UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURUTIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2008
Commission file number 333-149626
Wolfe Creek Mining, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 32-0218005
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
15868 SW Kimball Avenue
Lake Oswego, OR 97035
(Address of Principal Executive Offices & Zip Code)
Phone (503)344-6213 Fax (503)974-9692
(Telephone Number)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to section 12(g) of the Act:
Common Stock, $.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
As of February 4, 2009, the registrant had 4,000,000 shares of common stock
issued and outstanding. No market value has been computed based upon the fact
that no active trading market had been established.
WOLFE CREEK MINING, INC.
TABLE OF CONTENTS
Page No.
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Part I
Item 1. Business 3
Item 1A. Risk Factors 10
Item 2. Properties 12
Item 3. Legal Proceedings 13
Item 4. Submission of Matters to a Vote of Securities Holders 13
Part II
Item 5. Market for Common Equity and Related Stockholder Matters 13
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 15
Item 8. Financial Statements 18
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 31
Item 9A. Controls and Procedures 31
Part III
Item 10. Directors and Executive Officers 33
Item 11. Executive Compensation 34
Item 12. Security Ownership of Certain Beneficial Owners and Management 35
Item 13. Certain Relationships and Related Transactions 36
Item 14. Principal Accounting Fees and Services 36
Part IV
Item 15. Exhibits 37
Signatures 37
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PART I
ITEM 1. BUSINESS
SUMMARY
Wolfe Creek Mining, Inc. was incorporated in the State of Delaware on June 26,
2007 to engage in the acquisition, exploration and development of natural
resource properties. We intend to use the net proceeds from our S-1 offering to
develop our business operations. We are an exploration stage company with no
revenues or operating history. The principal executive offices are located at
15868 SW Kimball Avenue, Lake Oswego, OR 97035. The telephone number is
(760)564-8967.
We are an exploration stage company engaged in the acquisition and exploration
of mineral properties. Our mineral claim, the Eureka Lode Mineral Claim, is
comprised of one located claim with an area of 20 acres, and is located in the
easternmost portion the Goodsprings (Yellow Pine) Mining District within the
southwestern corner of the State of Nevada, U.S.A. We commenced mineral
exploration activities on the claim in July 2008 and received the results from
the geologist on Phase 1 of the exploration program. We are currently reviewing
his report and recommendations for further exploration.
At the present, we have no full-time employees. Our sole officer and director
will devote approximately 5 to 6 hours per week to our operation.
Our shares are listed on the Over the Counter Bulletin Board under the symbol
WCRM. To date there has been no active trading market.
We have a total of 75,000,000 authorized common shares with a par value of
$0.001 per share and 25,000,000 authorized preferred shares. As of December 31,
2008 there were 4,000,000 common shares issued and outstanding. Of the
outstanding shares 3,000,000 shares are held by our officer and director and
1,000,000 shares are held by a group of 26 investors.
GENERAL INFORMATION
GLOSSARY OF TECHNICAL GEOLOGICAL TERMS
The following defined technical geological terms may be used in this report:
Anglesite A native sulphate of lead. It occurs in white or
yellowish transparent, prismatic crystals.
Azurite Blue carbonate of copper; blue malachite.
Basalt A general term for dark-colored mafic igneous rocks,
commonly extrusive but locally intrusive (e.g., as in
dikes).
Breccia A rock in which angular fragments are surrounded by a
mass of fine-grained minerals.
Brecciated The formation of angular rock fragments.
Calamine A white mineral; a common ore of zinc.
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Carbonate A salt or ester of carbonic acid.
Cerussite A mineral consisting of lead carbonate that is an
important source of lead.
Chrysocolla A hydrous silicate of copper, occurring massive, of a
blue or greenish blue color.
Cinnabar A heavy reddish mineral consisting of mercuric sulfide;
the chief source of mercury.
Clastic Fragments of minerals, rocks, or organic structures
that have been moved individually from their places of
origin.
Cretaceous Rocks laid down during the last period of the Mesozoic
era (between the Jurassic and Tertiary periods, about
146 to 65 million years ago), at the end of which
dinosaurs and many other organisms died out.
Diamond drill(ing) A rotary type of rock drill in which the cutting is
done by abrasion rather than percussion. The cutting
bit is set with diamonds and is attached to the end of
long hollow rods through which water or other fluid is
pumped to the cutting face as a lubricant. The drill
cuts a core of rock that is recovered in long
cylindrical sections, two centimeters or more in
diameter.
Fault Zones A network of interconnected fractures representing the
surficial expression of a fault.
Fold A planar feature, such as a bedding plane, that has
been strongly warped, presumably by deformation.
Galena The chief ore of lead, commonly found in shallow ore
veins in which open cavities are frequent; hence,
crystals are common and well developed. Galena is
widely distributed and constitutes by far the most
important ore for lead. Silver, antimony, arsenic,
copper, and zinc minerals often occur in intimate
association with galena; consequently, galena ores
mined for lead also include other valuable by-products.
Granite Plutonic igneous rock having visibly crystalline
texture; generally composed of feldspar and mica and
quartz.
Hydrozincite An abundant element of the magnesium-cadmium group,
extracted principally from the minerals zinc blend,
smithsonite, calamine, and franklinite, as an easily
fusible bluish white metal, which is malleable,
especially when heated.
Igneous A type of rock which has been formed by the
consolidation of magma, a molten substance from the
earth's core.
Intrusive A body of igneous rock formed by the consolidation of
magma intruded into other rocks, in contrast to lavas,
which are extruded upon the surface.
Jurassic Second Period of Mesozoic Era, which covered span of
time between 190 - 135 million years before the present
time.
Limestone A bedded, sedimentary deposit consisting chiefly of
calcium carbonate.
Limonite A widely occurring iron oxide ore; a mixture of
goethite and hematite and lepidocrocite.
Lode A mineral deposit in solid rock.
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Malachite Green mineral used as an ore of copper and for making
ornamental objects.
Mesozoic One of the eras of geologic time. It includes the
Triassic, Jurassic and Cretaceous periods.
Mineralization The concentration of metals and their chemical
compounds within a body of rock.
Monte Cristo
Limestone Formation A local name for a geological series of rocks.
Normal Fault A dip-slip fault in which the block above the fault has
moved downward relative to the block below.
Ore A mixture of minerals and gangue from which at least
one metal can be extracted at a profit.
Oxidization A chemical reaction caused by exposure to oxygen that
results in a change in the chemical composition of a
mineral
Paleozoic Rocks that were laid down during the Paleozoic Era
(between 544 and 230 million years before the present
time).
Porphyritic Containing relatively large isolated crystals in a mass
of fine texture.
Porphyry A heterogeneous rock characterized by the presence of
crystals in a relatively finer-grained matrix.
Pyrite The most common of the sulphide minerals. It is usually
found associated with other sulphides or oxides in
quartz veins, sedimentary rock and metamorphic rock, as
well as in coal beds, and as the replacement mineral in
fossils.
Quartz A mineral whose composition is silicon dioxide. A
crystalline form of silica.
