundamental corporate changes such as
liquidation, merger or an amendment to our Articles of
Incorporation.
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 of a liquidation, dissolution or winding up, each outstanding share
entitles its holder to participate prorata 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
preemptive rights, no conversion rights and there are no redemption provisions
applicable to our common stock.
Preferred
Stock
As of
January 15, 2010 , there
is no preferred stock issued or authorized.
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.
Options,
Warrants and Convertible Securities
As of
January 15, 2010, there
are no outstanding options or warrants to purchase our securities or securities
convertible into shares of our common stock or any rights convertible or
exchangeable into shares of our common stock. We may, however, issue options,
warrants or convertible securities in the future.
Stock
Transfer Agent
As of
January 15, 2010 we had
not yet appointed a stock transfer agent.
Shares
Eligible for Future Sale
The
2,765,000 shares of common stock being registered in this offering will be
freely tradable without restrictions under the Securities Act. The
3,000,000 shares of our issued common stock that are not being registered in
this prospectus are held by Maurice Bidaux, our President, Chief Executive
Officer and Chief Financial Officer.
In
general, under Rule 144 as currently in effect, a person who has beneficially
owned restricted shares of our common stock for at least six months would be
entitled to sell their securities provided that (1) such person is not deemed to
have been one of our affiliates at the time of, or at any time during the three
months preceding, a sale, (2) we are subject to the reporting requirements of
the Securities Exchange Act of 1934, as amended, for at least 90 days before the
sale and (3) if the sale occurs prior to satisfaction of a one-year holding
period, we provide current information at the time of sale.
12
Persons
who have beneficially owned restricted shares of our common stock for at least
six months but who are our affiliates at the time of, or at any time during the
three months preceding, a sale, would be subject to additional restrictions, by
which such person would be entitled to sell within any three-month period only a
number of securities that does not exceed the greater of:
|
•
|
1%
of the total number of securities of the same class then outstanding,
which will equal approximately 228,632 shares immediately after this
offering; or
|
•
|
the
average weekly trading volume of such securities during the four calendar
weeks preceding the filing of a notice on Form 144 with respect to
such sale.
|
provided, in each case, that
we are subject to the periodic reporting requirements of the Securities Exchange
Act of 1934 for at least three months before the sale.
However,
since we will seek to initiate quotation of our common stock on the OTC Bulletin
Board, which is not an “automated quotation system,” our stockholders will not
be able to rely on the market-based volume limitation described in the second
bullet above. If, in the future, our securities are listed on an exchange or
quoted on NASDAQ, then our stockholders would be able to rely on the
market-based volume limitation. Unless and until our stock is so
listed or quoted, our stockholders can only rely on the percentage based volume
limitation described in the first bullet above. Such sales by
affiliates must also comply with the manner of sale, current public information
and notice provisions of Rule 144. The selling stockholders will not be governed
by the foregoing restrictions when selling their shares pursuant to this
prospectus.
The
3,000,000 outstanding restricted securities held by our sole director and
officer that are not registered in this prospectus are subject to the sale
limitations imposed by Rule 144. The availability for sale of substantial
amounts of common stock under Rule 144 could adversely affect prevailing market
prices for our securities.
LEGAL
MATTERS
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 exceeding
$50,000, directly or indirectly, in Keyser Resources Incorporated. Nor was any
such person connected with Keyser Resources Incorporated as a promoter, managing
or principal underwriter, voting trustee, director, officer, or
employee.
The
validity of the issuance of the common stock offered by the selling stockholders
under this prospectus will be passed upon for us by Sichenzia Ross Freidman
Ference LLP, New York, New York.
EXPERTS
Our
audited and unaudited financial statements are included in this Prospectus in
reliance upon Seale and Beers, CPA , as experts in
auditing and accounting.
The
geological report for the Rey Lake mineral property (“Rey Lake Geologist
Report”) was prepared by Agnes Koffyberg P. Geo., and the summary information of
the geological report disclosed in this prospectus is in reliance upon the
authority and capability of Agnes Koffyberg as a Professional
Geoscientist.
13
DESCRIPTION OF THE
BUSINESS
Our
Business
Corporate
History
We are a
start-up exploration stage company without significant operations and we are in
the business of gold and copper exploration. Keyser Resources Incorporated was
incorporated in the State of Nevada on November 26, 2007. On the
date of our incorporation, we appointed Maurice Bidaux as our
Director. Mr. Bidaux was then appointed President, Principal
Financial Officer, Principal Accounting Officer and Secretary of our
company. Our principal office is located at 61 Sherwood Circle NW,
Calgary Alberta T3R 1R3.
Business
Development
Our
President, Mr. Bidaux, has had an interest in British Columbia mineral
exploration for over 12 years having invested in B.C. and other Western Canada
publicly listed mineral exploration companies over that period. Mr.
Bidaux decided to start a mineral exploration company on November 26, 2007 after
years of experience in investing in publicly listed mineral exploration
companies and observing that the commodity prices for gold, zinc, copper and
other minerals appeared to be at a sustained attractive level.
Mr.
Bidaux believed he had located claims of merit in the Omineca Mining District
using the Province of British Columbia’s on-line staking system and staked 4
claims on our behalf in April 2008. These claims proved to be not
viable after consulting a geologist at Discovery Consultants Inc. Mr.
Bidaux then approached Discovery Consultants Inc., about attractive unencumbered
properties that Discovery might be able to identify for us to acquire and
develop.
On June
11, 2008 we signed an option agreement with Bearclaw Capital Corporation
(“Bearclaw”) to acquire 90% interest in the Rey Lake Property, which is located
in the Nicola Mining Division of British Columbia, 45 kilometers north-west of
Merrit, British Columbia, Canada. There is no assurance that a
commercially viable deposit exists on this mineral claim. Exploration will be
required before a final evaluation as to the economic and legal feasibility of
the mineral claim is determined.
The
agreement with Bearclaw allows Keyser to acquire the 90% interest in the Rey
Lake Property by making exploration expenditures totaling CDN$150,000
(approximately US$156,000 using current translation rates) through September 30,
2010 and paying CDN $12,500 (approximately US$ 13,000) cash (of which CDN $5,000
(approximately US$ 5,200) has been paid) to Bearclaw by September 30,
2010. The agreement with Bearclaw was amended on September 28, 2009
to extend a requirement for an interim exploration milestone from September 30,
2009 to July 31, 2010. The option agreement required that Bearclaw
transfer title to us within 30 days of signing the agreement. On our
request, Bearclaw transferred title to our President, Mr. Maurice Bidaux, who
has executed a trust agreement and has agreed to hold the claim in trust for us
(since British Columbia laws prevent a Nevada corporation from holding title
directly). If we do not make the exploration expenditures, we will forfeit our
right to exercise the option.
The
tenure number of the Rey Lake mineral claim is 510210. Under the
British Columbia Mineral Tenure Act, title to British Columbia mineral claims
can only be held by individuals or British Columbia
corporations. Because of this regulation, our President is holding
the mineral claim in trust for us until we can determine whether there is a
commercially viable copper/gold/molybdenum deposit on our claim. If
we determine that there is a commercially viable gold and/or copper deposit on
our claim we will incorporate a British Columbia subsidiary to hold title to the
claim and our President will transfer the mineral claim to the
subsidiary. The transfer will be at no cost to us other than the
costs associated with the incorporation of the British Columbia
subsidiary.
In
November 2008, we engaged a professional geoscientist named Agnes Koffyberg, who
is familiar with the Nicola Mining District area to develop a report about the
Rey Lake property that we optioned from Bearclaw. Agnes Koffyberg was
introduced to us through Bill Gilmour, P. Eng. of Discovery
Consultants. Discovery Consultants was contracted to assess the
properties staked in the Nicola Mining District. The report entitled
“Report on the Rey Lake Property” dated November 28, 2008 describes the mineral
claim, the regional geology, the mineral potential of the claim and
recommendations how we should explore the claim.
14
Plan
of Operation
The
agreement with Bearclaw allows Keyser to acquire the 90% interest in the Rey
Lake Property by making exploration expenditures totaling CDN$150,000
(approximately US$156,000 using current translation rates) through September 30,
2010 and paying CDN $12,500 (approximately US$ 13,000) cash (of which CDN $5,000
(approximately US$ 5,200) has been paid) to Bearclaw by September 30,
2010. The agreement with Bearclaw was amended on September 28, 2009
to extend a requirement for an interim exploration milestone from September 30,
2009 to July 31, 2010. The option agreement required that Bearclaw
transfer title to us within 30 days of signing the agreement. On our
request, Bearclaw transferred title to our President, Mr. Maurice Bidaux, who
has executed a trust agreement and has agreed to hold the claim in trust for us
(since British Columbia laws prevent a Nevada corporation from holding title
directly). If we do not make the exploration expenditures, we will forfeit our
right to exercise the option.
Our
consulting geologist Agnes Koffyberg has written the Rey Lake Geologist
Report providing us with recommendations of how we should explore our
claim. The potential economic significance of the mineral claim is that
according to the Rey Lake Geologist Report, the known mineralization has been
classified as a porphyry-copper-molybdenum type deposit and contains zones of
skarn alteration within the meta-sedimentary layers. Further,
according to the Rey Lake Geologist Report, our property has the potential to
host a deposit containing copper-molybdenum and gold
mineralization.
Regionally,
the Property is situated in a geologically prospective area that has proven
historic copper-molybdenum mineralization. On the property,
copper-molybdenum mineralization has been shown to occur for a distance of about
325m from DDH 75-24 (81m of 0.21% Cu, 0.023% Mo) to 72-6 (“skarn zone”) to
DDH72-1 and 2 (“breccia zone), in a north-northwest to south-southeast
direction. It remains open to the north and south. Best
host rocks for copper-molybdenum appear to be the “breccia zone” and the “skarn
zone”, although copper and molybdenum mineralization have also been
encountered within altered and fractured andesites and within the quartz
monzonite stock.
Due to
thick sequences of overburden, (Overburden refers to the loose soil, silt, sand,
gravel or other unconsolidated material overlying bedrock. Overburden
is removed during surface mining, but is typically not contaminated with toxic
components and may be used to restore a mining site to a semblance of its
appearance before mining began.) the effectiveness of geological mapping and
rock sampling are limited. Therefore, as recommended by our
geologist, MMI soil sampling, (Mobile Metal Ion measurement), as done by a
company called Southern Rio in 2005 will be utilized as it is more effective
than conventional B-horizon soil sampling due to our properties areas of thick
overburden.
It is the
geologist’s conclusion in the Rey Lake Geologist's Report that the
Rey Lake Property is a property of merit and it is recommended that further
exploration be carried out on the Property. A program to
identify extensions of altered mineralized rock is recommended with
initial work consisting of an extensive gridded MMI soil survey with the aim of
determining further drill targets. Depending on the results, targets
could be follow-up by a diamond drill program. If this work is
successful in encountering copper-molybdenum-gold mineralization, more drilling
and investment will be required to properly evaluate the Property.
Our
objective is to conduct exploration activities on our mineral claim to assess
whether the claim possesses any commercially viable gold/copper/molybdenum
deposits. Until we can validate otherwise, the claim is without known reserves
and we are planning a two phase program to explore our claim. Access to the
claim is limited to the period of April 1 to October 31 of each year due to snow
in the area. This means that our exploration activities are limited to a period
of about seven months per year. We will explore our claim between April
1, 2010 and October 31, 2010. Our goal is to complete our Phase
One of exploration within this period. Prior to carrying out a drill program on
the Property, Keyser will carry out the recommended MMI soil survey to test for
copper-molybdenum-gold mineralization below areas of thick overburden as
described above.
Before
the soil survey is performed, permission from private landowners is
required. As mentioned in the Rey Lake Geologist Report, a land title
search shows much of the property is on private land. Also, the
present access road to the property also passes through several private land
lots. Land owners must be given a ten day advance notice when access
to the property is required. Discovery Consultants of Vernon B.C.
prepared letters of notice of work to the landowners and
sent them out in August, 2009 . Work can commence any time after 8 days
after the landowners receive the
notice. No reply or follow-up is necessary unless a landowner expresses a concern. To date, no
concerns have been expressed by any landowner.
