Unknown;Stephen M. Fleming;Evan J. Costaldo;
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
placeCityWASHINGTON, StateD.C. PostalCode20549
FORM 10-K/A
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[X] | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED MARCH 31, 2010 |
[_] | TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO __________ |
BRAZOS INTERNATIONAL EXPLORATION, INC.
(exact name of registrant as specified in charter)
placeStateNEVADA 000-53336 01-0884561_______
State or other jurisdiction Commission File No. IRS Employer Identification No.
InPersonNamecorporation or organization
addressStreet2818 FORT HAMILTON PARKWAY CityBROOKLYN, StateNYPostalCode11218
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 917.586.2118
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: None
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 [_]
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements inPersonNamecorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]
State issuer’s revenues for its most recent fiscal year: $0.00
The aggregate market value of the voting and non-voting common equity held by non-affiliates, computed by reference to the average bid and asked price of such common equity, as of March 31, 2010 is $51,000.
As of March 31, 2010, the issuer had 20,400,000 outstanding shares of Common Stock.
Transitional Small Business Disclosure Format (check one): Yes [X] No [ ]
BRAZOS INTERNATIONAL EXPLORATION, INC.
FORM 10-K/A
For the Fiscal Year Ended March 31, 2010
TALE OF CONTENTS
NOTE: The financial statements contained in this Report on Form 10K/A have been restated to correct errors in the dates that shares were issued and the indicated adjustments in the Statements of Operations and Cash Flows.
Part I
FORWARD-LOOKING INFORMATION
This Annual Report of Brazos International Exploration, Inc on Form 10-K contains forward-looking statements, particularly those identified with the words, "anticipates," "believes," "expects," "plans," “intends”, “objectives” and similar expressions. These statements reflect management's best judgment based on factors known at the time of such statements. The reader may find discussions containing such forward-looking statements in the material set forth under "Legal Proceedings" and "Management's Discussion and Analysis and Plan of Operations," generally, and specifically therein under the captions "Liquidity and Capital Resources" as well as elsewhere in this Annual Report on Form 10-K. Actual events or results may differ materially from those discussed herein.
ITEM 1: DESCRIPTION OF BUSINESS
We were inPersonNamecorporated in the State of placeStateNevada on January 11, 2007. Our principal offices are located at addressStreet1660 N W 19th Avenue, CityPompano Beach, StateFlorida PostalCode33069
We intended to be in the business of mineral property exploration. We had an option to acquire a 100% interest in the mining claims comprising the Lac Dube claims, located approximately 200 km northwest and 65-70 km northeast of placeCityMontreal and Mont-Laurier, respectively. The property, which consists of 16 contiguous mining claims (940.04 ha), is situated in the PlaceNameFranchere PlaceTypeTownship (NTS Map 31J/15) in southwestern placeStateQuebec. The property is easily accessible by provincial highways, paved and all-weather gravel roads from major centers of StateQuebec (CityMontreal) and StateQuebec (placeCityOttawa).
We acquired the option from Mr. Michael Carr of placeCityCalgary, StateAlberta.
Due to lack of viable deposits on the mineral claims the Company has abandoned the pursuit and exploration of the mineral claims offered by Mr. Carr. As of March 2, 2010, the Company has issued 500,000 shares of its common stock and paid $5,000 towards the claims option and these amounts have been expensed as exploration costs.
As a result of our decision to not proceed with further efforts on the Lac Dube claims, our management is seeking other opportunities. These opportunities include investigating other potential mineral properties as well as non-mineral business ventures that may be seeking a business combination.
Employees
We currently have no full-time employees including our CEO and Principal Accounting Officer.
Research & Development
We have incurred no research and development costs, since inception.
ITEM 1 A: RISK FACTORS
An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
Our current operating funds are totally depleted. As of March 31, 2010 we had cash in the amount of $22. We currently do not have any operations and we have no income.
