SEC Company Response from TYLERSTONE VENTURES CORP (CIK 0001157443) — Mar 14, 2005
TYLERSTONE VENTURES CORP (CIK 0001157443)
Date: March 14, 2005 · CIK: 0001157443 · Accession: 0001157443-05-000007
AI Filing Summary & Sentiment
Referenced dates: January 26, 2005
Show Raw Text
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
(Letter head)
March 11, 2005
United States Securities and Exchange Commission
Washington, D.C.
20549
Mail Stop 4-6
ATTENTION: MR. MARK P. SHUMAN
Dear Mr. Shuman:
In response to your staff's letter dated January 26, 2005, I have the following
responses.
GENERAL
-------
1. The financial statements, included in our Form SB-2A, have been updated to
November 30, 2004 as per the requirements of Rule 310(g) of Regulation S-B.
2. This issue will be sold to subscribers outside the United States. This fact
has been stated on page 19 under Item 8 - Plan of Distribution as follows:
"The Company will be selling the shares through this offering only to investors
in British Columbia. Sales will be made in accordance with the British
Columbia securities laws".
PROSPECTUS SUMMARY, PAGE 1
-----------------------------
3. The previous section relating to proven and probable reserves has been
eliminated and has been included under "Lack of Viable Mineral Reserves" on
page 33.
(Address)
-1-
<PAGE>
The second sentence in the new third paragraph consisting of "The claim
consists of approximately 1,235 acres" has been eliminated since it mentioned on
page 33 under the heading "Claim status".
The third sentence in the new third paragraph has been eliminated as
follows: "It is 80 miles northeast of Vancouver, British Columbia' since it is
mentioned on page 32 under "Property Description, Location and Access".
The former paragraph starting with "The Company has had no revenues and
very limited losses of $120,029" has been eliminated due to this information
being elsewhere in the prospectus and under the "Summary of Financial
Information" in this section.
4. The Prospectus Summary has been changed to include the headings of "History
of the Company", "Business", "Offering" and "Use of Proceeds".
The last sentence in the above noted eliminated paragraph has been moved to
the section under "Summary of Financial Information" since it is felt an
investor would want to know this information prior to considering an investment
in our company.
Offering
Under "Offering', the following sentence has been inserted as follows:
"There is no minimum amount required to be raised by the Company and hence the
Company can use all the proceeds from investors immediately."
Even though this sentence was not originally included it is felt an investor
would want to know this fact prior to making an investment.
Other adjustments to Prospectus Summary
-2-
<PAGE>
The previous sentence in the seventh paragraph which states "The Company
anticipates minimum operating .Plan of Operations)" has been transferred to the
section under the Summary of Financial Information.
The previous last paragraph starting with "It will take many years to explore
.funds to achieve such a program" has been eliminated due to being stated
elsewhere in this Summary.
5. In response to this comment the following paragraph has been inserted
under the Summary of Financial Information.
"The Company's independent accountants have indicated in their opinion
dated November 5, 2004 that the Company will need additional working capital for
its planned activity and to service its debt, which raises substantial doubt
about its ability to continue as a going concern. If the Company does not raise
sufficient funds from this Offering to meet its debt obligations and to maintain
the Tylerstone in good standing, there is the distinct possibility the Company
will not be able to operate as a going concern and any investor subscribing for
shares under this Offering will lose their entire investment".
SUMMARY INFORMATION OF THE COMPANY, PAGE 1
------------------------------------------------
6. The sentence in question has been changed to read as follows:
"There is no assurance that the Company will find a commercially viable
mineral reserve on the Tylerstone regardless of the dollars spent on exploration
work on it. Therefore, no matter how much exploration work is undertaken, a
commercially viable mineral reserve might never be found.'
-3-
<PAGE>
SUMMARY FINANCIAL INFORMATION, PAGE 2
-----------------------------------------
7. The error has been noted and the Summary of Financial Information has
been updated to November 30, 2004 with comparisons as at August 31, 2004. The
current figures agree with the interim and annual financial statements included
in the prospectus.
