ITEM 1. DESCRIPTION OF BUSINESS
Development of Business
Goldfields International Inc. (the “Company” or “we”), f/k/a American Goldfields Inc., is a natural resource exploration stage company engaged in the acquisition and exploration of properties for deposits of gold or silver. We were incorporated on December 21, 2001 under the laws of the State of Nevada. Since then, we have engaged primarily in the acquisition and exploration of mining interests in properties that may potentially have deposits of gold and silver. To date, we have not earned any revenues.
On various dates in 2004 and 2005, we entered into separate agreements with MinQuest Inc. (“MinQuest”) granting us an option to purchase 100% of MinQuest’s mining interests in six different properties located in various parts of the State of Nevada, which we plan to explore for the purpose of determining whether there are any commercially exploitable deposits of gold or silver. None of the properties presently has any known mineral deposits. The properties are undeveloped and do not contain any open-pit or underground mines. There is no mining plant or equipment located on the properties, and there is no power supply to the properties. Our planned exploration program is exploratory in nature and no mineral reserves may ever be found.
On March 10, 2010, we caused the incorporation of our wholly owned subsidiary, Goldmin Exploration Inc., (“Goldmin”) under the laws of Nevada. On March 11, 2010 the Company entered into two Assignment Agreements, with Goldmin to assign the exclusive option to an undivided right, title and interest in the Gilman property; and the Crescent Fault, Bankop and Bullion Mountain, collectively named the Cortez property to Goldmin. Pursuant to the Assignment Agreements, Goldmin assumed the rights, and agreed to perform all of the duties and obligations, of the Company arising under the Gilman Property Option Agreement; and the Cortez Property Option Agreement.
On December 9, 2010, the Company chose to terminate the Gilman Property Option Agreement and the Cortez Property Option Agreement by giving MinQuest written notice to terminate. In addition, the Company and its subsidiary acknowledged that the Hercules Property has been reverted back to MinQuest according to a final 30 day notice of default served by MinQuest due to a shortfall in option payments and exploration expenditures. The Company and its subsidiary do not have any further rights, interests, or obligations in these properties.
On March 9, 2012, the Company and a majority of the Company’s stockholders authorized a name change and a 1:100 reverse stock split of our common stock. On May 7, 2012, the Company filed an Amendment to the Articles of Incorporation reflecting a name change to Goldfields International Inc. and the implementation to effect a one-for-one-hundred reverse stock split with all fractional shares being rounded up to the nearest whole share (the “Reverse Split”). The Reverse Split was declared effective by the Financial Industry Regulatory Authority (“FINRA”) on June 7, 2012. All share and per share amounts have been retrospectively restated to reflect the Reverse Split.
As a result of the reverse stock split, the number of shares of our common stock issued and outstanding was decreased from 34,876,932 shares from 347,770 shares.
Competition
The mineral exploration industry, in general, is intensively competitive and even if commercial quantities of ore are discovered, a ready market may not exist. Numerous factors beyond our control may affect the marketability of any substances discovered. 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 not receiving an adequate return on invested capital.
Compliance with Government Regulation
We are required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in the United States. The federal government and various state and local governments have adopted laws and regulations regarding the protection of natural resources, human health and the environment. We will be required to conduct all exploration activities in accordance with all applicable laws and regulations. These may include requiring working permits for any exploration work that results in physical disturbances to the land and locating claims, posting claims and reporting work performed on the mineral claims. The laws and regulations may tell us how and where we can explore for natural resources, as well as environmental matters relating to exploration and development. Because these laws and regulations change frequently, the costs of compliance with existing and future environmental regulations cannot be predicted with certainty.
Any exploration or production on United States Federal land will have to comply with the Federal Land Management Planning Act which has the effect generally of protecting the environment. Any exploration or production on private property, whether owned or leased, will have to comply with the Endangered Species Act and the Clean Water Act. The costs of complying with environmental concerns under any of these acts vary on a case by case basis. In many instances, the cost can be prohibitive to develop. Environmental costs associated with a particular project must be factored into the overall cost evaluation of whether to proceed with the project.
There are no costs to us at the present time in connection with compliance with environmental laws other than the reclamation bonding requirements of the Bureau of Land Management. However since we do anticipate engaging in natural resource exploration, these costs could occur at any time. Costs could extend into the millions of dollars for which we could be liable. In the event of liability, we would be entitled to contribution from other owners so that our percentage share of a particular project would be the percentage share of our liability on that project. However, other owners may not be willing or able to share in the cost of the liability. Even if liability is limited to our percentage share, a significant liability could severely impact our assets and resources.
Employees
We have no employees as of the date of this report. Our Officers and Directors provide planning and organizational services for us on a part-time consulting basis. Any other services required will be conducted largely through consultants and third parties.
Research and Development Expenditures
We have not incurred any research or development expenditures since our incorporation.
Patents and Trademarks
We do not own any patents or trademarks.
ITEM 1A.
ITEM 1A. RISK FACTORS
Factors that May Affect Future Results
1. We will require additional funds to achieve our current business strategy and our inability to obtain funding will cause our business to fail.
Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the acquisition and exploration of natural resource properties. We will need to raise additional funds through public or private debt or equity sales in order to fund our operations and fulfill our contractual obligations. These financings may not be available when needed. Even if these financings are available, it may be on terms that we deem unacceptable or are materially adverse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences, or other terms. Our inability to obtain financing would have an adverse effect on our ability to implement our current exploration and as a result, could require us to diminish or suspend our operations and possibly cease our existence. Obtaining additional financing would be subject to a number of factors, including the market prices for the mineral property and silver and copper. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.
2. If we do not complete the required option payments and capital expenditure requirements mandated in any prospective agreements, we will lose our interest in that respective property and our business may fail.
If we do not make all of the property payments or incur the required expenditures in accordance with any prospective property option agreements, we will lose our option to purchase the respective property for which we have not made the payments and may not be able to continue to execute our business objectives if we are unable to find an alternate exploration interest. Our payment obligations are non-refundable and if we do not make required payments, we will lose all amounts previously paid and all our rights to the prospective property.
3. Because our Directors serve as Directors and Officers of other companies engaged in mineral exploration, a potential conflict of interest could negatively impact our ability to acquire properties to explore and to run our business.