Should we find an alternate mineral property, significant expenses will be incurred in connection with the exploration. We do not currently have sufficient funds to continue in business and will be entirely dependent on loans or further equity investments from officers, directors and shareholders. Any sale of share capital will result in dilution to existing shareholders.
BECAUSE WE HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF BUSINESS FAILURE.
We were inPersonNamecorporated on January 11, 2007 and have been involved primarily in organizational activities and the acquisition of our mineral property. We have not earned any revenues as of the date of this prospectus. Potential investors should be aware of the difficulties normally encountered by new small “micro-cap” ventures and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the organization, infrastructure and implementation of a new business plan of any kind.
There is limited history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.
WE NEED TO CONTINUE AS A GOING CONCERN IF OUR BUSINESS IS TO SUCCEED.
Our independent accountant’s report to our audited financial statements for the period ended March 31, 2010, indicates that there are a number of factors that raise substantial doubt about our ability to continue as a going concern. Such factors identified in the report are our accumulated deficit since inception, our failure to attain profitable operations and our dependence upon obtaining adequate financing to pay our liabilities. If we are not able to continue as a going concern, it is likely investors will lose their investments.
BECAUSE MANAGEMENT HAS NO TECHNICAL EXPERIENCE IN MINERAL EXPLORATION, OUR BUSINESS HAS A HIGHER RISK OF FAILURE.
Our directors do not have any technical training in the field of geology. As a result, we may not be able to recognize and take advantage of potential acquisition and exploration opportunities in the sector without the aid of qualified geological consultants. As well, with no direct training or experience, our management may not be fully aware of the specific requirements related to working in this industry. Their decisions and choices may not be well thought out and our operations and ultimate financial success may suffer irreparable harm as a result. Should we be forced to consider an alternative course of action and/or a business combination our officers and directors may well face the same type of problem in evaluating any new business opportunity.
BECAUSE OUR DIRECTORS HAVE OTHER BUSINESS INTERESTS, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATIONS, CAUSING OUR BUSINESS TO FAIL.
Our president, Mr. Weiss intends to devote about 10 hours per week to our business affairs. It is possible that the demands on Mr. Weiss from other obligations could increase with the result that he would no longer be able to devote sufficient time to the management of our business. In addition, Mr. Weiss may not possess sufficient time for our business if the demands of managing our business increased substantially beyond current levels.
Risks Relating to Our Common Stock :
If A Market For Our Common Stock Does Not Develop, Shareholders May Be Unable To Sell Their Shares.
There is currently no market for our common stock and we can provide no assurance that a market will develop. We currently plan to apply for listing of our common stock on the over the counter bulletin board upon the effectiveness of the registration statement, of which this prospectus forms a part. However, we can provide investors with no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize. If no market is ever developed for our shares, it will be difficult for shareholders to sell their stock. In such a case, shareholders may find that they are unable to achieve benefits from their investment.
If We Fail to Remain Current in Our Reporting Requirements, We Could be Removed From the OTC Bulletin Board Which Would Limit the Ability of Broker-Dealers to Sell Our Securities and the Ability of Stockholders to Sell Their Securities in the Secondary Market.
Companies trading on the OTC Bulletin Board, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.
Authorization of preferred stock.
Our Certificate of InPersonNamecorporation authorizes the issuance of up to 5,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Although we have no present intention to issue any shares of our authorized preferred stock, there can be no assurance that the Company will not do so in the future.
The Shares are an illiquid investment and transferability of the Shares is subject to significant restriction
There are substantial restrictions on the transfer of the Shares. Therefore, the purchase of the Shares must be considered a long-term investment acceptable only for prospective investors who are willing and can afford to accept and bear the substantial risk of the investment for an indefinite period of time. There is not a public market for the resale of the Shares. A prospective investor, therefore, may not be able to liquidate its investment, even in the event of an emergency, and Shares may not be acceptable as collateral for a loan.
Our Common Stock is Subject to the "Penny Stock" Rules of the SEC and the Trading Market in Our Securities is Limited, Which Makes Transactions in Our Stock Cumbersome and May Reduce the Value of an Investment in Our Stock.
