UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended October 31, 2010
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
Commission file number: 333-164908
KOPR RESOURCES CORP.
(Exact name of registrant as specified in its charter)
Delaware 41-2252162
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
670 Kent Avenue
Teaneck, NJ 07666 (201) 410-9400
(Address, including zip code of (Registrant's telephone number,
principal executive offices) including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE EXCHANGE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE EXCHANGE ACT:
None
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 of 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 whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.229.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). * Yes [ ] No [ ]
* The registrant has not yet been phased into the interactive data requirements.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) 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.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
No market value has been computed based upon the fact that no active trading
market had been established as of January 6, 2011
As of January 6, 2011, the registrant's outstanding common stock consisted of
3,501,500 shares.
TABLE OF CONTENTS
Part I
Page
----
Item 1 Business 3
Item 1A Risk Factors 7
Item 1B Unresolved Staff Comments 14
Item 2 Properties 14
Item 3 Legal Proceedings 14
Item 4 [Removed and Reserved] 14
PART II
Item 5 Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities 14
Item 6 Selected Financial Data 15
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations 16
Item 8 Financial Statements 20
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 31
Item 9A Controls and Procedures 31
Item 9B Other Information 32
PART III
Item 10 Directors, Executive Officers and Corporate Governance 32
Item 11 Executive Compensation 35
Item 12 Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 35
Item 13 Certain Relationships and Related Transactions and Director
Independence 36
Item 14 Principal Accounting Fees and Services 36
PART IV
Item 15 Exhibits, Financial Statement Schedules 37
Signatures 37
2
PART I
ITEM 1 BUSINESS
THE COMPANY
Kopr Resources Corp. (the "Company", "we") was incorporated on July 23, 2007 in
the state of Delaware. We are engaged in the business of acquisition and
exploration of mineral properties, primarily for copper and other metals. The
Company has staked a claim on certain property located in the Osoyoos Mining
Division of British Columbia, Canada. This property consists of one claim held
by Reza Mohammed (the "Trustee") under Declaration of Trust dated November 28,
2007 in favor of the Company and is located about 15 km north of the town of
Keremeos in south central British Columbia. We refer to this claim as the
"Property" or the "Claim" throughout this Report. We are presently in the
exploration stage at the Property. We have not generated revenue from mining
operations. Our independent auditor has issued an audit opinion which includes a
statement expressing substantial doubt as to our ability to continue as a going
concern. In August of 2007 we engaged George Coetzee, an exploration and mine
geologist, to assess the Property for mineral occurrences. To date, we have
incurred expenses of $5,500 for the report. The source of information contained
in this discussion is our geological report which was included as Exhibit 99.1
in our Form S-1 registration statement filed with the SEC on February 13, 2009.
Our principal offices are located at 670 Kent Avenue, Teaneck, NJ 07666. Our
telephone number is (201) 410-9400.
ACQUISITION OF THE MINERAL CLAIM
The Claim is assigned Tenure Number 541991 and is recorded in the name of Reza
Mohammed. The Claim is in good standing to January 26, 2011. In order to retain
title to the Property, exploration work costs must be recorded and filed with
the British Columbia Department of Energy Mines and Petroleum Resources
("BCDM"). The Company will file the required information with the BCDM in
January 2011.
REQUIREMENTS OR CONDITIONS FOR RETENTION OF TITLE
Title to the property has been granted to Reza Mohammed, who holds the claim in
trust for the Company. To obtain a Free Miner's Certificate, which is required
to hold a mining claim in British Columbia, Section 8(1) of the B.C. Mineral
Tenure Act (MTA) stipulates that a corporation must be registered under the
British Columbia Business Corporations Act. Section 8(2) of the MTA stipulates
that an individual applicant must either be a resident of Canada or be
authorized to work in Canada. As the Company is not registered in British
Columbia, the Claim is held in trust for the Company by Mr. Mohammed who is a
Canadian citizen. The Claim was staked using the British Columbia Mineral Titles
Online computer Internet system.
All claims staked in British Columbia require $0.40 per hectare worth of
assessment work to be undertaken in year 1 through 3, followed by $0.80 per
hectare per year thereafter. In order to retain title to the Property,
exploration work costs must be recorded and filed with the British Columbia
Department of Energy Mines and Petroleum Resources ("BCDM"). The BCDM charges a
filing fee, equal to 10% of the value of the work recorded, to record the work.
PROPERTY DESCRIPTION AND LOCATION
The Property consists of one mineral claim held by the Trustee in favor of the
Company and is located in the Osoyoos Mining Division of British Columbia,
Canada covering an area of 505.292 hectares. The Property is located about 15 km
north of the town of Keremeos in south central British Columbia west of Highway
3A North, approximately 473 km east of Vancouver. The Property terrain is of
mainly steep to moderate relief, well forested and occupies the western slope of
a mountain with an elevation of 1760m. The highest mountain peak, at 2235m is
located above 4.5 km northwest of the Property.
3
The Property covers an area where the location of the Kopr showing has been
documented in MINFILE No. 082EDW050 by the British Columbia Ministry of Energy,
Mines and Petroleum Resources. There has been a limited amount of geological
work conducted over the years on the Property. The only recorded assessment work
was by Apex Exploration and Mining Co. Ltd during 1979 to 1980 in the vicinity
of an old adit which probably dates back to the early 1900s.
The underlying rocks in the Property area consist of a series of Carboniferous
to Triassic volcanic and sedimentary rocks that have been intruded by granitic
Okanagan intrusions. Larger intrusions are composed of granite and grandiorite,
while smaller stocks are composed of diorite and gabbro. Numerous sills, dikes
and apophyses are associated. Carboniferous to Triassic rocks are assigned to
the Shoemaker and Old Tom formations. These rocks form the eastern limb of a
large anticlinal fold with fold axes striking roughly north. The Shoemaker
consists of cherts, greenstone and minor argillite. A showing depicted as a
copper skarn was identified on the Property. A mineralized pyrrhotite copper
skarn zone and a few other small showings have been sampled. Due to dense
forest, the location of the old adit depicted in the MINFILE report remains
unknown.
The Company retained a consultant, George Coetzee, who has worked as an
exploration and mine geologist for 24 years. George Coetzee personally examined
the Property and the immediate surrounding area on August 31 and September 1,
2007. Mr. Coetzee graduated with a BSc (Honors) in Geology from University of
Pretoria in South Africa in 1981 and is a member of the Society of Economic
Geologists. He has worked as an exploration and mine geologist for more than 24
years in South Africa, North America and Mexico. We have a verbal agreement with
Mr. Coetzee to conduct the exploration program. However; there is the
possibility that our Claim does not contain any reserves, resulting in any funds
spent on exploration being lost.
The consultant studied a compilation of published data, maps and reports
available from the British Columbia Governmental geological database. The
consultant examined the geology of the Property and its immediate surrounding
area in August and September of 2007 to locate skarn copper occurrence and to
determine the mode of development and assess the mineral potential of the
Property. The consultant located a copper skarm occurrence but was unable to
locate the adit identified on the British Columbia Government MINFILE database
at the geographical coordinates provided. The adit may have been mismapped or
inaccurately surveyed. The consultant speculates that detailed reconnaissance
would reveal the location of the adit and mineralization in the largely dense
wooded terrain.
MINERAL PROPERTY EXPLORATION
Mineral property exploration is typically conducted in phases. We have not yet
commenced the initial phase of exploration on the Property. However, our
geologist recommends the exploration work based on the results from his
assessment of the Property. After we have completed each phase of exploration
and analyzed the results, we will make a decision as to whether we will proceed
with each successive phase. The decision will be made based upon the results
obtained in the previous phase. Our goal in exploration of the Property is to
ascertain whether it possesses commercially viable metal or mineral deposits. We
cannot assure you that any economical mineral deposits exist on the Property
until appropriate exploration work is completed. Even if we complete our
proposed exploration program on the Property and we are successful in
identifying a mineral deposit, we will have to spend substantial funds on
further drilling and engineering studies before we will know if we have a
commercially viable mineral deposit.
GEOLOGICAL REPORT
We retained the services of a consultant, George Coetzee, an exploration and
mine geologist, to complete an assessment of the Claim and to prepare an
assessment report on the Claim.
Mr. Coetzee has worked as an exploration and mine geologist for more than 24
years in South Africa, Canada and Mexico. Mr. Coetzee graduated from the
University of Pretoria in South Africa in 1981 with a Bachelor of Science degree
in Geology.
Based on his review, Mr. Coetzee recommends a two-phase program of exploration
on the Property.
4
The first phase of exploration would include the following:
* Further reconnaissance prospecting entailing silt sampling of all
creeks draining the Property area;
* Geological mapping and examination of all rock outcrops for potential
sulphide mineralization; and
* Ground geological survey over the magnetic anomalies highlighted by a
previous MAG airborne survey as well as new targets identified by the
mapping program.
The first phase is estimated to cost $28,640 as described below
BUDGET - FIRST PHASE
Geologist 10 days @$500 per day $ 5,000
Two Assistants 8 days @ $400 per day 3,200
Technologist 6 days @ $300 per day 1,800
Vehicle 10 days @ $100 day 1,000
Rock Samples 30 @ $50 each 1,500
Silt Samples 40 @ $40 1,600
Lodging @ $120 per day per person 3,840
Expenses, food, fuel and field supplies 2,200
Magnetometer Survey 6,000
Report 2,500
-------
$28,640
=======
After the completion of the first phase of the exploration program, we will have
review the results and conclusions and evaluate the advisability of additional
exploration work on the Property The second phase of exploration, if warranted,
would include trenching and a localized geochemical soil sampling program over
the magnetic anomalies and showings and proposed budget of $25,480.
BUDGET - SECOND PHASE
Bond $ 5,000
Geologist 7 days @$500 per day 3,500
Assistant 7 days @ $200 per day 1,400
Vehicle 7 days @ $100 day 700
Rock Samples 10 @ $50 each 500
Soil Samples 150 @ $40 6,000
Expenses, food and field supplies 1,200
Report 1,500
Lodging 7 days @$120/day/person 1,680
Trenching 4,000
-------
$25,480
=======
We would need additional financing to cover these exploration costs, although we
currently do not have any specific financing arranged. Further exploration would
be subject to the availability of financing.
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 Canada generally, and in British Columbia specifically.
