UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-KSB
(Mark
One)
| x |
ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the
fiscal year ended:
September 30, 2007
| o |
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the
transition period from __________ to __________
TOUCHSTONE
MINING LIMITED
(Exact
name of small business issuer as specified in its charter)
|
Nevada
|
333-130696
|
98-0468420
|
|
(State
or other jurisdiction
|
(Commission
file number)
|
(IRS
Employer
|
|
of
incorporation or organization)
|
|
Identification
No.)
|
808
Nelson Street, Suite 2103
Vancouver,
British Columbia V6Z 2H2 Canada
(Address
of principal executive offices, including Zip Code)
Issuer’s
telephone number: (604)
684-7619
Securities
registered under Section 12(b) of the Exchange Act: None.
Securities
registered under Section 12(g) of the Exchange Act: None.
Check
whether the issuer is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act. o
Check
whether the issuer (1) filed all reports required to be filed by Section 13
or
15(d) of the Exchange Act during the past 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 o
Check
if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained,
to
the best of issuer’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment
to
this Form 10-KSB. x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes x No o
State
issuer’s revenues for its most recent fiscal year. None.
State
the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity
was
sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. As
of December 3, 2007, there were 2,500,000 issued and outstanding shares of
our
common stock, par value $0.00001 per share, held by non-affiliates. The
aggregate value of the securities held by non-affiliates on December 3, 2007
was
$0 as our common stock does not presently trade.
State
the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date. As
of December 3, 2007, there were 6,100,000 shares of our common stock, $0.00001
par value, issued and outstanding.
Documents
Incorporated by Reference. Not
applicable.
Transitional
Small Business Disclosure Format (check one): Yes o No x
CAUTIONARY
STATEMENTS REGARDING
FORWARD-LOOKING INFORMATION
Except
for historical information, this report contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934. Such
forward-looking statements involve risks and uncertainties, including, among
other things, statements regarding our business strategy, future revenues and
anticipated costs and expenses. Such forward-looking statements include, among
others, those statements including the words “expect,” “anticipate,” “intend,”
“believe” and similar language. Our actual results may differ significantly from
those projected in the forward-looking statements. Factors that might cause
or
contribute to such differences include, but are not limited to, those discussed
in the sections “Plan of Operation” and “Business”. You are cautioned not to
place undue reliance on the forward-looking statements, which speak only as
of
the date of this report. We undertake no obligation to publicly release any
revisions to the forward-looking statements or reflect events or circumstances
taking place after the date of this document.
PART
I
ITEM
1. DESCRIPTION
OF BUSINESS
Business
Development
Touchstone
Mining Limited (“Touchstone” or the “Company”) was incorporated in the State of
Nevada on September 12, 2005. The Company has never declared bankruptcy, it
has
never been in receivership, and it has never been involved in any legal action
or proceedings.
Business
of Issuer
Exploration
Stage Company
We
are an
exploration stage corporation that engages primarily in the acquisition,
exploration and development of mineral deposits and reserves. We have the right
to conduct exploration work on ten mineral mining claims on the Boulder Group
property in Humboldt County, Nevada. Prior to this, our activities have been
limited to formation and the raising of capital.
We
have
not realized any revenue from our business operations, have achieved losses
since inception, and have relied upon the sale of our securities and loans
from
our officers and directors to fund operations.
Our
auditors have issued a going concern opinion. This means that our auditors
believe there is substantial doubt that we can continue as an on-going business
for the next 12 months.
Our
management is presently searching for ventures of merit for corporate
participation to enhance shareholder value. These ventures may involve sales
of
our debt or equity securities in merger or acquisition
transactions.
2
Our
principal offices are located at 808 Nelson Street, Suite 2103, Vancouver,
British Columbia, Canada, V6Z 2H2, and our telephone number is (604) 684-7619.
Douglas Scheving, our sole officer and director, supplies this office space
on a
rent free basis.
Boulder
Group Property
On
November 23, 2005, we entered into the Mineral Claim Purchase Agreement with
Mineral Exploration Services, Ltd. (“MES”) pursuant to which we acquired an
option to acquire certain unpatented mineral mining claims. The property
comprises of 10 lode mining claims on 200 acres located in Humboldt County,
Nevada. Under the terms of the agreement, we agreed to pay MES an aggregate
sum
of $50,000 as follows: (i) $3,500 upon signing, (ii) $3,500 one year from
signing,
which was paid September 25, 2006, (iii) $8,000 two years from signing, (iv)
$10,000 three years after signing, (v) $10,000 four years after signing, and
(v)
a final payment of $15,000 five years after signing.
In
addition to the payments to MES, we agreed to make exploration expenditures
in
the amount of $50,000 on the property over a 5-year period and to pay to MES
a
3% royalty on all mineral commodities sold from the claims. This royalty can
be
reduced to 1.5% at any time through the payment of $1,000,000 to
MES.
The
fee
simple title to the property is owned by the United States of America, and
the
property is subject to the rules and regulations of the Bureau of Land
Management (“BLM”). MES staked the land and obtained a lease from the BLM.
Pursuant to the agreement, MES leased these claims and the rights that go with
them to us. The lease grants us the right to enter on the property with our
employees, representatives and agents, and to prospect, explore, test, develop,
work and mine the property. We became responsible for payment of any taxes
and
maintenance fees due to the BLM for 2006 and every year thereafter.
We
retained William Utterback, a consulting geologist, of Gold Property Services
in
Winnemucca, Nevada to do a work program based upon the recommendations in his
report, “Gold Exploration Proposal for the Boulder Claim Group, Humboldt County,
Nevada,” dated October 26, 2005. Mr. Utterback recommended a program of
geological mapping and trenching. The exposed material in the trenches was
to be
metal detected with a Minelab GP Extreme Metal detector. The estimated cost
of
the program, consisting of supervision, trenching, grid mapping, metal
detecting, sample analysis, assays, labor and supplies, was $18,619, which
amount was paid to Mr. Utterback on October 12, 2006.
The
trenching program started on October 17, 2006 and was terminated October 27,
2006 after which reclamation of the trenches was initiated.
No
commercial quantities of gold were found during the exploration program. Fifteen
samples were taken and submitted to ALS Chemex of Sparks, Nevada for assay.
The
samples contained only trace amounts of gold and would not be economical for
even the largest low cost heap leach operation.
3
We
have
ceased exploration work on the property. All of the trenches have been filled
in
and the surface disturbance has been restored to its original
contours.
On
August
16, 2007, we notified MES of our intention to return the property via a quit
claim due to the poor results from the exploration program. MES informed us
that
it no longer wanted to retain the claims on the property and subsequently
allowed its claims on the property to lapse. Our agreement with MES was
terminated as of September 16, 2007.
In
October 2007, we re-staked the claims in the Boulder Group Property and paid
the
necessary fees to the BLM. The lease to the property is currently in our name.
We do not claim to have any minerals or reserves whatsoever at this time on
any
of the property. Our management has no current plan for the property at this
time, and all our exploration operations have been discontinued.
Claims
The
Boulder Group property consists of 10 lode claims. The claims have been legally
located and filed with the Humboldt County Recorder in Winnemucca, Nevada.
For
2007, annual fees to the BLM are $125 per claim for a total of $1,250 and annual
county taxes (including the notary charge) total $89.
The
following is a list of claim numbers, location and date of recording of our
claims:
|
Claim
No
|
Location
|
Date
of Recording
|
||
|
NMC-966226
|
Section
14, T. 35N., R. 34 E
|
Oct.
17, 2007
|
||
|
NMC-966227
|
Section
14, T. 35N., R. 34E
|
Oct.
17, 2007
|
||
|
NMC-966228
|
Section
14, T. 35N., R. 34E
|
Oct.
17, 2007
|
||
|
NMC-966229
|
Section
14, T. 35N., R. 34E
|
Oct.
17, 2007
|
||
|
NMC-966230
|
Section
14, T. 35N., R. 34E
|
Oct.
17, 2007
|
||
|
NMC-966231
|
Section
14, T. 35N., R. 34E
|
Oct.
17, 2007
|
||
|
NMC-966232
|
Section
14, T. 35N., R. 34E
|
Oct.
17, 2007
|
||
|
NMC-966233
|
Section
14, T. 35N., R. 34E
|
Oct.
17, 2007
|
||
|
NMC-966234
|
Section
14, T. 35N., R. 34E
|
Oct.
17, 2007
|
||
|
NMC-966235
|
Section
14, T. 35N., R. 34E
|
Oct.
17, 2007
|
Location
and Access
The
property is located near the extreme northern edge of the Eugene Mountains,
approximately 29 miles west of Winnemucca via Jungo Road, near the southern
boundary of Humboldt County. Section 14, in which the claims are located, lies
partly in the Gaskell (east-central border) and the Pronto (west-central border)
USGS Topographic 7.5 Minute Series map sheets. The claim block straddles an
east-west ridge, with access roads on both sides of the ridge. The main ridge
summit is steep and rugged with no easy access except on foot.
4
History
No
record
has been found of previous exploration activity. On the ground, two short adits
and a few widely scattered prospect pits probably date between 1910 and 1940.
