UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549





FORM 10-K





[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended June 30, 2011





[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from __________ to _________





Commission file number:000-54507





SANDALWOOD VENTURES, LTD.


(Name of registrant in its charter)





Nevada
1000
68-0679096(State or jurisdiction of incorporation or organization)
(Primary Standard

Industrial Classification

Code Number)
(IRS Employer Identification No.)





Riverside House, Riverside Drive


Aberdeen, United Kingdom AB11 7LH


(Address of principal executive offices)





Telephone: +44-122-422-4328


(Registrant's telephone number)





SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF


THE EXCHANGE ACT:





None.





SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF


THE EXCHANGE ACT:





Common Stock, $0.001 Par Value Per Share





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [   ] No [X]





Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes [   ] No [X]








Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [   ]





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes [   ] No [   ]








Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K  contained in this form, and no disclosure will be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]





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





Large accelerated filer [  ]
Accelerated filer [  ]Non-accelerated filer  [  ]
Smaller reporting company  [X]





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





The issuer's revenues for the most recent fiscal year ended June 30, 2011 were $0.





The aggregate market value of the issuer's voting and non-voting common equity held by non-affiliates computed by reference to the closing price of such common equity on the Over-The-Counter Bulletin Board as of December 31, 2010, the end of the issuer’s most recently completed second fiscal quarter, was $0 as there was no market for the issuer’s common equity as of December 31, 2010.





At October 5, 2011, there were 42,707,850 shares of the Issuer's common stock outstanding.































TABLE OF CONTENTS





PART I





ITEM 1. BUSINESS
4ITEM 1A. RISK FACTORS
7ITEM 2. PROPERTIES
17ITEM 3. LEGAL PROCEEDINGS
18ITEM 4. (REMOVED AND RESERVED)
18





PART II





ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
19ITEM 6. SELECTED FINANCIAL DATA
20ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
20ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
F-1ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
24ITEM 9A. CONTROLS AND PROCEDURES
24ITEM 9B. OTHER INFORMATION
25





PART III





ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
26ITEM 11. EXECUTIVE COMPENSATION
28ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
30ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
30ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
31





PART IV





ITEM 15. EXHIBITS
31












PART I





FORWARD-LOOKING STATEMENTS





ALL STATEMENTS IN THIS DISCUSSION THAT ARE NOT HISTORICAL ARE FORWARD-LOOKING STATEMENTS. STATEMENTS PRECEDED BY, FOLLOWED BY OR THAT OTHERWISE INCLUDE THE WORDS "BELIEVES", "EXPECTS", "ANTICIPATES",
"INTENDS", "PROJECTS", "ESTIMATES", "PLANS", "MAY INCREASE",
"MAY FLUCTUATE" AND SIMILAR EXPRESSIONS OR FUTURE OR CONDITIONAL VERBS SUCH AS "SHOULD", "WOULD", "MAY" AND "COULD" ARE
GENERALLY FORWARD-LOOKING IN NATURE AND NOT HISTORICAL FACTS. THESE FORWARD-LOOKING STATEMENTS WERE BASED ON VARIOUS FACTORS AND WERE DERIVED UTILIZING NUMEROUS IMPORTANT ASSUMPTIONS AND OTHER IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS INCLUDE THE INFORMATION CONCERNING OUR FUTURE FINANCIAL PERFORMANCE, BUSINESS STRATEGY, PROJECTED PLANS AND OBJECTIVES. THESE FACTORS INCLUDE, AMONG OTHERS, THE FACTORS SET FORTH BELOW UNDER THE HEADING "RISK FACTORS." ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS REFLECTED IN THE FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CANNOT GUARANTEE FUTURE RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS.
MOST OF THESE FACTORS ARE DIFFICULT TO PREDICT ACCURATELY AND ARE GENERALLY BEYOND OUR CONTROL. WE ARE UNDER NO OBLIGATION TO PUBLICLY UPDATE ANY OF THE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS. REFERENCES IN THIS FORM 10-K, UNLESS ANOTHER DATE IS STATED, ARE TO JUNE 30, 2011. AS USED HEREIN, THE "COMPANY," “SANDALWOOD,”
"WE," "US," "OUR" AND WORDS OF SIMILAR MEANING REFER TO SANDALWOOD VENTURES, LTD.





ITEM 1. BUSINESS





Overview





We were incorporated as Sandalwood Ventures, Ltd. in Nevada in April 2007. We chose to incorporate in Nevada for numerous reasons including the fact that we plan to raise capital in the future in the United States and we believe that we are more attractive to United States investors due to the fact that we are incorporated in the United States. In addition, we believe certain provisions of Nevada law provide favorable treatment for officers and Directors, including Nevada Revised Statutes ("NRS") Section
78.335. NRS Section 78.335 mandates that Directors in Nevada companies must be removed by "not less than two-thirds of the voting power of the issued and outstanding stock entitled to vote." This is in contrast to many of the more popular states where companies choose to incorporate, which require only majority vote to remove Directors, including Delaware, which pursuant to Delaware General Corporation Law, Section 141(k) only requires a vote of "a majority of the shares then entitled to vote."





We have 300,000,000 shares of stock authorized, representing 250,000,000 shares of common stock, $0.001 par value and 50,000,000 shares of preferred stock, $0.001 par value.





We are an exploration stage company engaged in the acquisition and exploration of mineral properties. We acquired a 100% undivided interest in one mineral claim known as the "Sandalwood 1 Lode Claim,” totaling 20 acres located in the Goodsprings (Yellow Pine) Mining District situated within the southwestern corner of the State of Nevada, U.S.A. Our plan of operation is to conduct mineral exploration activities on the Sandalwood 1 Lode Claim in order to assess whether it possesses mineral deposits of lead, zinc, copper or silver in commercial quantities capable of commercial extraction.





4


In April 2009, we engaged Laurence Sookochoff, Professional Geoscientist, who is familiar with the Goodsprings (Yellow Pine) Mining District in Nevada, to develop a report about our Sandalwood 1 Lode Claim.  The report entitled “Geological Evaluation Report on the Sandalwood 1 Lode Claim” dated June 30, 2007 (the “Report”) describes the mineral claim,
the regional geology, the mineral potential of the claim and recommendations on how we should explore the claim.  We paid $3,000 for the Report.





The Sandalwood 1 Lode Claim was acquired by us in April 2007, for a total of $6,000 US from Mr. Larry Sostad. Subsequent to the purchase of the claim from Mr. Sostad, we contracted with Mr. Sostad's company, Diamond S. Holdings, Ltd. ("Diamond") to perform any necessary exploration work on the Sandalwood 1 Lode Claim. Mr. Sostad passed away in April 2011, and his son is currently in control of Diamond and performing exploration activities on behalf of Diamond.  Diamond previously contracted with
Laurence Sookochoff, who along with Diamond, has conducted all exploration activities on our property to date, and who will conduct the following planned activities described below, subsequent to the date of this report, funding permitting.





The Sandalwood 1 Lode Claim currently has an expiration date ofSeptember 1, 2012and in order to maintain the claim in good standing it will be necessary for us to coordinate an agent to perform and record an Affidavit of Annual Assessment Work for the claim with a minimum expenditure of $100 per claim, or alternatively, to file an Affidavit and Notice of Intent to Hold Mining Claim and Site,
together with an annual maintenance fee to the U.S. Bureau of Land Management in the sum of $125 per claim, and a county recorders fee of between $8.50 to $10.50 per claim.  Failure to perform and record valid exploration work or pay the equivalent maintenance fees on the anniversary dates will result in forfeiture of title to the claim.





In the Report, Mr. Sookochoff recommended the following exploration program on the Sandalwood 1 Lode Claim, which we have not begun to date and which will require us to raise additional funding to begin and complete:





Phase I





Trenching and sampling over known mineralized zones (estimated to take three weeks to complete).Total estimated cost: $ 5,500





Phase II





a) VLF-EM (as defined below) and soil geochemical surveys; and
Estimated cost: $ 9,500b) After the VLF-EM surveying is completed, we will perform sampling and geological mapping of the veins within anomalous zones.
Estimated cost: $ 14,000Total estimated cost $23,500





Phase III





Test diamond drilling of the prime targets.  Diamond drilling is required to test the extent of mineralization to depth. We anticipate the drill hole locations being determined based on the results of, and the interpretation of, the previous exploration we plan to conduct in Phases I and II.Total estimated cost: $ 40,000





Total estimated costs of

Phases I through III:$ 69,000.











5


A Vertical Loop Electro Magnetic Survey ("VLF-EM") is completed by walking over the property or flying over the property in an airplane using a specially equipped receiver to pick up the possible location of precious minerals.





The VLF-EM survey of our claim will be used to prepare a map of abnormal magnetic fields from the claim, which abnormalities may be associated with mineral deposits. These abnormal readings are then compared, with the results correlated to determine the structural significance of the VLF-EM anomalies.





While we currently plan to conduct the exploration activities listed above, beginning with Phase I and continuing through Phase III as soon as we have sufficient funds to begin Phase I, our management will make a decision whether to proceed with each successive phase of the exploration program upon completion of the previous phase and upon analysis of the results of that program. Additionally, we are waiting for the results from Phases I-III before deciding whether any additional exploration activities would be appropriate on the claim, as we believe that we will know whether or not our claim has any commercially viable mineral deposits upon the completion of
our Phase III exploration activities.





Employees





We currently have no employees other than our sole officer and Director, Edwin Slater. We plan to use contractors in the future if the need arises during the course of our exploration and/or development activities, in the future.





Exploration Work





All exploration work to be completed by us on our claim will be conducted by or under the supervision of Laurence Sookochoff.





Competition





Mines have limited lives and as a result, we may seek to expand our reserves, if any, through the acquisition of new properties in the future. There is a limited supply of desirable mineral lands available in the United States, Canada and other areas where we may consider conducting exploration and/or production activities. We will face strong competition for new properties from other mining companies, most of which have greater financial resources than we do and as a result, we may be unable to acquire new mining properties on terms that we consider acceptable.





There is a global market for lead, zinc, copper and silver, which we plan to sell, if we are successful in our exploration and mining activities, at prevailing market prices. We do not believe that any single company or other institution has sufficient market power to significantly affect the price or supply of these metals.





Dependence On One Or A Few Major Customers





We do not depend on one or a small number of customers, as we have not successfully discovered or extracted any commercial quantities of minerals. We have no customers and have not generated any revenues to date.





Patents, Trademarks And Licenses





We have no patents, trademarks or licenses. We do own the mineral rights to the Sandalwood 1 Lode Claim, described above.





Need For Government Approval





In connection with our planned exploration activities, we may be required to comply with certain environmental laws and regulations which may require us to obtain permits issued by regulatory agencies and to file various reports and keep records of our operations affecting the environment. While we will not need any permits for Phases I through II (described above), we may require a permit to conduct diamond drilling pursuant to Phase III above. We plan to conduct our Phase III exploration activities only if the results from Phases I and II are encouraging.




6


Costs And Effects Of Compliance With Environmental Laws





All of our exploration, development and production activities which we may undertake in the future on our property in Nevada will be subject to regulation by governmental agencies under various environmental laws. These laws address emissions to the air, discharges to water, management of wastes, management of hazardous substances, protection of natural resources, antiquities and endangered species, and reclamation of lands disturbed by mining operations.





