Swingplane Ventures, Inc. - FORM 8-K - EX-99.1 - AUDITED FINANCIAL STATEMENTS OF MID AMERICAS CORP.

Attached files

file	filename
8-K - 8-K - Swingplane Ventures, Inc.	form8k.htm
EX-4.1 - CERTIFICATE OF DESIGNATION - Swingplane Ventures, Inc.	ex41.htm
EX-2.1 - SHARE EXCHANGE AGREEMENT BY AND BETWEEN THE COMPANY, MID AMERICAS CORP., AND THE STOCKHOLDERS OF MID AMERICAS CORP. DATED FEBRUARY 15, 2013 - Swingplane Ventures, Inc.	ex21.htm
EX-3.2 - CERTIFICATE OF AMENDMENT - Swingplane Ventures, Inc.	ex32.htm
EX-99.2 - PROFORMA FINANCIAL STATEMENTS - Swingplane Ventures, Inc.	ex992.htm
EX-10.5 - CONSULTING AGREEMENT - VOYER - Swingplane Ventures, Inc.	ex105.htm

Exhibit 99.1

MID AMERICAS CORP.

(An Exploration Stage Company)

INTERIM FINANCIAL STATEMENTS

For the six month period ended December 31, 2012

(Stated in US Dollars)

(AUDITED)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Mid Americas Corporation:

We have audited the accompanying balance sheets of Mid Americas Corporation (“the Company”) as of June 30, 2012, the six month period ended December 31, 2012 and the period from inception (April 23, 2012) to December 31, 2012 and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Mid Americas Corporation, as of June 30, 2012, the six month period ended December 31, 2012 and the period from inception (April 23, 2012) to December 31, 2012, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles in the United States of America.

The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Company's internal control over financial reporting. Accordingly, we express no such opinion.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Borgers & Cutler CPA’s PLLC

Borgers & Cutler CPA’s PLLC

Denver, CO

February 20, 2013

MID AMERICAS CORP.

(An Exploration Stage Enterprise)

Condensed Balance Sheets

(Audited)


	December 31,			June 30,
	2012			2012
ASSETS
Current assets:
Cash	$	0		$	0
Total current assets		0			0

Investment in Mineral Property Option		951,000			300,000
Total assets	$	951,000		$	300,000


LIABILITIES
Current liabilities:
Accounts payable	$	2,850		$	1,850
Total current liabilities		2,850			1,850


STOCKHOLDERS' DEFICIT
Common stock, $10 par value, 5,000 authorized,
5,000 shares issued and outstanding as at December 31, 2012 and June 30, 2012 respectively		50,000			50,000
Capital in excess of par value		950,000			950,000
Share subscriptions receivable		-			(650,000	)
(Deficit) accumulated during the exploration stage		(51,850	)		(51,850	)
Total stockholders' deficit		948,150			298,150
Total liabilities and stockholders' deficit	$	951,000		$	300,000

See accompanying notes.

MID AMERICAS CORP.

(An Exploration Stage Enterprise)

Condensed Statements of Operations

(Audited)

	December 31, 2012		Cumulative from Inception (April 23, 2012) to December 31, 2012

Revenues	$	-	$	-

General and administrative expenses:
Consulting fees		-		50,000
Incorporation costs		-		1,850
Total operating expenses		-		51,850
(Loss) from operations		-		(51,850	)

Other income (expense)		-		-
(Loss) before taxes		-		-

Provision (credit) for taxes on income:		-		-
Net (loss)	$	-	$	(51,850	)


Basic and diluted earnings (loss) per common share	$	-

Weighted average number of shares outstanding		5,000

See accompanying notes.

MID AMERICAS CORP.

(An Exploration Stage Enterprise)

STATEMENTS OF CASH FLOWS

(Audited)

	Six months ended December 31, 2012			Cumulative from Inception (April 23, 2012) to December 31, 2012

Cash flows from operating activities:
Net (loss)	$	-		$	(51,850	)
Changes in current assets and liabilities:
Increase in accounts payable		1,000			2,850
Net cash used in operating activities		1,000			(49,000	)

Cash flows from investing activities:
Investment in option on Mineral Property		(651,000	)		(951,000	)
Net cash flows from investing activities		(651,000	)		(951,000	)

Cash flows from financing activities:
Proceeds from sale of common stock		-			1,000,000
Subscriptions receivable		650,000			-
Net cash flows from financing activities		650,000			1,000,000
Net cash flows		-			-

Cash and equivalent, beginning of period		-			-
Cash and equivalent, end of period	$	-		$	-

Supplemental cash flow disclosures:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

See accompanying notes.

