10QSB/A 1 vanguard10qsba093007.htm VANGUARD MINERALS CORPORATION FORM 10-QSB/A SEPTEMBER 30, 2007 vanguard10qsba093007.htm



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-QSB/A
Amendment No. 1
 
[X]  Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended SEPTEMBER 30, 2007
 
[  ]  Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
 
For the transition period __________ to __________
 
Commission File Number        333-112830 
 
VANGUARD MINERALS COPORATION
(formerly Knewtrino, Inc.)
(Exact name of small Business Issuer as specified in its charter)
 
NEVADA 
Nil 
(State or other jurisdiction of incorporation or organization) 
(IRS Employer Identification No.) 
 
 
601 UNION STREET
TWO UNION SQUARE 42ND FLOOR
SEATTLE, WA
98101 
(Address of principal executive offices) 
(Zip Code) 
 
 
Issuer’s telephone number, including area code: 
604-351-1694 

Knewtrino, Inc. 
(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 Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X] Yes  [  ] No
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. [ X] Yes  [  ] No
 
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 76,020,000 common shares, par value of $0.001 per share, outstanding as of September 30, 2007. 
 
Traditional Small Business Disclosure Format (check one):  [  ] Yes  [X] No
 






 
 
Page
 
 
 
 
 
 
PART I - FINANCIAL INFORMATION
 
 
 
Item 1:
Financial Statements
3
 
 
 
Item 2:
Plan of Operation
14
 
 
 
Item 3:
Controls and Procedures
18
 
PART II - OTHER INFORMATION
 
 
 
Item 1:
Legal Proceedings
19
 
 
 
Item 2:
Unregistered Sales of Equity Securities and Use of Proceeds
19
 
 
 
Item 3:
Defaults Upon Senior Securities
19
 
 
 
Item 4:
Submission of Matters to a Vote of Security Holders
19
 
 
 
Item 5:
Other Information
19
 
 
 
Item 6:
Exhibits
19
 
 
 
 



2


 
 
The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB and Item 310 (b) of Regulation S-B, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three months ended September 30, 2007 are not necessarily indicative of the results that can be expected for the year ending December 31, 2007.

The following interim unaudited financial statements of Vanguard Minerals Corporation (the “Company”) for the three-month period ended September 30, 2007 are included with this Quarterly Report on Form 10-QSB:


 
(a)
Interim balance sheets as of September 30, 2007 and December 31, 2006;

 
(b)
Interim statements of operations for the nine months ended September 30, 2007 and 2006 and for the period from August 25, 2003 (inception) to September 30, 2007 (cumulative);

 
(c)
Interim statements of cash flows for the nine months ended September 30, 2007 and 2006 and for the period from August 25, 2003 (inception) to September 30, 2007 (cumulative);

 
(d)
Interim statements of stockholders’ equity (deficiency) for the period from August 25, 2003 (inception) to September 30, 2007 (cumulative); and

 
(e)
Notes to the financial statements.






3


 
 
 
 
 
 
 
 
 
 
VANGUARD MINERALS CORPORATION
 
(A Development Stage Company)
 
INTERIM FINANCIAL STATEMENTS
 
September 30, 2007
 
(Stated in US Dollars)
 
(Unaudited)

 
 
 
 
 
 
 
 
 
 
 
4

 
 
VANGUARD MINERALS CORPORATION
(formerly Knewtrino, Inc.)
(A Development Stage Company)
INTERIM BALANCE SHEETS
September 30, 2007 and December 31, 2006
(Stated in US Dollars)
(Unaudited)


   
September 30
   
December 31
 
   
2007
   
2006
 
ASSETS
 
Current
           
Cash
  $ 52,222     $ 288,107  
Prepaid expenses
    7,293       9,655  
                 
      59,515       297,762  
                 
Instant Wirefree technology
    -       46,200  
                 
Capital – Note 4
    18,738       12,174  
                 
    $ 78,253     $ 356,136  
                 
LIABILITIES
 
Current
               
Accounts payable and accrued liabilities – Note 5
  $ 49,284     $ 24,114  
                 
      49,284       24,114  
                 
STOCKHOLDERS’ DEFICIENCY
 
Capital stock
               
Authorized:
               
500,000,000 common shares with par value of $0.001
               
Issued:
               
76,020,000 common shares (2006: 76,020,000)
    76,020       76,020  
Additional paid-in capital
    1,354,252       1,354,252  
Warrants
    210,000       210,000  
Deficit accumulated during the Development Stage
    (1,611,303 )     (1,308,250 )
                 
