Attached files

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EX-32.1 - CODE GREEN APPAREL CORPex321.htm
EX-31.2 - CODE GREEN APPAREL CORPex312.htm
EX-31.1 - CODE GREEN APPAREL CORPex311.htm
EX-32.2 - CODE GREEN APPAREL CORPex322.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


_X_

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the Quarterly Period Ended March 31, 2010

 

 

____

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the Transition Period From                       to                     


Commission File Number 000-53434


GOLD STANDARD MINING CORP.

(Name of small business issuer specified in its charter)



              Nevada               

        80-0250289        

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

 

 

 

6399 Wilshire Blvd., Ste, 507, Los Angeles, CA

    90048    

(Address of principal executive offices)

(Zip Code)


 

 


                          (323) 782-8802                         

(Registrant’s telephone number, including area code)


190 N. Canon Drive, Suite 420, Beverly Hills, CA  90210

(Former name, former address and former fiscal year, if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 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   T     No   £



Indicate by check mark whether the registrant is a large accelerated filer, anon –accelerated filer, or a smaller reporting company.   See definitions of large accelerated filer, accelerated filer and smaller reporting company in Section 12b-2 of the Exchange Act.



Large accelerated filer           

Accelerated filer           

  

Non-accelerated filer             

Smaller reporting company   X 


As of March 31, 2010, the issuer had  142,699,522 shares of common stock outstanding.


Transitional Small Business Disclosure Format:     Yes   £     No   T


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes   T    No   £


1


PART I – FINANCIAL INFORMATION


Item 1. Financial Statements


The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (“Commission”). While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and footnotes thereto, which are included in the Company’s Report on Form 10K, as amended, previously filed with the Commission.


2




Gold Standard Mining Corp.

(a development stage enterprise)

Balance Sheets

   
 

March 31,

      2010     

December 31,      2009     

   

ASSETS

  
   

Current Assets

  

Cash in bank

$             -- 

$       5,654 

Total Current Assets

$             -- 

$       5,654 

Other Asset - Investment in unconsolidated subsidiary

     100,670 

      100,670 

   

TOTAL ASSETS

$   100,670 

$   106,324 

   

LIABILITIES AND STOCKHOLDERS’ EQUITY

  
   

Current Liabilities

  

       Checks issued in advance of deposits

$            87 

$              - 

       Loans from related parties

     184,656 

     171,086 

      Total Current Liabilities

     184,743 

     171,086 

   

STOCKHOLDERS EQUITY(DEFICIT)

  
   

Common stock , $.001 par value

  

   Authorized 500,000,000 shares;

  

   Issued and outstanding, 142,699,522 at

  

   March 31, 2010 and December 31, 2009

 142,700 

142,700 

   

Additional Paid in capital                            

465,099 

465,099 

Deficit accumulated during development stage                                      

   (691,872)

    (672,561)

Total Stockholders’ Equity (Deficit)

     (84,073)

      (64,762)

   

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$  100,670 

$    106,324 

   

See accompanying notes to financial statements




3




Gold Standard Mining Corp.

(a development stage enterprise)

Statement of Operations

(Unaudited)

    
 




Three months ended

March 31, 2010




Three months ended

March 31, 2009


For the Period December (inception) through

March 31, 2010

    

INCOME

$                --

$              -- 

$               -- 

    

Total Income

--

-- 

--  

    

EXPENSES

   
    

   General and Administrative

19,311 

 78,258 

691,872 

    

Total Expenses

         19,311 

        78,258 

        691,872 

    

NET INCOME (LOSS)

$     (19,311)

$    (78,258)

 $   (691,872)

    

NET LOSS PER COMMON SHARE, BASIC AND DILUTED


NIL 


NIL 

 
    

WEIGHTED AVERAGE NUMBER OF COMMON

   

SHARES OUTSTANDING, BASIC AND DILUTED         

      

142,699,522 

 99,058,544 

 
    

See accompanying notes to financial statements



4






Gold Standard Mining Corp.

