UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(AMENDMENT NO. 3)
STANFORD MANAGEMENT LTD.
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(Name of small business issuer in its charter)
Delaware 1099 98-0413066
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(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employee
incorporation or Classification Code Number) Identification No.)
organization)
420 - 625 Howe Street
Vancouver, B. C. Canada, V6C 2T6 420 - 625 Howe Street
(Tel: 604-608-0223) Vancouver, B. C., Canada, V6C 2T6
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(Address and telephone number of (Address of principal place of
principal executive offices) business or intended principal
place of business)
The Company Corporation, 1013 Centre Road, Wilmington, DE 19805,
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(Tel: 302-636-5440)
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(Name, address and telephone number of agent of service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box [x]
If this Form is filed to register additional common stock for an offering under
Rule 462(b) of the Securities Act, please check the following box and list the
Securities Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed under Rule 462(c) of the
Securities Act, of 1933 check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed under Rule 462(d) of the
Securities Act of 1933, check the following box and list the Securities Act
registration statement number of the of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made under Rule 434, please
check the following box. [ ]
TITLE OF EACH PROPOSED
CLASS OF SECURITIES NUMBER OF MAXIMUM/ AMOUNT OF
TO BE SHARES TO PROPOSED MAXIMUM OFFERING MINIMUM AGGREGATE REGISTRATION
REGISTERED BE REGISTERED PRICE PER SHARE OFFERING PRICE FEE (1)
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Common Stock - par value of $0.001
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Maximum. . . . . . . . . . . . . . 1,000,000 $ 0.20 $ 200,000 $ 100
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Minimum. . . . . . . . . . . . . . 250,000 $ 0.20 $ 50,000 $ 100
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(1) Estimated solely for the purpose of computing the amount of registration
fee in accordance with Rule 457 (o).
Stanford hereby amends this registration statement on such date or dates as may
be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may determine.
Prospectus Subject to Completion
Dated , 2004
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
STANFORD MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE (THE "EFFECTIVE DATE").
THIS PROSPECTUS IS NOT AN OFFER TO SELL SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFERING OR SALE IS NOT
PERMITTED.
A Minimum of 250,000, Maximum 1,000,000 shares
STANFORD MANAGEMENT LTD.
Common Stock
Stanford is offering a minimum of 250,000 shares of its common stock and a
maximum of 1,000,000 shares of its common stock, par value of $0.001, for $0.20
per share. This will result in minimum proceeds of $50,000 and maximum proceeds
of $200,000. All dollar amounts referenced herein refer to United States
dollars.
Stanford is making this offering of up to 1,000,000 shares of common stock on a
self-underwritten, minimum-maximum basis conducted only by the officers and
directors of Stanford. Stanford will begin to sell the shares on the date
listed on the cover of this prospectus. Stanford will open a separate escrow
bank account, in Stanford's name, to hold all funds received from the
subscriptions. No use of these funds will occur until the minimum subscriptions
have been subscribed for. During the initial offering period, Stanford may
continue to offer shares for a period of up to 12 months from the effective date
of this registration statement of which this prospectus is a part, at its sole
discretion. At such time that a miminum of $50,000 in proceeds is received
from the sale of shares, the proceeds will be distributed from the escrow
account to Stanford for immediate use. If Stanford does not sell the minimum
$50,000 gross proceeds during the initial period, Stanford may update this
prospectus and continue the offering for up to an additional 12 months, being a
total of 24 months from the effective date of this registration statement, but
after that time period the offering will be closed. During the continuous
offering period, being 24 months, investors will receive no interest in the
event that the offering is terminated for failure to meet the minimum proceeds
requirement. The minimum purchase for any investor is $200. Stanford may
terminate this offering at any time. If Stanford does not received
subscriptions for the minimum $50,000 in gross proceeds, all funds received from
potential investors will be returned without interest or deduction.
Before this offering, there has been no public market for Stanford's common
stock and its stock is not currently traded on any exchange or quotation system.
If is Stanford's intention to seek a market maker to apply for a quotation on
the OTC Bulletin Board in the United States, also known as the OTCBB, following
the effective date of this prospectus.
THE SECURITIES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. THE
READER SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING "RISK
FACTORS" BEGINNING ON PAGE 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
There are no selling security holders in this Offering.
Stanford has not authorized any person to give any information or to make any
representation not in this prospectus in connection with any offering of these
shares of common stock. This prospectus is not an offer to sell any securities
other than these shares of common stock and Stanford is not soliciting an offer
to buy any securities other than these shares of common stock. This prospectus
is not an offer to sell these shares of common stock to any person and Stanford
is not soliciting an offer from any person to buy these shares of common stock
in any jurisdiction where the offer or sale to that person is not permitted.
The reader of this prospectus should not assume that the information contained
in this prospectus is correct on any dated after the date of this prospectus,
even though this prospectus is delivered or these shares of common stock are
offered or sold at a later dated.
There is no debt security being offered under this prospectus.
STANFORD HAS NO AFFILIATIONS WITH STANFORD UNIVERSITY.
The date of this prospectus is May , 2004
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TABLE OF CONTENTS
Page
Item 3. Summary Information and Risk Factors 3
Item 4. Use of Proceeds 14
Item 5. Determination of Offering Price 16
Item 6. Dilution 16
Item 7. Selling Security Holders 18
Item 8. Plan of Distribution 18
Item 9. Legal Proceedings 19
Item 10 Directors, Executive Officers, Promoters and Control Persons 19
Item 11 Security Ownership of Certain Beneficial Owners and Management 24
Item 12 Description of Securities 26
Item 13 Interest of Named Experts and Counsel 27
Item 14 Disclosure of Commission Positions of Indemnification for Securities Act Liabilities 27
Item 15 Organization Within Last Five Years 29
Item 16 Description of Business 30
Item 17 Management's Discussion and Analysis or Plan of Operation 42
Item 18 Description of Property 54
Item 19 Certain Relationship and Related Party Transactions 54
Item 20 Market for Common Equity and Related Stockholder Matters 55
Item 21 Executive Compensation 56
Item 22 Financial Statements 57
Item 23 Changes In and Disagreement with Accountants on Accounting and Financial Disclosure 71
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PROSPECTUS SUMMARY AND RISK FACTORS
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STANFORD MANAGEMENT LTD.
("Stanford")
Stanford is a company without revenue, with little or no assets and having
incurred losses since its inception. The only source of funds to Stanford has
been from the sale of shares in its capital stock and loans made from
affiliates.
Stanford will register the common stock under the 1934 Act as of the Effective
Date of the Form SB-2. Stanford is a "small business issuer" as defined under
Regulation S-B adopted under the Securities Act of 1933, as amended, and will
file reports with the SEC pursuant to the 1934 Act on forms applicable to small
business issuers: being Forms 10-KSB, 10-QSB, Form 3 and 5 and any other forms
required, on a timely basis to be filed with the SEC.
Stanford intends to furnish annual reports to stockholders containing audited
financial statements, quarterly reports and such other periodic reports as it
may determine to be appropriate.
Stanford has ownership interest in the mineral rights on the claim called the
"SF" claim. During the next several years, Stanford will explore the SF claim.
Stanford's objectives are more fully described elsewhere in the Form SB-2.
Stanford is considered an "exploration stage company" since there is no
assurance that a commercially viable mineral deposit, a reserve (refer to next
three paragraphs), exists on the SF claim until appropriate exploration work is
done and a comprehensive study based upon such work concluded legal and economic
feasibility.
A reserve is part of a mineral deposit which can be economically and legally
extracted or produced at the time of the reserve determination. Reserves are
customarily stated in terms of "ore" when dealing with metalliferous minerals.
Reserves are classified as follows:
Proven (Measured) Reserves: Reserves for which (a) quantity is computed from
dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or
quality are computed from the results of detailed sampling and (b) the sites for
inspection, sampling and measurement are spaced so closely and the geologic
character is so well defined that size, shape, depth and mineral content of
reserves are well-established.
Probable (Indicated) Reserves: Reserves for which quantity and grade and/or
quality are computed from information similar to that used for proven (measure)
reserves, but the sites for inspection, sampling, and measurement are farther
apart or are otherwise less adequately spaced. The degree of assurance,
although lower than that for proven (measured) reserves, is high enough to
assume continuity between points of observation.
Stanford was incorporated under the laws of the State of Delaware on September
28, 1998. Currently, Stanford has three directors, Glen Macdonald, William
Nielson and Vera McCullough.
Stanford did not have sufficient capital in 2000 and 2001 to pay the annual
costs to the State of Delaware and therefore on May 16, 2002 Stanford filed a
Certificate of Renewal and the Revival of the Certificate of Incorporation to
ensure it was in good standing in the State of Delaware (Exhibit 3.i.1).
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Stanford originally considered the development of a software protocol program
for the restaurant industry, whereby a wireless menu system could be
implemented. The system would be designed to be compliant with Palm Pilots
which are currently readily available and widely used in the market for personal
hand-held devices. Such a software protocol program would eliminate the need
to develop a proprietary software program, which in turn would require design
and manufacture of specific special purpose hardware components. The concept of
this software program was dispensed with after several years due to a general
lack of interest on the part of restaurants. Stanford decided to obtain a
mineral property in British Columbia for exploration as more fully described
elsewhere in this Form SB-2.
Stanford acquired on January 21, 2001 a 100% interest in the mineral rights to
the "SF" claim, which will be explored for gold, platinum or other commercial
minerals such as zeolite and bentonite. The mineral rights to the SF claim will
expire on January 12, 2005 unless a minimum of $2,340 is spent on exploration
work or cash is paid in lieu of exploration work to the Ministry of Mines and
Energy for the Province of British Columbia.
Placer minerals comprise such minerals as gold, silver and platinum which remain
near their original location after the effect of long continued weathering or
the action of water has broken down the constituents. The more resistant
minerals, such as gold, silver and platinum, will collect nearer to the outcrop
while the softer and less resistant minerals are carried away by the forces of
erosion. Some of the normal ways of recovering placer minerals is by way of
panning (by extracting material from the bottom of a stream and washing the
lighter minerals out of the pan by hand with the circulation of water the
heavier minerals remain behind), sluicing (the placer gravel is shoveled into
the head of an elongated sluice box which is inclined and has various
configurations of bars and traps across the bottom called riffles which hold the
heavier minerals as the water washes out the lighter minerals), hydraulicking (a
stream of water under great pressure is directed against the base of the placer
gravel bank thereby collapsing the bank, disintegrating the gravel and washing
the broken material to and through sluice boxes situated in convenient positions
downslope) and dredging (method of removing material which is submerged in
streams and water bodies by use of a floating machine). The latter two methods
are not suitable for the SF claim. Stanford does not have a claim or lease for
placer minerals.
Stanford has the rights to the minerals on the SF claim other than placer
minerals and coal. In other words, Stanford has the rights to explore for
minerals below the surface but cannot extract minerals found on the surface of
the SF claim. Under the Mineral Tenure Act of British Columbia, Stanford would
have to stake the SF claim for placer minerals. Once this staking is completed
Stanford could use either panning or sluicing to extract minerals from Collins
Gulch Creek which flows through the claim. If Stanford only had the placer
claim rights then production would be limited to 2,000 cubic metres of paydirt
each year. Under a placer lease, which is a higher form of tenure than a claim,
there is no production limit and the issue lease cannot be challenged under the
Mineral Tenure Act. Title to a lease is therefore only issued when the ground
and title to be held by the leasehold has been verified to a higher standard
than that required of a claim. This is achieved by means of a survey.
Components of the survey are:
- - conduct the historical research to determine those titles which may affect
the ground to be acquired by the lease;
- - verification of the legal posts of those titles on the ground; and
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- - produce a survey plan from the collected data.
The majority of the SF claim has not been staked for placer minerals and does
not contain a placer lease over the claim. Until Stanford has completed its
initial exploration work on the SF claim, no decision will be made to stake the
claim for placer minerals and no survey will be undertaken to obtain a placer
lease.
Stanford will begin an exploration program on its claim contingent on the
success of this Offering. The exploration program will cost Stanford $21,550
(refer to page 39) and if the exploration program is successful, Stanford will
undertake a further exploration program on the SF claim.
The date of expiration of the SF claim is January 5, 2005.
SUMMARY FINANICAL INFORMATION
Date of Date of
Inception Inception
September 24, September 24,
1998 to 1998 to
February 29, August 31,
2004 2003
(Unaudited) (Audited)
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Statement of Expenses Information:
Revenue . . . . . . . . . . . . . . Nil Nil
Net Losses 116,923 98,072
Total Operating Expenses 116,923 98,072
Staking and Exploration Costs 6,238 4,693
General and Administrative 110,685 93,379
As of . . . . . . . . . . . . As of
February 29,. . . . . . . . August 31,
2004 2003
(Unaudited) . . . . . . . (Audited)
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Balance Sheet Information:
Cash. . . . . . . . . . . . . . . . Nil Nil
Total Assets. . . . . . . . . . . . Nil Nil
Total Liabilities 42,173 29,622
Stockholders Equity (deficit) 42,173 29,622
The number of common shares currently outstanding are 2,385,500.
RISK FACTORS
Any potential investor should carefully consider the risks described below and
other information in this Form SB-2. If any of the following risks occur,
Stanford's business, results of operation and financial condition could
seriously be harmed. Stanford's common stock does not have any value until it
obtains a quotation on a recognized stock exchange. Stanford's share value
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could decline below the offering price in this Prospectus even if it obtains a
quotation on a stock exchange due to the following risk factors.
RISKS ASSOCIATED WITH THIS OFFERING
1. STANFORD'S SHARE PRICE WILL BE SUBJECT TO THE PENNY STOCK RULE WHICH WILL
RESULT IN ANY BROKER-DEALER INVOLVED IN STANFORD'S SHARES HAVING INCREASED
ADMINISTRATIVE RESPONSIBILITIES WHICH WILL HAVE AN AFFECT ON STANFORD BEING
ABLE TO RAISE FUNDS AND AN INVESTOR PURCHASING OR SELLING HIS SHARES.
Stanford's common stock is considered to be a "penny stock" because it
meets one or more of the definitions in SEC Rule 3a51-1:
(i) it has a price of less than five dollars per share;
(ii) it is not traded on a recognized national exchange;
(iii) it is not quoted on the National Association of Security Dealers,
Inc. ("NASD") automated quotation system (NASDAQ), or even if so, has
a price less than five dollars per share; or
(iv) is issued by a company with net tangible assets of less than
$2,000,000, if in business more than three years continuously, or
$5,000,000, if in business less than a continuous three years, or with
average revenues of less than $6,000,000 for the past three years.
A broker-dealer will have to undertake certain administrative functions required
when dealing in a penny stock transaction. Disclosure forms detailing the level
of risk in acquiring Stanford's shares will have to be sent to an interested
investor, current bid and offer quotations will have to be provided with an
indication as to what compensation the broker-dealer and the salesperson will be
receiving from this transaction and a monthly statement showing the closing
month price of the shares being held by the investor. In addition, the
broker-dealer will have to receive from the investor a written agreement
consenting to the transaction. This additional administrative work might make
the broker-dealer reluctant to participate in the purchase and sale of
Stanford's shares.
From Stanford's point of view, being subject to the Penny Stock Rule could make
it extremely difficult for it to attract new investors for future capital
requirements since many financial institutions are restricted under their
by-laws from investing in shares under a certain dollar amount. Ordinary
investors might not be willing to subscribe to shares in the capital stock of
Stanford due to the uncertainty as to whether the share price will ever be able
to be high enough that the Penny Stock Rule is no longer a concern.
Any new investor purchasing shares under this Offering might consider whether
they will be able to sell their shares at the price of this Offering or higher
since if no broker-dealer becomes involved with Stanford and Stanford is unable
to raise future investment capital the price per share may deteriorate to a
point that an investor's entire investment could be lost.
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2. THIS OFFERING IS BEING SELF-UNDERWRITTEN BY STANFORD WITH NO INDEPENDENT
DUE DILIGENCE UNDERTAKEN BY EITHER A QUALIFIED INDEPENDENT THIRD PARTY OR A
BROKER-DEALER TO DETERMINE IF THE ASSETS, FUTURE INCOME POTENTIAL AND
CAPABILITIES OF MANAGEMENT ARE PRESENT TO SUPPORT THE OFFERING PRICE UNDER
THIS PROSPECTUS.
Stanford has decided to self-underwrite this Offering and thereby has eliminated
any opportunity for a qualified independent third party such as a
broker-dealer's legal counsel or the broker-dealer itself to examine the records
of Stanford, discuss with management its future strategy and assess the assets
and future income potential before making a decision whether the price under
this Offering is reasonable. Without an independent review, Stanford might find
it difficult to attract investors for this Offering since investors might be
unsure whether the price per share is reasonable or not and if Stanford is
unable to raise capital it might hinder the exploration activities of the SF
claim. New investors are relying on Stanford's management to set a reasonable
share price under this Offering and without independent verification by a
broker-dealer or an independent third party there is no assurance that the price
set herein is reasonable.
3. THE PRESENT SHAREHOLDERS HAVE PAID $0.001 PER SHARE WHEREAS THE NEW
INVESTORS WILL BE PAYING $0.20 PER SHARE.
Originally all shares were sold for $0.001 per share; a price considerably below
the Offering price under this Form SB-2. With this type of discrepancy, it might
be difficult for Stanford to attract new investors who might not wish to
contribute the majority of the money to Stanford for a considerably lesser
number of shares (refer to Item 6 - Dilution). With this fact in mind, new
investors should consider that if, and when, Stanford's shares are quoted on an
exchange the existing shareholders could commence selling their shares at prices
substantial below the Offering price herein and still make a profit.
4. THERE IS NO PUBLIC MARKET FOR THE SHARES OF STANFORD AND THE SHARES MAY
NEVER BE QUOTED ON ANY EXCHANGE.
Prior to this Offering, there has been no public market for Stanford's shares
and there may never be an active trading market for Stanford's shares. A new
investor may not, once he or she has subscribed for the shares under this
Offering, be able to dispose of his shares when he wishes to and if he is able
to sell them privately he might not realize his original cost.
5. A MARKET MAKER MIGHT NOT BE ABLE TO BE MAINTAINED TO OVERSEE TRANSACTIONS
IN THE TRADING OF STANFORD'S COMMON SHARES AND IF NO MARKET MAKER IS
MAINTAINED THE TRADING SHARES MIGHT BE IMPAIRED.
If Stanford is unable to maintain at least one NASD broker/dealer as a market
maker, the liquidity of the common shock could be impaired, not only in the
number of shares of common stock which could be bought or sold, but also through
possible delays in the timing of transactions, and lower prices than might
otherwise prevail. Furthermore, the lack of market makers could result in
Stanford's shareholders being unable to buy or sell shares of its common stock
on any secondary market. Stanford may not be able to maintain such market
makers and hence new investors might not be able to sell their shares.
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6. PREEMPTIVE RIGHT AND CUMULATIVE VOTING RESTRICTIONS MIGHT AFFECT NEW
INVESTORS IN HAVING CONTROL IN THE DEVELOPMENT OF STANFORD.
In accordance with Stanford's Articles of Incorporation and By-laws, there are
no preemptive rights in connection with Stanford's common stock. This being the
case, Stanford's existing and new shareholders might have a dilution in their
percentage ownership of Stanford's stock in the event additional shares are
issued under this Form SB-2 or in subsequent financings. Moreover, cumulative
voting in electing directors is not provided for. Accordingly, the holder(s)
of a majority of Stanford's outstanding shares, present in person or by proxy,
will be able to elect all of its directors and thereby control Stanford. New
investors might never have the opportunity to have any voice in the activities
of Stanford and might eventually be deleted in ownership interest to a point
that they will never be able to effectively offer any opposition to the
activities of the control group.
RISKS ASSOCIATED WITH STANFORD
1. STANFORD HAS A LIMITED OPERATING HISTORY IN WHICH NEW INVESTORS CAN VALUE
THE PERFORMANCE OF STANFORD, ITS MANAGEMENT AND ITS FUTURE EXPECTATIONS.
Stanford commenced its operations in 1998 but only became involved in the
mineral exploration industry in January 2001. With no past operating history,
any meaningful evaluation of Stanford is difficult. Having been mainly inactive
since its inception, Stanford is basically a start-up company and therefore
there is no history available which will allow a new investor to assess its
business plan, its management and its future operations. Without these three
factors, a new investor cannot make a meaningful decision as to whether or not
the purchase of shares in Stanford is a wise investment.
