UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[ X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2002
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition periodto
Commission File Number: 000-49698
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PRINCETON VENTURES, INC.
(Exact name of small Business Issuer as specified in its charter)
Nevada 98 - 0353007
--------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Suite 304, 595 Howe Street,
Vancouver, British Columbia, Canada V6K 3M3
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number,
including area code: 604-669-2293
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None
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [X] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 6,534,000 Shares of $.001 par value
Common Stock outstanding as of May 15, 2002.
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited financial statements have been prepared in accordance
with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B, and,
therefore, do not include all information and footnotes necessary for a complete
presentation of financial position, results of operations, cash flows, and
stockholders' equity in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations and financial position have
been included and all such adjustments are of a normal recurring nature.
Operating results for the nine months ended March 31, 2002 are not necessarily
indicative of the results that can be expected for the year ending June 30,
2002.
PRINCETON VENTURES, INC.
(An Exploration Stage Company)
FINANCIAL STATEMENTS
MARCH 31, 2002
(Unaudited)
(Stated in U.S. Dollars)
3
PRINCETON VENTURES, INC.
(An Exploration Stage Company)
BALANCE SHEET
(Unaudited)
(Stated in U.S. Dollars)
--------------------------------------------------------------------------------
MARCH 31 JUNE 30
2002 2001
--------------------------------------------------------------------------------
ASSETS
Current
Cash $ 242 $ 31,853
Prepaid expenses 4,700 9,000
---------- ---------
4,942 40,853
Mineral Property Interest (Note 4) - -
---------- ---------
$ 4,942 $ 40,853
==========================================================
LIABILITIES
Current
Accounts payable $ 20,251 $ 1,423
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SHAREHOLDER'S EQUITY
(DEFICIENCY)
Share Capital
Authorized:
100,000,000 common shares
with a par value of
0.001 per share
100,000,000 preferred shares
with a par value of
0.001 per share
Issued:
6,534,000 common shares
at March 31, 2002 and
6,204,000 common
shares at June 30, 2001 6,534 6,204
Additional paid-in capital 54,426 44,856
Deficit Accumulated During
The Exploration Stage (76,269) (11,630)
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(15,309) 39,430
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$ 4,942 $ 40,853
=========================================================
4
PRINCETON VENTURES, INC.
(An Exploration Stage Company)
STATEMENT OF LOSS AND DEFICIT
(Unaudited)
(Stated in U.S. Dollars)
----------------------------------------------------------------------
PERIOD
FROM
THREE NINE INCEPTION
MONTHS MONTHS MAY 10
ENDED ENDED 2001 TO
MARCH 31 MARCH 31 MARCH 31
2002 2002 2002
----------------------------------------------------------------------
Expenses
Mineral property option payments $ - $ - $ 1,075
Administrative expense - - 7,962
Professional fees 13,647 35,494 35,494
Transfer fees - 1,255 1,255
Consulting services 4,500 22,125 22,125
Office and sundry 16 1,265 1,877
Exploration expenses 4,500 4,500 6,481
---------------------------------
Net Loss For The Period 22,663 64,639 $ 76,269
==========
Deficit Accumulated During
The Exploration Stage,
Beginning Of Period 53,606 11,630
----------------------
Deficit Accumulated
During The Exploration
Stage, End Of Period $ 76,269 $ 76,269
===========================================================
Net Loss Per Share $ 0.01 $ 0.01
===========================================================
Weighted Average Number
Of Shares Outstanding 6,503,891 6,503,891
===========================================================
5
PRINCETON VENTURES, INC.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
(Stated in U.S. Dollars)
----------------------------------------------------------------------
PERIOD
FROM
THREE NINE INCEPTION
MONTHS MONTHS MAY 10
ENDED ENDED 2001 TO
MARCH 31 MARCH 31 MARCH 31
2002 2002 2002
----------------------------------------------------------------------
Cash Flows From Operating
Activities
Net loss for the period $ (22,663) $ (64,639) $ (76,269)
Adjustments To Reconcile
Net Loss To Net Cash
Used By Operating Activities
Stock issued for other
than cash - - 75
Change in prepaid expenses 2,250 4,300 (4,700)
Change in accounts payable 16,279 18,828 20,251
----------------------------------
(4,134) (41,511) (60,643)
----------------------------------
Cash Flows From Financing
Activity
Issue of share capital - 9,900 60,885
---------------------------------
-
(Decrease) Increase In Cash (4,134) (31,611) 242
Cash, Beginning Of Period 4,376 31,853 -
----------------------------------
Cash, End Of Period $ 242 $ 242 $ 242
==================================================================
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
Issue Of Share Capital For
Mineral Property Interest $ - $ - $ 75
==================================================================
6
PRINCETON VENTURES, INC.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
MARCH 31, 2002
(Unaudited)
(Stated in U.S. Dollars)
DEFICIT
COMMON STOCK ACCUMULATED
NUMBER OF ADDITIONAL DURING THE
COMMON PAR PAID IN EXPLORATION
SHARES VALUE CAPITAL STAGE TOTAL
----------------------------------------------------
Shares issued for cash
at $0.001 3,000,000 $3,000 $ - $ - $ 3,000
Shares issued for cash
at $0.015 3,199,000 3,199 44,786 - 47,985
Shares issued for mineral
property interest 5,000 5 70 - 75
Net loss for the period - - - (11,630) (11,630)
----------------------------------------------------
Balance, June 30, 2001 6,204,000 6,204 44,856 (11,630) 39,430
Shares issued for cash
at $0.03 330,000 330 9,570 - 9,900
Net loss for the period - - - (64,639) (64,639)
----------------------------------------------------
Balance, March 31, 2002 6,534,000 $6,534 $ 54,426 $ (76,269) $(15,309)
=====================================================
7
PRINCETON VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002
(Unaudited)
(Stated in U.S. Dollars)
1. BASIS OF PRESENTATION
The unaudited financial statements as of March 31, 2002, included herein have
been prepared without audit pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with United States generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. It is suggested that
these financial statements be read in conjunction with the June 30, 2001 audited
financial statements and notes thereto.
