Attached files
| file | filename |
|---|---|
| EX-99.4 - CERTIFICATE 18 U.S.C. SECT 1350 R. BALLAN, CFO - Novation Holdings Inc | certsect906reynanballancfo.htm |
| EX-99.3 - CERTIFICATE RULE 13A-14A REYNAN BALLAN, CFO - Novation Holdings Inc | certrule13a14arballancfo.htm |
| EX-99.2 - CERTIFICATE 18 U.S.C. SECT 1350 GREGORIO, CEO - Novation Holdings Inc | certsect906jancygregorioceo.htm |
| EX-99.1 - CERTIFICATE RULE 13A-14A JANCY GREGORIO, CEO - Novation Holdings Inc | certrule13a14agregorioceo.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q/A
|
(X
)
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITES EXCHANGE ACT OF
1934
|
|
For
the quarterly period
ended November
30, 2009
|
|
(
)
|
TRANSACTION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the transaction period
from
to
|
|
|
Commission
File
number 333-108218
|
|
STANFORD MANAGEMENT LTD.
|
|
(Exact
name of Company as specified in
charter)
|
|
Delaware
|
98-0413066
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employee I.D. No.)
|
|
2431 M. de la
Cruz Street
|
|
|
Pasay City,
Philippines
|
-
|
|
(Address of
principal executive offices)
|
(Zip
Code)
|
|
Issuer’s
telephone
number 011-632-813-1139
|
|
Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
definition of “large accelerated filer”, “accelerated filer” and “small
reporting company” Rule 12b-2 of the Exchange Act.
Large
accelerated
filer [ ] Accelerated
filer [ ]
Non-accelerated
filer [ ] (Do not check
if a small reporting
company) Small reporting
company [X]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act)
Yes
[ ] No [X]
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PROCEDING FIVE YEARS
Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by Section
12, 13 or 15(d) of the Securities Exchange Act of 1934 after the distribution of
securities subsequent to the distribution of securities under a plan confirmed
by a court. Yes □ No □
APPLICABLE
ONLY TO CORPORATE ISSUERS
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date:
January
10, 2010: 52,170,000 common shares
-1-
|
Page
Number
|
||
|
PART
1.
|
FINANCIAL
INFORMATION
|
|
|
ITEM 1.
|
Financial
Statements (unaudited)
|
3
|
|
Balance
Sheet as at November 30, 2009 and August 31, 2009
|
4
|
|
|
Statement
of Operations
For
the three months ended November 30, 2009 and 2008 and for the period
September 24, 1998 (Date of Inception) to November 30,
2009
|
5
|
|
|
Statement
of Cash Flows
For
the three months ended November 30, 2009 and 2008 and for the period
September 14, 1998 (Date of Inception) to November 30,
2009
|
6
|
|
|
Notes
to the Financial Statements.
|
7
|
|
|
ITEM 2.
|
Management’s
Discussion and Analysis or Financial Conditions and Results of
Operations
|
10
|
|
ITEM 3.
|
Quantitative
and Qualitative Disclosure about Market Risk
|
17
|
|
ITEM 4.
|
Controls
and Procedures
|
18
|
|
ITEM 4T.
|
Controls
and Procedures
|
19
|
|
PART
11.
|
OTHER
INFORMATION
|
19
|
|
ITEM 1.
|
Legal
Proceedings
|
19
|
|
ITEM 1A.
|
Risk
Factors
|
19
|
|
ITEM 2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
21
|
|
ITEM 3.
|
Defaults
Upon Senior Securities
|
21
|
|
ITEM 4.
|
Submission
of Matters to a Vote of Security Holders
|
21
|
|
ITEM 5.
|
Other
Information
|
21
|
|
ITEM 6.
|
Exhibits
|
22
|
|
SIGNATURES.
|
23
|
|
-2-
PART
1 – FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
The
accompanying balance sheets of Stanford Management Ltd. (pre-exploration stage
company) at November 30, 2009 (with comparative figures as at August 31, 2009)
and the statement of operations for the three months ended November 30, 2009 and
2008 and for the period from September 24, 1998 (date of inception) to November
30, 2009 and the statement of cash flows for the three months ended November 30,
2009 and 2008 and for the period from September 24, 1998 (date of incorporation)
to November 30, 2009 have been prepared by the Company’s management in
conformity with accounting principles generally accepted in the United States of
America. In the opinion of management, all adjustments considered
necessary for a fair presentation of the results of operations and financial
position have been included and all such adjustments are of a normal recurring
nature.
Operating
results for the quarter ended November 30, 2009, are not necessarily indicative
of the results that can be expected for the year ending August 31,
2010.
-3-
STANFORD
MANAGEMENT LTD.
(A Pre
-Exploration Stage Company)
BALANCE
SHEETS
(Unaudited
– Prepared by Management)
|
ASSETS
|
November
30, 2009
|
August
31, 2009
|
|
Current
Assets
|
||
|
Cash
|
$ 77
|
$ 2,621
|
|
Total Assets
|
$ 77
|
$ 2,621
|
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIENCY
|
||
|
Current
Liabilities
|
||
|
Accounts payable and accrued
liabilities
|
$ 128,466
|
$ 128,806
|
|
Due to related parties – Note
4
|
22,799
|
20,481
|
|
Total current
liabilities
|
151,265
|
149,287
|
|
Stockholders’
deficiency
|
||
|
500,000,000
common shares authorized, at $0.001 par value
|
||
|
52,170,000
shares issued and outstanding
|
52,170
|
52,170
|
|
Capital
in excess of par value
|
145,030
|
141,880
|
|
Deficit
accumulated during the pre-exploration stage
|
(348,388)
|
(340,716)
|
|
Total
stockholders’ deficiency
|
(151,188)
|
(146,666)
|
|
$ 77
|
$ 2,621
|
The
accompanying notes are an integral part of these interim unaudited financial
statements.
