UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended February 28, 2011
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 333-138148
AMERICAN PARAMOUNT GOLD CORP
(Exact name of registrant as specified in its charter)
Nevada 20-5243308
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
130 King Street West, Suite 3670, Toronto, ON M5X 1A9
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (416) 214-5640
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] YES [ ] NO
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
the definitions of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act
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 [ ] No [X]
Number of common shares outstanding at April 8, 2011: 64,000,000
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An exploration Stage Company)
Index
PART I: FINANCIAL INFORMATION
ITEM 1. Financial Statements
Balance Sheets at February 28, 2011 (unaudited) and
August 31, 2010 audited 3
Statements of Operations for the three and six months ended
February 28, 2011 and 2010, and for the period from inception
(July 20, 2006) to February 28, 2011 (unaudited) 4
Statement of Stockholders' Equity (Deficit) for the period
from inception (July 20, 2006) to February 28, 2011 (unaudited) 5
Statements of Cash Flows for the six months ended February 28,
2011 and 2010, and for the period from inception (July 20, 2006)
to February 28, 2011 (unaudited) 6
Notes to Financial Statements (unaudited) 7
2
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Company)
Balance Sheets - Presented in U.S. Dollars
February 28, August 31,
2011 2010
------------ ------------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash $ 1,192 $ 2,146
Other receivable 12,968 --
Prepaid and deposits 9,676 70,723
------------ ------------
Total current assets 23,836 72,869
Mineral claim 125,000 125,000
Website (net) 19,004 23,389
------------ ------------
TOTAL ASSETS $ 167,840 $ 221,258
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 143,815 $ 76,023
Accounts payable - related party -- 1,000
Notes payable 3,191 62,907
Convertible loans payable - related party, net of
unamortized discount of $4,649 and $10,791 as of
February 28, 2011 and August 31, 2010, respectively 676,948 240,142
------------ ------------
Total current liabilities 823,954 380,072
------------ ------------
TOTAL LIABILITIES 823,954 380,072
------------ ------------
STOCKHOLDERS' DEFICIT
Common stock
150,000,000 authorized shares, par value $0.001
64,000,000 shares issued and outstanding 64,000 64,000
Additional paid-in capital 3,038,833 558,033
Deficit accumulated during the exploration stage (3,758,947) (780,847)
------------ ------------
TOTAL STOCKHOLDERS' DEFICIT (656,114) (158,814)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 167,840 $ 221,258
============ ============
The accompanying notes are an integral part of
these interim financial statements
3
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Company)
Statements of Operations - Presented in U.S. Dollars
(Unaudited)
From inception
For the Three Months For the Six Months (July 20, 2006) to
Ended February 28, Ended February 28, February 28,
2011 2010 2011 2010 2011
------------ ------------ ------------ ------------ ------------
REVENUES $ -- $ -- $ -- $ -- $ --
OPERATING EXPENSES
Consulting expense -- -- 2,496,769 -- 3,033,999
Exploration expenses 94,695 -- 211,906 -- 229,406
General and administrative 57,911 727 83,694 1,460 126,936
Rent expenses - related party -- 1,500 -- 3,000 7,500
Management fees 37,869 -- 71,081 -- 71,081
Professional fees 37,757 9,879 79,495 12,879 220,081
------------ ------------ ------------ ------------ ------------
TOTAL EXPENSES 228,232 12,106 2,942,945 17,339 3,689,003
OTHER EXPENSES
Amortization of debt discount 1,946 -- 6,142 -- 12,184
Interest expense 19,428 -- 29,013 -- 37,760
------------ ------------ ------------ ------------ ------------
21,374 -- 35,155 -- 49,944
------------ ------------ ------------ ------------ ------------
NET LOSS $ (249,606) $ (12,106) $ (2,978,100) $ (17,339) $ (3,738,947)
============ ============ ============ ============ ============
NET LOSS PER COMMON SHARE - BASIC $ (0.00) $ (0.00) $ (0.05) $ (0.00)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING - BASIC 64,000,000 32,000,000 64,000,000 32,000,000
============ ============ ============ ============
The accompanying notes are an integral part of
these interim financial statements
4
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Company)
Statement of Stockholders' Equity (Deficit) - Presented in US Dollars
(Unaudited)
Deficit
Accumulated
Common Stock Additional During the
------------------ Paid-in Exploration
Number Amount Capital Stage Total
------ ------ ------- ----- -----
Balance, July 20, 2006 -- $ -- $ -- $ -- $ --
Issued for cash at $0.0005 per share
on July 26, 2006 40,000,000 40,000 -- (20,000) 20,000
Net loss -- -- -- (18,575) (18,575)
----------- ------- ---------- ----------- -----------
Balance, August 31, 2006 40,000,000 40,000 -- (38,575) 1,425
Issued for cash at $0.0025 per share
on December 20, 2006 24,000,000 24,000 36,000 -- 60,000
Net loss -- -- -- (15,058) (15,058)
----------- ------- ---------- ----------- -----------
Balance, August 31, 2007 64,000,000 64,000 36,000 (53,633) 46,367
Net loss -- -- -- (20,102) (20,102)
----------- ------- ---------- ----------- -----------
Balance, August 31, 2008 64,000,000 64,000 36,000 (73,735) 26,265
Net loss -- -- -- (17,820) (17,820)
----------- ------- ---------- ----------- -----------
Balance, August 31, 2009 64,000,000 64,000 36,000 (91,555) 8,445
Beneficial conversion feature -- -- 16,833 -- 16,833
Share-based compensation -- -- 505,200 -- 505,200
Net loss -- -- -- (689,292) (689,292)
----------- ------- ---------- ----------- -----------
Balance, August 31, 2010 64,000,000 64,000 558,033 (780,847) (158,814)
Share-based compensation -- -- 2,480,800 -- 2,480,800
Net loss -- -- -- (2,978,100) (2,978,100)
----------- ------- ---------- ----------- -----------
BALANCE, FEBRUARY 28, 2011 64,000,000 $64,000 $3,038,833 $(3,758,947) $ (656,114)
=========== ======= ========== =========== ===========
The accompanying notes are an integral part of
these interim financial statements
5
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Company)
Statements of Cash Flows - Presented in US Dollars
(Unaudited)
From inception
For the Six Months (July 20, 2006) to
Ended February 28, February 28,
2011 2010 2011
------------ ------------ ------------
CASH FLOW FROM OPERATING ACTIVITIES
Net loss $ (2,978,100) $ (17,339) $ (3,738,947)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization of website 4,385 -- 7,309
Stock issued for services 2,480,800 -- 2,986,000
Amortized debt discount 6,142 -- 12,184
Changes in operating assets and liabilities:
Decrease (increase) in prepaids and deposits 61,047 1,676 (9,676)
Increase in other receivable (12,968) -- (12,968)
Increase in accounts payable and accrued liabilities 67,792 8,163 143,815
(Decrease) increase accounts payable - related party (1,000) 1,500 --
------------ ------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (371,902) (6,000) (612,283)
------------ ------------ ------------
CASH FLOW FROM INVESTING ACTIVITIES
Mining claims -- -- (125,000)
Website -- -- (26,313)
------------ ------------ ------------
NET CASH USED IN INVESTING ACTIVITIES -- -- (151,313)
------------ ------------ ------------
CASH FLOW FROM FINANCING ACTIVITIES
Convertible loan proceeds - related party 430,664 -- 681,597
Notes payable proceeds 55,000 -- 117,907
Notes payable payments (114,716) -- (114,716)
Proceeds from sale of common stock -- -- 80,000
------------ ------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 370,948 -- 764,788
------------ ------------ ------------
(DECREASE) INCREASE IN CASH (954) (6,000) 1,192
CASH, BEGINNING OF PERIOD 2,146 7,419 --
------------ ------------ ------------
CASH, END OF PERIOD $ 1,192 $ 1,419 $ 1,192
============ ============ ============
NON-CASH FINANCING ACTIVITIES
Beneficial conversion feature $ -- $ -- $ 16,833
============ ============ ============
The accompanying notes are an integral part of
these interim financial statements
6
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Entity)
Notes to Financial Statements - Presented in US Dollars
Three and Six Months Ended February 28, 2011
(Unaudited)
1. BASIS OF PRESENTATION AND GOING CONCERN
The accompanying financial statements of American Paramount Gold Corp.(formally
known as Zebra Resources, Inc.) (the "Company") should be read in conjunction
with the Company's most recent filing of the Form 10-K which included the
financial statements as of August 31, 2010. Significant accounting policies
disclosed therein have not changed except as noted below.