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
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| · | that a broker or dealer approve a person's account for transactions in penny stocks; and |
| · | the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. |
In order to approve a person's account for transactions in penny stocks, the broker or dealer must:
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| · | obtain financial information and investment experience objectives of the person; and |
| · | make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. |
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:
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| · | sets forth the basis on which the broker or dealer made the suitability determination; and |
| · | that the broker or dealer received a signed, written agreement from the investor prior to the transaction. |
Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
ITEM 2: PROPERTIES.
We maintain our principal office at addressStreet1660 N W 19th Avenue, CityPompano Beach, StateFlorida PostalCode33069
Our telephone number: 917.586.2118 F: 516.977.1209
These facilities are provided at no charge as a temporary office and mailing address by an officer and director. As of March 31, 2010 we have no other property.
ITEM 3: LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse affect on our business, financial condition or operating results.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
OTC Bulletin Board Considerations
The Company’s common stock is currently traded on the Over the Counter Bulletin Board (“OTCBB”). To be quoted on the OTCBB, a market maker must file an application on our behalf in order to make a market for our common stock. Trading of our common stock is limited.
52 Week Low $0.01 High: $0.45
Holders
As of March 31, 2010, the approximate number of stockholders of record of the Common Stock of the Company was 38.
Dividends
We have not declared any dividends.
Equity Compensation Plan Information
We do not have any equity compensation plan as of the date of this report.
Recent sales of unregistered securities
We completed an offering of 3,500,000 shares of our common stock at a price of $0.01 per share to 35 purchasers from May through December, 2007.
On August 12, 2008 we issued 600,000 shares of our common stock to Mr. PersonNameDavid Keating our former president and CEO and 500,000 shares of our common stock to Mr. Mathew Elsner. Mr. Keating is our former president and Chief Executive Officer, our Treasurer and Principal Accounting Officer and director and has been replaced by Samuel Weiss, and Mr. Elsner remains our Secretary and Director. Mr. Keating and Mr. Elsner acquired these shares at a deemed price of $0.001 per share for total amount $1,100.00 for the time, effort and expense of organizing the company. These shares were issued pursuant to Section 4(2) and Regulations S of Rule 506 of the Securities Act of 1933 (the "Securities Act") and are restricted shares as defined in the Securities Act.
We issued 500,000 shares of our common stock to Mr. Michael Carr at a price of $0.01 on August 12, 2008 as partial payment for our Lac Dube claims.
On September 15th 2009, the company executed a 4 for 1 forward stock split to bring the number of issued and outstanding shares of the Company’s common stock to 20,400,000.
ITEM 6: SELECTED FINANCIAL DATA
Not applicable.
ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information should be read in conjunction with the consolidated financial statements and the notes thereto contained elsewhere in this report. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Information in this Item 7, "Management's Discussion and Analysis or Plan of Operation," and elsewhere in this 10-K that does not consist of historical facts, are "forward-looking statements." Statements accompanied or qualified by, or containing words such as "may," "will," "should," "believes," "expects," "intends," "plans," "projects," "estimates," "predicts," "potential," "outlook," "forecast," "anticipates," "presume," and "assume" constitute forward-looking statements, and as such, are not a guarantee of future performance. The statements involve factors, risks and uncertainties including those discussed in the “Risk Factors” section contained elsewhere in this report, the impact or occurrence of which can cause actual results to differ materially from the expected results described in such statements. Risks and uncertainties can include, among others, fluctuations in general business cycles and changing economic conditions; changing product demand and industry capacity; increased competition and pricing pressures; advances in technology that can reduce the demand for the Company's products, as well as other factors, many or all of which may be beyond the Company's control. Consequently, investors should not place undue reliance on forward-looking statements as predictive of future results. The Company disclaims any obligation to update the forward-looking statements in this report.
