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EX-99.1 - Oro East Mining, Inc. | v190009_ex99-1.htm |
EX-10.1 - Oro East Mining, Inc. | v190009_ex10-1.htm |
UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C.
20549
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF
1934
Date
of Report (Date of earliest event reported): July 2, 2010
Accelerated
Acquisitions I, Inc.
(Exact
Name of Registrant as Specified in its Charter)
Delaware
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000-53136
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26-2012582
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||
(State
or Other Jurisdiction of
Incorporation)
|
(Commission
File
No.)
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(I.R.S.
Employer
Identification
No.)
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1127
Webster Street, Suite 28, Oakland, CA
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94607
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(Address
of Principal Executive Offices)
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(Zip
Code)
|
Registrant’s
telephone number, including area code: (510) 544-1516
122 Ocean Park Blvd. Suite
307, Santa Monica, CA 90405
(Former
name or former address, if changed since last report)
(Address
of Principal Offices)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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TABLE
OF CONTENTS
Item
1.01 Entry into a Material Definitive Agreement
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3 | |||
Item
5.06 Change in Shell Company Status
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3 | |||
Item
9.01 Financial Statements and Exhibits
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24 | |||
SIGNATURES
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25 | |||
EXHIBIT
INDEX
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26 |
2
Item
1.01 Entry into a Material Definitive Agreement
On July
2, 2010, the Company entered into an Assignment of Rights Agreement (“Rights
Agreement”) with Oro-East Mining Company LTD. (“Oro”). Pursuant to
the terms of the Rights Agreement, Oro assigned to the Company certain rights
and obligations with respect to permitted mining claims of approximately $1.6
billion. Pursuant to the Rights Agreement, the Company will assume
the rights and obligations of Oro to explore, extract, refine and produce
precious metals and other industrial deposits on the claims and earn fees with
respect to such services. By entering into the Rights Agreement, the
Company commenced business as an exploration, mining, refinery and production
company. The Company intends to focus on extracting gold, silver, copper, iron
ore and other industrial minerals to primarily meet the demands of Chinese
Government and companies for the mined minerals.
Oro, the
registered and beneficial holder of two (2) mineral claims with the Mines and
Geosciences Bureau (MGB) for the Republic of the Philippines: MPSA 184-XI and
APSA 167-XI “Portfolio of Mineral Claims”, assigned all mineral rights of Oro to
the Company. Said mineral rights shall further include corresponding surface
rights. The assignment encompasses control of the surface, the subsurface and
the air above any and all real property or claims owned by Oro. The Company may
freely sell, lease, gift or bequest these rights individually or entirely to
others, within the scope and terms of the Agreement and applicable laws of the
Republic of Philippines. The Assignment Agreement also grants the Company all
rights to production, which shall include but not be limited to right to mineral
extraction on all mineral claims and tenements owned or controlled by Oro, right
to control production in all aspects, right to enter the property and remove the
minerals or resources at its election.
If the
Company fails to become a publicly listed company with the United States
Securities Exchange Commission and the Company’s common shares fail to commence
trading by January 1, 2013, then the Rights Agreement shall terminate
immediately and the Claims and all rights thereto shall revert back to
Oro.
The
Company and Oro are both controlled by the same principals who believe that
substantial benefit may potentially be derived from the assignment of the claims
and mining operations to a publicly-reporting entity by potentially opening up
new funding resources for the business and thereby facilitating the funding of
future operations and permitting the further expansion of the
business.
A copy of
the Rights Agreement is attached as Exhibit 10.1
Item
5.06 Change in Shell Company Status.
Prior to
our entry into the mining industry through the execution of the Rights Agreement
and the development of sales channels in connection therewith as described
in Item 1.01 above, we were a “shell company” (as such term is defined in Rule
12b-2 under the Securities Exchange Act of 1934, as amended). As a result of
entering into these agreements and undertaking efforts to begin exploration,
mining and mineral distribution operations, we have ceased to be a shell
company. There has not, however, been a change of control of our
company.
OTHER
PERTINENT INFORMATION
Unless
specifically set forth to the contrary, when used herein, the terms “Accelerated
Acquisitions I, Inc.”, “Oro-East Mining, Inc”, "we", "our", the "Company" and
similar terms refer to Accelerated Acquisitions I, Inc., a Delaware
corporation.
FORM
10 DISCLOSURE
Item
2.01(f) of Form 8-K states that if the registrant was a shell company, like our
company, the registrant must disclose the information that would be
required if the registrant were filing a general form for registration of
securities on Form 10. Accordingly, we are providing below the
information that would be included in a Form 10 if we were to file a Form
10.
3
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This
report contains forward-looking statements. These forward-looking statements are
subject to known and unknown risks, uncertainties and other factors which may
cause actual results, performance or achievements to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. These forward-looking statements
were based on various factors and were derived utilizing numerous assumptions
and other factors that could cause our actual results to differ materially from
those in the forward-looking statements. These factors include, but
are not limited to our ability to develop our operations, our ability to satisfy
our obligations, our ability to consummate the acquisition of additional assets,
our ability to generate revenues and pay our operating expenses, our ability to
raise capital as necessary, economic, political and market conditions and
fluctuations, government and industry regulation, interest rate risk, U.S. and
global competition, and other factors. Most of these factors are
difficult to predict accurately and are generally beyond our
control. You should consider the areas of risk described in
connection with any forward-looking statements that may be made
herein. Readers are cautioned not to place undue reliance on these
forward-looking statements and readers should carefully review this report in
its entirety, including the risks described in "Risk Factors" and the risk
factors described in our other filings with the Securities and Exchange
Commission. Except for our ongoing obligations to disclose material
information under the Federal securities laws, we undertake no obligation to
release publicly any revisions to any forward-looking statements, to report
events or to report the occurrence of unanticipated events. These
forward-looking statements speak only as of the date of this report, and you
should not rely on these statements without also considering the risks and
uncertainties associated with these statements and our business.
OUR
BUSINESS
From
inception (February 15, 2008), Accelerated Acquisitions I, Inc. was organized as
a vehicle to investigate and, if such investigation warrants, acquire a target
company or business seeking the perceived advantages of being a publicly held
corporation. Our principal business objectives were to achieve long-term growth
potential through a combination with a business rather than immediate,
short-term earnings. The Company has not restricted its potential candidate
target companies to any specific business, industry or geographical location
and, thus, positioned itself to acquire any type of business.
On
February15, 2008, the Registrant sold 5,000,000 shares of Common Stock to
Accelerated Venture Partners, LLC for an aggregate investment of
$8,000.00. The Registrant sold these shares of Common Stock under the
exemption from registration provided by Section 4(2) of the Securities
Act.
On June
23, 2010, Mutual Gain Hong Kong, Limited. (“Purchaser”) agreed to acquire
23,850,000 shares of the Company’s common stock par value $0.0001 (the “Shares”)
for a price of $0.0001 per share. At the same time, Accelerated Venture
Partners, LLC agreed to tender 3,500,000 of its 5,000,000 shares of the
Company’s common stock par value $0.0001 for cancellation. Following these
transactions, Mutual Gain Hong Kong, Limited owned 94.1% of the Company’s
25,350,000, issued and outstanding shares of common stock par value $0.0001 and
the interest of Accelerated Venture Partners, LLC was reduced to approximately
5.9% of the total issued and outstanding shares. Simultaneously with the share
purchase, Timothy Neher resigned from the Company’s Board of Directors effective
immediately and Tian Qing Chen was simultaneously appointed to the Company’s
Board of Directors. Such action represented a change of control of the Company.
The Purchaser used its working capital to acquire the Shares. The Purchaser did
not borrow any funds to acquire the Shares.
Prior to
the purchase of the Shares, the Purchaser was not affiliated with the Company.
However, the Purchaser is now deemed an affiliate of the Company as a result of
its stock ownership interest in the Company. The purchase of the shares by the
Purchaser was completed pursuant to a written Subscription Agreement with the
Company. The purchase was not subject to any other terms and conditions other
than the sale of the Shares in exchange for the cash payment. The Company
intends to file a Certificate of Amendment to its Certificate of Incorporation
with the Secretary of State of Delaware in order to change its name to “Oro East
Mining Inc.”.
On June
24, 2010, the Company entered into a Consulting Services Agreement with
Accelerated Venture Partners LLC (“AVP”), a company controlled by Timothy J.
Neher. The agreement requires AVP to provide the Company with certain
consulting services in consideration of (a) an option granted by the
company to AVP to purchase 1,500,000 shares of the company’s common stock at a
price of $0.0001 per share (which option was immediately exercised by the
holder) subject to a repurchase option granted to the company to repurchase the
shares in the event the Company fails to complete funding as detailed in the
agreement and (b) cash compensation at a rate of $133,333 per month. The payment
of such compensation is subject to the company’s achievement of certain
designated milestones detailed in the agreement and a company option to make a
lump sum payment to AVP in lieu of all amounts payable there
under.
