U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
| | x | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For Fiscal Year Ended: January 31, 2008
OR
| | ¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________________ to__________________
Commission file number 333-134549
| CALIFORNIA GOLD CORP. |
| (Exact name of small business issuer as specified in its charter) |
| Nevada | | 83-0483725 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | | |
| 6830 Elm Street, McLean, VA | | 22101 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number: (703) 403-7529
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ¨ No x
Indicate by check mark whether the registrant (1) has 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 ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company. See the definitions of the “large accelerated filer,” “accelerate filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer ¨ Accelerated Filer ¨
Non-Accelerated Filer ¨ Smaller reporting company x
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes x No ¨
The aggregate market value of the common equity on July 31, 2007 held by non-affiliates computed by reference to the closing price of the issuer’s Common Stock on that date, was $32,750,902 based upon the closing price ($1.30) multiplied by the 25,193,002 shares of the issuer’s Common Stock held by non-affiliates.
DOCUMENTS INCORPORATED BY REFERENCE
Not Applicable
EXPLANATORY NOTE:
This Form 10-K/A, Amendment No. 1 is being filed by California Gold Corp., formerly known as US Uranium Inc. (the “Company”), to amend its Annual Report on Form 10-KSB for the year ended January 31, 2008, filed with the Securities and Exchange Commission on May 15, 2008, (i) to restate its balance sheets, income statements, statements of stockholders’ equity and statement of cash flows and accompanying notes and text (Part II, Item 7) as a result of the improper accounting for a conversion feature of a debenture and freestanding warrant that we issued in June 2007 (ii) to revise our conclusion regarding the effectiveness of our internal controls over financial reporting and our disclosure controls and procedures as of the end of the period covered by this report, and (iii) to revise the certifications required by Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934 to include language regarding internal control over financial reporting.
New certifications of our principal executive and financial officer are included as exhibits to this amendment.
PART II
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION OR RESULTS OF OPERATIONS
Liquidity
We plan to explore possibilities of a business combination during the next 12 months. We are exploring various business opportunities that have the potential to generate revenue and profits in order to financially accommodate the costs of being a publicly held company. However, we cannot assure you that there will be any other business opportunities available nor of the nature of the business opportunity, nor give you an indication of the financial resources required for any possible business opportunity.
We have minimal operating costs and expenses at the present time due to our limited business activities. We may, however, be required to raise additional capital over the next twelve months to meet our current administrative expenses, and we may do so in connection with or in anticipation of possible merger and/or acquisition transactions. This financing may take the form of additional sales of our equity or debt securities or loans from our sole officer. There is no assurance that additional financing will be available, if required, or on terms favorable to us.
We are not currently engaging in any product research and development and have no plans to do so in the foreseeable future. We have no present plans to purchase or sell any plant or significant equipment. We also have no present plans to add employees although we may do so in the future if we engage in any merger or acquisition transactions.
Results of Operations
We realized a net loss of $982,922 for the year ended January 31, 2008 compared to a net loss of $21,158 for the year ended January 31, 2007. The increase was the result of an accrual of $268,688 in consulting fees in connection with our merger (the “Merger”)1 with Cromwell Uranium Holdings, Inc. (“Holdings”) and $595,000 for the value of the conversion feature and warrants attached to the convertible debentures we sold to finance our bridge loan to Holdings. We also incurred significant accounting fees in connection with the Merger. The accrued consulting fees were forgiven when the Merger with Holdings was reversed and recorded as contribution to capital since they were payable to certain of our shareholders.
We expect that our operating expenses for 2009 will be approximately $1,500 per month for the legal and accounting costs of maintaining our status as a public company. In the event that we enter into an acquisition of another company, costs will increase significantly.
1 For a more detailed description of the Merger, including a discussion of the convertible debentures, see “Item 1 – Description of Business” in our Form 10-KSB Annual Report for the fiscal year ended January 31, 2008 filed with the SEC on May 15, 2008.
