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 August 31, 2015
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number 000-54327
FIRST AMERICAN SILVER CORP.
(Exact name of registrant as specified in its charter)
Nevada 98-0579157
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
1 Nachal Maor, Suite 2, Ramat Bet Shemesh, Israel 99623
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: +972 52 798 0831
Securities registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
None N/A
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Securities registered under Section 12(g) of the Act:
Common Stock, $0.001 par value
(Title of class)
Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X]
Indicate by checkmark 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. Yes [X] 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 submit and post such files). Yes [] No [X]
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller 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]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [X] No [ ]
Indicate the number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date: 62,050,567 as of September 30, 2015
DOCUMENTS INCORPORATED BY REFERENCE
None.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements ................................................ 3
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ............................................... 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk .......... 18
Item 4. Controls and Procedures ............................................. 18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings ................................................... 19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds ......... 19
Item 3. Defaults Upon Senior Securities ..................................... 19
Item 4. Mine Safety Disclosures ............................................. 19
Item 5. Other Information ................................................... 19
Item 6. Exhibits ............................................................ 20
SIGNATURES .................................................................. 21
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
These unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the Securities and Exchange Commission instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended August 31, 2015 are not necessarily indicative of the results that can be expected for the full year.
FIRST AMERICAN SILVER CORP.
TABLE OF CONTENTS
AUGUST 31, 2015
Condensed Balance Sheets as of August 31, 2015 and November 30, 2014 (unaudited) 5 Condensed Statements of Operations for the three and nine months ended August 31, 2015 and 2014 (unaudited) 6 Condensed Statements of Cash Flows for the nine months ended August 31, 2015 and 2014 (unaudited) 7 Notes to the Condensed Financial Statements (unaudited) 8 |
FIRST AMERICAN SILVER CORP.
CONDENSED BALANCE SHEETS (unaudited)
August 31, November 30,
2015 2014
------------ ------------
ASSETS
Current Asset
Prepaid expenses $ 5,409 $ 22,128
------------ ------------
Total Current Assets 5,409 22,128
------------ ------------
Other Asset
Reclamation bond 591 591
------------ ------------
Total Other Assets 591 591
------------ ------------
Total Assets $ 6,000 $ 22,719
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 149,387 $ 95,075
Accrued expenses 44,860 32,804
Due to related party 33,072 8,100
Notes payable - current portion 200,750 200,750
------------ ------------
Total Liabilities 428,069 336,729
------------ ------------
Stockholders' Equity (Deficit)
Preferred stock, par value $0.001, 20,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, par value $0.001, 3,500,000,000 shares authorized,
62,808,567 shares issued and outstanding (62,320,567 - 2014) 62,808 62,321
Additional paid-in capital 1,180,228 1,170,995
Accumulated deficit (1,665,105) (1,547,326)
------------ ------------
Total Stockholders' Equity (Deficit) (422,069) (314,010)
------------ ------------
Total Liabilities and Stockholders' Equity (Deficit) $ 6,000 $ 22,719
============ ============
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The accompanying notes are an integral part of these financial statements.
FIRST AMERICAN SILVER CORP.
CONDENSED STATEMENTS OF OPERATIONS (unaudited)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
August 31, August 31, August 31, August 31,
2015 2014 2015 2014
------------ ------------ ------------ ------------
REVENUES $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------
OPERATING EXPENSES
Accounting and legal -- 1,500 1,750 1,500
Consulting fees 22,500 53,786 70,258 81,286
Transfer agent and filing fees 634 1,450 7,276 5,700
General and administrative -- 1,519 -- 3,553
------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES 23,134 58,255 79,284 92,039
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (23,134) (58,255) (79,284) (92,039)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSES)
Interest expense (10,892) (12,894) (38,495) (40,209)
Impairment of website -- -- -- (1,667)
Gain on sale of rights -- 74,690 -- 74,690
------------ ------------ ------------ ------------
TOTAL OTHER INCOME (EXPENSE) (10,892) 61,796 (38,495) 32,814
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX (34,026) 3,541 (117,779) (59,225)
PROVISION FOR INCOME TAX -- -- -- --
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (34,026) $ 3,541 $ (117,779) $ (59,225)
============ ============ ============ ============
LOSS PER SHARE: BASIC AND DILUTED $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
BASIC AND DILUTED 62,808,567 60,612,768 62,597,391 59,362,638
============ ============ ============ ============
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The accompanying notes are an integral part of these financial statements.