5
We will have to sustain the cost of reclamation and environmental mediation for
all exploration and development work undertaken. The amount of these costs is
not known at this time as we do not know the extent of the exploration program
that will be undertaken. Because there is presently no information on the size,
tenor, or quality of any resource or reserve at this time, it is impossible to
assess the impact of any capital expenditures on earnings or our competitive
position in the event a potentially economic deposit is discovered.
If we enter into production, the cost of complying with permit and regulatory
environmental laws will be greater than in the exploration phases because the
impact on the project area is greater. Permits and regulations will control all
aspects of any production program if the project continues to that stage because
of the potential impact on the environment. Examples of regulatory requirements
include:
- Water discharge will have to meet water standards;
- Dust generation will have to be minimal or otherwise re-mediated;
- Dumping of material on the surface will have to be re-contoured and
re-vegetated;
- All material to be left on the surface will need to be assessed to
ensure that it is environmentally benign;
- Groundwater will have to be monitored for any potential contaminants;
- The socio-economic impact of the project will have to be evaluated and
if deemed negative, will have to be re-mediated; and
- There will have to be an impact report of the work on the local fauna
and flora.
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 of these applications on an ongoing basis.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
At present, we have no employees and no employment agreements. Our President
provides services on a consultant basis. We anticipate that we will be
conducting most of our business through agreement with consultants and third
parties.
REPORTS TO SECURITY HOLDERS
We make our financial information available to any interested parties or
investors through compliance with the disclosure rules of Regulation S-K for a
smaller reporting company under the Securities Exchange Act of 1934. We became
subject to disclosure filing requirements on March 9, 2009 when the SEC declared
our S-1 Registration Statement effective. The public may read and copy any
materials that we file with the Securities and Exchange Commission, ("SEC"), at
the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site
(http://www.sec.gov) that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the SEC.
6
ITEM 1A RISK FACTORS
RISKS RELATING TO OUR COMPANY
OUR ONLY MINING PROPERTY IS ONE MINING CLAIM, THE FEASIBILITY OF WHICH HAS NOT
BEEN ESTABLISHED AS WE HAVE NOT COMPLETED EXPLORATION OR OTHER WORK NECESSARY TO
DETERMINE IF IT IS COMMERCIALLY FEASIBLE TO DEVELOP THE PROPERTY.
We are currently an exploration stage mining company. Our only mining asset is
one mining claim on the Property. The Property does not have any proven or
probable reserves. A "reserve," as defined by the SEC, is that part of a mineral
deposit which could be economically and legally extracted or produced at the
time of the reserve determination. A reserve requires a feasibility study
demonstrating with reasonable certainty that the deposit can be economically
extracted and produced. We have not carried out any feasibility study with
regard to the Property. As a result, we currently have no reserves and there are
no assurances that we will be able to prove that there are reserves on the
Property.
WE MAY NEVER FIND COMMERCIALLY VIABLE COPPER OR OTHER RESERVES.
Mineral exploration and development involve a high degree of risk and few
properties that are explored are ultimately developed into producing mines. We
cannot assure you that any future mineral exploration and development activities
will result in any discoveries of proven or probable reserves as defined by the
SEC since such discoveries are remote. Further, we cannot provide any assurance
that, even if we discover commercial quantities of mineralization, a mineral
property will be brought into commercial production. Development of our mineral
properties will follow only upon obtaining sufficient funding and satisfactory
exploration results.
WE WILL REQUIRE SIGNIFICANT ADDITIONAL CAPITAL TO CONTINUE OUR EXPLORATION
ACTIVITIES, AND, IF WARRANTED, TO DEVELOP MINING OPERATIONS.
Exploration activities and, if warranted, development of the Property will
involve significant expenditures. We will be required to raise significantly
more capital in order to fully develop the Property for mining production
assuming that economically viable reserves exist. There is no assurance that the
exploration will disclose potential for mineral development and no assurance
that any such development would be financially productive. Our ability to obtain
necessary funding depends upon a number of factors, including the price of
copper and other base metals and minerals which we are able to mine, the status
of the national and worldwide economy and the availability of funds in the
capital markets. If we are unable to obtain the required financing for these or
other purposes, our exploration activities would be delayed or indefinitely
postponed, and this would likely, eventually, lead to failure of our Company.
Even if financing is available, it may be on terms that are not favorable to us,
in which case, our ability to become profitable or to continue operating would
be adversely affected. If we are unable to raise funds to continue our
exploration and feasibility work on the Property, or if commercially viable
reserves are not present, the market value of our securities will likely
decline, and our investors may lose some or all of their investment.
WE HAVE INCURRED LOSSES SINCE OUR INCORPORATION IN 2007 AND MAY NEVER BE
PROFITABLE WHICH RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A
GOING CONCERN.
Since the Company was incorporated July 23, 2007, we have had limited operations
and incurred operating losses. As of October 31, 2010, our accumulated deficit
since inception is $143,016. As we are just beginning exploration activities on
the Property, we expect to incur additional losses in the foreseeable future,
and such losses may be significant. To become profitable, we must be successful
in raising capital to continue with our exploration activities, discover
economically feasible mineralization deposits and establish reserves,
successfully develop the Property and finally realize adequate prices on our
minerals in the marketplace. It could be years before we receive any revenues
from copper and mineral production, if ever. Thus, we may never be profitable.
Even if we do achieve profitability, we may not be able to sustain or increase
profitability on a long-term basis. These circumstances raise substantial doubt
about our ability to continue as a going concern as described in Note 1 of the
Notes to Financial Statements included in this Report. If we are unable to
continue as a going concern, investors will likely lose all of their investment
in the Company.
7
BECAUSE WE HAVE NOT YET COMMENCED BUSINESS OPERATIONS, EVALUATING OUR BUSINESS
IS DIFFICULT.
We were incorporated on July 23, 2007, and to date have been involved primarily
in organizational activities. We have not earned revenues as of the date of this
Report and have incurred total losses of $143,016 from inception to October 31,
2010.
Accordingly, our business and our future prospects cannot be evaluated due to
our lack of operating history. To date, our business development activities have
consisted solely of organizational activities. Potential investors should be
aware of the difficulties normally encountered by development stage companies
and the high rate of failure of such enterprises. In addition, there is no
guarantee that we will commence business operations. Even if we do commence
operations, at present, we do not know when.
Furthermore, prior to completion of our exploration stage, we anticipate that we
will incur increased operating expenses without realizing any revenues. We
therefore expect to incur significant losses into the foreseeable future. We
recognize that if we are unable to generate significant revenues from
development of the Claim and any production of minerals from the Claim, we will
not be able to earn profits or continue operations.
VERY FEW MINERAL PROPERTIES ARE ULTIMATELY DEVELOPED INTO PRODUCING MINES.
The business of exploration for minerals and mining involves a high degree of
risk. Few properties that are explored are ultimately developed into producing
mines. At present, the Claim has no known body of commercial mineralization.
Most exploration projects do not result in the discovery of commercially
mineable deposits of mineralization.
Substantial expenditures are required for the Company to establish
mineralization reserves through drilling, to develop metallurgical processes, to
extract the metal from the ore and, in the case of new properties, to develop
the mining and processing facilities and infrastructure at any site chosen for
mining.
Although substantial benefits may be derived from the discovery of a major
mineral deposit, we cannot assure you that the Company will discover minerals in
sufficient quantities to justify commercial operations or that it can obtain the
funds required for development on a timely basis. The economics of developing
precious and base metal mineral properties is affected by many factors including
the cost of operations, variations in the grade of ore mined, fluctuations in
metal markets, costs of processing equipment and other factors such as
government regulations, including regulations relating to royalties, allowable
production, importing and exporting of minerals and environmental protection.
HISTORICAL PRODUCTION OF MINERALS AT PROPERTIES IN THE AREA OF THE CLAIM MAY NOT
BE INDICATIVE OF THE POTENTIAL FOR FUTURE DEVELOPMENT OR REVENUE.
Historical production of metals and minerals from mines in the area of the Claim
cannot be relied upon as an indication that the Claim will have commercially
feasible reserves. Investors in our securities should not rely on historical
operations of mines in the area of the Claim as an indication that we will be
able to place the Property into commercial production. We expect to incur losses
unless and until such time as the Property enters into commercial production and
produces sufficient revenue to fund our continuing operations.
FLUCTUATING COPPER, METAL AND MINERAL PRICES COULD NEGATIVELY IMPACT OUR
BUSINESS PLAN.
The potential for profitability of our copper and other metal and mineral mining
operations and the value of the Property will be directly related to the market
price of copper and the metals and minerals that we mine. Historically, copper
and other mineral prices have widely fluctuated, and are influenced by a wide
variety of factors, including inflation, currency fluctuations, regional and
global demand and political and economic conditions. Fluctuations in the price
of copper and other minerals that we mine may have a significant influence on
the market price of our common stock and a prolonged decline in these prices
will have a negative effect on our results of operations and financial
condition.
8
RECLAMATION OBLIGATIONS ON THE PROPERTY AND OUR MINING OPERATIONS, IF ANY, COULD
REQUIRE SIGNIFICANT ADDITIONAL EXPENDITURES.
We are responsible for the reclamation obligations related to any exploratory
and mining activities located on the Property. Since we have only begun
exploration activities, we cannot estimate these costs at this time. We may be
required to file for a reclamation bond for any mining operations which we
conduct, and the cost of such a bond will be significant. We do not currently
have an estimate of the total reclamation costs for mining operations on the
Property. The satisfaction of current and future bonding requirements and
reclamation obligations will require a significant amount of capital. There is a
risk that we will be unable to fund these additional bonding requirements, and
further, that increases to our bonding requirements or excessive actual
reclamation costs will negatively affect our financial position and results of
operation.
TITLE TO MINERAL PROPERTIES CAN BE UNCERTAIN, AND WE ARE AT RISK OF LOSS OF
OWNERSHIP OF OUR PROPERTY.
Our ability to explore and mine the Property depends on the validity of title to
the Property. The Property consists of a mining claim. Unpatented mining claims
are effectively only a lease from the government to extract minerals; thus an
unpatented mining claim is subject to contest by third parties or the
government. These uncertainties relate to such things as the sufficiency of
mineral discovery, proper posting and marking of boundaries, failure to meet
statutory guidelines, assessment work and possible conflicts with other claims
not determinable from descriptions of record. Since a substantial portion of all
mineral exploration, development and mining now occurs on unpatented mining
claims, this uncertainty is inherent in the mining industry. We have not
obtained a title opinion on the Property. Thus, there may be challenges to the
title to the Property which, if successful, could impair development and/or
operations.
