UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED: DECEMBER 31, 2007
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 0-13738
THE SAINT JAMES COMPANY
(Exact Name of Registrant as Specified in its charter)
North Carolina 56-1426581
- -------------- ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
4505 Las Virgenes Road, Suite 210
Calabasas, CA 91302
(310) 739-5696
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(Address and Telephone Number of Principal Executive Offices)
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 par value.
Check whether the issuer: (1) Filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) Yes [X] No [ ]
State issuer's revenues for its most recent fiscal year: $0.
The aggregate market value of the voting stock held by non-affiliates computed
by reference to the average bid and asked prices of such stock on March 14, 2008
was $0. The Company's stock does not trade on any public market at this time.
On March 14, 2008, the Registrant had 11,999,057 shares of its common stock
issued and outstanding. Of the 11,999,057 shares issued and outstanding,
11,586,046 shares are held by non-affiliates. The Registrant's common stock does
not trade on any public markets at this time.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X].
TABLE OF CONTENTS
PAGE NUMBER
PART I
ITEM 1 Description of Business 1
ITEM 2 Description of Property 5
ITEM 3 Legal Proceedings 6
ITEM 4 Submission of Matters to A Vote of Security Holders 6
PART II
ITEM 5 Market For Common Equity, Related Stockholder Matters 6
ITEM 6 Management's Discussion and Analysis 7
ITEM 7 Financial Statements 9
ITEM 8 Changes In and Disagreements with Accountants and
Financial Disclosure 9
ITEM 8A(T) Controls And Procedures 9
ITEM 8B Other Information 11
PART III
ITEM 9 Directors and Executive Officers of the Company 11
ITEM 10 Executive Compensation 12
ITEM 11 Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters 14
ITEM 12 Certain Relationships and Related Transactions 16
PART IV
ITEM 13 Exhibits 16
ITEM 14 Principal Accountant Fees and Services 16
Signatures 18
FORWARD-LOOKING STATEMENTS
In addition to historical information, some of the information presented in this
Annual Report on Form 10-KSB contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform
Act"). Although The Saint James Company ("Saint James" or the "Company", which
may also be referred to as "we", "us" or "our") believes that its expectations
are based on reasonable assumptions within the bounds of its knowledge of its
business and operations: there can be no assurance that actual results will not
differ materially from our expectations. Such forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
materially from those anticipated, including but not limited to, our ability to
reach satisfactorily negotiated settlements with our outstanding creditors,
vigorously defend against any further appeal that may be made against our
currently successful defense of the law suit brought against us by certain of
our shareholders, bring our financial records and SEC filings up to date,
achieve a listing on the over the counter bulletin board, raise debt and, or,
equity to fund negotiated settlements with our creditors and to meet our ongoing
operating expenses and merge with another entity with experienced management and
opportunities for growth in return for shares of our common stock to create
value for our shareholders. Cautionary statements regarding the risks,
uncertainties and other factors associated with these forward-looking statements
are discussed under "Risk Factors" in this Form 10-KSB. You are urged to
carefully consider these factors, as well as other information contained in this
Form 10-KSB and in our other periodic reports and documents filed with the SEC.
ITEM 1. DESCRIPTION OF BUSINESS.
Chem-Waste Corporation (the "Company," "we," or "us") was incorporated on
January 10, 1984 under the laws of the State of North Carolina. On July 19,
1984, Chem-Waste Corporation changed its name to Radiation Disposal Systems,
Inc. From 1984 through 1998, the Company designed, manufactured, sold and
serviced equipment and systems for the treatment of contaminated insoluble
organic materials. However, due to heavy competition in the industry, that
aspect of the Company's business operations ceased in 1998.
On November 19, 1998 Radiation Disposal Systems, Inc. exchanged all of its
outstanding shares for an equivalent number of shares in The Saint James
Company, an entity that had been incorporated in Delaware on October 13, 1998.
In connection with that transaction, we changed our name to The Saint James
Company.
From 1984 through 1998, the Company designed, manufactured, sold and serviced
equipment and systems for the treatment of contaminated insoluble organic
materials. However, due to heavy competition in the industry, management decided
to cease the Company's business operations in 1998.
In 2007, we changed our name to The Saint James Company. The Company does not
currently have active business operations, other than holding certain artwork
and it is currently searching to find a potential purchaser or merger candidate
On December 15, 2005, the Company made the acquisition of Animation Cell Art
work from The Saint James Collection, LLC., a Nevada Corporation, with a view to
marketing and licensing the cells. Due to limited resources, the Company has not
been able to aggressively pursue its marketing objectives in connection with the
artwork. None of the stockholders of The Saint James Collection, LLC. were
affiliates of the Company, or affiliated with any director or officer of the
Company, nor did they have any material relationships with the Company. The
Company issued 5,000,000 shares of its restricted common stock to the
stockholders of The Saint James Collection, LLC., which represent approximately
41% of the issued and outstanding shares of the common stock of the Company at
the time. The artwork has a value of $50,000, which was based upon 5,000,000
shares of common stock issued at a value $0.01 per share (par value).
1
The animation cell artwork that the Company acquired is collectively called, The
St. James Company Ninja Turtles Animation Collection ("the Ninja Turtles
Animation Collection"). The Ninja Turtles Animation Collections consists of a
number of production Cels, pencil drawings, hand painted backgrounds and hand
painted pan backgrounds of Ninja Turtles
The Company intends to focus its business operations on the marketing and sale
of animation cell art. The Company intends to establish relationships with
different distributors to sell the art. The Company will initially penetrate the
market through two avenues. The first includes providing limited numbers of
original Animation Cell Art to collectors through select retail venues. The
second avenue is to work closely with charitable organizations, who would sell
the original or reproduction art to the public or through school systems, in
most states, as part of their fundraising efforts.
By creating relationships with sales organizations, we believe we will be
capable of selling products to retailers and the general public through existing
marketing channels, providing us with access to vendors with every major retail
chain outlet in America, Canada, and most of Europe and Asia. The animation cell
artwork that the Company acquired is collectively called, The St. James Company
Ninja Turtles Animation Collection ("the Ninja Turtles Animation Collection").
The Ninja Turtles Animation Collections consists of a number of production Cels,
pencil drawings, hand painted backgrounds and hand painted pan backgrounds of
Ninja Turtles
The St. James Company Ninja Turtles Animation Collection consists of a number of
production Cels, pencil drawings, hand painted backgrounds and hand painted pan
backgrounds.
