UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSBA
(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES ACT OF
1934
For the fiscal year ended August 31, 2003
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( ) TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transaction period from to
Commission File number 0-30402
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STANDARD CAPITAL CORPORATION
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(Exact name of Company as specified in charter)
Delaware 91-1949078
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State or other jurisdiction of (I.R.S. Employee
incorporation or organization I.D. No.)
2429 - 128th Street
Surrey, British Columbia, Canada V4A 3W2
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number 1-604-538-4898
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Securities registered pursuant to section 12 (b) of the Act:
Title of each share Name of each exchange on which registered
None None
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Securities registered pursuant to Section 12 (g) of the Act:
None
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(Title of Class)
Check whether the Issuer (1) filed all reports required to be filed by section
13 or 15 (d) of the Exchange Act during the past 12 months (or for a shorter
period that Standard was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
(1) Yes [X] No [ ] (2) Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Standard's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSBA or any amendment to this Form 10-KSBA. [ ]
State issuer's revenues for its most recent fiscal year: $ -0-
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State the aggregate market value of the voting stock held by nonaffiliates of
Standard. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specific date within the past 60 days.
As at August 31, 2003, the aggregate market value of the voting stock held by
nonaffiliates is undeterminable and is considered to be 0.
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(ISSUER INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE LAST FIVE YEARS)
Not applicable
(APPLICABLE ONLY TO CORPORATE COMPANYS)
As of August 31, 2003, Standard has 1,295,000 shares of common stock issued and
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Exhibits incorporated by reference are referred under Part IV.
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TABLE OF CONTENTS
PART 1
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Page
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ITEM 1. DESCRIPTION OF BUSINESS 4
ITEM 2.. . . DESCRIPTION OF PROPERTY 12
ITEM 3.. . . LEGAL PROCEEDINGS 15
ITEM 4.. . . SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS 15
PART II
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ITEM 5.. . . MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 18
ITEM 6.. . . MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION 18
ITEM 7.. . . FINANCIAL STATEMENTS 21
ITEM 8.. . . CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE 21
ITEM 8A. . . CONTROLS AND PROCEDURES 22
PART III
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ITEM 9.. . . DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND
CONTROL PERSONS, COMPLIANCE WITH SECTION 16 (a) OF
THE EXCHANGE ACT 23
ITEM 10. . . EXECUTIVE COMPENSATION 25
ITEM 11. . . SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDERS MATTERS 26
ITEM 12. . . CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 28
PART IV
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ITEM 13. . . EXHIBITS AND REPORTS ON FORM 8-K 30
ITEM 14. . . PRINCIPAL ACCOUNTANTS FEES AND SERVICES 31
SIGNATURES 33
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PART 1
ITEM 1. DESCRIPTION OF BUSINESS
HISTORY AND ORGANIZATION
Standard was incorporated on September 24, 1998 and has no subsidiaries and no
affiliated companies. It has not been in bankruptcy, receivership or similar
proceedings since its inception. Nor has it been involved in any material
reclassification, merger, consolidation or purchase or sale of any significant
assets not in the ordinary course of business. Standard's executive offices are
located at 34-3387 King George Highway, Surrey, B.C., V4P 1B7 (Tel:
604-538-4898).
Standard is engaged in the exploration of a mineral claim known as the
"Standard". (see Part 1, "Exploration and Development of the Standard Claim").
Standard is referred to as being in the "pre-exploration" stage by its auditors.
This term is generally used in Financial Accounting Standards to describe a
company seeking to develop its ideas and products. Standard is not in the
development stage with regards to any mineral claim. No ore reserve has been
discovered and no substantial exploration has been done on its mineral claim.
Standard is purely an exploration company. There is no assurance that any ore
reserve will ever be found and that Standard will have sufficient funds to
undertake the exploration work required to identify an ore reserve.
Management anticipates that Standard's shares will be qualified on the system of
the National Association of Securities Dealers, Inc. ("NASD") known as the OTC
Bulletin Board (the "OTCBB"). At the present time, Standard has made no
application to the OTCBB and there is distinct possibility its shares will never
be quoted on the OTCBB.
Standard owns the exclusive rights to all minerals on the Standard claim except
for coal which is under a separate license. There is virtually limited
possibilities that there is any coal on the Standard claim. The claim is in
good standing until February 24, 2004. The actual land is owned by the Crown
(the Province of British Columbia). If Standard does not perform exploration
work or pay cash-in-lieu in the amount of $2,800 on or before February 24, 2004
the rights to the mineral claim will expire and the ground can be staked by
someone else.
Standard has no revenue to date from the exploration of the Standard claim, and
its ability to effect its plans for the future will depend on the availability
of financing. Such financing will be required to explore the Standard claim to
a stage where a decision can be made by management as to whether an ore reserve
exists and can be successfully brought into production. Standard anticipates
obtaining such funds from its directors and officers, financial institutions or
by way of the sale of its capital stock in the future (see Part 1, Item 2 -
"Plan of Operations"), but there can be no assurance that Standard will be
successful in obtaining additional capital for exploration activities from the
sale of its capital stock or in otherwise raising substantial capital.
Standard is responsible for filing various forms with the United States
Securities and Exchange Commission (the "SEC") such as Form 10-KSB and Form
10-QSB but was deficient in these filings due to a lack of money. The filings
have now been brought up to date. Standard has not distributed any material to
its shareholders but is planning to hold an Annual General Meeting of
Shareholders in the early part of 2004.
The shareholders may read and copy any material filed by Standard with the SEC
at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, DC,
20549. The shareholders may obtain information on the operations of the Public
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Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
Internet site that contains reports, proxy and information statements, and other
information which Standard has filed electronically with the SEC by assessing
the website using the following address: http://www.sec.gov. Standard has no
website at this time.
PLANNED BUSINESS
The following discussion should be read in conjunction with the information
contained in the financial statements of Standard and the notes, which form an
integral part of the financial statements, which are attached hereto.
The financial statements mentioned above have been prepared in conformity with
accounting principles generally accepted in the United States of America and are
stated in United States dollars.
Standard presently has minimal day-to-day operations; consisting mainly of
maintaining the Standard claim in good standing and preparing the reports filed
with the SEC as required.
RISK FACTORS
Our shareholders and any future investors must be aware of the following risk
factors prior to investing in Standard's common stock. It must be emphasized
that Standard, if any of these risk become fact, may have to cease operations
and our shareholders and any future investors could lose part or all of their
investment.
RISKS ASSOCIATED WITH THIS OFFERING
1. Penny stock rules may make buying or selling of our shares difficult.
Eventual trading in our shares will, in all likelihood, be subject to the "Penny
Stock" rules. The SEC has adopted regulations that generally define a penny
stock to be any equity security that has a market price of less than $5.00 per
share, subject to certain exceptions. These rules require that any
broker-dealer who recommends our shares to persons other than prior customers
and accredited investors, must prior to the sale, make a special written
suitability determination for the purchaser and receive the purchaser's written
agreement to execute the transaction. Unless an exception is available, the
regulations require the delivery, prior to any transaction involving a penny
stock, of a disclosure explaining the penny stock market and the risks
associated with trading in the penny stock market. In addition, broker-dealers
must disclose commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities they offer. The
additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in our shares, which could
severely limit their market price and liquidity of our shares. Broker-dealers
who sell penny stocks to certain types of investors are required to comply with
the Commission's regulations concerning the transfer of penny stock. These
regulations require broker-dealers to:
- Make a suitability determination prior to selling a penny stock to the
purchaser;
- Receive the purchaser's written consent to the transaction; and
- Provide certain written disclosures to the purchaser.
From our standpoint, it might be difficult for us to induce new investors to
purchase shares since they might not want to be involved in a penny stock
company. Future investors must be aware that our shares will fall into the
classification of a penny stock and therefore be subject to the rules mentioned
above and the various limitations associated with these rules.
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2. We may, in the future, conduct offerings of our common stock in which case
all shareholdings will be diluted.
In the future, we may conduct offerings of shares to finance our exploration
activities on the Standard claim or to finance subsequent exploration projects
that we decide to undertake. If we decide to raise money through offerings in
the future all shareholdings will be diluted.
3. There is no public trading market for our common shares and our
shareholders may not be able to sell his or her shares at any time and on
terms and conditions he or she considers reasonable.
There is currently no public trading market for our common stock and therefore,
there is no central place, like a stock exchange or electronic trading system,
to resell one's shares. If one of our shareholders does want to resell his or
her shares, they will have to locate a buyer and negotiate their own sale. Even
if our shareholder is able to find a willing buyer, there can be no assurance he
or she will be able to sell their shares at or above the price at which these
shares were purchased.
4. If we are successful in obtaining a market for our shares certain internal
and external forces will affect the value of our trading shares.
The stock market has experienced extreme volatility in recent years and may
continue to do so in the future. We cannot be sure an active public market for
our shares will develop or if an active market should develop that it would
continue. The price for our shares will be determined in the marketplace and
may be influenced by many factors, including both internal and external forces
as follows:
- variations in our financial results compared to companies similar to ours;
especially in the exploration of the Standard claim compared to other
exploration properties in North America;
- changes in earnings estimates, if any, by industry research analysts for our
Company or for similar companies in the same industry;
- future investors or other market participants perceptions of our Company as a
current or future investment; and
- general or regional economic conditions normally have a wide impact on the
price of shares trading on the stock market and our Company's shares will be
affected by changes in such conditions.
The problem we encounter with a volatile stock market, which we have no control
over, is that we might not require funds when the market price of our shares are
high but when the price is lower we might require funds to maintain the Company
and explore the Standard claim. This would result in having to issue
additional shares during lower prices; resulting in a greater dilution effect on
our shareholders.
5. We may not be able to maintain a quotation of our common stock on the OTCBB
due to not filing the required information as it is due, which would make
it more difficult for an investor to sell our shares.
