UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
x
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|
For
the
quarter ended September 30, 2007
For
the
transition period from _____ to _____
Commission
File Number: 000-51197
STARGOLD
MINES, INC.
(Exact
name of issuer as specified in its charter)
Nevada
(State
of incorporation)
|
98-0400208
(IRS
Employer ID Number)
|
1840
Gateway Drive
Suite
200
San
Mateo, California 94404
(Address
of principal executive offices)
(604)
673-8427
(Issuer's
telephone number)
_______________________________________________________________
(Former
name, former address and former fiscal year, if changed since last
report)
Check
whether the issuer (1) filed all reports required to be filed by Section 13
or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
YES
x
NO
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act.
Large
Accelerated Filer [ ]
|
Accelerated
Filer [ ]
|
Non-Accelerated
Filer [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
o
APPLICABLE
ONLY TO CORPORATE ISSUERS:
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.
As
of May
14, 2008 the issuer had 56,519,311 shares
outstanding.
*Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer [ ]
|
Accelerated
filer [ ]
|
Non-accelerated
filer [ ]
|
Smaller
reporting company [x]
|
TABLE
OF CONTENTS
Item
1. Financial Statements
|
|
Item
2. Management’s Discussion and Analysis or Plan of
Operation
|
|
Item
4. Controls and Procedures
|
|
|
|
PART
II
|
|
|
|
Item
6. Exhibits
|
|
|
|
|
|
PART
I
FINANCIAL
INFORMATION
Item
1. Financial Statements.
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMERLY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
THREE
MONTHS ENDED MARCH 31, 2008 AND 2007
UNAUDITED
CONTENTS
Condensed
Consolidated Balance Sheet
|
|
|
1
|
|
Condensed
Consolidated Statements of Operations and Comprehensive
Loss
|
|
|
2
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
3
|
|
Notes
to Condensed Consolidated Financial Statements
|
|
|
4
- 14
|
|
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMERLY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Condensed
Consolidated Balance Sheet
March
31,
2008
Unaudited
ASSETS
|
Current
|
|
|
|
Cash
|
|
$
|
31,913
|
|
Accounts
and other receivable
|
|
|
4,510,000
|
|
Mineral
rights (note 5)
|
|
|
18,616,177
|
|
Prepaid
expenses
|
|
|
1,061,104
|
|
Loans
receivable (note 6)
|
|
|
82,000
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
24,301,194
|
|
Deferred
Taxes (note 11)
|
|
|
679,000
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
24,980,194
|
|
|
|
|
|
|
LIABILITIES
|
Current
|
|
|
|
|
Accounts
payable
|
|
$
|
1,076,827
|
|
Accrued
liabilities
|
|
|
104,620
|
|
Deposit
(note 7)
|
|
|
54,428
|
|
Loans
payable - current (note 8)
|
|
|
329,994
|
|
Advances
from related party (note 9)
|
|
|
10,000
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
1,575,869
|
|
Loans
Payables (note 8)
|
|
|
21,027,719
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
22,603,588
|
|
|
|
|
|
|
Commitment
and Contingency (note 12)
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
Capital
Stock (note 10)
|
|
|
|
|
Authorized
|
|
|
|
|
1,000,000,000
common stock,
|
|
|
|
|
par
value $0.0001 per share
|
|
|
|
|
Issued
and outstanding
|
|
|
|
|
56,219,311
common stock
|
|
|
5,622
|
|
Additional
Paid-in Capital
|
|
|
3,200,198
|
|
Accumulated
Other Comprehensive Loss
|
|
|
(10,154
|
)
|
Deficit
Accumulated During the Development Stage
|
|
|
(819,060
|
)
|
|
|
|
|
|
Total
Stockholders' Equity
|
|
|
2,376,606
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
|
$
|
24,980,194
|
|
(The
accompanying notes are an integral part of
these
unaudited condensed consolidated financial statements.)
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMERLY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Condensed
Consolidated Statements of Operations and Comprehensive Loss
Three
Months Ended March 31, 2008 and 2007, and the Period from
Date
of
Inception (May 21, 2003) through March 31, 2008
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
Three
|
|
Inception
|
|
|
|
Months
|
|
Months
|
|
(May
21, 2003)
|
|
|
|
Ended
|
|
Ended
|
|
through
|
|
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
Revenue
|
|
$
|
-
|
|
|
|
|
$
|
68,739
|
|
Cost
of Sales
|
|
|
-
|
|
|
-
|
|
|
60,508
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
-
|
|
|
-
|
|
|
8,231
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
Professional
fees
|
|
|
106,472
|
|
|
18,161
|
|
|
491,451
|
|
Salary
and benefits
|
|
|
32,462
|
|
|
-
|
|
|
112,462
|
|
Office
and general
|
|
|
23,862
|
|
|
5,101
|
|
|
111,497
|
|
Consulting
fees
|
|
|
-
|
|
|
-
|
|
|
20,000
|
|
Bad
debt
|
|
|
-
|
|
|
-
|
|
|
26,915
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
162,796
|
|
|
23,262
|
|
|
762,325
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Loss
|
|
|
(162,796
|
)
|
|
(23,262
|
)
|
|
(754,094
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other
Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
(93,020
|
)
|
|
-
|
|
|
(93,020
|
)
|
Debt
forgiveness
|
|
|
-
|
|
|
-
|
|
|
5,900
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income (Expense)
|
|
|
(93,020
|
)
|
|
-
|
|
|
(87,120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Loss Before Income Taxes
|
|
|
(255,816
|
)
|
|
-
|
|
|
(841,214
|
)
|
Deferred
income taxes - recovery (note 11)
|
|
|
22,154
|
|
|
-
|
|
|
22,154
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
|
(233,662
|
)
|
|
(23,262
|
)
|
|
(819,060
|
)
|
Foreign
exchange adjustment
|
|
|
(10,154
|
)
|
|
-
|
|
|
(10,154
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
Loss
|
|
$
|
(243,816
|
)
|
$ |
(23,262 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss per Share
|
|
|
|
|
|
|
|
|
|
|
Basic
and Diluted
|
|
$
|
(0.01
|
)
|
|
(0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and Diluted Weighted Average
Number
of Common Shares
Outstanding
During the Period
|
|
|
43,385,978
|
|
|
81,013,373
|
|
|
|
|
(The
accompanying notes are an integral part of
these
unaudited condensed consolidated financial statements.)
