As filed
with the Commission on June
2, 2008
File
No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
SWEETWATER RESOURCES, INC
.
(Exact
name of registrant as specified in its charter)
|
Nevada
|
1099
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71-1050559
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|
(State
or jurisdiction of incorporation or organization)
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(Primary
Standard Industrial Classification Cod Number)
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(I.R.S.
Employee Identification No.)
|
|
Madappilly
House, Elenjipra, P.O. Chalakudy, Via 680271 Kerala, India
(Telephone:
011-91-480-320-8192)
|
|
(Address,
including zip code, and telephone number, including area code, of
registrant’s principal executive
offices)
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|
Action
Stock Transfer Corp., 7069 S. Highland Drive, Suite 300, Salt Lake City,
Utah, 84121
Telephone
(801) 274-1088 – Fax: (801) 244-1099
|
|
(Name,
address and telephone number of agent of
service)
|
|
Copies
to:
Lawler
& Associates
29377
Rancho California Road, Suite 204, Temecula, California,
92591
|
|
Telephone:
951-676-4900 Fax: 951-676-4988
|
As soon as practicable after
the registration statement become effective
(Approximate
date of commencement of proposed sale to the public)
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the
following box. [X]
If this
form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same
offering. [ ]
If this
form is filed a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. [ ]
If this
form is filed a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. [ ]
Large
accelerated
filer Accelerated
filer
Non-accelerated
filer
(Do not check if a smaller reporting
company)
Smaller
reporting company
If
delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box [ ]
CALCULATION
OF REGISTRATION FEE
|
Securities
to
be
Registered
|
Amount
to be
Registered
|
Offering
Price
Per
Share
|
Aggregate
Offering
Price
|
Registration
Fee
(1)
|
|
Common
|
1,166,000
|
$
0.05
|
$
58,300
|
$7.50
|
[1] Estimated
solely for purposes of calculating the registration fee under Rule
457.
REGISTRANT
HEREBY AMENDS THIS REGISTRATION STATEMENT ON DATES AS MAY BE NECESSARY TO DELAY
ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8 (a) OF THE SECURITIES ACT OF 1933, OR
UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON DATES AS THE
COMMISSION, ACTING UNDER SAID SECTION 8 (a), MAY DETERMINE.
The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the
registration filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
SUBJECT
TO COMPLETION, DATED JUNE , 2008
PROSPECTUS
The
information in this prospectus is not complete and may be
changed. This prospectus is not an offer to sell
securities.
SWEETWATER
RESOURCES, INC.
Shares
of Common Stock
1,166,000
shares
Sweetwater
Resources, Inc.’s selling shareholders, including are directors and officers,
named in this prospectus offering a total of 1,166,000 common shares at a price
of $0.05 per share or whatever the market value of the shares are, if and when,
we are quoted on the Over-the-Counter Bulletin Board (the “OTCBB”). We will not
receive any of the proceeds from the sale of the shares by the selling
stockholders.
Our
selling shareholders may sell all or part of their shares in one or more
transactions on the OTCBB or in a private transaction if it
occurs. There is no assurance we will be able to find a market maker
to sponsor our shares on the OTCBB and if we are successful at identifying a
market maker that our application will ever be approved by the Financial
Industry Regulatory Authorities (the “FINRA”).
INVESTING
IN OUR COMMON STOCK INVOLVES RISKS. SEE “RISK FACTORS”
BEGINNING ON PAGE 6.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
DEALER
PROSPECTUS DELIVERY INSTRUCTIONS
Until 2008,
all dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers’ obligation to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
The Date
of this Prospectus is June , 2008
TABLE OF
CONTENTS
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Item
No.
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Description
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Page
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|
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Item
3.
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Summary
Information, Risk Factors and Ratio of Earnings to Fixed
Charges
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3
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|
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Item
4.
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Use
of Proceeds
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10
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Item
5.
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Determination
of Offering Price
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10
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Item
6.
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Dilution
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11
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Item
7.
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Selling
Securities Holders
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11
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Item
8.
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Plan
of Distribution
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13
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Item
9.
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Description
of Securities to be Registered
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15
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|
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Item
10.
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Interests
in name Experts and Counsel
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17
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Item
11.
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Information
with Respects to the Registrant
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18
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Item
11A.
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Material
Changes
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40
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Item
12.
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Incorporation
of Certain Information by Reference
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49
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Item
12A.
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Disclosure
of Commissions Position of Indemnification for Securities Act
Liabilities
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49
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ITEM
3.
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SUMMARY
OF INFORMATION, RISK FACTORS AND RATIO OF EARNINGS TO FIXED
CHARGES
|
Overview:
Sweetwater
Resources, Inc. was incorporated on the 24
th
day of
July, 2007, under the laws of the State of Nevada for the purpose of acquiring,
exploring and developing mineral properties. Our principal
offices are located at Madappilly House, Elenjipra, P.O. Chalakudey, Via 680271,
Kerala, India. Our telephone number is
011-91-480-320-8192.
The
following is a summary of the information, financial statements and notes
contained in this prospectus.
The
information in this prospectus is not complete and may be
changed. Our selling shareholders cannot sell their shares until the
registration statement filed with the Securities and Exchange Commission (the
“SEC”) is effective.
The
following is merely a summary of the information, including financial statements
and the commentary included herein. You should read the entire
Prospectus carefully, including “Risk Factors” and our financial statements and
the notes appended thereto prior to your making any investment in the shares of
our Company. Unless the context otherwise dictates or suggests, the terms “the
Company”, “we”, “our” and “us” refers to Sweetwater Resources, Inc.
Currently
we are in the pre-exploration stage. To date, we have had no
revenues, no operating history beyond the initial set up of our
Company. Our sole asset is a mining claim called the Bhavnagar Gold
Claim (the “Bhavnagar”) located in the Republic of India which is more fully
described elsewhere in this prospectus. We have incurred losses since
inception and to remain as a going concern we must raise additional capital,
through the sale of securities, in order to fund our operations. There is no
assurance we will be able to raise this capital and if we do not our Company may
no longer be a going concern.
We own no
other mineral property other than the Bhavnagar and are not engaged in the
exploration of any other mineral properties. There can be no
assurance that a commercially viable mineral deposit, an ore reserve, exits on
the Bhavnagar or can be shown to exist unless and until sufficient and
appropriate exploration work is carried out and a comprehensive evaluation of
such work concludes economic and legal feasibility. Such work
may take many years and there is no assurance that we will have available the
working capital to bring an ore deposit into production.
There is
no current public market for our securities as our stock is not publicly traded
on any exchange and as such investors face the prospect that they will be unable
to sell their shares and hence their investment does not have
liquidity.
We have
no fulltime employees and the management of the Company, all of whom are in the
Republic of India, devote a very little percentage of their working day to the
affairs of our Company. Presently our directors and officers are not
directors and officers of other public companies but this might not be the case
in the future. If this happens there might be a conflict of
interest on their part.
On
October 31, 2007 we completed a private placement pursuant to Regulation S of
the Securities Act of 1933, of 3,750,000 shares of common stock sold to our two
officers and directors at the price of $0.001 per share to raise $3,750. On
January 31, 2008 we completed a further private placement pursuant to Regulation
S of the Securities Act of 1933, whereby 791,000 common shares were sold at the
price of $0.05 per share to raise $39,550. The total cash raised from the sale
of shares was $43,300. Cash on hand totaled $10,996 as of April 30, 2008. The
amount of $32,304, being the balance spent since the funds were received, was
spent as follows:
|
Accounting
fees for the examination of the March 31, 2008 financial
statements
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$ 2,500
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Consulting
for identifying Bhavnagar ($5,000) and preparation of this prospectus
($10,000)
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15,000
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Exploration
– geology report ($5,000), exploration work ($5,000) and licenses
($1,321)
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11,321
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Legal
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2,983
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Office
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500
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Cash
paid from proceeds as of April 30, 2008
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$
32,304
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The
following financial information summarizes the more complete historical
financial information found in our audited financial statements contained
elsewhere in this prospectus:
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Since
inception to
March 31, 2008
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|
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Statement
of Expenses Information
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|
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Revenue
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$ -
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Net
losses
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43,183
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Net
operating expenses
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43,183
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Exploration
costs
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11,321
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General
and administrative
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31,862
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As
at March 31,
2008
|
|
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Balance
Sheet Information
|
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Cash
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$ 13,496
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Total
assets
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13,496
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Total
liabilities
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6,879
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Shareholders’
equity
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6,617
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The
Offering
This
offering relates to the offer and sale of our common share by the selling
security holders identified in this prospectus. The selling security
holders will determine when they will sell their shares, and in all cases, will
sell their shares at the current market price or at negotiated prices at the
time of the sale. Although we have agreed to pay the expenses
related to the registration of the shares being offered, we will not receive any
proceeds from the sale of the shares by the selling security
holders.
The
following sets forth the number and percentage of outstanding shares of common
stock that will be sold by:
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|
1.
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Selling
securities holders other than our two officers and directors and members
of their immediate family:
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Number
Percentage
791,000
17.4%
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2.
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Our
two officers and directors and members of their immediate families who are
among the selling securities
holders.
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Number Percentage
375,000 8.3%
3. All
selling securities holders including our two officers and members of their
immediate families:
Number Percentage
1,166,000 25.7%
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4.
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You
should carefully consider all the information in this
prospectus. In particular, you should evaluate the
information set forth in the section of the prospectus entitled “Risk
Factors” beginning on page 6 before deciding whether to invest in our
common shares.
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5.
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There
is a lack of liquidity in our common shares due it not presently being
quoted or traded on any securities exchange or automated quotation system
and we have not yet applied for listing on any public
market. We can provide no assurance that there will ever
be an established public trading market for our common
shares.
|
Cautionary
Statement Concerning Forward-Looking Statements
This
prospectus contains written statements regarding our business and prospectus,
such as projections of future performance, statements of management’s plans and
objectives, forecasts of market trends, and other matters that are
forward-looking statements. Statements containing the words or phases
such as “is anticipated”, “estimates”, “believes”, “expects”, “anticipates”,
“plans”, “objective”, “should” or similar expressions identify forward-looking
statements, which may appear in this prospectus.
Our
future results, including results related to forward-looking statements, involve
a number of risks and uncertainties. No assurance can be given
that the results reflected in any forward-looking statements will be
achieved. Any forward-looking statement speaks only as of the
date on which such statement is made. Our forward-looking
statements are based upon assumptions that are sometimes based upon estimates,
data, communication and other information from government agencies and other
sources that may be subject to revision. Except as required by
law, we do not undertake any obligation to update or keep current either (i) any
forward-looking statement to reflect events or circumstances arising after the
date of such statement, or (ii) the important factors that could cause our
future results to differ materially from historical results or trends, results
anticipated or planned by us, or which are reflected from time to time in any
forward-looking statement.
In
addition to other matters identified or described by us from time to time in
filings with the SEC, there are several important factors that could cause our
future results to differ materially from historical results or trends, results
anticipated or planned by us, or results that are reflected from time to time in
any forward-looking statement. Some of these important factors, but not
necessarily all important factors, include the following:
RISK
FACTORS
An
investment in our securities involves an exceptionally high degree of risk and
is extremely speculative. In addition to the other information regarding
Sweetwater Resources Inc., contained in this prospectus, you should consider
many important factors in considering whether you should purchase the shares
being offered. The following risk factors reflect the potential and
substantial material risks which could be involved if you consider purchasing
shares in this offering.
Risks
Associated With Our Company
Even
though we recently raised capital through the sale of our common shares our
financial position is not favorable.
Presently
we have accumulated losses of $43,183 since our inception on July 24, 2007 and
our working capital position is $6,879. This working capital
position could easily, and no doubt will do so, over the next few months be
reduced to a deficiency in working capital. This will mean we
will either have to raise funds through a sale of our common shares, ask our
directors and officers to offer personally guarantees for debt financing from a
lending institution or else the officers and directors will have to advance
money to us so that we can continue in operations. In short,
our current cash position will not last us for more than a few
months.
The
probability of any given property having any provable reserves is very
remote. In all likelihood our property does not contain any reserves,
and any funds spent on exploration will be lost.
As the
probability of finding provable reserves on any given property is extremely
unlikely, the same applies to prospects on our only property, the Bhavnagar Gold
Claim, with the result being that funds spent on exploration will be
lost. Following upon that, if we are unable to raise further funds
for our operations, we may have to suspend or cease our operations resulting in
loss of your investment.
We
lack an operating history and have losses which we expect will continue into the
future. As a result we may have to suspend or cease exploration and
cease operations.
We are an
exploration stage company which is undertaking limited exploration, at this
time, on the Bhavnagar. Accordingly, we anticipate incurring operating losses
into the foreseeable future.
Our
Company was incorporated in 2007, and has not undertaken any exploration, nor
has it generated any revenues. We do not have an exploration history
against which one can assess the future prospects of our Company. To
March 31, 2008, we have incurred a loss of $43,183. Whether we will
generate income or a positive cash flow will be dependent upon our capacity to
find economically viable reserves on the Bhavnagar and control of our operating
costs.
Our
present prospects are that we anticipate incurring further operating losses in
future operating quarters, given that we will be facing research and exploration
costs in exploring the Bhavnagar. There is no certainty that we will
be able to produce income in which case our business will cease or be suspended
indefinitely. Our prospects for success must be weighed in light of
the problems, expenses, complications, difficulties and delays commonly
associated with exploring a mineral property. There is a high rate of
failure in ventures such as ours.