There is no evidence that any material was stockpiled or removed from the
property. Although two short adits and several prospect pits are located on
the
property, no written record of past production has yet been located. A
reconnaissance survey of the adits and waste rock dumps revealed no indication
that ore was encountered or removed from the property. The existing access
road
does not reach either of the adits.
Geology
Host
rocks in the central part of the claim block are exposed on the slopes of the
east-west ridge (known locally as Big Easy Ridge). The ridge is flanked on
the
north and south with alluvial fans that only partly cover an eroded bedrock
surface. It was within the alluvial fans that the spectacular gold specimens
were found. The bedrock units of ALS Formation strike north 60 to 70 degrees
east and dip northwest at 25 to 35 degrees. The two adits were driven into
a
small intrusion of diorite which is crosscut by several of the gold bearing
quartz veins. These quartz veins vary in thickness from a few millimeters up
to
about one meter. They generally strike northwest (Azimuth 310 to 330 degrees)
and dip northeast 25 to 35 degrees, but several other orientations were noted.
Spectacular gold specimens were recovered from the alluvial fans inside the
claim block on both sides of Big Easy Ridge. The 4.5 ounce specimen was
recovered on the south side below the largest outcropping quartz vein and the
two adits.
During
the Pleistocene period this part of northern Nevada was covered by a large
lake
called Lake Lahontan. It probably never was deep enough to cover Big Easy Ridge.
Terraces developed on the flanking alluvial fans indicate that its upper level
was about 1,400 meters (4,593 feet) elevation. Most of the gold specimens
recovered with the use of metal detectors were between 1,340 and 1,380 meters
(4,395 and 4,527 feet) elevation. Their locations probably correspond to
different strand lines along the fluctuating lake shore line.
Overburden
on the ridge slopes is thin and discontinuous. Even the alluvial fan cover
is
thin, with frequent exposures of the underlying bedrock surface beveled by
the
wave action of Lake Lahontan. Some strategically located trenches would help
complete a detailed geologic map of the claims and test portions of the gold
veins that remain concealed.
Other
than our interest in the Boulder Group property, we own no plans or other
property.
Competitive
Factors
The
gold
mining industry is fragmented, that is there are many, many gold prospectors
and
producers, small and large. We do not compete with anyone. That is because
there
is no competition for the exploration or removal of minerals from the property.
We are one of the smallest exploration companies in existence. We are an
infinitely small participant in the gold mining market. Readily available gold
markets exist in the United States and around the world for the sale of gold.
Therefore, we will be able to sell any gold that we are able to recover.
5
Regulations
Our
mineral exploration program is subject to the regulations of the Bureau of
Land
Management.
Rental
Fee Requirement
The
federal government’s Continuing Act of 2002 extends the requirement of rental or
maintenance fees in place of assessment work for filing and holding mining
claims with the BLM. All claimants must pay a yearly maintenance fee of $125
per
claim for all or part of the mining claim assessment year. The fee must be
paid
at the State Office of the Bureau of Land Management by August 31 of each year.
We have paid this fee through 2008. The assessment year ends on noon of
September 1 of each year. The initial maintenance fee is paid at the time the
Notice of Location is filed with the BLM and covers the remainder of the
assessment year in which the claim was located. There are no exemptions from
the
initial fee. Some claim holders may qualify for a Small Miner Exemption waiver
of the maintenance fee for assessment years after the year in which the claim
was located. We do not qualify for a Small Miner Exemption. The following sets
forth the BLM fee schedule:
Fee
Schedule* (per claim)
|
Location
Fee
|
$
|
30.00
|
||
|
Maintenance
Fee.
|
$
|
125.00
|
||
|
Service
Charges
|
$
|
10.00
|
||
|
Transfer
Fee
|
$
|
5.00
|
||
|
Proof
of Labor
|
$
|
5.00
|
||
|
Notice
of Intent to Hold
|
$
|
5.00
|
||
|
Transfer
of Interest
|
$
|
5.00
|
||
|
Amendment
|
$
|
5.00
|
||
|
Petition
for Deferment of Assessment Work
|
$
|
25.00
|
||
|
Notice
of Intent to Locate on Stock Raising Homestead land
|
$
|
25.00
|
*
Fee
schedule reflects increases of July 2004 and July 2005.
The
BLM
regulations provide for three types of operations on public lands: (i) Casual
Use level, (ii) Notice level and (iii) Plan of Operation level.
6
|
1.
|
Casual
Use means activities ordinarily resulting in no or negligible disturbance
of the public lands or resources. Casual Use operations involve simple
prospecting with hand tools such as picks, shovels and metal detectors.
Small-scale mining devices such as dry washers having engines with
less
than 10 brake- horsepower are allowed, provided they are fed using
only
hand tools. Casual Use level operations are not required to file
an
application to conduct activities or post a financial
guarantee.
|
|
2.
|
Notice
level operations include only exploration activities in which five
or less
acres of disturbance are proposed. Presently, all Notice Level operations
require a written notice and must be bonded for all activities other
than
reclamation.
|
|
Plans
of Operation activities include all mining and processing (regardless
of
the size of the proposed disturbance), plus all other activities
exceeding
five acres of proposed public land disturbance.
|
Operators
are encouraged to conduct a thorough inventory of the claim to determine the
full extent of any existing disturbance and to meet with field office personnel
at the site before developing an estimate. The inventory should include
photographs taken “before” and “after” any mining activity.
If
an
operator constructs access or uses an existing access way for an operation
and
would object to BLM blocking, removing or claiming that access, then the
operator must post a financial guarantee that covers the reclamation of the
access.
Concurrence
by the BLM for occupancy is required whenever residential occupancy is proposed
or when fences, gates or signs will be used to restrict public access or when
structures that could be used for shelter are placed on a claim. It is the
claimant’s responsibility to prepare a complete notice or plan of
operators.
Mining
Claims on State Land
The
Nevada law authorizing location of claims on State Lands was repealed in 1998.
Acquisition of mineral rights on Nevada trust land can only be accomplished
by
application for a prospecting permit, mineral lease or lease of common variety
materials.
We
are in
compliance with all laws and will continue to comply with the laws in the
future. We believe that compliance with the laws will not adversely affect
our
business operations.
We
are
responsible to provide a safe working environment, not disrupt archaeological
sites, and conduct our activities to prevent unnecessary damage to the property.
We
will
secure all necessary permits for exploration and, if development is warranted
on
the property, will file final plans of operation before we start any mining
operations. At this point, a permit from the BLM would be required. Also, we
would be required to comply with the laws of the state of Nevada and federal
regulations. We anticipate no discharge of water into active stream, creek,
river, lake or any other body of water regulated by environmental law or
regulation. No endangered species will be disturbed. Restoration of the
disturbed land will be completed according to law. All holes, pits and shafts
will be sealed upon abandonment of the property. It is difficult to estimate
the
cost of compliance with the environmental law since the full nature and extent
of our proposed activities cannot be determined until we start our operations
and know what that will involve from an environmental standpoint.
7
We
submitted a plan of operations to the BLM and estimated that the maximum cost
of
reclamation of the claims held by us would be $4,330. The BLM required that
this
amount be posted as a bond before work could begin on the property. A cash
bond
was paid to the BLM on August 29, 2006. This bond is refundable after the
reclamation work has been inspected and approved by the BLM. The BLM will
inspect the property two years after the work is completed to determine if
the
reclamation work was successful and if they approve of the reclamation they
will
refund the bond to us.
Patents,
Trademarks and Licenses, Franchises, Concessions, Royalty Agreements or Labor
Contracts
We
presently utilize no patents, licenses, franchises, concessions, royalty
agreements or labor contracts in connection with our business.
Employees
and Employment Agreements
At
present, we have no full-time employees. Our sole officer and director, Douglas
Scheving, is a part-time employee and will devote about 10% of his time or
four
hours per work week to our operation. Mr. Scheving does not have an employment
agreement with us. We presently do not have pension, health, annuity, insurance,
stock options, profit sharing or similar benefit plans.
Risks
associated with Touchstone Mining Limited
1 Our
plan of operation is limited to finding an ore body. As such we have no plans
for revenue generation. Accordingly, you should not expect any revenues from
operations.
Our
plan
of operation is for exploration of the property to determine if there is an
ore
body beneath the surface. Exploration does not contemplate removal of the ore.
We have no plans or funds for ore removal. Accordingly, we will not generate
any
revenues from our current plan of operation.
2. Because
the probability of an individual prospect ever having reserves is extremely
remote any funds spent on exploration will probably be
lost.
8
The
probability of an individual prospect ever having reserves is extremely remote.
In all probability the property does not contain any reserves. As such, any
funds spent on exploration will probably be lost.
3. We
lack an operating history and have losses which we expect to continue into
the
future. As a result, we may have to suspend or cease
operations.
We
were
incorporated on September 12, 2005 and we have not started our proposed business
operations or realized any revenues. We have no operating history upon which
an
evaluation of our future success or failure can be made. Our net loss since
inception is $93,355. To achieve and maintain profitability and positive cash
flow we are dependent upon:
* our
ability to generate revenues
* our
ability to reduce exploration costs.
Based
upon current plans, we expect to incur operating losses in future periods.
This
will happen because there are expenses associated with the research and
exploration of our mineral properties. As a result, we may not generate revenues
in the future. Failure to generate revenues will cause us to suspend or cease
operations.
