CLASSWORX INC - FORM 10-Q

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EX-10.1 - PROMISSORY NOTE AGREEMENT DATED APRIL 10, 2013 - CLASSWORX INC	q1101113_ex10-1.htm
EX-32.1 - CLASSWORX INC	q1101113_ex32-1.htm
EX-31.2 - CLASSWORX INC	q1101113_ex31-2.htm
EX-31.1 - CLASSWORX INC	q1101113_ex31-1.htm
EXCEL - IDEA: XBRL DOCUMENT - CLASSWORX INC	Financial_Report.xls

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2013

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

For the transition period from ___________ to _____________

Commission file number 333-177209

SANBORN RESOURCES LTD.

(Name of Registrant as specified in its charter)

Delaware		45-2400399
(State or other jurisdiction of incorporation of organization)		(I.R.S. Employer Identification No.)

777 South Flagler Drive

Suite 800 - West Tower

West Palm Beach, FL 33401

(Address of principal executive office)

Phone number: (561) 515-6161

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 x No o

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

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

Large accelerated filer o	Accelerated filer o

Non-accelerated filer o	Smaller reporting company x
(Do not check if a smaller reporting company)

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

As of May 20, 2013, 40,250,000 shares of Common Stock, par value $0.0001 per share, were issued and outstanding.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION		Page

ITEM 1	Financial Statements	3

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	12

ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	15

ITEM 4	Controls and Procedures	15

PART II – OTHER INFORMATION

ITEM 1	Legal Proceedings	16

ITEM 1A	Risk Factors	16

ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	16

ITEM 3	Defaults Upon Senior Securities	16

ITEM 4	Mine Safety Disclosures	16

ITEM 5	Other Information	16

ITEM 6	Exhibits	16

FORWARD LOOKING STATEMENTS

This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q and in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.

We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

SANBORN RESOURCES, LTD.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

ASSETS

	March 31,			December 31,
	2013			2012
	(Unaudited)
Current Assets:
Cash and cash equivalents	$	21,452		$	2,346
Note receivable		10,000			-
Prepaid expenses		18,095			-
Total current assets		49,547			2,346

Total Assets	$	49,547		$	2,346

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
Accounts payable and accrued expenses	$	17,970		$	17,371
Accrued interest payable		6,005			1,666
Notes payable		150,000			50,000

Total Current Liabilities		173,975			69,037

Commitments and Contingencies		-			-

Stockholders' Deficit:
Preferred stock, par value $0.0001 per share, 20,000,000 shares authorized
Common stock, par value $0.0001 per share, 1,000,000,000 shares authorized;
240,000,000 shares issued and outstanding		24,000			24,000
Additional paid-in capital		45,253			45,253
Accumulated deficit during development stage		(193,682	)		(135,944	)

Total stockholders' deficit		(124,429	)		(66,691	)

Total Liabilities and Stockholders' Deficit	$	49,547		$	2,346

See accompanying notes to unaudited financial statements.

SANBORN RESOURCES, LTD.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

	For the Three Months			For the Three Months			Period from Inception
	Ended			Ended			(May 17, 2011) to
	March 31,			March 31,			March 31,
	2013			2012			2013
	(Unaudited)			(Unaudited)			(Unaudited)

Revenues	$	-		$	78,500		$	102,500

Cost of goods sold		-			51,810			67,650

Gross profit		-			26,690			34,850

Expenses:
Professional fees		19,783			21,852			105,002
Compensation		15,000			-			36,000
Consulting fees		-			24,700			24,700
Travel expenses		4,301			2,560			24,221
General and administrative		14,314			1,924			32,604

Total operating expenses		53,398			51,036			222,527
		-			-
Loss from Operations		(53,398	)		(24,346	)		(187,677	)

Interest Expense		(4,340	)		-			(6,006	)

Loss before provision for income taxes		(57,737	)		(24,346	)		(193,682	)

Provision for income taxes		-			-			-

Net Loss	$	(57,737	)	$	(24,346	)	$	(193,682	)

Net loss Per Common Share:
Basic and Diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted Average Number of Common Shares Outstanding - Basic and Diluted		240,000,000			207,032,967			221,591,241

See accompanying notes to unaudited financial statements.