-4-
STANFORD
MANAGEMENT LTD.
(A
Pre-Exploration Stage Company)
STATEMENTS
OF OPERATIONS
For the
three months ended November 30, 2009 and 2008 and for the period from September
24, 1998 (date of inception) to November 30, 2009
(Unaudited
– Prepared by Management)
|
Three
months
ended
Nov.
30, 2009
|
Three
months
ended
Nov.
30, 2008
|
Date
of Inception
to
Nov.
30, 2009
|
|
|
REVENUE
|
$ -
|
$
-
|
$
-
|
|
GENERAL
AND ADMINISTRATIVE EXPENSES:
|
|||
|
Exploration
costs
|
-
|
-
|
25,940
|
|
General
and administration
|
7,672
|
11,417
|
331,037
|
|
Net
loss from operations
|
(7,672)
|
(11,417)
|
(356,977)
|
|
Gain
on settlement of debt
|
-
|
-
|
8,589
|
|
NET
LOSS
|
$
(7,672)
|
$
(11,417)
|
$ (348,388)
|
|
NET
LOSS PER COMMON SHARE
|
|||
|
Basic
|
$ (0.00)
|
$ (0.00)
|
|
|
AVERAGE
OUTSTANDING SHARES
|
|||
|
Basic
|
52,170,000
|
52,170,000
|
The
accompany notes are an integral part of these interim unaudited financial
statements.
-5-
STANFORD
MANAGEMENT LTD.
(A
Pre-Exploration Stage Company)
STATEMENTS
OF CASH FLOWS
For the
three months ended November 30, 2009 and 2008 and for the period from September
24, 1998 (date of inception) to November 30, 2009
(Unaudited
– Prepared by Management)
|
Three
months ended
November
30, 2009
|
Three
months ended
November
30, 2008
|
September
24, 1998
(date
of Inception) to
November
30, 2009
|
|
|
Cash
flows from Operating Activities
|
|||
|
Net loss
|
$ (7,672)
|
$ (11,417)
|
$ (348,388)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|||
|
Capital
contributions - expenses
|
3,150
|
3,150
|
141,750
|
|
Changes
in accounts payable
|
(340)
|
73,518
|
128,466
|
|
Net
cash provided (used) in operations
|
(4,862)
|
65,251
|
(78,172)
|
|
Cash
flows from investing activities
|
-
|
-
|
-
|
|
Cash
flows from financing activities
|
|||
|
Proceeds
from loans for related parties
|
2,318
|
(66,018)
|
22,799
|
|
Proceeds
from issuance of common stock
|
-
|
-
|
55,450
|
|
Cash
provided by financing activities
|
2,318
|
(66,018)
|
78,249
|
|
Net
(decrease) increase in cash
|
(2,544)
|
(767)
|
77
|
|
Cash
at beginning of period
|
2,621
|
1,946
|
-
|
|
CASH
AT END OF PERIOD
|
$ 77
|
$ 1,179
|
$ 77
|
The
accompanying notes are an integral part of these interim unaudited financial
statements
-6-
STANFORD
MANAGEMENT LTD.
(A Pre -
Exploration Stage Company)
NOTES
TO THE FINANCIAL STATEMENTS
November
30, 2009
(Unaudited
– Prepared by Management)
1. ORGANIZATION
The
Company was incorporated under the laws of the State of Delaware on September
24, 1998 with the authorized common stock of 25,000,000 shares at $0.001 par
value. On March 9, 2007, at the Annual General Meeting of
Stockholders a Resolution was approved whereby the authorized share capital was
increased to 500,000,000 common shares with a par value of $0.001 per
share.
The
Company was organized for the purpose of acquiring and developing mineral
properties. At the report date mineral claims, with unknown reserves,
had been acquired. The Company has not established the existence of a
commercially minable ore deposit and therefore is considered to be in the
pre-exploration stage (see note 3).
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Accounting
Methods
The
Company recognizes income and expenses based on the accrual method of
accounting.
Dividend
Policy
The
Company has not yet adopted a policy regarding payment of
dividends.
Income
Taxes
|
|
The
Company utilizes the liability method of accounting for income
taxes. Under the liability method deferred tax assets and
liabilities are determined based on differences between financial
reporting and the tax bases of the assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect, when the
differences are expected to be reversed. An allowance
against deferred tax assets is recorded, when it is more likely than not,
that such tax benefits will not be
realized.
|
On
November 30, 2009, the Company had a net operating loss carry forward of
$348,388. The tax benefit of approximately $104,500 from the loss
carry forward has been fully offset by a valuation reserve because the use of
the future tax benefit is doubtful since the Company has no
operations. The loss carry forward will expire starting in 2022
through 2030.
|
|
|
|
Statement of Cash
Flows
|
|
|
For
the purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less to be
cash equivalents.
|
|
|
Basic and Diluted Net
Income (loss) Per Share
|
|
|
Basic
net income (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding. Diluted
net income (loss) per share amounts are computed using the weighted
average number of common and common equivalent shares outstanding as if
shares
|
-7-
STANFORD
MANAGEMENT LTD.
(Pre-Exploration
Stage Company)
NOTES
TO FINANCIAL STATEMENTS
November
30, 2009
(Unaudited
– Prepared by Management)
|
2.
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES - Continued
|
|
|
Basic and Diluted Net
Income (loss) Per Share -
continued
|
had been
issued on the exercise of any common share rights unless the exercise becomes
antidilutive and then only the basic per share amounts are shown in the
report.
