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 November 30, 2013
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.)
355 Burrard Street, Suite 1000, Vancouver, BC Canada V6C 2G8
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (250) 258-7481
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 December 15, 2015: 7,612,500
American Paramount Gold Corp.
Index
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets at November 30, 2013 and August 31, 2013 3
Statements of Operations for the three months ended
November 30, 2013 and 2012 4
Statements of Cash Flows for the three months ended
November 30, 2013 and 2012 5
Notes to Financial Statements 6
2
American Paramount Gold Corp.
Balance Sheets
(Expressed in U.S. Dollars)
(Unaudited)
November 30, August 31,
2013 2013
------------ ------------
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $ 550,738 $ 524,795
Convertible loan payable - related party 980,413 980,413
------------ ------------
Total Liabilities 1,531,151 1,505,208
------------ ------------
STOCKHOLDERS' DEFICIT
Common stock
200,000,000 authorized shares, par value $0.001
1,612,500 shares issued and outstanding
as at November 30, 2013 and August 31, 2013 1,613 1,613
Additional paid-in-capital 3,291,370 3,291,370
Stock payable 476,191 476,191
Deficit (5,300,325) (5,274,382)
------------ ------------
Total Stockholders' Deficit (1,531,151) (1,505,208)
------------ ------------
Total Liabilities and Stockholders' Deficit $ -- $ --
============ ============
The accompanying notes are an integral part of
these interim financial statements
3
American Paramount Gold Corp.
Statement of Operations
(Expressed in U.S. Dollars)
(Unaudited)
For the Three Months Ended
November 30,
2013 2012
---------- ----------
EXPENSES
Operating expenses
General and administrative $ 1,500 $ 1,631
---------- ----------
Total operating expenses 1,500 1,631
---------- ----------
Net loss from operations (1,500) (1,631)
---------- ----------
Interest expense 24,443 24,324
---------- ----------
Total other expenses 24,443 24,324
---------- ----------
NET AND COMPREHENSIVE LOSS $ (25,943) $ (25,955)
========== ==========
BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.02) $ (0.02)
========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - BASIC AND DILUTED 1,612,500 1,612,500
========== ==========
The accompanying notes are an integral part of
these interim financial statements
4
American Paramount Gold Corp.
Statement of Cash Flows
(Expressed in U.S. Dollars)
(Unaudited)
For the Three Months Ended
November 30,
2013 2012
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(25,943) $(25,955)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Interest expense 24,443 24,324
Change in operating assets and liabilities:
Decrease in excise tax receivable -- 977
Increase in accounts payable and accrued liabilities 1,500 1,499
-------- --------
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES -- 845
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft repayments -- (845)
-------- --------
NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES (845)
-------- --------
NET CHANGE IN CASH -- --
CASH, BEGINNING OF THE PERIOD -- --
-------- --------
CASH, END OF THE PERIOD $ -- $ --
======== ========
The accompanying notes are an integral part of
these interim financial statements
5
American Paramount Gold Corp.
Notes to the Financial Statements
November 30, 2013
(Stated in U.S. Dollars)
(Unaudited)
1. ORGANIZATION, NATURE OF BUSINESS AND BASIS OF PRESENTATION
American Paramount Gold Corp., a Nevada corporation, (the "Company") 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.
UNAUDITED INTERIM FINANCIAL STATEMENTS
The unaudited interim financial statements of the Company have been prepared in
accordance with United States generally accepted accounting principles ("GAAP")
for interim financial information and the rules and regulations of the
Securities and Exchange Commission ("SEC"). They do not include all information
and footnotes required by GAAP for complete financial statements. Except as
disclosed herein, there have been no material changes in the information
disclosed in the notes to the financial statements for the year ended August 31,
2013, included in the Company's Annual Report on Form 10-K, filed with the SEC.
The interim unaudited financial statements should be read in conjunction with
those audited financial statements included in Form 10-K. In the opinion of
management, all adjustments considered necessary for fair presentation,
consisting solely of normal recurring adjustments, have been made. Operating
results for the three month period ended November 30, 2013 are not necessarily
indicative of the results that may be expected for the year ending August 31,
2014.
