BrewBilt Brewing Co - Quarter Report: 2008 June (Form 10-Q)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
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[X]
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Quarterly
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
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For
the quarterly period ended June 30,
2008
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[ ]
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Transition
Report pursuant to 13 or 15(d) of the Securities Exchange Act of
1934
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For
the transition period to __________
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Commission
File Number: 333-143597
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Sunberta Resources,
Inc.
(Exact
name of small business issuer as specified in its charter)
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Nevada
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N/A
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(State
or other jurisdiction of incorporation or organization)
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(IRS
Employer Identification No.)
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45 Cove Park Road NE,
Calgary, AB T3K 5XB
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(Address
of principal executive offices)
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206-339-6314
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(Issuer’s
telephone number)
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_______________________________________________________________
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(Former
name, former address and former fiscal year, if changed since last
report)
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Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days [X] Yes
[ ] No
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
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[ ]
Large accelerated filer Accelerated filer
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[ ]
Non-accelerated filer
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[X]
Smaller reporting company
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). [X] Yes [ ] No
State the
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date: 82,042,000 common shares as of June 30,
2008.
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Page
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PART I – FINANCIAL
INFORMATION
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PART II – OTHER
INFORMATION
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PART
I - FINANCIAL INFORMATION
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Our
unaudited financial statements included in this Form 10-Q are as
follows:
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These
unaudited financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and the SEC instructions to Form 10-Q. In the
opinion of management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the interim
period ended June 30, 2008 are not necessarily indicative of the results that
can be expected for the full year.
SUNBERTA
RESOURCES INC.
(An Exploration Stage Company)
(An Exploration Stage Company)
(Expressed
in US Dollars)
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Note
2 - Basis of Presentation - going concern
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June
30 2008 |
March
31 2008 |
||||
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ASSETS
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|||||
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CURRENT
ASSETS
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|||||
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Cash
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$ | 21,131 | $ | 47,101 | |
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Total
current assets
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21,131 | 47,101 | |||
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FIXED
ASSETS (Note 3)
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607 | 802 | |||
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MINERAL
PROPERTIES (Note 4)
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5,498 | 5,448 | |||
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Total
assets
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$ | 27,236 | $ | 53,351 | |
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LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
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|||||
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CURRENT
LIABILITIES
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|||||
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Demand
loan (Note 5)
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$ | 50,000 | $ | 50,000 | |
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Accounts
payable including related party payable of $390 (March 31, 2008 - $646)
(Note 6)
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|||||
| 9,276 | 11,092 | ||||
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Accrued
liabilities
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8,919 | 18,620 | |||
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Total
current liabilities
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68,195 | 79,712 | |||
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COMMITMENTS
AND CONTINGENCIES (Notes 2, 4, 5, 6, 7 and
8)
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STOCKHOLDERS'
EQUITY (DEFICIT)
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|||||
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Common
stock (Note 7)
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|||||
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Authorized
1,500,000,000 shares at par value of $0.001 each Issued and
outstanding 82,042,000
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74,307 | 74,307 | |||
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Additional
paid-in capital
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9,750 | 8,250 | |||
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Accumulated
(deficit) during exploration stage
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(129,379) | (113,213) | |||
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Accumulated
other comprehensive income (loss)
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4,363 | 4,295 | |||
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Total
stockholders' equity (deficit)
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(40,959) | (26,361) | |||
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Total
liabilities and stockholder's equity (deficit)
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$ | 27,236 | $ | 53,351 | |
The
accompanying notes to the consolidated financial statements are an integral part
of these statements.
SUNBERTA
RESOURCES INC.