4
On July
2, 2010, the Company entered into the Rights Agreement with
Oro. Pursuant to the terms of the Rights Agreement, Oro assigned to
the Company certain rights and obligations with respect to the permitted mining
claims described in the Rights Agreement. Pursuant to the Rights
Agreement, the Company will assume the rights and obligations of Oro to explore,
extract, refine and produce precious metals and other industrial deposits on the
claims and earn fees with respect to such services. By entering into
the Rights Agreement, the Company commenced business as an exploration, mining,
refinery and production company. The Company intends to focus on extracting
gold, silver, copper, iron ore and other industrial minerals to primarily meet
the demands of Chinese Government and companies for the mined
minerals.
The
Company and Oro are both controlled by the same principals who believe that
substantial benefit may potentially be derived from the assignment of the claims
and mining operations to a publicly-reporting entity by potentially opening up
new funding resources for the business and thereby facilitating the funding of
future operations and permitting the further expansion of the
business.
Accelerated
Acquisitions I, Inc. is an emerging growth exploration mining and refining
company that has acquired rights to develop certain tenement lands in the
Republic of Philippines for the mining of gold, copper, and other precious or
industrial mineral deposits. The company will initially focus on one production
permitted Mineral Right Sharing Agreement (MPSA) claim, MPSA 184 XI and one soon
to be permitted Application Product Sharing Agreement (APSA) claim 167 XI
comprised of 15,631 hectares (38,608 acres) of mining right claims of an
estimated surface value of $1.6 billion USD on Mindanao Island in the Davao
region. The company’s claims are fee simple with all applicable permits obtained
to erect infrastructure, refining, smelting plants and power stations for
extraction and production of gold and copper as primary targets, and iron
ore and other metals as secondary. The company also has option agreements on six
surrounding claims comprised of 31,274 hectares (102,000 acres) to erect
infrastructure, refining, smelting plants and power stations on the claims for
extraction and production of gold, copper and or minerals.
Summary
of Claims
Accelerated
Acquisitions I, Inc. acquired exploration, extraction and production rights from
Oro, a privately-held corporation organized under the laws of the Republic
of the Philippines licensed for mine acquisition, exploration, and
development. Oro-East is the rightful owner of claims MPSA 184-XI and APSA
167-XI.
Prior to
the acquisition of its claims, Oro did manual test-pitting, artisanal tunneling
and trenching activities which suggested Copper grades on the sulphide side from
4% to as high as 15% Cu (from more than 40 laboratory assays on grab, outcrop,
test-pit and composite sampling grade range and Au grab and composite sample
contents of 1.5 to 5 gms/ton from 2-3 meter deep testpits).
MPSA
184-XI (7,855 hectares, 19,401 acres) is a tenement claim situated on the
outskirts of Davao City in the Philippines which contains significant deposits
of in copper and gold. The parcel was applied-registered with the MGB Region XI
on May 16, 1997. It is located in the municipalities of Lupon and Tarragona
in the Davao Oriental Province, Island Region of Mindanao, Philippines. The
project sites at Mt. Tagopo and Mt. Mayo are bounded by coordinates 7
degrees 01’00” to 7 degrees 05’ 00” latitude and 128 degrees 08’ 00” to
126 degrees 11’30” longitude and 7 degrees 02’30” to 7 degrees 08’30”
latitude and 126 degrees 17’00” to 126 degrees 19’20” longitude. Oro-East has
undergone exploration for copper and gold-bearing veins or structures in this
area. These exploration targets are shallow, for vein-type copper and
gold-bearing deposits. Copper, gold, and silver are the primary mineral targets
in this claim, with lead and zinc as secondary targets. This parcel is host to
artisanal mining activities, which include the mining of copper, gold, and
crude-panning activities for the mining of gold. Currently, small-scale miners
engage in tunneling and sluicing of free-gold in creeks located in and around
the claim.
APSA
167-XI (7,776 hectares,19,206 acres), applied-registered with MGB Region XI on
November 19, 1996; located at the Municipalities of Pantukan and Maragusan,
Compostela Province, Island Region of Mindanao, Philippines; project site is at
barrio Boringot bounded by coordinates 7 degrees 08’30” to 7 degrees 18’ 30”
latitude and 126 degrees 02’ 30” to 126 degrees 08’00” longitude.
These
mineral claims are located beneath the Philippine Fault and the Pacific Rim
tectonic belt, also known as the “Pacific Ring of Fire,” where significant
deposits of epithermal gold porphyry and copper-gold have been unearthed.
It has taken over thirteen years to obtain full permitting under the Mineral
Right Sharing Agreement (MRSA) with the Philippine Government which allows the
Company to commence full scale exploration and production as of May 15, 2010 on
MPSA 184-XI. The Company anticipates that full permitting for APSA
167-XI will be completed in prior to the end of 2010.
5
To
identify the mineral recourses on MPSA 184-XI, Oro conducted a
semi-detailed geological mapping using compass and tape method backed by Global
Positioning System (GPS). This was conducted by Agetro Davao
Mapping Team from June 29, 2008 to August 27, 2008 at the 4,939 hectares of
Oro East Mining Claim dominated as MPSA -184-XI Parcel II (approximately two
thirds of the fully permitted claim MPSA 184-XI).
Henceforth,
it is imperative to implement the proper evaluation of the deposit to be able to
know the estimated volume of ore that can be extracted economically, safely and
effectively. From the data gathered followed by other exploration programs, such
as expanded prospecting, mapping, sampling and ultimately diamond drilling,
effective mine planning and implementation will be facilitated. The
company will then identify and implement the mining method(s) best adapted to
maximize production, including:
1.
Effective extraction of ore delineated by the exploration, mine geology and
grade control department.
2. Proper
handling of ore and blending method to attain an economical grade without
sacrificing the quality of the ore.
3.
Proper, effective and economical milling plant operation that can recover the
gold at the highest percentage possible.
4. Proper
disposal of plant tails.
Detained
Description of the Claims.
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I.
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INTRODUCTION
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Semi-detailed
geological mapping using compass and tape method backed by Global Positioning
System (GPS) was conducted by Agetro Davao Mapping Team from June 29, 2008 to
August 27, 2008 at the 4,939 hectares of Oro East Mining Claim dominated as MPSA
-184-XI Parcel II. The geological mapping was undertaken to confirm actual
location of the copper ore bodies, gold vein system, alteration zones, lithology
and other pertinent geological features. Location of creeks, gulleys, major
tributaries, trails, old and current access roads was also facilitated. Prior to
the end of the mapping program, location of the initial proposed trenches was
also conducted within the areas where copper and gold veins were located. The
geological evaluation was undertaken to come up with an initial geological data
and recommendation that is deemed necessary for the succeeding exploration and
mine operation activities.
II.
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LOCATION
AND ACCESSIBILITY
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The
project area referred to as Parcel II under MPSA-184-XI with a total area of
4,939 hectares is more or less bounded by latitude 7 02'30” to 7 08'30” and
longitude 126 17'00” to 126 19'30”. It is located within Sitio Mabalante,
Barangay Calapagan, Municipality of Lupon and Sitio Manlandog, Bait, Antipolo,
New Cebu, Botog, Nasa, Barangay Limot, Municipality of Taragona, all in the
Province of Davao Oriental. From Davao City, the prospect can be reached on a
three (3) to four (4) hours travel via commercial buses plying the Davao-Mati
route. From the City of Mati, Mabalante area which is located at the northern
part of the claim can be reached in a three (3) to four (4) hours travel on a
4x4 vehicle via the Mati-Tagbinunga-Calatagan Daticor old logging road towards
Quinonoan headwaters Skynix camp area. Manlandog area on the other hand is
accessible via Mati-Don Salvador-Cangusan access road in a 1-1/2 travel on a 4x4
vehicle or motorcycle. From Sitio Cangusan, another two (2) hours hike on a foot
trail to Manlandog exploration fly camp east of Mayo River. The southern part of
the claim is accessible via Mati-Limot-Botog access road , all within the
Municipality of Taragona, Davo Oriental. The prospect areas which includes New
Cebu, Bait, Antipolo, Onlo, Botog, and Aponing area, all of which are
interconnected by either old logging road or by foot trails.
|
III.
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TOPOGRAPHIC
SETTING
|
The area
under consideration is characterized by rugged to extremely rugged topography
with elliptical shape of top ridges, with elevations ranging from 500 to 1,751
meters above sea level. Mountain ranges exhibiting triangular facets are common
in the area. The apparent physiographic conformity of deep valley seems to
indicate an earlier mature erosion of land surface. The erosion surface has
subsequently been dissected by youthful streams.
6
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IV.
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DRAINAGE,
VEGETATION, CLIMATE
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Drainage
is generally dendritic as exemplified by the Quinonoan and Mayo River as the
major drainage system, with system of modified rectangular drainage pattern and
network of tributaries and subtributaries. In the gently sloping area,
vegetation abounds in the form of tropical cogon grass, ferns, coffee, abaca,
vegetable, corn, variety of outcrop in the rugged and steep parts of the area,
are overgrown with second growth forest with some large trees and thick
undergrowth. The average weather variation of the region falls under Type 2 of
the Climate Map of the Philippines where there is no definite dry season and a
very pronounced maximum rainfall from November to January.
