Optex Systems Holdings Inc - Annual Report: 2008 (Form 10-K)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
____________________________________________________
FORM
10-K
(Mark
One)
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x
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ANNUAL
REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
The Fiscal Year Ended December 31, 2008
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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FOR THE
TRANSITION PERIOD FROM ______ TO ________
Commission
File No. 333-143215
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SUSTUT
EXPLORATION, INC.
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(Exact
name of issuer as specified in its charter)
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Delaware
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33-143215
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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1420
5th Avenue
#220
Seattle,
Washington
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98101
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (206)
274-5321
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Securities
registered under Section 12(b) of the Exchange Act:
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None.
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Securities
registered under Section 12(g) of the Exchange Act:
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Common stock, par value $0.001 per
share.
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(Title
of class)
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Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding twelve months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yesx Noo
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes X No £
State
issuer’s revenues for its most recent fiscal year: $0.
State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of
February 6, 2009: $1,211,800.
Number of
the issuer’s Common Stock outstanding as of February 6, 2009:
17,999,995
Documents
incorporated by reference: None.
Transitional
Small Business Disclosure Format (Check One): Yeso Nox
TABLE
OF CONTENTS
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PART
I
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ITEM
1.
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DESCRIPTION OF
BUSINESS
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1
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ITEM
2.
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PROPERTIES
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1
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ITEM
3.
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LEGAL PROCEEDINGS
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1
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ITEM
4.
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SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
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1
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PART
II
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|
|
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ITEM
5.
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MARKET FOR REGISTRANT’S COMMON EQUITY; RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
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2
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|
ITEM
6.
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SELECTED FINANCIAL
DATA
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3
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ITEM
7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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3
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ITEM
7A.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
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5
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ITEM
8.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
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6
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ITEM
9.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
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7
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ITEM
9A.
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CONTROLS AND
PROCEDURES
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7
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PART
III
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ITEM
10.
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
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7
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ITEM
11.
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EXECUTIVE
COMPENSATION
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8
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ITEM
12.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
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8
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ITEM
13.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
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9
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ITEM
14.
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PRINCIPAL ACCOUNTANT FEES AND
SERVICES
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9
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PART
IV
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ITEM
15.
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EXHIBITS, FINANCIAL STATEMENT
SCHEDULES
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10
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SIGNATURES
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11
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PART
I
ITEM
1. DESCRIPTION OF BUSINESS.
We are a
Delaware corporation formed on April 11, 2006 to search for available properties
in north central British Columbia. In May 2006, we entered into an agreement
which was negotiated at arms length with Richard Simpson to acquire a 100%
interest in the WILLOW claim. The claim is located in the Omineca Mining
Division, NTS map sheet 94D/10E. The property is 4.5 km east of the Sustut River
in British Columbia. The property could have been acquired from Simpson by
paying a total of $75,000 in two option payments with the last option payment
being due on May 15, 2008, however, we did not make the required payments and
now do not own these property rights.
We are an
exploration stage company engaged in the acquisition and exploration of mineral
properties. We did own a 100% interest in a mineral claim that we refer to as
the WILLOW mineral claim, however our option to own the mineral claim expired on
May 15, 2008 when we did not make the required payment. Our plan of
operations was to carry out exploration work on this claim in order to ascertain
whether it possesses commercially exploitable quantities of copper. We
determined that the mineral claim did not contain a commercially exploitable
mineral deposit, or reserve, therefore, we let the option expire and we do not
currently own any options on any exploratory lands.
Our board
of directors in consultation with our consulting geologist assessed whether to
proceed with further exploration and determined that it was in the Company’s
best interest to let the WILLOW mineral claim expire. It was determined that
there was no existence of commercially exploitable mineral deposits in the
WILLOW mineral claim.
Due to
our inability to successfully mine the WILLOW mineral claim and our inability to
sucessfully implement our business plan, we have ceased operations and are
seeking an alternative way to proceed with our business, either through: (i)
acquiring a new mineral claim in another location; or (ii) pursuing a potential
reverse merger candidate.
ITEM
2. DESCRIPTION OF PROPERTY.
We
currently use approximately 400 square feet of leased office space at 1420
5th Avenue #220 Seattle,
Washington 98101. We lease such space from the Regus Group for $237.00 month
which covers the use of the telephone, office equipment and
furniture.
Mineral
Property Agreement
On May 5,
2006, we entered into an agreement with Richard Simpson to acquire a 100%
interest in the WILLOW claim. The WILLOW mineral claim is situated approximately
25km east of Johansen Lake in the Province of British Columbia but no longer
belongs to us because we did not make the required payments under the option
agreement.
Property
Option Payments
We were
required but failed to pay Mr. Simpson the two Option Payments to keep our
Agreement in good standing. The payments are outlined in the table that
follows:
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Option
Payments
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||
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Payment
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Amount
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Status/Date
Due
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Initial
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$
55,000
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Paid
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Final
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$
20,000
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May
15, 2008
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Total
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$
75,000
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Location
and Land Status
The
WILLOW mineral claim consists of a mineral claim within the Omineca Mining
Division of British Columbia.
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Name
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Record
Number
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Units
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WILLOW
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530309
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183.83
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The
WILLOW group total area is 447.70 hectares. The claim is no longer in good
standing and we no longer own any rights to the property.
ITEM
3. LEGAL PROCEEDINGS.
To the
best of our knowledge, there are no known or pending litigation proceedings
against us..
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
None.
1
PART
II
ITEM
5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Market
Information
Our
common stock has traded on the OTC Bulletin Board system under the symbol “STUX”
since October 26, 2007. There is a limited trading market for our Common Stock.
The following table sets forth the range of high and low bid quotations for each
quarter within the last fiscal year. These quotations as reported by the OTCBB
reflect inter-dealer prices without retail mark-up, mark-down, or commissions
and may not necessarily represent actual transactions.
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2008
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||
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High
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Low
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October
26, 2007 to current
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$0.20
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$0.20
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The
source of these high and low prices was the Quotemedia.com. These quotations
reflect inter-dealer prices, without retail mark-up, markdown or commissions and
may not represent actual transactions. The high and low prices listed have been
rounded up to the next highest two decimal places.
