and no disclosure will be contained, to the best of registrant’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. [ ]
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes [X] No
[ ]
State issuer’s revenues for its most recent fiscal year. $Nil
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 prices of such
common
equity, as of a specified date within 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act.)
Note: If determining whether a person is an affiliate will
involve an unreasonable effort and expense, the issuer may
calculate the
aggregate market value of the common equity held by non-affiliates on the basis
of reasonable
assumptions, if the assumptions are stated.
15,990,000 common shares @ $0.115 (1) = $1,838,850
(1) Represents the average bid and ask price of our
shares on the OTC BB on August 25, 2008. Used only for the
purpose of this calculation.
State the number of shares outstanding of each of the issuer’s classes of equity stock, as of the latest practicable date.
54,990,000 common shares issued and outstanding as of August 25, 2008.
DOCUMENTS INCORPORATED BY REFERENCE
None
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X].
3
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
This annual report contains forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors”, that may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.
In this annual report, unless otherwise specified, all references to “common shares” refer to the common shares of our capital stock.
As used in this annual report, the terms “we”, “us” and “our” mean Carolyn River Projects Ltd., unless otherwise indicated.
Corporate History
We were incorporated on February 2, 2004 under the laws of the state of Nevada.
Effective June 15, 2007, we completed a merger with our subsidiary Parmasters Golf Training Centers, Inc. As a result, we changed our name from “Quorum Ventures, Inc.” to “Parmasters Golf Training Centers, Inc.”
In addition, effective June 15, 2007 we effected a seven point eight (7.8) for one (1) forward stock split of our authorized, issued and outstanding common stock. As a result, our authorized capital increased from 75,000,000 shares of common stock with a par value of $0.001 to 585,000,000,000 shares of common stock with a par value of $0.001. Our issued and outstanding share capital increased from 7,050,000 shares of common stock to 54,990,000 shares of common stock.
Effective August 24, 2007, we completed a merger with our subsidiary, Carolyn River Projects Ltd. As a result, we changed our name from “Parmasters Golf Training Centers, Inc.” to “Carolyn River Projects Ltd.” We changed the name of our company to better reflect the direction and business of our company.
Our company’s first acquisition occurred on April 1, 2004, when we entered into an agreement with Mr. Glen Macdonald of Vancouver, British Columbia, whereby he agreed to sell to us a total of three mineral claims located approximately 44 miles east-northeast of Yellowknife, Northwest Territories that have the potential to contain gold and silver mineralization or deposits. Neither we nor our management have any relationship or affiliation with Mr. Macdonald. In order to acquire a 90% interest in these claims, subject to a 2% net smelter returns royalty, we paid $7,500 to Mr. Macdonald from our cash on hand. These claims lapsed on May 27, 2007.
4
Our Current Business
We are an exploration stage company. We are currently seeking opportunities to acquire prospective or existing mineral properties or are seeking business opportunities with established business entities for the merger of a target business with our company. In certain instances, a target business may wish to become a subsidiary of us or may wish to contribute assets to us rather than merge. We are currently in negotiations with several parties to enter into a business opportunity but we have not entered into any definitive agreements to date and there can be no assurance that we will be able to enter into any definitive agreements. We anticipate that any new acquisition or business opportunities by our company will require additional financing. There can be no assurance, however, that we will be able to acquire the financing necessary to enable us to pursue our plan of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail.
Management of our company believes that there are perceived benefits to being a reporting company with a class of publicly-traded securities. These are commonly thought to include: (i) the ability to use registered securities to acquire assets or businesses; (ii) increased visibility in the financial community; (iii) the facilitation of borrowing from financial institutions; (iv) improved trading efficiency; (v) stockholder liquidity; (vi) greater ease in subsequently raising capital; (vii) compensation of key employees through stock options; (viii) enhanced corporate image; and (ix) a presence in the United States capital market.
We may seek a business opportunity with entities who have recently commenced operations, or entities who wish to utilize the public marketplace in order to raise additional capital in order to expand business development activities, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.
In implementing a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is likely that our present management will no longer be in control of our company. In addition, it is likely that our officers and directors will, as part of the terms of the acquisition transaction, resign and be replaced by one or more new officers and directors.
