BRAZOS INTERNATIONAL EXPLORATION, INC.
(exact name of registrant as specified in charter)
NEVADA 000-53336 01-0884561_______
State or other jurisdiction Commission File No. IRS Employer Identification No.
Incorporation or organization
1660 N W 19
th
Avenue, Pompano Beach, Florida 33069
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 917.586.2118
With a copy to:
Stephen M. Fleming, Esq.
Law Offices of Stephen M. Fleming PLLC
49 Front Street, Suite 206
Rockville Centre, NY 10005
T: 516.833.5034
F: 516.977.1209
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: None
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_]
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrants 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. [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]
State issuers revenues for its most recent fiscal year: $0.00
The aggregate market value of the voting and non-voting common equity held by non-affiliates, computed by reference to the average bid and asked price of such common equity, as of March 31, 2010 is $51,000.
As of March 31, 2010, the issuer had 5,100,000 outstanding shares of Common Stock.
Transitional Small Business Disclosure Format (check one): Yes [X] No [ ]
BRAZOS INTERNATIONAL EXPLORATION, INC.
FORM 10-K/A
For the Fiscal Year Ended March 31, 2010
TALE OF CONTENTS
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Part I
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Pg
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Item 1.
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Business
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3
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Item 1A.
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Risk Factors
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10
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Item 2
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Properties
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14
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Item 3
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Legal Proceedings
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14
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Item 4
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Submission of Matters to a Vote of Security Holders
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14
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Part II
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Item 5.
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Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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15
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Item 6
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Selected Financial Data
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16
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Item 7
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Managements Discussion and Analysis of Financial Condition and Results of Operations
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16
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Item 7A
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Quantitative and Qualitative Disclosure About Market Risk
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19
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Item 8
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Financial Statements and Supplementary Data
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19
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Item 9
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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19
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Item 9A
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Controls & Procedures
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19
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Item 9B
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Other Information
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20
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Part III
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Item 10
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Directors, Executive Officers and Corporate Governance
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20
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Item 11
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Executive Compensation
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21
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Item 12
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Security Ownership of Certain Beneficial Owners and Management
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21
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Item 13
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Certain Relationships and Related Transactions and Director Independence
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22
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Item 14
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Principal Accounting Fees and Services
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22
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Part IV
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Item 15
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Exhibits, Financial Statement Schedules
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23
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NOTE:
The financial statements contained in this Report on Form 10K/A have been restated to correct errors in the dates that shares were issued and the indicated adjustments in the Statements of Operations and Cash Flows.
Part I
FORWARD-LOOKING INFORMATION
This Annual Report of Brazos International Exploration, Inc on Form 10-K contains forward-looking statements, particularly those identified with the words, "anticipates," "believes," "expects," "plans," intends, objectives and similar expressions. These statements reflect management's best judgment based on factors known at the time of such statements. The reader may find discussions containing such forward-looking statements in the material set forth under "Legal Proceedings" and "Management's Discussion and Analysis and Plan of Operations," generally, and specifically therein under the captions "Liquidity and Capital Resources" as well as elsewhere in this Annual Report on Form 10-K. Actual events or results may differ materially from those discussed herein.
ITEM 1: DESCRIPTION OF BUSINESS
We were incorporated in the State of Nevada on January 11, 2007. Our principal offices are located at
1660 N W 19
th
Avenue, Pompano Beach, Florida 33069
We intended to be in the business of mineral property exploration. We had an option to acquire a 100% interest in the mining claims comprising the Lac Dube claims, located approximately 200 km northwest and 65-70 km northeast of Montreal and Mont-Laurier, respectively. The property, which consists of 16 contiguous mining claims (940.04 ha), is situated in the Franchere Township (NTS Map 31J/15) in southwestern Quebec. The property is easily accessible by provincial highways, paved and all-weather gravel roads from major centers of Quebec (Montreal) and Quebec (Ottawa).
We acquired the option from Mr. Michael Carr of Calgary, Alberta.