We
have never had profitable operations since our inception.
Even
though we have been incorporated for only a short period of time, we have never
had profitable operations and if the situation continues as it is today we might
never have profitable operations. This would mean that our
shareholders would never be able to realize any dividends and/or increase in the
value of their initial investment.
We
have no known reserves. Without ore reserves we cannot generate
income and if we cannot generate income we will have to cease exploration
activity, which will result in the loss of your investment. Reserve
estimates are very speculative and unreliable as indicators of
success. Regardless of how much money is spent on the Bhavnagar,
there is risk that we may never identify a commercially viable ore reserve. Even
with positive results during exploration, the Bhavnagar may never be put into
commercial production due to inadequate tonnage, low metal prices or high
extraction costs.
Currently
we have no known reserves. Without actual ore reserves we will be
unable to generate income, in which case exploration operations will cease
resulting in a loss of your investment. Typically reserves in regard
to mining claims are referred to as “proven reserves” or “probable
reserves”. At present, we have neither proven nor probable
reserves. Ore reserve figures are merely estimates and are not
guarantees that the amounts so estimated would be recovered. The
Company would engage private, independent contractors to conduct sampling and
testing of the mining claim and from the results of such sampling and testing
estimates of potential reserves are made. Such estimates are
inherently imprecise in that they are based upon statistical analysis of
geological data requiring the interpretation of the professionals
involved. As such they are likely to be unreliable as indicators of
the extent of reserves.
As
production proceeds, existing reserves are diminished. Reserves may
be reduced as a result of the grade and volume being recovered being lower than
anticipated.
As
reserve estimates are calculated using assumptions about metal prices, they are
subject to a great degree of uncertainty in that metal prices can fluctuate
considerably. Falling metal prices, rising production costs, capital
costs, declining recovery rates, can render reserve estimates commercially
unviable. Material declines in our reserves may result in reduced
cash flow, net losses, asset write downs, and other such adverse financial
consequences to our operation and the financial wherewithal of our
Company. Reserves are not assurances of future revenues or the
profitability of the mining operation, nor can they be utilized to predict the
life of a particular mining venture. Reserves are no assurance of the
amount of metal, if any that might be produced, nor that any given level of
production will be achieved.
If
we do not have enough funds for exploration, we will have to delay exploration
or go out of business which will result in the loss of your
investment.
If we are
unable to raise funds for exploration, our proposed exploration plan will be
delayed. This may result in cessation or suspension of
operations. If we cease operations or if operations are suspended for
indefinitely, we will go out of business and your investment will be
lost.
Because
we are small and do not have much capital, we must delay conduct of any
exploration and as a result may not find an ore body. Without an ore
body, we cannot generate revenues and you will lose your
investment.
As our
Company is small with little capital, there will delays in the conduct of
exploration and we may not find an ore body. If we do not find an ore
body, we cannot generate revenues and you will lose your
investment.
We
may not have access to all the materials and supplies we need to begin
exploration which could cause us to delay or suspend exploration
activity.
Due to
our own financial condition or due to extraneous factors relating to costs and
market forces, we may not be able to have access to the materials and supplies
required to commence exploration. Without such basics of exploration, we would
be forced to delay, suspend or even cancel exploration activity in which case
your investment may be lost.
Because
mineral exploration and development activities are inherently risky, we may be
subject to various hazards including environmental liabilities, adverse weather
conditions, floods, cave-ins, and the like. If such an event were to
occur it may result in loss of your investment.
Mining
operations are subject to a myriad of risks inherent to its
nature. These include the presentation of unusual geological
formations, environmental pollution issues, mine collapses, injury to personnel,
flooding, changing and adverse weather conditions, and other such uncontrollable
events. In some cases, the risk might be ameliorated by way of
insurance, however, all such risks are not necessarily covered by insurance and
the cost of insurance may in any event become prohibitive. Any one or
a combination of such events could render the operation subject to delay,
suspension or cancellation having become either too difficult or impossible to
continue or uneconomical to carry on.
Because
we have not put a mineral deposit into production before, we will have to
acquire outside expertise. If we are unable to acquire such expertise
we may be unable to put Bhavnagar into production and you may lose your
investment. Management has no technical experience mineral
exploration or production.
Our
directors do not have technical training or proficiency in geology or
engineering, specifically as such relates to exploration, development and
operation of a mine. Consequently, they may not exploit opportunities
in acquisition and exploration of claims without hired
professionals. Management may not appreciate the usual and common
approaches necessary in the industry to commercially exploit or investigate a
claim. Such a deficiency may severely, permanently and adversely
affect the financial viability of our business.
Risks
Associated With This Offering:
Without
a public market there is no liquidity for our shares and our shareholders may
never be able to sell their shares which would result in a total loss of their
investment.
Our
common shares are not list on any exchange or quotation system and we do not
have a market maker who will assist us in having our shares quoted on the
OTCBB. At the present, time none of our selling security holders are
able to sell their shares other than through private transactions and only after
this prospectus becomes effective. Selling shares privately might
result in our selling security holders not receiving the price per share that
they might have obtained if the shares were quoted on the
OTCBB. Management will seek out a market maker when this
registration statement becomes effective. This will occur as
follows:
|
●
|
We
will have to identify a market maker who will file a Form 211 for us which
will start the process with the FINRA and hopefully eventually obtaining a
quotation on the OTCBB; and
|
|
|
●
|
We
will have to be current in our financial statements to be quoted on the
OTCBB and hence we will be responsible for filing Forms 10K-SB and 10Q-SB
on a periodic bases as required.
|
We do not
know how long this process will take for our Company to become effective with
the SEC but estimate a period of between six to twelve months. Once
our registration statement is effective, we will identify a market maker and
commence the process of being quoted on the OTCBB. The length
of time this will take is unknown to us but we estimate approximately six to
twelve months again. There is the distinct possibility that our
Company will never be quoted on the OTCBB.
If
we are fortunate enough to be quoted on the OTCBB our shares might be thinly
traded resulting in our shareholders not having the opportunity to easily
liquidate their investment in our shares.
If our
shares our quoted on the OTCBB we might experience a lack of buying or selling
which will not allow our selling security holders to sell their shares when they
want and at prices they desire. Reasons for the lack of buying
or selling could be the result of investors not desiring to purchase our shares,
the stock markets overall are unfavorable to purchasing or selling shares or our
Company cannot identify an ore body on the Bhavnagar. On the other
hand, our share prices might be volatile with wide fluctuations in response to
the previous mentioned circumstances. This also might restrict
our shareholders from selling their investment in our shares at the price they
wish.
We
might in the future have to sell shares by way of private placements or through
a public offering which will have the effect of diluting our shareholders’
current percentage ownership in our Company.
If, in
the future, we decide to sell shares to raise additional capital for operations,
our shareholders current percentage ownership in our Company will be diluted
unless they participate in the purchase of shares equivalent to their present
ownership in our Company. If they do not participate in either
a future private placement or public offering their percentage interest in our
Company will be diluted.
Without
a public market there is no liquidity for our share and our shareholders may
never be able to sell their shares which could result in a total loss of our
shareholders’ investment.
Our
common shares are not listed on any exchange or quotation system and we do not
have a market maker which might results in no market for our
shares. Therefore, our shareholders will not be able to sell their
shares in an organized market place unless they sell their shares
privately. If this happens, our shareholders may not receive a price
per share which they might have received had there been a public market for our
shares. If we are ever quoted on the OTCBB our shares will be
considered “penny stock” and our market maker will have to adhere to the “penny
stock” rules:
Our
shares will be considered “penny stocks” and therefore are covered by Section
15(g) of the Securities Exchange Act of 1934 which imposes additional sales
practices requirements on broker dealers who sell our securities including the
delivery of standardized disclosure document: disclosure and confirmation of
quotation prices; disclosure of compensation the broker/dealer receives; and,
furnishing monthly account statements. For sales of our securities,
the broker/dealer must make a special suitability determination and receive from
his customers a written agreement prior to making a sale. The
imposition of the foregoing additional sales practices could adversely affect a
shareholder’s ability to dispose of his/her stock.
Because
our officers and directors have other outside business activities and may not be
in a position to devote a majority of their time to our planned exploration
activity, our exploration activity may be sporadic which may result in periodic
interruptions or suspensions of exploration
Our
directors and officers have other business interests which take a large
percentage of their time. Our president spends approximately 10 hours
a month attending to the affairs of our Company whereas our Secretary Treasurer
spends only 5 hours per month. If our business and exploration
activities expand in the near future our directors and officers will have to
devote more time to the affairs of our Company or they will have to hire
professional personnel to undertake these duties. This will
result in an increase in costs to the Company.
Ratio
of Earnings to Fixed Charges
We have
no registered debt securities nor any fixed charges in the way of interest
expense or preference security dividends.
The
Conversion of Indian Rupees to United States Dollars and Vise
Versa.
The
Bhavnagar is located in the Republic of India, and costs expressed in the
geological report prepared by Raman Mistry, Professional Geologist, are
expressed in Indian Rupees. For purposes of consistency and to express United
States Dollars throughout this registration statement, Indian Rupee have been
converted into United States currency at the rate of US $1.00 being
approximately equal to Indian Rupee 40.51 or 1 Indian Rupee being approximately
equal US $0.02460 which is the approximate average exchange rate during recent
months and which is consistent with the incorporated financial
statements.
ITEM
4. USE
OF PROCEEDS
This
prospectus relates to shares of our common stock that may be offered and sold
from time to time by the selling security holders. We will not receive any
proceeds from the sale of shares of common stock in this
offering. Nevertheless, there is cost to the Company for preparing
this prospectus which will be borne by the Company and not the selling security
holders. We have estimated the cost to as follows:
|
Description of Expenses
|
Paid
to date
|
Future
payments
|
Total
Amount
|
|
Internal
Accountant – preparation of financial statements as required
(1)
|
$ -
|
$ 2,363
|
$ 2,363
|
|
Independent
accountant’s examination of financial statements (2)
|
2,500
|
1,000
|
3,500
|
|
Fees
for preparation of this prospectus
|
10,000
|
-
|
10,000
|
|
Legal
opinion
|
-
|
1,500
|
1,500
|
|
Photocopying
and delivery expenses
|
-
|
150
|
150
|
|
SEC
filing fees
|
-
|
7
|
7
|
|
Estimated offering
costs
|
$
12,500
|
$
5,020
|
$
17,520
|
|
(1)
|
The
accountant has prepared the working papers for the March 31, 2008
financial statements and will prepare the financial statements as at June
30, 2008.
|
|
|
(2)
|
The auditors have given an opinion of the March 31, 2008 financial
statements included herein and will review of the financial statements as
at June 30, 2008.
|
|
ITEM
5.
|
DETERMINATION
OF OFFERING PRICE
|
There is
no public market for the shares being offered by our selling security
holders. The price of the offering shares should not be
considered as an indicator of either current or future value of the shares
themselves.
The facts
we took into consideration in determining the offering price of our selling
security holders shares is our Company’s financial condition and future
prospects, our lack of any operating history and the general conditions of the
securities markets. The offering price is not an indicator of
any actual value of our shares and it does not bear any relation to our assets
or earnings. It is merely an arbitrary figure we have
used.
Our
selling security holders can offer to sell their shares at what price they wish
or when they want. It might be a negotiated transaction or one
which is done through the facilities of the securities
market. Until our shares are quoted, if they are ever quoted,
our selling security holders are expected to sell their shares at the offering
price of $0.05 per share. We have been advised by our selling
security holders that none of them have entered into any agreement, undertaking
or arrangement to sell their shares. The selling security
holders do not have an underwriter or coordinating broker acting in connection
with the proposed sale of the common shares they hold. Our Company
will pay all the expenses of this prospectus but it is up to the individual
selling security holders to pay any future commissions to any brokers in
assisting them in selling their shares.
|
ITEM
6.
|
DILUTION
|
Our
shareholders will suffer no dilution of their percentage interest in our Company
since we are not undertaking an offering of our shares from
Treasury. In other words, no new shares are being
sold. If our selling security holders sell their shares, the
shares will become the property of the purchasing shareholders and those new
shareholders will have the identical interest in our Company as our original
selling security holders had.
|
ITEM
7.
|
SELLING
SECURITY HOLDERS
|
This
prospectus relates to the offering and sale, from time to time, of up to
1,166,000 shares of our common shares held by the selling security holders named
in the table below, which amount includes 375,000 common shares to be sold by
our officers and directors. All of the selling security holders named below
acquired their shares of our common stock directly from us in private
transactions.
The
selling security holders have furnished all information with respect to share
ownership. The shares being offered are being registered to permit public
secondary trading of the shares and each selling security holder may offer all
or part of the shares owned for resale from time to time. A selling security
holder is under no obligation, however, to sell any shares immediately pursuant
to this prospectus, nor are the selling security holders obligated to sell all
or any portion of the shares at any time. Therefore, no assurance can be given
by our Company as to the number of shares of common stock that will be sold
pursuant to this prospectus or the number of shares that will be owned by the
selling security holders upon termination of the offering.
None of
the selling security holders named in this prospectus are residents of the
United States. All are residents of the Republic of
India. They are offering for sale a total of 1,166,000 shares
of common stock of the Company.
