**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-K**

| **x**                                           |   | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**     |
|-------------------------------------------------|--------|----------------------------------------------------------------------------------------------|
| **For the fiscal year ended November 30, 2009** |
| **OR**                                          |
| **o**                                           |   | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

**For the transition period from**            **to**

          

**Commission file number: 000-51563**

 

**TEXADA VENTURES INC.**

(Exact Name of Registrant as Specified in its Charter)

| **Nevada**                                                     |   | **98-0431245**                       |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State of other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |
|                                                           |   |                                 |
| **11616 E. Montgomery Drive, Suite #54**                       |   |                                 |
| **Spokane Valley, Washington**                                 |   | **99206**                            |
| (Address of Principal Executive Offices)                       |   | (Zip Code)                           |

 

**(509) 301-6635**

(Registrant’s Telephone Number, including Area Code)

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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:   **None**

 

| SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: | **Common Stock, par value $0.001**                                                       |
|-------------------------------------------------------------|------------------------------------------------------------------------------------------|
|                                                             |              (Tile of Class) |

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes o   Nox

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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes o   Nox

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Indicate by checkmark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes        x    No o

 

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit        and post such files).  Yes x    No o

 

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K.        o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “Accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

|   | Large Accelerated Filer o | Accelerated Filer o | Non-Accelerated Filer o   | Smaller Reporting Company x |
|--------|---------------------------|---------------------|-------------------------------------|-----------------------------|

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes o   Nox

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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 last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter:        **$1,844,000 as of May 31, 2009**

 

The number of shares of the Registrant’s Common Stock outstanding as of March 15, 2010 was **24,293,334**.

 

Documents Incorporated by Reference: None.

 

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**Texada Ventures Inc.**

**FORM 10-K**

**November 30, 2009**

 

**TABLE OF CONTENTS**

 

| FORWARD-LOOKING STATEMENTS | 1 |
|----------------------------|---|

| PART I | 2 |
|--------|---|

| ITEM 1. BUSINESS | 2 |
|------------------|---|

| ITEM 1A. RISK FACTORS | 5 |
|-----------------------|---|

| ITEM 1B UNRESOLVED STAFF COMMENTS | 5 |
|-----------------------------------|---|

| ITEM 2. PROPERTIES | 5 |
|--------------------|---|

| ITEM 3. LEGAL PROCEEDINGS | 13 |
|---------------------------|----|

| PART II | 14 |
|---------|----|

| ITEM 4.    MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES | 14 |
|----------------------------------------------------------------------------------------------------------------------------------------------|----|

| ITEM 5. SELECTED FINANCIAL DATA | 15 |
|---------------------------------|----|

| ITEM 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 15 |
|-----------------------------------------------------------------------------------------------------|----|

| ITEM 6A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 21 |
|---------------------------------------------------------------------|----|

| ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | 22 |
|-----------------------------------------------------|----|

| ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE | 36 |
|----------------------------------------------------------------------------------------------|----|

| ITEM 8A(T). CONTROLS AND PROCEDURES | 36 |
|-------------------------------------|----|

| ITEM 8B. OTHER INFORMATION | 37 |
|----------------------------|----|

| PART III | 38 |
|----------|----|

| ITEM 9. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | 38 |
|----------------------------------------------------------------|----|

| ITEM 10. EXECUTIVE COMPENSATION | 40 |
|---------------------------------|----|

| ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 41 |
|---------------------------------------------------------------------------------------------------------|----|

| ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE | 42 |
|------------------------------------------------------------------------------------|----|

| ITEM 13. PRINCIPAL ACCOUNTING FEES AND SERVICES | 43 |
|-------------------------------------------------|----|

| PART IV | 44 |
|---------|----|

| ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES | 44 |
|--------------------------------------------------------------------|----|

| SIGNATURES | 45 |
|------------|----|

 

 

 

 

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**FORWARD-LOOKING STATEMENTS**

 

Certain statements contained in this Annual Report on Form 10-K constitute “forward-looking statements”. These statements, identified by words such as “plan”, “anticipate”, “believe”, “estimate”, “should,” “expect” and similar expressions include our expectations and objectives regarding our future financial position,        operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Information concerning the interpretation of drill results and mineral resource estimates also may be deemed to be forward-looking        statements, as such information constitutes a prediction of what mineralization might be found to be present if and when a project is actually developed. You are cautioned that any such forward-looking statements are not guarantees and may involve risks and uncertainties. Our actual results may differ materially from those in the forward-looking statements due to risks facing us or due to actual facts differing from the assumptions underlying our predictions. Some of these risks and        assumptions include:

|   | **•** | general economic and business conditions, including changes in interest rates, fluctuations in the prices for base metals, fluctuations in prices for securities in the resource sector, demand for base metals and other economic and business conditions; |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | natural phenomena or disasters that may affect completion of drill programs, exploration work, completion of feasibility studies or development, if warranted; |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | actions by government authorities, including changes in government regulation, permitting requirements or environmental legislation; |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | the Company’s ability to raise sufficient financing to complete its planned exploration work on its properties and to place its properties into development, if warranted, and to continue as a going concern; |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | the Company’s ability to complete the proposed transaction with Diamond Industry Associates Ltd. under the Term Sheet effective as of February 15, 2010;  |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | the Company’s ability to complete transactions, attract additional capital and continue as a going concern; |
|--------|------------|-------------------------------------------------------------------------------------------------------------------|

|   | **•** | future decisions by management in response to changing conditions, and |
|--------|------------|------------------------------------------------------------------------|

|   | **•** | misjudgments, inaccurate assumptions or changes in conditions related to forward-looking statements. |
|--------|------------|------------------------------------------------------------------------------------------------------|

Certain risks and uncertainties include those set forth under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-K. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our quarterly reports on        Form 10-Q and our current reports on Form 8-K.

 

We advise you that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf. The Company assumes no obligation to update its forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements. You should not place undue reliance on such forward-looking        statements.

 

As used in this Annual Report, the terms “we”, “us”, “our”, “Texada” and the “Company” mean Texada Ventures Inc., unless otherwise indicated. All dollar amounts in this Annual Report are expressed in U.S. dollars unless otherwise indicated.

 

 

 

1

 

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**PART I**

 

**ITEM 1. BUSINESS**

 

**Overview**

 

Texada Ventures Inc. (the “Company”) is engaged in the business of acquisition and exploration of mineral and resource properties. We were incorporated on October 17, 2001 under the laws of the State of Nevada. Our principal office is located at 11616 E. Montgomery Drive, Suite 54, Spokane Valley, WA 99206. Our phone number is 509-301-6635. Our facsimile number is 509-924-2524.

 

We have acquired a 100% undivided interest in a group of mineral claims located in the Wheaton River District in the Yukon Territory, Canada that we refer to as the Peek Claims. We have not earned any revenues to date. Our plan of operation is to continue to carry out exploration work on these claims in order to ascertain whether they possess commercially exploitable mineral deposits. We are presently in        the exploration stage of our business and we can provide no assurance that commercially viable mineral deposits exist on our claims or that we will discover commercially exploitable levels of mineral resources on our properties, or if such deposits are discovered, that we will enter into further substantial exploration programs. We will not be able to determine whether or not our mineral claims contain a commercially exploitable mineral deposit, or reserve, until appropriate exploratory        work is done and an economic evaluation based on that work concludes economic viability.

 

We generally conduct our business through verbal agreements with consultants and arms-length third parties. Our verbal agreement with our geologist includes his reviewing all of the results from the exploratory work performed upon the site and making recommendations based on those results in exchange for payments equal to the usual and customary rates received by geologists performing similar consulting        services.

 

As a result of our failure to generate substantial revenues since our inception, we have decided to review our initial business plan in order to evaluate the progress of our mining business. We have not attained profitable operations to date and are dependent upon obtaining financing to pursue our plan of operation. Following Dr. John Veltheer’s acquisition of 49% of our issued and outstanding        shares and his appointment to the board of Texada in October 2006, we have decided to continue to develop our current mining business and to seek other business opportunities. In accordance with that decision, in September 2008, we appointed Ted R. Sharp as our President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and a member of our Board of Directors. 

 

**RECENT SIGNIFICANT CORPORATE DEVELOPMENTS**

We have experienced the following significant corporate developments during our fiscal year ended November 30, 2009:

 

**Term Sheet - REX****:**

 

On September 16, 2008, we signed a Term Sheet (the “Term Sheet”) that sets forth the principal terms upon which we proposed to enter into a definitive agreement (the “Definitive Agreement”) to acquire Royalty Exploration, LLC (“REX”) and commenced a concurrent financing of $40,000,000. REX had entered into an agreement to acquire substantially all of the assets of a        business unit of a large research and development and manufacturing company engaged in the business of providing exploration and environmental surveys to resource companies for a purchase price of $40,000,000, of which $30,000,000 was due at closing and the balance was payable by issuing a promissory note. The Term Sheet was non-binding, except for customary binding provisions. The Term Sheet was subsequently amended on November 12, 2008 and March 9, 2009.

 

On August 25, 2009, we signed a Letter Agreement, among the Company and REX, which details the responsibilities of the parties going forward with respect to the transaction described in the Amended and Restated Term Sheet dated March 9, 2009. That transaction has not been consummated and the Term Sheet expired. The Letter Agreement identifies conditions under which expenses or a breakup fee would be        reimbursed or paid by REX to the Company should REX be successful in consummating the anticipated transaction without our involvement.

 

2

 

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The significant terms and disclosures of the Term Sheet, its subsequent amendments and the Letter Agreement were reported in Forms 8-K filed with the SEC on September 22, 2008, November 12, 2008, March 11, 2009 and September 1, 2009, respectively, which are herein incorporated by reference. 

 

**Term Sheet - DIA****:**

 

Subsequent to the end of fiscal 2009, on February 15, 2010 we entered into a Term Sheet with Diamond Industry Associates Ltd. (“DIA”) whereby we will acquire 100% of DIA’s issued and outstanding shares or alternatively the assets and contractual obligations of DIA. The acquisition will be subject to a definitive agreement and customary terms and conditions. In conjunction with the        transaction, we plan to commence a private placement financing of up to $3 million.

 

DIA seeks to become a leading diamond producer in the Democratic Republic of the Congo (“DRC”), a historically rich diamond producing region of the world. DIA’s alluvial diamond concessions are located along 40km of the Mbujimayi River in the Kasai Oriental region of the DRC. The area has been subject to extensive artisanal prospecting since the 1920s. The concessions are just northeast        of the Polygon, which is one of the richest diamond reserves in the world, estimated to contain a cluster of at least 12 kimberlites having produced 650 million carats of diamonds since 1917. 

 

The geology in this region is dominated by the sediments of the Precambrian Mbuji-Mayi Formation, which locally comprise dolomites, sandstones and argillites, as well as doleritic volcanics. This formation was intruded by highly diamondiferous Bakwanga kimberlites during the Lower Cretaceous period. It was the subsequent erosion of these deposits that led to the rise of some of the largest high-grade        alluvial diamond deposits in the world. The most economically important alluvial deposits (terraces) are Holocene in age, with the modern-day meandering Mbuji-Mayi river system cutting down into the valley floor of the Mbuji-Mayi Formation. 

 

We are in the process of completing our due diligence and negotiating a definitive agreement with DIA. We cannot assure you that the DIA transaction will be completed. The significant terms and disclosures of the Term Sheet were reported in a Form 8-K filed with the SEC on February 23, 2010, which is herein incorporated by reference. 

 

**PLAN OF OPERATION**

 

As a result of our failure to generate any revenues since our inception, we have not been satisfied with our initial business plan to this point. In September 2008, we appointed Ted R. Sharp as a member of our Board of Directors and as our President, Chief Executive Officer and Chief Financial Officer. We are presently reviewing the current state of our business in detail with consultants in order to        evaluate the progress of our mining business. As a result of its change in strategic direction, we entered into the Term Sheet with REX described above, which subsequently expired, and then into the Term Sheet with DIA described above. We are currently evaluating financing options to complete the transaction with DIA but there can be no assurance that such financing will be available in acceptable terms, if at all.

**Mineral Properties:**

 

As described in previous filings, we have taken a phased approach to our exploration efforts on the Peek Claims, and have received a geological report on the results of Phase III of our program with further recommendations from our geological consultant of additional activities prior to engaging in Phase IV of our plan. In his report, our geologist recommended that, prior to proceeding with Phase IV,        further geological engineering should be undertaken to define the exact source areas for the known and new vein float material. Our geologist recommended reserving a total of $10,000 for a two-stage delineation program prior to commencing Phase IV of our exploration program. We proceeded with our geologist’s recommendation and completed the first phase of the delineation program during the summer exploration season of 2006. A detailed, close-spaced, soil geochemical survey over        the conductors using a plugger style overburden sampling drill was recommended to locate the bed rock source of the mineralization following completion of Phase I of the delineation program.

 

3

 

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Our decision to proceed to Phase IV of our initial exploration program will be made based on factors such as other business opportunities, the final assay results and the recommendations of our geologist, the grades of any mineralization found, the size and extent of the mineralized zones, and the strength of metal prices in international markets.

Our expenditures toward the exploration of our mineral claims may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of exploration do not reveal viable commercial mineralization, we may decide to abandon our claims and acquire new        claims for new exploration. The acquisition of additional claims will be dependent upon our possessing sufficient capital resources at the time in order to purchase such claims. If no funding is available, we may be forced to abandon our operations. This assessment will include an assessment of our cash reserves after the completion of Phase III, the price of minerals and the market for financing of mineral exploration projects at the time of our assessment.

**Corporate Acquisition:**

 

In February 2010, we signed a Term Sheet with DIA, under which we would raise $3,000,000 and acquire all of the stock or assets of that company, subject to certain conditions. We are in the process of negotiating a definitive agreement, which we expect to enter into upon the successful completion of due diligence work by both parties to the transaction. As we move through the acquisition process, we will        perform appropriate due diligence activities to more fully assure investors of the benefits of this strategic move. We cannot assure you that our capital raising efforts will be successful given the current state of the financial markets or that we can successfully complete the acquisition of DIA. 

**Planned Expenditures****:**

During the exploration stage, Ted R. Sharp, our President, Secretary, Treasurer, Chief Executive Officer and Chief Financial Officer, and Dr. Veltheer will only be devoting approximately twenty hours per week of their time to our business. We do not foresee this limited involvement as negatively impacting the Company over the next twelve months. All exploratory work on our mining properties, if any,        is being performed by our geological consultant, Mr. Timmins, who contracts with appropriately experienced parties to complete work programs. However, if as a result of our acquisition efforts, the demands of our business require more business time of Mr. Sharp or Dr. Veltheer, such as raising additional capital or addressing unforeseen issues with regard to our exploration efforts, they are prepared to adjust their timetable to devote more time to our business.        

If our acquisition of DIA is successful, we anticipate that we will require capital for the following over the next twelve months:

|  

 

**Category**                | **Planned Expenditures over the Next Twelve Months**

**(US$)** |
|-------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|
| Acquisition Due Diligence                                                                                         | $250,000                                                        |
| Professional Fees                                                                                                 | $150,000                                                        |
| General and Administrative Expenses                                                                               | $300,000                                                        |
| Mineral Exploration Expenses                                                                                      | $2,300,000                                                      |
| **TOTAL 12-MONTH BUDGET**                                                                                         | **$3,000,000**                                                  |

 

The Company has issued four separate 6% convertible debentures with principal amounts totaling $585,000 which were due and payable on December 31, 2008. Each of these convertible debentures has been extended to December 31, 2010. Interest is payable at the option of the Company in cash or shares. As at November 30, 2009, the Company had not made any interest payments and pursuant to the debentures has        accrued default interest of 8% since the quarter ended May 31, 2008. Interest payable has accumulated to a total of $101,827. The principal and accrued interest on the debentures may be converted at any time into shares of the Company’s common stock at a price of $0.25 per share, at the option of the holder. As part of the financing arrangements required to fund and close the DIA transaction, the Company will be required to negotiate with holders of the convertible debentures to        convert the debentures and accrued interest into common stock.