In the opinion of management, all adjustments necessary to present fairly the
financial position as of February 28, 2011 and the results of operation,
stockholders' equity (deficit) and cash flows presented herein have been
included in the financial statements. All adjustments are of a normal recurring
nature.
GOING CONCERN
These financial statements have been prepared in accordance with accounting
principles generally accepted in the United States applicable to a going
concern, which contemplates the realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. The Company has
incurred a net loss of $2,978,100 and $17,339 for the six months ended February
28, 2011 and 2010. At February 28, 2011, the Company had a deficit accumulated
during the exploration stage of $3,758,947. Since inception (July 20, 2006) to
February 28, 2011, the Company has commenced limited operations, raising
substantial doubt about the Company's ability to continue as a going concern.
The Company will seek additional sources of capital through the issuance of debt
or equity financing, but there can be no assurance the Company will be
successful in accomplishing its objectives. The ability of the Company to
continue as a going concern is dependent on additional sources of capital and
the success of the Company's plan. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts, or amounts and classification of liabilities that might result from the
outcome of this uncertainty.
2. DESCRIPTION OF THE BUSINESS AND HISTORY
American Paramount Gold Corp., a Nevada corporation, (hereinafter referred to as
the "Company" or "APGC") was incorporated in the State of Nevada on July 20,
2006. The Company was formed to engage in the acquisition, exploration and
development of natural resource properties of merit. The Company acquired a
mineral claims option located in the Province of British Columbia, Canada during
the period ending August 31, 2006 for $15,000. The Company entered into a
Mineral Property Options Agreement (the "MPOA") with a private British Columbia
company, whereby the Company obtained an option to acquire mineral claims known
as "Astro 2006" located in British Columbia. During the period ending August 31,
2009, the Company terminated the MPOA and relieved itself from any further
obligations there under.
On April 14, 2010, we entered into a consulting agreement with Wayne Parsons
whereby Mr. Parsons agreed to provide our Company with various consulting
services as the president, chief executive officer, chief financial officer,
secretary and treasurer. In consideration of his services, we agreed to provide
Mr. Parsons with a monthly payment of CDN$1,500 and a one time grant of
1,000,000 non transferable options to acquire one share of our common stock at a
purchase price of US$1.00 per share, exercisable for five (5) years. These
options were cancelled and re-issued on October 6, 2010 with a purchase price of
$0.68 as part of the below described issuance under our 2010 Stock Plan. Under
ASC (718) this concurrent cancellation and reissuance of options was accounted
for as a modification. Accordingly, the Company compared the fair value of the
options cancelled to the fair value of the options reissued on October 6, 2010.
In connection with this modification the Company recorded stock-based
compensation of $276,000.
7
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Entity)
Notes to Financial Statements - Presented in US Dollars
Three and Six Months Ended February 28, 2011
(Unaudited)
2. DESCRIPTION OF THE BUSINESS AND HISTORY
On August 30, 2010, Wayne Parsons resigned as secretary and treasurer of the
Company. On September 29, 2010 Mr. Parsons resigned as president, chief
financial officer and chief executive officer of the Company. Concurrently on
September 29, 2010, the consulting agreement dated April 14, 2010 between Mr.
Parsons and the Company was terminated. In connection with the termination of
the consulting agreement the Company agreed to cancel 1,000,000 fully vested
stock options with an exercise price of $1.00 that were issued to Mr. Parsons on
April 14, 2010 as compensation under the consulting agreement, and to issue to
Mr. Parsons 1,000,000 fully vested stock options under the 2010 Stock Plan. The
1,000,000 options under the 2010 Stock Plan were issued on October 6, 2010 and
are exercisable at a price of $0.68 until October 6, 2015. The 1,000,000 options
issued on April 14, 2010 were cancelled effective November 18, 2010.
On September 7, 2010, and October 13, 2010 Monaco Capital Inc. advanced $100,000
and $50,000 respectively. The total advanced under the Convertible Loan is
$400,933.
On September 27, 2010, Peter Jenks and John Goodwin each resigned as members of
our board of directors. Mr. Jenks' and Mr. Goodwin's resignations were not the
result of any disagreements regarding our operations, policies, practices or
other disagreements.
Since September 27, 2010, our board of directors has consisted of 5 directors
including J. Trevor Eyton, Wayne Parsons, Hugh Aird, Dr. H. Neville Rhoden, and
Leland Verner.
On September 29, 2010, Wayne Parsons resigned as our president, chief executive
officer and chief financial officer. Mr. Parsons' resignation was not the result
of any disagreements regarding the Company's operations, policies, practices or
other disagreements and he remains a member of our board of directors. As a
result on September 29, 2010, we appointed Hugh Aird as our president and chief
executive officer and Ann Dumyn as our chief financial officer.
On October 6, 2010, we granted an aggregate of 5,400,000 stock options to ten
individuals, including directors, officers, consultants and employees, pursuant
to our 2010 Stock Plan, at an exercise price of $0.68 per share. Of the
5,400,000 stock options, 400,000 options are exercisable until October 5, 2012
and 5,000,000 options are exercisable until October 6, 2015. We issued the stock
options to seven (7) non-U.S. persons (as that term is defined in Regulation S
of the Securities Act of 1933), in an offshore transaction relying on Regulation
S and/or Section 4(2) of the Securities Act of 1933 and to three (3) U.S.
persons (as that term is defined in Regulation S of the Securities Act of 1933)
relying upon Rule 506 of Regulation D of the Securities Act of 1933.
On December 6, 2010 Monaco Capital Inc. advanced $100,000. The total advanced
under the Convertible Loan is $500,933.
On December 9, 2010 the Company, having performed the due diligence required to
acquire the Kisita Gold Mine Property, advised Lonsdale Acquisition Corporation
that it declined to proceed with the purchase agreement under its current terms
and conditions.
On December 16, 2010 Leland Verner resigned as a member of our board of
directors. Mr. Verner's resignation was not the result of any disagreements
regarding our operations, policies, practices or other disagreements.
8
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Entity)
Notes to Financial Statements - Presented in US Dollars
Three and Six Months Ended February 28, 2011
(Unaudited)
2. DESCRIPTION OF THE BUSINESS AND HISTORY (CONTINUED)
On December 17, 2010 the Company entered into a Convertible Loan agreement with
Monaco Capital Inc., majority shareholder, for a principal amount of up to
$5,000,000 for a term of one year. The convertible loan agreement replaced the
original agreement with Monaco Capital Inc., dated April 22, 2010 and provided
that the principal of $500,933 advanced under it, along with $20,664 in unpaid,
accrued interest, to and including December 17, 2010, be treated as if issued
under the terms of the new agreement. The loan is unsecured and shall bear
interest at the rate of 10% per annum payable on the due date. The Company may
at any time during the term of the loan prepay any sum up to the full amount of
the loan and accrued interest then outstanding at any time for an additional 10%
of such amount. The loan (including accrued interest) is convertible into
securities of the Company at a conversion price calculated as the mean volume
weighted average price for the Company's common stock during the ten (10)
trading day period ending on the latest complete trading day prior to the
conversion date. At any time after the advancement date, if the Company has not
paid the loan and accrued interest in full, the Lender may, by providing written
notice to the Company, exercise its rights of conversion in respect of either a
portion of the total outstanding amount of the loan as of that date into shares
of the Company.
On December 29, 2010, Monaco Capital Inc. advanced $100,000. The total advanced
under the Convertible Loan is $621,596.
On February 15, 2011, Monaco Capital Inc. advanced $60,000. The total advanced
under the Convertible Loan is $681,596.
The Company is an exploration stage enterprise, as defined in FASB ASC 915-10
"Development Stage Entities". As an exploration stage mining company we are
engaged in the identification, acquisition, and exploration of metals and
minerals with a focus on gold mineralization. Our current operational focus is
to conduct exploration activities on the Cap Gold Project and to complete the
terms of the Cap Gold option agreement (Note 4 Mineral Properties).
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
Cash consists of all highly liquid financial instruments purchased with an
original maturity of three months or less.
