U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CYPRIUM RESOURCES INC.
(Exact name of Registrant as specified in its charter)
|
NEVADA
(State or other jurisdiction of Incorporation or organization) |
1041 Gold Ores
(SIC Code) |
|
CYPRIUM RESOURCES INC.
2170 Nelson Avenue West Vancouver BC Canada V7V 2P7 (Name and address of principal executive offices) |
NEVEDA AGENCY AND TRUST COMPANY
50 West Liberty Street, Suite 880 Reno, Nevada 89501 (775) 322-0626 (Agent for service of process) |
| Registrant’s telephone number, including area code: 604-889-8111 | |
| Approximate date of commencement of proposed sale to the public: |
As soon as practicable after the effective date
of this Registration Statement. |
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [ ]
If this Form is filed to register securities for an offering to be made on a continuous or delayed basis pursuant to Rule 415 under the Securities Act, check the following box. [X]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH
|
AMOUNT TO BE
|
PROPOSED
|
PROPOSED
|
AMOUNT OF
|
|
Common Stock |
2,125,000 shares |
$0.02 |
$42,500 |
$1.30 |
| (1) | Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as amended. |
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE RERGISTRATION SHALL BECOME EFFECTIVE ON SUCH A DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
COPIES OF COMMUNICATION TO:
THE O’NEAL LAW FIRM, P.C.
14835 E. Shea Boulevard
Suite 103 PMB 494
Fountain Hills, Arizona 85268
Tel: (480) 812-5058
Fax: (480) 816-9241
SUBJECT TO COMPLETION, Dated September 10, 2007
PROSPECTUS
CYPRIUM RESOURCES INC.
2,125,000 SHARES
COMMON STOCK
The selling shareholders named in this are offering the 2,125,000 shares of our common stock offered through this prospectus. The 2,125,000 shares offered by the selling shareholders represent 58.6% of the total outstanding shares as of the date of this prospectus. We will not receive any proceeds from this offering. We have set an offering price for these securities of $0.02 per share of our common stock offered through this prospectus.
|
|
Offering Price |
Underwriting
|
Proceeds to Selling
|
|
Per Share |
$0.02 |
None |
$0.02 |
|
Total |
$42,500 |
None |
$42,500 |
Our common stock is presently not traded on any market or securities exchange. The sales price to the public is fixed at 0.02 per share until such time as the shares of our common stock are traded on the NASD Over-The-Counter Bulletin Board electronic quotation service. Although we intend to apply for trading of our common stock on the NASD Over-The-Counter Bulletin Board electronic quotation service, public trading of our common stock may never materialize. If our common stock becomes traded on the NASD Over-The-Counter Bulletin Board electronic quotation service, then the sale price to the public will vary according to prevailing market prices or privately negotiated prices by the selling shareholders.
The purchase of the securities offered through this prospectus involves a high degree of risk. See section entitled “Risk Factors” on page 7.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. The prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Resale restrictions on transferring “Penny Stocks” are sometimes imposed by some states, which may make transactions in our stock cumbersome and may reduce the value of an investment in our stock. Various state securities laws impose restrictions on transferring "penny stocks” and as a result, investors in the Common Stock may have their ability to sell their shares of the Common Stock impaired. For example, the Utah Securities Commission prohibits brokers from soliciting buyers for "penny stocks", which makes selling them more difficult.
The Date of This Prospectus Is: September 10, 2007
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PAGE
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| SUMMARY ……………………...…………………………………………………………………. |
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| RISK FACTORS …………………………………………………………………………………… |
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| USE OF PROCEEDS……………………………………………………………………….………. |
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| DETERMINATION OF OFFERING PRICE………………………………………………………. |
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| DILUTION…...……………………………………………………………………………………... |
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| SELLING SHAREHOLDERS ……………………………………………………………………... |
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| PLAN OF DISTRIBUTION………………………...…………………………………………...…. |
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| LEGAL PROCEEDINGS.………………………………………………………………….………. |
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| DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS………….. |
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| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......... |
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| DESCRIPTION OF SECURITIES ……………………………...………………………………….. |
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| INTEREST OF NAMED EXPERTS AND COUNSEL…………………………………………….. |
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DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES …….…………………………………………………….…….... |
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| ORGANIZATION WITHIN THE LAST FIVE YEARS..…………………………………………... |
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| DESCRIPTION OF BUSINESS…...……………………………………………………….……… |
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| PLAN OF OPERATIONS………………………………………………………………………..… |
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| CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS……...…………………...…... |
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| MARKET FOR COMMON EQUITY AND RELATED TRANSACTIONS ….…………………... |
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| EXECUTIVE COMPENSATION……..………………………………………………………...…. |
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| FINANCIAL STATEMENTS…………………………………………….……………………..…. |
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| CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ….………………………….. |
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| WHERE YOU CAN FIND MORE INFORMATION….………………………………………..…. |
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As used in this prospectus, unless the context otherwise requires, “we”, “us”, “our” “Cyprium” refers to Cyprium Resources Inc. All dollar amounts in this prospectus are in U.S. dollars unless otherwise stated. The following summary is not complete and does not contain all of the information that may be important to you. You should read the entire prospectus before making an investment decision to purchase our common shares.
Cyprium Resources Inc.
We are in the business of mineral exploration. On January 15, 2007, we entered in a Mineral Lease Agreement whereby we leased from Robert Steele a total of ten (10) Lode Mineral Claims in the State of Utah which we refer to as the King Claims. These mineral claims are located in T30S R22 W Sections 13 and 24, Piute County, Utah, owned by Robert Steele.
According to the lease Cyprium has agreed to pay Robert Steele minimum royalty payments which shall be paid in advance. Cyprium paid the sum of $4,500 upon execution of this lease. Cyprium has also paid $4,500 on August 15, 2007. Cyprium has agreed to pay $4,500 annually on August 15 in the amount of $4,500. Cyprium will pay Robert Steele a royalty of 2.5% of the Net Returns from all ores, minerals, concentrates, or other products mined and removed from the Property and sold or processed by Cyprium, quarterly in arrears. The minimum royalties of $4,500 paid annually on August 15 th of each year shall be credited against the production royalty. The term of this lease is for twenty (20) years, extendable for two (2) additional periods of Ten (10) years each by giving the owner notice of such extension not less than thirty (30) days prior to the expiration of the initial term or any extension thereof.
Our plan of operations is to conduct mineral exploration activities on the King Claims in order to assess whether these claims possess commercially exploitable mineral deposits. (Commercially exploitable mineral deposits are deposits which are suitably adequate or prepared for productive use of a natural accumulation of minerals or ores). Our exploration program is designed to explore for commercially viable deposits of gold, silver, copper or any other valuable minerals. (Commercially viable deposits are deposits which are suitably adequate or prepared for productive use of an economically workable natural accumulation of minerals or ores). We have not, nor has any predecessor, identified any commercially exploitable reserves of these minerals on our mineral claims. (A reserve is an estimate within specified accuracy limits of the valuable metal or mineral content of known deposits that may be produced under current economic conditions and with present technology). We are an exploration stage company and there is no assurance that a commercially viable mineral deposit exists on our mineral claims.
After acquiring a lease on the King Claims, we retained the services of Robert E. Miller, a Geological Engineer. Mr. Miller prepared a technical report for us on the mineral exploration potential of the claims. Mr. Miller has no direct or indirect interest and does not expect to receive an interest in any of the King Claims. Included in this report is a recommended exploration program which consists of trenching, mapping and sampling and drilling. The recommendations of Mr. Miller are further explained in the “Description of Business” section.
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At this time we are uncertain of the extent of mineral exploration we will conduct before concluding that there are, or are not, commercially viable minerals on our claims. Further phases beyond the current exploration program will be dependent upon numerous factors such as Mr. Miller’s recommendations based upon ongoing exploration program results and our available funds.
We have not earned any revenues to date. We do not anticipate earning revenues until such time as we enter into commercial production of our mineral property. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our property, or if such deposits are discovered, that we will enter into further substantial exploration programs. If we complete the current exploration program and are successful in identifying a mineral deposit, we will still need to spend substantial funds on further drilling and engineering studies before we will be able to determine if we have a commercially viable mineral deposit or reserve.
Since we are in the exploration stage of our business plan, we have not yet earned any revenues from our planned operations. The summarized financial data presented below is derived from and should be read in conjunction with our audited June 30, 2007 financial statements, including the notes to those financial statements, which are included elsewhere in this prospectus.
| Balance Sheet Data |
June 30, 2007
(audited) |
| Cash | $ 52,847 |
| Total Current Assets | $ 52,847 |
| Liabilities | $ 0 |
| Total Stockholder’s Equity | $ 51,859 |
|
Statement of Loss and
|
From January 1, 2007
|
|
|
(audited) |
|
|
|
|
Revenue |
$ - |
|
Net Loss for the Period |
$ 5,641 |
We were incorporated on December 22, 2006 under the laws of the State of Nevada. Our principal offices are located at 2170 Nelson Avenue, West Vancouver, B.C. Canada. Our telephone number is 604-889-8111.
