vanguard10ksba123107.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB/A

Amendment No. 1

(Mark One)

[X]

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007.

[ ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to _________

Commission File No. 0-50274

Vanguard Minerals Corporation

(Name of small business issuer in its charter)

Nevada	Nil
(State or other jurisdiction of incorporation or organization)	(I.R.S. 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 (604)351-1694

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.0001 par value

(Title of Class)

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. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes [ ] No [X]

As of March 31, 2008, the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity was approximately $38,511,000

As of March 31, 2008, the registrant had outstanding 80,549,666 shares of common stock, par value $0.001, of which there is only a single class.

DOCUMENTS INCORPORATED BY REFERENCE

None

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

THIS AMENDMENT NO. 1 TO THE COMPANY’S REPORT ON FORM 10KSB FOR THE FISCAL YEAR END DECEMBER 31, 2008 AMENDS PART II, ITEM 8A REGARDING CONTROLS AND PROCEEDURES. WE HAVE ALSO MADE CHANGES TO THE PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER CERTIFICATIONS WHICH ARE EXHIBITS TO THIS REPORT.

TABLE OF CONTENTS

	Page Number
PART I

ITEM 1. Description of Business.	1
ITEM 2. Description of Property.	3
ITEM 3. Legal Proceedings.	3
ITEM 4. Submission of Matters to a Vote of Security Holders.	3

PART II

ITEM 5. Market for Common Equity and Related Stockholder Matters.	4
ITEM 6. Management’s Discussion and Analysis or Plan of Operation.	5
ITEM 7. Financial Statements.	F-1
ITEM 8. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.	12
ITEM 8A. Controls and Procedures.	12
ITEM 8B. Other Information.	13

PART III

ITEM 9. Directors, Executive Officers, Promoters and Control Persons and Corporate Governance; Compliance With Section 16(a) of the Exchange Act.	14
ITEM 10. Executive Compensation.	15
ITEM 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	16
ITEM 12. Certain Relationships and Related Transactions, and Director Independence.	17
ITEM 13. Exhibits.	18
ITEM 14. Principal Accountant Fees and Services.	19

PART I

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-KSB, press releases and certain information provided periodically in writing or verbally by our officers or our agents contain statements which constitute forward-looking statements. The words “may”, “would”, “could”, “will”, “expect”, “estimate”, “anticipate”, “believe”, “intend”, “plan”, “goal”, and similar expressions and variations thereof are intended to specifically identify forward-looking statements. These statements appear in a number of places in this Form 10-KSB and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of us, our directors or our officers, with respect to, among other things: (i) our liquidity and capital resources; (ii) our financing opportunities and plans; (iii) our ability to generate revenues; (iv) competition in our business segments; (v) market and other trends affecting our future financial condition or results of operations; (vi) our growth strategy and operating strategy; and (vii) the declaration and/or payment of dividends.

Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. The factors that might cause such differences include, among others, those set forth in Part II, Item 6 of this annual report on Form 10-KSB, entitled Management’s Discussion and Analysis or Plan of Operation, including without limitation the risk factors contained therein. Except as required by law, we undertake no obligation to update any of the forward-looking statements in this Form 10-KSB after the date of this report.

ITEM 1. DESCRIPTION OF BUSINESS.

OVERVIEW

We are a development stage mineral exploration company. We do not currently have any mineral properties under development, although we have entered into an agreement with Coastal Uranium Holdings Ltd. to acquire its right and option to acquire an undivided 50% right, title and interest in certain mineral claims in the Athabasca region.

CORPORATE HISTORY AND DEVELOPMENT

We were incorporated in the State of Nevada on August 25, 2003 as Mongolian Explorations Ltd., an exploration company focused on the exploration of potentially viable mineral deposits in Mongolia, East Asia.

On April 19, 2006, due to deteriorating political conditions in Mongolia, we opted to exercise our termination rights with respect to our mineral leases and we ceased our exploration operations. We immediately began searching for other business opportunities.

By certificate of amendment filed May 17, 2006, we changed our name from Mongolian Explorations Ltd. to Knewtrino, Inc.

On May 24, 2006, we entered into a certain acquisition agreement with Instant Wirefree, Inc. (“Wirefree”), whereby we acquired one hundred percent (100%) of the issued and outstanding common stock of Wirefree in exchange for eighteen million seven hundred thousand (18,700,000) of our common shares and a lump sum payment in the amount of twenty-seven thousand five hundred dollars ($27,500). At the time of the acquisition Wirefree had no current operations, revenues or assets, other than certain technology.

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 as described above. 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. In September, 2007, we changed our name to Vanguard Minerals Corporation to reflect our renewed commitment to our traditional core business of mineral exploration. In November 2007, the Company entered into an agreement with Coastal Uranium Holdings Ltd. to acquire its right and option to acquire an undivided 50% right, title and interest in certain mineral claims in the Athabasca region. The option was acquired through payment of $ 57,585 in cash as well as 2,000,000 common shares of the Company. As of December 31, 2007, the shares had not yet been issued.

Our principal executive offices are located at 601 Union Street, Two Union Square, 42nd Floor, Seattle Washington 98101. Our phone number is (206) 652-3246.

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PRINCIPAL PRODUCTS AND SERVICES

We are a development stage mineral exploration company currently engaged in the process of evaluating mineral exploration opportunities.

PRINCIPAL MARKETS

We intend to compete in the market for mineral exploration and exploitation of mineral resources.

ADVERTISING AND MARKETING

We do not currently market or advertise any products or services, however, we anticipate that we may have to market any mineral products and resources discovered in the course of our mineral exploration activities.

COMPETITION

The mineral exploration field is filled with substantial, well-financed, multi-national competitors, although as we have not defined the specific area of mineral exploration in which we would compete, it is difficult for us to indicate the names of the specific competitors in that area.

SIGNIFICANT CUSTOMERS

As of the date of this annual report on Form 10-KSB for the fiscal year ended December 31, 2007, we are not and do not anticipate becoming dependent upon any single or group of major customers.

INTELLECTUAL PROPERTY

Overview

We intend to rely for our business on a combination of pending trademarks and trade secrets in order to protect our intellectual property.

We cannot be certain that the precautions we will take to safeguard pending trademarks and trade secrets will provide meaningful protection from unauthorized use. If we must pursue litigation in the future to enforce or otherwise protect our intellectual property rights, or to determine the validity and scope of the proprietary rights of others, we may not prevail and will likely have to make substantial expenditures and divert valuable resources in the process. Moreover, we may not have adequate remedies if our intellectual property is appropriated or our trade secrets are disclosed.

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Trademarks

We do not currently have any trademarks in registration.