FIRST AMERICAN SILVER CORP.
CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
Nine Months Nine Months
Ended Ended
August 31, August 31,
2015 2014
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (117,779) $ (59,225)
Adjustments to Reconcile Net Loss to Net Cash
Provided by (Used in) Operating Activities:
Depreciation and amortization -- 500
Write down of website -- 1,667
Stock issued for loan extension fees and services 9,720 48,291
Gain on sale of rights -- (74,690)
Changes in operating assets and liabilities:
Accounts receivable - other -- 6,433
Prepaid expenses 16,719 (6,612)
Accounts payable 54,312 52,389
Accrued expenses 12,056 14,806
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (24,972) (16,441)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable -- 12,000
Due to related party 24,972 4,361
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES 24,972 16,361
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS -- (80)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD -- 80
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ -- $ --
========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes $ -- $ --
========== ==========
Cash paid for interest $ -- $ --
========== ==========
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The accompanying notes are an integral part of these financial statements
FIRST AMERICAN SILVER CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
AUGUST 31, 2015 (UNAUDITED)
NOTE 1 - NATURE OF OPERATIONS
Mayetok, Inc. ("the Company") was incorporated in the state of Nevada on April 29, 2008. On June 8, 2010, the Company changed its name to First American Silver Corp.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
EXPLORATION STAGE COMPANY
On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued
update ASU 2014-10, Development Stage Entities (Topic 915). Amongst other
things, the amendments in this update removed the definition of development
stage entity from Topic 915, thereby removing the distinction between
development stage entities and other reporting entities from US GAAP. In
addition, the amendments eliminate the requirements for development stage
entities to (1) present inception-to-date information on the statements of
income, cash flows and shareholders equity, (2) label the financial statements
as those of a development stage entity; (3) 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. The amendments are
effective for annual reporting periods beginning after December 31, 2014 and
interim reporting periods beginning after December 15, 2015, however entities
are permitted to early adopt for any annual or interim reporting period for
which the financial statements have yet to be issued. The Company has elected to
early adopt these amendments and accordingly have not labeled the financial
statements as those of a development stage entity and have not presented
inception-to-date information on the respective financial statements.
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.
ACCOUNTING BASIS
The Company uses the accrual basis of accounting and accounting principles
generally accepted in the United States of America ("GAAP" accounting). The
Company has adopted a November 30 fiscal year end.
RISKS AND UNCERTAINTIES
The Company's operations are subject to significant risk and uncertainties
including financial, operational, technological, and regulatory risks including
the potential risk of business failure. See Note 10 regarding going concern
matters.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three
months or less to be cash equivalents. At August 31, 2015 and November 30, 2014,
respectively, the Company had $0 and $0 of unrestricted cash to be used for
future business operations.
The Company's bank accounts are deposited in insured institutions. The funds are insured up to $250,000. At times, the Company's bank deposits may exceed the insured amount. Management believes it has little risk related to the excess deposits.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, prepaid expenses, accounts
payable, accrued expenses, notes payable, and note payable-related party. The
carrying amount of these financial instruments approximates fair value due to
either length of maturity or interest rates that approximate prevailing market
rates unless otherwise disclosed in these financial statements.
FIRST AMERICAN SILVER CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
AUGUST 31, 2015 (UNAUDITED)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATIONS OF CREDIT RISK
The Company maintains its cash in bank deposit accounts, the balances of which
at times may exceed federally insured limits. The Company continually monitors
its banking relationships and consequently has not experienced any losses in
such accounts. The Company believes it is not exposed to any significant credit
risk on cash and cash equivalents.