(An
Exploration Stage Company)
(Expressed
in US Dollars)
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Three months
ended June 30
2008
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Three
months
ended June 30
2007
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Cumulative
from
date of inception
September 19, 2006
to June 30,
2008
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||||||
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EXPENSES
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||||||||
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Consulting
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$ | - | $ | - | $ | 3,710 | ||
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Investor
relations, promotion and entertainment
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202 | 880 | 1,792 | |||||
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Exploration
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- | 4,239 | 13,646 | |||||
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Depreciation
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204 | 188 | 1,738 | |||||
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Professional
fees
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11,655 | 14,455 | 76,313 | |||||
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Other
administrative expenses
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4,105 | 4,913 | 32,713 | |||||
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Total
expenses
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16,166 | 24,675 | 129,912 | |||||
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INTEREST
INCOME
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- | 142 | 533 | |||||
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Net
(loss) for the period
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$ | (16,166) | (24,533) | $ | (129,379) | |||
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Other
comprehensive income (loss)
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||||||||
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Foreign
currency translation
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68 | 3,032 | 4,363 | |||||
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Comprehensive
(loss)
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$ | (16,098) | (21,501) | $ | (125,016) | |||
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Net
(loss) for the period
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$
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nil |
$
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nil
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$
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nil | ||
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Weighted
average number of common stock outstanding
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82,042,000 | 82,042,000 | 73,447,075 | |||||
The
accompanying notes to the consolidated financial statements are an integral part
of these statements.
SUNBERTA
RESOURCES INC.
(An
Exploration Stage Company)
(Expressed
in US Dollars)
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Common
Stock
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Amount
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Accumulated
Other
Comprehensive
Income
(loss)
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Additional
Paid
in
Capital
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Deficit
Accumulated
During
Exploration
Stage
from
Inception
to June
30,
2008
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Stockholders’
Equity (Deficit)
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|||||||||||
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Beginning
balance, September 19, 2006
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- | $ | - | $ | - | $ | - | $ | - | $ | - | |||||
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Shares
issued pursuant to subscription November 15, 2006 at
$0.0005
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52,000,000 | 26,000 | - | - | - | 26,000 | ||||||||||
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Shares
issued pursuant to subscriptions November 27, 2006 at
$0.001
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25,500,000 | 25,500 | - | - | - | 25,500 | ||||||||||
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Shares
issued for acquisition of subsidiary at $0.05
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2,000 | 107 | - | - | - | 107 | ||||||||||
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Shares
issued pursuant to subscriptions March 30, 2007 at $0.005
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4,540,000 | 22,700 | - | - | - | 22,700 | ||||||||||
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Non-cash
use of premises contributed by a director
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- | - | - | 2,250 | - | 2,250 | ||||||||||
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Net
loss for the year
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- | - | (857) | - | (31,138) | (31,995) | ||||||||||
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Balance
March 31, 2007
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82,042,000 | $ | 74,307 | $ | (857) | $ | 2,250 | $ | (31,138) | $ | 44,562 | |||||
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Non-cash
use of premises contributed by a director
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- | - | - | 6,000 | - | 6,000 | ||||||||||
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Net
income (loss) for the year
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- | - | 5,152 | - | (82,075) | (76,923) | ||||||||||
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Balance
March 31, 2008
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82,042,000 | $ | 74,307 | $ | 4,295 | $ | 8,250 | $ | (113,213) | $ | (26,361) | |||||
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Non-cash
use of premises contributed by a director
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- | - | - | 1,500 | - | 1,500 | ||||||||||
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Net
income (loss) for the period
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- | - | 68 | - | (16,166) | (16,098) | ||||||||||
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Balance
June 30, 2008
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82,042,000 | $ | 74,307 | $ | 4,363 | $ | 9,750 | $ | (129,379) | $ | (40,959) | |||||
The
accompanying notes to the consolidated financial statements are an integral part
of these statements.
SUNBERTA RESOURCES INC.