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMERLY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Condensed
Consolidated Statements of Cash Flows
Three
Months Ended March 31, 2008 and 2007, and the Period from
Date
of
Inception (May 21, 2003) through March 31, 2008
Unaudited
|
|
|
|
|
|
Period
|
|
|
|
|
|
|
|
from
Date of
|
|
|
|
Three
|
|
Three
|
|
Inception
|
|
|
|
Months
|
|
Months
|
|
(May
21, 2003)
|
|
|
|
Ended
|
|
Ended
|
|
through
|
|
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
Cash
Flows from Operating Activities
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(233,662
|
)
|
$
|
(23,262
|
)
|
$
|
(819,060
|
)
|
Adjustment
to reconcile non-cash item:
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for services
|
|
|
-
|
|
|
-
|
|
|
2,500
|
|
Amortization
- debt discount
|
|
|
89,231
|
|
|
-
|
|
|
89,231
|
|
Deferred
income taxes - recovery
|
|
|
(22,154
|
)
|
|
-
|
|
|
(22,154
|
)
|
Changes
in working capital:
|
|
|
|
|
|
|
|
|
|
|
Prepaid
expenses
|
|
|
15,125
|
|
|
-
|
|
|
(16,104
|
)
|
Accounts
payable
|
|
|
(24,760
|
)
|
|
(14,750
|
)
|
|
55,866
|
|
Accrued
liabilities
|
|
|
57,551
|
|
|
-
|
|
|
104,620
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Used in Operating Activities
|
|
|
(118,669
|
)
|
|
(38,012
|
)
|
|
(605,101
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows from Investing Activities
|
|
|
|
|
|
|
|
|
|
|
Loans
receivable
|
|
|
(20,300
|
)
|
|
-
|
|
|
(1,239,300
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Used in Investing Activities
|
|
|
(20,300
|
)
|
|
-
|
|
|
(1,239,300
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock and warrants for cash
|
|
|
-
|
|
|
5,700
|
|
|
1,553,320
|
|
Loans
payable
|
|
|
167,952
|
|
|
34,760
|
|
|
322,994
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by Financing Activities
|
|
|
167,952
|
|
|
40,460
|
|
|
1,876,314
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase in Cash
|
|
|
28,983
|
|
|
2,448
|
|
|
31,913
|
|
Cash
- Beginning of Period
|
|
|
2,930
|
|
|
7,879
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
- End of Period
|
|
$
|
31,913
|
|
$
|
10,327
|
|
$
|
31,913
|
|
Supplemental
Disclosure of Cash Flow Information (note
13)
(The
accompanying notes are an integral part of
these
unaudited condensed consolidated financial statements.)
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMELY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Notes
to
Condensed Consolidated Financial Statements
March
31,
2008 and 2007
Unaudited
1.
|
Description
of Business and Going Concern
|
|
a)
|
Description
of Business
|
Stargold
Mines, Inc., formerly Sockeye Seafood Group Inc., (Sockeye Seafood Group
Inc.
merged with its wholly-owned subsidiary Stargold Mines, Inc. on November
23,
2006 and changed its name to Stargold Mines, Inc.) was incorporated under
the
laws of the State of Nevada on May 21, 2003. Stargold Mines, Inc. was formed
to
engage in the business of procuring and marketing seafood products direct
from
Pacific Northwest First Nations organizations to North American and
international wholesalers, distributors, and retailers.
On
November 30, 2006, Stargold Mines, Inc. entered into a Stock Purchase Agreement
with UniverCompany Limited Liability Company, a Russian limited liability
society (“UniverCompany”), and the shareholder of UniverCompany (collectively,
the “Univer Agreement”). Pursuant to the Univer Agreement, Stargold Mines, Inc.
agreed to purchase from the UniverCompany’s shareholder 100% of the issued and
outstanding shares of common stock of UniverCompany in exchange for 41,000,000
shares of Stargold Mines, Inc.'s common stock. In May 2007, the Univer Agreement
was amended to provide that the consideration for the shares of UniverCompany
would be 15,000,000 shares of Stargold Mines, Inc.'s common stock, rather
than
41,000,000 shares.
On
March
18, 2008, Stargold Mines, Inc. was advised that, according to the laws of
the
Russian Federation, all requirements had been met for the acquisition of
UniverCompany and as such was completed. As a result of the acquisition,
UniverCompany has become a wholly-owned subsidiary of Stargold Mines, Inc.
UniverCompany holds licenses to develop and extract natural resources of
gold,
copper, tin and lead located in the Siberian and Far Eastern Federal Districts
of Russia
Stargold
Mines, Inc. and Subsidiary's (the "Company") operations have been limited
to
general administrative operations, purchasing a limited amount of sample
inventory, minimal sales and establishing its website. The Company is considered
a development stage company in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 7 "Accounting and Reporting by Development Stage
Enterprises". The Company is currently working on acquiring licenses to develop
and extract natural resources in the Siberian and Far Eastern Districts of
Russia.
