ITEM 1. BUSINESS.
Business Overview
Our objective as a small
mining company is to consolidate mining interests, claims, mineral rights, and operations within one company and to develop these
mining interests by drilling and proving mineral reserves specifically in our first two properties located in Washington and Montana.
Our Corporate History and Background
We were incorporated in
the State of Nevada on September 8, 2006. Prior to the Share Exchange, we were a developmental stage company that had a principal
business objective of offering premium baseball cap type headwear for women with exquisite taste and extravagant appetites as exclusive
accessories to differentiate themselves. However, due to lack of capital, the Company had not been able to commence any business.
In late 2011, we considered
entering into the directional well drilling industry and changed our name from Exclusive Apparel, Inc. to Helmer Directional Drilling
Corp (the “Company”). However, we were unable to attract the necessary capital and management to begin any operations.
On March 14, 2013 (the
“Closing Date”), the Company entered into a share exchange agreement (the “Exchange Agreement”) by and
among the Company, Excelsior Gold Corporation, a Utah corporation (“Excelsior”), and the shareholders of Excelsior,
pursuant to which the Company purchased all of the outstanding common stock of Excelsior in exchange for 1,000.999 shares of our
Series M preferred stock, par value $0.001 per share (the “Series M Preferred Stock”) (such transaction is sometimes
referred to herein as the “Share Exchange”). The Series M Preferred Stock is convertible into 302,000,000 shares of
common stock, conditional upon the amendment of the Company’s Articles of Incorporation to increase the number of authorized
shares to 700,000,000. As a result of the Share Exchange, we are now the holding company of Excelsior and operating a company in
development of mining interests by drilling and proving mineral reserves specifically in our first two properties located in Washington
and Montana. As a condition to the Share Exchange, 155,466,645 shares of our common stock, par value $0.001 (the “Retired
Stock”) then outstanding were cancelled and retired.
As a result of the Share
Exchange, we will cease our prior operations and, we will operate as a mining exploration and development company.
Our Industry
The Mining Industry
The mining industry is
highly fragmented, as there are many gold and silver prospectors and producers, both small and large, in every market and region
throughout the world. As these metals are well established commodities with well established markets, we believe that a production-stage
mine will undoubtedly have a ready market for extracted minerals. Nevertheless, the global economic downturn has weakened the mining
sector, which is expected to witness greater consolidation and reliance on non-traditional sources of financing to develop mining
properties. In addition, we expect that the industry will also likely see a greater degree of vertical integration of mineral extraction
and distribution firms.
Our Business Strategy
Our objective is not to
extract gold, silver, and other precious metals, but only to prove mineral reserves. We intend to seek joint venture partners with
the financial and operational means to be able to extract the minerals.
Our principal property
is a deposit located in Northeast Washington where we hold 60 lode mining claims in respect of the Great Excelsior Mine (also sometimes
referred to as the “Excelsior Claims”) located in Whatcom County in the Mount Baker quadrangle in western Washington
State.
The explored portion of
the deposit is located on a large down-dropped landslide block. There are 105 core and reverse circulation holes delineating the
identified reserves. The Great Excelsior Mine was a former gold and silver producer which was forced to close in 1918 due to falling
metal prices and a shortage of supplies. This mining property has been explored by numerous mining companies over the years, including
ASARCO, Silver Standard, Ltd., Quintana Resources, Inc., US Borax, Steelhead Resources, Inc, FMC Gold Corp., Stanford Metals, Ltd,
and Arizuma Silver, Inc. Although a NI 43-101 compliant report has not been produced in respect of the mining claims we hold, we
estimate that 493,000 ounces of potential gold-equivalent drill indicated resources are available to be mined, and an additional
500,000 ounces of potential gold-equivalent non-drill indicated resources are also available. The term “gold-equivalent”
means that the precious metal content contained in these claims (whether of silver, gold, or other minerals) is estimated to be
equivalent in value to gold in these respective drill and non-drill indicated resources. Below are two 3-dimensional maps showing
a cross section of drill holes, and the contours of the project and probable deposit locations thereunder.