Overview
The registrant’s original plan was to explore and hopefully establish a commercially viable mineral deposit on the Lac Dube claims in the PlaceTypeprovince of PlaceNameQuebec, placecountry-regionCanada. In February of 2009 management decided to drop those claims. We have been seeking other exploration opportunities with very limited success. The rebound in the prices of gold, silver, platinum and uranium have put a unrealistic premium on the asking prices decent prospects.
Our plan of operation is to continue to seek exploration prospects at a reasonable price and failing acquisition of an project that meets our criteria, seek other business opportunities. We are also considering seeking business associates that have the financial strength and/or the access to outside funding.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Brazos International Exploration, Inc. (an Exploration Stage Company)
We have audited the accompanying balance sheets of Brazos International Exploration, Inc. (an Exploration Stage Company) (the Company) as of March 31, 2010 and 2009, and the related statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended March 31, 2010 and for the period from January 11, 2007 (date of inception) to March 31, 2010. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (placecountry-regionUnited 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. 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 effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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 audits provide 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 Brazos International Exploration, Inc. (an Exploration Stage Company) as of March 31, 2010 and 2009, and the results of its operations and its cash flows for each of the years in the two-year period ended March 31, 2010 and for the period from January 11, 2007 (date of inception) to March 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 5 to the financial statements, the Company has incurred losses since inception and has not been successful in establishing profitable operations, raising substantial doubt about its ability to continue as a going concern. Management’s plans in regards to these matters are also discussed in Note 5. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
s/Madsen & Associates CPA’s, Inc.
Madsen & Associates CPA’s, Inc.
placeCitySalt Lake City, StateUtah PostalCode84107
July 7, 2010
BRAZOS INTERNATIONAL EXPLORATION, INC.
(an Exploration Stage Company)
BALANCE SHEETS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
F-2
BRAZOS INTERNATIONAL EXPLORATION, INC.
(an Exploration Stage Company)
STATEMENTS OF OPERATIONS
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| From |
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| January 11, |
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| 2007 |
| For the | For the | (Date of |
| year | year | inception) |
| ended | ended | to |
| Mar 31, | Mar 31, | Mar 31, |
| 2010 | 2009 | 2010 |
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Revenue: | $ - | $ - | $ - |
Total Revenue | - | - | - |
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Operating Expenses: |
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Exploration costs | - | 5,500 | 19,582 |
General & administrative | 22,469 | 10,206 | 43,210 |
Total Operating Expenses | 22,469 | 15,706 | 62,792 |
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NET LOSS | $ (22,469) | $ (15,706) | $ (62,792) |
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Weighted Average Shares |
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Common Stock Outstanding | 20,400,000 | 20,400,000 |
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Net Loss Per Share |
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(Basic and Fully Dilutive) | $ (0.00) | $ (0.00) |
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
F-3
BRAZOS INTERNATIONAL EXPLORATION, INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
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| From |
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| January 11, |
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| 2007 |
| For the | For the | (Date of |
| year | year | inception) |
| ended | ended | to |
| Mar 31, | Mar 31, | Mar 31, |
| 2010 | 2009 | 2010 |
Operating Activities: |
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Net Loss | $ (22,469) | $ (15,706) | $ (62,792) |
Adjustments to reconcile net (loss) |
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Issuance of stock for services rendered | - | 1,100 | 1,100 |
Issuance of stock for exploration claims | - | 500 | 500 |
Increase (Decrease) in Accounts payable | 22,464 | 3,750 | 26,214 |
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Net Cash Used in Operating Activities | (5) | (10,356) | (34,978) |
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Investing Activities: | - | - | - |
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Financing Activities: |
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Issuance of common stock for cash | - | - | 35,000 |
Net Cash Provided by Financing Activities | - | - | 35,000 |
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Net Increase (Decrease) in Cash | (5) | (10,356) | 22 |
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Cash at Beginning of Period | 27 | 10,383 | - |
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Cash at End of Year | $ 22 | $ 27 | $ 22 |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
F-4
BRAZOS INTERNATIONAL EXPLORATION, INC.