The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America with the assumption that the Company will be able
to
realize its assets and liabilities in the normal course of business. The
Company
has experienced recurring losses since inception and has negative cash flows
from operations that raise substantial doubt as to its ability to continue
as a
going concern. For the three months ended March 31, 2008 and 2007, the Company
experienced net losses of $233,662 and $23,262, respectively, and has a deficit
accumulated during the development stage of $819,060 at March 31,
2008.
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMELY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Notes
to
Condensed Consolidated Financial Statements
March
31,
2008 and 2007
Unaudited
1.
|
Description
of Business and Going Concern (cont'd)
|
|
b)
|
Going
Concern (cont'd)
|
The
Company's ability to continue as a going concern is contingent upon its ability
to secure additional financing and attaining profitable operations.
Management
is pursuing various sources of equity financing. Although the Company plans
to
pursue additional financing, there can be no assurance that the Company will
be
able to secure financing when needed or obtain such on terms satisfactory
to the
Company, if at all.
The
accompanying unaudited condensed consolidated financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification
of
liabilities that may result from the inability of the Company to continue
as a
going concern.
2.
|
Summary
of Significant Accounting
Policies
|
The
unaudited condensed consolidated financial statements presented herein have
been
prepared by the Company in accordance with U.S. generally accepted accounting
principles for interim financial statements and in accordance with the
instructions to Form 10-Q. Accordingly, they do not include all information
and
notes required by U.S. generally accepted accounting principles for complete
financial statements. The unaudited condensed consolidated financial statements
reflect all adjustments, consisting of normal recurring adjustments and accruals
which, in the opinion of management, are considered necessary for a fair
presentation of the Company's consolidated financial position, results of
operations and cash flows for the interim periods presented.
Results
of operations for the interim periods are not necessarily indicative of results
of operations for future interim periods or for the full fiscal year ending
December 31, 2008. The accompanying unaudited condensed consolidated financial
statements should be read in conjunction with the audited financial statements
of the Company for the fiscal year ended December 31, 2007.
|
b)
|
Principles
of Consolidation
|
The
unaudited condensed consolidated financial statements include the accounts
of
the Company and its wholly-owned subsidiary, UniverCompany. All significant
inter-company balances and transactions have been eliminated on
consolidation.
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMELY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Notes
to
Condensed Consolidated Financial Statements
March
31,
2008 and 2007
Unaudited
2.
|
Summary
of Significant Accounting Policies (cont'd)
|
The
Company records its interest in mineral rights at cost. Accordingly, all
costs
associated with acquisition, exploration and development of mineral reserves,
including directly related overhead costs, are capitalized and are subject
to
ceiling tests to ensure the carrying value does not exceed fair
value.
All
capitalized costs of mineral properties subject to amortization and the
estimated future costs to develop proven reserves are amortized using the
unit-of-production method using estimates of proven reserves. Investments
in
unproved properties and major exploration and development projects are not
amortized until proved reserves associated with the projects can be determined
or until impairment occurs. If the results of an assessment indicate that
the
properties are impaired, the capitalized cost of the property will be added
to
the costs to be amortized. The Company presently has no proven reserves.
Where
estimates of future net cash flows are not available and where other conditions
suggest impairment, management assesses if the carrying values can be recovered.
If the carrying values exceed estimated recoverable values, then the costs
are
written-down to fair value with the write-down expensed in the
period.
|
d)
|
Foreign
Currency Translation
|
The
Company accounts for foreign currency translation pursuant to SFAS No. 52,
"Foreign Currency Translation". The Company's functional currency is United
States Dollars (''USD''). The currency used in foreign operations is the
Russian
ruble. All assets and liabilities are translated into United States dollars
using the current exchange rate. Revenues and expenses are translated using
the
average exchange rates prevailing throughout the period. Translation adjustments
are included in other comprehensive income for the period.
|
e)
|
Environmental
Liabilities
|
Liabilities
for environmental remediation are recorded when it is probable that obligations
have been incurred and the amounts can be reasonably estimated.
|
f)
|
Pension
and Post-employment Benefits
|
The
Company's mandatory contributions to the governmental pension plan are expensed
when incurred. Discretionary pensions and other post-employment benefits
are not
material.
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMELY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Notes
to
Condensed Consolidated Financial Statements
March
31,
2008 and 2007
Unaudited
2.
|
Summary
of Significant Accounting Policies (cont'd)
|
|
g)
|
Recent
Accounting Pronouncements
|
In
September 2006, the Financial Accounting Standards Board ("FASB") issued
FASB
Staff Position SFAS No. 157, "Fair Value Measurements" ("SFAS 157"), which
defines fair value, establishes a framework for measuring fair value and
expands
the related disclosure requirements. SFAS 157 applies under other accounting
pronouncements that require or permit fair value measurements and does not
require any new fair value measurements. SFAS 157 indicates, among other
things,
that a fair value measurement assumes that the transaction to sell an asset
or
transfer a liability occurs in the principal market for the asset or liability
or, in the absence of a principal market, the most advantageous market for
the
asset or liability. SFAS 157 defines fair value based upon an exit price
model.
In February 2008, the FASB issued FASB Staff Positions (FSP) SFAS No. 157-1,
"Application of FASB Statement No. 157 to FASB Statement No. 13 and Its Related
Interpretive Accounting Pronouncements That Address Leasing Transactions,"
and
FSP SFAS No. 157-2, "Effective Date of FASB Statement No. 157." FSP SFAS
157-1
removes leasing transactions from the scope of SFAS 157, while SFAS No. 157-2
defers the effective date of SFAS 157 to the fiscal year beginning after
November 15, 2008 for nonfinancial assets and nonfinancial liabilities that
are
recognized or disclosed at fair value in the financial statements on a
nonrecurring basis. It does not defer recognition and disclosure requirements
for financial assets and financial liabilities, or for nonfinancial assets
and
nonfinancial liabilities that are remeasured at least annually. Effective
January 1, 2008, the Company adopted SFAS 157, with the exception of the
application of the statement to non-recurring nonfinancial assets and
nonfinancial liabilities. The adoption of SFAS 157 did not impact the Company's
financial position or results of operations.