 

4

 

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In the event that we are unsuccessful in our efforts to fund the DIA acquisition, we will not have cash sufficient to satisfy the debentures in cash. We estimate that we would require a minimum of $1.5 million to fund payment of our current liabilities. Absent such financing, we may negotiate with the holders of the debentures to extend the due dates, convert them to common stock or modify terms        sufficient to remove or delay the requirement to satisfy the obligations with cash. Should we be unable to reach conversion or modification of the debentures on terms acceptable to us, we may be required to default on the obligations. 

We also maintain our position in mining claims in our mineral property referred to as the Peek Claim. In the event we decide to proceed with Phase IV of our exploration program, which is estimated to cost $120,000, we will need to obtain additional financing of nearly $1,000,000 to fund exploration, operating expenses and working capital deficit. 

As of November 30, 2009, we had a working capital deficit of $698,874. We do not expect our business to achieve profitability in the near future as we expect to continue to incur substantial acquisition, development and operating expenses. We will require additional funding to fund our working capital requirements. However, we cannot provide investors with any assurance that we will be able to raise        sufficient funding from the sale of our common stock or debt to fund our estimated general administration, exploration and other working capital requirements. 

Currently, we do not have any financing arrangements in place and there is no assurance that we will be able to obtain sufficient financing to fund our capital requirements. If we do not obtain the necessary financing, then our plan of operation will be scaled back according to the amount of funds available. The inability to raise the necessary financing will severely restrict our ability to continue        exploration programs or acquisition activities as planned. 

**ITEM 1A. RISK FACTORS**

 

Not required for smaller reporting companies.

 

**ITEM 1B UNRESOLVED STAFF COMMENTS**

 

Not required for smaller reporting companies.

 

**ITEM 2. PROPERTIES**

***PEEK CLAIMS***

We purchased a 100% interest in eight mineral claims known as the Peek Claims, located in Canada’s Yukon Territory, from Glen MacDonald of Vancouver, British Columbia, by an agreement dated November 2, 2001, for consideration of $2,500. At the time of the acquisition of the Peek Claims, we were seeking a potential high-grade gold/silver project. There was, at the time, an extensive technical file        available detailing the history of exploration on the Peek Claims property. We also considered the existence of a nearby milling plant as advantageous. Mr. Timmins, P.Eng. and Mr. Laurie Stephenson, P.Eng. were involved in assisting us in the selection process.

The YQMA and its regulations govern the procedures involved in the location, recording and maintenance of mineral titles in the Yukon Territory. The YQMA also governs the issuance of quartz mining licenses which are long-term licenses to produce minerals. Under the YQMA, title to Yukon quartz mineral claims can only be held by individuals or Yukon corporations. Because of this regulation, Barclay        McDonald, Glen MacDonald’s son, is holding the mineral claim in trust for us until we can determine whether there are significant mineral reserves on our claim. If we determine that there are significant mineral reserves on our claim we will incorporate a Yukon subsidiary to hold title to the claim and Barclay MacDonald will transfer the mineral claim to the subsidiary. The transfer will be at no cost to us other than the costs associated with the incorporation of the Yukon        subsidiary.

 

5

 

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**Location, Infrastructure and Access**

 

The Peek Claims cover a broad northwest trending ridge south of Pugh Peak (referred to locally as “Gold Hill”), extending from the Wheaton River to Hodnett Lakes. The property lies 40 km south of Whitehorse, the capital of the Yukon Territory, at geographical coordinates 60 16’N latitude, 135 06’W longitude, see Figures 1 and 2 below. Whitehorse is a modern city with a population        of 25,000, with most services available for conducting mineral exploration. Daily scheduled flights link the city with Vancouver, British Columbia, Edmonton, Alberta and Fairbanks, Alaska.

 

6

 

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The Peek Claims are accessible via an all-weather gravel and paved government-maintained road system which includes a tidewater port road link to Skagway, Alaska. The claims are linked by a secondary road with the Mount Skukum gold mill approximately 12.4 miles away. The Mount Skukum gold mill is a modern gold and silver production facility that is capable of producing both doré bars and metal        concentrates depending on the type of ore being processed. The mill is currently idle.

 

The Alaska and Klondike Highways, and the Wheaton River-Mount Skukum all-season gravel road provide access to the area. A four-wheel drive road follows Thompson Creek from the Wheaton Road to the property. Presently access to the Peek Claims is on foot, by all terrain vehicles or by helicopter because the road is closed by a slide. Further exploration of the property would require approximately $2,000 of        road construction work to make the road accessible. We intend to initiate road construction work to make the road accessible prior to commencing Phase IV of our recommended exploration program, as described below.

 

 

7

 

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**Physiography, Climate and Vegetation**

The Wheaton River district lies in the Boundary Ranges of the Coast Mountains, a rolling uplands area featuring prominent peaks and steep-walled stream and river valleys. Glacial action has modified major river valleys to deep U-shaped drainages with terrace and outwash deposits. Topographically, the area becomes progressively more severe to the southwest, culminating in mountains and ice fields at the        headwaters of the Wheaton and Watson Rivers.

 

A maximum elevation of 6,069 feet is reached on the Peek Claims while the lowest lying feature nearby is Wheaton River at 2,900 feet. The claims cover a barren northwest-trending ridge extending from the Wheaton River to Hodnett Lakes. Outcrop is common on steep slopes descending from the rounded ridge top. The effects of local alpine glaciation are evident on the northern side of Pugh Peak, where cirques        and tarns are present. The upland portion of Gold Hill is a rolling grassy plain with outcrop of less than 5%. Consequently most of the geological interpretation is based upon bulldozer trenches to expose bedrock at depths of ranging from six to sixteen feet.

 

Southwestern Yukon has a dry sub-arctic climate, locally modified by the Pacific Ocean. Summer temperatures average 12°C and annual precipitation totals approximately sixteen inches. The exploration season lasts from May until October.

 

Vegetation in the upland consists of dwarf grasses, moss and lichen. Timber is restricted to the main valleys at elevations below 3,936 feet.

**History of Exploration**

The Peek Claims property has been progressively explored since 1983 with work to date including road construction, bulldozer trenching, grid controlled geophysical, geochemical, and geological surveying and prospecting. 

 

The Wheaton River/Lake Bennett district was first explored by prospectors traveling along the major lakes and rivers of southwestern Yukon in the early 1890’s. More intensive exploration began in 1906 after the discovery of free gold and gold-silver tellurides on Gold Hill. Wagon roads were built along the Wheaton River, Thompson Creek and Stevens Creek to provide access to numerous adits and pits        on Mount Anderson. Limited mining of high grade gold and silver bearing ore occurred on the Gold Reef vein at the northeastern end of Gold Hill and on the Becker-Cochran (Whirlwind) property on the west face of Mount Anderson.

 

From the mid 1920’s to the late 1960’s, little exploration of significance took place. By the 1970’s, many of the old showings were restaked as an increase in the value of base and precious metals rekindled the interest of prospectors and mining companies in the area. The Venus and Arctic mines again operated on Montana Mountain from 1969 to 1971. The Venus Mine was again rehabilitated        during 1980 to 1981 and a new mill was installed at the southern end of Windy Arm, but no ore was processed.

 

On the area covered by the Peek Claims, recent exploration started in 1984 to 1985 when the Wheaton River Joint Venture performed prospecting, grid development, mapping, geochemical and geophysical surveys, bulldozer trenching and road building. Mineralized quartz veins and stockworks were discovered in several locations along a five kilometer long ridge on the claim property. The property was owned by        the Wheaton River Syndicate from 1983 to 1986.

 

During 1987 and 1988, Ranger Pacific Minerals Ltd. and others conducted additional geochemical and geophysical surveys. Also, blast trenching work was undertaken to better define target zones previously identified and to further explore the property. The Peek Claims property was owned by Ranger Pacific Minerals Ltd. from 1987 to 1990.

 

During the period from 1991 to 2001, the property was owned by Glen MacDonald of Vancouver, British Columbia. From 1991 to 2001, exploration work on the property has included bulldozer trenching, road construction, geological mapping and prospecting. Exploration work conducted from 1984 to 1998 covered most of the Gold Hill area, including but not limited to, the area of the Peek Claims.

 

In 2001, we purchased a 100% interest in the Peek Claims from Glen MacDonald by way of a purchase agreement dated November 2, 2001.

 

8

 

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Although exploratory work on the claims conducted by prior owners has indicated some potential showings of mineralization, we are uncertain as to the reliability of these prior exploration results and thus we are uncertain as to whether a commercially viable mineral deposit exists on our mineral claims. Further exploration of these mineral claims is required before a final determination as to their        viability can be made.

**Mineralization**

Precious metal values to date have occurred on the Peek Claims in two types of quartz veins: (i) quartz veins up to 6.5 feet wide in granite and meta-sedimentary/metavolcanic rocks, and (ii) narrow quartz and/or quartz-calcite veins in limestones, quartzites and schists; and silver occurs disseminated in siliceous pyritic schist.

 

Quartz veins in the first group have a general northwest orientation and are continuous over long distances. The Gold Reef vein on the northwest end of Gold Hill is considered a typical example, and has been traced by underground workings, and surface pits for over 984 feet where the average width has been 5 feet.

 

Quartz and quartz-calcite veins appear less continuous and have more random orientations. They are generally spatially related to Eocene intrusive rocks.

 

Alteration and accessory minerals present around the vein systems include clays (kaolinite, alunite) black and green chalcedonic breccias, fluorite, barite, pyrite and hematite. Carbonatization is common in andesitic rocks near veins, and carbonatization and massive chloritization are present in the shear zones in andesitic rocks.

 

Mineralization on the Peek Claims occurs as either of the following veins and siliceous stockworks:

 

|   | 1. | Epithermal gold-silver veins associated with northeast-trending normal faults hosted with bi-modal calc-alkaline andesitic volcanics of the Skukum Group and associated with Eocene rhyolite porphyry dykes outside the volcanic complex. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | 2. | Gold-silver and telluride bearing quartz veins spatially related to the “Tally-Ho Shear Zone”, sheared and chloritized mafic volcanic rocks and nearby sheared or unsheared granitic rocks and Jurassic Laberge Group arkosic sedimentary rocks. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**Compliance with Governmental Regulation**

We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in the Yukon Territory. The main agency that governs the exploration of minerals in the Yukon Territory, Canada, is the Minerals Management Branch of the Yukon Department of Energy Mines and Resources. 

 

The material legislation applicable to us is the Yukon Quartz Mining Act (the “YQMA”), administered by the Minerals Management Branch. The YQMA and its regulations govern the procedures involved in the location, recording and maintenance of mineral titles in the Yukon Territory. The Government of the Yukon Territory retains freehold ownership of the land which is subject to the mineral        claims.

 

All mineral exploration activities carried out on a mineral claim or mining lease in the Yukon must be in compliance with the Yukon Quartz Mining Land Use Regulations (the “Yukon Regulations”). The Yukon Regulations apply to all mines during exploration, development, construction, production, closure, reclamation and abandonment. Also, the Yukon Regulations contain standards for exploration        activities including construction and maintenance, site preparation, drilling, trenching and work in and about a water body. An annual exploration expenditure of approximately $80 per claim is required by the YQMA to maintain the claims in good standing. Alternatively an annual payment of approximately $80 per claim in lieu of work is sanctioned by the YQMA to maintain claims in good standing. Our annual cost of compliance with the YQMA is presently approximately $672 per        year.

 

We will also have to sustain the cost of reclamation and environmental remediation for all exploration work undertaken. Reclamation is the process of bringing the land back to its natural state after completion of exploration activities. Environmental remediation refers to the physical activity of taking steps to remediate, or remedy, any environmental damage caused, i.e. refilling trenches after sampling        or cleaning up fuel spills. 

 

9

 

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**Recommendation of Geological Report and Geological Exploration Program**

In June 2002, we received an initial Geological Report on the Peek Claims. Based on this report, we planned a four phase exploration program, at an estimated cost of $140,000, to be undertaken on the property to assess its potential to host high grade gold mineralization within quartz and sulphide veins. The four phase program consists of the following: 

 

| ***Phase***   | ***Exploration Program***                                                                                                                                                                          | ***Status***                                                                                       | ***Cost*** |   |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|------------|--------|
| **Phase I**   | Compilation of previous exploration data, 

and geological analysis of the data.                                                                                                                   | Completed in August 2002.                                                                          | $5,000     |   |
|          |
| **Phase II**  | Detailed field examination and study of known mineral zones including localized geophysical surveys.                                                                                               | Completed in December 2003.                                                                        | $10,000    |   |
|          |
|          |
| **Phase III** | Detailed field examination of potential exploration sites, including geological mapping, localized geophysical surveys and sampling using the knowledge obtained from the known exploration areas. | Completed April 2006.                                                                              | $5,000     |   |
|          |
|          |
|          |
|          |
| **Phase IV**  | Test diamond drilling (to 1,200 metres) of the targets delineated within the potential exploration sites.                                                                                          | To be determined subject to availability of exploration funds and the results of exploratory work. | $120,000   |   |
|          |
|          |
|          |

 

Based upon favorable results of Phase I and Phase II of our geological exploration program, we performed Phase III of the program which consisted of geological mapping, geophysical surveying and sampling, to select targets for the Phase IV drilling program consisting of 1,200 meters (approximately 3,936 feet) of diamond drilling, again contingent upon favorable results of Phase III. A Phase IV        drilling program would be dependent upon a number of factors such as the geologists’ recommendations based upon previous phases and our available funds. See “Present Condition of the Property and Current State of Exploration” below.

 

The projected costs of each phase of our exploration program included provision for mobilization and support costs. The expenditures made by us in the exploration of our mineral claim may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the        results of exploration do not reveal viable commercial mineralization, we may decide to abandon our claim and acquire new claims for new exploration. The acquisition of additional claims will be dependent upon our possessing sufficient capital resources at the time in order to purchase such claims. If no funding is available, we may be forced to abandon our operations.

 

We have complete Phases I through III of the recommended exploration program. In the event that we proceed with Phase IV, we intend to implement a drilling program which will target any mineralized zones or zones of interest identified in earlier phases’ exploration results. The results of any drilling will be used to assess whether further geological exploration and drilling of identified        mineralized areas is warranted. The funding required for the drilling program and our ability to complete the drilling program is expected to be dependent on the amount of funds we have available for exploration and our exploration priorities. Completion of our planned Phase IV drilling program is estimated to cost $120,000 and is expected to include the following:

 

 

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|   | (a) |   | Hiring of local contractors familiar with the mining region and drill conditions to perform the drilling operations and supply the drill and all other equipment and drill technicians required to perform the drilling operations; |
|--------|-----|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | (b) |   | Oversight of drilling program by a Professional Mining Engineer or Certified Geologist; |
|--------|-----|--------|-----------------------------------------------------------------------------------------|

 

|   | (c) |   | Outside laboratory analysis, particularly for prospective lode gold; |
|--------|-----|--------|----------------------------------------------------------------------|

 

|   | (d) |   | In-house and external review of results, including any feasibility studies; and |
|--------|-----|--------|---------------------------------------------------------------------------------|

 

|   | (e) |   | Hiring of lab technicians. |
|--------|-----|--------|----------------------------|

 

The primary expenses related to the drilling program are expected to be labor and contract costs, including transportation and on-site support.