Trade Secrets

Whenever we deem it important for purposes of maintaining competitive advantages, we require parties with whom we share, or who otherwise are likely to become privy to, our trade secrets or other confidential information to execute and deliver to us confidentiality and/or non-disclosure agreements. Among others, this may include employees, consultants and other advisors, each of whom we may require to execute such an agreement upon commencement of their employment, consulting or advisory relationships. These agreements generally provide that all confidential information developed or made known to the individual by us during the course of the individual’s relationship with us is to be kept confidential and not to be disclosed to third parties except under specific circumstances.

As of the date of this annual report on Form 10-KSB for the fiscal year ended December 31, 2007, we have not executed confidentiality and/or non-disclosure agreements with any of our key employees, consultants or advisors.

EMPLOYEES

For the fiscal year ended December 31, 2007, we had 1 full-time employee. We intend to expand our staff over the next twelve months, including additional hires as we identify mineral exploration opportunities.

We are not subject to any collective bargaining agreements and believe that our relationships with our employees are good.

ITEM 2. DESCRIPTION OF PROPERTY.

Our principal executive offices are located at 601 Union Street, Two Union Square, 42nd Floor, Seattle, Washington, 98101. Our telephone number is (206) 652-3246. We lease this premises on a month-to-month basis. We also maintain an office in Vancouver, British Columbia, Canada which we lease under a written lease agreement expiring in June of 2009. Under the lease, we make payments of approximately $2,495 per month.

ITEM 3. LEGAL PROCEEDINGS.

As of the date of this annual report on Form 10-KSB for the fiscal year ended December 31, 2007, there were no pending material legal proceedings to which we were a party and we are not aware that any were contemplated. There can be no assurance, however, that we will not be made a party to litigation in the future. Any finding of liability imposed against us is likely to have an adverse effect on our business, our financial condition, including liquidity and profitability, and our results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

We submitted a Proxy Information Statement to our shareholders in August, 2007 in order to inform our stockholders regarding the change of our name from Knewtrino, Inc. to Vanguard Minerals Corporation.

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PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Our common stock is quoted on the OTC Bulletin Board, a service provided by the Nasdaq Stock Market Inc., under the symbol “VNGM.”

The following table sets forth the high and low bid prices for our common stock as reported each quarterly period within the last two fiscal years on the OTC Bulletin Board, and as obtained from BigCharts.com. The high and low prices reflect inter-dealer prices, without retail mark-up, markdown or commission and may not necessarily represent actual transactions.


Period
	High		Low
Fiscal year ended 2006
Quarter ended
March 31, 2006*	$	-	$	-
June 30, 2006	$	1.780	$	1.265
September 30, 2006	$	1.960	$	1.320
December 31, 2006	$	1.300	$	1.020

Fiscal year ended 2007
Quarter ended
March 31, 2007	$	1.02	$	0.50
June 30, 2007	$	0.51	$	0.50
September 30, 2007	$	0.57	$	0.50
December 31, 2007	$	0.65	$	0.40

*	Our common shares began trading on the OTC Bulletin Board on May, 25, 2006; thus, prior historical price information regarding shares of our common stock is unavailable.

STOCKHOLDERS

As of March 31, 2008, there were approximately 48 holders of record of our common shares.

DIVIDENDS

From our inception we have never declared or paid any cash dividends on shares of our common stock and we do not anticipate declaring or paying any cash dividends in the foreseeable future. The decision to declare any future cash dividends will depend upon our results of operations, financial condition, current and anticipated cash needs, contractual restrictions, restrictions imposed by applicable law and other factors that our board of directors deem relevant. Although it is our intention to utilize all available funds for the development of our business, no restrictions are in place that would limit our ability to pay dividends. The payment of any future cash dividends will be at the sole discretion of our board of directors.

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RECENT SALES OF UNREGISTERED SECURITIES

On May 24, 2006, we issued eighteen million seven hundred thousand (18,700,000) of our common shares to the shareholders of Wirefree in connection with a certain acquisition agreement.

In May 2006, we issued 47,550,000 shares of common stock in settlement of promissory notes outstanding in the amount of $213, 260.

During the period of May through July 2006, we issued 420,000 shares of common stock as part of a private placement for $ 420,000 and 200,000 common stock purchase warrants at $1.50 per share without additional consideration. The common stock purchase warrants expired unexercised on May 31, 2007.

In November 2007, the Company issued 196,333 shares of the common stock of the company pursuant to a private placement for $ 58,900. The company at the same time issued 196,333 stock purchase warrants with an exercise price of $ .40 per share. All of the warrants are exercisable immediately through November 16, 2009, were issued without additional consideration and as at December 31, 2007 were outstanding.

In November 2007, the Company entered into an agreement with Coastal Uranium Holdings Ltd. to acquire its right and option to acquire an undivided 50% right, title and interest in certain mineral claims in the Athabasca region. The option was acquired through payment of $ 57,585 in cash as well as 2,000,000 common shares of the Company. As of December 31, 2007, the shares had not been issued.

ITEM 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

The following discussion and analysis of our financial condition, results of operations and liquidity should be read in conjunction with our financial statements for the fiscal years ended December 31, 2007 and 2006 and the related notes appearing elsewhere in this annual report. Our financial statements have been prepared in accordance with generally accepted accounting principles, contemplate that we will continue as a going concern, and do not contain any adjustments that might result if we were unable to continue as a going concern, however, our independent registered public accounting firms have added explanatory paragraphs in Note 1 of each of our financial statements for the fiscal years ended December 31, 2007 and 2006, respectively, raising substantial doubt as to our ability to continue as a going concern.

CRITICAL ACCOUNTING POLICIES

Our critical accounting policies, including the assumptions and judgments underlying those policies, are more fully described in the notes to our financial statements. We have consistently applied these policies in all material respects. Investors are cautioned, however, that these policies are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially. Set forth below are the accounting policies that we believe most critical to an understanding of our financial condition, results of operations and liquidity.

Use of Estimates

The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in our financial statements and the accompanying notes. We evaluate our estimates on an ongoing basis, and make our estimates and assumptions based on actual historical experience which we believe to be reasonable under the circumstances at that time. Actual results may differ materially from our current estimates.

Income Taxes

We use the asset and liability method of accounting for our income taxes, wherein 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

Foreign Currency Transactions

Our functional currency is the United States dollar as substantially all of our operations use this denomination. We also use the United States dollar as our reporting currency and, accordingly, transactions undertaken in currencies other than our functional currency are translated using the exchange rate in effect as of the transaction date.

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OVERVIEW

We are a development stage mineral exploration company. We currently possess certain rights to mineral claims in the Athabasca region of Canada. We anticipate that we will begin development of this property sometime within the 2008 fiscal year.