Additionally, depending on the results of our exploration activities, if completed, and what mining activities we may undertake, certain regulations may also require us to obtain permits for our activities. These permits normally may be subject to public review processes resulting in public approval of the activity. While these laws and regulations may govern how we conduct many aspects of our business, we do not believe that they will have a material adverse effect on our results of operations or financial condition. We plan to evaluate our operations in light of the cost and impact of environmental regulations on those operations. We also plan to evaluate new
laws and regulations as they develop to determine the impact on, and changes necessary to, our planned operations. Additionally, it is possible that future changes in these laws or regulations could have a significant impact on some portion of our business, causing us to reevaluate those activities at that time.





Material Agreements and Events:





On October 26, 2010 and November 4, 2010, we entered into Convertible Promissory Notes with Cornerstone Global Investments (“Cornerstone”) and Gordon Douglas King and Jay Louise King (the “Kings”), respectively, each in the amount of $5,000.





On January 31, 2011, February 2, 2011 and February 3, 2011, we entered into Convertible Promissory Notes with Cornerstone, the Kings, and Translink Communications, respectively, each in the amount of $5,000.





Additionally, in February 2011, the Company entered into Amended and Restated Convertible Promissory Notes with Morgarlan Limited (“Morgarlan”), in the amount of $12,500, and Little Bay Consulting SA (“Little Bay” and together with Morgarlan, the
“Note Holders”), in the amount of $12,500, which amended and replaced the prior Convertible Promissory Notes entered into with such entities in February 2010, and which extended the due date of such Convertible Promissory Notes to February 10, 2012.





In April and June 2011, the Company entered into two Convertible Promissory Notes with Cornerstone in the aggregate amount of $20,000.  In May 2011, the Company entered into a Convertible Promissory Note with MIH Holdings Ltd. in the amount of $10,000.





All of the Convertible Promissory Notes described above (the “Convertible Notes”) bear interest at the rate of 8% per annum, and are due and payable twelve months from their respective effective dates.  Additionally, the principal and interest due under such Convertible Notes is convertible into shares of the Company’s common stock at a conversion price of $0.01 per share at the option of the respective holders thereof, as provided in such Convertible Notes.





ITEM 1A. RISK FACTORS.





An investment in our common stock is highly speculative, and should only be made by persons who can afford to lose their entire investment in us. You should carefully consider the following risk factors and other information in this annual report before deciding to become a holder of our common stock. If any of the following risks actually occur, our business and financial results could be negatively affected to a significant extent.





7


We Have Future Capital Needs And Without Adequate Capital We May Be Forced To Cease Or Curtail Our Business Operations.  We May Not Have Sufficient Funds To Repay The Convertible Notes When Due And The Conversion Of Such Notes May Cause Dilution To Our Existing Shareholders.





Our growth and continued operations could be impaired by limitations on our access to capital markets.   Furthermore, the limited capital we have raised, and the capital we hope will be available to us from our principals, if any, may not be adequate for our long-term growth.   If financing is available, it may involve issuing securities senior to our common stock or equity financings, which are dilutive to holders of our common stock, similar to the Convertible Notes (described above, collectively the
“Notes”).  In addition, in the event we do not raise additional capital from conventional sources, such as our existing investors or commercial banks, there is every likelihood that our growth will be restricted and we may be forced to scale back or curtail implementing our business plan.  Furthermore, we currently owe an aggregate of $80,000 (not including accrued and unpaid interest) under the Notes which amount is due on various dates between October 2011 and June 2012.  In the event we are unable to repay the Notes when due or extend such Notes, we may be forced to curtail or abandon our business plan. Additionally, the Notes are convertible into shares of our common stock at a conversion
price of $0.01 per share, and the conversion of such Notes (and accrued and unpaid interest thereon) could cause substantial dilution to our then shareholders.





Even if we are successful in raising capital in the future, we will likely need to raise additional capital to continue and/or expand our operations and to repay the Notes.  If we do not raise the additional capital, the value of any investment in our Company may become worthless. In the event we do not raise additional capital from conventional sources, it is likely that we may need to scale back or curtail implementing our business plan.





We Have Not Generated Any Revenues Since Our Inception In April 2007.





Since our inception in April 2007, we have yet to generate any revenues, and currently have only limited operations, as we are presently in the planning stage of our business development as an exploration stage company.   We may not be able to generate any revenues in the future and as a result the value of our common stock may become worthless.




Shareholders Who Hold Unregistered Shares Of Our Common Stock Are Subject To Resale Restrictions Pursuant To Rule 144, Due To Our Status As A “Shell Company.”





Pursuant to Rule 144 of the Securities Act of 1933, as amended (“Rule 144”), a “shell company” is defined as a company that has no or nominal operations; and, either no or nominal assets; assets consisting solely of cash and cash equivalents; or assets consisting of any amount of cash and cash equivalents and nominal other
assets.  As such, we are a “shell company” pursuant to Rule 144, and as such, sales of our securities pursuant to Rule 144 are not able to be made until 1) we have ceased to be a “shell company”; 2) we are subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and have filed all of our required periodic reports for at least the previous one year period prior to any sale pursuant to Rule 144; and a period of at least twelve months has elapsed from the date
“Form 10 information” (i.e., information similar to that which would be found in a Form 10 Registration Statement filing with the SEC) has been filed with the Commission reflecting the Company’s status as a non-“shell company.”  Because none of our non-registered securities can be sold pursuant to Rule 144, until at least a year after we cease to be a “shell company”, any
non-registered securities we sell in the future or issue to consultants or employees, in consideration for services rendered or for any other purpose will have no liquidity until and unless such securities are registered with the Commission and/or until a year after we cease to be a “shell company” and have complied with the other requirements of Rule 144, as described above.  As a result, it may be harder for us to fund our operations and pay our consultants with our securities instead of cash.  Furthermore, it will be harder for us to raise funding through the sale of debt or equity securities unless we agree to register such securities with the Commission, which could cause us to expend additional
resources in the future.  Our status as a “shell company” could prevent us from raising additional funds, engaging consultants, and using our securities to pay for any acquisitions (although none are currently planned), which could cause the value of our securities, if any, to decline in value or become worthless.





8


There Is Substantial Doubt As To Whether We Can Continue As A Going Concern.





We have generated no revenues since our inception in April 2007. We had a working capital deficit of $19,312 and a deficit accumulated during the exploration stage of $173,469 as of June 30, 2011.  Not including the net discount on our Convertible Promissory Notes, we had a working capital deficit of $71,102 as of June 30, 2011.  We had a net loss of $78,783 for the year ended June 30, 2011 and a net loss of $55,764 for the year ended June 30, 2010.  These factors among others indicate that there is substantial doubt as to whether we may be able to continue as a going concern.  The accompanying financial statements do not
include any adjustments that might result from the outcome of this uncertainty and if we cannot continue as a going concern, your investment could become devalued or even worthless.





The Success Of The Company Depends Heavily On Edwin Slater, Our Sole Officer And Director.





The success of the Company will depend on the ability of Edwin Slater, the Chief Executive Officer and sole Director of the Company.  The loss of Mr. Slater will have a material adverse effect on the business, results of operations (if any) and financial condition of the Company.  In addition, the loss of Mr. Slater may force the Company to seek a replacement who may have less experience, fewer contacts, or less understanding of the business.   Further, we may not be able to find a suitable replacement for Mr. Slater, which could force the Company to curtail its operations and/or cause any investment in the Company to become
worthless.   The Company does not have an employment agreement with Mr. Slater.





Mr. Slater, Our Sole Officer And Director, Exercises Majority Voting Control Over The Company And Therefore Will Exercise Control Over Corporate Decisions Including The Appointment Of New Directors.





Edwin Slater, our sole officer and Director, can vote an aggregate of 40,000,000 shares of common stock, currently equal to 93.7% of our outstanding common stock.  Mr. Slater therefore exercises control in determining the outcome of all corporate transactions or other matters, including the election of Directors, mergers, consolidations, the sale of all or substantially all of our assets, and also the power to prevent or cause a change in control. Any investor who purchases shares in the Company will be a minority shareholder and as such will have little to no say in the direction of the Company and the election of Directors. Additionally, it will be
difficult if not impossible for investors to remove Mr. Slater as a Director of the Company, which will mean he will remain in control of who serves as officers of the Company as well as whether any changes are made in the Board of Directors. As a potential investor in the Company, you should keep in mind that even if you own shares of the Company's common stock and wish to vote them at annual or special shareholder meetings, your shares will likely have little effect on the outcome of corporate decisions.





Our Sole Officer And Director Has Other Employment Outside Of The Company, And As Such, May Not Be Able To Devote Sufficient Time To Our Operations.





Edwin Slater, our President, Chief Executive Officer and sole Director, is currently our only employee. Further, Mr. Slater currently has employment outside of the Company.  As such, Mr. Slater only spends approximately 10 to 15 hours per week on Company matters; and as such, he may not be able to devote a sufficient amount of time to our operations.  This may be exacerbated by the fact that Mr. Slater is currently our only officer.  If Mr. Slater is not able to spend a sufficient amount of his available time on our operations, we may not ever generate any revenue and/or any investment in the Company could become
worthless.





We Lack An Operating History Which You Can Use To Evaluate Us, Making Any Investment In Our Company Risky.





We lack an operating history which investors can use to evaluate our previous earnings, as we were only incorporated in April 2007. Therefore, an investment in us is risky because we have no business history and it is hard to predict what the outcome of our business operations will be in the future.






9





Our Growth Will Place Significant Strains On Ou r Resources.





The Company is currently in the exploration stage, with only limited operations, and has not generated any revenues since inception in April 2007. The Company's growth, if any, is expected to place a significant strain on the Company's managerial, operational and financial resources as Edwin Slater is our only officer and Director; and the Company will likely continue to have limited employees in the future. Moving forward, the Company's systems, procedures or controls may not be adequate to support the Company's operations and/or the Company may be unable to achieve the rapid execution necessary to successfully implement its business plan. The Company's future
operating results, if any, will also depend on its ability to add additional personnel commensurate with the growth of its operations, if any. If the Company is unable to manage growth effectively, the Company's business, results of operations and financial condition will be adversely affected.





Our Articles Of Incorporation, And Bylaws, As Amended, Limit The Liability Of, And Provide Indemnification For, Our Officers And Directors.





Our Articles of Incorporation, generally limit our officer’s and Director’s personal liability to the Company and its stockholders for breach of fiduciary duty as an officer or Director except for breach of the duty of loyalty or acts or omissions not made in good faith or which involve intentional misconduct or a knowing violation of law. Our Articles of Incorporation, as amended, and Bylaws, as amended, provide indemnification for our officers and Directors to the fullest extent authorized by the Nevada General Corporation Law against all expense, liability, and loss, including attorney's fees, judgments, fines, excise taxes or penalties and
amounts to be paid in settlement reasonably incurred or suffered by an officer or Director in connection with any action, suit or proceeding, whether civil or criminal, administrative or investigative (hereinafter a "Proceeding") to which the officer or Director is made a party or is threatened to be made a party, or in which the officer or Director is involved by reason of the fact that he is or was an officer or Director of the Company, or is or was serving at the request of the Company as an officer or director of another corporation or of a partnership, joint venture, trust or other enterprise whether the basis of the Proceeding is an alleged action in an official capacity as an officer or Director, or in any other capacity while
serving as an officer or Director. Thus, the Company may be prevented from recovering damages for certain alleged errors or omissions by the officers and Directors for liabilities incurred in connection with their good faith acts for the Company.  Such an indemnification payment might deplete the Company's assets. Stockholders who have questions regarding the fiduciary obligations of the officers and Directors of the Company should consult with independent legal counsel. It is the position of the Securities and Exchange Commission that exculpation from and indemnification for liabilities arising under the Securities Act of 1933, as amended, and the rules and regulations thereunder is against public policy and therefore unenforceable.