Even if our Company is accepted for a quotation on the OTCBB, we cannot
guarantee that it will always be available for quotation. The OTCBB is not an
issuer listing service, market or exchange. Although the OTCBB does not have any
listing requirements per se, to be eligible for quotation on the OTCBB, issuers
must remain current in their filings with the SEC. Market makers will not be
permitted to begin quotation of a security whose issuer does not meet this
filing requirement. Securities already quoted on the OTCBB that become
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delinquent in their required filings will be removed following a 30 or 60 day
grace period if they do not make their required filing during that time. If our
shares were not quoted on the OTCBB, trading in our shares would be conducted,
if at all, in the over-the-counter market. This would make it more difficult for
stockholders to dispose of their common stock and more difficult to obtain
accurate quotations for our shares. This could have an adverse effect on the
price of the common stock.
6. We are not planning to declare a dividend in either cash or shares in the
near future.
We are not planning to declare a dividend in either cash or shares in the near
future since our policy will be to retain any earnings received for the future
exploration of the Standard or any other mineral claims obtained by us.
Dividends are only declared by your Director when he feels that surplus funds
can be distributed to the shareholders without encroaching upon working capital
of our Company.
7. We want to advise our shareholders and future investors that the purchase
of shares in our Company involves a high degree of risk.
An investment in the shares of our Company is highly speculative and involves a
high degree of risk. For example, the Company is a start-up situation and the
failure rate for most start-up companies is high. Any person considering an
investment in our shares should be fully aware that they could lose their entire
investment.
RISK FACTORS ASSOCIATED WITH STANDARD
1. Our auditors have indicated, in their opinion report, a concern regarding
the going concern status of our Company.
The auditors have expressed a concern regarding whether our Company will
continue as a going concern if it does not receive adequate financing to meet
its obligations. The auditors are indicating there might be substantial doubt
regarding our Company's continuation as an operating concern over the next
twelve months. If our director is unwilling to advance us some funds to
maintain our Company in good standing, there is the possibility that we might
cease to be an operating company. As a shareholder of our Company you should
read the auditors' report and Note 5 to the audited financial statements
included in this Form 10-KSB.
2. We lack an operating history and have accumulated losses which are expected
to continue into the future.
Since inception, we have not realized any revenue to date and have no operating
history upon which an evaluation of our future success or failure can be made.
The accumulated losses since February 24, 1998 are $ 68,104. Our ability to
achieve and maintain profitability and positive cash flow is dependent upon:
- Our ability to successfully explore the Standard claim;
- Our ability to generate future revenues from a viable ore reserve on
the Standard claim; and
- Our ability to reduce our exploration costs in order to increase our
profit margins.
As in most mineral claims, the changes of success of identifying and developing
an ore reserve are extremely remote. The majority of mining companies never
find an ore reserve and therefore are never profitable.
3. Presently we have only two employees and will require additional employees
during the exploration of the Standard claim.
We currently only have two employees, the President, E. Del Thachuk and
Secretary Treasurer, Maryanne Thachuk. There is a substantial risk we may not
have the funds necessary to hire additional employees that would be needed in
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our future exploration program. We may not be able to maintain the Standard
claim in good standing with the Ministry of Energy and Mines for the Province of
British Columbia if we do not have individuals prepared to work during the
exploration stage.
4. Our mineral claim is considered "grass roots" because it has not had
adequate exploration work performed on it to identify an ore reserve.
Our mineral claim is considered a "grass roots" claim having no known ore
reserves associated with it. In additional, there has, over the years, not been
enough exploration work on the claim to determine the extent, if any, of any
mineralization. Therefore, there is a good chance our claim might prove to be
barren; having no commercial viable mineralization associated with it.
5. We can spend funds on exploration with no assurance we will prove the
Standard claim has an ore body associated with it.
No matter how many dollars are spent in the future on the Standard claim, there
is no guarantee that such expenditures will result in it being a property of
merit; having a proven commercially viable ore reserve on it. We might spend
hundreds of thousands of dollars and prove nothing. As more money is required
for exploration, the present and future investors will have their share
positions diluted without realizing any future benefits from the Standard claim.
6. We may not be able to raise money for exploration when needed due the
prevailing price of gold which is beyond our control.
Even with gold prices having increased over the past year, there is reluctance
in the investment community to consider speculative ventures such as exploration
companies. With this reluctance, we might find it difficult to raise any money
and therefore inhibit any future exploration on the Standard claim. When gold
prices are lower, we will have a difficult time to attract money even if we have
started to identify gold showings on the Standard claim. The market price of
gold is beyond our control and will greatly affect our raising of money.
7. Our Company is a one-property company which does not allow for exploration
of another mineral claim in the event no ore reserve is discovered on the
Standard claim.
Our only mineral claim is the Standard claim which has no known ore reserves on
it. Being a one claim company means that if the Standard claim does not prove
to have any viable mineral reserves associated with it, there is no other claim
which we can immediately explore. Most investors would want to have an
investment in a company that has some diversification in its mineral properties
to allow for continual operations.
8. Our mineral property, when explored, may not be of economic quality to
warrant a decision to go into production.
We might discover an ore reserve which is either too small or the ounces per ton
makes it uneconomical to develop. Such a mineral deposit would not enhance the
value of the Standard claim and have resulted in money having been spent which
would have proven nothing. No production decision can be made if this is the
case. Minerals are only economic to us if they can be sold above the cost of
mining them; otherwise, the Standard claim has little or no value.
9. We will have to compete with both large and small mining companies for such
things as money, properties of merit, workers and supplies.
In both the United States and Canada, there are many large and small mining
companies each trying to explore and, hopefully, eventually developing their
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mineral properties into a producing mine. We are not in direct conflict with
the larger mining companies in North America such as Newmont Mining Corp., Inco
Limited, Barrick Gold Corp. and Teck Cominco Limited, to name a few. These
larger companies have the available money to explore their properties and the
professional personnel to assist in the exploration process. Unless a major
mineral reserve is discovered on the Standard claim, the larger mining companies
would have no interest in either developing the claim themselves or joint
venturing with us. The competition to us would be from the smaller exploration
companies who are competing for money to explore their mineral claims and in
hiring professional staff to assist them. There is only a limited amount of
money available for exploration as well as professional personnel during the
exploration season. We might not be able to attract either the money or
professional personnel due to the other smaller exploration companies having
more money and better known mineral properties.
10. Weather interruptions in the Province of British Columbia may affect and
delay the proposed exploration operations.
The weather in the Province of British Columbia is always uncertain since the
annual rainfall, especially in the Bralorne area, can be many inches in the fall
and spring months. The winters are marked with below zero temperatures and
accumulated snow covers of several feet. The constant rain, during the spring
and fall months, will lessen the changes of our exploration crew performing any
meaningful work on the Standard claim due to the possibilities of injuries from
slippery rock surfaces and the inconvenience of setting up equipment that become
immediately wet. During the drier summer months, the Ministry of Forestry for
the Province of British Columbia might impose bans on exploration to avoid the
possibilities of forest fires. With these factors in mind, our exploration
season could be reduced substantially and we might not be able to obtain the
results we want during our exploration program.
11. The terrain surrounding the Standard claim is rugged and is not inductive
to exploration activities.
The terrain surrounding the Standard claim is mountainous and extremely rugged
with steep ridges and deep valleys. The exploration crew will find it difficult
to explore the entire Standard claim without the use occasionally of a
helicopter. Access to the claim during the winter months is virtually
impossible due to the heavy snow conditions. Even with snowmobiles, the
exploration crew would find it difficult to reach our claim and return to Gold
Bridge within one day. It is not an option during the winter to use tent
facilities on our claim due to the possibility of snow slides. The terrain has
a definite effect the exploration activities on the Standard claim.
12. We will have to address the environmental concerns in the Bralorne area and
adhere to the various Acts legislated to protect the environment.
During the exploration stage, there are few problems with environmental issues
in the Province of British Columbia if the exploration work involves mapping,
establishment of a grid, soil and rock sampling and some minor drilling. If
the exploration program involves work near an existing stream or removal of a
substantial amount of overburder and foliage, then permission for the work must
be obtained from one of the various Ministries involved in that area of
environmental concern. If a production decision is ever made, we will have to
adhere to various Acts established by the Provincial Government. Under these
Acts the main concerns are wildlife, including fish in streams, and vegetation.
The Government does not want exploration activities to cause excessive hardship
on the environment and to disfigure our claim for decades to come. It is
important to protect wildfire since the area in which our claim is situated has
been their natural habitat for centuries. The cost of adhering to these Acts
might be too expensive for us and exploration activities might have to be
cancelled or delayed until adequate money is available to us to adhere to the
requirements of the Acts. At the present time, we have no indication as to what
the dollar amount of adherence would be.
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13. We are a small Company without much money to devote for a full exploration
program on our mineral claim.
The small size of our Company and the present lack of money means a limited
exploration program on our claim. Unless adequate money is raised, we will be
unable to devote the time necessary to fully explore our claim. With only a
limited budget for exploration activities, we will not have many employees to
perform the exploration activities on our claim. By limiting our operations, it
will take longer to explore the Standard claim. Our shareholders should be
aware that it might take a number of years to realize any exploration results
from our claim due to the present lack of exploration money.
14. We cannot guarantee the title of our claim since there may be unregistered
claims that we are unaware of at this time.
We cannot guarantee absolute title to the Standard claim due to such factors as
prior unregistered transactions, native land claims or undetected defects in
title. We have taken all the necessary precautions to eliminate any of these
elements are far as are reasonably possible. Nevertheless, the future, and
especially if and when a production decision is made on the Standard claim,
there may be claims which presently we are completely unaware of. We have no
way of insuring against such claims and cannot estimate at the present time if
there are any elements out there which will effect the title to the minerals on
our claim. If there are, this could result in lengthy and costly legal actions,
which at the present time we do not have the funds to carry on.
15. At the present time, we will have difficulty in attracting mining personnel
who would like to work for a well-funded company having an assortment of
mineral properties.