(a development stage enterprise)

Statement of Cash Flows

(Unaudited)

 





Three months ended

March 31,       2010     





Three months ended

March 31,       2009     


For the period

December 11, 2007

(inception) through

March 31,      2010    

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

   Net loss

$   (19,311)

$   (78,258)

$  (691,872)

    Adjustment to reconcile net loss to net cash

    used in operating activities :

   

     Checks issued in advance of deposits

87 

-  

87  

    Common stock issued for services

             - 

           825 

    30,825 

 

 

 

 

Total cash used in operating  activities

(19,224)

    (77,433)

(660,960)

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Loans from related parties

13,570 

4,450 

184,656  

    Net proceeds from issuance of common stock     

             - 

    83,000 

  476,304 

 

 

 

 

    Total cash from financing activities

   13,570 

    87,450 

  660,960 

 

 

 

 

INCREASE (DECREASE) IN CASH

5,654 

10,017 

-  

BEGINNING CASH

      5,654 

             3 

             -  

 

 

 

 

ENDING CASH

$            - 

$   10,020 

$            -  

 

 

 

 

  

 

 

Supplemental disclosure of cash flow information:

 

 

 

Interest paid

$            - 

$            - 

$            - 

 

 

 

 

Income tax paid

$            - 

$            - 

$            - 

 

See accompanying notes to financial statements



5





GOLD STANDARD MINING CORP.

(A Development Stage Enterprise)

Statement of Stockholders’ Deficit

For the Period from December 11, 2007 (Inception) to March 31, 2010

      
      
 




     Common stock     

Shares            Amount



Additional

Paid in

   Capital   

Deficit

accumulated

during

development        stage     


Total

stockholders’

Equity

    (Deficit)    

      

Balance at inception (December 11, 2007

-- 

-- 

-- 

--  

--  

      

Common stock issued for services

66,000,000 

20,000 

-- 

--  

20,000  

      

Net loss for the period December 11, 2007

     

   through December 31, 2007

               -- 

               - 

              -- 

 (20,000)

    (20,000)

      

Balance December 31, 2007

66,000,000 

20,000 

-- 

(20,000)

--  

Issuance of shares for cash

33,000,000 

10,000 

-- 

--  

10,000  

      

Net loss for the year ended December 31, 2008

                -- 

               - 

               -- 

    (44,497)

     (44,497)

Balance, December 31, 2008

99,000,000 

 30,000 

--  

(64,497)

(34,497)

      

Common stock issued for cash

697,024 

697 

483,606  

--  

484,303 

Common stock retired

(59,400,000)

9,600 

(27,600)

 

(18,000)

Common stock issued for services

1,732,500 

1,733 

9,092  

--  

10,825 

Cancellation of common stock

(18,000,000)

(18,000)

   

Common stock issued to acquire Ross

30,506,060  

30,506  

5,000  

  

   Zoloto Co. Ltd

100,669,998  

100,670  

--  

--  

100,670 

      

Net loss for year ended December 31, 2009

               --  

             --  

              --  

(608,064)

(608,064)

      

Balance at December 31, 2009

142,699,522  

     142,700 

   465,099. 

  (672,561)

      (64,762)

      

Net loss for the period ended March 31, 2010

               --  

               -- 

               -- 

(19,311)

(19,311)

      

Balances, March 31, 2010

142,699,522  

$142,700 

$465,099 

$691,872

$       84,073 

 
 

The accompanying notes are an integral part of these financial statements



6




Gold Standard Mining Corp.

(a development stage enterprise)

Notes to Financial Statements

March 31, 2010


NOTE 1:   HISTORY OF OPERATIONS AND CHANGE OF CONTROL


The Company was incorporated in Nevada on December 11, 2007 under the name, Fluid Solutions, Inc.  The Company’s fiscal year end is December 31.  On May 18, 2009, Fluid Solutions, Inc. changed its name to Gold Standard Mining Corp. and effected a 3.3-1 forward common stock split.  All references to common stock shares in these financial statements give effect to the 3.3 to 1 stock split as well as the 1,000 to 1 stock split that took place on October 18, 2008.


On May 6, 2009, the Company entered into a material definitive agreement, as amended, with Gold Standard Mining Corp., a Wyoming corporation, by which the Company acquired 100% of the outstanding common stock of Gold Standard Mining Corp. in exchange for 100,699,998 shares of the Company's common stock issued in May and June 2009.  Shortly thereafter, Pantellis Zachos, an officer/director and a major shareholder retired 59.4 million shares of common stock to the Company treasury.  