As We Are A Public Reporting Company, We Will Incur Significant Costs In Connection With Compliance With Section 404 Of The Sarbanes Oxley Act, And Our Management Will Be Required To Devote Substantial Time To New Compliance Initiatives.





We are subject to among other things, the periodic reporting requirements of the Securities Exchange Act of 1934, as amended, and will incur significant legal, accounting and other expenses in connection with such requirements.  The Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and new rules subsequently implemented by the SEC have imposed various new requirements on public companies, including requiring changes in corporate governance practices. As such, our management and other personnel
will need to devote a substantial amount of time to these new compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. In addition, the Sarbanes-Oxley Act requires, among other things, that we report on the effectiveness of our internal controls for financial reporting and disclosure of controls and procedures. Our compliance with Section 404 will require that we incur additional accounting expense and expend significant management efforts. We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge to have effective internal controls for financial reporting. Additionally, due to the fact that we only have one officer and
Director, who has no experience as an officer or Director of a reporting company, such lack of experienced personnel may impair our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures, which may result in material misstatements to our financial statements and an inability to provide accurate financial information to our stockholders.   Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management
resources.








10





Risks Relating To the Company’s Operations





We May Not Find Any Commercial Quantities Of Minerals In The Future, And May Not Generate Any Profits, Which May Force Us To Curtail Our Business Plan.





As an exploration stage company, we have no revenues or profits to date.  We had a working capital deficit of $19,312 and a deficit accumulated during the exploration stage of $173,469 as of June 30, 2011.  Not including the net discount on our Convertible Promissory Notes, we had a working capital deficit of $71,102 as of June 30, 2011.  We had a net loss of $78,783 for the year ended June 30, 2011 and a net loss of $55,764 for the year ended June 30, 2010.  We have budgeted the need for approximately $100,000 of additional funding during the next 12 months to continue our business operations, pay costs and expenses
associated with our filing requirements with the Securities and Exchange Commission and conduct our exploration activities as planned, which does not include the funds we will require to repay the Convertible Notes (described above) and such required funding may not be able to be raised on favorable terms, if at all.  However, if we do not begin exploration and/or do not have enough money to continue exploration activities it is likely that we will never generate any revenues. Additionally, if we are unsuccessful in mining attempts we may choose to attempt in the future, it is likely that we will never generate any revenues. Additionally, the exploration of minerals is highly speculative, and if throughout our mineral exploration we do not find commercial quantities of minerals, we will likely be forced to curtail or abandon our business plan. If this happens, you could lose your
investment in us. If we are unable to generate profits, we will be forced to rely on external financing, of which there is no guarantee, to continue with our business plan.





Our Sole Officer And Director Lacks Technical And/Or Exploration Experience In And With Companies With Mining Activities And With The Reporting And Disclosure Obligations Of Publicly-Traded Companies.





While we rely heavily on Mr. Slater, our Chief Executive Officer and Director, he lacks technical training and experience exploring for, starting and/or operating a mine. As a result of Mr. Slater's lack of experience in exploration and/or development of mines, he may not be fully aware of many of the specific requirements related to working within our industry.  As a result of Mr. Slater's lack of experience, his decisions may not take into account standard engineering or managerial approaches mineral companies commonly use.  Additionally, due to Mr. Slater currently being located in Scotland; only being able to devote 10 to 15 hours per
week to the Company’s activities; having employment outside of the Company; and lacking experience with mining operations in general, we may be unable to successfully implement our business plan, and/or manage our future growth if any.  The Company also currently relies on its geologist and plans to rely on outside consultants (as funding permits) in the United States on an as needed basis for advice and guidance regarding the Company’s planned exploration activities, in addition to Mr. Slater.  Mr. Slater does not currently believe that his outside employment affects the day to day operations of the Company; however, Mr. Slater is prepared to relinquish his outside employment in the event the Company’s operations grow and he is required to spend additional time on Company matters, and the Company may also employ more accomplished officers and
Directors in the future, funding permitting.  While the Company believes that the time and resources that Mr. Slater is able to provide to the Company, and/or may be willing to provide to us in the future, as well as our outside consultants and geologist are adequate to support the Company’s business plan and exploration activities, our operations and growth (if any) may be adversely affected by Mr. Slater being located on another continent than our mining claims, only being able to provide a limited number of hours of service to the Company per week and/or his outside employment.  Consequently, we may never complete our planned mining activities and any investment in the Company may become devalued or worthless.









11


Furthermore, Mr. Slater has no experience serving as an officer or Director of a publicly-traded company, or experience with the reporting or financial disclosure requirements which public companies are subject to. Such lack of experience may impair our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures, which may result in material misstatements to our financial statements and an inability to provide accurate financial information to our stockholders. Consequently, our operations, future earnings and ultimate financial success could suffer irreparable harm due to his ultimate lack of experience in
our industry and with publicly-traded companies and their reporting requirements in general.





There Is Uncertainty As To Our Ability To Enforce Civil Liabilities Both In And Outside Of The United States Due To The Fact That Our Officer, Director And Certain Of Our Assets Are Not Located In The United States.





Our office is not located in the United States. Our sole officer and Director is located in the United Kingdom. As a result, it may be difficult for shareholders to effect service of process within the United States on our sole officer and Director. In addition, investors may have difficulty enforcing judgments based upon the civil liability provisions of the securities laws of the Unites States or any state thereof, both in and outside of the United States.





Our Planned Exploration And Development Activities May Be Adversely Effected By Inclement Weather In And Around Our Claim.





The temperatures on our claim are typical of a desert climate, with relative high temperatures and low participation. Inclement weather at our claim or the airports in and around our claim may make it more difficult for us to obtain the materials we will require for any of our planned exploration activities, and/or for our personnel to visit our claim. As a result, if there is an abnormal amount of rain, a lack of rain, and/or inclement weather on our claim or particularly bad winter weather at the airports surrounding our claim, we could be forced to expend additional finances dealing with such rainfall or drought on our claim and with the delays such abnormal
rainfall could have on our then operations, if any. The expenses associated with inclement weather on our claim could cause our revenues, if any, to decline and/or cause us to curtail or abandon our business operations.





Our Planned Mineral Exploration Efforts Are Highly Speculative.





Mineral exploration is highly speculative. It involves many risks and is often non-productive. Even if we believe we have found a valuable mineral deposit, it may be several years before production is possible. During that time, it may become no longer feasible to produce those minerals for economic, regulatory, political, or other reasons. Additionally, we may be required to make substantial capital expenditures and to construct mining and processing facilities. As a result of these costs and uncertainties, we may be unable to start, or if started, to finish our exploration activities.








12





Our Failure To Make Required Work Expenditures Or Pay The Annual Fees In Lieu Thereof Could Cause Us To Lose Title To Our Mineral Claim, Which Could Prevent Us From Carrying Out Our Business Plan.





We have previously had issues with the expiration of and lapse of rights associated with our mining claim due to our failure to file required reports and make required payments to the State of Nevada.  Currently, our mineral claim is in good standing and has an expiration date of September 1, 2012. In order to maintain the claim in good standing it will be necessary for us to coordinate an agent to perform and record an Affidavit of Annual Assessment Work for the claim with a minimum expenditure of $100 per claim, or alternatively, to file an Affidavit and Notice of Intent to Hold Mining Claim and Site, together with an annual maintenance fee to the
U.S. Bureau of Land Management in the sum of $125 per claim, and a county recorders fee of between $8.50 to $10.50 per claim prior to September 1, 2012.  Failure to perform and record valid exploration work or pay the equivalent maintenance fees on the anniversary dates will result in forfeiture of title to the claim, which could prevent us from carrying out our business plan and would likely cause any investment in us to become worthless.  While we have been successful in the past in re-establishing rights to our claim, if in the future, the rights to our claim lapses and another person or entity attempts to establish rights to our claim, we could be forced to curtail or abandon our planned operations or acquire rights to another claim, which may not be as promising as our current claim.





Our Property Has Not Produced Any Commercial Reserves Or Ore Body, And The Probability Of Such Property Producing Any Commercially Viable Reserves In The Future Is Remote.





Our mineral project is in the exploration stage as opposed to the development stage and we have no known body of economic mineralization. The known mineralization at these projects has not been determined to be economic ore. Until further exploration activities can be conducted, we will be unable to determine whether a commercially mineable ore body exists on any of our properties. In order to carry out exploration and development programs of any economic ore body and place it into commercial production, we will be required to raise substantial additional funding, and even if we are successful in completing our exploration activities on our property, we may not
be successful in finding commercial quantities of minerals. Furthermore, the probability of an individual prospect ever having reserves or being commercially viable is extremely remote. As a result, there is only a small probability that any of our properties contain any reserves and that any funds spent on exploration activities will ever be recovered.





Mining Operations In General Involve A High Degree Of Risk, Which We May Be Unable, Or MayNot Choose To Insure Against, Making Exploration And/Or Development Activities We May Pursue Subject To Potential Legal Liability For Certain Claims.





Our operations will be subject to all of the hazards and risks normally encountered in the exploration, development and production of minerals. These include unusual and unexpected geological formations, rock falls, flooding and other conditions involved in the drilling and removal of material, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage and possible legal liability. Although we plan to take adequate precautions to minimize these risks, and risks associated with equipment failure or failure of retaining dams which may result in environmental pollution, even
with our precautions, damage or loss may occur and we may be subject to liability which will have a material adverse effect on our business, results of operation and/or financial condition. If this were to happen, we could be forced to curtail or abandon our business activities.





We Will Be Subject To Numerous Risks If We Commence Mining Operations.





The mineral exploration and mining business is competitive in all of its phases. We currently have no mining operations of any kind; however, if we do commence mining activities in the future, we will be subject to numerous risks, including:





o
competitors with greater financial, technical and other resources, in the search for and the acquisition of attractive mineral properties;o
our ability to select and acquire suitable producing properties or prospects for mineral exploration;   13
  o
the accuracy of our reserve estimates, if any, which may be affected by the following factors beyond our control:





-
declines in the market price of the various metals we mine;-
increased production or capital costs;-
reduction in the grade or tonnage of the deposit;-
increase in the dilution of the ore; or-
reduced recovery rates;





o
risks and hazards associated with environmental hazards, political and country risks, civil unrest or terrorism, industrial accidents, labor disputes, unusual or unexpected geologic formations, cave-ins, explosive rock failures; and flooding and periodic interruptions due to inclement or hazardous weather conditions; ando
our failure to maintain insurance on certain risks associated with any exploration activities we may undertake in the future.





