-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VQMjA1gCDGlOJq1YxPK5fz6lc8uKhSmvZGw48yJ65yfuMVyJCehkC8cXZvR0eypV q8H4fYNZUZDqs7P0k77uCQ== 0001165527-08-000393.txt : 20080725 0001165527-08-000393.hdr.sgml : 20080725 20080725092517 ACCESSION NUMBER: 0001165527-08-000393 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20080531 FILED AS OF DATE: 20080725 DATE AS OF CHANGE: 20080725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Cinnabar Ventures Inc CENTRAL INDEX KEY: 0001409136 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-145443 FILM NUMBER: 08969626 BUSINESS ADDRESS: BUSINESS PHONE: 1 902 482 3456 MAIL ADDRESS: STREET 1: SUITE # 291 38 PEARSON ST CITY: ST JOHNS STATE: A5 ZIP: A1A 3R1 10-K 1 g2456.txt ANNUAL REPORT FOR THE YEAR ENDED 5-31-08 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURUTIES EXCHANGE ACT OF 1934 For the fiscal year ended May 31, 2008 Commission File Number 333-145443 Cinnabar Ventures Inc. (Exact Name of Registrant as Specified in Its Charter) NEVADA N/A (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) #291 - 38 Pearson Street Saint Johns, Newfoundland A1A 3R1 (Address of Principal Executive Offices) (902)482-3456 (Telephone Number) Val-U-Corp Services, Inc. 1802 North Carson Street, Suite 212 Carson City, NV 89701-9141 (800) 555-0738 (775)887-0738 (Name and Address of Agent for Service) (Telephone Number) (Fax Number) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to section 12(g) of the Act: Common Stock, $.001 par value Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X] 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 [ ] No [X] Indicate by check mark whether the registrant (1) has 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 [ ] Indicate by check mark 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 registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ] As of May 31, 2008, the registrant had 6,340,000 shares of common stock issued and outstanding. No market value has been computed based upon the fact that no active trading market had been established as of May 31, 2008. CINNABAR VENTURES INC. TABLE OF CONTENTS Page No. -------- Part I Item 1. Business 3 Item 1A. Risk Factors 9 Item 2. Properties 13 Item 3. Legal Proceedings 13 Item 4. Submission of Matters to a Vote of Securities Holders 13 Part II Item 5. Market for Registrant's Common Equity & Related Stockholder Matters 13 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 8. Financial Statements 20 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 29 Item 9A. Controls and Procedures 29 Part III Item 10. Directors and Executive Officers 31 Item 11. Executive Compensation 32 Item 12. Security Ownership of Certain Beneficial Owners and Management 33 Item 13. Certain Relationships and Related Transactions 33 Item 14. Principal Accounting Fees and Services 34 Part IV Item 15. Exhibits 34 Signatures 34 2 PART I ITEM 1. BUSINESS Cinnabar Ventures Inc. was incorporated in Nevada on May 24, 2006 to engage in the acquisition, exploration and development of natural resource properties. We are an exploration stage company with no revenues and limited operating history. The principal executive offices are located at #291 - 38 Pearson Street, Saint Johns, Newfoundland, Canada A1A 3R1. The telephone number is (902)482-3456. We received our initial funding of $5,000 through the sale of common stock to our directors in June 2006 (5,000,000 shares at $0.001) and $22,400 from sales of common stock to investors from the period of August 2006 through November 2006. In August 2006 we offered and sold 240,000 common stock shares at $0.01 per share to 6 non-affiliated private investors for proceeds of $2,400. In September 2006 we offered and sold 1,000,000 common stock shares at $0.01 per share to 12 non-affiliated private investors for proceeds of $10,000. In November 2006 we offered and sold 100,000 common stock shares at $0.10 per share to 20 non-affiliated private investors for proceeds of $10,000. From inception until the date of this filing we have had limited operating activities. Our audited financial statements for the period from inception through May 31, 2008 report no revenues and a net loss of $65,756. Our independent auditors have issued an audit opinion for Cinnabar which includes a statement expressing substantial doubt as to our ability to continue as a going concern. Our mineral claim has been acquired per Quebec government requirements and we hired a professional geologist to prepare a geological report. Based on the following factors it is concluded by our geologist in his report that the claims are prospective for diamond mineralization: 1. The Barou property is located in the Otish Mountains diamond camp. 2. The Barou property is located 10 km north of the Tichegamie kimberlite cluster 3. The presence of anomalously high counts of small lakes makes this 10 km2 property prospective for the presence of kimberlite pipes. We have not yet commenced any exploration activities on the claim. Our property, known as the Barou Claims may not contain any mineral reserves and funds that we spend on exploration will be lost. Even if we complete our current exploration program and are successful in identifying a mineral deposit we will be required to expend substantial funds to bring our claim to production. GENERAL INFORMATION The Barou property is located in Central Quebec, 199 miles northeast of the City of Chibougamau, Latitude: 52(0) 12'N and Longitude: 72(0) 20' W. The property consists of 17 claims in one contiguous block. The area of the mineral claims is unencumbered Crown Land with no existing liens, claims or restrictions of any sort. BAROU Claims Cinnabar Venture Inc. Quebec
Type of Inscription Expiry Surface Work Fees MAP SHEET Range Colum Title Title No Status Date Date area(Ha) required Required OWNER - --------- ----- ----- ----- -------- ------ ---- ---- -------- -------- -------- ----- SNRC 33A01 25 19 CDC 2055230 Actif 15-Feb-07 14-Feb-09 52,83 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 25 20 CDC 2055231 Actif 15-Feb-07 14-Feb-09 52,83 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 25 21 CDC 2055232 Actif 15-Feb-07 14-Feb-09 52,83 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 25 22 CDC 2055233 Actif 15-Feb-07 14-Feb-09 52,83 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 25 23 CDC 2055234 Actif 15-Feb-07 14-Feb-09 52,83 135 110 Cinnabar Venture Inc. 100% 3 SNRC 33A01 26 19 CDC 2055235 Actif 15-Feb-07 14-Feb-09 52,82 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 26 20 CDC 2055236 Actif 15-Feb-07 14-Feb-09 52,82 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 26 21 CDC 2055237 Actif 15-Feb-07 14-Feb-09 52,82 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 26 22 CDC 2055238 Actif 15-Feb-07 14-Feb-09 52,82 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 27 22 CDC 2055240 Actif 15-Feb-07 14-Feb-09 52,81 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 27 24 CDC 2055242 Actif 15-Feb-07 14-Feb-09 52,81 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 27 25 CDC 2055243 Actif 15-Feb-07 14-Feb-09 52,81 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 28 23 CDC 2055244 Actif 15-Feb-07 14-Feb-09 52,8 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 28 24 CDC 2055245 Actif 15-Feb-07 14-Feb-09 52,8 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 28 25 CDC 2055246 Actif 15-Feb-07 14-Feb-09 52,8 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 26 23 CDC 2055239 Actif 15-Feb-07 14-Feb-09 52,82 135 110 Cinnabar Venture Inc. 100% SNRC 33A01 27 23 CDC 2055241 Actif 15-Feb-07 14-Feb-09 52,81 135 110 Cinnabar Venture Inc. 100%
