UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2003
----------------
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period to
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Commission File Number 001-31608
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PACIFIC SPIRIT INC.
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(Exact name of small Business Issuer as specified in its charter)
Nevada 98-0349685
--------------------------------- -----------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
11640 96A Avenue
Surrey, British Columbia V3V 2A1
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(Address of principal executive offices) (Postal or Zip Code)
Issuer's telephone number, including area code: 604-760-1400
---------------------------
None
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(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [ ] Yes [X] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 3,820,000 shares of $0.001 par value
common stock outstanding as of April 13, 2004.
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
INTERIM FINANCIAL STATEMENTS
March 31, 2003
(Stated in US Dollars)
(Unaudited)
---------
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
INTERIM BALANCE SHEETS
March 31, 2003 and December 31, 2002
(Stated in US Dollars)
(Unaudited)
---------
(Unaudited) (Audited)
ASSETS March 31, December 31,
------
2003 2002
---- ----
Current
Cash $ 19,795 $ 27,983
--------------- ---------------
LIABILITIES
-----------
Current
Accounts payable $ 4,302 $ 8,487
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STOCKHOLDERS' EQUITY
--------------------
Preferred stock, $0.001 par value
10,000,000 shares authorized, none outstanding
Common stock, $0.001 par value
100,000,000 shares authorized
3,820,000 shares issued (December 31, 2002: 3,820,000) 3,820 3,820
Paid in capital 87,180 87,180
Deficit accumulated during the pre-exploration stage ( 75,507) ( 71,504)
--------------- ----------------
15,493 19,496
--------------- ----------------
$ 19,795 $ 27,983
=============== ================
SEE ACCOMPANYING NOTES
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENT OF OPERATIONS
for the three months ended March 31, 2003 and 2002,
and for the period May 4, 2001 (Date of Incorporation) to March 31, 2003
(Stated in US Dollars)
(Unaudited)
---------
May 4, 2001
(Date of
Three months ended Incorporation)
March 31, to March 31,
2003 2002 2003
---- ---- ----
Expenses
Accounting and audit fees $ 610 $ 1,500 $ 13,543
Administrative services 500 - 17,500
Bank charges 77 48 496
Exploration costs - - 1,747
Incorporation costs - - 900
Legal fees 2,700 - 31,187
Mineral lease advance royalty - - 8,000
-Note 3
Office 131 - 418
Transfer agent fees - - 1,805
------------------ ---------------- -----------------
Net loss before other item ( 4,018) ( 1,548) ( 75,596)
Other item
Interest income 15 - 89
------------------ ---------------- -----------------
Net loss for the period $ ( 4,003) $ ( 1,548) $ ( 75,507)
================== ================= =================
Basic loss per share $ ( 0.00) $ ( 0.00)
================== ==================
Weighted average number of shares outstanding 3,820,000 2,500,000
================== =================
SEE ACCOMPANYING NOTES
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENT OF CASH FLOWS
for the three months ended March 31, 2003 and 2002,
and for the period May 4, 2001 (Date of Incorporation) to March 31, 2003
(Stated in US Dollars)
(Unaudited)
---------
May 4, 2001
(Date of
Three months ended Incorporation) to
March 31, March 31,
2003 2002 2003
---- ---- ----
Cash Flows from Operating Activities
Net loss for the period $ ( 4,003) $ ( 1,548) $ ( 75,507)
Change in non-cash working capital balance
related to operations
Accounts payable ( 4,185) - 4,302
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( 8,188) ( 1,548) ( 71,205)
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Cash Flows from Financing Activities
Bank Indebtedness - 19 19
Capital stock issued - - 91,000
Advance from a director - 1,500 -
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- 1,519 91,019
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Increase (decrease) in cash during the period ( 8,188) ( 29) 19,795
Cash, beginning of the period 27,983 29 -
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Cash, (bank indebtedness), end of the period $ 19,795 $ ( -) $ 19,795
============= ============= =============
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ - $ - $ -
============= ============= =============
Income taxes $ - $ - $ -
============= ============= =============
SEE ACCOMPANYING NOTES
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the period May 4, 2001 (Date of Incorporation) to March 31, 2003
(Stated in US Dollars)