If we do begin exploration activities in the future, we will be subject to the above risks. If any of the above risks occur, we may be forced to curtail or abandon our operations and/or exploration and development activities, if any. As a result, any investment in us could decrease in value and/or become worthless.





Our Determinations Of Planned Activities And Estimates Of Potential Reserves, If Any, May Be Inaccurate.





We are currently in the exploration stage. Before we can begin a development project, if ever, we must first determine whether it is economically feasible to do so. This determination is based on estimates of several factors, including:





o
expected recovery rates of metals from the ore;o
facility and equipment costs;o
capital and operating costs of a development project;o
future metals prices;o
tax rates;o
inflation rates;o
political risks and regulatory climate in Canada; ando
availability of credit.





Any development projects we may undertake in the future will likely not have an operating history upon which to base these estimates and as a result, actual cash operating costs and returns from a development project, if any, may differ substantially from our estimates. Consequently, it may not be economically feasible to continue with a development project, if one is started.





As We Undertake Exploration Of Our Mining Claim, We Will Be Subject To Compliance Of Government Regulation That May Increase The Anticipated Time And Cost Of Our Exploration Program.





There are several governmental regulations that materially restrict the exploration of minerals. We will be subject to the mining laws and regulations as contained in Chapter 519A of the Nevada Revised Statutes as we carry out our exploration program. We may be required to obtain work permits and perform remediation work for any physical disturbance to the land in order to comply with these regulations. While our planned exploration program budgets for regulatory compliance in connection with such exploration activities, there is a risk that new regulations could increase our time and costs of doing business and prevent us from carrying out our exploration
program.





14


Risks Relating To the Company’s Securities





We Have Never Paid Cash Dividends In Connection With Our Common Stock And Have No Plans To Pay Dividends In The Future.





We have paid no cash dividends on our common stock to date and it is not anticipated that any cash dividends will be paid to holders of our common stock in the foreseeable future.  While our dividend policy will be based on the operating results and capital needs of our business, it is anticipated that any earnings will be retained to finance our future expansion.





Investors May Face Significant Restrictions On The Resale Of Our Common Stock Due To Federal Regulations Of Penny Stocks.





Our common stock will be subject to the requirements of Rule 15(g)9, promulgated under the Securities Exchange Act as long as the price of our common stock is below $5.00 per share. Under such rule, broker-dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements, including a requirement that they make an individualized written suitability determination for the purchaser and receive the purchaser's consent prior to the transaction. The Securities Enforcement Remedies and Penny Stock Reform Act of 1990, also requires additional disclosure in connection with
any trades involving a stock defined as a penny stock. Generally, the Commission defines a penny stock as any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00 per share. The required penny stock disclosures include the delivery, prior to any transaction, of a disclosure schedule explaining the penny stock market and the risks associated with it. Such requirements could severely limit the market liquidity of the securities and the ability of purchasers to sell their securities in the secondary market.





In addition, various state securities laws impose restrictions on transferring "penny stocks" and as a result, investors in the common stock may have their ability to sell their shares of the common stock impaired.





Shareholders May Be Diluted Significantly Through Our Efforts To Obtain Financing And Satisfy Obligations Through The Issuance Of Additional Shares Of Our Common Stock.





We have no committed source of financing. Wherever possible, our Board of Directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock. Our Board of Directors has authority, without action or vote of the shareholders, to issue all or part of the authorized but unissued shares of common stock. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of
existing shareholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of the Company because the shares may be issued to parties or entities committed to supporting existing management.





State Securities Laws May Limit Secondary Trading, Which May Restrict The States In Which And Conditions Under Which You Can Sell Shares.





Secondary trading in our common stock may not be possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common stock in any particular state, the common stock cannot be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the liquidity
for the common stock could be significantly impacted.










15





Because We Are Not Subject To Compliance With Rules Requiring The Adoption Of Certain Corporate Governance Measures, Our Stockholders Have Limited Protections Against Interested Director Transactions, Conflicts Of Interest And Similar Matters.





The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any
sooner than legally required, we have not yet adopted these measures.





Because our Directors are not independent directors, we do not currently have independent audit or compensation committees. As a result, our Directors have the ability to, among other things, determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and any potential investors may be reluctant to provide us with funds necessary to expand our operations.





We intend to comply with all corporate governance measures relating to director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, Directors and members of board committees required to provide for our effective management as a result of the Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of Directors and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals
from accepting these roles.





We Do Not Currently Have A Public Market For Our Securities. If There Is A Market For Our Securities In The Future, Such Market May Be Volatile And Illiquid.





While our common stock has been quoted on the Over-The-Counter Bulletin Board (“OTCBB”) under the symbol “SWDZ” since March 2010, only a minimum number of shares of common stock have traded and there is currently no active public market for our common stock. There may not be an active public market for our common stock in the
future. If there is an active market for our common stock in the future, we anticipate that such market would be illiquid and would be subject to wide fluctuations in response to several factors, including, but not limited to:





(1)
actual or anticipated variations in our results of operations;(2)
our ability or inability to generate new revenues;(3)
the number of shares in our public float;(4)
increased competition; and(5)
conditions and trends in the market for precious metals.





Furthermore, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock.  Additionally, moving forward we anticipate having a limited number of shares in our public float, and as a result, there could be extreme fluctuations in the price of our common stock.  Further, due to the limited volume of our shares which trade and our limited public float, we believe that our
stock prices (bid, ask and closing prices) will be entirely arbitrary, will not relate to the actual value of the Company, and will not reflect the actual value of our common stock.  Shareholders and potential investors in our common stock should exercise caution before making an investment in the Company, and should not rely on the publicly quoted or traded stock prices in determining our common stock value, but should instead determine the value of our common stock based on the information contained in the Company's public reports, industry information, and those business valuation methods commonly used to value private companies.









16


If We Are Late In Filing Our Quarterly Or Annual Reports With The Securities And Exchange Commission Or A Market Maker Fails To Quote Our Common Stock On The Over-The-Counter Bulletin Board For A Period Of More Than Four Days, We May Be De-Listed From The Over-The-Counter Bulletin Board.





Pursuant to Over-The-Counter Bulletin Board ("OTCBB") rules relating to the timely filing of periodic reports with the Securities and Exchange Commission (“SEC”), any OTCBB issuer which fails to file a periodic report (Form 10-Q or 10-K) by the due date of such report (not withstanding any extension granted to the issuer by the filing of a
Form 12b-25), three times during any 24 month period is automatically de-listed from the OTCBB. Such removed issuer would not be re-eligible to be listed on the OTCBB for a period of one year, during which time any subsequent late filing would reset the one-year period of de-listing. Additionally, if a market maker fails to quote our common stock on the OTCBB for a period of more than four consecutive days, we will be automatically delisted from the OTCBB.  As we were late in filing our Form 10-Q for the quarter ending December 31, 2010 and because we failed to timely comply with OTCBB rules requiring us to be “required” to file reports with the SEC (which we complied with by filing a Form 8-A and becoming
subject to Section 12 of the Securities Exchange Act of 1934, as amended, reporting obligations in September 2011), if we are late in our filings one additional time prior to the filing of our Form 10-Q for the quarter ended March 31, 2013 or three times in any subsequent 24 month and are de-listed from the OTCBB period or are automatically delisted for failure of a market maker to quote our stock, our securities may become worthless and we may be forced to curtail or abandon our business plan.





Nevada Law And Our Articles Of Incorporation Authorize Us To Issue Shares Of Stock, Which Shares May Cause Substantial Dilution To Our Existing Shareholders.





We have authorized capital stock consisting of 250,000,000 shares of common stock, $0.001 par value per share and 50,000,000 shares of preferred stock, $0.001 par value per share (“Preferred Stock”). As of the date of this filing, we
have42,707,850sharesof common stock issued and outstanding and – 0 – shares of Preferred Stock issued and outstanding.  As a result, our Board of Directors has the ability to issue a large number of additional shares of common stock without shareholder approval, which if issued could cause substantial dilution to our then shareholders.  Additionally, shares of Preferred Stock may be issued by our Board of Directors without shareholder approval with voting
powers, and such preferences and relative, participating, optional or other special rights and powers as determined by our Board of Directors, which may be greater than the shares of common stock currently outstanding.  As a result, shares of Preferred Stock may be issued by our Board of Directors which cause the holders to have super majority voting power over our shares, provide the holders of the Preferred Stock the right to convert the shares of Preferred Stock they hold into shares of our common stock, which may cause substantial dilution to our then common stock shareholders and/or have other rights and preferences greater than those of our common stock shareholders. Investors should keep in mind that the Board of Directors has the authority to issue additional shares of common stock and Preferred Stock, which could cause substantial dilution to our existing
shareholders.  Additionally, the dilutive effect of any Preferred Stock, which we may issue may be exacerbated given the fact that such Preferred Stock may have super majority voting rights and/or other rights or preferences which could provide the preferred shareholders with voting control over us and/or give those holders the power to prevent or cause a change in control.  As a result, the issuance of shares of common stock and/or Preferred Stock may cause the value of our securities to decrease and/or become worthless.





ITEM 2. PROPERTIES





Office Space:





The Company leases office space (which supplies the Company with a phone and mail forwarding service) at Riverside house, Riverside Drive, Aberdeen, United Kingdom, for which the Company pays approximately $225 per month.







17


Mining Property:





The Sandalwood 1 Lode Claim is comprised of one located claim with an area of 20 acres located in the Goodsprings (Yellow Pine) Mining District situated within the southwestern corner of the State of Nevada, U.S.A. The Sandalwood 1 Lode Claim covers some former exploratory workings.





The Sandalwood 1 Lode Claim is situated on the easternmost portion of the Yellow Pine Mining District in southern Nevada. Although less famous than many of the other mining districts of the Great Basin it nevertheless ranks second in historical total Nevada lead and zinc production.





The property consists of one located claim comprised of 20 acres recorded as the Sandalwood 1 Lode Mining Claim ("Sandalwood 1 Lode Claim"). The Sandalwood 1 Lode Claim was filed April 12, 2007 in the Clark County recorder's office in Las Vegas as Mining Map 080 0036 Page 0036 in the official records book No. 2007412.





Access from Las Vegas, Nevada to the Sandalwood 1 Lode Claim is southward via Interstate Highway #15 for approximately 27 miles, and one mile and one-half miles before the town of Jean, Nevada, to a junction with a road which is taken easterly for approximately one mile to a junction with a road which is taken southerly for one mile to the northern boundary of the Sandalwood 1 Lode Claim.





The Sandalwood 1 Lode Claim is situated at the northern end of the Sheep Mountain Range, a southerly trending range of mountains with peaks reaching an elevation of 4,184 feet. The claim covers the northeasterly and the southwesterly facing slopes of a northerly trending ridge. The topography is relatively flat in the northern portion and moderately steep sloping from near the valley floor at an elevation of 3,040 feet, to 3,400 feet at the southern boundary, at the crest of a north-south trending ridge, of the Sandalwood 1 Lode Claim.





The area is of a typically desert climate with relatively high temperatures and low precipitation. Vegetation consists mainly of desert shrubs and cactus. Sources of water would likely be available from valley wells.