Being a small exploration company with only the Standard claim, we might not be
able to attract mining personnel to carry on our exploration activities when
needed. Many geologist and workers are drawn to companies which are better
funded than us and have several properties which can be worked on at any given
time. Once an exploration program is completed on one property the personnel
are transferred to another property to commence work on it. This basically
guarantees a continual stream of work for exploration personnel. We, at this
time, cannot offer workers this form of continual work. To offset this, we might
have to hire lesser knowledgeable workers who are prepared to work for several
weeks and then become unemployed. Without quality mining personnel, there is no
assurance we will be able to obtain the exploration information we require to
make future decisions. The quality of the our workers should be of concern to
our shareholders since they would want to know that there is a possibility of
obtaining the best results possible from qualified personnel.
16. We do not carry any insurance policy to protect workers during the
exploration stage other than as required by legislation.
Injury to personnel is enhanced due to the effects of weather and the terrain.
We have no insurance to cover such hazards to workers on our claim other than
Workers' Compensation which is required to be contributed to by us for any
workers working on our claim. Basically this insurance covers only wages while
off work and does not provide for any long-term benefits. We are not prepared
to pay the premiums required to obtain accident insurance for the short duration
of our exploration program. By not having accident and liability insurance we
realize we are subject to lawsuits which, if successful, would impair the
working capital of our Company and might render us insolvent.
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17. Our Director does not have experience in hard rock mining and none of the
officers are professional geologists.
Our President, Del Thachuk, has mining experience over the past 30 years; mainly
in the placer mining through the private ownership of a property in Atlin,
British Columbia. In addition, he was the President of Red Fox Minerals Ltd., a
company previously listed on the Vancouver Stock Exchange, Canada, ten years
ago. His experience in hard rock mining is limited. He does not have any
professional training as a mining person and has gained any knowledge he has
from a hands on approach to exploration. Maryanne Thachuk has no mining
experience and has never been involved in the exploration of a mineral property.
To explore our claim, we will have to rely upon mining consultants; an expensive
way to explore with no guarantees of favorable results.
18. Our President has interests in another company which cause him to devote
time and effort to their activities resulting in a conflict of interest.
Del Thachuk is also a director and officer of Info-Pro Marketing Inc.
("Info-Pro"), a Nevada incorporated company, which will eventually seek a
listing on the OTCBB. Even though Info-Pro is involved in marketing certain
books on the Internet under the title of "The Basics of Business Success", Del
has a conflict of interest relating to the number of hours he can spend on our
Company and Info-Pro. In addition, he will have to raise money for both
companies and therefore we have to rely upon his discretion as to what money he
will be raising for Info-Pro and what money he will raise for us. We can only
hope Del will devote sufficient time to the affairs of our Company and allocate
any future money raising so that we will be maintained in good standing and can
commence our exploration program on our claim. Even with full disclosure by
Del, we cannot insure that we will receive fair and equitable treatment in every
transaction.
19. We have only one directors and the officers of our Company are related by
marriage which is not inductive to independency at the management level of
our Company.
We have only one director who is also our President. Del Thachuk is married to
the Secretary Treasurer of our Company. Therefore, there is basically no
independent director or officer to oversee various transactions entered into by
us. The likelihood of the Secretary Treasurer disputing any transaction
entered into by the sole director is remote. Our shareholders should be aware
that there is no independent officer or director to continually monitor the
activities of our company and therefore our shareholders will have to put their
faith in the honesty of the existing management.
20. We do not carry a policy for key man insurance, which in the event we wish
to replace our management team funds will not be available to do so.
We have not subscribed to a key man insurance policy in the event that our
current director and President either departs from our Company or meets an
untimely end. There will be no proceeds from insurance to allow us to attract
an individual to replace our President and it is unlikely we will have extra
money on hand to be allocated for this purpose.
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ITEM 2. DESCRIPTION OF PROPERTY
History of the Standard claim
The Standard claim was staked February 24, 1999 after the rights of the previous
owners had expired. The claim covers 15.8 square miles located within the
Bridge River Gold Camp near the historic Bralorne-Pioneer Mine. The
Bralorne-Pioneer Property represents the largest single gold producer in B.C.,
having produced over 4 million ounces of gold from ore averaging 0.53 oz/ton
during the period 1932-1971.
Standard engaged the services of Calvin Church, Professional Geologist, to
prepare a geological report on the Standard claim. His report was dated May 27,
1999 and parts of it are noted in this Form 10-KSB. Church's report covers the
geology and mineralization in the Bridge River mining camp and potential for
discoveries on the Standard claim.
Location, Access and Physiography of the Standard claim
The Standard claim is located approximately 113 miles north of Vancouver and 2.5
miles southeast of the town of Gold Bridge in southwestern British Columbia.
The geographical centre of the claim is given by the U.T.M. coordinates 516600E,
5626700N (Lat. 50 47'35"N, Long. 122 45'53"W) on N.T.S. mapsheet 92J/15. The
town of Gold Bridge can be accessed by all weather gravel road (highway #40B)
from Lillooet or via the Hurley River forestry road from Pemberton. Access to
the north end of the claim is by four-wheel drive vehicle up Fergusson Creek to
the headwaters above 5,800 feet elevation. Helicopters are available from bases
in the towns of Pemberton or Lillooet.
The property is situated near the northwest end of the Bendor Range within the
Coast Mountains where steep west facing slopes of Mt. Fergusson range from 5,000
to 8,500 feet. Sub-alpine scrub alder and hemlock trees grow at lower
elevations in the southwest corner of the claim and rock exposure is good along
peaks and ridges in the east half of the claim. The winters are cold with
generally high snowfall accumulations and summers are hot and dry.
Claim Status
The Standard claim was staked by professional staker and is registered in the
Lillooet Mining Division of British Columbia. The claim was then sold to
Standard Capital Corporation, of Surrey, B.C., who own the claim outright.
Mineral tenure is secure for one year from the date of staking as described
below.
Claim Name Tenure No. Units Expiry Date
----------- ----------- ----- -------------------
Standard 367933 18 February 24, 2004
Regional patterns of metal zonation across the eastern flank of the Coast
Plutonic Complex divide the camp into gold rich and silver rich deposits related
to the proximity with the central plutons (bodies of medium to course-grained
igneous rock that formed beneath the surface due to the solidification of
magma). 'Congress type' mineralization, represented by low gold-silver ratios
and antimony rich ores, developed distal to coast granitic intrusives in shear
zones and Tertiary porphyry dykes. Mineralization at the Bralorne and Pioneer
mines consists of gold and arsenopyrite bearing quartz veins filling in echelon
tension fractures in the Bralorne diorite (a group of course-grained igneous
rocks intermediate in composition between acidic and basic) and Pioneer
greenstones. The Standard property is located in a transition zone between
-12-
gold-arsenic rich and silver-antimony rich zones. Although economic
mineralization has not yet been identified on the property, rock samples from
the Waterloo showing show multielement anomalies and significant gold values to
warrant further investigation.
An exploration program including reconnaissance mapping, prospecting and
geochemical sampling is recommended to determine the extent of the mineralizing
system on the Standard claim. Further programs of trenching and drilling are
recommended contingent on favorable results of each preceding exploration phase.
Exploration activities undertaken between January 18 to 21, 2002
The Legal Corner Post is located approximately 2 miles southeast of the Village
of Bralorne and on the north side of Fergusson Creek. Access to the Standard
claim is by snowmobile part way up the Fergusson Creek access trail to the 5,800
feet elevation and approximately 1 mile up Fergusson Creek.
The claim boundary is characterized by extreme topographical conditions.
Sub-alpine scrub alder and hemlock trees grow at the creek elevations and rock
outcropping exposure is good along peaks and ridges in the east half of the
canyon. The winters are cold with generally high snowfall accumulations and
summers are hot and dry.
Assessment work for 2002 filed with B.C. Minfile documents the immediate claim
area being prospected. Trenching and underground exploration work was completed
on adjacent ground. Two zones of mineralization were identified. Assays from
this sheared vein structures ranged from 8.7 g/t to 28.2 g/t gold over variable
widths of 10 cm to 80 cm.
Exploration activities undertaken between February 2 to 3 and 13 to 14, 2003
The objective of this physical work program was to lay out a sampling grid
system in preparation for a geochemical soils sampling program. A budget of
approximately $3,600 was expended to lay out 2,350 metres of sampling grid. The
next step to be taken is to initiate a geochemistry soils program over the
entire grid and prospect the ridge for geological structures.
Subsequently, the Standard claim has had sufficient work and cash expended on it
to maintain it in good standing with the Ministry of Energy and Mines until
February 23, 2005.
Glossary of Geological and Technical Terms
-----------------------------------------------
The following represents various geological and technical terms used in this
Form which the reader may not be familiar with.
WORD DEFINITION
Arsenopyrite A monoclinic mineral most common arsenic mineral and principal ore of arsenic,
occurs in many sulfide ore deposits, particularly those containing lead,
silver and gold
Anomalies. . . . . .A departure from the expected or normal.
.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Claim A portion of mining ground held under the Provincial laws by Standard, by
virtue of one location and record where it has the mineral rights to all minerals
thereon except coal
Deposit Mineral deposit or ore deposit is used to designate a natural occurrence of
a useful mineral, or an ore, in sufficient extent and degree of concentration to
invite exploration
-13-
WORD . . . . . . . DEFINITION
Diorite A group of plutonic rocks intermediate in composition between acidic and basic,
characteristically composed of dark- coloured amphibale(especially hornblende),
acid plagioclase (oligoclase, andesine), pyroxene and sometimes a small amount
of quartz.
Echelon An arrangement of faults drawn up in parallel lines, but each somewhat to the
left or the right of the one in the rear, like a series of steps.
Fault. . . . . . . A break in the continuity of a body of rock.
Geochemical grid Two sets of uniformly spaced parallel lines, intersecting at right angles, by
means of which the surface of an area is divided into squares when a
checkerboard placement of samples of soil and rock is desired.
Granitic rock A term loosely applied to any light-colored, coarse-grained plutonic rock
containing quartz as an essential component, along with feldspar and mafic
minerals.
Greenstone A field term applied to any compact dark-green altered or metamorphosed basic
igneous rock that owes it color to the presence of chorite, actinolite or
epidote.
Hard-rock mining Mining that takes place in igneous and metamorphic rock by means of drilling
and blasting to extract the ore.
Igneous rock A rock or mineral that solidified from molten or partly molten material.