Due to lack of viable deposits on the mineral claims the Company has abandoned the pursuit and exploration of the mineral claims offered by Mr. Carr. As of March 2, 2010, the Company has issued 500,000 shares of its common stock and paid $5,000 towards the claims option and these amounts have been expensed as exploration costs.
As a result of our decision to not proceed with further efforts on the Lac Dube claims, our management is seeking other opportunities. These opportunities include investigating other potential mineral properties as well as non-mineral business ventures that may be seeking a business combination.
Employees
We currently have no full-time employees including our CEO and Principal Accounting Officer.
Research & Development
We have incurred no research and development costs, since inception.
Risk Factors
An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
Our current operating funds are totally depleted. As of March 31, 2010 we had cash in the amount of $22. We currently do not have any operations and we have no income.
Should we find an alternate mineral property, significant expenses will be incurred in connection with the exploration. We do not currently have sufficient funds to continue in business and will be entirely dependent on loans or further equity investments from officers, directors and shareholders. Any sale of share capital will result in dilution to existing shareholders.
BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF BUSINESS FAILURE.
We were incorporated on January 11, 2007 and have been involved primarily in organizational activities and the acquisition of our mineral property. We have not earned any revenues as of the date of this prospectus. Potential investors should be aware of the difficulties normally encountered by new small micro-cap ventures and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the organization, infrastructure and implementation of a new business plan of any kind.
There is limited history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance 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.
WE NEED TO CONTINUE AS A GOING CONCERN IF OUR BUSINESS IS TO SUCCEED.
Our independent accountants report to our audited financial statements for the period ended March 31, 2010, indicates that there are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such factors identified in the report are our accumulated deficit since inception, our failure to attain profitable operations and our dependence upon obtaining adequate financing to pay our liabilities. If we are not able to continue as a going concern, it is likely investors will lose their investments.
BECAUSE MANAGEMENT HAS NO TECHNICAL EXPERIENCE IN MINERAL EXPLORATION, OUR BUSINESS HAS A HIGHER RISK OF FAILURE.
Our directors do not have any technical training in the field of geology. As a result, we 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. As well, with no direct training or experience, our management may not be fully aware of the specific requirements related to working in this industry. Their decisions and choices may not be well thought out and our operations and ultimate financial success may suffer irreparable harm as a result. Should we be forced to consider an alternative course of action and/or a business combination our officers and directors may well face the same type of problem in evaluating any new business opportunity.
BECAUSE OUR DIRECTORS HAVE OTHER BUSINESS INTERESTS, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
Our president, Mr. Keating intends to devote 10 hours per week to our business affairs. It is possible that the demands on Mr. Keating from other obligations could increase with the result that he would no longer be able to devote sufficient time to the management of our business. In addition, Mr. Keating may not possess sufficient time for our business if the demands of managing our business increased substantially beyond current levels.
Risks Relating to Our Common Stock
:
If A Market For Our Common Stock Does Not Develop, Shareholders May Be Unable To Sell Their Shares.
There is currently no market for our common stock and we can provide no assurance that a market will develop. We currently plan to apply for listing of our common stock on the over the counter bulletin board upon the effectiveness of the registration statement, of which this prospectus forms a part. However, we can provide investors with no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize. If no market is ever developed for our shares, it will be difficult for shareholders to sell their stock. In such a case, shareholders may find that they are unable to achieve benefits from their investment.
If We Fail to Remain Current in Our Reporting Requirements, We Could be Removed From the OTC Bulletin Board Which Would Limit the Ability of Broker-Dealers to Sell Our Securities and the Ability of Stockholders to Sell Their Securities in the Secondary Market.
Companies trading on the OTC Bulletin Board, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.
Authorization of preferred stock.
Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Although we have no present intention to issue any shares of our authorized preferred stock, there can be no assurance that the Company will not do so in the future.