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| Securities Being Offered | Up to 2,125,000 shares of our common stock. |
| Offering Price | The offering price of the common stock is $0.02 per share. We intend to apply to the NASD Over-the-Counter Bulletin Board electronic quotation service to allow the trading of our common stock upon our becoming a reporting entity under the Securities Exchange Act of 1934. If our common stock becomes so traded and a market for the stock develops, the actual price of stock will be determined by prevailing market prices at the time of sale or by private transaction negotiated by the selling shareholders. The offering price would thus be determined by market factors and the independent decisions of the selling shareholders. |
|
Minimum Number of Shares
To Be Sold in This Offering |
None |
| Securities Issued and to be Issued | 3,625,000 shares of our common stock are issued and outstanding as of the date of this prospectus. All of the common stock to be sold under this prospectus will be sold by existing shareholders and thus there will be no increase in our issued and outstanding shares as a result of this offering. The issuance to the selling shareholders was exempt due to the provisions of Regulation S. |
| Use of Proceeds | We will not receive any proceeds from the sale of the common stock by the selling shareholders. |
| Risk Factors | See “Risk Factors” and the other information in this prospectus for a discussion of the factors you should consider before deciding to invest in our common shares. |
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An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock, when and if we trade at a later date, could decline due to any of these risks, and you may lose all or part of your investment.
Risks Related To Our Financial Condition and Business Model
If we do not obtain additional financing, our business will fail
Our current operating funds will only cover initial stages of our exploration program. In order for us to carry out any further exploration or testing we will need to obtain additional financing. We currently do not have any operations and we have no income. We will require additional financing to conduct further exploration programs. We will require additional financing to sustain our business operations if we are not successful in earning revenues once exploration is complete. We currently do not have any arrangements for financing and we may not be able to obtain financing when required. Although we have no arrangements in place for any future equity financing, in the case that we did conduct a financing from the sale of our common stock, this financing would have a dilutive impact on our stockholders and could negatively affect the stock price. Obtaining additional financing would be subject to a number of factors, including the market prices for gold and other minerals. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.
We have yet to attain profitable operations and because we will need additional financing to fund our exploration activities, our accountants believe there is substantial doubt about the company’s ability to continue as a going concern
We have incurred a net loss of $ 5,641 for the period from January 1, 2007 (inception) to June 30, 2007 and have no revenues to date. Our future is dependent upon our ability to obtain financing and upon future profitable operations from the development of our mineral project. These factors raise substantial doubt that we will be able to continue as a going concern.
Our financial statements included with this prospectus have been prepared assuming that we will continue as a going concern. Our auditors have made reference to the substantial doubt as to our ability to continue as a going concern in their audit report on our audited financial statements for the year ended June 30, 2007. If we are not able to achieve revenues, then we may not be able to continue as a going concern and our financial condition and business prospects will be adversely affected.
Since this is an exploration project, we face a high risk of business failure due to our inability to predict the success of our business
We are in the initial stages of exploration of our mineral project, and thus have no way to evaluate the likelihood that we will be able to operate the business successfully. We were incorporated on
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December 22, 2006 and to date have been involved primarily in organizational activities and the acquisition of the King Claims. We have not earned any revenues as of the date of this prospectus.
Because of the speculative nature of exploration of mining properties, there is substantial risk that no commercially exploitable minerals will be found and our business will fail
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 search for valuable minerals as a business is extremely risky. We may not find commercially exploitable reserves of gold or other minerals. The expenditures to be made by us on our exploration program may not result in the discovery of commercial quantities of ore. 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. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan.
Even if we discover commercial reserves of precious metals on our mineral claims, we may not be able to successfully obtain commercial production
Our mineral claims do not contain any known reserves of precious metals. However, if our exploration programs are successful in discovering commercially exploitable reserves of precious metals, we will require additional funds in order to place the mineral claims into commercial production. At this time, there is a risk that we will not be able to obtain such financing as and when needed. It is premature to estimate the amount required to place the mineral claims into commercial production, as we do not have sufficient information.
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.
Because access to our mineral claims may be restricted by bad weather, we may be delayed in our exploration
Once exploration begins, access to the claim may be restricted through some of the year due to weather in the area. As a result, any attempt to test or explore the property is largely limited to the times when weather permits such activities. These limitations can result in significant delays in exploration efforts. Such delays can have a significant negative effect on our exploration efforts.
Because our president has only agreed to provide his services on a part-time basis, he may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to fail
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Because we are in the early stages of our business, our president will not be spending a significant amount of time on our business. Mr. Sutherland, our president, expects to expend approximately 5 to 10 hours per week on Cyprium business. Competing demands on Mr. Sutherland’s time may lead to a divergence between his interests and the interests of other shareholders. Mr. Sutherland is a director of other private and publicly traded companies, and none of the work he will be undertaking as director of these companies will directly compete with Cyprium Resources Inc.
Because our president own 41.38% of our outstanding common stock, investors may find that corporate decisions influenced by the president are inconsistent with the best interests of other stockholders
Mr. Sutherland is our president, chief financial officer and sole director. He owns approximately 41% of the outstanding shares of our common stock. Accordingly, he will have a significant influence in determining the outcome of all corporate transactions or other matters, including mergers, consolidations and the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. While we have no current plans with regard to any merger, consolidation or sale of substantially all of its assets, the interests of Mr. Sutherland may still differ from the interests of the other stockholders. Mr. Sutherland owns 1,500,000 common shares for which he paid $0.01.
Because our director is a Canadian resident, difficulty may arise in attempting to effect service or process on him in Canada
Because our sole director is a Canadian resident, difficulty may arise in attempting to effect service or process on him in Canada or in enforcing a judgment against Cyprium’s assets located outside of the United States.
Because we lease the King Claims, we face the risk of not being able to meet the requirements of the lease and may be forced to default on the agreement
Under the terms of the lease on the King Claims, Cyprium has agreed to pay $4,500 minimum annual royalties on August 15 th of every year. If Cyprium is unable to meet these obligations, we may be forced to default on the agreement and the lease may be terminated by the owner resulting in the lose of the property for Cyprium.
Risks Related To Legal Uncertainty and Regulations
As we undertake exploration of the King Claims we will be subject to compliance with government regulation that may increase the anticipated cost of our exploration program
There are several governmental regulations that materially restrict mineral exploration. We will be subject to the laws of the State of Utah as we carry out our exploration program. We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these laws. While our planned exploration program budgets for regulatory compliance, there is a risk that new regulations could increase our costs of
9
doing business and prevent us from carrying out our exploration program. We currently have budgeted $2,000 for regulatory compliance.
Risks Related To This Offering
If a market for our common stock does not develop, shareholders may be unable to sell their shares
There is currently no market for our common stock and a market may never develop. Our stock is currently not traded on any market or exchange, and therefore our shares can only be purchased through private transactions. We plan to apply for listing of our common stock on the Over-the-Counter Bulletin Board electronic quotation service upon the effectiveness of the registration statement of which this prospectus forms a part. However, our shares may never be traded on the Over-the-Counter Bulletin Board electronic quotation service or, if traded, a public market may never materialize. If our common stock is not traded on the Over-the-Counter Bulletin Board electronic quotation service or if a public market for our common stock does not develop, investors may not be able to re-sell the shares of our common stock that they have purchased and may lose all of their investment.
If a market for our common stock develops, our stock price may be volatile
If a market for our common stock develops, we anticipate that the market price of our common stock will be subject to wide fluctuations in response to several factors, including: the results of our geological exploration program; our ability or inability to arrange for financing; commodity prices for gold, silver or other minerals; and conditions and trends in the mining industry.
In addition, if our common stock is traded on the Over-the-Counter Bulletin Board electronic quotation service, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock.
If the selling shareholders sell a large number of shares all at once or in blocks, the market price of our shares would most likely decline
The selling shareholders are offering 2,125,000 shares of our common stock through this prospectus. Our common stock is presently not traded on any market or securities exchange, but should a market develop, shares sold at a price below the current market price at which the common stock is trading will cause that market price to decline. Moreover, the offer or sale of a large number of shares at any price may cause the market price to fall. The outstanding shares of common stock covered by this prospectus represent approximately 58.6% of the common shares outstanding as of the date of this prospectus.
Because our stock is a penny stock, shareholders will be more limited in their ability to sell their stock
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The shares offered by this prospectus constitute a penny stock under the Securities and Exchange Act. The shares will remain classified as a penny stock for the foreseeable future. Penny stocks generally are equity securities with a price of less than $5.00. Broker/dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stock rules adopted by the Securities and Exchange Commission. The penny stock rules require a broker/dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the Securities and Exchange Commission that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker/dealer must provide the customer with bid and offer quotations for the penny stock, the compensation of the broker/dealer, and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules: the broker/dealer must make a special written determination that a penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of price fluctuations in the price of the stock and may reduce the level of trading activity in any secondary market for a stock that becomes subject to the penny stock rules, and accordingly, investors in this offering may find it difficult to sell their securities, if at all.