ITEM 8. FINANCIAL STATEMENTS
Index to Financial Statements
| | Page |
| | |
| Report of Independent Registered Public Accounting Firm. | 5 |
| | |
| Balance Sheets as of January 31, 2008 and January 31, 2007 | 6 |
| | |
| Statements of Operations for the years ended January 31, 2008 and January 31, 2007 and for the period from April 19, 2004 (inception) through January 31, 2008 | 7 |
| | |
| Statement of Stockholders’ Deficit | 8 |
| | |
| Statement of Cash Flows for the years ended January 31, 2008 and January 31, 2007 and for the period from April 19, 2004 (inception) through January 31, 2008 | 9 |
| | |
| Notes to Financial Statements | 10 |
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
California Gold Corp.
Formerly known as US Uranium Inc.
(An Exploration Stage Company)
We have audited the accompanying restated balance sheets of California Gold Corp. (An Exploration Stage Company) as of January 31, 2008 and January 31, 2007, and the related restated statements of operations, stockholders’ equity and cash flows for the years ended January 31, 2008 and January 31, 2007 and since inception on April 19, 2004 through January 31, 2008. These restated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these restated 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 restated financial statements referred to above present fairly, in all material respects, the financial position of California Gold Corp. (An Exploration Stage Company) as of January 31, 2008 and January 31, 2007, and the related restated statements of operations, stockholders’ equity and cash flows for the years ended January 31, 2008 and January 31, 2007 and since inception on April 19, 2004 through January 31, 2008, in conformity with accounting principles generally accepted in the United States of America.
The accompanying restated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5 to the restated financial statements, the Company has an accumulated deficit of $438,355, which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 5. The restated 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 13, 2009
6490 West Desert Inn Rd, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501
CALIFORNIA GOLD CORP.
(fka US Uranium Inc., fka Arbutus Resources, Inc.)
(An Exploration Stage Company)
Balance Sheets
| | | | | | | |
| | | January 31, | | | January 31, | |
| | | 2008 | | | 2007 | |
| | | (restated) | | | | |
| | | | | | | |
| ASSETS | | | | | | |
| CURRENT ASSETS | | | | | | |
| | | | | | | |
| Cash | | $ | 2,583 | | | $ | 23,967 | |
| Note receivable | | | 557,927 | | | | - | |
| | | | | | | | | |
| Total Current Assets | | | 560,510 | | | | 23,967 | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | 560,510 | | | $ | 23,967 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| CURRENT LIABILITIES | | | | | | | | |
| | | | | | | | | |
| Accounts payable | | $ | 797 | | | $ | - | |
| | | | | | | | | |
| Total Current Liabilities | | | 797 | | | | - | |
| | | | | | | | | |
| STOCKHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| Preferred stock, 10,000,000 shares authorized at of $0.001, no shares issued and outstanding | | | - | | | | - | |
| Common stock, 300,000,000 shares authorized at par value of $0.001, 56,313,002 and 55,753,002 shares issued and outstanding | | | 56,313 | | | | 55,753 | |
| Additional paid-in capital | | | 1,536,755 | | | | 18,647 | |
| Deficit accumulated during the development stage | | | (1,033,355 | ) | | | (50,433 | ) |
| | | | | | | | | |
| Total Stockholders' Equity | | | 559,713 | | | | 23,967 | |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 560,510 | | | $ | 23,967 | |
The accompanying notes are an integral part of these financial statements.
CALIFORNIA GOLD CORP.
(fka US Uranium Inc., fka Arbutus Resources, Inc.)
