Telco Cuba, Inc. - Quarter Report: 2008 August (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý      No r

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  

Yes ý    No q

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

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Financial Statements
(Unaudited - Prepared by Management)

(Presented In US Dollars)

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Approved by the sole director:

/s/ Mal Bains                                   Director

The accompanying notes are an integral part of these interim financial statements.

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The accompanying notes are an integral part of these interim financial statements.

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The accompanying notes are an integral part of these interim financial statements.

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The accompanying notes are an integral part of these interim financial statements.

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THE FOLLOWING PRESENTATION OF MANAGEMENT'S DISCUSSION AND ANALYSIS OF SUNGRO MINERALS INC. SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION INCLUDED HEREIN.

Sungro Minerals Inc. (the "Company" or "Sungro") was incorporated under the laws of the state of Nevada on August 10, 2007. We have not commenced business operations and we are considered an exploration stage company. We are defined as a "shell company" under the Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act because we have nominal operations and nominal assets. To date, our activities have been limited to organizational matters, obtaining a geology report on the Chevron Claims and the preparation and filing of a registration statement on Form S-1.

In September 2007 we acquired an option to acquire a 100% interest in and to three mineral claims called the Chevron Claims, located in the Tatsamenie Lake area, 87 miles (140 km) south of the town of Atlin Lake, in northern British Columbia, from Mr. Carl von Einsiedel, the registered owner of the Chevron Claims. The Chevron Claims consist of three mineral claims covering approximately 1,132.97 hectares (2,799.63 acres).

Under the option agreement, Sungro is required to make all filings related to the Chevron Property and to maintain the Chevron Property and to maintain the Chevron Claims in good standing by preparing and filing the assessment reports, paying taxes and keeping the Chevron Property free and clear of all liens and encumbrances. The Chevron Claims are in good standing until June 20, 2009 and have been assigned tenure numbers 566327, 552110 and 552111 by the Province of British Columbia.

Mr. Ian Foreman, P.Geo. was hired by Sungro to provide an initial Summary Report dated November 20, 2007 on the Chevron Claims.

Mr. Foreman recommends an initial results-based three-phase exploration program, with Phase 1 consisting of mapping and prospecting throughout the property, and is estimated to cost approximately $15,000. Phase 2 will consist of a ground geophysical survey and sampling program, estimated to cost approximately $20,000. If the results of Phase 1 and Phase 2 are favorable, Phase 3 will consist of a selective drilling program. We will be able to estimate the cost of Phase 3 after we finish the Phase 1 program.

Phase 1 consists of an intense program of mapping and prospecting throughout the property, paying special attention to areas adjacent to the contact of the volcanic package with the coarse clastic sediments, as this is the lithology which hosts the veins, and there is reason to believe that there is considerable potential for the occurrence of other analogous mineralization situations. In addition all previous areas of known mineralization will be re-sampled and all locations will be located using GPS. An effort will be made to try and understand the significance of the anomalous values of antimony and arsenic in the region and if there is a relation with the Chevron Property. Phase 1 is estimated to cost $15,000 (CAD$15,000).

We planned a preliminary field visit in mid-September of 2007, but due to poor weather conditions it was not possible to actually make it to the property. During October and November of 2007 we updated the historic data collected by Chevron in the early 1980's, digitizing the maps and 'georeferencing' them - this is the process of imputing all of the relevant data into a Geographic Information System (GIS) such that all the data is manipulatable and searchable.

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In August 2008, our geologist consultant attempted to visit the site but due to poor weather conditions it was not possible to actually make it to the property. It is our intention to attempt another visit to the site in July 2009.

We presently have the funds to conduct only Phase 1. We will need to raise additional money to conduct Phase 2 and Phase 3. Due to extreme weather conditions, exploration activities can only be conducted between July and September of each year.

Phase 2 will consist of a ground geophysical survey extending across adjacent parts of the property to delineate potential diamond drill targets, and follow-up sampling, estimated to cost between CAD$15,000 and CAD$20,000.

We expect Phase 3 to involve a selective drilling program. To maximize the effectiveness of the drilling, we plan to align the holes such that there is potential to intersect more than one vein with each hole. We cannot anticipate the cost for a drill program until after Phases 1 and 2 are completed. We expect a majority of the expense for Phase 3 to be the drill cost and helicopter support. We cannot determine the cost of this drill program at this time, however, a 1,000 meter drilling program would be about CAD$250,000.

Foremost Geological Consulting is a business operated by Mr. Ian Foreman. Mr. Foreman is a qualified geologist and we have engaged him to conduct the mineral exploration program under industry standards. He is responsible for hiring personnel and for all appropriate worker-related costs and will bill us for their services.

An investment in Sungro's common stock involves a number of very significant risks. Prospective investors should refer to all the risk factors disclosed in Sungro's Form S-1 filed on February 22, 2008.

