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EX-31.1 - CERTIFICATE RULE 13A-14A HECTOR DAVIS, CEO, CFO - Cortronix Biomedical Advancement Technologies Inc.certrule13a14ahectordavisceo.htm
EX-32.1 - CERTFICATE 18 U.S.C. SECT 1350 H. DAVID, CEO, CFO - Cortronix Biomedical Advancement Technologies Inc.certsect906hectordavieceocfo.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(X )
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITES EXCHANGE ACT OF 1934
 
For the quarterly period ended                                                      February 28, 2011

( )
TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transaction period from                                                                 to
   
 
Commission File number                                                      333-154218                      

PANA-MINERALES S.A.
(Exact name of registrant as specified in charter)

Nevada
98-0515701
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employee I.D. No.)

       Primera Calle El Carmen, EDF. PH Villa Medici
 
       Apt. 28, Torre C, Panama, Rep. of Panana
 
       (Address of principal executive offices)
(Zip Code)

       Issuer’s telephone number  507-391-6820 
 

Not Applicable
(Former name, former address and formal fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 [X] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definition of “large accelerated filer”, “accelerated filer” and “small reporting company” Rule 12b-2 of the Exchange Act.

Large accelerated filer   [   ]                                                                                                           Accelerated filer                     [   ]

Non-accelerated filer     [   ]  (Do not check if a small reporting company)                            Small reporting company      [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)     Yes [X]   No   [   ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PROCEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 after the distribution of securities subsequent to the distribution of securities under a plan confirmed by a court.  Yes No

APPLICABLE ONLY TO CORPORATE ISSUERS

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

March 20, 2011: 14,000,000 common shares
 
 
 
 
-1-

 
 

   
Page Number
     
PART 1.
FINANCIAL INFORMATION
 
     
ITEM 1.
Financial Statements (unaudited)
3
     
 
Balance Sheets as of February 28, 2011 and August 31, 2010
4
     
 
Statement of Operations
For the three months and six months ended February 28, 2011 and 2010 and for the period October 4, 2006 (Date of Inception) to February 28, 2011
 
 
5
     
 
Statement of Cash Flows
For the six months ended February 28, 2011 and 2010 and for the period October 4, 2006 (Date of  Inception) to February 28, 2011
 
 
6
     
 
Notes to the Financial Statements.
7
     
ITEM 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
11
     
                ITEM 3.
Quantitative and Qualitative Disclosure about Market Risk
17
     
        ITEM 4.
Controls and Procedures
18
     
                ITEM 4T.
Controls and Procedures
19
     
PART 11.
OTHER INFORMATION
19
     
ITEM 1.
Legal Proceedings
19
     
                ITEM 1A.
Risk Factors
19
     
ITEM 2.
Unregistered Sales of Equity Securities and Use of Proceeds
23
     
ITEM 3.
Defaults Upon Senior Securities
23
     
ITEM 4.
Submission of Matters to a Vote of Security Holders
23
     
ITEM 5.
Other Information
24
     
ITEM 6.
Exhibits
24
     
 
SIGNATURES.
25
     




 
-2-

 


PART 1 – FINANCIAL INFORMATION
 
ITEM 1.   FINANCIAL STATEMENTS
 
The accompanying balance sheets of Pana-Minerales S.A. (pre-exploration stage company) (the Company) at February 28, 2011 (with comparative figures as of August 31, 2010) and the statement of operations for the three and six months ended February 28, 2011 and 2010 and from October 4, 2006 (date of incorporation) to February 28, 2011 and the statement of cash flows for the six months ended February 28, 2011 and 2010 and for the period from October 4, 2006 (date of incorporation) to February 28, 2011 have been prepared by the Company’s management in conformity with accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Operating results for the six months ended February 28, 2011, are not necessarily indicative of the results that can be expected for the year ending August 31, 2011.



 
 
-3-

 




PANA-MINERALES S.A.
(Pre-Exploration Company)

BALANCE SHEETS


 
February 28, 2010
August 31,  2010
 
(Unaudited)
 
ASSETS
   
     
Current Assets
   
     
Cash
$              -
$             -   
     
Total Current Assets
$              -
$             -
     
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
   
     
Current Liabilities
   
     
Accounts Payable
$  16,724
$   12,814
Advances from related parties
34,358
 30,057
     
Total Current Liabilities
51,082
 42,871
     
STOCKHOLDERS’ DEFICIENCY
   
     
Common stock
   
100,000,000 shares authorized, at $0.001 par value
14,000,000 shares issued and outstanding
 
14,000
 
14,000
Capital in excess of par value
19,500
19,500
Deficit accumulated during the pre-exploration stage
(84,582)
(76,371)
     
Total Stockholders’ Deficiency
(51,082)
(42,871)
     
Total Liabilities and Stockholders’ Deficiency
$              -
$              -

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


 
 
-4-

 



PANA-MINERALES S.A.
(Pre-Exploration Company)

STATEMENT OF OPERATIONS

For the three and six months ended February 28, 2011 and 2010 and for the period from
October 4, 2006 (date of inception) to February 28, 2011

(Unaudited)

 
For the three months
ended
February 28, 2011
For the three months
ended
February 28,  2010
For the six months
ended
February 28, 2011
For the six months
ended
February 28, 2010
From inception
(October 4, 2006) to
February 28, 2011
           
REVENUE
$              -
$              -
$            -
$             -
$              -
           
EXPENSES
         
           
 
Exploration costs
 
-
 
-
 
-
 
-
 
1,843
Impairment loss on  mineral claim
 
-
 
-
 
-
 
-
 
5,000
General and administration
 2961
4,856
 8,211
11,262
77,739
           
NET LOSS
$  (2,961)
 $ (4,856)
$  (8,211)
$ (11,262)
  $ (84,582)
           
