ITEM 1: DESCRIPTION OF BUSINESS
IN GENERAL
We have commenced operations as an exploration stage company. We are engaged in the acquisition and exploration of mineral properties with a view to exploiting any mineral deposits we discover that demonstrate economic feasibility. Pursuant to a Mineral Property Purchase Agreement dated March 3, 2005, we acquired a 100% undivided right, title and interest in a total of six mineral claim cells, known collectively as the Copper Road I - VI claim, covering 150 hectares and located approximately two kilometers east of Deep Water Bay on Quadra Island of British Columbia. The original Copper Road I - VI claim was created on March 3, 2005, which we have renewed annually. The claim is currently recorded under Tenure Number 526652, and is in good standing until January 30, 2010. There is no other cost associated with the annual renewal of the claim.
There is no assurance that a commercially viable mineral deposit exists on the property. Further exploration will be required before a final evaluation as to the economic and legal feasibility is determined.
Mineral property exploration is typically conducted in phases. Each subsequent phase of exploration work is recommended by a geologist based on the results from the most recent phase of exploration. Once we have completed and evaluated each phase of exploration, we will make a decision as to whether or not we proceed with each successive phase based upon the analysis of the results of that phase. Our directors will make this decision based upon the recommendations of the independent geologist who oversees the program and records the results. We have completed the initial phase of exploration on the Copper Road I - VI claim. Our professional consulting geologist, Mr. Laurence Sookochoff, has provided his geological report for the results of Phase I exploration. Pursuant to the Phase I results, he has recommended that we initiate Phase II of our exploration program, which will consist of localized magnetometer and soil surveys over the prime indicated anomalous zones. The additional work program is estimated to cost $7,500 and further work will be dependent on the results of the recommended additional program.
Even if we complete our proposed exploration programs on the Copper Road I - VI claim 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.
COPPER ROAD I - VI CLAIM PURCHASE AGREEMENT
On March 3, 2005, we entered into a mineral property agreement with Mr. Larry Sostad of North Vancouver, British Columbia, whereby he sold us a 100% undivided right, title and interest in a total of six mineral cell claims located approximately two kilometers east of Deep Water Bay on Quadra Island, British Columbia.
DESCRIPTION, LOCATION AND ACCESS
The Copper Road I - VI claim property is located on Quadra Island, which is between Vancouver Island and the British Columbia mainland, within three kilometers off the east coast of Vancouver Island. The coordinates of the property are 125 degrees 18' 05" W Longitude and 50 degrees 11' 05" N Latitude in the Nanaimo Mining Division. The property is accessible by ferry from the city of Campbell River to Quathiaski Cove on Quadra Island, then inland by road approximately 21 kilometers. Facilities and skilled population in Campbell River are readily available and will provide all the necessary services needed for property exploration. According to the report provided by Mr. Sookochoff,
sufficient water for all phases of the exploration program could be available from numerous water sources within the confines of the property.
TITLE TO THE COPPER ROAD I - VI CLAIM
The original Copper Road I - VI claim was created on March 3, 2005 and renewed under Tenure Number 526652 on January 30, 2006. The claim has been renewed annually and is in good standing until January 30, 2010. We own a 100% interest in the claims, which entitles us to the sub-surface mineral rights. The company does not have any interest in the surface rights. To maintain the ownership of the claims, the company is obligated to either complete exploration work of one hundred dollars per cell per year (i.e. $600.00 per year) for the first three years commencing March 3, 2005, thence two hundred dollars per cell (i.e. $1,200) per year thereafter, or the payment of the equivalent of cash in lieu prior to the expiry date. There is no other cost associated with the annual renewal of the claim. If we fail to renew the claim at the expiry of the claim's tenure, we may lose rights to renew altogether.
A "mineral claim" refers to a specific section of land over which a title holder owns rights to exploration to ground. Such rights may be transferred or held in trust. Mr. Sostad is currently our trustee and is holding the Copper Road I - VI property in his name for our benefit. It is a common procedure to have such claims held in trust given the expense that we would incur in registering as a recorded claim holder and as an extra-provincial company in British Columbia. We can request that the claims be registered in our name at any time.
MINERALIZATION
The following technical terms in this section have the following meaning:
Andesitic: composed of solidified volcanic rock containing silica, iron and magnesium and usually medium dark in color
Chalcocite: an ore of copper formed from chalcopyrite that has 80% copper content
Chalcopyrite: a dark yellow mineral containing copper, iron and sulphur
Diorite: Igneous rock similar to granite, but with less quartz. Rock contains light-colored white and pink feldspar and dark biotite and hornblende minerals.