In February 2009, Gold Standard Mining Corp., of Wyoming, entered into an agreement with Ross Zoloto Co., Ltd., a Russian limited liability company, to exchange all of Ross Zoloto’s outstanding shares, held by its sole shareholder, Araik Khachatrian, for shares of the Wyoming corporation.  The exchange transaction is pending review and approval by the Russian regulatory authorities.  Ross Zoloto is a company engaged in the business of operating a producing gold mine in Zeya, Russia, which is located on the border between Russia and China.


As a result of the pending acquisition, the Company has changed its plan of operations to the mining of precious metals. On May 18, 2009, in order to complete the share issuance for Ross Zoloto,  the Company increased its authorized capital from 100,000,000 to 500,000,000 shares of common stock, $ 0.001 par value per share.

The assets of Gold Standard Mining of Wyoming , principally the agreement to acquire the ownership interest in Ross Zoloto Co., Ltd., have been transferred to the Company and its liabilities have been assumed by the Nevada parent.  Gold Standard Mining of Wyoming is currently inactive and in process of liquidation.   


On May 6, 2009, Agata Gotova, Araik Khachatrian, and Zurab Chachavadze were appointed as directors of the Company and Araik Khachatrian was appointed as Chief Operating Officer of the Company. Mr Zachos remains the Chief Executive Officer of the Company.


NOTE 2:  BASIS OF PRESENTATION AND GOING CONCERN


The Company’s accounting and reporting policies conform to accounting principles generally accepted in the United States of America applicable to development stage companies.  


The functional currency is the United States dollar, and the financial statements are presented in United States dollars.


7



The Company’s financial statements at March 31, 2009 and for the three months then ended have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business.  The Company incurred  a loss of $19,311 for the quarter ended March 31, 2010 and a loss of $179,545 for the period from December 11, 2007 (date of inception) through March 31, 2010.


The Company has not generated any revenue during the period from December 11, 2007 (date of inception) through March 31, 2009 and has funded its operations primarily through the issuance of equity. Accordingly, the Company’s ability to accomplish its business strategy and to ultimately achieve profitable operations is dependent upon its ability to obtain additional debt or equity financing and to complete its acquisition of Ross Zoloto Co. Ltd.,


These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.


The Company is in the business of investing in operations of other companies. There can be no assurance that the Company will be successful in its endeavor.


NOTE 3:  INVESTMENT IN UNCONSOLIDATED SUBSIDIARY


The Company has accounted for its investment in its wholly owned subsidiary, Gold Standard Mining, Wyoming and the principal asset of that subsidiary, Ross Zoloto Co., Ltd. as an unconsolidated subsidiary, pending completion of the acquisition of Ross Zoloto.  Such completion is subject to attainment by the Company of regulatory approval by the Russian governmental authorities of the acquisition of  Ross Zoloto by Gold Standard Mining, Wyoming.  Until such approval is granted, the Company is accounting for the acquisition at the par value of the common stock issued.  If, and when approval is obtained, the Company intends to consolidate the accounts of the Russian subsidiary with its own and to no longer account for its activities as a development stage enterprise.


NOTE 4:   SIGNIFICANT ACCOUNTING POLICIES


Accounting Method


The Company's financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.


Cash and Cash Equivalents


For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.


Development Stage Activities


 The Company has been in the development stage since its formation.  It was formerly engaged in seeking out opportunities in the bottled water industry none of which were realized.  Accordingly, the Company has not generated any revenue since its inception.  Since its acquisition of Ross Zoloto, a company in Russia activley engaged in mining operations, the Company has shifted its focus to that of gold mining.


8


While the acquisition is pending approval of the Russian regulatory authorities, the Company is accounting for the acquisition of Ross Zoloto as an unconsolidated subsidiary and whose operations have not been included with those of the Company. Upon the Russian regulatory authorities authorizing the completion of the acquisition of Ross Zoloto, the Company intends to consolidate its financial statements with that of its wholly-owned subsidiary.


Stock Based Compensation


Shares of the Company’s common stock may be issued for services. These issuances are valued at the fair market value of the services provided and the number of shares issued is determined based upon what the price of the common stock is on the date of each respective transaction subject to the existence of an active market for the stock.  If no active market is prevelant, the number of shares issued is based solely on the fair value of the services rendered.