To make
best use of our funds, our Phase One Exploration program targets, as recommended
by our geologist, testing in locations with a higher probability of success
based on favorable geology and as a logical follow-up to areas of previous work
performed on the site. If the high priority targets recommended do
not result in economically viable results, we can move on to another area
without the unnecessary expenditures to continue exploration of areas considered
to be lower priority targets (lower probability of success) by our geologist or
consider letting the option on the Rey Lake property expire.
Our plan
of operation for the next twelve months is to complete the following objectives
within the time periods specified, subject to our obtaining any additional
funding necessary for the continued exploration of our Rey Lake mineral
property. We anticipate that we have enough funds to complete our
Phase One exploration program. We do not have enough funds to
complete Phase Two of our program. OurPresident, Mr. Bidaux
is not obligated to provide personally any necessary funding for the listed
programs. Mr. Bidaux, however, will use his best efforts
to arrange
for the financing of the shortfall We intend to raise the funds for
our near-term 12-month cash requirements from private placements, shareholder
loans or possibly a registered public offering (either self-underwritten or
through a broker-dealer). If we are unsuccessful in raising enough money through
future capital raising efforts, we may review other financing possibilities such
as bank loans. At this time we do not have any commitments from any
broker-dealer to provide us with financing.
15
The
following is a brief summary of our two-phase exploration program.
Phase
Number
|
Planned
Exploration Activities
|
Timetable
|
Phase
One
|
A
MMI soil survey to test for copper-molybdenum-gold mineralization below
areas of thick overburden.
|
April 2010
– June, 2010
|
Phase
Two
|
- Extension
of the IP geophysical survey started in 2005; extending the lines
north and south.
|
June
2010 – October 2010
|
- A
magnometer survey, which can be done in conjunction with the IP
survey, may be useful in identifying magnetic rich
skarn.
|
||
- Depending
on the results from above, diamond drilling to follow up soil and
geophysical anomalies identified above. Large diameter (NQ)
should be drilled in the area to verify grades, especially in the vicinity
of 72-1 and 73-7 in the “breccia zone” and near 72-6 in the “skarn
zone.”.
|
Quality
Assurance and Quality Control Protocols that have been established for the
geochemical soil survey program include the following:
·
|
During
soil sample collection and handling, no jewelry (watches, rings,
bracelets, and chains) will be worn, as this can be a major source of
contamination
|
·
|
Chain
of Custody – soil samples will be collected and shipped by a bonded
carrier directly to the lab
|
·
|
Use
of SGS Analytical Services (“SGS”), which operates qualified laboratories
around the world, all having ISO 9001 and ISO 17025
certification
|
·
|
At
the lab, analysis of soil samples by SGS includes Laboratory Standards,
which monitor accuracy of the instrumentation. In addition, “blank”
samples inserted into the sample batch monitor contamination in the
analytical process. Laboratory duplicates are added to monitor the
precision of the instrumentation.
|
If the
results from Phase One and Phase Two are successful in encountering gold
mineralization, more drilling and investment will be required to properly
evaluate the Rey Lake Property. If our exploration activities
indicate that there are no commercially viable gold deposits on the Rey Lake
Property we will let the option agreement lapse and stake a new claim to explore
in British Columbia. We will continue to stake claims or enter in to option
agreements in British Columbia as long as we can afford to do so.
Contingent
on the results of Phase One, a Phase Two program would be
recommended:
·
|
Extension
of the IP geophysical survey started in 2005; extending the lines north
and south.
|
·
|
A
magnometer survey, which can be done in conjunction with the IP survey,
may be useful in identifying magnetite rich skarn.
|
·
|
Depending
on the results from the above, diamond drilling to follow up soil and
geophysical anomalies identified above. Large diameter (NQ)
should be drilled in the area to verify grades, especially in the vicinity
of 72-1 and 73-7 in the “breccia zone” and near 72-6 in the “skarn
zone”.
|
As of
September 30, 2009, we had a cash balance of $23,767 and a negative working
capital balance of 17,363. Over the next 12 months we do not
anticipate that we will generate any revenues.
We
anticipate that we need an additional financing of approximately $50,000 for the
next 6 months beginning in January 2010 to pay for our current liabilities
(approximately $40,000) incurred in connection with legal and other expenses for
the registration of these shares and management expenses, to pay for other
operating expenses (approximately $10,000). We anticipate
that we have enough funds to complete the Phase One Exploration Program
(approximately $21,450).
If we
continue to our Phase Two Exploration Program, we will have to raise an
additional $200,000 for the next 12 months beginning in January 2010 to pay for
our current liabilities (approximately $40,000) incurred in connection with
legal and other expenses for the registration of these shares and management
expenses, to pay for other operating expenses (approximately $25,000), to
complete the Phase One Exploration Program (approximately $21,450), $120,000 in
exploration expenditures and a CDN $7,500
payment (approximately US$7,800) to Bearclaw to
satisfy our agreement with Bearclaw.
The
agreement with Bearclaw, as amended on September 28, 2009, allows Keyser to
acquire the 90% interest in the Rey Lake Property by making exploration
expenditures totaling CDN$150,000 (approximately US$156,000 using current
translation rates) through September 30, 2010 and paying CDN $12,500
(approximately US$ 13,000) cash (of which CDN $5,000 (approximately US$ 5,200)
has been paid) to Bearclaw by September 30, 2010. The remaining
exploration expenditures must be made for us to acquire the 90% interest in the
Rey Lake Property:
a) a
further exploration expenditure of CDN $25,000 (approximately US$ 26,000) by
July 31, 2010 and,
b) a
further exploration expenditure of CDN $120,000 (approximately US$ 125,000) by
September 30, 2010.
We will
need additional funding from the sale of our common stock or sale of part of our
interest in the Rey Lake mineral property. If we are successful in completing an
equity financing, existing shareholders will experience dilution of their
interest in our company. We do not have any financing arranged and we cannot
provide investors with any assurance that we will be able to raise sufficient
funding from the sale of our common stock to fund our Phase Two and further exploration programs. Our
President will use his best efforts to arrange for the financing of any
shortfall additional equity financing. There is, however, no written
agreement in place. There is a risk that we may not obtain additional financing.
This risk is one of many risk factors, described in detail under the
section of Risk Factors, which may adversely affect our ability to begin
and sustain profitable operations.
16
Our
planned exploration expenditures and operation expenses for the Phase One
Exploration program are summarized as follows:
Field
Personnel
|
||||
Field
Technicians: 10 days@ $400/day
|
$
|
4,000
|
||
Geologist:
1 day
|
600
|
|||
Crew
mobilization costs, hotels, meals: 10 days @ $240
day
|
2,400
|
|||
Truck
Rental: 10 days@$100/day
|
1,000
|
|||
Fuel: Truck
|
1,500
|
|||
MMI
Soil sample analysis: 250 samples @
$40/sample
|
10,000
|
|||
Sub-total
|
$
|
19,500
|
||
Contingency 10%
|
1,950
|
|||
Total
|
$
|
21,450
|
As
described in “Development of the Business – Business Development”, our original
business plan was to explore our claim in the Omineca Mining District in
northern British Columbia. As we were about to begin an exploration
program, we determined that the property was not worthy of an exploration
program and abandoned the Omineca property in favor of the Rey Lake
property.
We had
planned to explore Rey Lake in 2009. As 2009 unfolded, however, we
experienced time delays and postponed Phase One exploration until
2010. Upon further discussions with our geologist, we have revised
our Phase One Exploration program which conserves costs and cuts down the
exploration time. As a result, we can pay for the Phase One
Exploration program with the funds in hand and, if the results are successful
begin Phase Two of our exploration plan.
As
recommended by the geologist, our Phase One Exploration program targets testing
in locations with a higher probability of success based on favorable geology and
as a logical follow-up to areas of previous work performed on the
site. If the high priority targets recommended do not result in
economically viable results, we can move on to another area without the
unnecessary expenditures to continue exploration of areas considered to be lower
priority targets (lower probability of success) by our geologist or consider
letting the option on the Rey Lake property expire.
Phase
One Exploration Cost Review
Transportation
Purchase Plan
The
transportation costs of Phase One are minimal as the Rey Lake Property is within
45 kilometers of Kamloops, a major supply center for the mining
industry. During Phase One we estimate that 10 days of truck rental
and fuel for the truck should amount to $2,500 .
Employee
Hiring (Labor) Plan
We will
use a geologist and field technicians for our Phase One of our exploration
plan. The expected labor cost for field personnel is $4,600. We will
incur crew costs, including accommodation and meals for field personnel and
field technicians, for approximately 10 crew-days. At $240
per crew-day, we estimate that expenses will total $2,400.
Reporting,
drafting and reproduction.
Sample
Analysis Plan
We plan
to allow for the analysis for up to 250 samples. Each analysis costs
$40 per sample. The expected cost for sample analysis will be $10,000
for the Phase One exploration program.
The costs
described above which include transportation, equipment, consumables, labor,
reporting and sample analysis make up the entire cost of our Phase One
exploration program. All the costs described are estimated so we will
provide a 10% contingency allowance for unanticipated and wrongly estimated
costs.
Based on
the nature of our business, we anticipate incurring operating losses in the
foreseeable future. We base this expectation, in part, on the fact that very few
mineral claims in the exploration stage ultimately develop into producing,
profitable mines. Our future financial results are also uncertain due to a
number of factors, some of which are outside our control. These factors include,
but are not limited to:
·
|
our
ability to raise additional funding;
|
·
|
the
market price for gold;
|
·
|
the
results of our proposed exploration programs on the mineral property;
and
|
·
|
our
ability to find joint venture partners for the development of our property
interests
|
Due to
our lack of operating history and present inability to generate revenues, our
auditors have stated their opinion that there currently exists substantial doubt
about our ability to continue as a going concern.
Competitive
Conditions
The
mineral exploration business is an extremely competitive industry. We are
competing with many other exploration companies looking for minerals. We are a
very small exploration company and a small participant in the mineral
exploration business. Being a junior mineral exploration company, we compete
with other companies like ours for financing and joint venture partners.
Additionally, we compete for resources such as professional geologists, camp
staff, helicopters and mineral exploration supplies.
17
Raw
Materials
The raw
materials for our exploration program will be items including camp equipment,
sample bags, first aid supplies, groceries and propane. All of these materials
are readily available in the City of Merrit, (45
kilometers
south of the Rey Lake property) British Columbia, Canada from a variety of
suppliers.
Dependence
on Major Customers
We
currently have no customers.
Intellectual
Property and Agreements
We have
no intellectual property such as patents or trademarks. Additionally, we have no
royalty agreements or labor contracts.
Government
Regulations
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 the province of British Columbia, specifically. Under these
laws, prior to production, we have the right to explore the property, subject
only to a notice of work which may entail posting a bond if we significantly
disturb the property surface. This would first occur during the drilling phase
of exploration.
We will
have to sustain the cost of reclamation and environmental mediation for all
exploration and development work undertaken. Our first two proposed phases of
exploration, which will consist of mapping, resampling, relocation, geological
soil survey and a geophysical survey, will not require any reclamation and
environmental mediation work because there will not be significant physical
disturbance to the land. Subsequent drilling will require some remediation work.
We will need to raise additional funds to finance any drilling programs,
including remediation costs.
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 programs 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;
|
·
|
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.
|
The
Canadian Environmental Assessment Act (CEAA), which came into force in January
1995, governs environmental assessment at the federal level. The Canadian
Environmental Assessment Agency is in charge of administering the environmental
assessment process. The CEAA requires an environmental assessment where a
federal authority supports a private or public sector project in one or more of
four ways:
·
|
by
being the proponent of the project,
|
·
|
by
providing money for the project,
|
·
|
by
providing land for the project, or
|
·
|
by
issuing some form of regulatory approval for the
project.
|
In
Canada, mineral title belongs to the provincial Crown. Mining is generally
regulated by the provinces. Provincial mining legislation, policies, and codes
of practice, usually have specific requirements for the control of mining
wastes. Provinces also use different procedures to regulate mining activity. We
will be required to comply with all regulations defined in the Mineral Tenure
Act for the Province of British Columbia. In British Columbia, the proponent
must submit a permit application for all mechanized surface exploration. The
application includes information about the mineral title, the operator, the
program of work, and the proposed reclamation plan. For minimal surface
disturbance in a non-sensitive area, a letter permit is issued by a district
inspector of the Ministry of Energy, Mines and Petroleum Resources. If a
mechanized work program is contemplated, the district inspector follows a
consultation procedure with other government agencies, following which a permit
will be issued. For exploration in highly sensitive areas, further referrals
will be made by the Ministry to, for example, the inter-agency management
committee, other government agencies, and/or public stakeholder
groups.
