CLASSWORX INC - FORM 10-Q/A

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EXCEL - IDEA: XBRL DOCUMENT - CLASSWORX INC	Financial_Report.xls
EX-31 - EXHIBIT 3.1 - CLASSWORX INC	exhibit31.htm
EX-32 - EXHIBIT 3.2 - CLASSWORX INC	exhibit32.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(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, 2014

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

(State or Other Jurisdiction of Incorporation or Organization)

45-2400399

(IRS Employer Identification Number)

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 

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 

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 	Accelerated filer 

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

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

As of May 16, 2014, 42,674,381 shares of Common Stock, par value $0.0001 per share, were issued and outstanding.

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A to the Quarterly Report on Form 10-Q for Sanborn Resources (“we” or the “Company”) for the quarterly period ended March 31, 2014, initially filed with the Securities and Exchange Commission on May 19, 2014, is being filed to report missing the word unaudited in the financials of the 10-Q.

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.	4

ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	7

ITEM 4	Controls and Procedures	7

PART II – OTHER INFORMATION

ITEM 1	Legal Proceedings	8

ITEM 1A	Risk Factors	8

ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	8

ITEM 3	Defaults Upon Senior Securities	8

ITEM 4	Mine Safety Disclosures	8

ITEM 5	Other Information	8

ITEM 6	Exhibits	9

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.

PART I - FINANCIAL INFORMATION

SANBORN RESOURCES, LTD.

(FORMERLY UNIVERSAL TECH CORP.)

(A DEVELOPMENT STAGE COMPANY)

Financial Statements

SANBORN RESOURCES, LTD.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS UNAUDITED

ASSETS

	March 31,			December 31,
	2014			2013
Current Assets:
Cash and cash equivalents	$	1,173		$	17,094

Total Assets	$	1,173		$	17,094

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
Accounts payable and accrued expenses	$	11,386		$	20,539
Notes payable - related party		28,600			-

Total Current Liabilities		39,986			20,539

Commitments and Contingencies		-			-

Stockholders' Deficit:
Preferred stock, par value $0.0001 per share, 20,000,000 shares		-			-
authorized; no shares issued and outstanding at March 31, 2014 and
December 31, 2013, respectively
Common stock, par value $0.0001 per share, 1,000,000,000 shares
authorized; 42,674,381 and 42,381,281 shares issued and
outstanding as of March 31, 2014 and December 31, 2013, respectively		4,531			4,238
Additional paid-in capital		163,919			152,488
Accumulated deficit during development stage		(207,263	)		(160,171	)

Total stockholders' deficit		(38,813	)		(3,445	)

Total Liabilities and Stockholders' Deficit	$	1,173		$	17,094

The accompanying notes are an integral part of the financial statements

SANBORN RESOURCES, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS UNAUDITED

							May 17, 2011
	For the Three Months Ended						(Inception) to
	March 31,						March 31,
	2014			2013			2014
Revenue	$	-		$	-		$	-
Cost of goods sold		-			-			-

Gross profit		-			-			-

Operating Expenses:
Professional fees		41,259			19,783			353,127
Compensation expense		-			15,000			61,600
Consulting fees		-			-			24,700
Travel		31			4,301			19,951
General and administrative		5,802			14,314			44,396

Total operating expenses		47,092			53,398			503,774

Net loss from operations		(47,092	)		(53,398	)		(503,774	)

Other Expenses
Interest expense		-			(4,340	)		(77,795	)

Total other expenses		-			(4,340	)		(77,795	)

Loss from continuing operations before provision for income taxes		(47,092	)		(57,738	)		(581,569	)

Provision for Income Taxes		-			-			-

Loss from continuing operations		(47,092	)		(57,738	)		(581,569	)

Gain on sale of subsidiary		-			-			463,622
Gain (loss) from discountinued operations, net of tax		-			-			(89,316	)

Net Loss	$	(47,092	)	$	(57,738	)	$	(207,263	)

Basic earnings (loss) per common share:
Net loss from continuing operations	$	(0.00	)	$	(0.00	)
Net income from discontinued operations		-			0.00
	$	(0.00	)	$	(0.00	)
Weighted Average Number of Common Shares
Outstanding - Basic and Diluted		42,624,343			240,000,000

The accompanying notes are an integral part of the financial statements

SANBORN RESOURCES, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS UNAUDITED

							May 17, 2011
	For the Three Months Ended						(Inception) to
	March 31,						March 31,
	2014			2013			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(47,092	)	$	(57,738	)	$	(207,263	)
Adjustments to reconcile net loss to net cash
provided by (used in) by operating activities:
Depreciation and amortization		-						21,926
Shares issued for services		8,000			-			47,380
Loss on foreign currency		-			-			4,124
Gain from sale of discontinued operations		-			-			(463,622	)
Changes in net assets and liabilities:
Trade and other receivables		-			-			9,353
Deferred offering costs		-			-			-
Prepaid expenses		-			(18,095	)		767
Accrued interest payable		-			4,340			-
Accounts payable and accrued expenses		(5,429	)		599			64,606