MID AMERICAS CORP.

(An Exploration Stage Enterprise)

STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

For the Period from April 23, 2012 (date of inception) to December 31, 2012

								Additional		Deficit
	Common Stock							Paid-in		Accumulated
	Shares		Amount ($)		Subscriptions Receivable			Capital ($)		Exploration stage ($)			Total ($)

Balance, April 23, 2012		-		-		-			-		-			-
Shares issued for cash		5,000		50,000		(650,000	)		950,000		-			350,000
Net loss for the period		-		-		-			-		(51,850	)		(51,850	)
Balance, June 30, 2012		5,000		50,000		(650,000	)		950,000		(51,850	)		298,150
Settlement of subscription receivable		-		-		650,000			-		-			650,000
Net loss for the period		-		-		-			-		-			-
Balance, December 31, 2012		5,000		50,000		-			950,000		(51,850	)		(948,150	)

See accompanying notes.

MID AMERICAS CORP.

(An Exploration Stage Enterprise)

NOTES TO THE AUDITED FINANCIAL STATEMENTS

December 31, 2012

Note 1 - Organization and summary of significant accounting policies:

Following is a summary of our organization and significant accounting policies:

Organization and nature of business – MID AMERICAS CORP. (identified in these footnotes as “we” or the “Company”) is an International Business Company (“IBC”), incorporated under the Laws of Belize on April 23, 2012. While our corporate offices are presently located in Belize, all of our profit–earning activities must be conducted outside Belize. We intend to operate in Chile. We use June 30 as a fiscal year for financial reporting purposes.

We are a natural resource exploration stage company and anticipate acquiring, exploring, and if warranted and feasible, developing natural resource assets.

On April 23, 2012, we entered into a Mineral Property Option Agreement (the “Original Property Agreement”) with Gunter Stromberger and Elsa Dorila Durate Horta (the “Vendors”) in respect to a property known as the Algarrobo . Under the terms of the Option Agreement the Company has the rights to acquire 75% of certain mining concessions in Chile from the Vendors in consideration for cash payments. On July 27, 2012 we entered into Amendment Number 1 to the Original Property Agreement, and on September 27, 2012, we entered into Amendment Number 2 to the Original Property Agreement (the “Amendments”).

On October 15, 2012, the Company entered into an assignment agreement (the “Assignment Agreement”) in respect of the aforementioned Option Agreement with Swingplane Ventures Inc. (“Swingplane”). Under the terms of the Assignment Agreement the Company assigned all of the rights under the Original Property Agreement and the Amendments thereto in consideration for the assumption of the ongoing obligations under the Original Property Agreement and the Amendments thereto, certain share based consideration and certain other terms and conditions.

On January 21, 2013, the Company renegotiated the Assignment Agreement so that under the revised terms, the Company and Swingplane will enter into a Share Exchange Agreement whereby Swingplane will acquire all of the issued and outstanding shares of the Company in exchange for the issuance of a total of 100,000,000 shares of Swingplane’s common stock and 5,000,000 shares of Swingplane’s preferred stock being issued to the Company’s shareholders. The preferred stock will be convertible into shares of common stock of Swingplane on the basis of 50 shares of common stock for each 1 share of preferred stock and will have voting rights of 100 votes for each preferred share held.

The business combination will be accounted for as a reverse acquisition and recapitalization using accounting principles applicable to reverse acquisitions whereby the financial statements subsequent to the date of the transaction will be presented as a continuation of the Company. Under reverse acquisition accounting the Company (subsidiary) is treated as the accounting parent (acquirer) and Swingplane (parent) is treated as the accounting subsidiary (acquiree). All outstanding shares of Swingplane will be restated to reflect the effect of the business combination and the Company will become a 100% owned subsidiary of Swingplane.

To date, our activities have been limited to formation, the raising of equity capital, and the development of a plan to develop and monetize the Algarrobo property. In the current exploration stage, we anticipate incurring operating losses as we implement our business plan.

Basis of presentation - The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles applicable to exploration stage enterprises.

Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

MID AMERICAS CORP.

(An Exploration Stage Enterprise)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2012

Note 1 - Organization and summary of significant accounting policies (continued):

Cash and cash equivalents - For purposes of the statement of cash flows, we consider all cash in banks, money market funds, and certificates of deposit with a maturity of less than three months to be cash equivalents.