Reserve Calculations for the Excelsior Deposit
The minerals underlying
the Excelsior Claim consist of a disseminated sediment-hosted submarine epithermal volcanogenic silver and gold deposit, striking
N300E which is open to the southwest (along strike) and to the west. American Mine Services, Inc. (1987) with the following reserve
calculations:
Tonnage
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Cutoff Grade
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Au opt
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Ag oz/T
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Aueq opt
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Probable
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(EMC, 2004)
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(60:1)
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4,814,004
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0.04
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0.036
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2.406
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0.076
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Possible
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(60:1)
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3,006,366
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0.03
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0.029
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1.219
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0.049
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Probable
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(Quinlan, James, 1989)
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(60:1)
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4,242,844
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0.035
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0.036
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2.3
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0.068
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Probable
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(Buchholz, Donald, 2004)
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(60:1)
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2,000,823
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0.04
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0.036
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2.46
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0.076
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Probable
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(Graham, Richard, 2004)
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(60:1)
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3,700,000
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0.03
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0.031
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2.32
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0.07
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Probable High Grade
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(Tschauder, Richard, 1999)
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Aueq opt
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(60:1)
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300,000
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0.207
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20.1
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0.536
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Probable High Grade
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(McGregor & Robertson, 1989)
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Aueq opt
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(60:1)
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550,000
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0.13
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12.5
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0.338
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Mark Hawksworth of FMC
Gold Corporation (1989) estimated the untested exploration potential of the Excelsior Claims to be +500,000 equivalent ounces of
gold. This conclusion was based upon the evaluation of six areas (not included in the above table) within and adjacent to the claim
group. Estimated tonnage for calculated and untested reserves is believed to be 7.1 million tons of 0.08 Aueq.
In October of 1999, Rick
Tschauder reviewed the Excelsior Claims’ geologic and assay data for Atlas Mining Company and did a sensitivity study to
determine mining feasibility at the then- current gold and silver prices (Au $280/oz, Ag $5.35/oz). He concluded that there appeared
to be sufficient ore for four (4) years production at 250 tpd the mine would produce 75,000 tons per year over a four (4) year
period. The total estimated high grade reserves are 300,000 tons. Approximately 95 percent of the high grade (>0.1 opt Aqeq)
mineralization is located within or immediately adjacent to the felsic volcanic rocks (Franklin, 1985).
Using the Rockware 2004
program and an “easterly weighted” inverse distance squared algorithm, Doug McFarland, our Chief Executive Officer,
recalculated the tonnage and grade of high-grade ore body and obtained 279,652 tons of 0.338 opt Aueq and 353,043 tons using a
cut off of 0.18 opt Aueq. We believe that this zone can be profitably mined by a small 250 tpd operation at current prices. We
further believe that the area bounded by 10,700 E to 11,300E and 9400N to 9900N can be profitably mined at 195,000 tpd using open
pit methods.
If we were able to commence
production in respect of our Great Excelsior Claims, we would likely not construct milling facilities but would transport extracted
material to a nearby mill operated by other larger gold and silver producers. Extensive metallurgical testing had been done on
the ore by Hazen Research, Inc. of Golden, Colorado. Recovery of 96.8 percent of the silver and 95.6 percent of the gold could
also, in our opinion, be accomplished by flotation accompanied by a nitric acid leach of the concentrates and CIL recovery.
We
also have rights in respect of a second property located in Montana known as the Liver Peak property which comprises 30 unpatented
federal mining claims covering 620 acres in the Lolo National Forest in Sanders County, Montana, about 8 kilometers northeast
of the town of Thompson Falls.
The Liver Peak claims are
centered on an elliptical area measuring 2.7 kilometers by 2.1 kilometers of strong hydrothermal alteration and quartz veining.
General Moly Inc. maintains about 890 acres of unpatented mining claims contiguous with the Liver Peak property on southeastern
fringes of the altered area. We believe Liver Peak is rich in molybdenum reserves, and we would expect to only incur an extraction
cost of 5-10% per ton.