As of the date hereof, management has not entered into any formal written agreements for a business combination or opportunity. When any such agreement is reached, we intend to disclose such an agreement by filing a current report on Form 8-K with the Securities and Exchange Commission.
We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Management believes that there are numerous firms in various industries seeking the perceived benefits of being a publicly registered corporation. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. We can provide no assurance that we will be able to locate compatible business opportunities.
As an exploration stage company, we are not able to fund our cash requirements through our current operations. Historically, we have been able to raise a limited amount of capital through private placements of our equity stock, but we are uncertain about our continued ability to raise funds privately. Further, we believe that our company may have difficulties raising capital until we locate a prospective property through which we can pursue our plan of operation. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail.
Employees
We have no employees other than our executive officers. We anticipate that we will be conducting most of our business through agreements with consultants and third parties.
5
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this annual report before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.
Risks Related To Our Financial Condition and Business Model
Scarcity of and Competition for Business Opportunities and Combinations
We are, and will continue to be, an insignificant participant amongst numerous other companies seeking a suitable business opportunity or business combination. A large number of established and well-financed entities, including venture capital firms, are actively seeking suitable business opportunities or business combinations which may also be desirable target candidates for us. Virtually all such entities have significantly greater financial resources, technical expertise and managerial capabilities than we do. We are, consequently, at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. We will also compete with numerous other small public companies seeking suitable business opportunities or business combinations.
We have had negative cash flows from operations and if we are not able to obtain further financing, our business operations may fail.
We had cash in the amount of $3,033 and a working capital deficit of $79,173 as of May 31, 2008. We anticipate that we may require additional financing while we are seeking a suitable business opportunity or business combination. Further, we anticipate that we will not have sufficient capital to fund our ongoing operations for the next twelve months. We may be required to raise additional financing for a particular business combination or business opportunity. We would likely secure any additional financing necessary through a private placement of our common shares.
There can be no assurance that, if required, any such financing will be available upon terms and conditions acceptable to us, if at all. Our inability to obtain additional financing in a sufficient amount when needed and upon terms and conditions acceptable to us could have a materially adverse effect upon our company. Although we believe that we have funds sufficient to meet our immediate needs, we may require further funds to finance the development of any business opportunity that we acquire. There can be no assurance that such funds will be available or available on terms satisfactory to us. If additional funds are raised by issuing equity securities, further dilution to existing or future shareholders is likely to result. If adequate funds are not available on acceptable terms when needed, we may be required to delay, scale back or eliminate the development of any business opportunity that we acquire. Inadequate funding could also impair our ability to compete in the marketplace, which may result in the dissolution of our company.
A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations.
A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because our operations have been primarily financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our continued operations. Any reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and would have a significant negative effect on our business plans and operations, including our ability to develop new products and continue our current operations. If our stock price declines, we may not be able to raise additional capital or generate funds from operations sufficient to meet our obligations.
6
We have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back or even cease our ongoing business operations.
We have a limited operating history on which to base an evaluation of our business and prospects. Our prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies seeking to acquire or establish a new business opportunity. Some of these risks and uncertainties relate to our ability to identify, secure and complete an acquisition of a suitable business opportunity.
We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition. In addition, our operating results are dependent to a large degree upon factors outside of our control. There are no assurances that we will be successful in addressing these risks, and failure to do so may adversely affect our business.
It is unlikely that we will generate any or significant revenues while we seek a suitable business opportunity. Our short and long-term prospects depend upon our ability to select and secure a suitable business opportunity. In order for us to make a profit, we will need to successfully acquire a new business opportunity in order to generate revenues in an amount sufficient to cover any and all future costs and expenses in connection with any such business opportunity. Even if we become profitable, we may not sustain or increase our profits on a quarterly or annual basis in the future.
We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until we complete a business combination or acquire a business opportunity. This may result in our company incurring a net operating loss which will increase continuously until we complete a business combination or acquire a business opportunity that can generate revenues that result in a net profit to us. There is no assurance that we will identify a suitable business opportunity or complete a business combination.
No Agreement for Business Combination or Other Transaction/No Standards for Business Combination.