The St. James Company Cel Art Collection consists of the following:
Ninja Turtles Animation Collection (Dino Cells)
PRODUCT: Original Production Cels, QUANTITY: 23,719
PRODUCT: Packaged Cels, QUANTITY: 18,680
PRODUCT: Pencil Drawings, QUANTITY: 33,266
PRODUCT: Painted Backgrounds, QUANTITY: 1,121
Animation Industry
Animation has historically been known as the principal medium of entertainment
for children. Originally, animation was primarily targeted at a television
audience consisting mainly of children. The production of animation has
typically involved developing a range of specific characters suitable to a story
line, then developing visual effects through the enactment of characters to the
story plot, using individually photographed Cels. The individual Cels are hand
produced on clear Celluloid film over a hand painted background, one scene at a
time.
2
RISK FACTORS
WE HAVE INCURRED SIGNIFICANT LOSSES AND ANTICIPATE FUTURE LOSSES
At December 31, 2007, we had an accumulated deficit of $3,625,79 1and
stockholders' equity of $36,787. Future losses are likely to occur as we have no
sources of income to meet our operating expenses. As a result of these, among
other factors, we received a report on our consolidated financial statements for
the year ended December 31, 2007 from our independent accountants that include
an explanatory paragraph stating that there is substantial doubt about our
ability to continue as a going concern. Consistent with our business plan, we
plan on reaching satisfactory negotiated settlements with our outstanding
creditors, vigorously defending against any further appeal that may be made
against our currently successful defense of the lawsuit brought against us by
certain of our shareholders, raising additional debt and/or equity to fund
settlements with our creditors and to meet our ongoing operating expenses and
attempting to merge with another entity with experienced management and
opportunities for growth in return for shares of our common stock to create
value for our shareholders. There can be no assurance that this series of events
will be successfully completed. No assurances can be given that we will be
successful in acquiring operations, generating revenues or reaching or
maintaining profitable operations.
OUR EXISTING FINANCIAL RESOURCES ARE INSUFFICIENT TO MEET OUR ONGOING OPERATING
EXPENSES
We have no sources of income at this time and no existing cash balances that are
adequate to meet our ongoing operating expenses. In the short term, unless we
are able to raise additional debt and/or, equity we shall be unable to meet our
ongoing operating expenses. On a longer term basis, we plan to acquire an entity
with experienced management and the opportunities for growth in exchange for
shares of our common stock and are dependent on achieving a successful merger
with a profitable company. No assurances can be given that we will be successful
in acquiring operations, generating revenues or reaching or maintaining
profitable operations.
OUR DIRECTORS MAY HAVE CONFLICTS OF INTEREST WHICH MAY NOT BE RESOLVED FAVORABLY
TO US.
Certain conflicts of interest may exist between our directors and us. Our
Directors have other business interests to which they devote their attention,
and may be expected to continue to do so although management time should be
devoted to our business. As a result, conflicts of interest may arise that can
be resolved only through exercise of such judgment as is consistent with
fiduciary duties to us. See "Directors, Executive Officers, Promoters and
Control Persons" and "Conflicts of Interest."
THE REGULATION OF PENNY STOCKS BY SEC AND NASD MAY HAVE AN EFFECT ON THE
TRADABILITY OF OUR SECURITIES.
Our securities are currently listed on the Pink Sheets and we are currently
seeking to have them listed on the over the counter bulletin board. Our shares
are subject to a Securities and Exchange Commission rule that imposes special
sales practice requirements upon broker-dealers who sell such securities to
persons other than established customers or accredited investors. For purposes
of the rule, the phrase "accredited investors" means, in general terms,
institutions with assets in excess of $5,000,000, or individuals having a net
worth in excess of $1,000,000 or having an annual income that exceeds $200,000
(or that, when combined with a spouse's income, exceeds $300,000). For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. Consequently, the rule may
affect the ability of broker-dealers to sell our securities and also may affect
the ability of purchasers in this offering to sell their securities in any
market that might develop therefore.
3
In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange
Act of 1934, as amended. Because our securities constitute "penny stocks" within
the meaning of the rules, the rules would apply to us and to our securities. The
rules may further affect the ability of owners of Shares to sell our securities
in any market that might develop for them.
Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired consequent investor losses. Our
management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
OUR STOCK WILL IN ALL LIKELIHOOD BE THINLY TRADED AND AS A RESULT YOU MAY BE
UNABLE TO SELL AT OR NEAR ASK PRICES OR AT ALL IF YOU NEED TO LIQUIDATE YOUR
SHARES.
The shares of our common stock may be thinly-traded on the OTC Bulletin Board,
meaning that the number of persons interested in purchasing our shares of common
stock at or near ask prices at any given time may be relatively small or
non-existent. This situation is attributable to a number of factors, including
the fact that we are a small company which is relatively unknown to stock
analysts, stock brokers, institutional investors and others in the investment
community that generate or influence sales volume, and that even if we came to
the attention of such persons, they tend to be risk-averse and would be
reluctant to follow an unproven, early stage company such as ours or purchase or
recommend the purchase of our shares of common stock until such time as we
became more seasoned and viable. As a consequence, there may be periods of
several days or more when trading activity in our shares of common stock is
minimal or non-existent, as compared to a seasoned issuer which has a large and
steady volume of trading activity that will generally support continuous sales
without an adverse effect on Securities price. We cannot give you any assurance
that a broader or more active public trading market for our shares of Common
Stock will develop or be sustained, or that any trading levels will be
sustained. Due to these conditions, we can give investors no assurance that they
will be able to sell their shares of common stock at or near ask prices or at
all if you need money or otherwise desire to liquidate your shares of common
stock of our Company.
4
RULE 144 SALES IN THE FUTURE MAY HAVE A DEPRESSIVE EFFECT ON OUR STOCK PRICE.
All of the outstanding shares of common stock held by our present officers,
directors, and affiliate stockholders are "restricted securities" within the
meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted
Shares, these Shares may be resold only pursuant to an effective registration
statement or under the requirements of Rule 144 or other applicable exemptions
from registration under the Act and as required under applicable state
securities laws. Rule 144 provides in essence that a person who has held
restricted securities for 6 months may, under certain conditions, sell
restricted securities without any volume limitations. A sale under Rule 144 or
under any other exemption from the Act, may have a depressive effect upon the
price of the common stock in any market that may develop.