NET LOSS PER COMMON SHARE
         
           
Basic and diluted
$  (0.000)
 $   (0.000)
$  (0.000)
$ (0.000)
 
           
WEIGHTED AVERAGE OUTSTANDING SHARES
         
           
Basic and diluted
14,000,000
14,000,000
14,000,000
14,000,000
 
           

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


 
-5-

 

 
PANA-MINERALES S.A.
(Pre-Exploration Company)
STATEMENTS OF CASH FLOWS
For the six months ended February 28, 2011 and 2010 and for the period from October 4, 2006 (date of inception) to February 28, 2011
(Unaudited)

 
For the six months ended
Feb. 28, 2011
For  the six months ended
Feb. 28, 2010
From inception (October 4, 2006) to
Feb. 28, 2011
       
CASH FLOWS FROM OPERATING ACTIVITIES:
     
       
Net loss
$  (8,211)
$  (11,262)
 $  (84,582)
       
Adjustment to reconcile net loss to net cash (used in) operating activities:
     
       
Impairment loss on mineral claim
-
-
5,000
Capital contributions – expenses paid by Officers
-
7,800
19,500
Changes in accounts payable
3,910
  (76)
 16,724
       
Net Cash (Used in) Operating Activities
(4,301)
(3,538)
(43,358)
       
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
       
Acquisition of mineral claim
           -
           -
 (5,000)
       
Net cash (Used) in Investing Activities
           -
           -
 (5,000)
       
CASH FLOWS FROM FINANCING ACTIVITIES:
     
       
Advances from related party
4,301
3,538
34,358
Proceeds from issuance of common stock
        -
        -
 14,000
Net Cash Provided by Financing Activities
4,301
3,538
48,358
       
Net (Decrease) Increase in Cash
-
-
-
       
Cash at Beginning of Period
        -
        -
          -
       
CASH AT END OF PERIOD
        -
          -
          -
       
Cash at end of Period
$          -
$          -
$          -

SUPPLEMENTAL DISCLOSURE OF
NONCASH FINANCING ACTIVITIES
     
       
Capital contributions – expenses paid by Officers
$            -
$ 7,800
$  19,500
 
 
 
The accompanying notes are an integral part of these unaudited financial statements.

 
 
 
-6-

 
 
 
 
PANA-MINERALES S.A.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 28, 2011

(Unaudited)

1.           ORGANIZATION

The Company, Pana-Minerales S.A., was incorporated under the laws of the State of Nevada on October 4, 2006 with the authorized capital stock of 100,000,000 shares at $0.001 par value.

The Company was organized for the purpose of acquiring and developing mineral properties.  At the report date mineral claims, with unknown reserves, had been acquired.  The Company has not established the existence of a commercially minable ore deposit and therefore has not reached the development stage and is considered to be in the pre-exploration stage.

2.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Methods

The Company recognizes income and expenses based on the accrual method of accounting.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

 
Basic and Diluted Net Income (loss) Per Share

 
Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding.   Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same.

Evaluation of Long-Lived Assets

The Company periodically reviews its long term assets and makes adjustments, if the carrying value exceeds fair value.

Income Taxes

The Company utilizes the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed.   An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.


 
-7-

 



PANA-MINERALES S.A.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 28, 2011

(Unaudited)

2.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Income Taxes - Continued

The Company’s deferred tax assets, valuation allowance, and change in valuation allowance are as follows (“NOL” denotes Net Operating Loss):

Year Ending
Estimated NOL Carry-Forward
NOL  expires
Estimated Tax Benefit from NOL
Valuation Allowance
Net Tax Benefit
           
2007
$   3,940
2027
   $   1,182
 $    (1,182)
 
           
2008
 17,670
2028
5,301
(5,301)
-
           
2009
 32,318
2029
9,695
(9,695)
-
           
2010
22,443
2030
6,733
(6,733)
 
           
2011
   8,211
2031
  2,463
 (2,463)
         -
           
 
$ 84,582
 
$  25,374
$  (25,374)
$         -

The total valuation allowance as of February 28, 2011 is $(25,374) which increased by $(2,463) for the reported period.

Revenue Recognition

Revenue is recognized on the sale and delivery of a product or the completion of a service provided.

Advertising and Market Development

The company expenses advertising and market development costs as incurred.

Impairment of Long-lived Assets

 
The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable.  The assets are subject to impairment consideration under ASC 360-10-35-17 if events or circumstances indicate that their carrying amounts might not be recoverable.   When the Company determines that an impairment analysis should be done, the analysis will be performed using rules of ASC 930-360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment or Disposal of Long-Lived Assets.
 
 
 
 
 
-8-

 
 

 
PANA-MINERALES S.A.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 28, 2011

(Unaudited)

2.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Financial Instruments

 
The carrying amounts of financial instruments are considered by management to be their fair value due to their short term maturities.

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with general accepted accounting principles.  Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.   Actual results could vary from the estimates that were assumed in preparing these financial statements.

 
Mineral Property Acquisition and Exploration Costs

 
Mineral property acquisition costs are initially capitalized when incurred.   These costs are then assessed for impairment when factors are present to indicate the carrying costs may be not recoverable.   Mineral exploration costs are expensed when incurred.

 
Statement of Cash Flows

 
For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.

 
Environmental Requirements

 
At the report date environmental requirements related to the mineral claim acquired are unknown and therefore any estimate of any future cost cannot be made.

Reclassification

Certain prior period amounts have been reclassified to conform with the current period’s financial statement presentation.

Recent Accounting Pronouncements

The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.



 
-9-

 




 
PANA-MINERALES S.A.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
February 28, 2011

(Unaudited)

3.           ACQUISITION OF MINERAL CLAIM

 
On January 15, 2008, the Company purchased the Marawi Gold Claims located in the Philippines for $5,000 and obtained a mining license for an additional payment of $1,843.  The Company had not established the existence of a commercially minable ore deposit on the Marawi Gold Claims.   These claims have no expiry date and only if the Company decides to abandon them will it no longer have an interest in the minerals thereon.