2. OPERATIONS
Organization
The Company was incorporated in the State of Nevada, U.S.A., on May 10, 2001.
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.
Going Concern
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern.
As shown in the accompanying financial statements, the Company has incurred a
net loss of $76,269 for the period from May 10, 2001 (inception) to March 31,
2002, 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 has plans to seek additional capital
through a private placement and public offering of its common stock. The
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.
8
PRINCETON VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002
(Unaudited)
(Stated in U.S. Dollars)
3. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States. Because a
precise determination of many assets and liabilities is dependent upon future
events, the preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful judgement.
The financial statements have, in management's opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:
a) Mineral Property Option Payments and Exploration Costs
The Company expenses all costs related to the maintenance and exploration of
mineral claims in which it has secured exploration rights prior to establishment
of proven and probable reserves. To date, the Company has not established the
commercial feasibility of its exploration prospects, therefore, all costs are
being expensed.
b) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses for the reporting period. Actual
results could differ from these estimates.
c) 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.
9
PRINCETON VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002
(Unaudited)
(Stated in U.S. Dollars)
3. SIGNIFICANT ACCOUNTING POLICIES (Continued)
d) Income Taxes
The Company has adopted Statement of Financial Accounting Standards No. 109 -
"Accounting for Income taxes" (SFAS 109). This standard requires the use of an
asset and liability approach for financial accounting, and reporting on income
taxes. If it is more likely than not that some portion or all of a deferred tax
asset will not be realized, a valuation allowance is recognized.
e) Loss Per Share
Loss per share is calculated using the weighted average number of common shares
outstanding during the period. Diluted earnings per share is not shown as the
effect is anti-dilutive.
4. MINERAL PROPERTY INTEREST
By an agreement, dated May 18, 2001, as amended, the Company acquired an option
to earn a 100% interest in a mineral claim located in British Columbia, Canada.
In order to earn its interest, the Company is required to:
i) pay $1,000 on execution of the agreement (paid);
ii) issue a total of 55,000 common shares of the Company, comprising 5,000
upon execution of the agreement (issued), and 50,000 upon completion of the
third phase of the exploration program or before June 30, 2003;
iii) incur an aggregate of $135,000 on exploration expenditures, comprising
$5,000 by February 28, 2002, $10,000 on or before June 30, 2002, and $120,000 on
or before June 30, 2003.
5. CONTINGENCY
Mineral Property
The Company's mineral property interest has been acquired pursuant to an option
agreement. In order to retain its interest, the Company must satisfy the terms
of the option agreement described in Note 4.
10
PRINCETON VENTURES, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2002
(Unaudited)
(Stated in U.S. Dollars)
6. COMMITMENT
On July 1, 2001, the Company entered into consulting agreements with two
directors. The agreements provide for payments of $750 per month for each
director and expire on June 30, 2003. In the case of each director, the fee
will increase to $5,000 per month in the event that they are required to spend
50% or more of their time performing the duties outlined in each agreement.
7. RELATED PARTY TRANSACTIONS
During the period ended March 31, 2002, the Company paid $13,500 in consulting
fees to two directors pursuant to the agreements referred to Note 6.
