UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended:March 31, 2013
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 000-54405
JAMESON STANFORD RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
| Nevada | 27-0585702 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 10785 West Twain Ave., Suite 200, Las Vegas, NV | 89135 | |
| (Address of principal executive offices) | (Zip Code) |
(702) 933-0808
(Registrant’s telephone number, including area code)
Copies of Communications to:
Laura Anthony, Esq.
Legal & Compliance, LLC
330 Clematis Street, Suite 217
West Palm Beach, FL 33401
(561) 514-0936
Fax (561) 514-0832
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer [ ] | Accelerated filer [ ] |
| Non-accelerated filer [ ] (Do not check if a smaller reporting company) | Smaller reporting company [X] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
The number of shares of Common Stock, $0.001 par value, issued and outstanding on May 20, 2013, was 31,460,000 shares.
TABLE OF CONTENTS
| 2 |
JAMESON STANFORD RESOURCES CORPORATION
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| March 31, 2013 | December 31, 2012 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 96 | $ | - | ||||
| Total current assets | 96 | - | ||||||
| Property & equipment, net | 38,173 | 40,367 | ||||||
| Mineral Rights | 25,869 | 25,869 | ||||||
| Deposits | 12,876 | - | ||||||
| TOTAL ASSETS | $ | 77,014 | $ | 66,236 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable and accrued expenses | $ | 504,960 | $ | 330,298 | ||||
| Accrued compensation | 225,000 | 180,000 | ||||||
| Convertible debt, related party | 185,000 | 185,000 | ||||||
| Loans payable | 46,697 | 45,342 | ||||||
| Advances from related party shareholders, including accrued interest | 201,435 | 49,993 | ||||||
| Total current liabilities | 1,163,092 | 790,633 | ||||||
| Total Liabilities | 1,163,092 | 790,633 | ||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Common stock, authorized 350,000,000 shares, $0.001 par value, 31,300,000 issued and outstanding | $ | 31,300 | $ | 31,300 | ||||
| Capital in deficit of par value | (47,172 | ) | (53,168 | ) | ||||
| Accumulated deficit during exploration stage | (1,070,206 | ) | (702,529 | ) | ||||
| Total Stockholder’s Deficit | (1,086,078 | ) | (724,397 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 77,014 | $ | 66,236 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements
| F-1 |
JAMESON STANFORD RESOURCES CORPORATION
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Period from | ||||||||||||
| Inception | ||||||||||||
| Three Months Ended | (Oct 12, 2010) to | |||||||||||
| March 31, 2013 | March 31, 2012 | March 31, 2013 | ||||||||||
| Revenue | $ | - | $ | - | $ | 89,994 | ||||||
| Cost of Revenue | - | - | 66,227 | |||||||||
| Gross Profit | - | - | 23,767 | |||||||||
| Operating Expenses | ||||||||||||
| Executive Compensation | 46,793 | - | 226,793 | |||||||||
| Exploration and development costs | 113,399 | 32,650 | 268,380 | |||||||||
| Exploration and development costs - related party | - | - | 109,922 | |||||||||
| General and administrative | 186,065 | 7,255 | 417,732 | |||||||||
| General and administrative - related party | 10,783 | - | 38,283 | |||||||||
| Total Operating Expenses | 357,040 | 39,905 | 1,061,110 | |||||||||
| Net Loss from Operations | (357,040 | ) | (39,905 | ) | (1,037,343 | ) | ||||||
| Other Expenses | - | |||||||||||
| Interest expense, related parties | (9,281 | ) | (2,974 | ) | (31,507 | ) | ||||||
| Interest expense | (1,356 | ) | - | (1,356 | ) | |||||||
| Net Loss before Income Taxes | (367,677 | ) | (42,879 | ) | (1,070,206 | ) | ||||||
| Income tax provision | - | - | - | |||||||||
| Net Loss | $ | (367,677 | ) | $ | (42,879 | ) | $ | (1,070,206 | ) | |||
| Basic and diluted loss per share | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | |||
| Basic and diluted weighted average shares outstanding | 31,300,000 | 25,000,000 | 26,069,811 | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
| F-2 |
JAMESON STANFORD RESOURCES CORPORATION
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
| Period from | ||||||||||||
| Inception | ||||||||||||
| For Three Months Ended | (October 12, 2010) to | |||||||||||
| March 31, 2013 | March 31, 2012 | March 31, 2013 | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net loss | $ | (367,677 | ) | $ | (42,879 | ) | $ | (1,070,206 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Depreciation | 2,194 | 1,571 | 10,196 | |||||||||
