Sungro Minerals Inc. (the "Company") was incorporated in the State of Nevada on August 10, 2007. The Company is engaged in the exploration, development, and acquisition of mineral properties. The accompanying financial statements have been prepared on the basis of accounting principles applicable to a going concern; accordingly, they do not give effect to adjustment that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and retire its liabilities in other than the normal course of business and at amounts different from those in the accompanying financial statements. As shown in the accompanying financial statements, the Company incurred a net loss of $465,897 for the year ended November 30, 2012, and has an accumulated deficit of $13,907,996. Management plans to raise cash from public or private debt or equity financing, on an as needed basis and in the longer term, to generate revenues from the acquisition, exploration and development of mineral interests, if found. The Company's ability to continue as a going concern is dependent upon achieving profitable operations and/or upon obtaining additional financing. The outcome of these matters cannot be predicted at this time.
The Company is considered to be in the exploration stage. The Company is devoting substantially all of its present efforts to exploring and identifying mineral properties suitable for development.
The accounting and reporting policies of the Company conform to United States generally accepted accounting principles applicable to exploration stage enterprises.
The Company is in the exploration stage and has not yet realized any revenue from its planned operations. Mineral property acquisition costs are capitalized. Additionally, mine development costs incurred either to develop new ore deposits and constructing new facilities are capitalized until operations commence. All such capitalized costs are amortized using a straight-line basis, based on the minimum original license term at acquisition, but do not exceed the useful life of the capitalized costs. Upon commercial development of an ore body, the applicable capitalized costs would then be amortized using the units-of-production method. Exploration costs, costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates, at least quarterly, the carrying value of capitalized mining costs and related property, plant and equipment costs, if any, to determine if these costs are in excess of their net realizable value and if a permanent impairment needs to be recorded. The periodic evaluation of carrying value of capitalized costs and any related property, plant and equipment costs are based upon expected cash flows and/or estimated salvage value in accordance with guidance issued by the FASB, "Accounting for Impairment or Disposal of Long-Lived Assets."
The Company's functional and reporting currency is the U.S. Dollar. All transactions initiated in foreign currencies are translated into U.S. dollars in accordance with ASC Topic 830 "Foreign Currency Matters" as follows:
i) monetary assets and liabilities at the rate of exchange in effect at the balance sheet date;
iii) revenue and expense items at the average rate of exchange prevailing during the period.
Gains and losses from foreign currency transactions are included in the statement of operations.
As of November 30, 2012, the Company only operates in the United States.
Basic and diluted loss per share is based on the weighted average number of shares outstanding. Potential common shares includable in the computation of fully diluted per share results are not presented in the financial statements as their effect would be anti-dilutive.
f) Fair Value Measurements
Valuation Hierarchy
ASC 820 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Companys own assumptions used to measure assets and liabilities at fair value. A financial asset or liabilitys classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
The following table provides the assets and liabilities carried at fair value measured on a recurring and non-recurring basis as of November 30, 2012 and November 30, 2011:
| | | | | | | | | | | | |
| | | | | Fair Value Measurements at November 30, 2012 | |
| | | | | Quoted prices | | | Significant | | | | |
| | Total Carrying | | | in active | | | other | | | Significant | |
| | Value at | | | markets | | | observable | | | unobservable | |
| | November 30, 2012 | | | (Level 1) | | | inputs (Level 2) | | | inputs (Level 3) | |
| | | | | | | | | | | | |
Derivative liabilities | $ | 200,535 | | $ | - | | $ | - | | $ | 200,535 | |
F-5
Sungro Minerals Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
November 30, 2012 and 2011
2. Significant Accounting Policies (continued)
f) Fair Value Measurements (continued)
| | | | | | | | | | | | |
| | | | | Fair Value Measurements at November 30, 2011 | |
| | | | | Quoted prices | | | Significant | | | | |
| | Total Carrying | | | in active | | | other | | | Significant | |
| | Value at | | | markets | | | observable | | | unobservable | |
| | November 30, 2011 | | | (Level 1) | | | inputs (Level 2) | | | inputs (Level 3) | |
| | | | | | | | | | | | |
Derivative liabilities | $ | 434,063 | | $ | - | | $ | - | | $ | 434,063 | |
The derivative liabilities are measured at fair value using quoted market prices and estimated volatility factors based on historical quoted market prices for the Companys common stock, and are classified within Level 3 of the valuation hierarchy.