THE PRICE OF OUR COMMON STOCK COULD BE HIGHLY VOLATILE
Our intention is for our shares of common stock to become quoted on the Over the
Counter Bulletin Board. If our shares are quoted, on the over the counter
bulletin board, it is likely that our common stock will be subject to price
volatility, low volumes of trades and large spreads in bid and ask prices quoted
by market makers. Due to the low volume of shares traded on any trading day,
persons buying or selling in relatively small quantities may easily influence
prices of our common stock. This low volume of trades could also cause the price
of our stock to fluctuate greatly, with large percentage changes in price
occurring in any trading day session. Holders of our common stock may also not
be able to readily liquidate their investment or may be forced to sell at
depressed prices due to low volume trading. If high spreads between the bid and
ask prices of our common stock exist at the time of a purchase, the stock would
have to appreciate substantially on a relative percentage basis for an investor
to recoup their investment. Broad market fluctuations and general economic and
political conditions may also adversely affect the market price of our common
stock. No assurance can be given that an active market in our common stock will
develop or be sustained. If an active market does not develop, holders of our
common stock may be unable to readily sell the shares they hold or may not be
able to sell their shares at all.
WE DO NOT ANTICIPATE PAYING CASH DIVIDENDS ON OUR COMMON STOCK
We do not anticipate paying any cash dividends on our common stock in the
foreseeable future.
EMPLOYEES
Bruce Anthony Cosgrove is the President and CEO as of November 2006; Wayne
Gronquist, Esq. is the Secretary of the Company, Mr. Hamilton is a Director of
the Company and was appointed at the November 6, 2006 Board of Director Meeting.
Neither Mr. Gronquist, Mr. Cosgrove nor Mr. Hamilton do not currently receive
compensation for serving as an officer of the Company or otherwise. The Company
does not have any employees.
ITEM 2. PROPERTIES
The Company does not own or lease any property.
5
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company or any of
its officers and directors are a party or of which any of the Company's property
is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted by us to a vote of our security holders during the
years ended December 31, 2007 and 2006 or subsequent to that date.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
Market Information
The Company's common stock does not currently trade on the over-the-counter
market or any national exchange. Due to the lack of trading, no bid or asked
closing prices per share for the Company's common stock for the quarterly
periods in 2007 or 2006 is available.
On December 31, 2007, the Company had 1,064 shareholders of record.
Stockholder Matters
Penny Stock Regulation Broker-dealer practices in connection with transactions
in "penny stocks" are regulated by certain penny stock rules adopted by the
Securities and Exchange Commission. Penny stocks generally are equity securities
with a price of less than $5.00. Excluded from the penny stock designation are
securities registered on certain national securities exchanges or quoted on
NASDAQ, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange/system or sold to
established customers or accredited investors.
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the risks
in the penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in connection with the transaction, and the
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. As our securities have become subject to the penny stock
rules, investors may find it more difficult to sell their securities.
6
Dividends
Our board of directors determines any payment of dividends. We have not paid any
cash dividends on our common stock in the past, and we do not anticipate paying
any dividends in the foreseeable future. Earnings, if any, are expected to be
retained to fund our future operations. There can be no assurance that we will
pay dividends at any time in the future.
Recent Sales of Unregistered Securities
We did not sell or issue any shares of common stock during the year ended
December 31, 2007.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the consolidated
financial statements and notes thereto and the other financial information
included elsewhere in this report. This discussion contains forward-looking
statements that involve risks and uncertainties. Our actual results could differ
materially from those anticipated in these forward looking statements as a
result of any number of factors, including those set forth under "Risk Factors"
on page -- and elsewhere in this report.
The St. James Company Ninja Turtles Animation Collection (also referred to as
"Dino Cells") consists of a number of production Cels, pencil drawings, hand
painted backgrounds and hand-painted pan backgrounds (the quantity of which is
listed in Item 9).
7
The Company intends on marketing this genre which would include providing
limited numbers of original Animation Cell Art to collectors through some select
retail venues and by working closely with some charities that can sell original
or reproduction art as a fund raiser to the public or through school systems in
most states. The Company intends to establish a relationship with distributors
to sell art.
Due to the Company's limited resources, the Company has not been able to
aggressively pursue their business objectives and will be better positioned once
the Company is quoted and traded on the OTC BB, wherein said listing may
facilitate financing opportunities during the next twelve months.
The Company anticipates potentially hiring one or two marketing sales
representatives to deal directly with distributors of art work and or greeting
card companies.
PLAN OF OPERATIONS
On December 15, 2005, the Company entered into a purchase agreement with The
Saint James Collection, LLC and purchased Limited Edition Animation Art Cell
Collection or Sericells for 5,000,000 shares of Saint James Company. The
5,000,000 shares were valued at $0.01 per share.
The Company has assets of $50,000. The Company has a net income of $28,070 for
the year ended December 31, 2007 and a net loss of $682 for 2006. Currently,
management does not anticipate any circumstances in which the Company will
produce revenues or acquire assets. Management is seeking a potential merger
candidate or purchaser for the Company to minimize the shareholders' loss.
RESULTS OF OPERATIONS
During the years ended December 31, 2007 and 2006, the Company did not recognize
any revenues.
During the years ended December 31, 2007 and 2006, the Company did not incur any
general and administrative expenses. This was due to the Company's cessation of
operations.
During the year ended December 31, 2007, the Company recognized a gain of
$28,582 in connection with the settlement of a $5,894 judgment and the release
of debt consisting of accounts payable and accrued interest totaling $22,688.
During the year ended December 31, 2007, the Company recognized net income of
$28,070 compared to a net loss of $682 in the year ended December 31, 2007. The
increase of $28,752 is primarily a result of the gain of $28,582, discussed
above.
FINANCIAL CONDITION AND LIQUIDITY
At December 31, 2007, the Company had no cash or cash equivalents. The Company
had assets of $50,000, consisting of the artwork acquired in 2006. The Company
had liabilities of $13,213, all current. During the year ended December 31,
2007, the Company did not use or receive funds through either its investing or
financing activities.
8
During the year ended December 31, 2007, the Company was released from debt
consisting of $12,403 in accounts payable, accrued interest of $10,285 and an
accrued judgment of $5,894. In connection with the releases, we recognized a
gain of $28,582.
During the year ended December 31, 2007, officers of the Company, who had made
advances of $53,003 to the Company, released us from our obligation to repay
this debt. This release of debt has been treated as a capital contribution and
accounted for in additional paid-in capital.