Unproven Mineral Claim
Costs
Cost of
acquisition, exploration, carrying and retaining unproven properties are
expensed as incurred.
Revenue
Recognition
Revenue
is recognized on the sale and transfer of goods or completion of
service.
Advertising and Market
Development
The
company expenses advertising and market development costs as
incurred.
Financial and Concentrations
Risk
The
Company does not have any concentration or related financial credit
risk.
|
|
Environmental
Requirements
|
|
|
At
the report date environmental requirements related to the mineral claim
acquired are unknown and therefore an estimate of any future cost cannot
be made.
|
Estimates and
Assumptions
Management
uses estimates and assumptions in preparing financial statements in accordance
with accounting principles accepted in the United States of
America. Those estimates and assumptions affect the reported amounts
of the assets and liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses. Actual
results could vary from the estimates that were assumed in preparing these
financial statements.
Financial
Instruments
The carrying amounts of financial
instruments, including cash and accounts payable, areconsidered by management to be their estimated
fair value due to their short termmaturities.
Recent Accounting
Pronouncements
The
Company does not expect that the adoption of other recent account pronouncements
will have a material impact of its financial statements.
-8-
STANFORD
MANAGEMENT LTD.
(Pre-Exploration
Stage Company)
NOTES
TO FINANCIAL STATEMENTS
November
30, 2009
(Unaudited
– Prepared by Management)
3. ACQUISITION
OF MINING CLAIMS
|
|
On
February 2, 2008, the Company purchased for $5,000 a 100% interest in a
mineral property called San Carlos Gold Claim located in the Philippines
from Ramos Ventures Ltd., a non related company. Under
the mining laws of the Philippines there is no requirement to maintain the
claim in good standing and the claim will lapse once the Company has no
further interest in it.
|
4. SIGNIFICANT
TRANSACTIONS WITH RELATED PARTIES
As at
November 30, 2009, officers-directors had acquired 15% of the common capital
stock issued, and have made no interest, demand loans of $22,799 and have made
contributions to capital of $141,750 in the form of expenses paid for the
Company.
|
5.
|
CAPITAL
STOCK
|
|
|
The
Company has completed one Regulation S offering of 40,300,000 post split
shares of its capital stock for a total consideration of
$2,015. In addition, the Company has completed another
Regulation S offering of 6,870,000 post split shares of its capital stock
for a total consideration of $3,435. Under an Offering
Memorandum the Company issued 5,000,000 post split shares for a total
consideration of $50,000.
|
On
September 19, 2007, the shareholders of the Company approved a 20 to 1 forward
stock split which became effective on November 6, 2007, resulting in an increase
of the outstanding shares of common stock from 2,608,500 to
52,170,000. The 52,170,000 post split common shares are shown as
split from the date of inception.
|
6.
|
GOING
CONCERN
|
|
|
The
Company will need additional working capital to service its debt and to
develop the mineral claims acquired, which raises substantial doubt about
its ability to continue as a going concern. Continuation
of the Company as a going concern is dependent upon obtaining additional
working capital and the management of the Company has developed a
strategy, which it believes will accomplish this objective through
additional equity funding, and long term financing, which will enable the
Company to operate for the coming
year.
|
-9-
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
OVERVIEW
The
Company was incorporated on September 24, 1998 under the laws of the State of
Delaware. The Company's amended Articles of Incorporation currently
provide that the Company is authorized to issue 500,000,000 post-split shares of
common stock, par value $0.001 per share. As at November 30, 2009
there were a total of 52,170,000 post-split common shares issued and
outstanding.
LIQUIDITY
AND CAPITAL RESOURCES
As at
November 30, 2009, the Company had $77 in cash and liabilities of
$151,265. The liabilities of $128,466 owed to general creditors are
as follows: auditors - $500, internal accountant - $47,413, former directors and
officers - $74,914 and office – $5,639. The amount owed to related
parties of $20,188 is non-interest bearing and has no fixed terms of
repayment.
During
the three months, the Company has incurred the following expenses:
|
Expenditure
|
Amount
|
|
|
Accounting
and audit
|
i
|
$ 3,900
|
|
Bank
charges and interest
|
ii
|
44
|
|
Edgarizing
|
iii
|
250
|
|
Management
fees
|
iv
|
1,500
|
|
Office
and general
|
v
|
213
|
|
Rent
|
vi
|
1,050
|
|
Telephone
|
vii
|
600
|
|
Transfer
agent
|
viii
|
115
|
|
Total
expenses
|
$ 7,672
|
|
|
i.
|
The
Company accrued $1,250 the preparation of working papers for filing with
the Form 10-Q. The accrual for the review of the financial
statements attached here by the Company new independent accountants,
Madsen & Associates CPA’s Inc. is $500 and an additional amount of
$2,150 for the review of prior year’s financial statements reviewed by
other auditors..
|
|
|
ii.
|
Standard
monthly bank charges for the three
months.
|
|
|
iii.
|
Represents
the cost to edgarize this Form 10-Q for the nine months ended November 30,
2009.
|
|
|
iv.
|
The
Company does not compensate its directors for the service they perform for
the Company since, at the present time, it does not have adequate funds to
do so. Nevertheless, management realizes that it should give
recognition to the services performed by the directors and officers and
therefore has accrued $500 per month. This amount has been
expensed in the current period with the offsetting credit being allocated
to "Capital in Excess of Par Value" on the balance sheet. The
Company will not, in the future, be responsible for paying either cash or
shares in settling this accrual.
|
|
|
v.
|
Represent
courier and photocopying charges incurred during the
period.
|
|
|
vi.
