UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES ACT OF
1934
For the fiscal year ended August 31, 2005
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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 0-25707
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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 (I.R.S. Employee I.D. No.)
of incorporation or organization
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-KSB
or any amendment to this Form 10-KSB. [ ]
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, 2005, 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, 2005, 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 11
ITEM 3. . LEGAL PROCEEDINGS 14
ITEM 4 SUBMISSION OF MATTERS TO VOTE OF
. . . . . . . .SECURITIES HOLDERS 14
PART II
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ITEM 5 MARKET FOR COMMON EQUITY AND
. . . . . . . . RELATED STOCKHOLDER MATTERS 14
ITEM 6. MANAGEMENT'S DISCUSSION AND
. . . . . . .ANALYSIS OR PLAN OF OPERATION 15
ITEM 7. . .FINANCIAL STATEMENTS 18
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING
. . . . . . . AND FINANCIAL DISCLOSURE 18
ITEM 8A . .CONTROLS AND PROCEDURES 18
PART III
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ITEM 9 DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS, AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16 (a) OF THE
. . . . . . . .EXCHANGE ACT 19
ITEM 10.. .EXECUTIVE COMPENSATION 22
ITEM 11 SECURITY OWNERSHIP OF CERTAIN
BENEFICAL OWNERS AND MANAGEMENT
.. . . . . AND RELATED STOCKHOLDERS MATTERS 24
ITEM 12 CERTAIN RELATIONSHIPS AND RELATED
.. . . . . . . TRANSACTIONS 25
PART IV
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ITEM 13.. EXHIBITS AND REPORTS ON FORM 8-K 27
ITEM 14 . PRINCIPAL ACCOUNTANTS FEES AND SERVICES 28
SIGNATURES. . . . . . . . . . . 30
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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 2429 - 128th Street, Surrey, British Columbia, Canada, V4A 3W2 (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 are virtually limited
possibilities that there is any coal on the Standard claim. The claim is in
good standing until February 24, 2006. 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 $3,100 on or before February 24, 2006
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. The directors have decided on November 18,
2005 for the next annual meeting of shareholders.
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
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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 risks become fact, may have to cease operations
and our shareholders and any future investors could lose part or all of their
investment.
RISKS ASSOCIATED WITH OUR COMMON STOCK
1. 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
delinquent in their required filings will be removed following a 30 or 60 day
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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 $ 105,389. 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 chances 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 four employees and will require additional employees
during the exploration of the Standard claim.
We currently only have three employees, the President, E. Del Thachuk, Chief
Financial Officer and Chief Accounting Officer, Gordon Brooke and Secretary
Treasurer, Maryanne Thachuk. There is a substantial risk we may not have the
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funds necessary to hire additional employees that would be needed in 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 addition, 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
mineral properties into a producing mine. We are not in direct conflict with
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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 chances 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
becomes 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 conducive
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 on 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 overburden 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 to 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 as 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 geologists 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 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 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 Directors do 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. Gordon Brooke and Maryanne Thachuk
have no mining experience and have 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 raised 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 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.
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.
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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 a 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
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Standard 367933 18 February 24, 2006
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
gold-arsenic rich and silver-antimony rich zones. Although economic
mineralization has not yet been identified on the property, rock samples from
the Waterloo 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
-12-
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
these 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 Cdn 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.
The Standard claim had sufficient work and cash expended on it to maintain it in
good standing with the Ministry of Energy and Mines until February 23, 2004.
In 2004 the Company maintained the Standard claim in good standing through the
purchase of certain PAC (portable assessment credits) expenses. The Company
was able to purchase these credits at 30 cents on the dollar and maintain the
claim in good standing for a further year. PAC credits occur when an
exploration company does sufficient work on its claim to maintain it in good
standing for a maximum of 10 years. Any excess exploration credits are applied
to a PAC account and can be used on other properties owned by the company or
sold to companies needing assessment work.
