Yeah, I'm out. This is a piece of junk. If I offended any junk out there by this comparison, your pardon I thus beg of you.
Our ability to function as an operating mining company is dependent on our ability to mine our properties
at a profit.
Our ability to operate on a positive cash flow basis is dependent on mining sufficient quantities of gold and silver
at a profit sufficient to finance our operations and for the acquisition and development of additional mining
properties.
We may not have good title to our unpatented mining claims.
The validity of unpatented mining claims is often uncertain, and such validity is always subject to contest.
Unpatented mining claims are unique property interests and are generally considered subject to greater title risk
than patented mining claims, or real property interests that are owned in fee simple.
Although the Company has attempted to acquire satisfactory title to its unpatented mining claims, the Company
does not generally obtain title opinions until financing is sought to develop a property, with the attendant risk that
title to some properties, particularly title to undeveloped properties, may be defective. We will need State of
Arizona Consent and a Mining Lease to Mine on State Lands.
123 | Page
GNCC CAPITAL, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
Because we have limited capital, inherent mining risks pose a significant threat to us.
Because we are small company with limited capital, we are unable to withstand significant losses that can result
from inherent risks associated with mining, including environmental hazards, industrial accidents, flooding,
interruptions due to weather conditions and other acts of nature. Such risks could result in damage to or destruction
of any infrastructure or production facilities we may develop, as well as to adjacent properties, personal injury,
environmental damage and delays, causing monetary losses and possible legal liability.
More stringent federal, provincial or state regulations could adversely affect our business.
If we are unable to obtain or maintain permits or water rights for development of our properties or otherwise fail
to manage adequately future environmental issues, our operations could be materially and adversely affected. We
may be required to expend significant resources, both financial and managerial, to comply with environmental
protection laws, regulations and permitting requirements. Although we believe our mineral property complies in
all material respects with all relevant permits, licenses, and regulations pertaining to worker health and safety, as
well as those pertaining to the environment, the historical trend toward stricter environmental regulation may
continue.
The volatility of gold and silver prices makes our business uncertain.
The volatility of gold and silver prices makes long-range planning uncertain and raising capital difficult. The
price of silver is affected by numerous factors beyond our control, including the investment and industrial demand
for silver, political and economic conditions, and legislation and production and costs of production of our
competitors.
Our inability to obtain insurance would threaten our ability to continue in business.
We currently do not have liability and property damage insurance. It should be noted that if we decide to obtain
such insurance, the insurance industry is undergoing change and premiums are being increased. If premiums
should increase to a level we cannot afford, we could be forced to discontinue business.
124 | Page
GNCC CAPITAL, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
If we cannot add reserves to replace future production, we would not be able to remain in business.
Our future gold and silver production, cash flow and income are dependent upon our ability to mine our mineral
property and acquire and develop gold and silver reserves. There can be no assurance that our property will be
placed into production or that we will be able to continue to find and develop or acquire additional reserves.
Competition from better-capitalized companies affects prices and our ability to acquire properties and
personnel.
There is global competition for gold and silver properties, capital, customers and the employment and retention
or qualified personnel. In the production and marketing of gold and silver, there are a limited number of major
producing entities, all of which are significantly larger and better capitalized than we are.
Gold and Silver mineral exploration, development and mining are subject to environmental regulations
which may prevent or delay the commencement or continuance of our operations.
Gold and Silver minerals exploration and development and future potential gold and silver mining operations are
or will be subject to stringent federal, state, provincial, and local laws and regulations relating to improving or
maintaining environmental quality. Our operations are also subject to many environmental protection laws.
Environmental laws often require parties to pay for remedial action or to pay damages regardless of fault.
Environmental laws also often impose liability with respect to divested or terminated operations, even if the
operations were terminated or divested of many years ago.
Future potential gold and silver mining operations and current exploration activities are or will be subject to
extensive laws and regulations governing prospecting, development, production, exports, taxes, labor standards,
occupational health, waste disposal, protection and remediation of the environment, protection of endangered and
protected species, mine safety, toxic substances and other matters. Gold and Silver mining is also subject to risks
and liabilities associated with pollution of the environment and disposal of waste products occurring as a result
of mineral exploration and production. Compliance with these laws and regulations will impose substantial costs
on us and will subject us to significant potential liabilities.
Costs associated with environmental liabilities and compliance is expected to increase with the increasing
scale and scope of operations and we expect these costs may increase in the future.