2. STANFORD HAS A LACK OF WORKING CAPITAL WHICH, UNLESS OBTAINED ON ACCEPTABLE
TERMS IN THE FUTURE, WILL INHIBIT ITS FUTURE GROWTH STRATEGY.
The only present source of working capital available to Stanford is through the
sale of common shares, incurring debt or other borrowing. At present, Stanford
does not have adequate funds to conduct operations and financing may not be
available when needed. Even if the financing is available, it may be on terms
Stanford deems unacceptable or are materially adverse to shareholders' interests
with respect to dilution of book value, dividend preferences, liquidation
preferences, or other terms. Stanford's inability to obtain financing would
have a materially adverse effect on its ability to implement its growth
strategy, and as a result, could require it to diminish or suspend its
exploration program on the SF claim and possibly cease its operations. An
investor may be investing in a company that does not have adequate funds to
conduct its operations and, if so, an investor might lose all of his investment.
3. STANFORD HAS INCURRED LOSSES SINCE ITS INCEPTION AND THEREFORE HAS AN
ACCUMULATED DEFICIT WHICH MIGHT AFFECT OBTAINING FUTURE CAPITAL.
Since inception, Stanford has incurred losses and has an accumulative deficit of
$116,923 as at February 29, 2004. Stanford's ultimate success in fully
implementing its mineral exploration program on the SF claim is dependent on its
ability to raise additional capital. Having never made a profit or having had a
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cash flow will effect Stanford in being able to raise funds from the public
since there is no certainty Stanford will ever be able to make a profit. New
investors should carefully consider whether they wish to invest in a company who
has incurred continual losses since its inception and may never be able to
reverse this trend.
4. THE AUDITORS HAVE EXAMINED THE FINANCIAL STATEMENTS BASED ON STANFORD BEING
A GOING CONCERN BUT HAVE SUBSTANTIAL DOUBT THAT IT WILL BE ABLE TO CONTINUE
AS A GOING CONCERN.
Stanford's auditors, Amisano Hanson, in the audited financial statements
attached to this Form SB-2 for the year ended August 31, 2003, have stated in
their audit report the following:
"The accompanying financial statements referred to above have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial statements, the Company is in the pre-exploration stage, and
has no established source of revenue and is dependent on its ability to raise
capital from shareholders or other sources to sustain operations. These factors,
along with other matters as set forth in Note 1, raise substantial doubt that
the Company will be able to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty."
The auditors are concerned that Stanford, without any established source of
revenue and being dependent on its ability to raise capital from its
shareholders or other sources might not be able to sustain operations. If this
is the case, Stanford, without adequate future funding, might not be able to
continue as a going concern. A new investor should give careful consideration to
this fact since the capital they contribute to Stanford under this Offering may
be the only capital which Stanford is able to raise. This might result in
the total loss of the investor's investment.
5. ABSENCE OF CASH DIVIDENDS MAY AFFECT A SHAREHOLDER'S RETURN ON INVESTMENT.
The Board of Directors does not anticipate paying cash dividends on the
outstanding shares, both now and in the future, and intends to retain any future
earnings to finance its exploration activities on the SF claim or to seek
additional claims. Payment of dividends, if any, will depend, among other
factors, on earnings, capital requirements and the general operating and
financial condition of Stanford, and will be subject to legal limitations on the
payment of dividends out of paid-in capital. An investor should be aware that a
dividend, either in cash or shares, may never be paid by Stanford and,
therefore, the shares of Stanford should not be purchased by an investor as an
income producing security.
6. THERE IS AN ABSENCE OF RECENT EXPLORATION ACTIVITIES ON THE SF CLAIM OTHER
THAN SUFFICIENT EXPLORATION WORK TO MAINTAIN THE SF CLAIM IN GOOD STANDING
WHICH HAS NOT RESULTED IN AN ORE RESERVE BEING DISCOVERED OR ANY REVENUE
BEING DERIVED FROM THE SF CLAIM.
There has been no significant exploration activity on the SF claim in
recent years, except for limited exploration during 2002 by Stanford to maintain
the claim in good standing until 2005. Without a detailed work program being
undertaken on the SF claim, no ore reserve has been identified, and may never be
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identified, and no other exploration company or entity has made an offer to
purchase, lease or engage in any other transaction, such as a joint venture,
with respect to the SF claim. Although Stanford incurred only nominal expenses
to preserve its ownership and maintain the SF claim in good standing with the
Ministry of Energy and Mines for the Province of British Columbia, it has
received no revenue or other income from the SF claim. Investors should be
aware the SF claim might never prove to have a commercially viable ore reserve
and therefore will eventually lapse leaving Stanford with no mineral claim.
7. NO MATTER HOW MUCH MONEY IS SPENT ON EXPLORING THE SF CLAIM THERE MAY NEVER
BE AN ORE RESERVE FOUND.
No matter how much Stanford spends on exploration activities it may never
discover a commercially viable quantity of ore on the SF claim. Most
exploration activities do not result in the discovery of commercially mineable
deposits of ore. In fact, it is extremely remote that a mineral property will
become a producing mine. An investor should not consider, by purchasing shares
in Stanford under this Offering, that they are acquiring an interest in a future
exploration company since it is extremely unlikely Stanford will ever become a
viable company.
8. THE UNCERTAINTY OF THE TOPOGRAPHY OF THE SF CLAIM WILL HAVE AN EFFECT ON
THE FUTURE COST OF ANY EXPLORATION ACTIVITIES.
The SF claim is located on a fairly rugged hill with ridge topography ranging
from 2,400 to 4,000 feet in elevation with a steep canyon at the north part of
the claim. The SF claim is covered by a thin layer of glacial till. This
ruggedness in the overlying area could affect during exploration the location of
drilling sites and trenches, as well as the construction of any facilities.
Platforms might have to be constructed to allow a drilling rig to function
properly due to the unevenness of the ground. This will mean additional costs
depending upon the drilling site selected by the geologist in-charge with the
exploration activities. This factor, at the present time, is uncertain, and
Stanford does not know if this factor will have a material adverse effect on the
ability of Stanford to conduct its exploration activities. If the cost of
exploration is prohibitive, Stanford might have to cease its operations on the
SF claim. New investors should consider whether a more suitable investment for
them would be a recognized exploration company with mineral claims already in
operation and no longer in the exploration stage.
9. THERE MIGHT NOT BE CAPITAL AVAILABLE WHEN NEEDED FOR THE EXPLORATION OF THE
SF CLAIM DUE TO STOCK MARKET PRICES OR MINERAL PRICES AND, THEREFORE, THE
RIGHTS TO THE MINERALS ON THE SF CLAIM MIGHT LAPSE DUE TO NO WORK BEING
PERFORMED THEREON.
Traditionally, in the exploration industry, capital is available for exploration
when metal prices are higher and unavailable when lower or investors' interest
are directed to other industries; for example, oil and gas or hi-tech. In
situations such as these, Stanford will find it more difficult to raise capital
to carry on its exploration of the SF claim. If either the market price of
shares of quoted exploration companies or mineral prices fall in the future, the
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capital received from new investors under this Form SB-2 might be the only
capital Stanford is able to raise and therefore, if this is the case, the rights
to the minerals on the SF claim might lapse due to no work being performed on
the claim. New investors should give consideration to the vulnerability of a
company which is subject to declines in the stock market and mineral prices to
such an extent that it could lose the mineral rights to the SF claim.
10. TITLE TO THE SF CLAIM IS NOT HELD IN THE NAME OF STANFORD.
The title of the SF claim is held in trust by the staker of SF claim. Even
though the staker has signed a Bill of Sale Absolute, Stanford has not recorded
it with the Ministry of Mines and Energy for the Province of British Columbia.
Basically, Stanford, to record the Bill of Sale Absolute, must have a Free Miner
License. Due to its present lack of funds it has not purchased this license.
Therefore, the staker's creditors could lien the rights to the minerals on the
SF claim and offer these rights for sale to another party. If this happens,
Stanford will be without a mineral claim. Until the rights to the minerals on
the SF claim have been formerly transferred to Stanford, a new investor might be
wise to refrain from investing in any shares being offered under this Form SB-2.
11. THE SF CLAIM HAS NEVER BEEN SURVEYED AND THE EXACT BOUNDARIES OF THE CLAIM
ARE UNCERTAIN.
The exact boundaries of the SF claim are uncertain since the claim has never
been professionally surveyed. At this time, Stanford does not intend to
undertake the cost of having the SF claim surveyed and therefore it may never
know the exact boundaries of the claim. The problem in the future, if and when
Stanford identifies an ore reserve, is that disputes could develop with other
companies or parties as to the exact boundaries of the SF claim. If the ore
reserve is partly or totally on another party's claim, Stanford would lose
either the majority or part ownership in the ore reserve. Unless a mutually
acceptable agreement can be reached, Stanford would have to enter into legal
action which might take years and a great deal of money to settle. If Stanford
was unsuccessful in its legal battle, it would lose the ore reserve and might be
left with nothing to put into production. A new investor might consider this
risk factor prior to making a decision in investing in Stanford's shares since
the loss of part or all of any future ore reserve, if any, due to not
undertaking an initial survey on the SF claim could be very costly to Stanford
and have a detrimental effect on its share price.
12. WEATHER WILL AFFECT THE EXPLORATION ACTIVITIES ON THE SF CLAIM.
The weather in the Princeton area of British Columbia is varied in that during
the months of November to early May the SF claim will be covered in snow whereas
during the summer months the weather is hot and dry. Stanford might not be able
to work during the winter months due to the snow conditions not allowing any
meaningful exploration activities on the SF claim. Whereas, during the hot dry
summer months, the Ministry of Forestry might close the Princeton area for fear
of forest fires and therefore curtail any exploration activities on the SF
claim. The weather might have a limiting effect on the exploration activities on
the SF claim resulting in a longer period before Stanford will know if there is
a viable commercial ore reserve on the SF claim. New investors might want to
consider investing in a company where its mineral claims can be explored
year-round since Stanford's share price might experience wide fluctuations;
dropping during periods of inactivity on the SF claim and increasing in value
during exploration.
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13. STANFORD DOES NOT HAVE THE RIGHTS TO PLACER MINERALS ON THE SF CLAIM.
Stanford has not staked the SF claim for placer minerals located on the surface
of the claim and therefore does not have any rights to placer minerals thereon.
Stanford only has the rights to the minerals below the surface of the earth. In
the event a third party stakes the SF claim for placer minerals, Stanford would
lose any future opportunity to develop a placer deposit. By not having the
rights to placer minerals Stanford might forego future revenues, if and only if,
it were determined that such placer deposits, if any, were economical.
14. STANFORD HAS NOT ENTERED INTO ANY CONTRACTUAL AGREEMENT WITH ITS OFFICERS
AND DIRECTORS AND THEREFORE ANY TERMINATION ON THEIR PART WILL HAVE A
DAMAGING EFFECT OF THE OPERATION OF STANFORD.
Stanford's directors and officers have varied business interests and are working
for other companies. No member of management has signed a written employment
agreement with Stanford and Stanford cannot afford to pay management. In the
event, Glen Macdonald, William Nielsen or Vera McCullough decides to resign as
directors and officers of Stanford, Stanford may be unable to attract other
qualified officers and directors. An investor might have an ownership interest
in a company which is, in the future, controlled by a Board of Directors who do
not have the qualification to manage an exploration company.
15. THE PRESIDENT OF STANFORD HAS CLIENTS AND IS A DIRECTOR OF OTHER COMPANIES
IN THE EXPLORATION INDUSTRY WHICH MIGHT RESULT IN A CONFLICT OF INTEREST.
Glen Macdonald is a professional geologist who has numerous clients in the
exploration and mining industry. These clients use a considerable amount of his
time thereby reducing the time he can spend on the activities of Stanford. For
example, Mr. Macdonald is a director of Starfield Resources Inc., a mineral
exploration company quoted on the TSX Exchange in Toronto, Canada. A conflict of
interest could develop in the event Mr. Macdonald knows of a mineral property
for either sale or staking since he would have to offer it to both Starfield and
Stanford. Stanford assumes Mr. Macdonald will act fairly to both companies in
such matters but has no way of knowing if this will be the case. An investor
might want to consider whether he is interested in purchasing shares in a
exploration company where the President is involved with other companies in the
same business, unable to devote full time to the activities of Stanford and may
or may not give Stanford the opportunity to acquire properties of merit of which
he has knowledge.
16. WITH ONLY THE PRESIDENT OF STANFORD HAVING ANY EXPLORATION EXPERIENCE,
STANFORD MIGHT HAVE TO RELY UPON OUTSIDE CONSULTANTS TO ASSIST IN THE
EXPLORATION OF THE SF CLAIM.
Glen Macdonald is a professional geologist but Ms. McCullough has no experience
at all in the exploration industry. Mr. Nielsen has limited experience in the
mining industry. Stanford will be dependent on Mr. Macdonald's expertise in any
exploration program on the SF claim. Stanford will, if Glen Macdonald is
unavailable, have to rely on outside consultants who are familiar with the
exploration industry in British Columbia. Using consultants will be an expensive
way to explore the SF claims since consultant fees generally are higher than the
use of full or part time employees. Capital raised will quickly be spent if
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Stanford has to rely on consultants and not the services of Mr. Macdonald. New
investors might wish to consider if this is the way that they want their money,
from the purchase of shares, to be spent.
17. THE DIRECTORS AND OFFICERS DO NOT WORK FULL TIME ON THE AFFAIRS OF STANFORD
AND THIS LIMITED TIME MIGHT HAVE AN ADVERSE EFFECT ON THE OPERATION OF
STANFORD.
Both Glen Macdonald, William Nielsen and Vera McCullough work approximately 5
hours each during a given month due to having other job commitments. Therefore,
Stanford does not have full time staff working for it which might have the
effect of lengthening the time it will take for the exploration on the SF claim
to either realize there is an ore reserve associated with it or that Stanford
should consider other properties. An investor might wish to consider, before
purchasing shares in Stanford, as to whether they wish to be involved in a
company where the directors and officers work only a few hours a month on its
activities.
18. STANFORD DOES NOT HAVE THE FUNDS AVAILABLE TO PURCHASE AN INSURANCE POLICY
TO PROTECT ITSELF IN THE EVENT ITS DIRECTORS AND OFFICERS DEPARTS.
Stanford does not have an insurance policy for loss of its directors and
officers since it is not prepared to currently pay the premiums for such a
policy. In the event Mr. Macdonald departs Stanford, there will be no insurance
proceeds to entice another geologist to become an officer and director of
Stanford and no other members of the present management team have a geological
background. This lack of insurance proceeds might result in Stanford not being
able to obtain an individual with the qualifications it desires. With Stanford
unwilling to pay the premiums of an insurance policy due to its lack of capital,
a new investor might wish to consider a company where there is a larger
management team, some of the members having a professional geological
designation, in the event that one departure will not affect the future
operations of the company.
19. STANFORD HAS ENTERED INTO INDEMNITY AGREEMENTS WITH ITS OFFICERS AND
DIRECTORS WHICH COULD RESULT IN SUBSTANTIAL EXPENDITURES AND MAYBE MONETARY
DAMAGES AS A RESULT OF THEIR ACTIONS.
Stanford's Articles of Incorporation provide that it may indemnify any director,
officer, agent or employee against certain liabilities. In addition, on
September 30, 2002, Stanford entered into an Indemnity Agreement with both Glen
Macdonald and Vera McCullough - refer to Exhibit 99.2. The foregoing
indemnification could result in substantial expenditures by Stanford and prevent
any monetary recovery from them for losses incurred by Stanford as a result of
their actions. It is Stanford's understanding that, in the opinion of the SEC,
indemnification is against public policy as expressed in the Security Act of
1933, as amended, and is, therefore, unenforceable. Nevertheless, a new
shareholder might not wish to invest in a company who has indemnified its
officers and directors for their actions which could result in substantial legal
costs and court ordered penalties which might render Stanford insolvent.
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FORWARD LOOKING STATEMENTS
This Form SB-2 contains certain forward-looking statements. Such
forward-looking statements include, but are not limited to, statements regarding
Stanford's future plans regarding the exploration of the SF claim and the
planned use of proceeds. Actual results could differ from those projected in
any forward-looking statement. The forward-looking statements are made as of
the date of this Form SB-2 and Stanford assumes no obligation to update such
forward-looking statements, or to update the reasons why actual results may
differ from those projected in the forward-looking statements. Numerous
factors, including without limitation those factors mentioned in the above Risk
Section of this Form SB-2, could cause future results to differ substantially
from those contemplated in such forward-looking statements. A number of the
factors that may influence future results of operations are outside Stanford's
control.
ITEM 4. USE OF PROCEEDS
The primary purpose of this Offering is to provide additional capital required
to support Stanford's continued exploration of the SF mineral claim. The use
of proceeds under this Offering, at various subscription levels, will be as
follows:
$50,000 % $100,000 % $150,000 % $200,000 %
------- -- ------- -- ------- -- ------- --
Offering expenses
(Item 25). . . . . . . $ 16,500 33.00 $ 16,715 16.72 $ 16,930 11.29 $ 17,200 8.60
Estimated exploration
Program
(page 39). . . . . . . 21,550 43.10 21,550 21.55 21,550 14.36 21,550 10.78
Estimated Phase 11 (i) - - 50,000 50.00 50,000 33.33 50,000 25.00
Payment to creditors
other than related
parties (iii) . . . . 25,561 51.12 25,561 25.56 25,561 17.04 25,561 12.78
Working
capital. . . . . . . . (13,611) (27.22.) (13,826) (13.83) 35,959 23.98 85,689 42.84
--------- --------- --------- --------- -------- ------ -------- ------
$ 50,000 100.00 $100,000 100.00 $150,000 100.00 $200,000 100.00
========= ========= ========= ========= ======== ====== ======== ======
(i) Depending upon the results of prospecting the SF claim and the soil sample
results obtained, as recommend by John Jenks on page 39, a secondary
exploration program might be warranted. Further prospecting and soil
sampling might be considered to identify an area of interest whereby a
drilling program will be contemplated. Stanford has estimated $50,000 for
Phase II which includes a drilling program as indicated on page 43.
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(ii) The net proceeds of the Offering remaining in working capital will be
invested in short-term, interest bearing-investments or accounts.
(iii) The settlement of accounts owed to creditors from the proceeds of this
Offering will be as follows:
Offering Balance to
Creditiors to be paid Amount (a) Expenses (b) be paid
- ---------------------- ----------- ------------- --------
Accounting (c) . . . . $ 9,987 $ 3,000 $ 6,987
Annual General
Meeting. . . . . . . . 1,158 - 1,158
Auditing (c) . . . . . 3,269 2,000 1,269
Consulting . . . . . . 5,000 - 5,000
Miscellaneous (c). . . 208 - 208
Office (c) . . . . . . 4,664 - 4,664
Transfer agent (d) . . 6,275 - 6,275
----------- ------------- --------
Total payment. . . . . $ 30,561 $ 5,000 $ 25,561
=========== ============= ========
(a) Represents the amount outstanding as indicated under Item 17 - Management
Discussion and Analysis or Plan of Operation - (a) Plan of Operation as
indicated on page 46. These figures are as at February 29, 2004.
(b) To avoid double accounting, the amount accrued under Item 25 - Other
Expenses of Issuance and Distribution on page 72, the accounting and audit
costs have been deducted as noted above.
(c) There is no interest or maturity dates associated with these outstanding
accounts payable.
(d) The interest charge by the transfer agent is 1 percent per month on the
outstanding balance. There is no maturity dated associated with the amount
outstanding.
The foregoing represents Stanford's best estimate of its use of the proceeds
derived from this Offering based on its present plans, the state of its business
operations and current conditions in the exploration industry which Stanford
operates. Stanford reserves the right to change the use of proceeds if
unanticipated regulatory or competitive conditions adversely affect Stanford.
The only other situation where the use of proceeds would be changed is where
Glen Macdonald recommends to the Board of Directors an increase in exploration
expenses on the SF claim. This would have the effect of reducing the working
capital position and increasing the exploration program costs.
The cost, timing and amount of funds Stanford needs cannot be precisely
determined at this time and will be based on numerous factors.
Other than indicated above, the proceeds from this Offering will not be used to
discharge debts to related parties. In addition, it is anticipated that the
proceeds will not be used to acquire assets or finance the acquisition of other
businesses.