Malachite: a mineral composed of copper and carbonate
The Copper Road I - VI claim contains mineralized quartz veins and copper mineralization hosted by a shear zone, the presence of which indicates a potential for high-grade zones of copper mineralization within the mineral controlling shear zone, which may be mined by underground methods.
EXPLORATION HISTORY
Previous exploration included diamond drilling and geophysical surveys from which estimates of mineral reserves were 115,000 tons copper and silver grading 2.8% copper and 0.5oz silver per ton and 60,000 tons of 2%+ copper subject to confirmation by drilling and underground exploration. Metallurgical tests completed in 1998 indicated that a recovery of 91% of the copper could be achieved. It was stated that the good copper recover by flotation suggests that an all-flotation procedure may be a viable process for recovery.
GEOLOGICAL ASSESSMENT REPORTS: COPPER ROAD I - VI CLAIM
We retained Mr. Laurence Sookochoff, a professional consulting geologist, to complete an initial evaluation of the Copper Road I - VI claim and to prepare a geology report on the six cells. He has also updated this report for the results of the Phase I exploration program.
Mr. Sookochoff has been practicing as a professional geologist since 1966. He graduated in 1966 from the University of British Columbia, and is licensed by the Association of Professional Engineers and Geoscientists of British Columbia.
INITIAL REPORT - JUNE 13, 2005
Based on his review of the Copper Road I - VI claim, Mr. Sookochoff concludes that the Copper Road I - VI claim is located in a favorable geological environment for the occurrence of copper mineralization. Mr. Sookochoff recommends that we commence Phase II exploration program which consists of localized general magnetometer and soil surveys over the prime indicated anomalous zones.
Following the results of Phase II, further exploration pursuant to Phase III of our exploration plan would entail geological mapping and trenching and sampling of anomalous zones. Geological mapping involves plotting previous exploration data relating to a property on a map in order to determine the best property locations to conduct subsequent exploration work. Phase IV would consist of drill testing anomalous or mineralized zones if warranted by the results of the preceding phases. Drilling involves extracting a long cylinder of rock from the ground to determine amounts of metals at different depths. Pieces of the rock obtained, known as drill core, are analyzed for mineral content.
UPDATED REPORT - JULY 17, 2006
Phase I of our exploration program consisted of trenching and sampling on the Copper Road property. The samples assayed significant values for copper. Based on the results of the Phase I exploration program, Mr. Sookochoff has suggested that we commence Phase II of our exploration program. The estimated cost of this work is U.S. $7,500. Further work will be dependent upon the results of the above recommended program.
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.
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 beyond completion of the currently planned work programs. 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 environment 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;
- An assessment of all material to be left on the surface will need to be environmentally benign;
- Ground water 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.
POTENTIAL ACQUISITIONS
Our ability to continue exploration of the Copper Road I - VI is subject to our ability to raise additional funds. We are reviewing other potential acquisitions in various sectors. Currently, we are in the process of completing due diligence investigations of various opportunities. However, there is no guarantee that we will be able to reach any agreement to acquire such assets.
EMPLOYEES
We have no employees as of the date of this annual report other than our one director.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have not incurred any other research or development expenditures since our incorporation.
SUBSIDIARIES
We do not have any subsidiaries.
PATENTS AND TRADEMARKS
We do not own, either legally or beneficially, any patents or trademarks.
ITEM 1A.
ITEM 1A. RISK FACTORS
FORWARD-LOOKING STATEMENTS
This Form 10-K contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual results are likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in the above "Risk Factors" section and elsewhere in this document.
In addition to the other information in this annual report, the following factors should be carefully considered in evaluating our business and prospects:
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
Our current operating funds are less than necessary to complete all intended exploration of the Copper Road I - VI claim, currently estimated at $57,500 for remaining proposed phases of exploration as more fully discussed in our professional consulting geologist's June 13, 2005 report and his update report dated July 17, 2006. We do not have sufficient funds on hand for Phase II of our exploration program, which was recommended by our professional consulting geologist on July 17, 2006 and our estimated administrative costs for 12 months from the date of this annual report. Therefore, we will need to obtain additional financing in order to complete our business plan. As of July 31, 2009, we had cash in the amount of $279. We have no revenue or income from operations.
We have completed the first phase of exploration on the Copper Road I - VI claim. Our professional consulting geologist has updated his geological report for the results of Phase I exploration. He has recommended an additional work program for samples taken the Copper Road I - VI property which indicated significant copper values. The additional work program is estimated to cost $7,500 and further work will be dependent on the results of the recommended additional program.
