Item 1. Financial Statements.
PROSPERO MINERALS CORP.
Yearly Report on Form 10-K for the
Period Ending March 31, 2008
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Prospero Minerals Corp.’s unaudited financial statements for the year ended March 31, 2007 are included with this Form 10-K. The unaudited financial statements for the year ended March 31, 2007 include:
Condensed Consolidated Balance Sheets:
March 31, 2007 and March 31, 2008
Condensed Consolidated Statements of Losses:
Twelve Months Ended March 31, 2007 and 2008
For the Period July 23, 2002 (Date of Inception) through March 31, 2008
Condensed Consolidated Statements of Deficiency in Stockholders’ Equity
For the period July 23, 2002 (Date of Inception) through March 31, 2008
Condensed Consolidated Statements of Cash Flows:
Twelve Months Ended March 31, 2007 and 2008
For the Period July 23, 2002 (Date of Inception) through March 31, 2008
Notes to Unaudited Condensed Consolidated Financial Information:
March 31, 2008
Item 2.
Item 2. Management’s Plan of Operation.
THE FOLLOWING PRESENTATION OF MANAGEMENT’S PLAN OF OPERATIONS OF PROSPERO MINERALS CORP. SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION INCLUDED HEREIN.
Form 10-K
Prospero Minerals Corp.
Forward Looking Statements
This report on Form 10-K contains certain forward-looking statements within the meaning of Section 21e of the Securities Exchange Act of 1934 , as amended, and other applicable securities laws. All statements other than statements of historical fact are “ forward-looking statements ” for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or explorations; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.
Overview
Prospero was incorporated on July 23, 2002, under the laws of the State of Nevada. Prospero is an exploration stage company engaged in the acquisition and exploration of mineral properties.
On June 20, 2006, Prospero Minerals Corp. announced its name change from “Corumel Minerals Corp.” to “Prospero Minerals Corp.” and increased its authorized capital.
On March 28, 2003, Prospero entered into a Property Acquisition Agreement whereby it purchased a 100% interest in six mineral claims known as the Thor Group mineral claims. The Thor Group mineral claims are located near Harrison Lake in the New Westminster Mining Division of the Province of British Columbia.
After Prospero acquired the Thor Group mineral claims it incorporated a wholly owned subsidiary known as CMC Exploration Corporation (“CMC”), a British Columbia corporation, which was formed for the purpose of carrying out Prospero’s mineral exploration program. Upon forming CMC, Prospero transferred all of its 100% ownership interest in the Thor Group mineral claims to CMC.
Prospero has not, nor has any predecessor, identified any commercially exploitable reserves of minerals on the Thor Claims. There is no assurance that a commercially viable mineral deposit exists on Prospero’s mineral properties.
On October 31, 2006 Prospero Minerals completed the acquisition from Cavitation Concepts Corporation of all of the assets pertaining to Cavitations’ water purification business. In exchange for the assets, Prospero Minerals issued 10 million shares of its common stock to Cavitation Concepts Corporation. The parties valued the shares at $1,000. based on their assessment of the fair value of the transferred assets.
The sale of the shares by Prospero Minerals to Cavitations Concepts was exempt pursuant to Section 4(2) of the Securities Act since the sale was not made in a public offering and was made to an entity whose principals had access to detailed information about Prospero Minerals and which was acquiring the shares for its own account. There were no underwriters.
On February 26, 2008 Prospero Minerals Corp. announced its first venture into the real estate market with an acquisition and resort development in Rum Cay, Bahamas through its major shareholder Cavitation Concepts Corporation Limited.
The property in Rum Cay will become a development of over 2,500 acres at an estimated value of $300,000 million dollars. PSPO, through Cavitation Concepts Corporation Limited, will work together with the owners of the property, New Port Harbour Limited to develop the property in accordance to the Plans being submitted to The Bahamas Government. This entire development program will be done by Rum Cay Resort Holdings Limited as the developer of the property. New Port Harbour Limited will assist in sales transactions and/or its use in procuring funds for the development of initially $100,000,000. This will be used through the utilization of the shares and assets of Cavitation Concepts Corporation Limited, a major shareholder of Prospero Minerals.