SANBORN RESOURCES, LTD.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

	For the Three Months			For the Three Months			Period from Inception
	Ended			Ended			(May 17, 2011) to
	March 31,			March 31,			March 31,
	2013			2012			2013
	(Unaudited)			(Unaudited)			(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(57,737	)	$	(24,346	)	$	(193,682	)
Adjustments to reconcile net loss to net cash provided by (used in) by operating activities:
Changes in net assets and liabilities:
Deferred offering costs		-			19,500			-
Prepaid expenses		(18,095	)		(18	)		(18,095	)
Accrued interest payable		4,340			-			6,006
Accounts payable and accrued expenses		599			10,737			17,971

Net Cash (Used in) Provided by Operating Activities		(70,894	)		5,873			(187,801	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Issuance of note receivable		(10,000	)		-			(10,000	)

Net Cash Used in Investing Activities		(10,000	)		-			(10,000	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loan		100,000			-			150,000
Contributed capital		-			-			18,753
Proceeds from common stock		-			17,426			50,500

Net Cash Provided by Financing Activities		100,000			17,426			219,253

Net Increase in Cash		19,106			23,299			21,452

Cash - Beginning of Period		2,346			43,722			-

Cash - End of Period	$	21,452		$	67,021		$	21,452

Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest	$	-		$	-		$	-
Income taxes	$	-		$	-		$	-

See accompanying notes to unaudited financial statements.

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Sanborn Resources, Ltd., formerly Universal Tech Corp. (the “Company”), is in the development stage, and has limited operations. The Company was incorporated under the laws of the State of Delaware on May 17, 2011. The business plan of the Company was in the field of direct marketing and sale of art.

On March 4, 2013, the Company filed an Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to, among other things, (1) effect a one hundred for one (100:1) forward split of the Company’s common stock, (2) change the name of the Company to Sanborn Resources, Ltd. and (iii) change the authorized stock to one billion (1,000,000,000) shares of common stock and twenty million (20,000,000) shares of preferred stock. All share and per share values for all periods presented in the accompanying financial statements are retroactively restated for the effect of the forward split.

On April 17, 2013, Inti Holdings Limited, a corporation incorporated pursuant to the laws of the Cayman Islands (“Inti Holdings”), and a newly formed wholly owned subsidiary of the Company, purchased, effective April 3, 2013, 100% of the outstanding capital stock of Rae Wallace Peru S.A.C., a corporation formed under the laws of Peru (“Rae Wallace”), pursuant to the terms of a Share Purchase Agreement by and among Inti Holdings, Rae Wallace and Rae-Wallace Mining Company and George Cole, the sole shareholders of Rae Wallace (the “Rae Wallace Shareholders, and the agreement, the “Share Purchase Agreement”). In consideration for the acquisition of Rae Wallace, Inti Holdings paid the Rae Wallace Shareholders an aggregate purchase price of $700,000. Rae Wallace is the owner of certain properties and mineral rights located in Peru. Certain of these properties are subject to third party royalty payments from the sale or disposition of all minerals produced by such covered properties. Following the acquisition, the Company intends to focus its efforts on mining and minerals in Peru.

Basis of presentation

Management acknowledges its responsibility for the preparation of the accompanying interim financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the interim period presented. These financial statements should be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company’s Form 10-K annual report for the year ended December 31, 2012. The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S.”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.

Use of Estimates and Assumptions

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

Development Stage Company

The Company is presented as a development stage company. Activities during the development stage include organizing the business and raising capital. The Company is a development stage company with insignificant revenues and no profits. The Company has not commenced significant operations and, in accordance with Accounting Standards Codification (“ASC”) Topic 915 “Development Stage Entities”, is considered a development stage company.

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with a high credit quality financial institution. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. At March 31, 2013, the Company has not reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits.

Prepaid expenses

Prepaid expenses of $18,095 and $0 at March 31, 2013 and December 31, 2012, respectively, consist primarily of prepayments in cash for legal services and prepaid compensation which are being amortized over the terms of their respective agreements.

Revenue Recognition

The Company recognizes revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.

Fair Value of Financial Instruments and Fair Value Measurements

The Company adopted FASB ASC 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that require the use of fair value measurements which establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

	Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities;
	Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data; and
	Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

The carrying amounts reported in the balance sheet for prepaid expense, accounts payable and accrued expenses approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying amount of the note payable at March 31, 2013, approximate their respective fair value based on the Company’s incremental borrowing rate. The Company did not identify any other assets or liabilities that are required to be presented on the balance sheets at fair value in accordance with the accounting guidance.