In Quebec mineral claims are defined by geographic coordinates can be acquired by letter or via an internet portal maintained by the Quebec government at: https://gestim.mines.gouv.qc.ca/MRN_GestimP_Presentation/ODM02101_login.aspx. Records of all claims can also be inspected and were verified by the author at the same site. The Barou claims were first applied for on November 23, 2006 and were registered on February 15, 2007. They are in good standing until February 14, 2009. In order to keep the claims in good standing for an additional 2 year period (to 14 Feb. 2011), exploration work has to be done and $4,500 in fees need to be paid. The property is situated in the Otish Mountains, 199 km northeast of the town of Chibougamau, near the geographic centre of the Province of Quebec. The nearest population centre is the Cree Village of Mistissini, 53 miles by road north of Chibougamau. The nearest all weather road is the access road from Mistissini to the float plane base at Riviere Temiscamie, where a single Turbo-Otter float-plane is stationed and available for charter. The distance from Temiscamie to the property is 103 miles. There is no permanent population or developed infrastructure in the area. The property can be reached by float plane (summer), or ski plane (winter), from Riviere Temiscamie or a helicopter can be chartered in Chibougamau. The area has a continental climate typical for this latitude, characterised by long winters lasting from late October to late April and short, cool summers with temperatures up to 59 degrees. Lakes freeze over in late October and are usable again for float planes in early May. Most precipitation falls in the form of snow during the wintertime with accumulations of several meters considered normal. Total precipitation averages 32 inches. The property is situated on a rolling plateau covered by glacial drift with numerous lakes, outcrops are rare. The Otish Mountains, situated immediately southeast of the property rise to elevations of 3,445 feet. Elevations on the property vary from 2,133 to 2,625 feet above sea level. Vegetation consists of conifers spaced widely apart and rarely thicker than 12 inches in diameter. Ground cover is a dense matt of mosses, lichens and labrador tea. The claim has had no known mineral exploration. We have not carried out any exploration work on the claim and have incurred no exploration costs. The future cost of exploration work on the property is disclosed in detail in the Plan of Operation section of this report. There is not a plant or any equipment currently located on the property. It is expected that the initial exploration phase will be supported by generators. Water required for exploration and development of the claim is available from several creeks and fresh water lakes located in the area. 4 Based on the following factors it is concluded by our geologist that the claims are prospective for diamond mineralization: 1. The Barou property is located in the Otish Mountains diamond camp. 2. The Barou property is located 10 km north of the Tichegamie kimberlite cluster 3. The presence of anomalously high counts of small lakes makes this 10 km2 property prospective for the presence of kimberlite pipes. Exploration for diamantiferous kimberlites is recommended on the Barou property. Exploration should proceed according to the three phase exploration program outlined in detail in the Plan of Operation section of this report. The cost of the proposed program is $10,920 (USD) for the initial phase of exploration work, $34,507 for the 2nd phase and $155,400 for the 3rd phase. We plan to commence Phase 1 of the exploration program in the spring of 2008. The discussions contained herein are management's estimates based on information provided by the professional geologist who prepared the geology report for the project. Because we have not commenced our exploration program we cannot provide a more detailed discussion of our plans if we find a viable store of minerals on our property, as there is no guarantee that exploitable mineralization will be found, the quantity or type of minerals if they are found, and the extraction process that will be required. ACQUISITION OF THE MINERAL CLAIM AND REQUIREMENTS OR CONDITIONS FOR RETENTION OF TITLE The Barou claims were first applied for on November 23, 2006 and were registered on February 15, 2007. They are in good standing until February 14, 2009. In order to keep the claims in good standing for an additional 2 year period (to 14 Feb. 2011), exploration work has to be done and fees need to be paid. In addition the work has to be reported to the authorities by a qualified person. Total work minimum requirements are C$2,295 ($2,167 USD) and the fees to record the work are C$1,870 ($1,765 USD) for a total of C$4,165 ($3,932 USD). LOCATION, ACCESS, CLIMATE, LOCAL RESOURCES & INFRASTRUCTURE The property is situated in the Otish Mountains, 199 miles northeast of the town of Chibougamau, near the geographic centre of the Province of Quebec. The nearest population centre is the Cree Village of Mistissini, 53 miles by road north of Chibougamau. The nearest all weather road is the access road from Mistissini to the float plane base at Riviere Temiscamie, where a single Turbo-Otter float-plane is stationed and available for charter. The distance from Temiscamie to the property is 103 miles. There is no permanent population or developed infrastructure in the area, with the exception of the winter road from Riviere Temiscamie to The East Main Gold mine, which passes 9 miles east of the claims. The only economic activity in the area, apart from mineral exploration, is seasonal trapping and hunting by Cree villagers from Mistissini. The property can be reached by float plane (summer) or ski plane (winter) from Riviere Temiscamie or alternatively a helicopter can be chartered in Chibougamau. Personnel experienced in expediting, exploration surveys and camp construction is available in the village of Mistissini. The Town of Chibougamau, a mining town, is the regional population centre with many services and amenities for industrial, educational and leisure activities. The airport of Chibougamau-Chapais has daily scheduled flights to Montreal. 5 [MAP SHOWING THE CLAIM LOCATION] 6 The area has a continental climate typical for this latitude, characterised by long winters lasting from late October to late April and short, cool summers with temperatures up to 59 degrees. Lakes freeze over in late October and are usable again for float planes in early May. Most precipitation falls in the form of snow during the wintertime with accumulations of several meters considered normal. Total annual precipitation averages 32 inches. The property is situated on a rolling plateau covered by glacial drift with numerous lakes, outcrops are rare. The Otish Mountains, situated immediately southeast of the property rise to elevations of 3,445 feet. Elevations on the property vary from 2,133 to 2,625 feet above sea level. Vegetation consists of conifers spaced widely apart and rarely thicker than 12 inches in diameter. Ground cover is a dense matt of mosses, lichens and labrador tea. HISTORY The Otish mountain area in Central Quebec has been the focus of diamond exploration in Canada since 1996. The first kimberlite occurrence discovered in the Otish Mountains was the fortuitous consequence of a 1975 drilling program for uranium at Lac Beaver, and was first recognized to contain diamonds in 1998. This kimberlite pipe however was found to be too lean for further development. Nevertheless this first find spurred till sampling surveys over large areas in the Otish Mountains by several companies. This resulted in a total of at least 24 kimberlite finds in 5 separate areas: * Foxtrot Property: 9 pipes and 4 dykes, all diamantiferous. Several pipes have been bulk sampled with encouraging diamond contents first published in 2005 (Ashton Mining of Canada Ltd. News releases) * Portage : 1 dyke in the area of Foxtrot found in 2005 ( Majescor Resources News Releases) * Lac Beaver: 2 pipes, diamantiferous but low grade. 