| Imputed interest | 5,996 | 2,974 | 23,610 | |||||||||
| Changes in operating assets and liabilities | ||||||||||||
| Prepaid expense/deposits | (12,876 | ) | - | (12,876 | ) | |||||||
| Accounts payable and accrued expenses | 174,662 | 1,184 | 465,378 | |||||||||
| Accrued interest | 4,641 | - | 9,253 | |||||||||
| Accrued compensation | 45,000 | - | 225,000 | |||||||||
| Net cash used in operating activities | (148,060 | ) | (37,150 | ) | (349,645 | ) | ||||||
| Cash flows from investing activities | ||||||||||||
| Acquisition of mineral rights | - | - | (25,869 | ) | ||||||||
| Purchase of equipment | - | - | (48,369 | ) | ||||||||
| Net cash used in investing activities | - | - | (74,238 | ) | ||||||||
| Cash flows from financing activities | ||||||||||||
| Proceeds from issuance of convertible debt, related party | - | 20,000 | 185,000 | |||||||||
| Loan payable | - | - | 42,000 | |||||||||
| Advances from related party shareholders | 148,156 | 10,186 | 196,879 | |||||||||
| Members contributions | - | - | 100 | |||||||||
| Net cash provided by financing activities | 148,156 | 30,186 | 423,979 | |||||||||
| Net increase (decrease) in cash | 96 | (6,964 | ) | 96 | ||||||||
| Cash, beginning of year | - | 6,991 | - | |||||||||
| Cash, end of year | $ | 96 | $ | 27 | 96 | |||||||
| Supplemental Information: | ||||||||||||
| Cash paid for: | ||||||||||||
| Taxes | $ | - | $ | - | 0 | |||||||
| Interest Expense | $ | - | $ | - | $ | 0 | ||||||
| Liabilities assumed in merger | $ | - | $ | - | $ | 39,582 | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
| F-3 |
JAMESON STANFORD RESOURCES CORPORATION
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
On October 29, 2012, Jameson Stanford Resources Corporation (“the Company”) merged with Bolcán Mining Corporation (Note 2). Prior to the Merger, the Company was a publically traded shell company with no business operations. The shell company was originally incorporated under the laws of the state of Nevada in June 2009 as MyOtherCountryClub.com for the purpose of developing a website that would offer reciprocal golf privileges, and other related services, to members of private country clubs throughout the United States. As a result of the Merger, the Company is no longer considered a shell company.
The intended future operating activities of the Company are to pursue the development of certain mining claims, mineral leases and excavation rights (collectively referred to herein as “mineral rights”) for mining projects located in (a) Star Mining District in Beaver County, Utah, (b) Spor Mountain Mining District in Juab County, Utah, and (c) Ogden Bay Wildlife Management Area in Weber County, Utah.
NOTE 2 – MERGER
Effective May 7, 2012, the Company entered into an Agreement and Plan of Merger with Jameson Stanford Resources Corporation, (“Jameson Stanford”), and JSR Sub Co, (“JSR”), both unrelated parties. On July 24, 2012, the above parties entered into an Extension Agreement in order to extend the effective time of the merger to August 3, 2012. On October 24, 2012, the parties entered into a second Extension Agreement extending the closing date for the Merger to October 29, 2012. On October 29, 2012, the Merger was closed. Effective as of the closing of the Merger, the CEO and Director of Jameson Stanford resigned from all positions with the Company and he returned, for cancellation, 52,500,000 shares of the Jameson Stanford’s common stock held in his name. Also at closing, the shareholder of Bolcán Mining was issued 25,000,000 shares of Jameson Stanford’s common stock. As of March 31, 2013 there were 31,300,000 shares of Jameson Stanford common stock outstanding, of which approximately 80% is held by the former shareholders of Bolcán. The merger has been treated as a reverse acquisition and recapitalization of a public company. Accordingly, the historic financial statements of the Company are the historic statements of Bolcán Mining Corporation, which was incorporated on April 11, 2012 in the State of Nevada.
NOTE 3 – GOING CONCERN
The Company is an exploration stage enterprise as defined under generally accepted accounting principles in the United States (“GAAP”). The financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in a deficit accumulated during exploration stage of $1,070,206 as of the period ended March 31, 2013. Further losses are anticipated in the development of its business.