The following is a reconciliation of the beginning and ending balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
| | | | | |
| November 30, 2012 | | November 30, 2011 |
Beginning balance | $ | 434,063 | | $ | 139,233 |
Derivative liabilities recorded | | 72,246 | | | 1,054,766 |
Derivative liabilities converted | | - | | | (587,363) |
Unrealized gain attributable to the change in liabilities still held | | (305,774) | | | (172,573) |
Ending balance | $ | 200,535 | | $ | 434,063 |
The fair value of the derivative liability at November 30, 2012 and November 30, 2011, totaling $200,535 and $434,063, respectively, was calculated using the Black-Scholes Option Pricing model under the assumptions detailed in Note 8. Gains and losses (realized and unrealized) included in earnings (to change in fair value of derivative liability) for the years ended November 30, 2012 and 2011, are reported in other expenses as follows:
| | | | | |
| November 30, 2012 | | November 30, 2010 |
(Gain) Loss on derivative liabilities recorded during the period | $ | (72,246) | | $ | 1,054,766 |
Debt discount attributable to derivative liabilities recorded | | (55,000) | | | (540,419) |
Derivative liabilities converted during the period | | (115,605) | | | (587,363) |
Unrealized gain attributable to the change in liabilities still held | | (45,677) | | | (172,573) |
Net unrealized (gain) loss included in earnings | $ | (288,528) | | $ | (245,589) |
The Company did not have any Level 1 or Level 2 assets or liabilities as of November 30, 2012 and 2011, and had Level 3 liabilities consisting of notes payable. The carrying amount of the notes payable at November 30, 2012 and 2011, approximate their respective fair value based on the Companys incremental borrowing rate.
Cash and cash equivalents include money market securities that are considered to be highly liquid and easily tradable as of November 30, 2012 and 2011, respectively. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy.
In addition, FASB ASC 825-10-25 Fair Value Option was effective at the time of adoption. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.
g) Income Taxes
Income taxes are accounted for in accordance with the provisions of FASB ASC 740, Accounting for Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.
h) Cash and Cash Equivalents
For purposes of the statement of cash flows, cash includes demand deposits, saving accounts and money market accounts. The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents.
i) Revenue Recognition
The Companies follow the guidance of the FASB ASC 605-10-S99 Revenue Recognition Overall SEC Materials. The Companies record revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. Revenues consist primarily of product sales.
As at November 30, 2012, the Company had no revenues to report.
F-6
Sungro Minerals Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
November 30, 2012 and 2011
2. Significant Accounting Policies (continued)
j) Estimates
The preparation of financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those reported.
k) Accounts receivable and concentration of credit risk
The Company currently has no accounts receivable, no customers, and therefore, does not currently foresee a concentrated credit risk associated with trade receivables. If and when the Company commences operations that generate revenue, the Company will evaluate the receivable in light of the collectability in the normal course of business.
l) Reclassifications
Certain prior year financial statement balances have been reclassified to conform to the current year presentation. These reclassifications had no effect on the recorded net loss.
m) Recently Adopted Accounting Pronouncements
Management does not believe that any recently issued but not yet effective accounting pronouncements if currently adopted would have a material effect on the accompanying financial statements.
3. Mineral Property
On August 27, 2009, the Company entered into a Mineral Agreement (the "Agreement") with unrelated parties to acquire a 100% interest in 331 unpatented lode mining claims known as the Conglomerate Mesa. The claims are located in Inyo Mountain County, California.
By written, mutual agreement between the parties, the final closing of the Agreement was extended to March 22, 2010. Under the agreement, Sungro was required to make all filings related to the Conglomerate Mesa Properties, to maintain the Conglomerate Mesa Claims in good standing by preparing and filing and paying claim fees to the Bureau of Land Management, and keeping the claim area free and clear of all liens and encumbrances.