As at August 31, 2008, Sungro had a cash balance of $25,683. Management does not anticipate generating any revenue for the foreseeable future. When additional funds become required, the additional funding will come from equity financing from the sale of Sungro's common stock. If Sungro is successful in completing an equity financing, existing shareholders will experience dilution of their interest in Sungro. Sungro does not have any financing arranged and Sungro cannot provide investors with any assurance that Sungro will be able to raise sufficient funding from the sale of its common stock. In the absence of such financing, Sungro's business will fail.

Based on the nature of Sungro's business, management anticipates incurring operating losses in the foreseeable future. Management bases this expectation, in part, on the fact that very few mineral claims in the exploration stage ultimately develop into producing, profitable mines. Sungro's future financial results are also uncertain due to a number of factors, some of which are outside its control. These factors include, but are not limited to:

Due to Sungro's lack of operating history and present inability to generate revenues, Sungro's auditors have stated their opinion that there currently exists a substantial doubt about Sungro's ability to continue as a going concern. This means that there is substantial doubt whether Sungro can continue as an on going business for the next 12 months unless we obtain additional capital to pay our bills. Further, even if Sungro completes its current Phase 1 exploration program, it will require additional funding before it can initiate Phases 2 and 3.

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Sungro's internal sources of liquidity will be loans that may be available to Sungro from management. Although Sungro has no written arrangements with any of its sole director and officer, Sungro expects that the sole director and officer will provide Sungro with internal sources of liquidity, if it is required.

Also, Sungro's external sources of liquidity will be private placements for equity conducted outside the United States. During the quarter covered by this quarterly report, Sungro did not complete any definitive arrangements for any external sources of liquidity.

As of August 31, 2008, Sungro had total assets of $25,683 and total liabilities of $17,310 for a net working capital of $8,373, compared with a net working capital of $73,605 as of November 30, 2007.

There are no assurances that Sungro will be able to achieve further sales of its common stock or any other form of additional financing. If Sungro is unable to achieve the financing necessary to continue its plan of operations, then Sungro will not be able to continue its exploration programs and its business will fail.

Management estimates that Sungro's current cash will be sufficient to fully finance its operations at current and planned levels through November 2008. Management intends to manage Sungro's expenses and payments to preserve cash until Sungro is profitable, otherwise additional financing must be arranged. Specifically, such cash management actions include donation of office space and services by Sungro's sole director and officer.

We did not earn any revenues for the nine months ended August 31, 2008 and from inception on August 10, 2007 to August 31, 2008. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties. 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 our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.

We incurred operating expenses in the amount of $7,058 for the three months ended August 31, 2008, and operating expenses in the amount of $61,959 during this fiscal year for the nine months ended August 31, 2008. These operating expenses comprised mainly of accounting and legal expenses of $7,305 for the three months ended August 31, 2008, and $60,721 during this fiscal year for the nine months ended August 31, 2008.

We incurred a loss in the amount of $10,331 for the three months ended August 31, 2008, and a loss in the amount of $65,232 during this fiscal year for the nine months ended August 31, 2008. Our loss was attributable to general, accounting and legal expenses.

This quarterly report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe," "our company believes," "management believes" and similar language. These forward-looking statements are based on our current expectations and are subject to certain risks, uncertainties and assumptions, including those set forth in the following discussion, including under the heading "Risk Factors". Our actual results may differ materially from results anticipated in these forward-looking statements. We base our forward-looking statements on information currently available to us, and we assume no obligation to update them. In addition, our historical financial performance is not necessarily indicative of the results that may be expected in the future and we believe that such comparisons cannot be relied upon as indicators of future performance. Other important

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factors that could cause actual results to differ materially include the following: business conditions, the price of precious metals, ability to attract and retain personnel; the price of the Company's stock; and the risk factors set forth from time to time in the Company's SEC reports, including but not limited to its annual report on Form 10-K; its quarterly reports on Form 10-Q; and any current reports on Form 8-K. In addition, the Company disclaims any obligation to update or correct any forward-looking statements in all the Company's annual reports and SEC filings to reflect events or circumstances after the date hereof.

Not applicable.

Under the supervision and with the participation of the Company's management, including the Company's principal executive officer and principal financial officer, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e) and Rule 15d-15(e) as of the end of the period covered by this quarterly report. Based on that evaluation, the principal executive officer and principal financial officer have identified that the lack of segregation of accounting duties as a result of limited personnel resources is a material weakness of its financial procedures. Other than for this exception, the principal executive officer and principal financial officer believe the 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 and forms and that our disclosure and controls are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. There were no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation and there were no corrective actions with regard to significant deficiencies and material weaknesses.

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PART II  -  OTHER INFORMATION

None.

Not applicable.

None.

None.

None.

None.

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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.