Fair value of financial instruments and derivative financial instruments - The carrying amounts of cash and current liabilities approximate fair value because of the short maturity of these items. These fair value estimates are subjective in

nature and involve uncertainties and matters of significant judgment, and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments in the management of our foreign exchange, commodity price or interest rate market risks.

The FASB Codification clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

Level 1:

Quoted prices in active markets for identical assets or liabilities.

Level 2:

Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.

Level 3:

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Income taxes – The Company is an International Business Company (IBC) incorporated in Belize, and as such is not subject to tax in its jurisdiction of incorporation. All profit-earning activities must be undertaken outside the country of Belize. It is anticipated that revenues may be subject to non-resident corporate taxation laws of the country of Chile once profitable operations commence.

Net income per share of common stock – We have adopted applicable FASB Codification regarding Earnings per Share, which require presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings per share of common stock is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. At December 31, 2012 and June 30, 2012, there were no variances between the basic and diluted loss per share as there were no potentially dilutive securities outstanding.

MID AMERICAS CORP.

(An Exploration Stage Enterprise)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2012

Note 2 – Going concern:

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the period ended December 31, 2012, the Company has had limited operations. As of December 31, 2012, the Company has not emerged from the development stage. In view of these matters, the Company’s ability to continue as a going concern is dependent upon the Company’s ability to begin operations and to achieve a level of profitability. The Company intends to continue financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 3 – Mineral Property Agreements:

On April 23, 2012, the Company entered into a Mineral Property Option Agreement (the “Option Agreement”) and on July 27, 2012 and September 27, 2012, respectively, we entered into Amendments to the Option Agreement with Gunter Stromberger and Elsa Dorila Durate Horta (the “Vendors”) in respect to a property known as the Algarrobo . Under the terms of the Option Agreement and the Amendments thereto, the Company has the rights to acquire 75% of certain mining concessions in Chile from the Vendors in consideration for cash payments set out below:

Section 3.2

(i)	$950,000 cash payments through to October 15, 2012
(ii)	$250,000 cash payment on December 1, 2012
(iii)	$750,000 cash payment on or before June 30, 2013
(iv)	$750,000 cash payment on or before June 30, 2014
(v)	$5,000,000 cash payment to be made from net proceeds of Production.

Further, the agreement calls for the Company to incur expenditures in an aggregate amount of $20,000,000 over a period of three (3) years from the Effective Date as follows:

Section 3.4

(i)	$10,000,000 to be placed in trust with the Optionee for expenditure on the Property within 180 days from October 1st (the “Effective Date”) to be fully expended within eighteen (18) months of the Effective Date.
(ii)	$10,000,000 to be expended on or before three years from the Effective Date;
(iii)	until the Option is earned retain the services of Gunter Stromberger at a fee of $25,000 per month, which fee shall commence with the commencement of operations on the mining concessions by Mid Americas.

All sums paid to the Optionors under Section 3.2 of this Agreement shall be understood to be Expenditures under section 3.4 of this Agreement and therefore shall be expressly considered as part of the Expenditures which the Optionee must incur pursuant to said section in order to maintain in force and exercise, the Option.

The Company has made all cash payments required up to October 15, 2012. On October 15, 2012, the Company entered into an assignment agreement (the “Assignment Agreement”) in respect of the aforementioned Option Agreement with Swingplane Ventures Inc. (“Swingplane”). Under the terms of the Assignment Agreement the Company has assigned all of the rights under the Option Agreement and the Amendments in consideration for the assumption of the ongoing payment obligations under the Option Agreement and the Amendments, commencing with the December 1, 2012 payment, certain share based consideration and certain other terms and conditions.

MID AMERICAS CORP.

(An Exploration Stage Enterprise)

NOTES TO THE AUDITED FINANCIAL STATEMENTS

December 31, 2012

Note 3 – Mineral Property Agreements (continued):

On January 21, 2013, the Company renegotiated the Assignment Agreement so that under the terms of the newly negotiated agreement, Swingplane will acquire all of the issued and outstanding shares of the Company in exchange for the issuance of a total of 100,000,000 shares of common stock of Swingplane and 5,000,000 shares of preferred stock of Swingplane being issued to the Company’s current shareholders. The preferred stock will be convertible into shares of common stock of the Company on the basis of 50 shares of common stock for each 1 share of preferred stock. Further, the preferred stock will carry voting rights of 100 shares per each share of preferred stock. Additionally, Swingplane will have the following obligations:

Swingplane assumes all payment obligations under the Option Agreement, including the initial payment of $250,000 which was due on December 1, 2012 ;

Swingplane will cause the cancellation of a total of 337,500,000 of its issued and outstanding common stock held by an officer and director of the Company;

On February 15, 2013, the Company, its shareholders and Swingplane Ventures, Inc. executed the Share Exchange Agreement reflecting the terms as disclosed above.