Sedimentary A type of rock which has been created by the deposition
of solids from a liquid.
Smithsonite Native zinc carbonate. It generally occurs in
stalactitic, reniform, or botryoidal shapes, of a white
to gray, green, or brown color.
Stratigraphy Strictly, the description of bedded rock sequences;
used loosely, the sequence of bedded rocks in a
particular area.
Structural Pertaining to geologic structure.
Tertiary Relating to the first period of the Cenozoic era, about
65 to 1.64 million years ago.
Thrust Faults
(Faulting) A dip-slip fault in which the upper block above the
fault plane moves up and over the lower block, so that
older strata are placed over younger. Trenching The
removal of overburden to expose the underlying bedrock.
Triassic The system of strata that was deposited between 210 and
250 million years before the present time.
Vein An occurrence of ore with an irregular development in
length, width and depth usually from an intrusion of
igneous rock.
The one property on which the net proceeds of our S-1 offering will be spent, is
the Eureka Lode Mineral Claim which is comprised of one located claim with an
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area of 20 acres located in the Goodsprings (Yellow Pine) Mining District within
the southwestern corner of the State of Nevada.
Access from Las Vegas, Nevada to the Eureka Lode Claim is southward via
Interstate Highway #15 for 31 miles, to within five miles past Jean, Nevada,
thence westerly for five miles to within 1,000 feet of the Eureka Lode Claim.
Las Vegas offers the necessary resources required to base and carry-out an
exploration program (accommodations, communications, equipment and supplies).
The area is of a typically desert climate with relatively high temperatures and
low precipitation. Vegetation consists mainly of desert shrubs and cactus.
There is not a plant or any equipment currently located on the property. It is
expected that the initial exploration phase will be supported by generators.
Water required for exploration and development of the claim is available from
valley wells.
A three phased exploration program of geophysical and geochemical surveys,
trenching, sampling, and diamond drilling estimated to cost US$87,500 is
recommended to explore for, and delineate, potentially economic lead/zinc/silver
bearing mineral zones on the Eureka Lode Claim. As exploration work is conducted
and assessed, a decision would be made as to its importance and priority. The
next phase of work will be determined by the results from the preceding phase.
The cost of the initial phase of exploration is $7,000, $10,500 for the
contingent second phase and $70,000 for the contingent third phase. We completed
Phase 1 of the exploration program in the summer of 2008.
The discussions contained herein are management's estimates based on information
provided by the consulting geologist who prepared the geology report for the
project. Because we have not commenced our exploration program we cannot provide
a more detailed discussion of our plans if we find a viable store of minerals on
our property, as there is no guarantee that exploitable mineralization will be
found, the quantity or type of minerals if they are found and the extraction
process that will be required. We are also unable to assure you we will be able
to raise the additional funding to proceed with any subsequent work on the
claims if mineralization is found.
ACQUISITION OF THE EUREKA LODE MINING CLAIM
We entered into a purchase agreement dated December 19, 2007 with Larry Sostad
pursuant to which we acquired a 100% interest in the Eureka Lode Mining Claim
for cash consideration of $9,000. The Eureka Claim is comprised of one
unpatented lode mineral claim within an area of 20 acres, located in the Yellow
Pine Mining District, Clark County, Nevada.
REQUIREMENTS OR CONDITIONS FOR RETENTION OF TITLE
In addition to the State regulations, Federal regulations require a yearly
maintenance fee to keep the claim in good standing. In accordance with Federal
regulations, the Eureka Lode Claim is in good standing to September 1, 2009. A
yearly maintenance fee of $125.00 is required to be paid to the Bureau of Land
Management prior to the expiry date to keep the claim in good standing for an
additional year.
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LOCATION, ACCESS, CLIMATE, LOCAL RESOURCES & INFRASTRUCTURE
The Eureka Lode Claim, comprising 20 acres, was located on November 26, 2007 and
was filed in the Clark County recorder's office in Las Vegas on November 30,
2007 as No 3368 File 080 Page00887 in the official records book No.20071130.
The Eureka Lode Claim is located within Sections 27 & 34 Range 58E, Township 25S
at the easternmost portion of the Yellow Pine Mining District of Clark County,
Nevada.
Access from Las Vegas, Nevada to the Eureka Lode Claim is southward via
Interstate Highway #15 for approximately 31 miles, to within five miles past
Jean, Nevada, thence westerly for five miles to within 1,000 feet of the Eureka
Lode Claim.
Infrastructure such as highways and back roads, communications, accommodations
and supplies that are essential to carrying-out an exploration program are
available in Las Vegas.
PHYSIOGRAPHY
The Eureka Lode Claim is situated at the southern end of the Sheep Mountain
Range, a north-south trending range of mountains with peaks reaching an
elevation of 4,184 feet. The Claim covers the southwesterly facing slopes of a
northerly trending ridge. Elevations within the confines of the Claim are within
the range of 250 feet.
The area is of a typically desert climate with relatively high temperatures and
low precipitation. Vegetation consists mainly of desert shrubs and cactus.
Sources of water would be available from valley wells.
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[MAP SHOWING THE CLAIM LOCATION]
HISTORY
The history of the Yellow Pine Mining District stems from 1856 when Mormon
missionaries reported ore in the area. In 1857 the smelting of ore produced
9,000 pounds of lead and in 1898 a mill was built south of Goodsprings. As a
result of the mill availability, exploration activity led to the discovery of
many of the mines in the area.
Although less famous than many of the other mining districts of the Great Basin
it nevertheless ranks second only to Tonopah in total Nevada lead and zinc
production. During World War I this district was one of the most productive in
the West, but by the end of World War II only a few mines remained in operation.
Even though the mines of this district have been worked primarily for their
lead-zinc-silver values, an estimated 91,000 ounces of gold have been recovered
as a by-product of copper-lead-silver mining.
GEOLOGICAL SETTING
REGIONAL GEOLOGY
In the Yellow Pine district, the Spring Mountain Range in the west, and the
Sheep Mountain Range in the east consist mainly of Paleozoic sediments which
have undergone intense folding accompanied by faulting. A series of
Carboniferous sediments consist largely of siliceous limestones and include
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strata of pure crystalline limestone and dolomite with occasional intercalated
beds of fine grained sandstone. These strata have a general west to southwest
dip of from 15 to 45 degrees which is occasionally disturbed by local folds.
Igneous rocks are scarce and are represented chiefly by quartz-monzonite
porphyry dikes and sills. The quartz-monzonite porphyry is intruded into these
strata and is of post-Jurassic age, perhaps Tertiary.
PROPERTY GEOLOGY
The Eureka Lode Claim is indicated to be underlain by the Yellowpine Limestone
member of the Monte Cristo Limestone Formation where lead/zinc mineralization
often occurs in a breccia at the base of the limestone.
[MAP SHOWING THE REGIONAL GEOLOGY]
COMPETITION
We do not compete directly with anyone for the exploration or removal of
minerals from our property as we hold all interest and rights to the claim.