The
following table provides, as of the date of this prospectus, information
regarding the beneficial ownership of our common stock held by each of the
selling security holders, including:
|
●
|
The
number of shares owned by each prior to this offering;
|
|
●
|
The
total number of shares that are to be offered for each;
|
|
●
|
The
total number of shares that will be owned by each upon completion of the
offering; and
|
|
●
|
The
percentage owned by each upon completion of the offering assuming such
selling security holders sell all of their common stock offered in this
registration statement.
|
To the
best of our knowledge, the named parties in the table beneficially own and have
sole voting and investment power over all shares or rights to their shares. We
have based the percentage owned by each on our 4,541,000 shares of common stock
outstanding as of the date of this prospectus.
|
Name of Shareholder
|
Common
Stock
Beneficially
Owned
Prior to Offering
|
Number
of
Common
stock
Offered
Hereby
|
Common
Stock Beneficially Owned
Following the Offering
(1)
|
|
No. of Shares
%
|
No. of
Shares
%
|
No. of
Shares
%
|
|
Shina
Joseph
|
40,000
|
.0088
|
40,000
|
Nil
|
Nil
|
|
Manoj
Kuttappan
|
37,500
|
.0083
|
37,500
|
Nil
|
Nil
|
|
Gopalan
Achari
|
36,000
|
.0079
|
36,000
|
Nil
|
Nil
|
|
Ranjith
P. Poul
|
35,000
|
.0077
|
35,000
|
Nil
|
Nil
|
|
Rekha
Rajan
|
35,000
|
.0077
|
35,000
|
Nil
|
Nil
|
|
Lissy
Thomas
|
33,000
|
.0073
|
33,000
|
Nil
|
Nil
|
|
Mary
Thomas
|
30,000
|
.0066
|
30,000
|
Nil
|
Nil
|
|
Annop
Vasudevan
|
30,000
|
.0066
|
30,000
|
Nil
|
Nil
|
|
Balakrishnan
Appakkunhi
|
27,000
|
.0059
|
27,000
|
Nil
|
Nil
|
|
Preethanjuj
Preethalavan
|
26,000
|
.0057
|
26,000
|
Nil
|
Nil
|
|
Lissy
James
|
25,000
|
.0055
|
25,000
|
Nil
|
Nil
|
|
Augusthy
Ouseph
|
25,000
|
.0055
|
25,000
|
Nil
|
Nil
|
|
Leena
George
|
25,000
|
.0055
|
25,000
|
Nil
|
Nil
|
|
Suneesh
Joseph
|
25,000
|
.0055
|
25,000
|
Nil
|
Nil
|
|
Jose
Kunjuvareeth
|
25,000
|
.0055
|
25,000
|
Nil
|
Nil
|
|
Abdul
Rehman
|
23,000
|
.0050
|
23,000
|
Nil
|
Nil
|
|
Johnson
Lonappan
|
22,000
|
.0048
|
22,000
|
Nil
|
Nil
|
|
Subran
Chendan
|
21,000
|
.0046
|
21,000
|
Nil
|
Nil
|
|
Lissy
Jose
|
20,000
|
.0044
|
20,000
|
Nil
|
Nil
|
|
Koran
Chathan
|
20,000
|
.0044
|
20,000
|
Nil
|
Nil
|
|
Unnikrishnan
Kanna
Nair
|
20,000
|
.0044
|
20,000
|
Nil
|
Nil
|
|
Varghese
Pailoth
|
20,000
|
.0044
|
20,000
|
Nil
|
Nil
|
|
Vasudevan
Raghavan
|
20,000
|
.0044
|
20,000
|
Nil
|
Nil
|
|
Krishnakamar
Appa
Nair
|
18,000
|
.0040
|
18,000
|
Nil
|
Nil
|
|
Baby
Subran
|
17,500
|
.0039
|
17,500
|
Nil
|
Nil
|
|
Ravendran Velayudham
|
15,000
|
.0033
|
15,000
|
Nil
|
Nil
|
|
Midunkumar
Unnikrishnan
|
15,000
|
.0033
|
15,000
|
Nil
|
Nil
|
|
Rosily
Augusthy
|
15,000
|
.0033
|
15,000
|
Nil
|
Nil
|
|
Kunjuvareeth
Ouseph
|
15,000
|
.0033
|
15,000
|
Nil
|
Nil
|
|
Kochannamma
Kunjuvareeth
|
10,000
|
.0022
|
10,000
|
Nil
|
Nil
|
|
Omana
Gopolan
|
10,000
|
.0022
|
10,000
|
Nil
|
Nil
|
(1) These
figures assume all shares offered by selling security holders are in fact
sold.
(2) Jose
Madappilly is our President, Chief Executive Officer and a
Director.
(3) Jaiiju
Maliakai is our Secretary Treasurer, Chief Financial Officer and a
Director.
Except
for Jose Madappilly and Jaiiju Maliakai, whose relationship with our Company is
detailed in the footnotes immediately above, to our knowledge, none of the
selling security holders has had a material relationship with our Company other
than as a shareholder.
ITEM
8. PLAN
OF DISTRIBUTION
Each
selling security holder and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on the OTCBB or any other stock exchange, market or trading
facility on which the shares are traded or in private transactions. These sales
may be at fixed or negotiated prices. A selling security holder may use any one
or more of the following methods when selling shares:
|
●
|
Using
a brokerage house wherein a broker-dealer will solicit
purchaser;
|
|
|
●
|
The
broker-dealer, as principal, purchases the shares for his/her own
account;
|
|
|
●
|
Selling
the shares in a private transaction negotiated by the selling security
holder;
|
|
|
●
|
The
broker-dealer attempts to sell a block of shares as agent for the selling
security holders and he acts as a principal in this
transaction;
|
|
|
●
|
An
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
|
●
|
Settlement
of short sales entered into after the effective date of this
prospectus;
|
|
|
●
|
The
broker-dealer and the selling security holder agreed to sell a specific
number of shares at a stipulated price per share;
|
|
|
●
|
Through
the writing or settlement of options or other hedging transactions,
whether through an option exchange or otherwise;
|
|
|
●
|
A
combination of any such methods of sale; or
|
|
|
●
|
Any
other method permitted pursuant to applicable
law.
|
The
selling security holders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”), if available, rather
than under this prospectus.
Broker-dealers
engaged by the selling security holders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling security holders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, but,
except as set forth in a supplement to this prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in compliance with
NASDR Rule 2440; and in the case of a principal transaction a markup or markdown
in compliance with NASDR IM-2440.
In
connection with the sale of the common stock or interests therein, the selling
security holders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of our
common shares in the course of hedging the positions they assume. The selling
security holders may also sell shares of the common shares short and deliver
these shares to close out their short positions, or loan or pledge the common
shares to broker-dealers that in turn may sell their shares. The selling
security holders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
selling security holders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each selling security holder has informed
our Company that he/she does not have any written or oral agreement or
understanding, directly or indirectly, with any person to distribute our common
shares. In no event shall any broker-dealer receive fees, commissions and
markups which, in the aggregate, would exceed eight percent (8%).
We are
required to pay certain fees and expenses incurred by our Company incident to
the registration of the shares. Our Company has agreed to indemnify the selling
security holders against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.
We agreed
to keep this prospectus effective until the earlier of (i) the date on which the
shares may be resold by our selling security holders without registration and
without regard to any volume limitations by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect or (ii) all of the shares
have been sold pursuant to this prospectus or Rule 144 under the Securities Act
or any other rule of similar effect. The resale shares will be sold only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale shares may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to the common shares for the applicable
restricted period, as defined in Regulation M, prior to the commencement of the
distribution. In addition, our selling security holders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
sales of shares of the common stock by the selling security holders or any other
person. We will make copies of this prospectus available to the selling security
holders and have informed them of the need to deliver a copy of this prospectus
to each purchaser at or prior to the time of the sale (including by compliance
with Rule 172 under the Securities Act).
Any FINRA
member participating in the distribution of the shares offered under this
prospectus will be subject to compliance with FINRA rules and regulations,
including rules governing the timely filing of documents and
disclosures
with the Corporate Finance Department of the FINRA.
ITEM
9. DESCRIPTION
OF SECURITIES TO BE REGISTERED
Capital
Stock
Our
authorized share capital consists of 450,000,000 common shares with a par value
of $0.001 per share. We have issued 4,451,000 common
shares. We have no other class of shares other than our common
shares.
Rights
of Our Shareholders
Our
shareholders are entitled to receive dividends as may be declared periodically
by our Board of Directors. Each of our shareholders is entitled
to share ratably in all of our assets available for distribution upon winding up
of the affairs of our Company. They are each entitled to one
non-cumulative vote per share on all matters on which our shareholders may be
asked to vote up either at an Annual General Meeting of Stockholders or by way
of Shareholders’ Resolutions.
Our
shareholders are not entitled to:
|
●
|
Preference
as to dividends or interest;
|
|
|
●
|
Preemptive
rights to purchase issuance of new shares in future public or private
offerings;
|
|
|
●
|
Preference
upon liquidation of our Company; and
|
|
|
●
|
Any
other special rights or
preferences.
|
Non-Cumulative
Voting
Our
shareholders do not have cumulative voting rights. What this
means is that the holders of more than 50% of our outstanding shares can ensure
the election of the directors that they vote for. This being the
case, the holders of the remaining shares are not able to elect any directors of
their personal choice.
Debt
Securities
We have
no debt securities.
Market
Information
Presently
our shares are not quoted on any exchange or quotation
system. Upon having this registration statement become
effective it is our intention to seek out a market maker who will sponsor our
shares for trading on the OTCBB. This will entail making an
application to FINRA under a Form 211. Until we are accepted
for a quotation on the OTCBB there is no established market for the shares of
our Company. Even if we make an application to FINRA there is
no assurance our shares will ever be quoted on the OTCBB. The
OTCBB does not have any listing requirements but to remain quoted on it requires
that we will have to be current with our filings with the
SEC. This means that we will have to file quarterly financial
statements reviewed by our independent accountants, filed under a Form 10Q, and
have our annual financial statements examined by our independent accountants,
filed under a Form 10K. If we are not current in our filing the
market makers will not be able to quote our shares. If we do
not keep our filings current then after 30 to 60 day grace period our shares
will no longer be quoted on the OTCBB. This will have two
effects; first, our shareholders will not be able to dispose of their shares
when they want to, and second, our share price could be adversely
affected. In other words, there might not be a secondary market
for our shares. If there is a secondary market there might be
wide fluctuations in our share price which would not give confidence to the
investment community. In the fluctuation in our share price is
extreme there might be the situation where class action litigation is brought
against our Company. Such litigation, if started against us, even if
not successful, could cost our Company a great deal of money; money which we
currently do not have and would prefer not to spend since it might impair our
working capital to such an extent that we could not longer be considered a going
concern.
“Penny
Stock” Requirements
Our
common shares are not quoted on any stock exchange or quotation system in North
America or elsewhere in the world. The SEC has adopted a rule that defines 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:
|
●
|
that
a broker or dealer approve a person’s account for transactions in penny
stocks;
and
|
|
|
●
|
that
the broker or dealer receives from the investor a written agreement to
thetransactions setting forth the identity and quantity of the penny stock
to bepurchased.
|
To
approve a person’s account transactions in penny stock, the broker or dealer
must:
|
●
|
obtaining
financial information and investment experience and objectives of
theperson; and
|
|
|
●
|
make
reasonable determination that the transactions in penny stock are suitable
forthat person and that person has sufficient knowledge and experience
infinancial matters to be capable of evaluating the risks of transactions
inpenny stocks.
|
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the SEC relating to the penny stock market,
which, in highlight form:
|
●
|
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 priorto the transaction.
|
Disclosure
also has to be made about the risks of investing in penny stocks and about
commission payable by 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.
Because
of the imposition of the foregoing additional sales practices, it is possible
that brokers will not want to make a market in our shares. This could prevent
you from reselling shares and may cause the price of our shares to
decline.
Transfer
Agent
Our
transfer agent is Action Stock Transfer Corp., Suite 300 – 7069 S. Highland
Drive, Salt Lake City, Utah, USA, 84121.
ITEM
10. INTEREST
IN NAME EXPERTS AND COUNSEL
We wish
to state that no named expert or counsel in this prospectus has any interest in
our Company. There are no contractual agreements with our experts or
counsel whereby they would received from our Company, either directly or
indirectly, an interest in us. None of them is a promoter,
underwriter, voting trustee, officer or director of our
Company. The definition of an “expert” is a person who is named
as preparing or certifying all or part of our prospector or a report or
valuation for use in connection with the prospectus. The definition
of “counsel” is any counsel named in the prospectus as having given an opinion
on the validity of the securities being registered or upon other legal matters
concerning the registration or offering of securities.
Madsen
& Associates CPA’s Inc., Certified Public Accountants, Unit #3 – 684 East
Vine Street, Murray, Utah, 84197 (Tel: 801-268-2632), have audited, as set forth
in their report dated May 2, 2008 which appear elsewhere in this prospectus, our
financial statements for the period from July 24, 2007 (date of inception) to
March 31, 2008. We have included our financial statements in
this prospectus in reliance on Madsen & Associates CPA’s Inc.’s report,
given on their authority as experts in accounting and auditing.
The
geological report on the Bhavnagar claim dated November 22, 2007 titled “Summary
of Exploration on the Bhavnagar Property” was authored by Raman Mistry,
Professional Geologist, 42 Darjiwala Apartments, Baroda, India.
The legal
opinion rendered by Lawler & Associates, Attorney at Law, 29377 Rancho
California Road, Suite 204, Temecula, California, 92591 regarding our common
shares registered in this prospectus is set forth in his opinion letter dated
May 13, 2008
ITEM
11. INFORMATION
WITH RESPECTS TO THE REGISTRANT
Description
of the Business
This
section of the prospectus includes a number of forward-looking statements that
reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words
like: believe, expect, estimate, anticipate, intend, project and similar
expressions, or words which, by their nature, refer to future events. You should
not place undue certainty on these forward-looking statements, which apply only
as of the date of this prospectus. These forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to differ
materially from historical results or our predictions.