The Shares are an illiquid investment and transferability of the Shares is subject to significant restriction
There are substantial restrictions on the transfer of the Shares. Therefore, the purchase of the Shares must be considered a long-term investment acceptable only for prospective investors who are willing and can afford to accept and bear the substantial risk of the investment for an indefinite period of time. There is not a public market for the resale of the Shares. A prospective investor, therefore, may not be able to liquidate
its investment, even in the event of an emergency, and Shares may not be acceptable as collateral for a loan.
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.
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the 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:
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that a broker or dealer approve a person's account for transactions in penny stocks; and
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the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
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In order to approve a person's account for transactions in penny stocks, the broker or dealer must:
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obtain financial information and investment experience objectives of the person; and
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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.
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The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:
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sets forth the basis on which the broker or dealer made the suitability determination; and
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that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
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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 have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
ITEM 2: PROPERTIES.
We maintain our principal office at
1660 N W 19
th
Avenue, Pompano Beach, Florida 33069
Our telephone number: 917.586.2118
F: 516.977.1209
These facilities are provided at no charge as a temporary office and mailing address by a officer and director. As of March 31, 2010 we have no other property.
ITEM 3: LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse affect on our business, financial condition or operating results.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5: MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
OTC Bulletin Board Considerations
The Companys common stock is currently traded on the Over the Counter Bulletin Board (OTCBB). To be quoted on the OTCBB, a market maker must file an application on our behalf in order to make a market for our common stock. Trading of our common stock is limited.
52 Week Low $0.01 High: $0.45
Holders
As of March 31, 2010, the approximate number of stockholders of record of the Common Stock of the Company was 38.
Dividends
We have not declared any dividends.
Equity Compensation Plan Information
We do not have any equity compensation plan as of the date of this report.
Recent sales of unregistered securities
We completed an offering of 14,000,000 shares of our common stock at a price of $0.0025 per share to 35 purchasers from May through December, 2007.
On August 12, 2008 we issued 2,400,000 shares of our common stock to Mr. David Keating and 2,000,000 shares of our common stock to Mr. Mathew Elsner. Mr. Keating is our president and Chief Executive Officer, our Treasurer and Principal Accounting Officer and director and Mr. Elsner is our Secretary and Director. Mr. Keating and Mr. Elsner acquired these shares at a deemed price of $0.00025 per share for total amount $1,100.00 for the time, effort and expense of organizing the company. These shares were issued pursuant to Section 4(2) and Regulations S of Rule 506 of the Securities Act of 1933 (the "Securities Act") and are restricted shares as defined in the Securities Act.
We issued 2,000,000 shares of our common stock to Mr. Michael Carr at a price of $0.00025 on August 12, 2008 as partial payment for our Lac Dube claims.
Item 6: Selected Financial Data
Not applicable.
Item 7: Managements Discussion And Analysis Of Financial Condition And Results Of Operations
The following information should be read in conjunction with the consolidated financial statements and the notes thereto contained elsewhere in this report. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Information in this Item 7, "Management's Discussion and Analysis or Plan of Operation," and elsewhere in this 10-K that does not consist of historical facts, are "forward-looking statements." Statements accompanied or qualified by, or containing words such as "may," "will," "should," "believes," "expects," "intends," "plans," "projects," "estimates," "predicts," "potential," "outlook," "forecast," "anticipates," "presume," and "assume" constitute forward-looking statements, and as such, are not a guarantee of future performance. The statements involve factors, risks and uncertainties including those discussed in the Risk Factors section contained elsewhere in this report, the impact or occurrence of which can cause actual results to differ materially from the expected results described in such statements. Risks and uncertainties can include, among others, fluctuations in general business cycles and changing economic conditions; changing product demand and industry capacity; increased competition and pricing pressures; advances in technology that can reduce the demand for the Company's products, as well as other factors, many or all of which may be beyond the Company's control. Consequently, investors should not place undue reliance on forward-looking statements as predictive of future results. The Company disclaims any obligation to update the forward-looking statements in this report.