-15-
As noted under Item 17 - Management's Discussion and Analysis or Plan of
Operations, if the minimum Offering is subscribed for there will not be adequate
funds available to meet the cash requirements over the next twelve months. If
this is the situation the directors will have to advance funds to Stanford to
maintain it in good standing for the twelve-month period. Glen Macdonald has
indicated he will provide sufficient capital to ensure Stanford does not lose
the rights to the SF claim and become a blank check company. No agreement or
written commitment has been entered into between Glen Macdonald and Stanford.
Upon the Effective Date of this Form SB-2 filed under the Securities Act by
Stanford, Stanford shall report the use of proceeds on its first periodic report
filed pursuant to sections 13(a) and 15(b) of the Exchange Act (15 U.S.C. 78m(a)
and 78o(d)) after effectiveness of its Form SB-2, and thereafter on each of its
subsequent periodic reports filed pursuant to sections 13(a) and 15(d) of the
Exchange Act through the latter of disclosure of the application of all the
Offering proceeds, or disclosure of the termination of the Offering.
ITEM 5. DETERMINATION OF OFFERING PRICE
----------------------------------------
Since Stanford's shares of common stock are not listed or quoted on any exchange
or quotation system, the offering price of the shares of its common stock was
arbitrarily determined. The facts considered in determining the Offering price
were Stanford's financial condition and prospects, its limited operating history
and the general condition of the securities market. The Offering price is not
an indication of and is not based upon the actual value of Stanford. The
Offering price bears no relationship to Stanford's book value, assets or
earnings or any other recognized criteria of value. The Offering price should
not be regarded as an indicator of the future market price of Stanford's
securities.
ITEM 6. DILUTION
-----------------
As at February 29, 2004, Stanford had a negative net tangible book value of
$42,173 or a negative $0.018 per share based on the existing outstanding shares
of 2,358,500.
The following analysis sets forth the net tangible book value per share before
and after distribution, the amount of the increase in such net tangible book
value per share attributable to the cash payments made by the new shareholders
of the shares being offered and the amount of the immediate dilution from the
public offering price which will be absorbed by the new shareholders.
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At various subscriptions levels
$50,000 $100,000 $150,000 $200,000
----------- ----------- ----------- -----------
Price per share. . . . . . . . $ 0.20 $ 0.20 $ 0.20 $ 0.20
Net negative tangible book
Value per share before
Offering . . . . . . . . . . . $ (42,173) $ (42,173) $ (42,173) $ (42,173)
Net tangible book value per
share after this Offering. . . $ 7,827 $ 57,827 $ 107,827 $ 157,827
Immediate dilution per share
To new shareholders. . . . . . $ (0.197) $ (0.180) $ (0.165) $ (0.153)
Increase in net tangible book
value per shares attributed
to cash payments by new
shareholders (i) . . . . . . . $ 0.003 $ 0.020 $ 0.035 $ 0.047
Number of shares held by
new shareholders . . . . . . . 250,000 500,000 750,000 1,000,000
Total shares outstanding
after this Offering. . . . . . 2,608,500 2,858,500 3,108,500 3,358,500
Percentage ownership by
new sharesholders. . . . . . . 9.6% 17.5% 24.1% 29.8%
Percentage ownership by
existing shareholders after
this Offering. . . . . . . . . 90.4% 82.5% 75.9% 70.2%
(i) The amount contributed by the existing shareholders are as follows:
Shareholders who paid $0.001 per share $ 2,015
Shareholders who paid $0.01 per share 3,435
-----
Total contributions to shares $ 5,450
======
Number of shares purchased by original shareholders 2,358,500
---------
Average price per share $ 0.002
----------
As can be determined from the above analysis, new investors will immediately
suffer a loss in the amount they contribute to Stanford on a per share basis
whereas the original shareholders will realize an immediate increase in their
per share value with no further investment on their part other than their
original investment.
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There are no outstanding stock options, warrants or rights which, if
outstanding, would have caused further dilution to the new investors.
All shares to be issued under this Form SB-2 will be for cash consideration
only. No shares will be issued in consideration of amounts owed by Stanford to
either third or related parties. Vera McCullough will purchase 25,000 shares
under this Offering for cash consideration only.
ITEM 7. SELLING SECURITY HOLDERS
There are no selling securities holders under this Form SB-2.
ITEM 8. PLAN OF DISTRIBUTION
Up to 1,000,000 shares of common stock of Stanford will be sold under this Form
SB-2 if all shares offered are subscribed for. Stanford is not using the
services of an underwriter and therefore is under no underwriting obligations
since it will self-underwrite this Offering. No compensation, in either cash
or shares, will be paid to any director, officer, finder or another third party
for assisting in selling any securities under this Offering.
The directors and officers will not be registered as a broker-dealer pursuant to
Section 15 of the Securities Act of 1934 in reliance upon Rule 3(a) 4-1. Rule
3(a) 4-1 sets forth those conditions under which a person associated with
Stanford may participate in the
Offering of Stanford's securities and not be deemed to be a broker-dealer. The
conditions are that:
1. None of such persons are subject to a statutory disqualification, as that
term is defined in Section 3(a)(39) of the Act, at the time of his
participation;
2. None of such persons are compensated in connection with his or her
participation by the payment of commissions or other remuneration based
either directly or indirectly on transactions in securities;
3. None of such persons are, at the time of his participation, an associated
person of a broker-dealer; and
4. All of such persons meet the conditions of Paragraph (a)(4)(ii) of Rule
3a4-1 of the Exchange Act, in that they (a) primarily perform, or are
intended primarily to perform at the end of the offering, substantial
duties for or on behalf of Stanford otherwise than in connection with
transactions in securities; and (b) are not a broker or dealer, or an
associated person of a broker or dealer, within the preceding twelve
months; and (c) do not participate in selling and offering of securities
for Stanford more than once every twelve months other than in reliance on
Paragraphs (a)(4)(i) or (a)(4)(iii).
This Offering will commence on the Effective Date of this Form SB-2 and
continue for a 12-month period thereafter. If Stanford is unable to sell the
minimum number of shares under this Offering, it will update this Form SB-2 and
continue the Offering for an additional 12 months from the date of the updating
of this Form SB-2. The procedure for purchasing shares is as follows:
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1. The investor will execute and deliver a Share Subscription Agreement (the
"Agreement") in the format as indicated in Exhibit 99.1. The Agreement is
the investor's acceptance of Stanford's offer to sell him or her shares of
common stock. Stanford will review the executed Agreement and decide if it
will accept the offer to buy its common shares. If Stanford accepts, the
Agreement will be signed by an authorized signatory of Stanford and a copy
will be returned to the subscriber.
2. The investor will deliver a check or certified funds to Stanford for the
acceptance or rejection.
All checks for the purchase of shares must be made payable to "Stanford
Management Ltd."
Stanford has the right to accept or reject subscriptions in whole or in part,
for any reason or for no reason. All funds received from rejected Agreements
will be returned immediately to the subscriber, without interest or deductions.
Subscriptions for securities will be accepted or rejected within 48 hours after
Stanford receives the Agreements.
The estimated fees and expenses, which will be paid by Stanford, associated with
the issuance and distribution of the securities being registered are more fully
described under Item 25 - Other Expenses of Issuance and Distribution.
ITEM 9. LEGAL PROCEEDINGS
Stanford is not aware of any pending legal proceeding contemplated by a
governmental authority, or concerning its business or the SF claim, that
involves primarily a claim for damages in excess of ten percent of current
assets excluding interest and costs. As of the date of this filing, Stanford is
not a party to any legal proceeding, either as plaintiff or defendant. Thus,
the financial statements have not been adjusted to reflect any material
uncertainty regarding exposure to liability in legal proceedings.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
DIRECTORS, EXECUTIVE OFFICERS AND PROMOTERS
The name, municipality of residence, position held within Stanford, principal
occupation of each of the directors and officers and the date the individual was
first elected or appointed are set forth in the following table. Each director
is to serve until the Annual Meeting of Shareholders or until his or her
successor is elected or appointed. Unless otherwise indicated, each director
and officer has been engaged for the past five years in the specified principal
occupations or in other executive capacities with the companies or firms
referred to, or with affiliates or predecessors thereof.
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NAME AND
MUNICIPALITY OF POSITION OR OFFICE WITHIN YEAR
RESIDENCE STANFORD BECAME A DIRECTOR
Glen Macdonald. . Chief Executive Officer, 2002 (2)
Vancouver . . . . President and
British Columbia. Director (1)
Canada. . . . . .
Vera McCullough . Chief Financial Officer, 2001 (3)
Vancouver . . . . Secretary-
British Columbia. Treasurer and
Canada. . . . . . Director (1)
William Nielsen Chief Accounting Officer and 2003 (4)
Burnaby Director
British Columbia.
Canada. . . . . .
(1) Directors who are members of the Audit Committee.
(2) Glen Macdonald was appointed a Director on October 23, 2002, President on
October 24, 2003 and Chief Executive Officer on August 8, 2003.
(3) Vera McCullough was appointed a Director and Secretary Treasurer on May 21,
2001 and Chief Financial Officer on August 8, 2003.
(4) William Nielsen appointed Chief Accounting Officer on August 8, 2003.
Audit Committee
The Audit Committee of Stanford currently consists of Glen Macdonald and Vera
McCullough. The Audit Committee has received and discussed the audited
financial statements. Glen Macdonald, on behalf of the Audit Committee, has
discussed with the independent auditors the matters required to be discussed by
SAS 61 and has received the written disclosures and the letters from the
independent accountants required by Independence Standards Board Standard No. 1.
Based on the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Stanford's Form SB-2.
The overall general function of the audit committee is to review the overall
audit plan and Stanford's system of internal control, to review the results of
the external audit, and to resolve any potential dispute with Stanford's
auditors. The percentage of common shares beneficially owned, directly or
indirectly, or even which control or direction is exercised by all directors and
officers of Stanford, collectively, is approximately 17 percent of the total
issued and outstanding shares. The directors will be appointing 2 independent
members of the Audit Committee; each one being a non-director and non-officer of
Stanford. These individuals have not yet been identified.
-20-
The following are biographies of the directors and officers of Stanford.
GLEN MACDONALD, 55, attended the University of British Columbia and obtained
degrees in economics and geology in 1972 and 1973 respectively. He attended the
Masters Program for Artic engineering at the University of Alaska for a year but
did not graduate with his Masters Degree due to family matters. He is a member
of the Alberta Professional Engineers, Geologists and Geophysicists Association
and a member of the British Columbia Association of Professional Engineers and
Geoscientists. He has experience in grade control and ore reserve definition at
2000 plus tons per day underground mine and has been a project manager for
exploration programs with budgets that exceed $2,000,000. Between 1973 and
1974, Mr. Macdonald worked as a geologist for Whitehorse Copper Mines Ltd. in
the Yukon where his duties involved exploration activities around the mine as
well as grade control underground. In 1975, Mr. Macdonald was employed as
Exploration Project Manager with Noranda Mines Ltd in the Yukon and parts of the
North West Territories in Canada where he was in-charge of projects that ranged
from regional exploration to ore definition drilling programs for feasibility
scooping studies. Noranda Mines is involved in base metal exploration, being
metals other than precious metals such as gold and silver, such as copper and
zinc and to a much lesser extent in gold and silver. As District Manager, Mr.
Macdonald was responsible for identifying mineral properties of merit for either
joint venture with other companies or the outright purchase of the mineral claim
in question. Mr. Macdonald was also responsible for a project which included
design and management of a placer mine which was a 2 to 3 year project employing
up to 10 professional staff plus ancillary personnel. In addition, he was
responsible for the identification, design and management of a joint venture
project between Noranda Mines and Westinghouse to look for tungsten in the North
West Territories and Alaska. In 1983, Mr. Macdonald left his position with
Noranda and became an independent consultant. Betweeen 1983 and 2002, he has
worked as a consultant for a number of junior and major explorationcompanies;
some of which include AGIP, Tenajon Resources, Ashton Mines and American Express
Leasing. As a consultant his duties included the design, implications and
management of core drilling projects either in British Columbia, North West
Territories or the Yukon. In the designing, implicating and managing of the
various exploration programs for his clients he was responsible for the
prospecting, mapping, undertaking various geochemcial surveys which would lead
to the eventual acquisition of the mineral claim under examination. In
addition, his responsibilities included mine resources definition for
extraction, project results analysis, project design and management, government
liason, report writing for professional corporate purposes and general corporate
direction. During 2002 and 2003, he acted as exploration manager for New
Shoshoni Ventures Ltd where he negotiated the acquisition of Drybones Bay
Kimberlite Ltd which had been inactive for the past five years. Within this
company was a property containing diamond bearing kimberlite (a mineral which
occurs in vertical pipes, dikes and sills and is the principal original
environment of diamonds) and Mr. Macdonald designed the program required to
further the geophysical and other exploration techniques to allow a decision to
be made to commence a winter drill program on the property. This has lead to
the discovery of a new diamond bearing kimberlite.
VERA McCULLOUGH, 55, graduated from New Westminister Senior Secondary in 1965
and was subsequently employed with BC Telephone where she became Supervisor of
Operations responsible for scheduling and hiring. In 1972 she left her position
at BC Telephone and started work for Brothers Electric Ltd. of Vancouver,
British Columbia; an electrical contracting company doing work in both the
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commercial and residential housing area. Her position in Brothers Electric Ltd
was as Comptroller in which her responsibilities included overseeing the
estimating of various commercial and residential jobs, setting up budgets for
over all review by management, accounting for accounts receivable and answering
any complaints from customers, ensuring adequate controls were established over
accounts payable and ensuring timely payment of all outstanding invoices,
control over payroll including remittances to the various governmental agencies,
reviewing complaints from staff members and assisting, where possible, in the
annual evaluation of personnel, and overseeing the daily operations of the
office and warehouse facilities. She was employed by Brothers Electric Ltd
until 2001 when she retired, having worked for the company for 29 years. Other
than being Chief Financial Officer, Secretary Treasurer and Director of
Stanford, Mrs McCullough is not seeking any employment with any other firm or
organization.
WILLIAM SCHELL NIELSEN, (60), obtained a degree as an Registered Industrial
Accountant while attending the University of Alberta in Calgary, Alberta. In
(year) he received a degree in Business Administration and Accounting while
living in Hamilton, Bermuda. In 1964 Mr. Nielsen worked as General Manager for
Major Supplies Ltd. in Sechelt, British Columbia, Canada which was a company
retailing and wholesaling lumber, tools, hardware, electrical and automotive
supplies. He was responsible for sales, installation and servicing of major
domestic and commercial appliances for Inglis/Whirlpool and Sears Canada Ltd.
In 1984, he became Branch Manager for Inglis Limited in Surrey, British Columbia
where he was responsible for starting up the new Inglis service branch by
establishing inventory requirements, determining staff levels and overall
responsibility for service technicians and the customer service center. During
this period, Mr. Nielsen was responsible for accounting for all branch profits
and computerizing the entire operations. In 1992, he was transferred by
Inglis/Whirlpool Corporation to Mississauga, Ontario as District Manager and
Accountant where he was responsible for the management of parts inventory and
sales distribution for 32 Inglis Service Depots throughout British Columbia.
In addition, he was responsible for the development of new sales areas and the
accounting for all assets under his control. In 1997, he became Chief
Accountant and Administrator for Zarcan Minerals Inc. of Vancouver, British
Columbia where he was responsible for managing all company financial
transactions, including budgeting, preparation of all financial information for
distribution to Directors and shareholders, income tax preparation and payroll.
In 2002 he left this position to work full time with a business consulting
company, Nielsen-Popek & Associates, Certified Public Accountants, which he had
originally established in 1980. This firm is an established consulting business
offering ongoing evaluations, assessments, management development programs,
accounting and income tax preparation to small and medium sized companies.
Glen Macdonald holds a directorship on the following reporting companies:
Starfield Resources Inc. (OTC.BB - SRFDF and TSX - SRU)
Thelon Ventures Ltd. (TSX - THV)
Otish Mountain Ventures Inc. (TSX - OTS)
Golden Caribou Resources Ltd. (TSV - GCC)
Solitaire Minerals Corporation (TSV - SLT)
Vera McCullough and William Nielsen do not hold a directorship position on any
other reporting companies.
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Family Relationships
There are no family relationships among directors, executive officers, or
persons nominated or chosen by Stanford to become directors or executive
officers.
Significant Employees, Full and Part time and Hours Worked
Other than the three directors of Stanford, Glen Macdonald, William Nielsen and
Vera McCullough, Stanford has no other employees. If Glen Macdonald is not
available during the exploration of the SF claim, Stanford will have to consider
hiring consultants to oversee the exploration activities. The consultants would
only be hired for the duration of the exploration program and once it has been
completed they will no longer be engaged in any activities of Stanford.
Stanford does not wish, at the present time due to lack of capital, to retain
employees during periods when the SF claim is not being explored.
Glen Macdonald, William Nielsen and Vera McCullough do not work full time for
Stanford. They may each spend up to 5 hours a month on administrative work for
Stanford - refer to Risk Factor #17 on page 13. During the exploration program,
it is anticipated Glen Macdonald will spend approximately 20 hours a week on
supervising the program. Mr. John Jenks, whose exploration budget is shown on
page 39, has no agreement with Stanford to serve as a consultant or to work for
Stanford in any other capacity.
Involvement in Certain Legal Proceedings
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 Stanford:
(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
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(iii) engaging in any activities in connection with the purchase or sale of
any security or commodity or in connection with any violation of
federal or state securities laws or federal commodities laws;
(4) was the subject of any order, judgment, or decree, not subsequently
reversed, suspended, or vacated, of any federal or state authority barring,
suspending or otherwise limiting for more than 60 days the right of such
person to engage in any activity described above under this Item, or to be
associated with persons engaged in any such activities;
(5) was found by a court of competent jurisdiction in a civil action or by the
Securities and Exchange Commission to have violated any federal or state
securities law, and the judgment in such civil action or finding by the
Securities and Exchange Commission has not been subsequently reversed,
suspended, or vacated.
(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.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF MANAGEMENT AND BENEFICIAL OWNERS
The following table sets forth information regarding the beneficial ownership of
shares of Stanford's common stock as of March 31, 2004 (2,358,500 shares issued
and outstanding) by all directors, executive officers and beneficial owners.
TITLE OR NAME AND ADDRESS OF AMOUNT OF PERCENT OF
CLASS BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP (2) CLASS
- ----------------------------- ------------------------------- ------------------------ ----------
Common Glen Macdonald
Stock 420 - 625 Howe Street
. . . . . . . . . . . Vancouver, British Columbia
. . . . . . . . . Canada, V6C 2T6 400,000 (3) 17
Common. Vera McCullough
Stock 40 Sweetwater Place
. . . . . . . . . . Lions Bay, British Columbia
. . . . . . . . . Canada, V0N 2E0 Nil (4) Nil
Common William Nielsen
Stock 93 - 7501 Cumberland Street
. . . . . . . . . . . Burnaby, British Columbia
. . . . . . . . . . Canada, V3N 4Y6 Nil Nil
Common. . . . . . . . . . . Ownership of all Directors and
Stock . . . . . . . . . Officers as a group 400,000 17
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(1) Mr. Macdonald has sole voting power and sole dispositive power as to all of
the shares shown as beneficially owned by him.
(2) Under Rule 13-d of the Exchange Act, shares not outstanding but subject to
options, warrants, rights and conversion privileges pursuant to which such
shares may be required in the next 60 days are deemed to be outstanding for
the purpose of computing the percentage of outstanding shares owned by the
person having such rights, but are not deemed outstanding for the purpose
of computing the percentage for such other persons. None of the directors
or officers of Stanford have any options, warrants, rights or conversion
privileges outstanding.
(3) The shares held by Glen Macdonald are restricted since they were issued to
a former director in compliance with an exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended. After
these shares have been held for one year, Mr. Macdonald could sell a
percentage of his shares based on one percent of the issued and outstanding
shares of the Stanford. In other words, Mr. Macdonald's shares can be sold
after the expiration of one year in compliance with the provisions of Rule
144. The share certificate bears a 'stop transfer' legend on it. As at
March 31, 2004, the number of shares which could presently be sold pursuant
to Rule 144 is 23,585 shares.
(4) Vera McCullough presently does not own any shares in Stanford but is
planning to acquire for cash 25,000 shares under this Offering. When issued
these shares will be restricted from trading in compliance with an
exemption from registration provided by Section 4(2) of the Securities Act
of 1933, as amended. After these shares have been held for one year, Mrs.
McCullough could sell a percentage of her shares based on one percent of
the issued and outstanding shares of Stanford. In other words, Mrs.