FAIR VALUE OF FINANCIAL INSTRUMENTS
FASB ASC 825 "Financial Instruments", requires the Company to disclose, when
reasonably attainable, the fair market value of its assets and liabilities which
are deemed to be financial instruments. The fair value represents management's
best estimates based on a range of methodologies and assumptions. The carrying
value of receivables and payables arising in the ordinary course of business and
the receivable from taxing authorities, approximate fair value because of the
relatively short period of time between their origination and expected
realization.
9
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Entity)
Notes to Financial Statements - Presented in US Dollars
Three and Six Months Ended February 28, 2011
(Unaudited)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
The Company accounts for its income taxes in accordance with FASB ASC 740
"Income Taxes", which requires recognition of deferred tax assets and
liabilities for future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax basis and tax credit carry-forwards. 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. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in operations in the period that includes the
enactment date. The Company has a net operating loss carry-forward to be used in
future years. The Company has established a valuation allowance for the full tax
benefit of the operating loss carry-forwards due to the uncertainty regarding
realization.
NET LOSS PER COMMON SHARE
The Company computes net loss per share in accordance with FASB ASC 260
"Earnings per Share". Under the provisions of FASB ASC 260 "Earnings per Share",
basic net loss per share is computed by dividing the net loss available to
common stockholders for the period by the weighted average number of shares of
common stock outstanding during the period. The calculation of diluted net loss
per share gives effect to common stock equivalents; however, potential common
shares are excluded if their effect is anti-dilutive. For the period from
Inception (July 20, 2006) through February 28, 2011, common stock equivalents
are the rights conferred upon Monaco Capital Inc. pursuant to the convertible
loan agreement (Note 6) and those arising from the 2010 Stock Option Plan (Note
8). These stock equivalents were not included as their effect was anti-dilutive
for the periods presented.
STOCK-BASED COMPENSATION
On August 1, 2009, the Company adopted the fair value recognition provisions of
FASB ASC 718-10 and 505-10. The Company accounts for equity instruments issued
in exchange for the receipt of goods or services from other than employees in
accordance with FASB ASC 505-10. Costs are measured at the estimated fair market
value of the consideration received or the estimated fair value of the equity
instruments issued, whichever is more reliably measurable. The value of equity
instruments issued for consideration other than employee services is determined
on the earliest of a performance commitment or completion of performance by the
provider of goods or services as defined by FASB ASC 505-10.
The Company records stock-based compensation in accordance with the guidance in
ASC 718. ASC Topic 718 requires the Company to recognize expense related to the
fair value of its employee stock option awards. This eliminates accounting for
share-based compensation transactions using the intrinsic value and requires
instead that such transactions be accounted for using a fair-value-based method.
The Company recognizes the cost of all share based awards on a graded vesting
basis over the vesting period of the award.
CONCENTRATION OF CREDIT RISK
The Company places its cash and cash equivalents with high credit quality
financial institutions. The Company obtained financing during the period from
Monaco Capital Inc. which holds 52% of the Company's common shares. The balance
of the loan as at February 28, 2011 was $676,948, net of debt discount.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
10
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Entity)
Notes to Financial Statements - Presented in US Dollars
Three and Six Months Ended February 28, 2011
(Unaudited)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
MINERAL PROPERTY COSTS
The Company has been in the exploration stage since its formation July 20, 2006
and has not yet realized any revenues from its planned operations. It is
primarily engaged in the acquisition and exploration of mining properties.
Mineral property acquisitions are capitalized and exploration costs are charged
to operations as incurred. When it has been determined that a mineral property
can be economically developed as a result of establishing proven and probable
reserves, the costs incurred to develop such property, are capitalized. Such
costs will be depleted using the units-of-production method over the estimated
life of the probable reserve.
Although the Company has taken steps to verify title to mineral properties in
which it has an interest, according to the usual industry standards for the
stage of exploration of such properties, these procedures do not guarantee the
Company's title. Such properties may be subject to prior agreements or transfers
and title may be affected by undetected defects.
4. MINERAL PROPERTIES AND WEBSITE DEVELOPMENT
On April 16, 2010, the Company entered into an option agreement to acquire a
100% long-term lease interest in 189 unpatented mining claims situated in the
Walker Lane Structural Belt in Nye County, Nevada (the "Cap Gold Project"). The
189 claims making up the Cap Gold Project form a contiguous block of
approximately 3,960 acres (1,602 hectares). The Company paid $125,000 to secure
the option, giving it the right to acquire a 100% long-term lease interest in
the Cap Gold Project. To exercise the option the Company must: (i) make ongoing
yearly advance production royalty cash payments during the term of the agreement
of $125,000 in years two (2) through five (5), $150,000 in years six (6) through
twelve (12), $200,000 in years 13 through 20 and $300,000 in years 21 through
30; (ii) incur expenditures on exploration of the Cap Gold Project of not less
than an aggregate of $1,250,000 over five (5) years; and (iii) make production
royalty payments from production from the property after the advance production
royalty cash payments described above have been repaid to our Company from
production from the property. At our Company's election, the production royalty
may be calculated either on a sliding scale or on a fixed production royalty
basis, and must range from 1% to a maximum of 3%.
On November 8, 2010, we entered into a letter of intent with Lonsdale
Acquisitions Corp. to acquire the Kisita Gold Mine Property, an operational gold
property four hours northwest of the capital city of Kampala in Uganda. The
Company has commenced onsite and corporate due diligence.
On December 9, 2010 the Company, having performed the due diligence required to
acquire the Kisita Gold Mine Property, advised Lonsdale Acquisition Corporation
that it declined to proceed with the purchase agreement under its current terms
and conditions.
The Company capitalizes the costs associated with the development of the
Company's website pursuant to ASC Topic 350. Other costs related to the
maintenance of the website are expensed as incurred. Amortization is provided
over the estimated useful life of 3 years using the straight-line method for
financial statement purposes. The Company capitalized $26,313 in Website
development in the 2010 fiscal year. The net book value at February 28, 2011 was
$19,004.
11
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Entity)
Notes to Financial Statements - Presented in US Dollars
Three and Six Months Ended February 28, 2011
(Unaudited)
5. NOTES PAYABLE
Effective June 1, 2010 the Company obtained liability insurance for its
directors and entered into a unsecured commercial premium finance agreement -
promissory note for $30,720 due in ten equal instalments with a finance charge
of $1,187. At February 28, 2011 the balance owing AFCO was $3,191.
On August 27, 2010 the Company obtained a loan from an individual in the
principal amount of $32,077. Due to its short-term nature the Company agreed to
pay the individual $6,493 as a premium. The note payable totalling $38,570 was
due and payable on or before September 15, 2010. The note was paid in full on
September 10, 2010.
On November 26, 2010, the Company obtained a demand promissory note from Taio
Investments Ltd. ("Taio") of CDN$50,000 ($49,518 US). Due to its short term
nature the Company agreed to pay Taio $5,000 as a premium. The note payable
totalling $55,000 was due and payable on December 6, 2010. The note was paid in
full on December 6, 2010.
6. CONVERTIBLE LOAN - RELATED PARTY
On April 22, 2010, the Company entered into a convertible loan agreement with
Monaco Capital Inc., majority shareholder, for a principal amount of up to
$500,000 for a term of one year from any applicable advancement date. The loan
is unsecured and shall bear interest at the rate of 10% per annum payable on the
due date. The Company may at any time during the term of the loan prepay any sum
up to the full amount of the loan and accrued interest then outstanding at any
time for an additional 10% of such amount.
The loan (including accrued interest) is convertible into securities of the
Company at a conversion price of $1.05 per share. At any time after the
advancement date, if the Company has not paid the loan and accrued interest in
full, the Lender may, by providing written notice to the Company, exercise its
rights of conversion in respect of either a portion of the total outstanding
amount of the loan as of that date into shares of the Company. At December 17,
2010, Monaco Capital Inc has advanced to the Company $500,933.
On December 17, 2010 the Company entered into a new convertible loan agreement
with Monaco Capital Inc., majority shareholder, for a principal amount of up to
$5,000,000 for a term of one year. The convertible loan agreement replaced the
original agreement with Monaco Capital Inc., dated April 22, 2010 and provided
that the principal of $500,933 advanced under it, along with $20,664 in unpaid,
accrued interest, to and including December 17, 2010, be treated as if issued
under the terms of the new agreement. The loan is unsecured and shall bear
interest at the rate of 10% per annum payable on the due date. The Company may
at any time during the term of the loan prepay any sum up to the full amount of
the loan and accrued interest then outstanding at any time for an additional 10%
of such amount. The loan (including accrued interest) is convertible into
securities of the Company at a conversion price calculated as the mean volume
weighted average price for the Company's common stock during the ten (10)
trading day period ending on the latest complete trading day prior to the
conversion date. At any time after the advancement date, if the Company has not
paid the loan and accrued interest in full, the Lender may, by providing written
notice to the Company, exercise its rights of conversion in respect of either a
portion of the total outstanding amount of the loan as of that date into shares
of the Company.