We remain dependent on raising additional equity and, or, debt to fund any
negotiated settlements with our outstanding creditors and meet our ongoing
operating expenses. There is no assurance that we will be able to raise the
necessary equity and, or, debt that we will need to be able to negotiate
acceptable settlements with our outstanding creditors or fund our ongoing
operating expenses. There can be no assurances that we will be able to raise
such funds
CRITICAL ACCOUNTING POLICIES
The Plan of Operations discusses our financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. When we prepare these financial statements, we are required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of expenses during the
reporting period. On an on-going basis, we evaluate our estimates and judgments,
including those related to accrued judgments and other liabilities. We base our
estimates and judgments on historical experience and on various other factors
that we believe to be reasonable under the circumstances, the results of which
form the basis for our judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.
ITEM 7. FINANCIAL STATEMENTS
See financial statements.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
Item 8A(T). Controls and Procedures.
Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer
and Principal Financial Officer, has evaluated the effectiveness of our
disclosure controls and procedures (as such term is defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as of December 31, 2007. Based on this evaluation, and except
as described in Management's Report on Internal Control Over Financial
Reporting, our Principal Executive Officer and our Principal Financial Officer
concluded, that our disclosure controls and procedures were effective, at the
reasonable assurance level, during the period and as of the end of the period
covered by this Annual Report to ensure that information required to be
disclosed by us in reports that we file or submit under the Exchange Act is
recorded, processed, summarized, and reported within the time periods specified
in the Securities and Exchange Commission rules and forms and that such
information is accumulated and communicated to our management as appropriate to
allow timely decisions regarding required disclosures.
9
Our management, including our Principal Executive Officer and Principal
Financial Officer, does not expect that our disclosure controls or procedures
will prevent all error and all fraud. A control system, no matter how well
conceived and operated, can provide only reasonable, not absolute assurance that
the objectives of the control system are met. Further, the benefits of controls
must be considered relative to their costs. Because of the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within us have been
detected. Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
Management's Report on Internal Control Over Financial Reporting
Our internal controls over financial reporting are designed by, or under
the supervision of our Principal Executive Officer and Principal Financial
Officer or persons performing similar functions, and effected by our board of
directors, management, and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. Our internal control over financial reporting includes
those policies and procedures that:
o Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of
our assets;
o Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with accounting principles generally accepted in the
United States and that our receipts and expenditures are being made
only in accordance with authorizations of our management and
directors; and
o Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition or disposition of our assets
that could have a material effect on the financial statements.
Our management has evaluated the effectiveness of our internal control
over financial reporting as of December 31, 2008, based on the control criteria
established in a report entitled Internal Control -- Integrated Framework,
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on this evaluation, our management concluded that our internal control
over financial reporting was deficient as of December 31, 2007, in that we did
not maintain effective controls to ensure there was adequate analysis,
documentation, reconciliation, and review of supporting data as it related to
the recordation of payments by related parties of expenses that had been
incurred on our behalf. This control deficiency contributed to the individual
material weaknesses described below:
(a) Due in large part to our financial status and lack of meaningful
operations during our 2007 fiscal year, we did not have qualified financial
reporting personnel with sufficient depth, skills, and experience to ensure
adequate analysis, documentation, reconciliation, and review of supporting data
as it related to the recordation of payments by related parties of expenses that
had been incurred on our behalf.
(b) We did not maintain effective controls to ensure adequate analysis,
documentation, reconciliation, and review of supporting data as it related to
the recordation of payments by related parties of expenses that had been
incurred on our behalf.
(c) We did not have adequate controls in place to identify the existence
of any non-recurring third-party payments such that proper accounting could be
determined on a timely basis.
The control deficiency and material weaknesses noted above resulted in a
restatement of our 2007 financial statements - specifically, an increase in our
net loss for that fiscal year of $61,373 and a corresponding increase in the
deficit accumulated during our current development stage to $3,687,164.
Accordingly, management has now determined that each of the control deficiencies
described above constituted a material weakness.
As of December 31, 2007, the control deficiencies discussed above
constituted material weaknesses in our internal control over financial
reporting. To the extent reasonably possible in accordance with our financial
condition and minimal business operations in our 2008 fiscal year, we accepted
the resignation of our principal accounting officer and chief financial officer
in September of 2008, more than six months after the smaller of the events
discussed above. To the extent reasonably possible in accordance with our
financial condition and expected future business operations in our 2009 fiscal
year, we replaced our chief executive officer and our principal accounting /
chief financial officer. Through these steps, we believe we addressed the
deficiencies that affected our internal control over financial reporting as of
December 31, 2007.
This report on internal control over financial reporting included in this
amended Annual Report was not included in the original filing of our Annual
Report on Form 10-KSB; however, subject to the deficiencies noted above, our
referenced disclosure controls and procedures were effective at the time of the
original filing, notwithstanding that omission.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting
(as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange
Act during either the fiscal year ended December 31, 2007, or the fourth quarter
of such fiscal year, that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
This Annual Report does not include an attestation report of our
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by our registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit us to provide only management's report in this
Annual Report.
10
ITEM 8B Other Information
None.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
All Directors are elected each year by the shareholders of the Company's at its
annual meeting normally held in November. Each Director holds office until his
death, resignation, retirement, removal disqualification, or until his successor
is elected and qualified.
The Officer and Directors of the Company, as of December 31, 2007, are as
follows:
Name Commenced Age Position
- ---------------------------------- ------------------- -------- --------------------------------
- ---------------------------------- ------------------- -------- --------------------------------
Bruce Anthony Cosgrove 2006 55 President & CEO, Director
Wayne Gronquist, Esq. 1998 64 Secretary, Director
Stuart Douglas Hamilton 2006 46 Director
Bruce Anthony Cosgrove. Mr. Cosgrove has been with the Company for 4 years and
was appointed President, CEO, at the November 06, 2006 Board of Directors
Meeting. Mr. Cosgrove has spent twenty years as an Investment Banker and eight
years as a Research Chemist. He has a Bachelor of Science and a Master of
Science in Chemistry and studies towards his Doctorate in Chemistry from Simon
University in Canada.
Wayne Gronquist. Mr. Gronquist has been our President and Secretary and a
director of the Company since 1998. He is an attorney in private practice in
Austin Texas with 26 years experience as corporate counsel and advisor for
various privately held corporations. The operation of his law practice is Mr.
Gronquist principal occupation. Mr. Gronquist has not held an office or served
on the Board of Directors of any other corporation, besides his personal law
practice, prior to his service for the Company and The Saint James Company.
Mr. Stuart Douglas Hamilton. Mr. Hamilton has been a director of the Company
since November 6, 2006. For the proceeding two years, he has also been employed
by BC Bearings Engineers Ltd., as an Oil Services Manager and for the
immediately preceeding five years, he was employed by HYDAC Canada, as its
Western Canadian Manager.
