UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITES
EXCHANGE ACT OF 1934
For the quarterly period ended Nov 30, 2005
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( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from to
Commission File number 0-25707
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STANDARD CAPITAL CORPORATION
------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 91-1949078
-------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2429 - 128th Street, Surrey, British Columbia, Canada, V4A 3W2
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(Address of principal executive offices)
1 - 604 - 538-4898
----------------------
(Issuer's telephone number)
n/a
---
(Former name, former address, and former fiscal year, if changed
since last report)
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 such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PROCEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
November 30, 2005: 2,285,000 common shares
Transitional Small Business Disclosure format (Check one): Yes [ ] No [X]
-1-
INDEX
PAGE
NUMBER
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PART 1.. . . . FINANCIAL INFORMATION
ITEM 1.. Financial Statements (unaudited)
Balance Sheet as at November 30, 2005 and August 31, 2005. 4
Statement of Operations
For the three months ended November 30, 2005 and 2004
and for the period September 24, 1998 (Date of
Inception) to November 30, 2005 . . . . . . . . 5
Statement of Cash Flows
For the three months ended November 30, 2005 and 2004
and for the period September 24, 1998 (Date of
Inception) to November 30, 2005 . . . . . . . . . . 6
Statement of Changes in Stockholders' Equity
For the period from September 24, 1998 (Date of
Inception) to November 30, 2005 . . . . . . . . . . 7
Notes to the Financial Statements. 8
ITEM 2.. Management's Discussion and Analysis or Plan of Operations 11
ITEM 3.. .Controls and Procedures
PART 11. . . . OTHER INFORMATION
ITEM 1.. Legal Proceedings 17
ITEM 2.. Changes in Securities 17
.ITEM 3 Defaults Upon Senior Securities 18
ITEM 4.. Submission of Matters to a Vote of Security Holders 18
ITEM 5.. Other Information 19
ITEM 6.. Exhibits and Reports on Form 8-K 19
SIGNATURES.. . . 21
-2-
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheet of Standard Capital Corporation (a
pre-exploration stage company) at November 30, 2005 (with comparative figures as
at August 31, 2005) and the statement of operations for the three months ended
November 30, 2005 and 2004 and the statement of cash flows for the three months
ended November 30, 2005 and 2004 and for the period from September 24, 1998
(date of incorporation) to November 30, 2005 have been prepared by the Company's
management in conformity with accounting principles generally accepted in the
United States of America. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature.
Operating results for the quarter ended November 30, 2005, are not necessarily
indicative of the results that can be expected for the year ending August 31,
2006.
-3-
STANDARD CAPITAL CORPORATION
(A Pre-exploration Stage Company)
BALANCE SHEETS
November 30, 2005
(with comparative figures at August 31, 2005)
(Unaudited - Prepared by Management)
NOVEMBER 30 AUGUST 31
2005 2005
------------- ------------
ASSETS
CURRENT ASSETS
Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,130 $ 103
------------- ------------
$ 11,130 $ 103
============= ============
LIABILITIES
Accounts payable - related party . . . . . . . . . . . . . . . . $ 31,192 28,403
Accounts payable and accrued liabilities . . . . . . . . . . . . 24,914 44,639
------------- ------------
56,106 73,042
------------- ------------
STOCKHOLDERS' DEFICIENCY
Common stock
200,000,000 shares authorized, at $0.001 par
value, 2,285,000 shares issued and outstanding (August 31,
2005 - 1,295,000 shares issued and outstanding) . . . . . . 2,285 1,295
Capital in excess of par value. . . . . . . . . . . . . . . . . . 80,715 31,155
Deficit accumulated during the pre-exploration stage. . . . . . . (127,976) (105,389)
------------- ------------
Total Stockholders' Deficiency . . . . . . . . . . (44,976) (72,939)
------------- ------------
$ 11,130 $ 103
============= ============
The accompanying notes are an integral part of these unaudited financial
statements.