In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities Including an Amendment of FASB
Statement No. 115” (“SFAS 159”). This Statement permits all entities to choose,
at specified election dates, to measure eligible items at fair value (the
“fair
value option”). A business entity is to report unrealized gains and losses on
items for which the fair value option has been elected in earnings at each
subsequent reporting date. Upfront costs and fees related to items for which
the
fair value option is elected is to be recognized in earnings as incurred
and not
deferred. SFAS 159 became effective for the Company as of January 1, 2008.
The
Company has not elected the fair value option for any of its arrangements.
Accordingly, the adoption of SFAS 159 did not have any impact on the Company's
consolidated financial statements.
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMELY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Notes
to
Condensed Consolidated Financial Statements
March
31,
2008 and 2007
Unaudited
2.
|
Summary
of Significant Accounting Policies (cont'd)
|
|
g)
|
Recent
Accounting Pronouncements (cont'd)
|
In
April
2008, FASB issued FASB Staff Position SFAS No. 142-3, “Determination of the
Useful Life of Intangible Assets” (“FSP SFAS No. 142-3”). FSP SFAS No. 142-3
amends the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognizable intangible
asset
under SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”). The
intent of FSP SFAS No. 142-3 is to improve the consistency between the useful
life of a recognizable intangible asset under SFAS No. 142 and the period
of
expected cash flows used to measure the fair value of the asset under SFAS
141(R), “Business Combinations” and other U.S. generally accepted accounting
principles. FSP SFAS No. 142-3 is effective for financial statements issued
for
fiscal years beginning after December 15, 2008, and interim periods within
those
fiscal years. Early adoption is prohibited. The Company does not anticipate
that
the adoption of FSP SFAS No. 142-3 will have an impact on its financial position
or results of operations.
Unless
otherwise noted, it is management's opinion that the Company is not exposed
to
significant interest, currency or credit risks arising from the financial
instruments. The fair value of the financial instruments approximates their
carrying values, unless otherwise noted.
Currency
Risk
While
the
reporting currency is the USD, approximately 37% of the Company's consolidated
costs and expenses for the period ended March 31, 2008 (March 31, 2007 -
0%) are
denominated in Russian ruble. As of March 31, 2008, approximately 100% of
the
Company's assets and 98% of the Company's liabilities are denominated in
Russian
ruble. The Company is exposed to foreign exchange risk as the results of
operations may be affected by fluctuations in the exchange rate between the
USD
and Russian ruble.
The
Company has not entered into any hedging transactions in an effort to reduce
the
exposure to currency risk.
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMELY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Notes
to
Condensed Consolidated Financial Statements
March
31,
2008 and 2007
Unaudited
4.
|
Fair
Value Measurements
|
Effective
January 1, 2008, the Company adopted SFAS 157, except as it applies to the
nonfinancial assets and nonfinancial liabilities subject to FSP SFAS 157-2.
SFAS
157 clarifies that fair value is an exit price, representing the amount that
would be received to sell an asset or paid to transfer a liability in an
orderly
transaction between market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that market
participants would use in pricing an asset or a liability. As a basis for
considering such assumptions, SFAS 157 establishes a three-tier value hierarchy,
which prioritizes the inputs used in the valuation methodologies in measuring
fair value:
|
Level
1
|
-
|
Observable
inputs that reflect quoted prices (unadjusted) for identical assets
or
liabilities in active markets.
|
|
Level
2
|
-
|
Include
other inputs that are directly or indirectly observable in the
marketplace.
|
|
Level
3
|
-
|
Unobservable
inputs which are supported by little or no market
activity.
|
The
fair
value hierarchy also requires an entity to maximize the use of observable
inputs
and minimize the use of unobservable inputs when measuring fair
value.
Cash
(level 1), accounts and other receivable (level 2), loans receivable (level
2),
accounts payable and accrued liabilities (level 2), loans payable (level
2) and
advances from related party (level 2) are reflected in the condensed
consolidated balance sheet at carrying value, which approximates fair value
due
to the short-term nature of these instruments.
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMELY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Notes
to
Condensed Consolidated Financial Statements
March
31,
2008 and 2007
Unaudited
Pursuant
to a Purchase and Sale Agreement No. Yuv/ZGP, dated November 5, 2006, as
amended
on December 1, 2006 (collectively “the Nerchinskiye Agreement”), the Company
obtained the rights to extract metals from two consignments of tailings,
aggregating 254,906 tons, from the Nerchinskiye Rudniki mining dump (the
“Nerchinkiye Dump”) from Mining Corporation Zabaikalgeoprom Limited Liability
Company, a Russian entity (the “Seller”).
The
Nerchinkiye Agreement provided that 133,271 tons of tailings from the
Nerchinkiye Dump were to be delivered on or before December 31, 2006 (the
“First
Consignment”). In exchange, the Company would pay the Seller two payments of
$426,000 (10,000,000 rubles ), the first on or before December 31, 2007,
that
has not been paid to date, and the second on December 31, 2008. The balance
of
$28,658,332 (672,729,331 rubles) for the First Consignment would be paid
in
equal monthly installments between 2009 and 2012. The above referenced payments
commence, if, and when, minerals are successfully extracted. If the Company
is
unable to implement, develop, or acquire an extraction method and begin
extracting metals from the Nerchinkiye Dump, it is entitled to cancel the
Nerchinkiye Agreement. Although the Company is deemed to be the owner of
the
Nerchinkiye Dump, if the Company begins extraction of the Nerchinkiye Dump
and
does not make the payments described above, the Seller may terminate the
Nerchinkiye Agreement and claim the property back from the Company.