General
Development of the Business
We are a
start up, pre-exploration stage company and have not yet generated or realized
any revenues from our business operations. We were incorporate
under the laws of the State of Nevada on July 24, 2007. We do
not have any subsidiaries or affiliate companies. We have never
been bankrupt, been under the control of a receiver or similar proceedings with
respect to ourselves. We have never had a material
reclassification, merger or consolidation of our Company. Since
inception we have not disposed of any material amount of assets other than in
the ordinary course of business and have had no material changes in the method
of conducting our business.
Our
present address is Madappilly House, Elenjhipra, P.O. Chalakudy, Via 680271
Kerala, India. Our telephone number is
011-91-480-320-8192.
We are
filing this registration statement on Form S-1 under the Securities
Act. We are not subject to the reporting requirements of
section 13(a) or 15(d) of the Exchange Act immediately before filing this
registration statement.
Our
Company has made no revenue since its inception on July 24,
2007. During the next fiscal year we will be conducting research in
the form of exploration on our Bhavnagar claim located in the Republic of
India. We have a 100% interest in the mineral rights on the Bhavnagar
claim which we acquired from Bhindi Mines LLC, an unrelated limited liability
company having its registered office at Bhopal, India for $5,000, on November 1,
2007.
In order
to determine a work program on the Bhavnagar claim we commissioned Raman Mistry,
Professional Geologist, to prepare a report on it.
The
professional background of Mr. Mistry is that he graduated from the University
of New Delhi, India with a Bachelor of Science degree in Geology in 1974 and a
Masters of Science degree in 1979 from the same university. He worked
as a consulting geologist for 25 years for such companies as Pradesh Mining,
Gusain Ventures and Porbqander Explorations where he was commissioned to write
reports on their geological structures. He is currently a member in
good standing of the Geological Society of India.
In order
to write his report, Mr. Mistry reviewed historical and current geological
reports of the area and of the Bhavnagar claim and visited to the area between
November 17 and19, 2007 for the purpose of evaluating the exploration potential
of the Bhavnagar. The reports by previous qualified persons as presented from a
literature search of the Mineral Resources Department of the Ministry of Energy
and Mineral Resources of the Government of the Republic of India in its annual
reports, papers, Geological Survey maps and assessment reports provide most of
the technical basis for his report. His report, dated November 22,
2007, is summarized below:
Description
of the Bhavnagar and its location
Bhavnagar
claim consists of 1 unpatented mineral claim, located 42 km East of Surat, and
79 km Northwest of Amreli at UTM co-ordinates Latitude 21
°
46’00”North and Longitude
072
°
14’00”East. A 100%
of the Bhavnagar claim was assigned to our Company by Bhindi Mines LLC. and
the assignment was filed with the Mineral Resources Department of the Ministry
of Energy and Mineral Resources of the Government of the Republic of
India.
There are
no known environmental concerns or parks designated for any area contained
within the Bhavnagar claim. The property has no encumbrances. As
advanced exploration proceeds there may be bonding requirements for
reclamation.
Accessibility,
climate, local resources, infrastructure and topography
The
Bhavnagar claim is accessible from Gujarat. It is connected to Mumbai
by air and railway. Daily flights operated by Jet Airways and
Air Deccan. It was one of the first cities in Gujarat to have
an airport. The city is well connected to other major cities of
Gujarat such as Valadara, Ahmedabad, Rajkot, Jamnagar, Surat and more by road,
with bus services operating by private and state-owned transport
corporations. The city is also connected to Ahmedabad and some major
cities of Saurashtra by rail road. Intercity bus service is
operated by VITCOs. Private auto-rikshaw is other mode of
transport. The city of Bhavnagar has an experienced work force
and will provide all the necessary services needed for an exploration and
development operation, including police, hospitals, groceries, fuel,
transportation services, hardware and other necessary
items. Drilling companies and assay facilities are present in
Gujurat.
Natural
resources play an important role in industrial development. Gujarat is endowed
with important resources like minerals, marine, agriculture; besides animal
wealth and human resources. The state government has taken several measures to
explore and exploit these resources for industrial development.
Tropical
mountain forests grow at lower elevations in the northeast corner of the claim
and good rock exposure is found along the peaks and ridges in the western
portion of the claim. The area has a tropical and humid climate, with an
oppressive summer and plentiful seasonal rainfall. The summer season, from March
to May, is followed by the south west monsoon from June to September. The north
east monsoon lasts from October to November.
History
Gold is
available in acid and basic volcanic rocks of Archaean age, the oldest known
rocks in India ranging in age from more than 3000 million years to 2000 million
years.
India has
a large number of economically useful minerals and they constitute one-quarter
of the world's known mineral resources. India is a country rich in mineral
resources. A major portion of the country is composed of Precambrian rocks which
have hosted major gold discoveries worldwide. There were over a hundred gold
mining centers in the early part of last century. Today India’s annual primary
gold mine output is only between 2 and 3 tones. India is the land of the world
famous Kolar Gold Fields and the largest consumer of gold.
Numerous
showings of mineralization have been discovered in the area and six
prospects have achieved significant production, with the nearby Dayal Gold Mine
(36 kilometers away) producing 175,000 ounces of gold annually.
During
the 1990’s several properties east of Bhavnagar claim were drilled by junior
mineral exploration companies.
Our
Company is preparing to conduct preliminary exploration work on the Bhavnagar
since we have advanced part of the money required to start Phase I of the Mistry
report.
Geological
Setting
Regional
Geology of the Area
The hilly
terrains and the middle level plain contain crystalline hard rocks such as
charnockites, granite gneiss, khondalites, leptynites, metamorphic gneisses with
detached occurrences of crystalline limestone, iron ore, quartzo-feldspathic
veins and basic intrusive such as dolerites and anorthosites. Coastal
zones contain sedimentary limestones, clay, laterites, heavy mineral sands and
silica sands. The hill ranges are sporadically capped with laterites and
bauxites of residual nature. Gypsum and phosphatic nodules occur as
sedimentary veins in rocks of the cretaceous age. Gypsum of secondary
replacement occurs in some of the areas adjoining the foot hills of the Western
Ghats. Lignite occurs as sedimentary beds of tertiary age. The Black
Granite and other hard rocks are amenable for high polish. These granites occur
in most of the districts except the coastal area.
Stratigraphy
The
principal bedded rocks for the area of Bhavnagar claim (and for most of India
for that matter) are Precambrian rocks which are exposed along a wide axial zone
of a broad complex.
Gold at
the Dayal Gold Mine (which is in close proximity to the Bhavnagar claim) is
generally concentrated within extrusive Precambrian rocks in the walls of large
volcanic caldera.
Intrusive
In
general the volcanoes culminate with effluents of hydrothermal solutions that
carry precious metals in the form of naked elements, oxides or
sulphides.
These
hydrothermal solutions intrude into the older rocks as quartz veins. These rocks
may be broken due to mechanical and chemical weathering into sand size particles
and carried by streams and channels. Gold occurs also in these sands as
placers.
Recent
exploration result for gold occurrence in Gujarat is highly encouraging. Gold
belt in sheared gneissic rocks is found in three sub parallel auriferous load
zones where some blocks having 250 to 500 meter length and 1.5 to 2 meter width
could be identified as most promising ones.
Structure
Capsule
Description: Graphite veins currently mined are from few centimeters to a meter
thick. Typically they cut amphibolite to granulite grade metamorphic rocks
and/or associated intrusive rocks.
Tectonic
Setting(s): Katazone (relatively deep, high-grade metamorphic environments
associated with igneous activity; conditions that are common in the shield
areas).
Depositional
Environment / geological setting: Veins form in high-grade, dynamothermal
metamorphic environment where met sedimentary belts are invaded by igneous
rocks.
Age of
Mineralization: Any age; most commonly Precambrian.
Host /
Associated Rock Type: Hosted by paragneisses, quartzites, clinopyroxenites,
wollastonite-rich rocks, pegmatites. Other associated rocks are charnockites,
granitic and intermediate intrusive rocks, quartz-mica schists, granulites,
aplites, marbles, amphibolites, magnetite-graphite iron formations and
anorthosites.
Deposit
Types
Deposits
are from a few millimeters to over a meter thick in places, although usually
less than 0.3 meter thick. Individual veins display a variety of forms,
including saddle-, pod- or lens-shaped, tabular or irregular bodies; frequently
forming anatomizing or stock work patterns.
Mineralization
is located within a large fractured block created where prominent
northwest-striking shears intersect the north striking caldera fault zone.
The major lodes cover an area of 2 km and are mostly within 400m of the surface.
Lodes occur in three main structural settings:
(i) steeply
dipping northweststriking shears;
(ii) flatdipping
(1040) fractures (flatmakes); and
(iii) shatter
blocks between shears.
Most of
the gold occurs in tellurides and there are also significant quantities of gold
in pyrite.
Mineralization
No
mineralization has been reported for the area of the Bhavnagar claim but
structures and shear zones affiliated with mineralization on adjacent properties
pass through it.
Exploration
Previous
exploration work has not to Mr. Mistry’s knowledge included any attempt to drill
the structure on Bhavnagar claim. Records indicate that no detailed
exploration has been completed on the property.
Property
Geology
To the
east of Bhavnagar claim is intrusive consisting of rocks such as tonalite,
monzonite, and gabbro while the property itself is underlain by sediments and
volcanic. The intrusive also consist of a large mass of granodiorite
towards the western most point of the property.
Drilling
Summary
No
drilling is reported on Bhavnagar claim.
Sampling
Method; Sample Preparation; Data Verification
All the
exploration conducted to date has been conducted according to generally accepted
exploration procedures with methods and preparation that are consistent with
generally accepted exploration practices. No opinion as to the quality of the
samples to be taken can be presented.
Adjacent
Properties
The
adjacent properties are cited as examples of the type of deposit that has been
discovered in the area and are not major facets to Mr. Mistry’s
report.
Interpretations
and Conclusions
The area
is well known for numerous productive mineral occurrences including the Dayal
Gold Claim.
The
locale of the Bhavnagar claim is underlain by the units of the Precambrian
rocks that are found at those mineral occurrence sites. These
rocks consisting of cherts and argillites (sediments) and andesitic to basaltic
volcanic have been intruded by granodiorite. Structures and mineralization
probably related to this intrusion are found throughout the region and occur on
the claim. They are associated with all the major mineral occurrences and
deposits in the area.
Mineralization
found on the Bhavnagar claim is consistent with that found associated with zones
of extensive mineralization. Past work however has been limited and sporadic and
has not tested the potential of the property.
Mr.
Mistry concludes that potential for significant amounts of mineralization to be
found exists on the Bhavnagar claim and it merits intensive
exploration.
Recommendations
A two
phased exploration program to further delineate the mineralized system currently
recognized on Bhavnagar claim is recommended. The program would consist of air
photo interpretation of the structures, geological mapping, both regionally and
detailed on the area of the main showings, geophysical survey using both
magnetic and electromagnetic
instrumentation
in detail over the area of the showings and in a regional reconnaissance survey
and geochemical soil sample surveying regionally to identify other areas on the
claim that are mineralized and in detail on the known areas of mineralization.
The effort of this exploration work is to define and enable interpretation of a
follow-up diamond drill program, so that the known mineralization and the whole
property can be thoroughly evaluated with the most up to date exploration
techniques.
Budget
The
proposed budget for the recommended work in US dollars is $38,376 (INR
1,560,000) is as follows:
Phase
I
|
U.S Dollars
|
Indian Rupee
|
|
|
Geological
mapping
|
$ 6,519
|
265,000
|
|
Geophysical
surveying
|
7,380
|
300,000
|
|
Total
Phase I
|
13,899
|
565,000
|
Phase
II
|
Geochemical
surveying and surface sampling (including sample collection and
assaying)
|
24,477
|
995,000
|
|
Total
of Phases I and II
|
$
38,376
|
1,560,000
|
Glossary
of Geological Definitions used in the Raman Mistry Report
|
Word
|
Definition
|
|
Anorthosite
|
A
plutonic rock composed almost entirely of a mixture of sodium and calcium
feldspars.
|
|
Aplite
|
A
light-colored igneous rock characterized by a fine-grained sand
texture.
|
|
Bauxite
|
An
off-white, grayish, brown, yellow or reddish brown rock which is the chief
ore of aluminum.
|
|
Bentonite
|
A
type of clay formed by the alternation of volcanic ash.
|
|
Clinopyroxene
|
A
group name for monoclinic magnesium-iron minerals.
|
|
Deposit
|
Mineral
deposit or ore deposit is used to designate a natural occurrence of a
useful mineral, or an ore, in sufficient extent and degree of
concentration to invite exploration.
|
|
Dolerite
|
A
term used in the United States for a fine-grained character of the rock
which makes it difficult to identify.
|
|
Dolomite
|
Usually
referred to as a bed of limestone.
|
|
Feldspar
|
Comprises
60% of the Earths’ surface and is conceived under
high-temperatures.
|
|
Gneiss
|
A
rock formed by regional metamorphism in which there are bands or layers of
other rock types.
|
|
Gypsum
|
Commonly
associated with rock salt, limestone, share and clay and often found in
large beds of colorless to white rock.
|
|
Laterite
|
Red
residual soil developed in humid, tropical and subtropical regions of good
drainage.
|
|
Leptynites
|
A
rock containing mica, quartz and feldspar.
|
|
Limestone
|
A
general term used commercially for a class of rock containing at least 80%
of the carbonates of calcium or magnesium and which, when calcined, gives
a product that slakes upon the addition of water.
|
|
Mineralization
|
Potential
economic concentration of commercial metals occurring in
nature.
|
|
Nodules
|
A
small, irregularly rounded knot, mass, or lump of a mineral or mineral
aggregate, normally having a warty or knobby surface and no internal
structure, and usually exhibiting a contrasting composition from the
enclosing sediment or rock.
|
|
Ore
|
The
natural occurring mineral from which a mineral or minerals of economic
value can be extracted profitable or to satisfy social or political
objectives.
|
|
Paragneill
|
A
gneiss formed by metamorphism of a sedimentary rock.
|
|
Pegmatite
|
An
exceptionally course-grained igneous rock, with interlocking crystals,
usually as irregular dikes, lenses, or veins.
|
|
Reserve
|
(1)
That
part of a mineral deposit which could be economically and legally
extracted or produced at the time the reserve is determined.