V.
|
GEOLOGIC
SETTING
|
A)
REGIONAL GEOLOGY AND TECTONIC SETTING
Regionally,
the prospect is located strategically at the southern segment of the Philippine
fault. It can also be considered as part of the Diwata range which appears to be
a paleogene subduction zone with upthrusted mafic-ultramafic rocks, metamorphic
rocks and clastics, comprising the northern part and some igneous rocks at the
western flank on the south. The northern part is overlain by Miocene clastics
and limestone intruded by middle miocene diorite, andesite and dacite. The
north-south trending Diwata range extending from Surigao to Davao forms the
backbone of eastern Mindanao. The range is rugged and has several peaks with
elevation from 900 to 2,500 meters. The highest which is Mt. Kampali is in the southern part
of the range.
The
Diwata range which is also known as the Cordilleras of the South is a mineral
district of Southeastern Mindanao where porphyry and vein type copper, gold,
molybdenum, tactite iron deposits containing sulfides are known to exist. At the
western flank of the prospect is a north-south trending batholith 4-8 kilometers
wide by more than 20 kilometers long. This batholith is often called by
Geologists as diorite intrusive complex, since it consists of different facies
mainly diorite, quartz diorite and hornblende diorite porphyry. This batholith
is exposed and serves as hostrock in most if not all copper and gold deposits
within Taguibo, Calapagan, Marayag, to the western flank of San Mariano up to
the Mountain Ranges of Mt. Kinayan in the Municipality of New
Bataan.
At the
northeastern part of the prospect is an exposure of a columnar basaltic rock
formation which is believed to be the oldest rock formation exposed in the
district. Probable age of this rock formation is cretaceous to Paleocene (?). At
the eastern flank is a thick formation of limestone formation of Oligocene age
(?) capped by the Eocene age volcanic clastics rock from Quinonoan to Mt. Tagbac
area.
Dominating
the geology of the region, the Eastern Mindanao ridge is a complex NNW-SSE
trending volcanic island structure that developed during the upper cretaceous to
quarternary as a result of convergent and transcurrent tectonics The area is
inferred as being associated with relic east dipping subduction zone that
collided with the west Mindanao ridge sometime in the late Miocene.
B) WITHIN
PROSPECTS
1.
MABALANTE AREA
The
Mabalante-upper Quinonoan copper gold prospect is underlain essentially by three
(3) rock units composed of diorite, intercalated sequences of metamorphosed
volcanics and sedimentary rocks. Common rock exposure however at Mabalante area
is volcanic clastics overlain by light to dark gray colored limestone formation.
Porphyritic andesite dikes intruded the volcanic clastic rocks. These dikes are
trending northwest and sub-parallel major faults in the area. In close proximity
with these dikes are thin fractures filled with quartz anhydrite and calc
silicate materials.
At
Mabalante area, the deposit is hosted to a large extent by andesite porphyry,
porphyritic-volcanic, volcanic clastics and partly by the uncomformity rock
formation of sandy and basalt limestone, calcarenite, sandstone sequences that
developed from spotty to hornfelsic texture. Silicification, chloritization,
epidotization and kaolinization are common alteration in the prospect area.
Copper mineralization consists predominantly of chalcopyrite, bornite and
subordinates of sphalerite and galena, occurring usually as fracture filling and
other interlacing minute fractures which serves as passageways or loci for
sulfide mineralization. Malachite, azurite and chalcocite are dominant oxidation
products.
Three (3)
distinct vein systems were mapped and sampled at Mabalante area, namely:
Mabalante Copper-molybdenum vein complex which is the focus of the past mining
activities; the Southeastern Mabalante vein complex and the Eastern Mabalante
vein complex.
7
1a. MABALANTE
COPPER-MOLYBDENUM VEIN COMPLEX
The
Mabalante copper-molybdenum vein complex also known as the main Mabalante vein
system is a northeast-southwest trending copper vein system with multiple
cymoidal and lacer structures along its strike. The main copper structure which
was drifted prior to its collapse is composed of 2.0 meter massive copper vein,
consisting of chalcopyrite, chalcocite, bornite and cubical specks of pyrite and
botroidal marcasite. Fine bandings of white-grayish quartz, sericite and
adularia were also noted. General trend of the main copper vein is North 48 -50
East dipping 45 southwest. Coatings of malachite and azurite are dominant
especially near the portal. Two (2) minor faults at the footwall of the
structure may have displaced the vein with a possible slight southeastern
oblique movement.
At upper
elevation of the main portal are two (2) abandoned adits with exposure of 0.30
to 1.30 meters copper vein composed of chalcopyrite, bornite, chalcocite, with
bonded quartz-calcite specked with fine pyrite. The vein based on its strike and
dip is correlative to the structure disclosed at the main portal, located at
lower elevation. 30-50 meters north of the main copper structure are two (2)
0.50 meters vein (sample no. M-OTC-09) which may have converged with the main
structure at lower elevation where the 0.50-0.70 meters molybdenum vein was
exposed. Chipping the hanging wall disclosed a massive copper complex which may
have converged forming one (1) major structure at lower elevation.
As of
this writing, the total strike of the Mabalante main vein complex is 150 meters.
Three (3) proposed trenches at 50 meters interval were delineated at the
southwestern side of the vein and another three (3) trenches at the northeast
side.
VALUE
OF MABALANTE VEIN
COPPER -
GOLD AREA
GOLD
Average Grade
Grams/MT
|
Total Grams
|
Value In
Phil. Peso
|
Total Equivalent
Ounces
|
Value in US Dollars
|
1.525
|
5,461,056.72
|
9,135,278,957.00
|
192,628.87
|
190,318,311.60
|
SILVER
20.129
|
71,940,844.71
|
1,827,069,072.00
|
2,537,595.93
|
38,063,939.00
|
COPPER
Average Grade
Per Gram (AU/MT)
|
Total Equiv.
MT Copper
|
Value In
Phil. Peso
|
Total Equivalent
Ounces
|
Value in US Dollars
|
2.763
98
|
98,749.34
|
29,264,523,409.60
|
217,742,294.70
|
609,678,425.20
|
Total
Value of Mabalante Area
|
40,226,871,438.60
|
$
838,060,675.80
|
Map of
Claim Location MPSA 184-XI and APSA 167-XI
Mandanao
Island, Davao Oriental,
8
Current
Map of Claim Location MPSA 184-XI and APSA 167-XI (in red)
Mandanao
Island, Davao Oriental, and six additional available claims to the
Company
9
Use
of “GREEN Refining Technology
The
Company plans to commence diamond drilling, excavation, and start-up refinery
lines for gold, copper, and the secondary target minerals upon receipt of the
capitalization. Oro will hire a subcontractor to mining operations commence and
by the end of the 4-month period, the claim is anticipated to be yielding 200
metric tons of gold and copper each per day. Although the initial technology
will be traditional mining equipment the Company plans on implementing new
patented, tested and proven “GREEN” nano-composite material, “Spiderweb”™, for
molecular and ionic separations. The Spiderweb material was developed to
overcome a fundamental physical limitation of conventional chromatographic
supports and ion exchange resins, the rate limiting diffusion of metal ions from
bulk solution phase into the pores, where ion exchange occurs. Spiderweb media
are thinly cross-linked networks of polymers between the solid material.
Metal-selective ligands are tethered onto the “Spiderweb”, in the middle of the
actively flowing solution and away from the stagnant surface. The Spiderweb
technology improves the process efficiency and economics of metal extraction for
mining operations. The solid phase extraction (SPE) columns enable efficient
(i.e. >98%) recovery of metal ions from solution and after the closed
electro-winning process produces 99.9% metal content.
Advantages
include:
|
·
|
Rapid
metal adsorption and equilibration kinetics that bind metal ions with
residence times of a few seconds in the SPE
column.
|
|
·
|
Chelating
ligand chemistries that give high association
constants for gold and silver ions and low binding constants
for other interfering metal ions.
|
|
·
|
Ligand
chemistries that enable the separation of gold and silver ions by
sequential removal from the support in a concentrated form, using
“selective elution”.
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Proven “GREEN” environmentally friendly
refining technologies.
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Market
Opportunity
The
Company intends to target the Chinese markets, due to the nation’s robust
economic growth in the copper industry, and progress into the Western
markets after becoming the largest competitor in Asia. China is the ideal
country to target because it is currently the top consumer of copper and
iron ore in the world. A main source of business for Oro will be from imports to
China of gold, refined copper, and other secondarily-targeted
metals.
The
Copper Market
According
to the New York Mercantile Exchange and Bloomberg statistics, closing prices of
copper have been on the rise since March 2008 and continue to gain. On the
London Metal Exchange, copper futures have also gained from 2007 to 2010.