In June 2004, William Timmins, P. Eng., wrote a geology report on the Standard
claim and proposed a budget for recommended work on the claim. The total
proposed expenditures for Phase I are $25,000 and for Phase II $50,000 for a
total proposed budget of $75,000. Between September 30, 2004 and November 30,
2004, work was done on the Standard claim in the amount of $3,600 Canadian plus
a $180 filing fee.
The claim is now in good standing until February 23, 2006.
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.
-13-
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
There has been no Annual General Meeting of Stockholders within the last fiscal
year. An Annual Meeting has been called for November 18, 2005 where the
stockholders will be asked re-elect Del Thachuk and Gordon Brooke as directors
for the forthcoming year and to approve the appointment of Madsen & Associated
CPA's. Inc. as the independent auditors.
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, 2005 Standard had 35
shareholders; one of these shareholders is an officer and director of Standard.
Subsequent to the balance sheet date, the Company, under an Offering Memorandum
dated September 5, 2005 accepted subscriptions from 20 investors in the amount
of $49,500 representing 990,000 common shares at a price of $0.05 per share.
These funds have been used as follows:
Payment of outstanding accounts payable:
Independent auditors $ 8,400
Office expense 681
Transfer agent fees 4,000
Previous exploration expenses 2,605 $ 15,686
Other expenses paid as incurred:
Consulting fees - preparation of Form SB-2 7,500
Automobile expenses paid to the President 888
Legal opinion for inclusion in Form SB-2 2,500
Assessment work on the Standard claim 3,100
Independent auditors - August 31, 2005 statements 2,100
-----
Amount disbursement from Offering Memorandum 31,774
Less: original amount of private placement (49,500)
--------
Balance of cash on hand as at October 24, 2005 $ 17,726
========
-14-
2004 Stock Option Plan
At the Annual General Meeting of Stockholders held on February 20, 2004, the
shareholders approved a Stock Option Plan whereby 5,000,000 common shares were
set aside for the reasons noted in the following paragraph. The exercise price
if the fair market value at the dated of granting of the option.
The purposes of this Plan are (i) to retain the services of a management team,
qualified employees of the Company and non-employee advisors or consultants;
(ii) to retain the services of valued non-employee directors; (iii) to provide
these persons with an opportunity to obtain or increase a proprietary interest
in the Company, to provide incentives for effective service and high-level
performance, to strengthen their incentive to achieve the objectives of the
shareholders of the Company; and (iv) to serve as an aid and inducement in the
hiring or recruitment of new employees, consultants, non-employee directors and
other persons needed for future operations and growth of the Company.
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 200,000,000 shares of common stock, par value
$0.001 per share. As at August 31, 2005, there were 1,295,000 shares
outstanding. Subsequent to the year end, as noted above, the Company issued a
further 990,000 common shares at a price of $0.05 per share for a total
consideration of $49,500.
LIQUIDITY AND CAPITAL RESOURCES
As at August 31, 2005, the Company had cash of $103 and liabilities of
$73,042. The liabilities of $44,639 owed to general creditors are as follows:
the transfer agent - $4,000, auditors - $10,500, internal accountant - $15,450,
edgarizing financial statements and other reports - $4,190, previous exploration
expenses - $2,605, travel expenses - $2,368, preparation of various filings
$2,500 and other payables - $3,026. The amount owed to related parties of
$28,403 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 $ 7,050
Bank charges . . . . . . . . . . . 75
Edgar filings. . . . . . . . . . . ii 1,150
Exploration and filing fees. . . . iii 3,070
Filing fees and franchise taxes. . iv 259
Management fees. . . . . . . . . . v 2,400
Office . . . . . . . . . . . . . . 26
Rent . . . . . . . . . . . . . . . vi 1,200
Telephone. . . . . . . . . . . . . vii 600
Transfer agent's fees and interest viii (2,725)
--------
Total expenses . . . . . $ 13,105
=========
-15-
i. The Company accrues $500 in fees to its auditors, Madsen & Associates,
CPA's Inc., for the review of its 10-QSBs and $2,100 for the examination of
the Form 10-KSB. In addition, the Company has accrued $750 each for its
November 10-QSB, February and May 10-QSBs; also, $1,200 has been accrued
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 expense for filing these
Forms 10-QSB was $250 per quarter and the Form 10-KSB is $400.
iii. In February 2005, the Company paid $3,780 Cdn. for assessment work on the
Standard claim. This expenditure maintained the claim in good standing
until February 24, 2006.
iv. The Company has paid annual filing fees to The Company Corporation of $175.