We have no arrangement, agreement, or understanding with respect to acquiring a business opportunity or engaging in a business combination with any private entity. There can be no assurance that we will successfully identify and evaluate suitable business opportunities or conclude a business combination. There is no assurance that we will be able to negotiate the acquisition of a business opportunity or a business combination on terms favorable to us. We have not established a specific length of operating history or a specified level of earnings, assets, net worth or other criteria which we will require a target business opportunity to have achieved, and without which we would not consider a business combination in any form with such business opportunity. Accordingly, we may enter into a business combination with a business opportunity having no significant operating history, losses, limited or no potential for earnings, limited assets, negative net worth or other negative characteristics.
Risks Associated with Our Common Stock
Trading of our stock may be restricted by the Securities Exchange Commission’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our stock.
The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid
7
and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.
Our common stock currently trades on a limited basis on the OTC Bulletin Board. Trading of our stock through the OTC Bulletin Board is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.
ITEM 2. DESCRIPTION OF PROPERTY.
We do not own any real property. Our principal business offices are located at 2640 Tempe Knoll Drive, North Vancouver, BC.
ITEM 3. LEGAL PROCEEDINGS.
We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
8
PART II
|
ITEM 5. |
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES. |
Our common shares were quoted for trading on the OTC Bulletin Board on November 22, 2006 under the symbol “QRMV”. On June 14, 2007 our symbol changed to “PGFT”. On August 24, 2007 our symbol changed to “CRPL”. The following quotations obtained from the OTC Bulletin Board reflect the highs and low bids for our common stock based on inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
The high and low bid prices of our common stock for the periods indicated below are as follows:
| OTC Bulletin Board(1) | ||
| Quarter Ended | High | Low |
| May 31, 2008 | $0.08 | $0.07 |
| February 29, 2008 | $0.17 | $0.07 |
| November 30, 2007 | $0.16 | $0.06 |
| August 31, 2007 | N/A | N/A |
| May 31, 2007 | N/A | N/A |
| February 28, 2007 | N/A | N/A |
| November 30, 2006 | N/A | N/A |
| August 31, 2006 | N/A | N/A |
(1) Over-the-counter market quotations reflect inter-dealer prices without retail mark-up, mark-down or commission, and may not represent actual transactions.
On August 25, 2008, the shareholders’ list of our common shares showed 13 registered shareholders and 54,990,000 shares outstanding.
Dividend Policy
No cash dividends have been paid by our company on our common stock. We anticipate that our company’s future earnings will be retained to finance the continuing development of our business. The payment of any future dividends will be at the discretion of our company’s board of directors and will depend upon, among other things, future earnings, any contractual restrictions, the success of business activity, regulatory and corporate law requirements and the general financial condition of our company.
Recent Sales of Unregistered Securities
None.
Equity Compensation Plan Information
We currently do not have any stock option or equity compensation plans or arrangements.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our shares of common stock or other securities during our fiscal year ended May 31, 2008.
9
ITEM 6. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following is a discussion and analysis of our plan of operation for the next year ended May 31, 2009, and the factors that could affect our future financial condition and plan of operation.
This discussion and analysis should be read in conjunction with our financial statements and the notes thereto included elsewhere in this annual report. Our financial statements are prepared in accordance with United States generally accepted accounting principles. All references to dollar amounts in this section are in United States dollars unless expressly stated otherwise. Please see our “Note on Forward Looking Statements” and “Risk Factors” for a list of our risk factors.
Plan of Operation
We are a junior exploration stage company that has not yet generated or realized any revenues from our business operations. Our company does not currently own any property interests.
We are currently seeking opportunities to acquire prospective or existing mineral properties or are seeking business opportunities with established business entities for the merger of a target business with our company. In certain instances, a target business may wish to become a subsidiary of us or may wish to contribute assets to us rather than merge. We are currently in negotiations with several parties to enter into a business opportunity but we have not entered into any definitive agreements to date and there can be no assurance that we will be able to enter into any definitive agreements. We anticipate that any new acquisition or business opportunities by our company will require additional financing. There can be no assurance, however, that we will be able to acquire the financing necessary to enable us to pursue our plan of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail.
Even if we are able to acquire an interest in a mineral property or enter into a business opportunity and obtain the necessary funding, there is no assurance that any revenues would be generated by us or that revenues generated would be sufficient to provide a return to investors.