McCullough's shares can be sold after the expiration of one year in
compliance with the provisions of Rule 144. The share certificate will have
a 'stop transfer' legend stamped on it.
Presently the control position is the 400,000 shares held by Glen Macdonald
which represents 17% of the issued shares. With the purchase of 25,000 shares
by Vera McCullough, the new control percentage in relationship to the issued
shares at the various subscription levels will be as follows:
Directors' and Officers'
Shares Number of shares Control
Subscribed for after Offering Percentage
- --------------- --------------- ----------
250,000 2,608,500 16.29%
500,000 2,858,500 14.87%
750,000 3,108,500 13.67%
1,000,000 3,358,500 12.65%
At various levels of subscription for shares under this Form SB-2, the total
number of shares outstanding increases and the percentage ownership by the
directors and officers decreases.
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ITEM 12. DESCRIPTION OF SECURITIES
The securities being offered are shares of common stock. The authorized capital
of Stanford consists of 25,000,000 common shares with a par value of one tenth
of a cent ($0.001) per share, amounting to twenty five thousand dollars
($25,000). The holders of common stock shall:
- - have equal ratable rights to dividends from funds legally available
therefore, when, as, and if declared by the Board of Directors of Stanford;
- - are entitled to share ratably in all of the assets of Stanford available
for distribution upon winding up of the affairs of Stanford; and
- - are entitled to one non-cumulative vote per share on all matters on which
shareholders may vote at all meetings of shareholders.
The shares of common stock do not have any of the following rights:
- - preference as to dividends or interest;
- - preemptive rights to purchase in new issues of shares;
- - preference upon liquidation; or
- - any other special rights or preferences.
In addition, the shares are not convertible into any other securities. There
are no restrictions on dividends under any loan agreements.
Non-Cumulative Voting.
The holders of shares of common stock of Stanford do not have cumulative voting
rights, which means that the holders of more than 50% of such outstanding
shares, voting for the election of directors, can elect all of the directors to
be elected, if they so choose. In such event, the holders of the remaining
shares will not be able to elect any of Stanford's directors.
Dividends
Stanford has not declared or paid any dividends on its common stock. It does
not currently anticipate paying any cash dividends in the foreseeable future on
its common stock, when issued pursuant to this Offering. Although Stanford
intends to retain its earnings, if any, to finance the exploration and growth of
the SF claim, its Board of Directors will have the discretion to declare and pay
dividends in the future. Payment of dividends in the future will depend upon
Stanford's earnings, capital requirements, and other factors, which its Board of
Directors may deem relevant.
Because Stanford does not intend to make cash distribution by way of dividends,
potential shareholders would need to sell their shares to realize a return on
their investment. There can be no assurance that the Offering price of $0.20
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per share as indicated in this Form SB-2 will be able to be realized by any
shareholder liquidating their share position in the future. A distribution of
revenues will be made only when, in the judgment of Stanford's Board of
Directors, it is in the best interest of Stanford's stockholders to do so.
Change in Control of Stanford
Stanford does not know of any arrangements which might result in a change in
control.
Registered Office
Stanford has engaged the service of Chennell Mowbray, The Company Corporation,
1013 Centre Road, Wilmington, DE 19805, to act as registrar.
Transfer Agent
Stanford has engaged the services of Nevada Agency & Trust Company, Suite 880,
50 West Liberty Street, Reno, Nevada, 89501 to act as transfer agent.
Debt Securities and Other Securities
There are no debt securities outstanding or any other form of securities.
ITEM 13. INTEREST OF NAMED EXPERTS AND COUNSEL
Other than as set forth below, no named expert or counsel was hired on a
contingent basis, will receive a direct or indirect interest in Stanford, or was
a promoter, underwriter, voting trustee, director, officer, or employee of
Stanford.
Stanford's auditors are Amisano Hanson, Chartered Accountants, 604-750 West
Pender Street, Vancouver, British Columbia, Canada, who examined the financial
statements of Stanford for the five years ended August 31, 2003 in conformity
with accounting principles generally accepted in the United States. The fee
paid to Amisano Hanson was $7,420; an accrual of $750 has been made in the
accounts for the six months ended February 29, 2004.
ITEM 14. DISCLOSURE OF COMMISSION POSITIONS ON INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers, and controlling persons of Stanford
pursuant to the following provisions or otherwise, Stanford has been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in such act, and is
therefore unenforceable.
Section 102(b)(7) of the Delaware General Corporation Law ("DGCL") enables a
corporation in its original certificate of incorporation or an amendment thereto
to eliminate or limit the personal liability of a director to a corporation or
its stockholders for violations of the director's fiduciary duty, except:
- - for any breach of a director's duty of loyalty to the corporation or its
stockholders;
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- - for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- - pursuant to Section 174 of the DGCL (providing for liability of directors
for unlawful payment of dividends or unlawful stock purchases or
redemptions); or
- - for any transaction from which a director derived an improper personal help
Section 145 of the DGCL provides, in summary, that directors and officers of a
Delaware corporation are entitled, under certain circumstances, to be
indemnified against all expenses and liabilities (including attorney's fees)
incurred by them as a result of suits brought against them in their capacity as
a director or officer, if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, if they had
no reasonable cause to believe their conduct was unlawful; provided, that no
indemnification may be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable to the
corporation, unless and only to the extent that the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, they
are fairly and reasonably entitled to indemnity for such expenses which the
court shall deem proper. Any such indemnification may be made by the
corporation only as authorized in each specific case upon a determination by the
stockholders or disinterested directors that indemnification is proper because
the indemnity has met the applicable standard of conduct.
The Articles of Incorporation contain provisions which, in substance, eliminate
the personal liability of the Board of Directors and officers of Stanford and
its shareholders from monetary damages for breach of fiduciary duties as
directors to the extent permitted by Delaware law. By virtue of these
provisions, and under current Delaware law, a director of Stanford will not be
personally liable for monetary damages for breach of fiduciary duty, except
liability for:
a. breach of his duties of loyalty to Stanford or to its shareholders;
b. acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
c. dividends or stock repurchase or redemptions that are unlawful under
Delaware law; and
d. any transactions from which he or she receives an improper personal
benefit.
These provisions pertain only to breaches of duty by individuals solely in the
capacity as directors, and not in any other corporate capacity, such as an
officer, and limit liability only for breaches of fiduciary duties under
Delaware law and not for violations of other laws (such as Federal securities
laws). As a result of these indemnification provisions, shareholders may be
unable to recover monetary damages against directors for actions taken by them
that constitute negligence or gross negligence or that are in violation of their
duties, although it may be possible to obtain injunctive or other equitable
relief with respect to such actions.
The inclusion of these indemnification provisions in Stanford's By-laws may have
the effect of reducing the likelihood of derivation litigation against
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directors, and may discourage or deter shareholders or management from bringing
lawsuit action, which if successful, might otherwise benefit Stanford or its
shareholders.
Stanford has entered into separate Indemnification Agreements with Glen
Macdonald and Vera McCullough containing provisions that provide for the maximum
indemnification allowed to directors and officers under Delaware law - refer to
Exhibit 99.2. Stanford, among other obligations, will indemnify such directors
and officers against certain liabilities that may arise by reason of their
status as directors and officers, other than liabilities arising from willful
misconduct of a culpable nature, provided that such persons acted in good faith
and in a manner that they reasonably believed to be in or not opposed to the
best interest of Stanford and, in the case of criminal proceeding, had no
reasonable cause to believe that his or her conduct was unlawful. In addition,
the indemnification agreement provides generally that Stanford will, subject to
certain exceptions, advance the expenses incurred by directors and officers as a
result of any proceedings against them as to which they may be entitled to
indemnifications. Stanford believes these arrangements are necessary to
attract and retain qualified persons as directors and officers.
ITEM 15. ORGANIZATION WITHIN LAST FIVE YEARS
Stanford yet been in existence for a period of five years but has during the
time since its inception accomplished the following:
1. The incorporating director was Philip Yee of Vancouver, British Columbia
who organized Stanford and raised the initial seed capital from the
existing shareholders.
2. During his time as the sole officer and director of Stanford, Mr. Yee
identified a software protocol program for the restaurant industry whereby
a wireless menu system could be implicated. Unfortunately the demand for
such a program was not present and the project was abandoned in 2001.
Subsequently in January 2001 the SF Claim was staked for Stanford.
3. Stanford engaged the services of John Jenks, Professional Geologist to
prepare a report on the SF mineral claim and to recommend a program of
exploration (as more fully detailed on page 39).
4. During the last two years, the directors have provided funds for a
preliminary exploration program on the SF claim.
5. Stanford appointed two additional directors, Doug Symonds and Vera
McCullough, on May 21, 2001. Soon afterwards, Philip Yee resigned as
President and Director on May 21, 2001 and Doug Symonds was appointed as
the new President of Stanford.
6. Mr. Symonds resigned on October 15, 2002 and was replaced by Glen Macdonald
on October 23, 2002. On October 24, 2002, Glen Macdonald was appointed
President of Stanford.
Holders of Common Equity
As of the date of this Form SB-2, Stanford has 59 shareholders, which include
the President, Glen Macdonald.
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Exploration Activities
Stanford undertook exploration work on the SF claim in 2002 and 2003. The
directors will undertake further exploration work on the SF claim from the
proceeds of the sale of common stock registered under this Form SB-2.
Additional Mineral Properties
Stanford may seek out additional mineral properties in the Princeton region
either by way of purchase, staking or joint venturing. No properties have been
identified to date.
Acquisition of Assets from Promoters, Founders or Organizers of Stanford
Stanford has not received or acquired any assets or other consideration from any
promoter, founder or organizer of Stanford since its inception.
ITEM 16. DESCRIPTION OF BUSINESS
Business Development
Stanford is a company without revenues, with little or no assets and having
incurred losses since its inception. The only source of funds to Stanford has
been from the sale of its shares in its capital stock and loans made by
affiliates.
Stanford does not have any subsidiary, affiliated companies or joint venture
partners. Stanford has not declared bankruptcy, been under receivership or
similar proceedings. In addition, Stanford does not have any material
reclassification, merger, consolidation or purchase or sale of a significant
amount of assets not in the ordinary course of business.
Stanford's area of interest is in the exploration industry, whereby it will
explore its SF claim ("Exploration of the SF Claim"). Stanford is an
exploration stage company in that there is no assurance that a commercially
viable mineral deposit on the SF claim will ever be found and further
exploration will be required before a final evaluation as to the economic and
legal feasibility is determined. Stanford does not have an ore reserve at the
present time and the likelihood of finding an ore body is remote (see "Risk
Factor - 7" page 10). Nevertheless, management feels that its SF claim is worth
the time and money to explore in order to determine if an ore reserve does
exist. Since it is in the exploration stage, Stanford is not distributing any
products, nor has it announced any new products or services.
Stanford has the rights to the mineral on the SF claim other than placer
minerals and coal. In other words, Stanford has the rights to explore for
minerals below the surface but cannot extract minerals found on the surface of
the SF claim. Under the Mineral Tenure Act of British Columbia, Stanford would
have to stake the SF claim for placer minerals. Once this staking is completed
Stanford could use either panning or sluicing to extract minerals from Collins
Gulch Creek which flows through the claim. If Stanford only had the placer
claim rights then production would be limited to 2,000 cubic metres of paydirt
each year. Under a placer lease, which is a higher form of tenure than a claim,
there is no production limit and the issue lease cannot be challenged under the
Mineral Tenure Act. Title to a lease is therefore only issued when the ground
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and title to be held by the leasehold has been verified to a higher standard
than that required of a claim. This is achieved by means of a survey.
Components of the survey are:
- - conduct the historical research to determine those titles which may affect
the ground to be acquired by the lease;
- - verification of the legal posts of those titles on the ground; and
- - produce a survey plan from the collected data.
The majority of the SF claim has not been staked for placer minerals and does
not contain a placer lease over the claim. Until Stanford has completed its
initial exploration work on the SF claim, no decision will be made to stake the
claim for placer minerals and no survey will be undertaken to obtain a placer
lease.
One of the main reasons Stanford is filing this Form SB-2 is to qualify its
shares for a quotation on the OTC Bulletin Board. There is the chance
Stanford's shares may never be qualified for trading on OTC Bulletin Board and
therefore the shareholders might never be able to sell their shares to recoup a
percentage of their original investment.
Presently Stanford has ownership interest in the mineral rights to one mineral
claim: the SF claim. As is custom in the Province of British Columbia, Stanford
does not actually own the land itself; only the mineral rights thereto. The
ownership interest in the land is held by the Province of British Columbia.
Having "staked" the mineral claim in January 2001, Stanford has the rights to
the minerals thereon for a period of one year from the date of staking (refer to
Exploration of the "SF Claim" for a description of staking). The actual cost of
staking the SF was $1,513 which maintained the mineral claim in good standing
until January 12, 2002. In January 2002, the Stanford spent $2,927, $1,188 in
June 2002 and $1,544 on November 15, 2003 to maintain the claim in good standing
until January 12, 2005.
To date Stanford has realized no revenue from the SF claim and it will take an
unknown number of years of exploration to be able to identify a commercially
viable ore reserve, if any. An exploration program of any size will require
additional capital which presently Stanford does not have. Its ability to raise
funds might be limited as more fully described under "Risk Factor - 9" on page
11.
If Stanford is unable to find minerals during its exploration of the SF claim
group, it will seek out other mineral properties of merit. In the meantime, the
SF claim comprises 1,109 acres and allows for a number of exploration programs
within the claim group. No specific mineralization has yet been identified by
Stanford on the SF claim. Stanford has not identified any other mineral
properties to date for future exploration work. Nevertheless, the corporate
objective is to acquire other mineral properties in the event that the SF claim
does not prove to have commercially viable ore reserve on it.
Stanford's main product
Stanford, being in the exploration stage, has no main product unless it
discovers a commercially viable mineral deposit.There is no guarantee any
commercially viable mineral deposit will ever be found and therefore no revenue
will be derived from the SF claim. Stanford does not have the rights to the
placer on its claim and therefore only has the rights to any minerals below the
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earth's surface. If a third party stakes the placer rights before Stanford has
made a decision to do so, which will depend upon its findings during its initial
exploration activities, it will lose the rights on the SF claim to placer gold,
silver, platinum, bentonite and zeolite.
Competitive business conditions
There are vast areas of British Columbia and the Pacific Northwest Coast, which
includes Washington, Oregon and California states, which have been explored and
in some cases staked through mineral exploration programs. Competition to
identify, locate and explore mineral claims is intense. Exploration companies
such as Stanford must compete for various resources, including consultants and
other human resources, equipment and capital - refer to Risk Factor - 13, page
12.
Sources and availability of raw materials
Stanford does not have available to it any sources of raw materials since it is
in the exploration stage and does not require any raw materials from outside
suppliers. In the future, it might require raw materials such as cement, wood
and sand to commence production of its SF claims. Such raw materials are easily
obtainable by Stanford from local suppliers in Princeton, British Columbia. If
no ore reserve is found on the SF claim, there will be no requirements for raw
materials.
Dependence on a few major customers
To date Stanford has no customers and may not have any customers if there is no
ore reserve on the SF claim.
Patents, trademarks, licenses, franchises, concessions, royalty agreements or
labor contracts
Stanford has no patents, trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts to date. Stanford has not entered into any joint
venture agreements with any parties relating to the SF claim.
Governmental Approvals and Mining Regulations
During the initial exploration stage, which comprised establishing a grid and
soil/rock sampling, Stanford was not required to seek any governmental
approvals. Upon completion of the initial exploration work as mentioned on page
39 herein, Stanford filed a "Statement of Work, Cash Payment, Rental" form with
the Gold Commissioner's Office as required under the Mineral Tenure Act. This
form stated that work credits from the exploration activities on the SF were
incurred and can be used to maintain it in good standing for a further year. The
recording fee to the Gold Commissioner's Office was $140.
Once a decision has been made to carry out a drilling program, as will be done
under Phase II, Stanford will have to obtain a "Reclamation Permit" and complete
a "Safekeeping Agreement" with the Ministry of Energy and Mines (the "Ministry")
by making a deposit to the Ministry directly or establishing a separate bank
account in one of the five chartered banks in Canada, being either Bank of
Montreal, Bank of Nova Scotia, Toronto-Dominion, Royal Bank or Imperial Bank of
Commerce, with the Ministry being beneficiary. The estimated amount to be
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deposited with the Ministry is between $2,700 and $3,850; as determined by the
Inspector of Mines upon review of the drilling and work program to be done on
the SF claim. Approval and confirmation of the deposit should take
approximately two weeks. This deposit will ensure Stanford will spend the time
to put the SF claim in basically the same environmental condition as it was
prior to the drilling program. Approval and confirmation of the required
deposit should take approximately two weeks.
When either a trenching or drilling program is considered, Stanford will have to
complete and submit to the Ministry a "Notice of Work" detailing the specifics
of its work program. Approval for this form normally takes approximately six
weeks and can be filed at the same time as the Reclamation Permit and
Safekeeping Agreement mentioned in the above paragraph. Again the fee for
filing the Notice Of Work form will be $140. The approximately date Stanford
will need the approval is unknown at this time but will be prior to the above
mentioned trenching or drilling activities taking place on the SF claim.
If Stanford decides to undertake trenching in addition to a drilling program, it
will have to file the above mentioned "Notice of Work" with the Ministry and in
the event that it does not clean-up the site after the trenching program, the
Ministry will undertake the clean-up at a cost of between $0.55 to $0.77 per
cubic metre of material moved.
All work must be carried out in accordance with the "Mineral Exploration Code -
Part II Health, Safety and Reclamation Code for Mines" in British Columbia as
set forth in the Mining Act. This Code is to protect employees and all other
persons from undue risks to their health and safety arising out of or in
connection with activities of mining and drilling, safeguarding the public from
risks arising out of or in connection with mining activities and exploration,
protecting and reclaiming the land and waterways affected by the activities of
Stanford. There is no fee charged by the Ministry in adhering to this Code.
In addition, Stanford will have to adhere to the "Fire Prevention and
Suppression Regulations of the Forest Practices Code of British Columbia Act"
which set specific guidelines on open fires either in a stove or campsite, use
of explosives in exploration and how Stanford should conduct itself during times
of forest closures. The Ministry does not charge a fee for adhering to this
Regulation.
During the drilling activities on the SF claim, the drilling company will be
responsible to have an employee on location who has a First Aid Certificate and
has a First Aid Kit on or near his person at all times. Having such a person on
staff is a standard requirement of all drilling companies in British Columbia.
There are no fee charges by the Ministry for Stanford to comply with this
requirement.
In the area where Stanford will undertake the initial exploration program, it is
covered by poplar and other species of trees not significant in size and of no
commercial value. Therefore, the removal of these trees will not require a
"License to Cut" under the Forestry Act unless Stanford is in an area on the SF
claim that has secondary growth. If this is the case, Stanford will apply for
a License to Cut which would take approximately two weeks to receive approval.
The filing fee is approximately $150.
Water to reduce the heat during drilling will be supplied by the drilling
company and can be obtained from nearby streams and lakes without causing any
hardships to the marine life therein. The drilling company can either obtain
water from Collins Gulch Creek which flows through the SF claim or transport it
from Tulameen River slightly north of the claim. The drilling company will be
required to meet all governmental requirements prior to commencing drilling
thereby eliminating Stanford from this responsibility.
-33-
Environmental requirements in the Province of British Columbia are under the
direction of the Provincial Government since both the local and Federal
governments do not take an active part in administering the requirements of Bill
57 - Environmental Management Act (the "Act") which was passed after the third
reading on October 21, 2003 and received Royal Assent on October 23, 2003.
Under the Act the basic principle is that a person or company who has
contaminated or contributed to the disturbance of a piece of property should
bear the cost of remedying such disturbance. Under the Act, the new legislation
also incorporates the corollary principle of "beneficiary pays", designed to
ensure that those who benefit from activities resulting in contamination or
disturbance will share in the liability for clean-up. The philosophical
underpinning of this concept is that those who benefit from the activity should
not be unfairly enriched. This Act mainly focuses on contamination of the soil
and underground water supplies. Stanford will not be using chemicals during its
exploration activities which would contaminate the surrounding soil. The
drilling process would require water to reduce the heat of the drill and this
can be obtained by the drilling company from either Collins Gulch Creek on the
SF claim itself or from Tulameen River, slightly north of the claim.
As mentioned previously in this Form SB-2, the establishment of a grid and
subsequent soil sampling does not require approval from the Inspector of Mines.