The
Nerchinkiye Agreement provides for the transfer of the balance of an additional
121,635 tons of tailings (the “Second Consignment”). The Second Consignment is
to be delivered to the Company, provided the Company requests this consignment
by December 30, 2008, provided, however, that the Company is under no obligation
to do so. If the Company requests the Second Consignment, $26,934,731
(632,270,669 rubles) must be paid in equal monthly installments between 2009
and
2012.
Loan
receivable from Priisk Zhaima Limited Liability Company ("Priisk Zhaima")
in the
amount of $23,247 bears interest at 10% per annum, is unsecured and was due
on
December 31, 2007. Pursuant to an oral amended agreement, the principal and
interest is due on July 1, 2008 and the Company is charging 0.1% penalty
per day
for deferring the due date.
Loan
receivable from Rudkaralon Limited Liability Company ("Rudkaralon LLC") in
the
amount of $39,839 bears interest at 15% per annum, is unsecured and was due
on
May 1, 2007. Pursuant to an oral amended agreement, the principal and interest
is due on August 1, 2008.
Loan
receivable from Rudkaralon LLC in the amount of $18,914 bears interest at
11%
per annum, is unsecured and was due on April 20, 2007. Pursuant to an oral
amended agreement, the principal and interest is due on August 1,
2008.
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMELY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Notes
to
Condensed Consolidated Financial Statements
March
31,
2008 and 2007
Unaudited
Pursuant
to the purchase agreement between the Company and Solvay Industries, Solvay
Industries paid the Company $54,428 for the transfer of 50% ownership of
Priisk
Zhaima to Solvay Industries when the Company acquires Priisk Zhaima. As of
March
31, 2008, the Company has not acquired any shares of Priisk Zhaima and is
obligated to return the amount advanced by Solvay Industries if the acquisition
does not take place.
Current
The
loan
payable to Bluewater Partners in the amount of $253,994 bears interest at
the
Federal Reserve's prime plus 1% per annum, is unsecured and has no specified
terms of repayment.
The
loan
payable to Quesir Group in the amount of $69,000 bears interest at the Federal
Reserve's prime plus 1% per annum, is unsecured and has no specified terms
of
repayment.
The
loan
payable to Almazineteh - Consulting Limited Liability Company in the amount
of
$7,000 bears interest at the 11% per annum, is unsecured and was due on April
5,
2007. Pursuant to an oral amended agreement, the loan is due on July 1,
2008.
Long-term
Loan
payable to the Seller as described in note 5 as of March 31, 2008 is
$29,510,332. The payable is non-interest bearing and has been discounted
using
the effective interest rate of 12%. The discount at March 31, 2008 is
$8,091,332.
9.
|
Advances
from Related Party
|
These
advances, from a director, bear interest at 15% per annum, are unsecured
and due
on July 1, 2008.
In
March
2008, the Company issued 15,000,000 shares valued at $1,650,000 for the
acquisition of all of the issued and outstanding shares of UniverCompany
pursuant to the terms of a purchase agreement between the Company and the
shareholder of UniverCompany, dated November 30, 2006 and amended in May
2007,
as described in note 1a.
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMELY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Notes
to
Condensed Consolidated Financial Statements
March
31,
2008 and 2007
Unaudited
The
Company accounts for income taxes pursuant to SFAS No. 109. This standard
prescribes the use of the liability method whereby deferred tax asset and
liability account balances are determined based on differences between financial
reporting and tax bases of assets and liabilities and are measured using
the
enacted tax rates. The effects of future changes in tax laws or rates are
not
anticipated.
Under
SFAS No. 109 income taxes are recognized for the following: a) amount of
tax
payable for the current period, and b) deferred tax liabilities and assets
for
future tax consequences of events that have been recognized differently in
the
financial statements than for tax purposes.
The
current provision for income taxes has been computed as follows:
Expected
income tax recovery at the effective statutory rate - 28%
|
|
$
|
(66,368
|
)
|
Valuation
allowance
|
|
|
66,368
|
|
|
|
|
|
|
Current
provision for income taxes
|
|
$
|
|
|
|
|
|
|
|
The
deferred income taxes have been computed as follows:
|
|
|
|
|
Deferred
incomes tax recovery on inventory and loans payable
|
|
$
|
|
|
The
Company has tax losses available to be applied against future years' income.
Due
to the losses incurred in the current period and expected future operating
results, management determined that it is more likely than not that the deferred
tax asset resulting from the tax losses available for carryforward will not
be
realized through the reduction of future income tax payments, accordingly
a
valuation allowance has been recorded for the current income taxes and deferred
income tax assets.
The
Company has deferred income tax assets as follows:
Net
operating loss carryforward
|
|
$
|
|
|
Valuation
allowance for deferred income tax assets
|
|
|
(250,183
|
)
|
Mineral
rights
|
|
|
2,506,000
|
|
Loans
payable
|
|
|
(1,827,000
|
)
|
|
|
|
|
|
Deferred
income tax assets
|
|
$
|
|
|
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMELY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Notes
to
Condensed Consolidated Financial Statements
March
31,
2008 and 2007
Unaudited
11.
|
Income
Taxes (cont'd)
|
As
of
March 31, 2008, the Company had $819,060 of Federal and state net operating
loss
carryforwards available to offset future taxable income. The Company has
the
following losses which expire in 20 years from the date the loss was
incurred.