We anticipate that we will incur the following expenses over the next twelve months:
| 1. |
$12,000 in connection with our company locating, evaluating and negotiating potential mineral properties or business opportunities; |
| 2. |
$20,000 for operating expenses, including professional legal and accounting expenses associated with our company being a reporting issuer under the Securities Exchange Act of 1934; and |
| 3. |
$10,000 for management, administrative and leasing costs payable. |
We will incur additional expenses if we are successful in entering into an agreement to acquire an interest in a prospective or existing mineral property or a business opportunity. If we acquire any property interests, we will require significant funds to develop the property in addition to any acquisition costs. It is not possible to estimate such funding requirements until such time as we enter into a definitive agreement to acquire an interest in a property or enter into a business combination.
We require a minimum of approximately $42,000 to proceed with our plan of operation over the next twelve months, exclusive of any acquisition or development costs. This amount may also increase if we are required to carry out due diligence investigations in regards to any prospective property or business opportunity or if the costs of negotiating the applicable transaction are greater than anticipated. As we had cash in the amount of $3,033 and a working capital deficit in the amount of $79,173 as of May 31, 2008, we do not have sufficient working capital to enable us to carry out our stated plan of operation for the next twelve months. We plan to complete private placement sales of our common stock in order to raise the funds necessary to pursue our plan of operation and to fund our working capital deficit in order to enable us to pay our accounts payable and accrued liabilities. We
10
currently do not have any arrangements in place for the completion of any private placement financings and there is no assurance that we will be successful in completing any private placement financings.
Liquidity And Capital Resources
We had cash of $3,033 as of May 31, 2008 compared to cash of $4,169 as of May 31, 2007. We had a working capital deficit of $79,173 as of May 31, 2008 compared to a working capital deficit of $40,369 as of May 31, 2007.
Product Research and Development
We do not anticipate that we will spend any significant monies on research and development over the twelve month period ending May 31, 2009.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment over the twelve month period ending May 31, 2009.
Off-Balance Sheet Arrangements
As of May 31, 2008, our company had no off-balance sheet arrangements, including any outstanding derivative financial statements, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. Our company does not engage in trading activities involving non-exchange traded contracts.
Employees
We currently have no employees, other than our executive officers and we do not expect to hire any employees in the foreseeable future. We presently conduct our business through agreements with consultants and arms-length third parties.
Going Concern
Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on the annual financial statements for the year ended May 31, 2008, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern.
CRITICAL ACCOUNTING POLICIES
The financial statements of our company have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgement.
The financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:
Use of Estimates
The preparation of financial statements in conformity with US GAAP 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 amounts of revenues and expenses during the reporting period. We regularly evaluate estimates and assumptions. We bases our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by our company may differ materially and adversely from our estimates. To the extent there are
11
material differences between the estimates and the actual results, future results of operations will be affected. The most significant estimates with regard to these financial statements relate to deferred income tax rates and timing of the reversal of income tax differences.
Foreign Currency Translation
The financial statements are presented in United States dollars. In accordance with SFAS No. 52, “Foreign Currency Translation”, foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at the transaction date. Revenue and expenses are translated at average rates of exchange during the period. Related translation adjustments are reported as a separate component of stockholders’ equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations.
Loss Per Share
In accordance with SFAS No. 128 - "Earnings Per Share", basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. At May 31, 2008, our company had no stock equivalents that were anti-dilutive and excluded in the loss per share computation.
Financial Instruments
The fair value of our financial instruments, consisting of cash, accounts payable, short-term debt and amount due to related party, is estimated to be equal to their carrying value. It is management's opinion that we are not exposed to significant interest, currency or credit risks arising from these financial instruments.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements” (“SFAS No. 160”). This Statement amends Accounting Research Bulletin (ARB) No. 51 to establish accounting and reporting standards for the non-controlling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements will have no impact. SFAS No. 160 is effective for our fiscal year beginning June 1, 2009. Management has determined that the adoption of this standard will not have an impact on our financial statements.
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities. SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. SFAS 161 achieves these improvements by requiring disclosure of the fair values of derivative instruments and their gains and losses in a tabular format. It also provides more information about an entity’s liquidity by requiring disclosure of derivative features that are credit risk-related. Finally, it requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. SFAS 161 will be effective for financial statements issued for fiscal years and interim periods beginning on March 1, 2009, and will be adopted by our company beginning in the year ending May 31, 2010. We do not expect there to be any significant impact of adopting SFAS 161 on our financial statements.