GOING CONCERN
The accompanying unaudited interim financial statements have been prepared
assuming the Company will continue as a going concern. Continuation as a going
concern is dependent upon the ability of the Company to obtain the necessary
obligations and pay its liabilities arising from normal business operations when
they come due and ultimately upon its ability to achieve profitable operations.
The outcome of these matters cannot be predicted with any certainty at this time
and raise substantial doubt that the Company will be able to continue as a going
concern. These unaudited interim financial statements do not include any
adjustments to the amounts and classification of assets and liabilities that may
be necessary should the Company be unable to continue as a going concern.
RECENT ACCOUNTING PRONOUNCEMENTS
The following are recent FASB accounting pronouncements, which may have an
impact on the Company's future financial statements:
"INCOME TAXES (ASC TOPIC 740): PRESENTATION OF AN UNRECOGNIZED TAX BENEFIT WHEN
A NET OPERATING LOSS CARRY-FORWARD, A SIMILAR TAX LOSS, OR A TAX CREDIT
CARRY-FORWARD EXISTS" ("ASU 2013-11") was issued during July 2013. FASB issued
guidance on how to present an unrecognized tax benefit. The guidance is
effective for annual periods beginning after December 15, 2013 for public
companies. The Company has adopted this pronouncement. The adoption of ASC Topic
740 did not have a significant impact on the Company's results of operations,
financial performance or cash flows.
In June 2014, the FASB issued ASU No. 2014-10, "DEVELOPMENT STAGE ENTITIES
(TOPIC 915): ELIMINATION OF CERTAIN FINANCIAL REPORTING REQUIREMENTS, INCLUDING
AN AMENDMENT TO VARIABLE INTEREST ENTITIES GUIDANCE IN TOPIC 810,
CONSOLIDATION." This ASU is intended to improve financial reporting by reducing
the cost and complexity associated with the incremental reporting requirements
for development stage entities. In addition, the amendments eliminate the
requirements for development stage entities to (1) present inception-to-date
information in the statements of income, cash flows, and shareholder equity, (2)
label the financial statements as those of a development stage entity, (3)
6
American Paramount Gold Corp.
Notes to the Financial Statements
November 30, 2013
(Stated in U.S. Dollars)
(Unaudited)
1. ORGANIZATION AND NATURE OF BUSINESS (CONTINUED)
disclose a description of the development stage activities in which the entity
is engaged, and (4) disclose in the first year in which the entity is no longer
a development stage entity that in prior years it had been in the development
stage. As of the first annual period beginning after December 15, 2014, the
presentation and disclosure requirements in Topic 915 will no longer be
required. The revised consolidation standards are effective one year later, in
annual periods beginning after December 15, 2015. The Company has early adopted
these changes and removed inception-to-date information and no longer describes
as an exploration stage entity.
In August 2014, the FASB issued ASU No. 2014-15, "PRESENTATION OF FINANCIAL
STATEMENTS--GOING CONCERN (SUBTOPIC 205-40): DISCLOSURE OF UNCERTAINTIES ABOUT
AN ENTITY'S ABILITY TO CONTINUE AS A GOING CONCERN." This ASU is intended to
define management's responsibility to evaluate whether there is substantial
doubt about an entity's ability to continue as a going concern and to provide
related footnote disclosures. Specifically, ASU 2014-15 provides a definition of
the term substantial doubt and requires an assessment for a period of one year
after the date that the financial statements are issued (or available to be
issued). It also requires certain disclosures when substantial doubt is
alleviated as a result of consideration of management's plans and requires an
express statement and other disclosures when substantial doubt is not
alleviated. The new standard will be effective for annual reporting periods,
including interim periods within those annual periods, beginning after December
15, 2016, with early adoption permitted. The Company is currently evaluating the
impact of this standard on its financial statements.
2. CONVERTIBLE LOAN - RELATED PARTY
On April 22, 2010, as amended December 17, 2010, the Company entered into an
agreement with Monaco Capital Inc., majority shareholder, for a principal amount
of up to $5,000,000. The loan is unsecured and bears interest at the rate of 10%
per annum. 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 the sum plus 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. The amounts
advanced plus accrued interest are due one year following the date advanced. At
November 30, 2013, $980,413 plus related interest is past due.