18
We are
also subject to safety policies of the Canadian Workers Compensation Board that
regulates the protection of the health and safety of workers.
In
addition to the foregoing, in the future, our Canadian operations may be
affected from time to time by political developments in Canada and by Canadian
Federal, provincial and local laws and regulations, such as restrictions on
mining production and exploration, price controls, tax increases, expropriation
of property, modification or cancellation of contract rights, and environmental
protection controls.
During
the initial phases of exploration, there will be no significant costs of
compliance with government regulations. However, while it is difficult to know
exactly how much these costs will be until we have a better indication of the
size and tenor of any production operation, we would expect that they could be
high in the production operation.
We are in
compliance with the act and will continue to comply with the act in the future.
We believe that compliance with the act will not adversely affect our business
activities in the initial phases of exploration.
We
currently have no funds to comply with environmental laws concerning our
exploration program.
Research
and Development Expenditures
We have
not incurred any research or development expenditures since our inception on
November 26, 2007.
Employees
As of
January 15, 2010 , we do
not have any full time or part time employees. Our sole director and officer
works as part time consultant in the areas of business development and
management, contributing approximately 20% of his time to us. We currently
engage independent contractors in the areas of accounting, geologist services,
legal, and auditing services. We intend to retain the services of independent
geologists, prospectors and consultants on a contract basis to conduct the
exploration programs on our Rey Lake mineral property.
LEGAL
PROCEEDINGS
We are
not aware of any pending or threatened legal proceedings which involve Keyser
Resources Incorporated or any of our properties.
DESCRIPTION OF
PROPERTY
Our
executive offices are located at 61 Sherwood Circle NW, Calgary Alberta T3R 1R3
which are provided by Mr. Bidaux at no expense. We also have a
mineral claim located in the Omineca Mining Division, British Columbia, Canada,
and an optioned property known as the Rey Lake Property.
Rey Lake
Property
The Rey
Lake Property is located in the Nicola Mining Division of British Columbia, 45
kilometres north-west of Merritt, BC. Access to the Rey Lake Property
is by paved and well-maintained dirt roads from Highway 97C. The Property
consists of one MTO claim, covering 474.37 hectares. Keyser Resources Inc. has
the right to earn a 90% interest in the Rey Lake Property by completing
specified cash payments and work commitments, as stipulated in a June 11, 2008
agreement with Bearclaw.
19
Location
and Means of Access
The
Property is located 45 km north of Merritt, BC. Access from Merritt is west via
Highway 8 for 8 km, then north on Highway 97C for 25 km to the Rey Lake turnoff
near Mamit Lake, then proceeding east along the Rey Lake road for 8 km to the
Property. Several cattle guards have been placed along this road. There are many
old roads and skidder trails that allow access to all parts of the Property. A
4-wheel drive vehicle is recommended to gain access to the lesser-maintained
dirt roads and trails.
Merritt
is the nearest major supply centre (population 8,000) and the nearest railhead.
The city of Kamloops (population 100,000), 45 km to the northeast is also a
major supply centre for the mining industry. The Property lies 5 km west of the
Coquihalla Highway between Merritt and Kamloops. A BC Hydro electrical
transmission line cuts across the north part of the Property.
The
general location of the claim is shown on Map 1 below.
Physiographically,
the Property lies within the southern Thompson Plateau. Topography in
this region consists of gentle rolling uplands. The Property, with elevations
from 1,350 to 1,450 metres, consists of open forested terrain and boggy wet
lands on the southeast end of Rey Lake. The area west of the Property was logged
in the mid 2000s. Outcrop exposure is scarce since much of the terrain is
covered by glacial drift. Road cuts and trenches provide the best rock
exposures.
Locally,
the Property lies within a valley of low relief, centered on Rey Lake at an
elevation of 1,342 m. The highest elevation within the Property is in the
northeast corner at 1,448 m. Drainage is into Rey Lake, which drains northwest
into Mamit Lake, which then flows south along the Guichon Creek valley into the
Nicola River near Merritt. This river in turn flows northwest to join the
Thompson River at the town of Spences Bridge.
20
The
modified continental climate consists of warm, dry summers and cool winters.
Precipitation is light and varies from 30 to 50 cm per year, most of which falls
during the winter months. Surface exploration work on the Property is most
favorable between April and October.
Rey
Lake mineral property description
Three
styles of copper mineralization are recognized on the Property, all of which are
likely related to the Upper Cretaceous quartz monzonite stock. These
are:
•
Disseminated in the quartz monzonite stock
•
Veinlets in the stock and country rocks
• In a
breccia zone as veinlets and disseminations in breccia fragments
Pyrite is
the dominant sulphide with lesser chalcopyrite and some
molybdenite. Chalcopyrite occurs within quartz vein stockwork and
breccia and to a lesser extent within epidote-garnet skarn. Quartz, calcite,
potassium feldspar and zeolite are also present. Alteration type includes
silicification, skarn and albitic-epidote±magnetite alteration. Drill core
indicates contact metamorphism of the albite-epidote-hornfels
facies. The volcanic rocks have been hornfelsed and chloritic
alteration is wide spread with the formation of biotite. Clay-sericite
alteration is associated with some of the quartz monzonite dykes.
The gold
content within drill core is unknown since gold assays were either not done or
not recorded for assessment during the 1970s, 1986 and 1993 drilling
programs.
21
There
is no assurance that a commercially viable gold deposit exists on the
claim. Exploration will be required before an evaluation as to the
economic feasibility of the claim is determined. Until we can
validate otherwise, the Rey Lake Property is without known reserves and we
are planning a two phase exploration program. Phase One will
consist of mapping, resampling, relocation, geological soil survey and a
geophysical survey. Phase Two will consist of extending the IP
geophysical survey started in 2005 and a magnometer survey, which can be
done in conjunction with the IP survey, may be useful in
identifying magnetic rich skarn.
|
We have
not commenced any exploration or other work on the claim.
Conditions
to Retain Title to Rey Lake mineral property
The
agreement with Bearclaw, as amended on September 28, 2009, allows Keyser to
acquire the 90% interest in the Rey Lake Property by making exploration
expenditures totaling CDN$150,000 (approximately US$156,000 using current
translation rates) through September 30, 2010 and paying CDN $12,500
(approximately US$ 13,000) cash (of which CDN $5,000 (approximately US$ 5,200)
has been paid) to Bearclaw by September 30, 2010. The remaining
exploration expenditures must be made for us to acquire the 90% interest in the
Rey Lake Property:
a) a
further exploration expenditure of CDN $25,000 (approximately US$ 26,000) by
July 31, 2010 and,
b) a further exploration expenditure of CDN $120,000
(approximately US$ 125,000) by September 30, 2010 .
History
of the Rey Lake mineral property area
Exploration
has been carried out intermittently on the Rey Lake Property since the early
1970s. From 1972-1973, American Smelting and Mining Company completed an
extensive program of geological mapping, geophysical surveying, road building,
and trenching. The company also completed 86 percussion holes totaling 5,668 m
and 17 diamond drill holes, for a total of 2684 m.
In 1998,
Discovery staked the REY 1 to 8 claims on behalf of the Phoenix II Syndicate. A
limited geochemical program of rock and soil sampling was completed the
following year. In 2004 the Property was sold to Bearclaw, which then optioned
it to Southern Rio Resources Ltd. in May 2005. They completed a geochemical
program of geological mapping, soil and rock sampling. This was done in
conjunction with an IP geophysical survey. Southern Rio Resources Ltd.
terminated their option in 2006. On June 11, 2008, on our
request, Bearclaw transferred title to our President, Mr. Maurice Bidaux, who
has executed a trust agreement and has agreed to hold the claim in trust for us
(since British Columbia laws prevent a Nevada corporation from holding title
directly).
It is the
geologist’s conclusion in the Rey Lake Geologist Report that the Rey Lake
Property is a property of merit and it is recommended that further exploration
be carried out on the Property. A program to identify extensions of altered
mineralized rock is recommended with initial work consisting of an extensive
gridded MMI soil survey with the aim of determining further drill targets. The
budget for this recommended work is $21,450. Depending on the results, targets
could be follow-up by a diamond drill program. If this work is successful in
encountering copper-molybdenum ± gold mineralization, more drilling and
investment will be required to properly evaluate the Property.
22
MARKET
FOR OUR COMMON STOCK AND OTHER RELATED STOCKHOLDER
MATTERS
Market
Information
Our
common stock is not traded on any exchange. We plan to eventually seek listing
on the OTC Bulletin Board, once our prospectus has been declared effective by
the SEC. We cannot guarantee that we will obtain a listing. There is no trading
activity in our securities and there can be no assurance that a regular trading
market for our common stock will ever be developed.
A market
maker sponsoring a company's securities is required to obtain a listing of the
securities on any of the public trading markets, including the OTC Bulletin
Board. We have not yet engaged any market makers to submit an application on our
behalf for quotation on the OTC Bulletin Board. There is no assurance that our
securities will be able to meet the requirements for a quotation or that the
securities will be accepted for listing on the OTC Bulletin Board.
The OTC
Bulletin Board securities are not listed and traded on the floor of an organized
national or regional stock exchange. Instead, OTC Bulletin Board securities
transactions are conducted through a telephone and computer network connecting
dealers in stocks. OTC Bulletin Board stocks are traditionally smaller companies
that do not meet the financial and other listing requirements of a regional or
national stock exchange.
As of
January 15, 2010 we have
36 holders of record of our common stock.
Equity
Compensation Plans
We have
no equity compensation program including no stock option plan and none are
planned for the foreseeable future.
Registration
Rights
We have
not granted registration rights to the selling shareholders or to any other
person.
Dividends
There are
no restrictions in our articles of incorporation or bylaws that restrict 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. We do not plan to declare any dividends in the
foreseeable future.
MANAGEMENT'S
DISCUSSION AND ANALYSIS
Results
of Operations
We have
had no operations from our inception on November 26, 2007, through to June 11,
2008. On June 11, 2008 we signed an option agreement with Bearclaw
Capital Corporation (“Bearclaw”) to acquire 90% interest in the Rey Lake
Property, which is located in the Nicola Mining Division of British Columbia, 45
kilometers north-west of Merrit, British Columbia, Canada. The
agreement with Bearclaw, as amended on September 28, 2009, allows Keyser to
acquire the 90% interest in the Rey Lake Property by making exploration
expenditures totaling CDN$150,000 (approximately US$156,000 using current
translation rates) through September 30, 2010 and paying CDN $12,500
(approximately US$ 13,000) cash (of which CDN $5,000 (approximately US$ 5,200)
has been paid) to Bearclaw by September 30, 2010. The remaining
exploration expenditures must be made for us to acquire the 90% interest in the
Rey Lake Property:
a) a
further exploration expenditure of CDN $25,000 (approximately US$ 26,000) by
July 31, 2010 and,
b) a
further exploration expenditure of CDN $120,000 (approximately US$ 125,000) by
September 30, 2010.
We have
not generated any revenue since our inception. For the year ended
December 31, 2008 and the nine months ended September 30, 2009, we had the
following expenses:
For
the year ended
December
31, 2008
|
For
the nine months ended
September
30, 2009
|
Accumulated
from
November
26, 2007 to September 30, 2009
|
||||||||||
General
and administrative
|
$
|
927
|
$
|
65,364
|
$
|
66,291
|
||||||
Exploration
|
9,585
|
13,032
|
22,617
|
|||||||||
Management
fees
|
-
|
12,480
|
12,480
|
|||||||||
10,512
|
90,876
|
101,388
|
During
the year ended December 31, 2008, we incurred $9,585 in exploration costs and
$927 for general and administrative expenses.
For the
nine months ended September 30, 2009, we incurred $65,364 in general and
administrative expenses, primarily for the registration of our shares, $13,032
in exploration costs and $12, 480 in management fees. Our general and
administrative fees were primarily for legal costs ($50,000) and accounting and
auditing fees ($13,364).