120 km SSW of Foxtrot * Tichegami: 4 pipes, 20 km NE of Lac Beaver (Ditem Explorations Inc - News Releases) * Dios: 4 pipes and dykes south of Beaver Lake An analysis of the exploration activity since 1996 shows that the principal exploration tools used were regional, widely spaced, till sampling for diamond and kimberlite indicator minerals and detailed aeromagnetic surveys. Typically aeromagnetic anomalies within areas with anomalous indicator minerals were then tested with drilling. One or both techniques found all the above kimberlite pipes except the first one at Lac Beaver. It is also clear from Canada's diamond exploration history that this exploration technique misses many kimberlite pipes because many kimberlite pipes are not expressed in till sample results and many kimberlite pipes do not have a recognizable magnetic signature. Another shortcoming with these techniques is that usually a very large a number of magnetic anomalies is generated, too many for drill testing. Of importance to note is that although prospecting for kimberlite has not been done much in the Otish area and though none of the Otish kimberlite pipes was discovered that way, at least 4 of the pipes (at Foxtrot and by Dios) have outcrop and several more have boulder trains of kimberlite. Clearly prospecting could have located these pipes. The caveat is that the area is too large for prospecting. Prospecting could only be rewarding if one could geographically narrow the areas with a high probability of containing kimberlite pipes. Prospecting success has many advantages especially for junior exploration companies. Prospecting will broaden the spectrum of findable kimberlite pipes to include those that have no magnetic signature and/or have no expression in till samples. A prospecting discovery also has the advantage of greatly shortening the exploration time of a discovery. Outcrops can be immediately sampled and meaningfully tested for diamond content in a short span of time. 7 The Barou property is located immediately north of the Tichegamie kimberlite cluster discovered by Ditem Explorations Inc in 2003. The only known exploration performed in the area of the Barou claims was an airborne magnetometer survey completed in 2003 by Ditem Explorations Ltd. over a large area, including the present Barou Property, GEOLOGICAL SETTING The Barou property is located within the Achaean age (2.7 to 2.9 Ga), Superior Craton of the Canadian Shield. Regional geological mapping of the area was published in 1984. The main lithologies in the area are foliated granite and granite gneiss. The metamorphic grade is mainly amphibolites facies. The predominant direction of foliation is north-northeast. Meta-volcanic and meta-sedimentary rocks of the Eastmain greenstone belt occur 10 km north of the property. 12 miles to the southeast of the property are outcrops the Proterozoic age sediments of the Otish Basin. Proterozoic dykes, typically a few tens of meters wide and composed of diabase, crosscut all lithologies. COMPETITION We do not compete directly with anyone for the exploration or removal of minerals from our property as we hold all interest and rights to the claim. Readily available commodities markets exist in Canada and around the world for the sale of diamonds and minerals. Therefore, we will likely be able to sell any diamonds or minerals that we are able to recover. We will be subject to competition and unforeseen limited sources of supplies in the industry in the event spot shortages arise for supplies such as dynamite, and certain equipment such as bulldozers and excavators that we will need to conduct exploration. If we are unsuccessful in securing the products, equipment and services we need we may have to suspend our exploration plans until we are able to do so. BANKRUPTCY OR SIMILAR PROCEEDINGS There has been no bankruptcy, receivership or similar proceeding. REORGANIZATIONS, PURCHASE OR SALE OF ASSETS There have been no material reclassifications, mergers, consolidations, or purchase or sale of a significant amount of assets not in the ordinary course of business. COMPLIANCE WITH GOVERNMENT 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 Canada generally, and in Quebec specifically. PATENTS, TRADEMARKS, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS, OR LABOR CONTRACTS We have no current plans for any registrations such as patents, trademarks, copyrights, franchises, concessions, royalty agreements or labor contracts. We will assess the need for any of these applications on an ongoing basis. NEED FOR GOVERNMENT APPROVAL FOR ITS PRODUCTS OR SERVICES We are not required to apply for or have any government approval for our products or services. 8 RESEARCH AND DEVELOPMENT COSTS DURING THE LAST TWO YEARS We have not expended funds for research and development costs since inception. EMPLOYEES AND EMPLOYMENT AGREEMENTS Our only employee is our officer, Stephanie Wood who currently devotes as much time as the board of directors determines is necessary to manage the affairs of the company. There are no formal employment agreements between the company and our current employee. REPORTS TO SECURITIES HOLDERS We will provide an annual report that includes audited financial information to our shareholders. We will make our financial information equally available to any interested parties or investors through compliance with the disclosure rules of Regulation S-B for a small business issuer under the Securities Exchange Act of 1934. We will become subject to disclosure filing requirements once our SB-2 registration statement becomes effective, including filing Form 10K-SB annually and Form 10Q-SB quarterly. In addition, we will file Form 8K and other proxy and information statements from time to time as required. We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and copy any materials that we file with the Securities and Exchange Commission, ("SEC"), at the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. ITEM 1A. RISK FACTORS YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING KNOWN RISKS AND UNCERTAINTIES IN ADDITION TO OTHER INFORMATION IN THIS REPORT IN EVALUATING OUR COMPANY. OUR BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION COULD BE SERIOUSLY HARMED DUE TO ANY OF THE FOLLOWING KNOWN RISKS. THE RISKS DESCRIBED BELOW ARE NOT THE ONLY ONES FACING OUR COMPANY. ADDITIONAL RISKS NOT PRESENTLY KNOWN TO US MAY ALSO IMPAIR OUR BUSINESS OPERATIONS. ESTIMATES OF MINERALIZED MATERIAL ARE FORWARD-LOOKING STATEMENTS INHERENTLY SUBJECT TO ERROR. ALTHOUGH RESOURCE ESTIMATES REQUIRE A HIGH DEGREE OF ASSURANCE IN THE UNDERLYING DATA WHEN THE ESTIMATES ARE MADE, UNFORESEEN EVENTS AND UNCONTROLLABLE FACTORS CAN HAVE SIGNIFICANT ADVERSE OR POSITIVE IMPACTS ON THE ESTIMATES. ACTUAL RESULTS WILL INHERENTLY DIFFER FROM ESTIMATES. THE UNFORESEEN EVENTS AND UNCONTROLLABLE FACTORS INCLUDE: GEOLOGIC UNCERTAINTIES INCLUDING INHERENT SAMPLE VARIABILITY, METAL PRICE FLUCTUATIONS, VARIATIONS IN MINING AND PROCESSING PARAMETERS, AND ADVERSE CHANGES IN ENVIRONMENTAL OR MINING LAWS AND REGULATIONS. THE TIMING AND EFFECTS OF VARIANCES FROM ESTIMATED VALUES CANNOT BE ACCURATELY PREDICTED. 9 WE ARE AN EXPLORATION STAGE COMPANY BUT HAVE NOT YET COMMENCED EXPLORATION ACTIVITIES ON OUR CLAIM. WE EXPECT TO INCUR OPERATING LOSSES FOR THE FORESEEABLE FUTURE. We have not yet commenced exploration on the Balou Claims. Accordingly, we have no way to evaluate the likelihood that our business will be successful. We were incorporated on May 24, 2006 and to date have been involved primarily in organizational activities and the acquisition of the mineral claim. We have not earned any revenues as of the date of this report. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues. We expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from development and production of minerals from the claim, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and it is doubtful that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail. OUR INDEPENDENT AUDITOR HAS ISSUED AN AUDIT OPINION FOR CINNABAR VENTURES INC. WHICH INCLUDES A STATEMENT DESCRIBING OUR GOING CONCERN STATUS. OUR FINANCIAL STATUS CREATES A SUBSTANTIAL DOUBT WHETHER WE WILL CONTINUE AS A GOING CONCERN. As described in Note 1 of our accompanying financial statements, our lack of operations and any guaranteed sources of future capital raise substantial doubt as to our ability to continue as a going concern. If our business plan does not work, we could remain as a start-up company with limited operations and revenues. BECAUSE MANAGEMENT HAS NO EXPERIENCE IN MINERAL EXPLORATION, OUR BUSINESS HAS A HIGHER RISK OF FAILURE. Our management has no professional training or technical credentials in the field of geology. As a result, they may not be able to recognize and take advantage of potential acquisition and exploration opportunities in the sector without the aid of qualified geological consultants. Their decisions and choices may not take into account standard engineering or managerial approaches mineral