Overview
The registrants original plan was to explore and hopefully establish a commercially viable mineral deposit on the Lac Dube claims in the province of Quebec, Canada. In February of 2009 management decided to drop those claims. We have been seeking other exploration opportunities with very limited success. The rebound in the prices of gold, silver, platinum and uranium have put a unrealistic premium on the asking prices decent prospects.
Our plan of operation is to continue to seek exploration prospects at a reasonable price and failing acquisition of an project that meets our criteria, seek other business opportunities. We are also considering seeking business associates that have the financial strength and/or the access to outside funding.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Reports of Registered Public Independent Accounting Firms, our Consolidated Financial Statements and Notes thereto appear in a separate section of this Form 10-K (beginning on Page F-1 following Part IV). The index to our Consolidated Financial Statements is included in Item 15.
ITEM 9: CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE
(a)
On August 6, 2009 the Board of Directors of the Registrant dismissed Moore & Associates Chartered, its independent registered public accounting firm. On the same date, August 6, 2009, the accounting firm of Madsen & Associates, CPAs Inc. was engaged as the Registrants new independent registered public accounting firm. The Board of Directors of the Registrant and the Registrant's Audit Committee approved of the dismissal of Moore & Associates Chartered and the engagement of Madsen & Associates, CPAs Inc. as its independent auditor. None of the reports of Moore & Associates Chartered on the Company's financial statements for either of the past two years or subsequent interim period contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles, except that the Registrant's audited financial statements contained in its Form 10-K for the fiscal year ended March 31, 2010 had a going concern qualification in the registrant's audited financial statements.
The PCAOB has revoked the registration of Moore and Associates Chartered, on August 27
th
, 2009 because of violations of PCAOB rules and quality controls standards, and section 10(b) of the securities exchange act of 1934and rule 10b-5theereunder, and non cooperation with a board investigator.
During the registrant's two most recent fiscal years and the subsequent interim periods thereto, there were no disagreements with Moore and Associates, Chartered whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Moore and Associates, Chartered's satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its report on the registrant's financial statements.
b)
On August 6, 2009, the registrant engaged Madsen & Associates, CPAs Inc. as its independent accountant. During the two most recent fiscal years and the interim periods preceding the engagement, the registrant has not consulted Madsen & Associates, CPAs Inc. regarding any of the matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-B.
c) Subsequent to the dismissal of Moore and Associates, Chartered the registrant engaged its new principal accountants to re-audit its finances from inception through March 31, 2009.
ITEM 9A: CONTROLS & PROCEDURES
MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) and pursuant to Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, as amended (the Exchange Act) as of June 30, 2008. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed at a reasonable assurance level and were not effective as of March 31, 2010 in providing reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes In Internal Control Over Financial Reporting.
We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.
There were no changes in our internal controls over financial reporting (as such term is defined under Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report on Form 10-Q that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.
PART III
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers:
Directors, Executive Officers, Promoters and Control Persons
Our executive officers and directors and their respective ages as of June 30, 2010 are as follows:
Name of Director
Age
Samuel Weiss
54
Mathew Elsner
40
Executive Officers:
Name of Officer
David Keating
David J. Keating, President, Treasurer, Chief Executive Officer and Principal Accounting Officer
Mathew Elsner, Secretary
Set forth below is a brief description of the background and business experience of each of our executive officers and directors for the past five years.
Samuel Weiss, President, Treasurer Chief Executive Officer and Principal Accounting Officer
A attorney practicing in the State of New York, Mr. Weiss was admitted to the bar in 1974. He received his BA degree from New York University in 1971, his Juris Doctor from New York University in 1974 and his LLM in taxation from the same institution in 1977. He is a partner in the firm of Weiss and Federici LLP now located in Port Washington, New York.