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This Statement will not have an impact on our financial statements.
12
In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts, an interpretation of FASB Statement No. 60.” The scope of this Statement is limited to financial guarantee insurance (and reinsurance) contracts, as described in this Statement, issued by enterprises included within the scope of Statement 60. Accordingly, this Statement does not apply to financial guarantee contracts issued by enterprises excluded from the scope of Statement 60 or to some insurance contracts that seem similar to financial guarantee insurance contracts issued by insurance enterprises (such as mortgage guaranty insurance or credit insurance on trade receivables). This Statement also does not apply to financial guarantee insurance contracts that are derivative instruments included within the scope of FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities.” This Statement will not have an impact on our financial statements.
ITEM 7. FINANCIAL STATEMENTS.
Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
It is the opinion of management that the audited financial statements for the fiscal year ended May 31, 2008 include all adjustments necessary in order to ensure that the audited financial statements are not misleading.
The following financial statements are filed as part of this annual report:
| 1. |
Balance Sheet as at May 31, 2008 and 2007 |
| 2. |
Statements of Operations for the years ended May 31, 2008 and May 31, 2007 and the period from February 2, 2004 to May 31, 2008 |
| 3. |
Statement of Cash Flows for the years ended May 31, 2008 and May 31, 2007 and the period from February 2, 2004 to May 31, 2008 |
| 4. |
Statement of Stockholders’ Deficit for the period from February 2, 2004 to May 31, 2008 |
| 5. |
Notes to Financial Statements |
13
CAROLYN RIVER PROJECTS LTD.
(Formerly Parmasters
Golf Training Centers, Inc. and Quorum Ventures, Inc.)
(A Development Stage Company)
FINANCIAL STATEMENTS
MAY 31, 2008
To the Stockholders and Board of Directors of Carolyn River Projects Ltd. (Formerly Parmasters Golf Training Centers, Inc. and Quorum Ventures, Inc.)
We have audited the accompanying balance sheets of Carolyn River Project Ltd. (a development stage company) as of May 31, 2008 and 2007 and the related statements of operations, cash flows and stockholders’ deficit for the years then ended and the period from February 2, 2004 (Inception) to May 31, 2008. 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 an audit to obtain reasonable assurance 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 audits 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material respects, the financial position of Carolyn River Projects Ltd. as of May 31, 2008 and 2007 and the results of its operations and its cash flows for the years then ended and the period from February 2, 2004 (Inception) to May 31, 2008 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 1 to the financial statements, the Company is in the development stage, has not generated revenues since inception, has incurred losses in developing its business, and further losses are anticipated. The Company requires additional funds to meet its obligations and the costs of its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| “DMCL” |
| DALE MATHESON CARR-HILTON LABONTE LLP |
| CHARTERED ACCOUNTANTS |
| Vancouver, Canada |
| August 27, 2008 |
15
CAROLYN RIVER PROJECTS LTD.
(Formerly Parmasters
Golf Training Centers, Inc. and Quorum Ventures, Inc.)
(A Development Stage
Company)
BALANCE SHEETS
| May 31, | May 31, | |||||
| 2008 | 2007 | |||||
| ASSETS | ||||||
| Current | ||||||
| Cash | $ | 3,033 | $ | 4,169 | ||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
| Current | ||||||
| Accounts payable and accrued liabilities | $ | 12,830 | $ | 12,988 | ||
| Short-term debt (Note 3) | 37,826 | - | ||||
| Due to related party (Note 4) | 31,550 | 31,550 | ||||
| 82,206 | 44,538 | |||||
| Stockholders’ deficit | ||||||
| Common stock (Note 5) | ||||||
| Authorized: | ||||||
| 585,000,000 common shares, par value $0.001 per share | ||||||
| Issued and outstanding: | ||||||
| 54,990,000 common shares (May 31, 2007 – 54,990,000) | 30,000 | 30,000 | ||||
| Deficit accumulated during the development stage | (109,173 | ) | (70,369 | ) | ||
| (79,173 | ) | (40,369 | ) | |||
| $ | 3,033 | $ | 4,169 |
The accompanying notes are an integral part of these financial statements.
16
CAROLYN RIVER PROJECTS LTD.