Estimates


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


Fair Value of Financial Instruments


The carrying amounts for the Company’s cash, and advances from shareholder approximate fair value due to the short-term maturity of these instruments.


Income Taxes


In February 1992, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes.” SFAS No. 109 required a change from the deferred method of accounting for income taxes of Accounting Principles Board (“APB”) Opinion No. 11 to the asset and liability method of accounting for income taxes. Under the asset and liability method of SFAS No. 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under SFAS No. 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.


9




At March 31, 2010 and December 31, 2009, the Company had net deferred tax assets calculated at an expected rate of 34% of approximately $235,200 and $228,600, respectively, principally arising from net operating loss carryforwards for income tax purposes.  As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset has been established at March 31, 2010 and December 31, 2009.  The significant components of the deferred tax asset at March 31, 2010 and December 31, 2009 were as follows:


  

March 31,

2010

   December 31,   

2009

Net operating loss carryforward

 

$691,872

$672,561

  

   

Deferred tax asset

 

$235,200

$228,600

Deferred tax asset valuation allowance

 

$(235,200)

$(228,600)


At March 31, 2010 and December 31, 2009, the Company has estimated net operating loss carryforwards of approximately $691,872 and $672,561 , respectively, which expire in the years 2029-2030.  The approximate net change in valuation allowance between December 31, 2008 and March 31, 2010 is $6,600.


The Company has not yet determined what portion, if any, of the net operating losses available for carryforward, amounting to approximately $691,872 at March 31, 2010,  that could be lost due to the May 2009 change in control.  



Earnings (Loss) Per Share


In February 1997, the FASB issued SFAS No. 128, “Earnings per Share.” SFAS No. 128 simplifies the standards for computing earnings per share (“EPS”) and was effective for financial statements issued for periods ending after December 15, 1997, with earlier application not permitted.


Basic EPS is determined using net income divided by the weighted average shares outstanding during the period. Diluted EPS is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued.


Concentration of Credit Risk


Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and cash equivalents.  The Company places its cash with high quality financial institutions and at times may exceed the FDIC insurance limit


Special purpose entities


The Company does not have any off-balance sheet financing activities.


10



Impairment or Disposal of Long-Lived Assets


In August 2001, FASB issued Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“FAS 144”). FAS 144 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to their estimated fair value based on the best information available.


Business segments


SFAS No. 131 “Disclosures About Segments of an Enterprise and Related Information” establishes standards for the way that public companies report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements issued to the public.  It also establishes standards for disclosures regarding products and services, geographic areas and major customers.  The Company has evaluated the requirements of SFAS No. 131, and has determined that it is not applicable.  


Start-up expenses


The Company has adopted Statement of Position No. 98-5, “Reporting the Costs of Start-up Activities”, which requires that costs associated with start-up activities be expensed as incurred.  Accordingly, start-up costs associated with the Company’s formation have been included in the Company’s general and administrative expenses for the period from December 11, 2007 (date of inception) through March 31, 2010.


Recently issued accounting pronouncements


In January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements. This guidance amends the disclosure requirements related to recurring and nonrecurring fair value measurements and requires new disclosures on the transfers of assets and liabilities between Level 1 (quoted prices in active market for identical assets or liabilities) and Level 2 (significant other observable inputs) of the fair value measurement hierarchy, including the reasons and the timing of the transfers. Additionally, the guidance requires a roll forward of activities on purchases, sales, issuance and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). The guidance will become effective for the reporting period beginning January 1, 2010, except for the disclosure on the roll forward activities for Level 3 fair value measurements, which will become effective for the reporting period beginning January 1, 2011. The Company will adopt this guidance on its effective date and since it currently only has Level 1 assets and liabilities, it does not expect its adoption to have an impact on its consolidated results of operations and financial condition.


 In October 2009, the FASB issued ASU No. 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. ASU No. 2009-13 amends revenue recognition guidance for arrangements with multiple deliverables. The new guidance eliminates the residual method of revenue recognition and allows the use of management’s best estimate of selling price for individual elements of an arrangement when vendor specific objective evidence (“VSOE”), vendor objective evidence (“VOE”) or third-party evidence (“TPE”) is unavailable. For the Company, this guidance is effective for all new or materially modified arrangements entered into on or after January 1, 2011 with earlier application permitted as of the beginning of a fiscal year. Full retrospective application of the new guidance is optional.  The Company does not expect a material impact on the consolidated financial statements.