PLAN OF OPERATION

We anticipate beginning development of the Athabasca mineral property sometime within 2008. The specific drilling and exploration program for this property has not yet been developed, but we intend to develop this program and to execute on the program throughout the next twelve months. We also intend to continue evaluating other mineral properties for development, although there can be no assurance that we will locate any such properties on terms and conditions that would be acceptable to us.

LIQUIDITY AND CAPITAL RESOURCES

As of the fiscal year ended December 31, 2007 we had $11,877 of cash on hand.

Our net loss increased $380,580 from $1,009,539 for the fiscal year ended December 31, 2006 to $1,390,119 for the fiscal year ended December 31, 2007, and our shareholder's equity decreased $331,219, from $332,022 for the fiscal year ended December 31, 2006 to $803 for the fiscal year ended December 31, 2007. This increase in net loss is primarily attributable to charge we have taken for $1,000,000, representing the 2,000,000 common shares to be issued for acquisition of the Athabasca mineral rights.

Net cash used in operating activities increased $958,141, from $364,986 for the fiscal year ended December 31, 2006 to $1,323,127 for the fiscal year ended December 31, 2007. This increase was primarily the result of the transaction where we acquired the Athabasca mineral rights.

Net cash provided by financing activities increased $638,050, from $420,850 for the fiscal year ended December 31, 2006 to $1,058,900 for the fiscal year ended December 31, 2007. Net cash provided by financing activities for was primarily attributable to stock subscriptions from the Athabasca transaction.

We do not believe that our current financial resources are sufficient to meet our working capital needs over the next twelve months and, accordingly, we will need to secure additional external financing to continue our operations. We may seek to raise additional capital though private equity or debt financings and shareholder loans. As of the date of this annual report on Form 10-KSB for the fiscal year ended December 31, 2007, we have obtained no verbal commitments regarding further investments in our company; and, there can be no assurance that we will be able to secure additional external financing, or, if we are able to secure such external financing, that it will be on terms favorable, or even acceptable, to us. If necessary, we may explore strategic alternatives, including a merger, asset sale, joint venture or other comparable transactions. Any inability to achieve or sustain profitability or otherwise secure external financing or locate a strategic partner would have a material adverse effect on our business, financial condition, and results of operations, raising substantial doubts as to our ability to continue as a going concern, and we may ultimately be forced to seek protection from creditors under the bankruptcy laws or cease operations.

Our short-term prospects are challenging considering our lack of financial resources. In the absence of additional financing, sales of our products or services, or locating a strategic partner willing to finance our further development, our short-term and long-term prospects for growth are minimal over and above incremental sales of our existing products and services.

RISK FACTORS

Our business entails a significant degree of risk and uncertainty, and an investment in our securities should be considered highly speculative. What follows is a general description of the material risks and uncertainties, which may adversely affect our business, our financial condition, including liquidity and profitability, and our results of operations, ultimately affecting the value of an investment in shares of our common stock. In addition to other information contained in this annual report on Form 10-KSB, you should carefully consider the following cautionary statements and risk factors.

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GENERAL BUSINESS RISKS

We are a development stage company and based on our historical operating losses and negative cash flows from operating activities there is uncertainty as to our ability to continue as a going concern.

We have a history of operating losses and negative cash flows from operating activities. In the event that we are unable to achieve or sustain profitability or are otherwise unable to secure external financing, we may not be able to meet our obligations as they come due, raising substantial doubts as to our ability to continue as a going concern. Any such inability to continue as a going concern may result in our security holders losing their entire investment. Our financial statements, which have been prepared in accordance with generally accepted accounting principles, contemplate that we will continue as a going concern and do not contain any adjustments that might result if we were unable to continue as a going concern. Changes in our operating plans, our existing and anticipated working capital needs, the acceleration or modification of our expansion plans, lower than anticipated revenues, increased expenses, potential acquisitions or other events will all affect our ability to continue as a going concern.

Our liquidity and capital resources are very limited.

Our ability to fund working capital and anticipated capital expenditures will depend on our future performance, which is subject to general economic conditions, our customers, actions of our competitors and other factors that are beyond our control. Our ability to fund operating activities is also dependent upon (i) the extent and availability of bank and other credit facilities, (ii) our ability to access external sources of financing, and (iii) our ability to effectively manage our expenses in relation to revenues. There can be no assurance that our operations and access to external sources of financing will continue to provide resources sufficient to satisfy our liabilities arising in the ordinary course of business.

Our accumulated deficit makes it more difficult to borrow funds.

As of the fiscal year ended December 31, 2007, and as a result of historical operating losses from prior operations and losses accumulated during our development stage, our working capital surplus was $803. Lenders generally regard an accumulated deficit or a very low working capital surplus as a negative factor in assessing creditworthiness, and for this reason, the extent of our accumulated deficit coupled with our historical operating losses will negatively impact our ability to borrow funds if and when required. Any inability to borrow funds, or a reduction in favorability of terms upon which we are able to borrow funds, including the amount available to us, the applicable interest rate and the collateralization required, may affect our ability to meet our obligations as they come due, and adversely affect on our business, financial condition, and results of operations, raising substantial doubts as to our ability to continue as a going concern.

From inception, we have historically generated minimal revenues while sustaining considerable operating losses and we anticipate incurring continued operating losses and negative cash flows in the foreseeable future resulting in uncertainty of future profitability and limitation on our operations.

From inception, we have generated minimal revenues and experienced negative cash flows from operating losses. We anticipate continuing to incur such operating losses and negative cash flows in the foreseeable future, and to accumulate increasing deficits as we increase our expenditures for (i) development of our mining properties, (ii) identification of other mining properties, (iii) sale or other exploitation of mineral resources on developed properties, and (iv) general business enhancements. Any increases in our operating expenses will require us to achieve significant revenue before we can attain profitability. In the event that we are unable to achieve profitability or raise sufficient funding to cover our losses we may not be able to meet our obligations as they come due, raising substantial doubts as to our ability to continue as a going concern.

RISKS ASSOCIATED WITH OUR BUSINESS AND INDUSTRY

We face serious competition in our business segment from new market entrants as well as a number of established companies with greater resources and existing customer bases.