This Prospectus contains forward-looking statements, including statements concerning possible or assumed results of exploration and/or operations of Cyprium Resources Inc., and those proceeded by, followed by or that include the words “may,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of such terms and other comparable terminology. Investors should understand that the factors described below, in addition to those discussed elsewhere in this document could affect Cyprium’s future results and could cause those results to differ materially from those expressed in such forward looking statements.
We will not receive any proceeds from the sale of the common stock offered through this prospectus by the selling shareholders.
DETERMINATION OF OFFERING PRICE
The $0.02 per share offering price of our common stock was determined arbitrarily by us. There is no relationship whatsoever between this price and our assets, earnings, book value or any other objective criteria of value. We intend to apply to the Over-the-Counter Bulletin Board electronic quotation service for the trading of our common stock upon our becoming a reporting entity under the Securities Exchange Act of 1934 (the “Exchange Act”). If our common stock becomes so traded and a market for the stock develops, the actual price of stock will be determined by prevailing market prices at the time of sale or by private transactions negotiated by the selling shareholders named in this prospectus. The offering price would thus be determined by market factors and the independent decisions of the selling shareholders named in this prospectus.
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The common stock to be sold by the selling shareholders is common stock that is currently issued and outstanding. Accordingly, there will be no dilution to our existing shareholders.
The selling shareholders named in this prospectus are offering all of the 2,125,000 shares of common stock offered through this prospectus. The selling shareholders acquired the 2,125,000 shares of common stock offered through this prospectus from us at a price of $0.02 per share in an offering that was exempt from registration under Regulation S of the Securities Act of 1933, as amended (the “Securities Act”) and completed on June 30, 2007. We will file with the Securities and Exchange Commission prospectus supplements to specify the names of any successors to the selling shareholders specified in this registration statement who are able to use the prospectus included in this registration statement to resell the shares registered by this registration statement.
The following table provides, as of the date of this prospectus, information regarding the beneficial ownership of our common stock held by each of the selling shareholders, including:
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1. |
the number of shares owned by each prior to this offering; |
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2. |
the total number of shares that are to be offered by each; |
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3. |
the total number of shares that will be owned by each upon completion of the offering; |
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4. |
the percentage owned by each upon completion of the offering; and |
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5. |
the identity of the beneficial holder of any entity that owns the shares. |
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Name Of Selling Stockholder |
Shares
|
Total
|
Total Shares
|
Percent
|
|
Debbie Clyne |
25,000 |
25,000 |
Nil |
Nil |
|
Geoff Edmunds |
12,500 |
12,500 |
Nil |
Nil |
|
Monika Edmunds |
12,500 |
12,500 |
Nil |
Nil |
|
Anne Ellis |
50,000 |
50,000 |
Nil |
Nil |
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The named party beneficially owns and has sole voting and investment power over all shares or rights to these shares, unless otherwise shown in the table. The numbers in this table assume that none of the selling shareholders sells shares of common stock not being offered in this prospectus or purchases additional shares of common stock, and assumes that all shares offered are sold.
None of the selling shareholders:
| (1) | has had a material relationship with us other than as a shareholder at any time within the past three years; or | |
| (2) | has ever been one of our officers or directors. |
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The selling shareholders may sell some or all of their common stock in one or more transactions, including block transactions:
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1. |
On such public markets as the common stock may from time to time be trading; |
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2. |
In privately negotiated transactions; |
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3. |
Through the writing of options on the common stock; |
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4. |
In short sales; or |
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5. |
In any combination of these methods of distribution. |
There is currently no market for any of our shares, and we cannot give any assurance that our shares will have any market value. The sales price to the public is fixed at $0.02 per share until such time as the shares of our common stock are traded on the Over-the-Counter Bulletin Board electronic quotation service. Although we intend to apply for trading of our common stock on the Over-the-Counter Bulletin Board electronic quotation service, public trading of our common stock may never materialize. In addition, if a market for our stock does materialize, we cannot give any assurances that a public market for our securities may be sustained. If our common stock becomes traded on the Over-the-Counter Bulletin Board electronic quotation service, then the sales price to the public will vary according to the selling decisions of each selling shareholder and the market for our stock at the time of resale. In these circumstances, the sales price to the public may be:
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1. |
The market price of our common stock prevailing at the time of sale; |
|
2. |
A price related to such prevailing market price of our common stock; or |
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3. |
Such other price as the selling shareholders determine from time to time. |
We can provide no assurance that all or any of the common stock offered will be sold by the selling shareholders named in this prospectus.
We are bearing all costs relating to the registration of the common stock. The selling shareholders, however, will pay any commissions or other fees payable to brokers or dealers in connection with any sale of the common stock.
The selling shareholders named in this prospectus must comply with the requirements of the Securities Act and the Exchange Act in the offer and sale of the common stock. The selling shareholders and any broker-dealers who execute sales for the selling shareholders may be deemed to be an "underwriter" within the meaning of the Securities Act in connection with such sales. In particular, during such times as the selling shareholders may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable law and may, among other things:
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1. |
Not engage in any stabilization activities in connection with our common stock;
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2. |
Furnish each broker or dealer through which common stock may be offered, such copies of this prospectus, as amended from time to time, as may be required by such broker or dealer; and
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3. |
Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Exchange Act. |
We are not currently a party to any legal proceedings.
Our agent for service of process in Nevada is NEVEDA AGENCY AND TRUST COMPANY, 50 West Liberty Street, Suite 880 Reno, Nevada 89501.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our executive officers and directors and their respective ages as of September 10, 2007 are as follows:
|
Name |
Age |
Office(s) Held |
|
|
|
|
|
John J. Sutherland |
57 |
President, Secretary and Treasurer and Director |
Set forth below is a brief description of the background and business experience of our sole officer and director.
Mr. John J. Sutherland is a director, and has been a director of Cyprium Resources Inc. since December 22, 2006. Mr. Sutherland has been a Certified General Accountant since 1976. Since February 2007, Mr. Sutherland has been a Vice President and Chief Financial Officer of Goldgroup Resources Inc., a private company involved in the exploration and development of mining properties focused in Mexico. Mr. Sutherland has acted as a Director of Silex Ventures Ltd. a capital pool company listing on the TSX Venture Exchange since March 2007. He has also acted as the Chief Financial Officer for Uracan Resources Ltd. since May, 2007. From March 2003 to September 2006, Mr. Sutherland was Vice President, Chief Financial Officer and a director of Tekion, Inc., a private company developing and marketing fuel cells. Between April 2002 and November 2002, he was the executive director of the Arthritis Research Centre of Canada. From May 2001 to February 2002, Mr. Sutherland was a Project Manager for International Absorbents Inc. Since 2002, Mr. Sutherland has been a director and audit committee chairman of Aquiline Resources Ltd. a publicly-held company listed on the Toronto Stock Exchange, and a director/trustee of Polymer Solutions, Inc., a former publicly-held company that sold all of its assets effective as of February 2004. Since 1988, he has been a director and audit committee chairman of International Absorbents Inc., a publicly-held company listed on the American Stock Exchange.
There are no orders, judgements, or decrees of any governmental agency or administrator, or of any court of competent jurisdiction, revoking or suspending for cause any license, permit or other authority to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining Mr. Sutherland from engaging in or continuing any conduct, practice or employment in connection with the purchase or sale of securities, or convicting him of any felony or misdemeanor involving a security, or any aspect of the securities business or of theft or of any felony.
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We presently do not pay our directors and officers any salary or consulting fee. We do not anticipate paying compensation to our directors and officers for the foreseeable future.
Term of Office
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Significant Employees
We have no significant employees other than our directors. We conduct our business through agreements with consultants and arms-length third parties. Mr. Robert E Miller, Geological Engineer, prepared a report on the King Claims, dated April 12, 2007. Mr. Miller has no direct or indirect interest and does not expect to receive an interest in the King Claims.
Committees of the Board of Directors
We presently do not have an audit committee, compensation committee, nominating committee, an executive committee of our board of directors, stock plan committee or any other committees. However, our board of directors is considering establish various committees in the future.
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of September 10, 2007 by:
| i) | each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, | |
| ii) | each of our directors, | |
| iii) | named executive officers, and | |
| iv) | officers and directors as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown. |
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Title of Class |
Name and Address of
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Amount and
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Percentage of
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Directors and
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|
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Common Stock
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John J. Sutherland
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1,500,000
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41.38%
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|
(1) |
The percentage of common stock held is based on 3,625,000 shares of common stock issued and outstanding as of September 10, 2007. |
We are not aware of any arrangements that may result in "changes in control" as that term is defined by the provisions of Item 403(c) of Regulation S-B.