-4-
STANDARD CAPITAL CORPORATION
(A Pre-exploration Stage Company)
STATEMENTS OF OPERATIONS
For the three months ended November 30, 2005 and 2004 and for the period from
September 24, 1998 (Date of Inception) to November 30, 2005
(Unaudited - Prepared by Management)
FOR THE FOR THE DATE OF
THREE MONTHS THREE MONTHS INCEPTION TO
ENDED ENDED NOVEMBER 30,
NOV 30, 2005 NOV 30, 2004 2005
----------------- -------------- ---------------
SALES . . . . . . . . . . . . . . . . $ - $ - $ -
--------------- -------------- ---------------
GENERAL AND ADMINISTRATIVE EXPENSES:
Accounting and audit . . . . . . 1,245 1,250 39,195
Annual General Meeting costs . . 679 - 2,230
Bank charges and interest. . . . 143 18 1,744
Consulting fees. . . . . . . . . 10,000 - 12,500
Edgar filing fees. . . . . . . . 250 250 6,429
Filing fees. . . . . . . . . . . 12 - 675
Geological report. . . . . . . . - - 2,780
Incorporation costs. . . . . . . - - 255
Legal fees . . . . . . . . . . . 2,500 - 2,987
Management fees. . . . . . . . . 600 600 17,400
Miscellaneous. . . . . . . . . . - - 1,600
Office expenses. . . . . . . . . 784 - 2,362
Rent . . . . . . . . . . . . . . 300 300 8,700
Staking and exploration costs . 3,100 - 12,956
Telephone. . . . . . . . . . . . 150 150 4,350
Transfer agent's fees. . . . . . 622 307 7,152
Travel and entertainment . . . . 2,202 - 4,661
--------------- -------------- ---------------
NET LOSS. . . . . . . . . . . . . . . $ 22,587 $ (2,875) $ (127,976)
=============== ============== ===============
NET LOSS PER COMMON SHARE
Basic. . . . . . . . . . . . . . $ 0.01 $ -
=============== ==============
AVERAGE OUTSTANDING SHARES
Basic. . . . . . . . . . . . . . 1,958,626 1,295,000
=============== ==============
The accompanying notes are an integral part of these unaudited financial
statements.
-5-
STANDARD CAPITAL CORPORATION
(A Pre-exploration Stage Company)
STATEMENTS OF CASH FLOWS
For the three months ended November 30, 2005 and 2004 and for the period from
September 24, 1998 (Date of Inception) to November 30, 2005
(Unaudited - Prepared by Management)
FOR THE THREE FOR THE THREE DATE OF
MONTHS MONTHS INCEPTION
ENDED ENDED TO
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
2005 2004 2005
--------------- --------------- --------------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . $ (22,587) $ (2,875) $ (127,976)
Adjustments to reconcile net loss to
net cash provided by
operating activities:
Changes in assets and liabilities:
Accounts payable . . . . . . . . (19,725) 1,807 24,914
Accounts payable - related party 2,789 - 31,192
Capital contributions - expenses 1,050 1,050 30,450
------------- ------------ ---------------
Net Cash from Operations. . (38,473) (18) (41,420)
------------- ------------ --------------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance of
common stock. . . . . . . . 49,500 - 52.550
------------- ------------- ---------------
49,500 - 52,550
------------- -------------- --------------
Net (decrease) increase in Cash . . . 11,027 (18) 11,130
Cash at Beginning of Period . . . . . 103 68 -
------------- ------------- --------------
CASH AT END OF PERIOD . . . . . . . . $ 11,130 $ 50 $ 11,130
============= ============= ==============
The accompanying notes are an integral part of these unaudited financial
statements
-6-
STANDARD CAPITAL CORPORATION
(PRE-EXPLORATION STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM SEPTEMBER 24, 1998 (DATE OF INCEPTION) TO NOVEMBER 30, 2005
(Unaudited - Prepared by Management)
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)
Issuance of common shares for
cash at $0.05 - September 30, 2005. . . 990,000 990 48,510 -
Capital contributions. . . . . . . . . . . - - 1,050 -
Net operating loss for the period ended
November 30, 2005 . . . . . . . . . . - - - (22,587)
---------- ------- ---------- -------------
Balance as at November 30, 2005. . . . . . 2,285,000 $ 2,285 $ 80,715 $ (127,976)
========== ======= ========== =============
The accompanying notes are an integral part of
these unaudited financial statements
-7-
STANDARD CAPITAL CORPORATION
(A Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2005
(Unaudited - Prepared by Management)
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
shares with a par value of $0.001 per share.
The Company has completed one Regulation D offering of 1,295,000 shares of
its capital stock for $3,050. In addition, the Company has completed an
Offering Memorandum whereby 990,000 common shares were subscribed for at a
price of $0.05 per share for $49,500.
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 November 30, 2005, the Company had a net operating loss carry forward of
$127,976. The tax benefit of $38,392 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.
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.
-8-
STANDARD CAPITAL CORPORATION
(A Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2005
(Unaudited - Prepared by Management)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Basic and Diluted Net Income (loss) Per Share
----------------------------------------------------
Basic net income (loss) per share amounts is 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 the common share rights unless the exercise becomes
antidulutive and then only the basic per share amounts are shown in the
report.
Unproven Mining Claim Costs
------------------------------
Cost of acquisition, exploration, carrying and retaining unproven
properties are expensed as incurred.
Revenue Recognition
--------------------
Revenue is recognized on the sale and delivery of product or the completion
of services.
Advertising and Market Development
-------------------------------------
The company expenses advertising and market development costs as incurred.