|
The
Company does not incur any rental expense since it uses the office of its
President. Similar to management fees, rent expense should be
reflected as an operating expense. Therefore, the Company has
accrued $350 per month as an expense with an offsetting credit to "Capital
in Excess of Par Value".
|
-10-
|
vii.
|
The
Company does not have its own telephone number but uses the telephone
number of its President. Similar to management fees and rent,
the Company accrues an amount of $200 per month to represent the charges
for telephone with an offsetting entry to "Capital in Excess of Par
Value".
|
|
viii.
|
Annual
storage charges invoiced by the transfer
agent.
|
The
Company estimates the following expenses will be required during the next twelve
months to meet its obligations:
|
Expenditures
|
Requirements
For
Twelve Months
|
Current
Accounts
Payable
|
Required
Funds
for
Twelve Months
|
|
|
Accounting
and audit
|
1
|
$ 9,250
|
$ 47,913
|
$ 57,163
|
|
Bank
charges
|
2
|
150
|
-
|
150
|
|
Directors
- former
|
3
|
-
|
74,914
|
74,914
|
|
Edgar
filing fees
|
4
|
1,150
|
-
|
1,150
|
|
Filing
fees and franchise taxes
|
5
|
375
|
-
|
375
|
|
Office
|
6
|
1,000
|
5,639
|
6,639
|
|
Transfer
agent's fees
|
7
|
1,200
|
-
|
1,200
|
|
Estimated
expenses
|
$ 13,125
|
$
128,466
|
$ 141,591
|
No
recognition has been given to management fees, rent or telephone since, at the
present time, these expenses are not cash oriented.
1. Accounting
and auditing expense has been projected as follows:
|
Filings
|
Accountant
|
Auditors
|
Total
|
|
Form
10-Q - Nov. 30, 2009
|
$ 1,250
|
$ 500
|
$ 1,750
|
|
Form
10-Q – Feb. 28, 2010
|
1,250
|
500
|
1,750
|
|
Form
10-Q – May 31, 2010
|
1,250
|
500
|
1,750
|
|
Form
10-K – Aug 31, 2010
|
1,500
|
2,500
|
4,000
|
|
$ 5,250
|
$ 4,000
|
$
9,250
|
|
2.
|
Bank
charges have been estimate at the amount accrued since account opened
during the year and projected for twelve
months.
|
|
|
|
3.
|
The
former and directors and officers are owed the sum of money as noted
above. The amount is on a demand basis but bears no
interest.
|
|
|
4. Edgar
filing fees comprise the cost of filing the various Forms 10-K and 10-Q on
Edgar. It is estimated the cost for each of the Form 10-Qs will
be $250 and the cost of filing the 10-K will be
$400.
|
|
|
|
|
5. Filing
fees to The Company Corporation as a registered agent in the State of
Delaware is estimated at $215 per year. Franchise taxes paid to
the State of Delaware are $160.
|
|
|
6. Relates
to photocopying and faxing and miscellaneous directors’ expenses based on
prior year’s actual charges giving consideration to some of the expenses
not being of a recurring nature.
|
-11-
|
|
7. Each
year the Company is charged a fee of $1,200 by its transfer agent to act
on its behalf.
|
Stanford
will have to raise sufficient funds to settle the balance of the outstanding
liabilities if it wishes to continue to operate in the future.
Stanford
does not expect to purchase or sell any plant or significant equipment during
the next year.
Stanford
does not expect any significant changes in the number of employees.
LIQUIDITY
AND CAPITAL RESOURCES
Stanford
has had no revenue since inception and its accumulated deficit is
$348,388. To date, the growth of Stanford has been funded by the sale
of shares and advances by its director in order to meet the requirements of
filing with the SEC and previously maintaining the SF claim in good
standing.
The
amount required to cover total operating costs for the next twelve months and to
settle all the outstanding amounts owed to third party creditors would be
$128,466 less the amount in the bank account being $77. At present,
Stanford does not have these funds to pay for future expenses and eliminate
accounts payable and therefore would be required to either sell shares in its
capital stock or obtain further advances from its
director. Stanford’s future operations and growth is dependent on its
ability to raise capital for expansion and to seek revenue sources.
RESULTS
OF OPERATIONS
The
San Carlos Gold Claim
Stanford
purchased a 100% interest in San Carlos. The property consists of one – 6 unit
claim block containing 92.7 hectares which have been staked and recorded with
the Mineral Resources Department of the Ministry of Energy and Mineral Resources
of the Government of the Republic of Philippines.
San
Carlos, located about 30 km Northwest of the city of San Carlos, (closest city)
lies 30 km Northwest of San Carlos and 40 km Northeast of Dagupan, is a gold
exploration project, located 35 km East of the past producing Villanueva Gold
Mine. The claims are accessible by all-weather government-maintained roads to
the town of San Carlos (to the Southeast) and to Dagupan to the North East.
Year-round deep sea port facilities at Iba and the skilled population base found
between San Carlos and Dagupan is readily available.
The past
producing mines yielded 27 million ounces of gold during the years 1919 and
1998.
The
district is immensely rich in mineral resources. The high elevation forest of
the district have concentrations of heavy minerals like Ilmenite, Rutile,
Monosite and Zircon which offer scope of exploitation for industrial
purpose.
A
recommended two phased mineral exploration program consisting of air photo
interpretation, geological mapping, geochemical soil sampling and geophysical
surveying will enhance the targets for diamond drilling. This exploration
program to fully evaluate the prospects of the San Carlos, at a cost of Php
1,756,211 is fully warranted to be undertaken.
Previous
exploration work to investigate the mineral potential of the property has
outlined some favourable areas for continued exploration and
development.