Despite the economic recession hitting the world, strong demands of copper have
been hedging global consumption. It is the third most demanded metal, after iron
and aluminum. Meanwhile the traditional major producers of copper have
experienced output declines. This year, Codelco, the largest copper producer in
Chile, experienced its largest drop in production in sixteen years. Phelps Dodge
Corporation, the second largest copper producer in the world and one of the main
importers of copper to China, has also experienced a sharp decline. Since the
beginning of 2008, demand in copper around the world rose while supplies
dropped. Oro will thus be entering the international copper market at a prime
time for filling the world demands. Former market titans are losing their
resources while Oro-East is gaining. As a result, Oro-East projects to dominate
the Asian markets in copper and iron ore within the first 5years of public
trading and the world market in totality by the year 2020.
The
Gold Market
The
world’s capital intensive industry relies heavily on the price and output of
gold. The gold industry is thus the lynchpin of the global economy. Gold prices
have hit record highs. Increasing gold prices have attracgted investors to the
shares of publicly-traded gold mining companies. Currently, leading gold mining
shares include Shandong Gold Mining Company, Ltd., Zhongjin Gold Corporation,
and Zijin Mining Group Company Ltd., all Chinese companies. With the low
overhead cost environment that the Philippines provide, we expect that the
Company may have a competitive edge competitors located in higher cost
markets.
10
Industry
Analysis
The 2009
Philippines Mining Report found that both the national and international mining
sectors are prospering through the current global economic crisis, due primarily
to its strengths in the gold and silver sectors. During economic downturns,
precious metals are generally seen as safe havens for investment. Foreign
corporations are flooding into the Philippines to grab a stake in the mineral
claims. Australia’s CGA Mining has partnered with
Philippines-based Filminera Resources to invest over US$200 million in
mining projects this year. Medusa Mining, another European company, is
developing the Philsaga Gold Project with the Philsaga Mining Corporation,
investing approximately US$30 million into mining. Norway’s Intex Resources will
be injecting US$3 billion dollars in the next few years for fertilizer projects.
Wealthy investors from the East are also turning their attention to the mining
sector. Prominent Chinese families and the government have invested millions
into mining, despite the economic downturn. While an estimated one trillion U.S.
dollars worth of mineral deposits lie in the Philippiines, less than two
billion U.S. dollars has been invested since 2004 to develop those minerals. The
net result is that there currently exist significant untapped reserves of gold,
copper, nickel, and zinc. Oro seeks to implement a large-scale mining project
and develop the country’s rich mineral reserves.
Competitor
Analysis
Crew
Gold Corporation
Type:
Public
Ticker:
CRU
Exchange(s):
TSE (Tokyo Stock Exchange) and OSE (Oslo Stock Exchange)
2008
Sales: $224,600,000
Industry:
Industrial Metals and Minerals
Sub-Industry:
Basic Materials
Headquarters:
United Kingdom
Crew Gold
conducts mining and processing operations in the Philippines, among other
countries. The company produces about 250,000 ounces annually, though in 2009,
Crew Gold has had major cutbacks. Thus, this would be an ideal time for Oro to
enter the market and take over Crew Gold’s former market share.
Apex
Mining Company, Inc.
Type:
Public
Ticker:
APX
Exchange(s):
PSE (Philippine Stock Exchange)
2008
Sales: PHP 136,000,000
Industry:
Metal Producers and Products Manufacturers
Sub-Industry:
Miscellaneous Metal Producers
Headquarters:
Philippines
Apex
Mining Company was established in 1970, and is primarily engaged in the business
of mining gold, copper, silver, lead, and other precious metals. The company has
interests in the Maco-Masara gold-silver veins and porphyry copper
deposits.
Lepanto
Consolidated Mining Company
Type:
Public
Ticker:
LCB
Exchange(s):
PSE (Philippine Stock Exchange)
2008
Sales: PHP 1,713,900,000
Industry:
Metal Producers & Products Manufacturers
Sub-Industry:
Diversified Metal Producers
Headquarters:
Philippines
The
Lepanto Consolidated Mining Company's principal activity is exploration for and
mining of gold, silver, copper, lead, zinc and various ores, metals, and
minerals. Its main office is located in Makati City, Philippines. Lepanto
operates the Victoria Project, a mining operation located in Mankayan, Benguet.
The company’s issued and outstanding shares are estimated at 28.8
billion.
Benefits
to the Community
Community
Development
In
addition to its mining activities, the Company’ business ventures carry a strong
humanitarian emphasis, which intends to charter civil engineering projects, such
as construction of freeways, paved roads, and a seaport in Compostela Valley.
The company will invest heavily in local schools and public welfare institutions
for the surrounding indigenous communities, along with providing hundreds of
jobs to the otherwise impoverished villages. Oro strictly adheres to the
mandates of the Department of Environment and Natural Resources (“DENR”),
establishing a strong Social Development Management Program (“SDMP”) within
Oro-East. The SDMP of Oro is committed to funding and providing sustainable
living and improving the quality of life of neighboring
communities.
11
Human
Development
We
believe that the company will not only stimulate job growth in the Republic of
Philippines, but its SDMP has implemented humanitarian programs for the
improvement of the lives of the miners it employs. Company-funded health care
services, nutritional and childcare services are provided for employees.
Community schools will also be provided for local villages, along with paved
roads for improved safety and travel for OroEast Mining, Inc. miners and their
families. The Oro SDMP further seeks to develop the local area and increase
industrialization to help improve the national economy. Finally, all of the
Company’s SDMP services strive to promote conservation and intellectual use and
management of the environment vis-à-vis community and mining
activities
RISK
FACTORS
Before
you invest in our securities, you should be aware that there are various risks.
You should consider carefully these risk factors, together with all of the other
information included in this annual report before you decide to purchase our
securities. If any of the following risks and uncertainties develop into actual
events, our business, financial condition or results of operations could be
materially adversely affected.
Our
independent auditors have expressed substantial doubt about our ability to
continue as a going concern, which may hinder our ability to continue as a going
concern and our ability to obtain future financing.
In their
report dated March 30, 2010 our independent auditors stated that our financial
statements for the period ended December 31, 2009 were prepared assuming that we
would continue as a going concern. Our ability to continue as a going concern is
an issue raised as a result of recurring losses from operations and cash flow
deficiencies since our inception. We continue to experience net losses. Our
ability to continue as a going concern is subject to our ability to generate a
profit and/or obtain necessary funding from outside sources, including obtaining
additional funding from the sale of our securities, increasing sales or
obtaining loans and grants from various financial institutions where possible.
If we are unable to continue as a going concern, you may lose your entire
investment.
We
were formed in February 15, 2008 and have a limited operating history and,
accordingly, you will not have any basis on which to evaluate our ability to
achieve our business objectives.
We are a
development stage company with limited operating results to date. Since we do
not have an established operating history or regular sales yet, you will have no
basis upon which to evaluate our ability to achieve our business
objectives.
The
absence of any significant operating history for us makes forecasting our
revenue and expenses difficult, and we may be unable to adjust our spending in a
timely manner to compensate for unexpected revenue shortfalls or unexpected
expenses.
As a
result of the absence of any operating history for us, it is difficult to
accurately forecast our future revenue. In addition, we have limited meaningful
historical financial data upon which to base planned operating expenses. Current
and future expense levels are based on our operating plans and estimates of
future revenue. Revenue and operating results are difficult to forecast because
they generally depend on our ability to promote and sell our services. As a
result, we may be unable to adjust our spending in a timely manner to compensate
for any unexpected revenue shortfall, which would result in further substantial
losses. We may also be unable to expand our operations in a timely manner to
adequately meet demand to the extent it exceeds expectations.
Our
limited operating history does not afford investors a sufficient history on
which to base an investment decision.
We are
currently in the early stages of developing our business. There can be no
assurance that at this time that we will operate profitably or that we will have
adequate working capital to meet our obligations as they become
due.
12
Investors
must consider the risks and difficulties frequently encountered by early stage
companies, particularly in rapidly evolving markets. Such risks include the
following:
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Competition
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ability
to anticipate and adapt to a competitive
market
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ability
to effectively manage expanding operations; amount and timing of operating
costs and capital expenditures relating to expansion of our business,
operations, and infrastructure; and
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dependence
upon key personnel to market and sell our services and the loss of one of
our key managers may adversely affect the marketing of our
services.
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We cannot
be certain that our business strategy will be successful or that we will
successfully address these risks. In the event that we do not successfully
address these risks, our business, prospects, financial condition, and results
of operations could be materially and adversely affected and we may not have the
resources to continue or expand our business operations.
We
have no profitable operating history and May Never Achieve
Profitability
From
inception, February 15, 2008, Accelerated Acquisitions I, Inc. was
organized as a vehicle to investigate and, if such investigation warrants,
acquire a target company or business seeking the perceived advantages of being a
publicly held corporation. On July 2, 2010, we changed our business plan and we
are now an exploration stage mining company, with no operating history. The
Company has not restricted our potential candidate target companies to any
specific business, industry or geographical location and, thus, may acquire any
type of business. Through December 31, 2009, the Company has an accumulated
deficit of $17,628 notwithstanding the fact that the principals of the Company
have worked without salary and the Company has operated with minimal overhead.