The
market price of our common stock is subject to significant fluctuations in
response to variations in our quarterly operating results, general trends in the
market, and other factors, over many of which we have little or no control. In
addition, broad market fluctuations, as well as general economic, business and
political conditions, may adversely affect the market for our common stock,
regardless of our actual or projected performance.
Holders
As of
February 6, 2009 in accordance with our transfer agent records, we had 71 record
holders of our Common Stock.
Dividends
To date,
we have not declared or paid any dividends on our common stock. We currently do
not anticipate paying any cash dividends in the foreseeable future on our common
stock, when issued pursuant to this offering. Although we intend to retain our
earnings, if any, to finance the exploration and growth of our business, our
Board of Directors will have the discretion to declare and pay dividends in the
future.
Payment
of dividends in the future will depend upon our earnings, capital requirements,
and other factors, which our Board of Directors may deem relevant.
Recent Sales of Unregistered
Securities
Sustut
Exploration, Inc. was incorporated in the State of Delaware on April 11, 2006
and 10,000,000 shares were issued to Terry Hughes for founders shares. These
shares of our common stock qualified for exemption under Section 4(2) of the
Securities Act of 1933 since the issuance shares by us did not involve a public
offering. These shares have subsequently been cancelled in connection
with his resignation from all his offices as sole officer and
director.
In April
2006, we completed a Regulation D, Rule 506 Offering in which we issued a total
of 6,000,000 shares of our common stock to a total of 12 investors, at a price
per share of $.01 for an aggregate offering price of $60,000. Each investor
received a copy of our private placement memorandum and completed a
questionnaire to confirm that they were either “accredited” or “sophisticated”
investors.
On
September 15, 2008, the Company authorized the issuance of 10,000,000
shares of common stock to Andrey Oks as compensation for his appointment as the
new sole officer and director. On September 12, 2008, Terry Hughes resigned from
his position as the sole officer and director of the Company, and agreed to
cancel all 9,902,624 shares of the Company common stock that he owned as of that
date, and hereby waived all rights, title and interest he had or may have with
respect to the 9,902,624 shares. These shares of our common stock
qualified for exemption under Section 4(2) of the Securities Act of 1933 since
the issuance shares by us did not involve a public offering.
On
December 23, 2008, the Company authorized the issuance of 2,000,000 shares of
common stock to Newbridge Securities as compensation for a business consulting
agreement. These shares of our common stock qualified for exemption
under Section 4(2) of the Securities Act of 1933 since the issuance shares by us
did not involve a public offering.
2
ITEM
6. SELECTED FINANCIAL DATA.
Not
applicable.
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS
The
following discussion contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 relating to future events or our future performance. Actual
results may materially differ from those projected in the forward-looking
statements as a result of certain risks and uncertainties set forth in this
prospectus. Although management believes that the assumptions made and
expectations reflected in the forward-looking statements are reasonable, there
is no assurance that the underlying assumptions will, in fact, prove to be
correct or that actual results will not be different from expectations expressed
in this report.
Plan
of Operation
To date
we have not been able to raise additional funds through either debt or equity
offerings. Due to our inability to successfully mine the WILLOW
mineral claim and our inability to sucessfully implement our business plan, we
have ceased operations and are seeking an alternative way to proceed with our
business, either through: (i) acquiring a new mineral claim in another location;
or (ii) pursuing a potential reverse merger candidate.
Results of
Operation
We did
not have any operating income from inception through December 31, 2008. For the
year ended December 31, 2008, the company recognized a net loss of $13,143 and
for the period from inception through December 31, 2008, the company recognized
net loss of $89,650. General and administrative expenses for the
year ended December 31, 2008 were $6,857 compared to $34,650 for
inception through December 31, 2008.
Liquidity and Capital
Resources
As of
December 31, 2008, we had $0 in cash.
We
believe we can not satisfy our cash requirements for the next twelve months with
our current cash. If we are unable to satisfy our cash requirements we may be
unable to proceed with our plan of operations. We do not anticipate the purchase
or sale of any significant equipment. We also do not expect any significant
additions to the number of employees. The foregoing represents our best estimate
of our cash needs based on current planning and business conditions. In the
event we are not successful in reaching our initial revenue targets, additional
funds may be required, and we may not be able to proceed with our business plan
for the development and marketing of our core services. Should this occur, we
will suspend or cease operations.
We
anticipate that depending on market conditions and our plan of operations, we
may incur operating losses in the foreseeable future. Therefore, our auditors
have raised substantial doubt about our ability to continue as a going
concern.
To date
we have not been able to raise additional funds through either debt or equity
offerings. Due to our inability to successfully mine the WILLOW
mineral claim and our inability to sucessfully implement our business plan, we
have ceased operations and are seeking an alternative way to proceed with our
business, either through: (i) acquiring a new mineral claim in another location;
or (ii) pursuing a potential reverse merger candidate.
Critical Accounting
Policies
Revenue and Cost
Recognition
The
Company uses the accrual basis of accounting for financial statement
reporting. Revenues and expenses are recognized in accordance with
Generally Accepted Accounting Principles for the industry. Certain
period expenses are recorded when obligations are incurred.
Use of Estimates
The
preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities, and disclosure of
contingent liabilities at the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Actual results
could differ from those results.
Accounts Receivable,
deposits, Accounts Payable and accrued Expenses
Accounts
receivable have historically been immaterial and therefore no allowance for
doubtful accounts has been established. Normal operating refundable
Company deposits are listed as Other Assets. Accounts payable and
accrued expenses consist of trade payables created from the normal course of
business.
3
Non-mining Property and
Equipment
Property
and equipment purchased by the Company are recorded at cost. Depreciation is
computed by the straight-line method based upon the estimated useful lives of
the respective assets. Expenditures for repairs and maintenance are
charged to expense as incurred as are any items purchased which are below the
Company’s capitalization threshold of $1,000.
For
assets sold or otherwise disposed of, the cost and related accumulated
depreciation are removed from accounts, and any related gain or loss is
reflected in income for the period.