2. PROPERTY
DESCRIPTION AND LOCATION
San
Carlos project consists of 1 unpatented mineral claim, located 30 kilometers
Northwest of the city of San Carlos at UTM co-ordinates Latitude
10°30’00”N and
Longitude 123°29’00”E. The mineral
claim was assigned to Stanford by Ramos Ventures Ltd and the said assignment was
filed with the Mineral Resources Department of the Ministry of Energy and
Mineral Resources of the Government of the Republic of the
Philippines.
-12-
There are
no known environmental concerns or parks designated for any area contained
within the claims. The property has no encumbrances. As advanced
exploration proceeds there may be bonding requirements for
reclamation.
3. ACCESSIBILITY,
CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE ANDTOPOGRAPHY
San
Carlos is accessible from San Carlos by traveling on the country’s only highway
system which for the most part consists of one lane in each direction and by
taking an all weather gravel road. San Carlos lies in a non-active seismic area,
which means that it is free from major earthquakes. The city was formed in the
so-called Carbon period, some 350 million years ago. During this period, large
shallow marshes were formed with abundant vegetation. The rotting plants and
trees in these marshes turned into peat and later into coal. The town
still has large coal reserves, the basis for the city’s coal mining industry of
today.
The
Philippines is situated between 5 and 22 degrees North latitude. This
means the country falls within the so-called tropical climate zone, a zone
characterized by high temperatures the whole year round, relatively high
rainfall and lush vegetation. Rainfall on the city can occur in every month, but
the wettest months are October, November and December. Annual
rainfall is approximately 1.5 meters. Due to the steep, deforested,
mountains on average 60 percent of the rainwater runs off fast to the
sea. The remaining 40 percent partly evaporates partly seeps through
to the island’s underground water aquifier.
San
Carlos has an experienced work force and will provide all the necessary services
needed for an exploration and development operation, including police,
hospitals, groceries, fuel, helicopter services, hardware and other necessary
items. Drilling companies and assay facilities are present in San
Carlos.
4. HISTORY
Deposits
of shell and eroded sand formed the basis for the limestone, which makes up most
of Philippines. This limestone was, over the ages, pushed upwards, making it
possible to find today sea fossils high in the country’s mountains. This pushing
up continues today. It is caused by the fact that the Philippine Plate, on which
most of the country lies, is slowly diving under the Eurasian Plate of the
mainland of Asia.
Philippines
are characterized by steep mountains without any substantial forest cover.
Highest peaks reach over 1,000 meters. The island is 300 km long and 35 km wide.
High, steep mountains, short distances and lack of forest cover mean that
rainwater runs fast to the sea, causing substantial erosion.
The
island has vast copper, gold and coal reserves which are mined mainly in the
central part.
Numerous
showings of mineralization have been discovered in the area and six
prospects have achieved significant production, with the nearby Villanueva Gold
Mine (35 kilometers away) producing 165,000 ounces of Gold
annually.
During
the 1990’s several properties west of San Carlos were drilled by junior mineral
exploration companies.
Stanford
is preparing to conduct preliminary exploration work on the
property.
-13-
5. GEOLOGICAL
SETTING
Regional
Geology of the Area
The hilly
terrains and the middle level plain contain crystalline hard rocks such as
charnockites, granite gneiss, khondalites, leptynites, metamorphic gneisses with
detached occurrences of crystalline limestone, iron ore, quartzo-feldspathic
veins and basic intrusives such as dolerites and anorthosites. Coastal
zones contain sedimentary limestones, clay, laterites, heavy mineral sands and
silica sands. The hill ranges are sporadically capped with laterites and
bauxites of residual nature. Gypsum and phosphatic nodules occur as
sedimentary veins in rocks of the cretaceous age. Gypsum of secondary
replacement occurs in some of the areas adjoining the foot hills of the Western
Ghats. Lignite occurs as sedimentary beds of tertiary age. The Black
Granite and other hard rocks are amenable for high polish. These granites occur
in most of the districts except the coastal area.
Stratigraphy
The
principal bedded rocks for the area of San Carlos Gold Claim (and for most of
the Philippines for that matter) are Precambrian rocks which are exposed along a
wide axial zone of a broad complex.
Gold at
the Villanueva Gold Mine (which, as stated above, is in close proximity to the
San Carlos) is generally concentrated within extrusive volcanic rocks in the
walls of large volcanic caldera.
Intrusive
In
general the volcanoes culminate with effluents of hydrothermal solutions that
carry precious metals in the form of naked elements, oxides or
sulphides.
These
hydrothermal solutions intrude into the older rocks as quartz veins. These rocks
may be broken due to mechanical and chemical weathering into sand size particles
and carried by streams and channels. Gold occurs also in these sands as
placers.
Recent
exploration result for gold occurrence in San Carlos, Kalinga is highly
encouraging. Gold belt in sheared gneissic rocks is found in three subparallel
auriferous load zones where some blocks having 220 to 450 meter length and 1.5
to 2 metre width could be identified as most promising ones.
Structure
DEPOSITIONAL
ENVIRONMENT / GEOLOGICAL SETTING: Veins form in high-grade, dynamothermal
metamorphic environment where metasedimentary belts are invaded by igneous
rocks.
HOST/ASSOCIATED
ROCK TYPES: Hosted by paragneisses, quartzites, clinopyroxenites,
wollastonite-rich rocks, pegmatites. Other associated rocks are charnockites,
granitic and intermediate intrusive rocks, quartz-mica schists, granulites,
aplites, marbles, amphibolites, magnetite-graphite iron formations and
anorthosites.
TECTONIC
SETTING(S): Katazone (relatively deep, high-grade metamorphic environments
associated with igneous activity; conditions that are common in the shield
areas).