(An
Exploration Stage Company)
Consolidated
Statements of Cash Flows
(Expressed
in US Dollars)
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Three
months
ended June 30
2008
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Three
months
ended June 30
2007
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Cumulative
from date of inception September 19, 2006 to June 30,
2008
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Cash
(used in) operating activities:
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Net
(loss)
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$ | (16,166) | $ | (24,533) | $ | (129,379) | ||
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Adjustments
to reconcile net loss to net cash used in operating
activities:
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Donated
services
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1,500 | 1,500 | 9,750 | |||||
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Depreciation
of fixed assets
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204 | 188 | 1,738 | |||||
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Net
change in operating assets and liabilities:
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Accounts
payable
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(1,816) | (4,068) | 9,276 | |||||
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Accrued
liabilities
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(9,701) | (1,000) | 8,919 | |||||
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Net
cash (used in) operating activities
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(25,979) | (27,913) | (99,696) | |||||
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Cash
(used in) investing activities:
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Purchase
of fixed assets
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- | - | (2,143) | |||||
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Purchase
of mining claims
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- | - | (4,857) | |||||
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Net
cash (used in) investing activities
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- | - | (7,000) | |||||
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Cash
from financing activities:
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Demand
loan
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- | - | 50,000 | |||||
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Issue
of shares
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- | - | 74,307 | |||||
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Net
cash from financing activities
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- | - | 124,307 | |||||
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Effect
of exchange rate changes on cash
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9 | 2,508 | 3,520 | |||||
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Increase
in cash and cash equivalent
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(25,970) | (25,405) | 21,131 | |||||
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Cash,
beginning of period
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47,101 | 59,848 | - | |||||
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Cash,
end of period
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$ | 21,131 | $ | 34,443 | $ | 21,131 | ||
The
accompanying notes to the consolidated financial statements are an integral part
of these statements.
SUNBERTA
RESOURCES INC.
(An
Exploration Stage Company)
June
30, 2008
(Expressed
in US Dollars)
1.
BASIS OF PRESENTATION
The
unaudited financial statements as of June 30, 2008 included herein have been
prepared without audit pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with United
States generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. It is suggested that
these financial statements be read in conjunction with the March 31, 2008
audited financial statements and notes thereto.
2.
BASIS OF PRESENTATION – GOING CONCERN
These
consolidated financial statements have been prepared on a going-concern basis
which assumes that the Company will be able to realize assets and discharge
liabilities in the normal course of business for the foreseeable
future.
The
Company has experienced losses since its inception amounting to
$129,379 as of June 30, 2008 and has limited business operations, which raises
substantial doubt about the Company's ability to continue as a going
concern. The ability of the Company to meet its commitments as they
become payable, including the completion of acquisitions, exploration and
development of mineral properties and projects, is dependent on the ability of
the Company to obtain necessary financing or achieving a profitable level
of operations. There are no assurances that the Company will be
successful in achieving these goals.
The
Company is in the process of exploring and evaluating its mineral properties and
projects and has not yet determined whether these properties contain
economically recoverable ore reserves. The underlying value of the
mineral properties is entirely dependent on the existence of economically
recoverable reserves, the ability of the Company to obtain the necessary
financing to complete development and upon future profitable production or
sufficient proceeds from the disposition thereof.
These
financial statements do not give effect to adjustments to the amounts and
classifications to assets and liabilities that would be necessary should the
Company be unable to continue as a going concern.
3.
FIXED ASSETS
Fixed
assets consist of the following:
|
June
30,
2008
|
March
31,
2008
|
||||
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Computer
equipment
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$ | 2,428 | $ | 2,406 | |
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Less:
Accumulated depreciation
|
1,821 | 1,604 | |||
| $ | 607 | $ | 802 | ||
SUNBERTA
RESOURCES INC.
(An
Exploration Stage Company)
Notes
to Consolidated Financial Statements
June
30, 2008
(Expressed
in US Dollars)
4.
MINERAL PROPERTIES
Mineral
properties consist of the following mineral claim tenures:
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Name
|
Number
of claim tenures
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Location
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Area
covered
|
Cost
June
30, 2008
|
Cost
March
31, 2008
|
|||
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Sombrio
River
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4
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11km
SE of Port Renfrew, British Columbia
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106.933
hectares
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$ | 2,749 | $ | 2,724 | |
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Loss
Creek
|
3
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17km
SE of Port Renfrew, British Columbia
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107.013
hectares
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$ | 2,749 | $ | 2,724 | |
| $ | 5,498 | $ | 5,448 | |||||
The
claims are subject to a requirement to either (1) complete exploration work on
the claims valued at an amount stipulated by the government and pay a filing
fee; or (2) pay a stipulated fee to the Province of British Columbia in lieu of
completing exploration work. The stipulated amount in respect of these claims is
anticipated to total approximately $7,500 during the upcoming two years. During
the three months ended June 30, 2008 the Company paid a fee in the amount
of $775 ($CAD 783) in lieu of exploration work to meet British
Columbia requirements for good standing.