We are an early stage company and have a limited history of operations and have
not generated revenues from operations since our inception. We are faced with
all of the risks associated with a company in the early stages of development.
Our business is subject to numerous risks associated with a relatively new,
low-capitalized company engaged in our business sector. Such risks include, but
are not limited to, competition from well-established and well-capitalized
companies, and unanticipated difficulties regarding the marketing and sale of
our services. There can be no assurance that we will ever generate significant
commercial sales or achieve profitability. Should this be the case, our common
stock could become worthless and investors in our common stock or other
securities could lose their entire investment.
Dependence
on the Founders, without whose services Company business operations could
cease.
At this
time, our founders are wholly responsible for the development and execution of
our business plan. Our founders are under no contractual obligation to remain
employed by us, although they have no present intent to leave. If our founders
should choose to leave us for any reason before we have hired additional
personnel our operations may fail. Even if we are able to find additional
personnel, it is uncertain whether we could find qualified management who could
develop our business along the lines described herein or would be willing to
work for compensation the Company could afford. Without such management, the
Company could be forced to cease operations and investors in our common stock or
other securities could lose their entire investment.
Our
officers and directors devote limited time to the Company’s business and are
engaged in other business activities
At this
time, none of our officers and directors devotes his full-time attention to the
Company’s business. Based upon the growth of the business, we would intend to
employ additional management and staff. The limited time devoted to the
Company’s business could adversely affect the Company’s business operations and
prospects for the future. Without full-time devoted management, the Company
could be forced to cease operations and investors in our common stock or other
securities could lose their entire investment.
13
Concentrated
control risks; shareholders could be unable to control or influence key
corporate actions or effect changes in the Company’s board of directors or
management.
Our
current officers and directors currently own 23,850,000 shares
of our common stock, representing approximately 89% of the voting control of the
Company. Our current officers and directors therefore has the power to make all
major decisions regarding our affairs, including decisions regarding whether or
not to issue stock and for what consideration, whether or not to sell all or
substantially all of our assets and for what consideration and whether or not to
authorize more stock for issuance or otherwise amend our charter or
bylaws.
Lack
of employment agreements with key management risking potential of the loss of
the Company’s top management
We do not
currently have an employment agreement with any of our key management or key man
insurance on their lives. Our future success will depend in significant part on
our ability to retain and hire key management personnel. Competition for such
personnel is intense and there can be no assurance that we will be successful in
attracting and retaining such personnel. Without such management, the Company
could be forced to cease operations and investors in our common stock or other
securities could lose their entire investment.
Lack
of additional working capital may cause curtailment of any expansion plans while
raising of capital through sale of equity securities would dilute existing
shareholders’ percentage of ownership
Our
available capital resources will not be adequate to fund our working capital
requirements based upon our present level of operations for the 12-month period
subsequent to December 31, 2009. A shortage of capital would affect our ability
to fund our working capital requirements. If we require additional capital,
funds may not be available on acceptable terms, if at all. In addition, if we
raise additional capital through the sale of equity or convertible debt
securities, the issuance of these securities could dilute existing shareholders.
If funds are not available, we could be placed in the position of having to
cease all operations.
We
do not presently have a traditional credit facility with a financial
institution. This absence may adversely affect our operations
We do not
presently have a traditional credit facility with a financial institution. The
absence of a traditional credit facility with a financial institution could
adversely impact our operations. If adequate funds are not otherwise available,
we may be required to delay, scale back or eliminate portions of our operations
and product development efforts. Without such credit facilities, the Company
could be forced to cease operations and investors in our common stock or other
securities could lose their entire investment.
Our
inability to successfully achieve a critical mass of sales could adversely
affect our financial condition
No
assurance can be given that we will be able to successfully achieve a critical
mass of sales in order to cover our operating expenses and achieve sustainable
profitability. Without such critical mass of sales, the Company could be forced
to cease operations.
Our
success is substantially dependent on general economic conditions and business
trends, a downturn of which could adversely affect our operations
The
success of our operations depends to a significant extent upon a number of
factors relating to business spending. These factors include economic
conditions, activity in the financial markets, general business conditions,
personnel cost, inflation, interest rates and taxation. Our business is affected
by the general condition and economic stability of our customers and their
continued willingness to work with us in the future. An overall decline in the
demand for government services could cause a reduction in our sales and the
Company could face a situation where it never achieves a critical mass of sales
and thereby be forced to cease operations.
Changes
in generally accepted accounting principles could have an adverse effect on our
business financial condition, cash flows, revenue and results of
operations
We are
subject to changes in and interpretations of financial accounting matters that
govern the measurement of our performance. Based on our reading and
interpretations of relevant guidance, principles or concepts issued by, among
other authorities, the American Institute of Certified Public Accountants, the
Financial Accounting Standards Board, and the United States Securities and
Exchange Commission, our management believes that our current contract terms and
business arrangements have been properly reported. However, there continue to be
issued interpretations and guidance for applying the relevant standards to a
wide range of contract terms and business arrangements that are prevalent in the
industries in which we operate. Future interpretations or changes by the
regulators of existing accounting standards or changes in our business practices
could result in future changes in our revenue recognition and/or other
accounting policies and practices that could have a material adverse effect on
our business, financial condition, cash flows, revenue and results of
operations.
14
We
will need to increase the size of our organization, and may experience
difficulties in managing growth.
We are a
small company with three full-time employees. We expect to experience a period
of significant expansion in headcount, facilities, infrastructure and overhead
and anticipate that further expansion will be required to address potential
growth and market opportunities. Future growth will impose significant added
responsibilities on members of management, including the need to identify,
recruit, maintain and integrate managers. Our future financial performance and
its ability to compete effectively will depend, in part, on its ability to
manage any future growth effectively.
We
are subject to compliance with securities law, which exposes us to potential
liabilities, including potential rescission rights.
We have
offered and sold our common stock to investors pursuant to certain exemptions
from the registration requirements of the Securities Act of 1933, as well as
those of various state securities laws. The basis for relying on such exemptions
is factual; that is, the applicability of such exemptions depends upon our
conduct and that of those persons contacting prospective investors and making
the offering. We have not received a legal opinion to the effect that any of our
prior offerings were exempt from registration under any federal or state law.
Instead, we have relied upon the operative facts as the basis for such
exemptions, including information provided by investors themselves.
If any
prior offering did not qualify for such exemption, an investor would have the
right to rescind its purchase of the securities if it so desired. It is possible
that if an investor should seek rescission, such investor would succeed. A
similar situation prevails under state law in those states where the securities
may be offered without registration in reliance on the partial preemption from
the registration or qualification provisions of such state statutes under the
National Securities Markets Improvement Act of 1996. If investors were
successful in seeking rescission, we would face severe financial demands that
could adversely affect our business and operations. Additionally, if we did not
in fact qualify for the exemptions upon which it has relied, we may become
subject to significant fines and penalties imposed by the SEC and state
securities agencies.
We
incur costs associated with SEC reporting compliance.
The
Company made the decision to become an SEC “reporting company” in order to
comply with applicable laws and regulations. We incur certain costs of
compliance with applicable SEC reporting rules and regulations including, but
not limited to attorneys fees, accounting and auditing fees, other professional
fees, financial printing costs and Sarbanes-Oxley compliance costs in an amount
estimated at approximately $25,000 per year. On balance, the Company determined
that the incurrence of such costs and expenses was preferable to the Company
being in a position where it had very limited access to additional capital
funding.
The
availability of a large number of authorized but unissued shares of common stock
may, upon their issuance, lead to dilution of existing
stockholders.
We are
authorized to issue 100,000,000 shares of common stock, $0.0001 par value per
share, of which, as of July 2, 2010, 26,850,000 shares of common stock were
issued and outstanding. We are also authorized to issue 10,000,000 shares of
preferred stock, $0.0001 par value, none of which are issued and outstanding.
These shares may be issued by our board of directors without further
stockholder approval. The issuance of large numbers of shares, possibly at below
market prices, is likely to result in substantial dilution to the interests of
other stockholders. In addition, issuances of large numbers of shares may
adversely affect the market price of our common stock.
15
We
may need additional capital that could dilute the ownership interest of
investors.
We
require substantial working capital to fund our business. If we raise additional
funds through the issuance of equity, equity-related or convertible debt
securities, these securities may have rights, preferences or privileges senior
to those of the rights of holders of our common stock and they may experience
additional dilution. We cannot predict whether additional financing will be
available to us on favorable terms when required, or at all. Since our
inception, we have experienced negative cash flow from operations and expect to
experience significant negative cash flow from operations in the future. The
issuance of additional common stock by the Company may have the effect of
further diluting the proportionate equity interest and voting power of holders
of our common stock.
We
may not have adequate internal accounting controls. While we have certain
internal procedures in our budgeting, forecasting and in the management and
allocation of funds, our internal controls may not be adequate.