4. Because
our management does not have technical training or experience in exploring
for,
starting, and operating an exploration program, we will have to hire qualified
personnel. If we cannot locate qualified personnel, we may have to suspend
or
cease operations.
Our
management has no direct training or experience in exploring for, starting,
and
operating an exploration program and as a result may not be fully aware of
many
of the specific requirements related to working within the industry.
Management’s decisions and choices may not take into account standard
engineering or managerial approaches, mineral exploration companies commonly
use. Consequently our operations, earnings and ultimate financial success could
suffer irreparable harm due to management’s lack of experience in this industry.
As a result we may have to suspend or cease operations.
5. Because
we are small and do not have much capital, we may have to limit our exploration
activity.
Because
we are small and do not have much capital, we may not be able to complete an
exploration program that is as thorough as we would like. In that event, an
existing ore body may go undiscovered. Without an ore body, we cannot generate
revenues.
6.
Because
Mr. Scheving has other outside business activities, our operations may be
sporadic which may result in periodic interruptions or suspensions of
exploration.
Mr.
Scheving, our sole officer and director, has other outside business activities
and he will only be devoting 10% of his time or four hours per work week to
our
operations. Hence, our operations may occur at times which are convenient to
Mr.
Scheving. As a result, exploration of the property may be periodically
interrupted or suspended.
9
7. If
our officers and directors resign or die without having found replacements
our
operations will be suspended or cease.
We
have
only one officer and director. We are entirely dependent upon him to conduct
our
operations. If Mr. Scheving should resign or die there will be no one to run
the
company. Further, we do not have key man insurance. If that should occur, until
we find other persons to run us, our operations will be suspended or cease
entirely.
8. NASD
sales practice requirements may limit a stockholder’s ability to buy and sell
our stock.
REPORTS
TO SECURITY HOLDERS
The
Company is not required to provide annual reports to security
holders.
We
are
subject to the reporting requirements of the Securities and Exchange Commission
(“SEC”) and will file reports including, but not limited to, Annual Reports of
Form 10-KSB, Quarterly Reports on Form 10-QSB, Current Reports on Form 8-K,
and
Proxy Statements on Schedule 14.
The
public may read and copy any materials we file with the SEC at the SEC’s Public
Reference Room at 100 F Street N.E., Washington, D.C. 20549. The public may
obtain information on the operation of the Public Reference Room by calling
the
SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports,
proxy and information statements, and other information regarding issuers that
file electronically with the SEC and the address of that site is
www.sec.gov.
10
ITEM
2. DESCRIPTION
OF PROPERTY
Since
September 12, 2005, our principal place of business and corporate offices have
been located at 808 Nelson Street, Suite 2103, Vancouver, B.C., V6Z 2H2, Canada.
There is no formal lease agreement and no rental fees were charged to us.
We
do not
have any investments or interests in any real estate. We do not invest in real
estate mortgages, nor do we invest in securities of, or interests in, persons
primarily engaged in real estate activities.
ITEM
3. LEGAL
PROCEEDINGS
We
are
not a party to any pending or, to our knowledge, threatened legal proceedings.
ITEM
4. SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
No
matter
was submitted during the fourth quarter of the fiscal year ended September
30,
2007, to a vote of security holders, through the solicitation of proxies or
otherwise.
PART
II
ITEM
5. MARKET
FOR COMMON EQUITY
AND
RELATED STOCKHOLDER MATTERS
Market
Information
Our
common stock is quoted on the OTC Bulletin Board under the symbol “THSM.OB”.
However, our common stock has not been traded since our inception. Accordingly,
there is no present market for our securities. Following the successful
completion of an acquisition or business combination, if any, we intend to
file
an application for the purpose of commencing trading of our stock.
Any
quotations on the OTC Bulletin Board would reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.
As
of
September 30, 2007, there were 46 record holders of our common stock.
Dividends
We
have
never declared any cash dividends with respect to our common stock. Future
payment of dividends is within the discretion of our board of directors and
will
depend on our earnings, capital requirements, financial condition and other
relevant factors. Although there are no material restrictions limiting, or
that
are likely to limit, our ability to pay dividends on our common stock, we
presently intend to retain future earnings, if any, for use in our business
and
have no present intention to pay cash dividends on our common
stock.
11
There
are
no restrictions in our articles of incorporation or bylaws that prevent us
from
declaring dividends. The Nevada Revised Statutes, however, do prohibit us from
declaring dividends where, after giving effect to the distribution of the
dividend:
1. We
would
not be able to pay our debts as they become due in the usual course of business;
or
2. Our
total
assets would be less than the sum of our total liabilities plus the amount
that
would be needed to satisfy the rights of shareholders who have preferential
rights superior to those receiving the distribution.
Securities
Authorized for Issuance Under Equity Compensation Plans
We
have
no authorized equity compensation plans and no outstanding options, warrants
or
similar rights.
Recent
Sales of Unregistered Securities
In
September 2007, we issued 3,000,000 shares of restricted common stock to Douglas
Scheving, our sole officer and director, in exchange for the forgiveness of
$34,502 that we owed to him. The shares were issued pursuant to the exemption
from registration contained in Section 4(2) of the Securities Act of 1933,
as
amended (the “Securities Act”).
ITEM
6. PLAN
OF OPERATION
Results
of Operations
We
are an
exploration stage corporation. We have generated no revenues from our business
operations since inception and have incurred $93,355 in expenses through
September 30, 2007.
The
following table provides selected financial data about our company for the
fiscal year ended September 30, 2007 and 2006, respectively.
|
September
30, 2007
|
|
September
30, 2006
|
|||||
|
Cash
|
$
|
42
|
$
|
28,120
|
|||
|
Total
assets
|
$
|
4,372
|
$
|
32,450
|
|||
|
$
|
1,225
|
$
|
34,133
|
||||
|
Stockholders’
equity (deficit)
|
$
|
3,147
|
$
|
(1,683
|
)
|
||
Our
cash
in the bank at September 30, 2007 was $42. Net cash provided by financing
activities since inception through September 30, 2007 was $96,502, raised from
the sale of our common stock.
Our
auditors have issued an opinion that there is a substantial doubt that we can
continue as an on-going business for the next 12 months.
12
Plan
of Operation
The
following plan of operation should be read in conjunction with our financial
statements and the notes thereto included elsewhere in this report. Statements
contained herein which are not historical facts are forward-looking statements,
as that term is defined by the Private Securities Litigation Reform Act of
1995,
including statements relating to our plans, objectives, expectations and
intentions. Although we believe that the expectations reflected in such
forward-looking statements are reasonable, forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
from those projected. We caution investors that any forward-looking statements
made by us are not guarantees of future performance and that actual results
may
differ materially from those in the forward-looking statements. Such risks
and
uncertainties include, without limitation: established competitors who have
substantially greater financial resources and operating histories, regulatory
delays or denials, ability to compete as a start-up company in a highly
competitive market, and access to sources of capital.
We
were
incorporated in the State of Nevada on September 12, 2005. We intended to engage
in the acquisition, exploration and development of mineral deposits and
reserves, but we have been unsuccessful in this area. The only operations we
have engaged in are exploration work on the Boulder Group property in Humboldt
County, Nevada. In August 2007, we determined to discontinue our exploration
efforts at this property and to look at other ventures of interest. These
ventures may involve sales of our debt or equity securities in merger,
acquisition or similar transactions.
In
its
report on our September 30, 2007 audited financial statements, our auditors
expressed an opinion that there is substantial doubt about our ability to
continue as a going concern. See Note 7. Our financial statements do not include
any adjustments that may result from the outcome of this uncertainty. We have
been in the development stage and have had no revenues since inception. For
the
period from September 12, 2005 (inception) to September 30, 2007, we recorded
a
net loss of $93,355. Our continuation as a going concern is dependent on future
events, including our ability to raise additional capital and to general
positive cash flows.
At
the
present time, we have minimal operating costs and expenses due to our limited
business activities. Accordingly, absent changed circumstances, we will not
be
required to raise additional capital over the next twelve months, although
we
may do so in connection with or in anticipation of possible acquisition
transactions. We do not currently engage in any product research and
development, other than maintaining the mineral mining claims we acquired in
October 2007. We have no present plans to purchase or sell any plant or
significant equipment. We also have no present plans to add employees, although
we may do so in the future if we engage in any merger or acquisition
transactions.
If
we
cannot generate sufficient revenues to continue operations, we will suspend
or
cease operations. By virtue of our inability to generate revenues over the
preceding year, we will begin to seek out other sources of cash, including
new
investors, joint venture and strategic partners or loans from our officers
or
directors. If we cease operations, we do not know what we would do subsequently
and we have no plans to do anything in such event. We have no plans to dissolve
statutorily at this time, under any circumstances, nor do we have plans to
enter
into any merger or acquisition.
13
Limited
Operating History; Need for Additional Capital
There
is
no historical financial information about us upon which to base an evaluation
of
our performance. We are an exploration stage corporation and have not generated
any revenues from business operations. We cannot guarantee we will be successful
in our business operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital resources,
possible delays in the exploration of our properties, and possible cost overruns
due to price and cost increases in services.
We
have
no assurance that future financing will be available to us on acceptable terms.
If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations. Equity financing could result in
additional dilution to existing shareholders.