Franchise taxes were paid by the Company to the State of Delaware in the
amount of $84 including interest.
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 $1,389. The amount owing to Nevada Agency & Trust
Company was written down to $4,000, resulting in a write down of $5,314 in
fees.
The Company estimates the following expenses will be required during the
next twelve months to meet its obligations:
Payments Required
Requirements Current from Funds for
For Accounts Private Twelve
Expenditures Twelve Months Payable Placement Months
------------------------------- -------------- --------- ----------- -----------
Accounting and audit. . . . . . 1 $ 7,050 $ 25,950 $ (10,500) $ 22,500
Annual general meeting. . . . .2 1,000 - - 1,000
Bank charges. . . . . . . . . . 100 - - 100
Consulting. . . . . . . . . . . 3 2,500 2,500 (2,500) 2,500
Edgar filing fees . . . . . . . 4 800 4,190 - 4,990
Exploration expenses. . . . . . 5 - 2,605 (2,605) -
Filing fees and franchise taxes 6 275 503 - 778
Office. . . . . . . . . . . . . 7 500 2,523 (681) 2,342
Transfer agent's fees . . . . . 8 1,200 4,000 (4,000) 1,200
Travel and entertainment. . . . 9 - 2,368 (888) 1,480
--------- ----------- ----------- ---------
Estimated expenses . . . $ 13,425 $ 44,639 $ (21,174) $ 36,890
============== ========= =========== ===========
-16-
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, 2005 $ 750 $ 500 $ 1,250
Form 10-QSB - Feb 28, 2006. 750 500 1,250
Form 10-QSB - May 31, 2006. 750 500 1,250
Form 10-KSB - Aug 31, 2006. 1,200 2,100 3,300
----------- --------- --------
$ 3,450 $ 3,600 $ 7,050
=========== ========= ========
2. Annual General Meeting of Stockholders to be held on November 18, 2005
is expected to cost $1,000 for preparation and circulating of the
Notice of Meeting and Proxy and the cost for holding the meeting
itself.
3. Consulting costs of $2,500 are expected for further work preparing an
Form SB-2 for submission to the SEC and responding to their comments.
To date, the Company has paid $7,500 for the preparation of the Form
SB-2 and another $2,500 to the attorney to give an opinion letter to
be included in the Form SB-2.
4. Edgar filing fees comprise the cost of filing the various Forms 10-KSB
and 10-QSB on Edgar. It is estimated the cost for each of the Form
10-QSBs will be $100, the cost of filing the 10-KSB will be $350 and
the cost for filing the Form SB-2 will be $150.
5. 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 $3,100 US. Subsequent to the balance sheet date, the Company
paid an advance of $3,100 for exploration work to be undertaken on the
Standard claim. This amount includes the filing fee of $180.
Therefore, there is no expense required for exploration during the
next twelve months since once filed the Standard will be in good
standing until February 24, 2007.
6. Filing fees for the Company as a registered agent are $175 per year.
Franchise taxes paid to the State of Delaware are $100.
7. Relates to photocopying and faxing based on prior year's actual
charges.
8. Each year the Company is charged a fee of $1,200 by its transfer agent
to act on its behalf. Since the Company has paid for the shares issued
under the private placement in the settlement with Nevada Agency &
Trust there is not cost associated with the issuance of shares. The
reason the Company decided to make an offer on the outstanding account
-17-
owed to Nevada Agency & Trust was that it had no transfer activities
since 1999 but was changed $1,200 a year plus interest on the
outstanding balance.
9. It is not expected that there will be any travel expenses in the next
year.
In addition to the above payments made from the Private Placement the Company
also paid the attorney - $2,500, the consultant preparing the Form SB-2 -
$5,000, assessment work on the Standard in the amount of $3,100. The total
amount paid by October 24, 2005 was $31,774.