5.
DEMAND LOAN
Under
a loan agreement dated March 26, 2008, the demand loan is repayable on
demand of the borrower and bears interest beginning April 1, 2008 at the rate of
10% per annum compounded monthly at the end of the month. In the event the loan
is placed with a lawyer for collection, a fee of 20% of the unpaid balance will
apply.
6.
RELATED PARTY TRANSACTIONS
Related
party transactions not disclosed elsewhere in the consolidated financial
statements are as follows:
The
Company has been provided with premises by its CEO for no
charge. Accordingly, rent of $1,500 has been recorded in the three
months ended June 30, 2008 (2007- $1,500), and additional paid-in capital has
been increased by the corresponding amount.
Accounts
payable includes $390 (March 31, 2008 - $646) due to the CEO for reimbursement
of expenses incurred on behalf of the Company.
SUNBERTA
RESOURCES INC.
(An
Exploration Stage Company)
Notes
to Consolidated Financial Statements
June
30, 2008
(Expressed
in US Dollars)
7.
COMMON STOCK
Effective
January 14, 2008, the Company split its common stock on a twenty-for-one basis.
All shareholders as of the record date of January 14, 2008 received twenty
shares of common stock in exchange for each one common share of their currently
issued common stock. The authorized, issued and per share information presented
is on a post-split basis. On January 14, 2008 the Company’s total
paid-in capital was less than the product of the par value per share multiplied
by the number of post-split shares outstanding. As a result, the shareholders
may have an obligation to make up the shortfall of $7,735.
8. INCOME
TAXES
The
Company is subject to United States income taxes and Canadian income taxes (to
the extent of its operations in Canada). The company had no income
tax expense during the reported period due to net operating losses.
A
reconciliation of income tax expense to the amount computed at the statutory
rates is as follows:
|
June
30,
2008
|
June
30,
2007
|
||||
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Loss
for the three months ended June 30
|
$ | (16,166) | $ | (24,533) | |
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Average
statutory tax rate
|
35% | 35% | |||
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Expected
income tax provision
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$ | (5,658) | $ | (8,587) | |
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Unrecognized
tax losses
|
5,658 | 8,587 | |||
|
Income
tax expense
|
$ | -- | $ | -- | |
Significant
components of deferred income tax assets are as follows:
|
June
30,
2008
|
June
30,
2007
|
||||
|
Net
operating losses carried forward
|
$ | 45,282 | $ | 8,587 | |
|
Valuation
allowance
|
(45,282) | (8,587) | |||
|
Net
deferred income tax assets
|
$ | - | $ | - | |
The
Company has net operating losses carried forward of approximately $129,000 for
tax purposes which will expire in 2027 and 2028 if not
utilized.
Forward-Looking
Statements
Certain
statements, other than purely historical information, including estimates,
projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based,
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of
1934. These forward-looking statements generally are identified
by the words “believes,” “project,” “expects,” “anticipates,” “estimates,”
“intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will
continue,” “will likely result,” and similar expressions. We intend
such forward-looking statements to be covered by the safe-harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and are including this statement for purposes of complying with
those safe-harbor provisions. Forward-looking statements are based on
current expectations and assumptions that are subject to risks and uncertainties
which may cause actual results to differ materially from the forward-looking
statements. Our ability to predict results or the actual effect of future plans
or strategies is inherently uncertain. Factors which could have a
material adverse affect on our operations and future prospects on a consolidated
basis include, but are not limited to: changes in economic conditions,
legislative/regulatory changes, availability of capital, interest rates,
competition, and generally accepted accounting principles. These risks and
uncertainties should also be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements. We undertake no obligation to update or revise publicly
any forward-looking statements, whether as a result of new information, future
events or otherwise. Further information concerning our business,
including additional factors that could materially affect our financial results,
is included herein and in our other filings with the SEC.