12
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Entity)
Notes to Financial Statements - Presented in US Dollars
Three and Six Months Ended February 28, 2011
(Unaudited)
6. CONVERTIBLE LOAN - RELATED PARTY (CONTINUED)
The balance sheets at February 28, 2011 and August 31, 2010 recorded the loan
value at $676,948 and $240,142 due to the unamortized beneficial conversion
feature on the convertible debt totalling $4,649 and $10,791. The initial
beneficial conversion feature was valued at $16,833 of which $12,184 has been
amortized. The beneficial conversion feature amount has been accounted for as a
debt discount which is being amortized and treated as interest expense over the
term of the new convertible loan. Accrued interest at February 28, 2011 and
August 31, 2010 relating to the loan totalling $12,095 and $8,746, respectively
was recorded in accounts payable and accrued liabilities.
7. STOCKHOLDERS' EQUITY (DEFICIT)
The Company has 150,000,000 (75,000,000 pre-forward stock split) shares
authorized with a par value of $0.001 per share.
Effective July 25, 2006, the Company issued 40,000,000 (20,000,000 pre-forward
stock split) to the founding and sole director of the Company pursuant to a
stock subscription agreement at $0.0005 per share for total proceeds of $20,000,
the shares were issued below par thus $20,000 was applied to accumulated
deficit.
Effective December 20, 2006, the Company issued 24,000,000 (12,000,000
pre-forward stock split) shares of the Company's common stock pursuant to the
Company's SB-2 prospectus offering at $0.0025 per share for total proceeds of
$60,000.
On February 26, 2010, Monaco Capital Inc. acquired a controlling interest in the
Company by purchasing 40,000,000 (20,000,000 pre-forward stock split) shares of
our common stock in a private transaction.
On March 17, 2010, the Company filed a Plan of Merger, Merger Agreement and
Certificate of Change with the Nevada Secretary of State to affect a forward
stock split of its common shares on a 2 new for 1 old basis. The change was
approved by FINRA effective April 12, 2010. As a result, our authorized capital
increased from 75,000,000 to 150,000,000 shares of common stock and our issued
and outstanding increased from 32,000,000 shares of common stock to 64,000,000
shares of common stock, all with a par value of $0.001. All references in these
financial statements and notes to the financial statements to the number of
shares, price per share and weighted average number of shares outstanding of
common stock prior to this stock split have been adjusted to reflect the stock
split on a retroactive basis unless otherwise noted.
On April 22, 2010, the Company entered into a convertible loan agreement with
Monaco Capital Inc., a majority shareholder, resulting in a beneficial
conversion feature valued at $16,833 which was applied to additional paid in
capital.
8. STOCK OPTIONS
On April 14, 2010, the Company entered into a consulting agreement with Wayne
Parsons, to act as President, CEO, CFO, Secretary and Treasurer of the Company.
As part of the compensation package he was granted 1,000,000 fully vested, non
transferable stock options with an exercise price of $1.00. These options were
cancelled and re issued on October 6, 2010 with a purchase price of $0.68 under
our 2010 Stock Plan. Under ASC(718) this concurrent cancellation and reissuance
of options was accounted for as a modification. Accordingly, the Company
compared the fair value of the options cancelled to the fair value of the
options reissued on October 6, 2010. In connection with this modification the
Company recorded stock-based compensation of $276,000.
13
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Entity)
Notes to Financial Statements - Presented in US Dollars
Three and Six Months Ended February 28, 2011
(Unaudited)
8. STOCK OPTIONS (CONTINUED)
Under ASC 718 and 505, the fair value of options is estimated at the date of
grant using a Black-Scholes-Merton ("Black-Scholes") option-pricing model, which
requires the input of highly subjective assumptions including the expected stock
price volatility. Volatility is determined using historical stock prices over a
period consistent with the expected term of the option. The Company utilizes the
guidelines of staff Accounting Bulletin No. 107 (SAB 107) of the Securities and
Exchange Commission relative to "plain vanilla" options in determining the
expected term of option grants. SAB 107 permits the expected term of "plain
vanilla" options to be calculated as the average of the options's vesting term
and contractual period.
The fair value of the options using the Black-Scholes option pricing model with
the following assumptions was recorded in the statement of operations as
consulting expenses at a value of $505,200:
Risk Free Interest Rate 1.07%
Expected life 913 days
Expected volatility 72%
Dividend per share $Nil
On July 30, 2010, the Company adopted the 2010 Stock Option Plan which permits
the Company to issue up to 6,500,000 shares of common stock to directors,
officers, employees and consultants of the Company upon the exercise of stock
options granted under the 2010 Plan. At the time of the grant of the option, the
Plan Administrator shall designate the expiration date of the option, which date
shall not be later than five (5) years from the date of grant. The vesting
schedule for each option shall be specified by the Plan Administrator at the
time of grant of the Option. Effective September 29, 2010 the Plan provides for
an exercise price to be established based on the Fair Market Value of a common
share of the Company being the average of the high and low sales prices (or bid
and ask prices, if sales prices are not reported) for the common stock for the
last trading day immediately preceding the date with respect to which Fair
Market Value is being determined, as reported for the principal trading market
for the Common Stock.
On October 6, 2010, an aggregate of 5,400,000 stock options was granted to ten
individuals, including directors, officers, consultants and employees, pursuant
to our 2010 Stock Plan, at an exercise price of $0.68 per share. Included in the
5,400,000 stock options granted was 1,000,000 re-issued to Wayne Parsons as
discussed in Note 8. Of the 5,400,000 stock options, 400,000 options are
exercisable until October 5, 2012 and 5,000,000 options are exercisable until
October 6, 2015. These stock options all vest immediately.
The fair value of the 5,400,000 options using the Black-Scholes option pricing
model with the following assumptions was recorded in the statement of operations
as consulting expenses at a value of $2,480,800:
Risk Free Interest Rate 0.38% and 1.16% respectively
Expected life 730 days and 1825 days respectively
Expected volatility 85.4%
Dividend per share $Nil
14
American Paramount Gold Corp.
(fka Zebra Resources Inc.)
(An Exploration Stage Entity)
Notes to Financial Statements - Presented in US Dollars
Three and Six Months Ended February 28, 2011
(Unaudited)
8. STOCK OPTIONS (CONTINUED)
A summary of the status of the Company's stock option plan as of February 28,
2011 and changes during the six months is presented below:
Number of Weighted Average
Stock Options Exercise Price ($)
------------- ------------------
BALANCE, AUGUST 31, 2010 1,000,000 1.00
Granted 5,400,000 0.68
Cancelled (1,000,000) (1.00)
---------- ------
BALANCE, FEBRUARY 28, 2011 5,400,000 0.68
========== ======
9. SUBSEQUENT EVENT
On March 1, 2011, we entered into a consulting agreement with Illyria Inc.,
(whose executive, Leland Verner, is a former director of the Company) to provide
strategic planning and business development services to the Company. The
agreement has a term ending December 31, 2012 and a fee of $120,000 per annum
with eligibility for additional compensation in the form of warrants or options
at the discretion of the Company.
On March 1, 2011, we entered into a consulting agreement with Wayne Parsons, a
director of the Company, to provide strategic planning and business development
services to the Company. The agreement has a term ending December 31, 2012 and a
fee of $60,000 per annum with eligibility for additional compensation in the
form of warrants or options at the discretion of the Company.
On March 2, 2011, we approved a Private Placement Offering (the "Offering") to
sell up to a maximum of 40,000,000 units ("Units") of the Company's securities
at $0.10 per Unit, each Unit consisting of one common share (a "Share") and
one-half of one common share purchase warrant (each whole warrant a "Warrant")
entitling the holder to subscribe for one Share at a price of $0.15 per Share
for a period of 18 months from closing. The Offering was made pursuant to
Section 4(2) of the Securities Act of 1933 and applicable exemptions in other
jurisdictions to Accredited Investors.