On August 31, 2007, the Company determined the $5,000 mineral property acquisition cost was impaired, and recorded a related impairment loss in the statement of operations.

4.           SIGNIFICANT TRANSACTIONS WITH RELATED PARTY

For the six months ended February 28, 2011, the Director made advances of $4,301 to the Company.

The Director has acquired 29% of the common stock issued, has made no interest, demand advances to the Company of $34,358, and has made contributions to capital of $19,500 in the form of expenses paid for the Company.

5.           CAPITAL STOCK

On August 31, 2007, the Company completed a private placement of 1,000,000 common shares at a price of $0.001 per share for $1,000 to its sole director and officer.

On August 23, 2008, the Company issued a further 13,000,000 common shares at a price of $0.001 per share for $13,000 to its sole director and officer.

6.           GOING CONCERN

The Company will need additional working capital to service its debt and for its intended purpose of acquiring and developing mineral properties, which raises substantial doubt about its ability to continue as a going concern. Management of the Company has developed a strategy, which it believes will accomplish this objective through additional advances from related parties, equity funding, and long term financing, which will enable the Company to operate for the coming year



 
 
-10-

 




ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the information contained in the financial statements of Pana-Minerales S.A. (“Pana” and “we”) and the notes which form an integral part of the financial statements which are attached hereto.

The financial statements mentioned above have been prepared in conformity with accounting principles generally accepted in the United States of America and are stated in United States dollars.
 
This section of our Form 10-Q includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Form 10-Q. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
 
We were incorporated in the State of Nevada on October 4, 2006 and established a fiscal year end of August 31.  We do not have any subsidiaries, affiliated companies or joint venture partners.
We are a start-up, pre-exploration stage company engaged in the search for gold and related minerals and have not generated any operating revenues since inception.

Pana was formed to engage in the exploration of mineral properties in the Republic of the Philippines for gold and silver.   The Company purchased, from an unaffiliated third party seller, a 100% interest in a mineral claim known as Marawi Gold Claim (“Marawi Claim”), consisting of one-9 unit claim block containing 97.4 hectares located near the town of Malaybalay in the Republic of the Philippines.
 
We own no property other than the Marawi Claim.
 
There is no assurance that a commercially viable mineral deposit, a reserve, exists at our mineral claim or can be shown to exist until sufficient and appropriate exploration is done and a comprehensive evaluation of such work concludes economic and legal feasibility.   Such work could take many years of exploration and would require expenditure of very substantial amounts of capital, capital we do not currently have and may never be able to raise.
 
The Company does not have any subsidiaries, affiliated companies or joint venture partners. We have not been involved in any bankruptcy, receivership or similar proceedings since inception nor have we been party to a reclassification, merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of business other than the Marawi Claim.    We have no intention of entering into a merger or acquisition and we have a specific business plan to complete exploration work on Marawi Claim. We do not foresee any circumstances that would cause us to alter our current business plan within the next twelve months.
 
We have incurred losses since inception and we must raise additional capital to fund our operations.  There is no assurance we will be able to raise this capital.
 
As of the date of this Form 10-Q, we have not conducted any exploration work on the Marawi Claim. We intend to complete our Phase I exploration program recommended for the Marawi Claim, at an estimated cost of $13,082.
 
We plan to finance our operations through a combination of equity and debt capital.  As summarized below, since inception we have raised a total of $14,000 in equity while our total expense incurred since inception total $84,582 leaving us with a working capital deficit of $51,082 as of February 28, 2011.  As of February 28, 2011 we had also received cash advances of $34,358 from our President.    These advances are non-interest bearing and payable on demand.  Our President has agreed to advance to the Company, on an ‘as needed’ basis, up to an additional $5,742 on the same terms and conditions
 
 
 
-11-

 
 
 

 
Apart from these advances we have no funds to satisfy our cash requirements and should we be unable to raise additional capital from other sources in the future we will have to go out of business.  We have no full time employees and our management devotes a small percentage of his time to the affairs of the Company.

Our administrative office is located at Primera Calle El Carmen, EDF. PH Villa Medici, Apt. 28,Torre C, Panama, Rep. of Panama.  Our telephone number is (507) 391-6820 and our fax number is (507) 265-0638

On August 31, 2007 we completed a private placement pursuant to Regulation S of the Securities Act of 1933, of 1,000,000 shares of common stock sold to our sole officer and director at the price of $0.001 per share to raise $1,000.  On August 23, 2008 we completed a further private placement pursuant to Regulation S of the Securities Act of 1933, whereby 13,000,000 common shares were sold at the price of $0.001per share to raise $13,000.  The total cash raised from the sale of shares was $14,000.   Subsequent to our effective registration statement our director sold 10,000,000 shares to various investors.

We had no cash on hand as of February 28, 2011, the end of our most recent fiscal quarter.

Pana presently has minimal day-to-day operations; mainly comprising of future exploration work on the  Marawi claim and preparing the various reports to be filed with the United States Securities and Exchange Commission (the “SEC”) as required.

LIQUIDITY AND CAPITAL RESOURCES
 
There is no historical financial information about us upon which to base an evaluation of our performance as an exploration corporation. We are a pre-exploration stage company and have not generated any revenues from our exploration activities. Further, we have not generated any revenues since our formation on October 4, 2006.  We cannot guarantee we will be successful in our exploration activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.
 
To become profitable and competitive, we must invest into the exploration of our property before we start production of any minerals we may find. We must obtain equity or debt financing to provide the capital required to fully implement our phased exploration program.  We have no assurance that financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to commence, continue, develop or expand our exploration activities. Even if available, equity financing could result in additional dilution to existing shareholder.
 
Results of Operations – Six Months Ended February 28, 2011.
 