Code of Ethics
Due to the limited scope of our current operations, we have not adopted a
corporate code of ethics that applies to our principal executive officer,
principal accounting officer, or persons performing similar functions.
11
Changes in Director Nomination
There have been no material changes to the procedures by which shareholders may
recommend nominees to our board of directors.
Audit Committee Financial Expert
All members of our board of directors perform the responsibilities of the audit
committee, providing oversight of our accounting functions and internal
controls. Our board of directors has not designated a Financial Expert, as
defined by the SEC, due to factors including but not limited to our operational
status and the limited number of transactions, accounts and balances that we
maintain. Our board of directors has determined that it is not in our best
interests at this time to incur the costs associated with identifying and
designating a Financial Expert.
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation paid
by the Company to the President and the Company's two most highly compensated
executive officers for the fiscal year ended December 31, 2007 and 2006 (the
"Named Executive Officers"):
SUMMARY EXECUTIVES COMPENSATION TABLE
- --------------- ------- -------- --------- -------- --------- --------------- ---------------- --------------- -------
Non-equity Non-qualified
incentive deferred
Stock Option plan compensation All other
Name & Salary Bonus awards awards compensation earnings compensation Total
Position Year ($) ($) ($) ($) ($) ($) ($) ($)
- --------------- ------- -------- --------- -------- --------- --------------- ---------------- --------------- -------
- --------------- ------- -------- --------- -------- --------- --------------- ---------------- --------------- -------
Bruce
Cosgrove,
President & 2007 0 0 0 0 0 0 0 0
CEO 2006 0 0 0 0 0 0 0 0
- --------------- ------- -------- --------- -------- --------- --------------- ---------------- --------------- -------
- --------------- ------- -------- --------- -------- --------- --------------- ---------------- --------------- -------
Wayne 2007 0 0 0 0 0 0 0 0
Gronquist,
Director
- --------------- ------- -------- --------- -------- --------- --------------- ---------------- --------------- -------
- --------------- ------- -------- --------- -------- --------- --------------- ---------------- --------------- -------
- --------------- ------- -------- --------- -------- --------- --------------- ---------------- --------------- -------
(1) Mr. Gronquist served as the Company's CEO and President till November 2006.
EMPLOYMENT AND CONSULTING AGREEMENTS
There were no employment contracts or consulting agreements with our directors
or officers during the year ended December 31, 2007.
12
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following table sets forth certain information concerning outstanding equity
awards held by the President and Chief Executive Officer (CEO) the fiscal year
ended December 31, 2007 (the "Named Executive Officers"):
Option Awards Stock awards
- ------------- ----------- ------------ ----------- ----------- ---------- ---------- ---------- ----------- ----------
Equity
incentive
Equity plan
incentive Equity awards:
plan incentive Market
awards: plan or
Number of Number of Number of Number Market awards: payout
securities securities securities of value of Number of value of
underlying underlying underlying shares shares unearned unearned
unexercised unexercised unexercised Option Option or units of units shares, shares,
options options unearned exercise expiration of stock of stock units or units or
Name (#) (#) options price date that that other others
exercisable unexercisable (#) ($) have not have not rights rights
vested vested that have that
(#) ($) not have not
vested (#) vested
($)
- ------------- ----------- ------------ ----------- ----------- ---------- ---------- ---------- ----------- ----------
- ------------- ----------- ------------ ----------- ----------- ---------- ---------- ---------- ----------- ----------
Bruce 0 0 0 0 0 0 0 0 0
Cosgrove,
President &
CEO
- ------------- ----------- ------------ ----------- ----------- ---------- ---------- ---------- ----------- ----------
- ------------- ----------- ------------ ----------- ----------- ---------- ---------- ---------- ----------- ----------
DIRECTOR COMPENSATION
The following table sets forth certain information concerning compensation paid
to our directors for services as directors, but not including compensation for
services as officers reported in the "Summary Executives Compensation Table"
during the year ended December 31, 2007:
- ---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
Non-qualified
Non-equity deferred
Fees earned incentive compensation All other
or paid in Stock Option plan earnings compensation Total
Name cash awards ($) awards ($) compensation ($) ($) ($)
($) ($)
- ---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
- ---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
Bruce Cosgrove $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
- ---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
- ---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
- ---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
- ---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
Wayne Gronquist $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
- ---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
- ---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
- ---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
- ---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
Stuart Hamilton $ -0- $ -0- $-0- $ -0- $-0- $ -0- $ -0-
- ---------------- ------------- ------------- ------------- --------------- -------------- --------------- ------------
All of our officers and/or directors will continue to be active in other
companies. All officers and directors have retained the right to conduct their
own independent business interests.
It is possible that situations may arise in the future where the personal
interests of the officers and directors may conflict with our interests. Such
conflicts could include determining what portion of their working time will be
spent on our business and what portion on other business interest. To the best
ability and in the best judgment of our officers and directors, any conflicts of
interest between us and the personal interests of our officers and directors
will be resolved in a fair manner which will protect our interests. Any
transactions between us and entities affiliated with our officers and directors
will be on terms which are fair and equitable to us. Our Board of Directors
intends to continually review all corporate opportunities to further attempt to
safeguard against conflicts of interest between their business interests and our
interests.
13
Directors receive no compensation for serving.
Mr. Gronquist serves on the Board of Directors and as an officer of the Company
and The Saint James Company at the request of First Dominion, a previous
majority owner of the outstanding Company shares. First Dominion is a client of
Mr. Gronquist law firm. Mr. Gronquist received $0 from First Dominion for work
performed in 2007. The work performed for First Dominion is unrelated to the
business of the Company. Mr. Gronquist does not receive any compensation for
acting as the Trustee for First Dominion's the Company shares
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of December 31, 2007, the number of shares of
the Company's outstanding Common Stock owned beneficially by (i) each person
known to the Company to be the beneficial owner of more than five percent (5%)
of such stock, (ii) each Director of the Company and (iii) each Executive
Officer.