Our Directors and Officers may work for other mining and mineral exploration companies. Due to time demands placed on our Directors and Officers, and due to the competitive nature of the exploration business, the potential exists for conflicts of interest to occur from time to time that could adversely affect our ability to conduct our business. The Directors' and Officers’ full-time employment with other entities limits the amount of time they can dedicate to us as a Director or Officer. Also, our Directors and Officers may have a conflict of interest in helping us identify and obtain the rights to mineral properties because they may also be considering the same properties. To mitigate these risks, we contract several geologists in order to ensure that we are not overly reliant on any one of our Directors and Officers to provide us with geological services. However, we cannot be certain that a conflict of interest will not arise in the future. To date, there have not been any conflicts of interest between the Directors or Officers and the Company.
4. Because of the speculative nature of exploration and development, there is a substantial risk that our business will fail.
The search for valuable natural resources as a business is extremely risky. We can provide investors with no assurance that the properties we option contain commercially exploitable reserves. Exploration for natural reserves is a speculative venture involving substantial risk. Few properties that are explored are ultimately developed into producing commercially feasible reserves. 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.
5. Because we have not commenced business operations, we face a high risk of business failure due to our inability to predict the success of our business.
We are in the initial stages of acquisition and exploration of mineral claims, and thus have no way to evaluate the likelihood that we will be able to operate the business successfully. To date, we have been primarily involved in the acquisition and exploration of the mineral claims. We have not earned any revenues as of the date of this report.
6. Because of the unique difficulties and uncertainties inherent in mineral exploration and the mining business, we face a high risk of business failure.
Potential investors should be aware of the difficulties normally encountered by early-stage 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.
7. Because we anticipate our operating expenses will increase prior to our earning revenues, we may never achieve profitability.
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 the exploration of our mineral 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 we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.
8. Because of the speculative nature of exploration of mineral properties, there is substantial risk that no mineral deposits will be found and this business will fail.
The search for valuable minerals as a business is extremely risky. Exploration for minerals is a speculative venture involving substantial risk. The expenditures to be made by us in the exploration of the mineral claims may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan.
9. Because the search for viable natural resources is extremely risky no assurance can be made that we will obtain financing which will likely have a negative impact on our financial condition.
We are a natural resource exploration company with an objective of acquiring, exploring, and if warranted and feasible, exploiting natural resource properties. The search for viable natural resources is extremely risky. A critical component of our operating plan impacting our continued existence is the ability to obtain additional capital through equity and/or debt financing. Since inception, we have financed our cash flow requirements through private placement issuances of common stock and debt financing. No assurance can be made that such financing will be available, and if available it may take either the form of debt or equity, and will likely have a negative impact on our financial condition.
10. Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.
The search for valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position.
11. Because access to our mineral claims may be restricted by inclement weather, we may be delayed in our exploration.
Access to our mineral properties may be restricted through some of the year due to weather in the area. As a result, any attempt to test or explore the property is largely limited to the times when weather permits such activities. These limitations can result in significant delays in exploration efforts. Such delays can have a significant negative effect on our results of operations.
12. Because our President has only agreed to provide his services on a part-time basis, he may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to fail.
Mr. Kehmeier, our sole Officer, provides his management services to a number of companies. Because we are in the early stages of our business, Mr. Kehmeier will not be spending all of his time working for the Company. Mr. Kehmeier expects to expend approximately one day per week on our business. Later, if the demands of our business require the full business time of Mr. Kehmeier, he is prepared to adjust his timetable to devote more time to our business. However, it still may not be possible for Mr. Kehmeier to devote sufficient time to the management of our business, as and when needed, especially if the demands of Mr. Kehmeier’s other interests increase. Competing demands on Mr. Kehmeier’s time may lead to a divergence between his interests and the interests of other shareholders.
Risks Related To Legal Uncertainty and Regulations
13. As we undertake exploration of our mineral claims, we will be subject to compliance with government regulation that may increase the anticipated cost of our exploration program
There are several governmental regulations that materially restrict mineral exploration. We will be subject to the federal, state and local laws as we carry out our exploration program. We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these laws. While our planned exploration program budgets for regulatory compliance, there is a risk that new regulations could increase our costs of doing business and prevent us from carrying out exploration program.
ITEM 1B.
ITEM 1B. UNRESOLVED STAFF COMMENTS
There are no unresolved staff comments.
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTIES
We currently maintain our corporate office at 3077 E. Warm Springs Road Suite 300 Las Vegas, NV 89120. This rental is on a month-to-month basis.
PLOMOSA MOUNTAIN PROPERTY
Effective August 1, 2012, Goldfields International Inc. (the “Company”) executed a Property Option Agreement (the “Agreement”), with Horizon Exploration, a third party (the “Optionor”) granting the Company the exclusive option to an undivided right, title and interest in the Plomosa Mountain Property ( the “ Property”), located in the Plomosa Mountain Range, La Paz County, Arizona. Simultaneous with the execution and delivery of the Agreement, the Company issued Thirty Five Million (35,000,000) Shares of its fully paid and non-assessable Restricted Common Stock and paid Fifteen Thousand Dollars ($15,000 USD) to the Optionor.
The Property consists of an aggregate of 31 unpatented Federal mineral claims located in the Plomosa Mountain Range, La Paz County, Arizona.
In order to earn a 100% interest in the Property, the Company must pay the Optionor and incur expenditures relating to exploration and mining operations in accordance with the following schedule: (i) on or before August 1, 2013, $20,000 to Optionor and incur $100,000 in expenditures incidental to the exploration and mining operations; (ii) on or before August 1, 2014, $20,000 to Optionor and an additional $100,000 in expenditures; (iii) on or before August 1, 2015, $30,000 to Optionor and an additional $150,000 in expenditures; (iv) on or before August 1, 2016, $40,000 to Optionor and an additional $200,000 in expenditures; and (v) on or before August 1, 2017, $50,000 to Optionor and incur an additional $250,000 in expenditures. Since our payment obligations are non-refundable, if we do not make all required payments, we will lose all payments made and our rights to the properties. If all said payments are made, then we will acquire all mining interests in the property subject to a 3% net smelter royalty.
The Optionor retains a 3% royalty of the aggregate proceeds received by the Company from any smelter or other purchaser of any ores, concentrates, metals or other material of commercial value produced from the property, minus the cost of transportation of the ores, concentrates or metals, including related insurance, and smelting and refining charges, including penalties.
Both the Company and Optionor have the right to assign, sell, mortgage or pledge their rights in the Agreement or on the property.