Historic drilling on the
Liver Peak property between 1967 and 1981 by Bear Creek Mining, Asarco, and Noranda, totaled 10 holes for 6,600 meters drilled.
This drilling intersected three significant zones of molybdenum mineralization grading over 0.1% MoS2 accompanied by elevated tungsten
and silver over an area extending at least 600 meters by 300 meters and extending to depths of nearly 1,400 meters. The system
is substantially untested at depth.
Molybdenum mineralization
has been found in three subsurface regions, termed the Upper Zone, the North Zone, and the Lower Zone, all of which are probably
genetically linked to a deep mass of quartz-eye porphyry intersected in the last deep hole drilled on the property in 1979. Falling
molybdenum prices in 1982 led Noranda to abandon the project and drop their claims. No significant work to determine the extent
of the quartz-eye porphyry and related molybdenum-tungstensilver mineralization has been done since that time.
In the last deep exploration
drilling conducted on the property in 1979, drill hole LP-4 (total depth 1460 meters) intersected 687 meters of a felsic intrusive
complex including a distinctive quartz-eye porphyry that carried significant molybdenite in stockwork quartz veinlets associated
with secondary K-feldsparand silica alteration. Significant molybdenum mineralization was found in ashallow zone between 268 meters
and 564 meters grading 0.118% MoS2 hosted by Precambrian Belt Series sedimentary rocks, and a lower zone between 1198 metersand
1387 meters grading 0.126% MoS2 hosted by stockwork quartz veinlets in quartz-eye porphyry immediately overlying a silica-altered
microgranite. The hole was terminated at a depth of 1460 meters in microgranite carrying increasing amounts of secondary K-feldspar
and secondary biotite. A previous drill hole LP-2, located 250 meters northwest of LP-4, encountered 216 meters grading 0.10% MoS2
between depths of 70 meters and 320 meters and a lower zone between depths of 637 meters and 853 meters (TD) grading 0.10% MoS2
though it wasn't drilled deep enough to encounter the quartz-eye porphyry.
Rising molybdenum prices
beginning in 2004 led Idaho General Mines (General Moly) to restake the district. For unknown reasons in 2006, Idaho General Mines
dropped the claims in the core of the district, and they were subsequently relocated by several affiliates of West Coast Resource
Associates, the principals of which are also newly-appointed officers and directors of the Company following the Share Exchange.
In early 2012, West Coast Resource Associates, LLC. consolidated its holdings by restaking the key ground in the district, directly
over the known molybdenum mineralization and the underlying quartz-eye porphyry.
Property Interests and Mining Claims in General
Mining claims are subject
to the same risk of defective title that is common to all real property interests. Additionally, mining claims are self-initiated
and self-maintained and therefore, possess some unique vulnerabilities not associated with other types of property interests. It
is impossible to ascertain the validity of unpatented mining claims solely from an examination of public real estate records and,
therefore, it can be difficult or impossible to confirm that all of the requisite steps have been followed for location and maintenance
of a claim. Furthermore, as these interests are derived from multiple jurisdictions, the risk of a defective claim or other problems
with ownership and development of the claim (including but not limited to the right of eminent domain) is compounded further. If
the validity of a patented mining claim or mineral interest is challenged by an applicable governmental body on the grounds that
mineralization has not been demonstrated, the claimant has the burden of proving the present economic feasibility of mining minerals
located thereon. Such a challenge might be raised at any stage of development or at the commencement of production, or simply when
the government seeks to include the land in an area to be dedicated to another use.