We are
constantly striving to improve our internal accounting controls. Our board of
directors has not designated an Audit Committee and we do not have any outside
directors. We do not have a dedicated full time Chief Financial Officer.
We hope to develop an adequate internal accounting control to budget, forecast,
manage and allocate our funds and account for them. There is no guarantee that
such improvements will be adequate or successful or that such improvements will
be carried out on a timely basis. If we do not have adequate internal accounting
controls, we may not be able to appropriately budget, forecast and manage our
funds, we may also be unable to prepare accurate accounts on a timely basis to
meet our continuing financial reporting obligations and we may not be able to
satisfy our obligations under US securities laws.
We
do not have adequate insurance coverage
At this
time, we do not have adequate insurance coverage and therefore have the risk of
loss or damages to our business and assets. We cannot assure you that we would
not face liability upon the occurrence of any event which could result in any
loss or damages being assessed against the Company. Moreover, any insurance we
may ultimately acquire may not be adequate to cover any loss or liability we may
incur.
We
are subject to numerous laws and regulations that can adversely affect the cost,
manner or feasibility of doing business.
Our
operations are subject to extensive federal, state and local laws and
regulations relating to the financial markets. Future laws or regulations,
any adverse change in the interpretation of existing laws and regulations or our
failure to comply with existing legal requirements may result in substantial
penalties and harm to our business, results of operations and financial
condition. We may be required to make large and unanticipated capital
expenditures to comply with governmental regulations. Our operations could
be significantly delayed or curtailed and our cost of operations could
significantly increase as a result of regulatory requirements or restrictions.
We are unable to predict the ultimate cost of compliance with these requirements
or their effect on our operations.
We
do not intend to pay cash dividends in the foreseeable future
We
currently intend to retain all future earnings for use in the operation and
expansion of our business. We do not intend to pay any cash dividends in the
foreseeable future but will review this policy as circumstances
dictate.
There
is currently no market for our securities and there can be no assurance that any
market will ever develop or that our common stock will be listed for
trading.
There has
not been any established trading market for our common stock and there is
currently no market for our securities. While we have been approved for trading
on the OTC Bulletin Board (“OTCBB”), there can be no assurance as the prices at
which our common stock will trade if a trading market develops, of which there
can be no assurance. Until our common stock is fully distributed and an
orderly market develops, (if ever) in our common stock, the price at which it
trades is likely to fluctuate significantly.
Prices
for our common stock will be determined in the marketplace and may be influenced
by many factors, including the depth and liquidity of the market for shares of
our common stock, developments affecting our business, including the impact of
the factors referred to elsewhere in these Risk Factors, investor perception of
us and general economic and market conditions. No assurances can be given that
an orderly or liquid market will ever develop for the shares of our common
stock. Due to the anticipated low price of the securities, many brokerage firms
may not be willing to effect transactions in the securities.
16
Our common stock
is subject to the Penny Stock Regulations
Our
common stock will likely be subject to the SEC's “penny stock” rules to the
extent that the price remains less than $5.00. Those rules, which require
delivery of a schedule explaining the penny stock market and the associated
risks before any sale, may further limit your ability to sell your
shares.
The SEC
has adopted regulations which generally define “penny stock” to be an equity
security that has a market price of less than $5.00 per share. Our common stock,
when and if a trading market develops, may fall within the definition of penny
stock and subject to rules that impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally those with assets in excess of
$1,000,000, or annual incomes exceeding $200,000 or $300,000, together with
their spouse).
For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of such securities and have received
the purchaser's prior written consent to the transaction. Additionally, for any
transaction, other than exempt transactions, involving a penny stock, the rules
require the delivery, prior to the transaction, of a risk disclosure document
mandated by the Commission relating to the penny stock market. The broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, current quotations for the securities and, if the
broker-dealer is the sole market-maker, the broker-dealer must disclose this
fact and the broker-dealer's presumed control over the market. Finally, monthly
statements must be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks.
Consequently, the `penny stock` rules may restrict the ability of broker-dealers
to sell our common stock and may affect the ability of investors to sell their
common stock in the secondary market.
Our
common stock is illiquid and subject to price volatility unrelated to our
operations
The
market price of our common stock could fluctuate substantially due to a variety
of factors, including market perception of our ability to achieve our planned
growth, quarterly operating results of other companies in the same industry,
trading volume in our common stock, changes in general conditions in the economy
and the financial markets or other developments affecting our competitors or us.
In addition, the stock market is subject to extreme price and volume
fluctuations. This volatility has had a significant effect on the market price
of securities issued by many companies for reasons unrelated to their operating
performance and could have the same effect on our common stock. Sales of
substantial amounts of common stock, or the perception that such sales could
occur, could adversely affect the market price of our common stock and could
impair our ability to raise capital through the sale of our equity
securities.
We
have not voluntarily implemented various corporate governance measures, in the
absence of which, shareholders may have more limited protections against
interested director transactions, conflicts of interest and similar
matters.
Recent
Federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted in
the adoption of various corporate governance measures designed to promote the
integrity of the corporate management and the securities markets. Some of these
measures have been adopted in response to legal requirements. Others have been
adopted by companies in response to the requirements of national securities
exchanges, such as the NYSE or the Nasdaq Stock Market, on which their
securities are listed. Among the corporate governance measures that are required
under the rules of national securities exchanges are those that address board of
directors' independence, audit committee oversight, and the adoption of a code
of ethics. We have not yet adopted any of these corporate governance
measures and, since our securities are not yet listed on a national securities
exchange, we are not required to do so. It is possible that if we
were to adopt some or all of these corporate governance measures, stockholders
would benefit from somewhat greater assurances that internal corporate decisions
were being made by disinterested directors and that policies had been
implemented to define responsible conduct. Prospective investors
should bear in mind our current lack of corporate governance measures in
formulating their investment decisions.
17
RISKS
RELATED TO OUR BUSINESS AND INDUSTRY
We are an exploration stage
corporation, lack a business history and have losses that we expect to continue
into the future.
We are in
the very early exploration stage and cannot guarantee that our exploration work
will be successful, or that any minerals will be found, or that any production
of minerals will be realized. The search for valuable minerals as a business is
extremely risky. We can provide investors with no assurance that
exploration on our properties will establish that commercially exploitable
reserves of minerals exist on our property. Additional potential
problems that may prevent us from discovering any reserves of minerals on our
property include, but are not limited to, unanticipated problems relating to
exploration and additional costs and expenses that may exceed current estimates.
If we are unable to establish the presence of commercially exploitable reserves
of minerals on our property our ability to fund future exploration activities
will be impeded, we will not be able to operate profitably and investors may
lose all of their investment in our company.
Because
of the unique difficulties and uncertainties inherent in mineral exploration
ventures, we face a high risk of business failure.
Potential
investors should be aware of the difficulties normally encountered by new
mineral exploration companies and the high rate of failure of such
enterprises. The likelihood of success must be considered in light of
the problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates. The expenditures to be
made by us in the exploration of the mineral claim may not result in the
discovery of mineral deposits. Problems such as unusual or unexpected
formations and other conditions are involved in mineral exploration and often
result in unsuccessful exploration efforts. If the results of our
exploration do not reveal viable commercial mineralization, we may decide to
abandon our claims. If this happens, our business will likely
fail.
Because
of the inherent dangers involved in mineral exploration, there is a risk that we
may incur liability or damages as we conduct our business.
The
search for valuable minerals involves numerous hazards. As a result, we may
become subject to liability for such hazards, including pollution, cave-ins and
other hazards against which we cannot insure or against which we may elect not
to insure. At the present time we have no coverage to insure against these
hazards. The payment of such liabilities may have a material adverse effect on
our financial position.
We
may be adversely affected by fluctuations in ore and precious metal prices. If
prices decrease, we may be unable to achieve profitability.
The value
and price of our shares of common stock, our financial results, and our
exploration, development and mining activities, if any, may be significantly
adversely affected by declines in the price of precious metals and
ore. Mineral prices fluctuate widely and are affected by numerous
factors beyond our control such as interest rates, exchange rates, inflation or
deflation, fluctuation in the value of the United States dollar and foreign
currencies, global and regional supply and demand, and the political and
economic conditions of mineral producing countries throughout the
world.
The
prices used in making resource estimates for mineral projects are disclosed, and
generally use significantly lower metal prices than daily metals prices quoted
in the news media. The percentage change in the price of a metal cannot be
directly related to the estimated resource quantities, which are affected by a
number of additional factors. For example, a 10% change in price may have little
impact on the estimated resource quantities, or it may result in a significant
change in the amount of resources. If prices decrease, we may be
unable to achieve profitability.
Transportation
difficulties and weather interruptions may affect and delay proposed mining
operations and impact our proposed business.
Our
mining properties are accessible by road. The climate in the area is hot and dry
in the summer but cold and subject to snow in the winter, which could at times
hamper accessibility depending on the winter season precipitation levels. As a
result, our exploration and mining plans could be delayed for several months
each year.