This acquisition, along with the New Cavitation Technology and proposed Health Care Facilities, soon to be developed in the Caribbean, now places Cavitation Concepts Corporation Limited and Prospero Minerals Corp. in a unique position to expand into the tourism, Real Estate sales and construction business.
To improve the balance in the expanding business areas, as of February 26, 2008, Prospero Minerals also reported a reorganization of the Board of Directors. As a result of a Board of Directors meeting, the following changes to the board were announced: Ms. Etoile Pinder, currently the CEO/Secretary will step down from these executive duties and will remain as a Director, Officer and Secretary of the Company and Mr. James A. Cercone has been elected to the Board of Directors and will assume the position of CEO.
Form 10-K
Prospero Minerals Corp.
Acquisition of the Thor Group mineral claims
Prospero purchased Thor Group mineral claims from William A. Howell, a graduate geologist, for his out-of-pocket costs incurred in staking and registering the claims. Prospero agreed to leave the claims registered in Mr. Howell’s name for reasons of convenience in the reporting of exploration work done on the claims.
Prospero launched an initial exploration program at a cost of approximately $7,500. Mr. Howell governed the initial exploration program operations conducted on the Thor Group mineral claims. As operator, Mr. Howell had the full right, power and authority to do everything necessary or desirable to carry out the program and the project and to determine the manner of exploration of the property. As the operator throughout the initial exploration program, Mr. Howell earned a 15% undivided interest in the Thor Group mineral claims as partial compensation for his services.
If after the initial exploration phase further exploration programs are recommended and Mr. Howell remains as the operator throughout the initial phase, the Property Acquisition Agreement requires that Prospero and a sole purpose company to be formed by Mr. Howell enter into a formalized joint venture. The purpose of the joint venture will be to further explore the property containing the Thor Group mineral claims with the eventual goal of putting the property into commercial mining production should both a feasibility report recommending commercial production be obtained and a decision to commence commercial production be made. The feasibility report refers to a detailed written report of the results of a comprehensive study on the economic feasibility of placing the property or a portion of the property into commercial mining production.
The work carried out during Phase I confirmed the presence of highly altered zones that, although not strongly mineralized, are of significant size and are worthy of diamond drilling. A drill program was proposed in the final report, consisting of drilling four holes x 100 meters each, IP surveys (6 mines), geological supervision and reporting, mobilization and demobilization, for a total estimated cost of $70,000. The purpose of these drill holes is for geological information concerning the nature of the altered and mineralized zones. Also additional infrared polarization surveys are recommended, following which the drilling plan should be reviewed.
As a result of a lack of funding, Prospero has been dormant and thus, no further work has been conducted or completed on the Thor Claims.
Results of Operations
Prospero did not earn any revenues from inception through the reporting period ending March 31, 2007. Prospero does not anticipate earning revenues until such time as it has entered into commercial production of its mineral properties and sale 0f its potable water products and the development of its Resort and other technologies as outlined in the Management Proposal for Operations during the first quarter of 2008.. Prospero has deferred the proposed drilling program on the Thor Group mineral claims until it has sufficient funding to proceed. Prospero has not yet determined whether the results of Phase 1 claims of the mineral exploration program on the Thor Group mineral are sufficiently positive to enable Prospero to proceed with further exploration programs. Prospero can provide no assurance that it will discover commercially exploitable levels of mineral resources on its properties, or if such resources are discovered, that Prospero will enter into commercial production of its mineral properties.
Prospero incurred expenses in the amount of $639,220, for the twelve month period March 31, 2008. From the period on inception on July 23, 2002 to March 31, 2008, Prospero incurred expenses in the amount of $2,993,823. These operating expenses were primarily related to professional fees in connection with Prospero’s corporate organization relating to audit fees and legal fees. Prospero anticipates its operating expenses will increase as it undertakes its plan of operations, provided further exploration is recommended. This increase will be attributable to further geological exploration and the professional fees associated with complying with the reporting requirements under the Securities Exchange Act of 1934 .