11
Item 2. Management's Discussion and Analysis or Plan of Operations
FORWARD LOOKING STATEMENTS
The information in this discussion contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements involve risks and uncertainties, including statements
regarding the Company's capital needs, business strategy and expectations. Any
statements contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expect", "plan", "Intend", "anticipate", "believe", estimate", "predict",
"potential" or "continue", the negative of such terms or other comparable
terminology. Actual events or results may differ materially. In evaluating
these statements, you should consider various risk factors, as set forth below,
and, from time to time, in other reports the Company files with the SEC. These
factors may cause the Company's actual results to differ materially from any
forward-looking statement. The Company disclaims any obligation to publicly
update these statements, or disclose any difference between its actual results
and those reflected in these statements. The information constitutes
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995.
OVERVIEW
We are in the business of mineral exploration; although, to date, we have only
recently commenced our exploration activities. We have obtained an option to
acquire a 100% interest in certain mineral claims located in the Lillooet Mining
Division of the Province of British Columbia, Canada. We refer to these mineral
claims as the Merry mineral claims.
Our objective is to conduct mineral exploration activities on the Merry mineral
claims in order to assess whether the Merry mineral claims possesses
commercially exploitable reserves of molybdenum or gold. We have not, as yet,
identified any commercially exploitable reserves. Our proposed exploration
program is designed to search for commercially exploitable deposits. We are an
exploration stage company and there is no assurance that a commercially viable
mineral deposit exists on our mineral claim.
Merry Mineral Claims Option Agreement
We purchased the option to acquire a 100% interest in the Merry mineral claims
pursuant to an agreement dated May 18, 2001 between Mr. Alan Brent Hemingway and
us. Mr. Hemingway is the owner of the Merry mineral claims. This option
agreement was amended on November 30, 2001 in order to give us additional time
in which to complete the exploration expenditures on the Merry mineral claims.
We are entitled to exercise the option to acquire the 100% interest in the Merry
mineral claims by:
(A) incurring an aggregate of $135,000 of property exploration expenditures
on the Merry mineral claims within the following periods:
12
(1) $5,000 on or before February 28, 2002;
(2) a further $10,000.00 on or before December 31, 2002;
(3) a further $120,000.00 on or before December 31, 2002;
(B) issuing to Mr. Hemingway 50,000 shares of our common stock upon the
completion of the third phase of the exploration program on the Merry mineral
claims on or before December 31, 2002.
We have satisfied this initial exploration expenditure requirement due by
February 28, 2002 by completing the initial phase of the recommended work
program on the Merry mineral claims.
Plan of Operations
Our business plan is to proceed with the exploration of the Merry mineral claims
to determine whether these mineral claims possess commercially exploitable
reserves of molybdenum and gold. We have proceeded with the first phase of the
exploration program recommended by the geological report at a cost of $5,000.
Completion of phase one satisfied the exploration expenditures required to be
completed by February 28, 2002 under our option agreement for the Merry mineral
claims, as amended.
We have received a geological report summarizing the conclusions and
recommendations of the first phase of our exploration program from Mr. Ostler,
our consulting geologist. We have reviewed the conclusions and recommendations
of Mr. Ostler based on his geological review of the results of the first phase.
We have determined that the results of the first phase of exploration are
sufficiently positive to warrant proceeding with the second phase of
exploration. The budgeted cost of this second phase is $10,000 which is in
excess of our current cash and working capital. We will attempt to raise the
funds to complete this second phase through a private placement financing of our
common stock. If we are unable to complete a private placement financing, of
which there is no assurance, Mr. William Robertson, our chief financial officer
and a principal shareholder, has indicated he may advance sufficient funds to
enable us to complete the work program. If we are able to raise the additional
financing, we will attempt to complete this phase in the summer or fall of 2002
prior to snowfall. We anticipate that we would engage Mr. Ostler to complete
this second phase of exploration.
If we determine to complete the second phase of our exploration program, we will
assess whether to proceed to the third phase of the recommended geological
exploration program upon completion of an assessment of the results of phase two
of the geological exploration program. In completing this determination, we will
make an assessment as to whether the results of phase two are sufficiently
positive to enable us to achieve the financing necessary for use to proceed with
phase two of the exploration program. This assessment will include an
assessment of our cash reserves after the completion of phase two and the market
for financing of mineral exploration projects at the time of our assessment. We
anticipate our geologist Mr. Ostler will complete all three phases on our behalf
if each are proceeded with and that Mr. Ostler's total fee for such work will
total $135,000, including $120,000 for the third phase. If we determine to
proceed with the third phase, it will not be
13
possible to start the third phase until the summer of 2003 due to the short
snow-free period of access of the mineral claims. The central part of the Merry
mineral claims is accessible during the snow free months of the year from May
until November, with variations from year to year.
We had cash in the amount of $242 as of March 31, 2002 and a working capital
deficit of $15,309 as of March 31, 2002. The anticipated cost of the second
phase of the exploration program is $10,000. The anticipated cost of the third
phase of the exploration program is $120,000. As these anticipated costs are in
excess of our current cash reserves and we have a working capital deficit, we
will require additional financing in order to proceed with each of phase two and
phase three of our exploration program. We anticipate that additional funding
will be in the form of equity financing from the sale of our common stock or a
loan from one of our directors, of which there is no assurance. 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 phase three of the
exploration program. We believe that debt financing will not be an alternative
for funding phase three of the exploration program. We do not have any
arrangements in place for any future equity financing.