Name and Address of Amount and Nature of Percentage of Outstanding
Beneficial Owner Beneficial Relationship Common Stock(1)
- -------------------------------------------------- ------------------------ ---------------------------------
Wynthrop Barrington, Inc. 1,000,000 8.2%
1800 E. Sahara, Suite 107
Las Vegas, NV 90104
Michael Brovsky, LLC 1,000,000 8.2%
5662 Calle Real #118
Goleta, CA 93117
Christian W. Johnson 1,000,000 8.2%
7172 Hawthorne #110
Los Angeles, CA 90046
Manufactures Warranty Group, Inc. 1,000,000 8.2%
3535 E. Coast Hwy, Suite 331
Corona del Mar, CA 92625
W. David Winitzky 1,000,000 8.2%
3463 State Street, PMB508
Santa Barbara, California 9310
Curtis J. Bernhardt 1,000,000 8.2%
PO Box 646
Glenhaven, CA 95443
June Masaki 1,000,000 8.2%
PO Box 646
Glenhaven, CA 95443
Christie Jones 1,000,000 8.2%
PO Box 646
Glenhaven, CA 95443
Union Standard Limited 1,000,000 8.2%
1104 Nueces Street
Austin, TX 78701
Credit Critque, Inc. 1,000,000 8.2%
1740 E. Garry Ave, Suite 231
Santa Ana, CA 92705
Tropical Springs Investment, Inc. 1,000,000 8.2%
8883 West Flamingo Road, Suite 102
Las Vegas, NV 89147
Wayne Gronquist Esq. Secretary & Director -0- 0%
1104 Nueces Street
Austin Tx 78701
14
Bruce Cosgrove, President & Director 413,008 3%
78536 Naples Drive
La Quinta CA 92253
Stuart Hamilton Director -0- -0-
#11 5736 59 Street
Edmonton, Alberta Canada T6B 3C3
All officers and Directors, as a group 413,008 3%
(3 individuals)
15
(1) Based on 11,999,057 shares of common stock issued and outstanding on
December 31, 2007.
ITEM 12. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS
Mr. Gronquist serves on the Board of Directors and as the Secretary of the
Company and The Saint James Company at the request of First Dominion, a former
25.59% owner of the outstanding the Company shares. First Dominion is a client
of Mr. Gronquist's law firm, Wayne Gronquist, P.C. Mr. Gronquist received $0
from First Dominion for work performed in 2002. The work performed for First
Dominion is unrelated to the business of the Company. Mr. Gronquist charges his
regular hourly rate for all work performed for First Dominion. Mr. Gronquist
does not receive any compensation for acting as the Trustee for First Dominion's
the Company shares.
PART IV
ITEM 13. EXHIBITS.
Exhibits. The following is a complete list of exhibits filed as part of this
Form 10-KSB. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-B.
Exhibit Description of Exhibit
- ------- --------------------------------------------------------------------
31.1 Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. ss. 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. ss. 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate fees billed and expected to be billed by Larry O'Donnell, CPA, our
independent registered public accounting firm, at the time, for professional
services in the fiscal years ended December 31, 2007 and 2006 are as follows:
Services Rendered 2007 2006
----------------- ---- ----
Audit Fees $ 0 $6,000
Audit Related Fees $ 0 $5,000
All Other Fees $ 9,000 $1,000
Our current independent registered public accounting firm, Larry O'Donnell, CPA
was engaged in 2007 to perform the audit for the year ended December 31, 2006.
16
THE SAINT JAMES COMPANY
Financial Statements
Table of Contents
Page
Report of Independent Registered Public Accounting Firm 1
Financial Statements:
Balance Sheet as of December 31, 2007 2
Statements of Operations for the Years Ended 3
December 31, 2007 and 2006 and the Period From
January 1, 1999 to December 31, 2007
Statements of Changes in Stockholders' Equity for the Period From 4
January 1, 1999 to December 31, 2007
Statements of Cash Flows for the Years Ended 5
December 31, 2007 and 2006 and the Period From
January 1, 1999 to December 31, 2007
Notes to Financial Statements 6 - 10
17
Larry O'Donnell, CPA, P.C.
Telephone (303) 745-4545 2228 South Fraser Street
Fax(303)369-9384 Unit I
E-mail larryodonnellcpa@msn.com Aurora, Colorado 80014
www.larryodonnellcpa.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
The Saint James Company
I have audited the accompanying balance sheet of The Saint James Company as of
December 31, 2007, and the related statements of operations, changes in
stockholders' deficit and cash flows for each of the years in the two-year
period ended and for the period January 1, 1999 (inception) to December 31,
2007. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audits.
I conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the 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. I believe that my audits provide a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of The Saint James Company as of
December 31, 2007, and the results of its operations and its cash flows for the
years then ended and for the period from January 1, 1999 to December 31, 2007,
in conformity with generally accepted accounting principles in the United States
of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company' is in the development state and has not
commenced operations. Its ability to continue as a going concern is dependent
upon its ability to develop additional sources of capital, locate and complete a
merger with another company and ultimately achieve profitable operations. These
conditions raise substantial doubt about its ability to continue as a going
concern. Management's plans regarding these matters are also described in the
Note 2 to the financial statements. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Larry O'Donnell, CPA, P.C.
Larry O'Donnell, CPA, P.C.
March 8, 2008
F-1
The Saint James Company
(A Development Stage Company)
Balance Sheet
December 31,
2007
-----------------
Assets
Other Assets
Cash and cash equivalents $ -
Artwork 50,000
-----------------
Total assets $ 50,000
=================
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 13,213
-----------------
Total current liabilities 13,213
-----------------
Commitment and contingencies -
Stockholders' equity
Common stock, $0.001 par value; 50,000,000
shares authorized; 11,999,057 issued and outstanding 11,999
Additional paid-in capital 3,650,579
Deficit accumulated during development stage (3,625,791)
-----------------
Total stockholders' deficit 36,787
-----------------
Total liabilities and stockholders' equity $ 50,000
=================
The accompanying notes are an integral part of these financial statements.
F-2
The Saint James Company
(A Development Stage Company)
Statements of Operations
Development
Stage - January 1,
Year Ended 1999 through
December 31, December 31, December 31,
2007 2006 2007
------------------ --------------------- -----------------------
Sales $ - $ - $ -
Cost of Sales - - -
------------------ --------------------- -----------------------
Gross profit - - -
Operating expenses
Research and development - - -
General and administrative - - 177,219
------------------ --------------------- -----------------------
Total operating expenses - - 177,219
------------------ --------------------- -----------------------
Loss from operation - - (177,219)
------------------ --------------------- -----------------------
Other income (expense)
Interest income - - -
Other income 28,582 - 37,067
Interest expense (512) (682) (5,407)
------------------ --------------------- -----------------------
Total other income (expense) 28,070 (682) 31,660
------------------ --------------------- -----------------------
Income (loss) before taxes 28,070 (682) (145,559)
Provision for taxes - - -
------------------ --------------------- -----------------------
Net income (loss) $ 28,070 $ (682) $ (145,559)
================== ===================== =======================
Earning (loss) per shares - basic and diluted $ * $ * $ (0.10)
================== ===================== =======================
Weighted average shares outstanding 11,999,057 11,999,057 1,519,434
================== ===================== =======================
* Less than $(0.01) per share.