On March 2, 2011, we cancelled 5,400,000 stock options previously granted on
October 6, 2010 to various directors, officers, and consultants of the Company
pursuant to our 2010 Stock Plan. The cancelled options constituted all of the
active stock options of the Company as at the cancellation date and were
variably exercisable for a term of 2 or 5 years at an exercise price of $0.68
per share. The cancellations were made in accordance with cancellation
agreements between the Company and the respective option holders.
On March 2, 2011, we granted 5,150,000 stock options to the officers, directors,
and consultants of the Company in accordance with our 2010 Stock Plan, at an
exercise price of $0.12 per share. Of the 5,150,000 stock options, 150,000
options are exercisable until March 2, 2013 and 5,000,000 options are
exercisable until March 2, 2016. These stock options all vest immediately.
On March 28, 2011 an Accredited Investor purchased 2,500,000 Units of the
Company's securities under the Private Placement Offering for net proceeds of
$250,000.
15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled "Risk Factors" that may cause our or our industry's actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.
Our unaudited interim financial statements are stated in United States dollars
and are prepared in accordance with United States generally accepted accounting
principles. The following discussion should be read in conjunction with our
company's audited financial statements and 10-K for the year ended August 31,
2010 and unaudited interim financial statements and the related notes that
appear elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all references to "common
stock" refer to common shares in the capital of our company and the terms "we",
"us", "our" and "our company" mean American Paramount Gold Corp.
GENERAL OVERVIEW
We were incorporated under the laws of the State of Nevada on July 20, 2006
under the name Zebra Resources Incorporated (aka "Zebra Resources, Inc.") At
inception, we were an exploration stage company engaged in the acquisition,
exploration and development of mineral properties.
On February 26, 2010, Monaco Capital Inc. acquired a controlling interest in our
company by purchasing 20,000,000 shares of our common stock in a private
transaction.
On March 17, 2010, we effected a 1 old for 2 new forward stock split of our
issued and outstanding common stock. As a result, our authorized capital
increased from 75,000,000 to 150,000,000 shares of common stock and our issued
and outstanding increased from 32,000,000 shares of common stock to 64,000,000
shares of common stock, all with a par value of $0.001.
Also effective March 17, 2010, we changed our name from Zebra Resources
Incorporated to American Paramount Gold Corp., by way of a merger with our
wholly owned subsidiary American Paramount Gold Corp., which was formed solely
for the change of name.
The name change and forward stock split became effective with the
Over-the-Counter Bulletin Board at the opening for trading on April 12, 2010
under the stock symbol APGA. Our CUSIP number is 02882T 05.
On April 16, 2010, we entered into an agreement with Royce L. Hackworth and
Belva L. Tomany in respect of an option to acquire 189 unpatented mining claims
situated in the Walker Lane Structural Belt in Nye County, Nevada known as the
Capgold Project. The 189 claims making up the Capgold Project form a contiguous
block of approximately 3,960 acres (1,602 hectares). We paid $125,000 to secure
the option, giving us the right acquire a 100% long-term lease interest in the
Capgold Project. To exercise the option we must: (i) make ongoing yearly advance
production royalty cash payments during the term of the agreement of $125,000 in
years 2 through 5, $150,000 in years 6 through 12, $200,000 in years 13 through
20 and $300,000 in years 21 through 30; (ii) incur expenditures on exploration
of the Capgold Project of not less than an aggregate of $1,250,000 over 5 years;
and (iii) make production royalty payments from production from the property
after the advance production royalty cash payments described above have been
16
repaid to our company from production from the property. At our company's
election, the production royalty may be calculated either on a sliding scale or
on a fixed production royalty basis, and must range from 1% to a maximum of 3%.
On April 22, 2010, we entered into a convertible loan agreement with Monaco
Capital Inc., wherein Monaco Capital Inc. has agreed to loan our company up to
$500,000. The loan (and accrued interest) is convertible in whole or in part
into common shares of our company at a conversion price of $1.05 and will bear
interest at 10% per annum. The principal amount of the loan and accrued interest
is due and payable one year from the advancement date. We may at any time during
the term of the loan prepay any sum up to the full amount of the loan and
accrued interest then outstanding for an additional 10% of such amount. At
December 17, 2010, Monaco Capital Inc. has advanced to the Company $500,933.
On July 30, 2010, our directors approved the adoption of the 2010 stock option
plan which permits our company to issue up to 6,500,000 shares of our common
stock to directors, officers, employees and consultants of our company upon the
exercise of stock options granted under the 2010 plan.
On July 28, 2010, we obtained an extra-provincial license to carry on business
in the Province of Ontario, Canada. Our Ontario corporation number is 1827852.
On November 9, 2010, we entered into a non-binding letter of intent to acquire
the Kisita Gold Mine Property, an operational gold property four hours northwest
of the capital city of Kampala, Uganda. The acquisition was subject to further
negotiation and due diligence of the project satisfactory to us. On December 9,
2010 our company, having performed the due diligence required to acquire the
Kisita Gold Mine Property, advised Lonsdale Acquisition Corporation that we
declined to proceed with the purchase agreement under its current terms and
conditions. Discussions with Lonsdale Acquisition Corporation are ongoing.
On December 17, 2010, we entered into a new convertible loan agreement with
Monaco Capital Inc. which replaces the original convertible loan agreement
entered into on April 22, 2010 in its entirety and provides that the principal
of $500,933 advanced under it, along with $20,664 in unpaid, accrued interest,
to and including December 17, 2010, be treated as if issued under the terms of
the new agreement. Under the December 17, 2010 convertible loan agreement,
Monaco Capital has agreed to loan our company up to $5,000,000. The loan bears
interest at a rate of 10% per annum and is convertible (including accrued
interest) into securities of our company at a conversion price calculated as the
mean volume weighted average price for our company's common stock during the 10
trading day period ending on the latest complete trading day prior to the
conversion date. The principal amount of the loan and accrued interest is due
and payable one year from the effective date. We may at any time during the term
of the loan prepay any sum up to the full amount of the loan and accrued
interest then outstanding for an additional 10% of such amount. At February 28,
2011, Monaco Capital Inc. has advanced $681,597. The balance sheet at February
28, 2011 records the loan value at $676,948 due to the unamortized beneficial
conversion feature on the convertible debt totalling $4,649. The beneficial
conversion feature amount has been accounted for as a debt discount which is
being amortized and treated as interest expense over the term of the new
convertible loan. Accrued interest relating to the loan totalling $12,095 as at
February 28, 2011 was recorded in accounts payable and accrued liabilities.
OUR CURRENT BUSINESS
We are an exploration stage mining company engaged in the identification,
acquisition, and exploration of metals and minerals with a focus on gold
mineralization on our property located in Nevada.
Since we are an exploration stage company, there is no assurance that a
commercially viable mineral reserve exists on any of our current or future
properties, To date, we do not know if an economically viable mineral reserve
exists on our property and there is no assurance that we will discover one. Even
if we do eventually discover a mineral reserve on our property, there can be no
assurance that we will be able to develop our property into a producing mine and
extract those resources. Both mineral exploration and development involve a high
degree of risk and few properties which are explored are ultimately developed
into producing mines.
Our current operational focus is to conduct exploration activities on the
Capgold Project and to complete the terms of the Capgold option agreement.
17
CASH REQUIREMENTS
We intend to conduct exploration activities on our Capgold Project property over
the next twelve months. We estimate our operating expenses and working capital
requirements for the next twelve month period to be as follows:
ESTIMATED EXPENSES FOR THE NEXT TWELVE MONTH PERIOD
General, administrative, and corporate expenses $ 400,000
Operating expenses $ 200,000
Exploration $2,500,000
----------
TOTAL $3,100,000
==========
At present, our cash requirements for the next 12 months outweigh the funds
available to maintain or develop our properties. Of the $3,100,000, that we
require for the next 12 months, we had $1,192 in cash as of February 28, 2011.
In order to improve our liquidity, we intend to pursue additional equity
financing from private investors or possibly a registered public offering. Other
than as set out below, we currently do not have any arrangements in place for
the completion of any further private placement financings and there is no
assurance that we will be successful in completing any further private placement
financings. If we are unable to achieve the necessary additional financing, then
we plan to reduce the amounts that we spend on our business activities and
administrative expenses in order to be within the amount of capital resources
that are available to us.