In addition, FASB ASC 825-10-25 “Fair Value Option” was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value.

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock-based compensation

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the non-employee’s service period.

Basic and Diluted Net Loss per Share

Net loss per common share is calculated in accordance with ASC Topic 260: Earnings Per Share. Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted average shares outstanding as they would be anti-dilutive. There were no dilutive financial instruments issued or outstanding for the three months ended March 31, 2013 and 2012.

Income Taxes

The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provision of the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, it is highly certain that some positions taken would be situated upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is most likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax position considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely that not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed.

Deferred Offering Costs

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.

Common Stock Registration Expenses

The Company considers incremental costs and expenses related to the registration of equity securities with the Securities and Exchange Commission (“SEC”), whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.

Fiscal Year End

The Company has adopted a fiscal year end of December 31.

Recent Accounting Pronouncements

Updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

NOTE 2 - GOING CONCERN

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has a stockholders’ deficit and accumulated deficit of $124,429 and $193,682, respectively, as of March 31, 2013, negative cash flows from operating activities and net loss of $70,894 and $57,737, respectively, for the three months ended March 31, 2013. The Company anticipates further losses in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company’s ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

NOTE 3 – NOTE RECEIVABLE

In January 2013, the Company was issued a note receivable of $10,000 by Rae Wallace (see Note 1). The note is non-interest bearing. The Borrower has the option of paying the principal sum to the Company in advance in full or in part at any time without premium or penalty. The principal shall become due and be paid in full on demand, which demand may be made by the Company at any time after March 1, 2013. Note receivable as of March 31, 2013 amounted to $10,000.

NOTE 4 – NOTES PAYABLE

On October 10, 2012, the Company issued a note payable amounting to $50,000. The note bears interest at 16% per annum and is due on demand. The note was used for working capital purposes.

On January 16, 2013, the Company issued a note payable amounting to $50,000. The note bears interest at 16% per annum and is due on demand. The note was used for working capital purposes.

On February 27, 2013, the Company issued a note payable amounting to $50,000. The note bears interest at 16% per annum and is due on demand. The note was used for working capital purposes.

Notes payable and accrued interest as of March 31, 2013 amounted to $150,000 and $6,005, respectively.

NOTE 5 – STOCKHOLDERS’ DEFICIT

On May 18, 2011, the Company sold 150,000,000 shares of common stock to a former director of the Company for gross proceeds of $22,500, at a price of $0.00015 per share.

On May 23, 2011, the Company sold 50,000,000 post-split shares of common stock to the former secretary of the Company for gross proceeds of $7,500, at a price of $0.00015 per share.

The Company has commenced a capital formation activity by filing a Registration Statement on Form S-1 to the SEC to register and sell in a self-directed offering 120,000,000 shares of newly issued common stock at an offering price of $0.001 per share for proceeds of up to $120,000. On March 16, 2012, the Company sold 40,000,000 shares of common stock pursuant to the Registration Statement on Form S-1 for gross proceeds of $40,000. The Company paid offering costs of $19,500 related to this sale of the Company’s common stock and were charged against additional paid in capital.

NOTE 6 – RELATED PARTY TRANSACTIONS

On May 18, 2011, the Company sold 150,000,000 shares of common stock to a former director of the Company for gross proceeds of $22,500, at a price of $0.00015 per share.

On May 23, 2011, the Company sold 50,000,000 shares of common stock to the former secretary of the Company for gross proceeds of $7,500, at a price of $0.00015 per share.

On October 3, 2012, the former director of the Company contributed capital for operating expenses amounting to $18,753. The Company recorded such contributed capital to additional paid in capital.

NOTE 7 – SUBSEQUENT EVENTS

On April 17, 2013, Inti Holdings, a corporation incorporated pursuant to the laws of the Cayman Islands, and a newly formed wholly owned subsidiary of the Company, purchased, effective April 3, 2013, 100% of the outstanding capital stock of Rae Wallace, pursuant to the terms of a Share Purchase Agreement by and among Inti Holdings, Rae Wallace and Rae-Wallace Mining Company and George Cole, the sole shareholders of Rae Wallace (see Note 1). In consideration for the acquisition of Rae Wallace, Inti Holdings paid the Rae Wallace Shareholders an aggregate purchase price of $700,000. Rae Wallace is the owner of certain properties and mineral rights located in Peru. Certain of these properties are subject to third party royalty payments from the sale or disposition of all minerals produced by such covered properties.

