Authorized capital stock consists of 75,000,000 common shares with a par value of $0.001 per share.
b) Share Issuances
During the period ended November 30, 2007, the Company issued 5,000,000 common shares for gross proceeds of $5,000 to the Company's president and sole director.
During the period ended November 30, 2007, the Company issued 4,750,000 common shares for gross proceeds of $95,000.
5. Financial Instruments
The Company's financial instruments consist of cash, accounts payable and accrued liabilities. It is management's opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. Because of the short maturity and capacity of prompt liquidation of such assets and liabilities, the fair values of these financial instruments approximate their carrying values.
The Company may operate outside the United States of America and thus may have significant exposure to foreign currency risk in the future due to the fluctuations between the currency in which the Company operates and the U.S. dollar.
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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.
Risk Factors
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.
Financial Condition
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.
Liquidity
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.
Capital Resources
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.
Sungro does not have sufficient cash to fully finance its operations at current and planned levels for the next 12 months. 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.
Results of Operations
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.
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