The Agreement will terminate if the Company fails to comply with any of its obligations in the Agreement and fails to cure such alleged breach. If the Company gives notice that it denies a default has occurred, the matter shall be determined finally through such means of dispute resolution as such matter has been subjected to by either party. The Agreement provides that all disputes shall be resolved by a sole arbitrator under the rules of the Arbitration Act of Arizona. The Company also has the right to terminate the Agreement by giving notice to Optionor.
Description and Location of the Plomosa Mountain Property
The 682 acre Plomosa Mountain Property (the “Property”) consists of 31 unpatented mining claims in the Plomosa Mountain range in the northwest area of the State of Arizona, located in the fairway tract of the world famous Walker Lane Gold Trend. The Walker Lane has historically produced over 50 million ounces of gold and 400 million ounces of silver.
The Property is easily accessed via Plomosa road which is paved with gravel inroads. The Property claims are located in sections 29, 30, 31, 32 of 6N, R17W G&SR B&M, in La Paz County, Arizona. This property lies in the historic Plomosa District, 11 miles northeast of the town of Quartzite, Arizona and approximately 150 miles southeast of Las Vegas, Nevada. This region's Lode and Placer gold has been heavily sought after since the 18th century, and based on historical records and data from former claim holders, the Company believes this property has the potential to host precious minerals.
The Company plans to utilize all historical work performed to date in the region and to conduct rock sampling and assaying, for the purpose of developing a detailed exploration program.
The Plomosa Mountain Property location in Northwest Arizona.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company is a party or in which any Director, Officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.
ITEM 4.
ITEM 4. MINE SAFETY DISCLOSURE
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) and Item 104 of Regulation S-K require certain mine safety disclosures to be made by companies that operate mines regulated under the Federal Mine Safety and Health Act of 1977. However, the requirements of the Act and Item 104 of Regulation S-K do not apply as the Company does not engage in mining activities. Therefore, the Company is not required to make such disclosures.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
Our common stock is traded on the OTC Markets and the OTCBB under the trading symbol “GDFI”. In 2010, the new “OTC Markets” quotation tiers began replacing the former OTCBB. The OTC Markets launched the OTCQB marketplace to help investors easily identify SEC reporting companies and regulated banks that are current with their disclosure obligations. Issuers on the OTCQB must be fully reporting and current in their reporting obligations with the SEC. Although, the entire Over the Counter is regulated by the SEC and FINRA, the OTC Markets and the OTCBB are both now privately owned and merely serve as quotation mediums. The OTC Markets is more user friendly, factually up-to-date and accurate than the website for the OTCBB. Over the Counter quotes can be found at www.otcmarkets.com and the companies trading on the OTCQB have the exact same standards as the OTCBB. Through the progressive changes of the OTC Markets platform, the Company’s stock is now quoted on the OTC:QB, as well as the OTC:BB.
*The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
Holders of Our Common Stock
The Company estimates that as of April 23, 2013, we had 58 (fifty-eight) registered holders of shares of common stock.
Warrants or Options.
Please refer to Note 7 under the caption “Stockholders’ Equity” for detailed information regarding outstanding warrants.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities.
On February 22, 2012, the Company closed a private placement of 130,000 restricted common shares at $1.00 per share, for aggregate gross proceeds of $130,000 from one non-US investor pursuant to Regulation S of the Securities Act of 1933, as amended. The proceeds of the sale will be used as working capital.
On August 1, 2012, the Company closed a private placement of 24,500,000 restricted common shares at $0.001 per share, for aggregate gross proceeds of $24,500 from ten non-US investors pursuant to Regulation S of the Securities Act of 1933, as amended. The proceeds of the sale will be used as working capital.
On August 1, 2012 the Company issued 35,000,000 restricted common shares and $15,000 for a property option agreement with a third party granting the Company the exclusive option to an undivided right, title and interest in the Plomosa Mountain Property. For further details refer to “Note 4: Mineral Property Interests”.
Subsequent to January 31, 2013 the Company closed private placements for a total of 750,000 units for an aggregate total offering price of $75,000, or $0.10 per unit. Each unit consists of one share of common stock of the Company and one Class A Warrant exercisable, beginning on the one year anniversary date of the placement, for one share of common stock for a period of four years and expiring in 2018. The proceeds of the sale will be used as working capital.
Dividend Policy
As of January 31, 2013, there had been no dividends declared on the Company’s common stock. We have never declared or paid any cash dividends on our common stock nor do we anticipate paying any in the foreseeable future. Furthermore, we expect to retain any future earnings to finance our operations and expansion. The payment of cash dividends in the future will be at the discretion of our Board of Directors and will depend upon our earnings levels, capital requirements, any restrictive loan covenants and other factors the Board considers relevant.
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.
Securities Authorized for Issuance under Equity Compensation Plans
The following table presents certain information as of January 31, 2013 with respect to compensation plans under which equity securities of the Company are authorized for issuance:
(1) Such amount includes 500 common stock purchase options which are outstanding and exercisable pursuant to the 2004 Stock Option Plan. It also includes 10,658 common stock purchase warrants. During the year, 4,036 warrants expired without being exercised
The 2004 Stock Option Plan
In March 2004, the Board of Directors adopted the 2004 Stock Option Plan (the 2004 Plan) reserving 50,000 common shares for grant to employees, directors and consultants. As of January 31, 2013, there were a total of 49,000 options that had been granted under the plan. Of these, 500 remain outstanding and exercisable at a weighted average exercise price of $6.00 per option. The following discussion describes material terms of grants made pursuant to the stock option plans:
Pursuant to the 2004 Stock Option Plan, grants of shares can be made to employees, officers, directors, consultants and independent contractors of non-qualified stock options as well as for the grant of stock options to employees that qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986 (“Code”) or as non-qualified stock options. The Plan is administered by the Option Committee of the Board of Directors (the “Committee”), which has, subject to specified limitations, the full authority to grant options and establish the terms and conditions for vesting and exercise thereof. Currently the entire Board functions as the Committee.
In order to exercise an option granted under the Plan, the optionee must pay the full exercise price of the shares being purchased. Payment may be made either: (i) in cash; or (ii) at the discretion of the Committee, by delivering shares of common stock already owned by the optionee that have a fair market value equal to the applicable exercise price.