The Company’s ability to continue as a going concern is dependent upon the Company generating profitable operations and cash flows in the near-term future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations. Management plans to finance the Company’s operating costs as necessary over the next twelve months with advances from owners and directors, and the private placement of the Company’s equity ownership. If management is unsuccessful in these efforts, discontinuance of operations is possible. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| F-4 |
JAMESON STANFORD RESOURCES CORPORATION
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting and Presentation
The accompanying condensed financial statements have been prepared in accordance with U. S. generally accepted accounting principles for interim financial statements. Accordingly, they omit or condense footnotes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles. The accounting policies followed for quarterly financial reporting conform with the accounting policies disclosed in Note 4 to the Notes to Condensed Consolidated Financial Statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2012. In the opinion of management, all adjustments that are necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results that can be expected for the entire year ending December 31, 2013. The unaudited financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2012.
NOTE 5 – TRANSACTIONS WITH MAJORITY OWNER AND OFFICER
Michael Stanford, the Company’s Chief Executive Officer and its majority shareholder (the “Majority Owner”) has made periodic advances to the Company to fund operations, which are unsecured and payable on demand after June 30, 2013. Interest is charged at the rate of 12%. During the period ended March 31, 2013, the majority owner advanced $139,758 to the Company and the Company expensed $3,286 in interest expense. The outstanding advances totaled $201,435 at the period ended March 31, 2013 including $4,556 of interest payable.
The Company has contracted for minerals testing, laboratory services, project management and materials supply from several entities that are operated by common management or are otherwise controlled by the Majority Owner. Payments to such related party totaled $0 for the period ended March 31, 2013.
NOTE 6 – CONVERTIBLE NOTE-RELATED PARTY
In connection with a memorandum of understanding dated October 27, 2011, the Company received certain cash advances totaling $105,000 from a related party. The advances were unsecured, did not bear interest and were payable on demand.
In 2011 and 2012, the Company borrowed $185,000 from a related party. The note is due on demand. The unpaid balance was convertible at the option of the related party or the Company into shares of common stock of the Company at the rate of one share of common stock for every two dollars of loan reduction. These conversion rights were not exercised and expired on December 31, 2012. The Company and the related party have verbally agreed to extend the conversion rights to June 30, 2013. Interest expense has been imputed at 12%. All advances under this facility are shown as a current liability in the accompanying financial statements.
The balance of the convertible note totaled $185,000 as of the period ended March 31, 2013. The imputed interest for the period ended March 31, 2013 was $5,995.
NOTE 7 – NOTE PAYABLE
On May 11, 2012, an individual loaned the Company $42,000. The loan is guaranteed by the Majority Owner, bears interest at 12% per annum, and was extended to a due date of August 24, 2012. The balance of this note, including accrued interest of $4,697, was $46,697 as of the period ended March 31, 2013. As the loan has passed its due date, it is in default.
| F-5 |
JAMESON STANFORD RESOURCES CORPORATION
(AN EXPLORATION STAGE COMPANY)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 –Contracts and lease commitments
Residential Office Lease
Commencing February 1, 2013 and continuing to January 31, 2014, the Company is renting residential office space from an entity controlled by the Majority Owner. The lease obligates the Company to monthly lease payments of $6,250.
Service Contracts
In February 2013, the Company contracted with a consulting group to receive consulting, investor relations and development services. This consulting agreement calls for the issuance of 200,000 restricted common shares. As of the period ended March 31, 2013, these shares were not yet issued. However, because the services were commenced with the signing of the contract, $80,000 was expensed for the period ended March 31, 2013. The value of the services was based on the closing common share value on the share issuance date of April 2, 2013 which was $1.20 per share.
Also in February 2013, the Company contracted with a PR advertising company to receive investor relations and development services, video production and distribution, public relations as well as various social media outreach and promotion services. This service contract requires the issuance of 60,000 restricted common shares and minimum quarterly fees totaling $40,000 to be paid over a six month service period. As of the period ended March 31, 2013, these shares were not yet issued. However, because the services were commenced with the signing of the contract, $15,000 was expensed for the period ended March 31, 2013. The value of the services was based on the closing common share value on the share issuance date of April 2, 2013 which was $1.20 per share.
NOTE 9 –Subsequent events
On April 2, 2013, 200,000 shares of restricted common stock were issued to a consulting company. Per the terms of the contract, 100,000 shares were not due to the consulting firm until May, 2013. The contract calls for various consulting and investor relations services to be performed over six months. The value of the services from the signing date in February to the end of the period ended March 31, 2013 was expensed as outlined in Note 9 above.