On
February 11, 2009, we entered into an agreement with a law firm to pay $25,000
in upfront legal fees relating to the preparation and filing of a Form S-1
Registration Statement, and we are obligated to pay an additional $25,000 in
legal fees once the Registration Statement has been declared effective by the
Securities and Exchange Commission. During the three month
period ended September 30, 2009, the President of Company provided management
services valued at $12,480. As of September 30, 2009, this amount is
included in due to related party. This amount is unsecured and non-interest
bearing.
23
Liquidity
and Capital resources
The
following is a summary of our balance sheet as of December 31, 2008 and
September 30, 2009:
December
31, 2008 ($)
|
September
30, 2009 ($)
|
|||||||
Cash
|
73,513
|
23,767
|
||||||
Current
Liabilities
|
-
|
41,130
|
||||||
Working
Capital
|
73,513
|
(17,363
|
)
|
|||||
Stockholders’
Equity
|
73,513
|
(17,363
|
)
|
As of
September 30, 2009, we had a negative working capital balance as a result of
payables to our attorneys ($25,000) and our President ($12,480).
We
anticipate that we need an additional financing of approximately $50,000 for the
next 6 months beginning in January 2010 to pay for our current liabilities
(approximately $40,000) incurred in connection with legal and other expenses for
the registration of these shares and management expenses, to pay for other
operating expenses (approximately $10,000). We anticipate
that we have enough funds to complete the Phase One Exploration Program
(approximately $21,450).
If we
continue to our Phase Two Exploration Program, we will have to raise an
additional $200,000 for the next 12 months beginning in January 2010 to pay for
our current liabilities (approximately $40,000) incurred in connection with
legal and other expenses for the registration of these shares and management
expenses, to pay for other operating expenses (approximately $25,000), to
complete the Phase One Exploration Program (approximately $21,450), $120,000 in
exploration expenditures and a $7,500 payment to Bearclaw to satisfy our
agreement with Bearclaw.
The
agreement with Bearclaw, as amended on September 28, 2009, allows Keyser to
acquire the 90% interest in the Rey Lake Property by making exploration
expenditures totaling CDN$150,000 (approximately US$156,000 using current
translation rates) through September 30, 2010 and paying CDN $12,500
(approximately US$ 13,000) cash (of which CDN $5,000 (approximately US$ 5,200)
has been paid) to Bearclaw by September 30, 2010. The remaining
exploration expenditures must be made for us to acquire the 90% interest in the
Rey Lake Property:
a) a
further exploration expenditure of CDN $25,000 (approximately US$ 26,000) by
July 31, 2010 and,
b) a
further exploration expenditure of CDN $120,000 (approximately US$ 125,000) by
September 30, 2010.
We intend
to raise the funds for our near-term 12-month cash requirements from private
placements, shareholder loans or possibly a registered public offering (either
self-underwritten or through a broker-dealer). If we are unsuccessful in raising
enough money through future capital raising efforts, we may review other
financing possibilities such as bank loans. At this time we do not have any
commitments from any broker-dealer to provide us with financing.
There are
no assurances that we will be able to achieve further sales of our common stock
or any other form of additional financing. If we are unable to achieve the
financing necessary to continue our plan of operations, then we will not be able
to continue our exploration of the Rey Lake mineral property and our business
will fail.
Private
Placements
To date,
in addition to an issuance to Mr. Maurice Bidaux of 3,000,000 shares of common
stock at $0.001 per share for cash proceeds of $3,000, we have raised $81,025
through two private placements completed in April 2008 and December
2008. The following table summarizes the date of offering, the price
per share paid, the number of shares sold and the amount raised for these
private placements. All of these issuances were made to non-US investors
pursuant to exemptions contained in Regulation S of the Securities Act of
1933.
Closing
Date of Offering
|
Price
Per Share Paid
|
Number
of Shares Sold
|
Amount
Raised
|
April
28, 2008
|
$0.015
|
1,635,000
|
$24,525
|
December
24, 2008
|
$0.05
|
1,130,000
|
$56,500
|
Going
Concern
We have
not attained profitable operations and are dependent upon obtaining financing to
pursue any extensive exploration activities. For these reasons our auditors
stated in their report that they have substantial doubt we will be able to
continue as a going concern.
Accounting
and Audit Plan
We intend
to continue to have our outside consultant assist us in the preparation of our
quarterly and annual financial statements and have these financial statements
reviewed or audited by our independent auditor. Our outside consultant is
expected to charge us approximately $800 to prepare our quarterly financial
statements and approximately $800 to prepare our annual financial statements.
Our independent auditor is expected to charge us approximately $1,200 to review
our quarterly financial statements and approximately $5,000 to audit our annual
financial statements. In the next twelve months, we anticipate spending
approximately $10,000 to pay for our accounting and audit
requirements.
24
Off-balance
sheet arrangements
We have
no significant off-balance sheet arrangements that have or are reasonably likely
to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to
stockholders.
Critical
Accounting Policies
Our
financial statements are impacted by the accounting policies used and the
estimates and assumptions made by management during their preparation. A
complete summary of these policies is included in Note 2 of the notes to our
historical consolidated financial statements. We have identified below the
accounting policies that are of particular importance in the presentation of our
financial position, results of operations and cash flows and which require the
application of significant judgment by management.
Mineral
Property Costs
We have
been in the exploration stage since our inception on November 26, 2007 and have
not yet realized any revenues from our planned operations. We are primarily
engaged in the acquisition and exploration of mining properties. Mineral
property exploration costs are expensed as incurred. Mineral property
acquisition costs are initially capitalized when incurred using the guidance in
EITF 04-02, “Whether
Mineral
Rights Are Tangible or Intangible
Assets”. We assess the carrying costs for impairment under SFAS 144,
“Accounting for Impairment or Disposal of Long Lived Assets” at each fiscal
quarter end. When we have been determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves,
the costs then 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. If mineral properties are subsequently abandoned or
impaired, any capitalized costs will be charged to operations.
QUANTITIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
We do not
use derivative financial instruments in our investment portfolio and have no
foreign exchange contracts. Our financial instruments consist of cash
and cash equivalents, trade accounts receivable and accounts
payable.
25
MANAGEMENT
The sole
Director and Officer currently serving our Company is as follows:
Name
|
Age
|
Positions
Held and Tenure
|
Maurice
Bidaux
|
39
|
President,
Chief Executive Officer, Chief Financial Officer and
Director
|
The sole
Director named above will serve until the next annual meeting of the
stockholders. Thereafter, directors will be elected for one-year terms at the
annual stockholders' meeting. Officers will hold their positions at the pleasure
of the board of directors, absent any employment agreement, of which none
currently exists or is contemplated.
Biographical
information
Maurice
Bidaux
Mr.
Maurice Bidaux has acted as our sole Director and Officer since our inception on
November 26, 2007. Since January 2008, Mr. Bidaux has worked for
Stirling Investor Relations in its Capital Markets Division. His
duties at Stirling Investor Relations involve marketing and financing publicly
traded companies. Prior to his tenure at Stirling Investor Relations,
from January 2007 through April 2007 Mr. Bidaux worked for Exclusive Capital
Corporation raising investment capital for Investicare Seniors Housing
Corp. Mr. Bidaux also worked as an Investment Advisor with Octagon
Capital Corporation from March 2002 through November 2006. From May
2007 through December 2007 and from November 2006 through December 2006, Mr.
Bidaux was a self-employed investor relations consultant. Mr. Bidaux
completed his Bachelors of Commerce from the University of Alberta, and
completed his CFA Level 1, passed the Canadian Securities Course, Options
Licensing Course, Derivatives, Investment Management Techniques as well as the
Conduct and Practices Course all with Honors. Mr. Bidaux does not
currently serve on the boards of other public companies.
Significant
Employees and Consultants
We have
no significant employees or consultants, other than Maurice Bidaux, our
President. For our accounting requirements we use the consulting services of
Lancaster & David, Chartered Accountants of Vancouver, Canada to assist in
the preparation of our interim financial statements in accordance with
accounting principles generally accepted in the United States. The
geological report for the Rey Lake mineral property was prepared by Agnes
Koffyberg P. Geo., and the summary information of the geological report
disclosed in this prospectus is in reliance upon the authority and capability of
Agnes Koffyberg as a Professional Geoscientist.
Transactions
with Related Persons, Promoters and Certain Control Persons
Mr Bidaux
is our sole officer, director and is a promoter of Keyser Resources
Inc. Although Mr. Bidaux does not work with any other mineral exploration
companies other than ours, he may in the future. We do not have any written
procedures in place to address conflicts of interest that may arise between our
business and the future business activities of Mr. Bidaux. Mr. Bidaux dedicates
approximately 20% of his time to act as our President. We
have not accrued or paid any compensation to Mr. Bidaux since our
inception other than $12,480 we accrued for services for
Mr. Bidaux during July, August and September of 2009 when Mr. Bidaux was
required to work additional hours for us. We do not anticipate accruing
additional compensation to Mr. Bidaux. The only other transaction between us and Mr. Bidaux is the sale of
3,000,000 shares of our common stock at $0.001 per share for cash proceeds of
$3,000
26
Legal
Proceedings
None of
our directors, executive officers, promoters or control persons has been
involved in any of the following events during the past five years:
·
|
any
bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;
|
·
|
any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses);
|
·
|
being
subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities;
or
|
·
|
being
found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not
been reversed, suspended, or
vacated.
|
Audit
Committee
We do not
have an audit committee. The cost of hiring a financial expert to act
as a director of Keyser Resources Incorporated and to be a member of the Audit
Committee or otherwise perform Audit Committee functions outweighs the benefits
of an audit committee.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth the ownership, as of January 15, 2010 , of our common stock by our
director, and by each person known to us who is the beneficial owner of more
than 5% of any class of our securities. As of January 15, 2010, there were 5,765,000 common shares
issued and outstanding. All persons named have sole voting and investment power
with respect to the shares, except as otherwise noted. The number of shares
described below includes shares which the beneficial owner described has the
right to acquire within 60 days of the date of this Prospectus..\
Name
and Address of
Beneficial
Owner
|
Number
of Shares Owned
Beneficially
|
Percent
of Class Owned Prior
To
This Offering
|
Maurice
Bidaux
President,
Chief Executive Officer Chief Financial
Officer, Principal Accounting Officer and Director
61
Sherwood Circle NW
Calgary
Alberta T3R 1R3
|
3,000,000
|
51.3%
|
All executive officers
and directors as a
group
|
3,000,000
|
51.3%
|
The
percent of class is based on 5,765,000 of common stock issued and outstanding as
of January 15, 2010 .
Changes
in Control
There are
currently no arrangements which would result in a change in control of Keyser
Resources Incorporated.
EXECUTIVE
COMPENSATION
Name
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards ($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Nonqualified
Deferred Compensation Earnings
($)
|
All
Other Compensation ($)
|
Total
($)
|
Maurice
Bidaux
|
2009
|
$12,480
|
-
|
-
|
-
|
-
|
-
|
-
|
$12,80
|
2008
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
2007
|
- | - | - | - | - | - | - | - |
Since our
inception (November 26, 2007), through June 30,
2009, we had not accrued or paid Maurice Bidaux
any compensation for his services as our sole officer and director other than $12,480 we accrued for services for Mr. Bidaux during
July, August and September of 2009. We do not anticipate accruing additional
compensation for Mr. Bidaux. We did record as an expense $500 a month as
donated services from Mr. Bidaux for his services as an
officer. During the three month period ended September 30, 2009, Mr.
Bidaux provided management services valued at $12,480. As of
September 30, 2009, this amount is included in due to related party. This amount
is unsecured and non-interest bearing.
27
Stock
Option Grants
We have
not granted any stock options to the executive officers since our inception on
November 26, 2007.
Employment
Agreements
Currently,
we do not have an employment agreement or consulting agreement with Mr. Bidaux
and we do not pay any salary to him. We accrued $12,480 for
services by Mr. Bidaux during July, August and September of 2009. We do not
anticipate accruing additional compensation for Mr. Bidaux.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS
On August
18, 2009, our Board of Directors dismissed Moore & Associates Chartered
("Moore") our independent registered public accountants. On the same
date, August 18, 2009, the accounting firm of Seale and Beers, CPAs was engaged
by our Board of Directors as our new
independent registered public accountants. None of the reports of Moore on the
Company's financial statements for the year ended December
31, 2008 or subsequent interim period contained an adverse opinion or disclaimer
of opinion, or was qualified or modified as to uncertainty, audit scope or
accounting principles, except for a going concern qualification in the
registrant's audited financial statements.