In order to complete the acquisition of the Conglomerate Mesa Claims, Sungro has made payments of cash and stock to Mr. Steve Van Ert and Mr. Noel Cousins in accordance with the table below:
| | | | |
| Cash | Stock1 | Stock Price | Total Value |
Steven Van Ert | $170,000 | 2,210,000 shares | $1.00 | $2,380,000 |
| | | | |
Noel Cousins | $ 30,000 | 390,000 shares | $1.00 | $420,000 |
| | | | |
Total | $200,000 | 2,600,000 shares | $1.00 | $2,800,000 |
1 - Shares issued into escrow and to be released in accordance with the schedule below:
| | | |
Escrow Release Date | Steven Van Ert | Noel Cousins | Total |
February 2010 | 255,000 | 45,000 | 300,000 |
January 1, 2011 | 425,000 | 75,000 | 500,000 |
January 1, 2012 | 425,000 | 75,000 | 500,000 |
January 1, 2013 | 425,000 | 75,000 | 500,000 |
January 1, 2014 | 425,000 | 75,000 | 500,000 |
January 1, 2015 | 255,000 | 45,000 | 300,000 |
Total | 2,210,000 | 390,000 | 2,600,000 |
In addition, the Company must make the following royalty payments:
| | |
Date | Minimum Royalty | Royalty % of Net Smelter Returns |
Second Anniversary | $200,000 | 4% |
Third Anniversary on | $250,000 | 4% |
Subsequent to the end of the fiscal year, the Company received notice that it was delinquent in its annual payments under the Mineral Agreement and that holders of the 331 unpatented lode mining claims were exercising their right to cancel the agreement. As a result, the Company has written of the value of the claims and the additional claims it still held title to (217 claims abutting the original 331 claims).
F-7
4. Capital Stock
a) Authorized
Authorized capital stock consists of:
2,500,000,000 common shares with a par value of $0.001 per share; and
1,000,000 preferred shares with a par value of $0.001 per share
b) Share Issuances
In December 2010, the Company issued 2,500,000 common shares for gross proceeds of $50,000 under a Subscription Agreement with a non-affiliated, accredited investor.
In December 2010, the Company issued 1,500,000 common shares to Internet Marketing Solutions, Inc. as compensation for consulting services rendered. The shares were issued at a price of $0.047 per share the closing market price on the date of issuance.
In January 2011, the Company issued 437,956 common shares in connection with the conversion of $12,000 of convertible debentures. The conversions had an average price of $0.0274 per share.
In January 2011, the Company issued 1,000,000 common shares to the Companys president and a director at a price of $0.05 per share as compensation.
In January 2011, the Company issued 1,500,000 common shares to the Companys Chief Financial Officer and a director at a price of $0.05 per share as compensation.
In January 2011, the Company issued 500,000 common shares to the Companys Investor Relations Manager at a price of $0.05 per share as compensation.
In February 2011, the Company issued 953,126 common shares in connection with the conversion of $24,400 of convertible debentures and accrued interest. The conversions had an average price of $0.0256 per share.
In February 2011, the Company issued 1,000,000 common shares to Internet Marketing Solutions, Inc. as compensation for consulting services rendered. The shares were issued at a price of $0.057 per share the closing market price on the date of issuance.
In March 2011, the Company issued 1,000,000 common shares to Internet Marketing Solutions, Inc. as compensation for consulting services rendered. The shares were issued at a price of $0.06 per share the closing market price on the date of issuance.
In March 2011, the Company issued 6,667 common shares to a non-affiliated, accredited investor in connection with a Subscription Agreement previously recorded as Stock to be issued. The shares were issued at a price of $0.75 per share the closing market price on the date of the original subscription.
In March 2011, the Company issued 2,196,629 common shares in connection with the conversion of $78,080 of convertible debentures and accrued interest. The conversions had an average price of $0.0356 per share.