 

The number of personnel involved in the drilling is expected to be four drilling personnel and/or a foreman and geologist. All personnel are expected to be contract employees. The geologist is expected to be the onsite technical person who will be able to evaluate and direct the program. We believe these types of contract employees are readily available, if needed.

 

Due to our strategic priority of closing the DIA acquisition, at this time, we currently do not plan to execute our Phase IV exploration strategy during fiscal 2010. Raising the $3,000,000 to fund the DIA transaction precludes a competing effort to raise the funds necessary to embark upon a continuing exploration program. We cannot provide investors with any assurance that we will be able to raise        sufficient funding from the sale of our common stock to fund our either of these activities. We believe that debt financing will not be an alternative for funding. The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt at this time. We presently do not have any arrangements in place for any future equity financing.

 

**Present Condition of the Property and Current State of Exploration**

In years prior to 2009, we conducted exploration activities on the Peek Claims to determine whether there is commercially exploitable gold and silver mineralization or other metals. The following is a summary of the status of our exploration program on the Peek Claims:

 

*Summary of Phase I – Exploration Program Results*

 

The results of our Phase I exploration program delineated three main zones of mineralization in addition to other mineralized showings that warrant additional exploration work. The three main mineralization zones identified by our geologist are described as follows:

 

|   | (i) |   | the North grid, containing moderate gold-silver and silver-lead soil geochemical anomalies and include intense “spot” highs; |
|--------|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | (ii) |   | the north end of Gold Hill which has a moderate to strong VLF-EM conductor and significant gold and silver values in quartz veins carrying galena and tetrahedrite occurring in the gully at the north end of Gold Hill and in float trains on the ridge top of Gold Hill; and |
|--------|------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | (iii) |   | the south end of Gold Hill, in which gold-silver bearing galena and tetrahedrite mineralization has been identified. 

  |
|--------|-------|--------|-------------------------------------------------------------------------------------------------------------------------------|

Our geologist concluded that the results of Phase I warranted a further program of exploration.

 

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*Summary of Phase II – Exploration Program Results*

 

The second phase consisted of detailed geophysical surveys utilizing new and more sensitive geophysical techniques to enhance the data that previously existed on the claims. Our work focused specifically upon the already known areas which our consultant had indicated may host minerals. This phase also included a detailed field examination and study of known mineral zones including localized geophysical        surveys. Phase II was completed in late 2003 and we received a geological report on the results in April, 2004.

 

The results of our Phase II exploration program confirmed the anomaly concerning the gold-silver bearing galena and tetrahedrite mineralization developing along the contacts on the north and south ends of Gold Hill. The anomaly was confirmed in the more detailed “vector geophysics survey” and warrants further exploration according to our geologist. Our geologist concluded that the results of        Phase II confirmed that the geological review identified areas which warranted a further program of exploration. The report recommends further evaluation of data obtained from the detailed geophysical surveying, which demonstrated that the areas evaluated have a geophysical signature that could indicate an unseen depth or length extent, and recommended further geological surveying and sampling to identify and confirm targets for the Phase IV drilling.

 

*Summary of Phase III – Exploration Program Results*

 

In 2005, our geologist visited the Peek Claims property to conduct testing on areas of interest indicated by Phase II of our geological program for prospective gold-silver mineralization. New showings were located and sampled. The samples were submitted for analysis and we received our geologist’s report with the assay result of Phase III in April 2006.

 

According to the Phase III report, during the 2005 exploration season, our geologist completed detailed prospecting and geological investigation of a portion of the claims with geophysical anomalies identified during 2003. Samples of vein material present as “float” were collected, reviewed and submitted for geochemical analysis. Our geologist confirmed that the original epithermal vein        systems contained copper, whereas the 2005 discovery contained copper in silver-deficient chalcopyrite. Six samples returned copper values ranging from 1,030 parts per million (ppm) (0.100%) to 4,974 ppm (0.497%) while two samples contained trace amounts.

 

In April 2006, we received the geological report on the results of Phase III of our 2005 exploration program. During the 2005 exploration season we completed detailed prospecting and geological investigation of a portion of the claims with geophysical anomalies identified during 2003. Samples of vein material present as “float” were collected, reviewed and submitted for geochemical analysis.        Our geologist concluded that these results confirm earlier sample analyses by Texada and others. Prior to proceeding with Phase IV, our geologist recommends further geological engineering on the Peek Claims properties to define the exact source areas for the known and new vein float material because frost action may have moved the vein material further than originally assumed. Our geologist recommends a total of $10,000 to be reserved for a two stage delineation program.

 

During the summer exploration season of 2006, we proceeded with the first phase of the delineation program. A field crew selected one of the sample sites and excavated a pit nearby, upslope, to examine the soil profile and suggest where the bedrock source for the float might occur. Boulder-rich overburden was present to a depth of seven feet, including more fragments of sulphide-rich quartz. Below seven        feet the ground is frozen by permafrost and the quartz vein fragments discontinued. Thus, our geologist concluded the source of the float lies further upslope and perhaps is within the geophysical conductors located earlier. A detailed, close-spaced, soil geochemical survey over the conductors using a plugger style overburden sampling drill was recommended to locate the bed rock source of the mineralization.

 

*Phase IV – Exploration Program*

 

In the event that we proceed with Phase IV of our exploration program, we will implement a drilling program expected to take place over a period of two weeks, which will target any mineralized zone or zones of interest identified in our Phase I, II and III exploration results. The results of any drilling will be used to assess whether further geological exploration and drilling of identified mineralized        areas is warranted. The funding required for the 

 

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drilling program and our ability to complete the drilling program will be dependent on the amount of funds we have available for exploration and our corporate priorities.

 

We will not be able to determine whether or not our mineral claims contain a commercially exploitable mineral deposit, or reserve, until appropriate exploratory work is done and an economic evaluation based on that work concludes economic viability.

**Peek Claim Status**

The Peek claims are located in the Whitehorse Mining District of Yukon Territory. The property consists of eight claims as detailed in Table 1 below. Claims such as these are administered under the provisions of the YQMA by the supervising mining recorder located in Whitehorse. An annual exploration expenditure of approximately $80 per claim is required by the YQMA to maintain the claims in good standing.        Alternatively an annual payment of approximately $80 per claim in lieu of work is sanctioned by the YQMA to maintain claims in good standing. Our annual cost of compliance with the YQMA is presently approximately $672 per year.

**Table 1 - Claim Status**

| **Claim Name** | **Grant Numbers**    | **Current Expiry Date** |
|----------------|----------------------|-------------------------|
| PEEK 1-8       | YC 19158 – 165 | August 19, 2010         |

 

**COMPETITION**

 

We are an exploration stage company. We compete with other mineral resource exploration and development companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration and development companies with whom we compete have greater financial and technical resources than us. Accordingly, these competitors may be able to spend greater amounts on acquisitions        of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact on our ability to        finance further exploration and to achieve the financing necessary for us to develop our mineral properties.

 

**EMPLOYEES**

We have no employees as of the date of this annual report. We generally conduct our business through agreements with consultants and arms-length third parties.

 

**ITEM 3. LEGAL PROCEEDINGS**

Neither we nor any of our properties are currently subject to any material legal proceedings or other regulatory proceedings.

 

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**PART II**

 

**ITEM 4.**   **MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES**

 

Our common stock is quoted on the Over the Counter (OTC) Bulletin Board which is sponsored by the Financial Industry Regulatory Authority, Inc. (FINRA). The OTC Bulletin Board is a network of security dealers who buy and sell stock. The dealers are connected by a computer network which provides information on current “bids” and “asks” as well as volume information. The OTC Bulletin        Board is not considered a “national exchange.”

 

Our Common stock is traded on the FINRA OTC Bulletin Board under the symbol “TXDV”. The following table shows the high and low bid information for the Common stock for each quarter of the fiscal years 2008 and 2009. 

 

| Fiscal Year    | Low Closing | High Closing |
|----------------|-------------|--------------|
| **2008**       |        |         |
| First Quarter  | $0.70       | $1.25        |
| Second Quarter | $1.01       | $1.25        |
| Third Quarter  | $0.42       | $1.01        |
| Fourth Quarter | $0.40       | $1.28        |

 

| Fiscal Year    | Low Closing | High Closing |
|----------------|-------------|--------------|
| **2009**       |        |         |
| First Quarter  | $1.28       | $1.28        |
| Second Quarter | $0.05       | $1.75        |
| Third Quarter  | $0.15       | $0.15        |
| Fourth Quarter | $0.15       | $2.40        |

 

The above quotations reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions.

 

**Holders of Record**

 

As of November 30, 2009 there were 4 shareholders of record of our common stock with an unknown number of additional shareholders who hold shares through brokerage firms. 

 

**Dividends**

 

We have not paid any dividends and do not anticipate the payment of dividends in the foreseeable future.

 

**Securities Authorized for Issuance under Equity Compensation Plans**

 

None.

 

**Issuer Purchase of Equity Securities**

 

During our fiscal year ended November 30, 2009, neither the Company nor any of its affiliates repurchased common shares of the Company. 

 

**Recent Sales of Unregistered Securities**

On March 25, 2009, the Company entered into a promissory note with a third party for $25,000, which is unsecured, due on demand and bears interest at 5% per annum. Interest and principal are due on demand.

The foregoing transactions were conducted by the Company in private placements to non-U.S. persons outside the United States in off-shore transactions pursuant to an exemption from registration available under Rule 903 of Regulation S of the United States Securities Act of 1933, as amended. 

 

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**ITEM 5. SELECTED FINANCIAL DATA**

 

Not required for smaller reporting companies.

 

**ITEM 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

**General**

 

This discussion and analysis should be read in conjunction with the accompanying financial statements and related notes. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. The discussion and analysis of the        financial condition and results of operations are based upon the financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial        statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis the Company reviews its estimates and assumptions. The estimates were based on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but the Company does not believe such differences will materially affect our financial position or        results of operations. Critical accounting policies, the policies the Company believes are most important to the presentation of its financial statements and require the most difficult, subjective and complex judgments, are outlined below in “Critical Accounting Policies,” as disclosed in this Form 10-K.

**Plan of Operation**

As a result of our failure to generate substantial revenues since our inception, we have not been satisfied with our initial business plan to this point. We are presently reviewing the current state of our business in detail with consultants in order to evaluate the progress of our mining business. At the present time, we intend to continue to develop our current mining business and complete an        acquisition under our revised management and corporate governance structure.

*Mining:*

Phase I of our exploration program, which consisted of a geological review of prior exploration work on the Peek Claims, was completed in the summer of 2002 at a cost of $5,000. Phase II of the recommended geological exploration program cost $10,000 and was completed in late 2003. Based on the results of Phase II of our exploration program, we proceeded with Phase III of our exploration program which was        substantially completed during the summer exploration season of 2005. On April 11, 2006, we received the geological report on the results of Phase III of our exploration program.

 

In his report, our geologist recommended that, prior to proceeding with Phase IV, further geological engineering should be undertaken to define the exact source areas for the known and new vein float material. Our geologist recommended reserving a total of $10,000 for a two stage delineation program prior to commencing Phase IV of our exploration program. We proceeded with our geologist’s        recommendation and completed the first phase of the delineation program during the summer exploration season of 2006. A detailed, close-spaced, soil geochemical survey over the conductors using a plugger style overburden sampling drill was recommended to locate the bed rock source of the mineralization following completion of Phase I of the delineation program.

 

Our decision to proceed to Phase IV of our initial exploration program will be made based on factors such as the final assay results and the recommendations of our geologist, the grades of any mineralization found, the size and extent of the mineralized zones, and the strength of metal prices in international markets.

 

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The expenditures made by us in the exploration of our mineral claims may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of exploration do not reveal viable commercial mineralization, we may decide to abandon our claims and acquire        new claims for new exploration. The acquisition of additional claims will be dependent upon our possessing sufficient capital resources at the time in order to purchase such claims. If no funding is available, we may be forced to abandon our operations. This assessment will include an assessment of our cash reserves after the completion of Phase III, the price of minerals and the market for financing of mineral exploration projects at the time of our assessment.

*Acquisition:*

**Term Sheet - REX****:**

 

On September 16, 2008, we signed a Term Sheet (the “Term Sheet”) that sets forth the principal terms upon which we proposed to enter into a definitive agreement (the “Definitive Agreement”) to acquire Royalty Exploration, LLC (“REX”) and commenced a concurrent financing of $40,000,000. The Term Sheet was subsequently amended on November 12, 2008 and March 9, 2009 and we        signed a letter agreement on August 25, 2009, which details the responsibilities of the parties going forward with respect to the transaction. The significant terms and disclosures of the Term Sheet and the letter agreement were reported in Forms 8-K filed with the SEC on September 22, 2008, November 12, 2008, March 11, 2009 and September 1, 2009, respectively, which are herein incorporated by reference. The Term Sheet expired and the transaction with REX was not completed. 

 

**Term Sheet - DIA****:**

 

Subsequent to the end of fiscal 2009, on February 15, 2010 we entered into a Term Sheet with Diamond Industry Associates Ltd (“DIA”) whereby we will acquire 100% of DIA’s issued and outstanding shares or alternatively the assets and contractual obligations of DIA. The acquisition will be subject to a definitive agreement and customary terms and conditions. In conjunction with the        transaction, we plan to commence a private placement financing of up to $3 million.

 

DIA seeks to become a leading diamond producer in the Democratic Republic of the Congo (“DRC”), a historically rich diamond producing region of the world. DIA’s alluvial diamond concessions are located along 40km of the Mbujimayi River in the Kasai Oriental region of the DRC. The area has been subject to extensive artisanal prospecting since the 1920s. The concessions are just northeast        of the Polygon, which is one of the richest diamond reserves in the world, estimated to contain a cluster of at least 12 kimberlites having produced 650 million carats of diamonds since 1917. 

 

The geology in this region is dominated by the sediments of the Precambrian Mbuji-Mayi Formation, which locally comprise dolomites, sandstones and argillites, as well as doleritic volcanics. This formation was intruded by highly diamondiferous Bakwanga kimberlites during the Lower Cretaceous period. It was the subsequent erosion of these deposits that led to the rise of some of the largest high-grade        alluvial diamond deposits in the world. The most economically important alluvial deposits (terraces) are Holocene in age, with the modern-day meandering Mbuji-Mayi river system cutting down into the valley floor of the Mbuji-Mayi Formation. 

 

We are in the process of completing our due diligence and negotiating a definitive agreement with DIA. The significant terms and disclosures of the Term Sheet were reported in a Form 8-K filed with the SEC on February 23, 2010, which is herein incorporated by reference. 

 

**Results of Operations**

 

We did not earn any revenues from November 30, 2008 to November 30, 2009. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties, which is not expected for several years, if at all. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral        resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties. Alternatively, we may begin to earn revenues with the acquisition of DIA, but cannot assure that this acquisition will be consummated.

 

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We incurred operating expenses in the amount of $185,032 for the period ended November 30, 2009 compared with $175,944 for the period ended November 30, 2008. These operating expenses included Consulting fees of $76,404 and General and administrative costs of $100,008 and $8,620 loss on foreign exchange activities. The lower operating expenses during fiscal 2009 compared to fiscal 2008 resulted from        decreased business activity related to exploring potential acquisitions. Costs during fiscal 2010 are anticipated to be consistent with those consulting and general and administrative expenses incurred in fiscal 2009; however, operational expenses may increase substantially if the acquisition of DIA is successful. 