(An Exploration Stage Company)
Statements of Operations
| | | | | | | | | From Inception | |
| | | For the Year | | | For the Year | | | on April 19, | |
| | | Ended | | | Ended | | | 2004 Through | |
| | | January 31, | | | January 31, | | | January 31, | |
| | | 2008 | | | 2007 | | | 2008 | |
| | | (restated) | | | | | | (restated) | |
| REVENUES | | $ | - | | | $ | - | | | $ | - | |
| COST OF SALES | | | - | | | | - | | | | - | |
| GROSS MARGIN | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | |
| OPERATING EXPENSES | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Mineral property expenses | | | 1,556 | | | | 1,450 | | | | 27,206 | |
| General and administrative | | | 386,366 | | | | 19,708 | | | | 411,149 | |
| | | | | | | | | | | | | |
| Total Operating | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Expenses | | | 387,922 | | | | 21,158 | | | | 438,355 | |
| | | | | | | | | | | | | |
| INCOME (LOSS) FROM OPERATIONS | | | (387,922 | ) | | | (21,158 | ) | | | (438,355 | ) |
| | | | | | | | | | | | | |
| OTHER EXPENSE | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Interest expense | | | (595,000 | ) | | | - | | | | (595,000 | ) |
| | | | | | | | | | | | | |
| LOSS BEFORE INCOME TAXES | | | (982,922 | ) | | | (21,158 | ) | | | (1,033,355 | ) |
| INCOME TAX EXPENSE | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | |
| NET LOSS | | $ | (982,922 | ) | | $ | (21,158 | ) | | $ | (1,033,355 | ) |
| | | | | | | | | | | | | |
| BASIC LOSS PER COMMON SHARE | | | (0.02 | ) | | | (0.00 | ) | | | | |
| | | | | | | | | | | | | |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | | | 56,033,002 | | | | 55,753,002 | | | | | |
The accompanying notes are an integral part of these financial statements.
CALIFORNIA GOLD CORP.
(fka US Uranium Inc., fka Arbutus Resources, Inc.)
(An Exploration Stage Company)
Statements of Stockholders’ Equity
| | | | | | | | | | | | Deficit | | | | |
| | | | | | | | | | | | Accumulated | | | | |
| | | | | | | | | Additional | | | During the | | | | |
| | | Common Stock | | | Paid-in | | | Development | | | | |
| | | Shares | | | Amount | | | Capital | | | Stage | | | Total | |
| Balance, April 19, 2004 | | | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Common stock issued for cash at $0.0001 per share | | | 46,990,000 | | | | 46,990 | | | | (39,590 | ) | | | - | | | | 7,400 | |
| | | | | | | | | | | | | | | | | | | | | |
| Common stock issued for cash at $0.001 per share | | | 6,985,000 | | | | 6,985 | | | | 4,015 | | | | - | | | | 11,000 | |
| | | | | | | | | | | | | | | | | | | | | |
| Common stock issued for cash at $0.03 per share | | | 1,778,000 | | | | 1,778 | | | | 54,222 | | | | - | | | | 56,000 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loss from inception through January 31, 2006 | | | - | | | | - | | | | - | | | | (29,275 | ) | | | (29,275 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Balance, January 31, 2006 | | | 55,753,000 | | | | 55,753 | | | | 18,647 | | | | (29,275 | ) | | | 45,125 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loss for the year ended January 31, 2007 | | | - | | | | - | | | | - | | | | (21,158 | ) | | | (21,158 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Balance, January 31, 2007 | | | 55,753,000 | | | | 55,753 | | | | 18,647 | | | | (50,433 | ) | | | 23,967 | |
| | | | | | | | | | | | | | | | | | | | | |
| Common stock issued for cash at $1.35 per share | | | 440,002 | | | | 440 | | | | 594,560 | | | | - | | | | 595,000 | |
| | | | | | | | | | | | | | | | | | | | | |
| Fair value of conversion feature and warrants | | | - | | | | - | | | | 595,000 | | | | - | | | | 595,000 | |
| | | | | | | | | | | | | | | | | | | | | |
| Contributed capital | | | - | | | | - | | | | 268,668 | | | | - | | | | 268,668 | |
| | | | | | | | | | | | | | | | | | | | | |
| Common stock issued for cash at $0.03 per share | | | 120,000 | | | | 120 | | | | 59,880 | | | | - | | | | 60,000 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loss for the year ended January 31, 2008 | | | - | | | | - | | | | - | | | | (982,922 | ) | | | (982,922 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Balance, January 31, 2008 | | | 56,313,002 | | | $ | 56,313 | | | $ | 1,536,755 | | | $ | (1,033,355 | ) | | $ | 559,713 | |
The accompanying notes are an integral part of these financial statements.
CALIFORNIA GOLD CORP.
(fka US Uranium Inc., fka Arbutus Resources, Inc.)