In April 2011, the Company issued 1,879,699 common shares in connection with the conversion of $50,000 of convertible debentures and accrued interest. The conversions had an average price of $0.0266 per share.
In May 2011, the Company issued 1,302,827 common shares in connection with the conversion of $30,000 of convertible debentures and accrued interest. The conversions had an average price of $0.023 per share.
In May 2011, the Company issued 243,902 common shares as compensation for consulting services rendered in the amount of $10,000. The shares were issued at a price of $0.041 per share the closing market price on the date of issuance.
In June 2011, the Company issued 11,272,916 common shares in connection with the conversion of $135,784 of convertible debentures and accrued interest. The conversions had an average price of $0.01205 per share.
In July 2011, the Company issued 6,620,324 common shares in connection with the conversion of $47,000 of convertible debentures and accrued interest. The conversions had an average price of $0.0071 per share.
In August 2011, the Company issued 25,484,016 common shares in connection with the conversion of $77,875 of convertible debentures and accrued interest. The conversions had an average price of $0.00306 per share.
In September 2011, the Company issued 16,582,478 common shares in connection with the conversion of $53,397 of convertible debentures and accrued interest. The conversions had an average price of $0.00322 per share.
In September 2011, the Company received $10,000 under a Subscription Agreement for 1,000,000 shares of Common Stock at a price of $0.01 per share from a non-affiliated, accredited investor.
In November 2011, the Company issued 37,410,783 common shares in connection with the conversion of $78,869 of convertible debentures and accrued interest. The conversions had an average price of $0.00211 per share.
In November 2011, the Company issued 22,000 Preferred B Series shares to a consultant in exchange for $770,000 of services rendered. On a fully converted basis, the common share value is $0.007 per share which is the average market price at the time of invoicing.
In December 2011, the Company issued 73,254,759 common shares in connection with the conversion of $46,020 of convertible debentures and accrued interest. The conversions had an average price of $0.00628 per share.
In January 2012, the Company issued 164,097,069 common shares in connection with the conversion of $39,023 of convertible debentures and accrued interest. The conversions had an average price of $0.00024 per share.
In February 2012, the Company issued 148,806,139 common shares in connection with the conversion of $33,050 of convertible debentures and accrued interest. The conversions had an average price of $0.00022 per share.
In March 2012, the Company issued 193,000,000 common shares in connection with the conversion of $50,771 of convertible debentures and accrued interest. The conversions had an average price of $0.00026 per share.
In April 2012, the Company issued 316,473,684 common shares in connection with the conversion of $33,120 of convertible debentures and accrued interest. The conversions had an average price of $0.0001 per share.
In May 2012, the Company issued 389,871,429 common shares in connection with the conversion of $22,041 of convertible debentures and accrued interest. The conversions had an average price of $0.00006 per share.
In September 2012, the Company issued 73,333,333 common shares in connection with the conversion of $4,400 of convertible debentures and accrued interest. The conversions had an average price of $0.00006 per share.
In October 2012, the Company issued 17,000,000 common shares in connection with the conversion of $3,400 of convertible debentures and accrued interest. The conversions had an average price of $0.0002 per share.
In November 2012, the Company issued 78,333,333 common shares in connection with the conversion of $4,700 of convertible debentures and accrued interest. The conversions had an average price of $0.00006 per share.
F-8
Warrants
From time to time, the Company has issued warrants in connection with the issuance of certain financial instruments.
During the year ended November 30, 2010, the Company issued 150,000 warrants at an exercise price of $0.049 per share, and 1,000,000 warrants at an exercise price of $0.050 per share.
At November 30, 2012, all warrants had expired unexercised.
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.
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. The Company places its cash with high credit quality financial institutions in the United States. Bank deposits in the United States did not exceed federally insured limits as of November 30, 2012 and as of November 30, 2011.
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.
A reconciliation of income taxes at statutory rates with the reported income taxes is as follows:
The significant components of the Company's deferred income tax assets are as follows:
At November 30, 2012 the Company has available net operating losses of approximately $2,354,400 which may be carried forward to apply against future taxable income. These losses will expire in 2032. Deferred tax assets related to these losses have not been recorded due to uncertainty regarding their utilization.