Prospero incurred a loss in the amount of $639,220 for the twelve month period ended March 31, 2008 and a loss in the amount of $2,993,823 for the period from inception of July 23, 2002 through March 31, 2008. Prospero’s loss was entirely attributable to general and administrative expenses, which included operating expenses and professional fees. Prospero did not carry on any work related to the Thor Group mineral claims.
Form 10-K
Prospero Minerals Corp.
Liquidity and Capital Resources
Prospero had cash of $5105 as of March 31, 2008, compared to cash in the amount of $19 as of its fiscal year end on March 31, 2007. Prospero had a working capital deficit of ($2,993,823) as of March 31, 2008, compared to working capital deficit of $2,472,604 as of March 31, 2007. Prospero’s liabilities as of March 31, 2008, total $2,993,823 related to advances from related parties, accounts payable and accrued liabilities, including professional fees for legal and audit services.
Prospero’s independent certified public accountants have stated in their report included in Prospero’s March 31, 2008 Form 10-K, that Prospero has not generated revenues and has incurred operating losses and that Prospero is dependent upon management's ability to develop profitable operations. These factors among others may raise substantial doubt about the Prospero’s ability to continue as a going concern.
Prospero had cash in the amount of $5,105 as of March 31, 2008. Prospero’s total expenditures over the next twelve months are anticipated to be approximately $100 Million dollars. Prospero does have plans to purchase significant equipment and change the number of its employees during this period of time. Accordingly, Prospero will need to obtain additional financing for further property developments of its investments in Pyramid Power and the Safety Bracelet, details of which have already been filed.
Plan of Operation for the Next Twelve Months
Prospero has not had any significant revenues generated from its business operations since inception. Management expects that the revenues generated from its operations for the next 12 months will not be enough for its required working capital. Until Prospero is able to generate any consistent and significant revenue it may be required to raise additional funds by way of equity.
At any phase of its plan of operations set out below, if Prospero finds that it does not have adequate funds to complete a phase, it may have to suspend its operations and attempt to raise more money so it can proceed with its business operations. If Prospero cannot raise the capital to proceed it may have to suspend operations until it has sufficient capital. However, management expects to raise the required funds for the next 12 months through equity financing and with revenues generated from its business operations.
To become profitable and competitive, Prospero needs to have at least one of its Joint Ventures or Property Developments to begin and sustain production. To achieve this goal, management has prepared the following phases for Prospero’s plan of operation for the next 12 months.
Prospero Minerals Corp. through its largest shareholder, Cavitation Concepts Corporation Limited has signed and completed a Joint Venture Proposal using the private label of “MIC” Mechanically Induced Cavitation, which is owned by Prospero Minerals Corp. with Pyramid Power for its Water & Energy Turbine Technology (“WETTECH”).
This Agreement calls for a $1,000,000.00 Licensing Fee along with 5,000,000 shares of non-restrictive Prospero Minerals Corp. stock of which will be funded by Cavitation Concepts Corporation Limited.
The “WETTECH” Water & Energy Turbine Technology operating system is the application system created by combining the “MIC” technology with a wind turbine and a steam turbine, which used together, produces steam from ocean, lake, river, well, or any impure water source, which will purify the water for drinking while the steam turbine generates electricity.
Together, they are working on the following Marketing Strategy:
1-ACT -Advanced Cavitation Technology is built, patent applied for, and working perfectly on a mobile, trailer mounted demonstrator unit currently located in Atlanta, GA.
2-ACT video available on www.pyramidpowersystems.com along with Power Point Presentation of Philosophy, Commitment Statement, Executive Summary, Technology Comparison, National Security Commentary, related new items and applications.
3-ACT is featured as part of the WETTECH - Water & Energy Turbine Technology as used in the Pyramid Power Stewardship System.
4-The agreed strategy is to NOT sell any of the new technology or application systems, but rather, sell only the water and energy products made by Pyramid Power.
Form 10-QK
Prospero Minerals Corp.