DEPOSITIONAL
ENVIRONMENT / GEOLOGICAL SETTING: Veins form in high-grade, dynamothermal
metamorphic environment where metasedimentary belts are invaded by igneous
rocks.
6. DEPOSIT
TYPES
Deposits
are from a few millimeters to over a metre thick in places. Individual veins
display a variety of forms, including saddle-, pod- or lens-shaped, tabular or
irregular bodies; frequently forming anastomosing or stockwork
patterns
-14-
Mineralization
is located within a large fractured block created where prominent
northwest-striking shears intersect the norths triking caldera fault zone. The
major lodes cover an area of 2 km and are mostly within 400m of the surface.
Lodes occur in three main structural settings:
(i) steeply
dipping northweststriking shears;
(ii) flatdipping
(1040) fractures (flatmakes); and
(iii) shatter
blocks between shears.
Most of
the gold occurs in tellurides and there are also significant quantities of gold
in pyrite.
7. MINERALIZATION
No
mineralization has been reported for the area of the property but structures and
shear zones affiliated with mineralization on adjacent properties pass through
it.
8. EXPLORATION
Previous
exploration work has not to the author’s knowledge included any attempt to drill
the structure on San Carlos. Records indicate that no detailed exploration has
been completed on the property.
Property
Geology
To the
east of the property is intrusives consisting of rocks such as tonalite,
monzonite, and gabbro while the property itself is underlain by sediments and
volcanics. The intrusives also consist of a large mass of granodiorite towards
the western most point of the property.
The area
consists of interlayered chert, argillite and massive andesitic to basaltic
volcanics. The volcanics are hornfelsed, commonly contain minor pyrite,
pyrrhotite.
9. DRILLING
SUMMARY
No
drilling is reported on the San Carlos.
10. SAMPLING
METHOD; SAMPLE PREPARATION; DATA VERIFICATION
All the
exploration conducted to date has been conducted according to generally accepted
exploration procedures with methods and preparation that are consistent with
generally accepted exploration practices. No opinion as to the quality of the
samples taken can be presented.
No other
procedures of quality control were employed and no opinion on their lack is
expressed.
11. ADJACENT
PROPERTIES
The
adjacent properties are cited as examples of the type of deposit that has been
discovered in the area and are not major facets to this report.
12. INTERPRETATIONS
AND CONCLUSIONS
The area
is well known for numerous productive mineral occurrences including the
Villanueva Gold Claim.
The
locale of the San Carlos is underlain by the units of the Precambrian rocks that
are found at those mineral occurrence sites.
These
rocks consisting of cherts and argillites (sediments) and andesitic to basaltic
volcanic have been intruded by granodiorite. Structures and mineralization
probably related to this intrusion are found throughout the region and occur on
the claim. They are associated with all the major mineral occurrences and
deposits in the area.
-15-
Potential
mineralization to be found on the claim is consistent with that found associated
with zones of extensive mineralization. Past work however has been limited and
sporadic and has not tested the potential of the property.
Potential
for significant amounts of mineralization to be found exists on the property and
it merits intensive exploration.
13. RECOMMENDATIONS
A two
phased exploration program to further delineate the mineralized system currently
recognized on San Carlos is recommended.
The
program would consist of air photo interpretation of the structures, geological
mapping, both regionally and detailed on the area of the main showings,
geophysical survey using both magnetic and electromagnetic instrumentation in
detail over the area of the showings and in a regional reconnaissance survey and
geochemical soil sample surveying regionally to identify other areas on the
claim that are mineralized and in detail on the known areas of mineralization.
The effort of this exploration work is to define and enable interpretation of a
follow-up diamond drill program, so that the known mineralization and the whole
property can be thoroughly evaluated with the most up to date exploration
techniques.
Budget
The
proposed budget for the recommended work in Php 1,756,211 (US $38,227) is as
follows:
|
Phase
I
|
||
|
Philippine Paso
|
U. S. Dollar
|
|
|
1. Geological
Mapping
|
321,420
|
6,996
|
|
2. Geophysical
Surveying
|
279,500
|
6,084
|
|
TOTAL
PHASE I
|
600,920
|
13,080
|
|
Phase
II
|
||
|
1. Geochemical
surveying and surface sampling (includes
sample collection and assaying)
|
1,155,291
|
25,147
|
|
TOTAL
EXPLORATION
|
1,756,211
|
38,227
|
The
Company’s Main Product
Stanford’s
primary product will be the sale of minerals, both precious and
commercial. No minerals have been found to exist on the San Carlos
and therefore the possibilities of obtaining a cash flow from the sale of
minerals in the future might be remote.
Stanford’s
Exploration Facilities
No
decision has been made as to what type, if any, explorations facilities will be
constructed on the San Carlos.
Investment
Policies
The
Company does not have an investment policy at this time. Any excess
funds it has on hand will be deposited in interest bearing notes such as term
deposits or short term money instruments. There are no restrictions on what the
director is able to invest or additional funds held by the
Company. Presently the Company does not have any excess funds
to invest.
-16-
|
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK
|
Market
Information
There are
no common shares subject to outstanding options, warrants or securities
convertible into common equity of our Company.
The
number of shares subject to Rule 144 is 8,000,000 Share
certificates representing these shares have the appropriate legend affixed on
them.
There are
no shares have been offered pursuant to an employee benefit plan or dividend
reinvestment plan. Our shares are traded on the
OTCBB. Although the OTCBB does not have any listing requirements per
se, to be eligible for quotation on the OTCBB, we must remain current in our
filings with the SEC; being as a minimum Forms 10-Q and
10-K. Securities already quoted on the OTCBB that become delinquent
in their required filings will be removed following a 30 or 60 day grace period
if they do not make their filing during that time.