In June 2008, the FASB finalized ASC 815, Determining Whether an Instrument (or Embedded Feature) is indexed to an Entitys Own Stock. Under ASC 815, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. The Company has determined that it needs to account for 15 convertible debentures (see note 3h) issued for its shares of common stock, as derivative liabilities, and apply the provisions of ASC 815. The instruments have a ratchet provision that adjust either the exercise price and/or quantity of the shares as the conversion price equals to 60% of the "market price" at the time of conversion, which "market price" will be calculated as the average of the three lowest "trading prices" for the Company's common stock during the ten day trading period prior to the date the conversion note is sent to the Company.
As a result, the instruments need to be accounted for as derivative liabilities. In accordance with ASC 815, these convertible debentures have been re-characterized as derivative liabilities. ASC 815, Accounting for Derivative Instruments and Hedging Activities (ASC 815) requires that the fair value of these liabilities be re-measured at the end of every reporting period with the change in fair value reported in the statement of operations.
The fair value of the derivative liabilities was measured using the Black-Scholes option pricing model and the following assumptions:
The discount rate was based on rates established by the Federal Reserve. The Company based expected volatility on the historical volatility for its common stock. The expected life of the debentures was based on their full term. The expected dividend yield was based upon the fact that the Company has not historically paid dividends, and does not expect to pay dividends in the future.
During the year ended November 30, 2012 the Company recorded $55,000 as debt discount on $65,000 in convertible debt that it had entered into during the year ended November 30, 2012, due to the beneficial conversion feature of the debt being convertible into shares of the Companys common stock at a conversion price below that of market on the date of entry into the convertible debt agreement. This debt will be amortized over the life of the debt, or until such time that the debt is converted with any unamortized debt discount being expensed at such time of early conversion. The convertible debt is presented net of the debt discount.
In addition to the debt discount, the Company recorded a derivative liability associated with the convertible debts, as the conversion price of most debentures is variable with a conversion threshold of 60% of the market value of the Companys common stock on the date of conversion except for debentures totaling $247,076 which have a conversion threshold of 70% of the market value of the Companys common stock on the date of conversion, and debentures totaling $199,530 which have a conversion threshold of 50% of the market value of the Companys common stock on the date of conversion. The initial measurement of this derivative liability is based on the value of the shares that could be issued upon entry into the convertible debt agreement. Such valuation is determined using a fair value valuation model of the potential shares that could be issued. The difference between the initial value of the derivative liability and the debt discount is charged as an expense on the change in fair value of derivative liabilities upon entry into the debt agreement. The derivative liability is adjusted at each reporting period date based on the conversion rate available at each reporting date, or until such time as the convertible debt is converted. The initial derivative liability for all convertible debt issued during the year ended November 30, 2012 was $17,246, offset by the debt discount of $55,000, with the remaining $37,754 offset charged to change in fair value of derivative liabilities. The value of the derivative is presented as the derivative liability in the accompanying balance sheet of the Company, less any adjustments to the value of the derivative.
At November 30, 2012, the Company reevaluated the derivative liability based on the fair value assumptions for the convertible debt that it had entered into during the current and previous years then ended. As of November 30, 2012, the derivative liability recorded during the year then ended, decreased by $233,528 due to the conversion threshold being lower at this reporting date than on the date that the convertible debt had been entered into coupled with final conversion of several debentures.
Between December 2010 and November 2011, the Company borrowed $177,309 from a non-affiliated accredited investor. The Notes carry interest at a rate of 15% per year and are due on demand.
During the year, by mutual agreement between the Company and the investor, the following sums (which included the balance forward of $231,507 the investor had loaned in the previous year) were converted or re-written to a number of one year notes: as described below:
December 1, 2011 for loans and accrued interest loaned on or before August 31, 2010 - $147,076
December 1, 2011 for loans and accrued interest loaned on or before November 18, 2010 - $169,030.