Reserve Estimates
Our reserve and resource
figures are estimates, and we cannot assure you that the indicated level of recovery will be realized or that we will have the
resources to do so. Because mining development is inherently capital intensive, we would expect that the Company would partner
with a larger mining company or other strategic source of capital and knowledge in respect of any significant development or operational
activity. Prolonged declines in the market price of gold may render reserves containing relatively lower grades of gold mineralization
uneconomic to exploit and could materially reduce our reserves. Should such reductions occur, discontinuation of exploration and
development (including the production of a NI 43-101 compliant report) could be discontinued. There are numerous uncertainties
inherent in estimating quantities of proven and probable gold reserves. The estimates in this document are based on various assumptions
relating to gold prices during the expected life of production and the results of additional planned development work, either by
us or in partnership with a larger mining company or other third party with more sufficient capitalization. Actual future production
rates, sales prices, and amounts, revenues, taxes, operating expenses, environmental and regulatory compliance expenditures, development
expenditures and recovery rates may vary substantially from those assumed in any estimates we have given. Any significant change
in these assumptions, including changes that result from variances between projected and actual results, could result in a material
downward or upward revision of current estimates.
Market
Gold has increased in value
from $400 per Troy ounce in early 2005 to over $1,600 at the end of 2012. The price of gold has been on a relatively steady increase
over the long term, with some disruption in this trend during 2008 and 2012. Deleveraging in 2008, which caused many financial
institutions to sell hard assets, drove the price decline from a high of approximately $1,000 in late 2007 to a low of approximately
$700 in mid 2008. In 2010, gold outperformed most other asset classes, with the spot price appreciating more than 27% during the
year, but further appreciated by more than 10% in 2011 before receding slightly during 2012. Since one of the most widespread uses
of gold is as a store of value, interest in owning the metal has increased significantly since the lows of 2008. The large fiscal
stimulus of the US, Europe and China, combined with economic instability, has heightened the concern for future inflation, driving
additional interest in owning gold. Gold is a currency without a country, and as such is preferred when confidence falls in any
one of the major currencies, or when international tensions build.
Physical demand for gold
has outpaced the discovery of new deposits and the introduction of new supply from developing deposits in the past decade. The
supply and production shortfall has been partly offset by central banks selling and the recycling of scrap gold. In the wake of
the financial crisis of 2008, central banks have reversed course, holding and purchasing gold. China and India have both reported
increases in their gold reserves year over year.
We believe that concerns
over future US inflation may be valid, regardless of the actual magnitude of inflation in the future. The balance sheet of the
U.S. Federal Reserve grew from zero in 1913 to approximately $500 billion in 1997, over an 84 year time period. A second $500 billion
was added to the Fed’s balance sheet from 1997 through September 2008. An additional $1,000 billion was added in September
and October of 2008 in an attempt to stave off a further deterioration in the U.S. economy and provide additional liquidity necessary
for a sustainable economic recovery. Since 2009, the present administration has generated record deficits in an effort to stimulate
the U.S. economy. Although such actions may have been necessary from a macroeconomic perspective, we believe this has contributed
to appreciable demand for gold by investors as a hedge against inflation of the U.S. Dollar. We further believe that, rather than
a temporary aberration which often occurs in commodity pricing, U.S. monetary policy has contributed to systemic long-term upward
pressure in the price of gold.
Competition
We face strong competition
for the limited supply of companies and mineral properties from other mining companies, in the United States and abroad, and some
of our competitors have greater financial resources than we do.
We also compete with other
mining companies to attract and retain key executives, skilled labor, contractors and other employees. We compete with other mining
companies for the services of skilled personnel and contractors and their specialized equipment, components and supplies, such
as drill rigs, necessary for exploration and development. We also compete with other mining companies for rights to mine properties.
We believe a high degree of competition in this industry will continue for the foreseeable future.
We believe that we can
distinguish the Company from our competition by providing a high degree of professionalism, precise accounting, exceptional technical
and practical knowledge of our management and consultants.
Employees
As of the date of this
report, we had two employees. We also utilize the services of various contract personnel from time to time.