RISK FACTORS, PAGE 3
-----------------------
8. In response to this comment the following Risk Factor headings have been
changed:
Risk Factor No.1 on page 3
The heading of this Risk Factor has been changed to read as follows:
"Loss of Total Investment by New Investors if the Company is Unable to
Raise Sufficient Funds to Carry on Operations"
Risk Factor No. 4 on page 4
The heading of this Risk Factor has been changed to read as follows:
"The Directors and Officers are self-underwriting this offering which will
result in no independent evaluation of the offering price paid by new
investors".
Risk Factor No. 10 on page 9
The heading of this Risk Factor has been changed to read as follows:
"The Company has only one mineral claim which might impair its ability to
attract capital to acquire further mineral properties."
9. The previous paragraph on page 3 directly under the heading of Risk
Factors has been deleted since this information has been disclosed under Risk
-4-
<PAGE>
Factor 10 on page 5.
10. In response to this comment the entire previous paragraph under C.
Management and the Company; Risk Factor No. 1 on page 9 has been changed to read
as follows:
"The Company expects to face many of the new challenges in the start-up of
its business. First, the Company will be required to raise capital to complete
its exploration programs on the Tylerstone claim and provide sufficient working
capital to enable it to continue as a going concern. Second, it will have to
undertake exploration programs to determine whether the Tylerstone actually has
a viable ore reserve thereon and if not to evaluate the possibilities of
identifying other mineral claims of merit. Third, it will have to attract
individuals who have knowledge in exploration and in assisting the directors to
develop the Company in the direction as set forth elsewhere in this prospectus;
that of becoming a mineral exploration company. Fourth, the Company will have
to meet all the standards and requirements of a company seeking a quotation on
NASD. Fifth, it will have to meet all the requirements of communicating on a
regular basis with its shareholders and in maintaining its status as a public
quoted company.
If the Company does not address all or any of the above challenges associated
with the starting up of a new business enterprise, there is the distinct
possibility it will not succeed and will eventually cease operation resulting in
the total loss of their investments by the new investors."
The paragraph under Risk Factor 2 under Section C on page 9 has been
re-written as follows:
"The Company commenced business operations on September 24, 1998 and since
that date has incurred accumulated losses of $128,089 without realizing any
revenue from any source. In addition, management has estimated during the next
-5-
<PAGE>
twelve months its cash requirements will be $33,775 which would result in an
accumulated deficit of $161,864 due to outlays of cash being expense related.
Even if the Company is able to raise the maximum amount of money under this
offering, being $300,000, it will not reduce the accumulated deficit since these
funds will be applied to Phases I to III of the exploration programs which total
$247,500. By spending these funds on the exploration programs, it will have the
effect of increasing the accumulated deficit to $409,364. Only through the
accumulation of net profits would the deficit be reduced. Net profits might
never occur."
Risk Factor No. 6 on page 10 has been changed to read as follows:
MESSRS. STEPHENSON AND SKODA ARE THE ONLY DIRECTORS WHO HAVE HAD ANY
EXPLORATION EXPERIENCE SINCE BOTH MS. MURPHY AND MR. HAWKINS HAVE HAD NO
INVOLVEMENT IN THE PAST WITH AN EXPLORATION COMPANY
"Laurence Stephenson, President, and Edward Skoda, Director of the Company,
have experience in the exploration industry but neither Louise Murphy nor Fred
Hawkins have ever been involved in an exploration company. Louise Murphy's back
ground is in accounting and administration of professional firms whereas Fred
Hawkins has been in construction industry for the majority of his working life.
In the event, Messrs. Stephenson and Skoda were unable to assist the Company in
its exploration activities due to terminating their involvement with the
Company, neither Louise Murphy nor Fred Hawkins would have the experience
necessary to manage an exploration program on the Tylerstone claim. Therefore,
consultants would have to be hired to assist in the exploration activities on
the Tylerstone and to make the decisions as to further exploration work thereon.
The Board of Directors would not have an individual whom had knowledge of the
exploration industry and could advise it as to the future approach to be taken.
-6-
<PAGE>
Bearing this in mind, a new investor may not wish to invest in a company where
the Board of Directors comprised members who are unfamiliar with the exploration
industry."