Income
Taxes
The
Company accounts for income taxes using the liability method which requires
recognition of deferred tax liabilities and assets for the expected future tax
consequences of event that have been included in the financial statements or tax
returns. Deferred tax assets and liabilities are determined based on the
difference between the financial statements and tax basis of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. The Company's management determines if a
valuation allowance is necessary to reduce any tax benefits when the available
benefits are more likely than not to expire before they can be
used.
Stock Based Compensation
The
Financial Accounting Standards Board issued Statement of Financial Accounting
Standards No. 123(R), “Accounting for Stock-Based Compensation,”
(SFAS
123(R)). SFAS 123(R) requires that companies recognize
compensation expense for grants of stock, stock options,
and other equity instruments based on fair value. The
Company has adopted SFAS 123(R) in accounting for
stock-based compensation.
Cash and Cash Equivalents,
and Credit Risk
For
purposes of reporting cash flows, the Company considers all cash accounts with
maturities of 90 days or less and which are not subject to withdrawal
restrictions or penalties, as cash and cash equivalents in the accompanying
balance sheet. The portion of deposits in a financial institution that insures
its deposits with the FDIC up to $100,000 per depositor in excess of such
insured amounts are not subject to insurance and represent a credit risk to the
Company.
Foreign Currency Translation
and Transactions
The
Company’s functional currency is the US dollar. No material
translations or transactions have occurred. Upon the occurrence of
such material transactions or the need for translation adjustments, the Company
will adopt Financial Accounting Standard No. 52 and other methods in conformity
with Generally Accepted Accounting Principles.
Earnings Per
Share
In February 1997, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting
Standards No. 128 (SFAS 128), "Earnings Per Share". SFAS
128 replaces the presentation of primary earnings per share with a
presentation of basic earnings per share based upon the
weighted average number of common
shares for the period.
Recent Accounting
Pronouncements
In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
160, “Noncontrolling Interests
in Consolidated Financial Statements – an amendment of ARB No.
51”. This statement improves the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require; the ownership interests in subsidiaries held by parties
other than the parent and the amount of consolidated net income attributable to
the parent and to the noncontrolling interest be clearly identified and
presented on the face of the consolidated statement of income, changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently, when a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former
subsidiary be initially measured at fair value, entities provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners. SFAS No. 160
affects those entities that have an outstanding noncontrolling interest in one
or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160
is effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Early adoption is prohibited. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.
4
In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS 161). This statement is intended to improve transparency in financial
reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows. SFAS 161 applies to all
derivative instruments within the scope of SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities” (SFAS 133) as well as related hedged items,
bifurcated derivatives, and nonderivative instruments that are designated and
qualify as hedging instruments. Entities with instruments subject to SFAS 161
must provide more robust qualitative disclosures and expanded quantitative
disclosures. SFAS 161 is effective prospectively for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008,
with early application permitted. We are currently evaluating the disclosure
implications of this statement.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS No. 162 identifies the sources of accounting
principles and provides entities with a framework for selecting the principles
used in preparation of financial statements that are presented in conformity
with GAAP. The current GAAP hierarchy has been criticized because it is directed
to the auditor rather than the entity, it is complex, and it ranks FASB
Statements of Financial Accounting Concepts, which are subject to the same level
of due process as FASB Statements of Financial Accounting Standards, below
industry practices that are widely recognized as generally accepted but that are
not subject to due process. The Board believes the GAAP hierarchy should be
directed to entities because it is the entity (not its auditors) that is
responsible for selecting accounting principles for financial statements that
are presented in conformity with GAAP. SFAS 162 is effective 60 days following
the SEC’s approval of PCAOB Auditing Standard No. 6, Evaluating Consistency
of Financial Statements (AS/6). The adoption of FASB 162 is not expected to have
a material impact on the Company’s financial position.
In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity
exists in practice in accounting for financial guarantee insurance contracts by
insurance enterprises under FASB Statement No. 60, Accounting and Reporting by
Insurance Enterprises. This results in inconsistencies in the recognition and
measurement of claim liabilities. This Statement requires that an insurance
enterprise recognize a claim liability prior to an event of default (insured
event) when there is evidence that credit deterioration has occurred in an
insured financial obligation. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements. SFAS 163 is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years. The adoption of FASB 163 is not
expected to have a material impact on the Company’s financial
position.
Off-Balance Sheet
Arrangements
We do not
have any off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities” (SPEs).
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
Market
risk is the risk of loss from adverse changes in market prices and interest
rates. We do not have substantial operations at this time so they are not
susceptible to these market risks. If, however, they begin to
generate substantial revenue, their operations will be materially impacted by
interest rates and market prices.
5
ITEM
8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA.
SUSTUT
EXPLORATION, INC.
(an
exploration stage company)
FINANCIAL
STATEMENTS
AS
OF DECEMBER 31, 2008
6
Financial
Statements Table of Contents
|
FINANCIAL
STATEMENTS
|
Page
#
|
|
Report
of Independent Registered Public Accountant
|
F-1
|
|
Balance
Sheet
|
F-2
|
|
Statement
of Operations and Retained Deficit
|
F-3
|
|
Statement
of Stockholders Equity
|
F-4
|
|
Cash
Flow Statement
|
F-5
|
|
Notes
to the Financial Statements
|
F-6
|
Report
of Independent Registered Public Accounting Firm
To the
Board of Director and shareholders
We have
audited the accompanying balance sheet of Sustut Exploration, Inc. as of
December 31, 2008 and the related statement of operations, stockholders’ equity,
and cash flows for the twelve months ended December 31, 2008 and 2007 and from
inception (April 11, 2006) through the year then ended December 31, 2008. These
financial statements are the responsibility of company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We
conducted our audit in accordance with 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. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statements 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 Indestructible I, Inc. at December
31, 2008 and the results of its operations and its cash flows for the twelve
months ended December 31, 2008 and 2007 and from inception (April 11, 2006)
through December 31, 2008 in conformity with U.S. Generally Accepted Accounting
Principles.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company has suffered losses from
operations and has a net capital deficiency that raise substantial doubt about
its ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
Gately
& Associates, L.L.C.