Standard will have to raise funds to settle the balance 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.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of Standard are included following the signature page
to this Form 10-KSB.
ITEM 8. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
During the fiscal year ended August 31, 2005 and through the subsequent period
to, to the best of Standard's knowledge, there have been no disagreements with
Madsen & Associates, CPA's Inc. on any matters of accounting principles or
practices, financial statement disclosure, or audit scope procedures, which
disagreement if not resolved to the satisfaction of Madsen & Associates, CPA's
Inc. would have caused them to make a reference in connection with its report on
the financial statements for the year.
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, Standard'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
-------------------------------
-18-
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.
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, 2005, 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. . . 69 President and Director 1998
Maryanne Thachuk 68 Secretary Treasurer -
B. Gordon Brooke 61 Chief Financial Officer, 2004
Chief Accounting Officer
and Director
The directors of Standard serve for a term of one year and until their
successors are elected at Standard's Annual Shareholders' Meeting and are
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.
Alexander Ibsen resigned as Chief Financial Officer and director on June 25,
2005. Gordon Brooke was appointed Chief Financial Officer on the same day.
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.
-19-
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
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 Vancouver as the Private Secretary for 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.
B. GORDON BROOKE 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,
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
-20-
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 his responsibilities have been to prepare business
plans, to serve 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.
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;
-21-
(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.
(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, 2005, 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 Date Report Filed
---- -------- ---- -------------------
Del Thachuk Chief Executive Officer, 3 September 11, 2002
President and Director 5 November 17, 2003
Maryanne Thachuk Secretary Treasurer 3 November 21, 2003
B. Gordon Brooke Chief Financial Officer,
Chief Accounting Officer
and Director 3 March 5, 2004
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, 2005.
The following table sets forth compensation paid or accrued by Standard
during the fiscal years ended August 31, 2002 to 2005 to Standard's President
and CEO, CFO, CAO, Directors and Secretary Treasurer.
SUMMARY COMPENSATION TABLE (2002-2005)
Long Term Compensation (US Dollars)
--------------------------------------
Annual Compensation Awards Payouts
-------------------- ------ -------
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(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 ($) ($) (#) ($) ($)
----------------------- ------- ----------- -------- -------- -------- -------- ---------
Del Thachuk. . . . . . . 2002 -0- -0- -0- -0- -0- -0-
Chief Executive. . . . . 2003 -0- -0- -0- -0- -0- -0-
Officer, President . . 2004 -0- -0- -0- -0- -0- -0-
and Director . . . . . 2005 -0- -0- -0- -0- -0- -0-
Maryanne Thachuk 2002 -0- -0- -0- -0- -0- -0-
Secretary Treasurer . . 2003 -0- -0- -0- -0- -0- -0-
. . . . . . . . . . . 2004 -0- -0- -0- -0- -0- -0-
2005 -0- -0- -0- -0- -0- -0-
Alexander J. Ibsen . . . 2004 -0- -0- -0- -0- -0- -0-
Former Chief Financial 2005 -0- -0- -0- -0- -0- -0-
Officer and Director.
B. Gordon Brooke .2004 -0- -0- -0- -0- -0- -0-
Chief Accounting Officer .2005 -0- -0- -0- -0- -0- -0-
Chief Financial Officer
and Director. . . . . . . .
There has been no compensation given to either of the Director or Officers
during the periods ended August 31, 2002 to 2005. There are no stock options
outstanding as at August 31, 2005, 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
-23-
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, 2005, 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.
Name and Address Amount
of Beneficial Nature of of Beneficial Percent
Owner Ownership(1) Ownership of Class
----------------------------- ------------ -------------- --------
DEL THACHUK
2429 - 128th Street
Surrey, British Columbia
Canada, V4A 3W2 . . . . . . . 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
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
ALEXANDER J. IBSEN
1533 Eagle Mountain Drive
Coquitlam, British Columbia
Canada, V3E 2Z3 . . . . . . . - NIL 0.00
B. GORDON BROOKE
115 Angelene Street,
Mississauga, Ontario
Canada, L5G 1X1 . . . . . . . - NIL 0.00
Director and Officers as a whole. . . Direct 100,000 7.72
-24-
(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.