5-The plan is to finance the building of each Pyramid Power, power and water production unit, and profit from the sale of power, water, and residual products.
6-We will become an international utility provider of power and water to the world, marketing to and distributing through the existing utility companies, and making environmentally friendly “green” energy at reduced prices.
7-Build a new, larger scale Beta Site in the Bahamas, using the new ACT as featured in the WETTECH - Water & Energy Turbine Technology, powered by the TMA wind turbine, to accurately measure the productions capacities of electricity and pure water.
8-Our plan is to sell Licenses for Profit Sharing Joint Ventures for $1 million to $5 million for each State, Country, territory, or business, depending on the location, population or application.
Mr. Hubert Pinder, CFO of Prospero Minerals Corp. declares “Therefore, instead of using electricity or other environmentally polluting fossil fuels to create the energy to clean water, ‘WETTECH’ systems clean and purify water from any source and produce electricity as a by-product of the process, producing both POWER & WATER.” We first launched this “MIC” technology in February 2003 in Nassau,Bahamas.
The Company has signed a Letter of Intent and Agreement between James L. Griggs a resident of the State of Georgia, USA as a representative for Per Hahne, the owner of certain technologies relating to public security, and air travel safety, i.e. an EMD Safety Bracelet under United States patent number 6,933,851.
The purchase price of sale of the Bracelet technology is Five Million US Dollars ($5,000,000.00), plus other valuable and considerable goods.
Today’s Security has many layers, should those layers fail there is one last line of defense- the EMD Safety Bracelet. Lamperd Less Lethal has entered into a manufacturing agreement to develop and manufacture this product for world wide distribution using our current technology and expert knowledge in this field. This funding by Prospero through Cavitation Concepts Corporation Limited will help develop this new technology; as Lamperd Less Lethal Inc. anticipates tremendous interest and demand as noted by the Homeland Security correspondence.
Lamperd Less Lethal Inc. (Lamperd) is a public company based in Sarnia Ontario Canada that provides training and designs and manufactures specialized civil defense related equipment. This equipment is sold internationally through a network of established distributors. The company’s specific area of expertise is less-lethal tactics and equipment. Less-lethal weaponry is designed to ensure the safety of military and civil defense personnel by disabling an opponent rather than killing. It is used by military and police forces around the world for crowd control, and peacekeeping activities. It is particularly well suited for situations where there would be a likelihood of harm to bystanders if conventional weapons were employed.
Lamperd has developed a line of exceptionally high quality systems, which have gained widespread industry attention for their accuracy, ease of use and flexibility. The company also produces a variety of less lethal munitions, which are rapidly gaining recognition for consistently high quality and superior performance.
The company has been assigned a NATO Commercial and Government Entity (NCAGE) Code, which enables it to sell military supplies to any NATO member country, and a federal Business Firearms License, which allows for the manufacture, repair, storage, import, export and sale of virtually any manner of firearms and ammunition. Lamperd is one of only a very few manufacturers of less-lethal munitions in the world to receive these approvals. As a result of receiving this high level accreditation, the company has the opportunity to significantly increase sales through access to the NATO market.
Form 10-QK
Prospero Minerals Corp.
Critical Accounting Policies
Prospero’s discussion and analysis of its financial condition and results of operations, including the discussion on liquidity and capital resources, are based upon its financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an on going basis, management re-evaluates its estimates and judgments, including but not limited to, those related to revenue recognition and collectibility of accounts receivable. Critical accounting policies identified are as follows:
Exploration Stage Activities
Prospero has been in the base and precious mineral exploration business since its formation. Prospero has now commenced significant operations and is now a multi-faceted business operation and no longer an exploration stage company.
Principles of Consolidation
The consolidated financial statements include Prospero’s accounts and its subsidiary’s. All significant inter-company balances and transactions have been eliminated.
Mineral Property Payments and Exploration Costs
Prospero expenses all costs related to the acquisition, maintenance and exploration of mineral claims in which Prospero has secured exploration rights prior to establishment of proven and probable reserves. To date, Prospero has not established the commercial feasibility of its exploration prospects; therefore, all costs are being expensed.