      28,969       332,022  
                 
    $ 78,253     $ 356,136  
                 
 

 
SEE ACCOMPANYING NOTES

 
5

 

VANGUARD MINERALS CORPORATION
(formerly Knewtrino, Inc.)
 (A Development Stage Company)
INTERIM STATEMENTS OF OPERATIONS
for the three months and nine months ended September 30, 2007 and 2006
for the period August 25, 2003 (Date of Incorporation) to September 30, 2007
(Stated in US Dollars)
(Unaudited)

   
Three months ended September 30, 2007
   
Three months ended September 30, 2006
   
Nine months ended September 30, 2007
   
Nine months ended September 30, 2006
   
August 25, 2003 (Date of Incorporation) to September 30, 2007
 
Expenses
                             
Audit and accounting
  $ 4,177     $ 4,330     $ 10,586     $ 9,250     $ 61,034  
Bank charges
    130       115       346       509       2,073  
Consulting fees – Note 5
    29,790       -       29,790       7,000       69,163  
Depreciation
    2,277       530       6,009       530       7,933  
Filing and registration fees
    861       2,750       2,174       6,249       22,248  
Insurance
    -       1,152       -       1,152       1,152  
Interest
    -       -       -       2,500       7,500  
Investor relations
    -       20,420       1,445       20,420       33,192  
Legal fees
    5,028       7,588       20,256       41,969       127,207  
Meals and entertainment
    -       667       -       667       667  
Mineral property costs
    -       -       -       1,500       156,196  
Office and miscellaneous
    646       6,156       1,511       6,156       14,888  
Product development
    33,200       66,828       122,740       66,828       262,663  
Rent and utilities
    7,710       7,119       23,515       7,119       38,534  
Salaries and compensation – Note 5
    11,547       -       36,694       -       89,694  
Telephone and internet
    482       -       1,787       -       4,808  
Travel
    -       57               57       13,082  
                                         
Loss before other item
    (95,848 )     (117,712 )     (256,853 )     (171,906 )     (912,034 )
                                         
Foreign exchange gain (loss)
    ( - )     1,113       ( - )     (153 )     43  
Fair value of discount on private placement
    -       (553,188 )             (653,112 )     (653,112 )
Impairment in Instant Wirefree technology
    -       -       (46,200 )     -       (46,200 )
                                         
Net loss for the period
  $ (95,848 )   $ (669,787 )   $ ( 303,053 )   $ (825,171 )   $ (1,611,303 )
                                         
Basic loss per share
  $ (0.00 )   $ (0.01 )   $ (0.00 )   $ (0.02 )        
                                         
Weighted average number of common shares outstanding
    76,020,000       76,020,000       76,020,000       46,311,111          
                                         
 
 
SEE ACCOMPANYING NOTES

 
6

 

VANGUARD MINERALS CORPORATION
(formerly Knewtrino, Inc.)
 (A Development Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
for the periods ended September 30, 2007 and 2006
for the period August 25, 2003 (Date of Incorporation) to September 30, 2007
 (Stated in US Dollars)
(Unaudited)

   
Nine months ended September 30, 2007
   
Nine months ended September 30, 2006
   
August 25, 2003 Date of Incorporation) to September 30, 2007
 
Operating Activities
                 
Net loss for the period
  $ (303,053 )   $ (825,171 )   $ (1,611,303 )
Adjustment for non-cash items:
                       
Depreciation
    6,009       530       7,933  
Capital stock issued for mineral property costs
    -       -       32,500  
Fair value discount on private placement
    -       653,112       653,112  
Impairment in Instant Wirefree technology
    46,200       -       46,200  
Change in non-cash working capital balances related to Operations
                       
Prepaid expenses
    2,362       (2,293 )     (7,293 )
Accounts payable and accrued liabilities
    25,170       (6,806 )     49,284  
                         
Net cash used in operations
    (223,312 )     (180,628 )     (829,567 )
                         
Investing Activities
                       
Acquisition of capital assets
    (12,573 )     (8,916 )     (26,671 )
Instant Wirefree technology
    -       (27,500 )     (27,500 )
                         
      (12,573 )     (36,416 )     (54,171 )
                         
Financing Activities
                       
Capital stock issued
    -       420,000       722,700  
Promissory notes
    -       850       213,260  
                         
Net cash provided by financing activities
    -       420,850       935,960  
                         
Increase (decrease) in cash during the period
    (235,885 )     203,806       52,222  
Cash, beginning of period
    288,107       273,841       -  
                         