(Formerly Parmasters
Golf Training Centers, Inc. and Quorum Ventures, Inc.)
(A Development Stage
Company)
STATEMENTS OF OPERATIONS
| February 2, 2004 | |||||||||
| Year Ended | Year Ended | (Inception) to | |||||||
| May 31, 2008 | May 31, 2007 | May 31, 2008 | |||||||
| Expenses | |||||||||
| Accounting and audit | $ | 17,890 | $ | 15,577 | $ | 59,004 | |||
| Bank charges and interest | 77 | 95 | 529 | ||||||
| Filing fees | 2,466 | 1,489 | 7,662 | ||||||
| Interest | 1,800 | - | 3,022 | ||||||
| Legal | 16,110 | - | 24,760 | ||||||
| Mineral property costs | - | - | 12,500 | ||||||
| Office and general | 436 | - | 596 | ||||||
| Transfer agent fees | 25 | 1,075 | 1,100 | ||||||
| Net loss | $ | (38,804 | ) | $ | (18,236 | ) | $ | (109,173 | ) |
| Net loss per share – basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | |||
| Weighted average number of shares | |||||||||
| outstanding – basic and diluted | 54,990,000 | 54,990,000 |
The accompanying notes are an integral part of these financial statements.
17
CAROLYN RIVER PROJECTS LTD.
(Formerly Parmasters
Golf Training Centers, Inc. and Quorum Ventures, Inc.)
(A Development Stage
Company)
STATEMENTS OF CASH FLOWS
| February 2, 2004 | |||||||||
| Year Ended | Year Ended | (Inception) to | |||||||
| May 31, 2008 | May 31, 2007 | May 31, 2008 | |||||||
| Cash flows from operating activities | |||||||||
| Net loss | $ | (38,804 | ) | $ | (18,236 | ) | $ | (109,173 | ) |
| Adjustments to reconcile net loss to net cash used in | |||||||||
| operating activities: | |||||||||
| Accrued interest | 1,800 | - | 1,800 | ||||||
| Changes in non cash working capital items: | |||||||||
| Prepaid expenses | - | 1,362 | - | ||||||
| Accounts payable and accrued liabilities | (158 | ) | 1,307 | 12,830 | |||||
| Net cash used in operating activities | (37,162 | ) | (15,567 | ) | (94,543 | ) | |||
| Cash flows from financing activities | |||||||||
| Proceeds from sale and issuance of common stock | - | - | 30,000 | ||||||
| Advances from related party | - | 12,000 | 31,550 | ||||||
| Short-term debt | 36,026 | - | 36,026 | ||||||
| Net cash provided by financing activities | 36,026 | 12,000 | 97,576 | ||||||
| Net increase (decrease) in cash | (1,136 | ) | (3,567 | ) | 3,033 | ||||
| Cash, beginning | 4,169 | 7,736 | - | ||||||
| Cash, ending | $ | 3,033 | $ | 4,169 | $ | 3,033 | |||
| Supplemental cash flow information | |||||||||
| Cash paid for: | |||||||||
| Interest | $ | - | $ | - | $ | 1,222 | |||
| Income taxes | $ | - | $ | - | $ | - |
The accompanying notes are an integral part of these financial statements.
18
CAROLYN RIVER PROJECTS LTD.
(Formerly Parmaster Golf
Training Centers, Inc. and Quorum Ventures, Inc.)