We incurred a net loss of $84,582 from the date of inception (October 4, 2006) to as of February 28, 2011.  The loss for the six months ended February 28, 2011 we incurred expense of $8,211 representing various administrative expenses as follows: audit and accounting - $7,246, office and miscellaneous - $401, and transfer agent fees - $564.  During the first quarter of the current year, the Company ceased to accrue management fees, rent and telephone.
 
Our Planned Exploration Program
 
We must conduct exploration to determine what, if any, amounts of minerals exist on the Marawi Claim and if such minerals can be economically extracted and profitably processed.
 
Our planned exploration program is designed to efficiently explore and evaluate our property.
 
Our anticipated exploration costs for Phase I work on the Marawi Claim are approximately $13,082.  This figure represents the anticipated cost to us of completing only Phase I work recommended in the Ngan Report.  With funds to be advanced by our President that he has agreed to provide, we will have funds available to undertake Phase I exploration work. However, should the results of this work be sufficiently encouraging to justify our undertaking Phase II work recommended in the Ngan Report, at an estimated cost of $25,650, we will have to raise additional investment capital.  Regardless, we will have to raise additional funds within the next twelve months in order to satisfy our ongoing cash requirements and finance anything beyond Phase I work on the Marawi Claim.
 
 
 
 
-12-

 
 
 
Balance Sheet
 
Total cash as of February 28, 2011 was $Nil.  Our working capital deficiency as of February 28, 2011 was $51,082.
 
Our lack of working capital since inception (October 4, 2006) and for the six months ended February 28, 2011 and the year ended August 31, 2010 is attributable to our incurring administrative and/or exploration expenses aggregating $84,582.

Since inception to February 28, 2011, our working capital was derived from the completion of an initial seed capital offering on August 31, 2007 which raised $1,000, a private placement completed on August 23, 2008 which raised a further $13,000 and cash advances from our President totalling $34,358.  No revenue was generated during these periods.
 
Total stockholders’ deficiency as of February 28, 201 was $51,082.  Total shares outstanding as of February 28, 2011 were 14,000,000.
 
Funds required over the next twelve months
 
Our director estimates the funds required over the next twelve months will be a follows:
 
Internal Accountant
$ 4,725
 
Preparation of various working papers for submission to the audits including financial statements.
Independent Accountant
5,700
 
Review of financial statement produced each quarter and examination of year-end financial statements
Edgarizing
1,470
 
Edgarizing various Form 10-Qs and K.
Exploration – Phase I
13,083
 
As per the Ngan Report
Filing fees
475
 
Filing of Annual Report and obtain Business License
Office
500
 
Office supplies, courier and fax charges
Transfer Agent
1,500
 
Issuance of share certificates and annual transfer agent fee
 
27,453
   
Accounts Payable – February 28, 2011
 16,724
 
Represents amounts owed to third parties
Cash requirements
$ 44,177
   
 
Even with the additional advances from our director, Pana will require an additional to meet its ongoing expenses during the forthcoming year.   We will have to seek outside financing either from the sale of treasury shares or from loans from third parties.   Our director has not yet considered what would be the best alternative for Pana.
 
Trends
 
We are in the pre-explorations stage, have not generated any revenue and have no prospects of generating any revenue in the foreseeable future.  We are unaware of any known trends, events or  uncertainties that have had,  or are reasonably likely to have, a material impact on our business or income, either in the long term of short term, other than as described under ‘Risk Factors’.
 
 

 
 
 
-13-

 

 
 
Critical Accounting Policies
 
Our discussion and analysis of its financial condition and results of operations, including the discussion on liquidity and capital resources, are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management re-evaluates its estimates and judgments.
 
The going concern basis of presentation assumes we will continue in operation throughout the next fiscal year and into the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. Certain conditions, discussed below, currently exist which raise substantial doubt upon the validity of this assumption. The financial statements do not include any adjustments that might result from the outcome of the uncertainty.
 
Our intended exploration activities are dependent upon our ability to obtain third party financing in the form of debt and equity and ultimately to generate future profitable exploration activity or income from its investments. As of the date of this registration statement we have not generated revenues, and have experienced negative cash flow from minimal exploration activities. We may look to secure additional funds through future debt or equity financings. Such financings may not be available or may not be available on reasonable terms.
 
Description of Property
 
We are the beneficial owner of a 100% interest in the Marawi Claim, consisting of one-9 unit claim block containing 97.4 hectares located near the town of Malaybalay in the Republic of the Philippines.  We do not have any ore body and have not generated any revenues from our operations.  Pana acquired the Marawi Claim because the claim area has mineral occurrences similar to those found at the Cotabatto Gold Mine (which has produced 265,000 ounces of gold), located approximately 35 kilometeres to the north of our claim.

Pana is preparing to conduct preliminary exploration work on the Marawi Claim.
 
Location and Access
 
The Marawi Claim is a gold exploration project located approximately 55 kilometers southwest of the city of Malaybalay in the Republic of the Philippines.  Access to the claim is via an all-weather government-maintained highway and all-weather gravel road.  Malaybalay has an experienced work force and will provide all the necessary services needed for exploration and development operations, including groceries, fuel, helicopter service, hardware and equipment, hospitals and police.

The Marawi Claim is located in an active mining area. There are no known environmental concerns or parks designated within the claim area.

 The Marawi Claim is located in the tropical climate zone, which is characterized by high temperatures year-round, high rainfall and lush vegetation. The rainy season is typically October-December.  Due to steep terrain and deforested land, the claim can work year-round, including the rainy season.

No electrical power is required at this stage of exploration.  Any electrical power that might be required in the foreseeable future could be supplied by gas powered portable generators.