We believe that all persons named have full voting and investment power with respect to the shares indicated, unless otherwise noted in the table. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.
General
Our authorized capital stock consists of 75,000,000 shares of common stock, with a par value of $0.001 per share. As of September 10, 2007, there were 3,625,000 shares of our common stock issued and outstanding held by thirty one (31) stockholders of record. There are no preferred shares authorized or issued.
Common Stock
Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law, the holders of our common stock will possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy. Holders of our common stock representing thirty three and one-third percent (33 1/3%) of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Articles of Incorporation. Our By-laws do not provide for cumulative voting in the election of directors.
Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.
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We have never declared or paid any dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any dividends in the foreseeable future.
Share Purchase Warrants
We have not issued and do not have outstanding any warrants to purchase shares of our common stock.
Options
We have not issued and do not have outstanding any options to purchase shares of our common stock.
Convertible Securities
We have not issued and do not have outstanding any securities convertible into shares of our common stock or any rights convertible or exchangeable into shares of our common stock.
Nevada Anti-Takeover laws
Nevada revised statutes sections 78.378 to 78.3793 provide state regulation over the acquisition of a controlling interest in certain Nevada corporations unless the articles of incorporation or bylaws of the corporation provide that the provisions of these sections do not apply. Our articles of incorporation and bylaws do not state that these provisions do not apply. The statute creates a number of restrictions on the ability of a person or entity to acquire control of a Nevada company by setting down certain rules of conduct and voting restrictions in any acquisition attempt, among other things. The statute is limited to corporations that are organized in the state of Nevada and that have 200 or more stockholders, at least 100 of whom are stockholders of record and residents of the State of Nevada; and does business in the State of Nevada directly or through an affiliated corporation. Because of these conditions, the statute does not apply to our company.
No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
John Kinross-Kennedy, our independent certified public accountant, has audited our financial statements included in this prospectus and registration statement to the extent and for the periods set forth in his audit report. John Kinross-Kennedy has presented his report with respect to our audited
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financial statements. The report of John Kinross-Kennedy on the financial statements herein includes an explanatory paragraph that states that we have not generated revenues and have an accumulated deficit since inception which raises substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The O’Neal Law Firm, P.C., our independent legal counsel, has provided an opinion on the validity of our common stock.
Robert E. Miller, Geological Engineer, has provided us with a geological report on the King Claims Project. Mr. Miller has no direct or indirect interest and does not expect to receive an interest in the King Claims or securities of Cyprium Resources Inc.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFCATION FOR SECURITIES ACT LIABILITIES
Our articles of incorporation provide that we will indemnify an officer, director, or former officer or director, to the full extent permitted by law. We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act of 1933 is against public policy as expressed in the Securities Act of 1933, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court's decision.
Insofar as indemnification for liabilities resulting from the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in that Act and is, therefore, unenforceable.
ORGANIZATION WITHIN THE LAST FIVE YEARS
We were incorporated on December 22, 2006 under the laws of the State of Nevada. Our president, Mr. John J. Sutherland is our promoter. Mr. Sutherland purchased 1,500,000 shares of our common stock effective January 10, 2007 for an aggregate purchase price of $15,000.
We entered a Mineral Lease Agreement for ten (10) mineral claims, located in Piute County, Utah, USA with Mr. Robert Steele effective January 15, 2007. Cyprium Resources Inc. does not, nor ever had a relationship with Mr. Steele aside from the lease of this property.
Glossary of Technical Terms
The following defined technical terms are used in our registration statement on Form SB-2:
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Alunite : A trigonal mineral, KAl 3 (OH) 6 (SO 4 ) 2 ; massive or disseminated; in pale tints; formed from sulfuric acid acting on potassium feldspar in volcanic regions (alunization), and around fumaroles. Formerly called alumstone, alum rock, alumite.
Argillic: Pertaining to clay or clay minerals.
Assay: qualitative or quantitative determination of the components of a material as an ore.
Breccia : A coarse-grained clastic rock, composed of angular broken rock fragments held together by a mineral cement or in a fine-grained matrix; it differs from conglomerate in that the fragments have sharp edges and unworn corners.
Commercially exploitable deposits: suitably adequate or prepared for productive use of a natural accumulation of minerals or ores.
Drilling: the creation or enlargement of a hole in a solid material with a drill.
Epithermal : Said of a hydrothermal mineral deposit formed within about 1 km of the Earth's surface and in the temperature range of 50 to 200 degrees.
Fault zone: A fault that is expressed as a zone of numerous small fractures or of breccia or fault gouge.
Geologic mapping : Representation of the geologic surface or subsurface features by means of signs and symbols and with an indicated means of orientation. Includes nature and distribution of rock units and the occurrence of structural features, mineral deposits and fossil localities.
Lode: a fissure in consolidated rock filled with mineral. Lode claim is that portion of a lode or vein and of the adjoining surface which has been acquired by a compliance with the law.
Mesothermal: Said of a hydrothermal mineral deposit formed at considerable depth and in the temperature range of 200 to 300 degrees.
Mining claim: that portion of the public mineral lands which a miner, for mining purposes, takes and holds in accordance with mining laws.
Ore: The naturally occurring material from which a mineral or minerals of economic value can be extracted profitably or to satisfy social or political objectives.
Patent: a certificate of grant by a government of an exclusive right with respect to claims.
Patented claim: a mining claim to which a patent has been secured from the government by compliance with the laws relating to such claims.
Quartz : A trigonal mineral, SiO 2 ; polymorphous with tridymite, cristobalite, coesite, stishovite, and keatite.
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Reverse Circulation (RC): The circulation of bit-coolant and cuttings-removal liquids, drilling fluid, mud, air, or gas down the borehole outside the drill rods and upward inside the drill rods.
Sampling: collecting small rock chips from outcrop areas to obtain a representative sample for assay.
Vein: a mineral deposit in tabular or shell-like form, filling a fracture in a host rock.
In General
We are an exploration stage company engaged in the acquisition and exploration of mineral properties. We currently hold a lease on ten (10) non-patented lode mineral claims that we refer to as the King Claims. Further exploration of these mineral claims is required before a final determination as to their viability can be made. Although exploratory work on the claims conducted prior to our obtaining a lease on the property has indicated some potential showings of mineralization, we are uncertain as to the potential existence of a commercially viable mineral deposit existing in the King Claims. The results of previous exploratory work of prior companies are in the “History” section below.
Our plan of operations is to carry out exploration work on these claims in order to ascertain whether they possess commercially exploitable quantities of gold, silver, copper or any other valuable minerals. We will not be able to determine whether or not our mineral claims contain a commercially exploitable mineral deposit, or reserve, until appropriate exploratory work is done and an economic evaluation based on that work concludes economic viability.
Mining Lease Agreement between Cyprium Resources Inc. and Robert Steele
We entered into a lease agreement with Robert Steele effective January 15, 2007, granting Cyprium Resources Inc. the exclusive possession of the Property for mining purposes during the term of this agreement. The property consists of ten (10) non-patented lode mineral claims located in T30S R22 W Sections 13 and 24, Piute County, Utah, USA, owned by Robert Steele. The property is hereon referred to as the King Claims. We selected this property based upon a recommendation from Robert E. Miller, Geological Engineer, and in Mr. Miller’s technical report, dated April 12, 2007; he recommended that we further explore this property.
According to the lease Cyprium has agreed to pay Robert Steele minimum royalty payments which shall be paid in advance. Cyprium paid the sum of $4,500 upon execution of this lease. Cyprium has also paid $4,500 on August 15, 2007. Cyprium has agreed to pay $4,500 annually on August 15 in the amount of $4,500. Cyprium will pay Robert Steele a royalty of 2.5% of the Net Returns from all ores, minerals, concentrates, or other products mined and removed from the Property and sold or processed by Cyprium, quarterly in arrears. The minimum royalties of $4,500 paid annually on August 15 th of each year shall be credited against the production royalty. The term of this lease is for twenty (20) years, extendable for two (2) additional periods of Ten (10) years each by giving Owner notice of such extension not less than thirty (30) days prior to the expiration of the initial term or any extension thereof.
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In addition, Cyprium is required by the agreement to perform $5,000 of work on the property on or before the second anniversary date of the agreement.
Description and Location of the King Claims Property
The property consists of ten (10) non-patented 20 acre mineral claims. The claims are named King #1 thru King #10. The King claims are located in T30S R22 W Sections 13 and 24, Piute County, Utah. These claims are owned by Robert Steele.
Access to the property is gained by traveling south along Highway 89 from the town of Marysvale to a point 2 miles south of Junction, then easterly along Highway 62 through Kingston Canyon to a point where Hickman Canyon intersects Highway 62. Turning north up Hickman Canyon approximately 2000 feet to the south end of the claim boundary. Generally the property lies between Piute and Otter Creek Reservoirs just to the north of Highway 62 along the east side of Phonolite Peak.