A total of $1,201,000 has been paid pursuant to the Option Agreement to date, of which amount $951,000 was remitted by the Company and is included on the balance sheet as Investment in Mineral Property Option, and $250,000 was paid by Swingplane.

Note 5 – Issuance of shares:

The Company has authorized share capital of 5,000 shares of common stock with a par value of $10 per share. On April 23, 2012, the Company received share subscriptions for a total of 5,000 shares at a purchase price of $200 per share for total proceeds of $1,000,000. Concurrently the Company received subscription proceeds of $350,000, and recorded the balance of $650,000 as Subscriptions receivable. During the six month period ended December 31, 2012 the Company received proceeds of $650,000 so that the 5,000 shares are paid in full.

As of December 31, 2012 there were a total of 5,000 shares issued and outstanding.

Note 6 – Related party transactions:

The Company was invoiced a total of $50,000 for consulting services with respect to negotiations of the original Option Agreement in April, 2012 by Toucan Tropical Consulting Ltd. Toucan is also the Company’s controlling shareholder holding 65% of the total issued and outstanding share capital.

Note 6 – Income Taxes:

The Company recorded no income tax provision or benefit for the year ended June 30, 2012, or to the six month period ended December 31, 2012 because the Company believes it is more likely than not that these will not be utilized in the near future due to net losses. The Company generated no taxable income.

MID AMERICAS CORP.

(An Exploration Stage Enterprise)

NOTES TO THE AUDITED FINANCIAL STATEMENTS

December 31, 2012

Note 6 – Income Taxes (continued):

Subsequent to this report the Company has undertaken a transaction whereby it will become a wholly owned subsidiary of a U.S.-based reporting company. The income tax provision (benefit) differs from the amount computed by applying the U.S. Federal income tax rate of 34% plus applicable state rates to the loss before income taxes due to the unrecognized benefit resulting from the Company’s valuation allowance, as well as due to nondeductible expenses.

For income tax reporting purposes, the Company has approximately $51,850 of net operating loss carry forwards that expire at various dates through 2032. The Tax Reform Act of 1986 contains provisions that may limit the net operating loss carry forwards and tax credits available to be used in any given year if certain events occur, including significant changes in ownership interests. Realization of net operating loss and tax credit carry forwards is dependent on generating sufficient taxable income prior to their expiration dates.

As of December 31, 2012 and June 30, 2012, the Company had approximately $17,629 of net deferred tax assets, comprised primarily of the potential future tax benefits from net operating loss carry forwards. Based upon the level of historical taxable income and projections for future taxable income over the period in which the deferred tax assets are deductible, management could not conclude that realization of the deferred tax assets as of December 31, 2012 and June 30, 2012 was more likely than not, and therefore, the Company has recorded a valuation allowance to reduce the net deferred tax assets to zero. The valuation allowance increased approximately $17,629 during the year ended June 30, 2012 and Nil during the six month period ended December 31, 2012. The amount of deferred tax assets considered realizable could be adjusted in the near term if future taxable income is generated.

Note 7 - New accounting pronouncements:

The Financial Accounting Standards Board (“FASB”) periodically issues new accounting standards in a continuing effort to improve standards of financial accounting and reporting. The Company has reviewed the recently issued pronouncements and concluded that there are no new accounting standards are applicable to the Company.

Note 8 – Subsequent events:

On January 21, 2013, the Company renegotiated the terms of an Assignment Agreement originally executed October 15, 2012 between the Company and Swingplane Ventures Inc. Refer to Note 3 – Mineral Property Option Agreements.

On January 31, 2013, the Company effected a 100 for 1 stock split effectively increasing the issued and authorized share capital from 5,000 to 5,000,000 shares, and reducing the par value per share from $10 to $0.01 per share.

On February 15, 2013, the Company and its stockholders executed the Share Exchange Agreement with Swingplane Ventures, Inc., and on February 20, 2013, the agreement closed and the Company became a wholly owned subsidiary of Swingplane Ventures, Inc.

Swingplane Ventures, Inc. - FORM 8-K - EX-99.1 - AUDITED FINANCIAL STATEMENTS OF MID AMERICAS CORP. - February 25, 2013

Attached files

Swingplane Ventures, Inc. Reports