2023
|
|
$
|
|
|
2024
|
|
|
4,513
|
|
2025
|
|
|
5,676
|
|
2026
|
|
|
50,726
|
|
2027
|
|
|
522,755
|
|
2028
|
|
|
233,662
|
|
|
|
|
|
|
|
|
$
|
|
|
12.
|
Commitment
and Contingency
|
The
Company has a contractual option to purchase up to an 80% ownership of
Rudkaralon LLC, a Russian company that owns the rights to exploit minerals
in a
region called Rudkaralon. In order to obtain such interest, payments must
be
made to the individual shareholders of Rudkaralon LLC in an aggregate amount
of
approximately $3,325,000.
Although
the Company paid $742,000 for approximately 17.5% of the shares of Rudkaralon
LLC, the payment made by the Company constitutes only a partial payment to
these
shareholders for the shares they own and under the terms of the agreement,
said
shareholders will not fully transfer any ownership shares of Rudkaralon LLC
until paid in full. If the Company does not make its payments in a timely
manner, the shareholders of Rudkaralon LLC will be entitled by the Russian
Civil
Code to seek the termination of the agreement. The shareholders of Rudkaralon
LLC have informed the Company that they have secured a new purchaser and
if the
transaction is concluded successfully, the Company will receive the Company's
pro rata share of the then purchase price.
STARGOLD
MINES, INC. AND SUBSIDIARY
(FORMELY
SOCKEYE SEAFOOD GROUP INC.)
(A
DEVELOPMENT STAGE COMPANY)
Notes
to
Condensed Consolidated Financial Statements
March
31,
2008 and 2007
Unaudited
13.
|
Supplemental
Disclosure of Cash Flow
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months
|
|
Three
Months
|
|
(May
21, 2003)
|
|
|
|
Ended
|
|
Ended
|
|
Through
|
|
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
|
|
|
|
|
|
|
|
Non-cash
investing activities is as follows:
|
|
|
|
|
|
|
|
Issuance
of common stock for acquisition of UniverCompany (note 10)
|
|
$
|
1,650,000
|
|
$
|
-
|
|
$
|
1,650,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
and income taxes paid during the period:
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
In
April
2008, the directors of the Company were awarded a total of 300,000 common
shares
valued at $36,000, in recognition of their services to the Company.
Item
2. Management’s
Discussion and Analysis or Plan of Operations.
Forward-Looking
Statements
The
following discussion should be read in conjunction with our financial
statements, which are included elsewhere in this Form 10-Q (the “Report”). This
Report contains forward-looking statements which relate to future events or
our
future financial performance. In some cases, you can identify forward-looking
statements by terminology such as “may”, “should”, “expects”, “plans”,
“anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or
the negative of these terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties, and
other factors that may cause our or our industry’s actual results, levels of
activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied
by
these forward-looking statements.
While
these forward-looking statements, and any assumptions upon which they are based,
are made in good faith and reflect our current judgment regarding the direction
of our business, actual results will almost always vary, sometimes materially,
from any estimates, predictions, projections, assumptions or other future
performance suggested herein. Except as required by applicable law, including
the securities laws of the United States, we do not intend to update any of
the
forward-looking statements to conform these statements to actual
results.
Overview
We
were
incorporated under the laws of the State of Nevada on May 21, 2003 under the
name Sockeye Seafood Group, Inc. On November 13, 2006, we entered into a Plan
and Agreement of Merger with our wholly-owned subsidiary, Stargold Mines, Inc.,
a Nevada corporation (the "Subsidiary"). The Subsidiary had no assets or
liabilities and no previous operating history; it was formed by us on November
8, 2006 for the sole purpose of entering into the merger.
The
merger was consummated on November 23, 2006. Pursuant to the Articles of Merger,
we also changed our name from "Sockeye Seafood Group, Inc." to "Stargold Mines,
Inc."
Effective
as of November 23, 2006, we implemented a one for forty (1:40) forward stock
split and increased our authorized shares of common stock on a corresponding
basis. The number of shares of our common stock increased on a one for forty
(1:40) basis, from 25,000,000 shares, par value $0.001, to 1,000,000,000 shares,
par value $0.0001.
As
disclosed in the Company's Current Report on Form 8-K filed with the Securities
and Exchange Commission (the "SEC") on December 5, 2006, on November 30, 2006,
the Company entered into a Stock Purchase Agreement with UniverCompany Limited
Liability Company, a Russian limited liability society ("UniverCompany"), and
the shareholder of UniverCompany, Evgeny Belchenko (the "UniverCompany
Shareholder")(collectively, the "Univer Agreement"). Pursuant to the Univer
Agreement, the Company agreed to purchase from the UniverCompany Shareholder
100% of the issued and outstanding shares of common stock of UniverCompany
in
exchange for 41,000,000 shares of the Company's common stock. On May 15, 2007,
the Univer Agreement was amended to reduce the consideration to 15,000,000
shares of the Company's common stock.
In March
2008, the Company completed its acquisition of UniverCompany and acquired 100%
of the issued and outstanding shares of common stock of UniverCompany in
accordance with the UniverAgreement, as amended. UniverCompany is now a
wholly-owned subsidiary of the Company.