(Unaudited)
---------
Deficit
Accumulated
Additional During the Pre-
Common Shares Paid-in exploration
---------------------------
Number Par Value Capital Stage Total
------ --------- ------- ----- -----
Capital stock issued for cash
- at $0.01 2,500,000 $ 2,500 $ 22,500 $ - $ 25,000
Net loss for the period - - - ( 40,255) ( 40,255)
--------- ----------- ----------- ------------- -----------
Balance, as at December 31, 2001 2,500,000 2,500 22,500 ( 40,255) ( 15,255)
Capital stock issued for cash
- at $0.05 1,320,000 1,320 64,680 - 66,000
Net loss for the year - - - ( 31,249) ( 31,249)
--------- ----------- ----------- ------------- -----------
Balance, as at December 31, 2002 3,820,000 3,820 87,180 ( 71,504) 19,496
Net loss for the period - - - ( 4,003) ( 4,003)
--------- ----------- ----------- ------------- -----------
Balance, as at March 31, 2003 3,820,000 $ 3,820 $ 87,180 $ ( 75,507) $ 15,493
========= =========== =========== ============= ===========
SEE ACCOMPANYING NOTES
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
March 31, 2003
(Stated in US Dollars)
(Unaudited)
---------
Note 1 Interim Reporting
-----------------
While information presented in the accompanying interim financial
statements is unaudited, it includes all adjustments which are, in
the opinion of management, necessary to present fairly the
financial position, results of operations and cash flows for the
interim period presented. All adjustments are of a normal
recurring nature. It is suggested that these interim financial
statements be read in conjunction with the Company's December 31,
2002 financial statements.
Note 2 Continuance of Operations
-------------------------
The financial statements have been prepared using generally
accepted accounting principles in the United States of America
applicable for a going concern which assumes that the Company will
realize its assets and discharge its liabilities in the ordinary
course of business. The Company has accumulated losses of $75,507
since its commencement. Its ability to continue as a going concern
is dependent upon the ability of the Company to obtain the
necessary financing to meet its obligations and pay its
liabilities arising from normal business operations when they come
due.
Note 3 Commitments
-----------
(a) Mineral Property
By a lease agreement effective June 1, 2001 and amended June
25, 2002 and November 25, 2002, the Company was granted the
exclusive right to explore and mine the Del Oro and NP Claims
located in Pershing County of the State of Nevada. The term of
this lease is for 30 years, renewable for an additional 30
years renewable for an additional 30 years so long as the
conditions of the lease are met. Minimum payments and
performance commitments are as follows:
Minimum Advance Royalty Payments:
The owner shall be paid a royalty of 4% of the net smelter
returns from all production. In respect to this royalty, the
Company is required to pay minimum advance royalty payments of
the following:
- $5,000 upon execution (paid and $3,000 (paid) for
extension of the agreement);
- $8,000 on June 1, 2003;
- $16,000 on June 7, 2003
- $24,000 on June 7, 2004
- $50,000 on June 7, 2005 and thereafter
Note 3 Commitments - (cont'd)
-----------
The Company can reduce the net smelter return royalty to 0.5% by payment of
a buy-out price of $5,000,000. Advance royalty payments made to the date of
the buy-out will be applied to reduce the buy-out price.
Performance Commitment:
In the event that the Company terminates the lease after June
1 of any year, it is required to pay all federal and state
mining claim maintenance fees for the next assessment year.
The Company is required to perform reclamation work on the
property as required by federal, state and local law for
disturbances resulting from the Company's activities on the
property.
Item 2. Management's Discussion and Analysis or Plan of Operation
FORWARD LOOKING STATEMENTS
This quarterly report contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results are likely to differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by us
described in this Risk Factors section and elsewhere in this annual report.
Plan of Operation
Our plan of operations for the twelve months following the date of this report
is to complete the recommended phase one exploration program on the Del Oro
property in which we hold a leasehold interest. We anticipate that this program
will cost us $53,000.
In January 2004, we amended our mineral claims agreement regarding the De; Oro
property located in Pershing County, Nevada. We paid the the lessor of the
property $2,000 upon execution of the agreement. In order to keep the lease in
good standing, we must pay the lessor $5,000 by July 9, 2004, $10,000 by January
9, 2005, and $50,000 per year thereafter.