exploration companies commonly use. Consequently our operations, earnings and ultimate financial success may suffer irreparable harm as a result. THERE IS THE RISK THAT OUR PROPERTY DOES NOT CONTAIN ANY KNOWN BODIES OF ORE RESULTING IN ANY FUNDS SPENT ON EXPLORATION BEING LOST. 10 There is the likelihood of our mineral claim containing little or no economic mineralization or reserves of minerals. We have a geological report and the claim has been acquired per Quebec regulations. However, there is the possibility that our claim does not contain any reserves, resulting in any funds spent on exploration being lost. BECAUSE WE HAVE NOT SURVEYED THE CLAIM, WE MAY DISCOVER MINERALIZATION ON THE CLAIM THAT IS NOT WITHIN OUR CLAIM BOUNDARIES. While we have conducted a mineral claim title search, this should not be construed as a guarantee of claim boundaries. Until the claim is surveyed, the precise location of the boundaries of the claim may be in doubt. If we discover mineralization that is close to the claim boundaries, it is possible that some or all of the mineralization may occur outside the boundaries. In such a case we would not have the right to extract those minerals. IF WE DISCOVER COMMERCIAL RESERVES OF PRECIOUS METALS ON OUR MINERAL PROPERTY, WE CAN PROVIDE NO ASSURANCE THAT WE WILL BE ABLE TO SUCCESSFULLY ADVANCE THE MINERAL CLAIMS INTO COMMERCIAL PRODUCTION. If our exploration program is successful in establishing ore of commercial tonnage and grade, we will require additional funds in order to advance the claim into commercial production. Obtaining additional financing would be subject to a number of factors, including the market price for the minerals, investor acceptance of our claims and general market conditions. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. The most likely source of future funds is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders. We may be unable to obtain any such funds, or to obtain such funds on terms that we consider economically feasible and you may lose any investment you make in this offering. IF ACCESS TO OUR MINERAL CLAIM IS RESTRICTED BY INCLEMENT WEATHER, WE MAY BE DELAYED IN OUR EXPLORATION AND ANY FUTURE MINING EFFORTS. Access to the property is only via float plane or helicopter in the summer or ski plane in the winter. It is possible that severe weather could restrict access to our claim. Winters last from late October to late April with short, cool summers. If access to the claim is restricted we would be delayed in our exploration timetable. GOVERNMENT REGULATION OR OTHER LEGAL UNCERTAINTIES MAY INCREASE COSTS AND OUR BUSINESS WILL BE NEGATIVELY AFFECTED. There are several governmental regulations that materially restrict mineral claim exploration and development. Under Canadian mining law, engaging in certain types of exploration requires work permits, the posting of bonds, and the performance of remediation work for any physical disturbance to the land. While these current laws will not affect our initial exploration phase, if we identify exploitable minerals and proceed to excavation 11 operations on the claim, we will incur regulatory compliance costs based upon the size and scope of our operations. In addition, new regulations could increase our costs of doing business and prevent us from exploring for and the exploitation of ore deposits. In addition to new laws and regulations being adopted, existing laws may be applied to mining that have not as yet been applied. These new laws may increase our cost of doing business with the result that our financial condition and operating results may be harmed. BECAUSE OUR CURRENT OFFICER HAS OTHER BUSINESS INTERESTS, SHE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATIONS, CAUSING OUR BUSINESS TO FAIL. Stephanie Wood, our sole officer, currently devotes approximately 5 hours per week providing management services to us. While she presently possesses adequate time to attend to our interests, it is possible that the demands on her from her other obligations could increase. The result being she would no longer be able to devote sufficient time to the management of our business. This could negatively impact our business development. THERE IS NO CURRENT ACTIVE TRADING MARKET FOR OUR SECURITIES. Our common stock has been listed for trading on FINRA's OTC Bulletin Board since October 10, 2007 (symbol CNBR), however; there has been no active trading in our shares. There is no guarantee of trading volume or trading price levels sufficient for investors to sell their stock, recover their investment in our stock, or profit from the sale of their stock. THE TRADING IN OUR SHARES IS REGULATED BY SECURITIES AND EXCHANGE COMMISSION RULE 15G-9 WHICH ESTABLISHED THE DEFINITION OF A "PENNY STOCK." Our shares are defined as a penny stock under the Securities and Exchange Act of 1934, and rules of the Commission. The Exchange Act and such penny stock rules generally impose additional sales practice and disclosure requirements on broker-dealers who sell our securities to persons other than certain accredited investors who are, generally, institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 ($300,000 jointly with spouse), or in transactions not recommended by the broker-dealer. For transactions covered by the penny stock rules, a broker-dealer must make a suitability determination for each purchaser and receive the purchaser's written agreement prior to the sale. In addition, the broker-dealer must make certain mandated disclosures in penny stock transactions. This includes, the actual sale or purchase price and actual bid and offer quotations, the compensation to be received by the broker-dealer and certain associated persons, and deliver certain disclosures required by the Commission. Consequently, the penny stock rules may make it difficult for our shareholders to resell any shares, if at all. 12 WE WILL INCUR ONGOING COSTS AND EXPENSES FOR SEC REPORTING AND COMPLIANCE. WITHOUT REVENUE WE MAY NOT BE ABLE TO REMAIN IN COMPLIANCE, MAKING IT DIFFICULT FOR INVESTORS TO SELL THEIR SHARES, IF AT ALL. To be eligible for quotation on the OTC Bulletin Board, issuers must remain current in their filings with the SEC. In order for us to remain in compliance we will require cash to cover the cost of these filings, which could comprise a substantial portion of our available cash resources. If we are unable to remain in compliance it may be difficult for our shareholders to resell any shares, if at all. ITEM 2. PROPERTIES We do not currently own any property. We are currently utilizing space at the residence of our president at #291 - 38 Pearson Street, Saint Johns, Newfoundland, Canada A1A 3R1. We believe the current premises are sufficient for our needs at this time. We currently have no investment policies as they pertain to real estate, real estate interests or real estate mortgages. ITEM 3. LEGAL PROCEEDINGS We are not currently involved in any legal proceedings and we are not aware of any pending or potential legal actions. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of the security holders during the year ended May 31, 2008. PART II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Our shares are quoted on the Over-the-Counter Bulletin Board (OTCBB) under the symbol "CNBR". The OTCBB is a regulated quotation service that displays real-time quotes, last sale prices and volume information in over-the-counter securities. The OTCBB is not an issuer listing service, market or exchange. Although the OTCBB does not have any listing requirements per se, to be eligible for quotation on the OTCBB issuers must remain current in their filings with the SEC or applicable regulatory authority. Securities quoted on the OTCBB that become delinquent in their required filings will be removed following a 30 or 60 day grace period if they do not make their required filing during that time. We cannot guarantee that we will continue to have the funds required to remain in compliance with our reporting obligations. There has been no active trading of our securities, and, therefore, no high and low bid pricing. As of the date of this report Cinnabar Ventures had 40 shareholders of record. We have paid no cash dividends and have no outstanding options. 