Plan
of Operation
We are an
exploration stage company engaged in the acquisition, exploration and
exploitation of gold placer resource properties. We currently own a 100%
interest in seven (7) adjoining mining claims, generally known as the Sombrio
River and Loss Creek properties. They are located in south-west British
Columbia. Our rights to the properties are limited to the exploration for and
exploitation of gold placer deposits. Our business plan is to proceed with the
exploration of the Sombrio River and Loss Creek mineral claims to determine
whether they contain commercially viable gold deposits. We intend to proceed
with a preliminary exploration program as recommended and explained below by our
Consulting Geologist.
The
preliminary exploration program recommended for the Sunberta placer claims
includes road building to provide access to the claims, refraction seismic
surveying on cut lines to determine thickness of potential placer gravels above
bedrock, and evaluation of the placer gold potential in the gravels by use of a
sluice box and assays of selected samples. The seismic lines should be 500 m in
length and spaced 200 m apart. The sluice box should be operated by a 2 man crew
working
under the direction of a geologist; both Sombrio River and Loss Creek provide
ample water for sluicing year round. The geologist should designate sample
locations based on access to representative gravels at locations where adequate
thickness of gravels is indicated by results of the seismic survey. The
preliminary program should be focused on the downstream claims on the Sombrio
River claim block (546350) and on the Loss Creek claim block (546358). On both
properties the program should be devoted to developing data over a length of 400
m along the streams. This would entail running 3 seismic lines on the above
claims and sluicing selected gravels over this length. It is believed that this
preliminary assessment of the potential for economic grade placer gold will be
adequate. If it develops that encouraging results are obtained from the
preliminary program then work should be expanded to cover the entire properties.
In the case of the Sombrio River claims this would involve seismic surveying and
sluicing over an additional length of 1400 m; in the case of the Loss Creek
claims, over an additional length of 1800 m.
There is
a gravel road up the Sombrio River valley that terminates in a quarry
approximately 1.0 kilometer from the south border of the claims. An
old roadbed exists from the quarry and passes the length of the claims. This old
road will have to be rebuilt to provide access through the property. It is
recommended that the preliminary exploration program include rebuilding the road
over a length of approximately 1.5 km; this would provide access to the south
border of the claims and access over 0.5 km across the southernmost claim
(546350). A preliminary estimate from a local contractor in British Columbia is
a cost of approximately $43.35 per meter of road: estimated cost for 1.5 km of
road building totals $65,025.
The
gravel road up the Loss Creek valley is in adequate shape to provide access
along the entire length of the claims. The road is overgrown along the sides but
this could easily be cleared by line cutters.
A
preliminary estimate of the cost to conduct surveys on 6 lines (Russ Hihnan of
Frontier Geosciences, Inc. of North Vancouver) that includes managing the line
cutting, gathering the survey data, interpretation of results, and
mobilization-demobilization is approximately $21,675.
A
transportable sluice box adequate for preliminary test work may be purchased for
approximately $173.40.
Sluicing
of gravels should be conducted under the direction of a consulting geologist
over a period of approximately 3 weeks. At $867 per day for 25 days (including
report), the geologist should cost approximately $21,675. The 2 men operating
the sluice should be local workers at a cost of $433.50 per day per man for 20
days, totaling approximately $17,340.
A backhoe
or front-end loader will be required during sluicing to transport gravels from
selected sites to the streams for sluicing. An estimate for this work is
approximately $13,005.
The
geologist should submit representative samples for gold assay to a reputable
assayer. The estimated cost for assays is approximately $4,335.
As
described above, the recommended geological exploration program will cost
approximately $157,794, summarized as follows:
|
Road
construction
|
$ | 65,025 |
|
Refraction
seismic survey, line cutting
|
$ | 21,675 |
|
Sluice
box, transportation
|
$ | 433.50 |
|
Geologist
|
$ | 21,675 |
|
Sluice
operators
|
$ | 17,340 |
|
Backhoe
or front-end loader
|
$ | 13,005 |
|
Assays
|
$ | 4,335 |
|
Contingency
@ 10%
|
$ | 14,305.50 |
|
Total
|
$ | 157,794 |
We had a
deficiency in working capital in the amount of $47,064 as of June 30,
2008. Subject to our ability to successfully raise sufficient
additional capital beyond the $50,000 demand loan we secured on March 26, 2008,
we intend to proceed with a preliminary exploration program as recommended by
our Consulting Geologist. We plan to raise up to $200,000 of additional capital
during the next 12 to 18 months by seeking additional funds from existing
investors or by offering equity securities to new investors. The risky nature of
this enterprise and lack of tangible assets places other types of debt financing
beyond the credit-worthiness required by most banks or typical investors of
corporate debt until such time as an economically viable mine can be
demonstrated.