Financial and Concentration 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 any 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 generally accepted in the United
States of America. Those estimates and assumptions affect the reported
amounts of the assets and liabilities, the disclosure of contingent assets
and liabilities, and the reported revenues and expenses. Actual results
could vary from the estimates that were assumed in preparing these
financial statements.
Financial Instruments
----------------------
The carrying value of financial instruments, including cash and accounts
payable, are considered by management to be their estimated fair value
due to their short term maturities.
-9-
STANDARD CAPITAL CORPORATION
(A Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2005
(Unaudited - Prepared by Management)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Recent Accounting Pronouncements
----------------------------------
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
3. AQUISITION OF MINERAL CLAIM
The Company acquired one 18 unit metric claim known as the Standard claim
situated 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.
4. SIGNIFICANT TRANSACTIONS WITH RELATED PARTY
On September 3, 2005, officers-directors and their family had acquired 21%
of the common capital stock issued, and have made no interest, demand loans
of $31,192, and have made contributions to capital of $30,450 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.
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 on 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, will enable the Company to operate for the coming
year.
-10-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS
The following discussion should be read in conjunction with the information
contained in the financial statements of Standard Capital Corporation
("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; mainly comprising the
maintaining of the Standard claim in good standing on an annual basis and
preparing the various reports to be filed with the United States Securities and
Exchange Commission (the "SEC") as required.
LIQUIDITY AND CAPITAL RESOURCES
Standard has had no revenue since inception and its accumulated deficit is
$127,976. To date, the growth of Standard has been funded by the sale of shares
and advances by its director in order to meet the requirements of filing with
the SEC and maintaining the Standard claim in good standing.
The plan of operations during the next twelve months will be to maintain the
Standard claim in good standing with the Province of British Columbia and meet
its filing requirements. Presently Standard does not have the funds to
consider any additional mineral claims. Management is considering the raising
of additional funds through the sale of shares but no decision as to the price
and number of shares to be issued has been decided upon.
Management estimates that a minimum of $14,315 will be required over the next
twelve months to pay for such expenses as bookkeeping ($3,450), auditing
($3,585), Edgar fees ($1,500), filing fees to maintain Standard in good standing
with the State of Delaware and payment to Standard's registrant ($280),
exploration activities on the Standard claim ($3,300), office and miscellaneous
($500), annual general meeting mail costs, holding of meeting, etc. ($500) and
payments to the transfer agent ($1,200). The above noted figure does not
include amounts owed to third party creditors in the amount of $24,914 as at
November 30, 2005. The amount required to cover total operating costs for the
next twelve months and to settle all the outstanding amounts owed to third party
creditors would be $24,914. At present Standard does not have these funds to
pay for future expenses and eliminate accounts payable and therefore would be
required to either sell shares in its capital stock or obtain further advances
from its director. Standard's future operations and growth is dependent on its
ability to raise capital for expansion and to seek revenue sources.
RESULTS OF OPERATIONS
The Standard claim
The Standard claim is located in the Bridge River gold camp near the town of
Gold Bridge, 160 kilometres north of Vancouver, British Columbia. The Standard
claim has had sufficient work and cash expended on it to maintain it in good
standing with the Ministry of Energy and Mines until February 23, 2006.
Standard has undertaken work on the Standard claim sufficient to maintain it in
good standing until February 23, 2007 but has not yet filed the information with
the Ministry of Energy and Mines for the Province of British Columbia. This
will be done in the early part of 2006.
Historical summary of the Standard claim
The Standard claim was located and staked on January 24, 1999 by the four post
staking method and, as mentioned above, is presently in good standing. This
mineral claim consists of 18 units totaling 450 hectares with an area 2 miles
south by 1 mile west.
-11-
The Legal Corner Post is located approximately 2 miles southeast of the Village
of Bralorne and on the north side of Fergusson Creek. Access to the Standard
claim is by snowmobile part way up the Fergusson Creek access trail to the 5,800
feet elevation and approximately 1 mile up Fergusson Creek.
The claim boundary is characterized by extreme topographical conditions.
Sub-alpine scrub alder and hemlock trees grow at the creek elevations and rock
outcropping exposure is good along peaks and ridges in the east half of the
canyon. The winters are cold with generally high snowfall accumulations and
summers are hot and dry.
Standard has undertaken no product research and development since inception.
Management has no plans to purchase or sell any plant or significant equipment
in the foreseeable future. In addition, Standard does not expect a significant
change in the number of employees.
There are certain risk factors regarding Standard's operation which might affect
the outcome of its ability to operate in the future. An investment in
Standard's securities involves an exceptionally high degree of risk and is
extremely speculative. The following risk factors reflect the potential and
substantial material risks which could be involved if you decide to purchase
shares in Standard.