Before the commencement of Phase II, Stanford will submit a Notice of Work and a
Reclamation Permit to the Ministry of Energy and Mines for the Province of
British Columbia. The SF claim has logging roads running through the claim
itself which will allow for easy access to a proposed drilling site. In the
event an additional road or trail is required to the drilling site, the drilling
company will meet with the Inspector of Mines and determine if a bond is
required and the particulars of the road or trail construction. The drilling
site itself will use limited ground space and therefore there may not be a need
to apply for License to Cut trees in the surrounding area. The License to Cut
trees and approval of construction access to the drill site will be applied for
by the drilling company. Upon completion of the drilling program, the drilling
company will have the responsibility of cleaning up the site. This might
entail planting small trees to replace the ones cut down and throwing grass seed
around the areas where the ground was disturbed. This cost will be borne by the
drilling company and will be included in the total fee charged to Stanford.
During the exploration and future drilling program, Stanford will not build
facilities to house the exploration and drilling crew since the drilling company
will provide accommodation for its employees in the town of Coalmont
approximately 15 miles away from the SF claim. Any employees of Stanford will
stay in Coalmont during the exploration program.
The President of Stanford, Glen Macdonald, has extensive exploration experience
and is familiar with the regulations respecting the initial acquisition and
early exploration of mining claims in British Columbia, Canada. Stanford does
expect there to be costs associated with adhering to government mining
regulations during the initial exploration stage but will have to deposit the
reclamation fees as noted above.
Research and Development
Stanford has not spent any money on research and development since its
inception.
-34-
Cost of Compliance with Environmental Regulations
Stanford is subject to the Health, Safety and Reclamation Code for Mines in
British Columbia, Canada. This code deals with environmental matters relating
to the exploration mineral properties. The Code is meant to protect the
environment through a series of regulations affecting:
1. Health and Safety
2. Archeological Sites
3. Exploration Access
Stanford is responsible to provide a safe work environment, no disruption of
archeological sites and conduct its activities in a manner as to not cause any
unnecessary damage to the SF claim.
Stanford will secure all necessary permits for exploration, if required, and
will file final plans of operation prior to the commencement of any
explorationoperations. It is anticipated no endangered species will be
disturbed. Re-contouring and re-vegetation of disturbed surface areas will be
completed pursuant to the law. There will be no discharge of water into active
streams, creeks, rivers or lakes and any other body of water regulated by the
environmental law, or regulation. Any portals, adits or shafts will be sealed.
The estimeated amount of dollars incurred for environmental "clean-up" which
Stanford will have to pay will be approximately $7,700 - the deposit posted with
the Ministry of Energy and Mines for the Province of British Columbia. The
amount of dollars required for environmental clean-up will depend upon the work
being done on the SF claim. If Stanford undertakes a trenching program the cost
per cubic metre of material moved will range between $0.55 to $0.77 if the
government is required to undertaken the clean-up. No charge will be incurred
if Stanford does the clean-up itself. If road access is required or the site
being explored will be unduly disturbed, the Inspector of Mines will have to
determine the amount of the bond in advance of work being done. The Reclamation
bond will have to be paid to the Government with the preparation of the site for
drilling and will be refunded, assuming Stanford does its own clean-up, when
Stanford completes that phase of its exploration program. This could mean the
refund for the Reclamation bond could be paid back to Stanford within several
months of completing the drilling program since time would have to be allowed
for the Inspector of Mines to examine the drilling site on the SF claim and
prepare the paper work required to refund the deposit. If Stanford chooses, it
might not make the application for a refund of the Reclamation bond and apply it
towards future drilling and exploration activities on the SF claim. The Federal
Government does not take an active part in environmental issues in the mining
industry unless a salmon spawning river is in danger. This is not the case
with the SF claim. Local governmental agencies do not become involved with
environmental issues since they rely upon the Provincial Government to ensure
regulations are adhered to.
Exploration of the "SF Claim"
Stanford retained John Jenks, Professional Geologist and Geoscientist, of Salmon
Arm, British Columbia, Canada, to summarize the geology and mineral potential on
its SF claim near Coalmont, British Columbia. The SF was "staked" by a
professional staker on behalf of Stanford. "Staking" of a claim is the method
used by the Ministry of Energy and Mines for the Province of British Columbia in
-35-
verifying title to the minerals on government-owned land. The individual
staking a claim, known as a "staker", prepares a post on the unstaked property
and defines this post as the corner post or "identification" post. A serieal
pre-numbered tag, purchased from the Gold Commissioner's office (a department of
the Ministry of Energy and Mines) is affixed to the post and the date and time
of preparing the post is recorded on it as well as the name of the claim. The
staker is required to define the perimeter of the claim by a clearly marked
line. Upon completion of marking the perimeter the staker records the number of
units being staked upon the metal tag on the corner post. This information is
recorded on a "4 Post Mineral Claim" form and filed with the Gold Commissioner's
Office.
Stanford has not identified any other mineral properties for staking and,
therefore, has title to the mineral rights only on the SF claim.
LOCATION AND ACCESS
The SF claim is situated 2.5 miles west-north-west of the hamlet of Coalmont,
BC, itself located 11 miles by paved road north-west of Princeton, British
Columbia. From Coalmont the SF claim may be accessed by a series of dirt/gravel
logging and recreational trails - a road distance of approximately 3 miles to
the eastern claim boundary.
While portions of the road system are driveable by four-wheel drive pick-up they
are best accessed by the four-wheeler/quad/all terrain vehicle type of vehicle
as was used during the initial property examination by John Jenks.
During the initial exploration stage, Stanford will only be able to explore the
SF claim during the late spring, summer and early fall months due to the
possibility of snow in the winter. Winter weather conditions make it difficult
to obtain soil and rock samples, prospecting, trenching and removal of
overburden.
During the winter months, the SF claim has to be accessed by snowmobile since
the number of inches of snow during a normal winter is approximately 39 inches
in the Princeton area. During the summer there is the possibility, on a random
basis, of road closures from July to September due to the possibility of fires.
Access to the property during the summer is best done by all terrain vehicles or
by four by four vehicles.
LAND TENURE
Consisting of an 18 unit four-post claim extending 1.8 miles in the north-south
direction by 0.9 miles east-west and totaling 1,109 acres. The SF mineral claim
was staked on January 12, 2001. The claim tenure number is 383391, tag number
240871 and the anniversary date is January 12, 2005. It should be noted the SF
claim confers the right to explore for precious and base metals in lode form and
certain industrial minerals. Coal, as well as placer minerals, are issued under
separate licenses and therefore are not owned by Stanford.
Stanford has not obtained the lease for placer minerals on the SF claim. Placer
minerals, often being gold, silver, platinum, gemstones or other heavy minerals
of value, are located in gravel or ground and are extracted by the use of water,
by sluicing, hydraulicking, etc. Under the Titles Division of the Ministry, a
separate application for a lease of placer minerals must be obtained. Under the
regulations of the Ministry, a lease is a higher form of tenure than a claim.
There is no production limit on a lease (placer claims have a production limit
of 2,000 cubic metres of paydirt per year), and the issued lease cannot be
challenged under the Mineral Tenure Act. Title to a lease is therefore only
issued when the ground and title to be held by the leasehold has been verified
to a higher standard than required for a claim. This is achieved by means of a
survey. Components of the survey process are:
-36-
conduct the historical research to determine those titles which may affect
the ground to be acquired by the lease;
verification of the legal posts of those titles on the ground, and
produce a survey plan from the collected data.
The Mineral Tenure Act Regulation provides for two alternative types of surveys
for a placer lease, a legal survey (to be completed by a British Columbia Land
Surveyor for submission to the Surveyor General's office for approval) and a
technical survey (option to a full legal survey but required all documents to be
completed and filed with the Ministry).
Stanford has not obtained the lease for placer minerals on the SF claim.
PHYSIOGRAPHY AND CLIMATE
The claim area is characterized by fairly rugged hill and ridge topography
ranging from 2,400 to 4,000 feet in elevation. The most predominant feature is
the steep canyon of the north-north-east trending Collins Gulch Creek which
bisects the claim area and empties into the Tulameen River at the northern
extremity. Outcrop, being that part of a rock formation that appears at the
surface of the ground, is exposed primarily along ridges and escarpment areas;
being a long, more or less continuous cliff or steep slope which separates two
levels of ground and usually was caused by erosion of the ground or in some case
faulting. Most of the claim area is covered by a thin layer of glacial till;
being comprising clay, silt, sand gravel and boulders ranging in various sizes
originally deposited under a glacier prior to it receding.
Tree cover is moderate to very thick consisting primarily of lodgepole pine and
Douglas fir with subordinate poplar and deciduous species. Most of the timber
is mature second-growth as much of the claim area has been previously logged.
Timber rights are held by Tolko Industries Ltd., a company unrelated to
Stanford.
Summers are hot with moderate precipitation. Up to 4.5 feet of snow may
accumulate anytime after late October and remain until early May. The effect
of winter conditions is more fully described on page 53, "(vii) Seasonal aspects
affecting the financial condition"
REGIONAL GEOLOGY
The Tulameen and Princeton areas, in which the SF claim is located, were
geologically mapped in 1960. Located within the southern portion of the
Intermontane Belt the map area is dominated by the magmatic area sequence Upper
Triassic Nicola Group. This consists of a north-trending belt of volcanic
(generally finely crystalline or glassy rock which has been put near the Earth's
surface by volcanic action) and sedimentary (a rock resulting from the
consolidation of loose sediment that has accumulated in layers) rocks intruded
by Late Triassic and Early Jurassic (a specific geologic time period from 208.0
to 146.6 million years before the present time) comagmatic plutons; being molten
rock material with the Earth from which an igneous rock results by cooling and
crystallization. The sequence is unconformably overlain by Cretaceous and
Tertiary volcanics and clastic sediments of the Spences Bridge, Kingsvale and
Princeton Groups.
-37-
PROPERTY GEOLOGY/AIR PHOTO INTERPRETATION
Approximately 60% of the SF claim is underlain by the northeast limb of the
Eocene-aged Tulameen Basin, a synclinal structure trending northwesterly. The
northern third is covered by older upper Triassic rock of the Nicola Group
consisting of basic lavas, being fluid rock issued during volcano reaction, and
sediments. Intrusive rock, being a body of igneous rock which has formed itself
into pre-existing rocks either along some definite structural feature or by
deformation and cross-cutting of the invading rocks, of the coast Intrusions
occupies the northeastern 10% of the claim.
The northeastern synclinal limb, a dipping curvature area of a fold between
adjacent fold hinges, dips at -45 degrees to the southwest. A prominent shale,a
fine grained sedimentary rock formed by consolidation of clay, silt and mud,
mudstone, a style of mud having the texture and composition of shale, member
forms a northwesterly-trending series of ridges. The prevalent schistosity
trend, being rock structure generally split into slabs which contain
mineralization of interest, of 55 degrees dipping minus 60 degrees to the
southeast may parallel a possible late fault structure coinciding with Collins
Gulch. Higher in the section a siliceous lapilli tuff, being small stones which
in the unconsolidated stage is similar to ash and upon consolidation is referred
to as tuff, contains interstitial zeolite; being part of the family of water
salts occurring as secondary minerals in cavities of lava. Within the above
interval, coal seams and bentonite, a clay formed by the alteration of volcanic
ash, horizons occur, however, more surface examination is required to define
their exact position.
DISCUSSION
The Tulameen Basin portion of the claim does contain the industrial minerals
zeolite and bentonite, both of which are included in the mineral title. Despite
their presence and possible resource potential, like most industrial minerals,
the marketing aspect is of prime consideration. Any decision to explore for
these materials must therefore coincide with corporate objectives.
The Nicola Group comprising the northern third of the claim is prospective for
both base and precious metals in veins and disseminated form within the area.
Accordingly, this portion could be subject for further investigation with these
metals in mind.
It is conceivable that satellite bodies of the ultrabasic, being an igneous rock
having a salt content lower than most basic rocks, could be distributed exterior
to the main body - in fact the northern third of the SF claim underlain by the
Nicola Group could host ultrabasic satellite intrusives with platinum/gold
potential.
Much of the claim is covered by a thin layer of glacial till implying that any
potential deposit is easily masked. Accordingly, careful prospecting, stream
geochemistry (including panning) and soil geochemistry would be employed in a
subsequent search for precious and platinum-group metal mineralization,
particularly within the northern third of the claim.
Based upon a single day's examination of the property and subsequent literature
research by John Jenks, the following conclusions are indicated by him:
- - The southern 60% of the SF claim area underlain by Eocene Tulameen basin
metasediments has industrial minerals zeolite and bentonite, both of which
-38-
pose a marketing challenge. A corporate decision to explore for these
minerals would be required prior to directing further efforts in this area.
- - The northern 30% of the claim underlain by Nicola Group metavolcanics and
metasediments has potential for high grade base and precious metal vein (a
mineral which has filled a fault or fracture in a rock and is often of
interest in exploration), shear zone, being an area that is often
mineralized by ore-forming solutions, hosted, breccia (a coarse-grained
rock usually composed of angular broken rock fragments held together by a
mineral cement or in a fine-grained matrix) and disseminated deposits.
Particular attention should be directed to this claim portion.
- - Within the same group the possible presence of smaller satellite intrusives
of the zoned Alaska-type Tulameen Ultrabasic Complex could imply potential
for platinum group mineralization.
- - The northeastern claim portion comprising 10% of the claim area underlain
by Coast Intrusive rock has a limited potential for disseminated base metal
deposits.
- - As 80% of the claim area is covered by a thin layer of glacial till,
surface prospecting would be best directed to ridge, escarpment and exposed
stream banks. Soil geochemistry could be applied in an effort to gain
insight into the possible presence of sub-surface mineralization.
It is recommended that efforts be directed in the following areas:
- - The northern 30% of the claim underlain by the Nicola Group. This area
could be surface prospected and soil sampled on a reconnaissance scale.
Particular attention should be made to the possible presence of ultrabasic
rock.
- - If corporate objectives include the industrial minerals zeolite and
bentonite then the potential for these minerals should be examined,
inventoried and later followed up by surface trenching. Old trenches should
be located and re-examined.
- - A cursory surface examination should be made of the small area underlain by
Coast Intrusive rock to ascertain its potential for mineralization and
subsequent follow-up detailed prospecting and soil geochemistry.
ESTIMATED PROGRAMME COSTS
- ---------------------------
Geologist/prospector 15 days @ $200/per day $ 3,000
Data compilation/report writing 3,000
Supervision 1,300
Establishment of recon.Grid 10 days @ $130/per day 1,300
Sampling 10 days @ $130/per day 1,300
Geochemical analyses 600 samples @ $8/sample 4,800
Vehicle expense 50 days @ $35/day 1,750
Gasoline 500
Food & accommodation 50 days @ $45/per day 2,250
Materials and supplies 350
-------
Subtotal 19,550
Contingency @ 10% 2,000
------
Total $21,550
=======
-39-
Success in the initial phase would entail a follow-up program and subsequent
budgeting. The cost of Phase II has been estimated at $50,000 as indicated on
page 43.
Stanford's Exploration Facilities
While in the exploration phase, the crew of Stanford will be living in the town
of Coalmont due to its close proximity to SF claim.
RECENT WORK ON THE SF CLAIM IN 2002
January 2002
Grid sample stations were set up and marked every 33 feet on the baseline and
grid sample lines in January 2002. The grid was set up as follows:
Baseline:
Stn. 0 + 000 N to Stn. 1 + 200 N 3,600 feet
Stn. 2 + 800 N to Stn. 3 + 000 N 600 feet
------
4,200 feet
------
Grid Sample lines:
Stn. 0 + 000 N to Stn. 0 + 300 W 900 feet
Stn. 0 + 090 N to Stn. 0 + 300 W 900 feet
Stn. 0 + 810 N to Stn. 0 + 250 W 750 feet
Stn. 0 + 990 N to Stn. 0 + 350 W 1,050 feet
Stn. 1 + 200 N to Stn. 0 + 250 W 750 feet
Stn. 2 + 800 N to Stn. 1 + 500 W 4,500 feet
Stn. 3 + 000 N to Stn. 1 + 500 W 4,500 feet
-----
13,350 feet
------
Total base and grid sample lines 17,550 feet
======
In June 2002, Stanford undertook a soil sampling program as mentioned below
based on the above grid system.
June 2002
Stanford continued its exploratory work on the SF claim by extending Grid line
station 0 + 000 N to 675 W. Soil samples were collected every 80 feet for
geochemical analysis.
Grid line station 0 + 090 N was entended to 0 + 0625 W every 75 plus feet and
soil samples were collected for geochemical analysis.
These soil samples were obtained following the accepted geological soil sampling
techniques. All 49 samples tested the "B" horizon, in soils, just below the
-40-
humus contact. These samples were all analyzed by Acme Laboratories Ltd.,
Vancouver, British Columbia, Canada, using the ME - ICP +1 method.
The soil sample geochemical assay results did not define any copper, lead or
zinc anomalies. Further exploration will extend the soil sampling to the
southern claim segment.
November 2003
Stanford undertook the establishment of a new grid system north of the
previously established grid system since due to light snow conditions and were
the ground was relatively level. As in the past, the grid layout was continued
with grid sampling stations horizontally chained and flagged every 30 feet.
Stations were recorded, with location, every 90 feet. The new grid sampling
lines established were as follows:
Stn. 0 + 000 N - 0 + 190 W. Coalmont Trail
- 0 + 685 W. . . Collins Gulch, East
- 0 + 900 W. . . . . . . Collins Gulch, West
- 0 + 960 W. . . . . . . Logging Boundary
- 0 + 070 W. . . . . . . Logging Road
- 0 + 190 W. . . . . . . Swamp
- 0 + 320 W. . . . . . . Logging Road
- 0 + 500 W. . . . . . . End 3,600 feet
Stn. 0 + 300 N . . . - 0 + 260 W. Coalmont Trail
- 0 + 750 W. . . . . . . Collins Gulch
- 0 + 050 W. . . . . . . Logging Boundary
- 0 + 310 W. . . . . . . Logging Road
- 0 + 475 W. . . . . . . Logging Road
- 0 + 500 W. . . . . . . End 4,500 feet
Stn. 0 + 600 N . . - 0 + 180 W. Coalmont Trail
- 0 + 710 W. . . . . . . Collins Gulch
Extreme Topography
End 2, 130 feet
Stn 0 + 720 N. . . - 0 + 030 W. Coalmont Trail
- 0 + 720 W. . . . . . . Collins Gulch
Extreme Topography
End 2,160 feet
------
Total Grid Layout. . . . 12,390 feet
======
In conjunction with the original grid layout, a soil and rock sampling program
will be undertaken in the late spring or early summer of 2004.
Even though John Jenks is the professional geologist who prepared a geological
report for Stanford, he will not be the geologist assigned to the exploration of
the SF claim. Mr. Macdonald, being a geologist himself, will direct and
supervise the exploration program, based on the recommendations of John Jenks as
noted above, and will determine at that time the staff he will require to
facilitate it.
-41-
Reports to Security Holders
Stanford does not currently file reports with the Securities and Exchange
Commission ("SEC"). It is the intention of Stanford that it will file the
required financial reports: 10-KSB and 10-QSB. The directors and beneficial
owners of Stanford will file their Form 3s once it is a reporting company.
In the future, the public may read and copy any material with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
The public may obtain information on the operations of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The Company will file electronically on
Edgar and the public may view these filings on the SEC's Internet site that
contains all reports, proxy and information statements, and other information
regarding the Company by using (http://www.sec.gov). At the present time,
------------------
Stanford does not have an Internet address.
ITEM 17. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(A) PLAN OF OPERATION
While management believes the SF claim has value and opportunity for further
exploration, management advises that Stanford is in the exploration stage and
has not yet generated or realized any revenues from its SF claim.
Stanford is attempting to raise the funds necessary for the exploration of the
SF claim - refer to "Use of Proceeds" on page 14. Stanford has not made any
additional arrangements to raise additional cash, other than through the current
Offering under this Form SB-2.
It is estimated that Phase I recommended by John Jenks, as shown on page 39,
will take approximately 15 days to complete. The objective under Phase I will
be to enlarge the present grid system established on the SF claim and take 600
soil and rock samples for subsequent assaying. The review of the results will
be done by Glen Macdonald, President of Stanford and Professional Geologist, who
in conjunction with the Board of Directors, will determine the area of interest
for Phase II. During the next twelve months following Effective Date of this
Form SB-2, Stanford will complete Phases I and II and determine the exploration
program for Phase III.