Supplies
needed for exploration may not always be available. If we are unable to secure
exploration supplies we may have to delay our anticipated business
operations.
Competition
and unforeseen limited sources of supplies needed for our proposed exploration
work could result in occasional spot shortages of supplies of certain products,
equipment or materials. There is no guarantee we will be able to obtain certain
products, equipment and/or materials as and when needed, without interruption,
or on favorable terms. Such delays could affect our anticipated business
operations and increase our expenses.
18
FINANCIAL
INFORMATION
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
The
following discussion of our financial condition and results of operation for the
twelve months ended December 31, 2009 and December 31, 2008 should be read
in conjunction with the financial statements and the notes to those statements
that are included elsewhere in this report. Our discussion includes
forward-looking statements based upon current expectations that involve risks
and uncertainties, such as our plans, objectives, expectations and intentions.
Actual results and the timing of events could differ materially from those
anticipated in these forward-looking statements as a result of a number of
factors, including those set forth under the “Risk Factors,” “Cautionary Notice
Regarding Forward-Looking Statements” and “Our Business” sections in this Form
8-K. We use words such as “anticipate,” “estimate,” “plan,”
“project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,”
“will,” “should,” “could,” and similar expressions to identify forward-looking
statements.
Plan
of Operation
Accelerated
Acquisitions I, Inc. is an emerging growth exploration mining and refining
company that has acquired rights to develop certain tenement lands in the
Republic of Philippines for the mining of gold, copper, and other precious or
industrial mineral deposits. The company will initially focus on two production
permitted claims, APSA 184 XI and APSA 167 XI comprised of 15,631 hectares
(38,608 acres) of mining right claims on Mindanao Island in the Davao region, an
area of significant proven reserves of copper and gold. The company’s claims are
fee simple with all applicable permits obtained to erect infrastructure,
refining, smelting plants and power stations for extraction and production of
gold and copper as primary targets, and iron ore and other metals as secondary.
The company also has access to six surrounding claims comprised of 31,274
hectares (102,000 acres) with an estimated value of US$48 billion to erect
infrastructure, refining, smelting plants and power stations on the claims for
extraction and production of gold, copper and or minerals.
Going
Concern
We were a
shell company from February 15, 2008 until our entry into the mining business in
June 2010. We have incurred net losses of approximately $17,628 since
inception through December 31, 2009. At December 31, 2009 we had
approximately $691 in cash and approximately $0 other assets and our total
liabilities were approximately $10,319. The
report of our independent registered public accounting firm on our financial
statements for the year ended December 31, 2009 contains an explanatory
paragraph regarding our ability to continue as a going concern based
upon recurring operating losses and our need to obtain additional financing
to sustain operations. Our ability to continue as a going concern is
dependent upon our ability to obtain the necessary financing to meet our
obligations and repay our liabilities when they become due and to generate
sufficient revenues from our operations to pay our
operating expenses. There are no assurances that we will
continue as a going concern.
Results
of Operations
Results of Operations for
the period ended December 31, 2009
Accelerated Acquisitions I, Inc. was incorporated on February 15, 2008, and as such had no meaningful results of
operations for the period ended December 31, 2009.
During
the period from inception (February 15, 2008) to December 31, 2009, we had no
revenues and recognized expenses of $17,628 which primarily comprised
professional and legal fees and other costs related to the start-up and
organization of our business and raising initial capital for the
Company.
Liquidity
and Capital Resources
As of
December 31, 2009, the Company had cash on hand of $691 and had total current
liabilities of $10,319. For the year ending December 31, 2009, we incurred
expenses of approximately $6,792 as a result of professional fees required for
the compliance of our financial reporting.
Off-Balance
Sheet Arrangements
The
Company does not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company’s financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.
19
Seasonality
Our
operating results are not affected by seasonality.
Inflation
Our
business and operating results are not affected in any material way by
inflation.
Critical
Accounting Policies
The
Securities and Exchange Commission issued Financial Reporting Release No. 60,
"Cautionary Advice Regarding Disclosure About Critical Accounting Policies"
suggesting that companies provide additional disclosure and commentary on their
most critical accounting policies. In Financial Reporting Release No.
60, the Securities and Exchange Commission has defined the most critical
accounting policies as the ones that are most important to the portrayal of a
company's financial condition and operating results, and require management to
make its most difficult and subjective judgments, often as a result of the need
to make estimates of matters that are inherently uncertain. The
nature of our business generally does not call for the preparation or use of
estimates. Due to the fact that the Company does not have any
operating business, we do not believe that we do not have any such critical
accounting policies.
PROPERTIES
Offices
At this
time, the Company maintains its designated office at 1127 Webster Street, Suite
28, Oakland, CA 94607. The Company’s telephone number is
510-544-1516. The Company’s fax number is 510-722-1528.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS
AND MANAGEMENT
The
following table sets forth certain information regarding beneficial ownership of
the Company's Common Stock as of July 2, 2010, by: (I) each current director;
each nominee for director, and executive officer of the Company; (ii) all
directors and executive officers as a group; and (iii) each shareholder who owns
more than five percent of the outstanding shares of the Company's Common Stock.
Except as otherwise indicated, the Company believes each of the persons listed
below possesses sole voting and investment power with respect to the shares
indicated.
Name
and Address
|
Number of Shares
|
Percentage Owned
|
||||||
Mutual
Gain Hong Kong, Limited
|
||||||||
Suite
2502
|
||||||||
Richard
Commercial Building
|
||||||||
109
Argyle Street
|
||||||||
Kowloon,
Hong Kong
|
23,850,000 | 88.82 | % | |||||
Accelerated
Venture Partners, LLC
|
||||||||
1840
Gateway Drive, Suite 200
|
||||||||
Foster
City CA, 94404
|
3,000,000 | 11.17 | % |
(1) This
table is based upon 26,850,000 shares issued and outstanding as July 2,
2010.
(2)
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting and investment power with
respect to the shares. Shares of Common Stock subject to options or warrants
currently exercisable or exercisable within 60 days are deemed outstanding for
computing the percentage of the person holding such options or warrants, but are
not deemed outstanding for computing the percentage of any other
person.
20
DIRECTORS
AND EXECUTIVE OFFICERS
The
following individuals currently serve as our executive officers and
directors:
Name
|
Age
|
Positions
|
||
Tian
Q. Chen
|
49
|
Chairman,
CEO
|
||
Linda
Chen
|
55
|
Director
|
||
Danni
Zhong
|
42
|
President
|
||
Romy
Yulo
|
48
|
COO
|
Tian Qing Chen Chairman
Mr. Chen was educated in East Asia and
received his bachelor’s degree from Guang Dong
University. He has been an
entrepreneur in finance and real estate investments since the age of 19. Mr. Chen launched
several successful real estate investment companies, and then moved into the
world of finance, where he is currently the CEO of a mid-size global equities and investments firm. Mr.
Chen has over 15 years of experience in finance and has since expanded his
breadth to the mining industry, where he has worked with major family
conglomerates throughout East Asia to learn the trade in gold, iron ore, silver, steel, and other precious and
semi-precious metals. He has successfully acquired mines and deals in Singapore,
Malaysia, the Republic of Philippines, the People’s Republic of China, and elsewhere across the Asian
continent. Mr. Chen is currently the President and CEO of Mutual Gain
Hong Kong
Group Limited, a venture
capital firm based in Hong
Kong.
Linda Chen Director
Ms.
Chen received her Master degree from Washington State University
and has over 28 years experience in international trade and had
launched several successful international trading companies. She has worked with
major family conglomerates throughout East Asia to gain experience and knowledge
on trade in gold, iron ore, silver, steel, and other precious and semi-precious
metals. Ms. Chen has successfully achieved additional skills and knowledge
mining industry and deals in Malaysia, the Republican of Philippines, the
People’s Republic of China, and elsewhere across the Asian continent. She
later expanded her experience and moved into the world of finance where she is
currently the Vice President and Director of a mid-size global equities and
investments firm. Linda Chen currently resident in San Francisco Bay area since
1979.
Danni Zhong President
Madame
Zhong has over 15 years of experience with global investment projects, financial
planning, and corporate management. She has served as CEO of numerous
privately-held corporations in the U.S., the Philippines and in China. She holds
a Bachelor’s Degree in Business Economics from the University of
California.
Romy Yulo Chief Operations
Officer
Mr. Yulo
has over 20 years of experience in mining and logging operations including
marketing and log export. He has a strong political base both locally and
nationally. Mr. Yulo engaged in Oro East copper and gold mining
operation as a COO in Mati, Davao, Philippine since 2006. He also is a
road construction designer and manager in mine site
over 10 years. Mr. Yulo has a strong political base both locally and
nationally and currently serves as the Chief Operation Officer of Oro East
Mining Company.
He holds a Bachelor’s Degree in Accounting from the University of San
Carlos.
There
are family relationships between our officers and
directors. Each director is elected at our annual meeting of
stockholders and holds office until the next annual meeting of stockholders, or
until his successor is elected and qualified.