On April 2, 2013, 60,000 shares of restricted common stock were issued to a marketing company. The contract calls for various social media and public relations services to be performed over six months. The value of the services from the signing date in February to the end of the period ended March 31, 2013 was expensed as outlined in Note 9 above.
| F-6 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report include forward-looking statements. These forward looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including but not limited to: variability of our future revenues and financial performance; risks associated with product development and technological changes; the acceptance of our products in the marketplace by potential future customers; general economic conditions. You should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results.
THE COMPANY
Business Development
We were originally incorporated under the laws of the state of Nevada in June 2009 as MyOtherCountryClub.com for the purpose of developing a website that would offer reciprocal golf privileges, and other related services, to members of private country clubs throughout the United States.
On May 7, 2012, we entered into an Acquisition Agreement and Plan of Merger, as amended on July 24, 2012 and on October 24, 2012 (collectively referred to as the “Merger Agreement”), with our wholly-owned subsidiary, JSR Sub Co, a Nevada corporation (“Sub Co”), and Bolcán Mining Corporation, a Nevada corporation (“Bolcán Mining”). Pursuant to the Merger Agreement, we issued 25,000,000 shares of our Rule 144 restricted common stock in exchange for 100% of Bolcán Mining’s issued and outstanding capital stock.
On May 2, 2012, we completed a 7-for-1 forward split of all outstanding shares of our common stock and a corresponding increase in our authorized common stock. The effect of the forward split was to increase the number of our common shares issued and outstanding from 8,400,000 to 58,800,000 and to increase our authorized common shares from 50,000,000 shares, par value $0.001, to 350,000,000 shares, par value $0.001.
Pursuant to the terms of the Merger Agreement, on October 29, 2012 Sub Co merged with and into Bolcán Mining (the “Merger”) with Bolcán Mining surviving the Merger as our wholly owned subsidiary. After the Merger, there were 31,300,000 shares of our common stock outstanding, of which approximately 80% are held by the former shareholders of Bolcán Mining. Prior to the Merger, we were a shell company with no business operations. As a result of the Merger, we are no longer considered a shell company.
| 3 |
Description of Bolcán Mining Corporation���s Business
Bolcán Mining was incorporated on April 11, 2012 to pursue the development of certain mining claims, mineral leases and excavation rights for mining projects located in (a) Star Mining District in Beaver County, Utah, (b) Spor Mountain Mining District in Juab County, Utah, and (c) Ogden Bay Wildlife Management Area in Weber County, Utah. On April 23, 2012, Bolcán Mining acquired certain lode mining claims and mineral leases related to the Star Mining District and Spor Mountain Mining District projects.
Effective as of June 30, 2012, pursuant to an Asset Purchase Agreement (the “APA”) between Bolcán Mining and the Bolcán Group LLC (“Bolcán Group”) which was formed in October 12, 2010 by Mr. Stanford, Bolcán Mining purchased all of the assets and assumed certain liabilities of the Bolcán Group resulting in a combination of the two companies.
The operating activities of the Bolcán Group were inconsequential until October 2011 and consisted primarily of historical site research performed by Mr. Stanford. Mr. Stanford has other mining interests and provides services to the mining industry that are not part of Bolcán Mining.
Business Strategy
We are a minerals exploration, development and production company focused on acquiring and consolidating mining claims and mineral leases with potential production and future growth through exploration discoveries. Our current growth strategy is focused on the initiation and expansion of production operations through the development of current mining claims and mineral properties into producing projects.
Since late 2011, Bolcán Mining has been engaged in exploration and acquisition activities in connection with two high-grade copper, gold, silver and base metals properties located in historic mining districts in Beaver County and Juab County, Utah. During this exploration phase, Bolcán Mining focused on identification and acquisition of under-explored mining claims and mineral leases in mining districts that are believed to hold significant unexploited production value. In addition, Bolcán Mining has acquired excavation rights and special permitting related to deposits of alluvial minerals and silica sand located at Ogden Bay, Utah.