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The market for mineral exploration rapidly evolves and is intensely competitive as established companies and new market entrants are regularly discovering new deposits and developing new methods to exploit mineral properties. Competition in our market segment is based primarily upon:

Capital resources;

Geological and industry expertise;

Relationships with refiners and consumers of mineral resources; and

Successful strategies to cope with environmental regulation and to minimize the environmental impacts of exploration;

To remain competitive in our market segment we will rely heavily upon superior mineral property selection, hiring the most qualified exploration team and receiving the best consultative advice on environmental strategies. However, we may not be able to effectively compete in this intensely competitive market. Mineral exploration is capital intensive and right now we do not have the financial resources to compete. Even if we acquire the financial resources, we may not be able to attract the talent necessary to exploit our mineral resources effectively. Moreover, we believe that as commodity prices continue to rise and industrial expansion in India and China fuel increased worldwide demand for mineral resources, competition will increase, additional companies will enter the field and established entrants will expand their exploration and exploitation activities.

If our mineral claims infringe on the rights of others, are clouded by previous transfers or our activities cause environmental damage, lawsuits may be brought requiring us to pay large legal expenses and judgments, lose some or all of our exploration rights and have to curtail our activities or undertake costly environmental remediation efforts

We are not aware of any circumstances under which our mineral claims infringe on the rights of others or are clouded. Infringement claims, however, could arise at any time, whether or not meritorious, and could result in time consuming and costly litigation or require us to enter into net mineral royalty or other agreements. If we are found to have infringed the property rights of others, we could be required to pay damages or even cease our exploration activities. If we are found to have caused environmental damage, we may be forced to pay large damages, engineer costly remediation solutions or cease or activities. Any of these outcomes, individually or collectively, would negatively affect on our business, financial condition and results of operations.

We face substantial competition in attracting and retaining qualified senior management and highly skilled key personnel and may be unable to develop and grow our business if we cannot attract and retain as necessary, or if we were to lose our existing, senior management and key personnel.

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As a development stage company, our success, to a large extent, depends upon our ability to attract, hire and retain highly qualified and knowledgeable senior management and key personnel who possess the skills and experience necessary to satisfy our business and client service needs. Our ability to attract and retain such senior management and key personnel will depend on numerous factors, including our ability to offer salaries, benefits and professional growth opportunities that are comparable with and competitive to those offered by more established companies. We may be required to invest significant time and resources in attracting and retaining, as necessary, additional senior management and highly skilled key personnel, and many of the companies with which we will compete for any such individuals have greater financial and other resources, affording them the ability to undertake more extensive and aggressive hiring campaigns, than we can. Furthermore, an important component to the overall compensation offered to our senior management and key personnel may be equity. If our stock prices do not appreciate over time, it may be difficult for us to attract and retain senior management and highly skilled key personnel. Moreover, should we lose any members of our senior management or key personnel, we may be unable to prevent the unauthorized disclosure or use of our trade secrets, including our technical knowledge, practices, procedures or client. The normal running of our operations may be interrupted, and our financial condition and results of operations negatively affected, as a result of any inability on our part to attract or retain the services of qualified and experienced senior management and highly skilled key personnel, any member of our existing senior management or key personnel leaving and a suitable replacement not being found, or should any of our former senior management or key personnel disclose our trade secrets.

RISKS ASSOCIATED WITH AN INVESTMENT IN OUR COMMON STOCK

Unless an active trading market develops for our securities, you may not be able to sell your shares.

Although, we are a reporting company and our common shares are listed on the OTC Bulletin Board (owned and operated by the Nasdaq Stock Market, Inc.) under they symbol “VNGM”, there is not currently an active trading market for our common stock and an active trading market may never develop or, if it does develop, may not be maintained. Failure to develop or maintain an active trading market will have a generally negative affect on the price of our common stock, and you may be unable to sell your common stock or any attempted sale of such common stock may have the affect of lowering the market price and therefore your investment could be a partial or complete loss.

Since our common stock is thinly traded it is more susceptible to extreme rises or declines in price, and you may not be able to sell your shares at or above the price paid.

Since our common stock is thinly traded its trading price is likely to be highly volatile and could be subject to extreme fluctuations in response to various factors, many of which are beyond our control, including:

the trading volume of our shares;

the number of securities analysts, market-makers and brokers following our common stock;

changes in, or failure to achieve, financial estimates by securities analysts;

new products introduced or announced by us or our competitors;

announcements of technological innovations by us or our competitors;

actual or anticipated variations in quarterly operating results;

conditions or trends in our business industries;

announcements by us of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

additions or departures of key personnel;

sales of our common stock; and

general stock market price and volume fluctuations of publicly-traded, and particularly microcap, companies.

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You may have difficulty reselling shares of our common stock, either at or above the price you paid, or even at fair market value. The stock markets often experience significant price and volume changes that are not related to the operating performance of individual companies, and because our common stock is thinly traded it is particularly susceptible to such changes. These broad market changes may cause the market price of our common stock to decline regardless of how well we perform as a company. In addition, securities class action litigation has often been initiated following periods of volatility in the market price of a company’s securities. A securities class action suit against us could result in substantial legal fees, potential liabilities and the diversion of management’s attention and resources from our business. Moreover, and as noted below, our shares are currently traded on the OTC Bulletin Board and, further, are subject to the penny stock regulations. Price fluctuations in such shares are particularly volatile and subject to manipulation by market-makers, short-sellers and option traders.

Trading in our common stock on the OTC Bulletin Board may be limited thereby making it more difficult for you to resell any shares you may own.

Our common stock trades on the OTC Bulletin Board (owned and operated by the Nasdaq Stock Market, Inc.). The OTC Bulletin Board is not an exchange and, because trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a national exchange or on the Nasdaq National Market, you may have difficulty reselling any of the shares of our common stock that you may own.

Our common stock is subject to the “penny stock” regulations, which are likely to make it more difficult to sell.

Our common stock is considered a “penny stock,” which generally is a stock trading under $5.00 and not registered on a national securities exchange or quoted on the Nasdaq National Market. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. These rules generally have the result of reducing trading in such stocks, restricting the pool of potential investors for such stocks, and making it more difficult for investors to sell their shares once acquired. Prior to a transaction in a penny stock, a broker-dealer is required to:

deliver to a prospective investor a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market;

provide the prospective investor with current bid and ask quotations for the penny stock;

explain to the prospective investor the compensation of the broker-dealer and its salesperson in the transaction;

provide investors monthly account statements showing the market value of each penny stock held in the their account; and

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 requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that is subject to the penny stock rules. Since our common stock is subject to the penny stock rules, investors in our common stock may find it more difficult to sell their shares.

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We do not intend to pay any common stock dividends in the foreseeable future.

We have never declared or paid a dividend on our common stock and, because we have very limited resources and a substantial accumulated deficit, we do not anticipate declaring or paying any dividends on our common stock in the foreseeable future. Rather, we intend to retain earnings, if any, for the continued operation and expansion of our business. It is unlikely, therefore, that the holders of our common stock will have an opportunity to profit from anything other than potential appreciation in the value of our common shares held by them. If you require dividend income, you should not rely on an investment in our common stock.