Reclamation and Abandonment Costs
The Financial Accounting Standards Board (“ FASB ”) issued Statement of Financial Accounting Standards No. 143 (“ SFAS 143 ”), “ Accounting for Asset Retirement Obligations ” which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This statement establishes a uniform methodology for accounting for estimated reclamation and abandonment costs whereby reclamation and closure costs including site rehabilitation will be recorded at the estimated present value of reclamation liabilities and will increase the carrying amount of the related asset. These reclamation costs will be allocated to expense over the life of the related assets and will be adjusted for changes resulting from the passage of time and revisions to either the timing or the amount of the original present value estimate. Prospero’s adoption of SFAS No. 143 did not have a material impact on its operations or financial position.
Internal and External Sources of Liquidity
Prospero has funded its operations primarily from the issuance of common stock and has now entered into Agreements with oher financial institutions to ensure the availability of Capital resources required for the development of all of the Projects that it undertakes in 2008 to enhance the profitability of its operations as a safe,, secure profitable Company with unique products not subject to the ever changing global fluctuations now being experience by Countries throughout the World at the present time.
Inflation
Prospero does not believe that inflation will have a material impact on its future operations.
Off-Balance Sheet Arrangements
Prospero does not have any off-balance sheet arrangements.
Form 10-K
Prospero Minerals Corp.
Item 3.
Item 3. Controls and Procedures
(a)
Evaluation of disclosure controls and procedures.
The term “disclosure controls and procedures” (defined in SEC Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within required time periods. The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer has concluded that, as of the Evaluation Date, such controls and procedures were effective.
(b)
Changes in internal controls.
The term “internal control over financial reporting” (defined in SEC Rule 13a-15(f)) refers to the process of a company that 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. The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated any changes in the Company’s internal control over financial reporting that occurred during the fiscal quarter covered by this quarterly report, and they have concluded that there was no change to the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1.
Legal Proceedings
Prospero is not a party to any pending legal proceedings and, to the best of Prospero’s knowledge, none of Prospero’s assets are the subject of any pending legal proceedings.
Item 2.
Unregistered Sale of Equity Securities and Use of Proceeds
There have been no sales of unregistered securities within the quarter ended September 30, 2006 that would be required to be disclosed pursuant to Item 701 of Regulation S-B.
Item 3.
Defaults Upon Securities
None.
Item 4.
Item 4.
Submission of Matters to a Vote of Security Holders
None.
Item 5.
Item 5.
None
Form 10-K
Prospero Minerals Corp.
Item 6.
Item 6. Exhibits
(a)
Index to and Description of Exhibits
Exhibit
Description
Status
Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Included
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Included
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, Prospero Minerals Corp. has caused this report to be signed on its behalf by the undersigned duly authorized person.
PROSPERO MINERALS CORP.
By:/s/ Huber Pinder
Name: Mr. Hubert Pinder
Title : Chief Financial Officer
Dated: April 19, 2008
Form 10-K
Prospero Minerals Corp.
Exhibit 31
Form 10-K
Prospero Minerals Corp.
PROSPERO MINERALS CORP.
CERTIFICATIONS PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Hubert Pinder, certify that:
1. I have reviewed this yearly report on Form 10-K of Prospero Minerals Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4. The small business issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the small business issuer and we have:
a) designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) evaluated the effectiveness of the small business issuer’s disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
c) presented in this report any change in the small business issuer’s internal controls over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and
5. The small business issuer’s other certifying officers and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent function):
a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial data; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.
Date: April 19, 2008
By:/s/ Hubert Pinder
Mr. Hubert Pinder
Chief Financial Officer
Form 10-K
Prospero Minerals Corp.
Exhibit 32
Form 10-K
Prospero Minerals Corp.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Yearly Report of Prospero Minerals Corp. (“Prospero”) on Form 10-K for the period ending March 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Hubert Pinder, Chief Financial Officer, certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of Prospero.
By:/s/ Hubert Pinder
Mr. Hubert Pinder
Chief Financial Officer
April 19, 2008