Our business development strategy for 2013-2014 comprises the following activities:
| ● | Initiate small-scale production of copper ore at the Chopar Mine project site; |
| ● | Ramp Chopar Mine copper ore production to profitability and positive cash flow; |
| ● | Commission independent engineering reports to validate reserves in compliance with SEC Industry Guide 7: |
| ● | Subcontract production at Ogden Bay Minerals to generate near term cash flow; |
| ● | Initiate production at the Dugway Minerals project site in 2013; |
| ● | Develop larger scale production plan and capital investment program; and |
| ● | Fund capital investment for significant production expansion. |
Projects
Our current active projects include:
Star Mountain/Chopar Mine (Star Mining District) - The Star Mountain/Chopar Mine project consists of 117 lode-mining claims, and four metalliferous mineral lease sections located in the Star Mountain range, Star Mining District, in Beaver County, Utah, approximately five miles west of Milford, Utah. The Star Mountain project involves total area of 3,740 acres. Based on our geological analysis, magnetometry studies and reverse circulation drilling samples, we believe that the Star Mountain/Chopar Mine involves a significant geologic formation containing commercial grades of copper ore, plus additional precious and base metals.
| 4 |
Spor Mountain/Dugway Minerals (Spor Mountain Mining District) - The Spor Mountain/Dugway Minerals project consists of three metalifferous mineral lease sections located in Juab County, Utah, approximately six miles southwest of the Dugway Military Proving Grounds, and 50 miles northwest of Delta, Utah. The Dugway Minerals project involves total area of 1,920 acres. Planned project activities at Dugway Minerals in 2012 are limited to prospecting, exploration and development. Assuming economic feasibility, we anticipate startup of production operations in 2013.
Ogden Bay Minerals - Ogden Bay Minerals is a developing mineral excavation project on federal protected wetlands, canals and river systems across 25 square miles of land area known as North Delta, located in West Ogden, Utah. Our excavation and harvesting rights are maintained through easement rights obtained from Weber County and a special use river/stream alteration permit as part of a State of Utah/Weber County flood mitigation project. Our Ogden Bay Minerals project contains deposits of alluvial mineral deposits that are created and replenished from 125 miles of river flow from the nearby Wasatch Mountain Range. We believe these alluvial mineral deposits contain commercial grades of gold, silver, zircon and other commercial metals and minerals that can be efficiently extracted by standard separation methods.
Products
We intend to develop our project mining claims, mineral leases and excavation rights to produce the following specialized mining products:
Copper Ore with Precious Metals Component - Hard rock mineralized material will be drilled, blasted, excavated and hauled, then crushed and classified to customer specifications. We will deliver this product on-demand or just in time to customers on a 24/7 schedule, utilizing truck and pup combos for local deliveries, and rail for regional deliveries. The Union Pacific Railroad main line from Los Angeles to Ogden, Utah, is routed through Milford, Utah, approximately five miles east of our Star Mountain project site.
Mined Mineral Concentrates - Finely divided particles from hard rock mining and recovery operations containing significant enrichments of silver and gold will be upgraded by gravity concentrating methods to contain a minimum 3,000 grams of precious metals per ton of concentrate. Mineral concentrate products are dried, bagged, and shipped to customers.
Refined Precious Metals - During 2013-2014, we plan to develop a refining capacity for up to two tons per day of selected precious metals concentrates from our mining and recovery operations. Precious metals concentrates containing greater than 50% combined silver/gold mixture will be further concentrated, refined, separated and manufactured into bar and ingot product.
Results of Operations for the three months ended March 31, 2013 and 2012.
The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this Quarterly Report.
Revenue.No revenue was generated for the three months ended March 31, 2013 and the three months ended March 31, 2012.
Cost of revenue.The cost of revenue for the three months ended March 31, 2013 and the three months ended March 31, 2012 was zero.
Operating Expenses. Operating expenses for the three months ended March 31, 2013 totaled $357,040, as compared to operating expenses totaling $39,905 for the three months ended March 31, 2012. The increase is primarily due to increased costs for legal and professional fees related to the merger as well as increased exploration costs at our Star Mountain project.
| 5 |
Operating Loss. Our operating loss during the three months ended March 31, 2013 totaled $357,040, as compared to an operating loss of $39,905 for the three months ended March 31, 2012. The increase is primarily due to increased costs for legal and professional fees related to the merger as well as increased exploration costs at our Star Mountain project.
Interest Expense.Interest expense, including – interest expense - related parties, for the three months ended March 31, 2013 totaled $10,637 as compared to interest expense of $2,974 for the three months ended March 31, 2012. The increase was primarily related to costs of borrowing from related parties.
Net Loss. Our net loss for the three months ended March 31, 2013 was $367,677 as compared to a net loss of $42,879 for the three months ended March 31, 2012. The increase in net loss was a result of the increase in operating loss and interest expense discussed above.
Liquidity and Capital Resources
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. The Company had $96 and $0 of cash as of March 31, 2013 and December 31, 2012, respectively.