Lake
Mary, FL
January
14, 2009
F-1
|
SUSTUT
EXPLORATION, INC.
|
||||||||
|
(an
exploration stage company)
|
||||||||
|
BALANCE
SHEET
|
||||||||
|
As
of December 31, 2008
|
||||||||
|
ASSETS
|
||||||||
|
CURRENT ASSETS
|
12/31/2008
|
12/31/2007
|
||||||
|
Cash
|
$ | - | $ | 10,157 | ||||
|
Total
Current Assets
|
- | 10,157 | ||||||
|
OTHER CURRENT ASSETS
|
||||||||
|
None
|
- | - | ||||||
|
Total
Other Current Assets
|
- | - | ||||||
|
TOTAL
ASSETS
|
$ | - | $ | 10,157 | ||||
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
||||||||
|
CURRENT LIABILITIES
|
||||||||
|
Accrued
Expenses
|
$ | 1,950 | $ | 5,250 | ||||
|
Payable
agreement for claim rights
|
- | 20,000 | ||||||
|
Total
Current Liabilities
|
1,950 | 25,250 | ||||||
|
LONG-TERM LIABILITIES
|
||||||||
|
Payable
agreement for claim rights
|
- | - | ||||||
|
TOTAL
LIABILITIES
|
1,950 | 25,250 | ||||||
|
STOCKHOLDERS' EQUITY
|
||||||||
|
Common
Stock, $.001 par value
|
||||||||
|
Authorized:
200,000,000
|
||||||||
|
Issued:
18,000,000and 15,902,624, respectively
|
18,000 | 15,903 | ||||||
|
Additional paid
in capital
|
469,700 | 71,797 | ||||||
|
Accumulated
deficit during development stage
|
(489,650 | ) | (102,793 | ) | ||||
|
Total
Stockholders' Equity
|
(1,950 | ) | (15,093 | ) | ||||
|
TOTAL
LIABILITIES AND EQUITY
|
$ | - | $ | 10,157 | ||||
The
accompanying notes are an integral part of these financial
statements
F-2
|
SUSTUT
EXPLORATION, INC.
|
||||||||||||
|
(an
exploration stage company)
|
||||||||||||
|
STATEMENT
OF OPERATIONS
|
||||||||||||
|
For
the twelve months ended December 31, 2008 and 2007, and
|
||||||||||||
|
From
inception (April 11, 2006) through December 31, 2008
|
||||||||||||
|
12
MONTHS
|
12
MONTHS
|
|||||||||||
|
ENDING
|
ENDING
|
FROM
|
||||||||||
|
12/31/08
|
12/31/07
|
INCEPTION
|
||||||||||
|
REVENUE
|
$ | - | $ | - | $ | - | ||||||
|
COST OF SERVICES
|
- | - | - | |||||||||
|
GROSS PROFIT OR (LOSS)
|
- | - | - | |||||||||
|
COMPENSATION IN THE FORM OF
STOCK
|
400,000 | 10,000 | 410,000 | |||||||||
|
GENERAL AND ADMINISTRATIVE
EXPENSES
|
6,857 | 5,186 | 24,650 | |||||||||
|
GENERAL EXPLORATION
|
- | - | 75,000 | |||||||||
|
OTHER INCOME
|
20,000 | - | 20,000 | |||||||||
|
OPERATING INCOME
|
(386,857 | ) | (15,186 | ) | (489,650 | ) | ||||||
|
ACCUMULATED DEFICIT,
BEGINNING
|
(102,793 | ) | (87,607 | ) | - | |||||||
|
ACCUMULATED DEFICIT, ENDING
|
$ | (489,650 | ) | $ | (102,793 | ) | $ | (489,650 | ) | |||
|
Earnings (loss) per share,
basic
|
$ | (0.024 | ) | $ | (0.001 | ) | $ | (0.031 | ) | |||
|
Weighted average number of common
shares
|
16,134,076 | 15,894,016 | 15,939,244 | |||||||||
The
accompanying notes are an integral part of these financial
statements
F-3
|
SUSTUT
EXPLORATION, INC.
|
||||||||||||||||||||
|
(an
exploration stage company)
|
||||||||||||||||||||
|
STATEMENT
OF STOCKHOLDERS' EQUITY
|
||||||||||||||||||||
|
As
of December 31, 2008
|
||||||||||||||||||||
|
ADDITIONAL
|
||||||||||||||||||||
|
COMMON
|
PAR
|
PAID
IN
|
ACCUM.
|
TOTAL
|
||||||||||||||||
|
STOCK
|
VALUE
|
CAPITAL
|
DEFICIT
|
EQUITY
|
||||||||||||||||
|
Common
stock issued for compensation
|
||||||||||||||||||||
|
April
11, 2006 at $0.001 per share
|
9,902,624 | $ | 9,903 | $ | 97 | $ | - | $ | 10,000 | |||||||||||
|
Common
stock issued for cash
|
||||||||||||||||||||
|
April
16, 2006 at $0.01
|
||||||||||||||||||||
|
per
share on private placement
|
5,941,575 | 5,942 | 54,058 | - | 60,000 | |||||||||||||||
|
Net
income (loss)
|
(87,607 | ) | (87,607 | ) | ||||||||||||||||
|
Balance,
December 31, 2006
|
15,844,199 | $ | 15,844 | $ | 54,156 | $ | (87,607 | ) | $ | (17,607 | ) | |||||||||
|
Common
stock issued for cash
|
58,425 | 58 | 17,642 | - | 17,700 | |||||||||||||||
|
February
21, 2007 at $0.30
|
||||||||||||||||||||
|
per
share on private placement
|
||||||||||||||||||||
|
Cancellation
of common stock
|
(990 | ) | (1 | ) | (299 | ) | - | (300 | ) | |||||||||||
|
issued
for cash March 21, 2007
|
||||||||||||||||||||
|
at
$.30 per share
|
||||||||||||||||||||
|
Common
Stock issued for cash
|
990 | 1 | 299 | - | 300 | |||||||||||||||
|
July
4, 2007 at $0.30 per
|
||||||||||||||||||||
|
share
on private placement
|
||||||||||||||||||||
|
Net
income (loss)
|
(15,186 | ) | (15,186 | ) | ||||||||||||||||
|
Balance,
December 31, 2007
|
15,902,624 | $ | 15,903 | $ | 71,797 | $ | (102,793 | ) | $ | (15,093 | ) | |||||||||
|
Retroactively
applied share
|
||||||||||||||||||||
|
issuance
treated as a 0.99026241954-to-1
|
||||||||||||||||||||
|
reverse
stock split at par value,
|
||||||||||||||||||||
|
$0.001
per share on April 17, 2008
|
||||||||||||||||||||
|
Cancellation
of common stock issued for
|
||||||||||||||||||||
|
compensation
at $0.001 per share on
|
||||||||||||||||||||
|
September
12, 2008
|
(9,902,624 | ) | (9,903 | ) | (97 | ) | - | (10,000 | ) | |||||||||||
|
Common
stock issued for compensation
|
||||||||||||||||||||
|
September
12, 2008 at $0.001 per share
|
10,000,000 | 10,000 | - | - | 10,000 | |||||||||||||||
|
Common
stock issued for compensation
|
||||||||||||||||||||
|
November
24, 2008 at $0.20 per share
|
2,000,000 | 2,000 | 398,000 | - | 400,000 | |||||||||||||||
|
Net
income (loss)
|
(386,857 | ) | (386,857 | ) | ||||||||||||||||
|
Balance,
December 31, 2008
|
18,000,000 | $ | 18,000 | $ | 469,700 | $ | (489,650 | ) | $ | (1,950 | ) | |||||||||
The
accompanying notes are an integral part of these financial
statements
F-4
|
SUSTUT
EXPLORATION, INC.