Net Cash Used in Operating Activities		(44,521	)		(70,894	)		(522,729	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Issuance of note receivable		-			(10,000	)		(10,000	)
Payment received on note receivable		-			-			10,000
Cash acquired in acquisition		-			-			-
Cash used in acquisition		-			-			(700,000	)

Net Cash Used in Investing Activities		-			(10,000	)		(700,000	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable		28,600			100,000			1,093,600
Proceeds from notes payable - related party		-			-			12,956
Proceeds from loans		-			-			48,093
Contributed capital		-			-			18,753
Proceeds from the sale of common stock		-			-			50,500

Net Cash Provided by Financing Activities		28,600			100,000			1,223,902

Net Increase (decrease) in Cash		(15,921	)		19,106			1,173

Cash - Beginning of Year		17,094			2,346			-

Cash - End of Year	$	1,173		$	21,452		$	1,173

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

Supplemental Disclosure of Non-Cash Investing and Financing Activities:

Common stock issued for services	$	8,000		$	-		$	47,380
Common stock issued for conversion of accounts payable	$	3,724		$	-		$	3,724
Common stock issued for conversion of note payable	$	-		$	-		$	48,093
Notes payable assumed in connection with sale of subsidiary	$	1,065,000		$	-		$	2,130,000

The accompanying notes are an integral part of the financial statements

SANBORN RESOURCES, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Sanborn Resources, Ltd., formerly Universal Tech Corp. (the “Company”), was incorporated under the laws of the State of Delaware on May 17, 2011. The Company’s business 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 and effective on April 3, 2013, Inti Holdings Limited (“Inti Holdings”), a corporation incorporated on January 8, 2013 pursuant to the laws of the Cayman Islands (“Inti Holdings”), and a newly formed wholly owned subsidiary of the Company, purchased 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 discontinued its marketing and sale of art business and had intended to focus its efforts on mining and minerals in Peru.

Effective December 30, 2013, the Company entered into a Stock Purchase Agreement (the “Agreement”) whereby the Company transferred all of its shareholdings of its wholly owned subsidiary, Inti Holdings, to Tuscan Capital, Ltd., a corporation formed under the laws of the Cayman Islands (“Tuscan”). Pursuant to the Agreement, as partial consideration for the Company’s transfer of all of the issued and outstanding shares of common stock of Inti Holdings, Tuscan consented to the assignment and assumption of all obligations and amounts due pursuant to three promissory notes in which the Company borrowed a total of $150,000. All of the note holders have signed consents to such assignments to Tuscan, and therefore, the Company is no longer indebted for such amounts due thereunder. Additionally, as consideration of the transfer of all of the issued and outstanding shares of common stock of Inti Holdings to Tuscan, Tuscan has released and cancelled three promissory notes in which Tuscan had loaned the Company a total of $915,000. As a result, promissory notes in an aggregate amount of $1,065,000 have been cancelled and the Company has satisfied its obligations under these notes. Consequently, on December 30, 2013, Inti Holdings is no longer a subsidiary of the Company and no longer holds any ownership interest in Rae Wallace. The Company intends to discontinue its efforts on mining and mineral business.

Nature of operations

The Company recently sold off its wholly owned subsidiary and is contemplating a change in business direction.

SANBORN RESOURCES, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

Basis of presentation

The accompanying unaudited condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information.

The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the audited financial statements and notes thereto, together with the Plan of Operations for the year ended December 31, 2013.

Certain information or footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted, pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the three months ended March 31, 2014 are not necessarily indicative of results for the full fiscal year.

Year end

The Company’s year end is December 31.

Use of estimates

The preparation 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 disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value.

Revenue recognition

We recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is probable.

Stock-based compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 505 and 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

SANBORN RESOURCES, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock-based compensation

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses, bank overdraft and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

Recent pronouncements

The Company has evaluated the recent accounting pronouncements through May 2014 and believes that none of them will have a material effect on the company’s financial statements.

NOTE 2 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. The Company incurred a net loss from continuing operations for the three months ended March 31, 2014 of $42,092. As of March 31, 2014, the accumulated deficit was $207,263. In addition, the Company’s activities during the six months ended September 30, 2013 have been financially sustained through equity financing.

SANBORN RESOURCES, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 – GOING CONCERN (CONTINUED)

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

NOTE 3 –RELATED PARTY TRASACTIONS

During the three months ended March 31, 2014, the Company received a loan from a shareholder of the Company totaling $28,600. The loan is due in one year and has a stated interest rate of 0% per annum. The Company analyzed the imputed interest on this loan and has determined that it is immaterial and no interest has been recorded.

NOTE 4 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue 20,000,000 shares of its $0.0001 par value preferred stock and 1,000,000,000 shares of its $0.0001 par value common stock.