RISKS ASSOCIATED WITH STANDARD:
1. BECAUSE STANDARD'S AUDITORS HAVE ISSUED A GOING CONCERN OPINION AND BECAUSE
ITS OFFICERS AND DIRECTORS WILL NOT LOAN ANY MONEY TO IT, STANDARD MAY NOT
BE ABLE TO ACHIEVE ITS OBJECTIVES AND MAY HAVE TO SUSPEND OR CEASE
EXPLORATION ACTIVITY.
Standard's auditors' report on its 2005 financial statements expressed an
opinion that substantial doubt exists as to whether Standard can continue
as an ongoing business for the next twelve months. Because its officers and
directors are unwilling to loan or advance capital to it, Standard believes
that if it does not raise additional capital through the issuance of
treasury shares, Standard will be unable to conduct exploration activity
and may have to cease operations and go out of business.
2. BECAUSE THE PROBABILITY OF AN INDIVIDUAL PROSPECT EVER HAVING RESERVES IS
EXTREMELY REMOTE, IN ALL PROBABILITY THE STANDARD CLAIM DOES NOT CONTAIN
ANY RESERVES, AND ANY FUNDS SPENT ON EXPLORATION WILL BE LOST.
Because the probability of an individual prospect ever having reserves is
extremely remote, in all probability Standard's property, the Standard
claim, does not contain any reserves, and any funds spent on exploration
will be lost. If Standard cannot raise further funds as a result, it may
have to suspend or cease operations entirely which would result in the loss
of the investment by its shareholders.
3. STANDARD LACK AN OPERATING HISTORY AND HAVE LOSSES WHICH IT EXPECTS TO
CONTINUE INTO THE FUTURE. AS A RESULT, STANDARD MAY HAVE TO SUSPEND OR
CEASE EXPLORATION ACTIVITY OR CEASE OPERATIONS.
Standard was incorporated in 1998 and its limited exploration activities
have not generated any revenues. Standard has an insufficient exploration
history upon which to properly evaluate the likelihood of its future
success or failure. Standard's net loss from inception to November 30, 2005
is $127,976. Its ability to achieve and maintain profitability and positive
cash flow in the future is dependent upon
* Its ability to locate a profitable mineral property
* Its ability to locate an economic reserve
* Its ability to generate revenues
-12-
* Its ability to reduce exploration costs
Based upon current plans, Standard expects to incur operating losses in
future periods. This will happen because there are expenses associated with
the research and exploration of the Standard claim. Standard cannot
guarantee it will be successful in generating revenues in the future.
Failure to generate revenues will cause it to go out of business.
4. BECAUSE STANDARD'S OFFICERS AND DIRECTORS DO NOT HAVE TECHNICAL TRAINING OR
EXPERIENCE IN STARTING, AND OPERATING AN EXPLORATION COMPANY NOR IN
MANAGING A PUBLIC COMPANY, IT WILL HAVE TO HIRE QUALIFIED PERSONNEL TO
FULFILL THESE FUNCTIONS. IF STANDARD LACKS FUNDS TO RETAIN SUCH PERSONNEL,
OR CANNOT LOCATE QUALIFIED PERSONNEL, IT MAY HAVE TO SUSPEND OR CEASE
EXPLORATION ACTIVITY OR CEASE OPERATIONS WHICH WILL RESULT IN THE LOSS OF
ITS SHAREHOLDERS' INVESTMENT.
Because Standard's officers and directors are inexperienced with exploring
for minerals and starting, and operating a mineral exploration company, it
will have to hire qualified persons to perform surveying, exploration, and
excavation of the Standard claim. Standard's officers and directors have no
direct training or experience in these areas and as a result may not be
fully aware of many of the specific requirements related to working within
the industry. Their decisions and choices may not take into account
standard engineering or managerial approaches, mineral exploration
companies commonly use. Consequently its exploration, earnings and ultimate
financial success could suffer irreparable harm due to certain of
management's lack of experience in this industry. Additionally, Standard's
officers and directors have no direct training or experience in managing
and fulfilling the regulatory reporting obligations of a 'public company'
like Standard. Unless its two part time officers are willing to spend more
time addressing these matters, it will have to hire professionals to
undertake these filing requirements for Standard and this will increase the
overall cost of operations. As a result Standard may have to suspend or
cease exploration activity, or cease operations altogether, which will
result in the loss of its shareholders' investment.
5. THE STANDARD CLAIM HAS NO KNOWN ORE RESERVES. WITHOUT ORE RESERVES STANDARD
CANNOT GENERATE INCOME AND IF IT CANNOT GENERATE INCOME IT WILL HAVE TO
CEASE EXPLORATION ACTIVITY WHICH WILL RESULT IN THE LOSS ITS SHAREHOLDERS'
INVESTMENT.