In April 2013, contemporaneously with the closing of the acquisition of Rae Wallace, the Company collected the $10,000 note receivable (see Note 3).

On April 10, 2013, the Company issued a note payable amounting to $775,000. The note bears interest at 8% per annum and is due after thirteen months, unless extended by the holder. This note may be accelerated upon the sale of any equity or equity-linked securities in the minimum amount of $1,000,000 net proceeds to the Company. The proceeds of this note was used for the acquisition of Rae Wallace and working capital purposes.

In May 2013, the Company cancelled 199,750,000 shares of common stock owned by the Company’s Chief Executive Officer. In connection with the return of the 199,750,000 shares of common stock, the Company valued the cancelled shares at par value of $0.0001 per share and recorded it against paid in capital.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Our Business and Recent Events

We were formed as a corporation pursuant to the laws of the State of Delaware on May 17, 2011. We historically conducted our business to leverage the burgeoning interest in art investment by tailoring the sales process through a direct sales approach. On October 3, 2012, our former officers and directors resigned and James Davidson was appointed as our sole director and Chief Executive Officer.

On March 4, 2013, we filed an Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to, among other things, (1) effect a one hundred for one (100:1) forward split of our common stock, (2) change our name to Sanborn Resources, Ltd. and (iii) change the authorized stock to one billion (1,000,000,000) shares of common stock and twenty million (20,000,000) shares of preferred stock. All share and per share values for all periods presented in the accompanying financial statements are retroactively restated for the effect of the forward split. In May 2013, we cancelled 199,750,000 shares of our common stock owned by our Chief Executive Officer.

On April 17, 2013, Inti Holdings Limited, a corporation incorporated pursuant to the laws of the Cayman Islands (“Inti Holdings”), and a newly formed wholly owned subsidiary of the Company, purchased, effective April 3, 2013, 100% of the outstanding capital stock of Rae Wallace Peru S.A.C., a corporation formed under the laws of Peru (“Rae Wallace”), pursuant to the terms of a Share Purchase Agreement by and among Inti Holdings, Rae Wallace and Rae-Wallace Mining Company and George Cole, the sole shareholders of Rae Wallace (the “Rae Wallace Shareholders, and the agreement, the “Share Purchase Agreement”). In consideration for the acquisition of Rae Wallace, Inti Holdings paid the Rae Wallace Shareholders an aggregate purchase price of $700,000. Rae Wallace is the owner of certain properties and mineral rights located in Peru. Certain of these properties are subject to third party royalty payments from the sale or disposition of all minerals produced by such covered properties. Following the acquisition, we intend to focus our efforts on mining and minerals in Peru.

Recent Financings

On January 16, 2013, we issued a note payable amounting to $50,000. The note bears interest at 16% per annum and is due on demand. The note was used for working capital purposes.

On February 26, 2013, we issued a note payable amounting to $50,000. The note bears interest at 16% per annum and is due on demand. The note was used for working capital purposes.

On April 10, 2013, we issued a note payable amounting to $775,000. The note bears interest at 8% per annum and is due after thirteen months, unless extended by the holder. This note may be accelerated upon the sale of any equity or equity-linked securities in the minimum amount of $1,000,000 net proceeds to the Company. The proceeds of this note were used for the acquisition of Rae Wallace and working capital purposes.

Critical Accounting Policies and Estimates

While our significant accounting policies are more fully described in Note 1 to our financial statements for the three months ended March 31, 2013, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to bad debts, recovery of long-lived assets, income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the financial statements.

Development Stage Company

We are presented as a development stage company. Activities during the development stage include organizing the business and raising capital. We are a development stage company with insignificant revenues and no profits. The Company has not commenced significant operations and, in accordance with Accounting Standards Codification (“ASC”) Topic 915 “Development Stage Entities”, is considered a development stage company.

Revenue Recognition

We recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.