Our business plan calls for significant expenses in connection with the exploration of the Copper Road I - VI claim. We will require additional financing in order to complete remaining phases of exploration to determine whether the property contains economic mineralization. We will also require additional financing if the costs of the exploration of the Copper Road I - VI claim are greater than anticipated. Even after completing all proposed exploration, we will not know if we have a commercially viable mineral deposit. We will have to spend substantial funds on further drilling and engineering studies in order to establish a deposit.
Our proposed exploration plan, which when complete, should allow us to determine whether mineralization exists on the Copper Road I - VI claim. At the completion of each phase of our exploration plan we will evaluate the results and make a determination to proceed to the next phase of exploration and its associated estimated cost. The four phases encompass compilation and analysis of previous exploration data, investigation of anomalous areas, localized general and detailed magnetometer and soil surveys, and testing diamond drilling of targets delineated within the potential exploration sites.
Each subsequent phase of exploration will require additional funds beyond our current cash resources. We will need to obtain additional financing from the sale of our securities to fund these exploration expenditures and future administrative costs. Our administrative costs will be dependent upon the time frame undertaken to complete the remaining phases of our exploration plan. To the extent we need more than one year to complete the remaining exploration or our administrative costs are higher than estimated, we will require additional financing to cover administrative costs.
We will require additional financing to sustain our business operations if we are not successful in earning revenues once exploration is complete. We do not currently have any arrangements for financing and may not be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including the market price for copper and precious metals, investor acceptance of our property and general market conditions. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.
The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders. The only other anticipated alternative for the financing of further exploration would be advances from related parties and joint venture
or sale of a partial interest in the Copper Road I - VI claim to a third party in exchange for cash or exploration expenditures, which is not presently contemplated.
BECAUSE WE HAVE ONLY RECENTLY COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF BUSINESS FAILURE.
We have commenced exploration on the Copper Road I - VI claim. We have completed Phase I exploration and received an updated geological report based on the results of Phase I from our professional consulting geologist. Since we have not conducted the remaining phases of exploration recommended in our June 30, 2005 or July 17, 2006 geological reports, we have no way to evaluate the likelihood that our business will be successful. We were incorporated on February 22, 2005 and to date have been involved primarily in organizational activities, the acquisition of the mineral property option and Phase I field exploration, which included showing relocation and geological examination, trenching and sampling and electromagnetic and magnetometer surveys. We have not earned any revenues as of the date of this annual report. Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. If we encounter these problems, we will likely continue to incur losses, which may have a negative impact on an investment in our common stock.
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 Copper Road I - VI claim and the production of metals from the claims, we will not be able to earn profits or continue operations.
There is no history upon which to base any assumption as to the likelihood that we will prove successful and it is doubtful that we will generate any operating revenues or ever achieve profitable operations as few mineral exploration properties are ultimately developed into operating mines. If we are unsuccessful in addressing these risks, our business will most likely fail.
BECAUSE WE WILL INCUR SIGNIFICANT COSTS COMPLYING WITH OUR OBLIGATIONS AS A REPORTING ISSUER, OUR ABILITY TO ATTAIN PROFITABLE OPERATIONS WILL BE ADVERSELY IMPACTED.
Because we are a reporting issuer in the United States, we will be required to file periodic reports with the Securities & Exchange Commission, including financial statements and disclosure regarding changes in our operations. We anticipate that we will incur approximately $25,000 per year in order to comply with these reporting requirements. As our operations become more complex, it is anticipated that these costs will increase. These compliance costs will be charged to operations and will negatively impact our ability to attain profitable operations.
BECAUSE OF THE SPECULATIVE NATURE OF EXPLORATION OF MINING PROPERTIES, THERE IS A SUBSTANTIAL RISK THAT OUR BUSINESS WILL FAIL.
The search for valuable metals as a business is extremely risky. The likelihood of our mineral claims containing economic mineralization or reserves of copper and precious metals is extremely remote. Exploration is a speculative venture necessarily involving substantial risk. In all probability, the Copper Road I - VI claim does not contain any economic reserves and funds that we spend on exploration will be lost. As well, problems such as unusual or unexpected
formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan.
WE NEED TO CONTINUE AS A GOING CONCERN IF OUR BUSINESS IS TO SUCCEED. OUR INDEPENDENT AUDITOR HAS RAISED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
The report of our independent accountant to our audited financial statements for the period ended July 31, 2009 indicates that there are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such factors identified in the report are that we have no source of revenue and our dependence upon obtaining adequate financing. If we are not able to continue as a going concern, it is likely investors will lose all of their investment.
BECAUSE OF THE INHERENT DANGERS INVOLVED IN MINERAL EXPLORATION, THERE IS A RISK THAT WE MAY INCUR LIABILITY OR DAMAGES AS WE CONDUCT OUR BUSINESS.
Exploration involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position.