Subject to the foregoing, the Committee has broad discretion to describe the terms and conditions applicable to options granted under the Plan. The Committee may at any time discontinue granting options under the Plan or otherwise suspend, amend or terminate the Plan and may, with the consent of an optionee, make such modification of the terms and conditions of such optionee’s option as the Committee shall deem advisable.
Purchases of equity securities by the issuer and affiliated purchasers
None.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Smaller reporting companies are not required to provide the information required by this item.
ITEM 7.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND PLAN OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Form 10-K. The matters discussed herein contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which involve risks and uncertainties. All statements other than statements of historical information provided herein may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes”, “anticipates”, “plans”, “expects” and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, those discussed under the heading “Factors that May Affect Future Results” and elsewhere in this report and the risks discussed in our other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis, judgment, belief or expectation only as of the date hereof. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
Plan of Operations
Our business plan is to proceed with the acquisition and exploration of mineral properties to determine whether there are commercially exploitable reserves of gold and silver or other metals. We had cash of $34,295 and working capital of $(16,557) as of January 31, 2013. On February 22 2012, the Company closed a private placement of 130,000 restricted common shares at $1.00 per share, for aggregate gross proceeds of $130,000. On August 1, 2012, the Company closed a private placement of 24,500,000 restricted common shares at $0.001 per share, for aggregate gross proceeds of $24,500 and issued 35,000,000 restricted common shares and $15,000 for a property option agreement with a third party granting the Company the exclusive option to an undivided right, title and interest in the Plomosa Mountain Property. We shall require additional funding and we anticipate that such funding will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund additional phases of the exploration program, should we decide to proceed. We believe that debt financing will not be an alternative for funding any further phases in our exploration program. The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable mine can be demonstrated. We do not have any arrangements in place for any future equity financing.
During our exploration stage, our President will only be devoting approximately one day per week of his time to our business. We do not foresee the limited involvement of our President as negatively impacting our Company over the next twelve months as all exploratory work is being performed by outside consultants. Additionally, we will not have a need to hire any employees over the next twelve months; nor do we plan to make any purchases of equipment over the next twelve months due to reliance upon outside consultants to provide all tools needed for the exploratory work being conducted.
Results of Operations for the Fiscal Year Ended January 31, 2013
We did not earn any revenues during the fiscal year ended January 31, 2013 or 2012. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.
For the year ended January 31, 2013 we had a net loss of $133,378 compared to a net loss of $67,278 from the prior year, an increase of $66,100. Our net loss increased due to acquisition of a mineral property totaling $50,000 consisting of a $15,000 cash payment and the issuance of 35,000,000 shares of common stock. Additionally, the increase in loss is due to an increase in general and administrative expenses of $16,166. General and administrative expenses were $83,393 and $67,227 for the years ended January 31, 2013 and January 31, 2012, respectively. The increase is comprised of the following items. Administrative expenses increased $34,955 due to the Company entering into a Consulting Services Agreement with an unrelated third party for a comprehensive suite of services to the Company including administrative, accounting, bookkeeping and services associated with regulatory filings. The Company pays $5,000 per month in connection with these services. The year ended January 31, 2013 was the first full year of this contract. Professional services decreased $11,014 due to a decrease in SEC filing requirements as the Company began utilizing the mineral company waiver for quarterly financial statement filing. Director’s fees decreased $10,600 due to a severance package paid in the year ended January 31, 2012 and no comparable payments in the year ended January 31, 2013. Consulting fees increased $1,920 primarily due to a stock option grant issued to a consultant providing mineral exploration services. All other miscellaneous expenses increased a total of $905.
Liquidity and Capital Resources
We had cash of $34,295 and working capital of $(16,557) as of January 31, 2013. We anticipate that we will incur over the next twelve months:
·$235,000 in connection with acquisition and exploration of mineral properties, which includes $20,000 for option payments and $100,000 for exploration payments due under the Plomosa Mountain Property , as well as $115,000 for additional acquisition and exploration.
·$84,000 for operating expenses, including working capital and general, legal, accounting and administrative expenses associated with reporting requirements under the Securities Exchange Act of 1934.
Net cash used in operating activities during the year ended January 31, 2013 was $126,517 compared to $61,607 during the year ended January 31, 2012. The increase in cash used in operations was due to the increase in the net loss.
Off Balance Sheet Arrangements
We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Smaller reporting companies are not required to provide the information required by this item.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements:
1.Auditors’ Reports;
2.Audited Consolidated Financial Statements for the year ended January 31, 2013, including:
a.Consolidated Balance Sheets as at January 31, 2013 and 2012;
b.Consolidated Statements of Operations for the years ended January 31, 2013 and 2012 and for the period from inception on December 21, 2001 to January 31, 2013;
c.Consolidated Statements of Stockholders’ Equity for the years ended January 31, 2013 and 2012 and for the period from inception on December 21, 2001 to January 31, 2013;
d.Consolidated Statements of Cash Flows for the years ended January 31, 2013 and 2012 and for the period from inception on December 21, 2001 to January 31, 2013;
e.Notes to the Consolidated Financial Statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders of
Goldfields International, Inc.
(Formerly American Goldfields, Inc.)
(An Exploration Stage Company)
We have audited the accompanying balance sheet of Goldfields International, Inc. (formerly American Goldfields, Inc.) (an exploration stage company) as of January 31, 2013 and 2012, and the related statements of operations, and cash flows for the years ended January 31, 2013 and 2012, and the cumulative since December 21, 2001 (inception) to January 31, 2013, and the statement of stockholder’s equity since December 21, 2001 (inception) to January 31, 2013. 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 audits 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Goldfields International, Inc. (formerly American Goldfields, Inc.) (an exploration stage company) as of January 31, 2013 and 2012 and the results of its operations and its cash flows for the years ended January 31, 2013 and 2012 and the cumulative since December 21, 2001 (inception) to January 31, 2013, 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 2 to the financial statements, the Company has suffered recurring losses from operations, has no revenues, and is dependent upon obtaining adequate financing to fulfill its exploration activities. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
April 25, 2013
Goldfields International Inc.
(formerly American Goldfields, Inc.).
(An exploration stage company)
Consolidated Balance Sheets
The accompanying notes are an integral part of these financial statements
Goldfields International Inc.
(formerly American Goldfields, Inc.)
(An exploration stage company)
Consolidated Statement of Operations
The accompanying notes are an integral part of these financial statements
Goldfields International Inc.
(formerly American Goldfields, Inc.)