Mathew Elsner, Secretary
EDUCATION:
9/02 5/04 BARUCH COLLEGE, Zicklin School of Business, New York, NY
Full-Time Honors Program
Master of Business Administration, June 2004
Concentration: Marketing
·
Jack Nash Scholar
–
3.7 GPA (4.0 GPA for marketing coursework)
·
Founder and President,
Corporate Responsibility, Ethics, and Governance Association
·
Co-author,
Baruch Student Guide to Academic Integrity
NEW YORK UNIVERSITY, College of Arts and Sciences, New York, NY
Bachelor of Arts, May 1995
Concentrations: International Politics, History
Deans List
11/07 PRES. INDEPENDENT CONSULTANT (MARKETING AND MANAGEMENT)
7/07 11/07 PR NEWS WIRE
7/06 7/07 INDEPENDENT CONSULTANT (MARKETING
7/04 7/06 SHOWTIME NETWORKS INC.
Senior Manager, Point of Sale Marketing/Training
12/03-5/04 INTERNATIONAL CENTER FOR CORPORATE ACCOUNTABILITY, INC.
New York, NY
Senior Research Associate
6/03-8/03 PEACEWORKS, LLP
.
New York, NY
Public Relations/Marketing Maven (Summer MBA Internship)
Term of Office
Our directors have been appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Security Ownership of Certain Beneficial Owners And Management
The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding common stock as of the date of this prospectus, and by the officers and directors, individually and as a group as at March 6, 2010. Except as otherwise indicated, all shares are owned directly.
Title of Name and address beneficial Percent
Class of beneficial owner ownership of class
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Common
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David Keating
2818 Fort Hamilton Parkway
Brooklyn, NY 11218
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2,400,000
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11.76
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Common
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Mathew Elsner
92 Newel Street
Brooklyn, NY
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2,000,000
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9.80
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The percent of class is based on 20,400,000 shares of common stock issued and outstanding as of the date of this filing.
All directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified.
Officers are elected by the Board of Directors and serve until their successors are appointed.
Code of Ethics
We have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have not adopted such a code of ethics because all of management's efforts have been directed to building the business of the Company. A code of ethics may be adopted by the board of directors at a later date.
Committees of the Board of Directors
We presently do not have any committees of the Board of Directors. However, our board of directors intends to establish various committees at a later time.
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ITEM 11: EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the named executive officers for the fiscal years ended October 31, 2007 and March 31, 2010.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
BRAZOS INTERNATIONAL EXPLORATION, INC.
(an Exploration Stage Company)
STATEMENTS OF OPERATIONS
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From
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January 11,
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2007
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For the
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For the
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(Date of
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year
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year
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inception)
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ended
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ended
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to
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Mar 31,
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Mar 31,
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Mar 31,
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2010
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2009
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2010
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Revenue:
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$ -
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$ -
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$ -
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Total Revenue
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-
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-
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-
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Operating Expenses:
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Exploration costs
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-
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5,500
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19,582
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General & administrative
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22,469
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10,206
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43,210
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Total Operating Expenses
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22,469
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15,706
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62,792
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NET LOSS
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$ (22,469)
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$ (15,706)
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$ (62,792)
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Weighted Average Shares
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Common Stock Outstanding
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20,400,000
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20,400,000
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Net Loss Per Share
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(Basic and Fully Dilutive)
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$ (0.00)
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$ (0.00)
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
BRAZOS INTERNATIONAL EXPLORATION, INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
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From
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January 11,
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2007
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For the
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For the
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(Date of
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year
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year
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inception)
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ended
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ended
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to
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Mar 31,
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Mar 31,
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Mar 31,
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2010
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2009
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2010
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Operating Activities:
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Net Loss
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$ (22,469)
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$ 5,706)
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$ (62,792)
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Adjustments to reconcile net (loss)
to net cash provided by
operating activities:
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Issuance of stock for services rendered
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-
|
1,100
|
1,100
|
Issuance of stock for exploration claims
|
-
|
500
|
500
|
Increase (Decrease) in Accounts payable
|
22,464
|
3,750
|
26,214
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Operating Activities
|
(5)
|
(10,356)
|
(34,978)
|
|
|
|
|
Investing Activities:
|
-
|
-
|
-
|
|
|
|
|
Financing Activities:
|
|
|
|
Issuance of common stock for cash
|
-
|
-
|
35,000
|
Net Cash Provided by Financing Activities
|
-
|
-
|
35,000
|
|
|
|
|
Net Increase (Decrease) in Cash
|
(5)
|
(10,356)
|
22
|
|
|
|
|
Cash at Beginning of Period
|
27
|
10,383
|
-
|
|
|
|
|
Cash at End of Year
|
$ 22
|
$ 27
|
$ 22
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
BRAZOS INTERNATIONAL EXPLORATION, INC.