BECAUSE WE HAVE NOT SURVEYED THE COPPER ROAD I - VI CLAIMS, WE MAY DISCOVER MINERALIZATION ON THE PROPERTY THAT IS NOT WITHIN OUR CLAIMS BOUNDARIES AND THEREFORE, CANNOT BE EXTRACTED.
Until the Copper Road I - VI claim is surveyed, the precise location of the boundaries of the claim may be in doubt. If we discover mineralization that is close to the estimated claim boundaries, it is possible that some or all of this mineralization may occur outside surveyed boundaries. In such a case, we would not have the right to extract these minerals.
EVEN IF WE DISCOVER COMMERCIAL RESERVES OF BASE OR PRECIOUS METALS ON THE COPPER ROAD I - VI CLAIM, WE MAY NOT BE ABLE TO SUCCESSFULLY COMMENCE COMMERCIAL PRODUCTION.
The Copper Road I - VI claim does not contain any known bodies of mineralization. If our exploration programs are successful in establishing copper and other metals of commercial tonnage and grade, we will require additional funds in order to place the property into commercial production. We may not be able to obtain such financing.
IF WE BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATION OR OTHER LEGAL UNCERTAINTIES, OUR BUSINESS WILL BE NEGATIVELY AFFECTED.
There are several governmental regulations that materially restrict mineral property exploration and development. Under Canadian mining law, to engage in certain types of exploration will require work permits, the posting of bonds, and the performance of remediation work for any physical disturbance to the land. While these current laws will not affect our current exploration plans, if we proceed to commence drilling operations on the Copper Road I - VI claim, we will incur modest regulatory compliance costs.
In addition, the legal and regulatory environment that pertains to the exploration is uncertain and may change. Uncertainty and new regulations could increase our costs of doing business and prevent us from exploring for economic deposits. The demand for base and precious metals may also be significantly reduced. This could delay demand for our metals and limit our ability to generate sufficient revenues. In addition to new laws and regulations being adopted, existing laws may be applied to mining that have not as yet been
applied. These new laws may increase our cost of doing business with the result that our financial condition and operating results may be harmed.
BECAUSE OUR OFFICER AND DIRECTOR HAS OTHER BUSINESS INTERESTS, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
Our president, secretary, treasurer and sole director, Mr. Graeme McNeill, only spends approximately 10% of his business time providing his services to us. While Mr. McNeill presently possesses adequate time to attend to our interests, it is possible that the demands on Mr. McNeill from his other obligations could increase with the result that he would no longer be able to devote sufficient time to the management of our business.
Our sole officer and director is not involved with other companies that are involved in mineral property exploration. Accordingly, we do not believe the other business interests of our officer and director presents any conflict of interest with our business.
BECAUSE OUR MINERAL PROPERTY IS LOCATED IN CANADA, THE ABILITY OF U.S. RESIDENTS TO ENFORCE LIABILITIES UNDER U.S. SECURITIES AND BANKRUPTCY LAWS WILL BE DIFFICULT.
Our sole mineral property asset is located in Canada. Accordingly, service of process upon us, or upon individuals related to us, may be difficult or impossible to obtain within the United States. As well, any judgment obtained in the United States against us may not be collectible within the United States. Accordingly, the ability of U.S. residents to enforce liabilities under U.S. securities and bankruptcy laws will be difficult.
BECAUSE WE HAVE NOT DECLARED DIVIDENDS AND HAVE NO INTENTION OF DOING SO IN THE FUTURE, STOCKHOLDERS SHOULD NOT EXPECT TO RECEIVE ANY FUNDS FROM THEIR INVESTMENT UNLESS THEY SELL OUR STOCK.
We have never declared or paid any cash dividends on our common stock. We currently intend to retain future earnings, if any, to finance the expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future. Therefore, investors will not receive any payments from their investment in our stock unless they sell their shares.
A PURCHASER IS PURCHASING PENNY STOCK WHICH LIMITS HIS OR HER ABILITY TO SELL THE STOCK.
Our shares constitute penny stock under the Exchange Act. The shares will remain penny stock for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, thus limiting investment liquidity. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in our company will be subject to rules 15g-1 through 15g-10 of the Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock.
ITEM 1B:
ITEM 1B: UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2:
ITEM 2: PROPERTIES
We do not currently own any property. Our current office facilities located at 647 1st Avenue N.E., Suite 213, Calgary, Alberta are provided to us on a rent free basis by our director. Management believes the current premises are sufficient for its needs at this time.
We currently have no investment policies as they pertain to real estate, real estate interests or real estate mortgages.