The King Claims lie within the fault bounded Sevier Plateau which is a part of the High Plateaus Subprovince, of the Colorado Plateaus physiographic Province. The Subprovince is structurally located between the Block faulted Basin and Range province to the West and the stable Colorado Plateaus to the east. (See Map on following page)
Local relief associated with the King claims area is about 1515 feet. The high point at an elevation of 7915 feet is the summit of Phonolite Hill along the West side of the Claim block and the low point at an elevation of 6400 feet is established along the North bank the East Sevier River which flows along the southern end of the claim block. The area terrain is fairly rugged with narrow canyons and abundant small discontinuous incised benches and drainages. Forshea Mountain, at an elevation of over 9500 feet is located north of the claim block. Vegetation is sparse consisting of grass and scrub brush on small rounded hills and along canyon walls. North of the area, as elevation is obtained vegetation includes grass, shrubs and commercial timber.
The Climate is moderate with long hot summers and short winters. Precipitation, mainly in the form of rain, averages 9.0 inches annually. Snow fall at the higher elevations is heavy, resulting in year around spring water and flowing steams. Water is close at hand associated with the East Sevier river along the south end of the property, the Otter Reservoir to the east, the Sevier Reservoir to the west as well as numerous springs within and adjacent to the claim block.
A Utah light and power electric transmission line that runs east west along Kingston Canyon at the south end of the claim block would be the closest source of power. Mechanical generation of power on site could be utilized. Fuel can be obtained from Cedar City and Richfield or from the local towns of Antimony, Junction, Circleville and Marysvale.
The south end of the claim block may be accessed from State Highway 62 north along a mile long four-wheel drive vehicle trail. Trucked commercial goods and personal vehicles may use the following route to access the claims. State Highway 62 connects to Highway 89 which in turn intersects Interstate 70 to the north and Interstate 15 to the west. There is rail service at Richfield 70 miles north and Cedar City about 79 miles south-west. Expanded services would be available in
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Salt Lake City which is 200 miles to the north. Mining supplies and common goods would also be found in Salt Lake City with some support items being available at Price, Richfield, Moab and Cedar City. Mine related skilled employees may be found locally at Marysvale, Antimony, Moab, Delta and Saint George.
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History
Historical mining in the area centered around the town of Marysvale, generally to the west, in the Tushar range some 60 miles northwest of the King claims. It included the Mining Districts of Gold Mountain, Ohio, Mount Baldy, Newton and Henry Mountains. The Gold Mountain District in Piute and Sevier counties, was organized in 1889 and lies only a few miles north-west of Marysvale, the terminus of the Denver and Rio Grande railroad. The Gold Mountain District metal production from 1892 to 1917 is reported as 143,561.27 oz/gold and 460,228 oz/silver extracted from 500,912 short tons of ore. The value given for the aforementioned production was $3,241,583.00. Production from the combined Ohio and Mount Baldy Mining Districts from 1904 to 1917 is reported as 3,381.17 oz/gold and 91,131.00 oz/silver, 72,734 lbs/copper, 847,883 lbs/lead from 6,320 short tons of ore. The total value for all the aforementioned ores is reported at $208,997.00. Estimated production prior to 1904 from the Mount Baldy district was 300 oz/gold, and approximately 31,000 oz/silver from 430 tons of ore.
Alunite deposits which occur in the Marysvale area were mined for their aluminum and potash content during times of national need and are not being mined at this time. Uranium which also occurs in the Marysvale area was mined during 1950 and 1970 and is not being mined at this time.
Evidence of prospecting on the King claims prior to 1988 appears to have been superficial as only a few prospect grubholes are evident. Through verbal communication with local prospectors, it has been reported that in 1957 companies prospected the King claim area for precious metals. In 1988 and 1989, Freeport-McMoran Gold located in Reno, Nevada conducted a number of rock and soil sampling programs in and around the claim block. This was followed by a sampling program conducted by Homestake Mining Co. in 1989.
To Mr. Miller’s, Geological Engineer, knowledge there has been no exploration on the property since that time.
The property has not been changed in any way by our operations. We have not conducted any work on the property to date.
The King Claims are without known reserves and the proposed program is strictly exploratory in nature.
Geological Exploration Program in General
We have obtained an independent Recommendation Report on the King Claims and have acquired a lease on the property. Robert E. Miller prepared the Recommendation Report and reviewed all available exploration data completed on the mineral claims.
Mr. Robert E. Miller is a graduate of the Brigham Young University, where he obtained a B.Sc. degree in Geological Engineering in 1969. He has been engaged in his profession as a Geological Engineer since 1969.
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Recommendation Report for the King Claims Project, Dated April 12, 2006
A primary purpose of the recommendation report was to review information from previous exploration of the property and to recommend exploration procedures to establish the feasibility of a mining project on the property. The report summarizes results of the history of the exploration of the property, the regional and local geology and the structure and mineralization of the property. The report also includes a recommended exploration program.
Conclusions of the Recommendation Report for the King Claims Project
Based on the property and research of the property Mr. Miller came to the following conclusion:
Locally within the King claim block, Chalcedonic veining and stockworks occur sporadically within zones of Argillic alteration along northeast and northwest trending faults becoming more wide spread and intense where the two structural zones intersect. Mineralization associated with quartz within the altered fault zone consists of pyrite, minor copper staining, as well as some iron oxide. The gold silver precious metal mineralization reported by others on the property was substantiated by the assay results of the samples the author collected in January 2007 from mineralized quartz, along altered fault zones.
Mr. Miller recommended the company investigate the gold gold-silver precious metal mineralization discovered on the King claims that is associated with extensive faulting which may have economic implications related to the claim block and also to an area wide exploration program. The epithermal-mesothermal occurrences should be investigated at depth by drilling, where more favorable host rocks, breccia and/or pre-Tertiary sediments may be intersected. The initial phase should be directed towards identifying suitable drilling targets. It is proposed that the four most promising mineralized surface occurrences be trenched across the outcropping with a backhoe, exposing the true width of the mineralized structure and some portion of the altered wall rock. The trenches should be sampled and mapped and at least two of the most promising mineralized areas should be trenched, sampled and mapped longitudinally followed by drilling, if warranted, using an RC drill rig.
The implementation of Phase II is dependant upon the success of Phase I.
Phase I will focus on cross cut trenching and will include mapping and sampling, trenching with the use of a backhoe, assays and the compilation of a geologic report. Phase II will focus on longitudinal trenching and will also include mapping and sampling, trenching with the use of a backhoe, assays and the compilation of a geologic report. Phase II will require permits and supplies, the drilling of 2 RC holes to 2,000 feet, 200 assays, and the compilation of a geologic report.
We are a junior mineral resource exploration company engaged in the business of mineral exploration. We compete with other junior mineral resource exploration companies for financing from a limited number of investors that are prepared to make investments in junior mineral resource exploration companies. The presence of competing junior mineral resource exploration companies may impact on our ability to raise additional capital in order to fund our exploration programs if
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investors are of the view that investments in competitors are more attractive based on the merit of the mineral properties under investigation and the price of the investment offered to investors. We also compete for mineral properties of merit with other junior exploration companies. Competition could reduce the availability of properties of merit or increase the cost of acquiring the mineral properties.
We have no employees as of the date of this prospectus other than our directors. We conduct our business largely through agreements with consultants and arms-length third parties.
We maintain our executive office at 2170 Nelson Avenue, West Vancouver, British Columbia, Canada V7V 2P7. This office space is being provided to the company free of charge by our president, Mr. Sutherland. This arrangement provides us with the office space necessary at this point. Upon significant growth of the company it may become necessary to lease or acquire additional or alternative space to accommodate our growth.
Research and Development Expenditures
We have not incurred any material research or development expenditures since our incorporation. We paid $4,500 for a mineral property lease on January 15, 2007. We paid an additional $4,500 lease payment on August 15, 2007.
Patents and Trademarks
We do not own, either legally or beneficially, any patent or trademark.
PLAN OF OPERATIONS
Our business plan is to proceed with the exploration of the King Claims to determine whether there are commercially exploitable reserves of gold, silver or other metals.
We will begin by Phase I which is focused on cross cut trenching and will include mapping, trenching and sampling, and approximately 50 assays, after which a geologic report will be prepared. Mr. Robert E. Miller will be in charge carrying out Phase I. We expect to begin Phase I on October 1 st 2007 and expect to have results of the Assays and a geologic report by November 15 th 2007. Phase I is estimated to cost $7,800. We have sufficient cash reserves to proceed with this phase of the exploration program.
If results from this action are favorable we will follow-up with Phase II of the recommended exploration plan.