Readily available commodities markets exist in the U.S. and around the world for
the sale of gold, silver and other minerals. Therefore, we will likely be able
to sell any gold, silver or other minerals that we are able to recover.
We will be subject to competition and unforeseen limited sources of supplies in
the industry in the event spot shortages arise for supplies such as dynamite,
and certain equipment such as bulldozers and excavators that we will need to
conduct exploration. If we are unsuccessful in securing the products, equipment
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and services we need we may have to suspend our exploration plans until we are
able to do so.
BANKRUPTCY OR SIMILAR PROCEEDINGS
There has been no bankruptcy, receivership or similar proceeding.
REORGANIZATIONS, PURCHASE OR SALE OF ASSETS
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.
COMPLIANCE WITH GOVERNMENT REGULATION
We will be required to comply with all regulations, rules and directives of
governmental authorities and agencies applicable to the exploration of minerals
in the United States generally, and in Nevada specifically. We will also be
subject to the regulations of the Bureau of Land Management.
PATENTS, TRADEMARKS, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS, OR LABOR
CONTRACTS
We have no current plans for any registrations such as patents, trademarks,
copyrights, franchises, concessions, royalty agreements or labor contracts. We
will assess the need for any copyright, trademark or patent applications on an
ongoing basis.
NEED FOR GOVERNMENT APPROVAL FOR ITS PRODUCTS OR SERVICES
We are not required to apply for or have any government approval for our
products or services.
RESEARCH AND DEVELOPMENT COSTS DURING THE LAST TWO YEARS
We have not expended funds for research and development costs since inception.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
Our only employee is our sole officer, Kristen Paul who currently devotes 5-6
hours per week to company matters and after receiving funding she plans to
devote as much time as the board of directors determines is necessary to manage
the affairs of the company. There are no formal employment agreements between
the company and our current employee.
ITEM 1A. RISK FACTORS
WE ARE AN EXPLORATION STAGE COMPANY BUT HAVE ONLY RECENTLY COMMENCED EXPLORATION
ACTIVITIES ON OUR CLAIM. WE EXPECT TO INCUR OPERATING LOSSES FOR THE FORESEEABLE
FUTURE.
We have only recently commenced exploration on the Eureka Lode Mineral
Claim. Accordingly, we have no way to evaluate the likelihood that our
business will be successful. We were incorporated on June 26, 2007 and to
date have been involved primarily in organizational activities and the
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acquisition of the mineral claim. We have not earned any revenues as of the
date of this report. Potential investors should be aware of the
difficulties normally encountered by new mineral exploration companies and
the high rate of failure of such enterprises. The likelihood of success
must be considered in light of the problems, expenses, difficulties,
complications and delays encountered in connection with the exploration of
the mineral properties that we plan to undertake. These potential problems
include, but are not limited to, unanticipated problems relating to
exploration, and additional costs and expenses that may exceed current
estimates. Prior to completion of our exploration stage, we anticipate that
we will incur increased operating expenses without realizing any revenues.
We expect to incur significant losses into the foreseeable future. We
recognize that if we are unable to generate significant revenues from
development and production of minerals from the claim, we will not be able
to earn profits or continue operations. There is no history upon which to
base any assumption as to the likelihood that we will prove successful, and
it is doubtful that we will generate any operating revenues or ever achieve
profitable operations. If we are unsuccessful in addressing these risks,
our business will most likely fail.
OUR INDEPENDENT AUDITOR HAS ISSUED AN AUDIT OPINION FOR WOLFE CREEK MINING, INC.
WHICH INCLUDES A STATEMENT DESCRIBING OUR GOING CONCERN STATUS. OUR FINANCIAL
STATUS CREATES A DOUBT WHETHER WE WILL CONTINUE AS A GOING CONCERN.
As described in Note 6 of our accompanying financial statements, our lack
of operations and any guaranteed sources of future capital create
substantial doubt as to our ability to continue as a going concern. If our
business plan does not work, we could remain as a start-up company with
limited operations and revenues.
BECAUSE MANAGEMENT HAS NO TECHNICAL EXPERIENCE IN MINERAL EXPLORATION, OUR
BUSINESS HAS A HIGHER RISK OF FAILURE.
Our director has no professional training or technical credentials in the
field of geology and specifically in the areas of exploring, developing and
operating a mine. As a result, we may not be able to recognize and take
advantage of potential acquisition and exploration opportunities in the
sector without the aid of qualified geological consultants. Management's
decisions and choices may not take into account standard engineering or
managerial approaches mineral exploration companies commonly use.
Consequently our operations, earnings and ultimate financial success may
suffer irreparable harm as a result.
THERE IS THE RISK THAT OUR PROPERTY DOES NOT CONTAIN ANY KNOWN BODIES OF ORE
RESULTING IN ANY FUNDS SPENT ON EXPLORATION BEING LOST.
There is the likelihood of our mineral claim containing little or no
economic mineralization or reserves of silver or other minerals. We have a
geological report detailing previous exploration in the area, and the claim
has been staked per Nevada regulations. However; there is the possibility
that the previous work was not carried out properly and our claim does not
contain any reserves, resulting in any funds spent on exploration being
lost.
IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON OUR MINERAL PROPERTY,
WE CAN PROVIDE NO ASSURANCE THAT WE WILL BE ABLE TO SUCCESSFULLY ADVANCE THE
MINERAL CLAIMS INTO COMMERCIAL PRODUCTION.
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If our exploration program is successful in establishing ore of commercial
tonnage and grade, we will require additional funds in order to advance the
claim into commercial production. Obtaining additional financing would be
subject to a number of factors, including the market price for the
minerals, investor acceptance of our claims and general market conditions.
These factors may make the timing, amount, terms or conditions of
additional financing unavailable to us. The most likely source of future
funds is through the sale of equity capital. Any sale of share capital will
result in dilution to existing shareholders. We may be unable to obtain any
such funds, or to obtain such funds on terms that we consider economically
feasible.
GOVERNMENT REGULATION OR OTHER LEGAL UNCERTAINTIES MAY INCREASE COSTS AND OUR
BUSINESS WILL BE NEGATIVELY AFFECTED.
Laws and regulations govern the exploration, development, mining,
production, importing and exporting of minerals; taxes; labor standards;
occupational health; waste disposal; protection of the environment; mine
safety; toxic substances; and other matters. In many cases, licenses and
permits are required to conduct mining operations. Amendments to current
laws and regulations governing operations and activities of mining
companies or more stringent implementation thereof could have a substantial
adverse impact on us. Applicable laws and regulations will require us to
make certain capital and operating expenditures to initiate new operations.
Under certain circumstances, we may be required to stop exploration
activities, once started, until a particular problem is remedied or to
undertake other remedial actions.
BASED ON CONSUMER DEMAND, THE GROWTH AND DEMAND FOR ANY ORE WE MAY RECOVER FROM
OUR CLAIMS MAY BE SLOWED, RESULTING IN REDUCED REVENUES TO THE COMPANY.
Our continued success will be dependent on the growth of demand for ore. If
consumer demand slows our revenues may be significantly affected. This
could limit our ability to generate revenues and our financial condition
and operating results may be harmed.