The Standard claim has no known ore reserves. Even if Standard finds gold
mineralization it cannot guarantee that any gold mineralization will be of
sufficient quantity so as to warrant recovery. Additionally, even if it
finds gold mineralization in sufficient quantity to warrant recovery,
Standard cannot guarantee the ore will be recoverable. Finally, even if any
gold mineralization is recoverable, it cannot guarantee that this can be
done at a profit. Failure to locate gold deposits in economically
recoverable quantities will mean Standard cannot generate income. If
Standard cannot generate income it will have to cease exploration activity,
which will result in the loss of its shareholders' investment.
6. BECAUSE STANDARD IS SMALL AND DO NOT HAVE MUCH CAPITAL, IT MUST LIMIT ITS
EXPLORATION AND AS A RESULT MAY NOT FIND AN ORE BODY. WITHOUT AN ORE BODY,
STANDARD CANNOT GENERATE REVENUES AND ITS SHAREHOLDERS WILL LOSE THEIR
INVESTMENT.
Any potential development of and production from Standard's exploration
property depends upon the results of exploration programs and/or
feasibility studies and the recommendations of duly qualified engineers and
geologists. Because Standard is small and do not have much capital, it must
limit its exploration activity unless and until it raise additional
capital.
Any decision to expand its operations on the Standard claim will involve
the consideration and evaluation of several significant factors including,
but not limited to:
- Costs of bringing the property into production including exploration work,
preparation of production feasibility studies, and construction of
production facilities;
-13-
- Availability and costs of financing;
- Ongoing costs of production;
- Market prices for the minerals to be produced;
- Environmental compliance regulations and restraints; and
- Political climate and/or governmental regulation and control.
Such programs will require very substantial additional funds. Because
Standard may have to limit its exploration, it may not find an ore body,
even though its property may contain mineralized material. Without an ore
body, it cannot generate revenues and the shareholders will lose their
investment.
7. STANDARD MAY NOT HAVE ACCESS TO ALL OF THE SUPPLIES AND MATERIALS IT NEEDS
TO BEGIN EXPLORATION WHICH COULD CAUSE IT TO DELAY OR SUSPEND EXPLORATION
ACTIVITY.
Competition and unforeseen limited sources of supplies in the industry
could result in occasional spot shortages of supplies, such as dynamite,
and certain equipment such as bulldozers and excavators that we might need
to conduct exploration. Standard has not attempted to locate or negotiate
with any suppliers of products, equipment or materials. It will attempt to
locate products, equipment and materials as and when it is able to raise
the requisite capital. If Standard cannot find the products and equipment
it needs, it will have to suspend its exploration plans until it does find
the products and equipment it needs.
8. BECAUSE STANDARD'S OFFICERS AND DIRECTORS HAVE OTHER OUTSIDE BUSINESS
ACTIVITIES AND MAY NOT BE IN A POSITION TO DEVOTE A MAJORITY OF THEIR TIME
TO STANDARD'S EXPLORATION ACTIVITY, ITS EXPLORATION ACTIVITY MAY BE
SPORADIC WHICH MAY RESULT IN PERIODIC INTERRUPTIONS OR SUSPENSIONS OF
EXPLORATION.
Standard's President and CEO, will be devoting only 15% of his time,
approximately 15 hours per month, to Standard's operations of its business.
Standard's Secretary-Treasurer and its other director will be devoting only
5 to 10 hours per month to Standard's operations. As a consequence
Standard's business may suffer. For example, because its officers and
directors have other outside business activities and may not be in a
position to devote a majority of their time to Standard's exploration
activity, its exploration activity may be sporadic or may be periodically
interrupted or suspended. Such suspensions or interruptions may cause us to
cease operations altogether and go out of business.
9. TITLE TO THE STANDARD CLAIM IS REGISTERED IN THE NAME OF ANOTHER PERSON.
FAILURE OF THE COMPANY TO OBTAIN GOOD TITLE TO THE CLAIM WILL RESULT IN
STANDARD HAVING TO CEASE OPERATIONS.
Title to the property Standard intends to explore is not held in its name.
Title to the Standard Claim is recorded in the name of Edward Skoda, an
arms-length mining consultant. In the event Edward Skoda was to grant a
third party a deed of ownership, by way of Bill Sale Absolute, which was
subsequently registered prior to our deed, that third party would obtain
good title and we would have nothing. Similarly, if Edward Skoda were to
grant an option to a third party, that party would be able to enter the
claims, carry out certain work commitments and earn right and title to the
claims and we would have little recourse against such third party even
though we would be harmed, would not own any property and would have to
cease operations. Although we would have recourse against Edward Skoda in
the situations described, there is a question as to whether that recourse
would have specific value.