Proposed
Business
UniverCompany
holds licenses to develop and extract natural resources of gold, copper, tin
and
lead located in the Siberian and Far Eastern Federal Districts of Russia. As
a
result, we own rights to the "Nerchinskie" minerals & metals deposit, which
StarGold believes contains significant amounts of gold and silver. The balance
of the purchase price for Nerchinskie license of approximately $26 million
USD
must be paid prior to January 2013. Under an agreement dated December 2006,
UniverCompany owns approximately 17% of a “Karalon” deposit and had the option
to acquire an additional 63% of the Karalon deposit in return for a payment
of
$2.8 million USD. However, the Company has been unable to make the required
payments under our agreement with Karlaon. Although we have defaulted on those
payments, the remaining owners have advised that they have secured a new
purchaser and if the transaction is concluded successfully, we will receive
our
pro rata share of the then purchase price.
In
December 2006 we received $1,000,000 gross proceeds from the sale of 1,000,000
units to Hampton Park Capital LLC. Each unit consisted of one share of common
stock and one share purchase warrant, exercisable for one share of common stock
at an exercise price of US$2.50 for two years from the date of issuance. The
$1,000,000 raised by us was lent to UniverCompany on an unsecured basis, with
no
specific terms for repayment.
In
May
2007, the Company received gross proceeds of an aggregate of $500,000 from
the
sale of 111,111 units of the Company's securities. Each unit consisted of one
share of common stock and one half Class A Warrant. Each Class A Warrant is
exercisable for one share of common stock at an exercise price of $7.00 for
two
years from the date of issuance. The units were sold pursuant to Section 4(2)
of
the Securities Act of 1933.
In
June
2007, the Company cancelled 40,000,000 shares of its commons stock which had
previously been issued to former directors.
As
of the
date of this Report, neither the company nor UniverCompany has had any revenues
for the current fiscal year ended December 31, 2007 (“2007 Fiscal Year”) and the
quarter ended March 31, 2008 (“1st
Quarter
2008”). Over the next twelve months, we intend to engage in the exploitation of
the Nerchinskiye Dump, raise the funds necessary to acquire mining sites and
to
begin exploration and possible limited exploitation of ore sites and to seek
out
and possible acquire other ore sites containing precious metals, ;lacer, or
other high value minerals.
We
anticipate that we will require approximately $11,428,000 for the 12 months
ending March 31, 2008 (“1st
Quarter
2009”) to fund our plans with respect to commencing the exploitation of the
Nerchinskiye Dump, the purchase of necessary machinery and equipment to explore
mining sites and to haul and process raw materials from Nerchinskiye. Additional
funds will be used for performing due diligence, including extensive geologic
testing to determine the potential viability of mining sites and other
properties being considered for acquisition, general operating expenses, and
to
start exploration and limited exploitation of mining sites (if acquired). In
some cases, exploration will be performed to establish reserves for exploitation
by the Company or to assist in the sale of our claims to third
parties.
The
Company intends to finance its operations by way of equity private
placement.
The
following discussion focuses on our property, or goals regarding that property
for the next 12 months and how we intend to accomplish our goals.
We
have
projected a budget of US $11,428,000:
Budget
|
|
Total
US$
|
|
|
|
|
|
Prospecting
- Mapping, geochemical sampling, due diligence of
potential
|
|
|
|
acquisition
targets
|
|
|
2,458,000
|
|
Construction
|
|
|
400,000
|
|
Payment
for mining sites
|
|
|
5,000,000
|
|
Purchase
of deposits
|
|
|
450,000
|
|
Material
- technical expenses
|
|
|
80,000
|
|
Machines
and equipment
|
|
|
2,003,000
|
|
Other
expenses
|
|
|
600,000
|
|
|
|
|
|
|
Administrative-and-managerial
expenses
|
|
|
437,000
|
|
|
|
|
|
|
Total
cost
|
|
|
11,428,000
|
|
We
intend
to finance our activities via brokered or non-brokered private placements during
the next twelve months. The amount and conditions precedent to such fund-raising
are presently under consideration.
Financial
Condition, Liquidity and Capital Resources
Year
ended December 31, 2007 Compared to Year Ended December 31, 2006
and
Quarter Ended March 31, 2008 Compared to Quarter Ended March 31,
2007
Revenues
We
have
generated only nominal operating revenues from operations from our inception.
We
believe we will begin earning revenues in 2008 from actual operation as we
transition from a development stage company to that of an active growth stage
company. Accordingly, the comparison of current period operating results with
those of prior periods is not meaningful.
Costs
and Expenses
From
our
inception through March 31, 2008, we have generated only nominal revenues and
have incurred cumulative losses of $829,214. In addition, a significant part
of
the overall remaining costs are associated principally with compensation to
consultants and professional services rendered. Selling, general and
administrative (“SG&A”) expenses for the quarter ended March 31, 2008
increased from $23,262 in the quarter ended March 31, 2007 to
$162,796 for
the
quarter ended March 31, 2008, or $139,534. SG&A expenses consisted of
accounting, legal, consulting, public relations, startup and organizational
expenses, respectively. As a result of the above-mentioned expenses, net losses
increased from $23,262 in the quarter ended March 31, 2007 to
$243,816 in
the
quarter ended March 31, 2008, or $220,554.
Going
Concern Consideration
Both
the
Company and UniverCompany have historically incurred losses since inception
through December 31, 2007. Through the 1st
Quarter
2008, UniverCompany and the Company had a combined comprehensive loss of
$243,816. UniverCompany, by itself, incurred comprehensive loss of $1,893,000
during the 2007 Fiscal Year. We sill require additional working capital to
develop our business operations. We intend to raise additional working capital
through private placements, public offerings, and/or bank financing, although
we
do not currently have any arrangements in place to effect any such financing
and
there can be no assurance that we will be able to raise the funds
required.