The accompanying notes are an integral part of these financial statements.
F-3
The Saint James Company
(A Development Stage Company)
Statement of Stockholders' (Deficit) Equity
December 31, 2007
Deficit
Accumulated
Additional During
Common Stock Paid-in Development
Shares Amount Capital Stage Total
------------- --------- ------------ ------------- ------------
Balance, December 31, 1998 999,057 $ 999 $3,460,568 $ (3,480,232) $ (18,665)
Net loss - - - (6,115) (6,115)
------------- --------- ------------ ------------- ------------
Balance, December 31, 1999 999,057 999 3,460,568 (3,486,347) (24,780)
Net loss - - - (22,670) (22,670)
------------- --------- ------------ ------------- ------------
Balance, December 31, 2000 999,057 999 3,460,568 (3,509,017) (47,450)
Net loss - - - (4,382) (4,382)
------------- --------- ------------ ------------- ------------
Balance, December 31, 2001 999,057 999 3,460,568 (3,513,399) (51,832)
Net loss - - - (4,314) (4,314)
------------- --------- ------------ ------------- ------------
Balance, December 31, 2002 999,057 999 3,460,568 (3,517,713) (56,146)
Capital contribution from Funet - - 27,239 - 27,239
Net loss - - - (54,644) (54,644)
------------- --------- ------------ ------------- ------------
Balance, December 31, 2003 999,057 999 3,487,807 (3,572,357) (83,551)
Capital contribution from Funet - - 10,769 - 10,769
Net loss - - - (47,640) (47,640)
------------- --------- ------------ ------------- ------------
Balance, December 31, 2004 999,057 999 3,498,576 (3,619,997) (120,422)
------------- --------- ------------ ------------- ------------
Issuance of common stock for purchased assets 5,000,000 5,000 45,000 - 50,000
Issuance of common stock for purchased services 6,000,000 6,000 54,000 - 60,000
Net loss - - - (33,182) (33,182)
------------- --------- ------------ ------------- ------------
Balance, December 31, 2005 11,999,057 11,999 3,597,576 (3,653,179) (43,604)
------------- --------- ------------ ------------- ------------
Net loss - - - (682) (682)
------------- --------- ------------ ------------- ------------
Balance, December 31, 2006 11,999,057 11,999 3,597,576 (3,653,861) (44,286)
------------- --------- ------------ ------------- ------------
Forgiveness of officer debt 53,003 53,003
Net Income - - - 28,070 28,070
------------- --------- ------------ ------------- ------------
Balance, December 31, 2007 11,999,057 $ 11,999 $3,650,579 $ (3,625,791) $ 36,787
============= ========= ============ ============= ============
The accompanying notes are an integral part of these financial statements.
F-4
The Saint James Company
(A Development Stage Company)
Statements of Cash Flows
Development
Stage - January 1,
Year Ended 1999 to
December 31, December 31, December 31,
2007 2006 2007
--------------- ----------------- ----------------------
Cash flows from operating activities
Net income (loss) $ 28,070 $ (682) $ (145,559)
Adjustments to reconcile net income (loss) to net
cash used in operating activities:
Common stock issued for services - - 60,000
Gain on settlement of judgment (28,582) - (37,067)
Changes in operating assets and liabilities - - -
Increase in accounts payable - - 25,616
Increase in accrued interest 512 682 5,285
--------------- ----------------- ----------------------
Net cash used in operating activities - - (91,725)
--------------- ----------------- ----------------------
Cash flows from financing activities
Advance from related parties - - 53,003
Capital contribution from Funet - - 38,008
--------------- ----------------- ----------------------
Net cash provided by financing activities - - 91,011
--------------- ----------------- ----------------------
Net increase (decrease) in cash - - (714)
Cash at beginning of period - - 714
--------------- ----------------- ----------------------
Cash at end of period $ - $ - $ -
=============== ================= ======================
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of 6,000,000 shares for accounts payable
valued at $60,000 $ - $ 60,000 $ 60,000
=============== ================= ======================
Issuance of 5,000,000 shares for artwork
valued at $50,000 $ - $ 50,000 $ 50,000
=============== ================= ======================
The accompanying notes are an integral part of these financial statements.
F-5
THE SAINT JAMES COMPANY
(A Development Stage Company)
Notes to the Financial Statements
Year Ended December 31, 2007
Note 1 - Organization
Chem-Waste Corporation was incorporated on January 10, 1984 under the laws of
the State of North Carolina. On July 19, 1984, Chem-Waste Corporation changed
its name to Radiation Disposal Systems, Inc. On October 13, 1998, The Saint
James Company (the "Company") incorporated an operating subsidiary called The
Saint James Company under the laws of the State of Delaware. On November 19,
1998 Radiation Disposal Systems, Inc. exchanged all of its outstanding shares
for equal shares in The Saint James Company. The effect of this transaction was
to change the name of the Company to The Saint James Company and to change the
Company's state of domicile from North Carolina to Delaware. The Company has
subsequently discovered that the legal paperwork to effectuate the merger was
never filed with the state of North Carolina; therefore, the Company is
currently domiciled in the state of North Carolina.
The Company re-entered the development stage on January 1, 1999 and is currently
a development stage company under the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 7.
From 1984 through 1998, the Company designed, manufactured, sold and serviced
equipment and systems for the treatment of contaminated insoluble organic
materials. However, due to heavy competition in the industry, the Company's
business operations ceased in 1998. The Company does not currently have active
business operations due to limited resources, other than holding certain artwork
and it is currently searching to find a potential purchaser or merger candidate.
Effective August 11, 2003, the Company entered into a Reorganization Agreement
with Funet Radio & Communications Corp. ("Funet") and with the majority
stockholders of Funet, a divided company formed under the laws of the Republic
of China (Taiwan). None of the stockholders of Funet were affiliates of the
Company, or affiliated with any director or officer of the Company, nor did they
have any material relationships with the Company. The Company agreed to issue
7,000,000 shares of its restricted common stock to the stockholders of Funet.
which represent approximately 87.5% of the issued and outstanding shares of the
common stock of the Company. This transaction closed on September 30, 2003 and
was subsequently rescinded. As these shares were never returned for
cancellation, the Company subsequently placed a stop order on said shares with
the intention of having these shares cancelled with a court order.
Note 2 - Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. However, the Company
has no operations and has not established a source of revenue. This matter
raises substantial doubt about the Company's ability to continue as a going
concern. These financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts, or amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
F-6
Management plans to take steps that it believes will be sufficient to provide
the Company with the ability to continue in existence.