On March
26, 2008, we were able to borrow $50,000 under a Loan Agreement with an
unaffiliated third party. The loan bears interest at 10% per annum
compounded monthly on the last day of each month with interest accruing from
April 1, 2008. The loan is due on demand. In addition, Mr.
Sundberg has agreed to loan us up to $100,000 as and when needed. This
additional capital will allow us to complete preliminary exploration activities
and perhaps begin additional activities as well, should we determine with our
consulting geologist that this is advisable. Subject to the availability
additional financing of personnel and professional geological advice, we intend
to begin our preliminary exploration program in the fall of 2008. We
previously intended to begin our program in February of 2008. This
will not be possible due to the unavailability of contractors to assist with the
program. Also, to finance operations we are also actively working to
raise additional capital from prospective investors by way of a non-brokered
private placement. To date, we have not engaged a broker-dealer to
assist in raising capital and management has not yet determined whether the
Company will do so.
Once we
receive the analysis of our preliminary exploration program, our board of
directors, in consultation with our consulting geologist, will assess whether to
proceed with additional exploration. In making this determination to proceed
with a further exploration program, we will make an assessment as to whether the
results of the preliminary exploration program are sufficiently positive to
enable us to proceed. This assessment will include an evaluation of our cash
reserves after the completion of the initial exploration, the price of minerals,
and the market for the financing of mineral exploration projects at the time of
our assessment.
In the
event the results of our initial exploration program prove not to be
sufficiently positive to proceed with further exploration on the Sombrio River
and Loss Creek mineral claims, we intend to seek out and acquire interests in
North American mineral exploration properties, which, in the opinion of our
consulting geologist, offer attractive mineral exploration opportunities. If we
are unable to locate and acquire such a prospect, we may be forced to seek other
business opportunities. Presently, we have not given any consideration to the
acquisition of other exploration properties because we have only recently
commenced our preliminary exploration program and have not received any
results.
Upon the
completion of preliminary exploration, or any additional programs, which are
successful in identifying mineral deposits, we will have to spend substantial
funds on further exploration and engineering studies before we know that we have
a mineral reserve. A mineral reserve is a commercially viable mineral
deposit.
Results
of Operations for the three months ended June 30, 2008 and 2007, and for the
period from inception (September 19, 2006) to June 30, 2008
We did
not earn any revenues from inception through June 30, 2008. We do not anticipate
earning revenues unless and until such time that we enter into commercial
production of the Sombrio River and Loss Creek mineral claim, or other mineral
claims we may acquire and develop. We are presently in the exploration stage of
our business and we can provide no assurance that we will discover commercially
exploitable levels of mineral resources on Sombrio River and Loss Creek mineral
claims, or if such resources are discovered, that we will enter into commercial
production.
We
incurred operating expenses in the amount of $16,166 for the three months ended
June 30, 2008, compared with operating expenses in the amount of $24,675 for the
three months ended June 30, 2007. The operating expenses for the
three months ended June 30, 2008 consisted primarily of professional fees in
connection with our corporate organization and current financial reporting in
the amount of $11,655 and office and administration expenses in the amount of
$4,105. The operating expenses for the three months ended June 30,
2007 consisted primarily of professional fees in connection with our corporate
organization and current financial reporting in the amount of $14,455, office
and administration expenses in the amount of $4,913, and exploration expenses in
the amount of $4,239.
We
incurred operating expenses in the amount of $129,912 for the period from
inception to June 30, 2008. The operating expenses for the period
from inception to June 30, 2008 consisted primarily of professional fees in
connection with our corporate organization and current financial reporting in
the amount of $76,313, office and administration expenses in the amount of
$32,713, and exploration expenses in the amount of $13,646.
We
anticipate our operating expenses will increase as we undertake our plan of
operations. The increase will be attributable to undertaking the additional
phases of our geological exploration
program
and the professional fees associated with our becoming a reporting company under
the Securities Exchange Act of 1934.