(an Exploration Stage Company)
Statements of Stockholders' Equity (Deficit)
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Preferred Stock | Common Stock |
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5,000,000 shares | 70,000,000 shares |
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authorized | authorized |
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| accumulated |
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| Par Value | Additional | Stock | during the |
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Shares | $.001 per | Shares | $.001 per | Paid-In | Subscription | exploration |
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Issued | share | Issued | share | Capital | Receivable | stage | Total |
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Issuance of shares at $.001 per share | - | $ - | 2,400,000 | $ 2,400 | $ (1,800) | $ - | $ (600) | $ - |
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Issuance of common stock at $.001 per |
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| 2,000,000 | 2,000 | (1,500) |
| (500) | - |
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| - |
Issuance of common stock at $.001 per |
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| 2,000,000 | 2,000 | (1,500) |
| (500) | - |
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Issuance of common stock for cash at |
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| 14,000,000 | 14,000 | 21,000 |
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| 35,000 |
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| - |
Net Income (loss) |
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| (24,617) | (24,617) |
| - | - | 20,400,000 | 20,400 | 16,200 | - | (26,217) | 10,383 |
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Net Income (loss) |
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| (14,106) | (14,106) |
| - | - | 20,400,000 | 20,400 | 16,200 | - | (40,323) | (3,723) |
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Net Income (loss) |
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| (22,469) | (22,469) |
| - | - | 20,400,000 | 20,400 | 16,200 | - | (62,792) | (26,192) |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
F-5
BRAZOS INTERNATIONAL EXPLORATION, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – NATURE AND PURPOSE OF BUSINESS
Brazos International Exploration, Inc. (the “Company”) was inPersonNamecorporated under the laws of the State of placeStateNevada on January 11, 2007. The Company’s activities to date have been limited to organization and capital formation. The Company is an exploration stage company and is attempting to acquire a series of mining claims for exploration and has formulated a business plan to investigate the possibilities of viable mineral deposits. The Company has adopted March 31 as its fiscal year end.
NOTE 2 – NATURE OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents.
REVENUE RECOGNITION
The Company considers revenue to be recognized at the time the service is performed.
USE OF ESTIMATES
The preparation of the Company’s financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company’s short-term financial instruments consist of cash and cash equivalents and accounts payable. The carrying amounts of these financial instruments approximate fair value because of their short-term maturities. Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash. During the year the Company did not maintain cash deposits at financial institution in excess of the $100,000 limit covered by the Federal Deposit Insurance Corporation. The Company does not hold or issue financial instruments for trading purposes nor does it hold or issue interest rate or leveraged derivative financial instruments.
ADVERTISING
As of March 31, 2010, we have incurred no advertising costs.
F-6
BRAZOS INTERNATIONAL EXPLORATION, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
EARNINGS PER SHARE
Basic Earnings per Share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year. Diluted EPS is computed by dividing net income available to common stockholders by the weighted-average number of common stock shares outstanding during the year plus potential dilutive instruments such as stock options and warrant. The effect of stock options on diluted EPS is determined through the application of the treasury stock method, whereby proceeds received by the Company based on assumed exercises are hypothetically used to repurchase the Company’s common stock at the average market price during the period. Loss per share is unchanged on a diluted basis since the assumed exercise of common stock equivalents would have an anti-dilutive effect. The Company does not have any common stock equivalents, therefore basic and diluted EPS are the same.
INCOME TAXES:
The Company uses the asset and liability method of accounting for income taxes. This method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of certain assets and liabilities. Deferred income tax assets and liabilities are computed annually for the difference between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities.
Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of the assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. The Company had no significant deferred tax items arise during any of the periods presented.
The Company has incurred net operating losses since inception of $62,792. The related deferred tax asset of approximately $21,000 has been fully offset by a valuation allowance. The net operating losses begin to expire in the year 2027.