10. A MATERIAL RISK OF STANDARD MAY BE THE LACK OF TIMELY REPORTING TO THE SEC.
Standard has, in the past, consistently been late in filing its Forms
10K-SB and 10Q-SB with the SEC. It did not file any reports with the SEC
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from April 22, 2004 to October 17, 2005 due to the Company having a lack of
funds to pay its independent auditors. Therefore, it was a late filer as
defined under Rule 12b-25(b)(2)(ii). With management not devoting
significant time to the affairs of Standard, there is the strong
possibility the lack of timely reporting may be a material risk to Standard
in that its shares may be halted on the OTC Bulletin Board, when and if
they are quoted, either for a period of time or permanently, if Standard
consistently files late. Shareholders should consider whether or not they
retain their shares in a company where its present management has been a
late filer with the SEC.
11. BECAUSE STANDARD MAY BE UNABLE TO MEET PROPERTY MAINTENANCE REQUIREMENTS OR
ACQUIRE NECESSARY MINING LICENSES, IT MAY LOSE ITS INTEREST IN THE STANDARD
CLAIM.
In order to maintain Standard's interest in the Standard Claim it must make
an annual payment and/or expend certain minimum amounts on the exploration
of the mineral claim. The annual cost to maintain the claim in good
standing is approximately $3,150. If it fails to make such payments or
expenditures in a timely fashion, it may lose its interest in the mineral
claim. Further, even if Standard does complete exploration activities, it
may not be able to obtain the necessary licenses to conduct mining
operations on the Standard claim, and thus would realize no benefit from
exploration activities on the property.
12. BECAUSE MINERAL EXPLORATION AND DEVELOPMENT ACTIVITIES ARE INHERENTLY
RISKY, STANDARD MAY BE EXPOSED TO ENVIRONMENTAL LIABILITIES. IF SUCH AN
EVENT WERE TO OCCUR IT MAY RESULT IN A LOSS OF ITS SHAREHOLDERS'
INVESTMENT.
The business of mineral exploration and extraction involves a high degree
of risk. Few properties that are explored are ultimately developed into
production. At present, the Standard claim does not have a known body of
commercial ore. Unusual or unexpected formations, formation pressures,
fires, power outages, labor disruptions, flooding, explosions, cave-ins,
landslides and the inability to obtain suitable or adequate machinery,
equipment or labor are other risks involved in extraction operations and
the conduct of exploration programs. Standard does not carry liability
insurance with respect to its mineral exploration operations and it may
become subject to liability for damage to life and property, environmental
damage, cave-ins or hazards. There are also physical risks to the
exploration personnel working in the rugged terrain of British Columbia,
often in poor climatic conditions. Previous mining exploration activities
may have caused environmental damage to the Standard Claim. It may be
difficult or impossible to assess the extent to which such damage was
caused by Standard or by the activities of previous operators, in which
case, any indemnities and exemptions from liability may be ineffective. If
the Standard claim is found to have commercial quantities of ore, it would
be subject to additional risks respecting any development and production
activities. Most exploration projects do not result in the discovery of
commercially mineable deposits of ore.
13. NO MATTER HOW MUCH MONEY IS SPENT ON THE STANDARD CLAIM, THE RISK IS THAT
STANDARD MIGHT NEVER IDENTIFY A COMMERCIALLY VIABLE ORE RESERVE.
No matter how much money is spent over the years on the Standard claim,
Standard might never be able to find a commercially viable ore reserve.
Over the coming years, Standard could spend a great deal of money on the
Standard claim without finding anything of value. There is a high
probability the Standard claim does not contain any reserves so any funds
spent on exploration will probably be lost.
14. EVEN WITH POSITIVE RESULTS DURING EXPLORATION, THE STANDARD CLAIM MIGHT
NEVER BE PUT INTO COMMERCIAL PRODUCTION DUE TO INADEQUATE TONNAGE, LOW
METAL PRICES OR HIGH EXTRACTION COSTS.
Standard might be successful, during future exploration programs, in
identifying a source of minerals of good grade but not in the quantity, the
tonnage, required to make commercial production feasible. If the cost of
extracting any minerals that might be found on the Standard claim is in
excess of the selling price of such minerals, we would not be able to
develop the Standard claim. Accordingly even if ore reserves were found on
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the Standard claim, without sufficient tonnage Standard would still not be
able to economically extract the minerals from the Standard claim in which
case it would have to abandon the Standard claim and seek another mineral
claim to develop, or cease operations altogether.
15. BECAUSE STANDARD HAS NOT PUT A MINERAL DEPOSIT INTO PRODUCTION BEFORE, IT
WILL HAVE TO ACQUIRE OUTSIDE EXPERTISE. IF IT IS UNABLE TO ACQUIRE SUCH
EXPERTISE IT MAY BE UNABLE TO PUT ITS PROPERTY INTO PRODUCTION AND ITS
SHAREHOLDERS MAY LOSE THEIR INVESTMENT.