March 31, 2011 for loans and accrued interest loaned on or before March 31, 2011 - $105,500
June 30, 2011 for loans and accrued interest loaned on or before June 30, 2011 - $60,000
The Company raised $925 in demand notes to from its CFO during the fiscal year ended November 30, 2012.
Between December 2011 and November 2012, the Company borrowed $108,700 from a non-affiliated accredited investor. The Notes carry interest at a rate of 15% per year and are due on demand.
From time to time, our former CEO, Mal Bains lent money to the Company. At November 30, 2012 and 2011 the balance owed was $19,816 and $20,337 respectively. The balance does not bear interest and is due on demand.
During 2012, our CEO and CFO have from time to time lent money to the Company. At November 30, 2012 they had a balance owed to them of $1,025. The balance does not bear interest and is due on demand.
In August, 2009, trading in the Companys stock was temporarily suspended in British Columbia, Canada by the British Columbia Securities Commission (BCSC). The temporary suspension was the result of what the BCSC termed suspicious trading activity due to a significant increase in the share price of the Companys stock price. Various shareholders, and the former CEO and President, Malkeet Bains have been interviewed and several have been either charged with or accepted please in connection with violations of Canadian securities laws.
The Cease Trade Order is still in effect regarding trading in British Columbia, Canada only, and specifically affects the residents thereof.
The case outlined above does not involve the Company or any of its current officers or directors.
A consulting agreement between Sungro and Internet Marketing Solutions, Inc. (IMS) provides that IMS will receive a Consulting Fee of ten percent (10%) of the gross value of the project received by Sungro including cash, stock and stock purchase warrants.
In September 2010, the Company entered into five year Employment Contracts with its three employees.
Other normal benefits provided such as health insurance as negotiated by the Company
In December 2012, The Company issued 78,333,333 common shares in connection with the conversion of $4,700 of convertible debentures and interest. The shares were issued at an average price of $0.00006 per share.
In January 2013, the Company issued 163,333,333 common shares in connection with the conversion of $6,825 of convertible debentures and interest. The shares were issued at an average price of $0.00004 per share.
On March 22, 2013, the Company filed a name change to become American Mineral Group, Inc.
On March 28, 2012, the Company filed a Form 15-12G with the SEC to suspend its required reporting under the Securities Act of 1933
On April 24, 2013, the Company executed a 1:125 reverse stock split of its shares.
On April 30, 2013, the Company filed an amendment on Form 15-12G/A to reverse its decision to suspend its reporting responsibilities and resume its reporting obligations under the Securities Act of 1933.
None.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Executive Officers And Directors
The following table sets forth the directors and executive officers of our Company, their ages and positions with our Company. Pursuant to our bylaws, our directors are elected at our annual meeting of stockholders and each director holds office until his successor is elected and qualified. Officers are elected by our Board of Directors and hold office until an officer's successor has been duly appointed and qualified unless an officer sooner dies, resigns or is removed by the Board.
There are no arrangements or understandings regarding the length of time a director of our company is to serve in such a capacity.
The following table sets forth information about our executive officers and directors as of March 31, 2013.
| | |
Name and Address | Age | Position |
Frederick J. Pucillo, Jr. Warwick, RI | 64 | Director, President and CEO |
Erwin Vahlsing, Jr. Warwick, RI | 57 | Director, Chief Financial Officer, Treasurer, and Secretary |
Thomas Craft, Jr. Warwick, RI | 49 | Director |
Frederick J. Pucillo, Jr. has served as our President, Chief Executive Officer and Director since December 2009. Mr. Pucillo has over twenty years experience serving mid-size to Fortune 100 companies in the banking and finance area, having managed a $110 million loan portfolio with 10,000 accounts, and other capital funding and business development opportunities. Mr. Pucillo was the CFO for Atlantic Fire Protection, LLC from 2007 through 2009, and previously, was CFO for Zammido Automotive Group from 2000 through 2007. He is thoroughly familiar with finance, cash flow analysis and budgeting, as well as negotiation of promising opportunities.