EXECUTIVE
COMPENSATION
The
following table summarizes all compensation recorded by us in 2009 for our
principal executive officers, each other executive officer serving as such whose
annual compensation exceeded $100,000, and up to two additional individuals for
whom disclosure would have been made in this table but for the fact that the
individual was not serving as an executive officer of our Company at December
31, 2008.
None
21
Outstanding
Equity Awards at Fiscal Year-End
The
following table provides information concerning unexercised options, stock that
has not vested and equity incentive plan awards for each named executive officer
outstanding as of December 31, 2009 and March 31, 2010:
None
Compensation
of Directors
We have
not established standard compensation arrangements for our directors and the
compensation, if any, payable to each individual for their service on our Board
will be determined from time to time by our Board of Directors based upon the
amount of time expended by each of the directors on our behalf. None
of our directors received any compensation for their services.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS,
AND
DIRECTOR INDEPENDENCE
Related
Transactions
Assignment
of Rights Agreement.
The
Company is a party to the Assignment of Rights Agreement with Oro-East Mining
Company LTD. Danni Zhong is a principal of Oro-East Mining Company
LTD. and officers, directors and significant shareholders of the
Company. As a result, this may not be an arms-length
agreement.
Consulting
Services Agreement.
The
Company is a party to the Consulting Services Agreement with Accelerated Venture
Partners, LLC, which is controlled by Timothy J. Neher, a shareholder of the
Company. As a result, this may not be an arms-length
agreement.
Other.
The
officers and directors for the Company are involved in other business activities
and may, in the future, become involved in other business opportunities.
If a specific business opportunity becomes available, such persons may
face a conflict in selecting between the Company and their other business
interest. The Company has not formulated a policy for the resolution of
such conflicts.
Director
Independence
The
Company has no “independent” directors within the meaning of Nasdaq Marketplace
Rule 4200.
LEGAL
PROCEEDINGS
None
MARKET
PRICE OF AND DIVIDENDS ON THE REGISTRANT’S
COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
Market
Price of the Registrant’s Common Equity
Our stock
has yet to trade on any established market.
22
Dividend
Policy
We have
never paid cash dividends on our common stock. Under Delaware law, we
may declare and pay dividends on our capital stock either out of our surplus, as
defined in the relevant Delaware statutes, or if there is no such surplus, out
of our net profits for the fiscal year in which the dividend is declared and/or
the preceding fiscal year. If, however, the capital of our company,
computed in accordance with the relevant Delaware statutes, has been diminished
by depreciation in the value of our property, or by losses, or otherwise, to an
amount less than the aggregate amount of the capital represented by the issued
and outstanding stock of all classes having a preference upon the distribution
of assets, we are prohibited from declaring and paying out of such net profits
any dividends upon any shares of our capital stock until the deficiency in the
amount of capital represented by the issued and outstanding stock of all classes
having a preference upon the distribution of assets shall have been
repaired.
RECENT
SALES OF UNREGISTERED SECURITIES
On
February 15, 2008, the Registrant sold 5,000,000 shares of Common Stock to
Accelerated Venture Partners, LLC for an aggregate investment of
$8,000.00. The Registrant sold these shares of Common Stock under the
exemption from registration provided by Section 4(2) of the Securities
Act.
On June
23, 2010, Mutual Gain Hong Kong, Limited. (“Purchaser”) agreed to acquire
23,850,000 shares of the Company’s common stock par value $0.0001 for a price of
$0.0001 per share. At the same time, Accelerated Venture Partners, LLC agreed to
tender 3,500,000 of their 5,000,000 shares of the Company’s common stock par
value $0.0001 for cancellation. Following these transactions, Mutual Gain Hong
Kong, Limited owned 94.1% of the Company’s 25,350,000, issued and outstanding
shares of common stock par value $0.0001 and the interest of Accelerated Venture
Partners, LLC was reduced to approximately 5.9% of the total issued and
outstanding shares. Simultaneously with the share purchase, Timothy Neher
resigned from the Company’s Board of Directors to be effective immediately and
Tian Qing Chen was simultaneously appointed to the Company’s Board of Directors.
Such action represents a change of control of the Company. The Purchaser used
their working capital to acquire the Shares. The Purchaser did not borrow any
funds to acquire the Shares.
Prior to
the purchase of the shares, the Purchaser was not affiliated with the Company.
However, the Purchaser will be deemed an affiliate of the Company after the
share purchase as a result of their stock ownership interest in the Company. The
purchase of the shares by the Purchaser was completed pursuant to written
Subscription Agreements with the Company. The purchase was not subject to any
other terms and conditions other than the sale of the shares in exchange for the
cash payment. The Company intends to file a Certificate of Amendment to its
Certificate of Incorporation with the Secretary of State of Delaware in order to
change its name to “Oro East Mining Inc.”.
On June
24, 2010, the Company entered into a Consulting Services Agreement with
Accelerated Venture Partners LLC (“AVP”), a company controlled by Timothy J.
Neher. The agreement requires AVP to provide the Company with certain financial
advisory services in consideration of (a) an option granted by the company to
AVP to purchase 1,500,000 shares of the company’s common stock at a price of
$0.0001 per share (which was immediately exercised by the holder) subject to a
repurchase option granted to the company to repurchase the shares in the event
the Company fails to complete funding as detailed in the agreement and (b) cash
compensation at a rate of $133,333 per month. The payment of such compensation
is subject to the company’s achievement of certain designated milestones
detailed in the agreement and a company option to make a lump sum payment to AVP
in lieu of all amounts payable there under.
DESCRIPTION
OF SECURITIES
Our
authorized capital stock consists of 100,000,000 shares of common stock, par
value $0.0001 per share, and 10,000,000 shares of preferred stock, par value
$0.0001 per share, the rights and preferences of which may be established from
time to time by our board. As of July 2, 2010, there were
26,850,000 shares of common stock and no shares of preferred stock issued
and outstanding.
23
Common
Stock
Holders
of our common stock are entitled to one vote for each share on all matters voted
upon by our stockholders, including the election of directors, and do not have
cumulative voting rights. Subject to the rights of holders of any
then outstanding shares of our preferred stock, our common stockholders are
entitled to any dividends that may be declared by our board. Holders
of our common stock are entitled to share ratably in our net assets upon our
dissolution or liquidation after payment or provision for all liabilities and
any preferential liquidation rights of our preferred stock then
outstanding. Holders of our common stock have no preemptive rights to
purchase shares of our stock. The shares of our common stock are not
subject to any redemption provisions and are not convertible into any other
shares of our capital stock. All outstanding shares of our common
stock are, and the shares of common stock to be issued in the offering will be,
upon payment therefore, fully paid and non-assessable. The rights, preferences
and privileges of holders of our common stock will be subject to those of the
holders of any shares of our preferred stock we may issue in the
future.
Preferred
Stock
Our board
may, from time to time, authorize the issuance of one or more classes or series
of preferred stock without stockholder approval. Subject to the provisions of
our certificate of incorporation and limitations prescribed by law, our board is
authorized to adopt resolutions to issue shares, establish the number of shares,
change the number of shares constituting any series, and provide or change the
voting powers, designations, preferences and relative rights, qualifications,
limitations or restrictions on shares of our preferred stock, including dividend
rights, terms of redemption, conversion rights and liquidation preferences, in
each case without any action or vote by our stockholders. One of the effects of
undesignated preferred stock may be to enable our board to discourage an attempt
to obtain control of our company by means of a tender offer, proxy contest,
merger or otherwise. The issuance of preferred stock may adversely affect the
rights of our common stockholders by, among other things:
•
|
Restricting
dividends on the common stock;
|
•
|
diluting
the voting power of the common
stock;
|
•
|
impairing
the liquidation rights of the common stock;
or
|
•
|
delaying
or preventing a change in control without further action by the
stockholders.
|
Item 9.01 Financial Statements
and Exhibits.
(a) Financial
Statements
Financial
Statements (Audited) for the periods ended December 31, 2009 and December 31,
2008 (audited by Paritz & Co., P.A.) are attached hereto as Exhibit
99.1.
(d) Exhibits
NUMBER
|
DESCRIPTION
|
|
10.1
|
Assignment
of Rights Agreement
|
|
99.1
|
Financial
Statements (Audited) for the periods ended December 31, 2009 and December
31, 2008 and Financial Statements (Unaudited) for the periods ended March
31, 2010 and
2009
|
24
SIGNATURES
Pursuant
to the requirements of the Securities and Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Accelerated
Acquisitions I, Inc.
|
|
By:
|
/s/ Tian Qing
Chen
|
Name: Tian Qing Chen |
Title:
Chairman and CEO
Dated:
July 6, 2010
25
EXHIBIT
LIST
NUMBER
|
DESCRIPTION
|
|
10.1
|
Assignment
of Rights Agreement
|
|
99.1
|
Financial
Statements (Audited) for the periods ended December 31, 2009 and December
31, 2008 and Financial Statements (Unaudited) for the periods ended March
31, 2010 and 2009
|
26