ITEM 3:
ITEM 3: LEGAL PROCEEDINGS
There are no legal proceedings pending, or to the best knowledge of management, threatened against us. There were no legal proceedings previously pending which were resolved during the fourth quarter of the fiscal year ended July 31, 2009. Our address for service of process in Nevada is 564 Wedge Lane, Fernley, Nevada
ITEM 4:
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of our fiscal year to a vote of security holders, through the solicitation of proxies or otherwise.
PART II
ITEM 5:
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
MARKET INFORMATION
Our shares of common stock are quoted for trading on the OTC Bulletin Board under the symbol WLFR. However, no trades of our shares of common stock occurred through the facilities of the OTC Bulletin Board during the fiscal year ended July 31, 2009.
HOLDERS
We have 40 shareholders of record as at the date of this annual report.
DIVIDENDS
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
1. we would not be able to pay our debts as they become due in the usual course of business; or
2. our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
ITEM 6:
ITEM 6: SELECTED FINANCIAL DATA
We have been in a development stage since our inception and had no income or assets during the period from our incorporation in 2005 through the end of our fiscal year ended July 31, 2009. Therefore, the information required by Item 301 of Regulation S-K is omitted for that period as not material.
ITEM 7:
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF DINANCIAL CONDITION AND RESULTS OF OPERATION
PLAN OF OPERATION
From inception to date, we have completed the initial phase of exploration on the Copper Road I - VI claim, completed assaying samples taken from the property during Phase I field exploration and received an updated geological report from our professional consulting geologist for the Phase I exploration.
Our plan of operation for the twelve months following the date of this annual report is to complete the recommended additional work recommended in our professional consulting geologist's June 13, 2005 report. Based on the results of the additional work program we will then undertake revised recommendations of our professional consulting geologist for Phases III & IV work programs. These programs will take approximately two months to complete. Although we have no current estimate of these revised phases of exploration, we will need to incur a total of $600 before January 30, 2010 in order to maintain ownership of our property claims. The exploration work will be conducted by our trustee, Mr. Larry Sostad, who will be supervised by Mr. Laurence Sookochoff, our professional consulting geologist. They will each provide their services at
standard market rates within the context of our exploration plan budget. Our agreements with each of Mr. Sostad and Mr. Sookochoff for their services are verbal.
We do not have any verbal or written agreement regarding the retention of any qualified engineer or geologist for this exploration program.
In addition to the exploration program costs, we estimate we will incur $20,000 in administrative costs for the year following the date of this annual report.
Total expenditures related to exploration, administration over the next 12 months are therefore expected to be approximately $35,000.
We will require additional funding in order to cover our anticipated administrative costs for the next year, as well as Phase II and III exploration programs on the Copper Road I - VI claim. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or from director loans. We do not have any arrangements in place for any future equity financing or loans.
If we are successful in our exploration program and identify a mineral deposit on the Copper Road I - VI claim we will still have to spend substantial funds on further drilling and engineering studies to determine if the deposit is commercially viable.
We are reviewing other potential acquisitions in various sectors. Currently, we are in the process of completing due diligence investigations of various opportunities. However, there is no guarantee that we will be able to reach any agreement to acquire such assets.
RESULTS OF OPERATIONS FOR THE PERIOD FROM INCEPTION THROUGH JULY 31, 2009
We have not earned any revenues from our incorporation on February 22, 2005 to July 31, 2009. We do not anticipate earning revenues unless we enter into commercial production on the Copper Road I - VI claim, which is doubtful. We have not commenced the exploration stage of our business and can provide no assurance that we will discover economic mineralization on the property, or if such minerals are discovered, that we will enter into commercial production.
We incurred operating expenses in the amount of $106,492 for the period from our inception on February 22, 2005 to July 31, 2009. These operating expenses were comprised of accounting and audit fees, mineral property costs, organization costs, regulatory fees and filings, donated management services, office rent, and office, bank charges and other sundries, net of interest income.
We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities. For these reasons our auditors believe that there is substantial doubt that we will be able to continue as a going concern.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Wolf Resources, Inc.
I have audited the accompanying balance sheets of Wolf Resources, Inc. (the "Company") as of July 31, 2009 and 2008, and the related statements of operations, stockholders' equity (deficiency), and cash flows for the years ended July 31, 2009 and 2008, and for the period February 22, 2005 (inception) to July 31, 2009. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July 31, 2009 and 2008 and the results of its operations and cash flows for the years ended July 31, 2009 and 2008, and for the period February 22, 2005 (inception) to July 31, 2009 in conformity with accounting principles generally accepted in the United States.
The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company's present financial situation raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to this matter are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Michael T. Studer CPA P.C. --------------------------------- Michael T. Studer CPA P.C.
Freeport, New York October 7, 2009
Wolf Resources, Inc. (formerly Cantop Ventures, Inc.) (An Exploration Stage Company) Balance Sheets (Expressed in US Dollars) - --------------------------------------------------------------------------------
See notes to financial statements.