Currently,
we have no financing plans.
Liquidity
and Capital Resources
As
of the
date of this report, we have yet to generate any revenues from our business
operations.
Since
inception, our main source for cash has been the sale of our equity securities.
Upon inception, we issued 600,000 shares of common stock to two directors for
$12,000. In June 2006, we completed an offering of 2,500,000 shares of common
stock to 44 persons in consideration of $50,000. The offering was made pursuant
to the exemption from registration contained in Rule 506 of Regulation D under
the Securities Act. In September 2007, we issued 3,000,000 shares of common
stock to our sole officer and director in exchange for forgiveness of $34,502
owed to him. The shares were issued pursuant to the exemption from registration
contained in Section 4(2) of the Securities Act. We have exhausted the proceeds
from these sales of our stock.
We
used
most of the proceeds to finance the exploration program on the resource property
located in Humboldt County, Nevada. See a description of our exploration
operations in the business section this report. Due to the poor results from
the
program, we have discontinued all exploration work on that property. We continue
to hold a lease on the ten mineral mining claims.
As
of
September 30, 2007, our total assets were $4,372 and our total liabilities
were
$1,225.
We
have
experienced difficulties in obtaining financing for our business; during this
past quarter, we have shifted some of our focus to investigating other business
opportunities. These opportunities include possible acquisitions or joint
venture arrangements in this and other industries. We can provide no assurance
that these efforts in exploring possible acquisitions or joint venture
arrangements will come to fruition. Additionally, if any new ventures are
successfully negotiated, we can provide no assurance that such new venture
will
have enough financial resources to fully develop the new venture.
14
ITEM
7 – FINANCIAL STATEMENTS.
TOUCHSTONE
MINING LIMITED
(An
Exploration Stage Company)
AUDITED
FINANCIAL STATEMENTS
SEPTEMBER
30, 2007 and 2006
TOUCHSTONE
MINING LIMITED
(An
Exploration Stage Company)
INDEX
TO AUDITED FINANCIAL STATEMENTS
FOR
THE PERIOD OF SEPTEMBER 12, 2005 (INCEPTION) TO SEPTEMBER 30,
2007
|
Page(s)
|
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|
Report
of Independent Registered Public Accounting Firm
|
F-3
|
|
Balance
Sheets at September 30, 2007 and 2006
|
F-4
|
|
Statements
of Operations for the years ended September 30, 2007 and
2006
|
|
|
and
cumulative totals from September 12, 2005 (Inception) to September
30,
2007
|
F-5
|
|
Statements
of Changes in Stockholders’ Equity (Deficit)
|
|
|
for
the period of September 12, 2005 (Inception) to September 30,
2007
|
F-6
|
|
Statements
of Cash Flows for the years ended September 30, 2007 and
2006
|
|
|
and
from September 12, 2005 (Inception) to September 30, 2007
|
F-7
|
|
Notes
to Audited Financial Statements
|
F-8 –
F-14
|
F-1
|
Douglas
W. Child, CPA
Marty
D. Van Wagoner, CPA
J.
Russ Bradshaw, CPA
William
R. Denney, CPA
Roger
B. Kennard, CPA
Russell
E. Anderson, CPA
Scott
L. Farnes
1284
W. Flint Meadow Dr. #D
Kaysville,
Utah 84037
Telephone
801.927.1377
Facsimile
801.927.1344
5296
S. Commerce Dr. #300
Salt
Lake City, Utah 84107
Telephone
801.281.4700
Facsimile
801.281.4701
Suite
B, 4F
North
Cape Commercial Bldg.
388
King’s Road
North
Point, Hong Kong
www.cpaone.net
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
The Board of Directors and Stockholders of
Touchstone
Mining Limited
Vancouver,
British Columbia
We
have audited the accompanying balance sheet of Touchstone Mining
Limited
(an exploration stage company) (the “Company”) as of September 30, 2007,
and the related statement of operations, stockholders' equity (deficit),
and cash flows for the year ended September 30, 2007. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We
conducted our audit in accordance with the standards of the Public
Company
Accounting Oversight Board (United States of America). Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
The company is not required to have, nor were we engaged to perform,
an
audit of its internal control over financial reporting. Our audit
included
consideration of internal control over financial reporting as a basis
for
designing audit procedures that are appropriate in the circumstances,
but
not for the purpose of expressing an opinion on the effectiveness
of the
company's internal control over financial reporting. Accordingly,
we
express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
In
our opinion, the financial statements referred to above present fairly,
in
all material respects, the financial position of the Company as of
September 30, 2007, and the results of its operations, stockholders’
equity (deficit) and its cash flows for the year ended September
30, 2007,
in conformity with accounting principles generally accepted in the
United
States of America.
The
accompanying financial statements have been prepared assuming that
the
Company will continue as a going concern. As discussed in Note 7
to the
financial statements, the Company has incurred significant net losses
since inception. This raises substantial doubt about the Company's
ability
to meet its obligations and to continue as a going concern. Management's
plans in regard to this matter are described in Note 7. The financial
statements do not include any adjustments that might result from
the
outcome of this uncertainty.
/s/
Child, Van Wagoner & Bradshaw, PLLC
Child,
Van Wagoner & Bradshaw, PLLC
Salt
Lake City, UT
December
10, 2007
|
|
F-2
 |
 |
Report
of Independent Registered Public Accounting Firm
To
the Stockholders of Touchstone Mining Limited:
We
have
audited the accompanying balance sheet of Touchstone Mining Limited (the
“Company”) as at September 30, 2006 and 2005 and the related statements of
operations, changes in stockholders’ equity, and cash flows for each of the year
ended September 30, 2006 and 2005. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an
opinion on these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required
to
have, nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit included consideration of internal control
over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures
in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provide a reasonable
basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as at September
30,
2006 and 2005, and the results of its operations and its cash flows for each
of
the years ended September 30, 2006 and 2005, in conformity with United States
generally accepted accounting principles.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company is dependent upon financing to continue operations,
had
suffered recurring losses from operations and has total liabilities that
exceed
total assets. These matters raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regards to these matters
are discussed in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
“Staley,
Okada & Partners”
|
Vancouver,
BC
|
STALEY,
OKADA & PARTNERS
|
|
December
15, 2006
|
CHARTERED
ACCOUNTANTS
|
F-3
Touchstone
Mining Limited
(An
Exploration Stage Company)
Balance
Sheets
As
at September 30,
|
2007
|
2006
|
||||||
|
ASSETS
|
|||||||
|
Current
|
|||||||
|
Cash
and cash equivalents
|
$
|
42
|
$
|
28,120
|
|||
|
Total
current assets
|
42
|
28,120
|
|||||
|
Non-Current
|
|||||||
|
Mineral
Property Reclamation Bond (Note
5)
|
4,330
|
4,330
|
|||||
|
TOTAL
ASSETS
|
$
|
4,372
|
$
|
32,450
|
|||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|||||||
|
Current
|
|||||||
|
Accounts
payable and accrued liabilities
|
$
|
1,225
|
$
|
5,100
|
|||
|
Due
to related party (Note
6)
|
–
|
29,033
|
|||||
|
TOTAL
LIABILITIES
|
1,225
|
34,133
|
|||||
|
STOCKHOLDERS’
EQUITY (DEFICIT)
|
|||||||
|
Capital
Stock (Note
3)
|
|||||||
|
Authorized:
100,000,000
common shares, $0.00001 par value
|
|||||||
|
Issued
and outstanding shares:
6,100,000
(3,100,000 – September 30, 2006) common shares
|
61
|
31
|
|||||
|
Capital
in excess of par value
|
96,441
|
61,969
|
|||||
|
Deficit
accumulated during the exploration stage
|
(93,355
|
)
|
(63,683
|
)
|
|||
|
Total
stockholders’ equity (deficit)
|
3,147
|
(1,683
|
)
|
||||
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
$
|
4,372
|
$
|
32,450
|
|||
The accompanying notes are an integral part of these financial statements.
F-4
Touchstone
Mining Limited
(An
Exploration Stage Company)
Statements
of Operations
|
Year Ended September 30,
|
Cumulative
from Inception
(September 12, 2005)
to September 30,
|
|||||||||
|
2007
|
2006
|
2007
|
||||||||
|
Income
|
$
|
–
|
$
|
–
|
$
|
–
|
||||
|
Expenses
|
||||||||||
|
Mineral
property costs
|
18,619
|
10,170
|
28,789
|
|||||||
|
Professional
fees
|
8,916
|
49,262
|
61,968
|
|||||||
|
Office
and administrative
|
1,667
|
354
|
2,128
|
|||||||
|
Total
Operating Expenses
|
29,202
|
59,786
|
92,885
|
|||||||
|
Foreign
currency transaction gain/loss
|
(470
|
)
|
–
|
(470
|
)
|
|||||
|
Other
Income (Expense)
|
–
|
–
|
–
|
|||||||
|
Net
Loss Applicable to Common Shares
|
$
|
(29,672
|
)
|
$
|
(59,786
|
)
|
$
|
(93,355
|
)
|
|
|
Basic
and Diluted Loss per Common Share
|
$
|
(0.01
|
)
|
$
|
(0.07
|
)
|
||||
|
Weighted
Average Number of Common Shares Outstanding
|
3,132,967
|
847,253
|
||||||||
The
accompanying notes are an integral part of these financial
statements.