Standard has no experience in placing mineral deposit properties into
production, and our ability to do so will be dependent upon using the
services of appropriately experienced personnel or entering into agreements
with other major resource companies that can provide such expertise. There
can be no assurance that we will have available to us the necessary
expertise when and if we place a mineral deposit into production.
16. WITHOUT A PUBLIC MARKET THERE IS NO LIQUIDITY FOR STANDARD'S SHARES AND ITS
SHAREHOLDERS MAY NEVER BE ABLE TO SELL THEIR SHARES WHICH WOULD RESULT IN A
TOTAL LOSS OF THEIR INVESTMENT.
Standard's common shares are not listed on any exchange or quotation system
and do not have a market maker which results in no market for its shares.
Therefore, Standard's shareholders will not be able to sell their shares in
an organized market place unless they sell their shares privately. If this
happens, Standard's shareholders might not receive a price per share which
they might have received had there been a public market for Standard's
shares. It is Standard's intention to apply for a quotation on the OTC
Bulletin Board ("OTCBB") whereby:
* It will have to be sponsored by a participating market maker who will
file a Form 211 on its behalf since it will not have direct access to
the NASD personnel; and
* Standard will not be quoted on the OTCBB unless it is current in its
periodic reports; being at a minimum Forms 10K-SB and 10Q-SB, filed
with the SEC or other regulatory authorities.
Standard cannot be sure it will be able to obtain a participating market
maker or be approved for a quotation on the OTCBB. If this is the case,
there will be no liquidity for the shares of its shareholders.
17. EVEN IF A MARKET DEVELOPS FOR STANDARD'S SHARES ITS SHARES MAY BE THINLY
TRADED, WITH WIDE SHARE PRICE FLUCTUATIONS, LOW SHARE PRICES AND MINIMAL
LIQUIDITY.
If a market for Standard's shares develops, the share price may be volatile
with wide fluctuations in response to several factors, including:
* Potential investors' anticipated feeling regarding our results of
operations;
* Increased competition and/or variations in mineral prices;
* Standard's ability or inability to generate future revenues; and
* Market perception of the future of the mineral exploration industry.
In addition, if its shares are traded on the OTCBB, its share price may be
impacted by factors that are unrelated or disproportionate to Standard's
operating performance. Standard's share price might be affected by general
economic, political and market conditions, such as recessions, interest
rates or international currency fluctuations. In addition, even if
Standard's stock is approved for quotation by a market maker through the
OTCBB, stocks traded over this quotation system are usually thinly traded,
highly volatile and not followed by analysts. These factors, which are not
under Standard's control, may have a material effect on its share price.
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18. STANDARD ANTICIPATES THE NEED TO SELL ADDITIONAL TREASURY SHARE IN THE
FUTURE MEANING THAT THERE WILL BE A DILUTION TO ITS EXISTING SHAREHOLDERS
RESULTING IN THEIR PERCENTAGE OWNERSHIP IN STANDARD BEING REDUCED ACCORDING
LY.
Standard expects that the only way it will be able to acquire additional
funds is through the sale of its common stock. This will result in a
dilution effect to its shareholders whereby their percentage ownership
interest in Standard is reduced. The magnitude of this dilution effect will
be determined by the number of shares Standard will have to issue in the
future to obtain the funds required.
19. BECAUSE STANDARD'S SECURITIES ARE SUBJECT TO PENNY STOCK RULES, ITS
SHAREHOLDERS MAY HAVE DIFFICULTY RESELLING THEIR SHARES.
Standard's shares are "penny stocks" and are covered by Section 15(g) of
the Securities Exchange Act of 1934 which imposes additional sales practice
requirements on broker/dealers who sell the Company's securities including
the delivery of a standardized disclosure document; disclosure and
confirmation of quotation prices; disclosure of compensation the
broker/dealer receives; and, furnishing monthly account statements. For
sales of Standard's securities, the broker/dealer must make a special
suitability determination and receive from its customer a written agreement
prior to making a sale. The imposition of the foregoing additional sales
practices could adversely affect a shareholder's ability to dispose of his
stock.
ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
-----------------------------------------------------
Standard's Chief Executive Officer, E. Del Thachuk, and its Chief Financial
Officer, Gordon Brooke, after evaluating the effectiveness of Standard's
controls and procedures (as defined in the Securities Exchange Act of 1934 Rule
13a, 14(c) and 15d 14(c) as of the end of the period covered by this quarterly
report on Form 10-QSB (the "Evaluation Date"), have concluded that as of the
Evaluation Date, Standard's disclosure 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 quarterly report
on Form 10-QSB was being prepared.