Future issuances of our common stock may depress our stock price and dilute your interest.

We may issue additional shares of our common stock in future financings or grant stock options to our employees, officers, directors and consultants under our stock incentive plan. Any such issuances could have the affect of depressing the market price of our common stock and, in any case, would dilute the percentage ownership interests in our company by our shareholders. In addition, we could issue serial preferred stock having rights, preferences and privileges senior to those of our common stock, including the right to receive dividends and/or preferences upon liquidation, dissolution or winding-up in excess of, or prior to, the rights of the holders of our common stock. This could depress the value of our common stock and could reduce or eliminate amounts that would otherwise have been available to pay dividends on our common stock (which are unlikely in any case) or to make distributions on liquidation.

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ITEM 7. FINANCIAL STATEMENTS.

VANGUARD MINERALS CORPORATION

(A Development Stage Company)

FINANCIAL STATEMENTS

December 31, 2007

(Stated in US Dollars)

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F-1

VANGUARD MINERALS CORPORATION

(A DEVELOPMENT STAGE COMPANY)

TABLE OF CONTENTS

	Page

Report of Independent Registered Public Accounting Firm	F-3

Balance Sheets as of December 31, 2007 and 2006	F-4

Statements of Operations for the Years Ended December 31, 2007 and 2006, and for the period from August 25, 2003 (Date of Incorporation) through the Year Ended December 31, 2007	F-5

Statements of Cash Flows for the Years Ended December 31, 2007 and 2006, and for the period from August 25, 2003 (Date of Incorporation) through the Year Ended December 31, 2007	F-6

Interim Statements of Stockholders’ Equity for the period from August 25, 2003 (Date of Incorporation) through December 31, 2007	F-7

Notes to the Financial Statements	F-8

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F-2

MOORE & ASSOCIATES, CHARTERED

ACCOUNTANTS AND ADVISORS

PCAOB REGISTERED

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Vanguard Minerals Corporation

Formerly Knewtrino Inc

(A Development Stage Company)

We have audited the accompanying balance sheets of Vanguard Minerals Corporation (A Development Stage Company) as of December 31, 2007 and 2006, and the related statements of operations, stockholders’ equity and cash flows for the years ended December 31, 2007, 2006 and since inception on August 25, 2003 through December 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Vanguard Minerals Corporation (A Development Stage Company) as of December 31, 2007 and 2006, and the related statements of operations, stockholders’ equity and cash flows for the years ended December 31, 2007, 2006 and since inception on August 25, 2003 through December 31, 2007, in conformity with accounting principles generally accepted 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 3 to the financial statements, the Company has not yet attained profitable operations and has accumulated losses of $2,698,369 as of December 31, 2007, which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Moore & Associates, Chartered

Moore & Associates Chartered

Las Vegas, Nevada

March 24, 2008

2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501

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F-3

VANGUARD MINERALS CORPORATION

(formerly Knewtrino, Inc.)

(A Development Stage Company)

BALANCE SHEETS

December 31, 2007 and December 31, 2006

(Stated in US Dollars)

	2007			2006
ASSETS
Current Assets
Cash	$	11,877		$	288,107
Prepaid expenses		7,293			9,655

Total current assets		19,170			297,762

Instant Wirefree technology		-			46,200

Furniture and Equipment -Note 3		16,213			12,174

Total Assets	$	35,383		$	356,136

LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities – Note 5	$	34,580		$	24,114

Total current liabilities		34,580			24,114

Total Liabilities		34,580			24,114

STOCKHOLDERS’ EQUITY
Capital stock
Authorized:
500,000,000 common shares with par value of $0.001
Issued:
76,216,333 common shares (2006: 76,020,000)		76,216			76,020
Additional paid-in capital		1,388,596			1,354,252
Warrants		234,360			210,000
Subscriptions receivable		1,000,000			-
Deficit accumulated during the Development Stage		(2,698,369	)		(1,308,250	)

Total shareholders’ equity		803			332,022

	$	35,383		$	356,136

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

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F-4

VANGUARD MINERALS CORPORATION

(formerly Knewtrino, Inc.)

(A Development Stage Company)

STATEMENTS OF OPERATIONS

for the years ended December 31, 2007 and 2006

for the period August 25, 2003 (Date of Incorporation) to December 31, 2007

(Stated in US Dollars)

							August 25, 2003 (Date of Incorporation) to December 31,
	2007			2006			2007
Expenses
General and administrative- Note 5	$	1,335,955		$	353,237		$	1,989,212
Depreciation		6,654			1,924			8,578

Loss before other items		(1,342,609	)		(355,161	)		(1,997,790	)

Foreign exchange gain (loss)		-			(1,266	)		43
Loss on disposal of capital asset		(1,310	)		-			(1,310	)
Fair value of discount on private placement		-			(653,112	)		(653,112	)
Impairment of Instant Wirefree Technology		(46,200	)		-			(46,200	)
Provision for income taxes		-			-			-

Net loss for the period	$	(1,390,119	)	$	(1,009,539	)	$	( 2,698,369	)

Basic loss per share	$	( 0.03	)	$	( 0.02	)

Weighted average number of common shares outstanding		76,052,722			53,738,333

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

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F-5

VANGUARD MINERALS CORPORATION

(formerly Knewtrino, Inc.)

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

for the years ended December 31, 2007 and 2006

for the period August 25, 2003 (Date of Incorporation) to December 31, 2007

(Stated in US Dollars)

	2007			2006			August 25, 2003 (Date of Incorporation) to December 31,2007
Operating Activities
Net loss for the period	$	( 1,390,119	)	$	( 1,009,539	)	$	( 2,698,369	)
Adjustment for non-cash items:
Depreciation		6,654			1,924			8,578
Capital stock issued for mineral property costs		-			-			32,500
Fair value discount on private placement		-			653,112			653,112
Impairment of Instant Wire technology		46,200			-			46,200
Loss on disposal of furniture and equipment		1,310			-			1,310
Change in non-cash working capital balances related to Operations
Prepaid expenses		2,362			(9,655	)		(7,293	)
Accounts payable and accrued liabilities		10,466			(828	)		34,580

Net cash used in operations		( 1, 323,127	)		( 364,986	)		( 1,929,382	)

Investing Activities
Acquisition of furniture and equipment		(13,030	)		(14,098	)		(27,128	)
Proceeds on disposal of furniture and equipment		1,027						1,027
Instant Wirefree technology		-			(27,500	)		(27,500	)

Net cash used in investing activities		(12,003	)		(41,598	)		(53,601	)

Financing Activities
Capital stock issued		58,900			420,000			781,600
Stock subscriptions		1,000,000			-			1,000,000
Promissory notes		-			850			213,260

Net cash provided by financing activities		1,058,900			420,850			1,994,860

Increase (decrease) in cash during the period		(276,230	)		14,266			11,877
Cash, beginning of period		288,107			273,841			-

Cash, end of period	$	11,877		$	288,107		$	11,877

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		$	213,260
Share subscriptions payable on acquisition of mineral property	$	1,000,000		$	-		$	1,000,000

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

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F-6

VANGUARD MINERALS CORPORATION

(formerly Knewtrino, Inc.)