Igneous rocks constitute one of three main classes into which rocks are
divided, the other being metamorphic and sedimentary.
Intrusive. . . . . In geology, a mass of igneous rock that, while molten, was forced into or
between other rocks.
Magma Naturally occurring molten rock, generated within the Earth and capable of
intrusion and extrusion, from which igneous rocks are derived through
solidification and related processes.
Mineralization . . Potentially economic concentration of commercial metals occurring in nature.
Ore. . . . . . . . The naturally occurring mineral from which a mineral of economic value can
be extracted.
Placer Mining Mining in ground which is composed of gravel whose mineral contents are
extracted by the use of water, by sluicing, hydrailicing, etc.
Quartz . . . . . . It is the most common of all solid minerals and may be colorless and
transparent, or colored.
Soil sample A sample of surface material analyzed by lab techniques to test for content
of trace elements occurring in nature (eg. Copper, lead, zinc, etc.)
-14-
The Company's Main Product
The Company's primary product will be the sale of minerals, both precious
and commercial. No minerals have been found to exist on the Standard claim and
therefore the possibilities of obtaining a cash flow from the sale of minerals
in the future might be remote.
The Company's Exploration Facilities
The Company will be exploring and developing, if warranted, the Standard
claim and does not plan to build any mill or smelter. There exists a fully
equipped smelter within 5 miles of the Standard claim but it is privately owned
and may or may not accept ore from the Company to process. If the Company is
unable to obtain a commitment when the claim is proven to have reserves thereon,
it might have to transport the ore to other smelters which are located at great
distances from the Standard claim.
During the exploration period, the Company can use tent facilities, during
the summer months, to house its geological workers or it can obtain hotel
accommodation in either the towns of Gold Bridge or Bralorne.
Investment Policies
The Company does not have an investment policy at this time. Any excess
funds it has on hand will be deposited in interest bearing notes such as term
deposits or short term money instruments. There are no restrictions on what the
director is able to invest or additional funds held by the Company. Presently
the Company does not have any excess funds to invest.
ITEM 3. LEGAL PROCEEDINGS
There are no legal proceedings to which Standard is a party or to which its
property is subject, nor to the best of management's knowledge are any material
legal proceedings contemplated.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of shareholders of Standard during the
fiscal year ended August 31, 2003. Nevertheless, the Company is preparing to
have its First Annual General Meeting in the early part of 2004. All proxies
and other information will be sent to shareholders prior to the Meeting.
Subsequent Events:
On February 20, 2004, Standard held it Annual General Meeting of Stockholders
wherein the following matters were approved by the Stockholders.
1. The election of E. Del Thachuk, Alexander J. Ibsen and B. Gordon Brooke as
directors.
2. The appointment of Madsen & Associates CPA's Inc. as independent
accountants to examine of the financial statements for the fiscal year
ended August 31, 2004.
-15-
3. The approval of the amendment to the Certificate of Incorporation whereby
the authorized share capital Standard will be increased from 25,000,000
common shares with a par value of $0.001 per share to 200,000,000 common
shares with a par value of $0.001 per share. The Certificate of
Incorporation will be revised to read as follows:
"FOURTH. The total number of shares of stock, which this corporation is
authorized to issue, is:
Two hundred Million (200,000,000) shares with a par value of one tenth of
one cent ($0.001) per share, amounting to Two Hundred Thousand Dollars
($200,000).
Article III
The aggregate number of shares, which the corporation shall have authorized
to issue, is 200,000,000 Common Shares ("Common Shares"), with a par value
of $0.001 per share."
4. The approval of a Stock Option Incentive Plan which will provide stock
options to acquire up to 5,000,000 common shares in the capital stock of
Standard at a price equivalent to the fair market value at the date of
granting the stock option when the common shares are listed on any
established stock exchange or national market system. This Stock Option
Incentive Plan will be granted to directors, officers, consultants and
non-employees who participate in the development of Standard.
There were no other transactions brought forth before the Meeting of
Stockholders.
Subsequent to the Meeting of Stockholders, the directors appointed the following
officers:
E. Del Thachuk - President and Chief Executive Officer
B. Gordon Brooke - Chief Accounting Officer
Alexander J. Ibsen - Chief Financial Officer
Maryanne Thachuk - Secretary Treasurer
The member of the Audit Committee were appointed as follows:
E. Del Thachuk - Chairman of Audit Committee
B. Gordon Brooke - Member of Audit Committee
Alexander J. Ibsen - Member of Audit Committee
Autobiographies of B. Gordon Brooke and Alexander J. Isben are shown below.
B. GORDON BROOKE, 59, attended Westwood School Secondary School in Paddington,
London, England before becoming an articled clerk in 1961 with Roberts White and
Company, Chartered Accountants. In 1967, he continued his articles with FF
Sharles & Company, Chartered Accountants, as audit manager and supervisor of
audits which entailed general audit, accounting, financial statement
presentation for small public companies, including such companies as a dairy, a
trade stamp company, automobile dealerships, financing companies, engineering,
retailer, wholesalers, barristers and solicitors, antique dealers and clothing
manufacturers. He had total responsibility for the audit of Michael
Manufacturing Limited, a public trading company. This entailed the preparation
of all information in the year-end financial statements and all printed matters
for exchange filing and information to be distributed to the shareholders. In
1969, he qualified as a Chartered Accountant for England and Wales and
immigrated to Canada where he accepted a position with Deloitte, Haskins and
Sells, Chartered Accountants, in Toronto, Canada. His responsibilities included
being an audit supervisor for mainly small and large business clients which
included such firms as Wickett & Craig- tanners, Canada Dry Inc. - soft drinks,
-16-
Chromalox Canada - heating systems, Northern Pigments - paints, to name a few.
In 1972, he accepted a position as assistant to the chief Financial Officer of
Candeco Management Inc. of Toronto where his responsibilities included
preparation of monthly and annual financial reporting packages for all
subsidiaries including corporate tax returns, preparation of all required audit
working papers and complete audit files for all subsidiaries, responsibilities
for internal control systems for all operating subsidiaries. In 1974, he became
assistant to the chief Financial Officer of Canadian Chromalox Ltd. in Toronto
where he undertook the controller functions from time to time and subsequently
became the Ant-Inflation Officer for Canadian Chromalox's group of companies
where he was responsible for all price increase application to Ottawa. In 1977,
with the end of the Anti-Inflation legislation he became an independent
financial consultant where he offered the following services: accounting,
financial statement presentation, business plans, personal and corporate
taxation services, corporate reorganizations and restructurings, prospectus
preparation and analysis and public offering advice and service. His client
base consisted of such companies as Spectra Anodizing Inc. - anodizing services,
Security Mirror Ltd. - mirror manufacturer, Arco Prime Steel Inc. -steel
fabricator and many other small businesses as well as a continuing relationship
with Canadian Chromalox and its subsidiaries. During this same period of time,
Gordon Brooke either owned or was a working shareholder in the following
business: Black Swan Investments Inc. 30% shareholder in a pub in Toronto,
Octagon Industries Inc. 10% shareholder in a signage company, Reybrooke
Housewares - 100% owner in a company licensed with a United Kingdom company for
PVC extrusions, Beaver Hill Farm Inc. - 33.3% owner of this company which was a
producer of fresh herbs grown under light and sold to over 200 retail outlets in
southern Ontario. In 1997 he became financial consultant to Confectionately
Yours Inc. a Toronto based company specializing in large fresh baked goods and
cereal bar manufacturer. His responsibilities were to serve as an interim
controller and prepare business plans. In 1998, he became the unofficial Chief
Financial Officer of the company until it was sold in December 2000. In 2001 to
the present time, he has been working for Snack Crafters Inc. in Toronto as a
financial consultant where he is responsibilities have been to prepare business
plans, to service as an interim accountant providing accounting services,
preparation of financial statements on a non-audit basis, corporate tax returns
and assisting the company in its reorganization and restructuring.
ALEXANDER ('AL") JOHN IBSEN, 62, graduated from grade 12 and was hired in 1965
by Grant, Atkinson & Blair Ltd., a food brokerage firm, located in Vancouver,
British Columbia where he worked initially as a salesman before becoming Sales
Management and eventually the Branch Manager, supervising a staff of 12. This
entailed all head offices accounts in the food, drug and mass merchandisers'
items. Through his leadership, the department exceeded the company's budgeted
revenue each year he was employed with the company. In 1972, Al joined the firm
of R.A. Brown and Sons Ltd., another food brokerage firm, located in Vancouver
where he became the sales Manager for the entire British Columbia Region. He was
responsible for a staff of 10 employees but the company itself did twice the
volume of sales of his former employer. During his employment with R.A. Brown
and Sons Ltd. Al's department exceeded the company's budget revenue figures each
year. In 1983, he became the general Manager for I.D. Foods Western Corporation
and subsequently became General Manager for western Canada with a staff of 20
people. Again he either met or exceeded the company's sales budget prior to
becoming employed in 1987 with Capital Bag Ltd./ Crown Packaging Ltd. In 1991,
he was hired as Sales Manager for the western Canadian division as well as being
responsible for Toronto, Ontario sales department for Sonoco Flexible Packaging
Corp. even though this company was located in Vancouver, British Columbia.
While at Sonoco, he managed to exceed the budgets there each and every year he
was with the company. In fact, in his last year with the firm, he sold an
additional CDN $10,000,000 over and above the budget figures. In May 2001, the
company sold their packaging lines in Canada thereby eliminating Al's position
with the company. Since 2001, Al has worked as a self-employed contractor in the
food industry. Al has served as the past President of many organizations; some
of which are as follows: Eastgate Masonic Lodge, Burnaby Big Brothers, B.C. Food
Brokerage Association (now an honorary member) and the Food Executives Club of
British Columbia (Honorary Member). Al has strong communication and
-17-
interpersonal skills at all levels of business and can identify and implement
new ideas when required.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
During the past year, there has been no established trading market for
Standard's common stock. Since its inception, Standard has not paid any
dividends on its common stock, and Standard does not anticipate that it will pay
dividends in the foreseeable future. As at August 31, 2003 Standard had 35
shareholders; one of these shareholders is an officer and director of Standard.
