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 June 30, 2003
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[ ] 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
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None
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(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [ ] 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
June 30, 2003 and December 31, 2002
(Stated in US Dollars)
(Unaudited)
-----------
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
INTERIM BALANCE SHEETS
June 30, 2003 and December 31, 2002
(Stated in US Dollars)
(Unaudited)
---------
(Unaudited) (Audited)
ASSETS June 30, December 31,
------
2003 2002
---- ----
Current
Cash $ 19,046 $ 27,983
============ ============
LIABILITIES
-----------
Current
Accounts payable and accrued liabilities $ 3,646 $ 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 ( 75,600) ( 71,504)
------------ -----------
15,400 19,496
$ 19,046 $ 27,983
============ ===========
SEE ACCOMPANYING NOTES
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF OPERATIONS
for the three and six months ended June 30, 2003 and 2002
and for the period May 4, 2001 (Date of Incorporation) to June 30, 2003
(Stated in US Dollars)
(Unaudited)
-----------
May 4, 2001
(Date of
Three months ended Six months ended Incorporation)to
June 30, June 30, June 30,
2003 2002 2003 2002 2003
---- ---- ---- ---- ----
Expenses
Accounting and audit fees $ - $ 3,628 $ 610 $ 5,128 $ 13,543
Administrative services - - 500 - 17,500
Bank charges 47 104 124 152 543
Exploration costs - 2,258 - 2,258 1,747
Incorporation costs - - - - 900
Legal fees 19 - 2,719 - 31,206
Mineral lease advance royalty
- Note 3 - - - - 8,000
Office - - 131 - 418
Transfer agent fees 38 180 38 180 1,843
----------- ----------- ---------- --------- --------
Net loss before other item ( 104) ( 6,170) ( 4,122) (7,718) ( 75,700)
Other item
Interest income 11 - 26 - 100
---------- ----------- ---------- ----------- ---------
Net loss for the period $ ( 93) $ ( 6,170) $ ( 4,096) $ (7,718) $ ( 75,600)
========== =========== ========== ========== =========
Basic loss per share $ ( 0.00) $ ( 0.00) $ ( 0.00)$ ( 0.00)
========== =========== ========== ==========
Weighted average number of shares
outstanding 3,820,000 2,500,000 3,820,000 2,500,000
============ ========== ========== =========
SEE ACCOMPANYING NOTES
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENT OF CASH FLOWS
for the six months ended June 30, 2003 and 2002,
and for the period May 4, 2001 (Date of Incorporation) to June 30, 2003
(Stated in US Dollars)
(Unaudited)
---------
May 4, 2001
(Date of
Six months ended Incorporation) to
June 30, June 30,
2003 2002 2003
---- ---- ----
Cash Flows from Operating Activities
Net loss for the period $ ( 4,096) $ ( 7,718) $ ( 75,600)
Change in non-cash working capital balance
related to operations
Accounts payable and accrued liabilities ( 4,841) 2,713 3,646
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( 8,937) ( 5,005) ( 71,954)
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Cash Flows from Financing Activities
Capital stock issued - - 91,000
Advance from a director - 7,000 -
------------ ----------- -----------
- 7,000 91,000
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Increase (decrease) in cash during the period ( 8,937) 1,995 19,046
Cash, beginning of the period 27,983 29 -
------------ ----------- ----------
Cash, end of the period $ 19,046 $ 2,024 $ 19,046
============ =========== ==========
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 June 30, 2003
(Stated in US Dollars)
--------------------
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 - - - ( 4,096) ( 4,096)
--------- --------- --------- --------- ---------
Balance, as at June 30, 2003 3,820,000 $ 3,820 $ 87,180 $ ( 75,600) $ 15,400
========= ========= ========= ========= =========
SEE ACCOMPANYING NOTES
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
June 30, 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 $75,600
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 - Note 4
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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 so long as the
condition 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 - Note 4 - (cont'd)
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Mineral Property - (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.
Note 4 Subsequent Event - Note 3
----------------
On August 7, 2003, the Company was granted a six month extension
on the June 1, 2003 and June 7, 2003 advance royalty payments of
$8,000 and $16,000 respectively for consideration of $1,500. This
payment will be considered as an advance royalty.
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 June 30, 2003 was $19,046. 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 Six-Month Period Ended June 30, 2003
We incurred a net loss of $4,096 for the six-month period ended June 30, 2003,
as compared to a loss of $7,718 in the same period in 2002. The decrease in net
loss was primarily due to a reduction in accounting and audit fees and property
exploration costs. At quarter end, we had cash on hand of $19,046. Our
liabilities at the same date totalled $3,646 and consisted of accounts payable
and accrued liabilities.
ITEM 3. Controls and Procedures
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 in 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 six-month period ended June
30, 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 June 30, 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 June 30, 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)