While we believe that our operations comply, in all material respects, with all applicable environmental
regulations, we are not currently fully insured against possible environmental risks.
125 | Page
GNCC CAPITAL, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
Any change to government regulation or administrative practices may have a negative impact on our
ability to operate and potential profitability.
The laws, regulations, policies or current administrative practices of any government body, organization or
regulatory agency in the United States or any other applicable jurisdiction, may be changed, applied or interpreted
in a manner which will fundamentally alter our ability to carry on business. The actions, policies or regulations,
or changes thereto, of any government body or regulatory agency, or other special interest groups, may have a
detrimental effect on us. Any or all of these situations may have a negative impact on our ability to operate and/or
our profitably.
We may be unable to retain key employees or consultants or recruit additional qualified personnel.
Our extremely limited personnel means that we would be required to spend significant sums of money to locate
and train new employees in the event any of our employees resign or terminate their employment with us for any
reason. Further, we do not have key man life insurance on any of our employees. We may not have the financial
resources to hire a replacement if any of our officers were to die. The loss of service of any of these employees
could therefore significantly and adversely affect our operations.
Our officers and directors may be subject to conflicts of interest.
Each of our executive officers and directors devotes part of his working time to other business endeavors,
including consulting relationships with other corporate entities, and has responsibilities to these other entities.
Such conflicts could include deciding how much time to devote to our affairs, as well as what business
opportunities should be presented to the Company. Because of these relationships, our officers and directors may
be subject to conflicts of interest. Wyoming law, our articles of incorporation and our Bylaws permit us broad
indemnification powers to all persons against all damages incurred in connection with our business to the fullest
extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders
from recovering damages against our officers and directors caused by their negligence, poor judgment or other
circumstances. The indemnification provisions may require us to use our limited assets to defend our officers and
directors against claims, including claims arising out of their negligence, poor judgment, or other circumstances.
We may lose our rights to our mining claims.
Under our gold and silver Project Acquisition Agreements there are minimum work expenditure requirements per
year per project. Also, we are required to pay the United States Bureau of Land Management (BLM) annual claim
maintenance fees for our claims. If the claim vendors pay the BLM claim maintenance fees on our behalf (and
they are not required to do so), we are required to reimburse them on demand. If we fail to pay any amounts due
to the claim vendors within the requisite cure periods, the claim vendors may terminate our rights to our claims.
126 | Page
GNCC CAPITAL, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
Risks Related to Our Common Stock:
We are not listed or quoted on any exchange and we may never obtain such a listing or quotation.
Therefore, there may never be a market for stock and stock held by our shareholders may have little or no value.
There is presently only an extremely limited public market in our shares as we are quoted on the “OTC Market.”
Even if we obtain a listing on an exchange and a more active market for our shares develops, sales of a substantial
number of shares of our common stock into the public market by certain stockholders may result in significant
downward pressure on the price of our common stock and could affect your ability to realize the current trading
price of our common stock.
The trading price of our common stock in a public market may fluctuate significantly and stockholders
may have difficulty reselling their shares.
Additional issuances of equity securities may result in dilution to our existing stockholders. Our Articles of
Incorporation authorize the issuance of 30,000,000,000 shares of common stock.
Our common stock is subject to the "penny stock" rules of the SEC.
Our common stock is subject to the "penny stock" rules of the SEC and the trading market in our securities is
limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our
stock.
Because our stock is not traded on a stock exchange or on the NASDAQ National Market or the NASDAQ Small
Cap Market and because there is no current established market price, the common stock is classified as a "penny
stock.” The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a
"penny stock," for purposes relevant to us, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction
involving a penny stock, unless exempt, the rules require:
1.That a broker or dealer approve a person's account for transactions in penny stocks; and
2.The broker or dealer receives, from the investor, a written agreement to the transaction, setting forth the identity
and quantity of the penny stock to be purchased.
127 | Page
GNCC CAPITAL, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
3.In order to approve a person's account for transactions in penny stocks, the broker or dealer must:
Obtain financial information and investment experience objectives of the person; and
Make a reasonable determination that the transactions in penny stocks are suitable for that person and the person
has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions
in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared
by the Commission relating to the penny stock market, which:
Sets forth the basis on which the broker or dealer made the suitability determination; and
That the broker or dealer received a signed, written agreement from the investor prior to the transaction.
Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules.
This may make it more difficult for investors to dispose of our common stock and cause a decline in the market
value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in
secondary trading and about the commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny
stock transactions. Finally, monthly statements disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stocks must be sent.
Investing in our Common Stock will provide you with an equity ownership in a gold resource company. As one
of our stockholders, you will be subject to risks inherent in our business. The trading price of your shares will be
affected by the performance of our business relative to, among other things, competition, market conditions and
general economic and industry conditions. The value of your investment may decrease, resulting in a loss. You
should carefully consider the following factors as well as other information contained in this disclosure before
deciding to invest in shares of our Common Stock.
The factors identified below are important factors (but not necessarily all of the important factors) that could
cause actual results to differ materially from those expressed in any forward-looking statement made by, or on
behalf of, the Company. Where any such forward-looking statement includes a statement of the assumptions or
bases underlying such forward-looking statement, we caution that while we believe such assumptions or bases to
be reasonable and make them in good faith, assumed facts or bases almost always vary from actual results, and
the differences between assumed facts or bases and actual results can be material, depending upon the
circumstances. Where, in any forward-looking statement, the Company, or its management, expresses an
expectation or belief as to the future results, such expectation or belief is expressed in good faith and believed to
have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result,
achieved, or accomplished. Taking into account the foregoing, the following are identified as important risk
factors that could cause actual results to differ materially from those expressed in any forward-looking statement
made by, or on behalf of, the Company.
128 | Page
GNCC CAPITAL, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
A number of our shares of Common Stock are controlled by a Limited Number of Stockholders and
Management.
A large number of our outstanding shares of Common Stock are controlled by about 8 stockholders of record.
Such ownership by the Company's principal shareholders may have the effect of delaying, deferring, preventing
or facilitating a sale of the Company or a business combination with a third party. This excludes shares of
Common Stock held on deposit with Stock Brokers in the DTCC. The Directors do not take these shares of
Common Stock into account as they will fluctuate from time to time based upon acquisition or disposal of shares
of Common Stock, in the market.
Even taking into account the limitations of Rule 144, the future sales of restricted shares could have a
depressive effect on the market price of the Company’s securities in any market, which may develop.
Certain of our outstanding shares of Common Stock, of the shares of Common Stock presently issued and
outstanding, are “restricted securities” as that term is defined under the Securities Act of 1933, as amended, (the
“Securities Act”) and in the future may be sold in compliance with Rule 144 of the Securities Act, or pursuant to
a Registration Statement filed under the Securities Act. Rule 144 provides, in essence, that a person, who has not
been an affiliate of the issuer for the past 90 (Ninety) days and has held restricted securities for twelve months of
an issuer that has been reporting for a period of at least 90 (Ninety) days, may sell those securities so long as the
Company is current in its reporting obligations. After one year, non-affiliates are permitted to sell their restricted
securities freely without being subject to any other Rule 144 condition. Sales of restricted shares by our affiliates
who have held the shares for 6 (Six) months are limited to an amount equal to one percent (1%) of the Company’s
outstanding Common stock that may be sold in any 3 (Three) month period. Additionally, Rule 144 requires that
an issuer of securities make available adequate current public information with respect to the issuer. Such
information is deemed available if the issuer satisfies the reporting requirements of Rule 15c2-11 of the Securities
Exchange Act of 1934 (the “Securities Exchange Act”) or, in the event that we become subject to the reporting
requirements of the Securities Exchange Act, under sections 13 or 15(d) thereunder. Sales under Rule 144 or
pursuant to a Registration Statement may have a depressive effect on the market price of our securities in any
market, which may develop for such shares.
129 | Page
GNCC CAPITAL, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
If the selling shareholders sell a large number of shares all at once or in blocks, the value of our shares
would most likely decline.
The Company has 17,406,920,766 shares of Common Stock outstanding as of June 30, 2019 and as at July 14,
2019. An amount of 15,332,983,520 of our shares of Common Stock are on deposit at the DTC, as at July 14,
2019.
The availability for sale of such a large number of shares may depress the market price for our Common Stock
and impair our ability to raise additional capital through the public sale of Common Stock. The Company has no
arrangement with any of the holders of the foregoing shares to address the possible effect on the price of the
Company's Common Stock of the sale by them of their shares. A decline in the future price of our common stock
could affect our ability to raise further working capital and adversely impact our operations