(An exploration stage company)
Consolidated Statement of Stockholders’ Equity
The accompanying notes are an integral part of these financial statements
Goldfields International Inc.
(formerly American Goldfields, Inc.)
(An exploration stage company)
Consolidated Statement of Stockholders’ Equity - continued
The accompanying notes are an integral part of these financial statements
Goldfields International Inc.
(formerly American Goldfields, Inc.)
(An exploration stage company)
Consolidated Statement of Cash Flows
The accompanying notes are an integral part of these financial statements
Goldfields International Inc.
(formerly f/k/a, American Goldfields Inc.)
(An exploration stage company)
Notes to the Consolidated Financial Statements
January 31, 2013
Note 1. Organization and Nature of the Business
Goldfields International Inc. (formerly, American Goldfields Inc.) (the “Company” or “we”) together with its wholly-owned subsidiary Goldmin Exploration Inc. (“Goldmin”), are a natural resource exploration stage company engaged in the acquisition and exploration of properties for deposits of gold or silver. We were incorporated on December 21, 2001 under the laws of the State of Nevada. Since then, we have engaged primarily in the acquisition and exploration of mining interests in properties that may potentially have deposits of gold and silver. To date, we have not earned any revenues.
Goldmin was incorporated in the State of Nevada on March 10, 2010 and has no assets or liabilities.
On March 9, 2012, the Company and a majority of the Company’s stockholders authorized a name change and a 1:100 reverse stock split of our common stock. On May 7, 2012, the Company filed an Amendment to the Articles of Incorporation reflecting a name change to Goldfields International Inc. and the implementation to effect a one-for-one-hundred reverse stock split with all fractional shares being rounded up to the nearest whole share (the “Reverse Split”). The Reverse Split was declared effective by the Financial Industry Regulatory Authority (“FINRA”) on June 7, 2012. All share and per share amounts have been retrospectively restated to reflect the Reverse Split.
Note 2. Going Concern Considerations
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying consolidated financial statements, the Company has incurred a net loss of $4,206,221 for the period from December 21, 2001 (inception) to January 31, 2013, and has no sales. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its mineral properties. Management is seeking additional capital through an equity financing. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
Note 3. Significant Accounting Policies
Basis of Presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Collectively, they are referred to herein as “the Company”. Inter-company accounts and transactions have been eliminated.
Exploration Stage Activities
The Company has been in the exploration stage since its formation and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Upon location of a commercial minable reserve, the Company expects to actively prepare the site for its extraction and enter a development stage.
Estimates
The preparation of the Company’s consolidated financial statements requires management to make estimates and use assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from these estimates and assumptions.
Cash and Cash Equivalents
The Company considers all liquid investments, with an original maturity of three months or less when purchased, to be cash equivalents.
Mineral Claim Payments and Exploration Expenditures
The Company expenses all costs related to the acquisition, maintenance and exploration of its unproven mineral properties, to which it has secured exploration rights. If and when proven and probable reserves are determined for a property and a feasibility study prepared with respect to the property, then subsequent development costs of the property will be capitalized. To date, the Company has not established the commercial feasibility of its exploration prospects. Therefore, all costs have been expensed.
Fair Value of Financial Instruments
The Company’s financial instruments are cash and cash equivalents, accounts receivable, accounts payable, notes payable, and long-term debt. The recorded values of cash and cash equivalents, and accounts payable approximate their fair values based on their short-term nature. The recorded values of loans approximate fair value as interest approximates market rates.
Environmental Costs
Environmental expenditures that relate to current operations are charged to operations 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 charged to operations. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, 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 a plan of action based on the then known facts. Environmental costs amounted to $0 and $0 at January 31, 2013 and 2012, respectively.
Asset Retirement Obligation
The Company accounts for its future asset retirement obligations by recording the fair value of the liability during the period in which it was incurred. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The increase in carrying value of a property associated with the capitalization of an asset retirement obligation is included in proven oil and gas properties in the balance sheets. The Company’s asset retirement obligation consists of costs related to the plugging of wells, removal of facilities and equipment and site restoration on its oil and gas properties. The asset retirement liability is allocated to operating expense using a systematic and rational method. Asset retirement obligations amounted to $0 and $0 at January 31, 2013 and 2012, respectively.
Stock-Based Compensation
The Company measures all stock-based compensation awards at fair value on the date of grant and recognize such expense in its financial statements over the requisite service period for awards expected to vest. The Company uses the Black-Scholes pricing model to determine the fair value of stock-based compensation awards on the date of grant. The Black-Scholes pricing model requires management to make assumptions regarding the option lives, expected volatility, and risk free interest rates. See “Note 7. Shareholders’ Equity” for additional information on the Company’s stock-based compensation plans.
Foreign Currency Translation
The Company’s functional currency is the U.S. dollar. Transactions in foreign currency are translated into U.S. dollars as follows:
i)monetary items at the rate prevailing at the balance sheet date;
ii)non-monetary items at the historical exchange rate;
iii)revenue and expense at the average rate in effect during the applicable accounting period.
Exchange gains or losses arising on translation are included in income (loss) for the year.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Interest costs related to unrecognized tax benefits are classified as “Interest expense, net” in the accompanying statements of operations. Penalties, if any, would be recognized as a component of “Selling, general and administrative expenses”. The Company recognized $0 of interest expense related to unrecognized tax benefits for the year ended January 31, 2013.
No Items of Other Comprehensive Income
The Company has no items of other comprehensive income in any period presented. Therefore, net income as presented in the Company’s Statement of Operations equals comprehensive income.
Loss Per Share
Basic net earnings (loss) per common share is computed by dividing net earnings (loss) applicable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net earnings (loss) per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and warrants. In periods where losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.
At January 31, 2013 and 2012, potential common shares of 11,158 and 15,194, respectively, related to common stock options and warrants were excluded from the computation of diluted earnings per share since their effect is anti-dilutive.
Related Party Transactions
A related party is generally defined as (i) any person who holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone who directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. See “Note 8. Related Party Transactions” for further discussion.
Recently Issued and Adopted Accounting Pronouncements
The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable to the Company, it has not identified any standards that it believes merit further discussion. The Company believes that none of the new standards will have a significant impact on its consolidated financial statements.