Phase II will focus on longitudinal trenching and will include mapping, trenching and sampling, and approximately 50 assays, after which a geologic report will be prepared. Mr. Robert E. Miller will be in charge carrying out Phase II. We expect to begin Phase II December 1 st 2007 and expect to
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have results of the Assays and a geologic report by January 15 th 2007. Phase II is estimated to cost $8,800. We have sufficient cash reserves to proceed with this phase of the exploration program.
If results from this action are favorable we will follow-up with Phase III of the recommended exploration plan.
Phase III will focus on the drilling of two (2) RC (Reverse Circulation) holes to an approximate dept of 2,000 feet. This phase will include obtaining permits and supplies, drilling two (2) RC holes, approximately 200 assays and the preparation of a geologic report. Mr. Robert E. Miller will be in charge carrying out Phase III. We expect to begin Phase III in early spring and expect to have results of the Assays and a geologic report within two months of the start of drilling. Phase III is estimated to cost $80,000. We do not have sufficient cash reserves to proceed with this phase of the exploration program.
If results are favorable leading up to the drilling of the property, the company will need to raise additional funds required to meet this and other capital needs. Should the results leading up to the drilling of the property prove not to be sufficiently positive to proceed with a further exploration on the property, we intend to seek out and acquire other North American mineral exploration properties which, in the opinion of a Geologist, offer attractive mineral exploration opportunities. However, we may not have sufficient financing to seek out and acquire other properties, and if we did have sufficient financing, it is possible that we would be unsuccessful in seeking out an acquiring alternative exploration properties.
During the exploration stage of the King Claims, our President will be devoting approximately 10 hours per week of his time to our business. We do not foresee this limited involvement as negatively impacting our company over the next twelve months as all exploratory work is being performed by outside consultants. If, however, the demands of our business require more time of our president such as raising additional capital or addressing unforeseen issues with regard to our exploration efforts, he is prepared to adjust his timetable to devote more time to our business. However, he may not be able to devote sufficient time to the management of our business, as and when needed.
Upon the event that we require additional funding, we anticipate that such funding will be in the form of equity financing from the sale of our common stock. However we cannot provide investors with any assurance that we will be able to obtain sufficient funding from the sale of our common stock to fund additional phases of the exploration program, should we decide to proceed. We believe that debt financing will not be an alternative for funding any phases in our exploration program. The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness by most banks or typical investors or corporate debt until such time as an economically viable mine can be demonstrated. We do not have any arrangements in place for any future equity financing.
In the event that Cyprium completes this exploration program and is successful in identifying a potential mineral deposit, we would have to spend substantial funds on additional drilling of the property and engineering studies before we would be able to determine if it’s a commercially viable mineral deposit.
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Results of Operations for Period Ending June 30, 2007
We did not earn any revenues from inception through the period ending June 30, 2007. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our property, or if such resources are discovered, that we will enter into commercial production of our mineral property.
We incurred operating expenses in the amount of $5,641 from inception on January 1, 2007 through the period ended June 30, 2007. These operating expenses were composed of the payment towards the company’s mineral lease and administrative expenses. We anticipate our operating expenses will increase as we undertake our plan of operations. The increase will be attributed to our commencing of our geological exploration program and the professional fees to be incurred in connection with the filing of a registration statement with the Securities Exchange Commission under the Securities Act of 1933. We anticipate our ongoing operating expenses will also increase once we become a reporting company under the Securities Exchange Act of 1934.
Reports to Security Holders
At this time, we are not required to provide annual reports to security holders. However, shareholders and the general public may view and download copies of all of our filings with the SEC, including annual reports, quarterly reports, and all other reports required under the Securities Exchange Act of 1934, by visiting the SEC site (http://www.sec.gov) and performing a search of our electronic filings. We intend to file with the Securities and Exchange Commission a Form 8-A to register our common stock pursuant to Section 12(g) of the Securities and Exchange Act of 1934, as soon as practicable after this registration statement is declared effective by the Securities and Exchange Commission. Thereafter, annual reports will be delivered to security holders as required or they will be available online.
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive exploration activities. For these reasons our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.
Future Financings
We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any of additional sales of our equity securities or arrange for debt or other financing to fund our exploration and development activities.
Off-Balance Sheet Arrangements
We entered into a lease agreement with Robert Steele effective January 15, 2007, granting Cyprium Resources Inc. the exclusive possession of the Property for mining purposes during the term of this
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agreement. The property consists of ten (10) Lode Mineral Claims located in T30S R22 W Sections 13 and 24, Piute County, Utah, USA, owned by Robert Steele. According to the lease Cyprium has agreed to pay Robert Steele minimum royalty payments which shall be paid in advance. Cyprium paid the sum of $4,500 upon execution of this lease. Cyprium has also paid $4,500 on August 15, 2007. Cyprium has agreed to pay $4,500 annually on August 15 in the amount of $4,500. Cyprium will pay Robert Steele a royalty of 2.5% of the Net Returns from all ores, minerals, concentrates, or other products mined and removed from the Property and sold or processed by Cyprium, quarterly in arrears. The minimum royalties of $4,500 paid annually on August 15 th of each year shall be credited against the production royalty.
We issued 1,500,000 total shares of common stock to John J. Sutherland, our President, for total consideration of $15,000 effective January 10, 2007. Mr. Sutherland was in a position of access to relevant and material information regarding our operations. The shares were issued pursuant to Section 4(2) of the Securities Act of 1933 and are restricted shares as defined in the Securities Act.
No Public Market for Common Stock
There is presently no public market for our common stock. We anticipate making an application for trading of our common stock on the Over-the-Counter Bulletin Board electronic quotation service upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares will be traded on the Over-the-Counter Bulletin Board electronic quotation service or, if traded, that a public market will materialize.
The Securities Exchange Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities' laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type, size and format, as the Commission shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask
31
prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement.
Cyprium Resources Inc. is subject to the penny stock rules, which disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock and stockholders may have difficulty selling those securities.
Holders of Our Common Stock
As of the date of this Registration Statement, we had 31 (thirty one) shareholders.
Rule 144 Shares
As of September 10, 2007, no shares currently issued and outstanding could be resold pursuant to Section 144 of the Securities Act. This is because no shares have been held for 2 years in order to satisfy 144(K) and no sufficient public information is available to satisfy the other 144 rules.
A total of 1,500,000 shares of our common stock will be available for resale to the public after January 10, 2009, in accordance with the volume and trading limitations of Rule 144 of the Securities Act of 1933.
In general, under Rule 144 as currently in effect, a person who has beneficially owned shares of a company's common stock for at least one year is entitled to sell within any three month period a number of shares that does not exceed the greater of:
-
one percent of the number of shares of the company's common stock then outstanding, which, in our case, will equal approximately 33,875 shares as of the date of this prospectus, or;
- the average weekly trading volume of the company's common stock during the four calendar weeks preceding the filing of a notice on form 144 with respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about the company.
Under Rule 144(k), a person who is not one of the company's affiliates at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.
32
As of the date of this prospectus, persons who are our affiliates hold 100% of the total shares that may be sold, at least partially, pursuant to Rule 144 after January 10, 2009.
Stock Option Grants
To date, we have not granted any stock options.
Registration Rights
We have not granted registration rights to the selling shareholders or to any other persons.
Dividends
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
|
1. |
We would not be able to pay our debts as they become due in the usual course of business; or
|
|
2. |
Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution. |
We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services rendered in all capacities to us for the period from our inception through September 10, 2007.
|
|
Annual Compensation
|
Long Term Compensation |
|||||||
|
Name |
Title |
Year |
Salary
|
Bonus |
Other Annual
|
Restricted
|
Options/*
|
LTIP
|
All Other
|
|
John J.
|
President,
|
2006
|
$0
|
$0
|
$0
|
0
|
0
|
0
|
0
|
We do not pay to our directors or officers any salary or consulting fee. We anticipate that compensation may be paid to officers in the event that we decide to precede with additional exploration programs in the future.
33
We do not pay to our directors any compensation for serving as a director on our board of directors.
Stock Option Grants
We did not grant any stock options to the executive officers or directors from inception through September 10, 2007.
34
FINANCIAL STATEMENTS
Audited financial statements for the period ended June 30, 2007, including:
36 Auditors’ Report
37 Balance Sheet
38 Statement of Operations
39 Statement of Stockholders’ Equity
40 Statement of Cash Flows
41-44 Notes to Financial Statements
35
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To: the Board of Directors and Shareholders
Cyprium Resources Inc.
I have audited the accompanying balance sheet of Cyprium Resources Inc. as of June 30, 2007, and the related statements of operations, of shareholders’ equity (deficit) and of cash flows for the six months ended June 30, 2007. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provide a reasonable basis for my opinion.
In my opinion, based on my audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Cyprium Resources Inc. as of June 30, 2007 and the results of its operations, of shareholders’ equity (deficit) and its cash flows for the six month period ended June 30, 2007 in conformity with United States generally accepted accounting principles.