STOCK-BASED COMPENSATION
The Company accounts for employee stock-based compensation in accordance with
the guidance of ASC Topic 718, COMPENSATION - STOCK COMPENSATION which requires
all share-based payments to employees, including grants of employee stock
options, to be recognized in the financial statements based on their fair
values. There has been no stock-based compensation issued to employees.
The Company follows ASC Topic 505-50, formerly EITF 96-18, "ACCOUNTING FOR EQUITY INSTRUMENTS THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN CONJUNCTION WITH SELLING GOODS AND SERVICES," for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.
INCOME TAXES
Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized. It is the
Company's policy to classify interest and penalties on income taxes as interest
expense or penalties expense. As of August 31, 2015, there have been no interest
or penalties incurred on income taxes.
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 the financial statements and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
REVENUE RECOGNITION
The Company is in the exploration stage and has yet to realize revenues from
operations. Once the Company has commenced operations, it will recognize
revenues when delivery of goods or completion of services has occurred provided
there is persuasive evidence of an agreement, acceptance has been approved by
its customers, the fee is fixed or determinable based on the completion of
stated terms and conditions, and collection of any related receivable is
probable.
BASIC INCOME (LOSS) PER SHARE
Basic income (loss) per share is calculated by dividing the Company's net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company's net income available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted for any potentially dilutive debt or equity.
RECENT ACCOUNTING PRONOUNCEMENTS
First American Silver does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flows.
FIRST AMERICAN SILVER CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
AUGUST 31, 2015 (UNAUDITED)
NOTE 3 - PREPAID EXPENSES
Prepaid expenses consisted of the following:
August 31, November 30,
2015 2014
-------- --------
Loan extension fees $ 5,409 $ 22,128
-------- --------
Total prepaid expenses $ 5,409 $ 22,128
======== ========
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NOTE 4 - NOTES PAYABLE
Notes payable consisted of the following at August 31, 2015:
Date of Note Note Amount Interest Rate Maturity Date Collateral Interest Accrued
------------ ----------- ------------- ------------- ---------- ----------------
April 17, 2013 $ 7,500 8% April 17, 2015 (default) None $ 1,424
June 12, 2013 $ 6,250 8% June 12, 2015 (default) None $ 1,110
June 18, 2013 $ 50,000 8% June 18, 2015 (default) None $12,811
August 22, 2013 $ 55,000 8% August 22, 2015 (default) None $13,308
November 1, 2013 $ 25,000 8% November 1, 2015 None $ 5,660
March 10, 2014 $ 12,000 8% March 10, 2015 (default) None $ 1,418
February 5, 2013 $ 15,000 8% February 5, 2016 None $ 3,081
February 22, 2013 $ 30,000 8% February 22, 2016 None $ 6,048
-------- -------
Total $200,750 $44,860
======== =======
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NOTE 5 - CAPITAL STOCK
The Company has 20,000,000 preferred shares authorized at a par value of $0.001 per share.
The Company has 3,500,000,000 common shares authorized at a par value of $0.001 per share.
On June 18, 2013, the Company issued 270,000 to extend the maturity date of a note payable to June 18, 2014. The value of these shares has been included in prepaid expenses and will amortize to interest expense over the term of the extension period (1 year).
On August 22, 2013, the Company issued 396,000 to extend the maturity date of a note payable to August 22, 2014. The value of these shares has been included in prepaid expenses and will amortize to interest expense over the term of the extension period (1 year).
On September 27, 2013, the Company issued 1,000,000 shares to Pyramid Lake LLC in consideration for the April 15, 2012 option payment on the Esmeralda Property.
On September 28, 2013, the Company issued 25,000 common shares to a consultant for services. The shares were valued at a fair market value of $0.03/share on the date of issuance for a total value of $750.
On October 16, 2013, the Company issued 403,000 common shares to retire $12,109 of accounts payable owing to a former consultant.