There are no securities authorized for issuance under outstanding stock options,
warrants or rights. There are no employee benefit plans entered into between
the Company and its director, officers, consultants or other non-employees. The
Company is considering adopting an incentive stock option plan for officers,
directors, employees and consultants in order to attract personnel who will
assist in the development of the Company. Once the incentive stock option plan
has been structured it will be presented at the Annual Meeting for shareholders'
approval.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW
The Company was incorporated on September 24, 1998 under the laws of the State
of Delaware. The Company's Articles of Incorporation currently provide that the
Company is authorized to issue 25,000,000 shares of common stock, par value
$0.001 per share. As at August 31, 2003, there were 1,295,000 shares
outstanding.
LIQUIDITY AND CAPITAL RESOURCES
As at August 31, 2003, the Company had cash of $131 and liabilities of
$44,185. The liabilities of $23,254 owed to general creditors are as follows:
the transfer agent - $4,559, auditors - $6,300, internal accountant - $10,700
and other payables - $1,695. The amount owed to related parties of $20,931 is
non-interest bearing and has not fixed terms of repayment.
During the year, the Company has incurred the following expenses:
EXPENDITURE AMOUNT
---------------------------------- ---------
Accounting and audit . . . . . . . i $5,900
Bank charges . . . . . . . . . . . 97
Edgar filings. . . . . . . . . . . ii 900
Exploration and filing fees. . . . iii 2,529
Filing fees and franchise taxes. . iv 628
Management fees. . . . . . . . . . v 2,400
Office . . . . . . . . . . . . . . 136
Rent . . . . . . . . . . . . . . . vi 1,200
Telephone. . . . . . . . . . . . . vii 600
Transfer agent's fees and interest viii 1,829
------
Total expenses . . . . . $ 16,219
=========
-18-
i. The Company accrues $500 in fees to its auditors, Sellers and Andersen LLC
for the review of its 10-QSBs and $1,900 for the examination of the Form
10-KSB. In addition, the Company has accrued $500 each for its various Form
10-QSBs and $1,000 for this Form 10-KSB in order that the accountant can
prepare the applicable working papers and other information to be submitted
to the auditors for their review of the Form 10-QSBs and 10-KSBs.
ii The Company has incurred certain expenses during the year for filing its
various Forms 10-QSB and 10-KSB with the SEC. The normal expense for filing
the Forms 10-QSB is $200 per quarter and the Form 10-KSB is $300.
iii. In February 2003, the Company undertook an exploration program on the
Standard mineral claim for four days. The above noted expenses include the
cost of two individuals, room and board and transportation by snowmobile to
the Standard claims. In addition, the amount shown includes filing the
assessment work with the Gold Commissions office at the Ministry of Mines
and Energy for the Province of British Columbia. This maintained the claim
in good standing until February 24, 2004.
iv. The Company has paid annual filing fees to The Company Corporation of $175
and other fees to reinstate the Company to good standing of $288. Franchise
taxes were paid by the Company to the State of Delaware in the amount of
$106 for 2002 and $59 for 2001. The difference between the two years was
due to interest and penalties charged in 2002.
v. The Company does not compensate its directors for the service they perform
for the Company since, at the present time, it does not have adequate funds
to do so. Nevertheless, management realizes that it should give recognition
to the services performed by the directors and officers and therefore has
accrued $200 per month. This amount has been expensed in the current period
with the offsetting credit being allocated to "Capital in Excess of Par
Value" on the balance sheet. The Company will not, in the future, be
responsible for paying either cash or shares in settling this accrual.
vi. The Company does not incur any rental expense since it used the
personal residence of its President. Similar to management fees, rent
expense should be reflected as an operating expense. Therefore, the
Company has accrued $100 per month as an expense with an offsetting
credit to "Capital in Excess of Par Value".
vii. The Company does not have its own telephone number but uses the
telephone number of its President. Similar to management fees and
rent, the Company accrues an amount of $50 per month to represent the
charges for telephone with an offsetting entry to "Capital in Excess
of Par Value".
viii. During the period, the Company received its annual billing from
Nevada Agency & Trust Company for acting as transfer agent for the
year in the amount of $1,200. In addition, the Company has accrued
certain late charges of interest totaling $629.
The Company estimates the following expenses will be required during the
next twelve months to meet its obligations:
Requirements Current Required
For Accounts Funds for
Expenditures Twelve Months Payable Twelve Months
------------------------------- -------------- --------- --------------
Accounting and audit. . . . . . 1 $ 6,200 $ 15,100 $ 21,300
Bank charges. . . . . . . . . . 80 - 80
Edgar filing fees . . . . . . . 2 900 1,900 2,800
-19-
Exploration expense . . . . . . 3 2,800 1,271 4,071
Filing fees and franchise taxes 4 275 - 275
Office. . . . . . . . . . . . . 5 200 424 624
Transfer agent's fees . . . . . 6 1,900 4,559 6,459
--------- -------------- -------
Estimated expenses . . . $ 12,355 $ 23,254 $ 35,609
============== ========= =========
No recognition has been given to management fees, rent or telephone since, at
the present time, these expenses are not cash oriented.
1. Accounting and auditing expense has been projected as follows:
Filings Accountant Auditors Total
--------------------------- ----------- --------- --------
Form 10-QSB - Nov. 30, 2003 $ 600 $ 500 $ 1,100
Form 10-QSB - Feb 28, 2004. 600 500 1,100
Form 10-QSB - May 31, 2004. 600 500 1,100
Form 10-KSB - Aug 31, 2004. 1,000 1,900 2,900
----------- --------- --------
$ 2,800 $ 3,400 $ 6,200
=========== ========= ========
2. Edgar filing fees comprise the cost of filing the various Forms 10-KSB
and 10-QSB on Edgar. It is estimated, based on past charges, that the
cost for each of the Form 10-QSBs will be $200 whereas the cost of
filing the 10-KSB will be $300.
3. To maintain the Standard claim in good standing the Company will incur
a cost of Cdn $200 per unit. The number of units comprising the
Standard claim is 18 and therefore, the minimum cost will be $3,600
Cdn or $2,680 US. The Company will not pay the Ministry of Mines and
Energy cash-in -lieu instead of performing assessment but will
undertake some exploration program in order to maintain the claims in
good standing. In addition, the Company will have to incur the cost of
$120 to record the work performed which has been accrued in the above
figure.
4. Filing fees for the Company as a registered agent are $175 per year.
Franchise taxes paid to the State of Delaware are $50 plus a late
filing charge of $50.
5. Relates to photocopying and faxing based on prior year's actual
charges.
6. Each year the Company is charges a fee of $1,200 by its transfer agent
to act on its behalf. In addition, there will be interest accrued on
the outstanding balance of approximately $700.
Standard will have to raise funds to settle these outstanding liabilities if it
wishes to continue to operate in the future.
Standard does not expect to purchase or sell any plant or significant equipment
during the next year.
Standard does not expect any significant changes in the number of employees.
-20-
ITEM 7. FINANCIAL STATEMENTS
The financial statements of Standard are included following the signature page
to this Form 10-KSBA.
ITEM 8. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On December 15, 2002, Standard dismissed Andersen Andersen & Strong, L.C. as the
independent accountants. This action was approved by the sole director of
Standard. Standard appointed Seller & Andersen, LLC as the independent
accountants. Unfortunately, the independent accountants' audit opinion dated
June 29, 2003, attached to the financial statements for the fiscal year ended
August 31, 2002 and included with the Form 10-KSB filed by Standard on July 9,
2003 with the United States Securities and Exchange Commission, was under the
letterhead of Andersen Andersen & Strong LC rather than Sellers & Andersen, LLC.
On February 5, 2004, Standard dismissed Sellers & Andersen LLC and appointed
Madsen & Associates, CPA's Inc. as the independent accountants to examine the
financial statements for the fiscal year ended August 31, 2002 and render an
opinion thereon. These financial statements are including in this Form 10-KSBA.
The reports of Andersen Andersen & Strong LC for the financial statements since
inception to August 31, 2001 and through the subsequent interim periods ended
December 15, 2002, contained no adverse opinion or disclaimers of opinion and
were not modified or qualified as to audit scope or accounting principles, but
did contain modifications as to Standard's ability to continue as a going
concern.
During the two fiscal years ended August 31, 2001 and 2000, and through the
subsequent interim period ended December 15, 2002, to the best of Standard's
knowledge. There have been no disagreements with Andersen Andersen & Strong, LC
on any matters of accounting principles or practices, financial statement
disclosure, or audit scope or procedures, which disagreement if not resolved to
the satisfaction of Andersen Andersen & Strong, LC would have caused them to
make reference in connection with its report on the financial statements of
Standard for such years.
During the two fiscal years ended August 31, 2001 and 2000, and through
subsequent interim period ended December 15, 2002, Andersen Andersen & Strong.
LC did not advise Standard on any matters set forth in Item 304 (a)(1)(iv)(B) of
Regulation S-B.
The reports of Sellers & Andersen LLC for the financial statements as at August
31, 2003 and through the subsequent interim periods ended February 5, 2004,
contained no adverse opinion or disclaimers of opinion and were not modified or
qualified as to audit scope or accounting principles, but did contain
modifications as to Standard's ability to continue as a going concern.
During the fiscal year ended August 31, 2003, and through the subsequent interim
period ended February 5, 2004, to the best of Standard's knowledge, there have
been no disagreements with Sellers & Andersen, LLC on any matters of accounting
principles or practices, financial statement disclosure, or audit scope or
procedures, which disagreement if not resolved to the satisfaction of Sellers &
Andersen, LLC would have caused them to make reference in connection with its
report on the financial statements of Standard for such years.
-21-
During the fiscal year ended August 31, 2003, and through subsequent interim
period ended February 5, 2004, Sellers & Andersen, LLC did not advise Standard
on any matters set forth in Item 304 (a)(1)(iv)(B) of Regulation S-B.