Management intends to actively pursue merger candidates that have ongoing
operations and a source of revenue.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reporting amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the periods. Management makes these estimates using the best information
available at the time the estimates are made; however, actual results could
differ materially from these estimates.
Impairment of Long-Lived Assets
The Company records impairment losses on long-lived assets used in operations
and finite lived intangible assets when events and circumstances indicate the
assets might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than their carrying amounts. The impairment
loss is measured by comparing the fair value of the asset to its carrying
amount.
Fair Value of Financial Instruments
The fair value of the advances to officers/directors is not practicable to
estimate, based upon the related party nature of the underlying transactions.
Comprehensive Income
SFAS No. 130, Reporting Comprehensive Income, establishes standards for the
reporting and display of comprehensive income and its components in the
financial statements. During the years ended December 31, 2007 and 2006, the
Company did not have any components of comprehensive income (loss) to report
and, accordingly, has not included a schedule of comprehensive income in the
financial statements.
Income Taxes
The Company accounts for income taxes in accordance with SFAS No. 109,
Accounting for Income Taxes. Deferred taxes are provided on the liability method
whereby deferred tax assets are recognized for deductible temporary differences,
and deferred tax liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts of assets
and liabilities and their tax bases. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of enactment.
F-7
Net Loss Per Share
SFAS No. 128, Earnings per Share, requires dual presentation of basic and
diluted earnings or loss per share ("EPS") for all entities with complex capital
structures and requires a reconciliation of the numerator and denominator of the
basic EPS computation to the numerator and denominator of the diluted EPS
computation. Basic EPS excludes dilution; diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the entity.
Basic loss per share is computed by dividing net loss applicable to common
shareholders by the weighted average number of common shares outstanding during
the period. Diluted loss per share reflects the potential dilution that could
occur if dilutive securities and other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the Company, unless the effect is to
reduce a loss or increase earnings per share. The Company had no potential
common stock instruments which would result in a diluted loss per share.
Therefore, diluted loss per share is equivalent to basic loss per share.
Recently Issued Accounting Pronouncements
In September 2006, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements," ("SAB 108"),which provides interpretive guidance on the
consideration of the effects of prior year misstatements in quantifying current
year misstatements for the purpose of a materiality assessment. The Company
adopted SAB 108 in the fourth quarter of 2006 with no impact on its financial
statements.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities". This Statement permits entities to
choose to measure many financial assets and financial liabilities at fair value.
Unrealized gains and losses on items for which the fair value option has been
elected are reported in earnings. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007. Management is currently evaluating the effect
of this pronouncement on the consolidated financial statements.
In June 2007, the FASB issued FASB Staff Position No. EITF 07-3, "Accounting for
Nonrefundable Advance Payments for Goods or Services Received for use in Future
Research and Development Activities" ("FSP EITF 07-3"), which addresses whether
nonrefundable advance payments for goods or services that used or rendered for
research and development activities should be expensed when the advance payment
is made or when the research and development activity has been performed.
Management is currently evaluating the effect of this pronouncement on the
consolidated financial statements.
In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements", which is an amendment of Accounting Research
Bulletin ("ARB") No. 51. This statement clarifies that a noncontrolling interest
in a subsidiary is an ownership interest in the consolidated entity that should
be reported as equity in the consolidated financial statements. This statement
changes the way the consolidated income statement is presented, thus requiring
consolidated net income to be reported at amounts that include the amounts
attributable to both parent and the noncontrolling interest. This statement is
effective for the fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Based on current conditions, the
Company does not expect the adoption of SFAS 160 to have a significant impact on
its results of operations or financial position. Management is currently
evaluating the impact of FASB 160 on the consolidated financial statements.
F-8
In December 2007, the FASB issued FASB 141R, Business Combinations ("FASB
141R"). Under FASB 141R, an entity is required to recognize the assets acquired,
liabilities assumed, contractual contingencies and contingent consideration
measured at their fair value at the acquisition date for any business
combination consummated after the effective date. It further requires that
acquisition-related costs are to be recognized separately from the acquisition
and expensed as incurred. This statement is effective for financial statements
issued for fiscal years beginning after December 15, 2008. Accordingly, we will
adopt FASB 141R effective January 1, 2009. Note 3 - Income Taxes The
reconciliation of the effective income tax rate to the federal statutory rate as
of December 31, 2007 and 2006 is as follows:
2007 2006
---------------- ----------
Federal income tax rate 34.0% 34.0%
Effect of net operating loss (34.0)% (34.0)%
--------------- -------------
Effective income tax rate 0.0% 0.0%
============== ============
Deferred tax assets and liabilities reflect the net effect of temporary
differences between the carrying amount of assets and liabilities for financial
reporting purposes and amounts used for income tax purposes. Significant
components of the Company's deferred tax assets and liabilities at December 31,
2007 are as follows:
Loss carry forwards $ 228,435
Less valuation allowance (228,435)
-------------
$ --
=============
At December 31, 2007 and 2006, the Company has provided a valuation allowance
for the deferred tax asset since management has not been able to determine that
the realization of that asset is more likely than not. Net operating loss carry
forwards of approximately $3,600,000 began to expire in 1999, of which $228,435
are still available as of December 31, 2007.
Note 4 - Release from liabilities
During the year ended December 31, 2007, the company was released from the
following liabilities:
Accounts payable $
12,403
Accrued judgments
Accrued interest 10,285
-------------
Total released $
28,582
==============
During the year ended December 31, 2007, officers of the Company, who had made
advances of $53,003 to the Company, released us from our obligation to pay for
this debt. This release of debt has been treated as a capital contribution and
accounted for in additional paid in capital.
F-9
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE SAINT JAMES COMPANY
By: /s/ RICHARD HURST
-----------------------------------
Richard Hurst
President, Chief Executive Officer,
and Director
Date: September 4, 2009
By: /s/ DALE PAISLEY
-----------------------------------
Dale Paisley
Chief Financial Officer
Date: September 4, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Title Date
- --------------------- ----------------------------------- ---------------
President, Chief Executive Officer, September 4, 2009
/s/ RICHARD HURST and Director
- --------------------- (Principal Executive Officer)
Richard Hurst
/s/ DALE PAISLEY Chief Financial Officer September 4, 2009
- --------------------- (Principal Accounting Officer)
Dale Paisley
18
Exhibit Description of Exhibit
- ------- --------------------------------------------------------------------
31.1 Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. ss. 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. ss. 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
19