 

We incurred a net loss in the amount of $351,966 for the fiscal year ended November 30, 2009, compared to $517,805 for the fiscal year ended November 30, 2008. The change in net loss was attributable primarily to a smaller accretion of discounts on convertible debentures, increases in interest costs on increased borrowings and increases in operating costs described above, offset by the non-occurrence        of write downs in oil and gas deposit assets in fiscal 2009 compared with $115,000 for the prior year . In 2009, the Company recognized a reserve of $93,160 for potential uncollectability of the receivable from REX for previously advanced due diligence funding to that company that is refundable to us in twelve equal monthly payments. 

 

**Liquidity and Capital Resources**

As of November 30, 2009, we had a working capital deficiency of $698,874. We do not expect our business to achieve profitability in the near future as we expect to continue to incur substantial development and operating expenses. We will require additional funding to fund our working capital requirements. However, we cannot provide investors with any assurance that we will be able to raise sufficient        funding from the sale of our common stock or debt to fund our estimated general administration, exploration and other working capital requirements. We believe that debt financing will not be an alternative for funding. The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until we locate mineral reserves on our mineral claims.

 

Currently, we do not have any financing arrangements in place and there is no assurance that we will be able to obtain sufficient financing to fund our capital requirements. If we do not obtain the necessary financing, then our plan of operation will be scaled back according to the amount of funds available. The inability to raise the necessary financing will severely restrict our ability to continue        exploration programs or acquisition activities as planned.

 

Our continued existence and plans for future growth depend on our ability to obtain the capital necessary to operate by the sale of equity shares. We will need to raise additional capital of $3,000,000 in coming months to fund our capital requirements through November 30, 2010, and to complete the transactions contemplated by the DIA Term Sheet.

 

We believe there is substantial doubt that we can continue as a going concern which, if true, raises substantial doubt that a purchaser or holder of our common stock will receive a return on his or her investment. As at November 30, 2009, we had cash of $2,416, a working capital deficit of $698,874 and an accumulated deficit of $1,642,777, and will likely continue to incur further losses as we continue        our exploration program and acquisition activities. Our future is dependent upon our ability to obtain financing and upon future profitable operations from the development of our mineral properties or successfully acquiring additional properties or business opportunities. If we cannot raise sufficient capital, we may be required to liquidate our assets, issue securities or debt on terms extremely dilutive to existing shareholders or file for bankruptcy. Our financial statements do not        include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.  

 

We have not declared or paid dividends on our shares since incorporation and do not anticipate doing so in the foreseeable future.

 

**Off-Balance Sheet Arrangements**

We had no off-balance sheet transactions.

 

17

 

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**Contractual Obligations**

We have entered into contracts with various individuals or companies which require minimum future payments or investments in exploration activities to satisfy the terms of the contract.

 

| **Contractual obligations** | **Payments due by period** |
|-----------------------------|----------------------------|
| **Total**                   | **Less than 1 year**       | **2-3 years** | **3-5 years** | **More than 5 years** |
| Convertible Debentures      | 585,000                    | - | 585,000 | - | - |
| Promissory Notes            | 365,000                    | 365,000 | - | - | - |
| **Total**                   | 950,000                    | 365,000 | 585,000 | - | - |

 

In February of 2010, we signed a Term Sheet with DIA. Under the Term Sheet, the Company agreed to commence a financing of $3,000,000 to fund the acquisition of DIA. 

 

**Critical Accounting Policies**

We have identified our critical accounting policies, the application of which may materially affect the financial statements, either because of the significance of the financials statement item to which they relate, or because they require management’s judgment in making estimates and assumptions in measuring, at a specific point in time, events which will be settled in the future. The critical        accounting policies, judgments and estimates which management believes have the most significant effect on the financial statements are set forth below:

|   | a) | Stock-based Compensation |
|--------|----|--------------------------|

The Company records stock-based compensation in accordance with ASC 718, *“Compensation – Stock Based Compensation”*, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the        consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

|   | b) | Financial Instruments |
|--------|----|-----------------------|

ASC 820, “*Fair Value Measurements”*requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A        financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which        significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

 

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

 

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Our financial instruments consist principally of cash, note receivable, accounts payable, amounts due to related parties, promissory notes payable, and convertible debentures. Pursuant to ASC 820, the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the        recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

The Company has operations in Canada, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency        risk.

 

**Adopted Accounting Pronouncements**

In May 2009, FASB issued ASC 855, Subsequent Events, which establishes general standards of for the evaluation, recognition and disclosure of events and transactions that occur after the balance sheet date. Although there is new terminology, the standard is based on the same principles as those that currently exist in the auditing standards. The standard, which includes a new required disclosure of the        date through which an entity has evaluated subsequent events, is effective for interim or annual periods ending after June 15, 2009. The adoption of ASC 855 did not have a material effect on the Company’s financial statements. Refer to Note 13.

In June 2009, the FASB issued guidance now codified as ASC 105, Generally Accepted Accounting Principles as the single source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP, aside from those issued by the SEC. ASC 105 does not change current U.S. GAAP, but is intended to        simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. The adoption of ASC 105 did not have a material impact on the Company’s financial statements, but did eliminate all references to pre-codification standards

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

**Going concern**

The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, confirmation        of the Company’s interests in the underlying properties, and the attainment of profitable operations. As at November 30, 2009, the Company has a working capital deficit of $698,874, and has accumulated losses of $1,642,777 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and        classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

As at November 30, 2009, the Company had cash of $2,416 on hand. The Company does not have sufficient funds to meet planned expenditures over the next twelve months, and will need to seek additional debt or equity financing to meet its planned expenditures. Management believes that it will need to raise approximately $40,000,000 in additional financing to complete the transactions contemplated by the REX        Term Sheet and meet its other planned expenditures. The Company currently has no commitment for such financing. Accordingly, there is a risk that the Company will be unable to raise the required financing and complete the transactions contemplated by the REX Term Sheet and its other planned expenditures.

 

**Private Placements**

On March 25, 2009, the Company entered into a promissory note with a third party for $25,000, which is unsecured, due on demand and bears interest at 5% per annum. Interest and principal are due on demand.

On December 19, 2008, the Company entered into a promissory note with a third party for $50,000, which is unsecured, due on demand and bears interest at 5% per annum. Interest and principal are due on demand.

 

19

 

----

On October 27, 2008, the Company entered into a promissory note with a third party for $140,000, which is due on demand and bears interest at 5% per annum. Interest and principal are due on demand.

The foregoing transactions were conducted by the Company in private placements to non-U.S. persons outside the United States in off-shore transactions pursuant to an exemption from registration available under Rule 903 of Regulation S of the United States Securities Act of 1933, as amended. 

 

**Convertible Debenture**

On April 10, 2007, the Company issued a 6% convertible debenture with a principal amount of $200,000 which was due and payable on December 31, 2008. On December 18, 2008, the maturity date was extended to December 31, 2010. Interest is payable semi-annually beginning on September 30, 2007, and thereafter on March 31st and September 30th of each year, payable at the option of the Company in cash or shares.        As at November 30, 2009, the Company had not made any interest payments and pursuant to the debenture has accrued default interest of 8% since September 30, 2007. The principal and accrued interest on the debenture may be converted at any time into shares of the Company’s common stock at a price of $0.25 per share, at the option of the holder. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $80,000 as additional paid-in capital and an        equivalent discount which will be charged to operations over the term of the convertible debenture. The Company records accretion expense over the term of the convertible debenture up to its face value of $200,000. As at November 30, 2009, $78,515 has been accreted increasing the carrying value of the convertible debenture to $198,516.

On May 2, 2007, the Company issued a 6% convertible debenture with a principal amount of $125,000 which was due and payable on December 31, 2008. On December 18, 2008, the maturity date was extended to December 31, 2010. Interest is payable semi-annually beginning on September 30, 2007, and thereafter on March 31st and September 30th of each year, payable at the option of the Company in cash or shares. As        at November 30, 2009, the Company had not made any interest payments and pursuant to the debenture has accrued default interest of 8% since September 30, 2007. The principal and accrued interest on the debenture may be converted at any time into shares of the Company’s common stock at a price of $0.25 per share, at the option of the holder. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $50,000 as additional paid-in capital and an        equivalent discount which will be charged to operations over the term of the convertible debentures. The Company records accretion expense over the term of the convertible debenture up to its face value of $125,000. As at November 30, 2009, $49,101 has been accreted increasing the carrying value of the convertible debenture to $124,050.

On November 19, 2007, the Company issued a 6% convertible debenture with a principal amount of $110,000 which was due and payable on December 31, 2008. On December 18, 2008, the maturity date was extended to December 31, 2010. Interest is payable semi-annually beginning on May 31, 2008, and thereafter on May 31st and November 30th of each year, payable at the option of the Company in cash or shares. As at        November 30, 2009, the Company had not made any interest payments and pursuant to the debenture has accrued default interest of 8% since May 31, 2008. The principal and accrued interest on the debenture may be converted at any time into shares of the Company’s common stock at a price of $0.25 per share, at the option of the holder. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $44,000 as additional paid-in capital and an equivalent        discount which will be charged to operations over the term of the convertible debenture. The Company records accretion expense over the term of the convertible debenture up to its face value of $110,000. As at November 30, 2009, $42,885 has been accreted increasing the carrying value of the convertible debenture to $108,885.

On March 11, 2008, the Company issued a 6% convertible debenture with a principal amount of $150,000 which was due and payable on December 31, 2008. On December 18, 2008, the maturity date was extended to December 31, 2010. Interest is payable semi-annually beginning on May 31, 2008, and thereafter on May 31st and November 30th of each year, payable at the option of the Company in cash or shares. As at        November 30, 2009, the Company had not made any interest payments and pursuant to the debenture has accrued default interest of 8% since May 31, 2008. The principal and accrued interest on the debenture may be converted at any time into shares of the Company’s common stock at a price of $0.25 per share, at the option of the holder. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $60,000 as additional paid-in capital and an equivalent        discount which will be charged to operations over the term of the convertible debenture. The Company records accretion expense over the term of the convertible debenture up to its face value of $150,000. As at November 30, 2009, $58,052 has been accreted increasing the carrying value of the convertible debenture to $148,052.

 

20

 

----

In each case, the Company accounted for the embedded beneficial conversion feature in accordance with ASC 470-20 “*Debt with Conversion and Other Options*”. 

The foregoing transactions were conducted by the Company in private placements to non-U.S. persons outside the United States in off-shore transactions pursuant to an exemption from registration available under Rule 903 of Regulation S of the United States Securities Act of 1933, as amended. 

 

**ITEM 6A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

 

Not required for smaller reporting companies.

 

21

 

----

**ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

 

Texada Ventures Inc.

(An Exploration Stage Company)

November 30, 2009

 

|   | Index |
|--------|-------|

 

| Report of Independent Registered Public Accounting Firm | 23 |
|---------------------------------------------------------|----|

 

| Balance Sheets | 24 |
|----------------|----|

 

| Statements of Operations | 25 |
|--------------------------|----|

 

| Statements of Cash Flows | 26 |
|--------------------------|----|

 

| Statement of Stockholders’ Deficit | 27 |
|------------------------------------------|----|

 

| Notes to the Financial Statements | 28 |
|-----------------------------------|----|

 

22

 

----

 

 

 

Report of Independent Registered Public Accounting Firm

 

To the Directors and Stockholders 

Texada Ventures Inc.

(An Exploration Stage Company)

We have audited the accompanying balance sheets of Texada Ventures Inc. (An Exploration Stage Company) as of November 30, 2009 and 2008, and the related statements of operations, cash flows and stockholders’ deficit for the years then ended and accumulated for the period from October 17, 2001 (Date of Inception) to November 30, 2009. 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial        statements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes 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 internal control over financial reporting. 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, the financial statements referred to above present fairly, in all material respects, the financial position of Texada Ventures Inc. (An Exploration Company) as of November 30, 2009 and 2008, and the results of its operations, cash flows and stockholders’ deficit for the years then ended and accumulated for the period from October 17, 2001 (Date of Inception) to November 30, 2009 in        conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has a working capital deficiency and has incurred operating losses since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these        matters are also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ MANNING ELLIOTT LLP

 

CHARTERED ACCOUNTANTS

Vancouver, Canada

March 10, 2010 

 

 

 

 

 

23

 

----

Texada Ventures Inc.

(An Exploration Stage Company)

Balance Sheets

(Expressed in US dollars)

 

 

|                                                                                                               | November 30,

2009 | November 30,

2008 |
|--------------------------------------------------------------------------------------------------------------------|--------------------|--------------------|
|                                                                                                               |               |               |
| ASSETS                                                                                                             |               |               |
|                                                                                                               |               |               |
| Current Assets                                                                                                     |               |               |
|                                                                                                               |               |               |
| Cash                                                                                                               | $ 2,416            | $ 3,352            |
| Note receivable (Note 4)                                                                                           | –            | 83,284             |
| Prepaid expenses and deposits                                                                                      | –            | 5,120              |
|                                                                                                               |               |               |
| Total Current Assets                                                                                               | 2,416              | 91,756             |
|                                                                                                               |               |               |
| Total Assets                                                                                                       | $ 2,416            | $ 91,756           |
|                                                                                                               |               |               |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                        |               |               |
|                                                                                                               |               |               |
| Current Liabilities                                                                                                |               |               |
|                                                                                                               |               |               |
| Accounts payable (Note 6(c))                                                                                       | $ 117,788          | $ 72,296           |
| Accrued liabilities (Note 5)                                                                                       | 148,113            | 79,915             |
| Due to related parties (Notes 6(a) and (b))                                                                        | 70,389             | 7,080              |
| Promissory notes payable (Note 7)                                                                                  | 365,000            | 290,000            |
| Convertible debentures, less unamortized discount of $nil and $16,124, respectively (Note 8)                       | –            | 568,876            |
|                                                                                                               |               |               |
| Total Current Liabilities                                                                                          | 701,290            | 1,018,167          |
|                                                                                                               |               |               |
| Convertible debentures, less unamortized discount of $5,497 and $nil, respectively (Note 8)                        | 579,503            | –            |
|  

                                                                                                      |               |               |
| Total Liabilities                                                                                                  | 1,280,793          | 1,018,167          |
|                                                                                                               |               |               |
| Nature of Operations and Continuance of Business (Note 1)                                                          |               |               |
| Commitments (Note 11)                                                                                              |               |               |
| Subsequent Event (Note 13)                                                                                         |               |               |
|                                                                                                               |               |               |
| Stockholders’ Deficit                                                                                        |               |               |
|                                                                                                               |               |               |
| Preferred shares, 100,000,000 shares authorized, $0.001 par value;

None issued and outstanding                    | –            | –            |
|                                                                                                               |               |               |
| Common shares, 200,000,000 shares authorized, $0.001 par value;

24,293,334 shares issued and outstanding (Note 9) | 24,293             | 24,293             |
|                                                                                                               |               |               |
| Additional paid-in capital                                                                                         | 340,107            | 340,107            |
|                                                                                                               |               |               |
| Deficit accumulated during the exploration stage                                                                   | (1,642,777)        | (1,290,811)        |
|                                                                                                               |               |               |
| Total Stockholders’ Deficit                                                                                  | (1,278,377)        | (926,411)          |
|                                                                                                               |               |               |
| Total Liabilities and Stockholders’ Deficit                                                                  | $ 2,416            | $ 91,756           |

 

 

 

 

 

(The accompanying notes are an integral part of these financial statements)

 

 

24

 

----

Texada Ventures Inc.