Available Information
The Company is subject to the information requirements
of the Securities Exchange Act of 1934, as amended, and in accordance therewith files quarterly and annual reports, as well as
other information with the Securities and Exchange Commission (“Commission”) under File No. 333-14477. Such reports
and other information filed with the Commission can be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates, and at various regional and district offices
maintained by the Commission throughout the United States. Information about the operation of the Commission’s public reference
facilities may be obtained
by calling the Commission at 1-800-SEC-0330. The Commission also
maintains a website at
http://www.sec.gov
that contains reports and other information regarding the Company and other registrants
that file electronic reports and information with the Commission.
ITEM 1A. RISK FACTORS.
An investment in our Common Stock involves
a high degree of risk. You should carefully consider the risks described below, together with all of the other information included
in this Report, before making an investment decision. If any of the following risks actually occur, our business, financial condition
or results of operations could suffer. In that case, the trading price of our shares of Common Stock could decline, and you may
lose all or part of your investment. You should read the section entitled “Special Note Regarding Forward Looking Statements”
above for a discussion of what types of statements are forward-looking statements, as well as the significance of such statements
in the context of this Report.
Risks
Related to Our Business
We have a limited
operating history that you can use to evaluate us, and the likelihood of our success must be considered in light of the problems,
expenses, difficulties, complications and delays frequently encountered by a small developing company.
We
were incorporated in Nevada in September 2006. We have no significant tangible assets or financial resources. The likelihood of
our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered
by a small developing company, particularly as it compares to other better capitalized firms in the mining industry. Since we have
a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient
revenues to meet our expenses and support our anticipated activities.
We need additional
capital to fund our growing operations, we may not be able to obtain sufficient capital and may be forced to limit the scope of
our operations.
If
adequate additional financing is not available on reasonable terms, we may not be able to undertake our exploration and development
activities and we would have to modify our business plans accordingly. There is no assurance that additional financing will be
available to us.
In
connection with our growth strategies, we may experience increased capital needs and accordingly, we may not have sufficient capital
to fund our anticipated operations without additional capital investments. Our capital needs will depend on numerous factors, including
(i) our profitability; (ii) the level of difficulty in proving extractable deposits and reserves for which we have claims; (iii)
the level of our investment in new projects; and (iv) the amount of our capital expenditures, including acquisitions. We cannot
assure you that we will be able to obtain capital in the future to meet our needs.
Even
if we do find a source of additional capital, we may not be able to negotiate terms and conditions for receiving the additional
capital that are acceptable to us. Any future capital investments could dilute or otherwise materially and adversely affect the
holdings or rights of our existing shareholders. In addition, new equity or convertible debt securities issued by us to obtain
financing could have rights, preferences and privileges senior to our Common Stock. We cannot give you any assurance that any additional
financing will be available to us, or if available, will be on terms favorable to us.
Our future success is dependent, in part,
on the performance and continued service of our officers.
We
are presently dependent to a great extent upon the experience, abilities and continued services of our management team. The loss
of services of any of the management staff could have a material adverse effect on our business, financial condition or results
of operation.
Risks
Related to Ownership of Our Common Stock
Though our common stock is quoted on
the OTCQB, there is no liquidity and no established public market for our common stock, which means that it will be difficult to
sell your shares.
Our common stock is quoted
on the OTCQB under the symbol “EXLA”. There is, however, presently no active public market in our shares. We cannot
assure you that such an active market for our common stock will develop. The over-the-counter market is a significantly more limited
market than established trading markets such as the New York Stock Exchange or Nasdaq. Broker dealers may not be willing to make
a market in our shares. In addition, the OTCQB and similar quotation services are often characterized by low trading volumes, and
price volatility, which may make it difficult for an investor to sell our common stock on acceptable terms.
Our common stock is subject to the “penny
stock” rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome
and may reduce the value of an investment in our stock.
Under U.S. federal securities
legislation, our common stock will constitute “penny stock”. Penny stock is any equity security that has a market price
of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules
require that a broker or dealer approve a potential investor’s account for transactions in penny stocks, and the broker or
dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock
to be purchased. In order to approve an investor’s account for transactions in penny stocks, the broker or dealer must obtain
financial information and investment experience objectives of the person, and make a reasonable determination that the transactions
in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form sets forth
the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions
in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common
stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny
stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in
penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held
in the account and information on the limited market in penny stocks.