BECAUSE OUR CURRENT OFFICER AND DIRECTOR HAS OTHER BUSINESS INTERESTS, SHE MAY
NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS
OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
Kristen Paul, our sole officer and director, currently devotes
approximately 5-6 hours per week providing management services to us. While
she presently possesses adequate time to attend to our interests, it is
possible that the demands on her from other obligations could increase,
with the result that she would no longer be able to devote sufficient time
to the management of our business. This could negatively impact our
business development.
ITEM 2. PROPERTIES
We do not currently own any property. We are currently operating out of the
premises of our President, Kristen Paul on a rent free basis during our
exploration stage. The office is at 15868 SW Kimball Avenue, Lake Oswego, OR
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97035. We consider our current principal office space arrangement adequate and
will reassess our needs based upon the future growth of the company.
ITEM 3. LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings and we are not aware of
any pending or potential legal actions.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the security holders during the
year ended December 31, 2008.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock is listed on the Over-the-Counter Bulletin Board (OTCBB) under
the symbol WCRM. There has been no active trading in our shares.
PENNY STOCK RULES
The Securities and Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
A purchaser is purchasing penny stock which limits the ability to sell the
stock. Our shares are considered penny stock under the Securities and Exchange
Act. The shares will remain penny stocks for the foreseeable future. The
classification of penny stock makes it more difficult for a broker-dealer to
sell the stock into a secondary market, which makes it more difficult for a
purchaser to liquidate his/her investment. Any broker-dealer engaged by the
purchaser for the purpose of selling his or her shares in us will be subject to
Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than
creating a need to comply with those rules, some broker-dealers will refuse to
attempt to sell penny stock.
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, to deliver a standardized risk
disclosure document prepared by the Commission, which:
- contains a description of the nature and level of risk in the market
for penny stocks in both public offerings and secondary trading;
- contains a description of the broker's or dealer's duties to the
customer and of the rights and remedies available to the customer with
respect to a violation to such duties or other requirements of the
Securities Act of 1934, as amended;
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- contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" prices for penny stocks and the significance
of the spread between the bid and ask price;
- contains a toll-free telephone number for inquiries on disciplinary
actions;
- defines significant terms in the disclosure document or in the conduct
of trading penny stocks; and
- contains such other information and is in such form (including
language, type, size and format) as the Securities and Exchange
Commission shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, to the customer:
- the bid and offer quotations for the penny stock;
- the compensation of the broker-dealer and its salesperson in the
transaction;
- the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
- monthly account statements showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
their securities.
HOLDERS
As of December 31, 2008, we have 4,000,000 shares of $0.001 par value common
stock issued and outstanding held by 27 shareholders of record.
The stock transfer agent for our securities is Columbia Stock Transfer Company.
DIVIDENDS
We have never declared or paid any cash dividends on our common stock. For the
foreseeable future, we intend to retain any earnings to finance the development
and expansion of our business, and we do not anticipate paying any cash
dividends on its common stock. Any future determination to pay dividends will be
at the discretion of the Board of Directors and will be dependent upon the
existing conditions, including our financial condition and results of
operations, capital requirements, contractual restrictions, business prospects,
and other factors that the board of directors considers relevant.
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PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
There were no shares of common stock or other securities issued to the issuer or
affiliated purchasers during the year ended December 31, 2008.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD LOOKING STATEMENTS
Some of the statements contained in this Form 10-K that are not historical facts
are "forward-looking statements" which can be identified by the use of
terminology such as "estimates", "projects", "plans", "believes", "expects",
"anticipates", "intends", or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. We urge you to be cautious of
the forward-looking statements, that such statements, which are contained in
this Form 10-K, reflect our current beliefs with respect to future events and
involve known and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No assurances can be
given regarding the achievement of future results, as actual results may differ
materially as a result of the risks we face, and actual events may differ from
the assumptions underlying the statements that have been made regarding
anticipated events.
All written forward-looking statements, made in connection with this Form 10-K
that are attributable to us or persons acting on our behalf, are expressly
qualified in their entirety by these cautionary statements. Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.
The safe harbors of forward-looking statements provided by the Securities
Litigation Reform Act of 1995 are unavailable to issuers not subject to the
reporting requirements set forth under Section 13(a) or 15(D) of the Securities
Exchange Act of 1934, as amended. As we have not registered our securities
pursuant to Section 12 of the Exchange Act, such safe harbors set forth under
the Reform Act are unavailable to us.
RESULTS OF OPERATIONS
We have generated no revenues since inception and have incurred $28,713 in
expenses through December 31, 2008.
The following table provides selected financial data about our company for the
years ended December 31, 2008 and 2007.
Balance Sheet Data: 12/31/08 12/31/07
------------------- -------- --------
Cash $16,287 5,895
Total assets $16,287 5,895
Total liabilities $ 5,000 0
Shareholders' equity $11,287 5,895
15
Cash provided by financing activities since inception through December 31, 2008
was $40,000, $15,000 from the sale of shares to our officer and director in
October 2007 and $25,000 resulting from the sale of our common stock in our
initial public offering to a group of 26 investors in July 2008.
PLAN OF OPERATION
Our plan of operation for the next twelve months is to complete the second phase
of the exploration program on our claim consisting of soil surveys, trenching
and sampling. In addition to the estimated cost of $10,500 for Phase 2 of the
exploration program as outlined below, we anticipate spending an additional
$5,000 on professional fees, including fees payable in complying with reporting
obligations and general administrative costs. Total expenditures over the next
12 months are therefore expected to be approximately $15,500.
The following work program was recommended by the consulting geologist who
prepared the geology report for the Eureka Lode Mining Claim.
PHASE 1 (COMPLETED)
VLF-EM and magnetometer surveys $ 7,000
PHASE 2
Localized soil surveys, trenching and sampling
over known and indicated mineralized zones $10,500
PHASE 3
Test diamond drilling $70,000
-------
Total $87,500
=======
The consulting geologist has completed Phase 1 of the exploration program. We
have a verbal agreement with Sookochoff Consultants Inc., the consulting geology
firm who prepared the geology report on our claim, to retain their services for
our entire exploration program. We commenced mineral exploration activities on
the claim in July 2008 and received the results from the geologist on Phase 1 of
the exploration program. We are currently reviewing his report and
recommendations for further exploration. If we decide to proceed with further
exploration we anticipate commencing Phase 2 in fall of 2009. We expect this
phase to take three weeks to complete and an additional three months for the
consulting geologist to receive the results from the assay lab and prepare his
report.
LIQUIDITY AND CAPITAL RESOURCES
Our cash balance at December 31, 2008 was $16,287. We have $5,000 in outstanding
liabilities, a loan from our director. The loan is non-interest bearing with no
specific terms of repayment. In order to achieve our exploration program goals,
we needed the funding of $25,000 from the offering of registered shares pursuant
to a registration statement on Form S-1 filed with the SEC under file number
16
333-149626 which became effective on April 8, 2008. The offering was closed on
July 21, 2008 after selling 1,000,000 shares to 26 investors.