(An Exploration Stage Company)
Statements of Cash Flows
| | | | | | | | | From Inception | |
| | | For the Year | | | For the Year | | | on April 19, | |
| | | Ended | | | Ended | | | 2004 Through | |
| | | January 31, | | | January 31, | | | January 31, | |
| | | 2008 | | | 2007 | | | 2008 | |
| | | (restated) | | | | | | (restated) | |
| | | | | | | | | | |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | |
| | | | | | | | | | |
| Net loss | | $ | (982,922 | ) | | $ | (21,158 | ) | | $ | (1,033,355 | ) |
| Adjustments to reconcile net loss to net cash used by operating activities: | | | | | | | | | | | | |
| Amortization of discount on convertible debt | | | 595,000 | | | | - | | | | 595,000 | |
| Contributed capital | | | 268,668 | | | | - | | | | 268,668 | |
| Changes in operating assets and liabilities: | | | | | | | | | | | | |
| Increase (decrease) in accounts payable | | | 797 | | | | (5,000 | ) | | | 797 | |
| | | | | | | | | | | | | |
| Net Cash Used by Operating Activities | | | (118,457 | ) | | | (26,158 | ) | | | (168,890 | ) |
| | | | | | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Increase in note receivable - related party | | | (557,927 | ) | | | - | | | | (557,927 | ) |
| | | | | | | | | | | | | |
| Net Cash Used by Investing Activities | | | (557,927 | ) | | | - | | | | (557,927 | ) |
| | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Proceeds from common stock issued | | | 655,000 | | | | - | | | | 729,400 | |
| | | | | | | | | | | | | |
| Net Cash Used by Financing Activities | | | 655,000 | | | | - | | | | 729,400 | |
| | | | | | | | | | | | | |
| NET DECREASE IN CASH | | | (21,384 | ) | | | (26,158 | ) | | | 2,583 | |
| | | | | | | | | | | | | |
| CASH AT BEGINNING OF PERIOD | | | 23,967 | | | | 50,125 | | | | - | |
| | | | | | | | | | | | | |
| CASH AT END OF PERIOD | | $ | 2,583 | | | $ | 23,967 | | | $ | 2,583 | |
| | | | | | | | | | | | | |
| SUPPLIMENTAL DISCLOSURES OF CASH FLOW INFORMATION | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| CASH PAID FOR: | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Interest | | $ | - | | | $ | - | | | $ | - | |
| Income Taxes | | $ | - | | | $ | - | | | $ | - | |
The accompanying notes are an integral part of these financial statements.
CALIFORNIA GOLD CORP.
(fka US Uranium Inc., fka Arbutus Resources, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2008 AND 2007
1. Summary of Significant Accounting Policies
Nature of Business
US Uranium Inc. was incorporated on April 19, 2004 as Arbutus Resources Inc. under the laws of the state of Nevada. The Company is engaged in the business of acquiring, developing and holding mineral properties, primarily uranium. The Company’s management is also authorized to pursue any other business opportunities believed to hold a potential for profit.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Basic (Loss) per Common Share
Basic (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of January 31, 2008.
| | | (Loss) | | | Shares | | | Basic (Loss) Per Share | |
| | | | | | (Denominator) | | | Amount | |
| For the Year Ended | | $ | (387,922 | ) | | | 56,033,002 | | | $ | (0.01 | ) |
| For the Period Ended | | $ | (21,158 | ) | | | 55,753,002 | | | $ | (0.00 | ) |
Dividends
The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.
Comprehensive Income
The Company has no component of other comprehensive income. Accordingly, net income equals comprehensive income for the year ended January 31, 2008.
Advertising Costs
The Company’s policy regarding advertising is to expense advertising when incurred. The Company had not incurred any advertising expense as of January 31, 2008.
CALIFORNIA GOLD CORP.