As at November 30, 2013, interest of $269,349 (August 31, 2013 - $237,907) is
included in accrued liabilities.
3. COMMON STOCK
On October 13, 2015, the Company amended its Articles of Incorporation to
increase its authorized number of shares to issue to 200,000,000 common shares
at a par value of $0.001 and 10,000,000 preferred shares at a par value of
$0.001.
7
American Paramount Gold Corp.
Notes to the Financial Statements
November 30, 2013
(Stated in U.S. Dollars)
(Unaudited)
4. STOCK OPTIONS
The Company has adopted a stock option plan (the "2010 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 2010 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.
A summary of the Company's stock options outstanding as at November 30, 2013 and
August 31, 2013 is presented below:
Number of
Options Outstanding Weighted Average Weighted Average Life
and Exercisable Exercise Price Remaining (years)
--------------- -------------- -----------------
Balance, August 31, 2013, and
November 30, 2013 5,000,000 $ 0.12 2.25
========= ====== ====
The following is a summary of the Company's stock options outstanding and
exercisable as at November 30, 2013:
Number of options outstanding
and exercisable Exercise Price Expiry Date
--------------- -------------- -----------
5,000,000 $ 0.12 March 2, 2016
5. RELATED PARTY TRANSACTIONS
At November 30, 2013, Monaco Capital Inc., a majority shareholder has advanced
$980,413 (August 31, 2013 - $980,413) with terms as discussed in Note 2.
6. SUBSEQUENT EVENTS
On October 1, 2015, Dennis Petke was appointed as the sole officer of the
Company, and as a director of the Company.
The Company entered into an agreement with a company owned by Dennis Petke
beginning on October 1, 2015 whereby the Company will pay a monthly service fee
of $2,500 and issue on a monthly basis 50,000 shares of the Company's common
stock for the services of Mr. Petke. This agreement can be terminated by the
Company with 180 days notice, and by the company owned by Mr. Petke with 30 days
notice.
The Company issued 3,000,000 restricted shares to the company owned by Mr. Petke
for a par value if $0.001 per share.
8
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,
2013 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" and "our" 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, 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, Inc. 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
Cap Gold Project. The 189 claims making up the Cap Gold 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 Cap Gold 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 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
9
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 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
November 30, 2012, Monaco Capital Inc. has advanced $975,652. Accrued interest
relating to the loan totalling $164,416 as at November 30, 2012 was recorded in
accrued liabilities.
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 2012 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,
2012 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 November 28, 2011, the Nevada Secretary of State accepted for filing a
Certificate of Change, wherein the corporation amended our Articles of
Incorporation to implement a forty (40) for one (1) reverse stock split of our
authorized and issued and outstanding common shares such that our company's
authorized capital will be decreased from 150,000,000 shares of common stock
with a par value of $0.001 to 3,750,000 shares of common stock with a par value
of $0.001 and, correspondingly, its issued and outstanding shares of common
stock shall decrease from 64,500,000 shares of common stock to 1,612,500 shares
of common stock. No fractional shares shall be issued and fractional shares
shall be rounded up. The reverse split was effective at the opening of trading
on January 26, 2012.
On March 9, 2012 based on recently released drill results the Board of Directors
decided the company could not justify the further expense of continuing with its
planned drill program at Cap Gold, Nye County, Nevada, USA. The Company advised
the owners that it was cancelling its option agreement.
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.
Both mineral exploration and development involve a high degree of risk and few
properties which are explored are ultimately developed into producing mines.
10
CASH REQUIREMENTS
We intend to search for qualifying exploration properties 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 $ 50,000
Operating expenses $ 50,000
Identification of properties of merit $ 50,000
--------
TOTAL $150,000
========
At present, our cash requirements for the next 12 months outweigh the funds
available. Of the $150,000 that we require for the next 12 months, we had $Nil
in cash as of November 30, 2013. 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. agreed to loan our company up to
$500,000
The total advanced under the Convertible Loan as at November 30, 2013 is
$980,413.
RESULTS OF OPERATIONS - THREE MONTHS ENDED NOVEMBER, 2013 AND 2012
The following summary of our results of operations should be read in conjunction
with our financial statements for the three month period ended November 30, 2013
and 2012 which are included herein.