For the financial statements for the fiscal years ended August 31, 2003 and
2002, Standard has not consulted with Madsen & Associates CPA's Inc. regarding
(i) the application of accounting principles to a specific transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
Standard's financial statements, and no written report or oral advice was
provided to Standard by concluding there was an important factor to be
considered by Standard in reaching a decision as to an accounting, auditing or
financial reporting issue; or (ii) any matter that was either the subject of a
disagreement, as that term is defined in Item 304 (a)(1)(iv)(A) of Regulation
S-B or an event, as that term is defined in Item 304 (a)(1)(iv)(B) of Regulation
S-B.
Standard has requested Madsen & Associates, CPA's Inc. to examine the financial
statements for the two fiscal years ended August 31, 2003 and 2002 and to review
the interim financial statements for the three months ended November 30, 2003
and 2002, the six months ended February 2003 and nine months ended May 31, 2003.
Standard will file amended Form 10-KSBs and 10-QSBs.
ITEM 8A - CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
-----------------------------------------------------
Standard's Chief Executive Officer and it Chief Financial Officer, after
evaluating the effectiveness of Standard's controls and procedures (as defined
in the Securities Exchange Act of 1934 Rules 13a 14(c) and 15d 14 (c) as of the
date within 90 days of the filing of this annual report on Form 10-KSB (the
"Evaluation Date"), have concluded that as of the Evaluation Date, Stanard's
disclosure controls and procedures were adequate and effective to ensure that
material information relating to it would be made known to it by others,
particularly during the period in which this annual report on Form 10-KSB was
being prepared.
(b) Changes in Internal Controls
-------------------------------
There were no significant changes in Standard's internal controls or in other
factors that could significantly affect Standard's disclosure controls and
procedures subsequent to the Evaluation Date, nor any significant deficiencies
or material weaknesses in such disclosure controls and procedures requiring
corrective actions.
-22-
PART 111
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE ACT
The following table sets forth as of August 31, 2003, the name, age, and
position of each executive officers and director and the term of office of each
director of Standard.
Term as
Director
Name Age Position Held Since
------------------ -------- ---------------------- -----
Del Thachuk. . . 68 President and Director 1998
Maryanne Thachuk 68 Secretary Treasurer -
The director of Standard serves for a term of one year and until his successor
is elected at Standard's Annual Shareholders' Meeting and is qualified, subject
to removal by Standard's shareholders. Each officer serves, at the pleasure of
the Board of Directors, for a term of one year and until his successor is
elected at a meeting of the Board of Directors and is qualified.
Set forth below is certain biographical information regarding each of Standard's
executive officers and directors.
DEL THACHUK has been the President and a Director of Standard since its
inception. Mr. Thachuk graduated from Victoria Composite High School in
Edmonton, Alberta before spending nine months articling as a chartered
accountant student. Subsequently, Mr. Thachuk worked for two years for the City
of Edmonton as a surveyor before entering professional football for four years.
He was a player for London Lords in London, Ontario and then was hired by the
Edmonton Eskimos. From 1962 to 1969, Mr. Thachuk was owner and president of
Civic Tire & Battery Ltd. located in Olds, Alberta. His company owned three tire
shops and was in partnership with an additional two. Subsequent to the sale of
his company he became a contractor for a short period of time during which time
he build and sold five houses and approximately thirty pre-fab homes. In 1971,
Mr.Thachuk commenced mining a placer gold property he owned in Atlin, British
Columbia. During the fifteen years he mined his placer property he extracted in
excess of 30,000 ounces of gold. With the sale of the placer property, Mr.
Thachuk, over the next five years, entered into various mining ventures in
Nevada, Washington State and British Columbia. During
this same period of time, Mr. Thachuk was president of Red Fox Minerals Ltd., a
company listed on the former Vancouver Stock Exchange. In 1991, he became
part owner and general manager for Koben Sand & Gravel which employed 36
employees and in its third year of operations had in excess of CDN $6,000,000 in
sales. In 1994, Mr. Thachuk became a consultant for various companies until
1997 when he incorporated and became president of Mine A Max Corporation
(renamed to Peabodys Coffee Inc.), a company trading on the OTC Bulletin Board
in United States. Recently he formed a Nevada company named Info-Pro Marketing
Inc. specializing in the distribution of educational books.
MARYANNE THACHUK has been Secretary Treasurer of Standard since its inception.
She graduated from Jasper Place Sr. High in Edmonton in 1954 and then obtained a
Certified Secretarial Diploma from McTavish Business College. From 1956 to
1960, Maryanne worked for CJCA Broadcasting Station in Edmonton reporting on
court cases, sport related events and other news issues. She was the assistant
to the Sports and News Director. In 1960, she moved to Vancouver and was
-23-
employed as Private Secretary to the President of Dueck Motors. In 1962, she
moved back to Alberta where she was trained as an In-Service Social Worker with
the Alberta Government Department of Public & Child Welfare. In 1964 Maryanne
moved back to the Vancouver as the Private Secretary of the President of Lindal
Cedar Homes. From 1965 to 1988 she worked part time for the President of Delmor
Enterprises before becoming one of its directors. In 1988, she became the
Personal Secretary to the Board Chairman of the Culinary Foods Division for
Canadian Airline. Since 1990, she has been working for the B.C. Government
Department of Education (Surrey School District #36) where she has received
specialized training in Finance & Administration. In 2001, she retired.
Del or Maryanne Thachuk are not directors of another company registered under
the Securities and Exchange Act of 1934 other than Del who was a director and
officer of Mine A Max Corporation until May 31, 1999.
Del Thachuk, the President and Director, and Maryanne Thachuk, the Secretary
Treasurer, are married to one another. The two, however, are not related to any
person under consideration for nomination as a director or appointment as an
executive officer.
To the knowledge of management, during the past five years, no present or former
director, executive officer or person nominated to become a director or an
executive officer of Standard:
(1) filed a petition under the federal bankruptcy laws or any state insolvency
law, nor had a receiver, fiscal agent or similar officer appointed by the
court for the business or property of such person, or any partnership in
which he was a general partner at or within two years before the time of
such filings;
(2) was convicted in a criminal proceeding or named subject of a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from or otherwise limiting, the
following activities:
(i) acting as a futures commission merchant, introducing broker, commodity
trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, associated person of any of the foregoing, or as
an investment advisor, underwriter, broker or dealer in securities, or
as an affiliate person, director or employee of any investment
company, or engaging in or continuing any conduct or practice in
connection with such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activities in connection with the purchase or sale of
any security or commodity or in connection with any violation of
federal or state securities laws or federal commodities laws;
(4) was the subject of any order, judgment, or decree, not subsequently
reversed, suspended, or vacated, of any federal or state authority barring,
suspending or otherwise limiting for more than 60 days the right of such
person to engage in any activity described above under this Item, or to be
associated with persons engaged in any such activities;
(5) was found by a court of competent jurisdiction in a civil action or by the
Securities and Exchange Commission to have violated any federal or state
securities law, and the judgment in such civil action or finding by the
Securities and Exchange Commission has not been subsequently reversed,
suspended, or vacated.
-24-
(6) was found by a court of competent jurisdiction in a civil action or by the
Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.
COMPLIANCE WITH SECTION 16 (A) OF THE EXCHANGE ACT
Standard knows of no director, officer, beneficial owner of more than ten
percent of any class of equity securities of Standard registered pursuant to
Section 12 ("Reporting Person") that failed to file any reports required to be
furnished pursuant to Section 16(a). Other than those disclosed below, Standard
knows of no Reporting Person that failed to file the required reports during the
most recent fiscal year.
The following table sets forth as at August 31, 2003, the name and position of
each Reporting Person that filed any reports required pursuant to Section 16 (a)
during the most recent fiscal year.
Name Position Form Report to be Filed
---- -------- ---- ---------------------
Del Thachuk President and Director 3 September 11, 2002
5 November 17, 2003
Maryanne Thachuk Secretary Treasurer 3 November 21, 2003
ITEM 10. EXECUTIVE COMPENSATION
CASH COMPENSATION
There was no cash compensation paid to any director or executive officer of
Standard during the fiscal year ended August 31, 2003.
The following table sets forth compensation paid or accrued by Standard
during the fiscal years ended August 31, 2000 to 2003 to Standard's President,
Directors and Secretary Treasurer.
SUMMARY COMPENSATION TABLE (2000-2003)
Long Term Compensation (US Dollars)
--------------------------------------
Annual Compensation Awards Payouts
-------------------- ------ -------
(a) (b) (c) (e) (f) (g) (h) (i)
Other Restricted All other
annual stock Options/ LTIP compen-
Name and Princi- . . Comp. awards SAR payouts sation
pal position . . . . Year Salary ($) ($) (#) ($) ($)
-------------------- ------- ----------- ---------- -------- -------- ---- ----
2000 -0- -0- -0- -0- -0- -0-
Del Thachuk. . . . . 2001 -0- -0- -0- -0- -0- -0-
President and. . . . 2002 -0- -0- -0- -0- -0- -0-
Director. . . . 2003 -0- -0- -0- -0- -0- -0-
-25-
2000 -0- -0- -0- -0- -0- -0-
Maryanne Thachuk . . 2001 -0- -0- -0- -0- -0- -0-
Secretary Treasurer 2002 -0- -0- -0- -0- -0- -0-
2003 -0- -0- -0- -0- -0- -0-
There has been no compensation given to either of the Director or Officers
during the periods ended August 31, 2000 to 2003. There are no stock options
outstanding as at August 31, 2003, but it is contemplated that the Company may
issue stock options in the future to officers, directors, advisers and future
employees.
BONUSES AND DEFERRED COMPENSATION
None
COMPENSATION PURSUANT TO PLANS
None
PENSION TABLE
None
OTHER COMPENSATION
The director has not received any compensation for the time he has devoted to
Standard. Nevertheless, Standard does give recognition to the time spent by
accruing as an expense each month a charge of $200 per month as management fees
with an offsetting credit to Capital in excess of par value. The amount so
accrued with not be pay in either cash or shares to the director in the future.
