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SWVI > SEC Filings for SWVI > Form 10-Q on 20-May-2013All Recent SEC Filings

Show all filings for SWINGPLANE VENTURES, INC. | Request a Trial to NEW EDGAR Online Pro

Form 10-Q for SWINGPLANE VENTURES, INC.


20-May-2013

Quarterly Report


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

This current report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results, later events or circumstances or to reflect the occurrence of unanticipated events.

In this report unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares of our capital stock.

The management's discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The following discussion of our financial condition and results of operations should be read in conjunction with our audited financial statements for the fiscal year ended June 30, 2012, as filed with the Securities and Exchange Commission on September 28, 2012, along with the accompanying notes. As used in this quarterly report, the terms "we", "us", "our", and the "Company" means Swingplane Ventures, Inc.

OVERVIEW

We were incorporated in the State of Nevada on June 24th, 2010 as a development stage company with a principal business objective of selling men's and women's golf apparel.

On August 22, 2012, the Company went through a change in control and management subsequently determined not to pursue the then current business of the Company which was to be men's and women's golf fashion manufacturer.

On October 15, 2012, the Company entered into an assignment agreement with Mid Americas (the "Assignment Agreement"). Under the terms of the Assignment Agreement the Company was to acquire all of the rights under an option agreement between Mid Americas Corp and Gunter Stromber and Elsa Dorila Durate Horta (the "Vendors") whereby Mid Americas has the rights to acquire 75% of certain mining concessions in Chile (the "Option Agreement"). The Agreement required the following actions to be taken to finalize closing:

the Company was required to assume the November 30, 2012 payment obligation of $250,000 and all other payments thereafter, which were due under the Option Agreement;

cause the cancellation of a total of 337,500,000 of its common stock currently held by Michel Voyer, an officer and director of the Company;

file a registration statement with the requisite regulatory authorities to raise up to $10,000,000 by way of the sale of up to 40,000,000 shares of the common stock of the Company, of which no less than seventy-five percent of the funds raised under such registration statement was used to fund the required payments under the Option Agreement;

issue a total of 300,000,000 shares of its common stock to Mid Americas or its directed assignees, of which a total of 10,000,000 shares of common stock to be issued to Mid Americas were to be included for registration in the registration statement.

In anticipation of closing, the Company issued 300,000,000 shares of common stock to Mid Americas and the Company's controlling shareholder, Michel Voyer, returned a total of 337,500,000 shares to treasury. Further as required under the Assignment Agreement the Company undertook, during the period of closing, the payment of certain property taxes to maintain the property and funded $125,000 of the $250,000 required option payment due on November 30, 2012. The Company was in default on the remaining $125,000 payment due on November 30, 2012 under the Assignment Agreement, which amount was settled in full on January 31, 2013. Pending completion of the registration statement required for closing, the Company commissioned the preparation of a 43-101 property report on the mining concessions. The Company determined during this process that it was in the best interests of the Company to renegotiate the acquisition of the Assignment Agreement to acquire Mid Americas directly thus giving the Company direct ownership of the Option agreement through a wholly owned subsidiary. On January 21, 2013, the Company announced the renegotiation of the Assignment Agreement, whereby the Company would enter into a Share Exchange Agreement with Mid Americas.


Under the terms of the Share Exchange Agreement, which closed on February 22, 2013 and effected a change in control of the Company, the Company has acquired all of the issued and outstanding shares of Mid Americas in exchange for the issuance of a total of 100,000,000 shares of common stock of the Company and 5,000,000 shares of preferred stock of the Company to the shareholders of Mid Americas. The preferred stock is convertible into shares of common stock of the Company on the basis of 50 shares of common stock for each 1 share of preferred stock. Further, the preferred stock carries voting rights of 100 shares per each share of preferred stock. All other terms of the Assignment Agreement are included in the Share Exchange agreement. The only terms that have been amended are the acquisition of Mid Americas rather than the assignment of the Option, the issuance of shares as defined above and the elimination of the requirement to register 10,000,000 shares of stock for Mid Americas. Further, the Company is not required to file the registration statement for the 40,000,000 shares to raise $10,000,000.

Concurrent with closing of the Share Exchange Agreement, the 300,000,000 shares issued to Mid Americas in trust under the terms of the Assignment Agreement were returned to treasury and the Company issued a total of 100,000,000 shares of common stock and 5,000,000 shares of preferred stock to the shareholders of Mid Americas in exchange for all of the issued and outstanding capital stock of Mid Americas.

As a result of the transaction, the shareholders of Mid Americas acquired 42.5% of our issued and outstanding common stock and 100% of our issued and outstanding preferred stock, Mid Americas became our wholly-owned subsidiary, and we acquired the business and operations of Mid Americas.

The Company's wholly owned subsidiary has the following obligations under the Option Agreement:

(i) $950,000 cash payments through to October 15, 2012 which have been paid
(ii) $250,000 cash payment on November 30, 2012, which has been paid
(iii) $750,000 cash payment on or before June 30, 2013
(iv) $750,000 cash payment on or before June 30, 2014
(v) $5,000,000 cash payment to be made from net proceeds of Production.

Further, the agreement calls for Mid Americas to incur expenditures in an aggregate amount of $20,000,000 over a period of three (3) years from the Effective Date, October 1, 2012, as well as certain additional obligations, as follows:

Section 3.4

(i) $10,000,000 to be placed in trust with the Optionee for expenditure on the Property within 180 days from the Effective Date to be fully expended within eighteen (18) months of the Effective Date. (March 30, 2013);

(ii) $10,000,000 to be expended on or before three years from the Effective Date (October 1, 2015);

(iii) until the Option is earned retain the services of Gunter Stromberger at a fee of $25,000 per month, which fee shall commence with the commencement of operations on the mining concessions by the Company.