(an Exploration Stage Company)
Statements of Stockholders' Equity (Deficit)
|
|
|
|
|
|
|
|
Preferred Stock
|
Common Stock
|
|
|
|
|
5,000,000 shares
|
70,000,000 shares
|
|
|
(Deficit)
|
|
authorized
|
authorized
|
|
|
accumulated
|
|
|
Par Value
|
|
Par Value
|
Additional
|
Stock
|
during the
|
|
Shares
|
$.001 per
|
Shares
|
$.001 per
|
Paid-In
|
Subscription
|
exploration
|
|
Issued
|
share
|
Issued
|
share
|
Capital
|
Receivable
|
stage
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares at $.001 per share
for services provided
|
-
|
$ -
|
2,400,000
|
$ 2,400
|
$ (1,800)
|
$ -
|
$ (600)
|
$ -
|
|
|
|
|
|
|
|
|
-
|
Issuance of common stock at $.001 per
share for claims - March 19, 2007
|
|
|
2,000,000
|
2,000
|
(1,500)
|
|
(500)
|
-
|
|
|
|
|
|
|
|
|
-
|
Issuance of common stock at $.001 per
share for services provided -
November 2007
|
|
|
2,000,000
|
2,000
|
(1,500)
|
|
(500)
|
-
|
|
|
|
|
|
|
|
|
-
|
Issuance of common stock for cash at
$.01 per share - December 12, 2007
|
|
|
14,000,000
|
14,000
|
21,000
|
|
|
35,000
|
|
|
|
|
|
|
|
|
-
|
Net Income (loss)
|
|
|
|
|
|
|
(24,617)
|
(24,617)
|
|
-
|
-
|
20,400,000
|
20,400
|
16,200
|
-
|
(26,217)
|
10,383
|
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
|
|
|
|
|
|
(14,106)
|
(14,106)
|
|
-
|
-
|
20,400,000
|
20,400
|
16,200
|
-
|
(40,323)
|
(3,723)
|
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
|
|
|
|
|
|
(22,469)
|
(22,469)
|
|
-
|
-
|
20,400,000
|
20,400
|
16,200
|
-
|
(62,792)
|
(26,192)
|
BRAZOS INTERNATIONAL EXPLORATION, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 NATURE AND PURPOSE OF BUSINESS
Brazos International Exploration, Inc. (the Company) was incorporated under the laws of the State of Nevada on January 11, 2007. The Companys activities to date have been limited to organization and capital formation. The Company is an exploration stage company and is attempting to acquire a series of mining claims for exploration and has formulated a business plan to investigate the possibilities of viable mineral deposits. The Company has adopted March 31 as its fiscal year end.
NOTE 2 NATURE OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents.
REVENUE RECOGNITION
The Company considers revenue to be recognized at the time the service is performed.
USE OF ESTIMATES
The preparation of the Companys financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Companys short-term financial instruments consist of cash and cash equivalents and accounts payable. The carrying amounts of these financial instruments approximate fair value because of their short-term maturities. Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash. During the year the Company did not maintain cash deposits at financial institution in excess of the $100,000 limit covered by the Federal Deposit Insurance Corporation. The Company does not hold or issue financial instruments for trading purposes nor does it hold or issue interest rate or leveraged derivative financial instruments.