F-5
Touchstone
Mining Limited
(An
Exploration Stage Company)
Statement
of Changes in Stockholders’ Equity (Deficit)
For
the Period of Inception (September 12, 2005) to September 30,
2007
|
Common Shares
|
Capital in
Excess of
|
Deficit
Accumulated
During the
|
|
|||||||||||||
|
Shares
|
Amount
|
Par Value
|
Exploration Stage
|
Total
|
||||||||||||
|
Inception –
September 12, 2005
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
|||||||
|
Common
shares issued for cash at $0.02 per share
|
600,000
|
6
|
11,994
|
–
|
12,000
|
|||||||||||
|
Loss
for the period
|
–
|
–
|
–
|
(3,897
|
)
|
(3,897
|
)
|
|||||||||
|
Balance –
September 30, 2005
|
600,000
|
6
|
11,994
|
(3,897
|
)
|
8,103
|
||||||||||
|
Common
shares issued for cash at $0.02 per share
|
2,500,000
|
25
|
49,975
|
–
|
50,000
|
|||||||||||
|
Loss
for the year
|
–
|
–
|
–
|
(59,786
|
)
|
(59,786
|
)
|
|||||||||
|
Balance –
September 30, 2006
|
3,100,000
|
31
|
61,969
|
(63,683
|
)
|
(1,683
|
)
|
|||||||||
|
Common
shares issued for $34,502 in debt
|
3,000,000
|
30
|
34,472
|
–
|
34,502
|
|||||||||||
|
Loss
for the year
|
–
|
–
|
–
|
(29,672
|
)
|
(29,672
|
)
|
|||||||||
|
Balance –
September 30, 2007
|
6,100,000
|
61
|
96,441
|
(93,355
|
)
|
3,147
|
||||||||||
The
accompanying notes are an integral part of these financial
statements.
F-6
|
Touchstone
Mining Limited
(An
Exploration Stage Company)
Statements
of Cash Flows
|
|
Cumulative
|
||||||||||
|
from Inception
|
||||||||||
|
(September 12,
2005)
|
||||||||||
|
Year Ended September 30,
|
to September 30,
|
|||||||||
|
2007
|
2006
|
2007
|
||||||||
|
Cash
Flow from Operating Activities:
|
||||||||||
|
Loss
for the period
|
$
|
(29,672
|
)
|
$
|
(59,786
|
)
|
$
|
(93,355
|
)
|
|
|
Changes
in operating assets and liabilities:
|
||||||||||
|
Decrease
in prepaid expense
|
–
|
15,000
|
–
|
|||||||
|
Increase
(decrease) in accounts payable and accrued liabilities
|
(3,875
|
)
|
1,600
|
1,225
|
||||||
|
Net
cash used in operating activities
|
(33,547
|
)
|
(43,186
|
)
|
(92,130
|
)
|
||||
|
Cash
Flow from Investing Activities:
|
||||||||||
|
Mineral
property reclamation bond
|
–
|
(4,330
|
)
|
(4,330
|
)
|
|||||
|
Net
cash used in investing activities
|
–
|
(4,330
|
)
|
(4,330
|
)
|
|||||
|
Cash
Flow from Financing Activities:
|
||||||||||
|
Advances
from related party
|
5,469
|
|
13,650
|
34,502
|
||||||
|
Issuance
of capital stock
|
-
|
50,000
|
62,000
|
|||||||
|
Net
cash provided by financing activities
|
5,469
|
63,650
|
96,502
|
|||||||
|
Net
Increase (Decrease) in Cash and Cash Equivalents
|
(28,078
|
)
|
16,134
|
42
|
||||||
|
Cash
and Cash equivalents – Beginning of period
|
28,120
|
11,986
|
-
|
|||||||
|
Cash
and Cash Equivalents – End of Period
|
$
|
42
|
$
|
28,120
|
$
|
42
|
||||
|
Supplemental
Cash Flow Disclosure:
|
||||||||||
|
Cash
paid for interest
|
$
|
–
|
$
|
–
|
$
|
–
|
||||
|
Cash
paid for income taxes
|
$
|
–
|
$
|
–
|
$
|
–
|
||||
|
Non-
Cash Financing and Investing Activities:
|
||||||||||
|
Debt
converted to Capital Stock
|
$
|
29,033
|
$
|
–
|
$
|
29,033
|
||||
The
accompanying notes are an integral part of these financial
statements.
F-7
Touchstone
Mining Limited
(An
Exploration Stage Company)
Notes
to
Audited Financial Statements
September
30, 2007 and 2006
| 1. |
Organization
|
Touchstone
Mining Limited (the “Company”) was incorporated on September 12, 2005 in the
State of Nevada, USA. It is based in Vancouver, British Columbia, Canada. The
accounting and reporting policies of the Company conform to accounting
principles generally accepted in the United States of America, and the Company’s
fiscal year end is September 30.
The
Company is an exploration stage company that engages primarily in the
acquisition, exploration and development of mineral resource properties. The
Company has the right to conduct exploration work on ten mineral mining claims
in Humboldt County, Nevada, USA. Prior to this, the Company’s activities have
been limited to its formation and the raising of equity capital.
Exploration
Stage Company
The
Company is considered to be in the exploration stage as defined in Statement
of
Financial Accounting Standards (SFAS) No. 7, “Accounting
and Reporting by Development Stage Enterprises,”
and
interpreted by the Securities and Exchange Commission for mining companies
in
Industry Guide 7. The Company is devoting substantially all of its efforts
to
development of business plans and the acquisition of mineral properties.
| 2. |
Significant
Accounting Policies
|
Use
of Estimates
The
preparation of the Company’s financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of
assets and liabilities and disclosure of contingent assets and liabilities
at
the date of the financial statements and the reported amount of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. The Company’s periodic filings with the Securities and Exchange
Commission include, where applicable, disclosures of estimates, assumptions,
uncertainties and markets that could affect the financial statements and future
operations of the Company.
Cash
and Cash Equivalents
Cash
and
cash equivalents include cash in banks, money market funds, and certificates
of
term deposits with maturities of less than three months, which are readily
convertible to known amounts of cash and which, in the opinion of management,
are subject to an insignificant risk of loss in value. The Company had $42
and
$28,120 in cash and cash equivalents at September 30, 2007 and 2006,
respectively.
F-8
Touchstone
Mining Limited
(An
Exploration Stage Company)
Notes
to
Audited Financial Statements
September
30, 2007 and 2006
Mineral
Acquisition and Exploration Costs
The
Company has been in the exploration stage since its formation on September
12,
2005 and has not yet realized any revenue from its planned operations. It is
primarily engaged in the acquisition, exploration and development of mining
properties. Mineral property acquisition and exploration costs are expensed
as
incurred. When it has been determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves,
the costs incurred to develop such property are capitalized. Such costs will
be
amortized using the units-of-production method over the estimated life of the
probable reserves.
Start-Up
Costs
In
accordance with the American Institute of Certified Public Accountant’s
Statement of Position 98-5, “Reporting
on the Costs of Start-up Activities”,
the
Company expenses all costs incurred in connection with the start-up and
organization of the Company.
Net
Income or (Loss) Per Share of Common Stock
The
Company has adopted Financial Accounting Standards Board (“FASB”) Statement
Number 128, “Earnings
per Share,”
(“EPS”)
which requires presentation of basic and diluted EPS on the face of the
statements of operations for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation.
In
the accompanying financial statements, basic earnings (loss) per share is
computed by dividing net income/loss by the weighted average number of shares
of
common stock outstanding during the period.
F-9
Touchstone
Mining Limited
(An
Exploration Stage Company)
Notes
to
Audited Financial Statements
September
30, 2007 and 2006
The
following table sets forth the computation of basic and diluted earnings per
share:
|
Year Ended September 30,
|
|||||||
|
2007
|
2006
|
||||||
|
Net
loss
|
$
|
(29,672
|
)
|
$
|
(59,786
|
)
|
|
|
Weighted
average common shares outstanding (Basic)
|
3,132,967
|
847,253
|
|||||
|
Options
|
-
|
-
|
|||||
|
Warrants
|
-
|
-
|
|||||
|
Weighted
average common shares outstanding (Diluted)
|
3,132,967
|
847,253
|
|||||
|
Net
loss per share (Basic and Diluted)
|
$
|
(0.01
|
)
|
$
|
(0.07
|
)
|
|
The
Company has no potentially dilutive securities, such as options or warrants,
currently issued and outstanding.
Concentrations
of Credit Risk
The
Company’s financial instruments that are exposed to concentrations of credit
risk primarily consist of its cash and cash equivalents and related party
payables it will likely incur in the near future. The Company places its cash
and cash equivalents with financial institutions of high credit worthiness.
At
times, its cash and cash equivalents with a particular financial institution
may
exceed any applicable government insurance limits. The Company’s management
plans to assess the financial strength and credit worthiness of any parties
to
which it extends funds, and as such, it believes that any associated credit
risk
exposures are limited.
Foreign
Currency Translations
The
Company’s functional currency is the Canadian dollar. The Company’s reporting
currency is the U.S. dollar. All
transactions initiated in Canadian dollars are translated into U.S. dollars
in
accordance with SFAS No. 52 “Foreign
Currency Translation” as
follows:
(i) Monetary
assets and liabilities at the rate of exchange in effect at the balance sheet
date.