Wolf Resources, Inc. (formerly Cantop Ventures, Inc.) (An Exploration Stage Company) Statements of Operations - --------------------------------------------------------------------------------
See notes to financial statements.
Wolf Resources, Inc. (formerly Cantop Ventures, Inc.) (An Exploration Stage Company) Statements of Stockholders' Equity (Deficiency) For the period February 22, 2005 (Inception) to July 31, 2009 (Expressed in US Dollars) - --------------------------------------------------------------------------------
See notes to financial statements.
Wolf Resources, Inc. (formerly Cantop Ventures, Inc.) (An Exploration Stage Company) Statements of Cash Flows (Expressed in US Dollars) - --------------------------------------------------------------------------------
See notes to financial statements.
Wolf Resources, Inc. (Formerly Cantop Ventures, Inc.) (An Exploration Stage Company) Notes to Financial Statements July 31, 2009 - --------------------------------------------------------------------------------
Note 1 Organization and Business Operations
Wolf Resources, Inc. (formerly Cantop Ventures, Inc.) (the "Company") was incorporated in the State of Nevada on February 22, 2005. The Company is an Exploration Stage Company as defined by Statement of Financial Accounting Standards ("SFAS") No. 7, "Accounting and Reporting for Development Stage Enterprises". The Company's principal business is the acquisition and exploration of mineral resources. The Company has acquired a mineral property located in the Province of British Columbia, Canada, and has not yet determined whether this property contains reserves that are economically recoverable. The recoverability of amounts from 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 from the sale thereof.
These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated any revenue since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at July 31, 2009, the Company had cash of $279 and has had accumulated losses of $106,492 since inception. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 2 Summary of Significant Accounting Policies
a) Basis of Presentation
These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars.
b) Use of Estimates
The preparation of financial statements in conformity with U.S. 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 reporting periods. Actual results could differ from those estimates.
c) Basic and Diluted Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with SFAS No. 128, "EARNINGS PER SHARE". SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income
Wolf Resources, Inc. (Formerly Cantop Ventures, Inc.) (An Exploration Stage Company) Notes to Financial Statements July 31, 2009 - --------------------------------------------------------------------------------
statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.
d) Comprehensive Loss
SFAS No. 130, "REPORTING COMPREHENSIVE INCOME," establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. For the years ended July 31, 2009 and 2008 and for the period February 22, 2005 (inception) to July 31, 2009, except for net loss, the Company had no items that represent comprehensive income (loss) and, therefore, has not included a schedule of comprehensive income (loss) in the financial statements.
e) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.
f) Mineral Claim Costs
Mineral claim acquisition costs are capitalized and reviewed periodically for impairment. Exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
g) Income Taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109, "ACCOUNTING FOR INCOME TAXES", as of its inception. Pursuant to SFAS No. 109, the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
h) Foreign Currency Translation
The Company's functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with SFAS No. 52, "FOREIGN CURRENCY TRANSLATION", using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars.
Wolf Resources, Inc. (Formerly Cantop Ventures, Inc.) (An Exploration Stage Company) Notes to Financial Statements July 31, 2009 - --------------------------------------------------------------------------------
The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
i) Financial Instruments
The fair values of the Company's financial instruments, consisting of cash, accounts payable and accrued liabilities and due to related party, approximate their carrying values due to the immediate or short-term maturity of the financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency, or credit risks arising from its financial instruments.
j) Recent Accounting Pronouncements
Certain accounting pronouncements have been issued by the FASB and other standard setting organizations which have not yet been adopted by the Company. The impact on the Company's financial position and results of operations from adoption of these standards is not expected to be material.
Note 3 Mineral Property
Pursuant to a mineral property purchase agreement dated March 3, 2005, the Company acquired a 100% undivided right, title and interest in the Copper Road I -VI mineral claim, located approximately 2 kilometres East of Deep Water Bay, Quadra Island of British Columbia, Canada for $3,500. The Tenure Number ID is 526652, which expires January 30, 2010. The property is in the name of Larry Ralph W. Sostad held by him in trust for the Company.
In June 2005, the Company received an evaluation report from a third party consulting firm recommending an exploration program with a total estimated cost of $65,000. Due to lack of working capital, the Company has not completed this program. At July 31, 2005, the Company provided a $3,500 reserve for impairment of the mining property acquisition costs.
Note 4 Related Party Transactions
The president of the Company provides management services and office space to the Company at no cost. For the period February 22, 2005 (inception) to July 31, 2009, these services were valued at and expensed for a total of $38,100 ($4,500 in the period February 22, 2005 to July 31, 2005, $8,400 per year in the years ended July 31, 2006, 2007, 2008 and 2009), with the same amounts added to additional paid-in capital.