Erwin Vahlsing, Jr. has served as our Chief Financial Officer, Secretary, Treasurer, and Director since September 2009. Mr. Vahlsing is a financial executive with domestic and international experience managing finance departments in the manufacturing, service, and construction industries. Mr. Vahlsing has acted as Chief Financial Officer to ICOA, Inc. since 2001. He acted as a Consultant to E&M Advertising for SEC compliance and due diligence. Mr. Vahlsing received an MBA from the University of Rhode Island in 1986 and a Bachelors degree in Accounting from the University of Connecticut.
Thomas J. Craft, Jr., is a Florida attorney, specializing in federal securities law and mergers and acquisitions. He practices securities law in Florida. Mr. Craft has more than 15 years of experience in federal securities matters as well as the public markets generally. Mr. Craft has served on the board of directors of several public companies prior to joining the Company's board of directors on November 22, 2002. Mr. Craft has served as a member of our Audit Committee since 2002 and in April 2007 Mr. Craft was appointed as a member of our Compensation Committee and Nominating Committee. Mr. Craft has served as an officer and a director of Peregrine Industries, Inc., a public reporting company, since March 2004.
Committees of the Board of Directors
The functions of the audit committee are currently carried out by our Board of Directors. In 2009, we hired a Chief Financial Officer. He was subsequently appointed to the Board. Our Board has determined that at current, we do not need an additional expert because we are a start-up exploration company and have no revenue. The cost of hiring a financial expert to act as a director of Sungro and to be a member of the audit committee or otherwise perform audit committee functions outweighs the benefits of having a financial expert on the audit committee. We do not have a compensation committee, nominating committee, executive committee of our board of directors, stock plan committee or any other committees.
Code of Ethics
We have adopted a code of ethics that applies to our Chief Executive Officer, Chief Financial Officer, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, Controller and persons performing similar functions within the Company. A copy of the code of ethics is filed with the SEC as an exhibit to the Company's Form S-1 filed on February 22, 2008. If we make any substantive amendments to the Code of Ethics or grant any waiver, including any implicit waiver, from a provision of the Code of Ethics to our directors, officers and employees, we will disclose the nature of such amendment or waiver in a report on Form 8-K. The Code of Ethics is available on the Companys website at http://www.sungrominerals.com/CodeofEthics021308.pdf.
Family Relationships
There are no family relationships between any two or more of our directors or executive officers. There is no arrangement or understanding between any of our directors or executive officers and any other person pursuant to which any director or officer was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management shareholders will exercise their voting rights to continue to elect the current board of directors. There are also no arrangements, agreements or understandings to our knowledge between non-management shareholders that may directly or indirectly participate in or influence the management of our affairs.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires directors, executive officers and 10% or greater shareholders of the Company ("Reporting Persons") to file with the Securities and Exchange Commission initial reports of ownership (Form 3) and reports of changes in ownership of equity securities of the Company (Form 4 and Form 5) and to provide copies of all such forms as filed to the Company. With the exception of the CFO, who has completed his Form 3 report but which as of the date of this filing had not been filed with the Commission, he also has not completed a Form 4 to update his holdings. Aside from this, the Company is not aware of any Reporting Persons that have failed to file reports on a timely basis.
Mr. Pucillo has completed and filed his Form 3 indicating he is currently the owner of 3,019,500 common shares.
At the time of Mr. Vahlsing hiring, he completed his Form 3. It appears the Company filed it on the Canadian, SEDA system and failed to file it on the SECs Edgar database. The report is being updated with current information and will be filed subsequent to the date of this report. Mr. Vahlsing is the owner at the time of this report of 3,000,000 common shares.
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Significant Personnel
We have no significant personnel other than our officers and directors. We presently rely on consultants and other third party contractors to perform administrative and geological services for the Company. We have no formal contracts with any of these consultants and contractors.
Nominating Committee
We do not have a standing nominating committee; our Board of Directors is responsible for identifying new candidates for nomination to the Board. We have not adopted a policy that permits shareholders to recommend candidates for election as directors or a process for shareholders to send communications to the Board of Directors.