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. In addition, the Company has a deficit accumulated in the development stage of $5,641 as at June 30, 2007. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease development of operations.
In order to continue as a going concern, develop a reliable source of revenues, and achieve a profitable level of operations the Company will need, among other things, additional capital resources. Management’s plans to continue as a going concern include raising additional capital through sales of common stock. In the interim, shareholders of the Company are committed to meeting its minimal operating expenses. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Certified Public Accountant
Irvine, California August 19, 2007
36
The accompanying notes are an integral part of these financial statements.
37
|
CYPRIUM RESOURCES, INC.
|
|||||||
|
(A Development Stage Company)
|
|||||||
|
Statement of Operations
|
|||||||
|
|
|
|
For the Period
|
||||
|
|
|
|
of Inception
|
||||
|
For the
|
|
For the
|
from January 1,
|
||||
|
Three Months Ended
|
|
Six Months Ended
|
2007, through
|
||||
|
June 30, 2007
|
|
June 30, 2007
|
June 30, 2007
|
||||
|
|
|
|
|||||
|
|
|
|
|
||||
| Revenue |
$ -
|
|
$ -
|
$ -
|
|||
|
|
|
||||||
| Cost of Sales |
-
|
|
-
|
-
|
|||
|
|
|
|
|||||
|
|
|
|
|
||||
| Operating Income |
|
|
|
|
|||
|
|
|
|
|
||||
| General and Administrative Expenses: |
|
|
|
|
|||
| Mining Leases |
|
|
4,500
|
4,500
|
|||
| Licenses & Permits |
225
|
|
325
|
325
|
|||
| Other Administrative Expenses |
795
|
|
816
|
816
|
|||
|
Total General and Administrative
|
|
|
|
||||
| Expenses |
1,020
|
|
5,641
|
5,641
|
|||
|
|
|
|
|||||
|
|
|
|
|
||||
| Net Loss |
$ (1,020)
|
|
$ (5,641)
|
$ (5,641)
|
|||
| =============== | =============== | =============== | |||||
|
|
|
|
|
||||
| Loss Per Common Share: |
|
|
|
|
|||
| Basic and Diluted |
$ (0.000)
|
|
$ (0.003)
|
|
|||
| =============== | =============== | ||||||
|
|
|
|
|
||||
|
|
|
|
|
||||
| Weighted Average Shares Outstanding, |
|
|
|
|
|||
| Basic and Diluted: |
2,378,571
|
|
$ 1,858,840
|
|
|||
|
===============
|
|
===============
|
|
||||
The accompanying notes are an integral part of these financial statements.
38
|
CYPRIUM RESOURCES, INC.
|
|||||||||
|
(A Development Stage Company)
|
|||||||||
|
Statement of Shareholders' Equity
|
|||||||||
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
Total
|
|
|
Common Stock
|
|
Additional
|
|
during the
|
|
Shareholders'
|
|||
|
Number of
|
|
|
|
Paid-In
|
|
Development
|
|
Equity
|
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Stage
|
|
(Deficit)
|
|
|
|
|
|
|
|
|||||
| Inception, January 1, 2007 |
-
|
|
$ -
|
|
$ -
|
|
$ -
|
|
$ -
|
| Common stock issued for cash, January 10, |
|
|
|
|
|
|
|
|
|
| 2007 @ $0.01 per share |
1,500,000
|
|
1,500
|
|
13,500
|
|
|
|
15,000
|
| Common stock issued for cash, May, 2007 |
|
|
|
|
|
|
|
|
|
| @ $0.02 per share |
1,325,000
|
|
1,325
|
|
25,175
|
|
|
|
26,500
|
| Common stock issued for cash, June, 2007 |
|
|
|
|
|
|
|
|
|
| @ $0.02 per share |
800,000
|
|
800
|
|
15,200
|
|
|
|
16,000
|
| Net loss for the six months ended June 30, 2007 |
|
|
|
|
|
|
(5,641)
|
|
(5,641)
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
| Balances, June 30, 2007 |
3,625,000
|
|
$ 3,625
|
|
$ 53,875
|
|
$ (5,641)
|
|
$ 51,859
|
|
========
|
|
======
|
|
=======
|
|
=========
|
|
=========
|
|
The accompanying notes are an integral part of these financial statements.
39
|
CYPRIUM RESOURCES, INC.
|
|||||||
|
(A Development Stage Company)
|
|||||||
|
Statement of Cash Flows
|
|||||||
|
|
|
For the Period
|
|||||
|
|
|
of Inception
|
|||||
|
For the
|
For the
|
from January 1,
|
|||||
|
Three Months Ended
|
Six Months Ended
|
2007, through
|
|||||
|
June 30, 2007
|
June 30, 2007
|
June 30, 2007
|
|||||
|
|
|
|
|||||
|
|
|
|
|
|
|||
| Cash flows from operating activities: |
|
|
|
|
|
||
| Net loss |
$ (1,020)
|
|
$ (5,641)
|
|
$ (5,641)
|
||
|
|
|
|
|||||
| Adjustments to reconcile net loss to |
|
|
|
|
|
||
| net cash used by operating activities: |
|
|
|
|
|
||
| Change in operating assets and liabilities: |
|
|
|
|
|
||
| Increase in accounts payable and |
|
|
|
|
|
||
| accrued liabilities |
|
|
|
|
|
||
|
|
|
|
|||||
| Net cash (used by) operating activities |
(1,020)
|
|
(5,641)
|
|
(5,641)
|
||
|
|
|
|
|||||
|
|
|
|
|
|
|||
| Cash flows from investing activities |
-
|
|
-
|
|
-
|
||
|
|
|
|
|||||
| Net cash (used by) investing activities |
-
|
|
-
|
|
-
|
||
|
|
|
|
|||||
|
|
|
|
|
|
|||
| Cash flows from financing activities: |
|
|
|
|
|
||
| Common stock issued for cash |
42,500
|
|
57,500
|
|
57,500
|
||
| Due to related parties |
988
|
|
988
|
|
988
|
||
|
|
|
|
|||||
|
Net cash (used) provided by financing
activitiies |
43,488
|
|
58,488
|
|
58,488
|
||
|
|
|
|
|||||
|
|
|
|
|
|
|||
| Net increase (decrease) in cash |
42,468
|
|
52,847
|
|
52,847
|
||
|
|
|
|
|
|
|||
| Cash, beginning of the period |
10,379
|
|
-
|
|
-
|
||
|
|
|
|
|||||
|
|
|
|
|
|
|||
| Cash, end of the period |
$ 52,847
|
|
$ 52,847
|
|
$ 52,847
|
||
| =============== | ============== | ============== | |||||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
| Supplemental cash flow disclosure: |
|
|
|
|
|
||
| Interest paid |
$ -
|
|
|
|
$ -
|
||
| =============== | ============== | ||||||
| Taxes paid |
$ -
|
|
|
|
$ -
|
||
|
===============
|
|
|
|
==============
|
|||
The accompanying notes are an integral part of these financial statements.
40
1. Organization
Cyprium Resources, Inc. (the “Company”) was incorporated under the laws of the State of Nevada December 22, 2006. The company was formed for mineral exploration in the United States. The Company entered into a Mineral Lease Agreement on January 15, 2007 for 10 mining claims in Utah, known as the King claims.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of the Company have been prepared using the accrual basis of accounting in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Significant estimates made by management are, among others, realizability of long-lived assets, deferred taxes and stock option valuation.
The financial statements have, in management’s opinion, been properly prepared within the reasonable limits of materiality and within the framework of the significant accounting.
Income Taxes
The Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company generated a deferred tax credit through net operating loss carryforward. However, a valuation allowance of 100% has been established, as the realization of the
41
Cyprium Resources, Inc.
(A Developmental Stage Company)
Notes to Financial Statements
June 30, 2007
deferred tax credits is not reasonably certain, based on going concern considerations outlined as follows.
Going Concern
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease development of operations.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its plans to exploit or lease its mining claim described in the initial paragraph, or engage a working interest partner, in order to eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classifications or liabilities or other adjustments that might be necessary should the Company be unable to continue as a going concern.
Development-Stage Company
The Company is considered a development-stage company, with limited operating revenues during the periods presented, as defined by Statement of Financial Accounting Standards (“SFAS”) No. 7. SFAS. No. 7 requires companies to report their operations, shareholders deficit and cash flows since inception through the date that revenues are generated from management’s intended operations, among other things. Management has defined inception as January 1, 2007. Since inception, the Company has incurred an operating loss of $5,641. The Company’s working capital has been generated through the sales of common stock. Management has provided financial data since January 1, 2007, “Inception” in the financial statements, as a means to provide readers of the Company’s financial information to make informed investment decisions.
Basic and Diluted Net Loss Per Share
Net loss per share is calculated in accordance with SFAS 128, Earnings Per Share for the period presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilative convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are
42
Cyprium Resources, Inc.