On April 22, 2010, we entered into a convertible loan agreement with Monaco
Capital Inc., wherein Monaco Capital Inc. has agreed to loan our company up to
$500,000. The loan is convertible into common shares of our company at a
conversion price of $1.05. On December 6, 2010 Monaco Capital Inc. advanced
$100,000. To date, $500,933 has been advanced under the April 2010 loan
agreement.
On December 17, 2010 our company entered into a convertible loan agreement with
Monaco Capital Inc., majority shareholder, for a principal amount of up to
$5,000,000 for a term of one year. The convertible loan agreement replaced the
original agreement with Monaco Capital Inc., dated April 22, 2010 and provided
that the principal of $500,933 advanced under it, along with $20,664 in unpaid,
accrued interest, to and including December 17, 2010, be treated as if issued
under the terms of the new agreement. The loan is unsecured and shall bear
interest at the rate of 10% per annum payable on the due date. Our company may
at any time during the term of the loan prepay any sum up to the full amount of
the loan and accrued interest then outstanding at any time for an additional 10%
of such amount. The loan (including accrued interest) is convertible into
securities of our company at a conversion price calculated as the mean volume
weighted average price for our company's common stock during the 10 trading day
period ending on the latest complete trading day prior to the conversion date.
At any time after the advancement date, if our company has not paid the loan and
accrued interest in full, the lender may, by providing written notice to our
company, exercise its rights of conversion in respect of either a portion of the
total outstanding amount of the loan as of that date into shares of our company.
On December 29, 2010 Monaco Capital Inc. advanced $100,000. The total advanced
under the convertible loan is $621,596.
On February 15, 2011 Monaco Capital Inc. advanced $60,000. The total advanced
under the convertible loan is $681,596.
RESULTS OF OPERATIONS - THREE MONTHS ENDED FEBRUARY 28, 2011 AND 2010
The following summary of our results of operations should be read in conjunction
with our financial statements for the three month period ended February 28, 2011
and 2010 which are included herein.
Our operating results for the three months ended February 28, 2011, for the
three months ended February 28, 2010 and the changes between those periods for
the respective items are summarized as follows:
18
Change Between
Three Month
Period Ended
Three Months Three Months February 28, 2011
Ended Ended and
February 28, February 28, February 28,
2011 2010 2010
-------- -------- --------
($) ($) ($)
Revenue Nil Nil Nil
Consulting expenses Nil Nil Nil
Exploration expenses (94,695) Nil (94,695)
General and administrative (57,911) (727) (57,184)
Rent expenses - related party Nil (1,500) 1,500
Management fees (37,869) Nil (37,869)
Professional fees (37,757) (9,879) (27,878)
-------- -------- --------
Net loss from operations (228,232) (12,106) (216,126)
======== ======== ========
REVENUES
We have not generated revenues since inception and we do not anticipate earning
revenues in the near future.
EXPLORATION EXPENSES
Exploration expenses increased by $94,695 during the three months ended February
28, 2011 as compared to the three months ended February 28, 2010 due to our work
on the Capgold Project for $63,695 and the Kisita Project for $31,000.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased by $57,184 during the three months
ended February 28, 2011 as compared to the three months ended February 28, 2010
due to amortization of $2,193, insurance costs of $9,675, travel expenses of
$13,767 and other office expenses of $19,317.
RENT EXPENSES
Rent expenses decreased by $1,500 during the three months ended February 28,
2011 as compared to the three months ended February 28, 2010 as a result of
termination of the rental agreement.
MANAGEMENT FEES
Management fees increased by $39,869 during the three months ended February 28,
2011 as compared to the three months ended February 28, 2010 as a result of the
payment for services of the president of $22,718 and the secretary/treasurer of
$15,150, commencing October 1, 2009 and September 1, 2009 respectively.
PROFESSIONAL FEES
Professional fees increased by $27,878 during the three months ended February
28, 2011 compared to the three months ended February 28, 2010 due to an increase
in administration and accounting services of $9,567, legal fees of $21,689 and
audit fees of $6,500.
19
LIQUIDITY AND FINANCIAL CONDITION
WORKING CAPITAL
February 28, August 31,
2011 2010
---------- ----------
Current assets $ 23,836 $ 72,869
Current liabilities 823,954 380,072
Working capital (deficit) $ (800,118) $ (307,203)
CASH FLOWS
Six Months Ended February 28,
2011 2010
---------- ----------
Cash flows provided by (used in) operating activities $ (371,902) $ (6,000)
Cash flows provided by (used in) investing activities Nil Nil
Cash flows provided by (used in) financing activities 370,948 Nil
---------- ----------
Increase (decrease) in cash and cash equivalents $ (954) $ (6,000)
========== ==========
OPERATING ACTIVITIES
Net cash used by operating activities was $371,902 for the six months ended
February 28, 2011 compared with cash used by operating activities of $6,000 in
the same period in 2010. The difference was largely due to an overall increase
in cash expenditures and an increase in accounts payable and accrued
liabilities.
INVESTING ACTIVITIES
Net cash used in investing activities was $Nil for the six months ended February
28, 2011 compared to net cash used in investing activities of $Nil in the same
period in 2010.
FINANCING ACTIVITIES
Net cash from financing activities for the six months ended February 28, 2011
was $370,948 and for the six months ended February 28, 2010 was $Nil. During the
six months ended February 28, 2011, Monaco Capital Inc. advanced our company
$410,000 pursuant to a convertible loan agreement.
CONTRACTUAL OBLIGATIONS
As a "smaller reporting company", we are not required to provide tabular
disclosure obligations.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to
stockholders.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
STOCK-BASED COMPENSATION
On August 1, 2009, our company adopted the fair value recognition provisions of
FASB ASC 718-10 and 505-10. Our company accounts for equity instruments issued
in exchange for the receipt of goods or services from other than employees in
accordance with FASB ASC 505-10. Costs are measured at the estimated fair market
value of the consideration received or the estimated fair value of the equity
instruments issued, whichever is more reliably measurable. The value of equity
instruments issued for consideration other than employee services is determined
20
on the earliest of a performance commitment or completion of performance by the
provider of goods or services as defined by FASB ASC 505-10.
Our company records stock-based compensation in accordance with the guidance in
ASC 718. ASC Topic 718 requires our company to recognize expense related to the
fair value of its employee stock option awards. This eliminates accounting for
share-based compensation transactions using the intrinsic value and requires
instead that such transactions be accounted for using a fair-value-based method.
Our company recognizes the cost of all share based awards on a graded vesting
basis over the vesting period of the award.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
MINERAL PROPERTY COSTS
Our company has been in the exploration stage since its formation July 20, 2006
and has not yet realized any revenues from its planned operations. It is
primarily engaged in the acquisition and exploration of mining properties.
Mineral property acquisitions are capitalized and exploration costs are charged
to operations as incurred. When it has been determined that a mineral property
can be economically developed as a result of establishing proven and probable
reserves, the costs incurred to develop such property, are capitalized. Such
costs will be depleted using the units-of-production method over the estimated
life of the probable reserve.
Although our company has taken steps to verify title to mineral properties in
which it has an interest, according to the usual industry standards for the
stage of exploration of such properties, these procedures do not guarantee our
company's title. Such properties may be subject to prior agreements or transfers
and title may be affected by undetected defects.
GOING CONCERN
Our company has incurred a net loss $249,606 for the three month period ended
February 28, 2011 [2010 - $12,106] and at February 28, 2011 had a deficit
accumulated during the development stage of $3,758,947. Since inception (July
20, 2006) to February 28, 2011, our company has commenced limited operations,
raising substantial doubt about our company's ability to continue as a going
concern. Our company will seek additional sources of capital through the
issuance of debt or equity financing, but there can be no assurance our company
will be successful in accomplishing its objectives.
The ability of our company to continue as a going concern is dependent on
additional sources of capital and the success of our company's plan. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, or amounts and
classification of liabilities that might result from the outcome of this
uncertainty.
At this time, we cannot provide investors with any assurance that we will be
able to raise sufficient funding from the sale of our common stock or through a
loan from our directors, shareholders or investors to meet our obligations over
the next twelve months. Other than a convertible loan agreement with Monaco
Capital Inc., we do not have any further arrangements in place for any future
debt. On March 2, 2011 we approved a private placement offering to sell up to a
maximum of 40,000,000 units of our company's securities at $0.10 per unit, each
unit consisting of one common share and one-half of one common share purchase
warrant entitling the holder to subscribe for one share at a price of $0.15 per
share for a period of 18 months from closing.