13 PENNY STOCK RULES The Securities and Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). A purchaser is purchasing penny stock which limits the ability to sell the stock. Our shares constitute penny stock under the Securities and Exchange Act. The shares will remain penny stocks for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his/her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document, which: - contains a description of the nature and level of risk in the market for penny stock in both public offerings and secondary trading; - contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the Securities Act of 1934, as amended; - contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" price for the penny stock and the significance of the spread between the bid and ask price; - contains a toll-free telephone number for inquiries on disciplinary actions; - defines significant terms in the disclosure document or in the conduct of trading penny stocks; and - contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation; The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer: - the bid and offer quotations for the penny stock; - the compensation of the broker-dealer and its salesperson in the transaction; - the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and - monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt 14 of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities. REPORTS We are subject to certain filing requirements and will furnish annual financial reports to our stockholders, certified by our independent accountant, and will furnish un-audited quarterly financial reports in our quarterly reports filed electronically with the SEC. All reports and information filed by us can be found at the SEC website, www.sec.gov. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS We are an exploration stage company and have generated no revenues. Our net losses for the years ended May 31, 2008 and 2007 were $41,022 and $24,734, respectively. Our net loss from inception (May 24, 2006) through May 31, 2008 was $65,756. These expenses consisted of general operating expenses incurred in connection with the day to day operation of our business and the preparation and filing of our periodic reports. In their report on our audited financial statements as at May 31, 2008, our auditors expressed substantial doubt about our ability to continue as a going concern unless we are able to raise additional capital and ultimately to generate profitable operations. LIQUIDITY AND CAPITAL RESOURCES Our cash in the bank at May 31, 2008 was $2,271. Our directors have agreed to advance funds to pay the cost of reclamation of the property should exploitable minerals not be found and we abandon our exploration program and there are no remaining funds in the company. While they have agreed to advance the funds, the agreement is verbal and is unenforceable as a matter of law. We received our initial funding of $5,000 through the sale of common stock to our directors in June 2006 (5,000,000 shares at $0.001) and $22,400 from sales of common stock to investors from the period of August 2006 through November 2006. In August 2006 we offered and sold 240,000 common stock shares at $0.01 per share to 6 non-affiliated private investors for proceeds of $2,400. In September 2006 we offered and sold 1,000,000 common stock shares at $0.01 per share to 12 non-affiliated private investors for proceeds of $10,000. In November 2006 we offered and sold 100,000 common stock shares at $0.10 per share to 20 non-affiliated private investors for proceeds of $10,000. 15 OFF-BALANCE SHEET ARRANGEMENTS We have no off-balance sheet arrangements. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. BASIS OF PRESENTATION The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company's year end is May 31. 2. CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with an original maturity of three months or less at the time of issuance to be cash equivalents. 3. REVENUE RECOGNITION The Company recognizes reproduction and distribution revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101 and 104 ("SAB 101 and 104"), "Revenue Recognition in Financial Statements." Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability is reasonably assured. As at May 31, 2008 the Company has not generated any revenues. 4. USE OF ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with 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 period. Actual results could differ from those estimates. 5. FOREIGN CURRENCY TRANSLATION The financial statements are presented in United States dollars. In accordance with Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation", foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Revenue and expenses are translated at average rates of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations. 16 6. EXPLORATION STAGE COMPANY The Company complies with Financial Accounting Standards Board Statement No. 7 "Accounting and Reporting by Development Stage Enterprises" in its characterization of the Company as an exploration stage enterprise. 7. FAIR VALUE OF FINANCIAL INSTRUMENT The carrying value of cash approximates its fair value because of the short maturity of this instrument. Unless otherwise noted, it is management's opinion the Company is not exposed to significant interest, currency or credit risks arising from this financial instrument. 8. COMPREHENSIVE LOSS SFAS No. 130, "Reporting Comprehensive Income," establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at May 31, 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. 9. INCOME TAXES Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109 "Accounting for Income Taxes" as of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. 10. BASIC AND DILUTED NET INCOME (LOSS) PER SHARE The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share" (SFAS 128). SFAS 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, 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 common shares if their effect is anti-dilutive. 11. RECENT ACCOUNTING PRONOUNCEMENTS The Company anticipates that the future adoption of recent accounting pronouncements will not have a material impact on the Company's financial statements. 17 BUSINESS OPERATIONS OVERVIEW Our plan of operation for the next twelve months is to complete the first of the three phases of the exploration program on our claim. In addition to the $12,863 we anticipate spending for Phase 1 of the exploration program as outlined below, we anticipate spending an additional $3,000 on professional fees, including fees payable in connection with compliance with reporting obligations and general administrative costs. Total expenditures over the next 12 months are therefore expected to be approximately $16,000. If we experience a shortage of funds prior to funding we may utilize funds from our directors, however they have no formal commitment, arrangement or legal obligation to advance or loan funds to the company. The following three phase exploration proposal and cost estimate is offered with the understanding that consecutive phases are contingent upon positive (encouraging) results being obtained from each preceding phase and our ability to raise additional capital after the first phase: Phase 1 DATA EVALUATION AND PROSPECTING A team of two prospectors will systematically cover the area to prospect for kimberlite rocks in float or in outcrop (approximately 8 days). Aeromagnetic data for the claim area should be scrutinized for kimberlite signatures. Priority areas for prospecting will be any aeromagnetic anomalies. Any kimberlite found will be sampled and analyzed for diamonds and diamond indicator minerals. Phase 2 GEOCHEMICAL SAMPLING: All kimberlite targets found will be prospected in detail and systematic soil sampling will be done along lines spaced no more than 100 meters apart and with samples at 50 or 25 meter intervals. Aeromagnetic targets totally covered by overburden should also be sampled. Sampling methods should follow the MMI protocol and samples need to be analyzed at a specialized MMI laboratory. Positive results will be the outline of kimberlite bodies, through indicator element signatures. Total duration of the field campaign depends