(A Developmental Stage Company)
Notes to Financial Statements
June 30, 2007
assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby we used to purchase common stock at the average market price during the period.
The Company has no potentially dilutive securities outstanding as of June 30, 2007.
The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the three months ended June 30, 2007:
Numerato r:
Basic and diluted net loss per share:
Net Loss $ (5,641)
Denominator
Basic and diluted weighted average
number of shares outstanding 1,858,840
Basic and Diluted Net Loss Per Share $ (0.003)
3. Capital Structure
During the period from inception through June 30, 2007, the Company entered into the following equity transactions:
| January 10, 2007: | Sold 1,500,000 shares of common stock at $.01 per share for $15,000. | |
| During May, 2007: | Sold 1,325,,000 shares of common stock at $.02 per share for $26,500. | |
| During June, 2007: | Sold 800,000 shares of common stock at $0.02 per share, realizing $16.000 |
As of June 30, 2007, the Company has authorized 75,000,000 of $0.001 par common stock, of which 3,625,000 shares were issued and outstanding.
43
Cyprium Resources, Inc.
(A Developmental Stage Company)
Notes to Financial Statements
June 30, 2007
4. Commitments
On January 15, 2007 the Company entered into a 20 year lease agreement with the owner of 10 mining claims situated in Utah, known as the King claims. The agreement requires a royalty of 2 ½ % of net returns, as defined by the agreement, paid quarterly in arrears. Minimum royalty payments are to be paid on August 15 annually:
In addition, Cyprium Resources, Inc. is required by the agreement to perform $5,000 of work on the property on or before the second anniversary date of the agreement
5. Litigation
There are no significant legal proceedings against the Company with respect to matters arising in the ordinary course of business.
44
We have had no changes in or disagreements with our accountants.
We have filed a Registration Statement on form SB-2 under the Securities Act of 1933 with the Securities and Exchange Commission with respect to the shares of our common stock offered through this prospectus. This Prospectus is filed as a part of that Registration Statement, but does not contain all of the information contained in the Registration Statement and exhibits. Statements made in the Registration Statement are summaries of the material terms of the referenced contracts, agreements or documents of the company. We refer you to our Registration Statement and each exhibit attached to it for a more detailed description of matters involving the company. You may inspect the Registration Statement, exhibits and schedules filed with the Securities and Exchange Commission at the Commission's principal office in Washington, D.C. Copies of all or any part of the Registration Statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The Securities and Exchange Commission also maintains a web site at http://www.sec.gov that contains reports, proxy statements and information regarding registrants that file electronically with the Commission. Our Registration Statement and the referenced exhibits can also be found on this site.
Until ________ , all dealers that effect in these securities whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
45
Part II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Our officers and directors are indemnified as provided by the Nevada Revised Statutes and our bylaws.
Under the Nevada statutes, director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a company's articles of incorporation that is not the case with our articles of incorporation. Excepted from that immunity are:
|
|
(1) |
a willful failure to deal fairly with the company or its shareholders in connection with a matter in which the director has a material conflict of interest;
|
|
|
(2) |
a violation of criminal law (unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful);
|
|
|
(3) |
a transaction from which the director derived an improper personal profit; and
|
|
|
(4) |
Willful misconduct. |
Our bylaws provide that we will indemnify our directors and officers to the fullest extent not prohibited by Nevada law; provided, however, that we may modify the extent of such indemnification by individual contracts with our directors and officers; and, provided, further, that we shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless:
|
|
(1) |
such indemnification is expressly required to be made by law;
|
|
|
(2) |
the proceeding was authorized by our Board of Directors;
|
|
|
(3) |
such indemnification is provided by us, in our sole discretion, pursuant to the powers vested us under Nevada law; or
|
|
|
(4) |
Such indemnification is required to be made pursuant to the bylaws. |
Our bylaws provide that we will advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer, of the company, or is or was serving at the request of the company as a director or executive officer of another company, partnership, joint venture, trust or other enterprise, prior to the final disposition
46
of the proceeding, promptly following request therefore, all expenses incurred by any director or officer in connection with such proceeding upon receipt of an undertaking by or on behalf of such person to repay said amounts if it should be determined ultimately that such person is not entitled to be indemnified under our bylaws or otherwise.
Our bylaws provide that no advance shall be made by us to an officer of the company, except by reason of the fact that such officer is or was a director of the company in which event this paragraph shall not apply, in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made: (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding, or (b) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the company.
Insofar as indemnification for liabilities resulting from the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in that Act and is, therefore, unenforceable.
The estimated costs of this offering are as follows:
|
Securities and Exchange Commission registration fee |
$
|
1.30 |
|
Federal Taxes |
$
|
NIL |
|
State Taxes and Fees |
$
|
NIL |
|
Transfer Agent Fees |
$
|
1,000 |
|
Accounting fee and expenses |
$
|
5,000 |
|
Legal fees and expenses |
$
|
5,000 |
|
|
||
|
Total |
$
|
11,001.30 |
We are paying all expenses of the offering listed above. No portion of these expenses will be paid by the selling shareholders. The selling shareholders, however, will pay any other expenses incurred in selling their common stock, including any brokerage commissions or costs of sale.
We issued 1,500,000 shares of common stock on January 10, 2007 to John J. Sutherland our president, chief financial officer and director. Mr. Sutherland acquired these shares at a price of $0.01 per share. We received $15,000 from this offering. These shares were issued pursuant to Section 4(2) of the Securities Act of 1933 and are restricted shares as defined in the Securities Act.
We completed an offering of 2,125,000 shares of our common stock at a price of $0.02 per share to a total of thirty (30) purchasers on June 30, 2007. The total amount we received from this offering
47
was $42,500. We completed the offering pursuant to Regulation S of the Securities Act. Each purchaser represented to us that he/she was a non-US person as defined in Regulation S. We did not engage in distribution of this offering in the United States. Each purchaser represented his/her intention to acquire the securities for investment only and not with a view toward distribution. Each investor was given adequate access to sufficient information about us to make an informed investment decision. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved. No registration rights were granted to any of the purchasers.
|
Exhibit
|
Description |
|
3.1 |
Articles of Incorporation |
|
3.2 |
By-Laws |
|
5.1 |
Opinion and Consent of The O’Neal Law Firm, P.C. |
|
10.1 |
Mineral Lease Agreement dated January 15, 2007 between Cyprium Resources Inc. and Robert Steele |
|
23.1 |
Consent of John Kinross-Kennedy, Certified Public Accountant |
|
23.2 |
Consent of Robert E. Miller, Geological Engineer. |
The undersigned registrant hereby undertakes:
-
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement;
| (a) | to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; | |
| (b) | to reflect in the prospectus any facts or events arising after the effective date of this registration statement, or most recent post-effective amendment, which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement, and; | |
| (c) | To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in the registration statement. |
-
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
48
-
To remove from registration by means of a post-effective amendment any of the securities being registered hereby which remain unsold at the termination of the offering.
-
For determining liability of the undersigned small business issuer under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned small business issuer undertakes that in a primary offering of securities of the undersigned small business issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned small business issuer will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
1. Any preliminary prospectus or prospectus of the undersigned small business issuer relating to the offering required to be filed pursuant to Rule 424;
2. Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned small business issuer or used or referred to by the undersigned small business issuer;
3. The portion of any other free writing prospectus relating to the offering containing material information about the undersigned small business issuer or its securities provided by or on behalf of the undersigned small business issuer; and
4. Any other communication that is an offer in the offering made by the undersigned small business issuer to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of its counsel the mater has been stated by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act of 1933, and we will be governed by the final adjudication of such issue.
49
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of West Vancouver, Province of British Columbia, Canada on September 10, 2007.
|
|
CYPRIUM RESOURCES INC.
|
|
By: |
/s/ John J. Sutherland |
|
|
John J. Sutherland
|
POWER OF ATTORNEY
ALL MEN BY THESE PRESENT, that each person whose signature appears below constitutes and appoints John J. Sutherland, true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him and his name, place and stead, in any and all capacities, to sign any and all pre- or post-effective amendments to this registration statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any one of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof. In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated.
By:
/s/ John J. Sutherland
President, Chief Executive Officer,
John J. Sutherland Chief Financial Officer, Chief Accounting
Officer, and Chairman of the Board of
Directors
Dated: September 10, 2007
INDEX TO EXHIBITS
|
Exhibit
|
Description |
|
3.1 |
Articles of Incorporation |
|
3.2 |
By-Laws |
|
5.1 |
Opinion and Consent of The O’Neal Law Firm, P.C. |
|
10.1 |
Mineral Lease Agreement dated January 15, 2007 between Cyprium Resources Inc. and Robert Steele |
|
23.1 |
Consent of John Kinross-Kennedy, Certified Public Accountant |
|
23.2 |
Consent of Robert E. Miller, Geological Engineer. |
50