(An Exploration Stage Company)

Statements of Operations

(Expressed in US dollars)

 

|                                            | Accumulated from                                                                                          |                                                                                                     |                                                                                                     |
|-------------------------------------------------|-----------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|
|                                            | October 17, 

2001

(Date of Inception)                                                                   | For the 

Year

Ended                                                                                    | For the

Year

Ended                                                                                     |
|                                            | to November 30,                                                                                           | November 30,                                                                                             | November 30,                                                                                             |
|                                            | 2009                                                                                                      | 2009                                                                                                     | 2008                                                                                                     |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
| Revenue                                         | $                 – | $                – | $                – |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
| Operating Expenses                              |                                                                                                      |                                                                                                     |                                                                                                     |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
| Amortization                                    | 798                                                                                                       | –                                                                                                  | –                                                                                                  |
| Consulting (Notes 6(a) and (b))                 | 182,958                                                                                                   | 76,404                                                                                                   | 52,555                                                                                                   |
| Exploration costs                               | 20,091                                                                                                    | –                                                                                                  | –                                                                                                  |
| General and administrative                      | 513,393                                                                                                   | 100,008                                                                                                  | 132,43                                                                                                   |
| Loss (gain) on foreign exchange                 | (444)                                                                                                     | 8,620                                                                                                    | (9,064)                                                                                                  |
| Mineral property costs                          | 3,747                                                                                                     | –                                                                                                  | –                                                                                                  |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
| Total Operating Expenses                        | 720,543                                                                                                   | 185,032                                                                                                  | 175,944                                                                                                  |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
| Loss from Operations                            | (720,543)                                                                                                 | (185,032)                                                                                                | (175,944)                                                                                                |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
| Other Income (Expense)                          |                                                                                                      |                                                                                                     |                                                                                                     |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
| Accretion of discount on convertible debentures | (228,503)                                                                                                 | (10,627)                                                                                                 | (169,617)                                                                                                |
| Interest income                                 | 4,022                                                                                                     | –                                                                                                  | –                                                                                                  |
| Interest on convertible debentures              | (101,825)                                                                                                 | (46,811)                                                                                                 | (42,766)                                                                                                 |
| Interest on promissory notes                    | (46,286)                                                                                                  | (22,226)                                                                                                 | (12,685)                                                                                                 |
| Interest on related party loans                 | (8,500)                                                                                                   | –                                                                                                  | (1,793)                                                                                                  |
| Gain on settlement of debt                      | 5,890                                                                                                     | 5,890                                                                                                    | –                                                                                                  |
| Loss on disposal of equipment                   | (2,075)                                                                                                   | –                                                                                                  | –                                                                                                  |
| Loss on write down of note receivable           | (86,797)                                                                                                  | –                                                                                                  | –                                                                                                  |
| Loss on write down of oil and gas deposit       | (365,000)                                                                                                 | –                                                                                                  | (115,000)                                                                                                |
| Provision for loan receivable                   | (93,160)                                                                                                  | (93,160)                                                                                                 |                                                                                                     |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
| Total Other Income (Expense)                    | (922,234)                                                                                                 | (166,934)                                                                                                | (341,861)                                                                                                |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
| Net Loss                                        | $ (1,642,777)                                                                                             | $ (351,966)                                                                                              | (517,805)                                                                                                |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
| Net Loss Per Share – Basic and Diluted    |                                                                                                      | $       (0.01)                                                             | $        (0.02)                                                       |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
|                                            |                                                                                                      |                                                                                                     |                                                                                                     |
| Weighted Average Shares Outstanding             |                                                                                                      | 24,293,334                                                                                               | 24,293,334                                                                                               |

 

 

 

 

 

 

 

 

 

 

(The accompanying notes are an integral part of these financial statements)

 

 

25

 

----

Texada Ventures Inc.

(An Exploration Stage Company)

Statements of Cash Flows

(Expressed in US dollars)

 

|                                                                        | Accumulated from

October 17, 2001

(Date of Inception)

to November 30,

2009                      | For the 

Year

Ended

November 30,

2009                                                     | For the

Year

Ended 

November 30,

2008                       |
|-----------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|-----------------------------------------------------------------|
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Operating Activities                                                        |                                                                                                |                                                                                          |                                                            |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Net loss                                                                    | $ (1,642,777)                                                                                       | $ (351,966)                                                                                   | $ (517,805)                                                     |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Adjustments to reconcile net loss to net cash used in operating activities: |                                                                                                |                                                                                          |                                                            |
| Accretion of convertible debt discount                                      | 228,503                                                                                             | 10,627                                                                                        | 169,617                                                         |
| Amortization                                                                | 798                                                                                                 | –                                                                                       | –                                                         |
| Gain on settlement of debt                                                  | (5,890)                                                                                             | (5,890)                                                                                       | –                                                         |
| Loss on disposal of equipment                                               | 2,075                                                                                               | –                                                                                       | –                                                         |
| Loss on write down of note receivable                                       | 86,797                                                                                              | –                                                                                       | –                                                         |
| Provision for loan receivable                                               | 93,160                                                                                              | 93,160                                                                                        | –                                                         |
| Write-off of oil and gas deposit                                            | 365,000                                                                                             | –                                                                                       | 115,000                                                         |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Changes in operating assets and liabilities:                                |                                                                                                |                                                                                          |                                                            |
| Note receivable                                                             | (9,876)                                                                                             | (9,876)                                                                                       | –                                                         |
| Prepaid expenses                                                            | –                                                                                             | 5,120                                                                                         | (4,968)                                                         |
| Accounts payable and accrued liabilities                                    | 265,901                                                                                             | 113,690                                                                                       | 68,754                                                          |
| Due to related parties                                                      | 76,279                                                                                              | 69,199                                                                                        | 373                                                             |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Net Cash Used in Operating Activities                                       | (540,030)                                                                                           | (75,936)                                                                                      | (169,029)                                                       |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Investing Activities                                                        |                                                                                                |                                                                                          |                                                            |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Acquisition of oil and gas interests                                        | (365,000)                                                                                           | –                                                                                       | (5,000)                                                         |
| Advance of note receivable                                                  | (170,081)                                                                                           | –                                                                                       | (83,284)                                                        |
| Purchase of equipment                                                       | (2,873)                                                                                             | –                                                                                       | –                                                         |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Net Cash Used In Investing Activities                                       | (537,954)                                                                                           | –                                                                                       | (88,284)                                                        |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Financing Activities                                                        |                                                                                                |                                                                                          |                                                            |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Advances from related party loan                                            | 50,000                                                                                              | –                                                                                       | –                                                         |
| Repayment of related party loan                                             | (50,000)                                                                                            | –                                                                                       | (50,000)                                                        |
| Proceeds from convertible debentures                                        | 585,000                                                                                             | –                                                                                       | 150,000                                                         |
| Proceeds from promissory notes payable                                      | 365,000                                                                                             | 75,000                                                                                        | 140,000                                                         |
| Proceeds from issuance of common shares                                     | 130,400                                                                                             | –                                                                                       | –                                                         |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Net Cash Provided by Financing Activities                                   | 1,080,400                                                                                           | 75,000                                                                                        | 240,000                                                         |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Increase (Decrease) in Cash                                                 | 2,416                                                                                               | (936)                                                                                         | (17,313)                                                        |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Cash - Beginning of Period                                                  | –                                                                                             | 3,352                                                                                         | 20,665                                                          |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Cash - End of Period                                                        | $         2,416                                             | $         2,416                                       | $ 3,352                                                         |
|                                                                        |                                                                                                |                                                                                          |                                                            |
| Supplemental Disclosures                                                    |                                                                                                |                                                                                          |                                                            |
| Interest paid                                                               | $         8,500                                             | $               – | $   8,500                                             |
| Income taxes paid                                                           | $                – | $               – | $          – |
|                                                                        |                                                                                                |                                                                                          |                                                            |

 

 

 

 

 

(The accompanying notes are an integral part of these financial statements)

 

 

26

 

----

Texada Ventures Inc.

(An Exploration Stage Company)

Statement of Stockholders’ Deficit

From October 17, 2001 (Date of Inception) to November 30, 2009

(Expressed in US dollars)

 

 

|  

                                          |          | Deficit     |       |
|--------------------------------------------------------|---------------|-------------|------------|
|                                                   | Common Shares | Accumulated |       |
|                                                   |          |        | Additional | During the |   |
|                                                   | Common        | Par         | Paid-in    | Exploration |   |
|                                                   | Shares        | Value       | Capital    | Stage | Total |
|                                                   | #             | $           | $          | $ | $ |
|                                                   |          |        |       |   |   |
| Balance, October 17, 2001 (Date of inception)          | –       | –     | –    | – | – |
|                                                   |          |        |       |   |   |
| Shares issued for cash at $0.0005                      | 12,000,000    | 12,000      | (6,000)    | – | 6,000 |
| Net loss for the period                                | –       | –     | –    | (4,254) | (4,254) |
|                                                   |          |        |       |   |   |
| Balance, November 30, 2001                             | 12,000,000    | 12,000      | (6,000)    | (4,254) | 1,746 |
|                                                   |          |        |       |   |   |
| Shares issued for cash at $0.01                        | 12,000,000    | 12,000      | 108,000    | – | 120,000 |
| Net loss for the year                                  | –       | –     | –    | (21,106) | (21,106) |
|                                                   |          |        |       |   |   |
| Balance, November 30, 2002                             | 24,000,000    | 24,000      | 102,000    | (25,360) | 100,640 |
|                                                   |          |        |       |   |   |
| Net loss for the year                                  | –       | –     | –    | (42,929) | (42,929) |
|                                                   |          |        |       |   |   |
| Balance, November 30, 2003                             | 24,000,000    | 24,000      | 102,000    | (68,289) | 57,711 |
|                                                   |          |        |       |   |   |
| Net loss for the year                                  | –       | –     | –    | (19,057) | (19,057) |
|                                                   |          |        |       |   |   |
| Balance, November 30, 2004                             | 24,000,000    | 24,000      | 102,000    | (87,346) | 38,654 |
|                                                   |          |        |       |   |   |
| Shares issued for cash at $0.015                       | 293,334       | 293         | 4,107      | – | 4,400 |
| Net loss for the year                                  | –       | –     | –    | (26,580) | (26,580) |
|                                                   |          |        |       |   |   |
| Balance, November 30, 2005                             | 24,293,334    | 24,293      | 106,107    | (113,926) | 16,474 |
|                                                   |          |        |       |   |   |
| Net loss for the year                                  | –       | –     | –    | (85,501) | (85,501) |
|                                                   |          |        |       |   |   |
| Balance, November 30, 2006                             | 24,293,334    | 24,293      | 106,107    | (199,427) | (69,027) |
|                                                   |          |        |       |   |   |
| Beneficial conversion feature of convertible debenture | –       | –     | 174,000    | – | 174,000 |
| Net loss for the year                                  | –       | –     | –    | (573,579) | (573,579) |
| Balance, November 30, 2007                             | 24,293,334    | 24,293      | 280,107    | (773,006) | (468,606) |
| Beneficial conversion feature of convertible debenture | –       | –     | 60,000     | – | 60,000 |
| Net loss for the year                                  | –       | –     | –    | (517,805) | (517,805) |
|                                                   |          |        |       |   |   |
| Balance, November 30, 2008                             | 24,293,334    | 24,293      | 340,107    | (1,290,811) | (926,411) |
| Net loss for the year                                  | –       | –     | –    | (351,966) | (351,966) |
| Balance, November 30, 2009                             | 24,293,334    | 24,293      | 340,107    | (1,642,777) | (1,278,377) |

 

 

 

 

(The accompanying notes are an integral part of these financial statements)

 

 

27

 

----

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

November 30, 2009

(Expressed in US dollars)

 

| 1. | Nature of Operations and Continuance of Business |
|----|--------------------------------------------------|

Texada Ventures Inc. (the “Company”) was incorporated in the State of Nevada on October 17, 2001. The Company is an Exploration Stage Company, as defined by ASC 915, *Development Stage Entities*. The Company’s principal business is the acquisition and exploration of oil and gas and mineral resources. The Company has        not presently determined whether its properties contain mineral or petroleum reserves that are economically recoverable. 

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The        continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at November 30, 2009, the Company has a working capital deficit of $698,874 and has accumulated losses of $1,642,777 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going        concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. 

As at November 30, 2009, the Company had cash of $2,416 on hand, and for the next twelve months, management anticipates that the minimum cash requirements to fund its proposed exploration program and continued operations will be $500,000. Accordingly, the Company does not have sufficient funds to meet planned expenditures over the next twelve months, and will need to seek additional        debt or equity financing to meet its planned expenditures. There is no assurance that the Company will be able to raise sufficient cash to fund its future exploration programs and operational expenditures. 

 

| 2. | Summary of Significant Accounting Policies |
|----|--------------------------------------------|

|   | a) | Basis of Presentation |
|--------|----|-----------------------|

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company’s fiscal year-end is November 30.

|   | b) | Reclassifications |
|--------|----|-------------------|

Certain reclassifications have been made to prior period financial statements to conform to the current period presentation.

|   | c) | Use of Estimates |
|--------|----|------------------|

The preparation of financial statements in conformity with US generally accepted accounting principles 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.        Actual results could differ from those estimates. The Company regularly evaluates estimates and assumptions related to its investment in oil and gas properties, valuation of note receivable, stock-based compensation, and deferred income tax asset valuations. 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.

|   | d) | Earnings (Loss) Per Share |
|--------|----|---------------------------|

The Company computes earnings (loss) per share in accordance with ASC 260, *Earnings per Share.*ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted        average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares        if their effect is anti dilutive. As at November 30, 2009, the Company has 1,098,922 (November 30, 2008 – 936,000) split-adjusted dilutive securities outstanding.

 

 

 

28

 

----

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

November 30, 2009

(Expressed in US dollars)

 

| 2. | Summary of Significant Accounting Policies (continued) |
|----|--------------------------------------------------------|

|   | e) | Mineral Property Costs |
|--------|----|------------------------|

The Company is engaged in the acquisition, exploration and development of mineral properties. Mineral property acquisition costs are capitalized in accordance with ASC 360, Property, Plant, and Equipment, when management has determined that probable future benefits consisting of a contribution to future cash inflows have been identified and adequate financial resources are available or        are expected to be available as required to meet the terms of property acquisition and budgeted exploration and development expenditures. Mineral property acquisition costs are expensed as incurred if the criteria for capitalization are not met. In the event that a mineral property is acquired through the issuance of the Company’s shares, the mineral property will be recorded at the fair value of the respective property or the fair value of common shares, whichever is more readily        determinable. 