History





The history of the Yellow Pine Mining District stems from 1856 when Mormon missionaries reported ore in the area. The completion of the San Pedro, Los Angeles and Salt Lake railroad in 1905 and recognition of oxidized zinc minerals in the ore in 1906 stimulated development of the mines and the region has been subject to intermittent activity up to 1964, particularly during the World War I and II years.





The history of the Sandalwood 1 Lode Claim mine workings is not known. However, the localized exploration workings were probably excavated during the period of mid to late 1800's after the Goodsprings concentrator was in operation and much exploration activity ensued as a very convenient market for ore.





ITEM 3. LEGAL PROCEEDINGS





From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.





ITEM 4. (REMOVED AND RESERVED)







18











PART II





ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES





While our common stock has been quoted on the Over-The-Counter Bulletin Board (“OTCBB”) under the symbol “SWDZ” since March 2010, only a minimum number of shares of common stock have traded and there is currently no active public market for our common stock.





The Company's common stock is considered a "penny stock" as defined in the Commission's rules promulgated under the Exchange Act (the “Rules”). The Commission's rules regarding penny stocks impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited
investors (generally persons with net worth in excess of $1,000,000, exclusive of residence, or an annual income exceeding $200,000 or $300,000 jointly with their spouse). For transactions covered by the rules, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written agreement to the transaction prior to the sale. Thus the Rules affect the ability of broker-dealers to sell the Company's shares should they wish to do so because of the adverse effect that the Rules have upon liquidity of penny stocks. Unless the transaction is exempt under the Rules, under the Securities Enforcement Remedies and Penny Stock Reform Act of 1990, broker-dealers effecting customer transactions in penny stocks are required to provide their customers with (i) a risk disclosure document; (ii) disclosure of current bid and ask quotations if any; (iii)
disclosure of the compensation of the broker-dealer and its sales personnel in the transaction; and (iv) monthly account statements showing the market value of each penny stock held in the customer's account. As a result of the penny stock rules, the market liquidity for the Company's securities may be severely adversely affected by limiting the ability of broker-dealers to sell the Company's securities and the ability of purchasers of the securities to resell them.





Dividends





We have never declared or paid any cash dividends on our common stock, and we do not anticipate paying any dividends in the foreseeable future.  We intend to devote any earnings to fund the operations and the development of our business.





DESCRIPTION OF CAPITAL STOCK





We have authorized capital stock consisting of 250,000,000 shares of common stock, $0.001 par value per share (“Common Stock”) and 50,000,000 shares of preferred stock, $0.001 par value per share (“Preferred Stock”).  As of October 5, 2011, we had 42,707,850 shares of Common Stock and no shares of Preferred Stock issued
and outstanding.





Common Stock





The holders of outstanding shares of Common Stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such times and in such amounts as the board from time to time may determine.  Holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders.  There is no cumulative voting of the election of directors then standing for election.  The Common Stock is not entitled to pre-emptive rights and is not subject to conversion or redemption.  Upon liquidation, dissolution or winding up of our company, the assets legally
available for distribution to stockholders are distributable ratably among the holders of the Common Stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors.





Preferred Stock





Shares of Preferred Stock may be issued from time to time in one or more series, each of which shall have such distinctive designation or title as shall be determined by our Board of Directors (“Board of Directors”) prior to the issuance of any shares thereof.  Preferred Stock shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof,
as shall be stated in such resolution or resolutions providing for the issue of such class or series of Preferred Stock as may be adopted from time to time by the Board of Directors prior to the issuance of any shares thereof.  The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all the then outstanding shares of our capital stock entitled to vote generally in the election of the directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.









19


Options, Warrants and Convertible Securities





None.





Recent Sales of Unregistered Securities





On October 26, 2010 and November 4, 2010, we entered into Convertible Promissory Notes with Cornerstone Global Investments (“Cornerstone”) and Gordon Douglas King and Jay Louise King (the “Kings”), respectively, each in the amount of $5,000.





On January 31, 2011, February 2, 2011 and February 3, 2011, we entered into Convertible Promissory Notes with Cornerstone, the Kings, and Translink Communications, respectively, each in the amount of $5,000.





Additionally, in February 2011, the Company entered into Amended and Restated Convertible Promissory Notes with Morgarlan Limited (“Morgarlan”), in the amount of $12,500, and Little Bay Consulting SA (“Little Bay” and together with Morgarlan, the
“Note Holders”), in the amount of $12,500, which amended and replaced the prior Convertible Promissory Notes entered into in with such entities in February 2010, and which extended the due date of such Convertible Promissory Notes to February 10, 2012.





In April and June 2011, the Company entered into two Convertible Promissory Notes with Cornerstone in the aggregate amount of $20,000.  In May 2011, the Company entered into a Convertible Promissory Note with MIH Holdings Ltd. in the amount of $10,000.





All of the Convertible Promissory Notes described above (the “Convertible Notes”) bear interest at the rate of 8% per annum, and are due and payable twelve months from their respective effective dates.  Additionally, the principal and interest due under such Convertible Notes is convertible into shares of the Company’s common stock at a conversion price of $0.01 per share at the option of the respective holders thereof, as provided in such Convertible Notes.





We claim an exemption from registration afforded by Regulation S of the Securities Act of 1933, as amended ("Regulation S") for the above sales since the sales of the Convertible Promissory Notes were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the
foregoing.





ITEM 6. SELECTED FINANCIAL DATA





Not required pursuant to Item 301 of Regulation S-K.





ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





The following discussion should be read in conjunction with our financial statements.





PLAN OF OPERATIONS





Moving forward, and funding permitting, we plan to begin Phase I exploration activities as described above in an effort to determine whether our Sandalwood 1 Load Claim contains any commercial quantities of minerals and whether we should conduct further exploration activities on such claim.





20


Critical Accounting Policies:





Mineral Property Acquisition, Exploration and Development Costs





Mineral property acquisition, exploration and related costs are expensed as incurred unless proven and probable reserves exist and the property may commercially be mined. When it has been determined that a mineral property can be economically developed, the costs incurred to develop such property, including costs to further delineate the ore body and develop the property for production, may be capitalized. Interest costs, if any, allocable to the cost of developing mining properties and to constructing new facilities are capitalized until operations commence. Mine development costs incurred either to develop new ore deposits, expand the capacity of operating
mines, or to develop mine areas substantially in advance of current production are also capitalized. All such capitalized costs, and estimated future development costs, are then amortized using the units-of-production method over the estimated life of the ore body. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates, at least quarterly, the carrying value of capitalized mining costs and related property, plant and equipment costs, if any, to determine if these costs are in excess of their net realizable value and if a permanent impairment needs to be recorded. The periodic evaluation of carrying value of capitalized costs and any related property, plant and equipment costs are based upon expected future cash flows and/or estimated
salvage value.  The Company currently does not have any capitalized mining costs and therefore no adjustments are needed.





Recent Accounting Pronouncements





The Company has evaluated recent accounting pronouncements and no other accounting standards or interpretations issued or recently adopted are expected to have, or did have, a material impact on the Company’s consolidated financial position, operations or cash flows.





COMPARISON OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2011 COMPARED TO THE YEAR ENDED JUNE 30, 2010





We generated no revenues for the year ended June 30, 2011 or the year ended June 30, 2010, and do not anticipate generating any revenues until such time, if ever, as we are able to successfully complete the exploration of our Sandalwood 1 Lode Claim, as detailed above; are successful in locating commercial quantities of minerals; and are able to extract and sell such minerals.





We had total costs and expenses of $48,945 for the year ended June 30, 2011, compared to $54,187 for the year ended June 30, 2010.  Total costs and expenses consisted of $46,745 of general and administrative expenses and $2,200 of exploration costs for the year ended June 30, 2011, compared to general and administrative costs of $53,199 and exploration costs of $988 for the year ended June 30, 2010, a decrease in total costs and expenses of $5,242 or 9.7% from the prior period.  Total costs and expenses decreased for the current period mainly as a result of one-time legal and accounting fees for the year ended June 30, 2010 associated with our
Registration Statement and amendments thereto filed with the SEC.





We had total interest expense of $29,838 for the year ended June 30, 2011, compared to $1,577 for the year ended June 30, 2010, which increase in interest expense was due to the amortization of the discount on convertible notes issued in February 2010, October 2010, November 2010, January 2011, February 2011, April 2011, May 2011 and June 2011.





We had a net loss of $78,783 for the year ended June 30, 2011, compared to a net loss of $55,764 for the year ended June 30, 2010, an increase in net loss of $23,019 or 41.2% from the prior period, which increase in net loss was due to the $28,261 increase in interest expense, partially offset by the $5,242 decrease in costs and expenses.





LIQUIDITY AND CAPITAL RESOURCES





We had current assets of $13,726 as of June 30, 2011, which was solely due to $13,726 of cash and cash equivalents.





21


We had total liabilities of $33,038 as of June 30, 2011,  which were solely current liabilities, and which consisted of accounts payable and accrued expenses of $4,828 and $28,210 of convertible notes payable, net of discount of $51,790, as of June 30, 2011.





We had a working capital deficit of $19,312 and a deficit accumulated during the exploration stage of $173,469 as of June 30, 2011.  Not including the net discount on our Convertible Promissory Notes, we had a working capital deficit of $71,102 as of June 30, 2011.





We had net cash used in operating activities of $48,778 for the year ended June 30, 2011, which consisted of net loss of $78,783, partially offset by $26,977 of amortization of debt discount, $2,125 of prepaid expenses and $903 of increase in accounts payable and accrued expenses.





We had $55,000 in net cash provided by financing activities for the year ended June 30, 2011, solely in connection with funds raised in connection with the sale of the October 2010, November 2010, January 2011, February 2011, April 2011, May 2011 and June 2011 Convertible Notes.





From September 2007 to November 2008, we sold an aggregate of 2,707,850 units, each consisting of one (1) share of common stock, and one (1) two year Class A Warrant with an exercise price of $0.05 per share (each a “Warrant,” and collectively with the shares, referred to hereinafter as the "Units"), for aggregate net consideration of
approximately $34,157 ($54,157 of gross proceeds net of $20,000 of direct issuance costs) or $0.02 per Unit in offshore transactions pursuant to Regulation S of the Securities Act of 1933, as amended, to an aggregate of 32 shareholders.   An aggregate of Warrants to purchase 375,000 shares expired unexercised in September 2009, additional Warrants to purchase 1,065,000 shares expired unexercised in November 2009, Warrants to purchase an additional 310,000 shares expired unexercised in December 2009, and the remaining Warrants expired unexercised in November 2010.





On or around February 10, 2010, the Company entered into (1) a Convertible Promissory Note with Morgarlan Limited (“Morgarlan”), in the amount of $12,500, to evidence amounts loaned to the Company by Morgarlan; and (2) a Convertible Promissory Note with Little Bay Consulting SA (“Little Bay” and together with Morgarlan, the
“Note Holders”), in the amount of $12,500, to evidence amounts loaned to the Company by Little Bay (collectively the “Convertible Notes”).  In February 2011, the Company entered into Amended and Restated Convertible Notes with the Note Holders, and as a result, the Convertible Notes bear interest at the rate of 8% per annum, and are due and payable on February 10, 2012.