OUR ONGOING OPERATIONS ARE SUBJECT TO ENVIRONMENTAL RISKS, WHICH COULD EXPOSE US
TO SIGNIFICANT LIABILITIES, DELAY, SUSPENSION OR TERMINATION OF OUR OPERATIONS.
Mining exploration and exploitation activities are subject to national,
provincial and local laws, regulations and policies, including laws regulating
the removal of natural resources from the ground and the discharge of materials
into the environment. These regulations mandate, among other things, the
maintenance of air and water quality standards and land reclamation. They also
set forth limitations on the generation, transportation, storage and disposal of
solid and hazardous waste. Exploration and exploitation activities are also
subject to national, provincial and local laws and regulations which seek to
maintain health and safety standards by regulating the design and use of
exploration methods and equipment.
National and provincial agencies may initiate enforcement activities against our
Company. The agencies involved, generally, can levy significant fines per day of
each violation, issue and enforce orders for clean-up and removal, and enjoin
ongoing and future activities. Our inability to reach acceptable agreements with
agencies in question would have a material adverse effect on us and our ability
to continue as a going concern.
Environmental and other legal standards imposed by national, provincial or local
authorities are constantly evolving, and typically in a manner which will
require stricter standards and enforcement, and increased fines and penalties
for non-compliance. Such changes may prevent us from conducting planned
activities or increase our costs of doing so, which would have material adverse
effects on our business. Moreover, compliance with such laws may cause
substantial delays or require capital outlays in excess of those anticipated,
thus causing an adverse effect on us. Additionally, we may be subject to
liability for pollution or other environmental damages that we may not be able
to or elect not to insure against due to prohibitive premium costs and other
reasons. Unknown environmental hazards may exist on the Property or upon
properties that we may acquire in the future caused by previous owners or
operators, or that may have occurred naturally.
WEATHER INTERRUPTIONS IN THE AREA OF THE PROPERTY MAY DELAY OR PREVENT
EXPLORATION.
The terrain of the Property is of mainly steep to moderate relief and occupies
the western slope of a mountain with an elevation of 1760 meters in British
Columbia, Canada. The area is subject to extreme winter conditions which may
delay or prevent exploration of the Property during the winter months.
9
OUR INDUSTRY IS HIGHLY COMPETITIVE, ATTRACTIVE MINERAL LANDS ARE SCARCE AND WE
MAY NOT BE ABLE TO OBTAIN QUALITY PROPERTIES OR RECRUIT AND RETAIN QUALIFIED
EMPLOYEES.
We compete with many companies in the mining industry, including large,
established mining companies with capabilities, personnel and financial
resources that far exceed our limited resources. In addition, there is a limited
supply of desirable mineral lands available for claim-staking, lease or
acquisition in British Columbia, and other areas where we may conduct
exploration activities. We are at a competitive disadvantage in acquiring
mineral properties, since we compete with these larger individuals and
companies, many of which have greater financial resources and larger technical
staffs. Likewise, our competition extends to locating and employing competent
personnel and contractors to prospect, develop and operate mining properties.
Many of our competitors can offer attractive compensation packages that we may
not be able to meet. Such competition may result in our Company being unable not
only to acquire desired properties, but to recruit or retain qualified employees
or to acquire the capital necessary to fund our operation and advance our
properties. Our inability to compete with other companies for these resources
would have a material adverse effect on our results of operation and business.
BECAUSE MARKET FACTORS IN THE MINING BUSINESS ARE OUT OF OUR CONTROL, WE MAY NOT
BE ABLE TO MARKET ANY MINERALS THAT MAY BE FOUND. The mining industry, in
general, is intensely competitive and we can provide no assurance to investors
that even if minerals are discovered, a ready market will exist from the sale of
any ore found. Numerous factors beyond our control may affect the marketability
of metals. These factors include market fluctuations, the proximity and capacity
of natural resource markets and processing equipment, government regulations,
including regulations relating to prices, taxes, royalties, land tenure, land
use, importing and exporting of minerals and environmental protection. The exact
effect of these factors cannot be accurately predicted, but the combination of
these factors may result in our not receiving an adequate return on invested
capital.
WE DEPEND ON OUR PRINCIPAL EXECUTIVE OFFICER AND THE LOSS OF THIS INDIVIDUAL
COULD ADVERSELY AFFECT OUR BUSINESS.
Our Company is completely dependent on Andrea Schlectman, our President,
Principal Executive Officer, Principal Financial Officer and Director. As of the
date of this Report, Andrea Schlectman was our sole executive officer and one of
our directors. The loss of Ms. Schlectman's services would significantly and
adversely affect our business. We have no life insurance on the life of Andrea
Schlectman.
MANAGEMENT HAS ONLY LIMITED EXPERIENCE IN RESOURCE EXPLORATION.
The Company's management, while experienced in business operations, has only
limited experience in resource exploration. The sole executive officer of the
Company has no significant technical training or experience in resource
exploration or mining. The Company relies on the opinions of consulting
geologists that it retains from time to time for specific exploration projects
or property reviews. As a result of management's inexperience, there is a higher
risk of the Company being unable to complete its business plan. To date, the
only mining consultant retained by the Company is George Coetzee who prepared an
assessment report on the Property which was attached as Exhibit 99.1 to the
Company's registration statement on Form S-1 filed with the SEC on February 13,
2009.
THE NATURE OF MINERAL EXPLORATION AND PRODUCTION ACTIVITIES INVOLVES A HIGH
DEGREE OF RISK AND THE POSSIBILITY OF UNINSURED LOSSES THAT COULD MATERIALLY AND
ADVERSELY AFFECT OUR OPERATIONS.
Exploration for minerals is highly speculative and involves greater risk than
many other businesses. Many exploration programs do not result in the discovery
of economically feasible mineralization. Few properties that are explored are
ultimately advanced to the stage of producing mines. We are subject to all of
the operating hazards and risks normally incident to exploring for and
developing mineral properties such as, but not limited to:
* economically insufficient mineralized material;
* fluctuations in production costs that may make mining uneconomical;
10
* labor disputes;
* unanticipated variations in grade and other geologic problems;
* environmental hazards;
* water conditions;
* difficult surface or underground conditions;
* industrial accidents; personal injury, fire, flooding, cave-ins and
landslides;
* metallurgical and other processing problems;
* mechanical and equipment performance problems; and
* decreases in revenues and reserves due to lower gold and mineral
prices.
Any of these risks can materially and adversely affect, among other things, the
development of properties, production quantities and rates, costs and
expenditures and production commencement dates. We currently have no insurance
to guard against any of these risks. If we determine that capitalized costs
associated with any of our mineral interests are not likely to be recovered, we
would incur a write-down of our investment in these interests. All of these
factors may result in losses in relation to amounts spent which are not
recoverable.
OUR OPERATIONS ARE SUBJECT TO PERMITTING REQUIREMENTS WHICH COULD REQUIRE US TO
DELAY, SUSPEND OR TERMINATE FUTURE OPERATIONS ON OUR MINING PROPERTY.
Our operations, including our planned exploration activities on the Property,
require permits from the provincial and national governmental agencies. We may
be unable to obtain these permits in a timely manner, on reasonable terms or at
all. If we cannot obtain or maintain the necessary permits, or if there is a
delay in receiving these permits, our timetable and business plan for
exploration of the Property will be adversely affected.
MINERAL EXPLORATION INVOLVES A HIGH DEGREE OF RISK AGAINST WHICH THE COMPANY IS
NOT CURRENTLY INSURED.
Unusual or unexpected rock formations, formation pressures, fires, power
outages, labor disruptions, flooding, cave-ins, landslides and the inability to
obtain suitable or adequate machinery, equipment or labor are risks involved in
the operation of mines and the conduct of exploration programs. The Company has
relied on and will continue to rely upon consultants and others for exploration
expertise.
It is not always possible to fully insure against such risks, and the Company
may decide not to take out insurance against such risks as a result of high
premiums or other reasons. Should such liabilities arise, they could reduce or
eliminate any future profitability and result in increasing costs and a decline
in the value of the Company's shares. The Company does not currently maintain
insurance against environmental risks relating to the Claim.
BECAUSE WE WILL HOLD ALL OF OUR CASH RESERVES IN UNITED STATES DOLLARS, WE MAY
EXPERIENCE WEAKENED PURCHASING POWER IN CANADIAN DOLLAR TERMS AND MAY NOT BE
ABLE TO AFFORD TO CONDUCT OUR PLANNED EXPLORATION PROGRAM.
Any cash reserves available to the Company will be held in United States
dollars. Due to foreign exchange rate fluctuations, the value of these United
States dollar reserves can result in both translation gains and losses in
Canadian dollar terms. If there is a significant decline in the US dollar versus
the Canadian Dollar, our US dollar purchasing power in Canadian dollars would
also significantly decline. If a there is a significant decline in the US dollar
11
we would not be able to afford to conduct our planned exploration program. We
have not entered into derivative instruments to offset the impact of foreign
exchange fluctuations.
MINING ACCIDENTS OR OTHER MATERIAL ADVERSE EVENTS AT OUR MINING LOCATIONS MAY
REDUCE OUR PRODUCTION LEVELS.
If we are able to advance to production on the Property, production may fall
below historic or estimated levels as a result of mining accidents, such as a
pit wall failure in an open pit mine, or cave-ins or flooding at underground
mines. In addition, production may be unexpectedly reduced at a location if,
during the course of mining, unfavorable ground conditions or seismic activity
are encountered, ore grades are lower than expected, the physical or
metallurgical characteristics of the ore are less amenable to mining or
treatment than expected, or our equipment, processes or facilities fail to
operate properly or as expected.
THE COSTS TO MEET OUR REPORTING AND OTHER REQUIREMENTS AS A PUBLIC COMPANY
SUBJECT TO THE SECURITIES EXCHANGE ACT OF 1934 WILL BE SUBSTANTIAL AND MAY
RESULT IN US HAVING INSUFFICIENT FUNDS TO EXPAND OUR BUSINESS OR EVEN TO MEET
ROUTINE BUSINESS OBLIGATIONS.