If we experience a shortage of funds prior to completing our exploration program
we may utilize funds from a director who has informally agreed to advance funds
to allow us to pay for business operations, however our director has no formal
commitment, arrangement or legal obligation to advance or loan funds to us.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
17
ITEM 8. FINANCIAL STATEMENTS
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
We have audited the accompanying balance sheets of Wolfe Creek Mining, Inc. (An
Exploration Stage Company) as of December 31, 2008 and 2007, and the related
statements of operations, stockholders' equity (deficit) and cash flows for the
years ended December 31, 2008 and 2007 and from inception on June 26, 2007
through December 31, 2008. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conduct our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wolfe Creek Mining, Inc. (An
Exploration Stage Company) as of December 31, 2008 and 2007, and the related
statements of operations, stockholders' equity and cash flows for the years
ended December 31, 2008 and 2007 and from inception on June 26, 2007 through
December 31, 2008, in conformity with accounting principles generally accepted
in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 7 to the
financial statements, the Company has an accumulated deficit of $28,713, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 7. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Moore & Associates, Chartered
------------------------------------------
Moore & Associates, Chartered
Las Vegas, Nevada
January 23, 2009
6490 West Desert Inn Rd, Las Vegas, NV 89146
(702) 253-7499 Fax (702) 253-7501
18
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
Balance Sheets
Year ended As of
December 31, December 31,
2008 2007
-------- --------
ASSETS
Current Assets
Cash $ 16,287 $ 5,895
-------- --------
Total Current Assets 16,287 5,895
Fixed Assets
Total Fixed Assets -- --
-------- --------
Total Assets $ 16,287 $ 5,895
======== ========
LIABILITIES
Current Liabilities
Loan from Director $ 5,000 $ --
-------- --------
Total Current Liabilities 5,000 --
-------- --------
Long term Liabilities -- --
-------- --------
Total Liabilities 5,000 --
======== ========
EQUITY
25,000,000 Preferred Shares Authorized at $.001 par value. None Outstanding
75,000,000 Common Shares Authorized at $.001 Par value
4,000,000 common shares issued and outstanding 4,000 3,000
Additional Paid in Capital 36,000 12,000
Accumulated Deficit during Exploration Stage (28,713) (9,105)
-------- --------
Total Stockholders Equity 11,287 5,895
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 16,287 $ 5,895
======== ========
The accompanying notes are an integral part of these financial statements.
19
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
Statements of Operations
June 26, 2007
(Inception) to
Year ended Year ended Year ended
December 31, December 31, December 31,
2008 2007 2008
---------- ---------- ----------
Revenue $ -- $ -- $ --
---------- ---------- ----------
Expenses
General and Administrative 12,608 105 12,713
---------- ---------- ----------
Total Expenses 12,608 105 12,713
---------- ---------- ----------
Other Income (expenses)
Recognition of an Impairment Loss (Mineral Claims) 7,000 9,000 16,000
---------- ---------- ----------
Income
Income (Loss) Before Income Taxes (19,608) (9,105) (28,713)
---------- ---------- ----------
Provision For Income Taxes -- -- --
---------- ---------- ----------
Net Income (Loss) $ (19,608) $ (9,105) $ (28,713)
========== ========== ==========
Basic & Diluted (Loss) per Share (0.005) (0.001) (0.001)
---------- ---------- ----------
Weighted Average Number of Common Shares 3,448,087 3,000,000
---------- ----------
The accompanying notes are an integral part of these financial statements.
20
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
Statements of Stockholders' Equity (Deficiency)
From Inception June 26, 2007 to December 31, 2008
Deficit
Accumulated
During
Preferred Stock Common Stock Paid in Exploration Total
Shares Amount Shares Amount Capital Stage Equity
------ ------ ------ ------ ------- ----- ------
Balance at Inception on June 26, 2007 -- $ -- -- $ -- $ -- $ -- $ --
Common Shares issued to founders on
@ $0.005 per share, par value .001
October 17, 2007 -- $ -- 3,000,000 $ 3,000 $ 12,000 15,000
Net loss for the period from inception
on June 26, 2007 to December 31, 2007 (9,105) (9,105)
------ ------ --------- ------- -------- --------- ---------
Balance, December 31, 2007 -- $ -- 3,000,000 $ 3,000 $ 12,000 (9,105) 5,895
====== ====== ========= ======= ======== ========= =========
Common Shares issued to individuals
on July 21, 2008 @ $0.025 per share,
par value .001 1,000,000 $ 1,000 24,000 25,000
Net (Loss) for Year ending
December 31, 2008 (19,608) (19,608)
------ ------ --------- ------- -------- --------- ---------
Balance, December 31, 2008 -- $ -- 4,000,000 $ 4,000 $ 36,000 $ (28,713) $ 11,287
====== ====== ========= ======= ======== ========= =========
The accompanying notes are an integral part of these financial statements.
21
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
Statements of Cash Flows
June 26, 2007
(Inception) to
Year ended Year ended Year ended
December 31, December 31, December 31,
2008 2007 2008
-------- -------- --------
OPERATING ACTIVITIES
Net Income (Loss) $(19,608) $ (9,105) $(28,713)
Accounts Payable
Impairment of Mineral Rights 7,000 9,000 18,000
-------- -------- --------
NET CASH FROM OPERATING ACTIVITIES (12,608) (105) (10,713)
NET CASH AFTER OPERATING ACTIVITIES (12,608) (105) (10,713)
FINANCING ACTIVITIES
Mineral rights (7,000) (9,000) (18,000)
Loan from Director 5,000 -- 5,000
-------- -------- --------
NET CASH FROM FINANCING ACTIVITIES (2,000) (9,000) (13,000)
NET CASH AFTER OPERATING AND FINANCIAL ACTIVITIES (14,608) (9,105) (23,713)
INVESTING ACTIVITIES
Common Shares Issued to Founders, @ $0.005 Per Share -- 15,000 15,000
Common Shares Issued to Individules, @ $0.025 Per Share 25,000 -- 25,000
-------- -------- --------
NET CASH FROM INVESTING ACTIVITIES 25,000 15,000 40,000
NET CASH AFTER OPERATING, FINANCIAL AND INVESTING ACTIVITIES 10,392 5,895 16,287
Provision for Income Tax -- -- --
Cash at Beginning of Period 5,895 -- --
-------- -------- --------
CASH AT END OF PERIOD $ 16,287 $ 5,895 $ 16,287
======== ======== ========
Supplemental Disclosure of Cash Flow Information
Cash paid for:
Interest Expense $ -- $ -- $ --
-------- -------- --------
Income Taxes $ -- $ -- $ --
-------- -------- --------
The accompanying notes are an integral part of these financial statements.
22
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2008
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Wolfe Creek Mining, Inc. (the Company) was incorporated on June 26, 2007 under
the laws of the State of Delaware. The Company is primarily engaged in the
acquisition and exploration of mining properties.