Assessing and evaluating the results of Phase I will be performed by Glen
Macdonald. A decision to continue exploration activities will be done jointly
by the Board of Directors upon recommendation from Glen Macdonald. The criteria
in making a decision to continue will be based on the results of Phase I and the
knowledge that the SF claim, under Phase I, has only had limited exploration
work thereon. If the results of Phase 1 are not significantly positive to
enable Stanford to continue in the area under exploration, the Board of
Directors will consider other areas within the claim for further exploration.
Until the majority of the SF claim has been explored, the Board of Directors is
reluctant to abandon the SF claim.
The following is a summary of the estimated expenditures to complete Phase II of
the exploration program on the SF claim.
-42-
Diamond drilling:
Diamond drilling (four holes of 300 feet per
hole @ $25 per foot)(i) $ 30,000
Independent consultant's fees, core logging, splitting,
Program management (14 days @ $275)(ii) 3,850
Expenses:
4-wheel drive rental (14 days @ $50 per day) 700
Assays of core (80 assays @ $15)(iii) 2,400
Gasoline 100
Accommodation (14 days @ $60) 840
Meals (14 days @ $40) 560
Core boxes - estimated 4 boxes 200
Exploration supplies - estimated 100
Maps and air photos - if required 100
Photocopying report 20
Telephone 25 5,045
----
Deposit on Reclamation with Ministry (iv) 5,000
Data interpretation and report writing (v) 2,500
------
46,395
Contingency reserve (vi) 3,605
-------
Total estimated cost for Phase II $50,000
======
(i) Drilling costs are between $20 to $30 per foot. This price includes
mobilization of the drill (transporting the drill to the SF claim and
setting it up for drilling) and de-mobilization (the removal of the drill
and cleaning the site drilled so that it is roughly in the same condition
as prior to the drilling), payment of the drillers and their accommodation
during drilling.
(ii) During the drilling program, Stanford might have to retain the services of
an independent geologist, if Glen Macdonald is not available, to oversee,
on behalf of itself, the drilling activities and ensure that the drilling
adheres to the program set forth. As the core is drawn from the hole it
will be examined by the geologist and split for assaying.
(iii) It has been assumed that 40 samples from each drill hole with be sent in
for fire assaying for gold or other precious metals.
(iv) Estimated amount for Stanford to pay as a reclamation deposit to ensure the
SF claim is basically left in its original condition after the drilling
program.
(v) Estimated amount for the independent geologist to interpret data and write
a report.
(vi) Contingency reserve to cover any expenditures not known at this time and
therefore not accounted for.
Stanford estimates Phase II will take approximately two weeks of drilling and
another week for the geologist to prepare and complete his report.
-43-
Stanford's President, from results of Phase I and prior work done in Phase II,
will determine where the drill holes will be set and the angle of drilling.
Stanford will issue tenders to the following drill companies to undertake the
drilling program defined in Phase II and will accept the bid with the lower
price per foot:
Aggressive Diamond Drilling Ltd. Kelowna, B.C.
Adams Diamond Drilling Ltd. Princeton, B.C.
Boisveneau Diamond Drilling Ltd. Surrey, B.C.
Hytech Diamond Drilling Ltd. Smithers, B.C.
Britton Bros Ltd. Smithers, B.C.
At this point in time, Stanford does not know what drilling rig will be used
since the decision will be left to the drilling company. There is a possibility
that a NQ wireless drill rig will be used on the SF claim but the final decision
will be made by the drilling company. All equipment and personnel for the
drilling program will be supplied by the drill company and is included in the
price per foot. It is estimated the drill program will take 10 to 14 days
depending upon the overburden and the bedrock the drill encounters. If Glen
Macdonald is unable to supervise the drilling program, Stanford will have one
individual on the SF claim the entire time of drilling so that the core can be
examined, split for assaying. In addition this individual, who will also have
to be a geologist, will ensure the drill company is adhering to the requirements
of the drill program; core size, angle of drilling and depth of the hole.
Once the drill program is completed and the drill has been removed from the SF
claim, the geologist will send samples of the core into Acme Analytical
Laboratories Ltd., Vancouver, British Columbia, for fire assaying to determine
the gold and precious metal content of each sample. If Glen Macdonald has
supervised the drill program and sent the core samples in for assay, Stanford
will have to engage the services of an independent geologist to prepare a report
on the results of the drilling program and to recommend a Phase III program.
Without the information derived from Phases I and II, Stanford is unable to
determine the expected cost and time frame for an exploration program under
Phase III. If the results are favorable from Phases I and II, the independent
geologist, preparing a report based on Phases I and II, will recommend a further
exploration program and the associated cost of undertaking said program. If the
results are minimal from Phases I and II, Stanford will explore other areas of
the SF claim to determine if any such areas are suitable for further
exploration. Being 1,109 acres in size, there is the possibility of other areas
within the SF claim will be of interest and worthy of exploration.
(1) The next twelve months cash requirements
Stanford will require, as a minimum, the following cash requirements within the
next twelve months. Stanford does not have the cash necessary to pay its
creditors; if capital is not raised by Stanford, it will be unable to satisfy
its current liabilities.
If Stanford is unable to raise any funds from this Offering, its directors will
advance money to it to maintain the SF claim in good standing and pay the
minimum amounts owed to creditors. Stanford has no written commitments or
agreements with any of its directors or officers to provide funds to it if
Stanford is unable to raise sufficient funded from this offering.
Unfortunately, this will result in Phase I and II not being undertaken as
-44-
planned. The consequences to Stanford and its investors is that the SF claim
will not be explored as planned and Stanford will have to rely upon its
directors for funds to maintain its existence. Without work being performed on
the SF claim, there will be little or no interest in new investors acquiring the
shares. The alternative plan, if no funds are received from this Offering, is
to maintain the SF claim in good standing for several years, pay its minimum
obligations to its creditors, and wait for a time when new investors find that a
investment in Stanford is a suitable investment.
The following represents the minimum funds required to maintain Stanford over
the next year to meet various financial requirements assuming no funds are
raised under this Offering.
Audit and accounting fees $ 4,750 (i)
Bank charges. . . . . . . . . . . . . . . . . . . . .. . 100 (ii)
Filing fees
State of Delaware $50
Registration fees 175
Edgar filings 1,350 .. . . 1,575 (iiii)
Miscellaneous expenses. . . . . . . . . . . . . . . . . . 1,000 (iv)
Offering expenses - Item 25 . . . . . . . . . . . . . . . 17,200 (v)
Transfer agent's fees . . . . . . . . . . . . . . . . . . 1,200 (vi)
Account payable - third parties - as at February 29, 2004 30,561 (vii)
-------
$56,386
=======
(i) Accounting and audit fees are for the preparation, examination and review
of the various Forms 10-KSB and 10-QSB required during the forthcoming
year.
(ii) Normally monthly charges incurred with operating a checking account over
the year.
(iii) Filing fees to the State of Delaware are the annual franchise fees based
on the number of shares issued. This amount payable to the State of
Delaware does not assume any penalties or interest for late filing.
Registration fees represent the cost of having a registered office in
Delaware and the Edgar filing fees are the cost of filing this Form SB-2
and subsequently, when Stanford is deemed to be a reporting company, the
fees for filing the various Forms 10-KSB and 10-QSB over the next fiscal
year.
(iv) Miscellaneous expenses represent various expenses which might be incurred
by Stanford which at the present time are unknown to it. For example,
miscellaneous expenses will include photocopying, fax, printing, delivery
charges and other expenses normally associated the administration of a
company as well a preparing and holding the Annual General Meeting for
2004.
(v) The Offering expenses are detailed under Item 25 - Other Expenses of
Issuance and Distribution. Regardless whether or not Stanford is able to
raise any funds under this Offering these costs will be incurred. The only
cost which might not be incurred if no funds are raised is the $1,000 for
the cost of printing share certificates which has been estimated under Item
25 - Other Expenses of Issuance and Distribution. In the above analysis,
Stanford has assumed the entire Offering will be subscribed for and
therefore has used the higher amount for Offering expenses.
-45-
(vi) The annual fee to the transfer agent is $1,200.
(vii) As at February 29, 2004, the following accounts payable were due to third
parties:
Creditor Amount
-------- ------
Accountant $ 9,987
Annual General Meeting 1,158
Auditors 3,269
Consulting (*) 5,000
Miscellaneous (**) 208
Office (***) 4,664
Transfer agent fees and interest 6,275
------
Total accounts payable - February 29, 2004 30,561
Deduct: audit and accounting under
Offering Costs (****) (5,000)
-------
Adjusted Accounts payable as per above $25,561
======
(*) Cost to prepare this Form SB-2
(**) Represents monies owed to the individual taking the soil samples on the SF
claim.
(***) Various office expenses such as photocopying, fax and delivery not paid
for over the last year, payment to State of Delaware and other charges.
(****) The cost of preparing the financial statements included in this Form SB-2
has been taken into consideration in Item 25 - Other Expenses of Issuance
and Distribution and therefore has been eliminated from the accounts
payable figure to avoid duplication.
The above estimated cash requirements for the next twelve months does not
reflect an outlay of funds for management fees, rent and telephone. As in the
past, management has taken no fees for their services and will continue with
this policy until such time as Stanford has sufficient funds on hand to warrant
such an expenditure or a decision is made to cease exploration activities on the
SF claim and proceed to develop a proven ore reserve, if ever.
When comparing the above cash requirements over the next twelve months with the
Use of Proceeds shown under Item 4, there will not be sufficient funds available
under the minimum Offering to maintain Stanford for the next twelve month period
unless exploration activities are reduced. Management does not wish to consider
this approach and will find other ways to raise funds, if required, to maintain
the SF claim in good standing and meet its financial obligations. No definite
decision by management has yet been made as to what approach to raise additional
funds will be used.
Stanford does not plan to convert $11,612 owed to related parties as at February
29, 2004 to shares being offered under this Form SB-2. If any of the directors
or officers acquire shares under this Form SB-2, it will be for cash
consideration only and not a conversion of debts owed to them. Therefore, only
cash will be paid for any shares subscribed to under this Offering and the cash
received will not be used to reduce debts to related parties.
Stanford has received no interim financing during the last several months except
from advances from its officers and directors - refer to page 48. Presently,
management does not contemplate arranging any interim financing unless Stanford
is unable to sell any shares under this Form SB-2.
-46-
At the present time, and in the foreseeable future, management does not wish to
acquire office space since it finds the present accommodations are adequate.
Management realizes that as its activities increase it will require its own
telephone number but for the intermediate period it will continue to use the
business telephone number of Glen Macdonald, its President.
(2) Purchase of plant and significant equipment.
Stanford will not buy any plant or significant equipment in the immediate
future.
(B) ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
(1) Full Fiscal Year of August 31, 1999, 2000, 2001, 2002 and 2003 and the six
months ended February 29, 2004
The changes in the balance sheet positions over the prior five years ending
August 31and for the six months ended February 29, 2004 are shown as follows:
February August August August August August
29 31 31 31 31 31
2004 2003 2002 2001 2000 1999
---------- -------- ---------- --------- -------- -------
Assets
Current assets:
Bank . . . . . . . . . . . $ - $ - $ - $ 1,045 $ 1,111 $ 2,561
-------- -------- -------- --------- ------ -------
Total . . . . . . . . . . . . $ - $ - $ - $ 1,045 $ 1,111 $ 2,561
======== ========= ========= ========= ======= =======
Liabilities and Stockholders'
Deficit
Current liabilities:
Accounts
Payable . . . . . . . . . . . $ 30,561 $ 19,554 $ 9,707 $ 6,175 $ 3,338 $ 1,805
Due to related
Parties . . . . . . . . . . . 11,612 10,068 3,895 2,912 - -
-------- -------- --------- --------- ------- ------
Total accounts
Payable . . . . . . . . . . . 42,173 29,622 13,602 9,087 3,338 1,805
-------- -------- --------- --------- ------- -------
Stockholders'
deficit:
Common stock. . . . . . . . 2,358 2,358 2,358 2,358 2,358 2,358
Paid in Capital . . . . . . 3,092 3,092 3,092 3,092 3,092 3,092
Contributed Surplus . . . . 69,300 63,000 50,400 37,800 25,200 12,266
Deficit . . . . . . . . . . (116,923) (98,072) (69,452) (51,292) (32,877) (17,294)
--------- -------- --------- -------- -------- -------
Total stockholders'
deficit . . . . . . . . . . . (42,173) (29,622) (13,602) (8,042) (2,227) 756
--------- --------- --------- -------- ------- -------
Total . . . . . . . . . . . . $ - $ - $ - $ 1,045 $ 1,111 $ 2,561
======== ========= ======== ========= ======= =======
-47-
August 31, 1999:
During Stanford's first year of operation, it raised the initial seed capital
from investors and engaged the services of Nevada Agency & Trust Company to act
as transfer agent. The number and price per share subscribed for was as
follows:
400,000 shares issued to its director at a price of $0.001 per share;
1,615,000 shares issued to 18 shareholders at a price of $0.001 per share;
and
343,500 shares issued to 40 shareholders at a price of $0.01 per share.
Since the initial raising of the seed capital, Stanford has not issued any more
shares in its capital stock.
August 31, 2000
During this fiscal period, Stanford considered the development of a software
program for the restaurant industry as mentioned on page 4.
August 31, 2001
During January 2001, Stanford identified, staked and recorded the SF claim.
Management had John Jenks prepare a geological report setting forth the
geological aspects of the claim and recommending a work program on the SF claim.
No work was undertaken during this fiscal year on the claim. John Jenks'
report, in part, is described under Item 16 - Description of Business on page
30.
August 31, 2002
Stanford undertook two separate geological programs on the SF claim during the
beginning and middle of this calendar year. These programs are described on
page 40.
Aug 31, 2003
Management prepared this Form SB-2 to raise capital to further explore the SF
claim and to proceed with its objective of becoming a reporting company and
eventually listed on the OTC Bulletin Board. No documents have been filed to
date with the OTC Bulletin Board and none will be filed until the Effective Date
of this Form SB-2.
For an analysis of the accounts payable as at February 29, 2004 refer to Item
17, "Management's Discussion and Analysis or Plan of Operation" (a) - Plan of
Operations, part (viii) on page 46.
The amount of capital contributed since inception by related parties is as
follows:
Glen Macdonald $ 7,717
Vera McCullough 3,895
-------
$11,612
======
-48-
The amounts due to related parties are unsecured, do not bear interest and have
no fixed repayment terms.
February 29, 2004
Stanford undertook work on the SF claim in November 2003 to maintain the claim
in good standing until January 5, 2005.
(2) Results of Operations
An overall analysis of the operations for Stanford for the five years ended
August 31, 2003 and the six months ended February 29, 2004 are shown below:
Statements of Operations:
Six Year Year Year Year Year From
Months ended ended ended ended ended Sept. 24,
Feb. Aug. Aug Aug Aug Aug 1998 to
29 31 31 31 31 31 May 31,
2004 2003 2002 2001 2000 1999 2003
------- ------ ------- ------- ------- -------- ----------
Accounting, audit (i) $ 2,250 $ 8,620 $ 1,750 $ 1,500 $ 1,550 $ 1,500 $ 17,170
Bank charges
and interest (ii) . . 435 701 426 84 70 38 1,754
Consulting fees . . . 6,000 - - - - - 6,000
Exploration
expenses (iii) . . . 1,544 500 1,282 2,912 - - 6,238
Filing fees (iv). . . 60 378 502 120 100 430 1,590
Legal . . . . . . . . 93 4,408 - - - - 4,501
Management
fees (v). . . . . . . 3,000 6,000 6,000 6,000 6,000 6,000 33,000
Office (vi) . . . . . 969 213 385 - 63 115 1,745
Rent (vii). . . . . . 2,100 4,200 4,200 4,200 4,200 4,200 23,100
Telephone (ix). . . . 1,200 2,400 2,400 2,400 2,400 2,400 13,200
Transfer agent's
fees (x). . . . . . . 1,200 1,200 1,215 1,200 1,200 2,610 8,625
------- ------- ------ ------ ------ ------ ------
Net loss for
the period . . . . . $18,851 $28,620 $18,160 $18,416 $15,583 $ 17,293 $ 116,923
======= ======= ======= ======= ======= ======== ========
(i) Accounting and audit
Stanford has engaged the services of Amisano Hanson, Chartered Accountants, to
examine the financial statements for the five years ended August 31, 2003 and
for the six months ended February 29, 2004; which are reproduced under Item 22 -
Financial Statements.
-49-
The audit fees incurred to date have been approximately $7,420 and the review of
the unaudited interim financial statements for the six months ended February 29,
2004 has been accrued at $750. Stanford has engaged the services of an
accountant to prepare the accounting records in advance of the examination by
the auditors. The cost associated with this service for the five years ended
August 31, 2003 and for the six months ended February 29, 2004 was $9,000.
(ii) Bank charges and interest
This expense represents the monthly charges imposed by Stanford's bank for
maintaining and servicing transactions within the account. Included in the
amount for August 31, 2003 and February 29, 2004, is interest charged by Nevada
Agency & Trust Company for late payment of it charges. Due to the lack of
funds, the bank account was closed but can be re-opened upon receipt of any
proceeds of funds obtained under this Form SB-2.
(iii) Exploration expenses
The cost of staking the SF mineral claim was $1,381 and the cost for the
preparation of the geological report commissioned by Stanford was $1,531. The
cost of the physical work program on the SF mineral claim in January and June
2002 was $1,282. The cost of assaying the soil samples taken during the work
program was $500. The cost of exploration performed in November 2003 was
$1,544. Exploration expenses were not capitalized and amortized over the life of
the mineral claim but were treated as a period cost and written off in the year
incurred. Stanford will expense all costs in the future relating to the SF
claim or any other future claim obtained by it until such time as a production
decision is made.
(iv) Filing fees
Filing fees are paid to The Company Corporation Inc. in the State of Delaware
and to the State of Delaware for franchise taxes. The Company Corporation Inc.
assisted in the incorporation of Stanford and acts as the registered office in
Delaware. The following represents an analysis of filing fees incurred since
inception.
February August August August August August
2004 2003 2002 2001 2000 1999
--------- ------- ------- ------- ------- -------
Incorporation costs. $ - $ - $ - $ - $ - $ 255
Fees paid to SEC . . - 100 - - - -
Basic franchise tax. 30 30 30 30 30
Filing fee for
franchise tax (a). . 60 20 20 20 20 20
Interest and
penalty (b). . . . - 53 75 70 50 -
Registration
fee (c). . . . . . . - 175 150 - - 125
Reinstatement
fee (d) . . . . . . - - 227 - - -
-------- ------ ----- ----- ------ ------
$ 60 $ 378 $ 502 $ 120 $ 100 $ 430
======== ===== ====== ====== ====== ======
-50-
(a) In 2004 the State of Delaware increased the franchise tax.
(b) Interest and penalties is charged by the State of Delaware on late filing
of the franchise fees.
(c) For the years 2000 and 2001, Stanford was late in paying its registered
agent fee. Stanford has re-instated itself with The Company Corporation and
will maintain itself in good standing with its registered agent in the
future.
(d) In re-instating itself in the State of Delaware, Stanford paid the
following additional fees besides the registered agent fee of $150 and the
annual payment to the State of Delaware:
State fee $ 95
Recording fee 24
Service fee 90
Federal Express charges 18
----
$227
===
(v) Management fee
The directors and officers of Stanford have never received anything of value for
their services nor have they received any compensation for the time they have
spent on the business of Stanford. Nevertheless, recognition should be given
for this service. Therefore, a charge of $500 per month has been determined as
reasonable in the light of the inactively of Stanford in prior years. This
amount has been expensed in each period with an offsetting entry to Contributed
Surplus. Basically, the accrual for management fees is a bookkeeping entry
which will never have to be settled by Stanford in either cash or shares either
now or in the future.
(vi) Office
Office expenses over the periods have related to photocopying, fax and delivery
charges. Office expenses were higher in August 2002 due to photocopying
charges for various documents and working papers being submitted to the
auditors. For the six months ended February 29, 2004, Stanford incurred
printing costs relating to the filing of this Form SB-2 as well as the purchase
of various office supplies.
(vii) Rent
Stanford uses the premises of its President without having the liability to pay
rent. A normal rent for a one room office located in a second class building
in Vancouver would be approximately $350. The accounting treatment for rent is
the same as for management fees above and telephone below.