(A Development Stage Company)

STATEMENT OF STOCKHOLDERS’ EQUITY

for the period from August 25, 2003 (Date of Incorporation) to December 31, 2007

(Stated in US Dollars)

	Common Stock				Additional Paid-in						Deficit Accumulated During the development
	Shares		Par Value		Capital		Warrants		Subscriptions		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
Common stock issued for cash pursuant to a private placement at $ 1.00 per share		196,333		196		34,344		24,360				-			58,900
Subscriptions payable, issued for mineral property at $.50										1,000,000					1,000,000
Net loss for the period		-		-		-		-		-		(1,390,119	)		(1,390,119	)

Balance, December 31, 2007		76,216,333	$	76,216	$	1,388,596	$	234,360	$	1,000,000	$	( 2,698,369	)	$	803

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

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F-7

VANGUARD MINERALS CORPORATION

(formerly Knewtrino, Inc.)

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2007

(Stated in US Dollars)

Note 1

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

On August 10, 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 December 31, 2007, the Company has not yet attained profitable operations and has accumulated losses of $2,698,369 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.

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 favorable 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 2

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.

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F-8

VANGUARD MINERALS CORPORATION

(formerly Knewtrino, Inc.)

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2007

(Stated in US Dollars)

(Continued)

Note 2

Significant Accounting Policies – (cont’d)

(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

(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.

(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.

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F-9

VANGUARD MINERALS CORPORATION

(formerly Knewtrino, Inc.)

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2007

(Stated in US Dollars)

(Continued)

Note 3

Furniture and Equipment

			Accumulated		Net Book Value
	Cost		Amortization		2007		2006

Computer equipment	$	16,043	$	5,536	$	10,507	$	4,618
Furniture and fixtures		6,568		1,952		4,616		5,740
Leasehold improvements		2,180		1,090		1,090		1,816
	$	24,791	$	8,578	$	16,213	$	12,174

Note 4

Promissory Notes Payable

	December 31,		December 31,
	2007		2006

Promissory notes payable, unsecured, non-interest bearing and due on demand	$	-	$	107,410

Promissory notes payable, unsecured, bearing interest at 10% per annum effective July 1, 2005, repayment of principle and interest is deferred until December 31, 2006, at which time $50,000 plus interest shall become payable on that date and the remaining $50,000 plus interest shall become payable on demand. As a result, should the issuer of the notes so choose, full payment of all $100,000 of the loan, plus interest, could be demanded on December 31, 2006.		-		105,000

		-		212,410
Less: current portion		-		(212,410	)

	$	-	$	-

During the year ended December 31, 2006, the issuer of the promissory notes converted the promissory notes into shares of the company.

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F-10

VANGUARD MINERALS CORPORATION

(formerly Knewtrino, Inc.)

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2007

(Stated in US Dollars)

(Continued)

Note 5

Related Party Transactions

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

	Year ended December 31,				August 25, 2003 (Date of Incorporation) to December 31,
	2007		2006		2007

Consulting fees	$	-	$	2,000	$	34,305
Interest		-		2,500		7,500
Office and miscellaneous		-		-		1,000
Salaries and compensation		44,424		53,000		97,424
Mineral property costs		-		-		2,000

	$	44,424	$	57,500	$	142,229

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 $ 4,551 (December 31, 2006: $1,000) owed to a director of the Company with respect to unpaid salaries and compensation.

Note 6

Common Stock

During the period ended December 31, 2006, the Company changed its authorized share capital to 500,000,000 common shares with par value of $.001 per share.

On May 24, 2006, the Company issued 18,700,000 common shares to shareholders of Instant Wirefree, Inc. under the terms of an acquisiton agreement.

In May 2006, the Company issued 47,550,000 shares of common stock in settlement of promissory notes outstanding in the amount of $ 213, 260.

In May 2006, the Company issued 100,000 shares of the common stock of the company pursuant to a private placement for $ 100,000. The company at the same time issued 100,000 stock purchase warrants with an exercise price of $ 1.50 per share. All of the warrants are exercisable immediately through May 31, 2007, were issued without additional consideration and as at December 31, 2006 were outstanding. The company recorded a discount of $ 99,924 to reflect the difference between the offering price and the market price on the date the offering was entered into.

In July 2006, the Company issued 320,000 shares of the common stock of the company pursuant to a private placement for $ 320,000. The company at the same time issued 320,000 stock purchase warrants with an exercise price of $ 1.50 per share. All of the warrants are exercisable immediately through May 31, 2007, were issued without additional consideration and as at December 31, 2006 were outstanding. The company recorded a discount of $ 553,188 to reflect the difference between the offering price and the market price on the date the offering was entered into.

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F-11

VANGUARD MINERALS CORPORATION

(formerly Knewtrino, Inc.)

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2007

(Stated in US Dollars)

(Continued)

Note 7

Mineral Property Acquistion

Note 8

Commitments

Option Agreements

By option agreements dated September 1, 2003, amended June 15, 2004 and November 4, 2004 (Undurshil Aimag property), November 25, 2003 and November 5, 2004 (Ovorkhangai Aimag property), the Company was granted the exclusive options to acquire up to 100% interest in two mineral licenses located in Mongolia.

The options shall be exercised by the Company by the payment of $20,000, the issuance of a total of 650,000 common shares of the Company and exploration expenditures of not less than $35,000 resulting in two geological reports, all of which were paid during the period ended December 31, 2003. In addition, the Company must incur future exploration expenditures on each property as follows:

Undurshil Aimag

Total exploration costs of $185,000, which is required to be incurred as follows:

$8,556 on or before December 31, 2003 (incurred);

a further $26,444 on or before March 31, 2006;

a further $50,000 on or before December 31, 2006; and

a further $100,000 on or before December 31, 2007.

ii)

Ovorkhangai Aimag

Total exploration costs of $300,000 which are required to be incurred as follows:

$10,000 on or before February 28, 2004 (incurred);

an additional $35,000 on or before March 31, 2006;

an additional $75,000 on or before March 31, 2007; and

an additional $180,000 on or before October 31, 2008.