The Company has been in the exploration stage since its formation and has not
yet realized any revenues from its planned operations. Upon the location of
commercially mineable reserves, the Company plans to prepare for mineral
extraction and enter the development stage.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Company reports revenue and expenses using the accrual method of accounting
for financial and tax reporting purposes.
USE OF ESTIMATES
Management uses estimates and assumptions in preparing these financial
statements in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities, and the reported revenues
and expenses.
MINERAL PROPERTY ACQUISITION AND EXPLORATION COSTS
Mineral property acquisition, exploration and development costs are expensed as
incurred until such time as economic reserves are quantified. To date the
Company has not established any proven or probable reserves on its mineral
properties.
DEPRECIATION, AMORTIZATION AND CAPITALIZATION
The Company records depreciation and amortization, when appropriate, using both
straight-line method over the estimated useful lives of the assets (five to
seven years). Expenditures for maintenance and repairs are charged to expense as
incurred. Additions, major renewals and replacements that increase the
property's useful life are capitalized. Property sold or retired, together with
the related accumulated depreciation is removed from the appropriate accounts
and the resultant gain or loss is included in net income.
23
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2008
INCOME TAXES
The Company accounts for its income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". Under
Statement 109, a liability method is used whereby deferred tax assets and
liabilities are determined based on temporary differences between basis used for
financial reporting and income tax reporting purposes. Income taxes are provided
based on tax rates in effect at the time such temporary differences are expected
to reverse. A valuation allowance is provided for certain deferred tax assets if
it is more likely than not, that the Company will not realize the tax assets
through future operations.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial accounting Standards Statement No. 107, "Disclosures about Fair Value
of Financial Instruments", requires the Company to disclose, when reasonably
attainable, the fair market values of its assets and liabilities which are
deemed to be financial instruments. The Company's financial instruments consist
primarily of cash and certain investments.
INVESTMENTS
Investments that are purchased in other companies are valued at cost less any
impairment in the value that is other than temporary in nature.
PER SHARE INFORMATION
The Company computes per share information in accordance with SFAS No. 128,
"Earnings per Share" which requires presentation of both basic and diluted
earnings per share on the face of the statement of operations. Basic loss per
share is computed by dividing the net loss available to common shareholders by
the weighted average number of common shares outstanding during such period.
Diluted loss per share gives effect to all dilutive potential common shares
outstanding during the period. Dilutive loss per share excludes all potential
common shares if their effect is anti-dilutive. The Company has basic and
diluted loss per share of $0.001
NOTE 3 - PROVISION FOR INCOME TAXES
The provision for income taxes for the period ended December 31, 2008 represents
the minimum state income tax expense of the Company, which is not considered
significant.
24
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2008
NOTE 4 - CONCENTRATIONS OF RISKS
CASH BALANCES
The Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). This government corporation insured balances up to
$100,000 through October 13, 2008. As of October 14, 2008 all non-interest
bearing transaction deposit accounts at an FDIC-insured institution, including
all personal and business checking deposit accounts that do not earn interest,
are fully insured for the entire amount in the deposit account. This unlimited
insurance coverage is temporary and will remain in effect for participating
institutions until December 31, 2009.
All other deposit accounts at FDIC-insured institutions are insured up to at
least $250,000 per depositor until December 31, 2009. On January 1, 2010, FDIC
deposit insurance for all deposit accounts, except for certain retirement
accounts, will return to at least $100,000 per depositor. Insurance coverage for
certain retirement accounts, which include all IRA deposit accounts, will remain
at $250,000 per depositor.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
LITIGATION
The Company is not presently involved in any litigation.
NOTE 6 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, DETERMINING
WHETHER INSTRUMENTS GRANTED IN SHARE-BASED PAYMENT TRANSACTIONS ARE
PARTICIPATING SECURITIES, ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether
instruments granted in share-based payment transactions are participating
securities prior to vesting, and therefore need to be included in the
computation of earnings per share under the two-class method as described in
FASB Statement of Financial Accounting Standards No. 128, "Earnings per Share."
FSP EITF 03-6-1 is effective for financial statements issued for fiscal years
beginning on or after December 15, 2008 and earlier adoption is prohibited. We
are not required to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF
03-6-1 would have material effect on our consolidated financial position and
results of operations if adopted.
In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No.
163, "Accounting for Financial Guarantee Insurance Contracts-and interpretation
of FASB Statement No. 60". SFAS No. 163 clarifies how Statement 60 applies to
financial guarantee insurance contracts, including the recognition and
25
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2008
NOTE 6 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (continued)
measurement of premium revenue and claims liabilities. This statement also
requires expanded disclosures about financial guarantee insurance contracts.
SFAS No. 163 is effective for fiscal years beginning on or after December 15,
2008, and interim periods within those years. SFAS No. 163 has no effect on the
Company's financial position, statements of operations, or cash flows at this
time.
In May 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No.
162, "The Hierarchy of Generally Accepted Accounting Principles". SFAS No. 162
sets forth the level of authority to a given accounting pronouncement or
document by category. Where there might be conflicting guidance between two
categories, the more authoritative category will prevail. SFAS No. 162 will
become effective 60 days after the SEC approves the PCAOB's amendments to AU
Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on
the Company's financial position, statements of operations, or cash flows at
this time.
In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS
No. 161, Disclosures about Derivative Instruments and Hedging Activities--an
amendment of FASB Statement No. 133. This standard requires companies to provide
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity's financial
position, financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged. The Company has not yet
adopted the provisions of SFAS No. 161, but does not expect it to have a
material impact on its consolidated financial position, results of operations or
cash flows.
In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110
regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB
107), in developing an estimate of expected term of "plain vanilla" share
options in accordance with SFAS No. 123 (R), Share-Based Payment. In particular,
the staff indicated in SAB 107 that it will accept a company's election to use
the simplified method, regardless of whether the company has sufficient
information to make more refined estimates of expected term. At the time SAB 107
was issued, the staff believed that more detailed external information about
employee exercise behavior (e.g., employee exercise patterns by industry and/or
other categories of companies) would, over time, become readily available to
companies. Therefore, the staff stated in SAB 107 that it would not expect a
company to use the simplified method for share option grants after December 31,
2007. The staff understands that such detailed information about employee
exercise behavior may not be widely available by December 31, 2007. Accordingly,
the staff will continue to accept, under certain circumstances, the use of the
26
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2008
NOTE 6 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (continued)
simplified method beyond December 31, 2007. The Company currently uses the
simplified method for "plain vanilla" share options and warrants, and will
assess the impact of SAB 110 for fiscal year 2009. It is not believed that this
will have an impact on the Company's consolidated financial position, results of
operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements--an amendment of ARB No. 51. This statement
amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. Before this statement was issued,
limited guidance existed for reporting noncontrolling interests. As a result,
considerable diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as liabilities or
in the mezzanine section between liabilities and equity. This statement improves
comparability by eliminating that diversity. This statement is effective for
fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2008 (that is, January 1, 2009, for entities with calendar
year-ends). Earlier adoption is prohibited. The effective date of this statement
is the same as that of the related Statement 141 (revised 2007). The Company
will adopt this Statement beginning March 1, 2009. It is not believed that this
will have an impact on the Company's consolidated financial position, results of
operations or cash flows.