Due
to
the uncertainty of UniverCompany’s ability to meet the operating expenses and
the capital expenses noted above, in their report on the annual financial
statements for the year ended December 31, 2007, UniverCompany’s independent
auditors included an explanatory paragraph regarding concerns about their
ability to continue as a going concern. UniverCompany’s financial statements
contained additional note disclosures describing the circumstances that lead
to
this disclosure by UniverCompany’s independent auditors.
The
continuation of our business is dependent upon obtaining further financing
and
achieving a profitable level of operations. The issuance of additional equity
securities by us could result in a significant dilution in the equity interests
of our current or future stockholders. Obtaining commercial loans, assuming
those loans would be available, will increase our liabilities and future cash
commitments.
There
are
no assurances that we will be able to either (1) achieve a level of revenues
adequate to generate sufficient cash flow from operations; or (2) obtain
additional financing through either private placements, public offerings and/or
bank financing necessary to support our working capital requirements. To the
extent that funds generated from operations and any private placements, public
offerings and/or bank financing are insufficient, we will have to raise
additional working capital. No assurance can be given that additional financing
will be available, or if available, will be on terms acceptable to us. If
adequate working capital is not available we may not increase our
operations.
These
conditions raise substantial doubt about our ability to continue as a going
concern. The financial statements do not include any adjustments relating to
the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might be necessary should we be unable to
continue as a going concern.
In
December 2004, the Financial Accounting Standards Board (FASB) issued Statement
No. 123(R) (the “Share Based Payment”) (revised 2004). In addition, in March
2005 the SEC issued Staff Accounting Bulleting Topic 14, “Share-Based
Payment”
(SAB
107) which provides interpretations regarding the interaction between FAS 123(R)
and certain SEC rules and regulations and provided the staff’s views regarding
the valuation of share-based payment arrangements for public companies. FAS
123(R) focuses primarily on accounting for transactions in which an entity
obtains employee services in share-based payment transactions, including stock
option awards. FAS 123(R) revises FASB Statement No. 123, “Accounting
for Stock-Based Compensation” and
supersedes APB Opinion No. 25. FAS 123 (R) will require us to measure the cost
of employee services received in exchange for stock option awards based on
the
grant date fair value of such awards. That cost will be recognized over the
period during which an employee is required to provide service in exchange
for
the award, which is usually the vesting period. We will report such costs as
part of our salary and benefits expenses. On April 14, 2005, the SEC announced
amended compliance dates for SFAS 123(R). The SEC previously required companies
to adopt this standard no later than July 1, 2005, but the new rules now require
us to adopt FAS 123(R) as of the beginning of the first annual reporting period
that begins after December 15, 2005, which is our fiscal year ended December
31,
2006. Currently, the cumulative effect of initially applying FAS 123(R) has
not
been determined and is subject to change depending on future
events.
Critical
Accounting Policies
Our
financial statements and accompanying notes are prepared in accordance with
generally accepted accounting principles in the United States (“US GAAP”).
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts f assets, liabilities, revenue,
and
expenses. These estimates and assumptions are affected by management’s
application of accounting policies. We believe that understanding the basis
and
nature of the estimates and assumptions involved with the following aspects
of
our financial statements is critical to an understanding of our
financials.
Use
of
Estimates
The
preparation of financial statements in conformity with US GAAP generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported 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
reporting period. Actual results could differ from those estimates.
Cash
and Cash Equivalents
We
consider all highly liquid instruments with maturity of three months or less
at
the time of issuance to be cash equivalents.
Financial
Instruments
The
fair
values of accounts payable, accrued liabilities and amounts due to a related
party were estimated to approximate their carrying values due to the immediate
or short-term maturity of these financial instruments.
Financial
Condition and Results of Operation
For
the
2007 Fiscal Year and the 1st
Quarter
2008, the Company and UniverCompany had minimal business operations and
continued to sustain losses. Our operating expenses consist primarily of
administrative costs. The Company used consulting resources to help develop
strategy, screen and recruit a key executive, and complete the acquisition
of
UniverCompany.
Off
Balance Sheet Arrangements
We
have
no off-balance sheet arrangements or contractual or commercial
commitments.
Item
4. Controls and Procedures.
Evaluation
of Disclosure Controls and Procedures
Our
disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports that we file, under the Securities
Exchange Act of 1934, as amended, are recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the United
States Securities and Exchange Commission. Our Chief Executive Officer and
Chief
Financial Officer has reviewed the effectiveness of our “disclosure controls and
procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c)
and 15d-14(c)) within the end of the period covered by this Quarterly Report
on
Form 10-Q and has concluded that the disclosure controls and procedures are
effective to ensure that material information relating to the Company is
recorded, processed, summarized, and reported in a timely manner. There were
no
significant changes in our internal controls or in other factors that could
significantly affect these controls subsequent to the last day they were
evaluated by our Chief Executive Officer and Chief Financial
Officer.
Changes
in Internal Controls over Financial Reporting
There
have been no changes in the Company's internal control over financial reporting
during the last quarterly period covered by this report that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.
PART
II
OTHER
INFORMATION
Item
6. Exhibits
Exhibit
No.
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|
Description
|
|
Where
Found
|
|
|
|
|
|
31.1
|
|
Rule
13a-14(a)/15d14(a) Certifications
|
|
Attached
Hereto
|
|
|
|
|
|
32.1
|
|
Section
1350 Certifications
|
|
Attached
Hereto
|
SIGNATURES
In
accordance with to requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated:
May 20, 2008
|
|
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STARGOLD
MINES, INC.
|
|
|
|
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By:
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/s/
F. Bryson Farrill
|
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Name:
|
F.
Bryson Farrill
|
|
Title:
|
Chief
Executive Officer,
Chief
Financial Officer, and Director
(Principal
Executive, Financial, and
and
Accounting Officer)
|