During
the registrant's year ended December 31, 2008 and the subsequent interim periods
thereto, there were no disagreements with Moore, whether or not resolved, on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which, if not resolved to Moore's satisfaction,
would have caused it to make reference to the subject matter of the disagreement
in connection with its report on the registrant's financial
statements.
On
September 2, 2009, we were advised that on August 27, 2009 the Public Company
Accounting Oversight Board ("PCAOB") revoked the registration of Moore because
of violations of PCAOB rules and auditing standards in auditing the financial
statements, PCAOB rules and quality controls standards and Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and noncooperation
with a Board investigation. Therefore, the audit for this period is no longer
valid and has being redone by Seale and Beers, CPAs.
We have
requested that Moore furnish us with a letter addressed to the Securities and
Exchange Commission stating whether it agrees with the above statements. We have
been advised by Moore that it will not comply with our request.
During
the two most recent fiscal years and the interim periods preceding the
engagement, the registrant has not consulted Seale and Beers, CPAs regarding any
of the matters set forth in Item 304(a)(2) of Regulation S-K.
FINANCIAL
STATEMENTS
We will
provide audited financial statements to our stockholders on an annual basis. Our
audited financial statements as of December 31, 2008 and unaudited financial
statements as of September 30, 2009 follow as pages F-1 through F-
15.
28
Keyser
Resources Inc.
Index
|
|
Audited
Financial Statements for the Years Ended December 31, 2008 and
2007
|
|
Report
of Independent Registered Public Accounting Firm
|
F–2
|
Balance
Sheets as of December 31, 2008 and 2007
|
F–3
|
Statements
of Operations for the years ended December 31, 2008 and
2007
|
F–4
|
Statements
of Cash Flows for the years ended December 31, 2008 and
2007
|
F–5
|
Statements
of Stockholders’ Equity for the years ended December 31, 2008 and
2007
|
F–6
|
Notes
to the Financial Statements
|
F–7
|
Unaudited
Financial Statements for the Nine Month Periods September 30, 2009 and
2008
|
|
Review Report of Independent Auditor | F - 14 |
Balance
Sheets as of September 30, 2009 and December 31,
2008
|
F–15
|
Statements
of Operations for the Three Month and Nine Month Periods Ended September
30, 2009 and 2008
|
F–16
|
Statements
of Cash Flows for the Nine Month Periods Ended September 30, 2009 and
2008
|
F–17
|
Notes
to the Financial Statements
|
F–18
|
F -
1
SEALE
AND BEERS, CPAs
PCAOB
& CPAB REGISTERED AUDITORS
www.sealebeers.com
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors
Keyser
Resources, Inc.
(An
Exploration Stage Company)
We
have audited the accompanying balance sheets of Keyser Resources, Inc. (An
Exploration Stage Company) as of December 31, 2008 and December 31, 2007 the
period from inception November 26, 2007 through December 31, 2007, and the
related statements of operations, stockholders’ equity and cash flows for the
year ended December 31, 2008 and the period from inception November 26, 2007
through December 31, 2007 and since inception on November 26, 2007 through
December 31, 2008. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We
conduct our audits in accordance with standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In
our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Keyser Resources, Inc. (An
Exploration Stage Company) as of December 31, 2008 and December 31, 2007 and the
period from inception November 26, 2007 through December 31, 2007, and the
related statements of operations, stockholders’ equity and cash flows for the
year ended December 31, 2008 and the period from inception November 26, 2007
through December 31, 2007 and since inception on November 26, 2007 through
December 31, 2008, in conformity with accounting principles generally accepted
in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has an accumulated deficit of $10,512 since
inception, which raises substantial doubt about its ability to continue as a
going concern. Management’s plans concerning these matters are also
described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
/s/
Seale and Beers, CPAs
_____________________________
Seale and
Beers, CPAs
Las
Vegas, Nevada
September
30, 2009
6490 West Desert Inn Rd, Las
Vegas, NV 89146 (702) 253-7492 Fax (702) 253-7501
F -
2
Keyser
Resources Inc.
(An
Exploration Stage Company)
Balance
Sheets
(Expressed
in US dollars)
December
31,
2008
|
December
31,
2007
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
|
73,513
|
–
|
||||||
Total
Assets
|
73,513
|
–
|
||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Total
Liabilities
|
–
|
–
|
||||||
Contingencies
and Commitments (Note 1)
|
||||||||
Stockholders’
Equity
|
||||||||
Common
stock, 75,000,000 shares authorized, $0.001 par
value; 5,764,996 and 0 at December 31, 2008 and 2007 shares
issued and outstanding
|
5,765
|
–
|
||||||
Additional
paid-in capital
|
78,260
|
–
|
||||||
Deficit
accumulated during the exploration stage
|
(10,512
|
)
|
–
|
|||||
Total
Stockholders’ Equity
|
73,513
|
–
|
||||||
Total
Liabilities and Stockholders’ Equity
|
73,513
|
–
|
(The
Accompanying Notes are an Integral Part of These Financial
Statements)
F -
3
Keyser
Resources Inc.
(An
Exploration Stage Company)
Statements
of Operations
(Expressed
in US dollars)
For
the period from
|
Accumulated
from
|
|||||||||||
For
the
|
November
26, 2007
|
November
26, 2007
|
||||||||||
Year
Ended
|
through
|
(Date
of Inception)
|
||||||||||
December
31,
|
December
31,
|
to
December 31,
|
||||||||||
2008
|
2007
|
2008
|
||||||||||
Revenue
|
–
|
–
|
–
|
|||||||||
Expenses
|
||||||||||||
General
and administrative
|
927
|
–
|
927
|
|||||||||
Exploration
costs
|
9,585
|
–
|
9,585
|
|||||||||
Total
Expenses
|
10,512
|
–
|
10,512
|
|||||||||
Provision
for Income Tax
|
–
|
–
|
–
|
|||||||||
Net
Loss for the Period
|
(10,512
|
)
|
–
|
(10,512
|
)
|
|||||||
Net
Loss Per Share – Basic and Diluted
|
–
|
–
|
||||||||||
Weighted
Average Common Shares Outstanding
|
4,187,000
|
–
|
(The
Accompanying Notes are an Integral Part of These Financial
Statements)
F -
4
Keyser
Resources Inc.
(An
Exploration Stage Company)
Statements
of Cash Flows
(Expressed
in US dollars)
For
the
Year
Ended
December
31,
2008
|
For
the period from
November
26, 2007
through
December
31,
2007
|
Accumulated
from
November
26, 2007
(Date
of Inception)
to
December 31,
2008
|
||||||||||
Operating
Activities
|
||||||||||||
Net
loss for the period
|
(10,512
|
)
|
–
|
(10,512
|
)
|
|||||||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
–
|
–
|
–
|
|||||||||
Net
Cash Used In Operating Activities
|
(10,512
|
)
|
–
|
(10,512
|
)
|
|||||||
Financing
Activities
|
||||||||||||
Proceeds
from sale of common stock
|
84,025
|
–
|
84,025
|
|||||||||
Net
Cash Provided By Financing Activities
|
84,025
|
–
|
84,025
|
|||||||||
Increase
in Cash
|
73,513
|
–
|
73,513
|
|||||||||
Cash
- Beginning of Period
|
–
|
–
|
–
|
|||||||||
Cash
- End of Period
|
73,513
|
–
|
73,513
|
|||||||||
Supplemental
Disclosures
|
||||||||||||
Interest
paid
|
–
|
–
|
–
|
|||||||||
Income
taxes paid
|
–
|
–
|
–
|
|||||||||
(The
Accompanying Notes are an Integral Part of These Financial
Statements)
F -
5
Keyser
Resources Inc.
(An
Exploration Stage Company)
Statements
of Stockholders’ Equity
For the
Period from November 26, 2007 (Date of Inception) to December 31,
2008
(Expressed
in US dollars)
Deficit
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
Additional
|
During
the
|
|||||||||||||||||||
Common
Stock
|
Paid-in
|
Exploration
|
||||||||||||||||||
Shares
|
Par
Value
|
Capital
|
Stage
|
Total
|
||||||||||||||||
Balance
– November 26, 2007
(Date
of Inception)
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||
Net
loss for the period
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||
Balance
– December 31, 2007
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||
Common
shares issued for cash in private placement:
|
||||||||||||||||||||
at
$0.001 per share on January 19, 2008
|
3,000,000
|
3,000
|
–
|
–
|
3,000
|
|||||||||||||||
at
$0.015 per share on April 28, 2008
|
1,634,996
|
1,635
|
22,890
|
–
|
24,525
|
|||||||||||||||
at
$0.05 per share on December 24, 2008
|
1,130,000
|
1,130
|
55,370
|
–
|
56,500
|
|||||||||||||||
Net
loss for the year
|
–
|
–
|
–
|
(10,512
|
)
|
(10,512
|
)
|
|||||||||||||
Balance
– December 31, 2008
|
5,764,996
|
5,765
|
78,260
|
(10,512
|
)
|
73,513
|
||||||||||||||
(The
Accompanying Notes are an Integral Part of These Financial
Statements)
F -
6
Keyser
Resources Inc.
(An
Exploration Stage Company)
Notes to
the Financial Statements
December
31, 2008
(Expressed
in US dollars)
1.
|
Nature
of Operations and Continuance of
Business
|
Keyser
Resources Inc. (the “Company”) was incorporated in the State of Nevada on
November 26, 2007. The Company is an Exploration Stage Company as defined by
Statement of Financial Accounting Standard (“SFAS”) No. 7, “Accounting and Reporting for
Development Stage Enterprises”. 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.
These
financial statements have been prepared on a going concern basis, which implies
the Company will continue to realize its assets and discharge its liabilities in
the normal course of business. The Company has not generated any revenue since
inception and has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
the Company as a going concern is dependent upon the continued financial support
from its shareholders, the ability of the Company to obtain necessary equity
financing to continue operations, and the attainment of profitable operations.
As at December 31, 2008, the Company has working capital of $73,513 and has
accumulated losses of $10,512 since inception. These factors raise substantial
doubt regarding the Company’s ability to continue as a going concern. These
financial statements do not include any adjustments to the recoverability and
classification of recorded asset amounts and classification of liabilities that
might be necessary should the Company be unable to continue as a going
concern.
2.
|
Summary
of Significant Accounting Policies
|
a)
|
Basis
of Presentation
|
These
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States, and are expressed
in US dollars. The Company’s fiscal year-end is December 31.
b)
|
Use
of Estimates
|
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. The
Company regularly evaluates estimates and assumptions related to the
recoverability of mineral property costs and deferred income tax asset valuation
allowances. The Company bases its estimates and assumptions on current facts,
historical experience and various other factors that it believes to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities and the
accrual of costs and expenses that are not readily apparent from other sources.
The actual results experienced by the Company may differ materially and
adversely from the Company’s estimates. To the extent there are material
differences between the estimates and the actual results, future results of
operations will be affected.
c)
|
Cash
and Cash Equivalents
|
The
Company considers all highly liquid instruments with maturity of three months or
less at the time of issuance to be cash equivalents.
d)
|
Earnings
(Loss) Per Share
|
The
Company computes net earnings (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 earnings (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 and convertible preferred stock using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive.
e)
|
Revenue
recognition
|
The
company recognizes revenue when persuasive evidence of an arrangement exists,
services have been rendered, the sales price is fixed or determinable, and
collectability is reasonably assured.
F -
7
Keyser
Resources Inc.
(An
Exploration Stage Company)
Notes to
the Financial Statements
December
31, 2008
(Expressed
in US dollars)
2. Summary
of Significant Accounting Policies (continued)
f)
|
Advertising
Costs
|
The
Company’s policy regarding advertising is to expense advertising when incurred.