(b) Changes in Internal Controls
-------------------------------
Based upon the evaluation of Standard's controls. E. Del Thachuk, and Gordon
Brooke have concluded that the disclosure controls are effective providing
reasonable assurance that material information relating to Standard is made
known to management on a timely basis during the period when its reports are
being prepared. There were no changes in its internal controls that occurred
during the quarter covered by this report that have materially affected, or are
reasonably likely to materially affect Standard's internal controls.
PART 11 - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings to which Standard is a party or to which its
mineral claim is subject, nor to the best of management's knowledge are any
material legal proceedings contemplated.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Under an Offering Memorandum dated September 5, 2005 the Company raised $49,500
through the sale of 990,000 common shares at a price of $0.05 per share.
Directors and officers subscribed for 170,000 common shares. The use of
proceeds from the sale of these shares have been distributed as follows as at
November 30, 2005:
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Source of Disbursement Ref. Amount
------------------------------- -------- -------
Independent accountants . . . . . . (i) $ 10,500
Consulting - preparation of SB-2. . (ii) 10,000
Exploration expenses. . . . . . . . (iii) 3,100
Office expenses - accounts payable. (iv) 681
Transfer agent - accounts payable . (v) 4,000
Travel expenses . . . . . . . . . . (vi) 471
Prior exploration - account payable (vii) 2,605
Transfer agent - current fees . . . (v) 622
Other accounts payable payments . . (viii) 3,422
Legal fees. . . . . . . . . . . . . (ix) 2,500
Bank charges and expenses . . . . . 144
Working capital remaining . . . . . 11,455
--------
Total amount raised. . . . . . $ 49,500
========
(i) Payment to Madsen & Associate CPA's Inc. for outstanding balance.
(ii) Directors' approved the use of a consultant to prepare and submit a
registration statement for filing with the Securities and Exchange
Commission.
(iii) Advance made to allow exploration work on the Standard claim in early
November. The exploration work has been completed but not filed with the
Ministry of Energy and Mines. This will be done in early 2006.
(iv) Represents amounts owed for the past for photocopying, fax and courier.
(v) Standard negotiated with Nevada Agency & Trust Company to settle their
outstanding account for the total consideration of $4,000. Subsequently an
invoice in the amount of $622 was received from the transfer agent for the
issuance of shares subscribed for under the Offering Memorandum dated
September 5, 2005 and for several copies of the shareholders' report.
(vi) Represents various travel expenses incurred by Standard's President over
the past year.
(vii) Certain exploration expenses incurred in past years had not been settled
in full and therefore were paid from the proceeds of the Offering
Memorandum.
(viii) Represent the payment of certain amounts set up in accounts payable.
(iv) Standard engaged the services of Conrad C. Lysiak, attorney at law, to
given a legal opinion to be included in the Form SB-2 filed with the
Securities and Exchange Commission on November 10, 2005.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On November 18, 2005, Standard held its Second Annual General Meeting of
Stockholders (the "Meeting").
There are 2,285,000 common shares issued and outstanding as at the record dated
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of October 31, 2005 of which the following shares were represented at the
Meeting.
Represented in Person: 385,000 common shares
Represented by Proxy: 1,535,500 common shares
This represented a total of 1,920,500 common shares which represents 84% of the
issued and outstanding shares.
The matters approved by the shareholders were as follows:
1. The election of E. Del Thachuk and B. Gordon Brooke as directors; and
2. The appointment of Madsen & Associates, CPA's Inc. as the Company's
independent accountants for the year ended August 31, 2006.
At a subsequent Directors' Meeting, the directors appointed the following
officers:
E. Del Thachuk Chief Executive Officer and President
B. Gordon Brooke Chief Financial Officer and Chief Accounting
Officer
Maryanne Thachuk Secretary Treasurer
In addition to the above appointments, the Directors appointed B. Gordon Brooke
as Chairperson of the Audit Committee and E. Del Thachuk as a member of the
Audit Committee.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
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 Certification of the Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
99.2 Certificate Pursuant to 18 U.S.C Section 1350 signed by the Chief Executive
Officer
99.3 Certification of the Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
99.4 Certificate Pursuant to 18 U.S.C. Section 1350 signed by the Chief
Financial Officer
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(b) Reports on Form 8-K
- Filed on November 22, 2005 regarding certain motions approved by the
shareholders at the Annual General Meeting of Stockholders.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
STANDARD CAPITAL CORPORATION
(Registrant)
/s/ "E. Del Thachuk"
-------------------------
E. Del Thachuk
Chief Executive Officer
President and Director
Dated: December 20, 2005
/s/ " B. Gordon Brooke"
---------------------------
B. Gordon Brooke
Chief Accounting Officer
Chief Financial Officer
and Director
Dated: December 20, 2005
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