FIRST AMERICAN SILVER CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
AUGUST 31, 2015 (UNAUDITED)
NOTE 5 - CAPITAL STOCK (CONTINUED)
On November 1, 2013, the Company issued 180,000 to extend the maturity date of a note payable to November 1, 2014. The value of these shares has been included in prepaid expenses and will amortize to interest expense over the term of the extension period (1 year).
On November 30, 2013, the Company issued 68,667 common shares to retire $2,060 of accounts payable owing to a former consultant.
On November 30, 2013, the Company issued 405,400 shares to its president to retire $12,162 of accounts payable owing.
On April 11, 2014, the Company issued 486,000 shares to extend a certain loan for one year. The value of these shares has been included in prepaid expenses and will amortize to interest expense over the term of the extension period (1 year).
On April 30, 2014, the Company issued 1,000,000 shares valued at $19,910 based on the stock closing price on the date of the grant to its president. The issuance paid $12,500 of accounts payable owing, and consulting fees of $7,410.
On August 14, 2014, the Company issued 148,500 shares to extend a certain loan for one year. The value of these shares has been included in prepaid expenses and will amortize to interest expense over the term of the extension period (1 year).
On August 14, 2014, the Company issued 888,000 shares valued at $17,760 based on the stock closing price on the date of the grant to its president. The issuance paid $8,883 of accounts payable owing, and consulting fees of $8,877.
On October 17, 2014, the Company issued 1,080,000 shares to extend a certain loan for one year. The value of these shares has been included in prepaid expenses and will amortize to interest expense over the term of the extension period (1 year).
On November 30, 2014, the Company issued 270,000 shares to extend a certain loan for one year. The value of these shares has been included in prepaid expenses and will amortize to interest expense over the term of the extension period (1 year).
On February 5, 2015, the Company issued 162,000 shares to extend a certain loan for one year. The value of these shares has been included in prepaid expenses and will amortize to interest expense over the term of the extension period (1 year).
On February 22, 2015, the Company issued 324,000 shares to extend a certain loan for one year. The value of these shares has been included in prepaid expenses and will amortize to interest expense over the term of the extension period (1 year).
FIRST AMERICAN SILVER CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
AUGUST 31, 2015 (UNAUDITED)
NOTE 6 - GOING CONCERN
The accompanying financial statements have been prepared assuming that First American Silver, Inc. will continue as a going concern. The Company has a working capital deficit, has not yet received revenue from sales of products or services, and has incurred losses from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Without realization of additional debt or capital, it would be unlikely for the Company to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.
The Company's activities to date have been supported by debt and equity financing. It has sustained losses in all previous reporting periods with an inception to date loss of approximately $1,665,000 as of August 31, 2015. Management continues to seek funding from its shareholders and other qualified investors.
NOTE 7 - SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations subsequent to August 31, 2015 to the date these financial statements were issued, and has determined that it does not
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We are an exploration stage company engaged in the acquisition, exploration and development of mineral properties.
The address of our principal executive office is located at 1 Nachal Maor, Suite 2, Ramat Bet Shemesh, Israel 99623. Our telephone number is +972 52 798 0831.
Our common stock is quoted on the OTC Bulletin Board under the symbol "FASV".
CORPORATE HISTORY
We were incorporated in the State of Nevada on April 29, 2008, under the name "Mayetok, Inc.". As Mayetok, Inc. we were engaged in the development of a website to market vacation properties in the Ukraine.
On June 8, 2010, we initiated a one (1) old for 35 new forward stock split of our issued and outstanding common stock. As a result, our authorized capital increased from 100,000,000 to 3,500,000,000 shares of common stock and the issued and outstanding increased from 2,200,000 shares of common stock to 77,000,000 shares of common stock, all with a par value of $0.001.
Also on June 8, 2010, we changed our name from "Mayetok, Inc." to "First American Silver Corp.", by way of a merger with our wholly owned subsidiary First American Silver Corp., which was formed solely for the change of name. We changed the name of our company to reflect the new direction of our company in the business of acquiring, exploring and developing mineral properties. As of June 2010, we had abandoned our former business plan of seeking to market vacation properties.