We
incurred a net loss in the amount of $16,616 for the three months ended June 30,
2008, as compared with $24,533 for the three months ended June 30, 2007, and
$129,379 for the period from inception to June 30, 2008.
Liquidity
and Capital Resources
We had
cash of $21,131 as our only current asset as of June 30, 2008. We had current
liabilities of $68,195 as of June 30, 2008. We therefore had a working capital
deficit of $47,064 as of June 30, 2008.
We
anticipate that we will be dependent, for the immediate future, upon additional
investment capital to fund operating expenses.
In
connection with our need for additional financing, On March 26, 2008, we
borrowed $50,000 under a Loan Agreement with an unaffiliated third
party. The loan bears interest at 10% per annum compounded monthly on
the last day of each month with interest accruing from April 1,
2008. The loan is due on demand. We may prepay the loan in whole or
in part at any time. We agreed to pay an attorney’s fee of 20% of the unpaid
balance if the loan is placed with an attorney for collection.
Although
he has no obligation to do so, Mr. Sundberg has agreed to loan us up to $100,000
as and when needed. This additional capital will allow us to complete
preliminary exploration activities and perhaps begin additional activities as
well, should we determine with our consulting geologist that this is
advisable.
Off
Balance Sheet Arrangements
As of
June 30, 2008, there were no off balance sheet arrangements.
Going
Concern
We have
experienced losses since the inception of the exploration stage amounting to
$129,379 as of June 30, 2008. As of June 30, 2008, we have a total of
$21,131 in cash; however this amount will be insufficient to sustain operations
over the course of the next year. These factors raise substantial doubt about
our ability to continue as a going concern. Our ability to meet our
commitments as they become payable, including the completion of acquisitions,
exploration and development of mineral properties and projects, is dependent on
our ability to obtain necessary financing or achieving a profitable level of
operations. There are no assurances that we will be successful in
achieving these goals.
We are in
the process of exploring and evaluating our mineral properties and projects and
have not yet determined whether these properties contain economically
recoverable ore reserves. The underlying value of the mineral
properties is entirely dependent on the existence of economically
recoverable
reserves, our ability to obtain the necessary financing to complete development
and upon future profitable production or sufficient proceeds from the
disposition thereof.
The
accompanying financial statements do not give effect to adjustments to the
amounts and classifications of assets and liabilities that would be necessary
should we be unable to continue as a going concern.
Recently
Issued Accounting Pronouncements
In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This
statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles, and expands disclosure about fair
value measurements. This statement applies under other accounting pronouncements
that require or permit fair value measurement, the FASB having previously
concluded in those accounting pronouncements that fair value is the relevant
measurement attribute. This statement does not require any new fair value
measurements. However, for some entities, the application of the statement will
change current practice. This statement is effective for financial statements
issued for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years. The Company is currently reviewing the effect, if
any, that this new pronouncement will have on its financial
statements.
There
were various other accounting standards and interpretations issued to June 30,
2008, none of which are expected to have a material impact on the Company's
financial position, operations or cash flows.
A smaller
reporting company is not required to provide the information required by this
Item.
We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of June 30, 2008. This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and our Chief Financial Officer, Kelly
Sundberg. Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer concluded that, as of June 30, 2008, our disclosure
controls and procedures are effective. There have been no changes in
our internal controls over financial reporting during the quarter ended June 30,
2008.
Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.
Limitations on the
Effectiveness of Internal Controls
Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.
PART
II – OTHER INFORMATION
We are
not a party to any pending legal proceeding. We are not aware of any pending
legal proceeding to which any of our officers, directors, or any beneficial
holders of 5% or more of our voting securities are adverse to us or have a
material interest adverse to us.
A smaller
reporting company is not required to provide the information required by this
Item.
None
None
No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended June 30,
2008.
None
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Exhibit
Number
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Description
of Exhibit
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SIGNATURES
In
accordance with the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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Sunberta
Resources, Inc.
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Date:
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August
12, 2008
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By: /s/Kelly
Sundberg
Kelly
Sundberg
Title: Chief
Executive Officer and
Director
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