Cash, end of period
  $ 52,222     $ 477,647     $ 52,222  
                         
Supplemental disclosure of cash flow information:
                       
Cash paid for:
                       
Interest
  $ -     $ -     $ -  
                         
Income taxes
  $ -     $ -     $ -  
                         
Non-cash transactions
                       
Shares issued on acquisition of Instant Wirefree, Inc.
  $ -     $ 18,700     $ 18,700  
Shares issued to settle debt
  $ -     $ -     $ 213,260  
                         

SEE ACCOMPANYING NOTES


 
7

 

VANGUARD MINERALS CORPORATION
(formerly Knewtrino, Inc.)
 (A Development Stage Company)
INTERIM STATEMENT OF STOCKHOLDERS’ EQUITY
for the period from August 25, 2003 (Date of Incorporation) to September 30, 2007
(Stated in US Dollars)

   
Common Stock
   
Additional
Paid-in
         
Deficit Accumulated During the Pre-exploration
       
   
Shares
   
Par Value
   
Capital
   
Warrants
   
Stage
   
Total
 
Common stock issued for cash – at $0.001
    2,700,000     $ 2,700     $ -     $ -     $ -     $ 2,700  
Common stock issued for mineral property costs – at $0.05
    650,000       650       31,850               -       32,500  
Net loss for the period
    -       -       -               (127,977 )     (127,977 )
Balance, December 31, 2003
    3,350,000     $ 3,350     $ 31,850             $ (127,977 )   $ (92,777 )
Net loss for the period
    -       -       -               (84,812 )     (84,812 )
Balance, December 31, 2004
    3,350,000     $ 3,350     $ 31,850             $ (212,789 )   $ (177,589 )
Common stock issued for cash pursuant to a public offering at $.05
    6,000,000       6,000       294,000                       300,000  
Net loss for the period
    -       -       -               (85,922 )     (85,922 )
Balance, December 31, 2005
    9,350,000     $ 9,350     $ 325,850             $ (298,711 )   $ 36,489  
Common stock issued for shares of Instant Wirefree, Inc. at $. 001
    18,700,000       18,700       -               -       18,700  
Common stock issued for debt at $.004
    47,550,000       47,550       165,710               -       213,260  
Common stock issued for cash pursuant to a private placement at $ 1.00 per share
    420,000       420       209,580       210,000       -       420,000  
Fair value discount on private placement
                    653,112                       653,112  
Net loss for the period
    -       -       -               (1,009,539 )     (1,009,539 )
Balance, December 31, 2006
    76,020,000       76,020     $ 1,354,252     $ 210,000     $ (1,308,250 )   $ 332,022  
Net loss for the period
    -       -       -               (303,053 )     (303,053 )
Balance, September 30, 2007
    76,020,000     $ 76,020     $ 1,354,252     $ 210,000     $ (1,611,303 )   $ 28,969  
 
 

 
SEE ACCOMPANYING NOTES
 
 
8

 

VANGUARD MINERALS CORPORATION
(formerly Knewtrino, Inc.)
(A Development Stage Company)
NOTES TO THE  INTERIM FINANCIAL STATEMENTS
September 30, 2007
(Stated in US Dollars)
(Unaudited)

Note 1
Interim Reporting

The accompanying unaudited interim financial statements have been prepared by Vanguard Minerals Corporation ( the “Company”) pursuant to the rules and regulations of the United States Securities and Exchange Commission.  Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations.  In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included. These interim financial statements should be read in conjunction with the audited financial statements of the Company for the fiscal year ended December 31, 2006.

The results of operations for the nine months ended September 30, 2007 are not indicative of the results that may be expected for the full year.

Note 2
Nature and Continuance of Operations

The Company was incorporated in the State of Nevada, United States of America on August 25, 2003.  The Company’s fiscal year end is December 31.

The Company is in the development stage.  The Company entered into a mineral license option agreement to explore and mine two properties in Mongolia.  On April 19, 2006, the Company terminated the option agreements it previously held.

On May 2, 2006, the Company changed its name to Knewtrino, Inc.

On May 24, 2006, the Company entered into an agreement to acquire certain technology owned by Instant Wirefree, Inc. by acquiring 100% of the common shares of Instant Wirefree, Inc. in exchange for cash in the amount of $ 27, 500 and 18,700,000 common shares of the Company.

During the period, the Company changed its business focus and as a result will no longer be developing the Instant Wirefree technology. As a result Vanguard has recognized an impairment of $ 46,200 in the value of the technology asset.