COMPENSATION OF DIRECTORS
None
TERMINATION OF EMPLOYMENT
There are no compensatory plans or arrangements, including payments to be
received from Standard, with respect to any person named in Cash Consideration
set out above which would in any way result in payments to any such person
because of his resignation, retirement, or other termination of such person's
employment with Standard or its subsidiaries, or any change in control of
Standard, or a change in the person's responsibilities following a change in
control of Standard.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as at August 31, 2003, the name and address and
the number of shares of Standard's common stock, with a par value of $0.001 per
share, held of record or beneficially by each person who held of record, or was
known by Standard to own beneficially, more than 5% of the issued and
outstanding shares of Standard's common stock, and the name and shareholdings of
each director and of all officers and directors as a group.
-26-
Name and Address Amount
of Beneficial Nature of of Beneficial Percent
Owner Ownership(1) Ownership of Class
------------------------------------- ------------ -------------- --------
DEL THACHUK
34- 3387 King George
Highway
Surrey, British Columbia
Canada, V4P 1B7 . . . . . . . Direct 100,000 (i) 7.72
DORIS O'BRIEN
626 - Highway 99
P.O. Box 5
Surrey, British Columbia
Canada, V4B 5A8. . . . . . . . Direct 100,000 7.72
AUGGNETHA QUASHIE
15382 - 110A Avenue
Surrey, British Columbia
Canada, V3R 9H6 . . . . . . . Direct 100,000 7.72
MICHAEL LEVESQUE
3350 - 199A Street
Langley, British Columbia
Canada, V3A 4T9 . . . . . . . Direct 100,000 7.72
MICHAEL THACHUK
47 - 20761 Telegraph Trail
Surrey, British Columbia
Canada, V1M 2W3 . . . . . . . Direct 100,000 (ii) 7.72
GERRY WOLFF
4364 Woodcrest Road
West Vancouver, B.C.
Canada, V7SX 2W1. . . . . . . Direct 100,000 7.72
MARVIS SHAW
246 - 20071 - 24th Avenue
Langley, British Columbia
Canada, V2Z 2A1. . . . . . . Direct 100,000 7.72
KEN RADOMSKY
840 - 15355 - 24th Avenue
White Rock, B.C.
Canada, V4B 4C2. . . . . . . Direct 100,000 7.72
RAYMOND MILLLER
301 - 1323 Merklin Street
White Rock, British Columbia
Canada, V4A 4C2. . . . . . . Direct 100,000 7.72
-27-
MARION K. SEPT
19188 - 84th Avenue
Surrey, British Columbia
Canada, V4N 3G5. . . . . . . Direct 100,000 7.72
KAREN FORD
17773 - 59 a Avenue
Surrey, British Columbia
Canada, V3S 1R2. . . . . . . Direct (2) 100,000 7.72
MARYANNE THACHUK
34-3387 King George Highway
Surrey, British Columbia
Canada, V4P 1B7. . . . . . . - NIL 0.00
Director and Officers as a whole. . . Direct 100,000 7.72
(1) All shares owned directly are owned beneficially and of record, and such
shareholder has sole voting, investment and dispositive power, unless
otherwise noted.
(2) These shares have been sold but the certificate has not been changed to
denote the new owner.
(3) Under Rule 13-d under the Exchange Act, shares not outstanding but subject
to options, warrants, rights, conversion privileges pursuant to which such
shares may be acquired in the next 60 days are deemed to be outstanding for
the purpose of computing the percentage of outstanding shares owned by the
persons having such rights, but are not deemed outstanding for the purpose
of computing the percentage for such other persons.
(i) This stock is restricted since it was issued in compliance with the
exemption from registration provided by Section 4(2) of the Securities
Act of 1933, as amended. After this stock has been held for one year,
Mr. Thachuk could sell 1% of the outstanding stock in Standard every
three months. Therefore, this stock can be sold after the expiration
of one year in compliance with the provisions of Rule 144. There is
"stock transfer" instructions placed against this certificate and a
legend has been imprinted on the stock certificate itself.
(ii) Michael Thachuk is the son of the President of Standard. He is married
and lives in his own home.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Except as indicated below, there were no material transactions, or series of
similar transactions, since inception of Standard and during its current fiscal
period, or any currently proposed transactions, or series of similar
transactions, to which Standard was or is to be a party, in which the amount
involved exceeds $60,000, and in which any director or executive officer, or any
security holder who is known by Standard to own of record or beneficially more
-28-
than 5% of any class of Standard's common stock, or any member of the immediate
family of any of the foregoing persons, has an interest.
INDEBTEDNESS OF MANAGEMENT
There were no material transactions, or series of similar transactions, since
the beginning of Standard's last fiscal year, or any currently proposed
transactions, or series of similar transactions, to which Standard was or is to
be a part, in which the amount involved exceeded $60,000 and in which any
director or executive officer, or any security holder who is known to Standard
to own of record or beneficially more than 5% of the common shares of Standard's
capital stock, or any member of the immediate family of any of the foregoing
persons, has an interest.
TRANSACTIONS WITH PROMOTERS
Standard does not have promoters and has no transactions with any promoters.
-29-
PART IV
ITEM 13. EXHIBITS AND REPORTS
(a) (1) FINANCIAL STATEMENTS.
The following financial statements are included in this report:
Title of Document Page
------------------- ----
Report of Madsen & Associated, CPA's Inc. 34
Balance Sheet as at August 31, 2003 35
Statement of Operations for the year ended August 31, 2003
and 2002 and for the period from September 24, 1998 (Date of
Inception) to August 31, 2003 36
Statement in Changes in Stockholders' Equity for the period
from September 24, 1998 (Date of Inception) to August
31, 2003 37
Statement of Cash Flows for the year ended August 31, 2003
and 2002 and for the period from September 24, 1998 (Date
of Inception) to August 31, 2003 38
Notes to the Financial Statements 39
(a) (2) FINANCIAL STATEMENT SCHEDULES
The following financial statement schedules are included as part of this report:
None.
(a) (3) EXHIBITS
The following exhibits are included as part of this report by reference:
1. Certificate of Incorporation, Articles of Incorporation and By-laws
1.1 Certificate of Incorporation (incorporated by reference from Standard's
Registration Statement on Form 10-SB filed on December 6, 1999)
1.2 Articles of Incorporation (incorporated by reference from Standard's
Registration Statement on Form 10-SB filed on December 6, 1999)
1.3 By-laws (incorporated by reference from Standard's Registration Statement
on Form 10-SB filed on December 6, 1999)
99.1 Certificate Pursuant to Section 301(a) of the Sarbanes-Oxley Act of 2002
(Chief Executive Officer)
-30-
99.2 Certification of the Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
99.3 Certificate Pursuant to Section 301(a) of the Sarbanes-Oxley Act of 2002
(Chief Financial Officer)
99.4 Certification of the Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
- Filed on February 13, 2004 and dated February 5, 2004 regarding change
of Standard's certifying accountants from Sellers & Andersen LLC to
Madsen & Associates, CPA's Inc.
- Filed on February 25, 2004 regarding certain motions approved by the
shareholders at the Annual General Meeting of Stockholders.
- Filed on February 25, 2004 and dated December 15, 2002 regarding
change of Standard's certifying accountants from Andersen Andersen &
Strong, LC to Sellers & Andersen
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(1) Audit Fees
-----------
The aggregate fees billed by the independent accountants for the last two fiscal
years for professional services for the audit of Standard's annual financial
statements and the review included in Standard's Form 10-QSB and services that
are normally provided by the accountants in connection with statutory and
regulatory filings or engagements for those fiscal years were $6,800.
(2) Audit-Related Fees
-------------------
The aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal accountants that are reasonably related to the
performance of the audit or review of Standard's financial statements and are
not reported under Item 9 (e)(1) of Schedule 14A was NIL.
(3) Tax Fees
---------
The aggregate fees billed in each of the last two fiscal years for professional
services rendered by the principal accountants for tax compliance, tax advise,
and tax planning was $200.
(4) All Other Fees
----------------
During the last two fiscal years there were no other fees charged by the
principal accountants other than those disclosed in (1) and (2) above.
-31-
(5) Audit Committee's Pre-approval Policies
------------------------------------------
At the present time, there are not sufficient directors, officers and employees
involved with Standard to make any pre-approval policies meaningful. Once
Standard has elected more directors and appointed directors and non-directors to
the Audit Committee it will have meetings and function in a meaningful manner.
(6) Audit hours incurred
----------------------
The principal accountants did not spend greater than 50 percent of the hours
spent on the accounting by Standard's internal accountant.
-32-
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
STANDARD CAPITAL CORPORATION
(Registrant)
Date: April 19, 2004 By:/s/ "Del Thachuk"
----------------------
Del Thachuk
Chief Executive Officer,
President and Director
Date: April 19, 2004 By: /s/ "Alexander J. Ibsen"
----------------------------------
Alexander J. Ibsen
Chief Financial Officer and Director
-33-
MADSEN & ASSOCIATES, CPA'S INC. 684 East Vine Street, #3
---------------------------------
Certified Public Accountants and Business Murray, Utah, 84107
Consultants Board Telephone 801-268-2632
Fax 801-262-3978
Board of Directors
Standard Capital Corporation
Vancouver B. C. Canada
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheet of Standard Capital Corporation
(pre- exploration stage company) at August 31, 2003, and the statement of
operations, stockholders' equity, and cash flows for the years ended August 31,
2003 and 2002 and the period September 24, 1998 (date of inception) to August
31, 2003. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes assessing the
accounting principles used and significant estimates made by management as well
as evaluating the overall balance sheet presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Standard Capital Corporation at
August 31, 2003, and the results of operations, and cash flows for the years
ended August 31, 2003 and 2002 and the period September 24, 1998 (date of
inception) to August 31, 2003, in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company will need additional
working capital to service its debt and for its planned activity, which raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are described in the notes to the financial
statements. These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Murray, Utah /s/ "Madsen & Associates, CPA's Inc."