Note 4. Mineral Property Interest
Effective August 1, 2012, the Company executed a Property Option Agreement (the “Agreement”), with a Nevada company (the “Optionor”) granting the Company the exclusive option to an undivided right, title and interest in the Plomosa Property located in the Plomosa Mountain Range, La Paz County, Arizona (the “Property”), subject to royalty payments. Simultaneous with the execution and delivery of the Agreement, the Company issued thirty five million (35,000,000) shares of its fully paid and non-assessable restricted common stock and paid fifteen thousand dollars ($15,000 USD).
The Property consists of an aggregate of 31 unpatented Federal mineral claims located in the Plomosa Mountain Range, La Paz County, Arizona.
In order to earn a 100% interest in the Property, the Company must pay the Optionor and incur expenditures relating to exploration and mining operations in accordance with the following schedule: (i) on or before August 1, 2013, $20,000 to Optionor and incur $100,000 in expenditures incidental to the exploration and mining operations; (ii) on or before August 1, 2014, $20,000 to Optionor and an additional $100,000 in expenditures; (iii) on or before August 1, 2015, $30,000 to Optionor and an additional $150,000 in expenditures; (iv) on or before August 1, 2016, $40,000 to Optionor and an additional $200,000 in expenditures; and (v) on or before August 1, 2017, $50,000 to Optionor and incur an additional $250,000 in expenditures. Since our payment obligations are non-refundable, if we do not make all required payments, we will lose all payments made and our rights to the properties. If all said payments are made, then we will acquire all mining interests in the property subject to a 3% net smelter royalty. If the Company fails to make any payment when due, the Agreement gives the Company a 30-day grace period to pay the amount of the deficiency.
The Optionor retains a 3% royalty of the aggregate proceeds received by the Company from any smelter or other purchaser of any ores, concentrates, metals or other material of commercial value produced from the property, minus the cost of transportation of the ores, concentrates or metals, including related insurance, and smelting and refining charges, including penalties.
Both the Company and Optionor have the right to assign, sell, mortgage or pledge their rights in the Agreement or on the property.
The Agreement will terminate if the Company fails to comply with any of its obligations in the Agreement and fails to cure such alleged breach. If the Company gives notice that it denies a default has occurred, the matter shall be determined finally through such means of dispute resolution as such matter has been subjected to by either party. The Agreement provides that all disputes shall be resolved by a sole arbitrator under the rules of the Arbitration Act of Nevada. The Company also has the right to terminate the Agreement by giving notice to Optionor.
Note 5. Reclamation Deposits
The Company has been granted exploration permits from the State of Nevada for several of its properties. As part of the application process, the Company is required to pay refundable deposits to the State as surety for the estimated reclamation costs associated with planned exploration programs. Upon completion of required reclamation the Company will receive a refund of the deposit.
Note 6. Loans Payable
On April 8, 2011, the Company entered into a $20,000 loan agreement with an unrelated party to provide working capital. The loan bears interest at the United States Prime Rate plus 1%. The Company may repay the entire loan including the outstanding interest at anytime by advising the lender of such intent to repay 15 days prior to the anticipated date of repayment. On May 9, 2011, the Company entered into a second loan agreement with this same party for $30,000. The loan bears the same terms and conditions as the loan agreement dated April 8, 2011.
During the years ended January 31, 2013 and 2012, the company recorded interest expense totaling $2,126 and $1,626 respectively, in its Consolidated Statement of Operations related to these loans payable.
Note 7. Shareholders’ Equity
The Company’s authorized capital consists of 600,000,000 shares of common stock, par value of $0.001 per share and 100,000,000 shares of preferred stock, par value $0.001 per share.
On February 9, 2012, the Company issued 5,300 restricted common shares to a former officer of the Company as severance.
On February 22, 2012, the Company closed a private placement of 130,000 restricted common shares at $1.00 per share, for aggregate gross proceeds of $130,000 from one non-US investor pursuant to Regulation S of the Securities Act of 1933, as amended.
On August 1, 2012, the Company closed a private placement of 24,500,000 restricted common shares at $0.001 per share, for aggregate gross proceeds of $24,500 from ten non-US investors pursuant to Regulation S of the Securities Act of 1933, as amended.
On August 1, 2012, the Company issued 35,000,000 shares of restricted stock to a Nevada company in exchange for an unrestricted interest in the Plomosa Mountain property. For further details refer to “Note 4: Mineral Property Interests”.
Stock Options
The Company’s Board of Directors adopted the Goldfields International Inc.’s 2004 Stock Option Plan (the “2004 Plan”) which reserved 50,000 common shares for grant to employees, directors and consultants. As of January 31, 2013, there were 1,000 shares available for grant. In general, options are granted with an exercise price equal to the fair value of the underlying common stock on the date of the grant. Options generally have a contractual life of 10 years and vest over periods ranging from being fully vested as of the grant dates to four years.
The following table summarizes stock option activity for each of the years ended January 31, 2013 and 2012 under the 2004 Plan:
The Company estimated the fair value of options granted under the stock option plan considering recent trading transaction due to the thin trading of its stock.
Stock-based compensation expense is included on the Consolidated Statements of Operations based upon job functions of the participant receiving the grants. Compensation expense related to the Company’s stock-based compensation plans for the years ended January 31, 2013 and 2012 was $1,250 recognized as consulting expenses and nil, respectively.
All stock options currently outstanding are fully vested so there is no unrecognized compensation expense as of January 31, 2013.
It is not the Company’s practice to repurchase shares in the open market.
Warrants
The following table lists the common share warrants outstanding as January 31, 2013. Each warrant is exchangeable for one common share.
Note 8. Related Party Transactions
Effective August 1, 2012 the Company executed a Property Option Agreement (the “Agreement”), with Horizon Exploration Inc. (the Optionor”), a related party by beneficial owner holding more than 5% of the Company’s voting securities, granting the Company the exclusive option to an undivided right, title and interest in the Plomosa Mountain Property located in La Paz County Arizona, subject to Royalty payments, in exchange for 35,000,000 common shares of the Company’s stock and $15,000 cash.
Note 9. Income Taxes
Deferred tax assets of the Company are as follows:
The Company changed its prior year Net Operating Loss (“ NOL”) calculation which then changed the reported deferred tax asset. The change was due to a correction in allowable deductions for stock option compensation expense upon grant and exercise of stock options. The correction had no impact on the Company’s Consolidated Balance Sheets, Consolidated Statement of Operations, Consolidated Statement of Stockholders’ Equity or Consolidated Statement of Cash Flows as the Company fully reserves its estimated benefit from future NOL carryforwards.