Net cash used in operating activities was $148,060 for the three months ended March 31, 2013, compared to $37,150 for the same period in 2012.
Net cash provided by financing activities during the three months ended March 31, 2013, was $148,156 compared to $30,186 for the three months ended March 31, 2012.
We had assets at March 31, 2013 of $77,014.
Cash Requirements
Our future capital requirements will depend on numerous factors, including the extent we continue exploration activities, the profitability of operations and our ability to control costs. We will be reliant upon shareholder loans, private placements or public offerings of equity to fund any kind of operations.
We do not currently have any contractual restrictions on our ability to incur debt and, accordingly we could incur significant amounts of indebtedness to finance operations. Any such indebtedness could contain covenants which would restrict our operations.
Related Party Transactions
At March 31, 2013 and December 31, 2012, we had outstanding net advances and loans from related parties of $201,435 and $49,993, respectively.
At March 31, 2013 and December 31, 2012, we had outstanding convertible debt from a related party of $185,000.
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company”, we are not required to provide the information under Item 3.
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ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls as of the end of the period covered by this report, March 31, 2013. This evaluation was carried out under the supervision and with the participation of our chief executive officer, Michael Stanford, and our financial officer, Mr. Robbie Chidester (the “Certifying Officers”). Based upon that evaluation, our Certifying Officers concluded that as of the end of the period covered by this report, March 31, 2013, our disclosure controls and procedures are ineffective in timely alerting management to material information relating to us and required to be included in our periodic filings with the Securities and Exchange Commission (the “Commission”).
Our certifying officer further concluded that our disclosure controls and procedures are ineffective to ensure that information required to be disclosed by the issuer in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and are also ineffective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow time for decisions regarding required disclosure.
Changes in Internal Controls Over Financial Reporting
There were no changes in the Company’s internal controls over financial reporting identified in connection with the evaluation of our controls performed during the quarter ended March 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us that may materially affect us.
At this time, the following matter has not been elevated to actual or threatened litigation, but it may do so in the future. On March 26, 2013, J. Michael Christianson filed with the SEC a Schedule 13D dated March 21, 2013 in which he claims that, as of October 29, 2012, he owned 2,250,000 shares of our common stock. We reject Mr. Christianson’s entire claim of stock ownership as reported in the Schedule 13D. We also maintain that Mr. Christianson filed the Schedule 13D with full knowledge of the inaccurate statements contained therein.
As reported in our Form 8-K/A filed with the SEC on November 30, 2012, on October 29, 2012, we closed on a merger with Bolcán Mining Corporation (“Bolcán”) in which, in part, we issued shares of our common stock to the Bolcán shareholders. Mr. Christianson claims that he was a Bolcán shareholder and therefore was entitled to shares of our stock in the merger/exchange. However, the Company disputes Mr. Christiansen’s claims of share ownership in Bolcan, and by extension, his ownership of the Company’s common stock in connection with the Merger. The Company has entered into negotiations with Mr. Christiansen to resolve the disputes regarding his claims of stock ownership. We have conveyed to Mr. Christianson our position that we reject his stock ownership claim as described in the Schedule 13D.
As a “smaller reporting company”, we are not required to provide disclosure under this Item 1A.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Pursuant to Section 1503(a) of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. At this time, we have no safety violations, orders, citations, related assessments or legal actions, or mining-related fatalities to report.
None.
| 31.1 | Section 302 Certificate of Chief Executive Officer.* | |
| 31.2 | Section 302 Certificate of Principal Financial and Accounting Officer.* | |
| 32.1 | Section 906 Certificate of Chief Executive Officer.* | |
| 32.2 | Section 906 Certificate of Chief Financial Officer.* | |
| 101.INS | XBRL INSTANCE DOCUMENT ** | |
| 101.SCH | XBRL TAXONOMY EXTENSION SCHEMA ** | |
| 101.CAL | XBRL TAXONOMY EXTENSION CALCULATION LINKBASE ** | |
| 101.DEF | XBRL TAXONOMY EXTENSION DEFINITION LINKBASE ** | |
| 101.LAB | XBRL TAXONOMY EXTENSION LABEL LINKBASE ** | |
| 101.PRE | XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE ** |
| * | Filed herewith | |
| ** | In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”. |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Jameson Stanford Resources Corporation | ||
| Date: May 20, 2013 | By: | /s/ Michael Stanford |
| Michael Stanford | ||
| Chairman and Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: May 20, 2013 | By: | /s/ Robbie Chidester |
Robbie Chidester (Principal Financial and Accounting Officer) | ||
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