11. Risk Factor 11 on page 6 has been changed to reflect a change of control
after the offering as follows:
"THE ISSUANCE OF SHARES UNDER THIS OFFERING MIGHT RESULT IN A CHANGE OF CONTROL"
"Before this Offering, the Directors and Officers control 57 % of the
issued and outstanding shares. If only 500,000 shares are subscribed for under
this Offering, the percentage ownership by the Directors and Officers would be
reduced to 46 % thereby resulting in the possibility of a change in control. If
the entire Offering is subscribed for, the ownership percentage of the current
Directors and Officers would be reduced to 23 % which would enable one or a
group of shareholders, acting together, to accumulate sufficient shares to
change the Board of Directors and therefore control. New investors might want
to give consideration to the possibility of a change in control which might
result in individuals being elected to the Board of Directors whom these new
investors, under normal circumstances, would not have entrusted with their money
and the operation of the Company."
12. During the exploration stage, comprising Phases I to III, the Company
does not wish to bear the cost of verifying the boundaries of the Tylerstone
claim by survey. It would only become practical to undertake a survey if, and
only if, an ore reserve of merit were found on the Tylerstone claim.
Therefore, under Section B - Exploration of the Tylerstone, Risk Factor No. 5
has had the following sentence added therein:
"The Company will not verify the boundaries of the Tylerstone by survey in
the near future and might never undertake a survey."
-7-
<PAGE>
13. In response to this comment, a new sentence has been inserted in the
paragraph on page 8 as follows:
"If the crew had to carry the supplies it might prove difficult to attract
an exploration crew - refer to "Hiring an Exploration Crew" on page 31".
The above mentioned paragraph on page 31 reads as follows:
Due to the hardship of the Tylerstone in accessing it by foot, the Company
might find it difficult to hire an exploration crew when it is needed. In the
event the Company does not wish to incur the cost of using helicopters to
transport the crew and supplies to the Tylerstone, only certain exploration
workers would be suitable to climb the wooded mountain side to the Tylerstone
while packing in supplies and tent facilities. These individuals would have to
be in good physical shape and willing to endure hardships in traveling to and
from the Tylerstone. This fact will limit the number of available men in the
town of Gold Bridge which would result in the Company having to seek exploration
workers in other areas of British Columbia. There is the distinct possibility
the Company would have to pay above normal wages for these workers to be
convinced to explore the Tylerstone. This being the case, it will have a
financial impact on the Company since its costs associated with hiring these
exploration workers would substantially increase.
14. In response to this comment, the previous paragraph has been amended on
page 10 as follows:
"WITHOUT FUNDS FROM THIS OFFERING, THE COMPANY WILL NOT BE ABLE TO
UNDERTAKE ANY EXPLORATION ON THE TYLERSTONE AND WOULD NOT BE ABLE TO CONTINUE AS
A GOING CONCERN."
"Currently, the Company has no operating capital and is relying on the
proceeds from this Offering to complete Phases I to III of its exploration
programs, at a cost of $247,500, and to contribute funds to pay the Offering
-8-
<PAGE>
expenses of $26,100 and partial payment to third parties. Management has
estimated $7,675, not including $26,100 for Offering expenses, for cash
requirements over the next year plus $47,718 owed to third parties; refer to
page 13. Since there is no minimum amount of shares that must be sold under
this Offering, the Company may not have sufficient funds to proceed into the
future. There are no other sources of funds at this time other than this
Offering unless the Directors and Officers are prepared to personally advance
funds to the Company or guarantee a loan from a financial institution. At the
present time, the Directors and Officers are not considering either of these
solutions. Without new investors subscribing to this Offering, there is the
distinct possibility the Company will cease as a going concern within the next
twelve months, Any new investor should give careful consideration to this fact
prior to making an investment in the Company."
The prior reference to the market price of gold, silver, lead or zinc has
been deleted in the above paragraph since it might lead an investor to believe
that the Company will be able to produce these minerals which might never be the
case.
15. The Company has paid cash sufficient to maintain the Tylerstone in good
standing until February 24, 2006. Therefore, Section B - Exploration of the
Tylerstone ona page 6, a new Risk Factor No. 1 has been inserted as follows in
response to this comment:
"THE TYLERSTONE IS IN GOOD STANDING WITH THE MINISTRY OF ENERGY AND MINES
UNTIL FEBRUARY 24, 2006 AT WHICH TIME FURTHER ASSESSMENT WORK WILL HAVE TO BE
DONE
The Tylerstone claim is in good standing until February 24, 2006 at which
time assessment work or cash in lieu of assessment work will have to be filed
with the Mini