History & Regional Geology

Deposits of shell and eroded sand formed the basis for the limestone, which makes up most of the Philippines. This limestone was, over the ages, pushed upwards, making it possible to today find sea fossils high in the country’s mountains such as those in an around the Mawawi Claim.  The island has vast coal, copper and gold reserves mined mainly from the central part of the island. Numerous showings of mineralization have been discovered in the area of the Marawi Claim and six prospects have achieved significant gold production, most notably the Cotabatto Gold Mine (which is in close proximity) mentioned above.
 
 
 
 
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The principal bedded rocks for the area of the Marawi Claim are Precambrian rocks that are exposed along a wide axial zone of a broad complex.

In general the volcanoes culminate with effluents of hydrothermal solutions that carry precious metals in the form of naked elements, oxides or sulphides. These hydrothermal solutions intrude into the older rocks as quartz veins. Recent exploration results for gold occurrences in the vicinity of the Marawi Claim are encouraging.  Gold belt in sheared gneissic rocks found in sub parallel auriferous lode zones, where some blocks having 250 to 500 meter length and 1.5 to 2 meter width, could be identified as most promising.

Typically veins form in high-grade dynathermal metamorphic environments where meta-sedimentary belts are invaded by igneous rocks, hosted by paragneisses, quartites clinopyroxenites, wollastonite-rich rocks, pegatites, charockites, granitic and intermediate intrusive rocks, quartz-mica schist and others.

Deposits are from a few millimeters to over a meter thick in places.  Individual veins display a wide variety of forms.  Mineralization is located within a large fractures block created where the prominent northwest-striking shears intersect the north striking caldera fault zone. (For example, gold at the nearby Cotabatto Gold Mine is generally concentrated within extrusive volcanic rocks in the walls of large volcanic caldera.)

The major lodes cover an area of 2 kilometers and are mostly within 400 meteres of the surface.  Lodes occur in three main structural settings:

(i)  
steeply dipping northwest striking shears;
(ii)  
flat-dipping (1040)  fractures (flatmakes); and
(iii)  
shatter blocks between shears.

Most of the gold occurs in tellurides and there are also significant quantities of gold in pyrite.

Property Geology

No mineralization has been reported for the area of the Marawi Claim but structures and shear zones affiliated with mineralization on adjacent properties pass through it.

While the area of our claim has been prospected in the past, to the knowledge of our Geologist, Mr. Ngan, such work has not include any drilling of the area covered by the Marawi Claim, nor do the records, which Mr. Ngan has been able to review, indicate that any detailed exploration of the claim area has ever been undertaken.

To the east of the Marawi Claim are intrusives consisting of rocks such as tonalite, monzonite, and gabbro while the property itself is inderlain by sediments and volcanics.  The intrusives also consist of a large mass of grandorite towards the western-most point of the claim.

The area consists of interlayered chert, argillite and massive andesitic to basaltic volcanics.  The volcanics are hornfelsed and commonly contain minor pyrite and pyrrhotite.
 
Proposed Exploration Work – Plan of Operation
 
Mr. Frank Ngan, P. Geol., authored "Summary of Exploration On the Marawi Property, Marawi Philippines” dated February 28, 2008 (the “Ngan Report”). In his report Mr. Ngan observes that the  area is:
 
-  
well known for numerous productive mineral occurrences, including the Cotabatto Gold Mine;
 
 
 
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-  
the area of our claim is underlain by units of Precambrian rocks found at those other mineral occurences;
 
-  
structures and mineralization on our claim are associated with all the major mineral occurrences and deposits in the regime;
 
-  
mineralization found on the claim is consistent with that found associated with zones of extensive mineralization and past work has been sporadic and limited and has not tested the potential of our claim; and
 
-  
potential for significant mineralization to be found on the Marawi Claim  exist and it merits intensive exploration.
 
Mr. Ngan has recommended a phased exploration program to evaluate the potential of the Marawi Claim.
 
Mr. Ngan is a registered Professional Geologist in good standing in the Geological Society of Philippines. He is a graduate of the University of Philippines, with a Bachelor of Science (1978) and Masters (1982) from the same university.   Mr. Ngan has practiced his profession as a geologist continuously for over 25 years.  He visited the area covered by our claim on February 18-21, 2008.
 
We must conduct exploration to determine what minerals exist on our property and whether they can be economically extracted and profitably processed. We plan to proceed with exploration of the Marawi Claim by undertaking work recommended in the Ngan Report, in order to begin determining the potential for discovering commercially exploitable deposits of gold on our claim.
 
We have not discovered any ores or reserves on the Marawi Claim, our sole mineral property. Our planned work is exploratory in nature.
 
The Ngan Report recommends a two-phase exploration program to further delineate the mineralized system currently recognized on the Marwai Claim, at an estimated total cost of approximately $38,732.

This two-phase program would consist of air photo interpretations of the structures, geological mapping, both regionally and detailed on the area of the main showings; geophysical survey (using both magnetic and electromagnetic instrumentation) in detail over the area of the showings and in a regional reconnaissance survey and geochemical soil surveying regionally to identify other areas on the claim that are mineralized in detail on the known areas of mineralization.  Costs are estimated as follows:

     
Philippine Pesos
U.S. Dollars
         
Phase I
 
Geological mapping
618,091
$  13,082
Phase II
 
Geochemical surveying & sampling
1,211,897
  25,650
   
Total
1,829,988
        $  38,732

The purpose of this exploration work is to define and enable the interpretation of a possible (which would be Phase III) diamond drill program.
 
We will finance Phase I work with advances from our President.  However, to conduct any additional exploration work we will have to raise additional funds.  If we are unable to raise such capital we will have to go out of business.
 
Even if we are able raise the necessary capital and to undertake the work recommended in the Ngan Report and the results of our planned exploration work proves encouraging, there is no assurance we will be able to raise the capital necessary to conduct further exploration work on the Marawi Claim.  Furthermore, even if funding is available,  additional work will only be undertaken if the results of our planned work is successful in identifying target zones of gold mineralization deemed worthy, by our geologist, of drilling to determine if a gold deposit may exist.   Should our initial work prove unsuccessful in identifying such drill targets, the Company will likely abandon the Marawi Claim and we may have to go out of business.
 
