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SWVI > SEC Filings for SWVI > Form 10-Q/A on 11-Jul-2013All Recent SEC Filings

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

Form 10-Q/A for SWINGPLANE VENTURES, INC.


11-Jul-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 Option Agreement required the following actions to be taken to finalize closing:

the Company was required to assume the December 1, 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 December 1, 2012. The Company was in default on the remaining $125,000 payment due on December 1, 2012 under the Assignment Agreement, which amount has been accrued as a current liability. 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 newly negotiated agreement, the Company will acquire 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. The preferred stock will be 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 will carry voting rights of 100 shares per each share of preferred stock. All other terms of the original acquisition agreement are to be included in this acquisition agreement. The only terms that have been amended are the acquisition of Mid Americas rather than the assignment of the option agreement, the issuance of shares as defined above and the requirement to register 10,000,000 shares is eliminated. Further, the Company is not required to file the registration statement for the 40,000,000 shares in order to close the acquisition, but must file the registration statement within three months of closing.

Concurrent with closing of the share exchange agreement, the 300,000,000 shares issued to Mid Americas in trust will be returned to treasury and will issue 100,000,000 shares of common stock and 5,000,000 shares of preferred stock to the Mid Americas stockholders in exchange for all of the issued and outstanding shares of Mid Americas.

Under Section 3.2 of the Option Agreement and certain amendments thereto, Mid Americas is required to pay the following payments:

(i) $950,000 cash payments through to October 15, 2012
(ii) $250,000 cash payment on December 1, 2012
(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

(a) Incur Expenditures in an aggregate amount of $20,000,000 over a period of three (3) years from the Effective Date as follows:

(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. (April 1, 2013)

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

(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

As at December 31, 2012, a total of $951,000 has been remitted by Mid Americas as option payments under the terms of the Option Agreement which amount has been allocated to exploration expenses, and a further $239,185 (including $125,000 of the Option payment due as of December 1, 2012 totaling $250,000) has been paid by Swingplane. A further $125,000 has been accrued as a current liability on Swingplane's balance sheet representing the remaining $125,000 payment as due and payable. Payments made and incurred by Swingplane are reflect in their entirety as Exploration Expenses on the Company's Statements of Operations. Swingplane remitted the remaining $125,000 due as of December 1, 2012 on January 31, 2013 to retire the current obligation, refer to Note 8 - Subsequent events for additional details.

As of December 31, 2012 the Company and Mid Americas have incurred total expenditures in relation to the Option Agreement totaling $1,315,185.

The Company is currently preparing a Share Exchange Agreement for execution by all parties based on the terms detailed above and expects to execute this agreement by February 5, 2013. The closing of this transaction will require audited financial statements of Mid Americas and the filing of a Super 8K. Mid Americas has advised they expect to provide audited financials by February 10, 2013.

The closing of this transaction may effect a change in control of the Company.

RESULTS OF OPERATIONS

Three Month Period Ended December 31, 2012 Compared to Three Month Period Ended December 31, 2011

We generated no revenue for the three month periods ended December 31, 2012 and December 31, 2011, respectively.

During the three month period ended December 31, 2012, we incurred operating expenses of $515,768 as compared to operational income of $3,068 during the three month period ended December 31, 2011, an increase of $518,836. The increase in operating expenses was primarily attributable to our entry into an Option Agreement as more fully discussed in Note 3 to the financial statements contained herein, which carries certain option payment obligations and the requirement to undertake exploration costs whereby during the current three month period we incurred exploration related expenses totaling $364,185, with no similar expenditures in the prior comparative period. We also experienced an increase in professional fees of $3,077 (2011: Nil), consulting fees of $42,953 (2011: NIL), management fees of $30,000 (2011: NIL), property investigation expenses related to the Option Agreement noted above of $65,726 (2011: NIL) and an increase in general and administrative expenses to $9,827 from $80 (2011),. The increase to operational expenditures is directly related to a change in management and the Company undertaking a change in business and its entry into mineral exploration operations. During the three month period ended December 31, 2012 we incurred a net loss of ($522,343) as compared to a net gain of $3,068 (2011). Of this amount loss from operations totaled ($515,768) as compared to $3,068 for the comparable three month period. Other expenses included in the net loss for 2012 relate to interest expenses in the amount of ($6,575) for the three month period ended December 31, 2012 with no comparable expense for the three months ended December 31, 2011.