Since having become subject to the reporting requirements of the Securities
Exchange Act of 1934, we will incur ongoing expenses associated with
professional fees for accounting, legal and a host of other expenses for annual
reports and proxy statements. We estimate that these costs will range up to
$50,000 per year for the next few years and will be higher if our business
volume and activity increases but lower during the first year of being a public
company because our overall business volume will be lower, and we will not yet
be subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002.
These obligations will reduce our ability and resources to fund other aspects of
our business and may prevent us from meeting our normal business obligations.
RISKS ASSOCIATED WITH OUR COMMON STOCK
TRADING ON THE OTC BULLETIN BOARD MAY BE VOLATILE AND SPORADIC, WHICH COULD
DEPRESS THE MARKET PRICE OF OUR COMMON SHARES AND MAKE IT DIFFICULT FOR OUR
SHAREHOLDERS TO RESELL THEIR SHARES.
Our common shares are quoted on the OTC Bulletin Board service of the Financial
Industry Regulatory Authority (FINRA). Trading in stock quoted on the OTC
Bulletin Board is often thin and characterized by wide fluctuations in trading
prices due to many factors that may have little to do with our operations or
business prospects. This volatility could depress the market price of our common
shares for reasons unrelated to operating performance. Moreover, the OTC
Bulletin Board is not a stock exchange, and trading of securities on the OTC
Bulletin Board is often more sporadic than the trading of securities listed on a
quotation system like NASDAQ or a stock exchange like the American Stock
Exchange. Accordingly, our shareholders may have difficulty reselling any of
their shares.
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S
PENNY STOCK REGULATIONS AND FINRA'S SALES PRACTICE REQUIREMENTS, WHICH MAY LIMIT
A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.
Our stock is a penny stock. The Securities and Exchange Commission has adopted
Rule 15g-9 which generally defines "penny stock" to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exceptions. Our securities are
covered by the penny stock rules; which impose additional sales practice
requirements on broker-dealers who sell to persons other than established
customers and "accredited investors". The term "accredited investor" refers
generally to institutions with assets in excess of $5,000,000 or individuals
with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. 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 in a form prepared
by the SEC which provides information about penny stocks and the nature and
level of risks in the penny stock market. The broker-dealer also must provide
the customer with current 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. The bid and offer quotations, and the broker-dealer and
12
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these 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 agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in, and limit the marketability of, our common shares.
FINRA'S SALES PRACTICE REQUIREMENTS MAY ALSO LIMIT A STOCKHOLDER'S ABILITY TO
BUY AND SELL OUR STOCK.
In addition to the "penny stock" rules promulgated by the Securities and
Exchange Commission (see above for a discussion of penny stock rules), FINRA
rules require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for
that customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common shares, which may limit your ability to buy and sell our stock and have
an adverse effect on the market for our shares.
ONE SHAREHOLDER OWNS 71.4% OF OUR OUTSTANDING COMMON STOCK, WHICH LIMITS OTHER
SHAREHOLDERS' ABILITY TO INFLUENCE THE OUTCOME OF ANY SHAREHOLDER VOTE.
Our sole executive officer and a director beneficially owns 71.4% of our
outstanding common stock as of the date of this Report. Under our Certificate of
Incorporation and the laws of the State of Delaware, the vote of a majority of
the shares voting at a meeting at which a quorum is present is generally
required to approve most shareholder action. As a result, she is able to control
the outcome of shareholder votes, including votes concerning the election of
directors, amendments to our Certificate of Incorporation or proposed mergers or
other significant corporate transactions.
CERTAIN COMPANY ACTIONS AND THE INTERESTS OF STOCKHOLDERS MAY DIFFER.
The voting control of the Company could discourage others from initiating a
potential merger, takeover or another change-of-control transaction that could
be beneficial to stockholders. As a result, the value of stock could be harmed.
THE COMPANY IS SUBJECT TO RIGHTS OF PREFERRED STOCKHOLDERS INCLUDING MANDATORY
REDEMPTION.
The Company has authorized 75,000,000 shares of blank check preferred stock none
of which is currently outstanding. Upon issuance of any preferred stock in the
future, the rights attached to the preferred shares could affect the Company's
ability to operate, which could force the Company to seek other financing. Such
financing may not be available on commercially reasonable terms or at all and
could cause substantial dilution to existing stockholders.
WE HAVE NEVER PAID A DIVIDEND ON OUR COMMON STOCK AND WE DO NOT ANTICIPATE
PAYING ANY IN THE FORESEEABLE FUTURE.
We have not paid a cash dividend on our common stock to date, and we do not
intend to pay cash dividends in the foreseeable future. Our ability to pay
dividends will depend on our ability to successfully develop one or more
properties and generate revenue from operations. Notwithstanding, we will likely
elect to retain earnings, if any, to finance our growth. Future dividends may
also be limited by bank loan agreements or other financing instruments that we
may enter into in the future. The declaration and payment of dividends will be
at the discretion of our Board of Directors.
13
WE HAVE NOT VOLUNTARILY IMPLEMENTED VARIOUS CORPORATE GOVERNANCE MEASURES, IN
THE ABSENCE OF WHICH, SHAREHOLDERS MAY HAVE MORE LIMITED PROTECTIONS AGAINST
INTERESTED DIRECTOR TRANSACTIONS, CONFLICTS OF INTEREST AND SIMILAR MATTERS.
Recent U. S. legislation, including the Sarbanes-Oxley Act of 2002, has resulted
in the adoption of various corporate governance measures designed to promote the
integrity of the corporate management and the securities markets. Some of these
measures have been adopted in response to legal requirements. Others have been
adopted by companies in response to the requirements of national securities
exchanges, such as the NYSE or NASDAQ Stock Market, on which their securities
are listed. Among the corporate governance measures that are required under the
rules of national securities exchanges and NASDAQ are those that address board
of directors' independence, audit committee oversight and the adoption of a code
of ethics. We have not yet adopted any of these corporate governance measures
and, since our securities are not listed on a national securities exchange or
NASDAQ, we are not required to do so. It is possible that if we were to adopt
some or all of these corporate governance measures, shareholders would benefit
from somewhat greater assurances that internal corporate decisions were being
made by disinterested directors and that policies had been implemented to define
responsible conduct. For example, in the absence of audit, nominating and
compensation committees comprised of at least a majority of independent
directors, decisions concerning matters such as compensation packages to our
senior officers and recommendations for director nominees may be made by a
majority of directors who have an interest in the outcome of the matters being
decided. Prospective investors should bear in mind our current lack of corporate
governance measures in formulating their investment decisions.
ITEM 1B UNRESOLVED STAFF COMMENTS
None.
ITEM 2 PROPERTIES
We do not hold ownership or leasehold interest in any property other than the
mining claim. To date, our president, Andrea Schlectman, has provided us with
office space and related office services free of charge. There is no obligation
for or guarantee that this arrangement will continue in the future.
ITEM 3 LEGAL PROCEEDINGS
There are no pending, nor to our knowledge threatened, legal proceedings against
the Company
ITEM 4 [REMOVED AND RESERVED]
PART II
ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
MARKET INFORMATION
Our common shares are quoted on the OTC Bulletin Board under the symbol "KOPR".
There has been no active trading of our shares and thus no high and low bid
information.
TRANSFER AGENT
Our transfer agent for our common shares is Empire Stock Transfer Inc. at 1859
Whitney Mesa Drive, Henderson, NV 89014. Telephone (702)818-5898, Fax
(702)974-1444.
14
HOLDERS OF COMMON SHARES
As of October 31, 2010, there were 31 holders of record of our common shares. As
of such date, 3,501,500 shares were issued and outstanding.
DIVIDENDS
We have never declared or paid any cash dividends or distributions on our
capital stock. We currently intend to retain our future earnings, if any, to
support operations and to finance expansion and therefore we do not anticipate
paying any cash dividends on our common shares in the foreseeable future.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
There are no shares authorized for issuance under equity compensation plans.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
We did not purchase any of our common shares or other securities during our
fiscal year ended October 31, 2010.
PENNY STOCK REGULATION
The SEC has adopted regulations which generally define "penny stock" to be any
equity security that has a market price (as defined) of less than $5.00 per
share or an exercise price of less than $5.00 per share. Such securities are
subject to rules that impose additional sales practice requirements on
broker-dealers who sell them. For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchaser of
such securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior to the
transaction, of a disclosure schedule prepared by the SEC relating to the penny
stock market. The broker-dealer also must disclose the commissions payable to
both the broker-dealer and the registered representative, current quotations for
the securities and, if the broker-dealer is the sole market-maker, the
broker-dealer must disclose this fact and the broker-dealer's presumed control
over the market. Finally, among other requirements, monthly statements must be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.
ITEM 6 SELECTED FINANCIAL DATA
The Company was organized on July 23, 2007. Our total current assets as of
October 31, 2010 were $9,881, our current liabilities, including a $51,500 loan
from director, were $127,897, and our total stockholders' deficiency was
$118,016. As of October 31, 2010, the Company held cash and cash equivalents in
the amount of $9,881. From inception through October 31, 2010 we incurred a net
loss of $143,016. The recoverability of costs incurred for acquisition and
exploration of the Property is dependent upon the Company's discovery of
economically recoverable reserves and the Company's ability to obtain financing
sufficient to satisfy the expenditure requirements and to complete development
of the Property and pursue production and sales thereof.
The notes to the Company's financial statements express substantial doubt about
the Company's ability to continue as a going concern because of the Company's
accumulated deficit since inception of $143,016 and the further losses which are
anticipated in the development of its business. The Company's ability to
continue as a going concern is dependent upon the Company's generation of
profits in the future and/or the ability to obtain financing necessary to meet
its obligations and repay its liabilities.
During the year ended October 31, 2010, general and administrative expenses and
net loss incurred increased 40.8% or $17,760 from $43,575 during the year ended
October 31, 2009 to $61,335. This resulted from increased expenses related to
auditor fees and sale of stock.