(ii) Equity
at
historical rates.
(iii) Revenue
and expense items at the average rate of exchange prevailing during the
period.
Adjustments
arising from such translations are deferred until realization and are included
as a separate component of stockholders’ equity as a component of comprehensive
income or loss. Therefore, translation adjustments are not included in
determining net income (loss) but reported as other comprehensive
income.
F-10
Touchstone
Mining Limited
(An
Exploration Stage Company)
Notes
to
Audited Financial Statements
September
30, 2007 and 2006
For
foreign currency transactions, the Company translates these amounts to the
Company’s functional currency at the exchange rate effective on the invoice
date. If the exchange rate changes between the time of purchase and the time
actual payment is made, a foreign exchange transaction gain or loss results
which is included in determining net income for the period. No significant
realized exchange gains or losses were recorded since September 12, 2005
(inception) to September 30, 2007.
Risks
and Uncertainties
The
Company operates in the resource exploration industry that is subject to
significant risks and uncertainties, including financial, operational,
technological and other risks associated with operating a resource exploration
business, including the potential risk of business failure.
Environmental
Expenditures
The
operations of the Company have been, and may in the future be, affected from
time to time in varying degree by changes in environmental regulations,
including those for future reclamation and site restoration costs. Both the
likelihood of new regulations and their overall effect upon the company vary
greatly and are not predictable. The Company’s policy is to meet or, if
possible, surpass standards set by relevant legislation by application of
technically proven and economically feasible measures.
Environmental
expenditures that relate to ongoing environmental and reclamation programs
are
charged against earnings as incurred or capitalized and amortized depending
on
their future economic benefits. All of these types of expenditures incurred
since inception have been charged against earnings due to the uncertainty of
their future recoverability. Estimated future reclamation and site restoration
costs, when the ultimate liability is reasonably determinable, are charged
against earnings over the estimated remaining life of the related business
operation, net of expected recoveries.
Recent
Accounting Pronouncements
In
September 2006, FASB issued Financial Accounting Standards No. 157, “Fair
Value Measurements.” This
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles (GAAP), and expands disclosures
about fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is
the
relevant measurement attribute. Accordingly, this Statement does not require
any
new fair value measurements. However, for some entities, the application of
this
Statement will change current practice. SFAS 157 is effective in the first
fiscal year that begins after November 15, 2007.
F-11
Touchstone
Mining Limited
(An
Exploration Stage Company)
Notes
to
Audited Financial Statements
September
30, 2007 and 2006
In
February 2007, FASB issued Financial Accounting Standards No. 159, “The
Fair Value Option for Financial Assets and Financial Liabilities—Including an
amendment of FASB Statement No. 115.” This
Statement permits entities to choose to measure many financial instruments
and
certain other items at fair value. The objective is to improve financial
reporting by providing entities with the opportunity to mitigate volatility
in
reported earnings caused by measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions. This Statement
is
expected to expand the use of fair value measurement, which is consistent with
the Board’s long-term measurement objectives for accounting for financial
instruments. SFAS 159 is effective as of the beginning of an entity’s first
fiscal year that begins after November 15, 2007.
None
of
the above new pronouncements has current application to the Company, but will
be
implemented in the Company’s future financial reporting when
applicable.
| 3. |
Stockholders’
Equity
|
Authorized
Stock
The
Company has authorized 100,000,000 common shares with a par value of $0.00001
per share. Each common share entitles the holder to one vote, in person or
proxy, on any matter on which action of the stockholders of the corporation
is
sought.
Share
Issuances
Since
inception (September 12, 2005), the Company has issued 3,100,000 common shares
at $0.02 per share and 3,000,000 common shares in forgiveness for debt of
$34,502, resulting in total proceeds of $96,502. There were 6,100,000 common
shares issued and outstanding at September 30, 2007. Of these shares, 3,300,000
were issued to our director and officer of the Company, 300,000 were issued
to a
former officer and director, and 2,500,000 were issued to independent
investors.
| 4. |
Provision
for Income Taxes
|
The
Company recognizes the tax effects of transactions in the year in which such
transactions enter into the determination of net income, regardless of when
reported for tax purposes. Deferred taxes are provided in the financial
statements under SFAS No. 109 to give effect to the resulting temporary
differences which may arise from differences in the bases of fixed assets,
depreciation methods, allowances, and start-up costs based on the income taxes
expected to be payable in future years. Minimal exploration stage deferred
tax
assets arising as a result of net operating loss carryforwards have been offset
completely by a valuation allowance due to the uncertainty of their utilization
in future periods. Operating loss carryforwards generated during the period
from
September 12, 2005 (date of inception) through September 30, 2007 of
approximately $93,355 will begin to expire in 2025. Accordingly, deferred tax
assets of approximately $33,000 were offset by the valuation allowance that
increased by approximately $10,400 and $20,800 during the years ended September
30, 2007 and 2006, respectively.
F-12
Touchstone
Mining Limited
(An
Exploration Stage Company)
Notes
to
Audited Financial Statements
September
30, 2007 and 2006
| 5. |
Mineral
Property Costs
|
By
agreement dated November 23, 2005 with Mineral Exploration Services Ltd.
(“MES”), the Company acquired an option to earn a 100% interest in certain
properties consisting of 10 unpatented mineral claims, known as the Boulder
Claims, (the Property) located in Humboldt County, Nevada, USA.
Upon
execution of the agreement, MES transferred 100% interest in the mineral claims
to the Company for $50,000 to be paid, at the Company’s option, as
follows:
|
Cash Payments
|
||||
|
Upon
signing of the agreement and transfer of title (paid)
|
$
|
3,500
|
||
|
On
or before November 23, 2006 (paid)
|
3,500
|
|||
|
On
or before November 23, 2007
|
8,000
|
|||
|
On
or before November 23, 2008
|
10,000
|
|||
|
On
or before November 23, 2009
|
10,000
|
|||
|
On
or before November 23, 2010
|
15,000
|
|||
|
$
|
50,000
|
|||
All
payments shall be made within 30 days of the due date or the Property and all
rights will revert back to MES.
In
addition, the Company must incur exploration expenditures of $50,000 on the
Property over five years. A professional geologist recommended a work program
of
$18,619 consisting of trenching, sampling and geological mapping to determine
the source of certain high-grade gold specimens found on the Property. The
funds
were advanced during October 2006 and the work program was completed during
the
year ended September 30, 2007. During the year ended September 30, 2007, the
Company spent the recommended $18,619 on property option payments and
exploration work performed on the Property.
In
August
2007, the Company reached an agreement with MES, whereby MES relinquished their
rights to the Property. Subsequent to September 30, 2007, the Company proceeded
to stake the claims in its own name. The Company is now only responsible for
maintaining the mineral claims in good standing by paying all the necessary
rents, taxes, and filing fees associated with the Property. As of October 31,
2007, the Company met these obligations.
F-13
Touchstone
Mining Limited
(An
Exploration Stage Company)
Notes
to
Audited Financial Statements
September
30, 2007 and 2006
A
$4,330
reclamation bond has been paid to the Bureau of Land Management (BLM) in the
State of Nevada. This bond will be held by the BLM until such time as they
determine that the mineral property has been properly reclaimed and indigenous
species of plants have been planted and are growing. Given the uncertainty
of
any future exploration and/or additional work on the property, that the Company
will perform and the additional time needed before a BLM inspector can view
the
property, this bond has been accounted for as a non-current asset.
| 6. |
Due
to Related Party
|
At
September 30, 2006, the Company was obligated to a director, who is also an
officer and a shareholder, for a non-interest bearing demand loan with a balance
of $29,033. During the year ended September 30, 2007, the outstanding loan
in
the amount of $34,502 to this director was satisfied by issuance of 3,000,000
shares of common stock.
| 7. |
Going
Concern and Liquidity
Considerations
|
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates, among other things, the
realization of assets and satisfaction of liabilities in the normal course
of
business. As at September 30, 2007, the Company has negative working capital
of
$1,183 and an accumulated deficit of $93,355. The Company intends to fund
operations through equity financing arrangements, which may be insufficient
to
fund its capital expenditures, working capital and other cash requirements
for
the next twelve months.
The
ability of the Company to emerge from the exploration stage is dependent upon,
among other things, obtaining additional financing to continue operations,
explore and develop the mineral properties and the discovery, development and
sale of ore reserves.
In
response to these problems, management intends to raise additional funds through
public or private placement offerings.
These
factors, among others, raise substantial doubt about the Company’s ability to
continue as a going concern. The accompanying financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
F-14
ITEM
8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING
AND FINANCIAL DISCLOSURE
On
January 23, 2007, we received a letter from our auditors, Staley, Okada &
Partners, advising that Staley, Okada & Partners had been acquired by
PricewaterhouseCoopers and that they were resigning as our auditors effective
immediately.