The $37,571 and $23,341 amounts due to related party at July 31, 2009 and 2008, respectively, are due a significant stockholder of the Company, are non-interest bearing, and are due on demand.
Wolf Resources, Inc. (Formerly Cantop Ventures, Inc.) (An Exploration Stage Company) Notes to Financial Statements July 31, 2009 - --------------------------------------------------------------------------------
Note 5 Series A Preferred Stock
On May 23, 2008, the Company certified the designation of 1,500,000 shares (of its 20,000,000 total authorized shares of preferred stock) as "Series A Preferred Stock". Each share of Series A Preferred Stock has a stated value and liquidation preference of $0.10, has no voting rights, is convertible at the option of the holder into 40 shares of the Company's common stock, and is entitled to noncumulative dividends when, if and as declared by the Board of Directors, at 6% of its par value per annum in preference to any dividends on the Company's common stock. In the event that dividends are declared on the common stock, each share of Series A Preferred Stock is entitled to receive a dividend equal to 40 times the dividend per share of common stock.
On May 28, 2008, the Company filed a Registration Statement on Form S-1 with the United States Securities and Exchange Commission (the "SEC") to sell up to 1,500,000 shares of Series A Preferred Stock at a price of $0.10 per share or $150,000 total in a "best efforts" self-underwriting for a period of 180 days from the effective date of the Registration Statement. On July 28, 2008, the Registration Statement was declared effective by the SEC. On January 24, 2009, the offering was terminated; no shares were sold.
Note 6 Common Stock
During the period from February 22, 2005 (inception) to July 31, 2005, the Company sold a total of 8,500,000 shares of common stock to 40 individuals and received total cash proceeds of $31,000. 4,000,000 shares were sold to Company officers and directors at a price of $0.001 per share. 2,000,000 shares were sold to other individuals at a price of $0.001 per share, and 2,500,000 shares were sold to other individuals at a price of $0.01 per share. On June 30, 2006, the Securities and Exchange Commission declared effective the Company's Registration Statement on Form SB-2 to register the 4,500,000 shares of common stock not owned by Company officers and directors.
At July 31, 2009, there are no outstanding stock options or warrants.
Note 7 Income Taxes
The provisions for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income tax rate of 35% to income (loss) before income taxes. The sources of the difference follow:
Period from February 22, 2005 (Date of Year Ended Year Ended Inception) to July 31, July 31, July 31, 2009 2008 2009 -------- -------- -------- Expected tax at 35% $ (7,903) $ (8,653) $(37,272) Donated services 2,940 2,940 13,335 Increase in valuation allowance 4,963 5,713 23,937 -------- -------- -------- Income tax provision $ -- $ -- $ -- ======== ======== ========
Wolf Resources, Inc. (Formerly Cantop Ventures, Inc.) (An Exploration Stage Company) Notes to Financial Statements July 31, 2009 - --------------------------------------------------------------------------------
Significant components of the Company's deferred income tax assets are as follows:
July 31, July 31, 2009 2008 -------- -------- Net operating loss carryforword $ 23,937 $ 18,974 Valuation allowance (23,937 (18,974) -------- -------- Net deferred tax assets $ -- $ -- ======== ========
Based on management's present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset of $23,937 at July 31, 2009 attributable to the future utilization of the net operating loss carryforward of $68,392 will be realized. Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the financial statements. The Company will continue to review this valuation allowance and make adjustments as appropriate. The $68,292 net operating loss carryforward expires $ 9,808 in year 2025, $18,767 in year 2026, $9,314 in year 2027, $16,323 in year 2028 and $14,180 in year 2029.
Current United States income tax laws limit the amount of loss available to offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.
Note 8 Subsequent Events
The Company has evaluated subsequent events through the filing date of this Form 10-K and has determined that there were no subsequent events to recognize or disclose in these financial statements.
ITEM 9:
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A:
ITEM 9A: CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS
We evaluated the effectiveness of our disclosure controls and procedures as of the end of the 2009 fiscal year. This evaluation was conducted with the participation of our chief executive officer and our principal accounting officer.
Disclosure controls are controls and other procedures that are designed to ensure that information that we are required to be disclosed in the reports we file pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported.
LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS
Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but no absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.
ASSESSMENT OF THE EFFECTIVENESS OF CONTROLS
As of our fiscal year ended July 31, 2009, our management has concluded that our internal control over financial reporting is effective. Our management is not aware of any material weakness in our internal control over financial reporting.
LIMITATIONS OF REPORT
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting: management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.