General and administrative expenses generally include corporate overhead, financial and administrative contracted services, and marketing costs. Professional fees include accounting and tax service fees.

Six Month Period ended December 31, 2012 Compared to Six Month Period Ended December 31, 2011

We generated no revenue for the six month periods ended December 31, 2012 and December 31, 2011, respectively.

During the six month period ended December 31, 2012, we incurred operating expenses of $554,730 as compared to $10,787 incurred during the six month period ended December 31, 2011, an increase of $543,943. The increase in operating expenses was primarily attributable to our entry into an Option Agreement as more fully discussed in Note 3 to the financial statements contained herein, which carries certain option payment obligations and the requirement to undertake exploration costs whereby during the current three month period we incurred exploration related expenses totaling $364,185, with no similar expenditures in the prior comparative period. We also experienced an increase in legal fees of $16,089 (2011: $4,500), professional fees of $5,577 (2011:$975), consulting fees of $48,829 (2011: $4,500), management fees of $30,000 (2011:
NIL), property investigation expenses related to the Option Agreement noted above of $65,726 (2011: NIL) and an increase in general and administrative expenses to $24,324 from $2,204 (2011).


The increase to operating expenses is directly related to a change in management and the Company pursuing its new business plan, including the entry into an agreement to acquire an interest in certain mineral concessions. During the six month period ended December 31, 2012 we incurred a net loss of ($562,250) as compared to a net loss of ($10,787) incurred during the six month period ended December 31, 2011. Of this amount loss from operations totaled ($554,730) as compared to ($10,787) for the comparable six month period. Other expenses included in the net loss for 2012 relate to interest expenses in the amount of ($7,520) for the six month period ended December 31, 2012 with no comparable expense for the six months ended December 31, 2011.

General and administrative expenses generally include corporate overhead, financial and administrative contracted services, and marketing costs. Professional fees include accounting and tax service fees.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2012, our current assets were $52,379 as compared to $18,494 as at June 30, 2012 and our current liabilities were $599,585 ($3,450 as at June 30, 2012), resulting in a working capital deficit of $547,206as at December 31, 2012 as compared to positive working capital of $15,044 as at June 30, 2012. The increase in current assets was due to cash in the amount of $49,099 ($18,494 as of June 30, 2012) and prepaid expenses in the amount of $3,280. This substantive change in our working capital is due to a loan in the amount of $425,000 during the six month period ended December 31, 2012, an accrued liability of $125,000 related to certain mining option payments unable to be met on the due date, and expenditures from those proceeds related to a pending transaction with respect to the mineral prospects under option. Our current liabilities as of December 31, 2012 increased substantially due to the loan and increased operating expenses as a result of new management and a change in our business focus to the mining sector. Current liabilities were comprised of: (i) $151,965 in accounts payable and accrued liabilities ($3,450 - June 30, 2012);(ii) $30,000 in accounts payable - related party ($Nil - June 30, 2012);
(iii) $425,000 in short term loans ($Nil - June 30, 2012) and (vi) $7,520 interest payable related to the short term loans ($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 that are currently in the process of being acquired by way of a share exchange agreement. This budget does not include any funds for the acquisition of any additional projects. It is anticipated that the transaction whereby we acquire the option on the mineral concessions will result in a business combination which will be treated as a reverse merger and recapitalization for accounting purposes.

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. While we have raised a total of $425,000 for operations, these funds will not be sufficient to maintain our SEC listing expenses and to further our new project. We intend to file a registration statement to raise $10,000,000 of the $11,000,000 required as noted in the aforementioned budget; however, there can be no assurance that we will be able to raise funds under this prospectus offering when approved. There can be no assurance that any additional financing will be available or accessible on reasonable terms, either by way of an equity financing or debt. If we cannot raise any additional funding we may either have to suspend operations until we do raise the cash, or cease operations entirely.


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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