-25-
(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.
Subsequent to the year end, the Company undertook a private placement where
Maryanne Thachuk purchased for cash 20,000 common shares and Gordon Brooke
purchased 50,000 common shares all at a price of $0.05 per share. These shares
have been restricted from sale and transfer and can only be dealt with under the
rules and regulations of Rule 144.
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
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.
-26-
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) (1) FINANCIAL STATEMENTS.
The following financial statements are included in this report:
Title of Document Page
------------------- ----
Report of Madsen & Associates, CPA's Inc. 31
Balance Sheet as at August 31, 2005 32
Statement of Operations for the year ended August 31,
2005 and 2004 and for the period from September 24,
1998 (Date of Inception) to August 31, 2005 33
Statement in Changes in Stockholders' Equity for the
period from September 24, 1998 (Date of Inception)
to August 31, 2005 34
Statement of Cash Flows for the year ended August 31,
2005 and 2004 and for the period from September 24,
1998 (Date of Inception) to August 31, 2005 35
Notes to the Financial Statements 36
(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)
-27-
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 $7,000.
(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 (3) above.
-28-
(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.
-29-
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: October 25, 2005 By:/s/ "Del Thachuk"
----------------------
Del Thachuk
Chief Executive Officer,
President and Director
Date: October 25, 2005 By: /s/ "B. Gordon Brooke"
--------------------------------
B. Gordon Brooke
Chief Accounting Officer,
Chief Financial Officer and Director
-30-
MADSEN & ASSOCIATES, CPA'S INC. 684 East Vine Street, #3
---------------------------------- Murray, Utah, 84107
Certified Public Accountants and Business Telephone 801-268-2632
Consultants Board Fax 801-262-3978
Board of Directors
Standard Capital Corporation
Vancouver B. C. Canada
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have audited the accompanying balance sheet of Standard Capital Corporation
(pre- exploration stage company) at August 31, 2005, and the statement of
operations, stockholders' equity, and cash flows for the years ended August 31,
2005 and 2004. 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 the standards of the Public Company
Accounting Oversight Board (United States). 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, 2005, and the results of operations, and cash flows for the years
ended August 31, 2005 and 2004 and the period September 24, 1998 (date of
inception) to August 31, 2005, 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."
October 16, 2005
-31-
STANDARD CAPITAL CORPORATION
(PRE-EXPLORATION STAGE COMPANY)
BALANCE SHEET
AUGUST 31, 2005
ASSETS
CURRENT ASSETS
CASH. . . . . . . . . . . . . . . . . . . . . . . . . . $ 103
------------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . $ 103
============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
ACCOUNTS PAYABLE - RELATED PARTY. . . . . . . . . . . . $ 28,403
ACCOUNTS PAYABLE. . . . . . . . . . . . . . . . . . . . 44,639
------------
73,042
------------
STOCKHOLDERS' DEFICIENCY
COMMON STOCK
200,000,000 SHARES AUTHORIZED, AT $0.001 PAR VALUE
1,295,000 SHARES ISSUED AND OUTSTANDING. . . . . . 1,295
CAPITAL IN EXCESS OF PAR VALUE. . . . . . . . . . . . . 31,155
DEFICIT ACCUMULATED DURING THE PRE-EXPLORATION STAGE. . (105,389)
------------
TOTAL STOCKHOLDERS' DEFICIENCY. . . . . . . (72,939)
------------
$ 103
============
The accompanying notes are an integral part of these financial statements
-32-
STANDARD CAPITAL CORPORATION
(PRE-EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED AUGUST 31, 2005 AND 2004 AND THE PERIOD
SEPTEMBER 24, 1998 (DATE OF INCEPTION) TO AUGUST 31, 2005
AUG 31, AUG 31, Sept 24, 1998
2005 2004 to Aug 31, 2005
----------- ------------- -----------------
REVENUES $ - $ - $ -
EXPENSES 13,105 24,180 105,389
----------- ------------- ---------------
NET LOSS $ (13,105) $ (24,180) $ (105,389)
=========== ============= ==============
NET LOSS PER COMMON SHARE
Basic and diluted . . $ (0.01) $ (0.02)
=========== ===========
AVERAGE OUTSTANDING SHARES
Basic . . . . . . . . 1,295,000 1,295,000
=========== ===========
The accompanying notes are an integral part of these financial statements.