 
 
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There are no permanent facilities, plants, buildings or equipment on the Marawi Claim.
 
Competitive Factors
 
The mining industry is highly fragmented. We are competing with many other exploration companies looking for gold and silver. We are among the smallest exploration companies in existence and are an infinitely small participant in the mining business which is the cornerstone of the founding and early stage development of the mining industry. While we generally compete with other exploration companies, there is no competition for the exploration or removal of minerals from our claims. Readily available markets exist for the sale of gold and silver. Therefore, we will likely be able to sell any gold or silver that we are able to recover, in the event commercial quantities are discovered on the Marawi Claims.  There is no ore body on the Marawi Claims.
 
Government Regulation
 
Exploration activities are subject to various national, state, foreign and local laws and regulations in the Republic of Philippines, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. We believe that we are in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations passed thereunder in the Philippines.
 
Environmental Regulation
 
Our exploration activities are subject to various federal, state and local laws and regulations governing protection of the environment. These laws are continually changing and, as a general matter, are becoming more restrictive. Our policy is to conduct business in a way that safeguards public health and the environment. We believe that our exploration activities are conducted in material compliance with applicable laws and regulations. Changes to current local, state or federal laws and regulations in the jurisdictions where we operate could require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could render certain exploration activities uneconomic.
 
Employees
 
We anticipate using the services of subcontractors to conduct exploration work on our claim.  At present, we have no employees as such.   Our sole officer and director devotes a portion of his time to the affairs of the Company.  Our sole officer and director does not have an employment agreement with us. We presently do not have pension, health, annuity, insurance, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no benefits available to any employee.
 
We expect to hiring subcontractors on an ‘as needed’ basis. We have not entered into negotiations or contracts with any of potential subcontractors.  We do not intend to initiate negotiations or hire anyone until we are nearing the time of commencement of our planned exploration activities.
 
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Market Information

There are no common shares subject to outstanding options, warrants or securities convertible into common equity of our Company.
 
The number of shares subject to Rule 144 is 4,000,000   Share certificates representing these shares have the appropriate legend affixed on them.
 
 
 
 
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Our shares are quoted on the OTC Bulletin Board (“OTCBB”).   Although the OTCBB does not have any listing requirements per se, to be eligible for quotation on the OTCBB, we must remain current in our filings with the SEC; being as a minimum Forms 10-Q and 10-K.  Securities already quoted on the OTCBB that become delinquent in their required filings will be removed following a 30 or 60 day grace period if they do not make their filing during that time.

ITEM 4.                      CONTROLS AND PROCEDURES
 
Under the supervision and with the participation of Pana’s management which including only our Chief Executive Officer, Hector Davis, who is also the only director, he has evaluated the effectiveness of Pana’s disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of February 28, 2011 (the “Evaluation Date”). Based on his evaluation, he has concluded that these disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting.
 
Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in Pana’s reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Pana’s reports filed under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure.

As of February 28, 2011, Hector Davis assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments.

Notwithstanding the assessment that Pana’s internal control over financial reporting was not effective and that there were material weaknesses as identified below, Hector Davis believes that the Company’s financial statements contained in its Annual Report on Form 10-Q for the six months ended February 28, 2011 fairly present its financial condition, results of operations and cash flows in all material respects.
 
Material Weaknesses
 
Hector Davis has assessed the effectiveness of the Company’s internal control over financial reporting as of Evaluation Date and identified the following material weaknesses:

1.  
Certain entity level controls establishing a “tone at the top” were considered material weaknesses. As of February 28, 2011, we did not have an audit committee due to there only being one officer who is also the sole director.   No independent expert has been appointed to the audit committee so that it is not controlled by one individual as it is presently. There is no policy on fraud. A whistleblower policy is not necessary given the small size of the organization.

2.  
Due to the significant number and magnitude of out-of-period adjustments identified during the year-end closing process, Hector Davis has concluded that the controls over the period-end financial reporting process were not operating effectively. A material weakness in the period-end financial reporting process could result in the Company not being able to meet its regulatory filing deadlines and, if not remedied, has the potential to cause a material misstatement or to miss a filing deadline in the future. Hector Davis override of existing controls is possible given the small size of the organization and lack of personnel.
 
 
 
 
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3.  
There is no system in place to review and monitor internal control over financial reporting. The Company maintains an insufficient complement of personnel to carry out ongoing monitoring responsibilities and ensure effective internal control over financial reporting.
 
 
ITEM 9T   CONTROLS AND PROCEDURES
 
There were no changes in the Company’s internal control over financial reporting during the six months ended February 28, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
PART 11 – OTHER INFORMATION

ITEM 1.                      LEGAL PROCEEDINGS

There are no legal proceedings to which Pana is party nor to the best of management’s knowledge are any material legal proceedings contemplated.
 
ITEM 1A                      RISK FACTORS
 
There are certain risk factors regarding Pana’s operation which might affect the outcome of its ability to operate in the future.  An investment in Pana’s securities involves an exceptionally high degree of risk and is extremely speculative. The following risk factors reflect the potential and substantial material risks which could be involved if you decide to purchase shares in Pana.
 
Risks Associated with our Company:
 
Since our auditors have issued a going concern opinion and although our sole officer and director has agreed to advance money to us, we may not be able to achieve our objectives and may have to suspend or cease exploration activity.
 
Our auditors have issued a going concern opinion. This means that there is doubt that we can continue as an ongoing business for the next twelve months.  If we do not raise additional capital through the issuance of treasury shares or advances to Pana we will be unable to conduct exploration activity on the Marawi Claim.  In addition, in the event we are unable to raise additional capital we will have to cease operations and go out of business.
 