11


 In August 2009, the FASB issued ASU 2009-05, Fair Value Measurements and Disclosures (Topic 820): Measuring Liabilities at Fair Value. The guidance provides clarification that in circumstances in which a quoted market price in an active market for an identical liability is not available, an entity is required to measure fair value using a valuation technique that uses the quoted price of an identical liability when traded as an asset or, if unavailable, quoted prices for similar liabilities or similar assets when traded as assets. If none of this information is available, an entity should use a valuation technique in accordance with existing fair valuation principles. The Company adopted this guidance in the quarter ended December 31, 2009 and there was no material impact on the consolidated financial statements.

   

 In June 2009, the FASB issued the Statement of Financial Accounting Standards (“SFAS”) No. 167, Amendments to FASB Interpretation No. 46(R). SFAS No. 167 addresses (1) the effects on certain provisions of Financial Accounting Standards Board Interpretation (“FIN”) No. 46 (revised December 2003), Consolidation of Variable Interest Entities, as a result of the elimination of the qualifying special-purpose entity concept in SFAS No. 166, Accounting for Transfers of Financial Assets, and (2) constituent concerns about the application of certain key provisions of FIN No. 46(R), including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. This Statement shall be effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. The Company adopted SFAS No. 167 for this interim period and its adoption did not have an impact on its consolidated results of operations and financial condition.

     

In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140. SFAS No. 166 was issued to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. This Statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. Earlier application is prohibited. This Statement must be applied to transfers occurring on or after the effective date. The Company adopted SFAS No. 166 for this interim period and its adoption did not have an impact on its consolidated results of operations and financial condition.


In November 2008, the FASB ratified EITF Issue No. 08-7 (EITF 08-7), Accounting for Defensive Intangible Assets. EITF 08-7 applies to defensive intangible assets, which are acquired intangible assets that the acquirer does not intend to actively use but intends to hold to prevent its competitors from obtaining access to them. As these assets are separately identifiable, EITF 08-7 requires an acquiring entity to account for defensive intangible assets as a separate unit of accounting, which should be amortized to expense over the period the asset diminished in value. Defensive intangible assets must be recognized at fair value in accordance with SFAS No. 141R and SFAS No. 157. EITF 08-7 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company is currently evaluating the impact of EITF 07-1, but do not expect the adoption to have an impact on our financial statements.


13


In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161 (SFAS No. 161), Disclosures about Derivative Instruments and Hedging Activities – An Amendment of FASB Statement No. 133. SFAS No. 161 requires enhanced disclosures on derivative and hedging activities by requiring objectives to be disclosed for using derivative instruments in terms of underlying risk and accounting designation. This statement requires disclosures on the need of using derivative instruments, accounting of derivative instruments and related hedged items, if any, under SFAS No. 133 and the effect of such instruments and related hedge items, if any, on the financial position, financial performance and cash flows. This new statement is effective for fiscal years beginning after November 15, 2008. The Company is currently evaluating the impact of the adoption of SFAS No. 161 on its financial statements.


NOTE 5:  RELATED PARTY TRANSACTIONS


On December 11, 2007, 66,000,000 shares of common stock were issued to Pantelis Zachos, an officer/director, pursuant to Section 4(2) of the Securities Act of 1933, in exchange for services rendered.  On May 7, 2009, in connection with the acquisition of Gold Standard Mining Corp., Mr. Zachos retired 59,400,000 shares of his common stock. 


Mr. Zachos and a shareholder have periodically made loans to the Company to fund its operations.  The advances are non-interest bearing, and are due on demand.  Loan balances at March 31, 2010 and December 31, 2009 were $184,656 and $171,086, respectively.


NOTE 6:  COMMITMENT AND CONTINGENCIES


The Company presently operates from several locations within the United States and Greece either on a rent free basis or month-to-month rentals.  


The Company is not involved in any litigation nor is it aware of any pending litigation.


Item 2:  Management’s Discussion and Analysis or Plan of Operation


The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes to the financial statements included elsewhere in this filing as well as with Management’s Discussion and Analysis or Plan of Operation contained in the Company’s Report on Form 10K for the period ended December 31, 2008, as amended, filed with the Securities and Exchange Commission.  