Common stock

In January 2014, the Company issued 93,100 shares of common stock in exchange for the settlement of accounts payable totaling $3,724.

In January 2014, the Company issued 200,000 shares of common stock in exchange for legal services totaling $8,000.

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

Sanborn Resources, Ltd. (formerly Universal Tech Corp.) was incorporated under the laws of the State of Delaware on May 17, 2011.

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 the name of the Company to “Sanborn Resources, Ltd.” from “Universal Tech Corp.” and (iii) change our authorized stock to one billion (1,000,000,000) shares of common stock, par value $0.0001 per share, and twenty million (20,000,000) shares of preferred stock, par value $0.0001 per share. In May of 2013, we cancelled 199,750,000 shares of our common stock owned by James Davidson.

Rae Wallace

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 intended to focus our efforts on mining and minerals in Peru.

Effective December 30, 2013, we entered into a Stock Purchase Agreement, as filed with the SEC on January 13, 2014, in which, in exchange for the consideration as detailed below, we transferred all of our shareholdings of our holly owned subsidiary Inti Holdings Limited, a corporation formed under the laws of the Cayman Islands (“Inti”) to Tuscan Capital, Ltd., a corporation formed under the laws of the Cayman Islands (“Tuscan”).

Pursuant to the Agreement, as partial consideration for the Corporation’s transfer of all of the issued and outstanding shares of common stock of Inti, Tuscan consented to the assignment and assumption of all obligations and amounts due pursuant to three promissory notes in which the Corporation borrowed a total of $150,000 USD. All of the note holders have signed consents to such assignments to Tuscan, and therefore, the Corporation is no longer indebted for such amounts due thereunder. Additionally, as consideration of the transfer of all of the issued and outstanding shares of common stock of Inti to Tuscan, Tuscan has released and cancelled three promissory notes in which Tuscan had loaned the Corporation a total of $915,000 USD.

As reported with the Securities and Exchange Commission in a Current Report on Form 8-K on April 23, 2013, Inti, a wholly owned subsidiary of the Corporation, through a Share Purchase Agreement, purchased 100% of the outstanding capital stock of Rae Wallace Peru S.A.C., a corporation formed under the laws of Peru (“Rae Wallace”). 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.

Additional Equity Raises

As of March 31, 2014, we had approximately $1,173 in cash. As a result, we are investigating alternative business opportunities.

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, 2014, 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 consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated 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 ASC Topic 915 “Development Stage Entities”, is considered a development stage company.

Principles of Consolidation

The unaudited consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America and present the financial statements of the Company and our wholly-owned subsidiaries. In the preparation of our unaudited consolidated financial statements, intercompany transactions and balances are eliminated.

Long-Lived Assets

We review for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360-10-35-15, “Impairment or Disposal of Long-Lived Assets”. An impairment is considered to exist when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its carrying amount.

Results of Operations

For the three months ended March 31, 2014 and 2013, operating expenses were $47,092 and $53,398, respectively.

Operating expenses were $47,092 for the three months ended March 31, 2014, as compared to $53,398 for the three months ended March 31, 2013. The decrease in expenses was primarily attributable to an change in business direction

For the three months ended March 31, 2014 and 2013, we incurred a net loss of $47,092 and $57,738, respectively. Our cumulative net loss during the period from May 17, 2011 (inception) through March 31, 2014 was $207,263.

Liquidity and Capital Resources

As of March 31, 2014, our current assets were $1,173 and our current liabilities were $39,986, resulting in working capital deficit of $38,813. We have been funding our operations through debt from a related party.

Operating Activities

For the three months ended March 31, 2014, net cash flows used in operating activities was $44,521 and was primarily attributable to our net loss of $47,092 add back by total changes in assets and liabilities of $5,429 due to a decrease in accounts payable of $5,429 and stock issued for services of $8,000. For the three months ended March 31, 2013, net cash flows provided by operating activities was $70,894 and was primarily attributable to our net loss of $57,738 add back by total changes in assets and liabilities of $13,156.

Investing Activities

Net cash flows used in investing activities were $0 for the three months ended March 31, 2014.

Financing Activities

Net cash flows provided by financing activities were $28,600 for the three months ended March 31, 2014. We received net proceeds from a loan;For the three months ended March 31, 2013, net cash provided by financing activities was $10,000 which was received from a loan.

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, 2013. 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, 2014, we had $1,173 available in cash.

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
31		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		XBRL Instance
101.SCH*		XBRL Taxonomy Extension Schema
101.CAL*		XBRL Taxonomy Extension Calculations
101.DEF*		XBRL Taxonomy Extension Definitions
101.LAB*		XBRL Taxonomy Extension Labels
101.PRE*		XBRL Taxonomy Extension Presentation

* XBRL 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 19, 2014	By:	/s/ Kristian Andresen
		Name: Kristian Andresen Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer)

Attached files

CLASSWORX INC Reports

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