On October 26, 2010 and November 4, 2010, we entered into Convertible Promissory Notes with Cornerstone Global Investments (“Cornerstone”) and Gordon Douglas King and Jay Louise King (the “Kings”), respectively, each in the amount of $5,000 (the
“October and November 2010 Notes”).





On January 31, 2011, February 2, 2011 and February 3, 2011, we entered into Convertible Promissory Notes with Cornerstone, the Kings, and Translink Communications, respectively, each in the amount of $5,000.





In April and June 2011, the Company entered into two Convertible Promissory Notes with Cornerstone in the aggregate amount of $20,000.  In May 2011, the Company entered into a Convertible Promissory Note with MIH Holdings Ltd. in the amount of $10,000.





All of the Convertible Promissory Notes described above (the “Convertible Notes”) bear interest at the rate of 8% per annum, and are due and payable twelve months from their respective effective dates.  Additionally, the principal and interest due under such Convertible Notes is convertible into shares of the Company’s common stock at a conversion price of $0.01 per share at the option of the respective holders thereof, as provided in such Convertible Notes.





We have budgeted the need for approximately $100,000 of additional funding during the next 12 months to continue our business operations, pay costs and expenses associated with our filing requirements with the Securities and Exchange Commission and conduct our exploration activities as planned which funding may not be available on favorable terms, if at all.  If we are unable to raise adequate working capital for fiscal 2012, we will be restricted in the implementation of our exploration plan.





22


These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has no revenues and has accumulated losses since inception. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable
operations. These financial statements do not include any adjustments related to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.





Moving forward, we plan to seek out additional debt and/or equity financing (similar to the Convertible Notes) to pay costs and expenses associated with our filing requirements with the Securities and Exchange Commission and conduct our exploration activities (as described herein); however, we do not currently have any specific plans to raise such additional financing at this time.  The sale of additional equity securities, if undertaken by the Company and if accomplished, may result in dilution to our shareholders. We cannot assure you, however, that future financing will be available in amounts or on terms acceptable to us, or at
all.
































23





ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA








INDEX TO FINANCIAL STATEMENTS


OF SANDALWOOD VENTURES, LTD.








Report of Independent Registered Public Accounting Firm
F-2Balance Sheets as of June 30, 2011 and 2010
F-3Statements of Operations for the Years Ended June 30, 2011 and 2010 and for the Period From April 10, 2007 (Inception) to June 30, 2011
F-4Statement of Shareholders’ Equity (Deficit) for the Period From April 10, 2007 (Inception) to June 30, 2011
F-5Statements of Cash Flows for the Years Ended June 30, 2011 and 2010 and for the Period From April 10, 2007 (Inception) to June 30, 2011
F-6Notes to Financial Statements
F-7



































F-1


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To the Shareholders


Sandalwood Ventures, Ltd.


(An Exploration Stage Company)


Aberdeen, United Kingdom





We have audited the accompanying balance sheets of Sandalwood Ventures, Ltd. (the “Company”) as of June 30, 2011 and 2010, and the related statements of operations, changes in stockholders’ equity, and cash flows for the years then ended and for the period from inception (April 10, 2007) to June 30, 2011.  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 audits.





We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance 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 audits 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes 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 Sandalwood Ventures, Ltd. as of June 30, 2011 and 2010, and the results of its operations and its cash flows for the years then ended and for the period from inception (April 10, 2007) to June 30, 2011, 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 1 to the financial statements, the Company has no revenues and has accumulated losses since inception.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in regard to these matters are also discussed in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.








/s/ GBH CPAs, PC








GBH CPAs, PC


www.gbhcpas.com


Houston, Texas


October 6, 2011








F-2




SANDALWOOD VENTURES, LTD.(An Exploration Stage Company)BALANCE SHEETSJune 30,


June 30,2011


2010ASSETSCurrent assetsCash and cash equivalents

$
13,726


$
7,504Prepaid expenses


-



2,125Total current assets


13,726



9,629Total assets

$
13,726


$
9,629LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)Current liabilitiesAccounts payable and accrued expenses

$
4,828


$
3,925Convertible notes payable, net of discount of $51,790 and $23,767, respectively


28,210



1,233Total current liabilities


33,038



5,158Commitments and contingencies


-



-Stockholders' equity (deficit)Preferred stock, $0.001 par value, 50,000,000 shares authorized,none issued and outstanding


-



-Common stock, $0.001 par value, 250,000,000 shares authorized,42,707,850 shares issued and outstanding


42,708



42,708Additional paid-in capital


111,449



56,449Deficit accumulated during the exploration stage


(173,469
)


(94,686
)Total stockholders' equity (deficit)


(19,312
)


4,471Total liabilities and stockholders' equity (deficit)

$
13,726


$
9,629








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




F-3





SANDALWOOD VENTURES, LTD.(An Exploration Stage Company)STATEMENTS OF OPERATIONSApril 10, 2007For the Year Ended


(Inception) toJune 30,


June 30,2011


2010


2011Costs and expensesGeneral and administrative expenses

$
46,745


$
53,199


$
127,046Exploration costs


2,200



988



15,008Total costs and expenses


48,945



54,187



142,054Other income (expense)Interest expense


(29,838
)


(1,577
)


(31,415
)Net loss

$
(78,783
)

$
(55,764
)

$
(173,469
)Basic and diluted net loss per share

$
(0.00
)

$
(0.00
)Weighted average common sharesoutstanding, basic and diluted


42,707,850



42,707,850





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












F-4





SANDALWOOD VENTURES, LTD.(An Exploration Stage Company)STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)Period from April 10, 2007 (Inception) to June 30, 2011Number of Common Shares Issued


Common Stock at Par Value


Additional

Paid-in

Capital


Deficit Accumulated During the Exploration Stage


TotalIssuance of shares for cash


40,000,000


$
40,000


$
-


$
-


$
40,000Net loss


-



-



-



(7,960
)


(7,960
)Balances, June 30, 2007


40,000,000



40,000



-



(7,960
)


32,040Issuance of shares for cash, net ofdirect issuance costs of $20,000


1,750,000



1,750



13,250



-



15,000Net loss


-



-







(18,782
)


(18,782
)Balances, June 30, 2008


41,750,000



41,750



13,250



(26,742
)


28,258Issuance of shares for cash


957,850



958



18,199



-



19,157Net loss


-



-



-



(12,180
)


(12,180
)Balances, June 30, 2009


42,707,850



42,708



31,449



(38,922
)


35,235Beneficial conversion feature of debt


-



-



25,000



-



25,000Net loss


-



-



-



(55,764
)


(55,764
)Balances, June 30, 2010


42,707,850



42,708



56,449



(94,686
)


4,471Beneficial conversion feature of debt


-



-



55,000



-



55,000Net loss


-



-



-



(78,783
)


(78,783
)Balances, June 30, 2011


42,707,850


$
42,708


$
111,449


$
(173,469
)

$
(19,312
)








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






F-5






SANDALWOOD VENTURES, LTD.(An Exploration Stage Company)STATEMENTS OF CASH FLOWSApril 10, 2007(Inception) toYear Ended June 30,


June 30,2011


2010


2011CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(78,783
)

$
(55,764
)

$
(173,469
)Adjustments to reconcile net loss to net cash used in operating activities:Amortization of debt discount


26,977



1,233



28,210Changes in operating assets and liabilities:Prepaid expenses


2,125



9,081



-Accounts payable and accrued expenses


903



(11,127
)


4,828Net cash used in operating activities


(48,778
)


(56,577
)


(140,431
)CASH FLOWS FROM FINANCING ACTIVITIES:Issuance of stock for cash


-



-



74,157Proceeds from convertible notes payable


55,000



25,000



80,000Net cash provided by financing activities


55,000



25,000



154,157NET CHANGE  IN CASH AND CASH EQUIVALENTS


6,222



(31,577
)


13,726CASH AND CASH EQUIVALENTS, beginning of period


7,504



39,081



-CASH AND CASH EQUIVALENTS, end of period

$
13,726


$
7,504


$
13,726Supplemental cash flow disclosures:Cash paid for income taxes

$
-


$
-


$
-Cash paid for interest


-



-



-Non-cash investing and financing activitiesBeneficial conversion feature of debt

$
55,000


$
25,000


$
80,000








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























F-6








SANDALWOOD VENTURES, LTD.


(AN EXPLORATION STAGE COMPANY)


NOTES TO FINANCIAL STATEMENTS





NOTE 1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Business Organization


Sandalwood Ventures, Ltd. (“Sandalwood" or the "Company") was incorporated on April 10, 2007 under the laws of the State of Nevada for the purpose of acquiring, exploring and developing mining properties. The Company's fiscal year end is June 30. The Company is an Exploration Stage Company.





Principles of Accounting


These financial statements are stated in U.S. Dollars and have been prepared by management on the accrual basis in accordance with United States generally accepted accounting principles (“US GAAP”).





Accounting Estimates


The preparation of financial statements in conformity with US GAAP 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 amounts of revenues and expenses during the reporting period.  Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of the Company's financial position and results of operations.





Going Concern


These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has no revenues and has accumulated losses since inception. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. These financial statements do not include any
adjustments related to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.





Cash and Cash Equivalents


The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. Cash consists of cash on deposit with a high quality major financial institution and to date, the Company has not experienced any losses on its balances.





Mineral Property Acquisition, Exploration and Development Costs


Mineral property acquisition, exploration and related costs are expensed as incurred unless proven and probable reserves exist and the property may commercially be mined. When it has been determined that a mineral property can be economically developed, the costs incurred to develop such property, including costs to further delineate the ore body and develop the property for production, may be capitalized. Interest costs, if any, allocable to the cost of developing mining properties and to constructing new facilities are capitalized until operations commence. Mine development costs incurred either to develop new ore deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of
current production are also capitalized. All such capitalized costs, and estimated future development costs, are then amortized using the units-of-production method over the estimated life of the ore body. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates, at least quarterly, the carrying value of capitalized mining costs and related property, plant and equipment costs, if any, to determine if these costs are in excess of their net realizable value and if a permanent impairment needs to be recorded. The periodic evaluation of carrying value of capitalized costs and any related property, plant and equipment costs are based upon expected future cash flows and/or estimated salvage value. The Company currently does not have any
capitalized mining costs and therefore no adjustments are needed.





F-7


Basic and Diluted Net Income (Loss) Per Share (“EPS”)


Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.  In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At June 30, 2011 and 2010, there were -0- and 3,457,850, respectively,
potential common shares that were anti-dilutive.





Financial Instruments


Our financial instruments consist principally of cash, cash equivalents, accounts payable, and convertible notes. Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments establish a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements. The recorded values of the Company’s financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.





Income Taxes


An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by net operating loss carryforwards. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.





Subsequent Events


Management has evaluated all transactions from June 30, 2011 through the financial statement issuance date for subsequent event disclosure consideration.





Recent Accounting Pronouncements


Management has considered all recent accounting pronouncements issued since the last audit of its consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements.