(2)
Proven: Reserves
for which (a) quantity is computed from dimensions revealed in outcrops,
trenches, workings or drill holes; grade and/or quality are computed from
the results of detailed sampling and (b) the site for inspection, sampling
and measurement are spaced so closely and the geologic character is so
well defined that size, shape, depth and mineral content of reserves are
well-established.
(3)
Probable: Reserves
for which quantity and grade and/or quality are computed from information
similar to that used for proven (measure) reserves, but the sites for
inspection, sampling, and measurement are farther apart or are otherwise
less adequately spaced. The degree of assurance, although
lower than for proven (measured) reserves, is high enough to assume
continuity between points of observation.
|
|
Wollastonite
|
It
is found in contact-metamorphosed limestone, and occurs usually in
cleavable masses or sometimes in tabular twinned
crystals.
|
Management’s
Discussion and Analysis of Financial Conditions and Results of
Operations
Our
exploration target is to find an ore body containing gold. Our success depends
upon finding mineralized material. This includes a determination by our
consultant if the Bhavnagar claim contains reserves. Mineralized
material is a mineralized body, which has been delineated by appropriate spaced
drilling or underground sampling to support sufficient tonnage and average grade
of metals to justify removal. If we do not find mineralized material or we
cannot
remove
mineralized material, either because we do not have the money to do it or
because it is not economically feasible to do it, we will cease operations and
our shareholders will loss their entire investment.
In
addition, we may not have enough money to complete our exploration of the
Bhavnagar claim. If it turns out that we have not raised enough money to
complete our exploration program, we will try to raise additional funds from a
second public offering, a private placement or loans. At the present time, we
have not made any plans to raise additional money and there is no assurance that
we would be able to raise additional money in the future. If we need additional
money and cannot raise it, we will have to suspend or cease
operations.
We must
conduct exploration to determine what amount of minerals, if any, exist on our
claim and if any minerals which are found can be economically extracted and
profitably processed.
The
Bhavnagar is undeveloped raw land. We are in the process of exploring the
Bhavnagar but have not had any results there from to date. If we
encounter satisfactory results from our current exploration program we will
extend our test to determine if a mineral body exists. The
chances of ever identifying a mineral body which can be commercially put into
production is extremely remote.
Before
minerals retrieval can begin, it is imperative that we explore thoroughly the
Bhavnagar and find mineralized material. After that has occurred we have to
determine if it is economically feasible to remove the mineralized material.
Economically feasible means that the costs associated with the removal of the
mineralized material will not exceed the price at which we can sell the
mineralized material. We cannot predict what that will be until we find
mineralized material.
We do not
know if we will find mineralized material. We believe that activities occurring
on adjoining properties are not material to our activities. The reason is that
whatever is located on adjoining property may or may not be located on the
Bhavnagar.
We do not
claim to have any minerals or reserves whatsoever at this time on any part of
the Bhavnagar claim.
We intend
to implement an exploration program which consists of geochemical soil and rock
sampling along with prospecting, geological mapping and geophysical surveys.
Work will focus on prospecting the numerous new roads and clear cuts which may
have exposed previously covered bedrock. Areas of alteration, fault zones and
especially quartz veining (float or in situ) will be explored by establishing
grids along which soil sampling will be conducted. Streams should be sampled by
collecting silt and heavy mineral concentrates. The soil samples will be
analyzed to determine if elevated amounts of minerals are present. The results
will be plotted on a map to determine where the elevated areas of mineralization
occur. Rock samples and geological mapping and prospecting will be done by
competent professionals. Preliminary geophysical surveying will also be done to
try and locate anomalies which may be caused by mineralization which is not
evident on the surface. Based upon the results of the exploration we will
determine, in consultation with our consultants, if the Bhavnagar is to be
dropped or further exploration work is warranted and is to be done.
We
estimate the cost of the Phase I work program to be $13,899 (INR 565,000). This
is composed of $6,519 (INR 265,000) for geological mapping, $7,380 (INR 300,000)
geophysical surveying, which work we have already commenced with an advancement
of $5,000. We do not expect to receive any results until late
June or July 2008.
If we
receive some results from Phase I, we will consider raising money to do Phase II
as recommended by Raman Minsty, which will comprise geochemical surveying and
surface sampling including sample collection and assaying at an estimated cost
of $24,477 (INR 995,000). We do not have sufficient funds to
undertake this portion of the work and will have to raise additional capital by
subsequent issuance of our securities, attracting a joint venture partner to
undertake work on our claim (presumably in exchange for an interest in the
Bhavnagar) or through advances from our directors. If we are unable to complete
any element of Phase I exploration because we do not have enough money, we will
cease operations until we raise more money. If we cannot or do not raise more
money, we will cease operations. If we cease operations, we do not have any
plans to do anything else.
We do not
intend to hire any employees at this time. All of the work on the property will
be conducted by unaffiliated independent contactors that we will hire. The
independent contractors will be responsible for surveying, geology, engineering,
exploration, and excavation. The geologists will evaluate the information
derived from the exploration and excavation and the engineers will advise us on
the economic feasibility or removing any mineralized material we may
find.
There is
no historical financial information about us upon which to base an evaluation of
our performance. We are a pre-exploration stage corporation and have not
generated any revenues from operations. We cannot guarantee we will be
successful in our business operations. Our business is subject to risks inherent
in the establishment of a new business enterprise, including limited capital
resources, possible delays in the exploration of our claim, and possible cost
overruns due to price and cost increases in services. To become profitable and
competitive, we will conduct the research and exploration of our claim before we
start production of any minerals we may find.
We have
no assurance that future financing will be available to us on acceptable terms.
If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations. Equity financing could result in an
additional dilution to existing shareholders.
Liquidity
and Capital Resources
We are
not raising any funds under this prospectus but we will have to consider doing
so in the future if we are to remain as a going concern. If we
find mineralized material and it is economically feasible to remove the
mineralized material, we will attempt to raise additional money through a
subsequent private placement, public offering or through loans.
We have
discussed the lack of funds in the future with our directors and officers and
they have agreed to advance funds as needed until such time and they decide what
type of funding would be suitable for our Company; whether a public issue of
shares, continued advances from our directors and officers or seeking some form
of debt financing from an institutional lender or lenders. If we need additional
cash and cannot raise it we will either have to suspend operations until we do
raise the cash, or cease operations entirely.
We issued
3,750,000 shares of our common stock on October 31, 2007 for an aggregate
purchase consideration of $3,750 (being at $0.001 per
share). These shares were issued pursuant to the exemption from
registration set forth in section 4(2) of the Securities Act of 1933. Our
directors have provided us with various loans totaling $2,668 for legal fees
($1,731), office expenses ($68) and incorporation costs ($870). The amounts owed
to our directors are non-interest bearing, unsecured and due on demand.
Accordingly, the loans are classified as current liabilities.
As of
March 31, 2008, our total assets were $13,496 consisting sole of cash and our
total liabilities to third party creditors was $4,211 and amounts owed to our
directors was $2,668.
Our
capital commitments for the next twelve months consist of administrative
expenses together with expenses associated with the completion of our planned
exploration program are estimated as follows:
|
Expenses
|
Amount
|
Description
|
|
Accounting
|
$ 3,750
|
Fees
to the independent accountant for preparing the working papers for the
quarters ended for June, 30, September 30 and December 31, 2008 and annual
financial statements as at March 31, 2009 for submission to our
auditors.
|
|
Audit
|
4,000
|
Review
of the quarterly financial statements for June 30, September 30 and
December 31, 2008 and audit of the annual financial statements for the
year ended March 31, 2009.
|
|
Edgarzing
fees
|
1,000
|
Filing
this prospectus and future financial statements.
|
|
Exploration
|
9,119
|
Balance
of Phase I as per the Raman Mistry’s report.
|
|
Filing
fees
|
225
|
Annual
fee to the Secretary of State for Nevada
|
|
Miscellaneous
|
2,000
|
Accrual
for expenses not known at this time.
|
|
Office
|
500
|
Photocopying,
delivery and fax expenses
|
|
Transfer
agent’s fees
|
1,000
|
Annual
fee of $500 and estimated miscellaneous charges of $500
|
|
Estimated
expenses
|
$
21,594
|
Since our
initial share issuances, the Company has been unable to raise cash from any
source other than loan advances from our President who is one of our controlling
shareholders. Our total requirement for cash over the next twelve
months is summarized below:
|
Cash
requirements over the next twelve months as determined
above
|
$ 21,594
|
|
Add: Accounts
payable to third parties
|
4,211
|
|
25,805
|
|
|
Deduct: Cash
on hand as at March 31, 2008
|
(
13,496
)
|
|
Estimated cash requirements for
the next twelve months
|
$
12,308
|
We have
no plant or significant equipment to sell, nor are we going to buy any plant or
significant equipment during the next twelve months. We will not buy any
equipment until we have located a body of ore and we have determined it is
economical to extract the ore from the land.
We may
attempt to interest other companies to undertake exploration work on the
Bhavnagar Gold Claim through joint venture arrangement or even the sale of part
of the Bhavnagar claim. Neither of these avenues has been pursued as
of the date of this prospectus.
Raman
Mistry has recommended an exploration program for the
Bhavnagar. However, even if the results of this work suggest further
exploration work is warranted, we do not presently have the requisite funds and
so will be unable to complete anything beyond the initial exploration work
recommended in Raman Mistry’s report dated November 22, 2007 until we raise more
money or find a joint venture partner to complete the exploration
work. If we cannot find a joint venture partner and do not raise more
money, we will be unable to complete any work beyond part of Phase I we are
currently doing. If we are unable to finance additional exploration
activities, we do not know what we will do and we do not have any plans to do
anything else.
We do not
intend to hire any employees at this time. All of the work on the
Bhavnagan will be conducted by unaffiliated independent contractors that we will
hire. The independent contractors will be responsible for supervision,
surveying, exploration, and excavation. If Raman Mistry is not
available when we need him, we may engage a geologist to assist in evaluating
the information derived from the exploration and excavation including advising
us on the economic feasibility of removing any mineralized material we may
discover.
Limited
Operating History; Need for Additional Capital
There is
no historical financial information about us upon which to base an evaluation of
our performance as an exploration corporation. We are a pre-exploration stage
company and have not generated any revenues from our exploration activities.
Further, we have not generated any revenues since our formation on July 24,
2007. We cannot guarantee we will be successful in our exploration
activities.
Results
of Operations for the Period ended March 31, 2008.
For the
period from July 24, 2007 (date of inception) to March 31, 2008, we had a net
loss of $43,183. This represents a net loss of $0.01 per share
for the period based on a weighted average number of shares outstanding of
3,942,235. We have not generated any revenue from operations
since inception. Our loss to date represents various expenses
incurred with organizing our Company, undertaking audits, exploration expenses,
general office expenses, consulting and legal fees for preparation of this
prospectus, accruing management fees, rent and telephone which can be broken
down as follows:
|
Expense
|
Inception to March 31, 2008
|
Description
|
|
|
Accounting
and audit
|
$4,075
|
Preparation
of working papers ($1,575) for submission to our independent accountants
for examination and/or of the financial statements
($2,500)
|
|
|
Consulting
|
5,000
|
Assisting
in organizing the company and seeking out the
Bhavnagar.
|
|
|
Exploration
Expenses
|
11,321
|
Acquiring
the Bhavnagar ($5,000), advance on Phase I exploration program ($5,000)
and obtaining certificates for the Company to do business as a mining
company in India.
|
|
|
Incorporation
costs
|
870
|
Incorporation
costs paid to the State of Nevada.
|
|
|
Legal
|
14,713
|
Legal
expenses relating to the preparation of this prospectus, administering the
Company’s trust account and various other legal services as
required.
|
|
|
Management
Fees
|
5,000
|
The
Company does not pay management fees to its directors and officers but
realizes there is a cost associated with their services to the Company and
therefore accrues $1,000 a month in recognition of this
service. The credit is allocated to Capital in Excess of
Par Value. These expenses will never be paid out in cash
or shares to any of the directors or officers.
|
|
|
Office
and general
|
704
|
General
office expenses.
|
|
|
Rent
|
1,000
|
The
Company as its office the private residence of its President but does not
pay him any money. Nevertheless it gives recognition to
rent expense by accruing $200 per month with an offsetting credit to
Capital in Excess of Par Value.
|
|
|
Telephone
|
500
|
Similar
to management fees and rent the Company accrues $100 per month for
telephone with the credit being applied to Capital in Excess of Par
Value.
|
|
|
Total
expenses
|
$
43,183
|
When
deducing the non-cash expense, being management fees, rent and telephone, the
Company has paid and payable expenses of $36,683.