In the
future our common stock trading price might be volatile with wide
fluctuations. Things that could cause wide fluctuations in our
trading price of our stock could be due to one of the following or a combination
of several of them:
|
●
|
our
variations in our operations results, either quarterly or
annually;
|
|
●
|
trading
patterns and share prices in other exploration companies which our
shareholders consider similar to ours;
|
|
●
|
the
exploration results on the San Carlos claim, and
|
|
●
|
other
events which we have no control
over.
|
In
addition, the stock market in general, and the market prices for thinly traded
companies in particular, have experienced extreme volatility that often has been
unrelated to the operating performance of such companies. These wide
fluctuations may adversely affect the trading price of our shares regardless of
our future performance. In the past, following periods of volatility
in the market price of a security, securities class action litigation has often
been instituted against such company. Such litigation, if instituted,
whether successful or not, could result in substantial costs and a diversion of
management’s attention and resources, which would have a material adverse effect
on our business, results of operations and financial conditions.
Trends
We are in
the pre-explorations stage, have not generated any revenue and have no prospects
of generating any revenue in the foreseeable future. We are unaware
of any known trends, events or uncertainties that have had, or are
reasonably likely to have, a material impact on our business or income, either
in the long term of short term, as more fully described under ‘Risk
Factors’.
-17-
ITEM
4. CONTROLS
AND PROCEDURES
It is
management’s responsibility for establishing and maintaining adequate internal
control over financial reporting. Under the supervision and with the
participation of our management, including Janay B. Gregorio, Chief Executive
Officer and Reynan Ballan, Chief Accounting Officer, they have evaluated the
effectiveness of Stanford’s disclosure controls and procedures as required by
the Exchange Act Rule 13a-15(d) as at November 30, 2009 (the “Evaluation
Date”). Based on the evaluation by management, they have concluded
these disclosure controls and procedures were not effective as of the Evaluation
Date as a result of material weaknesses in internal control over financial
reporting as more fully discussed below.
Under
Rule 13a-15(e)/15d-15(e); Regulation S-K, Item 307, the SEC states that
“disclosure controls and procedures” have the following
characteristics:
|
●
|
designed
to ensure disclosure of information that is required to be disclosed in
the reports that Stanford files or submits under the Exchange
Act;
|
|
●
|
recorded,
processed, summarized and reported with the time period required by the
SEC’s rules and forms; and
|
|
●
|
accumulated
and communicated to management to allow them to make timely decisions
about the required
disclosures.
|
As of
November 30, 2009, the management of Stanford 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.
Management
concluded, during the three months ended November 30, 2009, internal controls
and procedures were not effective to detect the inappropriate application of US
GAAP rules. Management realized there are deficiencies in the
design or operation of the Company’s internal control that adversely affected
the Company’s internal controls which management considers to be material
weaknesses.
Material
Weaknesses
Management
assessed the effectiveness of our internal control over financial reporting as
of the Evaluation Date and identified the following material
weaknesses:
|
●
|
As
at November 30, 2009, Stanford did not have an audit committee which
complies to the requirements of an audit committee since it did not have
an independent “financial expert” on the committee. Even though
it has a Code of Ethics it does not emphasize fraud and methods to avoid
it. Due to the small size of Stanford a whistleblower
policy is not necessary.
|
|
●
|
Due
to a significant number and magnitude of out-of-period adjustments
identified during the quarter-end closing process, management has
concluded that the controls over the quarter-end financial reporting
process were not operating effectively. A material
weakness in the quarter-end financial reporting process could result in
Stanford not been able to meet its regulatory filing deadlines and, if not
remedied, has the potential to cause a material misstatement or to miss a
filing deadline in the future. Management override of
existing controls is possible given the small size of the organization and
lack of personnel.
|
|
●
|
There
is no system in place to review and monitor internal control over
financial reporting. This is due to Stanford maintaining an
insufficient complement of personal to carry out ongoing monitoring
responsibilities and ensure effective internal control over financial
reporting.
|
-18-
ITEM
4A. CONTROLS
AND PROCEDURES
There
were no changes in Stanford’s internal controls over financial reporting during
the three months ended November 30, 2009 that have materially affected, or are
reasonably likely to material affect, Stanford’s internal control over financial
reporting. Nevertheless, management will have to introduce the above
mentioned changes in internal control and procedures to protect Stanford’s
assets.
PART
11 – OTHER INFORMATION
ITEM
1. LEGAL
PROCEEDINGS
There are
no legal proceedings to which Stanford is a party or to which its mineral claim
is subject, nor to the best of management’s knowledge are any material legal
proceedings contemplated.
ITEM
1A RISK
FACTORS
Our
shareholders and any future investors must be aware of the following risk
factors prior to investing in Stanford’s common stock. It must
be emphasized that Stanford, if any of these risks become fact, may have to
cease operations and our shareholders and any future investors could lose part
or all of their investment.
RISKS
ASSOCIATED WITH OUR COMMON STOCK
|
1.
|
The
Company’s share price are subject to the Penny Stock Rule which will
result in any broker-dealer involved in the Company’s shares having
increased administrative responsibilities which will have a negative
effect on both the Company’s ability to raise funds and an investor’s
ability to purchase or sell his
shares.
|
|
|
The
Company’s common stock is considered to be a “penny stock” because it
meets one or more of the definitions in SEC Rule
3a51-1:
|
|
(i)
|
it
has a price of less than five dollars per share;
|
|
|
(ii)
|
it
is not traded on a recognized national exchange;
|
|
|
(iii)
|
it
is not quoted on a National Association of Securities Dealers,
Inc.