15
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD LOOKING STATEMENTS
This Report contains projections and statements relating to Company that
constitute "forward-looking statements." These forward-looking statements may be
identified by the use of predictive, future-tense or forward-looking
terminology, such as "intends," "believes," "anticipates," "expects,"
"estimates," "may," "will," or similar terms. Such statements speak only as of
the date of such statement, and the Company undertakes no ongoing obligation to
update such statements. These statements appear in a number of places in this
Report and include statements regarding the intent, belief or current
expectations of the Company, and its respective directors, officers or advisors
with respect to, among other things: (1) trends affecting the Company's
financial condition, results of operations or future prospects, (2) the
Company's business and growth strategies and (3) the Company's financing plans
and forecasts. Potential investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve significant
risks and uncertainties, and that, should conditions change or should any one or
more of the risks or uncertainties materialize or should any of the underlying
assumptions of the Company prove incorrect, actual results may differ materially
from those projected in the forward-looking statements as a result of various
factors, some of which are unknown. The factors that could adversely affect the
actual results and performance of the Company include, without limitation, the
Company's inability to raise additional funds to support operations and capital
expenditures, the Company's inability to effectively manage its growth, the
Company's inability to achieve greater and broader market acceptance in existing
and new market segments, the Company's inability to successfully compete against
existing and future competitors, the Company's reliance on independent
consultants and suppliers, disruptions in the supply chain, the Company's
inability to protect its intellectual property, other factors described
elsewhere in this Report, or other reasons. All forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the foregoing cautionary statements and the "Risk
Factors" described herein.
The following discussion of our financial condition and plan of operation should
be read in conjunction with the Company's financial statements, the notes to
those statements and the information included elsewhere in this Report. This
discussion includes forward-looking statements that involve risks and
uncertainties. As a result of many factors, such as those set forth under "RISK
FACTORS" and elsewhere in this Report, our actual results may differ materially
from those anticipated in these forward-looking statements.
OVERVIEW
We are engaged in the business of acquisition and exploration of mineral
properties, primarily for copper and other metals. The Company has staked a
claim on certain property located in the Osoyoos Mining Division of British
Columbia, Canada. This property consists of one claim held by Reza Mohammed (the
"Trustee") under Declaration of Trust dated November 28, 2007 in favor of the
Company and is located about 15 km north of the town of Keremeos in south
central British Columbia. We are presently in the exploration stage at the
Property. We have not generated revenue from mining operations. In August of
2007 we engaged George Coetzee, an exploration and mine geologist, to assess the
Property for mineral occurrences.
Mr. Coetzee, who has worked as an exploration and mine geologist for 24 years,
studied a compilation of published data, maps and reports available from the
British Columbia Governmental geological database. The consultant examined the
geology of the Property and its immediate surrounding area in August and
September of 2007 to locate skarn copper occurrence and to determine the mode of
development and assess the mineral potential of the Property.
PLAN OF OPERATION
Mineral property exploration is typically conducted in phases. Based on our
consultant's studies, Mr. Coetzee recommends a two-phase program of exploration
on the Property.
The first phase of exploration estimated to cost $28,640 would include further
reconnaissance prospecting entailing silt sampling of all creeks draining the
Property area, geological mapping and examination of all rock outcrops for
16
potential sulphide mineralization and a ground geological survey over the
magnetic anomalies highlighted by a previous MAG airborne survey as well as new
targets identified by the mapping program.
After the completion of the first phase of the exploration program, we will
review the results and conclusions and evaluate the advisability of additional
exploration work on the Property The second phase of exploration, if warranted,
would include trenching and a localized geochemical soil sampling program over
the magnetic anomalies and showings and a proposed budget of $25,480.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
We have not yet commenced the initial phase of exploration on the Property. We
would need additional financing to cover exploration costs, although we
currently do not have any specific financing arranged. Further exploration would
be subject to financing. Management expects to finance operating costs over the
next twelve months with existing cash on hand, loans and/or the proceeds from
any stock offering or private placement.
LIQUIDITY AND CAPITAL RESOURCES
As of October 31, 2010, our total assets were $9,881, and our total liabilities
were $127,897. From inception on July 23, 2007 through October 31, 2010, we
incurred a net loss of $143,016. As of October 31, 2010, we held cash and cash
equivalents of $9,881.
We received our initial funding of $10,000 through the sale of common stock to
our Andrea Schlectman, our Principal Executive Officer, Principal Financial
Officer and a Director, who purchased 1,500 shares of our common stock at
approximately $6.66 per share on July 23, 2007. Ms. Schlectman, paid $5,000 on
our behalf for the cost of the mining claim on the Claim property, and on June
1, 2008, we issued 2,500,000 shares of our common stock to Ms. Schlectman in
exchange for the cash paid out. The Company registered 1,000,000 shares of
common stock for public sale pursuant to the Registration Statement (the
"Registration Statement") on Form S-1 which was filed with the SEC on February
16, 2010, and declared effective by the SEC on February 26, 2010. On June 9,
2010, the Company accepted subscriptions for 1,000,000 shares from 30
subscribers pursuant to the prospectus which was part of the Registration
Statement for gross proceeds of $10,000.
Management believes that the Company's current cash together with subscriptions
for stock in any private placement will be sufficient to cover the expenses we
will incur during the next twelve months. If we experience a shortage of funds
during our exploration stage, our sole executive officer has agreed to advance
funds as needed. She has also agreed to pay the cost of reclamation of the
property should exploitable minerals not be found and we abandon our exploration
program and there are no remaining funds in the Company. While she has agreed to
advance the funds, the agreement is verbal and is unenforceable as a matter of
law. To date, she has loaned monies to pay for certain expenses incurred. These
loan(s) are interest free and there is no specific time for repayment. The
balance due the director as of October 31, 2010 is $51,500.
Initially, the Company's sole focus will be the exploration of the Property. If
commercially viable metal or mineral reserves are found on the Property, the
Company intends to mine the reserves. If the Company successfully mines any
minerals or metals discovered on the Property, it will explore sales
opportunities for such products.
The Company is in its exploration stage and has not begun operations. As such,
the Company has no historical periods with which to compare anticipated capital
requirements in the future. The Company will use the proceeds from any private
placement or loans from our executive officer to support its capital
requirements.
IMPORTANT ASSUMPTIONS
Mineral exploration and development involve a high degree of risk and few
properties that are explored are ultimately developed into producing mines. At
this stage without having conducted the initial exploration phase, we are unable
to determine whether future mineral exploration and development activities will
result in any discoveries of proven or probable reserves. Even if we discover
commercial quantities of mineralization, the mineral property may never be
brought into commercial production. Our development of mineral properties will
occur only upon obtaining sufficient funding and satisfactory exploration
results.
17
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.
GOING CONCERN
Our audited financial statements have been prepared on a going concern basis,
which implies that we will continue to realize our assets and discharge our
liabilities and commitments in the normal course of business. The Company has
incurred losses since inception resulting in an accumulated deficit during the
exploration stage of $143,016 and a working capital deficiency of $118,016 as of
October 31, 2010 and further losses are anticipated in the development of its
business raising substantial doubt about the Company's ability to continue as a
going concern. The ability to continue as a going concern is dependent upon the
Company generating profitable operations in the future and/or to obtain the
necessary financing to meet its obligations and repay its liabilities arising
from normal business operations when they come due. Management intends to
finance operating costs over the next twelve months with existing cash on hand
and loans from directors and or private placement of common stock.
Due to the uncertainty of our ability to meet our current operating expenses and
the capital expenses noted above, in their report on the annual financial
statements for the year ended October 31, 2010, our independent auditors
included an explanatory paragraph regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.
RECENT ACCOUNTING PRONOUNCEMENTS
In April 2010, the FASB issued ASU 2010-13, Compensation-Stock Compensation
(Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment
Award in the Currency of the Market in Which the Underlying Equity Security
Trades - a consensus of the FASB Emerging Issues Task Force. The amendments in
this Update are effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2010. Earlier application is
permitted. The Company does not expect the provisions of ASU 2010-13 to have a
material effect on the financial position, results of operations or cash flows
of the Company.
In March 2010, the FASB issued Accounting Standards Update ("ASU") No.2010-11,
which is included in the Certification under ASC 815. This update clarifies the
type of embedded credit derivative that is exempt from embedded derivative
bifurcation requirements. Only an embedded credit derivative that is related to
the subordination of one financial instrument to another qualifies for the
exemption. This guidance became effective for the Company's interim and annual
reporting periods beginning January 1, 2010. The adoption of this guidance did
not have a material impact on the Company's financial statements.
In February 2010, the FASB issued ASU No. 2010-09, which is included in the
Codification under ASC 855, SUBSEQUENT EVENTS ("ASC 855"). This update removes
the requirement for an SEC filer to disclose the date through which subsequent
events have been evaluated and become effective for interim and annual reporting
periods beginning January 1, 2010. The adoption of this guidance did not have a
material impact on the Company's financial statements.
18
In January 2010, the FASB issued ASU No. 2010-06, which is included in the
Codification under ASC 820, FAIR VALUE MEASUREMENTS AND DISCLOSURES ("ASC 820").
This update requires the disclosure of transfers between the observable input
categories and activity in the unobservable input category for fair value
measurements. The guidance also requires disclosures about the inputs and
valuation techniques used to measure fair value and become effective for interim
and annual reporting periods beginning January 1, 2010. The adoption of this
guidance did not have a material impact on the Company's financial statements.
The Company does not expect the adoption of recently issued accounting
pronouncements to have any significant impact on the Company's results of
operations, financial position or cash flow.
As new accounting pronouncements are issued, the Company will adopt those that
are applicable under the circumstances.
19
ITEM 8 FINANCIAL STATEMENTS
TABLE OF CONTENTS
Page No.
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Report of Independent Registered Public Accounting Firm 21
Balance Sheets 22
Statements of Operations 23
Statements of Changes in Stockholder's Deficiency 24
Statements of Cash Flows 25
Notes to Financial Statements 26
20
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Kopr Resources Corp.
We have audited the accompanying balance sheets of Kopr Resources Corp. (an
Exploration Stage Company) ("the Company") as of October 31, 2010 and 2009 and
the related statements of operations, stockholders' deficiency and cash flows
for each of the years in the two year period ended October 31, 2010 and for the
period from July 23, 2007 (inception) to October 31, 2010. 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 audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides 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 the Company as of October 31,
2010 and 2009 and the results of its operations and its cash flows for each of
the two years in the two period ended October 31, 2010 and for the period from
July 23, 2007 (inception) to October 31, 2010 in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1, the Company
has incurred significant losses since its inception and has limited capital
resources. These conditions raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regard to these matters
are also discussed in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Bernstein & Pinchuk LLP
-------------------------------------
New York, New York
January 5, 2011
21
KOPR RESOURCES CORP.