(viii) Telephone
Stanford, at this time, does not have its own telephone number but rather uses
as its business telephone number that of its President. Therefore, no charge
has been incurred by Stanford but Stanford recognizes that there is a cost
associated with a telephone and has accrued $200 per month as a reasonable
charge. Similar to management fees and rent, the expense has been recognized
-51-
in the periods noted above. It is the intention of Stanford to eventually seek
its own office and install its own telephone system once it has the funds
available to do so.
(ix) Transfer agent's fees
The transfer agent for Stanford is Nevada Agency & Trust Company in Reno,
Nevada. During 1999 Stanford paid a total of $2,610 in fees to the transfer
agent consisting of $1,200 for Nevada Agency to be the registered transfer
agent, $175 for obtaining a CUCIP number and $1,235 for the issuance of the
share certificates to the shareholders. In 2000 to 2003, Stanford paid the
annual fee to Nevada Agency to act as the transfer agent. No shares were
required to be issued in years 2000 to 2004 other than a transfer from a
previous director to a current director.
First Annual General Meeting to Shareholders
Stanford held its First Annual General Meeting of Shareholders (the "Meeting")
on September 19, 2003 in Vancouver, British Columbia Canada to approve various
resolutions recommended by the Board of Directors to Stanford's shareholders.
The following resolutions were approved at the Meeting:
1. the approval of the audited financial statements for the fiscal year ended
August 31, 2002;
2. the election of the Board of Directors comprising Glen Macdonald, Vera
McCullough and William Nielsen (a);
3. the appointment of Amisano Hanson as auditors for the ensuing year;
4. the approval of the issuance of a maximum 1,000,000 common shares at a
price of $0.20 per share as indicated under this Form SB-2; and
The votes cast at the Meeting were a total of 1,887,000 representing 80% of the
shares eligible to vote. The breakdown of shares was 620,000 shares were in
person and 1,267,000 shares were by proxy.
Other factors and trends to be considered:
(i) Short and long-term trend liabilities
Stanford is unaware of any known trends, events or uncertainties that have or
are reasonably likely to have a material impact on its business either in the
long-term or long-term liquidity which have not been disclosed under Risk
Factors - Page 6.
(ii) Internal and external sources of liquidity
There are no material internal and external sources of liquidity.
(iii) Commitments for capital expenditures
-52-
Stanford has no commitments for any capital expenditures of a significant amount
and has not budgeted any funds from this Offering to purchase any assets of any
nature.
(iv) Known trends, events or uncertainties having an impact on income.
Since Stanford is in the start-up stage and the SF claims have not produced any
income, and there is a chance that they never will, management does not know of
any trends, events or uncertainties that are reasonably expected to have a
material impact on income in the future - refer to Risk Factor - 13 - page 12.
(v) Income from other sources.
Stanford knows of no significant elements of income or losses that do not arise
from Stanford's continuing operations. Until such time as Stanford has defined
a mineable ore reserve it will not realize any income.
(vi) Changes in the financial statements.
Stanford does not know of any cause for any material changes from period to
period in one or more line items of its financial statements as shown in this
Form SB-2. These audited financial statements adhere with accounting principles
generally accepted in the United States of America.
(vii) Seasonal aspects affecting the financial condition.
The only seasonal aspect known to Stanford which will affect its financial
condition or results of operations is the weather. During the initial
exploration stage, Stanford will only be able to explore the SF claim during the
late spring, summer and early fall months due to the possibility of snow in
winter. Winter weather conditions makes it difficult to obtain soil and rock
samples, prospecting, trenching and removal of overburden. Refer to Location
and Access on page 36.
(2) Interim Periods
Stanford has no historical financial information upon which to base an
evaluation of its performance other than the audited financial statements filed
with this Form SB-2. It is in the exploration stage and has not generated any
revenues from operations to date. There is no guarantee that Stanford will have
successful business operations. It is subject to risks inherent in the
establishment of a new business enterprise, including limited capital resources,
possible delays in the exploration of the SF claim, and possible cost overruns
due to price and cost increases in services required during its exploration
work.
To date Stanford has concentrated on the SF claim. In the future, Stanford will
investigate other exploration properties to determine which ones are of merit
and are of interest to Stanford. Subject to the availability of financing,
Stanford will seek to increase its inventory of mineral properties and, if
acceptable to management, enter into joint venture agreements to explore various
other mineral properties of merit. No mineral properties or joint venture
situations have been identified to date.
-53-
ITEM 18. DESCRIPTION OF PROPERTY
SF Claim
The description of the SF claim is more fully described under "Location and
Access" and "Land Tenure" on page 36.
Advantage of incorporation in Delaware
Stanford was incorporated in the State of Delaware. Had it been incorporated in
the Province of British Columbia it would be subject to both Provincial and
Federal Taxes on its net income earned during the fiscal year. In addition, the
Province of British Columbia has a capital tax over and above its corporate tax.
Taking into consideration the Federal/Provincial corporate tax and the capital
tax could result in Stanford paying half of its net income in taxes. Being a
Delaware incorporated entity will result in Stanford paying only 15% tax in
Canada which becomes a credit when filing a corporate tax return in the United
States. To take advantage of this situation, Stanford will have to become an
ex-provincially incorporated company in British Columbia. It has not yet taken
the steps to do this and will not ex-provincially incorporate until such time as
it has proven to have a viable ore reserve.
Investment Policy
Stanford is not limited on the percentage of assets which it may invest in and
therefore can purchase other mineral claims in the future. A disposal of a
major asset would result in the Board of Directors seeking shareholders'
approval since this would ensure no subsequent shareholder action could be
brought against Stanford and its directors and officers. Stanford's policy is
to acquire assets, being mineral properties, primarily for income in the future
rather than capital gains. It is the intention of Stanford to explore the SF
claim in hopes of eventually developing it into becoming a producing mineral
based property. In the interim period, management will invest idle funds into
income bearing securities such as term deposits, interest bearing notes, etc.
ITEM 19. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Stanford has never before filed a prospectus specified under Section 10(a) of
the Securities Act of 1933. Stanford raised funds from its director's
relatives, friends and business associates as more fully described below.
A former director, Philip Yee, acquired 400,000 shares at $0.001 per share for
cash consideration on February 24, 1999. Philip Yee is deemed to be a founder,
organizer and initial shareholder of Stanford. Other than the shares he
purchased, he received nothing of value from Stanford.
Douglas Symonds, a former President and director of Stanford, was transferred
Mr. Yee's shares for becoming a director and President of Stanford.
After the resignation of Mr. Symonds, Glen Macdonald acquired the 400,000 shares
noted above from Mr. Symonds and he became the President of Stanford.
-54-
Vera McCullough, Secretary Treasurer and Director, has no shares in Stanford but
is planning to acquire 25,000 shares under this Offering. Vera McCullough has
not entered into any agreement to purchase these shares and when they are
available for sale she will pay cash as will all investors under this Offering.
The shares registered to Glen Macdonald and the proposed shares to be purchased
under this Offering by Vera McCullough are and will be restricted since they
were and will be 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, the holders of these shares could sell a
percentage of their shares every three months based on 1% of the outstanding
stock in Stanford. Therefore, this stock can be sold after the expiration of
one year in compliance with the provisions of Rule 144. There are "stop
transfer" instructions placed against the stock of Glen Macdonald and a legend
is imprinted on the stock certificate. This will be the same case for the
future shares being purchased by Vera McCullough.
As of March 31, 2004, Glen Macdonald has the only shares restricted under Rule
144 totaling 400,000 shares.
Stanford did not use the services of an underwriter for the issuance of the
above-mentioned shares and therefore no discounts or commissions were paid to
anyone. All shares purchased were for cash consideration only.
Other than as set forth above, since inception there have not been any
transactions that have occurred between Stanford and its officers, directors,
promoters and five percent or greater shareholders.
ITEM 20. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
Market Information
Stanford's stock is not presently traded or listed on any public market and
therefore there is no established market price for the shares. Subsequent to
the Effective Dated of Stanford's registration statement under the Securities
Act of 1933, it is anticipated one or more broker dealers may make a market in
its securities over-the-counter, with quotations carried on the National
Association of Securities Dealers, Inc.'s "OTC Bulletin Board". There is no
assurance Stanford will ever be quoted on the OTC Bulletin Board or any other
exchange.
Stanford has no proposed symbol for the OTC Bulletin Board and there is no
market maker for Stanford's shares.
There are no common shares subject to outstanding options, warrants or
securities convertible into common equity of Stanford. The number of shares
presently subject to Rule 144 is 400,000 shares. The share certificate has the
appropriate legend affixed thereto. Presently, under Rule 144, the number of
shares which could be sold, if an application is made, is 23,585 shares. The
400,000 shares, mentioned above, are the only shares issued by Stanford which
are restricted. There are no shares being offered pursuant to an employee
benefit plan or dividend reinvestment plan. In addition, there are no
outstanding options or warrants to purchase common shares or shares convertible
into common shares of Stanford.
-55-
Equity Compensation Plans
There are no securities authorized for issuance under equity compensation plans
or individual compensation arrangements.
ITEM 21. EXECUTIVE COMPENSATION
There has been no compensation given to any of the directors or officers since
inception. There are no stock options outstanding as at March 31, 2004 and no
options have been granted in 2002, 2003 or 2004, but it is contemplated that
Stanford may issue stock options in the future to officers, directors, advisers
and future employees.
Stanford has accrued $500 per month since its inception as management fees to
give recognition to services provided by the directors and officers for which
they are not paid. The directors and officers have agreed not to accept shares
or cash in the future for the management fees accrued to date. Therefore,
management fees have been expensed during the period they were recognized and
credited to Contributed Surplus. The total amount of management fees so
credited since inception is $33,000.
Stanford does not consider the above noted management fees as compensation to
the directors and officers because they received nothing personally, and the
expenses were accrued to accurately reflect the value of services provided to
Stanford, even though Stanford did not actually pay anything for such services.
There are no employment contracts or termination of employment agreements in
effect.
Initially Stanford will use independent workers and consultants on a part time
basis. This will enable Stanford to not incur long-term contracts with any
employee and will assist Stanford to utilize funds raised by way of this Form
SB-2 in the exploration of the SF claim and not the retention of employees
during idle times.
Directors are not paid for meetings attended and there are no fees for telephone
meetings. Nevertheless, Stanford has accrued telephone charges for each period
since inception and credited a similar amount to Contributed Surplus. All
travel and lodging expenses associated with directors' meeting(s) are reimbursed
by Stanford when incurred.
-56-
ITEM 22. FINANCIAL STATEMENTS
The following represents the audited financial statements for the year ended
August 31, 2003.
(on Amisano Hanson letterhead)
INDEPENDENT AUDITORS' REPORT
To the Stockholders,
Stanford Management Ltd.
We have audited the accompanying balance sheets of Stanford Management Ltd. (A
Pre-exploration Stage Company) as of August 31, 2003 and 2002 and the related
statements of operations, stockholders' deficiency and cash flows for the three
year period ended August 31, 2003 and for the period September 24, 1998 (Date of
Incorporation) to August 31, 2003. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, these financial statements referred to above present fairly, in
all material respects, the financial position of Stanford Management Ltd. as of
August 31, 2003 and 2002 and the results of its operations and its cash flows
for three year period ended August 31, 2003 and for the period from September
24, 1998 (Date of Incorporation) to August 31, 2003, in conformity with
accounting principles generally accepted in the United States of America.
The accompanying financial statements referred to above have been prepared
assuming that the Company will continue as a going concern. As discussed in
Note 1 to the financial statements, the Company is in the pre-exploration stage,
and has no established source of revenue and is dependent on its ability to
raise capital from shareholders or other sources to sustain operations. These
factors, along with other matters as set forth in Note 1, raise substantial
doubt that the Company will be able to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
"Amisano Hanson"
Vancouver, Canada Chartered Accountants and
November 21, 2003 Certified Public Accountant
-57-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
BALANCE SHEETS
August 31, 2003 and 2002
(Stated in US Dollars)
--------------------
LIABILITIES 2003 2002
------- -------
Current Liabilities
Accounts payable and accrued liabilities. . . . . $ 19,554 $ 9,707
Due to related parties - Note 4 . . . . . . . . . 10,068 3,895
---------- ---------
29,622 13,602
---------- ---------
STOCKHOLDERS' DEFICIENCY
Common stock $0.001 par value
25,000,000 authorized
2,358,500 outstanding (2002: 2,385,500) . . . . . . . 2,358 2,358
Paid-in Capital . . . . . . . . . . . . . . . . . . . 3,092 3,092
Contributed surplus - Note 8. . . . . . . . . . . . . 63,000 50,400
Deficit accumulated during the pre-exploration stage. (98,072) (69,452)
---------- --------
(29,622) (13,602)
---------- --------
$ - $ -
========= =========
Nature and Continuance of Operations - Note 1
Commitments - Note 9
SEE ACCOMPANYING NOTES
-58-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
STATEMENTS OF OPERATIONS
For the years ended August 31, 2003, 2002 and 2001 and the period
September 24, 1998 (Date of Incorporation) to August 31, 2003
(Stated in US Dollars)
--------------------
SEPTEMBER 24,
YEAR ENDED YEAR ENDED YEAR ENDED 1998 (DATE OF
AUGUST 31 AUGUST 31 AUGUST 31 INCORPORATION)
2003 2002 2001 AUGUST 31, 2003
--------------- ------------ --------------- --------------------
Expenses
Accounting . . . . . . . . . . $ 8,620 $ 1,750 $ 1,500 $ 14,920
Bank charges and interest. . . 701 426 84 1,319
Exploration expenses . . . . . 500 1,282 2,912 4,694
Filing fees. . . . . . . . . . 378 502 120 1,530
Legal fees . . . . . . . . . . 4,408 - - 4,408
Management fees (Note 8) . . . 6,000 6,000 6,000 30,000
Office . . . . . . . . . . . . 213 385 - 776
Rent - Note 8. . . . . . . . . 4,200 4,200 4,200 21,000
Telephone - Note 8 . . . . . . 2,400 2,400 2,400 12,000
Transfer agent's fees. . . . . 1,200 1,215 1,200 7,425
----------- --------- ---------- -----------
$ 28,620 $ 18,160 $ 18,416 $ 98,072
---------- --------- --------- -----------
Net loss for the period . . . . . $ (28,620) $ (18,160) $ (18,416) $ (98,072)
========== ========= =========== ===========
Basic and diluted loss per share. $ ( 0.001) $ ( 0.001) $ ( 0.001)
========== ========== ===========
Weighted average shares
outstanding . . . . . . . . . . . 2,358,500 2,358,500 2,358,500
========= ========= =========
SEE ACCOMPANYING NOTES
-59-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
STATEMENTS OF CASH FLOWS
For the years ended August 31, 2003, 2002 and 2001 and for the period
September 24, 1998 (Date of Incorporation) to August 31, 2003
(Stated in US Dollars)
--------------------
SEPTEMBER 24,
1998 (DATE OF
YEAR ENDED YEAR ENDED YEAR ENDED INCORPORATION)
AUGUST 31 AUGUST 31 AUGUST 31 TO AUGUST 31
2003 2002 2001 2003
--------------- ------------ --------------- --------------
Cash flows from Operating Activities
Net loss for the period. . . . . $ (28,620) $ (18,160) $ (18,416) $ (98,072)
Non-cash administrative expenses 12,600 12,600 12,600 63,000
Changes in non-cash working capital
item
Accounts payable and accrued
liabilities . . . . . . . . . . 9,847 3,532 2,838 19,554
--------------- ------------ --------------- --------------
Cash used in operating activities (6,173) (2,028) (2,978) (15,518)
--------------- ------------ --------------- --------------
Cash flows from Financing Activities
Capital stock issued. . . . . . . - - - 5,450
Due to related party. . . . . . . 6,173 983 2,912 10,068
--------------- ------------ --------------- --------------
Cash provided by financing activities 6,173 983 2,912 15,518
--------------- ------------ --------------- --------------
Decrease in cash during the period. . - (1,045) ( 66) -
Cash, beginning of the period . . . . - 1,045 1,111 -
--------------- ------------ --------------- --------------
Cash, end of the period . . . . . . . $ - $ - $ 1,045 $ -
=============== ============ =============== ==============
Supplemental disclosure of cash flow
information:
Cash paid for:
Interest. . . . . . . . . . . $ - $ - $ - $ -
=============== ============ =============== ==============
Income taxes. . . . . . . . . $ - $ - $ - $ -
=============== ============ =============== ==============
Non-cash transaction - Note 8
SEE ACCOMPANYING NOTES
-60-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
STATEMENTS OF STOCKHOLDERS' DEFICIENCY
for the period September 24, 1998 (Date of Incorporation) to August 31, 2003
(Stated in US Dollars)
--------------------
DEFICIT
ACCUMULATED
DURING THE PRE-
PAID-IN CONTRIBUTED EXPLORATION
NUMBER PAR VALUE CAPITAL SURPLUS STAGE TOTAL
----------- ------------ ----------------- -------- ------------- -----
Capital stock issued
For cash - at $0.001. . . 2,015,000 $ 2,015 $ - $ - $ - $ 2,015
- at $0.01 343,500 343 3,092 - - 3,435
Capital contribution. . . . . . . . . . - - - 12,600 - 12,600
Net loss for the period . . . . . . . . - - - - (17,294) (17,294)
----------- ------------ ----------------- -------- --------- ----------
Balance, August 31, 1999. . . . . . . . 2,358,500 2,358 3,092 12,600 (17,294) 756
Capital contribution. . . . . . . . . . - - - 12,600 - 12,600
Net loss for the period . . . . . . . . - - - - (15,583) (15,583)
----------- ------------ ----------------- -------- --------- ----------
Balance, August 31, 2000. . . . . . . . 2,358,500 2,358 3,092 25,200 (32,877) (2,227)
Capital contribution. . . . . . . . . . - - - 12,600 - 12,600
Net loss for the period . . . . . . . . - - - - (18,415) (18,415)
----------- ------------ ----------------- -------- --------- ----------
Balance, August 31, 2001. . . . . . . . 2,358,500 2,358 3,092 37,800 (51,292) ( 8,042)
Capital contribution. . . . . . . . . . - - - 12,600 - 12,600
Net loss for the period . . . . . . . . - - - - (18,160) (18,160)
----------- ------------ ----------------- -------- --------- ----------
Balance, August 31, 2002. . . . . . . . 2,358,500 2,358 3,092 50,400 (69,452) (13,602)
Capital Contribution. . . . . . . . . . - - - 12,600 - 12,600
Net loss for the year . . . . . . . . . - - - - (28,620) (28,620)
----------- ------------ ----------------- -------- --------- ----------
BALANCE, AUGUST 31, 2003. . . . . . . . 2,358,500 $ 2,358 $ 3,092 $ 63,000 $(98,072) $( 29,622)
=========== ============ ================= ======== ========= ==========
SEE ACCOMPANYING NOTES
-61-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2003 and 2002
(Stated in US Dollars)
--------------------
NOTE 1 NATURE AND CONTINUANCE OF OPERATIONS
----------------------------------------
The Company was incorporated under the laws of the State of Delaware on
September 24, 1998.
The Company is in the pre-exploration stage. The Company has staked a mineral
claim and has not yet determined whether this property contains reserves that
are economically recoverable. The recoverability of amount from the property
will be dependent upon the discovery of economically recoverable reserves,
confirmation of the Company's interest in the underlying property, the ability
of the Company to obtain necessary financing to explore and complete and
development of the property and upon future profitable production or proceeds
for the sale thereof.
These financial statements have been prepared on a going concern basis. The
Company has accumulated a deficit of $98,072 since inception and at August 31,
2003 has a working capital deficiency totaling $29,622. Its ability to continue
as a going concern is dependent upon the ability of the Company to generate
profitability operations in the future and/or to obtain the necessary financing
to meet its obligations and repay its liabilities arising from normal business
operations when they come due.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful judgement.
Actual results may vary from these estimates.
The financial statements have, in management's opinion, been properly prepared
within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:
Pre-exploration Stage Company
- -------------------------------
The Company complies with Financial Accounting Standard Board Statement No. 7,
and Securities and Exchange Commission Act Guide 7 for its characterization of
the Company as pre-exploration stage.
Exploration Expenses
- ---------------------
Cost of lease, acquisition, exploration, carrying and retaining unproven mineral
properties are expenses as incurred.
-62-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2003 and 2002
(Stated in US Dollars) - Page 2
--------------------
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONT'D)
-----------------------------------------------------------
Environmental Costs
- --------------------
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations, and which do not contribute to current or future
revenue generation, are expensed. Liabilities are recorded when environmental
assessments and/or remedial efforts are probable, and the cost can be reasonably
estimated. Generally, the timing of these accruals coincides with the earlier
of completion of a feasibility study or the Company's commitments to plan of
action based on the then known facts.