The properties are subject to the payment of a 1.5% net smelter return royalty

On April 19, 2006, the option agreements on the mineral property were terminated.

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F-12

VANGUARD MINERALS CORPORATION

(formerly Knewtrino, Inc.)

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2007

(Stated in US Dollars)

(Continued)

Note 9

Deferred Tax Assets

The following table summarizes the significant components of the Company's deferred tax assets:

	2007			2006
Deferred tax Assets
Non-capital loss carryforward	$	472,640		$	99,747
Less: valuation allowance		(472,640	)		(99,747	)

	$	-		$	-

The amount taken into income as deferred tax assets must reflect that portion of the income tax loss carryforwards that is likely to be realized from future operations. The Company has chosen to provide an allowance of 100% against all available income tax loss carryforwards regardless of their expiry

Note 10

Income Taxes

No provision for income taxes has been provided for in these financial statements due to the net loss. At December 31, 2007, the Company has a net operating loss carryforward which expires commencing in 2023, totaling approximately $2,698,000 the benefit of which has not been recorded in the financial statements.

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F-13

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AN ACCOUNTING FINANCIAL DISCLOSURE.

There were no previously unreported events under this Item 8 during the fiscal year ended December 31, 2007.

ITEM 8A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2007. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Principal Financial and Accounting Officer, as well as a team of outside consultants. In assessing the effectiveness of our internal control over financial reporting we utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission as published in "Internal Control over Financial Reporting – Guidance for Smaller Public Companies." Based on that evaluation, our Chief Executive Officer and Principal Financial and Accounting Officer found material weaknesses in our disclosure controls and procedures and therefore concluded that our disclosure controls and procedures as of the end of the period covered by this report were ineffective.

The determination of ineffective internal control is based upon the lack of separation of duties. Our entire management is comprised of one individual. It is impossible to create a system of checks and balances with oversight in this circumstance. It is management’s intention to bring additional people into the management team. Once there are more members of management, responsibilities can be divided and oversight roles created. Although the Company does not currently have sufficient financial resources to hire additional management, the Company expects to have such resources, make such hires and create segregation of duties and proper oversight within 12 months. The Company estimates the annual costs of such remediation efforts in the form of additional management will be $150,000 per year.

We understand that remediation of disclosure controls is a continuing work in progress due to the issuance of new standards and promulgations. However, remediation of the material weaknesses described above is among our highest priorities. Our management will periodically assess the progress and sufficiency of our ongoing initiatives and make adjustments as and when necessary. As of the date of this report, our management believes that our efforts will remediate the material weaknesses in internal control over financial reporting as described above.

Notwithstanding these material weaknesses which are described below, our management performed additional analyses, reconciliations and other post-closing procedures and has concluded that the Company’s consolidated financial statements for the periods covered by and included in theAnnual Report on Form 10-KSB as previously filedare fairly stated in all material respects in accordance with generally accepted accounting principles in the U.S. for each of the periods presented herein.

Inherent Limitations Over Internal Controls

The Company's internal control over financial reporting is designed 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. The Company's internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the Company's receipts and expenditures are being made only in accordance with authorizations of the Company's management and directors; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

Management does not expect that the Company's internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed 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 internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the (i) effectiveness and efficiency of operations, (ii) reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and (iii) compliance with applicable laws and regulations. Our internal controls framework is based on the criteria set forth in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Management, consisting of our Chief Executive Officer and Principal Accounting and Financial Officer, is responsible for establishing and maintaining adequate internal control over the Company's financial reporting.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2007, utilizing the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission as published in "Internal Control over Financial Reporting – Guidance for Smaller Public Companies." Based on the assessment by management, we determined that our internal control over financial reporting was ineffective as of December 31, 2007.

As a non-accelerated smaller reporting filer, management's assessment of the effectiveness of our internal control over financial reporting as of December 31, 2007 is not required to be audited by Moore & Associates, Chartered, our independent registered public accountant until our fiscal year ending December 31, 2009.

Changes in Internal Control of Financial Reporting

During the quarters ended December 31, 2007, March 31, 2008 and June 30, 2008, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.

ITEM 8B. OTHER INFORMATION.

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ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

The following table sets forth our directors and executive officers and their ages as of the fiscal year ended December 31, 2007:

Name		Age		Position
Vladimir Fedyunin		35		Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer, President, and Director.

Vladimir Fedyunin - Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer, President, and Director

Vladimir Fedyunin has served as our Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer, President, and Director since December 29, 2006. In addition, from January 2006 Mr. Fedyunin has served as President of Navigator Consulting Group, a corporate and management consultancy. Previously, he also served as Vice-President of Navigator Consulting Group, from November 1999 to January 2004. From January 2004 through January 2006 Mr. Fedyunin served as President of Inter Currency Exchange Corporation, a foreign exchange brokerage firm. From February 1993 through October 1998, he served as Executive Director of FOX, Ltd., and, from January 1992 through February 1993, as a Marketing General Manager for Trade House, Inc., both firms located in Zhitomir, Ukraine. Mr. Fedyunin holds a Certificate in Business Administration from Kiev Polytechnic Institute, and a Masters of Science in Commercial and Investment Banking from Moscow State University of Economics, Statistics and Informatics.

FAMILY RELATIONSHIPS

There are no family relationships, by blood or marriage, among any of our directors or executive officers.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

During the past five years, none of our directors, executive officers and control persons have been involved in any of the following events:

any bankruptcy petition filed by or against any business of which such person was an executive officer either at the time of the bankruptcy or within two years prior to that time;

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and

being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

BOARD OF DIRECTORS COMMITTEES

As of the date of this annual report on Form 10-KSB for the fiscal year ended December 31, 2007, we have no standing committees and our entire board of directors serves as our audit, compensation and nominating committees. We believe that our board of directors are capable of adequately analyzing and evaluating our financial statements and understanding our internal controls over financial reporting, and that retaining an independent director who would qualify as an audit committee financial expert would be overly cost prohibitive and unwarranted given our limited resources and operations.

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As of the date of this annual report on Form 10-KSB for the fiscal year ended December 31, 2007, there have been no material changes to the procedures by which our security holders may recommend nominees to our board of directors.

CODE OF ETHICS

We have adopted a code of business conduct and ethics applicable to each of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. A copy of our code of business conduct and ethics is available, without charge, to any person who so requests a copy, in writing, at: Vanguard Minerals Corporation, 601 Union Street, Two Union Square, 42nd Floor, Seattle, Washington, 98101.

COMPLIANCE WITH SECTION 16(A)

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities of ours. Officers, directors and greater than ten percent stockholders are required by the SEC’s regulations to furnish us with copies of all Section 16(a) forms they filed.