on the number of targets present. Duration will be 1 to 2 days per target for a 2 person prospecting-sampling crew. Processing of samples during summer can be up to 6 weeks Phase 3 DRILLING: Positive targets will need to be drill tested, first with shallow (<100 meter) holes. Tentatively 5 drill holes are contemplated. BUDGET PHASE 1 PROSPECTING C $ US $ ------- ------- Mobilization and travel costs to Chibougamau 2,000 Prospector 8 days @ $350/day 2,800 Assistant 8 days @ $250/day 2,000 Camping equipment/food 2,300 Floatplane (shared) 3,000 Organization, planning 900 ------ Total 13,000 12,863 18 PHASE 2 GEOCHEMICAL SAMPLING Mobilization and travel to Chibougamua 3,000 Technician 15 days @ $400/day 6,000 Assistant 15 days @ $250/day 3,750 Camping equipment and food 3,500 Floatplane charter 4,000 Sampling materials and equipment 600 MiM analysis 250 samples @ $35 8,750 Sample shipping 500 Drafting , Interpretation and Report 7,000 Assessment fees 1,980 Planning , Organization 2,000 ------- Total 41,080 40,642 PHASE 3 DIAMOND DRILLING 500 m , 4 drill holes @ $110/m 45,000 Supervision, organization and logging, sampling 16,000 Helicopter support 30 hrs @ $1,100 33,000 Mobe and Demobe 60,000 Report, Drafting 6,000 Camping , travel costs, food 25,000 ------- 185,000 183,029 ------- ------- 236,534 ======= Subject to financing, we plan to commence Phase 1 of the exploration program on the claim in late summer 2008. We expect this phase to take eight days to complete and an additional one to two months for the geologist to prepare his report. The above program costs are management's estimates based upon the recommendations of the professional geologist's report and the actual project costs may exceed our estimates. To date, we have not commenced exploration. Following phase one of the exploration program, if it proves successful in identifying mineral deposits, we intend to proceed with phase two of our exploration program. Subject to financing and the results of phase 1, we anticipate commencing with phase 2 and 3 in spring or summer 2009. We have a verbal agreement with Andre Pauwels, the professional geologist who prepared the geology report on the Balou Claims, to retain his services for our planned exploration program. We will require additional funding to proceed with any subsequent work on the claim; we have no current plans on how to raise the additional funding. We cannot provide any assurance that we will be able to raise sufficient funds to proceed with any phase of the exploration program. 19 ITEM 8. FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors of Cinnabar Ventures Inc. (An Exploration Stage Company) St Johns, Newfoundland, Canada We have audited the accompanying balance sheets of Cinnabar Ventures Inc. (the "Company") as of May 31, 2008 and 2007, and the related statements of operations, stockholders' equity (deficit), and cash flows for the years ended May 31, 2008 and 2007 and for the period from May 24, 2006 (inception) through May 31, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our 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 Cinnabar Ventures Inc. as of May 31, 2008 and 2007, and the results of its operations and its cash flows for the years ended May 31, 2008 and 2007 and for the period from May 24, 2006 (inception) through May 31, 2008 in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1 to the financial statements, the Company's absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2009 raise substantial doubt about its ability to continue as a going concern. The 2008 financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ LBB & Associates Ltd., LLP - --------------------------------------- LBB & Associates Ltd., LLP Houston, Texas July 2, 2008 20 CINNABAR VENTURES INC. (An Exploration Stage Company) BALANCE SHEETS - --------------------------------------------------------------------------------
May 31, 2008 May 31, 2007 - $ - - $ - ------------ ------------ ASSETS Current assets Cash 2,271 21,166 ------- ------- Total current assets 2,271 21,166 ------- ------- Total assets 2,271 21,166 ------- ------- LIABILITIES Current liabilities Accounts payable and accrued liabilities 1,627 500 Shareholder advances 3,000 -- ------- ------- Total current liabilities 4,627 500 ------- ------- Total liabilities 4,627 500 ------- ------- STOCKHOLDERS' EQUITY (DEFICIT) Common stock Authorized: 75,000,000 common shares with a par value of $0.001 Issued and outstanding: 6,340,000 common shares 6,340 6,340 Additional paid in capital 57,060 39,060 Deficit accumulated during the exploration stage (65,756) (24,734) ------- ------- Total stockholders' equity (deficit) (2,356) 20,666 ------- ------- Total liabilities and stockholders' equity (deficit) 2,271 21,166 ======= =======
See accompanying summary of accounting policies and notes to financial statements 21 CINNABAR VENTURES INC. (An Exploration Stage Company) STATEMENTS OF OPERATIONS Years ended May 31, 2008 and May 31, 2007 and period from May 24, 2006 (Inception) through May 31, 2008 - --------------------------------------------------------------------------------
Period from May 24, 2006 (Inception) to May 31, May 31, May 31, 2008 2007 2008 - $ - - $ - - $ - ---------- ---------- ---------- Management fees 12,000 12,000 24,000 General and administrative 29,022 12,734 41,756 ---------- ---------- ---------- Net loss (41,022) (24,734) (65,756) ========== ========== ========== Basic and diluted net loss per share (0.01) (0.00) Weighted average number of shares outstanding 6,340,000 5,763,342 ========== ==========
See accompanying summary of accounting policies and notes to financial statements 22 CINNABAR VENTURES INC. (An Exploration Stage Company) STATEMENTS OF CASH FLOWS Years ended May 31, 2008 and May 31, 2007 and period from May 24, 2006 (Inception) through May 31, 2008 - --------------------------------------------------------------------------------
Period from May 24, 2006 (Inception) through May 31, May 31, May 31, 2008 2007 2008 - $ - - $ - - $ - ------- ------- ------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss (41,022) (24,734) (65,756) Add: Non cash contribution of services 18,000 18,000 36,000 Adjustments to reconcile net loss to cash used by operating activities: Net change in: Accounts payable and accrued liabilities 1,127 500 1,627 ------- ------- ------- CASH FLOWS USED IN OPERATING ACTIVITIES (21,895) (6,234) (28,129) ------- ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from shareholder advances 3,000 -- 3,000 Cash received from sale of common stock -- 22,400 27,400 ------- ------- ------- CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 3,000 22,400 30,400 ------- ------- ------- NET INCREASE (DECREASE) IN CASH (18,895) 16,166 2,271 CASH, BEGINNING OF PERIOD 21,166 5,000 -- ------- ------- ------- CASH, END OF PERIOD 2,271 21,166 2,271 ======= ======= ======= SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid -- -- -- ======= ======= ======= Taxes paid -- -- -- ======= ======= =======
See accompanying summary of accounting policies and notes to financial statements 23 CINNABAR VENTURES INC. (An Exploration Stage Company) STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) Period from May 24, 2006 (Inception) through May 31, 2008 - --------------------------------------------------------------------------------
Deficit Accumulated Common Shares Additional During the --------------------- Paid-in Exploration Number Par Value Capital Stage Total ------ --------- ------- ----- ----- Balance, May 24, 2006 -- $ -- $ -- $ -- $ -- Stock issued to founders for cash 5,000,000 5,000 -- -- 5,000 --------- ------- -------- --------- -------- Balance, May 31, 2006 5,000,000 5,000 -- -- 5,000 Stock issued for cash 1,340,000 1,340 21,060 -- 22,400 Donated capital -- -- 18,000 -- 18,000 Net loss -- -- -- (24,734) (24,734) --------- ------- -------- --------- -------- Balance, May 31, 2007 6,340,000 6,340 39,060 (24,734) 20,666 Donated capital -- -- 18,000 -- 18,000 Net loss -- -- -- (41,022) (41,022) --------- ------- -------- --------- -------- Balance, May 31, 2008 6,340,000 $ 6,340 $ 57,060 $ (65,756) $ (2,356) ========= ======= ======== ========= ========
