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