When mineral properties are acquired under option agreements with future acquisition payments to be made at the sole discretion of the Company, those future payments, whether in cash or shares, are recorded only when the Company has made or is obliged to make the payment or issue the shares. When it has been determined that a mineral property can be economically developed as a result        of establishing proven and probable reserves and feasibility, the costs incurred to develop such property are capitalized.

|   | f) | Stock-based Compensation |
|--------|----|--------------------------|

The Company records stock-based compensation in accordance with ASC 718, *Compensation - Stock Based Compensation*, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the        fair value of the equity instrument issued, whichever is more reliably measurable.

|   | g) | Long-lived Assets |
|--------|----|-------------------|

In accordance with ASC 360, *Property, Plant and Equipment*, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the        market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the        end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

|   | h) | Comprehensive Loss |
|--------|----|--------------------|

ASC 220, *Comprehensive Income,*establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at November 30, 2009 and 2008, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial        statements.

|   | i) | Cash and Cash Equivalents |
|--------|----|---------------------------|

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

|   | j) | Financial Instruments |
|--------|----|-----------------------|

ASC 820, *Fair Value Measurements*requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial        instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

*Level 1*

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

 

29

 

----

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

November 30, 2009

(Expressed in US dollars)

 

| 2. | Summary of Significant Accounting Policies (continued) |
|----|--------------------------------------------------------|

*Level 2*

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which        significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

*Level 3*

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Our financial instruments consist principally of cash, note receivable, accounts payable, amounts due to related parties, promissory notes payable, and convertible debentures. Pursuant to ASC 820, the fair value of our cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the        recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

The Company has operations in Canada, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency        risk.

|   | k) | Income Taxes |
|--------|----|--------------|

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, *Income Taxes*. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets        and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

|   | l) | Foreign Currency Translation |
|--------|----|------------------------------|

The Company’s functional and reporting currency is the United States dollar. Occasional transactions may occur in a foreign currency and the Company follows ASC 830, *Foreign Currency Translation.*Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance        sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. 

|   | m) | Asset Retirement Obligations |
|--------|----|------------------------------|

The Company has adopted ASC 440, *Asset Retirement and Environmental Obligations,*which requires that an asset retirement obligation (“ARO”) associated with the retirement of a tangible long-lived asset be recognized as a liability in the period which it is incurred and becomes determinable, with an offsetting increase in        the carrying amount of the associated asset. 

The cost of the tangible asset, including the initially recognized ARO, is depleted, such that the cost of the ARO is recognized over the useful life of the asset. The ARO is recorded at fair value, and accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. The fair value of the ARO is measured using expected future cash        flow, discounted at the Company’s credit-adjusted risk-free interest rate. To date, no significant asset retirement obligation exists due to the early stage of exploration. Accordingly, no liability has been recorded.

|   | n) | Adopted Accounting Pronouncements |
|--------|----|-----------------------------------|

In May 2009, FASB issued ASC 855, *Subsequent Events*, which establishes general standards of for the evaluation, recognition and disclosure of events and transactions that occur after the balance sheet date. Although there is new terminology, the standard is based on the same principles as those that currently exist in the auditing        standards. The standard, which includes a new required disclosure of the date through which an entity has evaluated subsequent events, is effective for interim or annual periods ending after June 15, 2009. The adoption of ASC 855 did not have a material effect on the Company’s financial statements. Refer to Note 13.

 

 

30

 

----

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

November 30, 2009

(Expressed in US dollars)

 

| 2. | Summary of Significant Accounting Policies (continued) |
|----|--------------------------------------------------------|

|   | n) | Adopted Accounting Pronouncements |
|--------|----|-----------------------------------|

In June 2009, the FASB issued guidance now codified as ASC 105, *Generally Accepted Accounting Principles*as the single source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP, aside from those issued by the        SEC. ASC 105 does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. The adoption of ASC 105 did not have a material impact on the Company’s financial statements, but did eliminate all references to pre-codification standards

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

| 3. | Mineral Properties |
|----|--------------------|

 

Pursuant to an agreement dated November 2, 2001, the Company acquired a 100% interest in eight mineral claims located in the Whitehorse Mining District, Yukon Territory, Canada known as the Peek claims for $2,500. The property is being held in trust for the Company by a third party.

 

| 4. | Note Receivable |
|----|-----------------|

 

The Company provided a note receivable of $93,160 to the Royalty Exploration pursuant to the Term Sheet described in Note 11(a). The note receivable is due upon the close of the REX acquisition or, if the REX acquisition is not consummated, in 12 equal monthly instalments after the termination of the Term Sheet. The terms of repayment were modified by the Letter Agreement as described        in Note 11(a). The receivable is unsecured and does not accrue interest. As there is uncertainty as to the collectability of the loan at November 30, 2009, a provision has been recognized for the entire amount.

 

| 5. | Accrued Liabilities |
|----|---------------------|

 

Accrued liabilities consist of accrued interest of $148,113 (November 30, 2008 - $79,075) on the convertible debentures and promissory notes payable and accrued liabilities for services of $nil (November 30, 2008 - $840). 

 

| 6. | Related Party Transactions |
|----|----------------------------|

|   | a) | On September 12, 2008, Company entered into an engagement letter with the Chief Executive Officer (“CEO”) of the Company as described in Note 11(b). Pursuant to the agreement the Company incurred $14,217 (2008 - $4,555) in consulting fees to a company owned and controlled by the CEO of the Company during the year ended November 30, 2009. A                        $10,000 retainer was paid to the company owned and controlled by the CEO. As at November 30, 2009, $13,059 (November 30, 2008 - $3,080) in consulting fees are owed to the CEO. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | During the year ended November 30, 2009, the Company incurred $48,000 (2008 - $48,000) in consulting fees to the former President of the Company. As at November 30, 2009, $44,000 (November 30, 2008 - $4,000) in consulting fees and $13,330 (November 30, 2008 - $nil) of expenditures incurred on behalf of the Company are owed to the former President of the                        Company. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | As at November 30, 2009, accounts payable includes $3,125 (November 30, 2008 - $3,125) owing to a former director for expenses incurred on the Company’s behalf. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | The Company neither owns nor leases any real or personal property. The Chief Financial Officer provides office services without charge. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

| 7. | Promissory Notes Payable |
|----|--------------------------|

|   | a) | On March 25, 2009, the Company entered into a promissory note with a third party for $25,000, which is unsecured, due on demand and bears interest at 5% per annum. Interest and principal are due on demand. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | On December 19, 2008, the Company entered into a promissory note with a third party for $50,000, which is unsecured, due on demand and bears interest at 5% per annum. Interest and principal are due on demand. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | On October 27, 2008, the Company entered into a promissory note with a third party for $140,000, which is unsecured, due on demand and bears interest at 5% per annum. Interest and principal are due on demand. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

31

 

----

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

November 30, 2009

(Expressed in US dollars)

 

| 7. | Promissory Notes Payable (continued) |
|----|--------------------------------------|

|   | d) | On February 15, 2007, the Company entered into a promissory note with a third party for $50,000, which is unsecured, due on demand and bears interest at 8% per annum. Interest is payable annually due on or before February 14 of each year. Interest due on February 14, 2009 and 2008 is recorded as accrued interest as of November 30, 2009. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | e) | On November 20, 2006, the Company entered into a promissory note with a third party for $100,000, which is unsecured, due on demand and bears interest at 8% per annum. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

| 8. | Convertible Debentures |
|----|------------------------|

|   | a) | On April 10, 2007, the Company issued a 6% convertible debenture with a principal amount of $200,000 which was due and payable on December 31, 2008. Interest is payable semi-annually beginning on September 30, 2007, and thereafter on March 31st and September 30th of each year, payable at the option of the Company in cash or shares. As at November 30,                        2009, the Company had not made any interest payments and pursuant to the debenture has accrued default interest of 8% since September 30, 2007. The principal and accrued interest on the debenture may be converted at any time into shares of the Company’s common stock at a price of $0.625 per share, at the option of the holder. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

In accordance with ASC 470-20, *Debt with Conversion and Other Options,*the Company recognized the intrinsic value of the embedded beneficial conversion feature of $80,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible debenture. The Company records accretion        expense over the term of the convertible debenture up to its face value of $200,000. On December 18, 2008, the Company entered into an amendment to the convertible debenture to extend the maturity date of the note from December 31, 2008 to December 31, 2010. As at December 18, 2008, $78,352 had been accreted increasing the carrying value of the convertible debenture to $198,352. As at December 18, 2008, the Company had accrued interest of $25,151.

Pursuant to ASC 470-60, *Troubled Debt Restructurings by Debtors,*the total future cash flows of the restructured debt was compared with the carrying value of the original debt. As the total future cash flows of the restructured debt were greater than the carrying value at the date of amendment, the carrying value of the original debt        at the date of modification was not adjusted. Pursuant to ASC 470-60, a new effective interest rate was computed and used to determine interest expense for the modified debenture. As at November 30, 2009, $78,515 has been accreted increasing the carrying value of the convertible debenture to $198,516. As at November 30, 2009, the Company has accrued interest of $40,362.

|   | b) | On May 2, 2007, the Company issued a 6% convertible debenture with a principal amount of $125,000 which was due and payable on December 31, 2008. Interest is payable semi-annually beginning on September 30, 2007, and thereafter on March 31st and September 30th of each year, payable at the option of the Company in cash or shares. As at November 30, 2009,                        the Company had not made any interest payments and pursuant to the debenture has accrued default interest of 8% since September 30, 2007. The principal and accrued interest on the debenture may be converted at any time into shares of the Company’s common stock at a price of $0.625 per share, at the option of the holder. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

In accordance with ASC 470-20, *Debt with Conversion and Other Options,*the Company recognized the intrinsic value of the embedded beneficial conversion feature of $50,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible debentures. The Company records        accretion expense over the term of the convertible debenture up to its face value of $125,000. On December 18, 2008, the Company entered into an amendment to the convertible debenture to extend the maturity date of the note from December 31, 2008 to December 31, 2010. As at December 18, 2008, $48,910 had been accreted increasing the carrying value of the convertible debenture to $123,933. As at December 18, 2008, the Company had accrued interest of $15,267. 

Pursuant to ASC 470-60, *Troubled Debt Restructurings by Debtors,*the total future cash flows of the restructured debt was compared with the carrying value of the original debt. As the total future cash flows of the restructured debt were greater than the carrying value at the date of amendment, the carrying value of the original debt        at the date of restructuring was not adjusted. Pursuant to ASC 470-60, a new effective interest rate was computed and used to determine interest expense for the modified debenture. As at November 30, 2009, $49,101 has been accreted increasing the carrying value of the convertible debenture to $124,050. As at November 30, 2009, the Company has accrued interest of $24,774.

 

 

32

 

----

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

November 30, 2009

(Expressed in US dollars)

 

| 8. | Convertible Debentures (continued) |
|----|------------------------------------|

|   | c) | On November 19, 2007, the Company issued a 6% convertible debenture with a principal amount of $110,000 which was due and payable on December 31, 2008. Interest is payable semi-annually beginning on May 31, 2008, and thereafter on May 31st and November 30th of each year, payable at the option of the Company in cash or shares. As at November 30, 2009, the                        Company had not made any interest payments and pursuant to the debenture has accrued default interest of 8% since May 31, 2008. The principal and accrued interest on the debenture may be converted at any time into shares of the Company’s common stock at a price of $0.625 per share, at the option of the holder. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

In accordance with ASC 470-20, *Debt with Conversion and Other Options,*the Company recognized the intrinsic value of the embedded beneficial conversion feature of $44,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible debenture. The Company records accretion        expense over the term of the convertible debenture up to its face value of $110,000. On December 18, 2008, the Company entered into an amendment to the convertible debenture to extend the maturity date of the note from December 31, 2008 to December 31, 2010. As at December 18, 2008, $42,598 had been accreted increasing the carrying value of the convertible debenture to $108,598. As at December 18, 2008, the Company had accrued interest of $8,333. 

Pursuant to ASC 470-60, *Troubled Debt Restructurings by Debtors,*the total future cash flows of the restructured debt was compared with the carrying value of the original debt. As the total future cash flows of the restructured debt were greater than the carrying value at the date of amendment, the carrying value of the original debt        was not adjusted. Pursuant to ASC 470-60, a new effective interest rate was computed and used to determine interest expense for the modified debenture. As at November 30, 2009, $42,885 has been accreted increasing the carrying value of the convertible debenture to $108,885. As at November 30, 2009, the Company has accrued interest of $16,699.

|   | d) | On March 11, 2008, the Company issued a 6% convertible debenture with a principal amount of $150,000 which was due and payable on December 31, 2008. Interest is payable semi-annually beginning on May 31, 2008, and thereafter on May 31st and November 30th of each year, payable at the option of the Company in cash or shares. As at November 30, 2009, the                        Company had not made any interest payments and pursuant to the debenture has accrued default interest of 8% since May 31, 2008. The principal and accrued interest on the debenture may be converted at any time into shares of the Company’s common stock at a price of $0.625 per share, at the option of the holder. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

In accordance with ASC 470-20, *Debt with Conversion and Other Options,*the Company recognized the intrinsic value of the embedded beneficial conversion feature of $60,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible debenture. The Company records accretion        expense over the term of the convertible debenture up to its face value of $150,000. On December 18, 2008, the Company entered into an amendment to the convertible debenture to extend the maturity date of the note from December 31, 2008 to December 31, 2010. As at December 18, 2008, $57,356 had been accreted increasing the carrying value of the convertible debenture to $147,356. As at December 18, 2008, the Company had accrued interest of $8,584. 

Pursuant to ASC 470-60, *Troubled Debt Restructurings by Debtors,*the total future cash flows of the restructured debt was compared with the carrying value of the original debt. As the total future cash flows of the restructured debt were greater than the carrying value at the date of amendment, the carrying value of the original debt        was not adjusted. Pursuant to ASC 470-60, a new effective interest rate was computed and used to determine interest expense for the modified debenture. As at November 30, 2009, $58,052 has been accreted increasing the carrying value of the convertible debenture to $148,052. As at November 30, 2009, the Company has accrued interest of $19,992.

 

| 9. | Common Stock |
|----|--------------|

 

On March 30, 2009, the Company effected a 2.5 to 1 reverse stock split of the authorized, issued and outstanding common stock. As a result, the authorized share capital decreased from 500,000,000 shares of common stock with a par value of $0.001 per share to 200,000,000 shares of common stock with a par value of $0.001 per share. The issued and outstanding shares decreased from        60,733,335 shares of common stock to 24,293,334 shares of common stock. All share amounts have been retroactively adjusted for all periods presented. 

 

 

33

 

----

Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

November 30, 2009

(Expressed in US dollars)

 

| 10. | Segment Disclosures |
|-----|---------------------|

 

The Company operates in one operating segment, which is the acquisition and exploration of oil and gas resources and mineral resources. The Chief Executive Officer is the Company’s Chief Operating Decision Maker (“CODM”) as defined by ASC 280, *Segment Report.*The CODM allocates resources and assesses the performance        of the Company based on the results of operations.