See accompanying summary of accounting policies and notes to financial statements 24 CINNABAR VENTURES INC. (An Exploration Stage Company) NOTES TO FINANCIAL STATEMENTS Period From Inception (May 24, 2006) to May 31, 2008 - -------------------------------------------------------------------------------- 1. NATURE OF OPERATIONS The Company was incorporated in the State of Nevada on May 24, 2006 and is in the exploration stage. These financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company anticipates future losses in the development of its business, which raises substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and/or issuance of common shares. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company's year end is May 31. CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with an original maturity of three months or less at the time of issuance to be cash equivalents. REVENUE RECOGNITION The Company recognizes reproduction and distribution revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101 and 104 ("SAB 101 and 104"), "Revenue Recognition in Financial Statements." Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectibility is reasonably assured. As at May 31, 2008, the Company has not generated any revenues. USE OF ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with 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 period. Actual results could differ from those estimates. FOREIGN CURRENCY TRANSLATION The financial statements are presented in United States dollars. In accordance with Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation", foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Revenue and expenses are translated at average rates of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations. EXPLORATION STAGE COMPANY The Company complies with Financial Accounting Standards Board Statement No. 7 "Accounting and Reporting by Development Stage Enterprises" in its characterization of the Company as an exploration stage enterprise. 25 CINNABAR VENTURES INC. (An Exploration Stage Company) NOTES TO FINANCIAL STATEMENTS Period From Inception (May 24, 2006) to May 31, 2008 - -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) FAIR VALUE OF FINANCIAL INSTRUMENT The carrying value of cash approximates its fair value because of the short maturity of this instrument. Unless otherwise noted, it is management's opinion the Company is not exposed to significant interest, currency or credit risks arising from this financial instrument. COMPREHENSIVE LOSS SFAS No. 130, "Reporting Comprehensive Income," establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at May 31, 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. INCOME TAXES Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109 "Accounting for Income Taxes" as of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. BASIC AND DILUTED NET INCOME (LOSS) PER SHARE The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share" (SFAS 128). SFAS 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, 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 common shares if their effect is anti-dilutive. RECENT ACCOUNTING PRONOUNCEMENTS The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position, or cash flow. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances. 3. COMMON SHARES a) In June 2006 the Company issued 5,000,000 common shares of the Company at $0.001 per share for cash proceeds of $5,000. b) In August 2006 the Company issued 240,000 common shares of the Company at $0.01 per share for cash proceeds of $2,400. c) In September 2006 the Company issued 1,000,000 common shares of the Company at $0.01 per share for cash proceeds of $10,000. d) In November 2006 the Company issued 100,000 common shares of the Company at $0.10 per share for cash proceeds of $10,000. 26 CINNABAR VENTURES INC. (An Exploration Stage Company) NOTES TO FINANCIAL STATEMENTS Period From Inception (May 24, 2006) to May 31, 2008 - -------------------------------------------------------------------------------- 4. INCOME TAXES The Company follows Statement of Financial Accounting Standards Number 109 (SFAS 109), "Accounting for Income Taxes." Deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry-forwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry-forward has been recognized, as it is not deemed likely to be realized. The provision for refundable federal income tax consists of the following for the years ending May 31: May 31, 2008 May 31, 2007 - $ - - $ - ------------ ------------ Refundable federal income tax attributable to: Net loss 14,000 8,500 Less: Change in valuation allowance (14,000) (8,500) ------- ------- Net refundable amount -- -- ======= ======= The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows: May 31, 2008 - $ - ------------ Deferred tax asset attributable to: Net operating loss carryover 22,500 Valuation allowance (22,500) ------- Net deferred tax asset -- ======= At May 31, 2008, the Company had an unused net operating loss carry-forward approximating $66,000 that is available to offset future taxable income; the loss carry-forward will start to expire in 2028. The effective tax rate for the Company is reconciled to statutory tax rates as follows: May 31, 2008 May 31, 2007 ------------ ------------ U.S. Federal statutory tax rate 34% 34% U.S. valuation difference (34%) (34%) ----- ----- Effective tax rate -- -- ===== ===== 27 CINNABAR VENTURES INC. (An Exploration Stage Company) NOTES TO FINANCIAL STATEMENTS Period From Inception (May 24, 2006) to May 31, 2008 - -------------------------------------------------------------------------------- 5. RELATED PARTY TRANSACTIONS During the year ending May 31, 2008, a related party contributed management services and office space to the Company. These services were valued at $1,500 per month and recorded as a contribution to capital. During the year ending May 31, 2008, the president of the company advanced $3,000 to the company for operating expenses. The loan is shown as an account payable on the balance sheet, bears no interest, is unsecured and is payable upon demand. 28 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared. MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company. Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. 29 Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the Evaluation Date. Management assessed the effectiveness of the Company's internal control over financial reporting as of Evaluation Date and identified the following material weaknesses: INSUFFICIENT RESOURCES: We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting. INADEQUATE SEGREGATION OF DUTIES: We have an inadequate number of personnel to properly implement control procedures. LACK OF AUDIT COMMITTEE & OUTSIDE DIRECTORS ON THE COMPANY'S BOARD OF DIRECTORS: We do not have a functioning audit committee and outside directors on the Company's Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures. Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) may consider appointing outside directors and audit committee members in the future. Management, including our Chief Executive Officer and Chief Financial Officer, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected. This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING Additionally, there were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date. We have not identified any significant deficiencies or material weaknesses in our internal controls, and therefore there were no corrective actions taken. 