In addition, we anticipate spending $10,000 on professional fees and $12,000 on
administrative expenses.
Total expenditures over the next 12 months are therefore expected to be $75,000.
Our cash on hand at March 31, 2003 was $19,795. Accordingly, we will need to
raise additional funds in order to complete the recommended exploration program
on the Del Oro and meet our other expected expenses.
Results Of Operations for Three-Month Period Ended March 31, 2003
We incurred a net loss of $4,003 for the three-month period ended March 31,
2003, as compared to a loss of $1,548 in the same period in 2002. The increase
in net loss was primarily due to legal fees that we incurred in connection with
the filing of our registration statement on Form SB-2. At quarter end, we had
cash on hand of $19,795. Our liabilities at the same date totalled $4,302 and
consisted entirely of accounts payable.
ITEM 3. Controls and Procedures
Mr. Peter Sotola, our principal executive officer and principal financial
officer, has concluded that the effectiveness of our controls and procedures, as
defined in ss.240.13a-14(c) and 240.15d-14(c), as of April 1, 2004, are
sufficient. There have been no changes in internal controls since the previous
period.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any pending legal proceeding. Management is not
aware of any threatened litigation, claims or assessments.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Report on Form 8-K
31.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
There were no reports filed on Form 8-K during the three-month period ended
March 31, 2003.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Pacific Spirit Inc.
/s/ Peter Sotola
---------------------------
Peter Sotola
President, Secretary, Treasurer
Chief Executive Officer and
Director
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
Dated: April 13, 2004
Exhibit 31.1
CERTIFICATION
I, Peter Sotola, President and Chief Executive Officer of Pacific Spirit Inc.,
certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Pacific Spirit
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the small business issuer and I have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the small business issuer, including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this quarterly
report is being prepared;
b) designed such internal control over financial reporting, or caused
such disclosure control and procedures to be designed under our
supervision, 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;
c) evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this quarterly report based on
such evaluation; and
d) disclosed in this quarterly report any change in the small business
issuer's internal control over financial reporting that occurred
during the small business issuer's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the
small business issuer's internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal controls
over financial reporting, to the small business issuer's auditors and the
audit committee of the small business issuer's board of directors (or
persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the small business issuer's ability
to record, process, summarize and reporting financial information; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's
internal control over financial reporting.
Date: April 13, 2004 /s/ Peter Sotola
--------------------------------
Peter Sotola
President, C.E.O. and Director
(Principal Executive Officer)
Exhibit 31.2
CERTIFICATION
I, Peter Sotola, Secretary, Treasurer and Chief Financial Officer of Pacific
Spirit Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Pacific Spirit
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal contrl over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the small business issuer and I have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the small business issuer, including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this quarterly
report is being prepared;
b) designed such internal control over financial reporting, or caused
such disclosure control and procedures to be designed under our
supervision, 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;
c) evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this quarterly report based on
such evaluation; and
d) disclosed in this quarterly report any change in the small business
issuer's internal control over financial reporting that occurred
during the small business issuer's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the
small business issuer's internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal controls
over financial reporting, to the small business issuer's auditors and the
audit committee of the small business issuer's board of directors (or
persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the small business issuer's ability
to record, process, summarize and reporting financial information; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's
internal control over financial reporting.
Date: April 13, 2004 /s/ Peter Sotola
------------------------------
Peter Sotola
Secretary, Treasurer & C.F.O.
(Principal Financial Officer
and Principal Accounting
Officer)
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Pacific Spirit Inc. (the "Company")
on Form 10-QSB for the period ended March 31, 2003 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), the undersigned, in
the capacities and on the dates indicated below, hereby certifies pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of
the Company.
Date: April 13, 2004
/s/ Peter Sotola
--------------------------------
Peter Sotola
President, C.E.O. and Director
(Principal Executive Officer)
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Pacific Spirit Inc. (the "Company")
on Form 10-QSB for the period ended March 31, 2003 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), the undersigned, in
the capacities and on the dates indicated below, hereby certifies pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
Date: April 13, 2004
/s/ Peter Sotola
------------------------------
Peter Sotola
Secretary, Treasurer & C.F.O.
(Principal Financial Officer
and Principal Accounting Officer)