We anticipate that we will incur the following expenses over the next twelve
months:
1. $10,000 in connection with the completion of the second phase of our
recommended geological work program, if we are able to raise the financing
required to proceed with this phase;
2. $18,000 for payments to Mr. Locke Goldsmith and Mr. William Robertson
under their management agreements, of which we have prepaid a total of $4,700;
3. $15,000 for operating expenses, including professional legal and
accounting expenses associated with our becoming a reporting issuer under the
Securities Exchange Act of 1934;
We had cash in the amount of $242 as of March 31, 2002 and a working capital
deficit of $15,309 as of March 31, 2002. Our total expenditures over the next
twelve months are anticipated to be $28,300, after accounting for prepaid
expenditures. Accordingly, we will require additional financing in the minimum
amount of approximately $54,000 to fund our operations for the next twelve
months.
If we do not complete the exploration expenditures required under the option
agreement for the Merry mineral claims, our option will terminate and we will
lose all our rights and interest in the Merry mineral claims. If we do not
secure additional financing to incur the required exploration expenditures, we
may consider bringing in a joint venture partner to provide the required
funding. We have not undertaken any efforts to locate a joint venture partner.
In addition, we cannot provide investors with any assurance that we will be able
to locate a joint venture partner who will assist us in funding the exploration
of the Merry mineral claims. If our option lapses, we plan to pursue the
acquisition of an interest in other mineral claims. We anticipate that any
future acquisition would involve the acquisition of an option to earn an
interest in a mineral claim as we anticipate that we would not have sufficient
cash to purchase a mineral claim of sufficient merit to warrant exploration.
14
Results Of Operations for Nine months ending March 31, 2002
We did not earn any revenues during the nine months ending March 31, 2002. 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 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.
We incurred operating expenses in the amount of $64,639 for the nine months
ended March 31, 2002. The largest component of our operating expenses were
professional fees in the amount of $35,494 during the nine months ending March
31, 2002 that were incurred in connection with our corporate organization and
our filing a registration statement with the Securities and Exchange Commission.
We anticipate that our professional fees will remain significant due to our
ongoing reporting requirements as a reporting company under the Securities
Exchange Act of 1934. We paid consulting fees in the amount of $22,125 during
the nine months ended March 31, 2002. These consulting fees included consulting
fees in the amount of $13,500 paid to our two executive officers, Mr. Locke
Goldsmith, our Chief Executive Officer, and Mr. William Robertson, our Chief
Financial Officer.
We anticipate that we will not incur increased operating expenses until such
time as we achieve the financing required to enable us to pursue further
exploration of our optioned mineral property. Our operating expenses will
increase if we are able to achieve the required financing and determine to
proceed with further exploration.
We incurred a loss of $64,639 for the nine months ending March 31, 2002. Our
loss is entirely attributable to our operating expenses.
Liquidity And Capital Resources
We had cash of $242 as of March 31, 2002 compared to cash of $31,853 as of June
30, 2001. We had a working capital deficit of $15,309 as of March 31, 2002
compared to positive working capital of $39,430 as of June 30, 2001.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue exploration activities. For these reasons our auditors
stated in their report that they have substantial doubt we will be able to
continue as a going concern.
We will require additional financing in order to enable us to proceed with any
further exploration of our mineral claims, as discussed above under Plan of
Operations, and to complete the required payments and exploration expenditures
to maintain our option. In addition, we anticipate that we will require
approximately $54,000 over the next twelve months to pay for our expenses in
pursuing our plan of operations, as outlined above. These cash requirements are
in excess of our current cash resources. Accordingly, we will require
additional financing in order to continue operations. We have no arrangements
in place for any additional financing and there is no assurance that we will
achieve the
15
required additional funding. We have not purchased or sold any plant or
significant equipment and do not expect to do so in the foreseeable future.
16
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any material legal proceedings and to our knowledge, no
such proceedings are threatened or contemplated.
Item 2. Changes in Securities
We did not complete any sales of our common stock during our fiscal quarter
ended March 31, 2002.
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to our security holders for a vote during the fiscal
quarter ending March 31, 2002.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K.
EXHIBITS REQUIRED BY ITEM 601 OF FORM 8-K
None
REPORTS ON FORM 8-K
None
17
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorised.
Date: May 17, 2002
PRINCETON VENTURES, INC.
By: /s/ WILLIAM ROBERTSON
--------------------------------
WILLIAM ROBERTSON
Chief Financial Officer,
Secretary and Treasurer
Director