21
ITEM 4. CONTROLS AND PROCEDURES
MANAGEMENT'S REPORT ON DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to our management, including our president (also our principal
executive officer) and our chief financial officer (also our principal financial
officer and principal accounting officer), to allow for timely decisions
regarding required disclosure.
As of February 28, 2011, the end the quarter covered by this report, we carried
out an evaluation, under the supervision and with the participation of our
president (also our principal executive officer) and our chief financial officer
(also our principal financial officer and principal accounting officer), of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, our president (also our principal executive
officer) and our chief financial officer (also our principal financial officer
and principal accounting officer) concluded that our disclosure controls and
procedures were effective in providing reasonable assurance in the reliability
of our financial reports as of the end of the period covered by this quarterly
report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal controls over financial reporting
that occurred during the quarter ended February 28, 2011 that have materially or
are reasonably likely to materially affect, our internal controls over financial
reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We know of no material, existing or pending legal proceedings against our
company, nor are we involved as a plaintiff in any material proceeding or
pending litigation. There are no proceedings in which any of our directors,
executive officers or affiliates, or any registered or beneficial stockholder,
is an adverse party or has a material interest adverse to our interest.
ITEM 1A. RISK FACTORS
Much of the information included in this quarterly report includes or is based
upon estimates, projections or other "forward-looking statements". Such
forward-looking statements include any projections or estimates made by us and
our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions, or other future
performance suggested herein. We undertake no obligation to update
forward-looking statements to reflect events or circumstances occurring after
the date of such statements.
Such estimates, projections or other "forward-looking statements" involve
various risks and uncertainties as outlined below. We caution readers of this
quarterly report that important factors in some cases have affected and, in the
future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other "forward-looking statements". In evaluating us, our business and any
investment in our business, readers should carefully consider the following
factors.
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RISKS ASSOCIATED WITH MINING
OUR PROPERTY IS IN THE EXPLORATION STAGE. THERE IS NO ASSURANCE THAT WE CAN
ESTABLISH THE EXISTENCE OF ANY MINERAL RESOURCE ON OUR PROPERTY IN COMMERCIALLY
EXPLOITABLE QUANTITIES. UNTIL WE CAN DO SO, WE CANNOT EARN ANY REVENUES FROM
OPERATIONS AND IF WE DO NOT DO SO WE WILL LOSE ALL OF THE FUNDS THAT WE EXPEND
ON EXPLORATION. IF WE DO NOT DISCOVER ANY MINERAL RESOURCE IN A COMMERCIALLY
EXPLOITABLE QUANTITY, OUR BUSINESS COULD FAIL.
Despite exploration work on our mineral property, we have not established that
it contains any mineral reserve, nor can there be any assurance that we will be
able to do so. If we do not, our business could fail.
A mineral reserve is defined by the Securities and Exchange Commission in its
Industry Guide 7 as that part of a mineral deposit which could be economically
and legally extracted or produced at the time of the reserve determination. The
probability of an individual prospect ever having a "reserve" that meets the
requirements of the Securities and Exchange Commission's Industry Guide 7 is
extremely remote; in all probability our mineral resource property does not
contain any "reserve" and any funds that we spend on exploration will probably
be lost.
Even if we do eventually discover a mineral reserve on our property, there can
be no assurance that we will be able to develop our property into a producing
mine and extract those resources. Both mineral exploration and development
involve a high degree of risk and few properties which are explored are
ultimately developed into producing mines.
The commercial viability of an established mineral deposit will depend on a
number of factors including, by way of example, the size, grade and other
attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.
MINERAL OPERATIONS ARE SUBJECT TO APPLICABLE LAW AND GOVERNMENT REGULATION. EVEN
IF WE DISCOVER A MINERAL RESOURCE IN A COMMERCIALLY EXPLOITABLE QUANTITY, THESE
LAWS AND REGULATIONS COULD RESTRICT OR PROHIBIT THE EXPLOITATION OF THAT MINERAL
RESOURCE. IF WE CANNOT EXPLOIT ANY MINERAL RESOURCE THAT WE MIGHT DISCOVER ON
OUR PROPERTY, OUR BUSINESS MAY FAIL.
Both mineral exploration and extraction require permits from various foreign,
federal, state, provincial and local governmental authorities and are governed
by laws and regulations, including those with respect to prospecting, mine
development, mineral production, transport, export, taxation, labour standards,
occupational health, waste disposal, toxic substances, land use, environmental
protection, mine safety and other matters. There can be no assurance that we
will be able to obtain or maintain any of the permits required for the continued
exploration of our mineral properties or for the construction and operation of a
mine on our properties at economically viable costs. If we cannot accomplish
these objectives, our business could fail.
We believe that we are in compliance with all material laws and regulations that
currently apply to our activities but there can be no assurance that we can
continue to remain in compliance. Current laws and regulations could be amended
and we might not be able to comply with them, as amended. Further, there can be
no assurance that we will be able to obtain or maintain all permits necessary
for our future operations, or that we will be able to obtain them on reasonable
terms. To the extent such approvals are required and are not obtained, we may be
delayed or prohibited from proceeding with planned exploration or development of
our mineral properties.
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IF WE ESTABLISH THE EXISTENCE OF A MINERAL RESOURCE ON OUR PROPERTY IN A
COMMERCIALLY EXPLOITABLE QUANTITY, WE WILL REQUIRE ADDITIONAL CAPITAL IN ORDER
TO DEVELOP THE PROPERTY INTO A PRODUCING MINE. IF WE CANNOT RAISE THIS
ADDITIONAL CAPITAL, WE WILL NOT BE ABLE TO EXPLOIT THE RESOURCE, AND OUR
BUSINESS COULD FAIL.
If we do discover mineral resources in commercially exploitable quantities on
our property, we will be required to expend substantial sums of money to
establish the extent of the resource, develop processes to extract it and
develop extraction and processing facilities and infrastructure. Although we may
derive substantial benefits from the discovery of a major deposit, there can be
no assurance that such a resource will be large enough to justify commercial
operations, nor can there be any assurance that we will be able to raise the
funds required for development on a timely basis. If we cannot raise the
necessary capital or complete the necessary facilities and infrastructure, our
business may fail.
MINERAL EXPLORATION AND DEVELOPMENT IS SUBJECT TO EXTRAORDINARY OPERATING RISKS.
WE DO NOT CURRENTLY INSURE AGAINST THESE RISKS. IN THE EVENT OF A CAVE-IN OR
SIMILAR OCCURRENCE, OUR LIABILITY MAY EXCEED OUR RESOURCES, WHICH WOULD HAVE AN
ADVERSE IMPACT ON OUR COMPANY.
Mineral exploration, development and production involve many risks which even a
combination of experience, knowledge and careful evaluation may not be able to
overcome. Our operations will be subject to all the hazards and risks inherent
in the exploration for mineral resources and, if we discover a mineral resource
in commercially exploitable quantity, our operations could be subject to all of
the hazards and risks inherent in the development and production of resources,
including liability for pollution, cave-ins or similar hazards against which we
cannot insure or against which we may elect not to insure. Any such event could
result in work stoppages and damage to property, including damage to the
environment. We do not currently maintain any insurance coverage against these
operating hazards. The payment of any liabilities that arise from any such
occurrence would have a material adverse impact on our company.
MINERAL PRICES ARE SUBJECT TO DRAMATIC AND UNPREDICTABLE FLUCTUATIONS.
We expect to derive revenues, if any, either from the sale of our mineral
resource property or from the extraction and sale of ore. The price of those
commodities has fluctuated widely in recent years, and is affected by numerous
factors beyond our control, including international, economic and political
trends, expectations of inflation, currency exchange fluctuations, interest
rates, global or regional consumptive patterns, speculative activities and
increased production due to new extraction developments and improved extraction
and production methods. The effect of these factors on the price of base and
precious metals, and therefore the economic viability of any of our exploration
properties and projects, cannot accurately be predicted.
THE MINING INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE THAT WE WILL
CONTINUE TO BE SUCCESSFUL IN ACQUIRING MINERAL CLAIMS. IF WE CANNOT CONTINUE TO
ACQUIRE PROPERTIES TO EXPLORE FOR MINERAL RESOURCES, WE MAY BE REQUIRED TO
REDUCE OR CEASE OPERATIONS.