In December 2007, the FASB, issued FAS No. 141 (revised 2007), Business
Combinations'. This Statement replaces FASB Statement No. 141, Business
Combinations, but retains the fundamental requirements in Statement 141. This
Statement establishes principles and requirements for how the acquirer: (a)
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree; (b) recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase; and (c) determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. This statement
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. An entity may not apply it before that date. The
effective date of this statement is the same as that of the related FASB
Statement No. 160, Noncontrolling Interests in Consolidated Financial
Statements. The Company will adopt this statement beginning March 1, 2009. It is
not believed that this will have an impact on the Company's consolidated
financial position, results of operations or cash flows.
27
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2008
NOTE 6 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (continued)
In February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for
Financial Assets and Liabilities--Including an Amendment of FASB Statement No.
115. This standard permits an entity to choose to measure many financial
instruments and certain other items at fair value. This option is available to
all entities. Most of the provisions in FAS 159 are elective; however, an
amendment to FAS 115 Accounting for Certain Investments in Debt and Equity
Securities applies to all entities with available for sale or trading
securities. Some requirements apply differently to entities that do not report
net income. SFAS No. 159 is effective as of the beginning of an entity's first
fiscal year that begins after November 15, 2007. Early adoption is permitted as
of the beginning of the previous fiscal year provided that the entity makes that
choice in the first 120 days of that fiscal year and also elects to apply the
provisions of SFAS No. 157 Fair Value Measurements. The Company will adopt SFAS
No. 159 beginning March 1, 2008 and is currently evaluating the potential impact
the adoption of this pronouncement will have on its consolidated financial
statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements This
statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles (GAAP), and expands disclosures
about fair value measurements. This statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this statement does not require any
new fair value measurements. However, for some entities, the application of this
statement will change current practice. This statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. Earlier application is
encouraged, provided that the reporting entity has not yet issued financial
statements for that fiscal year, including financial statements for an interim
period within that fiscal year. The Company will adopt this statement March 1,
2008, and it is not believed that this will have an impact on the Company's
consolidated financial position, results of operations or cash flows.
NOTE 7 - GOING CONCERN
Future issuances of the Company's equity or debt securities will be required in
order for the Company to continue to finance its operations and continue as a
going concern. The Company's present revenues are insufficient to meet operating
expenses.
The financial statements of the Company have been prepared assuming that the
Company will continue as a going concern, which contemplates, among other
things, the realization of assets and the satisfaction of liabilities in the
normal course of business. The Company has incurred cumulative net losses of $
28,713. since its inception and requires capital for its contemplated
28
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2008
NOTE 7 - GOING CONCERN (continued)
operational and marketing activities to take place. The Company's ability to
raise additional capital through the future issuances of common stock is
unknown. The obtainment of additional financing, the successful development of
the Company's contemplated plan of operations, and its transition, ultimately,
to the attainment of profitable operations are necessary for the Company to
continue operations. The ability to successfully resolve these factors raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements of the Company do not include any adjustments that may
result from the outcome of these aforementioned uncertainties.
NOTE 8 - RELATED PARTY TRANSACTIONS
Kristen Paul, the sole officer and director of the Company may, in the future,
become involved in other business opportunities as they become available, thus
she may face a conflict in selecting between the Company and her other business
opportunities. The Company has not formulated a policy for the resolution of
such conflicts.
Kristen Paul, the sole officer and director of the Company, will not receive any
interest on any funds that she advances to the Company for offering expenses
prior to the offering being closed which will be repaid from the proceeds of the
offering.
NOTE 9 - STOCK TRANSACTIONS
Transactions, other than employees' stock issuance, are in accordance with
paragraph 8 of SFAS 123. Thus issuances shall be accounted for based on the fair
value of the consideration received. Transactions with employees' stock issuance
are in accordance with paragraphs (16-44) of SFAS 123. These issuances shall be
accounted for based on the fair value of the consideration received or the fair
value of the equity instruments issued, or whichever is more readily
determinable.
NOTE 10 - STOCKHOLDERS' EQUITY
The stockholders' equity section of the Company contains the following classes
of capital stock as of December 31, 2007:
Preferred Shares, $ 0.001 par value: 25,000,000 shares authorized.
Common Stock, $ 0.001 par value: 75,000,000 shares authorized; 3,000,000 shares
issued and outstanding.
On October 17, 2007 the Company issued a total of 3,000,000 shares of common
stock to one director for cash in the amount of $0.005 per share for a total of
$15,000.
29
Wolfe Creek Mining, Inc.
(An Exploration Stage Company)
Notes to Financial Statements
December 31, 2008
NOTE 10 - STOCKHOLDERS' EQUITY (continued)
On July 21, 2008 we sold 1,000,000 shares of our par value $0.001 common stock
to a group of 26 investors for total proceeds of $25,000.
On July 21, 2008 we closed our offering of 1,000,000 shares pursuant to our
registration statement on Form S-1 which became effective on April 8, 2008.
As of December 31, 2008 the Company had 4,000,000 shares of common stock issued
and outstanding.
NOTE 11 - PURCHASE OF MINERAL RIGHTS AND IMPAIRMENT
On December 19, 2007, the Company entered into an agreement to acquire a Eureka
Lode Mining Claim for $9000. No proven or probable reserves on the property have
been established. The cost of the Mineral Rights was impaired 100% as of
December 31, 2007.
30
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the
company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:
- Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the
assets of the company;
- Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with accounting principles generally accepted in the United States of
America and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and
directors of the company; and
- Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the company's
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Because of the
inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this risk.
As of December 31, 2008 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and SEC guidance on conducting such assessments. Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described below. This
31
was due to deficiencies that existed in the design or operation of our internal
controls over financial reporting that adversely affected our internal controls
and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; (2) inadequate segregation of duties consistent with control
objectives; and (3) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were identified
by our Chief Executive Officer in connection with the review of our financial
statements as of December 31, 2008.
Management believes that the material weaknesses set forth in items (2) and (3)
above did not have an effect on our financial results. However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in ineffective
oversight in the establishment and monitoring of required internal controls and
procedures, which could result in a material misstatement in our financial
statements in future periods.
This annual report does not include an attestation report of the Corporation's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the
Corporation's registered public accounting firm pursuant to temporary rules of
the SEC that permit the Corporation to provide only the management's report in
this annual report.
MANAGEMENT'S REMEDIATION INITIATIVES
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control objectives
and will increase our personnel resources and technical accounting expertise
within the accounting function when funds are available to us. And, we plan to
appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.
Management believes that the appointment of one or more outside directors, who
shall be appointed to a fully functioning audit committee, will remedy the lack
of a functioning audit committee and a lack of a majority of outside directors
on our Board.
We anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2009. Additionally, we plan to test our updated
controls and remediate our deficiencies by December 31, 2009.