Forward Looking Statements


This discussion and the accompanying financial statements (including the notes thereto) may contain “forward-looking statements” that relate to future events or our future financial performance, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward looking statements are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks and other factors include, among others, those listed under “Risk Factors” in Part II Item 1a. and those included elsewhere in this filing.  For a more detailed discussion of risks and uncertainties, see the Company’s public filings made with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward-looking statements.


14



Revenues


There were no revenues in either three month period ended March 31, 2010 and March 31, 2009.


General and Administrative Expenses


The Company incurred general and administrative expenses amounting to $19,311 in the three month period ended March 31, 2010, compared to $96,433 for the three months ended March 31, 2009.  The principal reasons for the reduction of expenses related to lower legal and accounting and banking fees.  



Critical Accounting Estimates and Policies


The discussion and analysis of our financial condition and plan of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates including, among others, those affecting revenue, the allowance for doubtful accounts, the salability of inventory and the useful lives of tangible and intangible assets. The discussion below is intended as a brief discussion of some of the judgments and uncertainties that can impact the application of these policies and the specific dollar amounts reported on our financial statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates. Many of our estimates or judgments are based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed below and elsewhere in this Registration Statement. We do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances.


We have identified below some of our accounting policies that we consider critical to our business operations and the understanding of our results of operations. This is not a complete list of all of our accounting policies, and there may be other accounting policies that are significant to us. For a detailed discussion on the application of these and our other accounting policies, see note 1 to the financial statements for the period ended March 31, 2010, included in this Form 10Q.


Cash Equivalents


Cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing any corporate obligations.


Stock Based Compensation


Shares of the Company’s common stock may be issued for services. These issuances are valued at the fair market value of the services provided and the number of shares issued is determined based upon what the price of the common stock is on the date of each respective transaction.


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Estimates


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


Income Taxes


In February 1992, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes.” SFAS No. 109 required a change from the deferred method of accounting for income taxes of Accounting Principles Board (“APB”) Opinion No. 11 to the asset and liability method of accounting for income taxes. Under the asset and liability method of SFAS No. 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under SFAS No. 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.


Earnings (Loss) Per Share


In February 1997, the FASB issued SFAS No. 128, “Earnings per Share.” SFAS No. 128 simplifies the standards for computing earnings per share (“EPS”) and was effective for financial statements issued for periods ending after December 15, 1997, with earlier application not permitted. Upon adoption, all prior EPS data was restated. Basic EPS is determined using net income divided by the weighted average shares outstanding during the period. Diluted EPS is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued.


Segment Reporting


Based on the Company's integration and management strategies, the Company operates in a single business segment. For the period ended March 31, 2010, the Company had no revenue.


Plan of Operations


The Company’s plan of operations originally involved the seeking and development of natural mineral water sources for bottled water and juices.   With the acquisition of Ros Zoloto subsequent to this reporting period, and subject to the review and approval of the Russian government, the Company intends to expand its operations into minerals and mining.


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Item 3.  Quantitative and Qualitative Disclosures About Market Risk


The Company’s business activities contain elements of risk. The Company considers a principal type of market risk to be a valuation risk. All assets are valued at fair value as determined in good faith by or under the direction of the Board of Directors (which is based, in part, on quoted market prices). Market prices of common equity securities in general, are subject to fluctuations which could cause the amount to be realized upon sale to differ significantly from the current reported value. The fluctuations may result from perceived changes in the underlying economic characteristics of the Company’s portfolio companies, the relative prices of alternative investments, general market conditions and supply and demand imbalances for a particular security.


Neither the Company’s investments nor an investment in the Company is intended to constitute a balanced investment program. The Company will be subject to exposure in the public—market pricing and the risks inherent therein.


Item 4: Controls and Procedures


As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Chief Executive Officer/Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures as of March 31, 2010. In designing and evaluating the Company’s disclosure controls and procedures, the Company recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, the Company’s management was required to apply its reasonable judgment. Furthermore, management considered certain matters deemed by the Company’s independent auditors to constitute a material weakness in the Company’s internal control over financial reporting described below. Based upon the required evaluation, the Chief Executive Officer/ Chief Financial Officer concluded that as of March 31, 2010, due to material weaknesses in internal control over financial reporting observed as a result of the evaluation, the Company has instituted a new system of controls and procedures which management believes is effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.