(fka US Uranium Inc., fka Arbutus Resources, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2008 AND 2007
1. Summary of Significant Accounting Policies (Continued)
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
Income Taxes
The Company provides for income taxes under Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. SFAS No. 109 Requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 39% to the net loss before provision for income taxes for the following reasons:
| | | January 31, | |
| | | 2008 | | | 2007 | |
| Income tax expense at statutory rate | | $ | (151,290 | ) | | $ | (8,252 | ) |
| | | | | | | | | |
| Valuation allowance | | | 151,290 | | | | 8,252 | |
| | | | | | | | | |
| Income tax expense per books | | $ | -0- | | | $ | -0- | |
Net deferred tax assets consist of the following components as of:
| | | January 31, | |
| | | 2008 | | | 2007 | |
| NOL Carryover | | $ | 174,177 | | | $ | 22,887 | |
| Valuation allowance | | | (174,177 | ) | | | (22,887 | ) |
| | | | | | | | | |
| Net deferred tax asset | | $ | -0- | | | $ | -0- | |
CALIFORNIA GOLD CORP.
(fka US Uranium Inc., fka Arbutus Resources, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2008 AND 2007
1. Summary of Significant Accounting Policies (Continued)
Income Taxes (Continued)
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $438,355 for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.
Impairment of Long-Lived Assets- Mineral Properties
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Accounting Basis
The basis is accounting principles generally accepted in the United States of America. The Company has adopted a January 31 fiscal year end.
Stock-based compensation.
As of January 31, 2008, the Company has not issued any share-based payments to its employees.
The Company adopted SFAS No. 123-R effective January 1, 2007 using the modified prospective method. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2007, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123-R.
Recent Accounting Pronouncements
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. This statement is effective for us beginning January 1, 2008. The Company is currently assessing the potential impact that adoption of SFAS No. 157 would have on the financial statements.
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 gives the irrevocable option to carry many financial assets and liabilities at fair values, with changes in fair value recognized in earnings. SFAS No. 159 is effective beginning January 1, 2008, although early adoption is permitted. The Company is currently assessing the potential impact that adoption of SFAS No. 159 will have on the financial statements.
CALIFORNIA GOLD CORP.
(fka US Uranium Inc., fka Arbutus Resources, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2008 AND 2007
1. Summary of Significant Accounting Policies (Continued)
Recent Accounting Pronouncements (Continued)
The FASB has revised SFAS No. 141. This revised statement establishes uniform treatment for all acquisitions. It defines the acquiring company. The statement further requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquired at the acquisition date, measured at their fair market values as of that date. It requires the acquirer in a business combination achieved in stages to recognize the identifiable assets and liabilities, as well as the non-controlling interest in the acquired, at the full amounts of their fair values. This changes the way that minority interest is recorded and modified as a parent’s interest in a subsidiary changes over time. This statement also makes corresponding significant amendments to other standards that related to business combinations, namely, 109, 142 and various EITF’s. This statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company believes the implementation of this standard will have no effect on our financial statements.
Revenue Recognition
The Company will determine its revenue recognition policies upon commencement of principle operations.
2. COMMON STOCK
During July 2005, the Company issued 46,990,000 shares of its common stock to its founders for $7,400 in cash. During July 2005, the Company issued 6,985,000 shares of its common stock for $11,000 in cash. During August 2005, the Company issued 1,778,000 shares of its common stock for $56,000 in cash. During August 2007, the Company issued 440,002 shares of its common stock for $595,000 in cash. During January 2008, the Company issued 120,000 shares of its common stock for $60,000 in cash.
During November 2007, the Company’s common stock was forward split on a 6.35 shares of 1 share basis. The accompanying financial statements reflect the forward stock split on a retroactive basis.
3. RELATED PARTY TRANSACTIONS
Effective August 8, 2007, the Company entered into a Reversal Agreement pursuant to which it sold the shares of its subsidiary back to its former stockholder in exchange for the return to treasury of the 31,000,000 shares of its common stock issued in the Merger. As additional consideration for the purchase and sale of the shares of the subsidiary, the former shareholder agreed to repay to the entire net principal amount of the subsidiary had received, together with certain expenses incurred by the Company, or an aggregate of $557,927.
CALIFORNIA GOLD CORP.
(fka US Uranium Inc., fka Arbutus Resources, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2008 AND 2007
3. RELATED PARTY TRANSACTIONS (Continued)
The former shareholder issued to the Company a promissory note for the $557,927 principal balance of net funds advanced. The Note was due on November 15, 2007 , and bore interest at the rate of 9% per annum. The Note was secured by a perfected security interest and first priority lien on all of the assets of the former subidiary, as well as by the deposit into escrow of all of the issued and outstanding shares of the former subsidiary.