On September 19, 2007, the Company changed its name to Vanguard Minerals Corporation.

The financial statements have been prepared using generally accepted accounting principles in the United States of America applicable for a going concern which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business.  At September 30, 2007, the Company has not yet attained profitable operations and has accumulated losses of $1,611,303 since its commencement.  Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations and/or obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due.



 
9

 

Knewtrino Inc.
(formerly Knewtrino, Inc.)
(A Development Stage Company)
Notes to the  Interim Financial Statements
September 30, 2007
(Stated in US Dollars)
-Page 2


The Company has obtained financing from share subscriptions and by loans from its shareholders; however, there is no guarantee that additional funds from its shareholders will be received in the future.  The Company may also solicit loans from other non-affiliated individuals; however, there is no assurance that such loans can be negotiated or that such financing will be available on terms favourable to the Company.  The Company may also obtain additional financing by the sale of its common stock; however, the Company is not publicly listed nor is its stock currently quoted or traded but there currently are plans for the sale of common stock.  There can be no assurance that such additional funding will be available on acceptable terms, if at all.


Note 3
Significant Accounting Policies

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.  Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.  Actual results may vary from these estimates.

The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:

 
(a)
Development Stage Company
 
The Company complies with Financial Accounting Standard Board Statement No. 7 and The Securities and Exchange Commission Act Guide 7 for its characterization of the Company as development stage.

 
 
(b)
Capital Assets
 
Capital assets are recorded at cost and are being depreciated on a straight line basis at the following annual rates:
 
 
Computer equipment
3 years
 
Furniture and fixtures
5 years
 
 Leasehold improvements
 3 years

 

 
10

 

Knewtrino Inc.
(formerly Knewtrino, Inc.)
(A Development Stage Company)
Notes to the  Interim Financial Statements
September 30, 2007
(Stated in US Dollars)
-Page 3

 

 
 
(c)
Mineral Properties
 
Costs of license acquisition, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred.

 
(d)
Environmental Costs
 
Environmental expenditures that relate to current operations are expensed or capitalized as appropriate.  Expenditures that relate to an existing condition caused by past operations and which do not contribute to current or future revenue generation, are expensed.  Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated.  Generally, the timing of these accruals coincide with the earlier of completion of a feasibility study or the Company's commitments to plan of action based on the then known facts.
 
 
(e)
Income Taxes
 
The Company uses the asset and liability method of accounting for incomes taxes pursuant to Statement of Financial Accounting Standards (“FAS”), No 109 " Accounting for Income Taxes".  Under the assets and liability method of FAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

 
(f)
Basic Loss per Share
 
The Company reports basic loss per share in accordance with the FAS No. 128, "Earnings per Share".  Basic loss per share is computed using the weighted average number of shares outstanding during the period.


 
11

 

Knewtrino Inc.
(formerly Knewtrino, Inc.)
(A Development Stage Company)
Notes to the  Interim Financial Statements
September 30, 2007
(Stated in US Dollars)
-Page 4


 
 
(g)
Foreign Currency Translation
 
The Company’s functional currency is United States ( “U.S”) as substantially all of the Company’s operations use this denomination.  The Company uses the United States dollar as its reporting currency for consistency with registrants of the Securities and Exchange Commission (“SEC”) and in accordance with the Statement of Financial Accounting (“FAS”) No. 52.

Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date.  Any exchange gains and losses would be included in Other Income (Expenses) on the Statement of Operations.
 

Note 4
Capital Assets

               
Net Book Value
 
         
Accumulated
   
September 30
 
   
Cost
   
Amortization
   
2007
   
2006
 
                         
Computer equipment
  $ 17,922     $ 5,402     $ 12,520     $ 4,618  
Furniture and fixtures
    6,569       1,623       4,946       5,740  
Leasehold improvements
    2,180       908       1,272       1,816  
    $ 26,671     $ 7,933     $ 18,738     $ 12,174  


Note 5
Related Party Transactions

The Company was charged the following expenses by shareholders and directors of the Company:


 
12

 


   
Nine months ended
   
August 25, 2003 (Date of Incorporation) to
 
   
September 30
   
September 30,
 
   
2007
   
2006
   
2007
 
                   
Consulting fees
  $ -     $ 2,000     $ 34,305  
Interest
    -       2,500       7,500  
Office and miscellaneous
    -       -       1,000  
Salaries and compensation
    36,694       -       89,694  
Mineral property costs
    -       -       2,000  
                         
    $ 36,694     $ 4,500     $ 134,499  

These charges were measured by the exchange amount, which is the amount agreed upon by the transacting parties.