Item 4T: Controls and Procedures


This item is not applicable because this is not an annual report for a fiscal year ending on or after March 31, 2007 but before December 15, 2008.


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PART II – OTHER INFORMATION


Item 1. Legal Proceedings


In the normal course of business, the Company is, and in the future may be, subject to various disputes, claims, lawsuits, and administrative proceedings arising in the ordinary course of business with respect to commercial, employment and other matters, which could involve substantial amounts of damages. In the opinion of management, any liability related to any such known proceedings would have a material adverse effect on the business or financial condition of the Company.  Additionally, from time to time, we may pursue litigation against third parties to enforce or protect our rights under our contracts, trademarks, trade secrets and our intellectual property rights generally.  At the present time, the Company is not the subject of any lawsuits or claims.


Item 1A Risk Factors


We are subject to various risks which may materially harm our business, financial condition and results of operations. You should carefully consider the risks and uncertainties described below and the other information in this filing before deciding to purchase our common stock. If any of these risks or uncertainties actually occur, our business, financial condition or operating results could be materially harmed. In that case, the trading price of our common stock could decline and you could lose all or part of your investment.


We are a relatively young company with limited operating history

 

Since we are a young company, it is difficult to evaluate our business and prospects. At this stage of our business operations, even with our good faith efforts, potential investors have a high probability of losing their investment. Our future operating results will depend on many factors, including the ability to generate sustained and increased demand and acceptance of our products, the level of our competition, and our ability to attract and maintain key management and employees. While management believes their estimates of projected occurrences and events are within the timetable of their business plan, there can be no guarantees or assurances that the results anticipated will occur.   


We expect to incur net losses in future quarters


If we do not achieve profitability, our business may not grow or operate. We may not achieve sufficient revenues or profitability in any future period. We will need to generate revenues from the sales of our products or take steps to reduce operating costs to achieve and maintain profitability. Even if we are able to generate revenues, we may experience price competition that will lower our gross margins and our profitability. If we do achieve profitability, we cannot be certain that we can sustain or increase profitability on a quarterly or annual basis.


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We may require additional funds to operate in accordance with our business plan

 

We may not be able to obtain additional funds that we may require. We do not presently have adequate cash from operations or financing activities to meet our long-term needs.  If unanticipated expenses, problems, and unforeseen business difficulties occur, which result in material delays, we will not be able to operate within our budget. If we do not achieve our internally projected sales revenues and earnings, we will not be able to operate within our budget. If we do not operate within our budget, we will require additional funds to continue our business. If we are unsuccessful in obtaining those funds, we cannot assure you of our ability to generate positive returns to the Company. Further, we may not be able to obtain the additional funds that we require on terms acceptable to us, if at all. We do not currently have any established third-party bank credit arrangements. If the additional funds that we may require are not available to us, we may be required to curtail significantly or to eliminate some or all of our development, manufacturing, or sales and marketing programs.

 

If we need additional funds, we may seek to obtain them primarily through equity or debt financings. Such additional financing, if available on terms and schedules acceptable to us, if available at all, could result in dilution to our current stockholders and to you. We may also attempt to obtain funds through arrangement with corporate partners or others. Those types of arrangements may require us to relinquish certain rights to our intellectual property or resulting products.

 

We are highly dependent on Pantelis Zachos, our President and CEO. The loss of Mr. Zachos, whose knowledge, leadership, and technical expertise upon which we rely, would harm our ability to execute our business plan.


 We are largely dependent on Pantelis Zachos, our President and CEO, for specific proprietary technical knowledge and the Company market knowledge. Our ability to successfully carry out our business plan may be at risk from an unanticipated accident, injury, illness, incapacitation, or death of Mr. Zachos. Upon such occurrence, unforeseen expenses, delays, losses and/or difficulties may be encountered.  Our success may also depend on our ability to attract and retain other qualified management and sales and marketing personnel. We compete for such persons with other companies and other organizations, some of which have substantially greater capital resources than we do. We cannot give you any assurance that we will be successful in recruiting or retaining personnel of the requisite caliber or in adequate numbers to enable us to conduct our business.  