CONCLUSIONS
Based on his evaluation of our controls, our chief executive officer and chief accounting officer has concluded that, subject to the limitations noted above, the disclosure controls are effective providing reasonable assurance that material information relating to us is made known to management on a timely basis during the period when our reports are being prepared. There were no
changes in our internal controls that occurred during the period covered by this report that have been materially affected, or are reasonably likely to affect our internal controls.
ITEM 9B:
ITEM 9B: OTHER INFORMATION
None.
PART III
ITEM 10:
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Our executive officers and directors and their respective ages as of the date of this annual report are as follows:
DIRECTORS:
Name of Director Age - ---------------- --- Graeme McNeill 28
EXECUTIVE OFFICERS:
Name of Officer Age Office - --------------- --- ------ Graeme McNeill 28 President, CEO, Secretary, Treasurer and Director
Set forth below is a brief description of the background and business experience of our executive officer and director for the past five years.
Since January 2008, GRAEME MCNEILL has been employed as a sales executive with Taiga Forest Products in Calgary Alberta. Prior to that, he worked from January 2007 to January 2008 as a sales executive and inventory specialist for Weyerhaeuser Company in Calgary. Mr. McNeill holds a Bachelor of Commerce degree that he obtained at Royal Roads University in Calgary, Alberta in August of 2006.
TERM OF OFFICE
Our director is appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officer is appointed by our board of directors and hold office until removed by the board.
SIGNIFICANT EMPLOYEES
We have no significant employees other than the officer and director described above.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our executive officer and director, and persons who beneficially own more than 10% of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Based on our review of the copies of such forms we received, we believe
that during the fiscal year ended July 31, 2009 all such filing requirements applicable to our officers and directors were complied as follows:
Number Transactions Known Failures of Late Not Timely To File a Name and Principal Position Reports Reported Report - --------------------------- ------- -------- ------
Graeme McNeill 0 0 1 (President CEO and director)
ITEM 11:
ITEM 11: EXECUTIVE COMPENSATION
The table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services rendered in all capacities to us for the fiscal year ended July 31, 2009.
ANNUAL COMPENSATION
STOCK OPTION GRANTS
We have not granted any stock options to the executive officer since our inception.
CONSULTING AGREEMENTS
We did not and do not have any employment or consulting agreement with Mr. McNeill. We do not pay him any amount for acting as an officer or director.
ITEM 12:
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding common stock as of the date of this annual report, and by the officers and directors, individually and as a group as at the date of this annual report. Except as otherwise indicated, all shares are owned directly.
Title and Name and Address of Number of Percentage Class Beneficial Owner Shares of Class ----- ---------------- ------ -------- Common Graeme McNeill 2,000,000 23.5% Stock 647 - 1st Ave. N.E., Suite 213 Calgary, Alberta
Common Christopher Paterson 2,000,000 23.5% Stock 17365 SW 13th Street Pembroke Pines, Florida 33029
Common All Officers and Directors 2,000,000 23.5% Stock as a Group that consists of shares one person
The percent of class is based on 8,500,000 shares of common stock issued and outstanding as of the date of this annual report.
There are no arrangements that may result in our change in control of the company.
ITEM 13:
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Neither our director and officer, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to all of our outstanding shares, nor any promoter, nor any relative or spouse of any of the foregoing persons has any material interest, direct or indirect, in any transaction since our incorporation or in any presently proposed transaction which, in either case, has or will materially affect us.
Our management is involved in other business activities and may, in the future become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between our business and their other business interests. In the event that a conflict of interest arises at a meeting of our directors, a director who has such a conflict will disclose his interest in a proposed transaction and will abstain from voting for or against the approval of such transaction.
ITEM 14:
ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our principal accountants, Michael T. Studer CPA P.C., billed the following fees for the services indicated:
Fiscal year ended Fiscal year ended July 31, 2009 July 31, 2008 ------------- ------------- Audit fees $10,500 $11,900 Audit-related fees Nil Nil Tax Fees Nil Nil All other fees Nil Nil
Audit fees consist of fees related to professional services rendered in connection with the audit of our annual financial statements and reviews of our quarterly financial statements.
Our policy is to pre-approve all audit and permissible non-audit services performed by the independent accountants. These services may include audit services, audit-related services, tax services and other services.
PART IV
ITEM 15:
ITEM 15: EXHIBITS FINANCIAL STATEMENT SCHEDULES
Exhibit 31.1: Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
Exhibit 31.2: Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
Exhibit 32.1: Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2: Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of Section 13 and 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.
Dated: October 7, 2009
WOLF RESOURCES, INC.
/s/ Graeme McNeill - ----------------------------------- Graeme McNeill President, Chief Executive Officer, Secretary, Treasurer and Director