Staley,
Okada & Partners’ reported on our financial statements for the past two
years and did not issue an adverse opinion or disclaimer of opinion and that
opinion was not modified as to uncertainty, audit scope, or accounting
principles. In connection with its audit for the most recent fiscal year, or
the
subsequent interim periods through January 23, 2007, there were no disagreements
with Staley, Okada & Partners on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
During
the year ended September 30, 2006, through the date of resignation, and through
the date of our acceptance of Staley, Okada & Partners resignation, there
were no disagreements with Staley, Okada & Partners on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction
of
Staley, Okada & Partners, would have caused Staley, Okada & Partners to
make reference to the subject matter of the disagreement in its reports on
our
consolidated financial statements for such periods.
On
January 25, 2007, we delivered a copy of our report on Form 8-K disclosing
the
resignation to Staley, Okada & Partners. Staley, Okada & Partners issued
a response that it agreed with the foregoing disclosure. A copy of their
response is attached hereto as Exhibit 16.1.
On
January 23, 2007, we engaged Child, Van Wagoner & Bradshaw, PLLC an
independent registered firm of Certified Public Accountants, as our independent
accountants with the approval of our board of directors.
ITEM
8A. CONTROLS AND PROCEDURES
Douglas
Scheving, our principal executive and financial officer, conducted an evaluation
of the effectiveness of the design and operation of our disclosure controls
and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended, as of the end of the period covered by this
report (the “Evaluation Date”). Based on this evaluation, he concluded that, as
of the Evaluation Date, our disclosure controls and procedures were effective
to
provide a reasonable level of assurance that information relating to us required
to be disclosed in our SEC reports (i) is recorded, processed, summarized and
reported within the time periods specified in the SEC rules and forms and (ii)
is accumulated and communicated to our management, including our chief executive
officer and financial officer, to allow timely decisions regarding required
disclosure.
15
There
were no changes in our internal control over financial reporting that occurred
during the last fiscal quarter of the period covered by this report that
have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
A
control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems,
no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within our Company have been detected. Because
of the inherent limitations in a cost-effective control system, misstatements
due to error or fraud may occur and not be detected.
ITEM
8B. OTHER INFORMATION
Not
applicable.
PART
III
ITEM
9. DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, CONTROL
PERSONS
AND CORPORATE GOVERNANCE; COMPLIANCE WITH
SECTION
16(A) OF THE EXCHANGE ACT
Executive
Officers and Directors
The
following table sets forth certain information, as of December 3, 2007, with
respect to our sole officer and director:
|
Name
and Address
|
Age
|
Positions
|
||
|
Douglas
W. Scheving
808
Nelson Street, Suite 2103
Vancouver,
B.C., V6Z 2H2
|
57
|
President,
Chief Financial Officer, Secretary, Treasurer and
Director
|
Douglas
Scheving has held the positions of President and director since inception and
the positions of Chief Financial Officer, Secretary and Treasurer since October
18, 2007. He is expected to hold said offices/positions until the next annual
meeting of our stockholders. Mr. Scheving is our only officer, director,
promoter and control person.
Background
of Officer and Director
Douglas
W. Scheving has been a President and director of the Company since September
12,
2005. Mr. Scheving is also a member of the Board of Directors of Mariposa
Resources, Ltd. (since June 2006), an OTCBB quoted company. Since July 1993,
Mr.
Scheving has held various positions with Golden Glacier Resources Ltd. and
Exeter Resource Corporation, each a TSX Venture Exchange listed exploration
stage mining company located in Vancouver, British Columbia. Mr. Scheving is
currently director and a member of the audit and compensation committees. He
has
also held the positions of president and secretary. Since October 1997, Mr.
Scheving has held various positions with Golden Dynasty Resources Limited,
a TSX
Venture Exchange listed natural resource company located in Vancouver, British
Columbia. He is currently a director, corporate secretary, and member of the
audit committee. He previously held the position of president. Mr. Scheving
was
also president, principal executive officer and a member of the Board of
Directors of Electrum Mining Limited from August 2004 until November, 2006.
Mr.
Scheving was president and director of E-COMBIZ.COM Inc. (a development stage
pink sheet company located in Vancouver, British Columbia) from December 01,
2005 to November 2006. Since April 2001, Mr. Scheving has been the owner of
Corporate Administrative Services Limited located in Vancouver, British
Columbia. Corporate Administrative Services Limited is engaged in the business
of bookkeeping, invoice paying and providing office services. Mr. Scheving
devotes up to 10% of his time or approximately four hours per work week to
Touchstone Mining Limited.
16
Involvement in Certain Legal Proceedings
To
our
knowledge, during the past five years, no present or former director or
executive officer of our company: (1) filed a petition under the federal
bankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent
or
similar officer appointed by a court for the business or present of such a
person, or any partnership in which he was a general partner at or within two
years before the time of such filing, or any corporation or business association
of which he was an executive officer within two years before the time of such
filing; (2) was convicted in a criminal proceeding or named subject of a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3)
was the subject of any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining him from or otherwise limiting the following activities:
(i) acting as a futures commission merchant, introducing broker, commodity
trading advisor, commodity pool operator, floor broker, leverage transaction
merchant, associated person of any of the foregoing, or as an investment
advisor, underwriter, broker or dealer in securities, or as an affiliated
person, director of any investment company, or engaging in or continuing any
conduct or practice in connection with such activity; (ii) engaging in any
type
of business practice; (iii) engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection with any
violation of federal or state securities laws or federal commodity laws; (4)
was
the subject of any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any federal or state authority barring, suspending
or
otherwise limiting for more than 60 days the right of such person to engage
in
any activity described above under this Item, or to be associated with persons
engaged in any such activity; (5) was found by a court of competent jurisdiction
in a civil action or by the Securities and Exchange Commission to have violated
any federal or state securities law and the judgment was not subsequently
reversed, suspended or vacated; (6) was found by a court of competent
jurisdiction in a civil action or by the Commodity Futures Trading Commission
to
have violated any federal commodities law, and the judgment in such civil action
or finding by the Commodity Futures Trading Commission has not been subsequently
reversed, suspended or vacated.
17
Board
of Directors
None
of
our directors receive any remuneration for acting as such. Directors may however
be reimbursed their expenses, if any, for attendance at meetings of the Board
of
Directors. Our Board of Directors may designate from among its members an
executive committee and one or more other committees. No such committees have
been appointed to date. Accordingly, we do not have an audit committee or an
audit committee financial expert. We are presently not required to have an
audit
committee financial expert and do not believe we otherwise need one at this
time
due to our lack of material business operations. Similarly we do not have a
nominating committee or a committee performing similar functions. Our entire
board serves the functions of an audit committee and a nominating committee.
We
have not implemented procedures by which our security holders may recommend
board nominees to us but expect to do so in the future, when and if we engage
in
material business operations.
We
are
not presently required to have independent directors. Our sole director, Douglas
Scheving is not independent. If we ever become a listed issuer whose securities
are listed on a national securities exchange or on an automated inter-dealer
quotation system of a national securities association, which has independent
director requirements, we intend to comply with all applicable requirements
relating to director independence.
Code
of Ethics
We
have
adopted a corporate code of ethics. We believe our code of ethics is reasonably
designed to deter wrongdoing and promote honest and ethical conduct; provide
full, fair, accurate, timely and understandable disclosure in public reports;
comply with applicable laws; ensure prompt internal reporting of code
violations; and provide accountability for adherence to the code. A copy of
the
code of ethics is attached hereto as Exhibit 14.1. We will also provide to
any
person, without charge and upon request, a copy of the code of ethics. Any
such
request must be made in writing to us at, 808 Nelson Street, Suite 2103,
Vancouver, B.C. V6Z 2H2 Canada.
ITEM
10. Executive
Compensation
The
following table sets forth information concerning the total compensation paid
or
accrued by us during the two years ended September 30, 2007 to
|
(i)
|
all
individuals serving as Touchstone’s principal executive officer or acting
in a similar capacity during the last completed fiscal year (“PEO”),
regardless of compensation level;
|
|
(ii)
|
Touchstone’s
two most highly compensated executive officers other than the PEO
who (A)
served as executive officers at the end of the last completed fiscal
year
and (B) received annual compensation during the last completed fiscal
year
in excess of $100,000; and
|
|
(iii)
|
up
to two additional individuals for whom disclosure would have been
provided
pursuant to subsection (ii) of this paragraph but for the fact that
the
individual was not serving as an executive officer of Touchstone
at the
end of the last completed fiscal
year.
|
18
SUMMARY
COMPENSATION TABLE
|
Name and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Non-Qualified
Deferred
Compensation
Earnings
($)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||
|
Douglas
Scheving,
|
2007
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||
|
President,
CFO, Director (PEO)
|
2006
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||
Currently,
none of our officers or directors is being compensated for their services during
the development stage of our business operations.
We
have
not paid any salaries in 2007, and we do not anticipate paying any salaries
at
any time in 2007. We will not begin paying salaries until we have adequate
funds
to do so.
The
officers and directors are reimbursed for any out-of-pocket expenses they incur
on our behalf. In addition, in the future, we may approve payment of salaries
for our officers and directors, but currently, no such plans have been approved.