All sums paid to the Optionors under Section 3.2 shall be expressly understood to be Expenditures under Section 3.4 which the Optionee must incur pursuant to said Section in order to maintain in force and exercise the Option.


A total of $1,365,090 has been paid pursuant to the Option Agreement to date, of which amount $951,000 was remitted by Mid Americas and $414,090 by the Company. Of amounts remitted by the Company $250,000 related to cash payments required under Section 3.2 to meet certain payment obligations, with a further $164,090 expended for geologist, analysis and consultancy fees. As of March 31, 2013, the Company has recorded $1,365,090 as exploration expenses, all of which amount is allocated to the total expenditure requirement in Section 3.4(a)(i) of $10,000,000.

Effective March 30, 2013 there is a default on the obligation under Section 3.4 of the Option Agreement whereby Mid Americas was required to place certain funds in trust for exploration expenditures, which amount as at the date of the default would have been $8,634,910.

RESULTS OF OPERATIONS

The following discussion of the financial condition, results of operations, cash flows, and changes in our financial position should be read in conjunction with our audited financial statements and notes included in our Annual Report on Form 8-K/A filed on May 10, 2013.

We have suffered recurring losses from operations. The continuation of our Company is dependent upon us attaining and maintaining profitable operations and raising additional capital as needed.

Three month period ended March 31, 2013 and from inception (April 23, 2012)

During the three month period ended March 31, 2013 and from Inception (April 23, 2012) to March 31, 2013, we earned no revenues from operations.

The Company has recently completed a reverse merger with an inception date of April 23, 2012 and therefore there is no comparable data for the three months ended March 31, 2012.

For the three month period ended March 31, 2013 we incurred a net loss of $368,174. This loss is primarily attributed to exploration expenses of $289,090, management fees of $20,000, professional fees of $24,310, including legal fees and consulting fees, and general and administrative expenses of $26,610. All of the aforementioned expenses are related to our new business operations. We also incurred interest of $8,164 on loans for operating capital.

Nine month period ended March 31, 2013 and from inception (April 23, 2012)

During the nine month period ended March 31, 2013 and from Inception (April 23, 2012) to March 31, 2013, we earned no revenues from operations.

The Company has recently completed a reverse merger with an inception date of April 23, 2012 and therefore there is no comparable data for the nine months ended March 31, 2012.

For the nine month period ended March 31, 2013 we incurred a net loss of $744,174. This loss is primarily attributed to exploration expenses of $665,090, management fees of $20,000, professional fees of $24,310, including legal fees and consulting fees, and general and administrative expenses of $26,610. All of the aforementioned expenses are related to our new business operations. We also incurred interest of $8,164 on loans for operating capital.

Period from inception, April 23, 2012 to March 31, 2013

Our revenues from inception to date have been $nil. Since inception, we have an accumulated deficit during the exploration stage of $1,496,024.


LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2013, our current assets were $48,328 as compared to $Nil as at June 30, 2012 and our current liabilities were $807,890 ( $401,850 as at June 30, 2012), resulting in a working capital deficit of $759,562 as at March 31, 2013 as compared to negative working capital of $401,850 as at June 30, 2012. The increase in current assets was due to cash in the amount of $37,423 ($Nil as of June 30, 2012) and prepaid expenses in the amount of $10,905 as compared to $Nil as of June 30, 2012. Our current liabilities as of March 31, 2013 increased substantially due to the loan and increased operating expenses as a result of new management and a change in our business focus. Current liabilities were comprised of $49,357in accounts payable ($401,850 - June 30, 2012), $11,259 in accounts payable - related party ($Nil - June 30, 2012); $725,000 in short term loans ($Nil - June 30, 2012) and $22,274 in accrued interest ($Nil - June 30, 2012).

As of the date of this Quarterly Report, we have yet to generate any revenues from our business operations and we do not expect to generate any revenues in the near future.

We estimate that in the next twelve months we will require a minimum of $12,000,000 of which we will expend approximately $1,000,000 for operations and $11,000,000 as required with respect to an option on certain mining concessions in Chile. This budget does not include any funds for the acquisition of any additional projects.

We are an exploration stage company and are in the early stages of developing our business plan. As of the date of this report, we have not generated any revenues and are just commencing operations under our new business initiative. As a result, we have generated operating losses since our formation and expect to incur substantial losses and negative operating cash flows for the foreseeable future as we attempt to undertake our business plan. Our ability to continue may prove more expensive than we currently anticipate and we may incur significant additional costs and expenses. These conditions could further impact our business and have an adverse effect on our financial position, results of operations and/or cash flows.

We cannot sustain our operations from existing working capital as we have not generated any revenues and there can be no assurance at this time that we can generate significant revenues from operations.

We will require additional working capital, as we currently have inadequate capital to fund our business strategies, which could severely limit our operations.

As at the date of this filing we had approximately $37,000 for operations, but we have arranged funding of up to an additional $100,000 on terms yet to be finalized with an unrelated third party, of which the first $25,000 has been funded to Mid Americas and will be used to pay outstanding expenses related to property reports and property visits.

Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements that will have a current or future effect on our financial condition and changes in financial condition.

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