Income Taxes
- -------------
The Company uses the liability method of accounting for income taxes pursuant to
Statement of Financial Accounting Standards, No. 109 "Accounting for Income
Taxes."
The Financial Accounting Standards Board issued Statement Number 109 in
Accounting for Income Taxes ("FAS 109") which is effective for fiscal years
beginning after December 15, 1992. FAS 109 requires the use of asset and
liability method of accounting for income taxes. Under the assets and
liability method of FAS 109, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to temporary differences between
the financial statements carry amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expect to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled.
Basic Loss Per Share
- -----------------------
The Company reports basic loss per share in accordance with the Statement of
Financial Accounting Standards No. 128, "Earnings Per Share". Basic loss per
share is computed using the weighted average number of shares outstanding during
the period. Diluted loss per share has not been provided as it would be
anti dilutive.
Financial Instruments
- ----------------------
The carrying value of each accounts payable and accrued liabilities and due to
related parties approximates fair value because of the short maturity of these
instruments. Unless otherwise noted, it is management's opinion that the
Company is not exposed to significant interest, currency or credit risks arising
from these financial instruments.
-63-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2003 and 2002
(Stated in US Dollars) - Page 3
--------------------
NOTE 3 UNPROVEN MINERAL CLAIMS
-------------------------
The Company has a 100% interest in a 18 unit metric mineral claim known as the
SF claims located in the Tulameen Mining Division located 11 miles northwest of
Princeton, British Columbia, Canada. The claims have not been proven to have a
commercially minable reserve and therefore all costs for exploration and
retaining the properties have been expensed.
NOTE 4 DUE TO RELATED PARTIES
-------------------------
Amounts due to related parties are comprised of advances from to a director of
the Company and are unsecured, do not bear interest and have no fixed repayment
terms.
NOTE 5 DEFERRED TAX ASSETS
---------------------
The following table summarizes the significant components of the Company's
deferred tax assets:
Total
-----------------
Deferred tax assets
Non-capital loss carryforward $ 21,600
Less: valuation allowance . . (21,600)
-----------------
$ -
=================
The amount taken into income as deferred tax assets must reflect that portion of
the income tax loss carry forwards that is likely to be realized from future
operations. The Company has chosen to provide an allowance of 100% against all
available income tax loss carryforwards, regardless of their time of expiry.
NOTE 6 INCOME TAXES
-------------
No provision for income taxes has been provided in these financial statements
due to the net loss. At August 31, 2003 the Company has net operating loss
carryforwards, which expire commencing in 2019, totaling approximately $98,072,
the benefit of which has not been recorded in the financial statements.
NOTE 7 NEW ACCOUNTING STANDARDS
--------------------------
Management does not believe that any recently issued, but not yet effective
accounting standards if currently adopted could have a material effect on the
accompanying financial statements.
-64-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 2003 and 2002
(Stated in US Dollars) - Page 4
--------------------
NOTE 8 NON-CASH TRANSACTION
---------------------
Investing and financing activities that do not have a direct impact on current
cash flows are excluded from the statement of cash flows. Directors and
officers of the Company have provided certain administrative services at no
charge. The deemed fair value of these services has been recorded as
contributed surplus as follows:
SEPTEMBER 24
1998 (DATE OF
INCORPORATION)
TO AUGUST 31,
2003 2002 2001 2003
------ ------- ------- --------------
Management fees. $ 6,000 $ 6,000 $ 6,000 $ 30,000
Rent . . . . . . 4,200 4,200 4,200 21,000
Telephone. . . . 2,400 2,400 2,400 12,000
------ -------- -------- ---------
$ 12,600 $ 12,600 $ 12,600 $ 63,000
======= ======== ========= =========
These transactions were excluded from the statement of cash flows.
NOTE 9 COMMITMENT
-----------
The Company filed a SB-2 registration statement which includes an offering of up
to 1,000,000 common shares at $0.20 per share to the public.
-65-
The following financial statements for the six months ended February 29, 2004
have been reviewed by Amisano Hanson.
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
INTERIM BALANCE SHEETS
February 29, 2004 and August 31, 2003
(Stated in US Dollars)
--------------------
(Unaudited)
February 29, August 31,
LIABILITIES 2004 2003
- ----------------------------------------------------- ---------------- --------------
Current Liabilities
Accounts payable and accrued liabilities. . . . . . . $ 30,561 $ 19,554
Due to related parties . . . . . . . . . . . 11,612 10,068
----------- ----------
42,173 29,622
----------- ----------
STOCKHOLDERS' DEFICIENCY
-----------------------------------------------------
Common stock $0.001 par value
25,000,000 authorized
2,358,500 outstanding (2003: 2,358,500) . . . . . . . 2,358 2,358
Paid-in capital . . . . . . . . . . . . . . . . . . . 3,092 3,092
Contributed surplus - Note 3 . . . . . . . . . . . . 69,300 63,000
Deficit accumulated during the pre-exploration stage. (116,923) ( 98,072)
------------ ----------
(42,173) ( 29,622)
------------ ----------
$ - $ -
============ ==========
Nature and Continuance of Operations - Note 2
Commitment - Note 4
SEE ACCOMPANYING NOTES
-66-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF OPERATIONS
for the three and six months ended February 29, 2004 and February 28, 2003
and for the period September 24, 1998 (Date of Incorporation) to February 29,
2004
(Stated in US Dollars)
(Unaudited)
September 24,
Three Three Six Six 1998 (Date of
Months Months Months Months Incorporation)
Ended Ended Ended Ended to
February February February February February
29 28 29 28 29
2004 2003 2004 2003 2004
------------- ----------- ------------ -------------- -------------
Expenses
Accounting and
auditing fees. . . . . . . . . . $ 2,250 $ 950 $ 2,250 $ 900 $ 16,989
Bank charges
and interest . . . . . . . . . . 223 119 435 246 1,754
Consulting fees . . . . . . . . . . . 6,000 - 6,000 - 6,000
Exploration expenses. . . . . . . . . 1,544 - 1,544 500 6,238
Filing fees . . . . . . . . . . . . . 60 - 60 - 1,590
Legal fees. . . . . . . . . . . . . . - - 93 - 4,501
Management
Fees -
Note 3. . . . . . . . . . . . . . 1,500 1,500 3,000 3,000 33,000
Office. . . . . . . . . . . . . . . . 700 168 969 168 1,426
Rent - Note 3 . . . . . . . . . . . . 1,050 1,050 2,100 2,100 23,100
Telephone -
Note 3. . . . . . . . . . . . . . 600 600 1,200 1,200 13,200
Transfer
agent's fees . . . . . . . . . . . 1,200 - 1,200 51 8,625
----------- -------- ------- -------- ----------
12,877 4,387 18,851 8,165 116,923
------------ -------- -------- --------- ----------
Net loss for the
period . . . . . . . . . $ ( 12,877) $ ( 4,387) $ ( 18,851) $ (8,165) $ (116,923)
========== ======== ========= ========== =========
Basic and
diluted per
share. . . . . . . . . . . . . . . $ ( 0.00) $ ( 0.00) $ ( 0.01) $ (0.00)
========== ======== ========== =========
Weighted average number of
shares outstanding . . . . . . . . . . 2,358,500 2,358,500 2,358,500 2,358,500
========= ========= ========= =========
SEE ACCOMPANYING NOTES
-67-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
for the six months ended February 29, 2004 and February 28, 2003
and for the period September 24, 1998 (Date of Incorporation) to February 29,
2004
(Stated in US Dollars)
--------------------
(Unaudited)
September 24,
1998 (Date of
Incorporation) to
Six Months Ended February 29,
2004 2003 2004
--------------- ------------------- --------------
Cash flow from Operating Activities
Net loss for the period. . . . . . . . . . . . . . $ ( 18,851) $ ( 8,165) $ ( 116,923)
Non-cash administration expenses . . . . . . . . . 6,300 6,300 69,300
Change in non-cash working capital item:
Accounts payable and accrued
Liabilities . . . . . . . . . . . . . . . . . . . 11,007 1,865 30,561
--------------- ------------------- --------------
Cash used in operating activities. . . . . . . . . (1,544) - (17,062)
--------------- ------------------- --------------
Cash flows from Financing Activities
Capital stock issued . . . . . . . . . . . . . . . - - 5,450
Due to related parties . . . . . . . . . . . . . . 1,544 - 11,612
--------------- ------------------- --------------
Cash provided by financing activities. . . . . . . 1,544 - 17,062
--------------- ------------------- --------------
Decrease in cash during the period . . . . . . . . - - -
Cash, beginning of the period. . . . . . . . . . . - - -
------------ -------------- ----------
Cash, end of the period. . . . . . . . . . . . . . $ - $ - $ -
=========== ============= ===========
Supplemental disclosure of cash flow information:
Cash paid for:
Interest . . . . . . . . . . . . . . . . . . . . . $ - $ - $ -
============ ============= ===========
Income taxes . . . . . . . . . . . . . . . . . . . $ - $ - $ -
============ ============= ===========
Non-cash transactions - Note 3
SEE ACCOMPANYING NOTES
-68-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
INTERIM STATEMENT OF STOCKHOLDERS' DEFICIENCY
February 29, 2004
(Stated in US Dollars)
--------------------
(Unaudited)
DEFICIT
ACCUMULATED
DURING THE
PAID-IN CONTRIBUTED PRE-EXPLORATION
NUMBER PAR VALUE CAPITAL SURPLUS STAGE TOTAL
----------- ------------ ----------
Capital stock issued
For cash - at $0.001. . . . 2,015,000 $ 2,015 $ - $ - $ - $ 2,015
- at $0.001 343,500 343 3,092 - - 3,435
Capital contribution. . . . - - - 12,600 - 12,600
Net loss for the period . . - - - - (17,293) (17,293)
----------- ------------ ---------------- -------- ----------- ------------
Balance, August 31, 1999. . 2,358,500 2,358 3,092 12,600 (17,293) 757
Capital contribution. . . . - - - 12,600 - 12,600
Net loss for the period . . - - - - (15,583) (15,583)
----------- ------------ ---------------- -------- ----------- ------------
Balance, August 31, 2000. . 2,358,500 2,358 3,092 25,200 (32,876) (2,226)
Capital contribution. . . . - - - 12,600 - 12,600
Net loss for the period . . - - - - (18,416) (18,416)
----------- ------------ ---------------- -------- ----------- ------------
Balance, August 31, 2001. . 2,358,500 2,358 3,092 37,800 (51,292) ( 8,042)
Capital contribution. . . . - - - 12,600 - 12,600
Net loss for the period . . - - - - (18,160) (18,160)
----------- ------------ ---------------- -------- ----------- ------------
Balance, August 31, 2002. . 2,358,500 2,358 3,092 50,400 (69,452) (13,602)
Capital contribution. . . . - - - 12,600 - 12,600
Net loss for the period . . - - - - (28,620) (28,620)
----------- ------------ ---------------- -------- ----------- ------------
Balance, August 31, 2003. . 2,358,500 2,358 3,092 63,000 (98,072) (29,622)
Capital contribution. . . . - - - 6,300 - 6,300
Net loss for the period . . - - - - (18,851) (18,851)
----------- ------------ ---------------- -------- ----------- ------------
Balance, February 29, 2004. 2,358,500 $ 2,358 $ 3,092 $ 69,300 $ (116,923) $ (42,173)
=========== ============ ================ ======== =========== ============
SEE ACCOMPANYING NOTES
-69-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
February 29, 2004
(Stated in US Dollars)
--------------------
(Unaudited)
Note 1 Interim Reporting
------------------
While the information presented in the accompanying interim six months
financial statements is unaudited, it includes all adjustments which are,
in the opinion of management, necessary to present fairly the financial
position, results of operations and cash flows for the interim period
presented. All adjustments are of a normal recurring nature. It is
suggested that these financial statements be read in conjunction with the
company's August 31, 2003 annual financial statements.
Note 2 Continuance of Operations
-------------------------
The financial statements of the Company have been prepared using generally
accepted accounting principles in the United States of America applicable
for a going concern which assumes that the company will realize its assets
and discharge its liabilities in the ordinary course of business.. AS at
February 29, 2004, the Company has a working capital deficiency of $42,173,
which is not sufficient to meet its planned business objective or to fund
mineral property expenditures and ongoing operations for the next fiscal
year. The Company has accumulated losses of $116,923 since its
commencement. Its ability to continue as a going concern is dependent upon
the ability of the Company to obtain the necessary financing to meet its
obligations and pay its liabilities arising from normal business operations
when they come due.
Note 3 Non-cash Transactions
---------------------
Investing and financing activities that do not have a direct impact on
current cash flows are excluded from the statement of cash flows. Directors
and officers of the Company have provided certain administrative services
at no charge. The deemed fair value of these services has been recorded as
contributed surplus as follows:
September 24
1998 (Date of
Incorporation)
Three months ended Six months ended to February 29,
2004 2003 2004 2003 2004
---- ---- ---- ---- ----
Management fees $ 1,500 $ 1,500 $ 3,000 $ 3,000 $ 33,000
Rent 1,050 1,050 2,100 2,100 23,100
Telephone 600 600 1,200 1,200 13,200
----- ----- ----- ----- ------
$ 3,150 $ 3,150 $ 6,300 $ 6,300 $ 69,300
========== ======== ======= ======== ========
These transactions were excluded from the statement of cash flows.
-70-
STANFORD MANAGEMENT LTD.
(A Pre-exploration Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
February 29, 2004
(Stated in US Dollars)
(Unaudited)
Note 4 Commitment
----------
The Company has filed a SB-2 registration statement which includes an
initial public offering of 1,000,000 common shares at $0.20 per share. The
registration statement is subject to approval by the United States Security
Exchange Commission.
ITEM 23. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNT
AND FINANCIAL DISCLOSURE
The principal accountant's report, rendered by Amisano Hanson, Chartered
Accountants, on the financial statements did not contain adverse opinion or
disclaimer of opinion, or was modified as to uncertainty, audit scope, or
accounting principles. No decision has been made by the shareholders of the
Stanford to change accountants. There has been no disagreement with the auditors
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedures.
Dealer Prospectus Delivery Obligation
Until --------, 2004, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
-71-
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Information on this item is set forth in the prospectus under the heading Item
14 - "Disclosure of Commission Position on Indemnification for Securities Act
Liabilities" on page 27.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated fees and expenses in connection
with the issuance and distribution of the securities being registered hereunder,
all of which are being paid by Stanford:
Various Subscription Levels
$50,000 $100,000 $150,000 $200,000
------- -------- -------- --------
Accounting and auditing. . . . . . . . . . . . $ 5,000 $ 5,000 $ 5,000 $ 5,000
Legal. . . . . . . . . . . . . . . . . . . . . 10,000 10,000 10,000 10,000
Office and miscellaneous . . . . . . . . . . . 500 550 600 700
Transfer agent's fees - new issuance of shares 1,000 1,165 1,330 1,500
------- -------- -------- --------
Estmated expenses of
issuance . . . . . . . . . . . . . . . . . . . $16,500 $ 16,715 $ 16,930 $ 17,200
======= ======== ======== ========
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
From inception through to March 31, 2004, Stanford has issued and sold the
following unregistered shares of its common stock (the aggregated value of all
such offerings did not exceed $1,000,000):
(i) Subscription for shares by a Director and Officer of Stanford
(a) Subscription for shares by a former director and officer
On February 24, 1999 Stanford issued to its former President, Philip Yee,
400,000 common shares at .001 per share.
Douglas Symonds, a former President, acquired the 400,000 common shares
previously held by Mr. Yee for becoming Stanford's President.
-72-
(b) Subscription for shares by current directors and officers
Stanford's new President Glen Macdonald, was transferred the 400,000 common
shares previously held by Mr. Symonds for becoming the President of
Stanford on October 24, 2002.
These shares are restricted since they were 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, Glen
Macdonald could sell within a three month period a percentage of his shares
based on 1% of the outstanding stock in the Stanford. Therefore, this stock
can be sold after the expiration of one year in compliance with the
provisions of Rule 144. There are "stop transfer" instructions placed
against this certificate and a legend has been imprinted on the stock
certificate itself.
(ii) Subscription for 1,615,000 shares
On February 24, 1999, Stanford accepted subscriptions from 18 investors in
the amount of 1,615,000 shares at a price of $0.001 per share. In all
cases, the consideration was cash. These shares were issued in accordance
with the exemption from registration provided by Rule 504 of Regulation D
of the Securities Act of 1933, as amended, and an appropriate Form D was
filed in connection with the issuance of these shares. These owners of
record of this stock do not own 5% of the outstanding shares of Stanford
and therefore were not controlling shareholders and none of them were
officers and directors of Stanford.
(iii) Subscription for 343,500 shares
On March 3, 1999, Stanford accepted subscriptions from 40 investors in the
amount of 343,500 shares at a price of $0.01 per share. In all cases the
consideration was cash. These shares were issued in accordance with the
exemption from registration provided by Rule 504 of Regulation D of the
Securities Act of 1933, as amended, and an appropriate Form D was filed in
connection with the issuance of these shares. These owners of record of
this controlling shareholders and none of them were officers and directors
of Stanford.
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ITEM 27. EXHIBITS
------------------
EXHIBIT
NO. DESCRIPTION PAGE
- ------- ------------------------------------------------- ----
11.1 Statement re: Computation of Per Share Earnings 77
23.1 Consent of Experts and Counsel
Amisano Hanson . . . . . . . . . . . 78
John Jenks, P. Geo.. . . . . . . . 79
The following exhibits are included as part of this report by reference:
Exhibit
No. Description
3.i Certificate of Incorporation (incorporated by
Reference from Stanford's Registration
Statement on Form SB-2A filed on August 29, 2003)
3.i.1 Certificate of Renewal and the Revival
of the Certificate of Incorporation
(incorporated by reference from Stanford's
Registration Statement on Form SB-2A on August 29, 2003)
3.ii By-laws (incorporated by reference from
Stanford's Registration Statement on
.. . . . . . . Form SB-2A on August 29, 2003)
4.1 Stock Specimen (incorporated by reference
from Stanford's Registration Statement on
Form SB-2A on August 29, 2003)
5 Opinion re. Legality (incorporated by
reference from Stanford's Registration
Statement on Form SB-2A on February 3, 2004
10.1 Material Contracts
Transfer Agent and Registrar
Agreement (incorporated by reference from
Stanford's Registration Statement on Form
SB-2A on August 29, 2003)
99 99.1 Share Subscription Agreement
(incorporated by reference from Stanford's
Registration Statement on Form SB-2A on
August 29, 2003
99-2 Indemnification Agreement
(incorporated by reference from Stanford's
Registration Statement on Form SB-2A
on August 29, 2003)
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the registrant to
the foregoing provisions, or otherwise, the registrant has been advised that in
the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
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payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlled person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submitted to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are made, a
post-effective amendment to this registration statement:
a. To include any prospectus required by Section 10(a)(3) of the Securities
Act;
b. To reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
registrant statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to
Rule 424 (b)(S 230.424(b)) of the Securities Act, if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registrant Fee" table in the effective registration statements; and
c. To include any additional or changed material information with respect to
the plan of distribution.
2. For determining liability under the Securities Act to treat each such
post-effective amendment as a registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
3. to file a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, Stanford
certifies that it has reasonable grounds to believe that it meets all the
requirements of filing on Form SB-2 and authorized this registration to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Vancouver, British Columbia, Canada on April 26, 2004.
STANFORD MANAGEMENT LTD.
(Registrant)
/s/ "Glen Macdonald"
----------------------
Glen Macdonald
Principal Executive Officer,
President, and Director
SPECIAL POWER OF ATTORNEY
The undersigned constitute and appoint Glen Macdonald their true and lawful
attorney-in-fact and agent with full power of substitution, for him and in his
name, place, and stead, in any and all capacities, to sign any and all
amendments, including post-effective amendments, to this Form SB-2 registration
the U.S. Securities and Exchange Commission, granting such attorney-in-fact the
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully and to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorney-in-fact may lawfully do or cause to be done by
virtue hereof. Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the
capacities and on the date indicated.
Dated: April 26, 2004
/s/ "Glen Macdonald"
- ----------------------
Glen Macdonald
Principal Executive Officer,
President and Director
/s/ "Vera McCullough"
- -----------------------
Vera McCullough
Principal Financial Officer,
Secretary Treasurer and Director
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