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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 September 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
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
11640 96A Avenue
Vancouver, British Columbia V3V 2A1
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(Address of principal executive offices) (Postal or Zip Code)
Issuer's telephone number, including area code: 604-683-8083
None
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(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [X] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 3,820,000 shares of $0.001 par value
common stock outstanding as of June 8, 2004.
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
INTERIM FINANCIAL STATEMENTS
September 30, 2003 and December 31, 2002
(Stated in US Dollars)
(Unaudited)
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PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
INTERIM BALANCE SHEETS
September 30, 2003 and December 31, 2002
(Stated in US Dollars)
(Unaudited)
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ASSETS September 30, December 31,
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2003 2002
---- ----
Current
Cash $ 12,544 $ 27,983
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LIABILITIES
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Current
Accounts payable and accrued liabilities $ 766 $ 8,487
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STOCKHOLDERS' EQUITY
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Preferred stock, $0.001 par value
10,000,000 shares authorized, none outstanding
Common stock, $0.001 par value
100,000,000 shares authorized
3,820,000 shares issued (December 31, 2002: 3,820,000) 3,820 3,820
Paid in capital 87,180 87,180
Deficit accumulated during the pre-exploration stage ( 79,222) ( 71,504)
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11,778 19,496
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$ 12,544 $ 27,983
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SEE ACCOMPANYING NOTES
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF OPERATIONS
for the three and nine months ended September 30, 2003 and 2002
and for the period May 4, 2001 (Date of Incorporation) to September 30, 2003
(Stated in US Dollars)
(Unaudited)
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May 4, 2001
(Date of
Three months ended Nine months ended Incorporation) to
September 30, September 30, September 30,
2003 2002 2003 2002 2003
---- ---- ---- ---- ----
Expenses
Accounting and audit fees $ 1,121 $ 855 $ 1,731 $ 5,983 $ 14,664
Administrative services - 7,000 500 7,000 17,500
Bank charges 49 63 173 215 592
Incorporation costs - - - - 900
Legal fees - - 2,719 - 31,206
Mineral property costs
- Note 3 2,155 - 2,155 2,258 11,902
Office - - 131 - 418
Transfer agent fees 297 - 335 180 2,140
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Loss before other item ( 3,622) ( 7,918) ( 7,744) ( 15,636) ( 79,322)
Other item
Interest income - 7 26 7 100
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Net loss for the period $ ( 3,622) $ ( 7,911) $ ( 7,718) $ ( 15,629) $ ( 79,222)
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Basic loss per share $ ( 0.00) $ ( 0.00) $ ( 0.00) $ ( 0.01)
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Weighted average number of shares
outstanding 3,820,000 2,500,000 3,820,000 2,500,000
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SEE ACCOMPANYING NOTES
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
INTERIM STATEMENT OF CASH FLOWS
for the nine months ended September 30, 2003 and 2002,
and for the period May 4, 2001 (Date of Incorporation) to September 30, 2003
(Stated in US Dollars)
(Unaudited)
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May 4, 2001
(Date of
Nine months ended Incorporation) to
September 30, September 30,
2003 2002 2003
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Cash Flows from Operating Activities
Net loss for the period $ ( 7,718) $ ( 15,629) $ ( 79,222)
Change in non-cash working capital balance
related to operations
Accounts payable and accrued liabilities ( 7,721) 1,483 766
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( 15,439) ( 14,146) ( 78,456)
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Cash Flows from Financing Activities
Capital stock issued - 12,500 91,000
Advance from a director - 7,000 -
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- 19,500 91,000
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Increase (decrease) in cash during the period ( 15,439) 5,354 12,544
Cash, beginning of the period 27,983 29 -
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Cash, end of the period $ 12,544 $ 5,383 $ 12,544
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Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ - $ - $ -
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Income taxes $ - $ - $ -
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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 September 30, 2003
(Stated in US Dollars)
(Unaudited)
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Deficit
Accumulated
Additional During the Pre-
Common Shares Paid-in Exploration
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Number Par Value Capital Stage Total
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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)
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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)
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Balance, as at December 31, 2002 3,820,000 3,820 87,180 ( 71,504) 19,496
Net loss for the period - - - ( 7,718) ( 7,718)
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Balance, as at September 30, 2003 3,820,000 $ 3,820 $ 87,180 $ ( 79,222) $ 11,778
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SEE ACCOMPANYING NOTES
PACIFIC SPIRIT INC.
(A Pre-exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2003
(Stated in US Dollars)
(Unaudited)
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Note 1 Interim Reporting
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While the information presented in the accompanying interim nine
month 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 financial
statements be read in conjunction with the company's December 31,
2002 annual financial statements.
Note 2 Continuance of Operations
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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. As at September 30, 2003, the Company has not
yet attained profitable operations and has accumulated losses of
$79,222 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
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Mineral Property
By a lease agreement effective June 1, 2001 and amended June 25,
2002, November 25, 2002 and January 9, 2004 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 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 $4,500 (paid) for extensions of
the agreement;
- $2,000 upon execution of the amended agreement dated January 9,
2004 (paid subsequently);
- $5,000 on July 9, 2004;
- $10,000 on January 9, 2005; and
Pacific Spirit Inc.
(A Pre-exploration Stage Company)
Notes to the Interim Financial Statements
September 30, 2003
(Stated in US Dollars)
(Unaudited) - Page 2
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Note 3 Commitments - (cont'd)
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Mineral Property - (cont'd)
- each annual payment thereafter of $50,000 plus an annual
increase or decrease equivalent to the rate of inflation
designated by the Consumer Price Index for that year with the
execution year as the base year. Each such payment shall be
made by January 9, of each successive year of the lease.
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 Del Oro
property located in Pershing County, Nevada. We paid 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 $77,000.
Our cash on hand at September 30, 2003 was $12,544. 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 Nine-Month Period Ended September 30, 2003
We incurred a net loss of $7,718 for the nine-month period ended September 30,
2003, as compared to a loss of $15,629 in the same period in 2002. The decrease
in net loss was primarily due to a reduction in accounting and audit fees,
administrative services, and property exploration costs. At quarter end, we had
cash on hand of $12,544. Our liabilities at the same date totalled $766 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 September 30, 2003, 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 nine-month period
ended September 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
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Peter Sotola
President, Secretary, Treasurer
Chief Executive Officer and
Director
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
Dated: June 8, 2004