ADVERTISING
As of March 31, 2010, we have incurred no advertising costs.
EARNINGS PER SHARE
Basic Earnings per Share (EPS) is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year. Diluted EPS is computed by dividing net income available to common stockholders by the weighted-average number of common stock shares outstanding during the year plus potential dilutive instruments such as stock options and warrant. The effect of stock options on diluted EPS is determined through the application of the treasury stock method, whereby proceeds received by the Company based on assumed exercises are hypothetically used to repurchase the Companys common stock at the average market price during the period. Loss per share is unchanged on a diluted basis since the assumed exercise of common stock equivalents would have an anti-dilutive effect. The Company does not have any common stock equivalents, therefore basic and diluted EPS are the same.
INCOME TAXES:
The Company uses the asset and liability method of accounting for income taxes. This method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of certain assets and liabilities. Deferred income tax assets and liabilities are computed annually for the difference between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities.
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of the assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The Company had no significant deferred tax items arise during any of the periods presented.
The Company has incurred net operating losses since inception of $62,792. The related deferred tax asset of approximately $21,000 has been fully offset by a valuation allowance. The net operating losses begin to expire in the year 2027.
CONCENTRATION OF CREDIT RISK:
The Company does not have any concentration of related financial credit risk.
RECENT ACCOUNTING PRONOUNCEMENTS:
The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact to its financial statements.
NOTE 3 MINERAL CLAIMS
On March 19, 2007, the Company entered into an agreement to acquire an option from Michael Carr which gives the Company the right to acquire a 100% undivided interest in certain mineral claims. The price of the option is $26,500 (due by March 24, 2009) and the issuance of 2,000,000 shares of the Companys common stock to Mr. Carr. During the option period, the Company has the right to explore and test the mineral claims to determine if there are viable deposits. As of the balance sheet date, the Company has issued 2,000,000 shares to Mr. Carr, and has paid $5,000 as partial payment for these claims.
NOTE 4 COMMON STOCK
From May through December 2007, the Company issued 14,000,000 shares of common stock for $35,000 cash.
On August 18, 2008, the Company issued 4,400,000 shares of common stock to its President and Secretary, valued at $1,100, for services provided to the Company.
Also, on August 18, 2008, the Company issued 2,000,000 shares of common stock to Michael Carr as partial payment for the acquisition of mineral claims (see Footnotes 3 and 6). These shares were valued at $.00025 per share for a total value of $500, which has been recorded as exploration costs in the financial statements.
On September 15, 2009, the Company executed a 4 for 1 forward stock split to bring the number of issued and outstanding shares of the Companys common stock to 20,400,000. All common stock references in these financial statements have been retroactively adjusted for this stock split.
NOTE 5 GOING CONCERN
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has no sales and has incurred a net loss of $ 62,792 since inception. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its mineral properties. Management has plans to seek additional capital through a private placement and public offering of its common stock. The financial statements do not include any adjustments relating to the recoverability and classifications of recorded assets, or the amounts of and the classification of liabilities that might be necessary in the event the Company cannot continue in existence.
NOTE 6 SUBSEQUENT EVENTS
On May 28, 2010, the registrant entered into a services agreement (the Agreement) with Renfro Holdings, Inc. (Renfro) whereby Renfro will assist the Company in acquiring oil and gas companies by locating the appropriate candidates for acquisition, including Renfro Energy LLC (the Services). In consideration for providing the Services and a conditional option to acquire all of the units of Renfro Energy LLC (pending the delivery and approval of audited financial statements, the Company issued to Renfro 24,000,000 shares of common stock, $0.001 par value per share. The issuance of these shares constitutes a change in control.
These shares were valued using the prices normally paid for related services and the conditional option which was $ 24,000 or $ 0.001 per share. This amount will be recognized over the term of the services agreement, which is one year.
The Company has evaluated subsequent events through July 1, 2010, which is the date these financial statements were issued.