(An Exploration Stage Company)
Balance Sheets
October 31,
-------------------------------
2010 2009
---------- ----------
ASSETS
Current assets
Cash and cash equivalents $ 9,881 $ 12,295
Prepaid expense -- 500
---------- ----------
TOTAL CURRENT ASSETS $ 9,881 $ 12,795
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Accounts payable $ 76,397 $ 62,976
Loan from director 51,500 16,500
---------- ----------
TOTAL CURRENT LIABILITIES 127,897 79,476
---------- ----------
STOCKHOLDERS' DEFICIENCY
Preferred stock $0.001 par value 75,000,000 shares authorized; none issued -- --
Common stock $0.001 par value; 150,000,000 shares authorized; 3,501,500
and 2,501,500 shares issued and outstanding at October 31, 2010 and 2009 3,502 2,502
Additional paid-in-capital 21,498 12,498
Deficit accumulated during exploration stage (143,016) (81,681)
---------- ----------
TOTAL STOCKHOLDERS' DEFICIENCY (118,016) (66,681)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 9,881 $ 12,795
========== ==========
See notes to financial statements
22
KOPR RESOURCES CORP.
(An Exploration Stage Company)
Statements of Operations
For the Period
July 23, 2007
(Inception)
Year Ended October 31, Through
------------------------------- October 31,
2010 2009 2010
---------- ---------- ----------
Revenues $ -- $ -- $ --
Cost of sales -- -- --
---------- ---------- ----------
Gross margin -- -- --
---------- ---------- ----------
Operating Expense
General and administrative expenses 61,335 43,575 143,016
---------- ---------- ----------
LOSS BEFORE INCOME TAX EXPENSE (61,335) (43,575) (143,016)
Income tax expense -- -- --
---------- ---------- ----------
NET LOSS $ (61,335) $ (43,575) $ (143,016)
========== ========== ==========
Loss per share basic and diluted $ (0.02) $ (0.02)
========== ==========
Weighted average number of common shares
outstanding basic and diluted 2,876,842 2,501,500
========== ==========
See notes to financial statements
23
KOPR RESOURCES CORP.
(An Exploration Stage Company)
Statements of Changes in Shareholders' Deficiency
For the Period from July 23, 2007 (Inception) through October 31,2010
Deficit
Accumulated
Common Stock Additional During Total
--------------------- Paid-in Exploration Stockholders'
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
September 25, 2007 stock issued for cash 1,500 $ 2 $ 9,998 $ -- $ 10,000
Net loss (5,500) (5,500)
----------- -------- -------- --------- ---------
Balance October 31, 2007 1,500 2 9,998 (5,500) 4,500
June 1, 2008 stock issued for cash 2,500,000 2,500 2,500 -- 5,000
Net loss (32,605) (32,605)
----------- -------- -------- --------- ---------
Balance October 31, 2008 2,501,500 2,502 12,498 (38,105) (23,105)
Net loss (43,576) (43,576)
----------- -------- -------- --------- ---------
BALANCE OCTOBER 31, 2009 2,501,500 2,502 12,498 (81,681) (66,681)
June 17, 2010 stock issued for cash 1,000,000 1,000 9,000 -- 10,000
Net loss (61,335) (61,335)
----------- -------- -------- --------- ---------
BALANCE OCTOBER 31,2010 3,501,500 $ 3,502 $ 21,498 $(143,016) $(118,016)
=========== ======== ======== ========= =========
See notes to financial statements
24
KOPR RESOURCES CORP.
(An Exploration Stage Company)
Statements of Cash Flows
For the Period
July 23, 2007
(Inception)
Year Ended October 31, Through
------------------------------- October 31,
2010 2009 2010
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (61,335) $ (43,575) $ (143,016)
Adjustments to reconcile net loss to net
cash used in operating activities
Changes in operating assets and liabilities
Prepaid expense 500 (500) --
Accounts payable 13,421 35,491 76,397
---------- ---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (47,414) (8,584) (66,619)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Loan from director 35,000 16,500 51,500
Proceeds from sale of common stock 1,000 -- 25,000
Additional paid in capital 9,000 --
---------- ---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 45,000 16,500 76,500
---------- ---------- ----------
Net (decrease) increase in cash and cash equivalents (2,414) 7,916 9,881
Cash and cash equivalents at beginning of period 12,295 4,379 --
---------- ---------- ----------
Cash and cash equivalents at end of period $ 9,881 $ 12,295 $ 9,881
========== ========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ -- $ -- $ --
========== ========== ==========
Income Taxes $ -- $ -- $ --
========== ========== ==========
See notes to financial statements
25
Kopr Resources Corp.
(An Exploration Stage Company)
Notes to Financial Statements
(Stated in U.S. Dollars)
1. NATURE AND CONTINUANCE OF OPERATIONS
Kopr Resources Corp., ("the Company") was incorporated under the laws of the
State of Delaware on July 23, 2007. The Company is in the exploration stage of
its resource business and it was generally inactive during the period July 23,
2007 (inception) to October 31, 2010. During the year ended October 31, 2008 the
Company commenced its limited activities by issuing shares and acquiring a
mineral property located in the Osoyoos Mining Division of British Columbia,
Canada. The Company has not yet determined whether this property contains
reserves that are economically recoverable. The recoverability of costs incurred
for acquisition and exploration of the property will be dependent upon the
discovery of economically recoverable reserves, confirmation of the Company's
interest in the underlying property, the ability of the Company to obtain
necessary financing to satisfy the expenditure requirements under the property
agreement and to complete the development of the property and upon future
profitable production or proceeds for the sale thereof.
The Company's tax reporting year end is October 31.
These financial statements have been prepared on a going concern basis which
assumes the Company will be able to realize its assets and discharge its
liabilities in the normal course of business for the foreseeable future. The
Company has incurred losses since inception resulting in an accumulated deficit
during the exploration stage of $143,016 and a working capital deficiency of
$118,016 as of October 31, 2010 and further losses are anticipated in the
development of its business raising substantial doubt about the Company's
ability to continue as a going concern. The ability to continue as a going
concern is dependent upon the Company generating profitable operations in the
future and/or to obtain the necessary financing to meet its obligations and
repay its liabilities arising from normal business operations when they come
due. Management intends to finance operating costs over the next twelve months
with existing cash on hand and loans from directors and or private placement of
common stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America. All
amounts are presented in U.S. dollars.
EXPLORATION STAGE COMPANY
The Company complies with Accounting Standards Codification ("ASC") 915-235-50
and Securities and Exchange Commission Act Guide 7 for it's characterization of
the Company as an exploration stage enterprise.
MINERAL INTERESTS
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. The Company has adopted the provisions of SFAS No. 143 "Accounting
for Asset Retirement Obligations" ("ASC 410") which establishes standards for
the initial measurement and subsequent accounting for obligations associated
with the sale, abandonment, or other disposal of long -lived tangible assets
arising from the acquisition, construction or development and for normal
operations of such assets. As at October 31, 2010, any potential costs relating
to the future retirement of the Company's mineral property have not yet been
determined.
26
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in United States dollars. In accordance
with Statement of Financial Accounting Standards No. 52 "Foreign Currency
Translation," ("ASC 830") foreign denominated monetary assets and liabilities
are translated into their United States dollar equivalents using foreign
exchange rates which prevailed at the balance sheet date. Non monetary assets
and liabilities are translated at the exchange rates prevailing on the
transaction date. Revenue and expenses are translated at average rates of
exchange during the year. Gains or losses resulting from foreign currency
transactions are included in results of operations.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of cash and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is management's opinion the Company is
not exposed to significant interest currency or credit risks arising from these
financial instruments.
ENVIRONMENT COSTS
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations, and which do not contribute to current or future
revenue generation, are expensed. Liabilities are recorded when environmental
assessments and/or remedial efforts are probably, and the cost can be reasonably
estimated. Generally, the timing of these accruals coincides with the earlier of
completion of a feasibility study or the Company's commitments to plan of action
based on the then known facts.
INCOME TAXES
The Company follows the accrual method of accounting for income taxes. Under
this method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences). The effect on the deferred income tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. At October 31, 2010, a full deferred tax asset valuation
allowance has been provided and no deferred tax asset has been recorded.
BASIC AND DILUTED LOSS PER SHARE
The Company computes loss per share in accordance with ASC 260-10-45 "Earnings
per Share", (SFAS 128) 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 net loss available to common shareholders by the
weighted average number of outstanding common shares during the 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 no potential dilutive instruments. Basic loss and diluted loss
per share are equal.
27
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (CONTINUED)
REVENUE RECOGNITION
Revenue for mined copper-halloysite, if any, will be recognized upon shipment
and customer acceptance once a contract with a fixed and determinable fee has
been established and collection is reasonably assured or the resulting
receivable is deemed probable.
ADVERTISING
The Company's policy is to charge the costs of advertising to expense as
incurred. The Company has not incurred any advertising costs during the years
ended October 31, 2010 and 2009.
STOCK BASED COMPENSATION
In December 2004, the FASB issued SFAS No. 123R ASC 718-10, "Share-Based
Payments," which replaced SFAS No. 123, "Accounting for Stock-Based
Compensation" and superseded APB Opinion No. 25, "Accounting for Stock Issued to
Employees." In January 2005, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin ("SAB") No. 107, "Share-Based Payment," which
provides supplemental implementation guidance for ASC 718-10. ASC 718-10requires
all share based payments to employees , including grants of employee stock
options, to be recognized in the financial statements based on the grant date
fair value of the award. ASC 718-10 was to be effective for interim or annual
reporting periods beginning on or after June 15, 2005, but in April 2005, the
SEC issued a rule that will permit most registrants to implement SFAS No. 123R
at the beginning of their next fiscal year, instead of the next reporting period
as required by ASC 718-10. The pro-forma disclosures previously permitted under
ASC 718-10no longer will be an alternative to financial statement recognition.
Under ASC 718-10, the Company must determine the appropriate fair value model to
be used for valuing share-based payments, the amortization method for
compensation costs and the transition method to be used at date of adoption.
The transition methods include prospective and retroactive adoption options.