March 20, 2004
-34-
STANDARD CAPITAL CORPORATION
(PRE-EXPLORATION STAGE COMPANY)
BALANCE SHEET
AUGUST 31, 2003
ASSETS
CURRENT ASSETS
CASH . . . . . . . . . . . . . . . . . . . . . . . . . $ 131
------------
TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . . $ 131
============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
ACCOUNTS PAYABLE - RELATED PARTY . . . . . . . . . . . $ 20,931
ACCOUNTS PAYABLE . . . . . . . . . . . . . . . . . . . 23,254
------------
44,185
------------
STOCKHOLDERS' DEFICIENCY
COMMON STOCK
25,000,000 SHARES AUTHORIZED, AT $0.001 PAR VALUE
1,295,000 SHARES ISSUED AND OUTSTANDING . . . . . 1,295
CAPITAL IN EXCESS OF PAR VALUE . . . . . . . . . . . . 22,755
DEFICIT ACCUMULATED DURING THE PRE-EXPLORATION STAGE . (68,104)
------------
TOTAL STOCKHOLDERS' DEFICIENCY . . . . . . (44,054)
------------
$ 131
============
The accompanying notes are an integral part of these financial statements
-35-
STANDARD CAPITAL CORPORATION
(PRE-EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED AUGUST 31, 2003 AND 2002 AND THE PERIOD
SEPTEMBER 24, 1998 (DATE OF INCEPTION) TO AUGUST 31, 2003
AUG 31, AUG 31, SEPT 24, 1998
2003 2002 TO AUG 31, 2003
------------- ----------- -----------------
REVENUES $ - $ - $ -
EXPENSES 16,219 13,502 68,104
------------- ----------- -----------------
NET LOSS $ (16,219) $ (13,502) $ (68,104)
============= =========== =================
NET LOSS PER COMMON SHARE
Basic and diluted . . $ (0.01) $ (0.01)
=========== ===========
AVERAGE OUTSTANDING SHARES
Basic . . . . . . . . 1,295,000 1,295,000
=========== ===========
The accompanying notes are an integral part of these financial statements.
-36-
STANDARD CAPITAL CORPORATION
(PRE-EXPLORATION STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM SEPTEMBER 24, 1998 (DATE OF INCEPTION)
TO AUGUST 31, 2003
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
---------- ------- ---------- -------------
BALANCE SEPTEMBER 24, 1998 (date of
inception). . . . . . . . . . . . . . - $ - $ - $ -
Issuance of common shares for cash at
$0.001 - January 11, 1999. . . . . . . 1,000,000 1,000 - -
Issuance of common shares for cash at
$0.001 - February 19, 1999 . . . . . . 100,000 100 - -
Issuance of common shares for cash at
$0.01 - February 15, 1999. . . . . . . 195,000 195 1,755 -
Capital contributions - expenses . . . . . - - 4,200 -
Net operating loss for the period from
September 24, 1998 to August 31, 1999. - - - (12,976)
Capital contributions - expenses . . . . . - - 4,200 -
Net operating loss for the year ended
August 31, 2000. . . . . . . . . . . . - - - (12,392)
Capital contributions - expenses . . . . . - - 4,200 -
Net operating loss for the year ended
August 31, 2001. . . . . . . . . . . . - - - (13,015)
Capital contributions - expenses . . . . . - - 4,200 -
Net operating loss for the year ended
August 31, 2002. . . . . . . . . . . . - - - (13,502)
Capital contributions. . . . . . . . . . . - - 4,200 -
Net operating loss for the year ended
August 31, 2003. . . . . . . . . . . . - - - (16,219)
---------- ------- ---------- -------------
BALANCE, AUGUST 31, 2003 . . . . . . . . . 1,295,000 $ 1,295 $ 22,755 $ (68,104)
========== ======= ========== =============
The accompanying notes are an integral part of these financial statements.
-37-
STANDARD CAPITAL CORPORATION
(PRE-EXPLORATION STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED AUGUST 31, 2003 AND 2002 AND THE PERIOD
SEPTEMBER 24, 1998 (DATE OF INCEPTION) TO AUGUST 31, 2003
AUG 31, Aug 31, Sept 24, 1998
2003 2002 to Aug 31, 2003
----------- ------------ -----------------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . $ (16,219) $ (13,503) $ (68,104)
Adjustments to reconcile net loss
to net cash provided by
operating activities:
Change in accounts payable . . . 11,821 9,628 44,185
Capital contributions - expenses 4,200 4,200 21,000
----------- ------------ -----------------
Net Change in Cash from
Operations. . . . . . (198) 326 (2,919)
----------- ------------ -----------------
CASH FLOWS FROM INVESTING
ACTIVITIES. . . . . . . . . . . . . - - -
----------- ------------ -----------------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance of
common stock . . . . . . . . - - 3,050
----------- ------------ -----------------
Net Increase in Cash. . . . . . . . (198) 326 131
Cash at Beginning of Period . . . . 329 3 -
----------- ------------ -----------------
CASH AT END OF PERIOD . . . . . . . $ 131 $ 329 $ 131
=========== ============ =================
SCHEDULE OF NONCASH
OPERATING ACTIVITIES
Capital contributions - expenses $21,000
=======
The accompanying notes are an integral part of these financial statements.
-38-
STANDARD CAPITAL CORPORATION
(Pre-Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
1. ORGANIZATION
The Company was incorporated under the laws of the State of Delaware on
September 24, 1998 with the authorized common stock of 25,000,000 shares at
$0.001 par value.
The Company was organized for the purpose of acquiring and developing
mineral properties. At the report date mineral claims, with unknown
reserves, had been acquired. The Company has not established the existence
of a commercially minable ore deposit and therefore has not reached the
development stage and is considered to be in the exploration stage (see
note 3).
The Company has completed a private placement offerings of 1,295,000 shares
of its capital stock for $3,050.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
-------------------
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
----------------
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
-------------
The Company utilizes the liability method of accounting for income taxes.
Under the liability method deferred tax assets and liabilities are
determined based on differences between financial reporting and the tax
bases of the assets and liabilities and are measured using the enacted tax
rates and laws that will be in effect, when the differences are expected to
be reversed. An allowance against deferred tax assets is recorded, when it
is more likely than not, that such tax benefits will not be realized.
On August 31, 2003, the Company had a net operating loss carry forward of
$68,104. The tax benefit of approximately $20,000 from the loss carry
forward has been fully offset by a valuation reserve because the use of the
future tax benefit is doubtful since the Company has no operations. The
loss carry forward will expire starting in 2014 through 2023.
Statement of Cash Flows
--------------------------
For the purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less to be
cash equivalents.
-39-
STANDARD CAPITAL CORPORATION
(Pre-Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Basic and Diluted Net Income (loss) Per Share
----------------------------------------------------
Basic net income (loss) per share amounts are computed based on the
weighted average number of shares actually outstanding. Diluted net income
(loss) per share amounts are computed using the weighted average number of
common and common equivalent shares outstanding as if shares had been
issued on the exercise of any common share rights unless the exercise
becomes antidilutive and then only the basic per share amounts are shown in
the report.
Unproven Mineral Claim Costs
-------------------------------
Costs of acquisition, exploration, carrying and retaining unproven
properties are expensed as incurred.
Revenue Recognition
---------------------
Revenue is recognized on the sale and transfer of goods or completion of
service.
Advertising and Market Development
-------------------------------------
The company expenses advertising and market development costs as incurred.
Financial and Concentrations Risk
------------------------------------
The Company does not have any concentration or related financial credit
risk.
Environmental Requirements
---------------------------
At the report date environmental requirements related to the mineral claim
acquired are unknown and therefore an estimate of any future cost cannot be
made.
Estimates and Assumptions
---------------------------
Management uses estimates and assumptions in preparing financial statements
in accordance with accounting principles accepted in the United States of
America. Those estimates and assumptions affect the reported amounts of the
assets and liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses. Actual results could
vary from the estimates that were assumed in preparing these financial
statements.
Financial Instruments
----------------------
The carrying amounts of financial instruments, including cash and accounts
payable, are considered by management to be their estimated fair value.
-40-
STANDARD CAPITAL CORPORATION
(Pre-Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Recent Accounting Pronouncements
----------------------------------
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
3. ACQUISITION OF MINING CLAIMS
The Company acquired one 18 unit metric claim known as the Standard claim
located within the Bridge River gold camp near the town of Gold Bridge, 160
kilometres north of Vancouver, British Columbia with an expiration date of
February 23, 2004. The claims may be extended for one year by the payment
of $1,980 Cdn or the completion of work on the property of $3,600 Cdn plus
a filing fee of $180 Cdn.
The claims have not been proven to have commercially recoverable reserves
and therefore the acquisition and exploration costs have been expensed.
4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officers-directors and their families have acquired 15% of the common
capital stock issued, and have made no interest, demand loans of $20,931
and have made contributions to capital of $21,000 to the Company in the
form of expenses paid for the Company.
5. GOING CONCERN
The Company will need additional working capital to service its debt and to
develop the mineral claims acquired, which raises substantial doubt about
its ability to continue as a going concern. Continuation of the Company as
a going concern is dependent upon obtaining additional working capital and
the management of the Company has developed a strategy, which it believes
will accomplish this objective through additional equity funding, and long
term financing, which will enable the Company to operate for the coming
year.
6. SUBSEQUENT EVENTS
a. Mineral Claim
The Company has maintained its mineral claim in good standing until
February 23, 2005.
b. Amendment to Certificate of Incorporation
The shareholders, at the Annual General Meeting held on February 20, 2004,
approved an amendment to the Certificate of Incorporation whereby the
authorized share capital of the Company would be increased from 25,000,000
common shares with a par value of $0.001 per share to 200,000,000 common
share with a par value of $0.001 per share.
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STANDARD CAPITAL CORPORATION
(Pre-Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2003
6. SUBSEQUENT EVENTS - CONTINUED
c. Stock Option Plan
At the Annual General Meeting held on February 20, 2004, the shareholders
approved a Stock Option Plan (the "Plan") whereby a maximum of 5,000,000
common shares were authorized but unissued to be granted to directors,
officers, consultants and non-employees who assisted in the development of
the Company. The value of the stock options to be granted under the Plan
will be determined on the fair market value of the Company's shares when
they are listed on any established stock exchange or a national market
system at the closing price as at the date of granting the option. No stock
options have been granted under this Plan as at the date of the auditors'
opinion attached to these financial statements.
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