|
||||||||||||
|
(an
exploration stage company)
|
||||||||||||
|
STATEMENTS
OF CASH FLOWS
|
||||||||||||
|
For
the twelve months ended December 31, 2008 and 2007,
and
|
||||||||||||
|
From
inception (April 11, 2006) through December 31, 2008
|
||||||||||||
|
12
MONTHS
|
12
MONTHS
|
|||||||||||
|
ENDING
|
ENDING
|
FROM
|
||||||||||
|
CASH FLOWS FROM OPERATING
ACTIVITIES
|
12/31/08
|
12/31/07
|
INCEPTION
|
|||||||||
|
Net
income (loss)
|
$ | (386,857 | ) | $ | (15,186 | ) | $ | (489,650 | ) | |||
|
Adjustments to
reconcile net income to net cash
|
||||||||||||
|
provided
by (used in) operating activities:
|
||||||||||||
|
Stock
issued in the form of compensation
|
400,000 | - | 410,000 | |||||||||
|
Increase
(Decrease) in Accrued Expenses
|
(3,300 | ) | 2,750 | 1,950 | ||||||||
|
Increase
(Decrease) in claims payable
|
(20,000 | ) | - | - | ||||||||
|
Total
adjustments to net income
|
376,700 | 2,750 | 411,950 | |||||||||
|
Net
cash provided by (used in) operating activities
|
(10,157 | ) | (12,436 | ) | (77,700 | ) | ||||||
|
CASH FLOWS FROM INVESTING
ACTIVITIES
|
||||||||||||
|
None
|
- | - | - | |||||||||
|
Net
cash flows provided by (used in) investing activities
|
- | - | - | |||||||||
|
CASH FLOWS FROM FINANCING
ACTIVITIES
|
||||||||||||
| Cash paid to related party | - | - | - | |||||||||
|
Proceeds from
stock issuance
|
. | 17,700 | 77,700 | |||||||||
|
Net
cash provided by (used in) financing activities
|
- | 17,700 | 77,700 | |||||||||
|
CASH RECONCILIATION
|
||||||||||||
|
Net
increase (decrease) in cash
|
(10,157 | ) | 5,264 | - | ||||||||
|
Cash -
beginning balance
|
10,157 | 4,893 | - | |||||||||
|
CASH BALANCE END OF PERIOD
|
$ | - | $ | 10,157 | $ | - | ||||||
The
accompanying notes are an integral part of these financial
statements
F-5
SUSTUT
EXPLORATION, INC.
(an
exploration stage company)
NOTES
TO FINANCIAL STATEMENTS
NOTE 1 - OPERATIONS AND BASIS OF PRESENTATION
Sustut
Exploration, Inc. (the Company), an exploration stage company, was incorporated
on April 11, 2006 in the State of Delaware. The Company was an
exploration stage mineral company. However, after the change in ownership on
September 12, 2008, the Company plans to locate and negotiate with a business
entity for the combination of that target company with The Company. The
combination will normally take the form of a merger, stock-for-stock exchange or
stock-for assets exchange. In most instances the target company will wish to
structure the business combination to be within the definition of a tax-free
reorganization under Section 351 or Section 368 of the Internal Revenue Code of
1986, as amended. No assurances can be given that The Company will be successful
in locating or negotiating with any target company.
The
Company’s fiscal year end is December 31.
The
Company's financial statements have been presented on the basis
that it is a going concern, which contemplates
the realization of the mineral
properties and other assets and the
satisfaction of liabilities in the normal
course of business. The Company has incurred
losses from inception to December 31, 2008. These factors raise substantial
doubt about the Company's ability to continue as a going concern. Management
continues to actively seek additional sources of capital to fund current and
future operations. There is no assurance that the Company will be successful in
continuing to raise additional capital, establishing probable or proven
reserves. These financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue and Cost
Recognition
The
Company uses the accrual basis of accounting for financial statement
reporting. Revenues and expenses are recognized in accordance with
Generally Accepted Accounting Principles for the industry. Certain
period expenses are recorded when obligations are incurred.
Use of Estimates
The
preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities, and disclosure of
contingent liabilities at the date of the financial statements, and the reported
amount of revenues and expenses during the reporting period.
Actual
results could differ from those results.
F-6
SUSTUT
EXPLORATION, INC.
(an
exploration stage company)
NOTES
TO FINANCIAL STATEMENTS
Accounts Receivable,
deposits, Accounts Payable and accrued Expenses
Accounts
receivable have historically been immaterial and therefore no allowance for
doubtful accounts has been established. Normal operating refundable
Company deposits are listed as Other Assets. Accounts payable and
accrued expenses consist of trade payables created from the normal course of
business.