A valuation allowance has been recorded to reduce the net benefit recorded in the financial statements related to these deferred tax assets. The valuation allowance is deemed necessary as a result of the uncertainty associated with the ultimate realization of these deferred tax assets.
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate of 34% (2012 - 34%) to net loss for the year. The sources and tax effect of the differences are as follows:
As at January 31, 2013, the Company has net operating loss carry-forwards of approximately $3,923,713 (2012 - $3,775,750), which expire between 2022 and 2032.
With few exceptions, the company is generally no longer subject to U.S. federal, state, local or non-U.S. income tax examinations by tax authorities for years before 2009. The tax years 2009 through 2012 remain open to examination by federal agencies and other jurisdictions in which it operates.
Note 10. Subsequent Events
In preparing these consolidated financial statements, management has evaluated information about subsequent events that became available to them through the date the consolidated financial statements were issued. This information relates to events, transactions or changes in circumstances that would require them to adjust the amounts reported in the financial statements or to disclose information about those events, transactions or changes in circumstances. The Company has noted the following events for disclosure.
·On February 19, 2013, the Company’s Board of Directors appointed Dr. Thomas Robyn as a member of the Board of Directors.
·March 1, 2013, the Company completed the registration of it’s 2013 Stock Option Plan (the "2013 Plan"), in order to provide to officers, directors, consultants and advisors of the Company added incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the Company for high levels of performance and to reward unusual efforts which increase the earnings and long-term growth of the Company. It is intended to accomplish this by providing for the grant of "Incentive Stock Options" and "Nonqualified Stock Options" to qualified eligible individuals.
The total number of shares reserved and available for grant pursuant to the 2013 Plan is 8,900,000 shares. Shares subject to awards that are cancelled, forfeited, settled in cash or that expire by their terms will again be available for grant and issuance in connection with other awards. At all times the Company will reserve and keep available a sufficient number of Shares as will be required to satisfy the requirements of all awards granted and outstanding under this Plan.
The 2013 Plan shall be administered by the Option Committee. All actions taken by the Option Committee shall be submitted to the Board of Directors for ratification and approval. If there is no Option Committee, the Board of Directors shall act in lieu thereof.
Option grants shall be made at fair market value per share on the date of grant. air market value shall be determined on the following basis: (i) if the Shares are not traded on a securities exchange and are not quoted on the National Association of Securities Dealers, Inc.'s Automated Quotation System ("NASDAQ"), but are quoted on the Over The Counter Electronic Bulletin Board, "Fair Market Value per Share" shall be the mean between the average daily bid and average daily asked prices of the Shares on the applicable date, as published on such bulletin board; (ii) if the Shares are not traded on a securities exchange and are quoted on NASDAQ, "Fair Market Value per Share" shall be the closing transaction price of the Shares on the applicable date, as reported on NASDAQ; (iii) if the Shares are traded on a securities exchange, "Fair Market Value per Share" shall be the daily closing price of the Shares, on such securities exchange as of the applicable date; or (iv) if the Shares are traded other than as described in (i), (ii) or (iii) above, or if the Shares are not publicly traded, "Fair Market Value per Share" shall be the value determined by the Option Committee in good faith based upon the fair market value as determined by completely independent and well qualified experts.
·Subsequent to the year end the Company closed private placements for a total of 750,000 units for an aggregate total offering price of $75,000, or $0.10 per unit.. Each unit consists of one share of common stock of the Company and one Class A Warrant exercisable, beginning on the one year anniversary date of the placement, for one share of common stock for a period of four years and expiring in 2018.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
We have had no disagreements with our independent auditors on accounting or financial disclosures.
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management, under supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of January 31, 2013, our disclosure controls and procedures were effective.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Controls over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 14d-14(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
All internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting reliability and financial statement preparation and presentation. In addition, projections of any evaluation of effectiveness to future periods are subject to risk that controls become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of January 31, 2013. In making the assessment, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on its assessment, management concluded that, as of January 31, 2013, the Company’s internal control over financial reporting was effective.
As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board (“PCAOB”), a material weakness is a deficiency or combination of deficiencies that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management concluded the Company does not have control deficiencies that represent material weaknesses as of January 31, 2013.
Attestation Report of Registered Public Accounting Firm
This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to permanent rules of the SEC that permit the Company to provide only management’s report in this annual report.
Changes in Internal Controls over Financial Reporting
ITEM 9B.
ITEM 9B. OTHER INFORMATION
None
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Set forth below is certain information concerning the Company’s Executive Officers and Directors as of April 23, 2013.
(1)On August 01, 2009, Mr. Richard Kehmeier joined the Company’s Board of Directors and on November 30, 2010 he was appointed the Company’s President, Chief Executive Officer, Secretary, and Treasurer.
(2)On February 19, 2013, Mr. Thomas Robyn joined the Company’s Board of Directors.
The following is a brief account of the education and business experience of each Director and Executive Officer during the past five years:
Richard Kehmeier is a Certified Professional Geologist with nearly forty years of international experience in all phases of resource development for the mining industry. Mr. Kehmeier is currently the Chief Geologist for Pincock Allen & Holt in Lakewood Colorado. During his career he has held such positions as Vice President of Exploration at Gold Reserve Corp and Atlas Corporation and has worked for companies such as Union Carbide, and Anaconda. He is responsible for the discovery of nearly 15 million ounces of gold in his career. Mr. Kehmeier graduated from the Colorado School of Mines with a Bachelor of Science in Geological Engineering and a Master of Science in Geology.
Jared Beebe is an experienced geologist with an extensive background in mineral exploration. In his nearly 20 years of working in the mining industry, he has worked for a variety of exploration companies in Canada and the United States. He is currently an independent consulting Project Manager. He previously worked for Soho Resources from 2007 to 2008, for Globex Mining in 2006, for Scorpio Mining in 2005 and from 1999 to 2004 he worked as a researcher at the University of Quebec where he studied Geographic Information Systems. Mr. Beebe earned a Bachelor of Science degree in Geology from Metropolitan State College, Denver, Colorado, in 1981. He is a member of the Association of Applied Geochemists, the Geological Society of Nevada, the Ordre du Géologues du Québec, and the Society of Economic Geologists. Mr. Beebe is currently a Director of Patriot Gold Corp.