Under the retroactive options, prior periods may be restated either as of the
beginning of the year of adoption or for all periods presented. The prospective
method requires that compensation expense be recorded for all unvested stock
options and restricted stock at the beginning of the first quarter of adoption
of ASC 718-10, while the retroactive methods would record compensation expense
for all unvested stock options and restricted stock beginning with the first
period restated. The Company adopted the modified prospective approach of ASC
718-10 for the period ended October 31, 2010. The Company did not record any
compensation expense for the period ended October 31, 2010 because there were no
stock options outstanding prior to, or at October 31, 2010.
RECENT ACCOUNTING PRONOUNCEMENTS
In April 2010, the FASB issued Accounting Standard Update ("ASU") 2010-13,
Compensation-Stock Compensation (Topic 718): Effect of Denominating the Exercise
Price of a Share-Based Payment Award in the Currency of the Market in Which the
Underlying Equity Security Trades - a consensus of the FASB Emerging Issues Task
Force. The amendments in this Update are effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2010.
Earlier application is permitted. The Company does not expect the provisions of
ASU 2010-13 to have a material effect on the financial position, results of
operations or cash flows of the Company.In March 2010, the FASB issued ASU
No.2010-11, which is included in the Certification under ASC 815. This update
clarifies the type of embedded credit derivative that is exempt from embedded
derivative bifurcation requirements. Only an embedded credit derivative that is
related to the subordination of one financial instrument to another qualifies
for the exemption. This guidance became effective for the Company's interim and
annual reporting periods beginning January 1, 2010. The adoption of this
guidance did not have a material impact on the Company's financial statements.
28
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (CONTINUED)
In February 2010, the FASB issued ASU No. 2010-09, which is included in the
Codification under ASC 855, SUBSEQUENT EVENTS ("ASC 855"). This update removes
the requirement for an SEC filer to disclose the date through which subsequent
events have been evaluated and become effective for interim and annual reporting
periods beginning January 1, 2010. The adoption of this guidance did not have a
material impact on the Company's financial statements.
In January 2010, the FASB issued ASU No. 2010-06, which is included in the
Codification under ASC 820, FAIR VALUE MEASUREMENTS AND DISCLOSURES ("ASC 820").
This update requires the disclosure of transfers between the observable input
categories and activity in the unobservable input category for fair value
measurements. The guidance also requires disclosures about the inputs and
valuation techniques used to measure fair value and become effective for interim
and annual reporting periods beginning January 1, 2010. The adoption of this
guidance did not have a material impact on the Company's financial statements.
The Company does not expect the adoption of recently issued accounting
pronouncements to have any significant impact on the Company's results of
operations, financial position or cash flow.
As new accounting pronouncements are issued, the Company will adopt those that
are applicable under the circumstances.
3. COMMON STOCK TRANSACTIONS
The total number of common shares authorized that may be issued by the Company
is 150,000,000 shares and 75,000,000 preferred shares each with a par value of
$0.001 per share. No other class of shares is authorized.
On September 25, 2007, the Company issued 1,500 shares of common stock to a
Director, for total cash proceeds of $10,000.
On June 1, 2008, the Company issued 2,500,000 shares of common stock at $0.002
to the Director for total proceeds of $5,000.
On June 17, 2010 the Company issued 1,000,000 shares of common stock to 30
subscribers for gross proceeds of $10,000.
At October 31, 2010, there were no shares of preferred stock, stock options or
warrants issued.
4. MINERAL INTERESTS
On November 28, 2007, the Company entered into a purchase and sale agreement to
acquire a 100% interest in one mining claim of approximately 505 hectares
located in the mining division approximately 15 kilometers north of the town of
Keremos, in South Central British Columbia, Canada.
The mineral interest is held in trust for the Company by the vendor of the
property. Upon request from the Company, the title will be changed to the name
of the Company with the appropriate mining recorder. The claim is assigned
Tenure Number 541991 and is recorded in the name of Reza Mohammed. The claim is
in good standing until January of 2011.
5. INCOME TAXES
As of October 31, 2010, the Company had a net operating loss carry forwards of
approximately $143,000 that may be available to reduce future years' taxable
income through 2030. Future tax benefits which may arise as a result of these
losses have not been recognized in these financial statements, as their
realization is determined not likely to occur and accordingly, the Company has
not recorded a valuation allowance for the deferred tax asset relating to this
tax loss carry forward.
29
6. RELATED PARTY TRANSACTIONS
On September 25, 2007, in connection with its organization, the Company issued
1,500 shares of common stock to Andrea Schlectman, our President, Principal
Executive Officer, Principal Financials Officer and a Director of the Company,
for consideration of $10,000.
On June 1, 2008, the Company issued 2,500,000 shares of common stock at $0.002
per share for a total of $5,000 to Andrea Schlectman as reimbursement for Ms.
Schlectman's payment of $5,000 on behalf of the Company for its mining claim.
Andrea Schlectman may in the future, become involved in other business
opportunities as they may 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 a conflict.
While the Company is seeking additional funds, Ms. Schlectman, our President,
Principal Executive Officer, Principal Financial Officer and a Director, has
loaned monies to pay for certain expenses incurred. These loans are interest
free and there is no specific time for repayment. The balance due the director
as of October 31, 2010 is $51,500.
7. OTHER DEVELOPMENTS
On February 12, 2010, The Company filed with the Securities and Exchange
Commission a withdrawal request for the Form S-1 Registration Statement which
was declared effective March 9, 2009 and under which no sales had been made.
On February 16, 2010, a new Registration Statement on Form S-1 was filed with
the Securities and Exchange Commission and was declared effective on February
26, 2010. On June 17, 2010, 1,000,000 shares of common stock at $0.001 par value
were issued to 30 subscribers at $0.01 per share, for total gross proceeds of
$10,000. This initial offering closed on June 9, 2010.
On April 21, 2010, the Company filed a Form 8-K with the Securities and Exchange
Commission regarding the election of a new director, Guo Yuying, effective April
16, 2010. She is an independent business consultant and her expertise is helping
management of public and privately-held companies maximize productivity as well
as advising on general corporate matters.
8. SUBSEQUENT EVENTS
The Company has evaluated events subsequent to October 31, 2010 through the date
these financial statements were issued to assess the need for potential
recognition or disclosure in this report. Based upon this evaluation, it was
determined that no subsequent events occurred that require recognition or
disclosure in the financial statements.
30
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
There have been no changes in, or disagreements with the Company's principal
independent registered public accounting firm for the two-year period ended
October 31, 2010.
ITEM 9A CONTROLS AND PROCEDURES
As of the end of the period covered by this Annual Report, our sole executive
officer performed an evaluation of the effectiveness of our disclosure controls
and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act.
Based on the evaluation and the identification of the material weaknesses in
internal control over financial reporting described below, our sole executive
officer concluded that, as of October 31, 2010, the Company's disclosure
controls and procedures were not effective.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal
control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of
the Exchange Act. Internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements in accordance with GAAP.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projection of any evaluation of
effectiveness to future periods is 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.
Andrea Schlectman, our President, Principal Executive Officer and Principal
Financial Officer conducted an assessment of our internal control over financial
reporting as of October 31, 2010. Management's assessment of internal control
over financial reporting was conducted using the criteria in Internal Control
over Financial Reporting - Guidance for Smaller Public Companies issued by the
Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
A material weakness is a deficiency, or a combination of deficiencies, in
internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the Company's annual or interim
financial statements will not be prevented or detected on a timely basis. In
connection with management's assessment of our internal control over financial
reporting as required under Section 404 of the Sarbanes-Oxley Act of 2002, we
identified the following material weaknesses in our internal control over
financial reporting as of October 31, 2010:
1. The Company has not established adequate financial reporting monitoring
procedures to mitigate the risk of management override, specifically because
there are no employees and only one officer with management functions and
therefore there is lack of segregation of duties. In addition, the Company does
not have accounting software to prevent erroneous or unauthorized changes to
previous reporting periods or to provide an adequate audit trail of entries.
However, although our controls are not effective, these significant weaknesses
did not result in any material misstatements in our financial statements.
2. In addition, there is insufficient oversight of accounting principles
implementation and insufficient oversight of external audit functions.
3. There is a strong reliance on the external auditors to review and adjust
the annual and quarterly financial statements, to monitor new accounting
principles, and to ensure compliance with GAAP and SEC disclosure requirements.
4. There is a strong reliance on the external attorneys to review and edit
the annual and quarterly filings and to ensure compliance with SEC disclosure
requirements.
31
Because of the material weaknesses noted above, management has concluded that we
did not maintain effective internal control over financial reporting as of
October 31, 2010, based on Internal Control over Financial Reporting - Guidance
for Smaller Public Companies issued by COSO.
REMEDIATION OF MATERIAL WEAKNESSES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
As a small business, without a viable business and revenues, the Company does
not have the resources to install a dedicated staff with deep expertise in all
facets of SEC disclosure and GAAP compliance. As is the case with many small
businesses, the Company will continue to work with its external auditors and
attorneys as it relates to new accounting principles and changes to SEC
disclosure requirements. The Company has found that this approach worked well in
the past and believes it to be the most cost effective solution available for
the foreseeable future.
The Company will conduct a review of existing sign-off and review procedures as
well as document control protocols for critical accounting spreadsheets. The
Company will also increase management's review of key financial documents and
records.
As a small business, the Company does not have the resources to fund sufficient
staff to ensure a complete segregation of responsibilities within the accounting
function. However, Company management does review, and will increase the review
of, financial statements on a monthly basis, and the Company's external auditor
conducts reviews on a quarterly basis. These actions, in addition to the
improvements identified above, will minimize any risk of a potential material
misstatement occurring.
This Annual Report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the SEC that
permit the Company to provide only management's report in this annual report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during
the period ended October 31, 2010 that materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
ITEM 9B OTHER INFORMATION
REGISTRATION OF SECURITIES
The Company registered 1,000,000 shares of common stock for public sale pursuant
to the Registration Statement (the "Registration Statement") on Form S-1 which
was filed with the SEC on February 16, 2010, and declared effective by the SEC
on February 26, 2010. On June 9, 2010, the Company accepted subscriptions for
1,000,000 shares from 30 subscribers pursuant to the prospectus which was part
of the Registration Statement for gross proceeds of $10,000.