NOTE 2 – CONVERTIBLE NOTES PAYABLE





In February 2010, the Company issued two convertible promissory notes. Each of the convertible notes has a principal amount of $12,500. The convertible notes matured in February 2011, and were superseded and replaced by amended and restated promissory notes due in February 2012.  The notes bear interest at the rate of 8% per annum. At any time prior to the payment in full of the entire balance, the holders have the option of converting all or any portion of the unpaid balance of the Notes into shares of Sandalwood common stock at a conversion price equal to $0.01 per share, subject to adjustment upon certain events. The conversion price was based on the stock purchased during the private placement and near
non-liquidity of our common stock, the number of shares that would be issued and the effect that the sale of such shares would have on the market for our common stock, and the legal constraints on the sale of such shares. Assuming no adjustment to the conversion price, if the holders convert the entire principal balance of the convertible notes, they would each be issued approximately 1,250,000 shares of Sandalwood common stock (not including the conversion of any accrued and unpaid interest).





F-8


On October 26, 2010 and November 4, 2010, the Company issued two convertible promissory notes. Each of the convertible notes has a principal amount of $5,000. The convertible notes mature on October 26, 2011 and November 4, 2011 and bear interest at the rate of 8% per annum. At any time prior to the payment in full of the entire balance, the holders have the option of converting all or any portion of the unpaid balance (principal and any accrued and unpaid interest) of the convertible notes into shares of Sandalwood common stock at a conversion price equal to $0.01 per share, subject to adjustment upon certain events. The conversion price was based on the stock purchased during the private placement and near
non-liquidity of our common stock, the number of shares that would be issued and the effect that the sale of such shares would have on the market for our common stock, and the legal constraints on the sale of such shares. Assuming no adjustment to the conversion price, if the holders convert the entire principal balance of the convertible notes, they would each be issued 500,000 shares of Sandalwood common stock (not including the conversion of any accrued and unpaid interest).





On January 31, 2011, February 2, 2011 and February 3, 2011, the Company issued three convertible promissory notes. Each of the convertible notes has a principal amount of $5,000. The convertible notes mature on January 31, 2012, February 2, 2012 and February 3, 2012, respectively, and bear interest at the rate of 8% per annum. At any time prior to the payment in full of the entire balance, the holders have the option of converting all or any portion of the unpaid balance (principal and any accrued and unpaid interest) of the convertible notes into shares of Sandalwood common stock at a conversion price equal to $0.01 per share, subject to adjustment upon certain events. The conversion price was based on the stock
purchased during the private placement and near non-liquidity of our common stock, the number of shares that would be issued and the effect that the sale of such shares would have on the market for our common stock, and the legal constraints on the sale of such shares. Assuming no adjustment to the conversion price, if the holders convert the entire principal balance of the convertible notes, they would each be issued 500,000 shares of Sandalwood common stock (not including the conversion of any accrued and unpaid interest).





In April, May and June 2011, the Company issued three convertible promissory notes. A note dated April 19, 2011 has a principal amount of $8,000, matures in April 2012, and bears interest at the rate of 8% per annum. A note dated May 25, 2011 has a principal amount of $10,000, matures in May 2012, and bears interest at the rate of 8% per annum. The third note is dated June 3, 2011, has a principal amount of $12,000, matures in June 2012, and bears interest at the rate of 8% per annum. At any time prior to the payment in full of the entire balance, the holders of the notes have the option of converting all or any portion of the unpaid balance of the Notes into shares of Sandalwood common stock at a conversion price
equal to $0.01 per share, subject to adjustment upon certain events. The conversion price was based on the stock purchased during the private placement and near non-liquidity of our common stock, the number of shares that would be issued and the effect that the sale of such shares would have on the market for our common stock, and the legal constraints on the sale of such shares. Assuming no adjustment to the conversion price, if the holders convert the entire principal balance of the convertible notes, they would be issued 800,000, 1,000,000, and 1,200,000 shares of Sandalwood common stock (not including the conversion of any accrued and unpaid interest).





The Company evaluated the terms of the convertible notes in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the convertible notes did not result in a derivative. The Company evaluated the terms of the convertible notes and concluded that there was a beneficial conversion feature since the convertible notes were convertible into shares of common stock at a discount to the market value of the common stock. The discount related to the beneficial conversion feature was valued at $55,000 based on intrinsic value. The discount related to the beneficial conversion feature is being amortized over the term of the debt (one year). For the years ended June 30, 2011 and 2010, the Company
recognized $28,210 and $1,233, respectively, of interest expense related to the amortization of the discount.









F-9


NOTE 3 – PREFERRED STOCK, COMMON STOCK AND WARRANTS





The Company is authorized to issue 50,000,000 shares of $0.001 par value preferred stock, which may be issued from time to time in one or more series as shall be determined by the Board of Directors. Such stock shall have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in resolutions providing for the issuance of such class or series of Preferred Stock. There are no preferred shares issued.





The Company is authorized to issue 250,000,000 shares of $0.001 par value common stock.





In April 2007, the Company issued 40,000,000 shares of common stock to the Company’s Chief Executive Officer at $0.001 per share for cash proceeds of $40,000.





In September 2007, the Company issued 375,000 shares of common stock at $0.02 per share for cash proceeds of $7,500.





In November 2007, the Company issued 1,065,000 shares of common stock at $0.02 per share for cash proceeds of $21,300.





In December 2007, the Company issued 310,000 shares of common stock at $0.02 per share for cash proceeds of $6,200.





In connection with the stock sales in fiscal 2008, the Company paid $20,000 of direct issuance costs.





In November 2008, the Company issued 957,850 shares of common stock at $0.02 per share for cash proceeds of $19,157.





The following table is an analysis of warrants for the purchase of the Company's common stock for the years ended June 30, 2011 and 2010:





Warrants


Weighted Average Exercise PriceOutstanding, June 30, 2009


2,707,850


$
0.05Expired/Cancelled


(1,750,000
)

$
0.05Outstanding, June 30, 2010


957,850


$
0.05Expired/Cancelled


(957,850
)

$
0.05Outstanding, June 30, 2011


–


$
–





NOTE 4 – INCOME TAXES





The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes. The Company has net operating losses of approximately $145,000 as of June 30, 2011 which begin expiring in 2027. The potential benefit of the Company's net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely-than-not it will utilize the net operating losses carried forward.





F-10


The following table sets forth a reconciliation of the statutory federal income tax to the provision for income taxes for the years ended June 30, 2011 and 2010:





2011


2010Statutory rate


34%



34%Income tax benefit at statutory rate

$
34,832


$
18,960Amortization of debt discount


(17,218
)


-Impact of federal graduated tax rates


(9,662
)


(10,019
)Valuation allowance


(7,952
)


(8,941
)Provision for income taxes

$
-


$
-





Significant components of the deferred tax assets as of June 30, 2011 and 2010 are:





2011



2010Deferred tax assets and liabilities:Net operating loss carryforwards

$
49,300


$
20,443Valuation allowance


(49,300
)


(20,443
)Net deferred tax assets

$
-


$
-




































F-11





ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE





None.





ITEM 9A. CONTROLS AND PROCEDURES.





Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K (the "Evaluation Date"), has concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate,
to allow timely decisions regarding required disclosure.  This conclusion was based on the existence of the material weaknesses in ourinternal control over financial reporting previously disclosed and discussed below.





A material weakness is a deficiency, or a combination of deficiencies, ininternal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We identified and continue to have the following material weakness in our internal controls over financial reporting:





We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. Additionally, due to the fact that we only have one officer and Director, who has no experience as an officer or Director of a reporting company, such lack of experienced personnel may impair our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures, which may result in material misstatements to our financial statements and an inability to provide accurate and timely financial information to our stockholders.





To address the need for more effective internal controls, management has plans to improve the existing controls and implement new controls as our financial position and capital availability improves.





Management’s Annual Report on Internal Control over Financial Reporting





The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. The Company's internal control over financial reporting is a process designed under the supervision of the Company's Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (US GAAP) and includes those policies and
procedures that:





-
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions  of our assets;-
provide reasonable assurance that the transactions are recorded  as necessary to permit the preparation of financial statements in accordance with 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.









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Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect of financial statement preparation and may not prevent or detect misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.





Effective as of June 30, 2011, management assessed the effectiveness of the Company's internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments.





Based on that evaluation, management concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that taken together may be considered to be a material weakness.





A material weakness is a deficiency, or combination of deficiencies, that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control


deficiencies that represent material weaknesses at June 30, 2011:





(1)
lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors capable to perform the audit function; and(2)
inadequate segregation of duties due to limited number of personnel, which makes the reporting process susceptible to management override.





Management believes that the material weaknesses set forth in items (1) and (2) above did not have an affect on the Company's financial reporting in fiscal 2011. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors can adversely affect reporting in the future years, when our operations become more complex and less transparent and require higher level of financial expertise from the overseeing body of the Company.





We are committed to improving our financial organization. As part of this commitment, we will, as soon as funds are available to the Company (1) appoint one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures; (2) create a position to segregate duties consistent with control objectives and will increase our personnel resources; and (3) hire independent third parties to provide expert advice.





We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.





Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.





ITEM 9B. OTHER INFORMATION.





None.









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PART III





ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE





The following table sets forth the name, age and position of our Director and executive officer. There are no other persons who can be classified as a promoter or controlling person of us. Our executive officer and Director currently serving is as follows:





NAME
AGE
POSITIONEdwin Slater
38
Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer, and Director





Set forth below is a brief description of the background and business experience of our executive officers and Director.





Edwin Slater





Mr. Slater has served as our Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and sole Director since our inception in April 2007. Since October 2009, Mr. Slater has performed services as an independent oil consultant, focusing on working with start-up exploration companies in and around the United Kingdom. Through such activities, he plans to assemble staff and crew for exploration companies mainly in the oil sector, including planning and organizing support crews that service drilling camps. From January 2007 to October 2009, Mr. Slater was employed by Chevron Offshore. While employed by Chevron Offshore, Mr. Slater was
responsible for the maintenance of the flow of oil and gas from Chevron Offshore’s offshore installation to its land refinery, which included serving as a liaison with oil rig bosses, providing flow reports, mechanical reports, and safety updates. Mr. Slater also worked with a team responsible for on-site safety and helped head up local safety initiatives. From January 2001 to January 2007, Mr. Slater served as a Control Room Operator with Chevron Offshore in the United Kingdom.   From January 2000 to January 2001, Mr. Slater was employed as a Shop Floor Manager with MacLeman Butcher in Scotland.  From January 1990 to January 2000, Mr. Slater was employed as the Master Butcher with MacLeman Butcher.





Qualifications:





Mr. Slater has been running the day to day operations of the Company as an officer and Director since its inception in 2007. He continues to look for new avenues to grow the Company. He has also continued to work within the oil and gas industry in the United Kingdom.





-------------------------------------





Our Director and any additional Directors we may appoint in the future are elected annually and will hold office until our next annual meeting of the shareholders and until their successors are elected and qualified. Officers will hold their positions at the pleasure of the Board of Directors, absent any employment agreement. Our officers and Directors may receive compensation as determined by us from time to time by vote of the Board of Directors. Such compensation might be in the form of stock options. Directors may be reimbursed by the Company for expenses incurred in attending meetings of the Board of Directors. Vacancies in the Board are filled by majority
vote of the remaining Directors.