The former subsidiary was to begin making consecutive monthly interest-only payments on the Note of accrued interest commencing 30 days from the closing of the Loan through the due date, at which time the former subsidiary was required to repay the unpaid principal amount of the Note, together with accrued and unpaid interest.
A default by former subsidiary under the Note caused an increase to the interest rate from 9% to 15% per annum, which increased interest rate will continue until all defaults are cured. In addition, if such default is not cured, the Company is entitled to foreclose on its security interest in the collateral provided for under the Loan Documents and to obtain delivery of the escrowed shares.
4. SIGNIFICANT EVENTS
In connection with the transactions contemplated by the prior merger with Cromwell Uranium Holdings, Inc. (which merger, as previously reported, was subsequently reversed), Mr. Davidson made advances to, and incurred expenses on behalf of, us. The parties have agreed that these advances and expenses aggregate approximately $31,000. These advances and expenses are not represented by a promissory note, do not bear interest and are repayable on demand. The Company has agreed with Mr. Davidson that, in lieu of a cash repayment of these amounts, we will repay these obligations by issuing 31,000,000 shares of our common stock to Mr. Davidson from our treasury.
These shares have been issued to Mr. Davidson pursuant to a Restricted Stock Purchase Agreement. The agreement provides for a purchase price of par value, or $31,000, which amount was paid by cancellation of the indebtedness the Company owed to Mr. Davidson. The Company has an option, but not the obligation, to repurchase the shares, subject to certain limitations, in the event of termination of Mr. Davidson’s services, at Mr. Davidson’s original purchase price. One-third of the shares (10,333,333 shares) will be released from the Company’s right to repurchase on December 31, 2008, an additional one-third of the shares will be released from its right to repurchase on December 31, 2009 and the remaining shares will be released from its right to repurchase on December 31, 2010. The Agreement requires that the certificate evidencing the shares be held in escrow until our right to repurchase lapses.
CALIFORNIA GOLD CORP.
(fka US Uranium Inc., fka Arbutus Resources, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2008 AND 2007
5. GOING CONCERN
These financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $438,355 at January 31, 2008 and further losses are anticipated in the development of its business raising substantial doubt about the Company's ability to continue as a going concern. Its ability to continue as a going concern 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 repay its liabilities arising from normal business operations when they come due.
Management has plans to seek additional financing through private placements of its common stock and/or loans from directors. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.
6. CONVERTIBLE DEBENTURES
During 2007, the Company issued convertible debentures totaling $595,000. The notes were convertible at $1.35 into 440,002 shares of the Company’s common stock and 440,002 warrants to purchase shares of the Company’s common stock at $0.75 per share. The value of the conversion feature was determined using the intrinsic value method. The amount was recorded as a discount to the convertible debt at $595,000. The discount was expensed upon the conversion of the debt in July 2007.
7. RESTATED FINANCIAL STATEMENTS
The Company has restated its financial statements as of and for the year ended January 31, 2008 to reflect the value of the conversion feature and warrants attached to the convertible debentures. This restatement resulted in an additional expense of $595,000 being recorded in 2008. The Company’s summarized financial statements comparing the restated financial statements to those originally filed are as follows:
BALANCE SHEET
| | | Restated | | | Original | |
| CURRENT ASSETS | | | | | | |
| Cash | | $ | 2,583 | | | $ | 2,583 | |
| Note receivable | | | 557,927 | | | | 557,927 | |
| Total Current Assets | | | 560,510 | | | | 560,510 | |
| TOTAL ASSETS | | $ | 560,510 | | | $ | 560,510 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| CURRENT LIABILITIES | | | | | | | | |
| Accounts payable | | $ | 797 | | | $ | 797 | |
| Total Current Liabilities | | | 797 | | | | 797 | |
CALIFORNIA GOLD CORP.