Non-mining Property and
Equipment
Property
and equipment purchased by the Company are recorded at cost. Depreciation is
computed by the straight-line method based upon the estimated useful lives of
the respective assets. Expenditures for repairs and maintenance are
charged to expense as incurred as are any items purchased which are below the
Company’s capitalization threshold of $1,000.
For
assets sold or otherwise disposed of, the cost and related accumulated
depreciation are removed from accounts, and any related gain or loss is
reflected in income for the period.
Income Taxes
The
Company accounts for income taxes using the liability method which requires
recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Deferred tax assets and liabilities are determined based on the
difference between the financial statements and tax basis of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. The Company’s management determines if a
valuation allowance is necessary to reduce any tax benefits when the available
benefits are more likely than not to expire before they can be
used.
Stock Based Compensation
The
Financial Accounting Standards Board issued Statement of Financial Accounting
Standards No. 123(R), "Accounting for Stock-Based Compensation," (SFAS 123(R)).
SFAS 123(R) requires that companies recognize compensation expense for grants of
stock, stock options, and other equity instruments based on fair value. The
Company has adopted SFAS 123(R) in accounting for stock-based
compensation.
Cash and Cash Equivalents,
and Credit Risk
For
purposes of reporting cash flows, the Company considers all cash accounts with
maturities of 90 days or less and which are not subject to withdrawel
restrictions or penalties, as cash and cash equivalents in the accompanying
balance sheet.
F-7
SUSTUT
EXPLORATION, INC.
(an
exploration stage company)
NOTES
TO FINANCIAL STATEMENTS
The
portion of deposits in a financial institution that insures its deposits with
the FDIC up to $100,000 per depositor in excess of such insured amounts are not
subject to insurance and represent a credit risk to the Company.
Foreign Currency Translation
and Transactions
The
Company’s functional currency is the US dollar. No material
translations or transactions have occurred. Upon the occurrence of
such material transactions or the need for translation adjustments, the Company
will adopt Financial Accounting Standard No. 52 and other methods in conformity
with Generally Accepted Accounting Principles.
Earnings Per Share
In February 1997, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting
Standards No. 128 (SFAS 128), "Earnings Per Share". SFAS
128 replaces the presentation of primary earnings per share with a
presentation
of basic earnings per share based
upon the weighted average number of common
shares for the period.
NOTE 3 - AFFILIATES AND RELATED PARTIES
Significant
relationships with (1) companies affiliated through common ownership
and/or management, and (2) other related parties are as follows:
The Company had ownership of the Don 1-2 claims which were placed in trust with
the Company’s President. The mineral claims, per the purchase agreement, had
been reverted back to the seller.
The
Company has stock-based compensation with directors of the Company as disclosed
in Footnote No. 7.
NOTE 4 - MINERAL PROPERTIES
The Company's net investment
in mineral properties include one claim as described in footnote number 1 have
all costs related to the claim have be expended in accordance with Generally
Accepted Accounting Principles for the industry .
NOTE 5
- INCOME TAXES
The
income tax payable that was accrued from inception through September 12, 2008
was offset by the Company’s net operating loss carry-forward therefore the
provisions for income tax in the income statement is $0. The
accounting for these losses derives a deferred tax asset for the period from
inception to September 12, 2008 of 17,540. However, $87,700 of the net operating
loss carryforwards are disallowed due to the change in ownership of more than
50% and the change in continuity of business enterprise.
F-8
SUSTUT
EXPLORATION, INC.
(an
exploration stage company)
NOTES
TO FINANCIAL STATEMENTS
No
provision was made for federal income tax since the Company has significant net
operating losses. From September 13 through December 31, 2008, the Company
incurred net operating losses for tax purposes of approximately $469,797. The
net operating loss carry forwards may be used to reduce taxable income through
2028. The availability of the Company’s net operating loss carry-forwards are
subject to limitation if there is a 50% or more positive change in the ownership
of the Company’s stock. The provision for income taxes consists of the federal
and state minimum tax imposed on corporations.
Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial statement purposes and
the amounts used for income tax purposes. Significant components of the
Company's deferred tax liabilities and assets as of December 31, 2008 are as
follows:
|
Deferred
tax assets:
|
||||
|
Federal
net operating loss
|
$
|
73,448
|
||
|
State
net operating loss
|
24,482
|
|||
|
Total
deferred tax assets
|
97,930
|
|||
|
Less
valuation allowance
|
(97,930
|
)
|
||
|
$
|
--
|
|||
The
Company has provided a 100% valuation allowance on the deferred tax assets at
December 31, 2008 to reduce such asset to zero, since there is no assurance that
the Company will generate future taxable income to utilize such asset.
Management will review this valuation allowance requirement periodically and
make adjustments as warranted.
The
reconciliation of the effective income tax rate to the federal statutory rate
for the periods ended December 31, 2008 and December 31, 2007 is as
follows:
|
2008
|
2007
|
||||||
|
Federal
income tax rate
|
(15.0
|
%)
|
(15.0
|
%)
|
|||
|
State
tax, net of federal benefit
|
(5.0
|
%)
|
(5.0
|
%)
|
|||
|
Increase
in valuation allowance
|
20.0
|
%
|
20.0
|
%
|
|||
|
Effective
income tax rate
|
0.0
|
%
|
0.0
|
%
|
|||
NOTE
6 – CONTRACTUAL
AGREEMENTS
On May 5,
2006, the Company entered into an agreement with Richard Simpson of Vancouver,
BC to acquire one rock mineral claim covering 445.70 hectares. The
agreement called for a 100% interest in the claims subject to a 2.5% Net Smelter
Royalty (NSR) for a total of $25,000. 1.5% of the NSR can be acquired
for $1.0 million within 12 months from commencement of commercial
production. Advance royalties of $20,000 shall be paid annually
commencing January 17, 2010. The purchase of the claim
F-9
SUSTUT
EXPLORATION, INC.
(an
exploration stage company)
NOTES
TO FINANCIAL STATEMENTS
required
payment of $55,000 on May 15, 2006 and a further $20,000 on or before May 15,
2008. The Company has satisfied the initial payment of $55,000. Subsequently
from the initial payment the Company defaulted on the next payment per the
purchase agreement. The mineral claims, per the purchase agreement,
have reverted back to the seller.