(“NASD”)
automated quotation system (NASDAQ), or even if so, has
a
price less than five dollars per share; or
|
|
|
(iv)
|
is issued
by a company with net tangible assets of less that
$2,000,000,
if in business more than three years continuously, or
$5,000,000,
if the business is less than three years continuously, or with average
revenues of less than $6,000,000 for the past three
years.
|
|
|
A
broker-dealer will have to undertake certain administrative functions
required when dealing in a penny stock transaction. Disclosure
forms detailing the level of risk in acquiring The Company’s shares will
have to be sent to an interested investor, current bid and offer
quotations will have to be provided with an indication as to what
compensation the broker-dealer and the salesperson will be receiving from
this transaction and a monthly statement showing the closing month price
of the shares being held by the investor. In addition,
the broker-dealer will have to receive from the investor a written
agreement consenting to the transaction. This additional
administrative work might make the broker-dealer reluctant to participate
in the purchase and sale of the Company’s
shares.
|
-19-
From the
Company’s point of view, being subject to the Penny Stock Rule could make it
extremely difficult for it to attract new investors for future capital
requirements since many financial institutions are restricted under their
by-laws from investing in shares under a certain dollar
amount. Ordinary investors might not be willing to subscribe to
shares in the capital stock of the Company due to the uncertainty as to whether
the share price will ever be able to be high enough that the Penny Stock Rule is
no longer a concern.
RISKS
ASSOCIATED WITH THE COMPANY
|
1.
|
The
Company has a limited operating history in which new investors can value
the performance of the Company, its management and its future
expectations.
|
The
Company commenced its operations in 1998 but only became involved in the mineral
exploration industry in January 2001. With no past operating history,
any meaningful evaluation of the Company is difficult. Having been
mainly inactive since its inception, the Company is basically a start-up company
and therefore there is no history available which will allow a new investor to
assess its business plan, its management and its future
operations. Without these three factors, a new investor cannot make a
meaningful decision as to whether or not the purchase of shares in the Company
is a wise investment.
|
2.
|
The
Company has a lack of working capital which, unless obtained on acceptable
terms in the future, will inhibit its future growth
strategy.
|
The only
present source of working capital available to the Company is through the sale
of common shares, incurring debt or other borrowing. At present, the
Company does not have adequate funds to conduct operations and financing may not
be available when needed. Even if the financing is available, it may
be on terms the Company deems unacceptable or are materially adverse to
shareholders’ interests with respect to dilution of book value, dividend
preferences, liquidation preferences, or other terms. The Company’s
inability to obtain financing would have a materially adverse effect on its
ability to implement its growth strategy, and as a result, could require it to
cease its operations. An investor may be investing in a company that
does not have adequate funds to conduct its operations and, if so, an investor
might lose all of his investment.
|
3.
|
The
Company has incurred losses since its inception and therefore has an
accumulated deficit which might inhibit the raising of additional
capital.
|
|
|
Since
inception, the Company has incurred losses and has an accumulative deficit
of $348,388 as at November 30, 2009. The Company has never
generated any revenue from its business activities and has no prospect of
generating any such revenue in the foreseeable
future. Those factors are expected to negatively affect
the Company’s ability to raise funds from the public since there is no
certainty the Company will ever be able to make a
profit.
|
|
4.
|
Absence
of cash dividends may affect a shareholder’s return on
investment.
|
The Board
of Directors does not anticipate paying cash dividends on the outstanding
shares, both now and in the future, and intends to retain any future earnings to
finance its exploration activities on the mineral claim to be obtained in the
near future. Payment of dividends, if any, will depend, among other
factors, on earnings, capital requirements and the general operating and
financial condition of the Company, and will be subject to legal limitations on
the payment of dividends out of paid-in capital. An investor should
be aware that a dividend, either in cash or shares, may never be paid by the
Company and, therefore, the shares of the Company should not be purchased by an
investor as an income producing security.
|
5.
|
There
is an absence of recent exploration activities on the San Carlos other
than the preparation of a geological report containing an initial
exploration program.
|
-20-
|
|
Since
its purchase on February 2, 2008, there has been no significant
exploration activity on the San Carlos, except for several properties
being drilled by junior mineral exploration companies west of the
claim. The Company does not have sufficient funds to
under take the exploration program recommended by Jeffrey Manalastas,
Professional Geologist.
|
|
6.
|
No
matter how much money is spent on exploring the San Carlos there may never
be an ore reserve found.
|
No matter
how much the Company spends on exploration activities it may never discover a
commercially viable quantity of ore on the San Carlos. Most
exploration activities do not result in the discovery of commercially mineable
deposits of ore. In fact, it is extremely remote that a mineral
property will become a producing mine.
ITEM
2. UNREGISTERED
SALE OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
None
|
ITEM
3. DEFAULTS
UPON SENIOR SECURITIES
None
ITEM
4. SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM
5. OTHER
INFORMATION
None
ITEM
6. EXHIBITS
1. Certificate
of Incorporation, Articles of Incorporation and By-laws
|
1.1
|
Certificate
of Incorporation (incorporated by reference from Stanford’s Registration
Statement on Form SB-2 filed on August 26,
2003)
|
|
1.2
|
Articles
of Incorporation (incorporated by reference from Stanford’s Registration
Statement on Form SB-2 filed on August 26,
2003)
|
|
1.3
|
By-laws
(incorporated by reference from Stanford’s Registration Statement on Form
SB-2 filed on August 26, 2003)
|
-21-
SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
STANFORD
MANAGEMENT LTD.
(Registrant)
JANAY B.
GREGORIO
Janay B. Gregoria
Chief Executive Officer
President and Director
Dated: February 8,
2010
REYNAN
BALLAN
Reynan Ballan
Chief Accounting Officer
Chief Financial Officer
and Director
Dated: February 8,
2010
-22-