Balance
Sheet
As at
March 31, 2008 our total cash and cash equivalents was $13,496. Our
working capital as at March 31, 2008 was $6,617.
Our
accounts payable to third parties as at March 31, 2008 was as
follows:
|
Auditors
|
For
examination of the financial statements as at March 31, 2008 and giving an
opinion thereon
|
$ 2,500
|
|
Internal
accountant
|
For
preparation of the working papers as at March 31, 2008 for submission to
the auditors
|
1,575
|
|
Office
expenses
|
Unpaid
amounts for photocopying, fax and courier
|
136
|
|
Total
accounts payable to third parties – March 31, 2008
|
$
4,211
|
Total
shareholders’ equity as at March 31, 2008 is $6,617. Total shares
outstanding, as at March 31, 2008, was 4,541,000.
Trends
We are in
the pre-explorations stage, have not generated any revenue and have no prospects
of generating any revenue in the foreseeable future. We are unaware
of any known trends, events or uncertainties that have had, or are reasonably
likely to have, a material impact on our business or income, either in the long
term of short term, other than as described in the Risk Factors section on page
6.
Critical
Accounting Policies
Our
discussion and analysis of its financial condition and results of operations,
including the discussion on liquidity and capital resources, are based upon our
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. On an ongoing basis, management
re-evaluates its estimates and judgments.
The going
concern basis of presentation assumes we will continue in operation throughout
the next fiscal year and into the foreseeable future and will be able to realize
our assets and discharge our liabilities and commitments in the normal course of
business.
Description
of Property
As more
fully described under “Description of Business” above our mineral claim is
called the Bhavnagar and is located in the Republic of
India. Bhavnagar claim is located 42 km East of
Surat, (closest city) lies 60 km Southeast of Bhavreh and 79 km Northwest of
Amreli, is a gold exploration project, located 36 km West of the past producing
Dayal Gold Mine. Bhavnagar is a coastal city in the eastern
coast of Saurashtra, also known as Kathiwar. General slope dips in the
northeasterly direction at the apex of Gulf of Cambay. Small
non-perennial river named Kansara Nala passes through outer area of the city.
Bhavnagar was the first city in India to have underground drainage. Bhavnagar is
an important center for diamond cutting and polishing industry in Gujarat as
well as India.
The
claims are accessible by all-weather government-maintained roads and railway
tracks to the town of Surat (to the East) and to Bhavreh to the
Southeast. The city is well connected to other major cities of
Gujarat such as Vadodara, Ahmedabad, Rajkot, Jamnagar, Surat and more by road,
with bus services operated by private and state-owned transport
corporations.
There are
no known ore reserves on the Bhavnagar and no matter how much money we spend on
exploration work we might never identify an ore reserve of commercial
value.
Market
Price of and Dividend on our Common Equity and Related Stockholder
Matters.
As more
fully described under “Description of Securities to be Registered” above we have
authorized 450,000,000 common shares and have issued and outstanding 4,541,000
common shares.
There is
no established public trading market for our common shares anywhere in the
world.
We do not
have any stock options or warrants outstanding and our common shares are not
convertible into any other form of shares or securities.
We are
qualifying under this prospectus 1,166,000 common shares of which 375,000 common
shares are owned by our directors and officers. Upon the
effectiveness of this prospectus, these shares can be sold by our selling
security holders in adherence to the requirements of the Securities
Act.
Holders
of our Common Shares
As at May
15, 2008, we have 42 shareholders which include Messrs. Madappilly and Maliakal,
our President and Secretary Treasurer respectively.
Our
Dividend Policy
Since we
are a start-up company having been incorporated on July 24, 2008 and having
earned no revenue, we have not paid a dividend to our
shareholders. We do not intend to pay a dividend in the
immediate future. There is no restriction in us paying dividends in
the future. If we start to earn revenue it is our intention to
retain these funds in our Company and use them for further exploration on the
Bhavnagar as well as using funds to maintain our working capital
position. It might take years before we consider paying a
dividend.
Securities
Authorized for Issuance under Compensation Plans
We do not
have an equity compensation plan whereby securities are authorized for issuance
to our directors, officers, affiliates or promoters.
We do not
have any plan, contract or arrangement for the issuance of warrants or rights
and do not have an employee benefit plan.
|
|
Changes
in and Disagreement with Accountant on Accounting and Financial
Disclosure
|
Our
auditors are Madsen & Associates, CPA’s Inc. of # 3- 684 East Vine, Murray,
Utah, 84107. From the date of the appointment of Madsen & Associates, CPA’s
Inc. to March 31, 2008:
|
(i)
|
we
did not receive an adverse opinion or disclaimer of opinion from
them;
|
|
|
(ii)
|
the
opinions were not qualified or modified as to uncertainty, audit scope or
accounting principles;
|
|
|
(iii)
|
there
have been no disagreement with Madsen & Associates, CPA’s Inc. on any
matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedures, which, if not resolved to the
satisfaction of Madsen & Associates, CPA’s Inc. would have caused them
to make reference to the subject matter in their report;
and
|
|
|
(iv)
|
In
particular, there were no “reportable events”, as such term is defined in
Item 304 (a) (1) (iv) of Regulation S-B, during the period from their
appointment through to March 31,
2008.
|
Directors,
Executive Officers, Promoters and Control Persons
Officers
and Directors
Each of
our Directors serves until his successor is elected and qualified. Each of our
officers is elected by the Board of Directors to a term of one (1) year and
serves until his successor is duly elected and qualified, or until he is removed
from office. The Board of Directors has no nominating or compensation
committees.
The name,
address, age and position of our officers and directors is set forth
below:
|
Name and Address
|
Position(s
)
|
Age
|
|
Jose
Madappilly
|
Chief
Executive Officer, President and Director (1)
|
38
|
|
Dr.
Jaiju Maliakal
|
Chief
Financial Officer, Chief Accounting
Officer,
Secretary-Treasurer and Director (2)
|
36
|
|
(1)
|
Jose
Madappilly was appointed a Director, President and Chief Executive Officer
on July 25, 2007.
|
|
(2)
|
Dr.
Jaiji Maliakal was appointed a Director, Secretary/Treasurer and Chief
Financial Officer on July 25, 2007.
|
The
percentage of common shares beneficially owned, directly or indirectly, or over
which control or direction are exercised by our directors and officers,
collectively, is approximately 83% of the total issued and outstanding
shares.
None of
our directors or officers has professional or technical accreditation in the
mining business.
Background
of officers and directors
Jose
Maddappilly was born in Chalakudy, India (the Spice town of India’s Southern
most state of Kerala). He attended Carmel High School from where he
graduated in 1987. He attended Christ College where he did his Senior Secondary
and graduated in 1989. As a student, he excelled in Mathematics and
Science and represented his State for the junior basketball team. While at
school he actively participated in the various student movements; such as
Literacy Movement and the Beautiful Kerala movements. In 1991, Jose
left Christ College where he had been attending while in the Bachelor of Science
Program specializing in Physics and entered one of the best institutes in
Bhopal, India to take a course in hotel management, catering technology and
applied nutrition program. He graduated in 1994 after excelling in the Food
Production and Food and Beverage Service. He was successful in
working for the elite Leela Group of Hotels in Mumbai as a management
trainee. After several years he was appointed the Assistant
Food and Beverage Manager. In 1999 Jose left his employment at the
Leela Group of Hotels and returned to Kerala, his home state, where he had some
real estate interests. Subsequent to 1999 he worked as a
consultant for the
hospitality
industry, worked as a mediator for the Government for the Tourism Infrastructure
and was part of the faculty at various hospitality schools. He
assisted in setting up several of Cochin’s best restaurants where he had a
financial interest in. For the past five years he has been president
and chief executive officer of his own private company, Madappilly Ventures
Inc., which he has been using to assist in the setting up of an international
school for students wishing to enter the tourist industry.
Dr. Jaiju
Maliakal was born in Ayyampilly, Kerala. Jaiju attended Carmel High
School where he graduated with honor in 1990 and subsequently went to Christ
College in Irinjalakuda where he graduated in 1992. After graduation he went to
university where he obtained a Bachelor of Science before entering the medical
program. In 2002 he obtained his medical degree and is
currently registered with the Indian Medical Council as a Doctor in General
Medicine Currently he is a practicing doctor at Vincent De Paul’s
Hospital in his home town of Ayyampilly, Kerala, India. He, with his
fellow Physicians and Surgeons, conduct free medical classes to educate the
people in the financially backward communities.
None of
our officers and directors work full time for our Company. It is
expected that Jose Madappilly will spend approximately 10 hours a month on the
affairs of our Company. Once our Company is quoted and we commence
Phase II of our exploration program we anticipate Jose will spend more time on
the affairs of our Company; being estimated at twenty-five to thirty hours a
month. As Secretary Treasurer, Dr. Jaiju Maliakal spends
approximately 5 hours per month on affairs of our Company and we anticipate,
similar to Jose, that time spent will increase once we are effective and are
quoted, if possible, on the OTCBB.
Board
of Directors
Since
inception our Board has held no meetings and our Audit Committee held no
meetings. All agreements and directions have been done by way of
Directors’ Consent Resolutions to date. With both our directors
and officers residing in India it is likely that within the next several months
they will hold a Directors’ Meeting.
Below
is a description of the Audit Committee of the Board of Directors.
The
Charter of the Audit Committee of the Board of Directors sets forth the
responsibilities of the Audit Committee. The primary function of the Audit
Committee is to oversee and monitor the Company’s accounting and reporting
processes and the audits of the Company’s financial
statements.
On July
31, 2007, our directors appointed Jose Madappilly and Dr. Jaiju Maliakal to the
Audit Committee and at the same time adopted the Audit Committee
Charter. Neither Jose nor Jaiju can be considered an “audit committee
financial expert” as defined in Item 401 of Regulation S-B. We will
have to attract an individual with the qualification of an audit committee
expert to our Audit Committee. At this time, we have not
identified such an individual.
Apart
from the Audit Committee, our Company does not have any other Board
committees.
Conflicts
of Interest
While
none of our officers and directors is a director or officer of any other company
involved in the mining industry there can be no assurance such involvement will
not occur in the future. Such involvement could create a conflict of
interest.
To ensure
that potential conflicts of interest are avoided or declared to our Company and
its shareholders and to comply with the requirements of the Sarbanes Oxley Act
of 2002, the Board of Directors adopted, on July 31, 2007, a Code of Business
Conduct and Ethics. Our Company’s Code of Business Conduct and Ethics
embodies our commitment to such ethical principles and sets forth the
responsibilities of our Company and its officers and directors to its
shareholders, employees, customers, lenders and other stakeholders. Our Code of
Business Conduct and Ethics addresses general business ethical principles,
conflicts of interest, special ethical obligations for employees with financial
reporting responsibilities, insider trading rules, reporting of any unlawful or
unethical conduct, political contributions and other relevant
issues.
Significant
Employees
We have
no paid employees. Our Officers and Directors fulfill many of the
functions that would otherwise require our Company to hire employees or outside
consultants. Even though our Company does not pay remuneration to our
officers and directors, it realizes there is a cost associated with the services
performed by them and therefore accrues each month, starting in November 1,
2007, management fees of $1,000 per month. The credit is
changed to Capital in Excess of Par Value under the Shareholders Equity section
of the Balance Sheet. This amount will never be paid to the
directors and officers in either cash or shares.
Since our
directors and officers do not have direct experience in exploration or mining we
will to rely on consultants to assist in the exploration of the
Bhavnagar. In particular we will engage a professional geologist on a
consulting basis, together with an assistant(s). Such geologist will
responsible for hiring and supervising, to conduct the Phase I exploration work
to undertaken on the Bhavnagar. Being professionals and with
knowledge of the exploration business for mineral properties they will be
responsible for the completion of our exploration program. They will
not be full or part time employees since our exploration program will only last
several weeks.
Family
Relationships
Jose
Madappilly and Jaiju Maliakal are not related.
Directorships
Neither
Jose Madappilly nor Dr. Jaiju Maliakal are not directors of another company
registered under the Securities and Exchange Act of 1934
Involvement
in Certain Legal Proceedings
To the
knowledge of the Company, during the past five years, none of our directors or
executive officers:
(1) has
filed a petition under the Federal bankruptcy laws or any state insolvency law
was filed by or against, or a receiver, fiscal agent or similar officer was
appointed by the court for the business or property of such person, or any
partnership in which he was a general partner at or within two years before the
time of such filings, or any corporation or business association of which he was
an executive officer at or within the last two year before the time of such
filing;
(2) was
convicted in a criminal proceeding or named subject of a pending criminal
proceeding (excluding traffic violations and other minor offenses);
(3) was
the subject of any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining him from or otherwise limiting, the following
activities:
|
(i)
|
acting
as a futures commission merchant, introducing broker, commodity trading
advisor, commodity pool operator, floor broker, leverage transaction
merchant, any other person regulated by the Commodity Futures
Trading Commission, or an associated person of any of the foregoing, or as
an investment advisor, underwriter, broker or dealer in securities, or as
an affiliate person, director or employee of any investment company, bank,
savings and loan association or insurance company, or engaging in or
continuing any conduct or practice in connection with such
activity;
|
(ii) engaging
in any type of business practice; or
|
|
(iii)
|
engaging
in any activities in connection with the purchase or sale of any security
or commodity or in connection with any violation of Federal or State
securities laws or Federal commodities
laws;
|
(4) was
the subject of any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any Federal or State authority barring, suspending or
otherwise limiting for more than 60 days the right of such person to engage in
any activity described above under paragraph (3) (i) above, or to be associated
with persons engaged in any such activities; or
(5) was
found by a court of competent jurisdiction in a civil action or by the
Commission to have violated any Federal or State securities law, and the
judgment in such civil action or finding by the Commission has not been
subsequently reversed, suspended, or vacated.
|
(6)
|
was
found by a court of competent jurisdiction in a civil action or by the
Commodity Futures Trading Commission to have violated any Federal
commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.
|
Promoters
and Control Persons
The
promoters of our Company are our two directors and officers. We
have no other promoters. Our two directors and officers jointly
control 83% of our issued and outstanding shares.