PART III
ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The directors of the Company hold office for annual terms and will remain in
their positions until successors have been elected and qualified. The officers
are appointed by the board of directors of the Company and hold office until
their death, resignation or removal from office. The ages, positions held, and
duration of terms of the directors and executive officers are as follows:
Name Age Position
---- --- --------
Andrea Schlectman 38 Andrea Schlectman President, Principal Executive
Officer, Principal Financial Officer and a Director
Guo Yuying 24 Director
32
ANDREA SCHLECTMAN, PRESIDENT, PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL FINANCIAL
OFFICER AND A DIRECTOR
Ms. Schlectman has been President, Secretary, Treasurer, CEO, CFO and a Director
of the Company since inception. Ms. Schlectman has a Bachelor's Degree in
Sociology and Criminal Justice from William Paterson University, Wayne NJ. She
has been an independent business consultant for the past eight years. Her
experience includes working with management of privately-held companies to
maximize productivity as well as general corporate matters. Ms. Schlectman also
has experience in various industries in the areas of marketing, sales and
finance. For several years she assisted the Regional Sales Manager of Washington
Mutual Financial Services and most recently was involved in sales and marketing
for a charter jet company in New York.
GUO YUYING, DIRECTOR
Ms. Yuying has been a director of the Company since April 16, 2010. From August
2005 to July 2009, she attended Peking University. Ms. Yuying received her
Bachelor's degree in mathematics and was enrolled in the Yuanpei Honor Program.
From July 2009 until now, Ms. Yuying has been an independent business
consultant. Her experience includes working with management of public and
privately-held companies to maximize productivity as well as general corporate
matters. Ms. Yuying has experience in various industries including agriculture,
textile, and new media.
CERTAIN SIGNIFICANT EMPLOYEES
At present, we have no employees and no employment agreements. Ms. Schlectman,
our President, Principal Executive Officer and Principal Financial Officer,
provides services on a consultant basis. We anticipate that we will be
conducting most of our business through agreement with consultants and third
parties.
FAMILY RELATIONSHIPS
There are no family relationships between any director and executive officer.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
Our directors and executive officer have not been involved in any of the
following events during the past 10 years:
1. any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offences);
3. being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities;
4. being found by a court of competent jurisdiction (in a civil action),
the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended, or
vacated;
5. being the subject of, or a party to, any federal or state judicial or
administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated, relating to an alleged violation of:
(i) any federal or state securities or commodities law or regulation;
or (ii) any law or regulation respecting financial institutions or
insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil
money penalty or temporary or permanent cease- and-desist order, or
removal or prohibition order; or (iii) any law or regulation
prohibiting mail or wire fraud or fraud in connection with any
business entity; or
33
6. being the subject of, or a party to, any sanction or order, not
subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Securities
Exchange Act of 1934), any registered entity (as defined in Section
1(a)(29) of the Commodity Exchange Act), or any equivalent exchange,
association, entity or organization that has disciplinary authority
over its members or persons associated with a member.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act requires our executive officers and
directors, and persons who own more than 10% of our common stock, to file
reports regarding ownership of, and transactions in, our securities with the
Securities and Exchange Commission and to provide us with copies of those
filings. Based solely on our review of the copies of such forms received by us,
or written representations from certain reporting persons, we believe that
during fiscal year ended October 31, 2010, all filing requirements applicable to
its officers, directors and greater than 10% beneficial owners were complied
with.
CODE OF ETHICS
We do not currently have a code of ethics, because we have only limited business
operations and only one executive officer and two directors, 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.
NOMINATING COMMITTEE
We do not have a nominating committee.
NOMINATION OF DIRECTORS BY SHAREHOLDERS
We do not have any defined policy or procedural requirements for shareholders to
submit recommendations or nominations for directors. Our director believes that,
given the stage of our development, a specific nominating policy would be
premature and of little assistance until our business operations develop to a
more advanced level. A shareholder who wishes to communicate with our Board may
do so by directing a written request addressed to our President, at the address
appearing on the first page of this annual report.
AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT
We do not have an audit committee or an audit committee charter. Currently we do
not have a member of our Board who is considered as an "audit committee
financial expert" as defined in SEC Release No. 33-8 177 SEC. II(A)(4)(c). Since
the commencement of our most recently completed fiscal year, we have not
required any non-audit services to be provided by our auditor.
CORPORATE GOVERNANCE
We currently act with Ms. Schlectman and Ms. Yuying as our two directors. We
have determined that neither Ms. Schlectman or Ms. Yuying is an independent
director as defined by Nasdaq Marketplace Rule 4200(a)( 1.5 ).
COMPENSATION COMMITTEE
We do not have a compensation committee, or a committee that performs similar
function.
34
ITEM 11 EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and long-term
compensation earned by the Company's sole principal executive officer as of the
date of this Report.
Change in
Pension
Value and
Non-Equity Nonqualified
Incentive Deferred
Stock Option Plan Compensation All Other
Salary Bonus Awards Awards Compensation Earnings Compensation Total
Name and Principal Position Year ($) ($) ($) ($) ($) ($) ($) ($)
--------------------------- ---- ------ ----- ------ ------ ------------ -------- ------------ -----
Andrea Schlectman 2010 Nil Nil Nil Nil Nil Nil Nil Nil
President, Principal 2009 Nil Nil Nil Nil Nil Nil Nil Nil
Executive Officer,
Principal Financial
Officer and a Director
There are no employment agreements or consulting agreements with our current
directors and executive officers. There are no arrangements or plans in which we
provide pension, retirement or similar benefits for directors or executive
officers. We do not have any material bonus or profit sharing plans pursuant to
which cash or non-cash compensation is or may be paid to our directors or
executive officers, except that stock options may be granted at the discretion
of our board of directors from time to time. We have no plans or arrangements in
respect of remuneration received or that may be received by our executive
officers to compensate such officers in the event of termination of employment
(as a result of resignation, retirement, change of control) or a change of
responsibilities following a change of control.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth certain information as of the date of this Report
with respect to the beneficial ownership of the outstanding common stock of the
Company by (i) any holder of more than five (5%) percent; (ii) each of the
Company's executive officers and directors; and (iii) the Company's directors
and executive officers as a group. Unless otherwise indicated below, the persons
and entities named in the table have sole voting and sole investment power with
respect to all shares beneficially owned. The percentage of class is based on
3,501,500 shares of common stock issued and outstanding as of the date of this
Report. The address for the individuals identified below is 670 Kent Avenue,
Teaneck, NJ 07666.
Name and Address Amount of Percentage
of Beneficial Owner Beneficial Ownership of Class
------------------- -------------------- --------
Andrea Schlectman 2,501,500 71.4%
President, Principal Executive Officer,
Principal Financial Officer and a Director
Guo Yuying
Director -- --
Directors and Executive Officers 2,501,500 71.4%
as a Group (2 persons) ========= ====
CAPITAL STOCK
The authorized capital stock of the Company is 150,000,000 shares of common
stock, with a par value of $0.001 per share, and 75,000,000 shares of blank
check preferred stock, with a par value of $0.001 per share.
35
As of the date of this Report, there are 3,501,500 shares of common stock issued
outstanding. There is no preferred stock outstanding.
As of the date of this Report, there are thirty-one (31) holders of record of
the Company's common stock, one (1) being an affiliate of the Company.
OPTIONS AND WARRANTS
There are no outstanding options or warrants or other securities that are
convertible into our common stock.
VOTING RIGHTS
Each shareholder is entitled to one (1) vote for each share of voting stock.
DIVIDEND POLICY
We intend to retain and use any future earnings for the development and
expansion of our business and do not anticipate paying any cash dividends in the
foreseeable future.
TRANSFER AGENT
The registrar and transfer agent for our common stock is Empire Stock Transfer
Inc., located at 1859 Whitney Mesa Drive, Henderson, NV 89014. Their telephone
number is (702) 818-5898.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
On September 25, 2007, 1,500 shares were issued to our Andrea Schlectman, our
President, Principal Executive Officer, Principal Financial Officer and a
Director, in connection with the organization of the Company. On June 1, 2008,
2,500,000 shares were issued to Andrea Schlectman as reimbursement for Ms.
Schlectman's payment of $5,000 on behalf of the Company for its mining claim. In
each instance, Ms. Schlectman acquired her shares with the intent to hold the
shares for investment purposes and not with a view to further resale or
distribution, except as permitted under exemptions from registration
requirements under applicable securities laws.
Each of the certificates issued to Ms. Schlectman contain a restrictive legend
with respect to the issuance of securities pursuant to exemptions from
registration requirements under the Securities Act.
ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES
For the year ended October 31, 2010, the total audit services fees for the
Company is estimated to be $13,175, which $5,000 estimated for audit-related
services and $8,175 were charged for interim review services, for tax services
were $Nil and for other services were $Nil.
For the year ended October 31, 2009, the total fees charged to the Company for
audit services were $10,000, which $5,000 were for audit-related services and
$5,000 for interim review services, for tax services were Nil and for other
services were $Nil.
36
PART IV
ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Exhibit No. Description
----------- -----------
3.1 Certificate of Incorporation*
3.2 Amended Certificate of Incorporation*
3.3 By-Laws*
4.1 Specimen common stock certificate*
10.1 Declaration of Trust dated November 28, 2007 *
31 Certification of Principal Executive Officer and Principal
Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
32 Certification of Principal Executive Officer and Principal
Financial Officer to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
99.1 Assessment Report of George Coetzee *
----------
* Incorporated herein by reference from the Company's Registration Statement
on Form S-1 filed with the Securities and Exchange Commission on February
13, 2009
SIGNATURES
Pursuant to the requirements of Section 13 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.
Date: January 6, 2011 KOPR RESOURCES CORP.
By: /s/ Andrea Schlectman
------------------------------------------
Andrea Schlectman
President, Principal Executive Officer
Principal Financial and Accounting Officer
and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:
Date: January 6, 2011
By: /s/ Andrea Schlectman
------------------------------------------
Andrea Schlectman
President, Principal Executive Officer
Principal Financial and Accounting Officer
and Director
By: /s/ Guo Yuying
------------------------------------------
Guo Yuying
Director
37
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT
The registrant has not furnished to its security holders an annual report
covering its fiscal year ended October 31, 2010 or any proxy material with
respect to any annual or other meeting of security holders, nor will the
registrant furnish such material to its security holders subsequent to the
filing of its annual report on this Form 10-K.