Because we do not intend to pay any cash
dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.
We have never paid a dividend
and we intend to retain any future earnings to finance the development and expansion of our business. Consequently, we do not anticipate
paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be
able to receive a return on their shares unless they sell them. We cannot assure you that stockholders will be able to sell shares
when desired.
Future issuance
of our Common Stock could dilute the interests of existing shareholders.
We
may issue additional shares of our Common Stock in the future. The issuance of a substantial amount of Common Stock could have
the effect of substantially diluting the interests of our shareholders. In addition, the sale of a substantial amount of Common
Stock in the public market, either in the initial issuance or in a subsequent resale by the target company in an acquisition which
received such Common Stock as consideration or by investors who acquired such Common Stock in a private placement could have an
adverse affect on the market price of our Common Stock.
If we are unable to establish appropriate
internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the
restatement of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors
to lose confidence in our reported financial information and have a negative effect on the market price for shares of our Common
Stock.
Effective internal controls are necessary for
us to provide reliable financial reports and to effectively prevent fraud. We maintain a system of internal control over financial
reporting, which is defined as a process designed by, or under the supervision of, our principal executive officer and principal
financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles.
As a public company that files reports under
the Exchange Act, we have significant additional requirements for enhanced financial reporting and internal controls. We are required
to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley
Act of 2002, which requires annual management assessments of the effectiveness of our internal controls over financial reporting.
The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and
react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a
system of internal controls that is adequate to satisfy our reporting obligations as a public company under the Exchange Act.
We cannot assure you that we will not, in the
future, identify areas requiring improvement in our internal control over financial reporting. We cannot assure you that the measures
we will take to remediate any areas in need of improvement will be successful or that we will implement and maintain adequate controls
over our financial processes and reporting in the future as we continue our growth. If we are unable to establish appropriate internal
financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations, result in the restatement
of our financial statements, harm our operating results, subject us to regulatory scrutiny and sanction, cause investors to lose
confidence in our reported financial information and have a negative effect on the market price for shares of our Common Stock.
Lack of experience as officers
of publicly-traded companies of our management team may hinder our ability to comply with Sarbanes-Oxley Act.
It may be time consuming, difficult and costly
for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need
to hire additional financial reporting, internal controls and other finance staff or consultants in order to develop and implement
appropriate internal controls and reporting procedures.
Following the Share Exchange,
public company compliance may make it more difficult to attract and retain officers and directors.
The Sarbanes-Oxley Act
and rules subsequently implemented by the SEC have required changes in corporate governance practices of public companies that
file reports under the Exchange Act. As a public reporting company, we expect these rules and regulations to continue to increase
our compliance costs and to make certain activities more time consuming and costly. As a public company, these rules and regulations
may make it more difficult and expensive for us to obtain director and officer liability insurance at commercially acceptable rates
and we may therefore be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the
same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our
board of directors or as executive officers.
Because our directors and executive
officers are among our largest shareholders, they can exert significant control over our business and affairs and have actual or
potential interests that may depart from those our other shareholders.
Our directors and executive
officers will own or control a significant percentage of the Common Stock following the
Share Exchange
. The interests of
such persons may differ from the interests of our other shareholders. As a result, in addition to their board seats and offices,
such persons will have significant influence over and control all corporate actions requiring shareholder approval, irrespective
of how the Company’s other shareholders including participants in the Share Exchange, may vote, including the following
actions:
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to elect or defeat the election of our directors;
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to amend or prevent amendment of our Articles of Incorporation or By-laws;
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to effect or prevent a merger, sale of assets or other corporate transaction; and
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to control the outcome of any other matter submitted to our shareholders for vote.
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Such persons’ stock ownership may discourage
a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company, which in turn could reduce
our stock price or prevent our shareholders from realizing a premium over our stock price.