Executive
Compensation
Our
Company’s Board of Directors is responsible for establishing and administering
the Company’s executive and directors’ compensation. To date
none of our directors and officers have been paid any money or received any
other compensation. As mentioned above, the Company gives
recognition to the services the Company performs on behalf of the Company by
accruing each month as an expense management fees with an offsetting credit to
Capital in Excess of Par Value. As at March 31, 2008 the
Company expenses $5,000 as management fees.
Directors
are not compensated if they attend Directors’ Meetings. Any
out-of-pocket costs paid by them on behalf of the Company is reimbursed to them
including any travel and entertainment charges.
The
following table summarizes all compensation earned by or paid to our Chief
Executive Officer and other executive officers, during the past two fiscal
years.
Summary
Compensation Table
|
Name
and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-equity
Incentive
Plan
Compensation
($)
|
Change
in
Pension
value and
Nonqualified
Compensation
Earnings
($)
|
All
other
Compensation
($)
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
|
Jose
Madappilly
Chief
Executive
Officer
|
2007
2008
|
-0-
-0-
|
-0-
-0-
|
-0-
-0-
|
-0-
-0-
|
-0-
-0-
|
-0-
-0-
|
-0-
-0-
|
|
Jaiju
Maliakal
Chief
Financial
Officer
|
2007
2008
|
-0-
-0-
|
-0-
-0-
|
-0-
-0-
|
-0-
-0-
|
-0-
-0-
|
-0-
-0-
|
-0-
-0-
|
Termination
of Employment
The
Company has no financial obligation to our directors or officers if they
terminate their involvement with our Company through resignation, severance or
constructive termination of their employment with us.
Change
of Control
We do not
know of any arrangements which might result in a change in control.
In the
State of Nevada there are no anti-takeover provisions that may have the affect
of delaying or preventing a change in control. Sections 78.378
through 78.379 of the Nevada Revised Statutes relates to control share
acquisitions thaqt may delay to make more difficult acquisitions or changes in
our control, however, they only apply when we have 200 or more shareholders of
record, at least 100 of whom have addresses in the State of Nevada as per our
Shareholders’ List and we are doing, either through a subsidiary or directly,
business in the State of Nevada. At this time neither of these
two events seems like they will occur. Presently all our
shareholders are residents of India and all our directors and officers are also
residents of India. None reside in the United
States. We are not contemplating doing any business in the
State of Nevada, either through a subsidiary or directly, and none of our shares
have been sold to citizens of Nevada. Accordingly, there are no
anti-takeover provisions that have the affect of delaying or preventing a change
in our control.
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth, as at May 15, 2008, the total number of shares owned
beneficially by each of our directors, officers and key employees, individually
and as a group, and the present owners of 5% or more of our total outstanding
shares. The shareholder listed below has direct ownership of his shares and
possesses sole voting and dispositive power with respect to the
shares.
|
Title
of
Class
|
Name
and Address of
Beneficial
Owner (*)
|
Amount
and
nature
of
Beneficial
Ownership
(**)
|
Percent
of
Class
|
|
Common
Stock
|
Jose
Madappilly
Madappilly
House
Elenjipra,
P.O. ,
Chalakudy
via
680721,
Kerala, India
|
2,000,000
|
44.04%
|
|
Common
Stock
|
Dr.
Jaiju Maliakal
Maliakal
House
“Rose
Garden”
Ayyampilly,
P.O., Ernakulam, Dt.,
682501,
Kerala, India
|
1,750,000
|
38.54%
|
|
Common
Stock
|
Directors
and Officers as a
Group
|
3,750,000
|
82.58%
|
|
(*)
|
Unless
otherwise noted, the security ownership disclosed in this table is of
record and beneficial.
|
|
(**)
|
Under
Rule 13d-3 of the Exchange Act, shares not outstanding but subject to
options, warrants, rights, conversion privileges pursuant to which such
shares may be acquired in the next 60 days are deemed to be outstanding
for the purpose of computing the percentage of outstanding shares owned by
the person having such rights, but are not deemed outstanding for the
purpose of computing the percentage for such other
persons. None of our officers or directors has options,
warrants, rights or conversion privileges
outstanding.
|
Future
Sales by Existing Shareholders
As of May
15, 2008, there are a total of 4,451,000 shares of our common stock are issued
and outstanding. Of these all 4,451,000, being 100%, are ‘restricted shares’ as
defined in Rule 144 of the Securities Act of 1933. Under this prospectus, we are
registering 1,166,000 shares, being 25.6% of our issued shares leaving 3,375,000
shares, being 74.4% of our shares, as restricted shares.
|
Jose
Madappilly
|
1,800,000
shares
|
|
Jaiju
Maliakal
|
1,575,000
shares
|
|
Total
restricted shares
|
3,375,000
shares
|
Transactions
with Related Persons, Promoters and Certain Control Persons
Except as
indicated below, there were no material transactions, or series of similar
transactions, since inception of our Company to March 31, 2008 and thereafter to
the date of this prospectus, or any currently proposed transactions, or series
of similar transactions, to which our Company was or is to be a party, in which
the amount involved exceeds $120,000, and in which any director, executive
officer, any security holder or related party who is known by us to own of
record or beneficially more than 5% of any class of our Company's common stock,
or any member of the immediate family of any of the foregoing persons, has an
interest.
Indebtedness
of Management
There
were no material transactions, or series of similar transactions, from our
inception to March 31, 2008, or any currently proposed transactions, or series
of similar transactions, to which our Company was or is to be a part, in which
the amount involved exceeded $120,000 and in which any director or executive
officer, or any security holder who is known to us to own of record or
beneficially more than 5% of the common shares of our Company's capital stock,
or any member of the immediate family of any of the foregoing persons, has an
interest.
Transactions
with Promoters
We do not
promoters and have had no transactions with any promoters.
Transactions
with Management and Others
Except as
indicated below, there were no material transactions, or series of
similar transactions,
since inception of our Company and during its current fiscal period, or any
currently proposed transactions, or series of similar transactions, to which our
Company was or is to be a party, in which the amount involved exceeds $120,000,
and in which any director or executive officer, or any security holder who is
known by our Company to own of record or beneficially more than 5% of any class
of our Company’s common stock, or any member of the immediate family of any of
the foregoing persons, has an interest.
ITEM
11A: MATERIAL
CHANGES
There
have been no material changes since our fiscal year end of March 31,
2008.
Financial
Statements
Our
fiscal year end is March 31. We will provide audited financial statements to our
stockholders on an annual basis; the financial statements will be audited by
Independent Accountants.
Our
audited financial statements for the period ended March 31, 2008 immediately
follow:
|
FINANCIAL STATEMENTS – March 31,
2008
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
41
|
|
Balance
Sheet
|
42
|
|
Statement
of Operations
|
43
|
|
Statement
of Changes in Stockholders’ Equity
|
44
|
|
Statement
of Cash Flows
|
45
|
|
Notes
to the Financial Statements
|
46
|
|
MADSEN & ASSOCIATES, CPA’s
INC.
|
684
East Vine Street, #3
|
|
Certified
Public Accountants and Business Consultants Board
|
Murray,
Utah, 84107
|
|
Telephone:
801-268-2632
|
|
|
Fax:
801-262-3978
|
Board of
Directors
Sweetwater
Resources, Inc.
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have
audited the accompanying balances sheet of Sweetwater Resources, Inc.
(pre-exploration stage company) at March 31, 2008, and the related statements of
operations, stockholders' equity, and cash flows for the period July 24, 2007
(date of inception) to March 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 audit 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 includes examining, on a test basis, evidence
supporting the amounts and disclosure in the financial statements. An
audit includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall balance sheet
presentation. We believe that our audit provides 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 Sweetwater Resources, Inc.
(pre-exploration stage company) as at March 31, 2008 and the related statements
of operations, and cash flows for the period July 24, 2007 (date of inception)
to March 31, 2008, in conformity with accounting principles generally accepted
in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company will need additional working
capital for its planned activity and to service its debt, which raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are described in the notes to the financial
statements. These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Murray,
Utah
/s/ “Madsen &
Associates, CPA’s Inc.”
May 2,
2008
SWEETWATER
RESOURCES, INC.
(A
Pre-exploration Stage Company)
BALANCE
SHEET
March 31,
2008
|
ASSETS
|
|
|
CURRENT
ASSETS
|
|
|
Cash
|
$
13,496
|
|
Total Current
Assets
|
$
13,496
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
CURRENT
LIABILITIES
|
|
|
Accounts payable
|
$ 4,211
|
|
Accounts payable – related
parties
|
2,668
|
|
Total Current
Liabilities
|
6,879
|
|
STOCKHOLDERS’
EQUITY
|
|
|
Common
stock
|
|
|
450,000,000 shares authorized, at
$0.001 par value;
|
|
|
4,541,000 shares issued and
outstanding
|
4,541
|
|
Capital in excess of par
value
|
45,259
|
|
Deficit accumulated during the
pre-exploration stage
|
(43,183)
|
|
Total Stockholders’
Equity
|
6,617
|
|
$
13,496
|
The
accompanying notes are an integral part of these financial
statements.
SWEETWATER
RESOURCES, INC.
(A
Pre-exploration Stage Company)
STATEMENT
OF OPERATIONS
For the
period from July 24, 2007 (date of inception) to March 31, 2008
|
REVENUES
|
$
-
|
|
EXPENSES
|
|
|
Accounting
and audit
|
4,075
|
|
Consulting
|
5,000
|
|
Exploration
expenses
|
11,321
|
|
Incorporation
costs
|
870
|
|
Legal
|
14,713
|
|
Management
fees
|
5,000
|
|
Office
|
704
|
|
Rent
|
1,000
|
|
Telephone
|
500
|
|
NET
LOSS FROM OPERATIONS
|
$
(43,183)
|
|
NET
LOSS PER COMMON SHARE
|
|
|
Basic
and diluted
|
$
(0.01)
|
|
AVERAGE
OUTSTANDING SHARES
|
|
|
Basic
|
3,942,235
|
The
accompanying notes are an integral part of these financial
statements.
SWEETWATER
RESOURCES, INC.
(Pre-Exploration
Stage Company)
STATEMENT
OF CHANGES IN STOCKHOLDERS' EQUITY
Period July
24, 2007 (date of inception) to March 31, 2008
|
Common
Shares
|
Stock
Amount
|
Capital
in
Excess
of
Par Value
|
Accumulated
Deficit
|
|
|
Balance July 24,
2007
|
-
|
$ -
|
$ -
|
$ -
|
|
Issuance
of common shares for cash at
$.001
– October 31, 2007
|
3,750,000
|
3,750
|
-
|
-
|
|
Issuance
of common shares for cash at
$.05
– January 31, 2008
|
791,000
|
791
|
38,759
|
|
|
Capital
contributions – expenses
|
-
|
-
|
6,500
|
|
|
Net
operating loss for the period July 24, 2007 (date
of
Inception) to March 31, 2008
|
-
|
-
|
-
|
(43,183
)
|
|
Balance
as at March 31, 2008
|
4,541,000
|
$
4,541
|
$
45,259
|
$
(43,183)
|
The
accompanying notes are an integral part of these financial
statements
SWEETWATER
RESOURCES, INC.
(A
Pre-exploration Stage Company)
STATEMENT
OF CASH FLOWS
For the
period from July 24, 2007 (date of inception) to March 31, 2008
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
Net
loss
|
$(43,183)
|
|
Adjustments
to reconcile net loss to net cash provided by
operating
activities:
|
|
|
Capital
contributions – expenses
|
6,500
|
|
Changes
in accounts payable
|
4,211
|
|
Net
Cash Provided (Used) in Operations
|
(32,472)
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
-
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
Proceeds from loan from related
party
|
2,668
|
|
Proceeds from issuance of common
stock
|
43,300
|
|
Net
Cash from financing operations
|
45,968
|
|
Net
Increase in Cash
|
13,496
|
|
Cash
at Beginning of Period
|
-
|
|
CASH
AT END OF PERIOD
|
$
13,496
|
The
accompanying notes are an integral part of these financial
statements
SWEETWATER
RESOURCES, INC.
(A
Pre-exploration Stage Company)
NOTES
TO FINANCIAL STATEMENTS
March 31,
2008
1. ORGANIZATION
The
Company, Sweetwater Resources, Inc. was incorporated under the laws of the State
of Nevada on July 24, 2007 with the authorized common capital stock of
450,000,000 shares at $0.001 par value.
The
Company was organized for the purpose of acquiring and developing mineral
properties. At the report date mineral claims, with unknown reserves,
had been acquired. The Company has not established the existence of a
commercially minable ore deposit and therefore has not reached the development
stage and is considered to be in the pre-exploration stage.