CONCENTRATION OF CREDIT RISK:
The Company does not have any concentration of related financial credit risk.
RECENT ACCOUNTING PRONOUNCEMENTS:
The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact to its financial statements.
F-7
BRAZOS INTERNATIONAL EXPLORATION, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 3 – MINERAL CLAIMS
On March 19, 2007, the Company entered into an agreement to acquire an option from Michael Carr which gives the Company the right to acquire a 100% undivided interest in certain mineral claims. The price of the option is $26,500 (due by March 24, 2009) and the issuance of 2,000,000 shares of the Company’s common stock to Mr. Carr. During the option period, the Company has the right to explore and test the mineral claims to determine if there are viable deposits. As of the balance sheet date, the Company has issued 2,000,000 shares to Mr. Carr, and has paid $5,000 as partial payment for these claims.
NOTE 4 – COMMON STOCK
From May through December 2007, the Company issued 14,000,000 shares of common stock for $35,000 cash.
On August 18, 2008, the Company issued 4,400,000 shares of common stock to its President and Secretary, valued at $1,100, for services provided to the Company.
Also, on August 18, 2008, the Company issued 2,000,000 shares of common stock to Michael Carr as partial payment for the acquisition of mineral claims (see Footnotes 3 and 6). These shares were valued at $.00025 per share for a total value of $500, which has been recorded as exploration costs in the financial statements.
On September 15, 2009, the Company executed a 4 for 1 forward stock split to bring the number of issued and outstanding shares of the Company’s common stock to 20,400,000. All common stock references in these financial statements have been retroactively adjusted for this stock split.
NOTE 5 – GOING CONCERN
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has no sales and has incurred a net loss of $ 62,792 since inception. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its mineral properties. Management has plans to seek additional capital through a private placement and public offering of its common stock. The financial statements do not include any adjustments relating to the recoverability and classifications of recorded assets, or the amounts of and the classification of liabilities that might be necessary in the event the Company cannot continue in existence.
NOTE 6 – SUBSEQUENT EVENTS
On May 28, 2010, the registrant entered into a services agreement (the “Agreement”) with Renfro Holdings, Inc. (“Renfro”) whereby Renfro will assist the Company in acquiring oil and gas companies by locating the appropriate candidates for acquisition, including Renfro Energy LLC (the “Services”). In consideration for providing the Services and a conditional option to acquire all of the units of Renfro Energy LLC (pending the delivery and approval of audited financial statements, the Company issued to Renfro 24,000,000 shares of common stock, $0.001 par value per share. The issuance of these shares constitutes a change in control.
F-8
BRAZOS INTERNATIONAL EXPLORATION, INC.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
These shares were valued using the prices normally paid for related services and the conditional option which was $ 24,000 or $ 0.001 per share. This amount will be recognized over the term of the services agreement, which is one year. The Company has evaluated subsequent events through July 1, 2010, which is the date these financial statements were issued.
F-9
ITEM 9: CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE
(a)
On August 6, 2009 the Board of Directors of the Registrant dismissed Moore & Associates Chartered, its independent registered public accounting firm. On the same date, August 6, 2009, the accounting firm of Madsen & Associates, CPAs Inc. was engaged as the Registrant’s new independent registered public accounting firm. The Board of Directors of the Registrant and the Registrant's Audit Committee approved of the dismissal of Moore & Associates Chartered and the engagement of Madsen & Associates, CPAs Inc. as its independent auditor. None of the reports of Moore & Associates Chartered on the Company's financial statements for either of the past two years or subsequent interim period contained an adverse opinion or disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles, except that the Registrant's audited financial statements contained in its Form 10-K for the fiscal year ended March 31, 2010 had a going concern qualification in the registrant's audited financial statements.
The PCAOB has revoked the registration of Moore and Associates Chartered, on August 27th , 2009 because of violations of PCAOB rules and quality controls standards, and section 10(b) of the securities exchange act of 1934and rule 10b-5theereunder, and non cooperation with a board investigator.