The Company had not incurred any advertising expense as of December 31,
2008.
g)
|
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
December 31, 2008 and 2007, the Company has no items that represent a
comprehensive loss and, therefore, has not included a schedule of comprehensive
loss in the financial statements.
h)
|
Mineral
Property Costs
|
The
Company has been in the exploration stage since its inception 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
exploration costs are expensed as incurred. Mineral property acquisition costs
are initially capitalized when incurred using the guidance in EITF 04-02, “Whether Mineral Rights Are Tangible
or Intangible Assets”. The Company assesses the carrying costs for
impairment under SFAS No. 144, “Accounting for Impairment or
Disposal of Long Lived Assets” at each fiscal quarter end. When it has
been determined that a mineral property can be economically developed as a
result of establishing proven and probable reserves, the costs then 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. If
mineral properties are subsequently abandoned or impaired, any capitalized costs
will be charged to operations.
i)
|
Long-lived
Assets
|
In
accordance with SFAS No. 144, “Accounting for the Impairment or
Disposal of Long-Lived Assets”, the Company tests long-lived assets or
asset groups for recoverability when events or changes in circumstances indicate
that their carrying amount may not be recoverable. Circumstances which could
trigger a review include, but are not limited to: significant decreases in the
market price of the asset; significant adverse changes in the business climate
or legal factors; accumulation of costs significantly in excess of the amount
originally expected for the acquisition or construction of the asset; current
period cash flow or operating losses combined with a history of losses or a
forecast of continuing losses associated with the use of the asset; and current
expectation that the asset will more likely than not be sold or disposed
significantly before the end of its estimated useful life. Recoverability is
assessed based on the carrying amount of the asset and its fair value which is
generally determined based on the sum of the undiscounted cash flows expected to
result from the use and the eventual disposal of the asset, as well as specific
appraisal in certain instances. An impairment loss is recognized when the
carrying amount is not recoverable and exceeds fair value.
j)
|
Asset
Retirement Obligations
|
The
Company follows the provisions of SFAS No. 143, "Accounting for Asset Retirement
Obligations," which establishes standards for the initial measurement and
subsequent accounting for obligations associated with the sale, abandonment or
other disposal of long-lived tangible assets arising from the acquisition,
construction or development and for normal operations of such assets. As at
December 31, 2008, the Company has not recognized any asset retirement
obligations.
k)
|
Income
Taxes
|
The
Company accounts for income taxes using the asset and liability method in
accordance with SFAS No. 109, “Accounting for Income Taxes.”
The asset and liability method provides that deferred tax assets and liabilities
are recognized for the expected future tax consequences of temporary differences
between the financial reporting and tax bases of assets and liabilities, and for
operating loss and tax credit carry-forwards. Deferred tax assets and
liabilities are measured using the currently enacted tax rates and laws that
will be in effect when the differences are expected to reverse. The Company
records a valuation allowance to reduce deferred tax assets to the amount that
is believed more likely than not to be realized.
l)
|
Stock-based
Compensation
|
The
Company records stock-based compensation in accordance with SFAS No. 123R, “Share Based Payments”, using
the fair value method. All transactions in which goods or services are the
consideration received for the issuance of equity instruments are accounted for
based on the fair value of the consideration received or the fair value of the
equity instrument issued, whichever is more reliably measurable.
F -
8
Keyser
Resources Inc.
(An
Exploration Stage Company)
Notes to
the Financial Statements
December
31, 2008
(Expressed
in US dollars)
2. Summary
of Significant Accounting Policies (continued)
m)
|
Financial
Instruments
|
SFAS No.
157 “Fair Value
Measurements” requires an entity to maximize the use of observable inputs
and minimize the use of unobservable inputs when measuring fair value. SFAS No.
157 establishes a fair value hierarchy based on the level of independent,
objective evidence surrounding the inputs used to measure fair value. A
financial instrument’s categorization within the fair value hierarchy is based
upon the lowest level of input that is significant to the fair value
measurement. SFAS No. 157 prioritizes the inputs into three levels that may be
used to measure fair value:
Level
1
Level 1
applies to assets or liabilities for which there are quoted prices in active
markets for identical assets or liabilities.
Level
2
Level 2
applies to assets or liabilities for which there are inputs other than quoted
prices that are observable for the asset or liability such as quoted prices for
similar assets or liabilities in active markets; quoted prices for identical
assets or liabilities in markets with insufficient volume or infrequent
transactions (less active markets); or model-derived valuations in which
significant inputs are observable or can be derived principally from, or
corroborated by, observable market data.
Level
3
Level 3
applies to assets or liabilities for which there are unobservable inputs to the
valuation methodology that are significant to the measurement of the fair value
of the assets or liabilities.
The
Company’s financial instruments consist principally of only cash. Pursuant to
SFAS No. 157, fair value of assets and liabilities measured on a recurring basis
include cash equivalents determined based on “Level 1” inputs, which consist of
quoted prices in active markets for identical assets. The Company believes that
the recorded values of all of the other financial instruments approximate their
current fair values because of their nature and respective maturity dates or
durations.
The
Company’s operations are in Canada, which results in 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.
n)
|
Foreign
Currency Translation
|
The
Company’s functional and reporting currency is the United States dollar.
Occasional transactions may occur in Canadian dollars and management has adopted
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. Non-monetary assets and liabilities denominated in foreign
currencies are translated at rates of exchange in effect at the date of the
transaction. Average monthly rates are used to translate revenues and expenses.
Gains and losses arising on translation or settlement of foreign currency
denominated transactions or balances are included in the determination of
income.
o)
|
Recent
Accounting Pronouncements
|
In June
2009, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 168,
“The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles – a
replacement of FASB Statement No. 162”. The FASB Accounting Standards
Codification (“Codification”) will become the source of authoritative U.S.
generally accepted accounting principles (“GAAP”) recognized by FASB to be
applied by non-governmental entities. Rules and interpretive releases of the
Securities and Exchange Commission “SEC” under authority of federal
securities laws are also sources of authoritative GAAP for SEC registrants. On
the effective date of this statement, the Codification will supersede all
then-existing non-SEC accounting and reporting standards. All other
non-grandfathered non-SEC accounting literature not included in the Codification
will become non-authoritative. This statement is effective for financial
statements issued for interim and annual periods ending after September 30,
2009. The adoption of this statement is not expected to have a material effect
on the Company’s financial statements.
F -
9
Keyser
Resources Inc.
(An
Exploration Stage Company)
Notes to
the Financial Statements
December
31, 2008
(Expressed
in US dollars)
2. Summary
of Significant Accounting Policies (continued)
o) Recent
Accounting Pronouncements (continued)
In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation
No. 46(R)”. The objective of this statement is to improve financial
reporting by enterprises involved with variable interest entities. This
statement addresses (1) the effects on certain provisions of FASB Interpretation
No. 46 (revised December 2003), “Consolidation of Variable Interest
Entities”, as a result of the elimination of the qualifying
special-purpose entity concept in SFAS No. 166, “Accounting for Transfers of
Financial Assets”, and (2) concern about the application of certain key
provisions of FASB Interpretation No. 46(R), including those in which the
accounting and disclosures under the Interpretation do not always provide timely
and useful information about an enterprise’s involvement in a variable interest
entity. This statement is effective as of the beginning of each reporting
entity’s first annual reporting period that begins after November 15, 2009, for
interim periods within that first annual reporting period, and for interim and
annual reporting periods thereafter. Earlier application is prohibited. The
adoption of this statement is not expected to have a material effect on the
Company’s financial statements.
In June
2009, the FASB issued SFAS No. 166, “Accounting for Transfers of
Financial Assets – an amendment of FASB No. 140”. The object of this
statement is to improve the relevance, representational faithfulness, and
comparability of the information that a reporting entity provides in its
financial statements about a transfer of financial assets; the effects of a
transfer on its financial position, financial performance, and cash flows; and a
transferor’s continuing involvement, if any, in transferred financial assets.
This statement addresses (1) practices that have developed since the issuance of
SFAS No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”,
that are not consistent with the original intent and key requirements of
that statement and (2) concerns of financial statement users that many of the
financial assets (and related obligations) that have been de-recognized should
continue to be reported in the financial statements of transferors. SFAS No. 166
must be applied as of the beginning of each reporting entity’s first annual
reporting period that begins after November 15, 2009, for interim periods within
that first annual reporting period and for interim and annual reporting periods
thereafter. Earlier application is prohibited. This statement must be applied to
transfers occurring on or after the effective date. Additionally, on and after
the effective date, the concept of a qualifying special-purpose entity is no
longer relevant for accounting purposes. The disclosure provisions of this
statement should be applied to transfers that occurred both before and after the
effective date of this statement. The adoption of this statement is not expected
to have a material effect on the Company’s financial statements.
In May
2009, the FASB issued SFAS No. 165, “Subsequent Events”. SFAS No.
165 establishes general standards of accounting for and disclosure of events
that occur after the balance sheet date but before financial statements are
issued or are available to be issued. SFAS No. 165 is to be applied to interim
and annual financial periods ending after June 15, 2009. The adoption of this
statement is not expected to have a material effect on the Company’s financial
statements.
In June
2009, the Securities and Exchange Commission’s Office of the Chief Accountant
and Division of Corporation Finance announced the release of Staff Accounting
Bulletin (SAB) No. 112. This staff accounting bulletin amends or rescinds
portions of the interpretive guidance included in the Staff Accounting Bulletin
Series in order to make the relevant interpretive guidance consistent with
current authoritative accounting and auditing guidance and Securities and
Exchange Commission rules and regulations. Specifically, the staff is updating
the Series in order to bring existing guidance into conformity with recent
pronouncements by the Financial Accounting Standards Board, namely, Statement of
Financial Accounting Standards No. 141 (revised 2007), Business Combinations,
and Statement of Financial Accounting Standards No. 160, Non-controlling
Interests in Consolidated Financial Statements. The statements in staff
accounting bulletins are not rules or interpretations of the Commission, nor are
they published as bearing the Commission's official approval. They represent
interpretations and practices followed by the Division of Corporation Finance
and the Office of the Chief Accountant in administering the disclosure
requirements of the Federal securities laws.
On April
13, 2009, the Securities and Exchange Commission’s (“SEC”) Office of the Chief
Accountant and Division of Corporation Finance issued SEC Staff Accounting
Bulletin 111 (“SAB 111”). SAB 111 amends and replaces SAB Topic 5M, “Miscellaneous Accounting—Other Than
Temporary Impairment of Certain Investments in Equity Securities” to
reflect FSP FAS 115-2 and FAS 124-2. This FSP provides guidance for assessing
whether an impairment of a debt security is other than temporary, as well as how
such impairments are presented and disclosed in the financial statements. The
amended SAB Topic 5M maintains the prior staff views related to equity
securities but has been amended to exclude debt securities from its scope. SAB
111 is effective upon the adoption of FSP FAS 115-2 and FAS 124-2. The Company
is currently evaluating the impact, if any, that the adoption of SAB 111 will
have on the financial statements of the Company.
F -
10
Keyser
Resources Inc.
(An
Exploration Stage Company)
Notes to
the Financial Statements
December
31, 2008
(Expressed
in US dollars)
2. Summary
of Significant Accounting Policies (continued)
o) Recent
Accounting Pronouncements (continued)
In April
2009 the FASB issued FSP No. 141R-1 “Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from
Contingencies”, or FSP 141R-1. FSP 141R-1 amends the provisions in
Statement 141R for the initial recognition and measurement, subsequent
measurement and accounting, and disclosures for assets and liabilities arising
from contingencies in business combinations. The FSP eliminates the distinction
between contractual and non-contractual contingencies, including the initial
recognition and measurement criteria in Statement 141R and instead carries
forward most of the provisions in SFAS 141 for acquired contingencies. FSP
141R-1 is effective for contingent assets and contingent liabilities acquired in
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. We expect FSP 141R-1 will have an impact on our financial statements,
but the nature and magnitude of the specific effects will depend upon the
nature, term and size of the acquired contingencies. The effect of adopting FSP
141R-1 will depend upon the nature, terms and size of any acquired contingencies
consummated after the effective date of January 1, 2009.
On April
9, 2009, the FASB issued three FSPs intended to provide additional application
guidance and enhanced disclosures regarding fair value measurements and
other-than-temporary impairments of securities.
FSP FAS
157-4, “Determining Fair Value
When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not
Orderly,” provides guidelines for making fair value measurements more
consistent with the principles presented in FASB Statement No. 157, “Fair Value Measurements.”