The
Company has elected March 31 as its fiscal year end.
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Accounting
Methods
The
Company recognizes income and expenses based on the accrual method of
accounting.
Dividend
Policy
The
Company has not yet adopted a policy regarding payment of
dividends.
|
|
Basic and Diluted Net
Income (loss) Per Share
|
|
|
Basic
net income (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding. Diluted
net income (loss) per share amounts are computed using the weighted
average number of common and common equivalent shares outstanding as if
shares had been issued on the exercise of the common share rights unless
the exercise becomes antidilutive and then only the basic per share
amounts are shown in the report.
|
Evaluation of Long-Lived
Assets
The
Company periodically reviews its long term assets and makes adjustments, if the
carrying value exceeds fair value.
Income
Taxes
The
Company utilizes the liability method of accounting for income
taxes. Under the liability method deferred tax assets and liabilities
are determined based on differences between financial reporting and the tax
bases of the assets and liabilities and are measured using the enacted tax rates
and laws that will be in effect, when the differences are expected to be
reversed. An allowance against deferred tax assets is recorded,
when it is more likely than not, that such tax benefits will not be
realized.
On March
31, 2008, the Company had a net operating loss carry forward of $43,183 for
income tax purposes. The tax benefit of approximately $13,000 from
the loss carry forward
SWEETWATER
RESOURCES, INC.
(A
Pre-exploration Stage Company)
NOTES
TO INANCIAL STATEMENTS
March 31,
2008
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Income Taxes
-
Continued
has been
fully offset by a valuation reserve because the future tax benefit is
undeterminable since the Company is unable to establish a predictable projection
of operating profits for future years. The losses will expire
in 2029.
Evaluation of Long-Lived
Assets
The
Company periodically reviews its long term assets and makes adjustments, if the
carrying value exceeds fair value.
Foreign Currency
Translations
Part of
the transactions of the Company were completed in Canadian dollars and have been
translated to US dollars as incurred, at the exchange rate in effect at the
time, and therefore, no gain or loss from the translation is
recognized. The functional currency is considered to be US
dollars.
Revenue
Recognition
Revenue
is recognized on the sale and delivery of a product or the completion of a
service provided.
Advertising and Market
Development
The company expenses advertising and
market development costs as incurred.
Financial
Instruments
|
|
The
carrying amounts of financial instruments are considered by management to
be their fair value to their short term
maturities.
|
Estimates and
Assumptions
Management
uses estimates and assumptions in preparing financial statements in accordance
with general accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that
were assumed in preparing these financial statements.
|
Statement of Cash
Flows
|
|
|
For
the purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less to be
cash equivalents.
|
SWEETWATER
RESOURCES, INC.
(A
Pre-exploration Stage Company)
NOTES
TO INANCIAL STATEMENTS
March 31,
2008
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Unproven Mining Claim
Costs
Cost of
acquisition, exploration, carrying and retaining unproven properties are
expensed as incurred.
|
|
Environmental
Requirements
|
|
|
At
the report date environmental requirements related to the mineral claim
acquired are unknown and therefore any estimate of any future cost cannot
be made.
|
Recent Accounting
Pronouncements
The
Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial
statements.
3. AQUISITION
OF MINERAL CLAIM
|
|
The
Company acquired a mineral claim known as the Bhavnagar Gold
Claim located near Surat in the Republic of India for $5,000 from Bhindi
Mines LLC, an unrelated company located at Bhopol, India. The
claim, under Indian mineral law, remains in good standing until such time
as the Company abandons it.
|
4. SIGNIFICANT
TRANSACTIONS WITH FORMER RELATED PARTY
The
former officers-directors have acquired 83% of the common stock issued and have
made no interest, demand loans to the Company of $2,668 and have made
contributions to capital of $6,500 in the form of expenses paid for the
Company.
5. CAPITAL
STOCK
On
October 31, 2007, Company completed a private placement consisting of 3,750,000
common shares sold to directors and officers at a price of $0.001 per share for
a total consideration of $3,750. On January 31, 2008, the Company
completed a private placement of 791,000 common shares at $0.05 per share for a
total consideration of $39,550.
ITEM
12. INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
Additional
Information
We are
subject to the informational requirements of the Securities Exchange Act of
1934, and in accordance therewith file reports, proxy or information statements
and other information with the Securities and Exchange
Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 100 F Street N. E., Washington, D.C. 20549, at
prescribed rates. In addition, the Commission maintains a web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the
Commission. The address of the Commission’s web site is
http://www.sec.gov.
Our
Company has filed with the Commission a registration statement on Form S-1 under
the Securities Act of 1933 with respect to the common stock being offered
hereby. As permitted by the rules and regulations of the Commission, this
prospectus does not contain all the information set forth in the registration
statement and the exhibits and schedules thereto. For further information with
respect to our Company and the common shares offered hereby, reference is made
to the registration statement, and such exhibits and schedules. A copy of the
registration statement, and the exhibits and schedules thereto, may be inspected
without charge at the public reference facilities maintained by the Commission
at the addresses set forth above, and copies of all or any part of the
registration statement may be obtained from such offices upon payment of the
fees prescribed by the Commission. In addition, the registration statement may
be accessed at the Commission’s web site. Statements contained in this
prospectus as to the contents of any contract or other document are not
necessarily complete and, in each instance, reference is made to the copy of
such contract or document filed as an exhibit to the registration statement,
each such statement being qualified in all respects by such
reference.
|
Item
12A.
|
DISCLOSURE
OF COMMISSIONS POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
|
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore
unenforceable.
Under the
Nevada General Corporation Law and our Articles of Incorporation, our directors
will have no personal liability to us or our stockholders for damages incurred
as the result of the breach or alleged breach of fiduciary duty as a director of
the Company involving any act or omission of any such director. This
provision does not apply to the directors' (i) acts or omissions that involve
intentional misconduct, fraud or knowing violation of law, or (ii) approval of
an unlawful dividend, distribution, stock repurchase or redemption under Section
78.300 of the Nevada Revised Statutes. This provision would generally
absolve directors of personal liability for negligence in the performance of
duties, including gross negligence.
The
effect of this provision in our Articles of Incorporation, is to eliminate the
rights of our Company and our stockholders (through stockholder's derivative
suits on behalf of our Company) to recover damages against a director for breach
of his fiduciary duties as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) and (ii) above. This provision does not limit nor
eliminate the rights of our Company or any stockholder to seek relief such as an
injunction or
rescission
in the event of a breach of a director's fiduciary duties. The Nevada
General Corporation Law grants corporations the right to indemnify their
directors, officers, employees and agents in accordance with applicable
law. In addition, our Bylaws authorizes the Company to indemnify
directors and officers of the Company in cases where such officer or director
acted in good faith and in a manner reasonably believed to be in the best
interest of the Company, and with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful.
PART
11 – INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM
13. OTHER
EXPENSES OF ISSUANCE AND DISTRIBUTION
The
following table sets forth the costs and expenses payable by us in connection
with the issuance and distribution of the securities being registered
hereunder. No expenses will be borne by the selling security
holders. All of the amounts shown are estimates, except for the SEC
registration fee.
|
Description of Expenses
|
Total amount
|
|
Internal
Accountant – preparation of financial statements as
required
|
$ 2,363
|
|
Independent
accountant’s examination of financial statements
|
3,500
|
|
Fees
for preparation of this prospectus
|
10,000
|
|
Legal
opinion
|
1,500
|
|
Photocopying
and delivery expenses
|
150
|
|
SEC
filing fees
|
7
|
|
Estimated offering
costs
|
$
17,520
|
ITEM
14. INDEMNIFICATION
OF DIRECTORS AND OFFICERS
Under the
Nevada General Corporation Law and our Articles of Incorporation, our directors
will have no personal liability to us or our stockholders for damages incurred
as the result of the breach or alleged breach of fiduciary duty as a director of
the Company involving any act or omission of any such director. This
provision does not apply to the directors' (i) acts or omissions that involve
intentional misconduct, fraud or knowing violation of law, or (ii) approval of
an unlawful dividend, distribution, stock repurchase or redemption under Section
78.300 of the Nevada Revised Statutes. This provision would generally
absolve directors of personal liability for negligence in the performance of
duties, including gross negligence.
The
effect of this provision in our Articles of Incorporation, is to eliminate the
rights of our Company and our stockholders (through stockholder's derivative
suits on behalf of our Company) to recover damages against a director for breach
of his fiduciary duties as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) and (ii) above. This provision does not limit nor
eliminate the rights of our Company or any stockholder to seek relief such as an
injunction or rescission in the event of a breach of a director's fiduciary
duties. The Nevada General Corporation Law grants corporations the
right to indemnify their directors, officers, employees and agents in accordance
with applicable law. In addition, our Bylaws authorizes the Company
to indemnify directors and officers of the Company in cases where such officer
or director acted in good faith and in a manner reasonably believed to be in the
best interest of the Company, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful.
Item
15. RECENT
SALES OF UNREGISTERED SECURITIES
Since our
inception on July 24, 2007, we have sold and issued the following securities
without registering the securities under the Securities Act.
|
(i)
|
On
October 31, 2007, the Company undertook a private placement with its two
director and officers wherein they issued a total of 3,750,000 common
shares at a price of $0.001 per share for a total consideration of
$3,750.
|
|
|
(ii)
|
On
January 31, 2008, the Company undertook a second private placement where
investors subscribed for 791,000 common shares at a price of $0.05 per
share for a total consideration of
$39,550.
|
In both
private placements mentioned above, the consideration for purchasing the shares
was cash. No other consideration was accepted other than
cash.
ITEM
16. EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
|
Exhibit
No.
|
Description
|
|
2
|
Corporate
Charter
|
|
3
(i)
|
Articles
of Incorporation
|
|
3
(ii)
|
Bylaws
|
|
4
|
Specimen
Stock Certificate
|
|
5
|
Opinion
re. Legality, Lawler & Associates
|
|
10.1
10.2
|
Transfer
Agent and Registrar Agreement
Agreement
between Bhindi Mines LLC and Sweetwater Resources, Inc. dated November 1,
2007
|
|
11
|
Statement
re: Computation of Per Share Earnings
|
|
23.1
23.2
23.3
|
Consent
of
Madsen & Associates,
CPA’s Inc.
Consent
of Legal Counsel – Lawler & Associates – see Exhibit
5
Consent
of Raman Mistry – Professional
Geologist
|
ITEM
17. UNDERTAKINGS
Sweetwater
Resources, Inc. hereby undertakes:
(a)
|
|
(1)
|
File,
during any period in which it offers or sells securities, a post-effective
amendment to this registration statement
to:
|
(i) Include
any prospectus required by section 10 (a) (3) of the Securities Act of
1933;
(ii) Reflect
in the prospectus any facts or events which, individually or together, represent
a fundamental change in the information in the registration statement, and
notwithstanding the forgoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospects filed
with the U.S. Securities and Exchange Commission pursuant to Rule 424 (b) if, in
the aggregate, the changes in the volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the “Calculation of
Registration Fee” table in the effective registration statement.
(
iii) Include any
additional or changed material information on the plan of
distribution.
|
|
(2)
|
For
determining liability under the Securities Act of 1933, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be initial
bona fide offering.
|
|
|
(3)
|
File
a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the
offering.
|
|
|
(4
) For
determining liability of the undersigned small business issuer under the
Securities Act to any purchaser in the initial distribution of the
securities, the undersigned small business issuer undertakes that in a
primary offering of securities of the undersigned small business issuer
pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are
offered or sold to such purchaser by means of any of the following
communications, the undersigned small business issuer will be a seller to
the purchaser and will be considered to offer or sell such securities to
such purchaser:
|
(i)
Any preliminary prospectus or prospectus of the undersigned small business
issuer relating to the offering required to be filed pursuant to Rule 424
(§ 230.424 of this chapter);
(ii)
Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned small business issuer or used or referred to by the
undersigned small business issuer;
(iii)
The portion of any other free writing prospectus relating to the offering
containing material information about the undersigned small business issuer or
its securities provided by or on behalf of the undersigned small business
issuer; and
(iv)
Any other communication that is an offer in the offering made by the
undersigned small business issuer to the purchaser.
|
(e)
|
Insofar
as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion
of the Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the small business
issuer of expenses incurred or paid by a director, officers or controlling
person of the small business issuer in the successful defense of any
action, suit or proceedings) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
small business issuer will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act of 1933 and
will be governed by the final adjudication of such
issue.
|
|
(g)
|
For
the purpose of determining liability under the Securities Act to any
purchaser, each prospectus filed pursuant to Rule 424(b) (§ 230.424(b) of
this chapter) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A (§ 230.430A of this chapter),
shall be deemed to be part of and included in the registration statement
as of the date it is first used after effectiveness.
Provided
,
however
, that no
statement made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a
time of contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus that
was part of the registration statement or made in any such document
immediately prior to such date of first
use.
|
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City Elenjipra, Kerala, India on
May 20, 2008.
SWEETWATER
RESOURCES, INC.
Registrant
JOSE
MADAPPILLY
Jose
Madappilly
Chief
Executive Officer, President
and
Director
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
May 20,
2008
JOSE
MADAPPILLY
Jose
Madappilly
Chief
Executive Officer, President
and
Director
JAIJU
MALIAKAL
Jaiju
Maliakal
Chief
Financial Officer, Chief Accounting
Officer,
Secretary Treasurer and Director