Results of Operations

For the three months ended March 31, 2013 and 2012, we had revenues of $0 and $78,500, respectively. Cost of sales was $ 0 and $51,810 for the three months ended March 31, 2013 and 2012 respectively. Gross profit during the three months ended March 31, 2013 and 2012 were 0% and 34%, respectively.

Operating expenses were $53,398 for the three months ended March 31, 2013, as compared to $51,036 for the three months ended March 31, 2012. The increase in expenses was primarily attributable to an increase in compensation to our Chief Executive Officer and an increase in general administrative expense offset by a decrease in consulting fees.

Interest expense in connection with the issuance of notes payable amounted to $4340 and $0 during the three months ended March 31, 2013 and 2012, respectively.

For the three months ended March 31, 2013 and 2012, we incurred a net loss of $57,737 and $24,346, respectively. Our cumulative net loss during the period from May 17, 2011 (inception) through March 31, 2013 was $193,682.

Liquidity and Capital Resources

As of March 31, 2013, our current assets were $49,547 and our current liabilities were $173,975, resulting in working capital deficit of $124,428. We have been funding our operations through the issuance of notes for operating capital purposes.

Operating Activities

For the three months ended March 31, 2013, net cash flows used in operating activities was $70,894 and was primarily attributable to our net loss of $57,737 add back by total changes in assets and liabilities of $13,156 due to an increase in prepaid expenses of $18,095 and an increase in accrued interest payable of $4,340. For the three months ended March 31, 2012, net cash flows provided by operating activities was $5,873 and was primarily attributable to our net loss of $24,346, offset by total changes in assets and liabilities of $30,219 due to a decrease in deferred offering cost of $19,500, and increase in accounts payable and accrued liabilities of $10,737.

Investing Activities

Net cash flows used in investing activities were $10,000 for the three months ended March 31, 2013. We were issued a note receivable of $10,000 in January 2013.

Financing Activities

Net cash flows provided by financing activities were $100,000 for the three months ended March 31, 2013. We received net proceeds from issuance of notes payable of $100,000. For the three months ended March 31, 2012, net cash provided by financing activities was $17,426 which was received from sale of common stock.

We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern in their audit opinion for the year ended December 31, 2012. We estimate that based on current plans and assumptions, that our available cash is insufficient to satisfy our cash requirements for the next 12 months. We presently have no other alternative source of working capital. We may not have sufficient working capital to provide working capital necessary for our ongoing operations and obligations for the next 12 months. As of March 31, 2013, we had $21,452 available in cash.

Contractual Obligations

We have certain fixed contractual obligations and commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments. We have presented below a summary of the most significant assumptions used in our determination of amounts presented in the tables, in order to assist in the review of this information within the context of our consolidated financial position, results of operation, and cash flows.

The following table summarizes our contractual obligations as of March 31, 2013, and the effect these obligations are expected to have on our liquidity and cash flows in future periods:

	Payments Due By Period
	Total		Less than 1 year		1-3 Years		4-5 Years		6- 10 Years
Contractual Obligations:
Notes payable including accrued interests		156,005		156,005		-		-		-


Total Contractual Obligations	$	156,005	$	156,005	$	-	$	-	$	-

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required for smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our principal executive officer and principal financial officer have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) as of the end of the period covered by this report and have concluded that the disclosure controls and procedures are not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.

Changes in Internal Controls

There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

None

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

None

Item 3. Defaults upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None

Item 6. Exhibits

Exhibit
Number		Description

10.1 *		Promissory Note Agreement dated April 10, 2013

31.1 *		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 *		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 *		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS† XBRL Instance Document

101.SCH † XBRL Taxonomy Schema

101.CAL † XBRL Taxonomy Calculation Linkbase

101.DEF † XBRL Taxonomy Definition Linkbase

101.LAB † XBRL Taxonomy Label Linkbase

101.PRE † XBRL Taxonomy Presentation Linkbase

* Filed herewith.

† Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

	SANBORN RESOURCES LTD.

Date: May 20, 2013	By:	/s/ James Davidson
		Name: James Davidson Title: Chief Executive Officer, Treasurer and Director (Principal Executive Officer)

Date: May 20, 2013		By: /s/ Adam Wasserman
		Title: Chief Financial Officer (Principal Financial and Accounting Officer)

Attached files

CLASSWORX INC Reports

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