We also do not currently have any benefits, such as health insurance, life
insurance or any other benefits available to our employees.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||||||||||||||
|
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Equity
Incentive
Plan
Awards;
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
Number
of Shares
or Units
of Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested (#)
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested (#)
|
|||||||||||||||||||
|
Douglas
Scheving
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|||||||||||||||||||
We
have
not issued any stock options or maintained any stock option or other incentive
plans since our inception. We have no plans in place and have never maintained
any plans that provide for the payment of retirement benefits or benefits that
will be paid primarily following retirement including, but not limited to,
tax
qualified deferred benefit plans, supplemental executive retirement plans,
tax-qualified deferred contribution plans and nonqualified deferred contribution
plans. Similarly, we have no contracts, agreements, plans or arrangements,
whether written or unwritten, that provide for payments to the named executive
officers or any other persons following, or in connection with the resignation,
retirement or other termination of a named executive officer, or a change in
control of us or a change in a named executive officer’s responsibilities
following a change in control.
19
As
of the
date hereof, we have not entered into employment contracts with any of our
officers and do not intend to enter into any employment contracts until such
time as it is profitable to do so.
Compensation
of Directors
None
of
our directors receive any compensation for serving as such, for serving on
committees of the Board of Directors or for special assignments. During the
fiscal year ended September 30, 2007, there were no other arrangements between
us and our directors that resulted in our making payments to any of our
directors for any services provided to us by them as directors.
Indemnification
Under
our
bylaws, the Company will indemnify any person who was or is a party or is
threatened to be made a party to any proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the
Company) by reason of the fact that such person is or was a director, trustee,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a director, trustee, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys’ fees), judgment, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner such person reasonable believed to be in or not opposed to the best
interests of the Company, and with respect to any criminal action or proceeding,
had no reasonable cause to believe such person’s conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, will not,
of
itself, create a presumption that the person did not act in good faith and
in a
manner which such person reasonably believed to be in or not opposed to the
best
interests of the Company, and with respect to any criminal action proceeding,
had reasonable cause to believe that such person’s conduct was
unlawful.
Regarding
indemnification for liabilities arising under the Securities Act, which may
be
permitted to directors or officers under Nevada law, we are informed that,
in
the opinion of the Securities and Exchange Commission, indemnification is
against public policy, as expressed in the Act and is, therefore,
unenforceable.
20
ITEM
11. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth information with respect to the beneficial ownership
of our common stock known by us as of December 3, 2007 by (i) each person or
entity known by us to be the beneficial owner of more than 5% of our common
stock, (ii) each of our directors, (iii) each of our executive officers, and
(iv) all of our directors and executive officers as a group. The percentages
in
the table have been calculated on the basis of treating as outstanding for
a
particular person, all shares of our common stock outstanding on such date
and
all shares of our common stock issuable to such holder in the event of exercise
of outstanding options, warrants, rights or conversion privileges owned by
such
person at said date which are exercisable within 60 days of such date. Except
as
otherwise indicated, the persons listed below have sole voting and investment
power with respect to all shares of our common stock owned by them, except
to
the extent such power may be shared with a spouse.
|
Title of
Class
|
Name of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percent of Class
|
|||||||
|
Common
Stock
|
Douglas W. Scheving |
3,300,000*
|
54%**
|
|||||||
|
Common
Stock
|
All officers and directors as a group(1 person) |
|
3,300,000*
|
54%**
|
||||||
*
The
beneficial owner currently has no right to acquire shares, within 60 days of
December 3, 2007, from options, warrants, rights, conversion privileges or
similar obligations.
**The
percentage ownership is calculated based on 6,100,000 shares of our common
stock
issued and outstanding as of December 3, 2007.
Securities
Authorized for Issuance under Equity Compensation Plans
We
do not
presently maintain any equity compensation plans and have not maintained any
such plans since our inception.
ITEM
12. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS,
AND
DIRECTOR
INDEPENDENCE
In
September 2005, we issued a total of 600,000 shares of restricted common stock
to Douglas Scheving and Jack BesMargian, our then directors and officers. This
was accounted for as an issuance of shares of common stock in the amount of
$12,000. In September 2007, we issued 3,000,000 shares of restricted common
stock to Douglas Scheving, in exchange for the forgiveness of $34,502 that
we
owed to him. These shares of common stock are restricted securities, as defined
in Rule 144 of the Rules and Regulations of the SEC promulgated under the
Securities Act.
Effective
October 18, 2007, Jack BesMargian resigned as our Chief Financial Officer,
Secretary, Treasurer and a director. His resignation did not result from any
disagreement with us.
Effective
October 18, 2007, Douglas Scheving, our President and a director, was appointed
as our Chief Financial Officer, Secretary and Treasurer to fill the positions
vacated by Mr. BesMargian.
21
Mr.
Scheving, our sole director, is not independent under the independence standards
under Item 407(a)(1) of Regulation S-B.
ITEM
13. EXHIBITS
Exhibits
The
following Exhibits are being filed with this report on Form 10-KSB:
|
Exhibit
No.
|
SEC Report
Reference
Number
|
Description
|
||
|
3.1
|
3.1
|
Articles
of Incorporation of Registrant(1)
|
||
|
3.2
|
3.2
|
Bylaws
of Registrant(1)
|
||
|
10.1
|
10.1
|
Stock
Purchase Agreement, dated September 26, 2007, between Touchstone
Mining
Limited and Douglas Scheving(2)
|
||
|
14.1
|
14.1
|
Code
of Ethics(3)
|
||
|
16.1
|
16.1
|
Letter
from Staley, Okada & Partners(4)
|
||
|
21
|
List
of Subsidiaries of Registrant(5)
|
|||
|
23.1
|
Consent
of Staley, Okada & Partners(5)
|
|||
|
31.1
|
Certification
of Principal Executive Officer and Principal Financial Officer pursuant
to
Section 302 the Sarbanes-Oxley Act of 2002(5)
|
|||
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to
18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002(5)
|
22
|
(1)
|
Filed
with the Securities and Exchange Commission on December 27, 2005
as an
exhibit, numbered as indicated above, to the Registrant’s registration
statement on the Registrant’s Registration Statement on Form SB-2 (file
no. 333-130696), which exhibit is incorporated herein by
reference.
|
|
(2)
|
Filed
with the Securities and Exchange Commission on October 1, 2007 as
an
exhibit, numbered as indicated above, to the Registrant’s Current Report
on Form 8-K, which exhibit is incorporated herein by
reference.
|
|
(3)
|
Filed
with the Securities and Exchange Commission on December 22, 2006
as an
exhibit, numbered as indicated above, to the Registrant’s Annual Report on
Form 10-KSB for the year ended September 30, 2006, which exhibit
is
incorporated herein by reference.
|
|
(4)
|
Filed
with the Securities and Exchange Commission on January 26, 2007 as
an
exhibit, numbered as indicated above, to the Registrant’s Current Report
on Form 8-K, which exhibit is incorporated herein by
reference.
|
|
(5)
|
Filed
herewith.
|
ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit
Fees
The
aggregate fees billed by our principal accountant for services rendered during
the fiscal years ended September 30, 2007 and 2006, respectively, are set forth
in the table below:
|
Fee Category
|
Year ended
September 30, 2007
|
Year ended
September 30, 2006
|
|||||
|
Audit
fees (1)
|
$
|
2,965
|
$
|
12,577
|
|||
|
Audit-related
fees (2)
|
0
|
0
|
|||||
|
Tax
fees (3)
|
$
|
1,211
|
$
|
836
|
|||
|
All
other fees (4)
|
0
|
0
|
|||||
|
Total
fees
|
$
|
4,176
|
$
|
13,413
|
|||
|
(1)
|
“Audit
fees” consists of fees incurred for professional services rendered for
the
audit of annual financial statements, for reviews of interim financial
statements included in our quarterly reports on Form 10-QSB and for
services that are normally provided in connection with statutory
and
regulatory filings or engagements.
|
|
(2)
|
“Audit-related
fees” consists of fees billed for professional services that are
reasonably related to the performance of the audit or review of our
financial statements, but are not reported under “Audit
fees.”
|
|
(3)
|
“Tax
fees” consists of fees billed for professional services relating to tax
compliance, tax advice and tax planning, consisting of preparation
of our
corporate tax returns for the periods ended September 30, 2006 and
2005.
|
23
|
(4)
|
“All
other fees” consists of fees billed for all other
services.
|
Audit
Committee’s Pre-Approval Policies and Procedures
We
do not
at this time have an audit committee, therefore, no policies or procedures
other
than those required by SEC rules on auditor independence, have been implemented.
The Board of Directors will have to pre-approve the engagement of our principal
independent accountants to provide non-audit services. Non-audit services,
consisting of the preparation of corporate tax returns by our principal
independent accountants in 2007 and 2006, were not pre-approved pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. Section 10A(i) of the
Securities Exchange Act of 1934 prohibits our auditors from performing audit
services for us as well as any services not considered to be “audit services”
unless such services are pre-approved by the Board of Directors (in lieu of
an
audit committee) or unless the services meet certain de minimis
standards.
24
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly
authorized.
|
TOUCHSTONE
MINING LIMITED
|
||
|
By:
|
/s/ Douglas W. Scheving | |
|
Title:
President
|
||
In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the
dates indicated.
|
Signature
|
Title
|
Date
|
||
| /s/ Douglas W. Scheving |
President
(principal executive
|
December 14, 2007 | ||
|
Douglas
W. Scheving
|
officer),
Chief Financial Officer
(principal
financial officer) and
sole
member of the Board of
Directors
|
|