30 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS The officer and directors of Cinnabar Ventures Inc., whose one year terms will expire on 05/31/09, or at such a time as their successor(s) shall be elected and qualified are as follows: Name & Address Age Position Date First Elected Term Expires - -------------- --- -------- ------------------ ------------ Stephanie Wood 41 President, 5/24/06 5/31/09 #291 - 38 Pearson Street Secretary, Saint Johns, Newfoundland Treasurer, Canada A1A 3R1 CFO, CEO & Director Barry Anderson 61 Director 5/24/06 5/31/09 #291 - 38 Pearson Street Saint Johns, Newfoundland Canada A1A 3R1 The persons named above are promoters of Cinnabar Ventures Inc., as that term is defined in the rules and regulations promulgated under the Securities and Exchange Act of 1933. Directors are elected to serve until the next annual meeting of stockholders and until their successors have been elected and qualified. Officers are appointed to serve until the meeting of the board of directors following the next annual meeting of stockholders and until their successors have been elected and qualified. Our directors currently devote as much time as the board of directors deems necessary to manage the affairs of the company. Our officer and directors have not been the subject of any order, judgment, or decree of any court of competent jurisdiction, or any regulatory agency permanently or temporarily enjoining, barring, suspending or otherwise limiting them from acting as an investment advisor, underwriter, broker or dealer in the securities industry, or as an affiliated person, director or employee of an investment company, bank, savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any securities. They have not been convicted in any criminal proceeding (excluding traffic violations) and are not the subject of a criminal proceeding which is currently pending. RESUMES STEPHANIE WOOD has been President, CEO, Treasurer, CFO, Secretary and Director of the Company since inception. 31 From 1997 to the present she has been employed by Aliant, a telecommunications company, as a Human Resource Manager. 1994 Graduate of Temple University, Philadelphia, PA with a bachelor's degree in geography and urban studies. BARRY ANDERSON has been Director of the Company since inception. For the last 18 years he was employed in sales and promotions by Air Canada and retired in 2006. 1973 Graduate of University of Western Ontario with a bachelor's degree in commerce. CODE OF ETHICS We do not currently have a code of ethics, because we have only limited business operations, one officer and two directors, we believe a code of ethics would have limited utility. We intend to adopt such a code of ethics as our business operations expand and we have more directors, officers and employees. ITEM 11. EXECUTIVE COMPENSATION Our current officer receives no compensation. The current Board of Directors is comprised of Stephanie Wood and Barry Anderson. SUMMARY COMPENSATION TABLE
Change in Pension Value & Non-Equity Nonqualified Incentive Deferred All Name and Plan Compen- Other Principal Stock Option Compen- sation Compen- Position Year Salary Bonus Awards Awards sation Earnings sation Totals - -------- ---- ------ ----- ------ ------ ------ -------- ------ ------ Stephanie Wood, 2007 0 0 0 0 0 0 0 0 President, 2008 0 0 0 0 0 0 0 0 CEO and Director Barry Anderson, 2007 0 0 0 0 0 0 0 0 Director 2008 0 0 0 0 0 0 0 0
There are no current employment agreements between the company and its executive officers. In June 2006, a total of 5,000,000 shares of common stock were issued to Stephanie Wood and Barry Anderson in exchange for cash in the amount of $5,000 U.S., or $.001 per share. 32 The terms of these stock issuances were as fair to the company, in the opinion of the board of directors, as could have been made with an unaffiliated third party. Stephanie Wood currently devotes approximately 5 hours per week to manage the affairs of the company. She has agreed to work with no remuneration until such time as the company receives sufficient revenues necessary to provide management salaries. At this time, we cannot accurately estimate when sufficient revenues will occur to implement this compensation, or what the amount of the compensation will be. There are no annuity, pension or retirement benefits proposed to be paid to officers, directors or employees in the event of retirement at normal retirement date pursuant to any presently existing plan provided or contributed to by the company or any of its subsidiaries, if any. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information on the ownership of Cinnabar Ventures Inc. voting securities by officers, directors and major shareholders as well as those who own beneficially more than five percent of our common stock as of the date of this annual report: Name of No. of Percentage Beneficial Owner(1) Shares of Ownership: ------------------- ------ ------------- Stephanie Wood 2,500,000 39% Barry Anderson 2,500,000 39% Officers and Directors as a Group (2) 5,000,000 78% - ---------- (1) The persons named may be deemed to be a "parent" and "promoter" of the Company, within the meaning of such terms under the Securities Act of 1933, as amended. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In June 2006, a total of 5,000,000 shares of Common Stock were issued to Stephanie Wood and Barry Anderson in exchange for $5,000 US, or $.001 per share (2,500,000 shares each). All of such shares are "restricted" securities, as that term is defined by the Securities Act of 1933, as amended, and are held by the officer and directors of the Company. (See "Principal Stockholders".) During the year ending May 31, 2008, the president of the company advanced $3,000 to the company for operating expenses. The loan is shown as an account payable on the balance sheet, bears no interest, is unsecured and is payable upon demand. 33 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The total fees charged to the company for audit services were $4,600, for tax services were $Nil and for other services were $10,050 during the year ended May 31, 2008. The total fees charged to the company for audit services were $Nil, for tax services were $Nil and for other services were $Nil during the year ended May 31, 2007. ITEM 15. EXHIBITS The following exhibits are included with this filing: Exhibit No. Description ----------- ----------- 3.1 Articles of Incorporation* 3.2 Bylaws* 31.1 Sec. 302 Certification of Chief Executive Officer 31.2 Sec. 302 Certification of Chief Financial Officer 32.1 Sec. 906 Certification of Chief Executive Officer 32.2 Sec. 906 Certification of Chief Financial Officer - ---------- * Incorporated by reference and can be found in our original Form SB-2 Registration Statement, filed under SEC File Number 333-145443, at the SEC website at www.sec.gov. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. July 25, 2008 Cinnabar Ventures Inc., Registrant By: /s/ Stephanie Wood ----------------------------------------------------- Stephanie Wood, President, Chief Executive Officer, Principal Accounting Officer, Chief Financial Officer and Director By: /s/ Barry Anderson ----------------------------------------------------- Barry Anderson, Director 34 EX-31.1 2 ex31-1.txt CEO SECTION 302 CERTIFICATION Exhibit 31.1 CERTIFICATION I, Stephanie Wood, certify that: 1. I have reviewed this report on Form 10-K of Cinnabar Ventures, Inc. 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 25, 2008 /s/ Stephanie Wood - ------------------------------------- Stephanie Wood Principal Executive Officer EX-31.2 3 ex31-2.txt CFO SECTION 302 CERTIFICATION Exhibit 31.2 CERTIFICATION I, Stephanie Wood, certify that: 1. I have reviewed this report on Form 10-K of Cinnabar Ventures, Inc. 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 25, 2008 /s/ Stephanie Wood - ------------------------------------------------------------ Stephanie Wood Principal Accounting Officer and Principal Financial Officer EX-32.1 4 ex32-1.txt CEO SECTION 906 CERTIFICATION Exhibit 32.1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Cinnabar Ventures Inc. (the "Company") on Form 10-K for the year ending May 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Stephanie Wood, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. IN WITNESS WHEREOF, the undersigned has executed this certification as of the 25th day of July, 2008. /s/ Stephanie Wood - ----------------------------------- Principal Executive Officer EX-32.2 5 ex32-2.txt CFO SECTION 906 CERTIFICATION Exhibit 32.2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Cinnabar Ventures Inc. (the "Company") on Form 10-K for the year ending May 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Stephanie Wood, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. IN WITNESS WHEREOF, the undersigned has executed this certification as of the 25th day of July, 2008. /s/ Stephanie Wood - --------------------------------- Principal Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----