-33-
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, 2005
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)
Capital contributions. . . . . . . . . . . - - 4,200 -
Net operating loss for the year ended
August 31, 2004. . . . . . . . . . . . - - - (24,180)
Capital contributions. . . . . . . . . . . - - 4,200 -
Net operating loss for the year ended
August 31, 2005. . . . . . . . . . . . - - - (13,105)
---------- ------- ---------- -------------
Balance, August 31, 2005 . . . . . . . . . 1,295,000 $ 1,295 $ 31,155 $ (105,389)
========== ======= ========== =============
The accompanying notes are an integral part of these financial statements.
-34-
STANDARD CAPITAL CORPORATION
(PRE-EXPLORATION STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED AUGUST 31, 2005 AND 2004 AND THE PERIOD
SEPTEMBER 24, 1998 (DATE OF INCEPTION) TO AUGUST 31, 2005
AUG 31, Aug 31, Sept 24, 1998
2005 2004 to Aug 31, 2005
------------ ------------ -----------------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . $ (13,105) $ (24,180) $ (105,389)
Adjustments to reconcile net loss
to net cash provided by
operating activities:
Change in accounts payable . . . 8,940 19,917 73,042
Capital contributions - expenses 4,200 4,200 29,400
------------ ------------ -----------------
Net Change in Cash from
Operations. . . . . . 35 (63) (2,947)
------------ ------------ -----------------
CASH FLOWS FROM INVESTING
ACTIVITIES. . . . . . . . . . . . . - - -
------------ ------------ -----------------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance of
common stock . . . . . . . . - - 3,050
------------ ------------ -----------------
Net Increase in Cash. . . . . . . . 35 (63) 103
Cash at Beginning of Period . . . . 68 131 -
------------ ------------ -----------------
CASH AT END OF PERIOD . . . . . . . $ 103 $ 68 $ 103
============ ============ =================
SCHEDULE OF NONCASH
OPERATING ACTIVITIES
Capital contributions - expenses $ 4,200 $ 4,200 $29,400
========= ========= =======
The accompanying notes are an integral part of these financial statements.
-35-
STANDARD CAPITAL CORPORATION
(Pre-Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2005
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 pre-exploration stage (see
note 3).
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.
The Company has completed a private placement offering 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, 2005, the Company had a net operating loss carry forward of
$105,389. The tax benefit of approximately $31,600 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 2025.
-36-
STANDARD CAPITAL CORPORATION
(Pre-Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2005
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Statement of Cash Flows
--------------------------
For the purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less to be
cash equivalents.
Basic and Diluted Net Income (loss) Per Share
----------------------------------------------------
Basic net income (loss) per share amounts are computed based on the
weighted average number of shares actually outstanding. Diluted net income
(loss) per share amounts are computed using the weighted average number of
common and common equivalent shares outstanding as if shares 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.
-37-
STANDARD CAPITAL CORPORATION
(Pre-Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2005
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Financial Instruments
----------------------
The carrying amounts of financial instruments, including cash and accounts
payable, are considered by management to be their estimated fair value due
to their short term maturities.
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, 2006. The claims may be extended for one year by the payment
of $3,780 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
On September 3, 2005 officers-directors and their families had acquired 21%
of the common capital stock issued, and have made no interest, demand loans
of $28,403 and have made contributions to capital of $29,400 to the Company
in the form of expenses paid for the Company.
5. 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.
6. CAPITAL STOCK
During October and November 2005 the Company completed a private placement
offering of 990,000 common shares for cash of $49,500.
7. 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 (note 6),
and long term financing, which will enable the Company to operate for the
coming year.
-38-