Committees of the Board





Our Company currently does not have nominating, compensation, or audit committees or committees performing similar functions nor does our Company have a written nominating, compensation or audit committee charter. Our sole Director believes that it is not necessary to have such committees, at this time, because the functions of such committees can be adequately performed by the sole Director.





26


Audit Committee Financial Expert





Our board of Directors has determined that we do not have a board member that qualifies as an "audit committee financial expert" as defined in Item 407(D)(5) of Regulation S-K, nor do we have a Board member that qualifies as "independent" as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and
as defined by Rule 4200(a)(14) of the FINRA Rules.





We believe that our sole Director is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The sole Director of our Company does not believe that it is necessary to have an audit committee because management believes that the functions of an audit committee can be adequately performed by the Board of Directors. In addition, we believe that retaining an independent Director who would qualify as an "audit committee financial
expert" would be overly costly and burdensome and is not warranted in our circumstances given the stage of our development and the fact that we have not generated any positive cash flows from operations to date.





Involvement in Certain Legal Proceedings





Our Director and executive officer has not been involved in any of the following events during the past ten years:





1.
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;





2.
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);





3.
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or





4.
being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.





Independence of Directors





We are not required to have independent members of our Board of Directors, and do not anticipate having independent Directors until such time as we are required to do so.





Board Meetings and Annual Meeting





During the fiscal year ended June 30, 2011, our Board of Directors did not meet or hold any formal meetings.  We did not hold an annual meeting in 2011.  In the absence of formal board meetings, the Board conducted all of its business and approved all corporate actions during the fiscal year ended June 30, 2011 by the unanimous written consent of its Board of Directors.





Code of Ethics





We have not adopted a formal Code of Ethics. The Board of Directors evaluated the business of the Company and the number of employees and determined that since the business is operated by only one person, Mr. Slater, general rules of fiduciary duty and federal and state criminal, business conduct and securities laws are adequate ethical guidelines.   In the event our operations, employees and/or Directors expand in the future, we may take actions to adopt a formal Code of Ethics.





27


Shareholder Proposals





Our Company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for Directors. The Board of Directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our Company does not currently have any specific or minimum criteria for the election of nominees to the Board of Directors and we do not have any specific process or procedure for evaluating such nominees. The Board of Directors will assess all candidates, whether submitted by management or shareholders, and
make recommendations for election or appointment.





A shareholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our President and Director, Mr. Slater, at the address appearing on the first page of this Report.





SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE





Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and persons who own more than 10% of a class of our equity securities which are registered under the Exchange Act of 1934, as amended, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes of ownership of such registered securities. Such executive officers, directors and greater than 10% beneficial owners are required by Commission regulation to furnish us with copies of all Section 16(a) forms filed by such reporting persons.








To our knowledge, based solely on a review of the copies of such reports furnished to us, Edwin Slater is the sole individual or entity currently subject to Section 16(a) filing requirements.  Mr. Slater inadvertently failed to timely file his Form 3 reporting his initial ownership of our common stock, which Form 3 was subsequently filed on October 5, 2011.





ITEM 11. EXECUTIVE COMPENSATION.





Summary Compensation Table:





Name and principal position

(a)
Year ended June 30

(b)

Salary ($)

(c)


Bonus ($)

(d)


Stock Awards ($)

(e)


Option Awards ($)

(f)


Non-Equity Incentive Plan Compensation ($)

(g)


Nonqualified Deferred Compensation Earnings ($)

(h)


All Other Compensation ($)

(i)


Total ($)

(j)Edwin Slater

CEO, CFO, President, Secretary Treasurer and Director
2011


-



-



-



-



-



-



-


$
-2010


-



-



-



-



-



-



-


$
-





The table above does not include perquisites and other personal benefits in amounts less than 10% of the total annual salary and other compensation.  During the periods indicated, the Company had no Directors who did not also serve as executive officers of the Company, whose total compensation as provided above, included compensation for services as Directors of the Company (if any).







28


Summary of Compensation





Sandalwood Ventures, Ltd. was incorporated in April 2007 and has paid no compensation to any executive or Director to date.   There have been no material changes in the Company’s compensation policies and payments/awards since June 30, 2011, the end of the Company’s last fiscal year.





Stock Option Grants





We have not granted any stock options to our executive officers since our incorporation.





Employment Agreements





We do not have an employment or consulting agreement with Edwin Slater, our Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and Director.





Compensation Discussion and Analysis





Director Compensation





Our Board of Directors (consisting solely of Mr. Slater) does not currently receive any consideration for their services as members of the Board of Directors.  The Board of Directors reserves the right in the future to award the members of the Board of Directors cash or stock based consideration for their services to the Company, which awards, if granted shall be in the sole determination of the Board of Directors.





Executive Compensation Philosophy





Our Board of Directors determines the compensation given to our executive officers in their sole determination, and as such Mr. Slater, as our sole Director, determines his salary in his sole discretion.  As Mr. Slater does not currently draw any compensation from us, we do not currently have any executive compensation program in place.  Our Board of Directors also reserves the right to pay our executive or any future executives a salary, and/or issue them shares of common stock issued in consideration for services rendered and/or to award incentive bonuses which are linked to our performance, as well as to the individual executive
officer’s performance.  This package may also include long-term stock based compensation to certain executives which is intended to align the performance of our executives with our long-term business strategies.  Additionally, while our Board of Directors has not granted any performance base stock options to date, the Board of Directors reserves the right to grant such options in the future, if the Board in its sole determination believes such grants would be in the best interests of the Company.





Incentive Bonus





The Board of Directors may grant incentive bonuses to our executive officer and/or future executive officers in its sole discretion, if the Board of Directors believes such bonuses are in the Company’s best interest, after analyzing our current business objectives and growth, if any, and the amount of revenue we are able to generate each month, which revenue is a direct result of the actions and ability of such executives.





Long-term, Stock Based Compensation





In order to attract, retain and motivate executive talent necessary to support the Company’s long-term business strategy we may award our executive and any future executives with long-term, stock-based compensation in the future, in the sole discretion of our Board of Directors, which we do not currently have any immediate plans to award.









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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.





The following table presents certain information regarding the beneficial ownership of all shares of common stock as of October 5, 2011 by (i) each person who owns beneficially more than five percent (5%) of the outstanding shares of common stock based on 42,707,850 shares outstanding as of October 5, 2011, (ii) each of our Directors, (iii) each named executive officer and (iv) all Directors and officers as a group. Except as otherwise indicated, all shares are owned directly.





Name and Address of Beneficial Owner
Shares Beneficially Owned
Percentage Beneficially OwnedEdwin Slater

Riverside House, Riverside Drive

Aberdeen, United Kingdom AB11 7LH
40,000,000
93.7%All Officers and Directors as a Group

(1 individual)
40,000,000
93.7%





Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act of 1934, as amended (the “Exchange Act”). Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60
days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power at any particular date.





ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS





In April 2007, we sold an aggregate of 40,000,000 shares of our common stock to Edwin Slater, our Chief Executive Officer and Director in consideration for $40,000, or $0.001 per share.





Review, Approval and Ratification of Related Party Transactions





Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officer and Director and significant stockholders.  However, all of the transactions described above were approved and ratified by our Board of Directors, consisting solely of Mr. Slater.  In connection with the approval of the transaction described above, our Director took into account several factors, including his fiduciary duty to the Company; the relationship of the related parties described above to the Company; the material
facts underlying each transaction; the anticipated benefits to the Company and related costs associated with such benefits; whether comparable products or services were available (if applicable); and the terms the Company could receive from an unrelated third party.





We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional Directors, so that such transactions will be subject to the review, approval or ratification of our Board of Directors, or an appropriate committee thereof.   On a moving forward basis, our sole Director will continue to approve any related party transaction based on the criteria set forth above.








30





CORPORATE GOVERNANCE





The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that
governs the Company’s employees, officers and Directors as the Company is not required to do so.





In lieu of an Audit Committee, the Company’s Board of Directors, consisting solely of Mr. Slater, is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company's financial statements and other services provided by the Company’s independent public accountants. The Board of Directors, consisting solely of Mr. Slater, the Chief Executive Officer and Chief Financial Officer of the Company reviews the Company's internal accounting controls, practices and policies.





ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.





AUDIT FEES





The aggregate fees billed for the fiscal years ended June 30, 2011 and 2010 for professional services rendered by our independent principal accountants, GBH CPAs, PC, for the audit of our annual financial statements as included in our Annual Report on Form 10-K and the review of the financial statements included in our Quarterly Reports on Form 10-Q, as well as services provided in connection with statutory and regulatory filings or engagements for those fiscal years were $15,500 and $16,000, respectively.





AUDIT RELATED FEES





The aggregate fees billed for the fiscal years ended June 30, 2011 and 2010 for audit related fees rendered by GBH CPAs, PC were $1,815 and $0, respectively.





TAX FEES





None.





ALL OTHER FEES





None.





PART IV





ITEM 15. EXHIBITS





Exhibit Number
Description of ExhibitExhibit 3.1(1)
Articles of IncorporationExhibit 3.2(1)
BylawsExhibit 10.1(1)
Mineral Property Acquisition AgreementExhibit 10.2(2)
Convertible Promissory Note with Morgarlan LimitedExhibit 10.3(2)
Convertible Promissory Note with Little Bay Consulting SAExhibit 10.4(3)
Amended and Restated Convertible Promissory Note with Morgarlan LimitedExhibit 10.5(3)
Amended and Restated Convertible Promissory Note with Little Bay Consulting SA    31
   Exhibit 10.6(3)
Convertible Promissory Note with Cornerstone Global Investments (Effective October 26, 2010)Exhibit 10.7(3)
Convertible Promissory Note with Gordon Douglas King and Jay Louise King (Effective November 4, 2010)Exhibit 10.8(3)
Convertible Promissory Note with Cornerstone Global Investments (Effective January 31, 2011)Exhibit 10.9(3)
Convertible Promissory Note with Gordon Douglas King and Jay Louise King (Effective February 2, 2011)Exhibit 10.10(3)
Convertible Promissory Note with Translink Communications (Effective February 3, 2011)Exhibit 10.11*
Convertible Promissory Note with Cornerstone Global Investments (Effective April 19, 2011)Exhibit 10.12*
Convertible Promissory Note with MIH Holdings Ltd. (Effective May 25, 2011)Exhibit 10.13*
Convertible Promissory Note with Cornerstone Global Investments (Effective June 3, 2011)Exhibit 31*
Certificate of the Chief Executive Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 32*
Certificate of the Chief Executive Officer and Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





*   Attached hereto.





(1) Filed as an exhibit to the Company’s Form S-1 Registration Statement, filed with the Commission on October 19, 2009, and incorporated by reference herein.





(2) Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q, filed with the Commission on February 22, 2010, and incorporated by reference herein.





(3) Filed as an exhibit to the Company’s Quarterly Report on Form 10-Q, filed with the Commission on February 23, 2011, and incorporated by reference herein.








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.








SANDALWOOD VENTURES, LTD.DATED: October 11, 2011
By: /s/ Edwin SlaterEdwin SlaterChief Executive Officer (Principal Executive Officer)And Principal Financial Officer/Principal Accounting Officer, Treasurer, Secretary and Director














32