Telco Cuba, Inc. - Quarter Report: 2009 February (Form 10-Q)

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

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

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Financial Statements
(Unaudited - Prepared by Management)

(Presented In US Dollars)

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

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The financial data presented below should be read in conjunction with the more detailed financial statements and related notes, which are included elsewhere in this report. Information discussed herein, as well as elsewhere in this quarterly report on Form 10-Q, includes forward-looking statements or opinions regarding future events or the future financial performance of the Company, and are subject to a number of risks and other factors which could cause the actual results to differ materially from those contained in forward-looking statements. Among such factors are general business and economic conditions, and risk factors as listed in its Annual Report on Form 10-K or listed from time to time in documents filed by the Company with the Securities and Exchange Commission.

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 10-K filed with the SEC on March 2 and 3, 2009.

As of February 28, 2009, Sungro had total assets of $7,613 and total liabilities of $16,026 for a net working capital deficiency of $8,413. We need to raise additional money to meet our general and administrative expenses, and we need to raise money to achieve our business objective to acquire another mineral property or a target company or business. 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 it lost its only property and will need to acquire another mineral property or a target company or business before Sungro will generate revenue or be profitable. 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:

• Sungro's ability to raise additional funding;

• Sungro's ability to identify and successfully negotiate the acquisition of any potential properties or assets; and

• such opportunities or businesses acquired will be profitable.

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.

Sungro's internal sources of liquidity will be loans that may be available to Sungro from management. Although Sungro has no written arrangements with 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.

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Sungro's external sources of liquidity will be private placements for equity conducted outside the United States. During the three months ended February 28, 2009, Sungro did not complete any definitive arrangements for any external sources of liquidity.

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.

As of February 28, 2009, Sungro had total assets of $7,613 and total liabilities of $16,026 for a net working capital deficiency of $8,413, compared with a net working capital of $1,643 as of November 30, 2008 (a decrease of $10,056). The assets are comprised of cash. The liabilities consisted mainly of accounting, audit and legal fees.

We did not earn any revenues for the three months ended February 28, 2009 and from inception on August 10, 2007 to February 28, 2009. 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 total expenses and a loss in the amount of $10,056 for the three months ended February 28, 2009, compared to total expenses and a loss of $27,122 for the three months ended February 29, 2008 (a decrease of $17,066). These expenses comprised mainly of accounting and legal expenses of $12,016 for the three months ended February 28, 2009, and for the three months ended February 29, 2008 the accounting and legal expenses were $26,652.

Sungro has no off-balance sheet arrangements.

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 factors that could cause actual results to differ materially include the following: business conditions, the price of precious metals, ability to attract

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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.

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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.