Attached files
file | filename |
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8-K - AFFINITY GOLD CORP. | v188569_8k.htm |
EX-99.3 - AFFINITY GOLD CORP. | v188569_ex99-3.htm |
EX-99.5 - AFFINITY GOLD CORP. | v188569_ex99-5.htm |
EX-99.2 - AFFINITY GOLD CORP. | v188569_ex99-2.htm |
EX-99.4 - AFFINITY GOLD CORP. | v188569_ex99-4.htm |
EX-99.6 - AFFINITY GOLD CORP. | v188569_ex99-6.htm |
809
Meander Court, Medina, MN 55340
Office
(763) 557-4954
Fax (763)
557-5834
www.larsonallen.com
Mr. Corey
J. Sandberg, Treasurer and Director
Affinity
Gold Corporation
7950 Main
Street, Suite 217
Maple
Grove, MN 55369
Dear
Cory:
LarsonAllen
LLP (“LarsonAllen”) is pleased to present this proposal to assist Affinity Gold
Corporation (“Affinity Gold”) in performing the following tasks to help your
organization meet your objectives.
SERVICES:
Outsourced
CFO and Controller Services
Compile
monthly financial statements
Draft
Form 10Q and 10K for the various quarter end SEC filing
requirements
Provide
periodic financial and management reports, as requested
Prepare
and/or review various monthly and quarterly account reconciliations
Other
services
Manage
audit prep process
Prepare
information for tax filing, as requested
Process
and procedure (including consolidation) evaluation and recommendation (SOX 404
work will be completed under a separate engagement letter)
Assist
management in establishing key performance indicators, as requested
Other
advisory services specifically requested by authorized Affinity Gold
personnel
SCOPE AND
APPROACH:
Related
to Compiling the Monthly Financial Statements, the following will be our
responsibility under professional standards:
1.
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We
will compile the month-end Balance Sheet and the related Statements of
Operations and Changes in Shareholder Equity and Cash Flows for Affinity
Gold. (a corporation) for each month starting from December 2009
forward. We will compile the financial statements and issue an
accountants’ report thereon in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of
Certified Public Accountants. The objective of a compilation is to present
in the form of financial statements, information that is the
representation of management without undertaking to express any assurance
on the financial statements.
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A
compilation differs significantly from a review or an audit of financial
statements. A compilation does not contemplate performing inquiry, analytical
procedures, or other procedures performed in a review. Additionally, a
compilation does not contemplate obtaining an understanding of the entity’s
internal control; assessing fraud risk; tests of accounting records by obtaining
sufficient appropriate audit evidence through inspection, observation,
confirmation, or the examination of source documents (for example, cancelled
checks or bank images); or other procedures ordinarily performed in an audit.
Therefore, a compilation does not provide a basis for expressing any level of
assurance on the financial statements being compiled.
Management
has elected to omit substantially all of the disclosures (footnotes) required by
generally accepted accounting principles. If the omitted disclosures were
included in the financial statements, they might influence the user’s
conclusions about the Company’s financial position, results of operations, and
cash flows. Accordingly, the financial statements we compile are not designed
for those who are not informed about such matters. If, for any
reason, we are unable to complete the compilation of your financial statements,
we will not issue a report on such statements.
809
Meander Court, Medina, MN 55340
Office
(763) 557-4954
Fax (763)
557-5834
www.larsonallen.com
|
2.
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The
other data accompanying the financial statements is presented only for
supplementary analysis purposes and will be compiled from information that
is the representation of management, without audit or review. We do not
express an opinion or any other form of assurance on such
data.
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You are
responsible for making all management decisions and performing all management
functions as well as evaluating the adequacy and results of the services
performed and accepting responsibility for such services. You are responsible
for establishing and maintaining internal control, including monitoring ongoing
activities.
Our
engagement cannot be relied upon to disclose fraud, or illegal acts that may
exist. However, we will inform the appropriate level of management of any
material errors and of any evidence or information that comes to our attention
during the performance of our compilation procedures that fraud may have
occurred. In addition, we will report to you any evidence or information that
comes to our attention during the performance of our compilation procedures
regarding illegal acts that may have occurred, unless they are clearly
inconsequential.
We are
not independent with respect to Affinity Gold.
Don Frank
is the engagement principal and is responsible for this engagement.
Limitation
of remedies
Our role
is strictly limited to the engagement described in this letter, and we offer no
assurance as to the results or ultimate outcomes of this engagement or of any
decisions that you may make based upon our communications with, or our reports
to you. Your company will be solely responsible for making all decisions
concerning the contents of our communications and reports, for the adoption of
any plans and for implementing any plans you may develop, including any that we
may discuss with you.
You agree
that it is appropriate to limit the liability of LarsonAllen LLP (LarsonAllen),
its principals, directors, officers, employees and agents (“we” or “us”) and
that this limitation of remedies provision is governed by the laws of the state
of Minnesota without giving effect to choice of law principles.
You
further agree that you will not hold us liable for any claim, cost or damage,
whether based on warranty, tort, contract or other law, arising from or related
to this agreement, the services provided under this agreement, the work product,
or for any plans, actions or results of this engagement, except to the extent
authorized by this agreement. In no event shall we be liable to you for any
indirect, special, incidental, consequential, punitive or exemplary damages, or
for loss of profits or loss of goodwill, costs or attorneys’ fees.