During the registrant's two most recent fiscal years and the subsequent interim periods thereto, there were no disagreements with Moore and Associates, Chartered whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Moore and Associates, Chartered's satisfaction, would have caused it to make reference to the subject matter of the disagreement in connection with its report on the registrant's financial statements.
b)
On August 6, 2009, the registrant engaged Madsen & Associates, CPAs Inc. as its independent accountant. During the two most recent fiscal years and the interim periods preceding the engagement, the registrant has not consulted Madsen & Associates, CPAs Inc. regarding any of the matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-B.
c) Subsequent to the dismissal of Moore and Associates, Chartered the registrant engaged its new principal accountants to re-audit its finances from inception through March 31, 2009.
ITEM 9A (T): CONTROLS & PROCEDURES
MANAGEMENT’S placeCityREPORT StateON INTERNAL CONTROL OVER FINANCIAL REPORTING
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the applicable period to ensure that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Our Chief Executive Officer and Chief Financial Officer concluded our disclosure controls and procedures were effective for the reporting period ending March 31, 2010.
Managements Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
| · | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of our assets; |
| · | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
| · | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations and provide only reasonable assurance, not absolute assurance, with respect to financial statement preparation and presentation. The design of an internal control system reflects resource constraints and the benefits must be considered relative to the costs of implementing and maintaining the system.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2009. This assessment was based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment, we believe that as of March 31, 2010 the Company’s internal control over financial reporting was effective based on those criteria.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal controls over financial reporting during the year ended March 31, 2010 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART III
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers:
Directors, Executive Officers, Promoters and Control Persons
Our executive officers and directors and their respective ages as of March 31, 2010 are as follows:
Name of Director Age
Samuel Weiss
54
Mathew Elsner 40*
Executive Officers:
Name of Officer
Samuel Weis
Samuel Weiss , President, Treasurer, Chief Executive Officer and Principal Accounting Officer
* Mathew Elsner , Secretary. Mr. Elsner resigned as Secretary of the Company in August 2010.
Set forth below is a brief description of the background and business experience of each of our executive officers and directors for the past five years.
Samuel Weiss, President, Treasurer Chief Executive Officer and Principal Accounting Officer
An attorney practicing in the State of PersonNamePersonNameNew York, Mr. Weiss was admitted to the bar in 1974. He received his BA degree from PersonNameNew York PersonNameUniversity in 1971, his Juris Doctor from PersonNamePersonNameNew York PersonNameUniversity in 1974 and his LLM in taxation from the same institution in 1977. He is a partner in the firm of Weiss and Federici LLP now located in PersonNamePersonNamePort Washington, PersonNameNew York.
Mathew Elsner, Secretary
EDUCATION:
9/02 – 5/04 BARUCH COLLEGE, Zicklin PersonNamePersonNameSchool of Business, PersonNameNew York, NY
Full-Time Honors Program
Master of Business Administration, June 2004
Concentration: Marketing
·
Jack Nash Scholar– 3.7 GPA (4.0 GPA for marketing coursework)
·
Founder and President,Corporate Responsibility, Ethics, and Governance Association
·
Co-author,Baruch Student Guide to Academic Integrity
PersonNameNEW YORK PersonNameUNIVERSITY, PersonNameCollege of PersonNameArts and Sciences, PersonNamePersonNameNew York, PersonNameNY
Bachelor of Arts, May 1995
Concentrations: International Politics, History
Dean’s List
11/07 – PRES. INDEPENDENT CONSULTANT (MARKETING AND MANAGEMENT)
7/07 – 11/07 PR NEWS WIRE
7/06 – 7/07 INDEPENDENT CONSULTANT (MARKETING
7/04 – 7/06 SHOWTIME NETWORKS INC.
Senior Manager, Point of PersonNamePersonNameSale Marketing/Training
12/03-5/04 PersonNamePersonNameINTERNATIONAL PersonNameCENTER FOR CORPORATE ACCOUNTABILITY, INC.