On
November 24, 2008, the Company entered into a Business Advisory Agreement with
Newbridge Securities Corporation (“Advisor”), a Virginia
corporation. The agreement calls for the Advisor to furnish certain
business and financial related advice and services to the Company. The term of
the agreement shall be for one (1) year commencing from the date of the
agreement. It may be renewed or extended upon such terms and conditions as may
be mutually agreed upon the parties. Compensation agreed upon for advisory
services was the issuance of 2,000,000 restricted shares of common stock to
Advisor in the amount of $400,000, or $0.20 per share. In the
event the Advisor effects, underwrites or introduces a financing by offering or
selling any of the securities of the Company, pursuant to which the Company
obtains financing or other consideration, the Advisor shall receive a Financing
fee, which shall be mutually determined between the Company and the Advisor at
the time of any such Financing. In
connection with any merger or acquisition transaction consummated by the Company
during the period ending two years from the termination of this agreement in
which the Advisor during term of this agreement introduced the other party to
the Company, the Company shall pay to the Advisor a transaction fee based on the
aggregate consideration received or to be paid by the Company in connection with
such transaction, and commuted as follows:
7% of the first million dollars or part thereof
6% of the next million dollars or part
thereof
5% of the next million dollars or part
thereof
4% of the next million dollars or part thereof
3% of the balance of the value of the
transaction
NOTE 7
- SHAREHOLDERS' EQUITY
Common
Stock
The
Company has authorized two hundred million (200,000,000) shares of common stock
with a par value of $.001.
Upon
incorporation the Company issued 10,000,000 common shares to directors of the
Company as compensation in the amount of $10,000, or $0.001 per
share.
F-10
SUSTUT
EXPLORATION, INC.
(an
exploration stage company)
NOTES
TO FINANCIAL STATEMENTS
During
April 2006 the Company undertook a Section 4(2) registration under the
Securities Act of 1933 to raise $60,000 in the issuance of 6,000,000 shares of
common stock for the purpose of acquisition and exploration of mining
properties. The Company’s management considers this offering to be
exempt under the Securities Act of 1933.
During
February 2007, the Company undertook a Section 4(2) registration under the
Securities Act of 1933 to raise $17,700 in the issuance of 59,000 shares of
common stock at $.30 per share. The Company’s management considers this offering
to be exempt under the Securities Act of 1933.
During
March 2007, the Company cancelled the issuance of 1,000 shares of common stock
at $.30 per share.
During
July 2007, the Company reissued 1,000 shares of common stock at $0.30 per share
that were cancelled during March 2007.
During
April 2008, the Company undertook a 0.99026241954-for-1 reverse stock split of
the Corporation’s issued and outstanding shares of common stock.
On September 12, 2008, the
Company authorized the issuance of 10,000,000 shares of common stock to
Andrey Oks as compensation for his appointment as the new sole officer and
director. On September 12, 2008, Terry Hughes resigned from his position as the
sole officer and director of the Company, and agreed to cancel all 9,902,624
shares of the Company common stock that he owned as of that date, and hereby
waived all rights, title and interest he had or may have with respect to the
9,902,624 shares.<?xml:namespace prefix = o ns =
"urn:schemas-microsoft-com:office:office" />
On
November 24, 2008, the Company authorized the issuance of 2,000,000 restricted
shares of common stock as compensation in the amount of $400,000, or $0.20 per
share.
NOTE 8
- COMMITMENTS AND CONTINGENCIES
Management
is not aware of any contingent matters that could have a material adverse effect
on the Company’s financial condition, results of operations, or
liquidity.
NOTE 9
- LITIGATION, CLAIMS AND
ASSESSMENTS
From time
to time in the normal course of business the Company will be involved in
litigation. The Company’s management has determined any asserted or
unasserted claims to be immaterial to the financial statements.
F-11
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Our
accountant is Gately & Associates, L.L.C.. independent certified public
accountants. We do not presently intend to change accountants. At no time have
there been any disagreements with such accountants regarding any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure.
ITEM
9A. CONTROLS AND PROCEDURES
Evaluation
of disclosure controls and procedures
Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2008. Based
on this evaluation, our principal executive officer and principal financial
officers have concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed by us in the
reports we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the Securities and
Exchange Commission’s rules based on the material weakness described
below:
MANAGEMENT’S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management
of the Company is responsible for establishing and maintaining effective
internal control over financial reporting as defined in Rule 13a-15(f) under the
Exchange Act. The Company’s internal control over financial reporting
is designed to provide reasonable assurance to the Company’s management and
Board of Directors regarding the preparation and fair presentation of published
financial statements in accordance with United State’s generally accepted
accounting principles (US GAAP), including those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of
the company, (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with US GAAP and that receipts and expenditures are being made only
in accordance with authorizations of management and directors of the company,
and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial
statements.
Management
conducted an evaluation of the effectiveness of internal control over financial
reporting based on the framework in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway
Commission. Management’s assessment included an evaluation of the
design of our internal control over financial reporting and testing of the
operational effectiveness of our internal control over financial
reporting. Based on this assessment, Management concluded the Company
maintained effective internal control over financial reporting as of December
31, 2008.
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation.
This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only management’s report in this
Annual Report.
PART
III
ITEM 10. DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION 16(A)
OF THE EXCHANGE ACT
Our
executive officers and directors and their ages as of February 6, 2009 is as
follows:
|
NAME
|
AGE
|
POSITION
|
|
Andrey
Oks
|
30
|
President,
Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer,
Director
|
Set forth
below is a brief description of the background and business experience of our
executive officers and directors for the past five years.
7
Mr. Andrey Oks, 30,
President and Chief Executive Officer
Over the
last 6 1/2 years, Mr. Oks worked as a technical specialist and supervisor
in the utility industry. He is also an engineering analyst in the
corporate planning group for a major utility company. Most recently,
Mr. Oks was appointed as a district operator in the Energy Control
Center. Mr. Oks graduated from Rensselaer Polytechnic Institute with
a B.S. in Mechanical Engineering and is currently pursuing a Masters of Business
Administration.