The following table sets for the compliance reporting under Section 16(a) during the last fiscal year.

		Number of Late Reports		Number of Transactions Not Timely Reported		Failure to File
Ivan Bebek		1		1		1

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth the total compensation awarded to, earned by, or paid to our Chief Executive Officer during each of the last two completed fiscal years. No other individuals are employed by us or have earned a total annual salary and bonus in excess of $100,000 during any of the last two completed fiscal years.

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary	Bonus	Stock Awards	Option Awards	Non-Equity Incentive Plan Compensation	Nonqualified Deferred Compensation Earnings	All Other Compensation	Total
Ivan Bebek*	2005	-	-	-	-	-	-	-	-
Chief Executive Officer	2006	-	-	-	-	-	-	-	-

Jenifer Osterwalder*	2006	$50,000	-	-	-	-	-	-	$50,000
Chief Executive Officer

Vladimir Fedyunin**	2006	-	-	-	-	-	-	-	-
Chief Executive Officer

Vladimir Fedyunin**	2007	$43,500	-	-	-	-	-	-	$43,500
Chief Executive Officer

*	Ivan Bebek resigned as our Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer, President, and a director on May 24, 2006.

**	Jenifer Osterwalder served as our Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer, President, and a director from May 24, 2006, until her resignation on December 29, 2006.

***	Vladimir Fedyunin was appointed our Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer, President, and a director on December 29, 2006.

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EMPLOYMENT AGREEMENTS

As of the date of this annual report on Form 10-KSB for the fiscal year ended December 31, 2007, we have no employment agreements in place with any of our other executive officers, directors or employees.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

There were no unexercised options, stock that had not vested, or equity incentive plan awards outstanding for our Chief Executive Officer as of the end of the fiscal year ended December 31, 2007.

COMPENSATION OF DIRECTORS

Pursuant to authority granted under our Article II, Section 2.16 of our bylaws, directors are entitled to such compensation as our board of directors shall from time to time determine. For the fiscal year ended December 31, 2007, we compensated our former director, Harshawardan Shetty, in an amount of $3000 during 2006 and $6000 during 2007. Mr Shetty resigned from the board in July, 2007.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

As of the date of this annual report on Form 10-KSB for the fiscal year ended December 31, 2007, we have not adopted an equity compensation plan.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 31, 2008. The information in these tables provides ownership information for:

each person known by us to be the beneficial owner of more than a 5% of our common stock

each of our directors and executive officers; and

all of our directors and executive officers as a group.

Beneficial ownership has been determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to our common stock and those rights to acquire additional shares within sixty days. Unless otherwise indicated, the persons named in the table below have sole voting and investment power with respect to the number of shares of common stock indicated as beneficially owned by them, except to the extent such power may be shared with a spouse. Common stock beneficially owned and percentage ownership are based on 80,549,666 shares of common stock currently outstanding. The address of each person listed is care of Vanguard Minerals Corporation, 601 Union Street, Two Union Square, 42nd Floor, Seattle, Washington, 98101.

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Name	Amount and Nature of Ownership	Percent of Class*

Ivan Bebek (1)	6,000,000	7.85%

(1)	Consists of 6,000,000 shares of common stock directly owned.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

During the fiscal year ended December 31, 2006 we incurred $2,000 in consulting fees to Ivan Bebek, our then Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer, President, and a director, and $2,500 in interest to Fred Tham a shareholder.

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ITEM 13. EXHIBITS.

No.	Description of Exhibit

2.1	Assignment Agreement between Vanguard Minerals Corporation and Coastal Uranium Holdings Ltd. dated november 15, 2007, incorporated by reference to Exhibit 2.1 on Form 10-KSB filed April 2, 2008.

3(i)(1)

Articles of Incorporation of Vanguard Minerals Corporation dated August 25, 2003, incorporated by reference to Exhibit 3.1 on Form SB-2 filed February 13, 2004.

3(i)(2)

Certificate of Amendment to Articles of Incorporation of Vanguard Minerals Corporation as described in definitive Schedule 14C filed August 24, 2007.

3(ii)

By-laws of Vanguard Minerals Corporation dated August 26, 2003, incorporated by reference to Exhibit 3.2 on Form SB-2 filed February 13, 2004.

14.1	Code of Ethics, incorporated by reference to Exhibit 14.1 on Form 10-KSB filed March 30, 2006.

31.1	Certification of Vanguard Minerals Corporation Chief Executive Officer, Vladimir Fedyunin, required by Rule 13a-14(a) or Rule 15d-14(a), dated September 3, 2008.

31.2	Certification of Vanguard Minerals Corporation Chief Financial Officer, Vladimir Fedyunin, required by Rule 13a-14(a) or Rule 15d-14(a), dated September 3, 2008.

32.1	Certification of Vanguard Minerals Corporation Chief Executive Officer, Vladimir Fedyunin, required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), dated September 3, 2008.

32.2	Certification of Vanguard Minerals Corporation Chief Financial Officer, Vladimir Fedyunin, required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), dated September 3, 2008.

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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The following table sets forth the aggregate amount of various professional fees billed by our principal accountants with respect to our last two fiscal years:


	2007		2006
Audit fees	$	12,600	$	7200
Audit-related fees
Tax fees
All other fees
Total	$	12,600	$	7200

All audit fees are approved by our board of directors. Moore & Associates, Chartered (Moore) were our principal accountants for the fiscal years ended December 31, 2006 and December 31, 2005 did not provide any non-audit services to us.

Audit Fees

Audit fees billed for professional services rendered by Moore, during the fiscal years ended December 31, 2007 and 2006, respectively, for the audit of our annual financial statements, review of the financial statements included in our quarterly reports on Form 10-QSB, and any services provided in connection with statutory and regulatory filings or engagements for those year ended, totaled approximately $12,600 and $7,200 respectively.

Audit-Related Fees

Audit-related fees billed by Moore during the fiscal years ended December 31, 2007 and 2006, respectively, for assurance and related services and totaled approximately $0 and $0, respectively.

Tax Fees

Tax fees billed by Moore during the fiscal years ended December 31, 2007 and 2006, respectively, for tax compliance, tax advice and tax planning services totaled approximately $0 and $0, respectively.

All Other Fees

The aggregate fees billed by Moore during the fiscal years ended December 31, 2007 and 2006, respectively, for services rendered other than the amounts set forth above, including attendance at meetings and other miscellaneous financial consulting work, totaled approximately $0 and $0, respectively.

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Signatures

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: September 3, 2008
	VANGUARD MINERALS CORPORATION

	By:	/s/ Vladimir Fedyunin
		Vladimir Fedyunin
		Chief Executive Officer & Principal Financial Officer

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