FSP FAS 157-4 must be applied prospectively and retrospective application is not
permitted. FSP FAS 157-4 is effective for interim and annual periods ending
after June 15, 2009, with early adoption permitted for periods ending after
March 15, 2009. An entity early adopting FSP FAS 157-4 must also early adopt FSP
FAS 115-2 and FAS 124-2.
FSP FAS
115-2 and FAS 124-2, “Recognition and Presentation of
Other-Than-Temporary Impairments,” provides additional guidance designed
to create greater clarity and consistency in accounting for and presenting
impairment losses on debt securities. FSP FAS 115-2 and FAS 124-2 are effective
for interim and annual periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. An entity may early adopt
this FSP only if it also elects to early adopt FSP FAS 157-4.
FSP FAS
107-1 and APB 28-1, “Interim
Disclosures about Fair Value of Financial Instruments,” enhance
consistency in financial reporting by increasing the frequency of fair value
disclosures. FSP 107-1 and APB 28-1 are effective for interim periods ending
after June 15, 2009, with early adoption permitted for periods ending after
March 15, 2009. However, an entity may early adopt these interim fair value
disclosure requirements only if it also elects to early adopt FSP FAS 157-4 and
FSP FAS 115-2 and FAS 124-2.
The
Company is currently evaluating the impact, if any, that the adoption of these
FSPs will have on its financial statements.
In June
2008, the FASB issued FASB Staff Position EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities”.
FSP EITF 03-6-1 addresses whether instruments granted in share-based
payment transactions are participating securities prior to vesting, and
therefore need to be included in the computation of earnings per share under the
two-class method as described in FASB Statement of Financial Accounting
Standards No. 128, “Earnings
per Share.” FSP EITF 03-6-1 is effective for financial statements issued
for fiscal years beginning on or after December 15, 2008 and earlier adoption is
prohibited. The adoption of this statement is not expected to have a material
effect on the Company’s financial statements.
F -
11
Keyser
Resources Inc.
(An
Exploration Stage Company)
Notes to
the Financial Statements
December
31, 2008
(Expressed
in US dollars)
2. Summary
of Significant Accounting Policies (continued)
o) Recent
Accounting Pronouncements (continued)
In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts – An interpretation of FASB Statement No. 60”. SFAS
No. 163 requires that an insurance enterprise recognize a claim liability prior
to an event of default when there is evidence that credit deterioration has
occurred in an insured financial obligation. It also clarifies how Statement 60
applies to financial guarantee insurance contracts, including the recognition
and measurement to be used to account for premium revenue and claim liabilities,
and requires expanded disclosures about financial guarantee insurance contracts.
It is effective for financial statements issued for fiscal years beginning after
December 15, 2008, except for some disclosures about the insurance enterprise’s
risk-management activities. SFAS No. 163 requires that disclosures about the
risk-management activities of the insurance enterprise be effective for the
first period beginning after issuance. Except for those disclosures, earlier
application is not permitted. The adoption of this statement is not expected to
have a material effect on the Company’s financial statements.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”. SFAS No. 162 identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. It is effective 60 days following the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles”. The adoption
of this statement is not expected to have a material effect on the Company’s
financial statements.
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment to FASB Statement No.
133”. SFAS No. 161 is intended to improve financial standards for
derivative instruments and hedging activities by requiring enhanced disclosures
to enable investors to better understand their effects on an entity's financial
position, financial performance, and cash flows. Entities are required to
provide enhanced disclosures about: (a) how and why an entity uses derivative
instruments; (b) how derivative instruments and related hedged items are
accounted for under SFAS No. 133 and its related interpretations; and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. SFAS No. 161 is effective for
financial statements issued for fiscal years beginning after November 15, 2008,
with early adoption encouraged. The adoption of this statement is not expected
to have a material effect on the Company's financial statements.
In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations”. SFAS
No. 141 (revised 2007) establishes principles and requirements for how the
acquirer of a business recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any non-controlling
interest in the acquiree. The statement also provides guidance for recognizing
and measuring the goodwill acquired in the business combination and determines
what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. SFAS No.
141 (revised 2007) applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. The adoption of this statement
is not expected to have a material effect on the Company's financial
statements.
In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements Liabilities – an Amendment of ARB No.
51”. This statement amends ARB 51 to establish accounting and reporting
standards for the Non-controlling interest in a subsidiary and for the
deconsolidation of a subsidiary. This statement is effective for fiscal years,
and interim periods within those fiscal years, beginning on or after December
15, 2008, and earlier adoption is prohibited. The adoption of this statement is
not expected to have a material effect on the Company’s financial
statements.
F -
12
Keyser
Resources Inc.
(An
Exploration Stage Company)
Notes to
the Financial Statements
December
31, 2008
(Expressed
in US dollars)
3.
|
Mineral
Property
|
On June
11, 2008, the Company entered into an agreement with Bearclaw Capital Corp.
(“Bearclaw”) to acquire a 90% interest in certain mineral claims located in
British Columbia, Canada by making exploration expenditures totalling
CDN$150,000 and paying CDN$12,500 by September 30, 2010 as follows:
a) Expenditures:
i.
|
CDN$5,000
(paid) by December 31, 2008;
|
ii.
|
CDN$25,000
by September 30, 2009, and;
|
iii.
|
CDN$120,000
by September 30, 2010.
|
b) Cash:
i.
|
CDN$5,000
on the signing of the agreement (paid),
and;
|
ii.
|
CDN$7,500
by September 30, 2009.
|
Upon
fulfilling the above obligations, the Company will have earned a 90% interest in
the property. Bearclaw’s 10% interest is a fully carried interest through to
production.
4.
|
Common
Stock
|
a)
|
On
January 19, 2008, the Company issued 3,000,000 shares of common stock at
$0.001 per share for cash proceeds of
$3,000.
|
b)
|
On
April 28, 2008, the Company issued 1,634,996 shares of common stock at
$0.015 per share for cash proceeds of
$24,525.
|
c)
|
On
December 24, 2008, the Company issued 1,130,000 shares of common stock at
$0.05 per share for cash proceeds of
$56,500.
|
5.
|
Income
Taxes
|
The
Company has a net operating loss carry-forward of approximately $10,500
available to offset taxable income in future years which commence expiring in
fiscal 2028.
The
Company is subject to United States income taxes at a rate of 35%. The
reconciliation of the provision for income taxes at the United States statutory
rate compared to the Company’s income tax expense as reported is as
follows:
Year
Ended
December
31,
2008
|
Year
Ended
December
31,
2007
|
|||||||
Income
tax recovery at statutory rate
|
3,679
|
–
|
||||||
Valuation
allowance change
|
(3,679
|
)
|
–
|
|||||
Provision
for income taxes
|
–
|
–
|
The
significant components of deferred income tax assets and liabilities as at
December 31, 2008 and 2007 are as follows:
December
31,
2008
|
December
31,
2007
|
|||||||
Net
operating losses carried forward
|
3,679
|
–
|
||||||
Valuation
allowance
|
(3,679
|
)
|
–
|
|||||
Net
deferred income tax asset
|
–
|
–
|
F -
13
SEALE
AND BEERS, CPAs
PCAOB
& CPAB REGISTERED AUDITORS
www.sealebeers.com
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors
Keyser
Resources Inc.
(An
Exploration Stage Company)
We have
reviewed the accompanying condensed balance sheet of Keyser Resources Inc. as of
September 30, 2009, and the related condensed statements of operations and cash
flows for the three-month and nine-month period ended September 30, 2009 and
from inception November 26, 2007 through September 30, 2009. These interim
financial statements are the responsibility of the Corporation’s
management.
We
conduct our reviews in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists of principally applying analytical procedures and making
inquiries of persons responsible for the financials and accounting matters. It
is substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board (United States), the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on
our reviews, we are not aware of any material modifications that should be made
to such condensed financial statements for them to be in conformity with
accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been reviewed assuming that the Company
will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has accumulated losses of $101,388 since
inception, which raises substantial doubt about its ability to continue as a
going concern. Management’s plans concerning 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/
Seale and Beers, CPAs
_____________________________
Seale and
Beers, CPAs
Las
Vegas, Nevada
November
19, 2009
50
S. Jones Blvd Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 Fax:
(888)782-2351
F -
14
Keyser
Resources Inc.
(An
Exploration Stage Company)
Balance
Sheets
(Expressed
in US dollars)
September
30,
2009
|
December
31,
2008
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
|
23,767
|
73,513
|
||||||
Total
Assets
|
23,767
|
73,513
|
||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable and accrued liabilities
|
28,650
|
–
|
||||||
Due
to related party (Note 4)
|
12,480
|
–
|
||||||
Total
Liabilities
|
41,130
|
–
|
||||||
Contingencies
and Commitments (Note 1 and 4)
|
||||||||
Stockholders’
Equity (Deficit)
|
||||||||
Common
stock, 75,000,000 shares authorized, $0.001 par value; 5,764,996 shares
issued and outstanding
|
5,765
|
5,765
|
||||||
Additional
paid-in capital
|
78,260
|
78,260
|
||||||
Deficit
accumulated during the exploration stage
|
(101,388
|
)
|
(10,512
|
)
|
||||
Total
Stockholders’ Equity (Deficit)
|
(17,363
|
)
|
73,513
|
|||||
Total
Liabilities and Stockholders’ Equity
|
23,767
|
73,513
|
||||||
F -
15
Keyser
Resources Inc.
(An
Exploration Stage Company)
Statements
of Operations
(Expressed
in US dollars)
(Unaudited)
For
the
Three
Months
Ended
September
30,
2009
|
For
the
Three
Months
Ended
September
30,
2008
|
For
the
Nine
Months
Ended
September
30,
2009
|
For
the
Nine
Months
Ended
September
30,
2008
|
Accumulated
from
November
26, 2007
(Date
of Inception)
to
September 30,
2009
|
||||||||||||||||
Revenue
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||
Expenses
|
||||||||||||||||||||
General
and administrative
|
4,534
|
–
|
65,364
|
663
|
66,291
|
|||||||||||||||
Exploration
costs
|
8,791
|
9,585
|
13,032
|
9,585
|
22,617
|
|||||||||||||||
Management
fees
|
12,480
|
–
|
12,480
|
–
|
12,480
|
|||||||||||||||
Total
Expenses
|
25,805
|
9,585
|
90,876
|
10,248
|
101,388
|
|||||||||||||||
Provision
for Income Tax
|
–
|
–
|
–
|
–
|
–
|
|||||||||||||||
Net
Loss for the Period
|
(25,805
|
)
|
(9,585
|
)
|
(90,876
|
)
|
(10,248
|
)
|
(101,388
|
)
|
||||||||||
Net
Loss Per Share – Basic and Diluted
|
–
|
–
|
(0.02
|
)
|
–
|
|||||||||||||||
Weighted
Average Common Shares Outstanding
|
5,765,000
|
4,635,000
|
5,765,000
|
3,717,000
|
F -
16
Keyser
Resources Inc.
(An
Exploration Stage Company)
Statements
of Cash Flows
(Expressed
in US dollars)
(Unaudited)
For
the
Nine
Months
Ended
September
30,
2009
|
For
the
Nine
Months
Ended
September
30,
2008
|
Accumulated
from
November
26, 2007
(Date
of Inception)
to
September 30,
2009
|
||||||||||
Operating
Activities
|
||||||||||||
Net
loss for the period
|
(90,876
|
)
|
(10,248
|
)
|
(101,388
|
)
|
||||||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Accounts
payable and accrued liabilities
|
28,650
|
–
|
28,650
|
|||||||||
Due
to related party
|
12,480
|
652
|
12,480
|
|||||||||
Net
Cash Used In Operating Activities
|
(49,746
|
)
|
(9,596
|
)
|
(60,258
|
)
|
||||||
Financing
Activities
|
||||||||||||
Proceeds
from sale of common stock
|
–
|
27,525
|
84,025
|
|||||||||
Net
Cash Provided By Financing Activities
|
–
|
27,525
|
84,025
|
|||||||||
(Decrease)
increase in Cash
|
(49,746
|
)
|
17,929
|
23,767
|
||||||||
Cash
- Beginning of Period
|
73,513
|
–
|
–
|
|||||||||
Cash
- End of Period
|
23,767
|
17,929
|
23,767
|
|||||||||
Supplemental
Disclosures
|
||||||||||||
Interest
paid
|
–
|
–
|
–
|
|||||||||
Income
taxes paid
|
–
|
–
|
–
|
|||||||||
F -
17
Keyser
Resources Inc.