Our operating results for the three months ended November 30, 2013 and 2012 are
summarized as follows:
Three Months Three Months
Ended Ended
November 30, November 30,
2013 2012
-------- --------
General and administrative $ 1,500 $ 1,631
Interest expense 24,443 24,324
-------- --------
Net loss from operations $(25,943) $(25,955)
======== ========
REVENUES
We have not generated revenues since inception and we do not anticipate earning
revenues in the near future.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses decreased by $131 during the three months
ended November 30, 2013 as compared to the three months ended November 30, 2012.
11
LIQUIDITY AND FINANCIAL CONDITION
WORKING CAPITAL
November 30, August 31,
2013 2013
------------ ------------
Current assets $ -- $ --
Current liabilities 1,531,151 1,505,208
------------ ------------
Working capital (deficit) $ (1,531,151) $ (1,505,208)
============ ============
OPERATING ACTIVITIES
Net cash provided by operating activities was $Nil for the three months ended
November 30, 2013.
INVESTING ACTIVITIES
Net cash used in investing activities was $Nil for the three months ended
November 30, 2013.
FINANCING ACTIVITIES
Net cash used in financing activities was $Nil for the three months ended
November 30, 2013.
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
USE OF ESTIMATES
The preparation of the 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 an
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
NET LOSS PER COMMON SHARE
Our company computes net loss per share in accordance with ASC 260, "EARNINGS
PER SHARE" and SEC Staff Accounting Bulletin No. 98 (SAB 98). Under the
provisions of ASC 260 and SAB 98, 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 November
30, 2013, our company had no potentially dilutive securities.
12
STOCK-BASED COMPENSATION
On August 1, 2009, the company adopted the fair value recognition provisions of
FASB ASC 718-10. 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.
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.
GOING CONCERN
Our company has incurred a net loss $25,943 for the three month period ended
November 30, 2013 and at November 30, 2013 had a deficit accumulated of
$5,302,333. Since inception (July 20, 2006) to November 30, 2013, 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 or equity financing.
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.
13
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 November 30, 2012 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.
RISKS ASSOCIATED WITH MINING
THERE IS NO ASSURANCE THAT WE CAN ACQUIRE OR DEVELOP ANY MINERAL RESOURCE
PROPERTIES 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.
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 the mineral resource property does not
contain any "reserve" and any funds that we spend on exploration will probably
be lost.
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, 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
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development, mineral production, transport, export, taxation, labor 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 mineral properties or for the construction and operation of a
mine on those 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
mineral properties.
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 a 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 the 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.
15
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.
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 THE 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 the mineral property and we build and operate a mine. We
had cash in the amount of $Nil as of November 30, 2013. At November 30, 2013, we
had working capital deficit of $1,531,151. We incurred a net loss of $25,943 for
the three month period ended November 30, 2013 and $5,300,325 since inception.
We estimate our average monthly operating expenses to be approximately $12,500,
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 the 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 the 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.
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.
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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
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 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 option plan, at an exercise price of $0.68 per share. Of the
5,400,000 stock options, 5,000,000 options are exercisable until March 2, 2016.
All the stock options vested upon issuance.
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ITEM 3. DEFAULT UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
On October 6, 2015, the Company appointed Dennis Petke as director, Interim
President, Chief Financial Officer and Secretary Treasurer.
Our board of directors now consists of Dennis Petke.
On December 4, 2015, the Company issued 3,000,000 common shares to Q4 Financial
Group Inc. in exchange for services rendered. Dennis Petke is the Principal of
Q4 Financial Group Inc.
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, 2012. (incorporated by reference from
our Current Report on Form 8-K filed on April 19, 2010).
10.2 Consulting agreement with Vista Partners LLC dated January 29, 2010
10.3 Convertible Loan Agreement between our company and Monaco Capital Inc.
dated December 17, 2010.
(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: December 16, 2015 /s/ Dennis Petke
------------------------------------------------
Dennis Petke
President, Chief Executive Officer and Director
(Principal Executive Officer)
Date: December 16, 2015 /s/ Dennis Petke
------------------------------------------------
Dennis Petke
Chief Financial Officer, Secretary and Treasurer
(Principal Financial Officer and Principal
Accounting Officer)
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