Our liquidity, and thus our ability to continue to operate depends upon the continuing willingness of our President, who is also our sole stockholder, to finance the Company’s operations.
 
We are financing our continuing operations with cash advanced to us by our President.  As of February 28, 2010, our President has ed us $34,358.  He has agreed to advance a further $5,642 until such time as other sources of funding can be considered.  Without these advances, absent any other source of funds, we would be forced to go out of business.  Even if our President advances further funds we will at some time have to consider other avenues of raising money either by way of private placement offerings, further advance from Hector Davis or loans guaranteed by him personally.  We will have to raise additional funds in the next twelve months to satisfy our cash requirements.  The advances made by Hector Davis are repayable on demand.  Accordingly, if he were to demand repayment of his advances we would not have sufficient funds to satisfy our cash requirements and would be forced to go out of business.
 
We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease exploration activity or cease operations.
 
We have not yet conducted any exploration activities.  We have not generated any revenues. We have no exploration history upon which you can evaluate the likelihood of our future success or failure.  Our net loss from inception to February 28, 2011, the date of our most recent financial statements, was $84,582.  Our ability to achieve profitability and positive cash flow in the future is dependent upon
 
 
 
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*
our ability to locate a profitable mineral property
 
*
our ability to locate an economic ore reserve
 
*
our ability to generate revenues
 
*
our ability to reduce exploration costs.
 
Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the research and exploration of our mineral property. We cannot guarantee we will be successful in generating revenues in the future. Failure to generate revenues may cause us to go out of business.
 
We have no known ore reserves and we cannot guarantee we will find any gold and/or silver mineralization or, if we find gold and/or silver mineralization, that it may be economically extracted. If we fail to find any gold and/or silver mineralization or if we are unable to find gold and/or silver mineralization that may be economically extracted, we will have to cease operations.
 
We have no known ore reserves. Even if we find gold and/or silver mineralization we cannot guarantee that any gold and/or silver mineralization will be of sufficient quantity so as to warrant recovery. Additionally, even if we find gold and/or silver mineralization in sufficient quantity to warrant recovery, we cannot guarantee that the ore will be recoverable. Finally, even if any gold and/or silver mineralization is recoverable, we cannot guarantee that this can be done at a profit. Failure to locate gold deposits in economically recoverable quantities will cause us to cease operations.
 
Because the probability of an individual prospect ever having reserves is extremely remote, in all probability our property does not contain any reserves, and any funds spent on exploration will be lost.
 
Because the probability of an individual prospect ever having reserves is extremely remote, in all probability our sole property, the Marawi Claim, does not contain any reserves, and any funds spent on exploration will be lost. If we cannot raise further funds as a result, we may have to suspend or cease operations entirely which would result in the loss of your investment.
 
Because our sole officer and director does not have technical training or experience in starting and operating an exploration company nor in managing a public company, we will have to hire qualified personnel to fulfill these functions. If we lack funds to retain such personnel, or cannot locate qualified personnel, we may have to suspend or cease exploration activity or cease operations which will result in the loss of your investment.
 
Because our sole officer and director is inexperienced with exploring for minerals and starting, and operating a mineral exploration company, we will have to hire qualified persons to perform surveying, exploration, and excavation of our property.  Our officer and director has no direct training or experience in these areas and as a result may not be fully aware of many of the specific requirements related to working within the industry. His decisions and choices may not take into account standard engineering or managerial approaches, mineral exploration companies commonly use. Consequently our exploration, earnings and ultimate financial success could suffer irreparable harm due to management's lack of experience in this industry.   Additionally, our sole officer and director has no direct training or experience in managing and fulfilling the regulatory reporting obligations of a ‘public company’ like Pana.  Unless our sole part time officer is willing to spend more time addressing these matters, we will have to hire professionals to undertake these filing requirements for Pana and this will increase the overall cost of operations. As a result we may have to suspend or cease exploration activity, or cease operations altogether, which will result in the loss of your investment.
 
If we don't raise additional capital for ongoing exploration work, we will have to delay such exploration or go out of business, which will result in the loss of your investment.
 
We estimate that with the $40,000 our President has agreed to advance (of which $34,358 had been advanced as of February 28, 2011), we will have sufficient cash to continue operations into the summer of 2011 provided we carry out only the ‘Phase I’ exploration activity recommended by our engineer at an estimated cost of $17,500.   We are a start-up, pre-exploration stage company.  We will need to raise additional capital to undertake additional exploration activity.  You may be investing in a company that will not have the funds necessary to conduct any exploration beyond the initial work noted above due to our inability to raise additional capital. If that occurs we will have to cease our exploration activity and go out of business that will result in the loss of your investment.
 
 
 
 
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Since we are small and do not have much capital, we must limit our exploration and as a result may not find an ore body. Without an ore body, we cannot generate revenues and you will lose your investment.
 
The possibility of development of and production from our exploration property depends upon the results of exploration programs and/or feasibility studies and the recommendations of duly qualified professional engineers and geologists.  We are small company and do not have much capital.  We must limit our exploration activity unless and until we raise additional capital.  Any decision to expand our operations on our exploration property will involve the consideration and evaluation of several significant factors beyond our control.  These factors include, but are not limited to:
 
 
Market prices for the minerals to be produced;
 
Costs of bringing the property into production including exploration preparation of production feasibility studies and construction of production facilities;
 
Political climate and/or governmental regulations and controls;
 
Ongoing costs of production;
 
Availability and cost of financing; and
 
Environmental compliance regulations and restraints.
 
These types of programs require substantial capital. Because we may have to limit our exploration, we may not find an ore body, even though our property may contain mineralized material. Without an ore body, we cannot generate revenues and you will lose your investment.
 
Because our sole officer and director has other outside business activities and may not be in a position to devote a majority of his time to our exploration activity, our exploration activity may be sporadic which may result in periodic interruptions or suspensions of exploration.
 