(fka US Uranium Inc., fka Arbutus Resources, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2008 AND 2007
7. RESTATED FINANCIAL STATEMENTS (CONTINUED)
| STOCKHOLDERS' EQUITY | |
| Preferred stock, 10,000,000 shares authorized at of $0.001, no shares issued and outstanding | | | - | | | | - | |
| Common stock, 300,000,000 shares authorized at par value of $0.001, 56,313,002 and 55,753,002 shares issued and outstanding | | | 56,313 | | | | 56,313 | |
| Additional paid-in capital | | | 1,536,755 | | | | 941,755 | |
| Deficit accumulated during the development stage | | | (1,033,355 | ) | | | (438,355 | ) |
| Total Stockholders' Equity | | | 559,713 | | | | 23,967 | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 560,510 | | | $ | 23,967 | |
STATEMENT OF OPERATIONS
| REVENUES | | $ | - | | | $ | - | |
| COST OF SALES | | | - | | | | - | |
| GROSS MARGIN | | | - | | | | - | |
| OPERATING EXPENSES | | | | | | | | |
| Mineral property expenses | | | 1,556 | | | | 1,556 | |
| General and administrative | | | 386,366 | | | | 386,366 | |
| | | 387,922 | | | | 387,922 | |
INCOME (LOSS) FROM OPERATIONS | | | (387,922 | ) | | | (387,922 | ) |
| OTHER EXPENSE | | | | | | | | |
| Interest expense | | | (595,000 | ) | | | - | |
| LOSS BEFORE INCOME TAXES | | | (982,922 | ) | | | (387,922 | ) |
| INCOME TAX EXPENSE | | | - | | | | - | |
| NET LOSS | | $ | (982,922 | ) | | $ | (387,922 | ) |
ITEM 9A(T) - CONTROLS AND PROCEDURES
(a) Management’s Annual Report on Internal Control Over Financial Reporting. The management of California Gold Corp. (formerly US Uranium Inc.) is responsible for establishing and maintaining an adequate system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Under the supervision and with the participation of our senior management, consisting of James D. Davidson, our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our chief executive officer and chief financial officer concluded, as of the Evaluation Date, that our disclosure controls and procedures were not effective because of the identification of what might be deemed a material weakness in our internal control over financial reporting which is identified below.
Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on this evaluation, our sole officer concluded that, during the period covered by this annual report, our internal controls over financial reporting were not operating effectively. Management did not identify any material weaknesses in our internal control over financial reporting as of January 31, 2008; however, it has identified the following deficiencies that, when aggregated, may possibly be viewed as a material weakness in our internal control over financial reporting as of that date:
| | 1. | We do not have an audit committee. While we are not currently obligated to have an audit committee, including a member who is an “audit committee financial expert,” as defined in Item 407 of Regulation S-K, under applicable regulations or listing standards; however, it is management’s view that such a committee is an important internal control over financial reporting, the lack of which may result in ineffective oversight in the establishment and monitoring of internal controls and procedures. |
| | 2. | We did not maintain proper segregation of duties for the preparation of our financial statements. We currently only have one officer overseeing all transactions. This has resulted in several deficiencies including the lack of control over preparation of financial statements, and proper application of accounting policies: |
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
(b) Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
| (a) | Financial Statements. See index to financial statements on page 4 of this Annual Report, Amendment No. 1. |
| | 23.1 | Consent of Moore & Associates, Chartered, independent registered public accountants |
| | 31.1/31.2 | Certification of Principal Executive and Principal Financial Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| | 32.1/32.2 | Certification of Chief Executive and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** |
** This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.
2 For a complete list of exhibits filed with our Form 10-KSB annual report, see “Item 13 – Exhibits” in our Form 10-KSB Annual Report for the fiscal year ended January 31, 2008 filed with the SEC on May 15, 2008
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: March 19, 2009 | CALIFORNIA GOLD CORP. |
| | | |
| | | |
| | By: | /s/ James D. Davidson |
| | | James D. Davidson, President and Chief Executive Officer |
| | | (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | |
| | | | | |
| /s/ James D. Davidson | | President, Treasurer, Chief | | March 19, 2009 |
| James D. Davidson | | Executive Officer, Chief Financial and Accounting Officer, Director | | |
| | | | | |
| /s/ David Rector | | Director | | March 19, 2009 |
| David Rector | | | | |