Thomas L. Robyn earned his BA in Geology from Western Michigan University (1972) and his Ph.D., Geology (1977) from the University of Oregon with a major in Igneous Petrology/Volcanology. He began his career with Anaconda Minerals Company and has held top-level positions with several junior companies. He has planned and supervised exploration projects in such countries as Australia, Ecuador, Greenland, Norway, Liberia, Equatorial Guinea, Guyana and Suriname, as well as several U.S. States.
As President & CEO and Director of Yorbeau Resources, he designed and implemented an exploration program that resulted in discovery of two Late Archean gold deposits along the Cadillac-Larder Lake Break in the Abitibi region of Quebec.
As Executive Chairman of Dia Bras Exploration (now Sierra Metals), he conceived and supervised pilot mining programs for a Cu-Zn skarn deposit (Bolivar) and a low-sulfidation epithermal silver deposit (Cusi) in Chihuahua State, Mexico. The Bolivar mine is now in commercial production at 1,100 tpd and the Cusi mine is in advanced development.
Dr. Robyn is currently Senior Vice President, Exploration, Sierra Metals (Toronto) and a Director of Yorbeau Resources (Montreal).
Our Directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders, if required by Nevada law, or until removed from office in accordance with our bylaws. Our Officers are appointed by our Board of Directors and holds office until removed by the board.
The Board of Directors has not established an audit committee and does not have an audit committee financial expert. The Board is of the opinion that an audit committee is not necessary since the Company’s directors have been performing the functions of an audit committee.
The Board has not established an Option Committee or a Compensation Committee. Currently the Board functions as these committees. The Option Committee recommends and grants options to individuals under the option plans adopted by the company. The Compensation Committee recommends and grants compensation to individuals who work for the company.
The Board does not have a nominating committee, the functions of which are performed by the Board.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company’s executive officers, directors and persons who beneficially own more than 10% of a registered class of the Company’s equity securities to file with the Commission initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Such persons are required by Commission regulations to furnish the Company with copies of all Section 16(a) forms they filed.
We are not aware of any instances in fiscal year 2013 when an executive officer, director or owners of more than 10% of the outstanding shares of our common stock failed to comply with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934.
Code of Ethics
The Company has adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. For purposes of this Item, the term code of ethics means written standards that are reasonably designed to deter wrongdoing and to promote:
·honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
·full, fair, accurate, timely, and understandable disclosure in reports and documents that the issuer files with, or submits to, the Commission and in other public communications made by the issuer; compliance with applicable governmental laws, rules and regulations;
·the prompt internal reporting of violations of the code to the Board of Directors or another appropriate person or persons; and
·accountability for adherence to the code.
The Company hereby undertakes to provide to any person without charge, upon request, a copy of such code of ethics. Such request may be made in writing to the Board of Directors at the address of the issuer.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation.
Mr. Richard Kehmeier has been serving as a Director since August 1, 2009 and as our President, Chief Executive and Operating Officer, Treasurer, and Secretary since November 30, 2010. We had no other officers during the fiscal year ended January 31, 2013.
We have no employment agreements with any of our directors or our sole executive officer. We have no pension, health, annuity, bonus, insurance, equity incentive, non-equity incentive, stock options, profit sharing or similar benefit plans.
There was no compensation paid or earned during the fiscal years ended January 31, 2013, 2012 and 2011 for services rendered to our Company in all capacities by the following persons: (i) all individuals who served as the principal executive officer or acting in a similar capacity during the fiscal year ended January 31, 2013, regardless of compensation level; (ii) all individuals who served as officers at January 31, 2013 and whose total compensation during the fiscal year ended January 31, 2013 exceeded $100,000; and (iii) up to two additional individuals who served as officers during the fiscal year ended January 31, 2013 and whose total compensation during the fiscal year ended January 31, 2013 exceeded $100,000, regardless of whether they were serving as officers at the end of such fiscal year.
Outstanding Equity Awards
None of our Directors or Executive Officers hold unexercised options or stock that has not vested, or equity incentive plan awards.
Compensation of Directors
The Company has entered into Service Agreements with Mr. Kehmeier and Mr. Beebe to receive USD $500 per month for serving as Directors of the Company. Mr. Kehmeier and Mr. Beebe agreed to suspend their director’s fees in order to conserve working capital. For the fiscal period ending January 31, 2013, there was $Nil paid to Mr. Kehmeier and $Nil to Mr. Beebe.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of April 23, 2013 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our directors, and (iii) officers and directors as a group. Information relating to beneficial ownership of common stock by our principal stockholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days.
Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest.
The percentages below are calculated based on 60,623,858 shares of common stock issued and outstanding.
The persons or entities named in this table, based upon the information they have provided to us, have
sole voting and investment power with respect to all shares of common stock beneficially owned by them.
(1)Horizon Exploration claims sole voting and dispositive power with respect to 35,000,000 shares of the Company’s common shares as of April 23, 2013.
(2)Mr. Richard Kehmeier has been serving as a Director since August 1, 2009 and as our President, Chief Executive and Operating Officer, Treasurer, and Secretary since November 30, 2010.
(3)Jared Beebe has been serving as a Director since September 15, 2006.
(4)Thomas Robyn has been serving as a Director since February 19, 2013.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
Director Independence
We are not subject to listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our Board comprised of a majority of “independent directors.” We believe that our Directors currently meet the definition of “independent” as that term is defined in the rules and regulations of the American Stock Exchange.
ITEM 14
ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES
Robison, Hill & Co. is the Company’s Principal Accountant. Their fees billed to the Company for the fiscal years ending January 31, 2013 and 2012 are set forth below:
All of the principal accounting fees and services were approved by the Board of Directors, currently acting in place of the Audit Committee in accordance with the By-Laws of the Company.
PART IV
ITEM 15.
ITEM 15. EXHIBITS
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GOLDFIELDS INTERNATIONAL INC.
Dated: April 23, 2013 By: /s/ Richard Kehmeier
Name: Richard Kehmeier
Title: President, Chief Executive and Operating Officer, Treasurer, Secretary, and Director
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
SIGNATURE
TITLE
DATE
/s/Richard Kehmeier
President, Chief Executive and Operating Officer, Treasurer, Secretary, and Director
April 23, 2013
Richard Kehmeier
/s/ Jared Beebe
Director
April 23, 2013
Jared Beebe
/s/ Thomas Robyn
Director
April 23, 2013
Thomas Robyn