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CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, which has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
Directors of the corporation are elected by the stockholders to a term of one
year and serve until a successor is elected and qualified. Officers of the
corporation are appointed by the Board of Directors to a term of one year and
serves until a successor is duly appointed and qualified, or until he or she is
removed from office. The Board of Directors has no nominating, auditing or
compensation committees.
The name, address, age and position of our officer and director is set forth
below:
Name and Address Age Position(s)
---------------- --- -----------
Kristen Paul 45 President, Secretary,
15868 SW Kimball Avenue Chief Financial Officer,
Lake Oswego, OR 97035 Chief Executive Officer,
Sole Director
The person named above has held her offices/positions since the inception of our
Company and is expected to hold said offices/positions until the next annual
meeting of our stockholders. The officer and director is our only officer,
director, promoter and control person.
BACKGROUND INFORMATION ABOUT OUR OFFICER AND DIRECTOR
Kristen Paul has been president and CEO and Chairman of the Board of Directors
of the company since inception. Since 2005 Kristen has been designer, ceramist
and owner of Earth & Hand Studios. Kristen founded Earth & Hand Studios in 2005.
Prior to that, beginning in 1998, Kristen was a consultant and sales
representative for Braden Enterprises, the parent company of the Vic Braden
Tennis College and Vic Braden Sports Instruction, a video/DVD/book retail
business. Her experience, comprised of 15 years in sales and marketing, helped
launch a successful internet sales presence. Kristen spent 9 years in the
Entertainment Industry working with several production companies coordinating
television commercials, documentaries and music videos.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, and persons who own more than ten percent of our common
stock, to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes of ownership of our common stock. Officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish us with copies of all Section 16(a) forms they file.
33
We intend to ensure to the best of our ability that all Section 16(a) filing
requirements applicable to our officers, directors and greater than ten percent
beneficial owners are complied within a timely fashion.
CONFLICTS OF INTEREST
We believe that our officer and director may be subject to conflicts of
interest. The conflicts of interest arise from her being unable to devote full
time to our operations.
No policy has been implemented or will be implemented to address conflicts of
interest.
In the event our officer and director resigns from her position, there may be no
one to run our operations and our operations may be suspended or cease entirely.
CODE OF ETHICS
We do not currently have a code of ethics, because we have only limited business
operations and one officer and director, we believe a code of ethics would have
limited utility. We intend to adopt such a code of ethics as our business
operations expand and we have more directors, officers and employees.
ITEM 11. EXECUTIVE COMPENSATION
Currently, our officer and director receives no compensation for her services
during the exploration stage of our business operations. She is reimbursed for
any out-of-pocket expenses that she incurs on our behalf. In the future, we may
approve payment of salaries for officers and directors, but currently, no such
plans have been approved. We do not have any employment agreements in place with
our sole officer and director. We also do not currently have any benefits, such
as health or life insurance, available to our employees.
SUMMARY COMPENSATION TABLE
Change in
Pension
Value and
Non-Equity Nonqualified
Incentive Deferred All
Name and Plan Compen- Other
Principal Stock Option Compen- sation Compen-
Position Year Salary Bonus Awards Awards sation Earnings sation Totals
------------ ---- ------ ----- ------ ------ ------ -------- ------ ------
Kristen Paul, 2008 0 0 0 0 0 0 0 0
President, 2007 0 0 0 0 0 0 0 0
CEO, CFO
and Director
34
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards Stock Awards
----------------------------------------------------------------- ----------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options (#) Options (#) Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable Unexercisable Options (#) Price Date Vested(#) Vested Vested Vested
---- ----------- ------------- ----------- ----- ---- --------- ------ ------ ------
Kristen 0 0 0 0 0 0 0 0 0
Paul
DIRECTOR COMPENSATION
Change in
Pension
Value and
Fees Non-Equity Nonqualified
Earned Incentive Deferred
Paid in Stock Option Plan Compensation All Other
Name Cash Awards Awards Compensation Earnings Compensation Total
---- ---- ------ ------ ------------ -------- ------------ -----
Kristen Paul 0 0 0 0 0 0 0
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the date of this report, the total number
of shares owned beneficially by our director, officers and key employees,
individually and as a group, and the present owners of 5% or more of our total
outstanding shares. The stockholder listed below has direct ownership of her
shares and possesses sole voting and dispositive power with respect to the
shares.
Name and Address of No. of Percentage
Beneficial Owner Shares of Ownership
---------------- ------ ------------
Kristen Paul 3,000,000 75%
15868 SW Kimball Avenue
Lake Oswego, OR 97035
All Officers and
Directors as a Group 3,000,000 75%
FUTURE SALES BY EXISTING STOCKHOLDERS
A total of 3,000,000 shares have been issued to the existing stockholder, all of
which are held by our sole officer and director and are restricted securities,
as that term is defined in Rule 144 of the Rules and Regulations of the SEC
35
promulgated under the Act. Under Rule 144, such shares can be publicly sold,
subject to volume restrictions and certain restrictions on the manner of sale,
commencing six months after their acquisition. Any sale of shares held by the
existing stockholder (after applicable restrictions expire) may have a
depressive effect on the price of our common stock in any market that may
develop, of which there can be no assurance.
Our principal shareholder does not have any plans to sell her shares at any time
after this offering is complete.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Kristen Paul is our sole officer and director. We are currently operating out of
the premises of Kristen Paul on a rent-free basis for administrative purposes.
There is no written agreement or other material terms or arrangements relating
to said arrangement.
On October 15, 2007 the Company issued a total of 3,000,000 shares of common
stock to Kristen Paul for cash at $0.005 per share for a total of $15,000.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
For the year ended December 31, 2008, the total fees charged to the company for
audit services, including quarterly reviews, were $8950, for audit-related
services were $Nil, for tax services were $Nil and for other services were $Nil.
The total fees charged to the company for audit services were $Nil, for
audit-related services, including quarterly reviews, were $Nil, for tax services
were $Nil and for other services were $Nil during the year ended December 31,
2007.
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PART IV
ITEM 15. EXHIBITS
The following exhibits are included with this quarterly filing. Those marked
with an asterisk and required to be filed hereunder, are incorporated by
reference and can be found in their entirety in our registration statement on
form S-1, filed under SEC File Number 333-149626, at the S.E.C. website at
www.sec.gov:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
31.1 Sec. 302 Certification of Principal Executive Officer
31.2 Sec. 302 Certification of Principal Financial Officer
32.1 Sec. 906 Certification of Principal Executive Officer
32.2 Sec. 906 Certification of Principal Financial Officer
SIGNATURES
Pursuant to the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
February 4, 2009 Wolfe Creek Mining, Inc., Registrant
By: /s/ Kristen Paul
---------------------------------------------------
Kristen Paul, President and Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
February 4, 2009 Wolfe Creek Mining, Inc., Registrant
By: /s/ Kristen Paul
----------------------------------------------------
Kristen Paul, President, Secretary and Treasurer
Chief Financial Officer (Principal Executive Officer
and Principal Accounting Officer)
37