None of
our Officers and/or Directors have filed any bankruptcy petition, been convicted
of or been the subject of any criminal proceedings or the subject of any order,
judgment or decree involving the violation of any state or federal securities
laws within the past five (5) years.
Term
of Office
Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our stockholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.
Current
Issues and Future Management Expectations
No board
audit committee has been formed as of the filing of this Annual
Report.
Compliance
With Section 16(A) Of The Exchange Act.
Section
16(a) of the Exchange Act requires the Company’s officers and directors, and
persons who beneficially own more than 10% of a registered class of the
Company’s equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and are required to
furnish copies to the Company. To the best of the Company’s knowledge, any
reports required to be filed were timely filed in fiscal year ended December 31,
2008.
Code
of Ethics
The
Company has adopted a Code of Ethics applicable to its Chief Executive Officer
and Chief Financial Officer. This Code of Ethics is filed herewith as an
exhibit.
ITEM
11. EXECUTIVE COMPENSATION
The table
below summarizes all compensation awarded to, earned by, or paid to our
executive officers by any person for all services rendered in all capacities to
us from the date of our inception until the fiscal year ended December 31,
2008.
|
Name
and Principal Position
|
Year
|
Salary
|
Bonus
|
Stock
Awards
($)
|
Option
Awards
($)
|
Totals
($)
|
|||||||||||||||
|
Andrey
Oks, Chief Executive Officer, Chief Financial Officer, Secretary,
Treasure, and Director
|
2008
|
$
|
0
|
N/A
|
N/A
|
N/A
|
$
|
0
|
|||||||||||||
|
2007
|
$
|
N/A
|
N/A
|
N/A
|
N/A
|
$
|
N/A
|
||||||||||||||
Stock
Option Grants
None.
|
(1)
|
Mr. Oks
received 10,000,000 shares for services rendered to us. He will not
receive such compensation in the
future.
|
Employment
Agreements
We do not
have any employment agreements in place with our sole officer and
director.
Compensation of
Directors
Directors
do not receive any compensation for their services as directors. The Board of
Directors has the authority to fix the compensation of directors. No amounts
have been paid to, or accrued to, directors in such capacity.
ITEM 12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth each person known by us to be the beneficial owner of
five percent or more of the Company's Common Stock, all directors individually
and all directors and officers of the Company as a group. Except as noted, each
person has sole voting and investment power with respect to the shares
shown.
8
|
Name
And Address Of
Beneficial
Owner (1)
|
Amount
And Nature Of
Beneficial
Ownership
|
Percent
Of Outstanding
Shares
|
|
5%
Stockholders, Director And Named Executive Officer
|
||
|
Andrey
Oks
|
10,000,000
|
62.3%
|
|
Officers
And Directors
As
A Group (1 In Number)
|
10,000,000
|
62.3%
|
(1) Under
the rules of the SEC, a person is deemed to be the beneficial owner of a
security if such person has or shares the power to vote or direct the voting of
such security or the power to dispose or direct the disposition of such
security. A person is also deemed to be a beneficial owner of any securities if
that person has the right to acquire beneficial ownership within 60 days of the
date hereof. Unless otherwise indicated by footnote, the named entities or
individuals have sole voting and investment power with respect to the shares of
common stock beneficially owned.
(2) This
table is based upon information obtained from our stock records. Unless
otherwise indicated in the footnotes to the above table and subject to community
property laws where applicable, we believe that each shareholder named in the
above table has sole or shared voting and investment power with respect to the
shares indicated as beneficially owned.
Stock Option
Grants
We have
not granted any stock options to our executive officer since our
incorporation.
ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTION, AND DIRECTOR INDEPENDENCE
None.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND
SERVICES
Audit
Fees
For the
Company’s fiscal years ended December 31, 2008 and 2007, we were billed
approximately $3,000 and $1,500 for professional services rendered for the audit
and review of our financial statements.
Audit Related
Fees
There
were no fees for audit related services for the years ended December 31, 2008
and 2007.
Tax Fees
For the
Company’s fiscal years ended December 31, 2008 and 2007, we were not billed for
professional services rendered for tax compliance, tax advice, and tax
planning.
All Other
Fees
The
Company did not incur any other fees related to services rendered by our
principal accountant for the fiscal years ended December 31, 2008 and
2007.
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Effective
May 6, 2003, the Securities and Exchange Commission adopted rules that require
that before our auditor is engaged by us to render any auditing or permitted
non-audit related service, the engagement be:
-approved
by our audit committee; or
-entered
into pursuant to pre-approval policies and procedures established by the audit
committee, provided the policies and procedures are detailed as to the
particular service, the audit committee is
informed of each service, and such policies and procedures do not include
delegation of the audit committee's responsibilities to management.
9
We do not
have an audit committee. Our entire board of directors pre-approves
all services provided by our independent auditors. The pre-approval process has
just been implemented in response to the new rules. Therefore, our board of
directors does not have records of what
percentage of the above fees were pre-approved. However, all of the
above services and fees were reviewed and approved by the entire board of
directors either before or after the respective services were
rendered.
PART
IV
ITEM15. EXHIBITS,
FINANCIAL STATEMENT SCHEDULES.
a)
Documents filed as part of this Annual Report
1.
Consolidated Financial Statements
2.
Financial Statement Schedules
3.
Exhibits
| 14.1 | Code of Ethics |
| 31.1 | Certification of President, Chief Executive Officer, Chief Financial Officer, Chairman of the Board of Directors Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
32.1
|
Certification of President,
Chief Executive Officer, Chief Financial Officer, Chairman of the Board of
Directors Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
10
SIGNATURES
In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this Annual Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated:
February 6, 2009
By /s/ Andrey
Oks
Andrey
Oks,
President,
Chief
Executive Officer,
Chief
Financial Officer,
Principal
Accounting Officer
In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
|
Signature
|
Title
|
Date
|
||
|
/s/ Andrey Oks
|
President,
|
February
6, 2009
|
||
|
Andrey
Oks
|
Chief
Executive Officer,
Chief
Financial Officer, Principal Accounting Officer
|
|||
11