Our sole officer and director will be devoting only approximately 10% of his time, approximately 16 hours per month, to our business. As a consequence of the limited devotion of time to the affairs of the Company expected from management, our business may suffer.  For example,  because our officer and director has other outside business activities and may not be in a position to devote a majority of his time to our exploration activity, our exploration activity may be sporadic or may be periodically interrupted or suspended.   Such suspensions or interruptions may cause us to cease operations altogether and go out of business.
 
We may not have access to all of the supplies and materials we need to begin exploration which could cause us to delay or suspend exploration activity.
 
We have made no attempt to locate or negotiate with any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials as and when we begin to undertake exploration activity.  Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of equipment and/or supplies we need to conduct our planned exploration work.  If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we do find the products and equipment we need.
 
 
 
 
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No matter how much money is spent on the Marawi Claim, the risk is that we might never identify a commercially viable ore reserve.

Over the coming years, we might expend considerable capital on exploration of the Marawi Claim without finding anything of value.  It is very likely the Marawi Claim does not contain any reserves so any funds spent on exploration will probably be lost.  No matter how much money is spent on the Marawi Claim, we might never be able to find a commercially viable ore reserve.
 
Even if our property were found to contain a deposit, since we have not put a mineral deposit into production before, we will have to acquire outside expertise. If we are unable to acquire such expertise we may be unable to put our property into production and you may lose your investment.
 
We have no experience in placing mineral deposit properties into production, and our ability to do so will be dependent upon using the services of appropriately experienced personnel or entering into agreements with other major resource companies that can provide such expertise. There can be no assurance that we will have available to us the necessary expertise when and if we place a mineral deposit into production.
 
 Mineral exploration and development activities are inherently risky and we may be exposed to environmental liabilities. If such an event were to occur it may result in a loss of your investment.
 
The business of mineral exploration and extraction involves a high degree of risk. Few properties that are explored are ultimately developed into production.  Most exploration projects do not result in the discovery of commercially mineable deposits of ore.  The Marawi Claim, our sole property, does not have a known body of commercial ore. Should our mineral claim be found to have commercial quantities of ore, we would be subject to additional risks respecting any development and production activities. Unusual or unexpected formations, formation pressures, fires, power outages, labour disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are other risks involved in extraction operations and the conduct of exploration programs. We do not carry liability insurance with respect to our mineral exploration operations and we may become subject to liability for damage to life and property, environmental damage, cave-ins or hazards.
 
Even with positive results during exploration, the Marawi Claim might never be put into commercial production due to inadequate tonnage, low metal prices or high extraction costs.

We might be successful, during future exploration programs, in identifying a source of minerals of good grade but not in the quantity, the tonnage, required to make commercial production feasible.  If the cost of extracting any minerals that might be found on the Marawi Claim is in excess of the selling price of such minerals, we would not be able to develop the claim.  Accordingly even if ore reserves were found on the Marawi Claim, without sufficient tonnage we would still not be able to economically extract the minerals from the claim in which case we would have to abandon the Marawi Claim and seek another mineral property to develop, or cease operations altogether.
 
Risks Associated with our Shares:
 
Our sole officer and director will own a substantial amount of our common stock and will have substantial influence over our operations.
 
Our sole director and officer currently own 4,000,000 shares of common stock representing approximately 29% of our outstanding shares.  As a result, he has the potential to continue to exercise influence over our operations. This concentration of ownership may also have the effect of delaying or preventing a change in control.



 
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Even our shares may be thinly traded, with wide share price fluctuations, low share prices and minimal liquidity.

Our share price might be volatile with wide fluctuations in response to several factors, including:

 
Potential investors’ anticipated feeling regarding our results of operations;
 
Increased competition and/or variations in mineral prices;
 
Our ability or inability to generate future revenues; and
 
Market perception of the future of the mineral exploration industry.

In addition, our share price may be impacted by factors that are unrelated or disproportionate to our operating performance.  Our share price might be affected by general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations.  In addition, stocks traded over this quotation system are usually thinly traded, highly volatile and not followed by analysts.  These factors, which are not under our control, may have a material effect on our share price.

 We anticipate the need to sell additional treasury share in the future meaning that there will be a dilution to our shareholders resulting in their percentage ownership in the Company being reduced accordingly.

We may seek additional funds through the sale of our common stock.  This will result in a dilution effect to our shareholders whereby their percentage ownership interest in the Company is reduced.  The magnitude of this dilution effect will be determined by the number of shares we will have to issue in the future to obtain the funds required.
 
 Since our securities are subject to penny stock rules, you may have difficulty reselling your shares.
 
Our shares are "penny stocks" and are covered by Section 15(g) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell the Company's securities including the delivery of a standardized disclosure document; disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and, furnishing monthly account statements. For sales of our securities, the broker/dealer must make a special suitability determination and receive from its customer a written agreement prior to making a sale. The imposition of the foregoing additional sales practices could adversely affect a shareholder's ability to dispose of his stock.
 
ITEM 2.                      UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS
 
None

ITEM 3.                      DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.                      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5.                      OTHER INFORMATION

None


 
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ITEM 6.                      EXHIBITS

(a)           Exhibits

1.           Certificate of Incorporation, Articles of Incorporation and By-laws

1.1
Certificate of Incorporation (incorporated by reference from Pana’s Registration Statement on Form S-1 filed on October 14, 2008)

1.2
Articles of Incorporation (incorporated by reference from Pana’s Registration Statement on Form S-1 filed on October 14, 2008)

1.3
By-laws (incorporated by reference from Pana’s Registration Statement on Form S-1 filed on October 14, 2008)




 
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


PANA-MINERALES S.A.
(Registrant)


HECTOR FRANCISCO VASQUEZ DAVIS
Hector Francisco Vasquez Davis
Chief Executive Officer, Chief Financial Officer.
President, Secretary Treasurer and Director

Dated: March 14, 2011

 
 
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