Included in accounts payable and accrued liabilities is $4,000 (December 31, 2006: $nil) owed to a shareholder of the Company with respect to unpaid consulting fees.











 
13


Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
Cautionary Statement Regarding Forward-Looking Statements
 
The information in this Quarterly Report on Form 10-QSB/A contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties, including statements regarding our markets, capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding the ability to continue mining exploration on a timely basis, that we will attract customers, that there will be no material adverse competitive or regulatory change in conditions in our business, that our President will remain employed as such, that our forecasts accurately anticipate market demand, and that there will be no material adverse change in our operations or business or in governmental regulations affecting our business, availability of funds, common share prices, operating costs, capital costs, and other factors. Forward-looking statements are made, without limitation, in relation to marketing plans, operating plans, availability of funds, and ongoing capital and operating costs. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined below, and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
 
Overview
 
Vanguard Minerals Corporation, formerly Knewtrino, Inc., (the “Company”) was originally incorporated as Mongolian Explorations Ltd. on August 25, 2003, under the laws of the State of Nevada. We were originally founded to conduct mineral explorations in Mongolia. Although we did exploratory feasibility work on mineral lease development, we abandoned our mineral exploration efforts in April, 2006 due to the deteriorating political and security situation in Mongolia and specifically due to intense protests over North American mining concessions in that country which jeopardize the safety of our consultants as well as undermining our confidence that we will ever be able to see a return on our continued investments to develop the properties. Since that time, we had appointed an interim chief executive officer, Jenifer Osterwalder, who saw us through our transition out of the mineral exploration business and now are under the leadership of a new chief executive officer, Vladimir Fedyunin, and we were in the process of developing a business around cell phone enabled wireless applications. Toward that end, we acquired the intellectual property of wireless technology start-up Instant Wirefree, Inc., a Nevada corporation.  Unfortunately, we were not able to make the transition to the ultra-competitive field of cell phone wireless applications.  In June, 2007, we made the decision to abandon this line of business and to no longer pursue commercialization of any product in the wireless space.  Instead, we have returned to our original, core focus of mining, where the company has its roots, however, we wish to find a more politically stable and less dangerous environment to mine in than Mongolia.  Toward that end, our Chief Executive Officer is currently involved in exploring mining opportunities which may have a good fit.  We have not yet concluded any agreements regarding any such potential mining operations, but are actively seeking partners and opportunities in the mineral exploration space.  In September, 2007, we changed our name to Vanguard Minerals Corporation to reflect our renewed commitment to our traditional core business of mineral exploration.

 
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Results of Operations
 
Until April 19, 2006, we have been involved primarily in organizational activities, the acquisition of the option to acquire the Altan as well as the Ovorkhangai property mineral licenses, obtaining a geological report on our mineral licenses and initiating the first phase of exploration. After April 19, 2006, when we abandoned these efforts, we have acquired wireless technology from Instant Wirefree, Inc., a Nevada corporation.  We attempted to commercialize technology for the wireless space but abandoned that effort in June, 2007.  We are currently in the process of returning to our core business of mining. We incurred an accumulated net loss of $911,991 for the period from inception to September 30, 2007. We have had no revenues from operations since our inception.

We do not plan to buy or sell any plant or significant equipment during the next twelve months. We are currently in the process of seeking a mining opportunity. We do not yet have any products or services available for sale and are not conducting any mining operations.   Consistent with our attempt to enter the wireless space, we acquired Instant Wirefree, Inc. and received consultation from its president, Harshawardan Shetty.   On October 18, 2006, we appointed Mr. Shetty to our board of directors. On July 27, 2007, Mr. Shetty resigned from our board of directors because of a prohibition against serving on public boards by his new employer.
 
Financial Condition and Liquidity
 

Our financial statements contained herein have been prepared on a going concern basis, which assumes that we will be able to realize our assets and discharge our obligations in the normal course of business. We incurred an accumulated net loss of $1,611,303 for the period from inception to September 30, 2007.

Our financial statements included in this report have been prepared without any adjustments that would be necessary if we become unable to continue as a going concern and are therefore required to realize upon our assets and discharge our liabilities in other than the normal course of business.


 
 

 

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Cash and Working Capital

The Company's cash balance as of September 30, 2007 was $52,222, as compared to the cash balance of $288,107 as of December 31, 2006.
 