The
exclusive remedy available to you shall be the right to pursue claims for actual
damages that are directly caused by acts or omissions that are breaches by us of
our duties under this agreement, but any recovery on any such claims, including
any costs and attorneys’ fees incurred in pursuing them, shall not exceed the
fees actually paid under this agreement by you to LarsonAllen. No action arising
out of the services under this agreement may be brought by either party more
than one year after the date of the last services under this
agreement.
FEES AND
TERMS:
The fees
will be billed as follows:
Controller
services performed by a senior level person
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$ | 85 per hour | ||
CFO
and Controller services performed by Bryan Hamilton
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$ | 125 per hour | ||
CFO
services performed by QA or Don Frank
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$ | 200 per hour |
809
Meander Court, Medina, MN 55340
Office
(763) 557-4954
Fax (763)
557-5834
www.larsonallen.com
The
per-hour charge above reflects all costs for services performed by LarsonAllen
employees. Out of pocket expenses such as out of town travel, meals
and lodging will be billed at cost and are not included in the fee
estimate. These rates are guaranteed through October 31,
2010.
At this
time, it is difficult to determine the time necessary to complete the work as
defined above. We normally estimate between 30-40 hours per quarter
for the 10Q work, but this is completely dependent of the condition of the
information that is provided by Affinity Gold. This engagement also
includes many other services as discussed with the company
management. We will communicate to you as the work is being completed
so you have an estimate of our time.
This
agreement will automatically renew for one year from the rate guarantee
expiration date unless it is cancelled in writing at least 30 days prior to
expiration date or is changed by the mutual signing of an
amendment. Work could begin under this agreement the week of March 8, 2010. We
will require an advance payment of $5,000 prior to commencement of the
services.
Term of
payment for consulting services is net 10
days. Amounts unpaid after 30 days from invoice date will be
charged a service fee of 1.5% per month. In addition, in the event
action is instituted to collect any portion of an amount owed by Affinity Gold
to LarsonAllen, Affinity Gold agrees to pay such additional sums as reasonable,
including attorney's fees.
SERVICE
SATISFACTION:
Our work
is intended to meet the satisfaction of the customer. If you are not
completely satisfied with the services performed by LarsonAllen, we will take
reasonable corrective action to satisfy you, and then if you are not completely
satisfied we will accept portion of said price that reflects Affinity Gold’
level of satisfaction. Upon payment of your invoice, we will assume
you have been satisfied with our work and our service level will have been
fulfilled.
This
agreement can be terminated by either party with a 30-day
notice. Upon termination of this agreement and timely payment by
Affinity Gold of the final billings, all of Affinity Gold property in our
possession will be turned over to you in a timely manner.
OTHER:
LarsonAllen
will not disclose any confidential, proprietary or privileged information of
Affinity Gold to any persons without the authorization of Affinity Gold
management.
This is
also to confirm that we will be responsible for our own property & casualty,
general liability, and workers compensation insurance, taxes, professional
training and other personal costs related to the operation of our
business. During a portion of our work, we may require the use of one
of the company's computers. We will try to give you advance notice
and coordinate our use so it does not interfere with Affinity Gold
employees.
A portion
of this engagement is designed to apply procedures that will assure the
financial records of the company are materially correct at the end of each
quarter. Accounting standards and procedures will be suggested and
applied that are consistent with those normally utilized in a company of your
size and nature. Certain internal controls will be recommended as
they relate to the safeguard of company assets. To the extent that
internal control recommendations are not implemented, and as a result, fraud
occurs which is initiated by Affinity Gold employees or other third party
employee Affinity Gold insurance will be responsible for covering any
losses.
Affinity
Gold agrees that LarsonAllen will not be assuming any fiduciary responsibility
on behalf of Affinity Gold during the course of this
engagement.
809
Meander Court, Medina, MN 55340
Office
(763) 557-4954
Fax (763)
557-5834
www.larsonallen.com
In the
event that a LarsonAllen employee is solicited to work in a position as an
employee of Affinity Gold and in the event that the LarsonAllen employee accepts
the position of employment with Affinity Gold the following conditions will
apply:
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1)
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LarsonAllen
will require a 4-week notice period subsequent to employees proper written
notice to LarsonAllen
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AND
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2)
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Affinity
Gold will be required to pay an employment fee of $35,000 for the
Controller/CFO and $20,000 for the staff accountant to LarsonAllen
immediately upon this notice.
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If any
former LarsonAllen employee shall be hired as an employee within 60 days of
leaving LarsonAllen, there shall be a refutable presumption that the LarsonAllen
employee was solicited to work as an employee of Affinity Gold and the above fee
shall be payable to LarsonAllen.
If you
agree that the above adequately sets forth Affinity Gold’s understanding of our
mutual responsibilities, please authorize this Agreement and return it to our
office. A copy is provided for your records.
We would
like to take this opportunity to express our appreciation for the opportunity to
serve you.
Very
Truly Yours,
BY:
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/s/ Donald D. Frank
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Don
Frank, Principal, LarsonAllen
LLP
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Agreed to
and accepted:
BY:
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/s/ Corey J. Sandberg
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DATE:
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April
1, 2010
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Corey
Sandberg, Affinity Gold Corporation
ADDRESS:
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7950 MAIN STR., SUITE 217, MAPLE GROVE,
MN 55369
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EMAIL:
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csandberg@affinitygold.com
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PHONE:
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612-987-3500
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FAX:
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763-420-5092
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