PersonNamePersonNameNew York, PersonNameNYSenior Research Associate
6/03-8/03 PEACEWORKS, LLP.
PersonNamePersonNameNew York, PersonNameNYPublic Relations/Marketing Maven (Summer MBA Internship)
Term of Office
Our directors have been appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
Security Ownership of Certain Beneficial Owners And Management
The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding common stock as of the date of this prospectus, and by the officers and directors, individually and as a group as at March 6, 2010. Except as otherwise indicated, all shares are owned directly.
Title of Name and address beneficial Percent
Class of beneficial owner ownership of class
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Common | PersonNameDavid Keating PersonNamePersonName2818 Fort Hamilton Parkway PersonNamePersonNameBrooklyn, PersonNameNY PersonName11218 | 2,400,000 | 11.76 |
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Common | Mathew Elsner PersonNamePersonName92 Newel Street PersonNamePersonNameBrooklyn, PersonNameNY | 2,000,000 | 9.80 |
The percent of class is based on 20,400,000 shares of common stock issued and outstanding as of the date of this filing.
All directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified.
Officers are elected by the Board of Directors and serve until their successors are appointed.
Code of Ethics
We have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have not adopted such a code of ethics because all of management's efforts have been directed to building the business of the Company. A code of ethics may be adopted by the board of directors at a later date.
Committees of the Board of Directors
We presently do not have any committees of the Board of Directors. However, our board of directors intends to establish various committees at a later time.
ITEM 11: EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the named executive officers for the fiscal years ended October 31, 2007 and March 31, 2010.
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Name and Principal Position (1) | Fiscal Year | Annual Salary ($) | Annual Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non-qualified Deferred Compensation ($) | All Other Compensation | Total ($) (4) |
Samuel Weiss CEO, President, Director | 2009 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
| 2010 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | -0- |
Mathew Elsner CFO, Director | 2009 2010 | -0- -0- | -0- -0- | -0- -0- | -0- -0- | -0- -0- | -0- -0- | -0- -0- | -0- -0- |
The Company did not pay salaries to directors or officers during the 2008 and 2009 fiscal years. The also company did not grant any plan-based compensation awards during the 2008 or 2009 fiscal year.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no transactions, or proposed transactions, which have materially affected or will materially affect us in which any director, executive officer or beneficial holder of more than 5% of the outstanding common stock, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest. We have no policy regarding entering into transactions with affiliated parties.
ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees
Our independent registered public accounting firm billed us $ 6,000 during the fiscal year ended March 31, 2010 and $16,955 during the fiscal year ended March 31, 2009 for audit related services.
Tax Fees
Our independent registered public accounting firm billed us $0 for tax related work during fiscal years ended March 31, 2010, and billed us $ 0.00 for tax related work during the fiscal year ended March 31, 2008.
PART IV
ITEM 15: EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES
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Exhibit No. | Description |
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3.1 * | Articles of InPersonNamecorporation (filed as exhibit to S-1 filed on June 2, 2008) |
3.2 * | Bylaws of the Company (filed as exhibit to S-1 filed on June 2, 2008) |
10.1 * | Claims Purchase Agreement (filed as exhibit to SB-1 filed on June 2, 2008) |
23.1 * | Auditor’s consent |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended. |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the Securities and Exchange Act of 1934, as amended. |
32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer). |
32.2 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer). |
* Previously filed
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized onMarch 9, 2011
BRAZOS INTERNATIONAL EXPLORATION INC.
/s/ Samuel Weiss
By: Samuel Weiss
Chairman, President and Chief Executive Officer
(Principal Executive, Financial and Accounting Officer)
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
March 9,2011
BRAZOS INTERNATIONAL EXPLORATION, INC.
/s Samuel Weiss
By: Samuel Weiss
Chairman, President and Chief Executive Officer
(Principal Executive, Financial and Accounting Officer)
/s/James R. Renfro
James R. Renfro
Director