(A Development Stage
Company)
STATEMENT OF STOCKHOLDERS' DEFICIT
February 2, 2004 (Inception)
to May 31, 2008
| Deficit | ||||||||||||
| Accumulated | ||||||||||||
| During the | ||||||||||||
| Common Shares | Common Shares | Development | ||||||||||
| Number | Amount | Stage | Total | |||||||||
| Common stock issued for cash at $0.001 | ||||||||||||
| per share, February 2004 | 39,000,000 | $ | 5,000 | $ | - | $ | 5,000 | |||||
| Common stock issued for cash at $0.01 | ||||||||||||
| per share, March 2004 | 15,600,000 | 20,000 | - | 20,000 | ||||||||
| Common stock issued for cash at $0.10 | ||||||||||||
| per share, April 2004 | 390,000 | 5,000 | - | 5,000 | ||||||||
| Net loss | - | - | (14,547 | ) | (14,547 | ) | ||||||
| Balance, May 31, 2004 | 54,990,000 | 30,000 | (14,547 | ) | 15,453 | |||||||
| Net loss | - | - | (15,553 | ) | (15,553 | ) | ||||||
| Balance, May 31, 2005 | 54,990,000 | 30,000 | (30,100 | ) | (100 | ) | ||||||
| Net loss | - | - | (22,033 | ) | (22,033 | ) | ||||||
| Balance, May 31, 2006 | 54,990,000 | 30,000 | (52,133 | ) | (22,133 | ) | ||||||
| Net loss | - | - | (18,236 | ) | (18,236 | ) | ||||||
| Balance, May 31, 2007 | 54,990,000 | 30,000 | (70,369 | ) | (40,369 | ) | ||||||
| Net loss | - | - | (38,804 | ) | (38,804 | ) | ||||||
| Balance, May 31, 2008 | 54,990,000 | $ | 30,000 | $ | (109,173 | ) | $ | (79,173 | ) |
The accompanying notes are an integral part of these financial statements.
19
| CAROLYN RIVER PROJECTS LTD. |
| (Formerly Parmaster Golf Training Centers, Inc. and Quorum Ventures, Inc.) |
| (A Development Stage Company) |
| NOTES TO THE FINANCIAL STATEMENTS |
| MAY 31, 2008 |
1. NATURE AND CONTINUANCE OF OPERATIONS
Nature of Business
The Company was incorporated in the State of Nevada on February 2, 2004. The Company’s fiscal year end is May 31. Effective June 15, 2007, the Company completed a merger with its subsidiary Parmasters Golf Training Centers, Inc. As a result, the Company’s name was changed from “Quorum Ventures, Inc.” to “Parmasters Golf Training Centers, Inc.”. Effective August 24, 2007, the Company completed a merger with its subsidiary, Carolyn River Projects Ltd. As a result, the Company’s name was changed from “Parmasters Golf Training Centers, Inc.” to “Carolyn River Projects Ltd.”.
The Company is a development stage company. It is currently seeking opportunities to acquire prospective or existing mineral properties or is seeking business opportunities with established business entities for the merger of a target business with the Company.
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As of May 31, 2008, the Company has not yet achieved profitable operations and has accumulated a deficit of $109,173. Its ability to continue as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. Management intends to obtain additional funding by borrowing funds from its directors and officers, or a private placement of common stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America and are presented in US dollars.
Development Stage Company
The Company is considered to be in the development stage, pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprises”.
20
| CAROLYN RIVER PROJECTS LTD. |
| (Formerly Parmaster Golf Training Centers, Inc. and Quorum Ventures, Inc.) |
| (A Development Stage Company) |
| NOTES TO THE FINANCIAL STATEMENTS |
| MAY 31, 2008 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Cont’d
Use of Estimates
The preparation of financial statements in conformity with US GAAP 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 amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The most significant estimates with regard to these financial statements relate to deferred income tax rates and timing of the reversal of income tax differences.
Foreign Currency Translation
The financial statements are presented in United States dollars. In accordance with SFAS No. 52, “Foreign Currency Translation”, foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at the transaction date. Revenue and expenses are translated at average rates of exchange during the period. Related translation adjustments are reported as a separate component of stockholders’ equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations.
21
| CAROLYN RIVER PROJECTS LTD. |
| (Formerly Parmaster Golf Training Centers, Inc. and Quorum Ventures, Inc.) |
| (A Development Stage Company) |
| NOTES TO THE FINANCIAL STATEMENTS |
| MAY 31, 2008 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Cont’d
Income Taxes
The Company has adopted SFAS No. 109 - "Accounting for Income Taxes". SFAS No. 109 requires the use of the asset and liability method of accounting of income taxes. Under the asset and liability method of SFAS No. 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing a two-step method of first evaluating whether a tax position has met a more likely than not recognition threshold and, second, measuring that tax position to determine the amount of benefit to be recognized in the financial statements. FIN 48 provides guidance on the presentation of such positions within a classified balance sheet as well as on de-recognition, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 was adopted by the Company on June 1, 2007.
Loss Per Share
In accordance with SFAS No. 128 - "Earnings Per Share", basic loss per commo