 
Period Ending September 30, 2007

Operating expenses for the three month period ended September 30, 2007 totaled $95,848 and from inception to the period ended September 30, 2007 totaled $912,034. The company experienced a net loss of $95,848 and $1,611,303 for the three month period ended September 30, 2007 and from inception to period ended September 30, 2007, respectively, against no revenue from operations. The difference between our expenses and our net loss is attributable to the amount of a discount given in our private placement, the impairment of the instant wirefree assets and a foreign currency gain. The major expenses during this three month period were for legal and accounting fees.

The earnings per share (fully diluted -- weighted average) was a net loss of $0.00 for the three month period ended September 30, 2007.
 


For the nine month period ended September 30, 2007, net cash used in operating activities, consisting mostly of loss from operations was $223,312. For the period from inception to September 30, 2007, net cash used in operating activities, consisting mostly of loss from operations was $829,567.

For the period from inception to September 30, 2007, net cash resulting from financing activities was in the amount of $935,960.

Our capital resources have been limited. We currently do not, and have not yet determined when we will, generate revenue for our technology activities, and to date have relied on the sale of equity and related party loans for cash required for our exploration activities. The company has no external sources of liquidity in the form of credit lines from banks. No investment banking agreements are in place and there is no guarantee that the company will be able to raise capital in the future should that become necessary.
 

Future Financings
 
We anticipate that if we pursue any additional financing, the financing would be an equity financing achieved through the sale of our common stock. We do not have any arrangement in place for any debt or equity financing. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our company. If we do not secure additional financing in the future we may consider bringing in a joint venture partner to provide the required funding. We have not, however, undertaken any efforts to locate a joint venture partner. In addition, we cannot provide investors with any assurance that we will be able to locate a joint venture partner now that we have abandoned our mineral leases and have not yet replaced those assets with a specific potential revenue source.



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Off Balance Sheet Arrangements
 
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
 
 
Significant Contingencies
 
Our financial statements have been prepared assuming we will continue as a going concern. Our independent auditors have made reference to the substantial doubt about our ability to continue as a going concern in their report of independent registered public accounting firm on our audited financial statements for the year ended December 31, 2006. Our continuation is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern.
 
Plan of Operation
 
We are uncertain of what our plan of operation over the next 12 months will be. We intend to return to our roots in the mining exploration field, but to seek a more politically stable environment than the one in Mongolia.  We currently do not have any mineral leases or any mining operations of any kind.





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We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2007. This evaluation was carried out under the supervision and with the participation of our officer and director, Vladimir Fedyunin. Based upon that evaluation, Mr. Fedyunin concluded that, as of September 30, 2007, our disclosure controls and procedures are effective. There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to the date we carried out our evaluation.

Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Internal Controls
 
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal 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 design of a control system must reflect the fact that there are resource constraints, and 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 the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.





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PART II - OTHER INFORMATION


 
We are not party to any legal proceedings.


 
None.


 
None.



None.


 
On July 27, 2007, Harshawardan Shetty resigned from our board of directors because of a prohibition against serving on public boards by his new employer.  In June, 2007, we made the decision to abandon all attempts to commercialize or develop any wireless products or services of any kind including any use or commercialization of the technology we acquired from Instant Wirefree, Inc.  We are currently seeking to return to the field of mining, where the company has its roots, however, we wish to find a more politically stable and less dangerous environment to mine in than Mongolia.  Toward that end, our Chief Executive Officer is currently involved in exploring mining opportunities which may have a good fit.  We have not yet concluded any agreements regarding any such potential mining operations, but are actively seeking partners and opportunities in the mineral exploration space.  In September, 2007, we changed our name to Vanguard Minerals Corporation to reflect our return to our traditional core business of mining.



(a) Exhibits
 
Exhibits
Document Description

3.1
Articles of Incorporation, incorporated by reference from our Prospectus on Form SB-2 filed February 13, 2004. File Number 333-112830.
3.2
Bylaws, incorporated by reference from our Prospectus on Form SB-2 filed February 13, 2004. File Number 333-112830.
31.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed as an Exhibit to this Quarterly Report on Form 10-QSB/A.
32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed as an Exhibit to this Quarterly Report on Form 10-QSB/A.


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(b) REPORTS ON FORM 8-K

None.


























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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
Vanguard Minerals Corporation
 
 
 
 
 
 
 
 
DATE: January 10, 2008
/s/ Vladimir Fedyunin                      
 
Vladimir Fedyunin
 
President, CEO, Director, Principal
Financial and Accounting Officer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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