 

| 11. | Commitments |
|-----|-------------|

|   | a) | On September 16, 2008, the Company signed a term sheet (The REX Term Sheet) that set forth the principal terms upon which the Company would enter into a definitive agreement (the “Definitive Agreement”) to acquire Royalty Exploration (the “REX Acquisition”) and commence a concurrent financing of $40,000,000. On November 12, 2008                        and March 9, 2009, the REX Term Sheet was amended to extend the closing date of the transaction and to reduce the concurrent financing to between $10,000,000 and $40,000,000. The REX Term Sheet was non-binding, except for customary binding provisions. The REX Acquisition has not been consummated and the REX Term Sheet has expired on May 31, 2009. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | On August 28, 2009, the Company signed a Letter Agreement dated August 25, 2009, among the Company the transaction described in the Amended and Restated Term Sheet dated March 9, 2009, with Royalty Exploration, LLC and its wholly-owned subsidiary, Royalty Exploration Acquisition Co., LLC (collectively, “REX”). That transaction has not been                        consummated and the Term Sheet has expired. The Letter Agreement identifies the following conditions under which expenses or a breakup fee would be reimbursed or paid by REX to the Company should REX be successful in consummating the anticipated transaction without the involvement of Texada: |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a. | REX agrees to pay the Company $168,971 in cash as full and complete satisfaction of the obligations under the Term Sheet, including the Bridge Loan and any expenses incurred in connection with the transactions contemplated in the Term Sheet. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | REX agrees to pay the Company $40,000 in cash as a break fee if REX does not accept a commercially reasonable financing transaction proposed by the Company. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | On September 12, 2008, the Company entered into an engagement letter with the Company’s Chief Executive Officer to provide management services in consideration for fees based upon time expended, with a designated portion payable in cash and balance payable in the Company’s common stock at a deemed price of $2.50 per split-adjusted share.                        Refer to Note 6(a). |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | On June 24, 2009, the Company and REX entered into an agreement with an agent for capital funding services for a period from June 24, 2009 to December 24, 2009. Pursuant to the agreement, the Company agreed to pay a success fee of 8%, inclusive of all fees, in cash of the amount of capital raised. The Company also agreed to pay reasonable expenses                        incurred in relation to the financial services provided. The agent did not provide any funding during the service period and the agreement expired on December 24, 2009. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

12. Income Taxes

 

The Company accounts for income taxes under ASC 740, *Income Taxes*. Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to        reverse. Income tax expense differs from the amount that would result from applying the U.S federal and state income tax rates to earnings before income taxes. The Company has a net operating loss carryforward of approximately $1,318,600 available to offset taxable income in future years which expire through fiscal 2029. Pursuant to ASC 740, the potential benefit of the net operating loss carryforward has not been recognized in the financial statements since the Company cannot be        assured that it is more likely than not that such benefit will be utilized in future years.

 

The Company is subject to United States federal and state income taxes at an approximate rate of 35%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:

 

|                                  |   | November 30,

2009

$                                                                                                                           |   | November 30,

2008

$                                                                                            |
|---------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------|
|                                  |   |                                                                                                                                            |   |                                                                                                             |
| Income tax recovery at statutory rate |   |      $             123,200                            |   |     $          181,200                               |
|                                  |   |                                                                                                                                            |   |                                                                                                             |
| Accretion on convertible debentures   |   | (3,700)                                                                                                                                         |   | (59,400)                                                                                                         |
|                                  |   |                                                                                                                                            |   |                                                                                                             |
| Provision for loan receivable         |   | (32,600)                                                                                                                                        |   |                                                                                                             |
|                                  |   |                                                                                                                                            |   |                                                                                                             |
| Valuation allowance change            |   | (86,900)                                                                                                                                        |   | (121,800)                                                                                                        |
|                                  |   |                                                                                                                                            |   |                                                                                                             |
| Provision for income taxes            |   |     $                     – |   |   $                 – |

 

34

 

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Texada Ventures Inc.

(An Exploration Stage Company)

Notes to the Financial Statements

November 30, 2009

(Expressed in US dollars)

 

12. Income Taxes (continued)

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred income taxes arise from temporary differences in the recognition of income and expenses for financial reporting and tax purposes. The significant components of deferred        income tax assets and liabilities at November 30, 2009 and 2008 are as follows:

 

|                            |   | November 30,

2009

$ |   | November 30,

2008

$ |
|---------------------------------|--------|-----------------------|--------|-----------------------|
|                            |   |                  |   |                  |
| Net operating loss carryforward | $      | 461,500               | $      | 374,600               |
|                            |   |                  |   |                  |
| Valuation allowance             |   | (461,500)             |   | (374,600)             |
|                            |   |                  |   |                  |
| Net deferred income tax asset   | $      | –               | $      | –               |

The Company has recognized a valuation allowance for the deferred income tax asset since the Company cannot be assured that it is more likely than not that such benefit will be utilized in future years. The valuation allowance is reviewed annually. When circumstances change and which cause a change in management’s judgment about the realizability of deferred income tax assets,        the impact of the change on the valuation allowance is generally reflected in current income.

 

| 13. | Subsequent Event |
|-----|------------------|

In accordance with ASC 855, *Subsequent Events*, the Company has evaluated subsequent events through the date of issuance of the audited consolidated financial statements. During this period, the Company did not have any material recognizable subsequent events, except as disclosed below. 

|   | (a) | On February 15, 2010, the Company signed a non-binding term sheet (the “Term Sheet”) with Diamond Industry Associates Limited (“DIA”) that set forth the principal terms upon which the Company would enter into a definitive agreement to acquire all of the issued and outstanding equity interest of DIA, or alternatively all of the                        assets, liabilities and contractual obligations of DIA by issuing shares of the Company’s common stock, and to commence a concurrent financing of at least $3,000,000. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

The Term Sheet may be terminated by either party if the conditions set forth in the Term Sheet have not been satisfied on or before May 30, 2010. The Term Sheet may be terminated by DIA if the Company has not provided to DIA satisfactory evidence of financial commitments to raise at least $3,000,000 before May 30, 2010.

|   | (b) | On February 15, 2010, the Company entered into a promissory note with a third party for $27,500, which is unsecured, non interest bearing and due on demand. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

 

 

 

35

 

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**ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE**

 

There have been no disagreements between the Company and its accountants regarding any matter or accounting principles or practice or financial statement disclosures. The Company changed its accountants in March 2007 as disclosed in Form 8-K filed with the SEC on March 1, 2007.

 

**ITEM 8A(T). CONTROLS AND PROCEDURES**

 

**Disclosure Controls and Procedures**

 

At the end of the period covered by this report, an evaluation was carried out under the supervision of, and with the participation of, the Company’s management, including the Chief Executive Officer / Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) of        the Securities and Exchange Act of 1934, as amended). Based on that evaluation, the Chief Executive Officer / Chief Financial Officer has concluded that as of the end of the period covered by this report, due to material weaknesses in internal controls over financial reporting described below, the Company’s disclosure controls and procedures were not adequately designed and were not effective in ensuring that information required to be disclosed by the Company in its reports that        it files or submits to the SEC under the Exchange Act, is recorded, processed, summarized and reported within the time period specified in applicable rules and forms.

 

Our Chief Executive Officer / Chief Financial Officer has also determined that, due to material weaknesses in internal controls over financial reporting described below, the disclosure controls and procedures are not effective to ensure that material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including the        Company’s Chief Executive / Chief Financial Officer, to allow for accurate required disclosure to be made on a timely basis.

 

Through the year ended November 30, 2009, and to the present, we have engaged legal counsel who is experienced and qualified to practice before the Security and Exchange Commission, who actively reviewed company events and major transactions to advise management on appropriate disclosure of those events and transactions. Additionally, as at September 2008, the Company entered into an agreement with Ted R.        Sharp, CPA, an experienced CFO of publicly-traded companies, to serve as CEO and CFO of the Company, Company filings with the SEC are reviewed by the Board of Directors, our management, and our SEC legal firm for proper and complete disclosure. Management believes that appropriate improvements in control over financial reporting in the future will improve the results of its evaluation of disclosure controls. 

 

**Management’s Report on Internal Control over Financial Reporting**

 

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of its Chief Executive Officer / Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the        Company’s financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America. Management evaluates the effectiveness of the Company’s internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – “Integrated Framework.”  Management, under the supervision and with the        participation of the Company’s Chief Executive Officer / Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of November 30, 2009 and concluded that it is ineffective in assuring that the financial reports of the Company are free from material errors or misstatements.

 

Management has identified three areas that contain material weaknesses and is evaluating appropriate action to remedy and remove those weaknesses in its internal controls over financial reporting:

 

|   | **•** | Lack of segregation of duties of functions that contribute to the financial reporting processes. Due to the size of the Company and the associated limitations of staffing, segregation of duties issues exist in the |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

36

 

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assignment of conflicting tasks. Management has segregated critical tasks related to cash to the extent possible; however, these conflicts may not be avoidable without adding additional manpower, which is not economically possible at this time. The Company is evaluating application of additional detective controls to mitigate this weakness. 

 

|   | **•** | General journal entries made during the audit. While not large in dollar amount, these audit entries were material to the Company’s financial statements due to the very small size of the Company, and indicate that additional controls are needed to ascertain that all material transactions are posted to the Company’s financial records on a                        complete and timely basis. Management is evaluating application of additional detective controls in the financial reporting process. |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | **•** | Lack of an independent board of directors and an audit committee, including an independent financial expert. With the consummation of the DIA acquisition, the Company anticipates expanding the board of directors to include a financial expert and independent directors. The current board is composed of two members who are not independent. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only        management’s report in this annual report.

 

**Changes in internal controls over financial reporting**

 

During the period covered by this report, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. 

 

**ITEM 8B. OTHER INFORMATION**

 

None.

 

 

 

37

 

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**PART III**

 

**ITEM 9. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**

 

The following table sets forth certain information with respect to our current directors, executive officers and key employees. The term for each director expires at our next annual meeting or until his or her successor is appointed. The ages of the directors, executive officers and key employees are shown as of November 30, 2009. 

|   | **Name, Current Office** | **Principal Occupation** | **Director/Officer Since** | **Age**  |
|--------|--------------------------|--------------------------|----------------------------|---------------|

|   | Ted R. Sharp, CPA | Strategy Consultant | September 12, 2008 | 53 |
|--------|-------------------|---------------------|--------------------|----|

Chief Executive Officer 

Chief Financial Officer, 

President, Secretary,

|   | Treasurer and Director |
|--------|------------------------|

 

|   | Dr. John Veltheer, Director | Strategy Consultant | September 26, 2006 | 44 |
|--------|----------------------------------|---------------------|--------------------|----|

 

 

**Ted R. Sharp, Principal Executive Officer and Principal Financial Officer:**

 

We entered into a written Independent Contractor Agreement, effective September 12, 2008, with Sharp Executive Associates, Inc., and the owner of that firm, Ted R. Sharp CPA, for Mr. Sharp to act as a Management Consultant to serve as Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director and to provide through his extended staff and firm all services typical of a        Strategy Consultant and accounting department for a small company.

 

Since February 2006, Mr. Sharp serves as Chief Financial Officer under a part-time management contract for Chief Financial Officer of Goldrich Mining Company, a mineral exploration company (OTCBB:GRMC). From November 2006 to June 2009, he also served as Chief Financial Officer and Director under a part-time management contract for Commodore Applied Technologies, Inc., an environmental remediation        company (OTCBB:CXIA). In December 2002, Mr. Sharp founded Sharp Executive Associates, Inc., a consulting firm providing contract CFO services, Sarbanes-Oxley compliance services and other contract services to both privately-held and publicly-traded companies. From February 1989 through March 2003, Mr. Sharp served in executive management positions for Key Technology, Inc., a manufacturer of commercial goods (FINRAAQ: KTEC). Those positions included Corporate Controller,        Managing Director of European Operations and Chief Financial Officer. 

 

We have agreed to pay Sharp Executive Associates, Inc. contracted hourly rates ranging from $200 per hour to $25 per hour, with half of the fee accrued payable in common stock upon the close of the REX acquisition, for Mr. Sharp, our sole officer, and others on his staff in consideration of management consulting, accounting and other services provided to the Company. Mr. Sharp does not        receive any salary in his capacity as an officer or director of the Company. 

**Dr.** **John Veltheer**

 

On September 12, 2008, Dr. Veltheer resigned his positions as our Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer, to which he was appointed September 26, 2006. He remains on our Board of Directors. Dr. Veltheer has had experience at the executive level of a number of public and private companies over the past nine years, including both established businesses        and start-up ventures. From 1999 to 2000, Dr. Veltheer was president and director of SUMmedia.com Inc. (OTCCB:ISUM), a U.S. reporting company where, in addition to significant fundraising, he oversaw the running of one of the Internet’s first eCoupon portals. From 2002 to 2003, Dr. Veltheer was the president and a director of Rapidtron, Inc. (OTCBB:RPDT), a U.S. reporting company and a leading provider of Radio Frequency Smart access control and ticketing/membership        systems, where he was responsible for SEC compliance and corporate governance. From 2003 to 2005, Dr. Veltheer was vice-president, business development and later chief operating officer and director of House of Brussels Chocolates, Inc. (OTCBB:HBSL), 

 

 

38

 

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a U.S. reporting company whose primary business is gourmet chocolate wholesaling. From 2005 to September 2006, Dr. Veltheer was president and director of SES Solar Inc. (OTCBB:SESI), a U.S. reporting company, where he managed a business combination with a Swiss Solar Energy concern and associated fundraising. Dr. Veltheer remains a director of SES Solar Inc. Dr. Veltheer is currently the        chief executive officer, secretary, treasurer and a director of Vecten Corporation, a startup private equity fund. Dr. Veltheer continues to serve as the president and a director of Iridium Capital Inc., a private Canadian company that provides its clients with start-up consulting services. Dr. Veltheer received his B.Sc. Chemistry (Honours) from Queen’s University in 1988 and his Ph.D. (Chemistry) from the University of British Columbia in 1993.

 

Dr. John Veltheer provides management consulting to the Company on a contract basis. We have agreed to pay Dr. Veltheer $4,000 per month in consideration of management consulting provided to the Company. Dr. Veltheer does not receive any salary in his capacity as an officer or director of the Company. 

**Arrangements between Officers and Directors**

To our knowledge, there is no arrangement or understanding between any of our executive officers and any other person, including directors, pursuant to which the officer was selected to serve as an officer.

**Family Relationships**

None of our executive officers are related by blood, marriage, or adoption to any other director, executive officer, or other key employees. 

**Legal Proceedings**

We are not aware of any material legal proceedings to which any of our executive officers or any associate of any of our executive officers is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.

We are not aware of any of our executive officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses) or being subject to any of the items set forth under Item 401 of Regulation S-K.

**Significant Employees**

Neither Mr. Sharp nor Dr. Veltheer has formal training as a geologist or in the technical aspects of a mineral exploration company. Accordingly, we will have to rely on the technical services of others to advise us on the managerial aspects specifically associated with a mineral exploration company. We rely on our independent geological consultant, Mr. Timmins, to make recommendations        to us on work programs on our property, to hire appropriately skilled persons on a contract basis to complete work programs and to supervise, review, and report on such programs to us.

**Code of Ethics**

We have adopted a Code of Ethics applicable to our officers and directors which is a “code of ethics” as defined by applicable rules of the SEC. Our Code of Ethics was attached as an exhibit to our Annual Report filed on February 28, 2007. A copy of such Code of Ethics will be provided to any person without charge upon written request sent to the Company at its principal address.

 

**Committees of the Board of Directors**

We have no Audit, Compensation, Corporate Governance or Nominating Committee due to our small size. Our board of directors is responsible for developing our approach to corporate governance issues. 

 

 

39

 

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**Section 16(a) Beneficial Ownership Reporting Compliance**

Section 16(a) of the Securities and Exchange Act of 1934 requires any person who is our director or executive officer or who beneficially holds more than 10% of any class of our securities which have been registered with the Securities and Exchange Commission, to file reports of initial ownership and changes in ownership with the Securities and Exchange Commission. These persons are also required        under the regulations of the Securities and Exchange Commission to furnish us with copies of all Section 16(a) reports they file. 

To our knowledge, based solely on our review of the copies of the Section 16(a) reports furnished to us, all Section 16(a) filing requirements applicable to our directors, executive officers and holders of more than 10% of any class of our registered securities were timely complied with during the year ended November 30, 2009.

**Board Nominations**

 

There have been no changes to the procedures pursuant to which shareholders may nominate directors to the board of directors of the Company.