The mineral exploration, development, and production industry is largely
un-integrated. We compete with other exploration companies looking for mineral
resource properties. While we compete with other exploration companies in the
effort to locate and acquire mineral resource properties, we will not compete
with them for the removal or sales of mineral products from our properties if we
should eventually discover the presence of them in quantities sufficient to make
production economically feasible. Readily available markets exist worldwide for
the sale of mineral products. Therefore, we will likely be able to sell any
mineral products that we identify and produce.
In identifying and acquiring mineral resource properties, we compete with many
companies possessing greater financial resources and technical facilities. This
competition could adversely affect our ability to acquire suitable prospects for
exploration in the future. Accordingly, there can be no assurance that we will
acquire any interest in additional mineral resource properties that might yield
reserves or result in commercial mining operations.
24
RISKS RELATED TO OUR COMPANY
THE FACT THAT WE HAVE NOT EARNED ANY OPERATING REVENUES SINCE OUR INCORPORATION
RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE TO EXPLORE OUR MINERAL
PROPERTIES AS A GOING CONCERN.
We have not generated any revenue from operations since our incorporation and we
anticipate that we will continue to incur operating expenses without revenues
unless and until we are able to identify a mineral resource in a commercially
exploitable quantity on our mineral property and we build and operate a mine. We
had cash in the amount of $1,192 as of February 28, 2011. At February 28, 2011,
we had working capital deficit of $800,118. We incurred a net loss of $249,606
for the three month period ended February 28, 2011 and $3,738,947 since
inception. We estimate our average monthly operating expenses to be
approximately $150,000, including mineral property costs, management services
and administrative costs. Should the results of our planned exploration require
us to increase our current operating budget, we may have to raise additional
funds to meet our currently budgeted operating requirements for the next 12
months. As we cannot assure a lender that we will be able to successfully
explore and develop our mineral property, we will probably find it difficult to
raise debt financing from traditional lending sources. We have traditionally
raised our operating capital from sales of equity securities, but there can be
no assurance that we will continue to be able to do so. If we cannot raise the
money that we need to continue exploration of our mineral property, we may be
forced to delay, scale back, or eliminate our exploration activities. If any of
these were to occur, there is a substantial risk that our business would fail.
These circumstances lead our independent registered public accounting firm, in
their report dated November 29, 2009, to comment about our company's ability to
continue as a going concern. Management has plans to seek additional capital
through a private placement of its capital stock. These conditions raise
substantial doubt about our company's ability to continue as a going concern.
Although there are no assurances that management's plans will be realized,
management believes that our company will be able to continue operations in the
future. The 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 our company
cannot continue in existence. We continue to experience net operating losses.
RISKS ASSOCIATED WITH OUR COMMON STOCK
TRADING ON THE OTC BULLETIN BOARD MAY BE VOLATILE AND SPORADIC, WHICH COULD
DEPRESS THE MARKET PRICE OF OUR COMMON STOCK AND MAKE IT DIFFICULT FOR OUR
STOCKHOLDERS TO RESELL THEIR SHARES.
Our common stock is quoted on the OTC Bulletin Board service of the Financial
Industry Regulatory Authority. Trading in stock quoted on the OTC Bulletin Board
is often thin and characterized by wide fluctuations in trading prices, due to
many factors that may have little to do with our operations or business
prospects. This volatility could depress the market price of our common stock
for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board
is not a stock exchange, and trading of securities on the OTC Bulletin Board is
often more sporadic than the trading of securities listed on a quotation system
like NASDAQ or a stock exchange like NYSE Amex. Accordingly, shareholders may
have difficulty reselling any of their shares.
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S
PENNY STOCK REGULATIONS AND FINRA'S SALES PRACTICE REQUIREMENTS, WHICH MAY LIMIT
A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.
Our stock is a penny stock. The Securities and Exchange Commission has adopted
Rule 15g-9 which generally defines "penny stock" to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exceptions. Our securities are
covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to persons other than established
customers and "accredited investors". The term "accredited investor" refers
generally to institutions with assets in excess of $5,000,000 or individuals
with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document in a form prepared
by the SEC which provides information about penny stocks and the nature and
25
level of risks in the penny stock market. The broker-dealer also must provide
the customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in, and limit the marketability of, our common stock.
In addition to the "penny stock" rules promulgated by the Securities and
Exchange Commission, the Financial Industry Regulatory Authority has adopted
rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the Financial Industry Regulatory Authority believes that there
is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The Financial Industry Regulatory
Authority's requirements make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may limit your ability to buy
and sell our stock.
OTHER RISKS
TRENDS, RISKS AND UNCERTAINTIES
We have sought to identify what we believe to be the most significant risks to
our business, but we cannot predict whether, or to what extent, any of such
risks may be realized nor can we guarantee that we have identified all possible
risks that might arise. Investors should carefully consider all of such risk
factors before making an investment decision with respect to our common stock.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On March 28, 2011 we issued 2,500,000 units at $0.10 per unit to an accredited
investor for net proceeds of $250,000. Each unit consists of one common share
and one-half of one common share purchase warrant, each whole warrant entitling
the holder to subscribe for one share at a price of $0.15 per share for a period
of 18 months. The securities were issued pursuant to a private placement
approved by our board of directors under Section 4(2) of the Securities Act of
1933.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None.
ITEM 4. [REMOVED AND RESERVED]
ITEM 5. OTHER INFORMATION
On March 1, 2011, we entered into a consulting agreement with Illyria Inc.,
(whose executive, Leland Verner, is a former director of our company) to provide
strategic planning and business development services to our company. The
agreement has a term ending December 31, 2012 and a fee of $120,000 per annum
with eligibility for additional compensation in the form of warrants or options
at the discretion of our company.
On March 1, 2011, we entered into a consulting agreement with Wayne Parsons, a
director of our company, to provide strategic planning and business development
services to our company. The agreement has a term ending December 31, 2012 and a
fee of $60,000 per annum with eligibility for additional compensation in the
form of warrants or options at the discretion of our company.
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ITEM 6. EXHIBITS
Exhibit
No. Description
--- -----------
(3) ARTICLES OF INCORPORATION AND BYLAWS
3.1 Articles of Incorporation (incorporated by reference from our
Registration Statement on Form SB-2 filed on October 23, 2006).
3.2 By-laws (incorporated by reference from our Registration Statement on
Form SB-2 filed on October 23, 2006).
3.3 Articles of Merger (incorporated by reference from our Current Report
on Form 8-K filed on April 12, 2010).
3.4 Certificate of Change (incorporated by reference from our Current
Report on Form 8-K filed on April 12, 2010).
(10) MATERIAL CONTRACTS
10.1 Mineral Lease Agreement between Royce L. Hackworth and Belva L. Tomany
and our company dated April 16, 2010. (incorporated by reference from
our Current Report on Form 8-K filed on April 19, 2010).
10.2 2010 Stock Option Plan (incorporated by reference from our Current
Report on Form 8-K filed on August 25, 2010).
10.3 Form of Stock Option Agreement (incorporated by reference from our
Current Report on Form 8-K filed on August 25, 2010).
10.4* Convertible Loan Agreement between our company and Monaco Capital Inc.
dated December 17, 2010.
10.5* Consulting agreement with Illyria Inc. dated March 1, 2011
10.6* Consulting agreement with Wayne Parsons dated March 1, 2011
(31) RULE 13A-14(A)/15D-14(A) CERTIFICATIONS
31.1* Section 302 Certification of the Principal Executive Officer under
Sarbanes-Oxley Act of 2002
31.2* Section 302 Certification of the Principal Financial Officer and
Principal Accounting Officer under Sarbanes-Oxley Act of 2002
(32) SECTION 1350 CERTIFICATIONS
32.1* Section 906 Certification of the Principal Executive Officer under
Sarbanes-Oxley Act of 2002
32.2* Section 906 Certification of the Principal Financial Officer and
Principal Accounting Officer under Sarbanes-Oxley Act of 2002
----------
* Filed herewith.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AMERICAN PARAMOUNT GOLD CORP.
(Registrant)
Date: April 14, 2011 /s/ Hugh Aird
------------------------------------------------
Hugh Aird
President, Chief Executive Officer and Director
(Principal Executive Officer)
Date: April 14, 2011 /s/ Ann Dumyn
------------------------------------------------
Ann Dumyn
Chief Financial Officer, Secretary and Treasurer
(Principal Financial Officer and Principal
Accounting Officer)
28