(An
Exploration Stage Company)
Notes to
the Financial Statements
September
30, 2009
(Expressed
in US dollars)
1.
Nature of Operations and Continuance of Business
Keyser
Resources Inc. (the “Company”) was incorporated in the State of Nevada on
November 26, 2007. The Company is an Exploration Stage Company as defined by
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 915, Development Stage
Entities. 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.
These
financial statements have been prepared on a going concern basis, which implies
the Company will continue to realize its assets and discharge its liabilities in
the normal course of business. The Company has not generated any revenue since
inception and has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
the Company as a going concern is dependent upon the continued financial support
from its shareholders, the ability of the Company to obtain necessary equity
financing to continue operations, and the attainment of profitable operations.
As at September 30, 2009, the Company has accumulated losses of $101,388 since
inception. These factors raise substantial doubt regarding the Company’s ability
to continue as a going concern. These financial statements do not include any
adjustments to the recoverability and classification of recorded asset amounts
and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
2. Summary
of Significant Accounting Policies
a)
|
Basis
of Presentation
|
These
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States, and are expressed
in US dollars. The Company’s fiscal year-end is December 31.
b)
|
Interim
Financial Statements
|
The
unaudited financial statements as of September 30, 2009 and for the three and
nine months ended September 30, 2009 and 2008, and for the period November 26,
2007 (inception) to September 30, 2009 have been prepared in accordance with
accounting principles generally accepted in the United States for interim
financial information and with instructions to Form 10-Q. In the opinion of
management, the unaudited financial statements have been prepared on the same
basis as the annual financial statements and reflect all adjustments, which
include only normal recurring adjustments, necessary to present fairly the
financial position as of September 30, 2009 and the results of operations and
cash flows for the periods ended September 30, 2009 and 2008, and for the period
November 26, 2007 (inception) to September 30, 2009. The financial data and
other information disclosed in these notes to the interim financial statements
related to these periods are unaudited. The results for the nine month period
ended September 30, 2009 is not necessarily indicative of the results to be
expected for any subsequent quarter of the entire year ending December 31, 2009.
The balance sheet at December 31, 2008 has been derived from the audited
financial statements at that date.
Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States have been condensed or omitted pursuant to the Securities and
Exchange Commission's rules and regulations. These unaudited financial
statements should be read in conjunction with our audited financial statements
and notes thereto for the year ended December 31, 2008 as included in our Form
S-1A filed with the Securities and Exchange Commission.
F -
18
Keyser
Resources Inc.
(An
Exploration Stage Company)
Notes to
the Financial Statements
September
30, 2009
(Expressed
in US dollars)
2. Summary
of Significant Accounting Policies (continued)
c)
|
Recently
Adopted Pronouncements
|
In June
2009, the FASB issued guidance now codified as ASC 105, Generally Accepted
Accounting Principles as the single source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in conformity with U.S. GAAP, aside from
those issued by the SEC. ASC 105 does not change current U.S. GAAP, but is
intended to simplify user access to all authoritative U.S. GAAP by providing all
authoritative literature related to a particular topic in one place. The
adoption of ASC 105 did not have a material impact on the Company’s financial
statements, but did eliminate all references to pre-codification
standards.
In May
2009, FASB issued ASC 855, Subsequent Events, which
establishes general standards of for the evaluation, recognition and disclosure
of events and transactions that occur after the balance sheet date. Although
there is new terminology, the standard is based on the same principles as those
that currently exist in the auditing standards. The standard, which includes a
new required disclosure of the date through which an entity has evaluated
subsequent events, is effective for interim or annual periods ending after June
15, 2009. The adoption of ASC 855 did not have a material effect on the
Company’s financial statements.
The
Company has implemented all new accounting pronouncements that are in effect and
that may impact its financial statements and does not believe that there are any
other new accounting pronouncements that have been issued that might have a
material impact on its financial position or results of operations.
3.
|
Mineral
Property
|
On June
11, 2008, the Company entered into an agreement with Bearclaw Capital Corp.
(“Bearclaw”) to acquire a 90% interest in certain mineral claims located in
British Columbia, Canada by making exploration expenditures totalling
CDN$150,000 and paying CDN$12,500 by September 30, 2010 as follows:
a) Expenditures:
i. CDN$5,000
(paid) by December 31, 2008;
ii. CDN$25,000
by July 31, 2010, and;
iii. CDN$120,000
by September 30, 2010.
b) Cash:
i. CDN$5,000
on the signing of the agreement (paid), and;
ii. CDN$7,500
(paid) by September 30, 2009.
Upon
fulfilling the above obligations, the Company will have earned a 90% interest in
the property. Bearclaw’s 10% interest is a fully carried interest through to
production.
4. Related
Party Transaction
During
the nine month period ended September 30, 2009, the President of Company
provided management services valued at $12,480 (2008 - $Nil). As at September
30, 2009, this amount is included in due to related party. This amount is
unsecured, non-interest bearing and have no specific terms of
repayment.
All
related party transactions were recorded at the exchange amount, which is the
value established and agreed to by the related party.
5.
Commitment
On
February 11, 2009, the Company entered into an agreement with an attorney to pay
$25,000 (paid) in legal fees relating to the preparation and filing of a Form
S-1 Registration Statement, and is obligated to pay an additional $25,000 in
legal fees once the Registration Statement has been declared effective by the
Securities and Exchange Commission.
F -
19
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
ITEM
13. Other Expenses of Issuance and
Distribution.
The
following table sets forth a list of the registrant’s expenses in connection
with the issuance and distribution of the securities being registered
hereby:
Amount
|
||||
SEC
registration fee
|
$
|
8
|
||
Legal
expenses
|
$
|
50,000
|
||
Accounting
expenses*
|
$
|
10,000
|
||
Printing
expenses*
|
$
|
500
|
||
Miscellaneous
expenses*
|
$
|
500
|
||
Total*
|
$
|
61,008
|
*
Estimated
On
February 11, 2009, the Company entered into an agreement with an attorney to pay
$25,000 in legal fees relating to the preparation and filing of a Form S-1
Registration Statement, and is obligated to pay an additional $25,000 in legal
fees once the Registration Statement has been declared effective by the
Securities and Exchange Commission
ITEM
14. Indemnification of Directors and
Officers.
Sections
78.7502 and 78.751 of the Nevada Revised Statutes provide us with the power to
indemnify any of our directors and officers. The director or officer must have
conducted himself/herself in good faith and reasonably believe that his/her
conduct was in, or not opposed to, our best interests. In a criminal action, the
director or officer must not have had reasonable cause to believe his/her
conduct was unlawful.
Under
Section 78.751 of the Nevada Revised Statutes, advances for expenses may be made
by agreement if the director or officer affirms in writing that he/she believes
he/she has met the standards and will personally repay the expenses if it is
determined the officer or director did not meet the standards.
Our
bylaws include an indemnification provision under which we have the power to
indemnify, to the fullest extent permitted under Nevada law, our current and
former directors and officers, or any person who serves or served at our request
for our benefit as a director or officer of another corporation or our
representative in a partnership, joint venture, trust or other enterprise,
against all expenses, liability and loss reasonably incurred by reason of being
or having been a director, officer or representative of ours or any of our
subsidiaries. We may make advances for expenses upon receipt of an undertaking
by or on behalf of the director or officer to repay the amount if it is
ultimately determined by a court of competent jurisdiction that he/she is not
entitled to be indemnified by us.
In
addition, our by-laws provide that we must indemnify our directors and officers
and we must advance expenses, including attorneys’ fees, to our directors and
officers in connection with legal proceedings, subject to very limited
exceptions.
We intend
to purchase insurance on behalf of our respective directors and officers against
certain liabilities that may be asserted against, or incurred by, such persons
in their capacities as our directors or officers, or that may arise out of their
status as our directors or officers, including liabilities under the federal and
state securities laws.
II -
1
ITEM
15. Recent Sales of Unregistered
Securities.
To date,
in addition to an issuance to Mr. Maurice Bidaux of 3,000,000 shares of common
stock at $0.001 per share for cash proceeds of $3,000, we have raised $81,025
through two private placements completed in April 2008 and December
2008. The following table summarizes the date of offering, the price
per share paid, the number of shares sold and the amount raised for these
private placements. All of these issuances were made to non-US investors
pursuant to exemptions contained in Regulation S of the Securities Act of
1933.
Closing
Date of Offering
|
Price
Per Share Paid
|
Number
of Shares Sold
|
Amount
Raised
|
April
28, 2008
|
$0.015
|
1,635,000
|
$24,525
|
December
24, 2008
|
$0.05
|
1,130,000
|
$56,500
|
ITEM
16. Exhibits and Financial Statement
Schedules.
Exhibit No.
|
Exhibit Description
|
|
3.1
|
Certificate
of Incorporation of Keyser Resources Incorporated
.(1)
|
|
3.2
|
By-laws
of Keyser Resources Incorporated (1)
|
|
5.1
|
Opinion
of Sichenzia Ross Friedman Ference *
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10.1
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Declaration
of Trust (1)
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10.2
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Option
Agreement with Bearclaw Capital Corporation (1)
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23.1
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Consent
of Seale & Beers *
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23.2
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Consent
of Agnes M. Koffeyberg, P.Geo., Technical Report
Author*
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*Filed
herewith
(1)
Incorporated by reference to the Company’s Registration Statement on Form S-1
filed May 28, 2009
ITEM
17. Undertakings.
The
undersigned Registrant hereby undertakes:
(i) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in aggregate,
the changes in volume and price represent no more than a 20 percent change in
the maximum aggregate offering price set forth in the “Calculation of
Registration Fee” table in the effective registration statement;
and
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
(2)
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That,
for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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(3)
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To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
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(4)
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That,
for the purpose of determining liability under the Securities Act of 1933
to any purchaser:
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(a)
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If
the Company is relying on Rule
430B:
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i. Each
prospectus filed by the Company pursuant to Rule 424(b)(3) shall be deemed to be
part of the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
ii. Each prospectus
required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a
registration statement in reliance on Rule 430B relating to an offering made
pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the
information required by section 10(a) of the Securities Act shall be deemed to
be part of and included in the registration statement as of the earlier of the
date such form of prospectus is first used after effectiveness or the date of
the first contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of the issuer and
any person that is at that date an underwriter, such date shall be deemed to be
a new effective date of the registration statement relating to the securities in
the registration statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof; provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such effective date,
supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such
document immediately prior to such effective date; or
(b)
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If
the Company is subject to Rule
430C:
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Each
prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in reliance on Rule
430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness; provided,
however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will,
as to a purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or
made in any such document immediately prior to such date of first
use.
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(5)
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That,
for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of
securities: The undersigned registrant undertakes that in a primary
offering of securities of the registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to
offer and sell such securities to the purchaser: (i) any preliminary
prospectus or prospectus of the undersigned registrant relating to the
offering required to be filed pursuant to Rule 424; (ii) any free writing
prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant; (iii) the portion of any other free writing prospectus
relating to the offering containing material information about the
undersigned registrant or its securities provided by or on behalf of the
undersigned registrant; and (iv) Any other communication that is an offer
in the offering made by the undersigned registrant to the
purchaser.
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(6)
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Insofar
as Indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provision, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, the registrant
has duly caused this Registration Statement on Form S-1 to be signed on its
behalf by the undersigned, thereunto duly authorized on January 19, 2010.
KEYSER
RESOURCES INCORPORATED
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By:
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/s/
Maurice Bidaux
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Name:
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Maurice
Bidaux
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Title:
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President,
Chief Executive Officer and Chief Financial Officer
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Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration
Statement on Form S-1 has been signed by the following persons in the following
capacities on January 19, 2010.
By:
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/s/
Maurice Bidaux
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Name:
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Maurice
Bidaux
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Title:
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Sole
Director
Principal
Executive Officer, Principal Financial Officer and Principal Accounting
Officer
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