Our directors and executive officers beneficially own a substantial amount of our common stock


 Accordingly, these persons will be able to exert significant influence over the direction of our affairs and business, including any determination with respect to our acquisition or disposition of assets, future issuances of common stock or other securities, and the election or removal of directors. Such a concentration of ownership may also have the effect of delaying, deferring, or preventing a change in control of the Company or cause the market price of our stock to decline. Notwithstanding the exercise of their fiduciary duties by the directors and executive officers and any duties that such other stockholder may have to us or our other stockholders in general, these persons may have interests different than yours. We do not expect to pay dividends for the foreseeable future.


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For the foreseeable future, it is anticipated that earnings, if any, that may be generated from our operations will be used to finance our operations and that cash dividends will not be paid to holders of our common stock.


We are subject to SEC regulations and changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and other trading market rules, are creating uncertainty for public companies.

 

We are committed to maintaining high standards of corporate governance and public disclosure. As a result, we intend to invest appropriate resources to comply with evolving standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.


There is Substantial Doubt About Our Ability to Continue as a Going Concern, which Means that We May Not Be Able to Continue Operations Unless We Obtain Additional Funding


The report of our independent accountants on our December 31, 2009 financial statements included an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern due to recurring losses and working capital shortages. Our ability to continue as a going concern will be determined by our ability to obtain additional funding. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.


Our Common Stock May Be Affected By Limited Trading Volume and May Fluctuate Significantly


Prior to this offering, there has been no market for our common stock and there can be no assurance that an active trading market for our common stock will develop. As a result, this could adversely affect our shareholders' ability to sell our common stock in short time periods, or possibly at all. Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations which could adversely affect the market price of our common stock without regard to our operating performance. In addition, we believe that factors such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause the price of our common stock to fluctuate substantially. Substantial fluctuations in our stock price could significantly reduce the price of our stock.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds


We issued the following securities within the past three years that were not registered under the Securities Act.  All amounts have been adjusted to give effect to the 1,000 to 1 stock split that took place on October 18, 2008 and the 3.3 to 1 stock split that took place on May 18, 2009:


In December 2007, 66,000,000 shares of common stock were issued to officer and director Pantelis Zachos for services, pursuant to Section 4(2) of the Securities Act of 1933.


From June through October  2008, 33,000,000 shares were sold to 25 investors for cash, pursuant to Regulation D, Rule 504(b)(ii), registered in the State of Illinois as a Small Corporate Offering.


In January 2009, 66,000 shares of common stock were issued to a non-affiliate investor for cash, pursuant to Section 4(2) of the Securities Act of 1933. In addition, the investor received an option to purchase an additional 20,000 shares at $1.50 per share.


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In February 2009, the Company issued to several non- affiliate investors 6,600, 66,000 and 33,000 shares of for cash, pursuant to Section 4(2) of the Securities Act of 1933.


Also in February 2009, 82,500 shares of common stock were issued to a non-affiliate investor in exchange for services, pursuant to Section 4(2) of the Securities Act of 1933.


On or about April 25, 2009, 5,502 shares of common stock were issued to a non-affiliate investor in exchange for cash, pursuant to Section 4(2) of the Securities Act of 1933.


In May  2009, the Company issued for cash the following shares of its common stock pursuant to Section 4(2) of the Securities Act of 1933:


165,000 shares to a non-affiliate investor.  In addition, the investor received an option  to

purchase an additional 50,000 shares at $5.00 per share,


186,222 shares to a non-affiliate investor and,


135,300 shares to a non-affiliate investor.


In July 2009, the Company issued to a consultant 1,650,000 shares for services rendered, pursuant to Section 4(2) of the Securities Act of 1933.


Item 3. Defaults Upon Senior Securities


None.


Item 5. Other Information


None.



Item 6. Exhibits.


Exhibit      No.    

DESCRIPTION

 

 

31.1

Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a)

31.2

Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a)

32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350

32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

 

 


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SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date:  May 13, 2010

GOLD STANDARD MINING CORP.

 

 

 

BY:     Pantelis Zachos

 

 

 

      /s/  Pantelis Zachos                   

  

            Pantelis Zachos

            Chief Executive Officer and Director


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