 

| **ITEM 10.** | **EXECUTIVE COMPENSATION** |
|--------------|----------------------------|

 

We have no fulltime employees, including our executive officers. Our business is currently very small and does not require the services of full-time persons to executive our corporate strategies. Engaging professional consultants under part-time contracts allows us to conserve our limited cash resources while applying appropriate resources to technical and executive tasks. Our executives have been engaged        and compensated as independent contractors to provide services similar to those provided by them to other companies. Additionally, the fees paid to the firm owned by our Chief Executive Officer / Chief Financial Officer, Ted R. Sharp, is at reduced rates from market rates, with a success fee to be paid in common stock upon the successful close of the REX acquisition. That contract also provides the ability to utilize other members of his consulting firm without entering into employment        arrangements with each one. This compensation structure not only allows us to conserve cash for Mr. Sharp’s professional services, it also provides him incentive to close that strategic transaction. As we are successful in our growth strategies, our employment practices will change to more traditional employer/employee relationships as appropriate. 

 

**Summary Compensation Table**

A summary of cash and other compensation paid to our executive officers and directors for the fiscal years ended November 30, 2009 and 2008 is as follows: 

 

|  

 

**Name****and****Principal Position**                                                                    |  

 

 

**Year Ending November 30** |  

 

 

**Salary****($)** |  

 

 

**Bonus****($)** |  

 

**Stock Awards****($)** |  

 

**Option****Awards****($)** |  

**Non-Equity Incentive Plan Compensation****($)** | **Nonqualified Deferred Compensation Earnings****($)** |  

 

 

**All other Comp.** |  

 

 

 

**Total** |
|--------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|-------------------------------------------|------------------------------------------|-----------------------------------------|---------------------------------------------|-----------------------------------------------------------|--------------------------------------------------------|---------------------------------------------|-------------------------------------------|
| **(a)**                                                                                                                  | **(b)**                                             | **(c)**                                   | **(d)**                                  | **(e)**                                 | **(f)**                                     | **(g)**                                                   | **(h)**                                                | **(i)**                                     | **(j)**                                   |
|                                                                                                                     |                                                |                                      |                                     |                                    |                                        |                                                      |                                                   |                                        |                                      |   |
| Ted R. Sharp (1)Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and Director

    | 20092008                                            | --                                        | --                                       | --                                      | --                                          | --                                                        | --                                                     | $ 22,484$ 9,089                             | $ 22,484$ 9,089                           |   |
| Dr. John Veltheer (2)Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and Director | 20092008                                            | --                                        | --                                       | --                                      | --                                          | --                                                        | --                                                     | $48,000  $48,000                  | $48,000  $48,000                |   |
|                                                                                                                          |                                                     |                                           |                                          |                                         |                                             |                                                           |                                                        |                                             |                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

|   | (1) | Mr. Sharp was appointed to these positions on September 12, 2008. Amounts paid includes $4,762 and $3,080 due in cash and $10,656 and $2,367 of fair value of stock issuable as of November 30, 2009 and 2008, respectively. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

40

 

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|   | (2) | Dr. Veltheer resigned all positions except Director on September 12, 2008. He continues to provide consulting services under contract through and beyond the year ended November 30, 2009 for which he is paid $4,000 per month. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Our contract with Ted R. Sharp and his firm Sharp Executive Associates, Inc. provides for 50% of the fees charged to be paid in the form of common stock, contingent upon the successful close of the REX acquisition. Such stock is issued at a deemed price of $1.00 per share payable and issued quarterly against an invoice for services rendered for the preceding quarter. The Term Sheet for the REX        acquisition terminated during the year, but some informal and unstructured efforts continued as of November 30, 2009 to consummate a transaction in some form. If we are successful at sometime in the future in consummating an acquisition of REX, a success fee consisting of 10,872 common shares is due for services rendered during the year ended November 30, 2009.

The Company has no equity or incentive plan under which shares of company stock may be issued to officers, directors, employees or other interests.

**Director Compensation**

We do not pay any compensation to Dr. John Veltheer or Ted R. Sharp for serving on our board of directors. 

**Employment Contracts and Termination of Employment and Change-In-Control Arrangements**

On September 12, 2008, we entered into a engagement letter agreement with Sharp Executive Associates, Inc., a management consulting firm owned by Ted R. Sharp, CPA, under which Mr. Sharp would serve as Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and Director. In general, that agreement provides for hourly compensation for services rendered by Mr. Sharp or        members of his staff at rates ranging from $200 per hour to $25 per hour, with 50% of the fee payable in the form of common stock upon the successful closing of the REX acquisition. The consulting agreement has been filed with the SEC on Form 8-K dated September 14, 2008. 

 

On September 12, 2008, concurrent with the engagement of Mr. Sharp and his firm, Dr. Veltheer resigned all positions except Director. He continues to provide consulting services under contract through and beyond the year ended November 30, 2009 for which he is paid $4,000 per month.

 

**ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**

 

The following tables set forth information as of March 15, 2010 regarding the ownership of our common stock by: 

| • | each person who is known by us to own more than 5% of our shares of common stock; and |
|--------|---------------------------------------------------------------------------------------|

| • | each named executive officer, each director and all of our directors and executive officers as a group. |
|--------|---------------------------------------------------------------------------------------------------------|

 

The number of shares beneficially owned and the percentage of shares beneficially owned are based on 24,293,334 shares of common stock outstanding as of March 15, 2010. 

Beneficial ownership is determined in accordance with the rules and regulations of the Securities and Exchange Commission. Shares subject to options that are exercisable within 60 days following March 15, 2010 are deemed to be outstanding and beneficially owned by the optionee for the purpose of computing share and percentage ownership of that optionee but are not deemed to be outstanding for the        purpose of computing the percentage ownership of any other person. Except as indicated in the footnotes to this table, and as affected by applicable community property laws, all persons listed have sole voting and investment power for all shares shown as beneficially owned by them. 

 

 

 

41

 

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**Officers, Directors and Principal Stockholders**

| **Name and Address of Beneficial Owner**                                                                                                                  |        |                                               |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|----------------------------------------------------|
| **Name/Position**

**Officers and Directors**                                                                                                             | **Address** | **Number of****Shares**                            | **Percentage of Issued****and Outstanding** |
|                                                                                                                                                      |        |                                               |   |   |   |   |   |
| Ted R. Sharp, CPA

Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and Director                                         |        | 714 Whisperwood Ct.

Nampa, ID 83686

        |   | 0 |   | 0% |   |
|                                                                                                                                                      |        |                                               |   |   |   |   |   |
| Dr. John Veltheer

Former Chief Executive Officer, Former Chief Financial Officer, Former President, Former Secretary, Former Treasurer and Director |        | 2957 West 21st AvenueVancouver, B.C. V6L 1K7Canada |   | 12,000,000 |   | 49.4% |   |
|                                                                                                                                                      |        |                                               |   |   |   |
|                                                                                                                                                      |        |                                               |   |   |   |   |   |
| Officers and Directors as a Group                                                                                                                         |        |                                               |   |  

12,000,000 |   |  

49.4% |   |

 

We have no knowledge of any arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in our control. 

We are not, to the best of our knowledge, directly or indirectly owned or controlled by another corporation or foreign government. 

**ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**

 

None of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us, other than noted in this section:

| • | any of our directors or officers; |
|--------|-----------------------------------|

| • | any person proposed as a nominee for election as a director; |
|--------|--------------------------------------------------------------|

| • | any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding share of common stock; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| • | any of our promoters; |
|--------|-----------------------|

| • | any relative or spouse of any of the foregoing persons who has the same home address as such person. |
|--------|------------------------------------------------------------------------------------------------------|

On September 12, 2008, the Company entered into an engagement letter with Ted R. Sharp, the Chief Executive Officer of the Company, as described earlier. Pursuant to the agreement, the Company incurred $14,217 (2008 - $4,555) in consulting fees to a company owned and controlled by the Chief Executive Officer of the Company during the year ended November 30, 2009. As at November 30, 2009, $13,059 (2008 -        $3,080) of consulting fees are owed to Mr. Sharp’s company. A $5,000 retainer was paid to the company owned and controlled by the Chief Executive Officer which has been applied to outstanding invoices. If the Company is successful in the acquisition of REX, a success fee consisting of 9,058 common shares is due for services rendered during the year ended November 30, 2009.

During the year ended November 30, 2009, the Company incurred $48,000 (2008 - $48,000) in consulting fees to Dr. John Veltheer, a director and the former President of the Company. As at November 30, 2009, $46,430 (2008 - $4,000) in consulting fees are owed to Mr. Veltheer.

 

 

42

 

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As at November 30, 2009, accounts payable includes $3,125 (2008 - $3,125) owing to a former director for expenses incurred on the Company’s behalf.

During the year ended November 30, 2006, the Company received an advance of $50,000 from Mr. Veltheer, a director. The amount is supported by a promissory note, bears interest at 12% per annum and matured October 18, 2007. On November 8, 2007, the Company entered into an agreement to extend the loan to October 18, 2008. On March 18, 2008, the Company repaid the director $58,500, representing the        total principal and accrued interest as of the repayment date. Interest of $nil was accrued as at November 30, 2009 (2008 - $6,707). 

 

**Director Independence**

 

There are no independent directors on the Board of Directors of the Company.

 

| **ITEM 13.** | **PRINCIPAL ACCOUNTING FEES AND SERVICES** |
|--------------|--------------------------------------------|

 

**Audit Fees**

The aggregate fees billed by the Company’s auditors for professional services rendered in connection with the audit of the Company’s annual financial statements for the periods from November 30, 2008 to November 30, 2009 and from November 30, 2007 to November 30, 2008 and reviews of the consolidated financial statements included in the Company’s Forms 10-Q for the periods from        November 30, 2008 to November 30, 2009 and from November 30, 2007 to November 30, 2008, were $19,975 and $23,675, respectively. 

**Audit-Related Fees**

The aggregate fees billed by the Company’s auditors for any additional fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit Fees” above for the periods November 30, 2008 to November 30, 2009 and from November 30, 2007 to November 30, 2008, were $nil        and $nil, respectively. 

**Tax Fees**

The aggregate fees billed by the Company’s auditors for professional services for tax compliance, tax advice, and tax planning for the periods from November 30, 2008 to November 30, 2009 and from November 30, 2007 to November 30, 2008, were $nil and $nil, respectively. 

**All Other Fees**

The aggregate fees billed by the Company’s auditors for all other non-audit services rendered to the Company, such as attending meetings and other miscellaneous financial consulting, for the periods from November 30, 2008 to November 30, 2009 and from November 30, 2007 to November 30, 2008, were $nil and $nil, respectively. 

 

 

43

 

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**PART IV**

 

| **ITEM 14.**   | **EXHIBITS, FINANCIAL STATEMENT SCHEDULES** |
|--------------------------|---------------------------------------------|

 

| **EXHIBIT** | **DESCRIPTION** |
|-------------|-----------------|
|        |            |   |
| 3.1         |            |   | Articles of Incorporation(1) |   |   |
| 3.2         |            |   | Bylaws, as amended(1) |   |   |
| 3.3         |            |   | Articles of Incorporation, as amended(2) |   |   |
| 4.1         |            |   | Form of Share Certificate(1) |   |   |
| 10.1        |            |   | Mineral Claim Purchase Agreement, dated November 2, 2001, between Glen MacDonald and Texada Ventures Inc.(1) |   |   |
| 10.2        |            |   | Loan Agreement, dated October 18, 2006, between Dr. John Veltheer and Texada Ventures Inc.(3) |   |   |
| 10.3        |            |   | Letter Agreement, dated November 9, 2006, between Texada Ventures Inc. and Link Investment Holdings, S.A.(4) |   |   |
| 10.4        |            |   | Promissory Note issued by Texada Ventures Inc. to IFG Trust Services, Inc. on February 15, 2007(7) |   |   |
| 10.5        |            |   | Term Sheet Agreement, dated March 21, 2007, between Texada Ventures Inc. and Anglo Energy Refining Corp.(8) |   |   |
| 10.6        |            |   | Assignment Agreement, dated April 5, 2007, between Texada Ventures Inc. and Anglo Energy Refining Corp.(9) |   |   |
| 10.7        |            |   | Loan Extension Agreement, dated November 8, 2007, between Texada Ventures Inc. and Dr. John Veltheer(10) |   |   |
| 10.8        |            |   | Assignment Agreement, effective November 8, 2007, between Texada Ventures Inc. and Anglo Energy Refining Corp.(10) |   |   |
| 10.9        |            |   | Engagement Letter agreement, dated September 12, 2008, between Texada Ventures Inc. and Sharp Executive Associates, Inc. (12) |   |   |
| 10.10       |            |   | Letter Agreement dated August 25, 2009, between Texada and Royalty Exploration LLC (13) |   |   |
| 14.1        |            |   | Code of Ethics(5) |   |   |
| 16.1        |            |   | Letter from Telford Sadovnick, P.L.L.C. regarding change in certifying accountant(11) |   |   |
| 31.1        |            |   | Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |   |   |
| 32.1        |            |   | Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |   |   |
| 99.1        |            |   | Share Purchase Agreement, dated September 25, 2006, between Marc Branson and Dr. John Veltheer (6) |   |   |

 

|   | (1) | Filed with the SEC as an exhibit to our Registration Statement on Form SB-2 originally filed on April 15, 2003, as amended. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on November 21, 2006. |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (3) | Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed on October 20, 2006. |
|--------|-----|----------------------------------------------------------------------------------------------------|

|   | (4) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on November 11, 2006 |
|--------|-----|-----------------------------------------------------------------------------------------------|

|   | (5) | Filed with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on March 9, 2006. |
|--------|-----|----------------------------------------------------------------------------------------------|

|   | (6) | Filed with the SEC as an exhibit to our Current Report on Form 8-K filed on September 29, 2006 |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (7) | Filed with the SEC as an exhibit to our Annual Report on Form 10-KSB filed on February 28, 2007 |
|--------|-----|-------------------------------------------------------------------------------------------------|

|   | (8) | Filed with the SEC as an exhibit to our Current Report on 8-K filed on March 23, 2007 |
|--------|-----|---------------------------------------------------------------------------------------|

|   | (9) | Filed with the SEC as an exhibit to our Current Report on 8-K filed on April 11, 2007 |
|--------|-----|---------------------------------------------------------------------------------------|

|   | (10) | Filed with the SEC as an exhibit to our Current Report on 8-K filed on November 13, 2007 |
|--------|------|------------------------------------------------------------------------------------------|

|   | (11) | Filed with the SEC as an exhibit to our Current Report on 8-K filed on March 5, 2007 |
|--------|------|--------------------------------------------------------------------------------------|

|   | (12) | Filed with the SEC as an exhibit to our Current Report on 8-K filed on September 14, 2008 |
|--------|------|-------------------------------------------------------------------------------------------|

|   | (13) | Filed with the SEC as an exhibit to our Current Report on 8-K filed on September 1, 2009 |
|--------|------|------------------------------------------------------------------------------------------|

 

 

44

 

----

 **SIGNATURES**

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

|                 | **TEXADA VENTURES INC.**                                        |
|----------------------|-----------------------------------------------------------------|
|                 |                                                            |
| Date: March 15, 2010 | /s/ Ted R. Sharp                                                |
|                 | Ted R. Sharp, Chief Executive Officer,

Chief Financial Officer |

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, 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/ Ted R. Sharp | Chief Executive Officer, Chief Financial Officer and Director |  

March 15, 2010 |
| Ted R. Sharp             | (Principal Executive Officer and Principal Financial Officer) |                   |
|                     |                                                          |                   |
|                     |                                                          |                   |
|                     |                                                          |                   |
| /s/ John Veltheer        | Director                                                      | March 15, 2010         |
| Dr. John Veltheer   |                                                          |                   |
|                     |                                                          |                   |

 

 

 

45

 

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