Our name change and forward stock split became effective with the Over-the-Counter Bulletin Board at the opening of trading on June 16, 2010, on which date we adopted the new stock symbol "FASV".
OUR CURRENT BUSINESS
On September 22, 2011, we entered into a License and Assignment Agreement dated and effective as of September 16, 2011 with our then president and director, Thomas J. Menning. Mr. Menning is the successor in interest of the rights of Universal Gas, Inc. and Universal Exploration, Ltd. (together "Universal") pursuant to an agreement among Universal, Bullion Monarch Company, Polar Resources Co., Camsell River Investments, Ltd., Lameert Management Ltd., and Etel Holdings Ltd. dated May 10, 1979 (the "1979 Agreement"). Pursuant to the License Agreement, we acquired the rights and obligations of Universal established by the 1979 Agreement and pertaining to 256-square-miles of the Carlin Gold Trend in Elko County, Nevada.
Under the terms of the 1979 Agreement and the License Agreement, we are deemed the successor of a specific Right to Participate on a 50 percent basis with ongoing and future projects operated, controlled and/or conveyed by Newmont Mining and Barrick Gold Corporation within the area of interest.
Under the terms of the License Agreement, we are required to finance the cost of pursuing the rights established in the 1979 Agreement. The distribution of any proceeds will be as follows: After First American has been reimbursed for any and all out-of-pocket expenses, it will share proceeds on an 80/20 percent basis with Mr. Menning. The term of the licensing agreement will be for 10 years with an option to renew for an additional 10 years.
Under the terms of the agreement, a notification of assignment to the operator is required. Both Newmont Mining and Barrick Gold Corp. have been notified.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 31, 2015 AND 2014
We have not earned any revenues from inception through the period ending August 31, 2015.
Three Months Three Months
Ended Ended
August 31, August 31,
2015 2014
---------- ----------
Revenues $ Nil $ Nil
Operating Expenses $ 23,134 $ 58,255
Operating Loss $ (23,134) $ (58,255)
Other Income (Expense) $ (10,892) $ 61,796
Net Income (Loss) $ (34,026) $ 3,541
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We earned net loss in the amount of $34,026 for the three months ended August 31, 2015 compared to a net income of $3,541for the three months ended August 31, 2014 which represents an increase of $37,567. Included in other expense is interest expense. Our operating expenses incurred for the three months ended August 31, 2015 included $22,500 for consulting fees and $634 of transfer agent and filing fees. . Our operating expenses incurred for the three months ended August 31, 2014 included $1,500 accounting and legal fees $53,786 for consulting fees and $1,450 of transfer agent and filing fees $1,519 in general and administrative.
Other income and expenses for the three months ended August 31, 2105 consisted of $10,892 in interest expense compared to $12,894 for the three months ended August 31, 2014. We had gain of 74,690 on the sale of rights for the three months ended August 31, 2014 compared to $0 fir the three months ended August 31, 2015.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED AUGUST 31, 2015 AND 2014
We have not earned any revenues from inception through the period ending August 31, 2015.
Nine Months Nine Months
Ended Ended
August 31, August 31,
2015 2014
---------- ----------
Revenues $ Nil $ Nil
Operating Expenses $ 79,284 $ 92,039
Operating Loss $ (79,284) $ (92,039)
Other Income (Expense) $ (38,495) $ 32,814
Net Income (Loss) $ (117,779) $ (59,225)
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We earned incurred a loss in the amount of $117,779 for the nine months ended August 31, 2015 compared to a net loss of $59,225 for the nine months ended August 31, 2014 which represents an increase of $58,554. Included in other expense is interest expense. Our operating expenses incurred for the nine months ended August 31, 2015 included $70,258 for consulting fees, $1,750 in professional fees and $7,276 of transfer agent and filing fees. Our operating expenses incurred for the nine months ended August 31, 2014 included $81,286 for consulting fees, $1,500 in professional fees and $5,700 of transfer agent and filing fees and $3,553 in general and administrative expenses.
Other income and expenses for the nine months ended August 31, 2105 consisted of $38,495 in interest expense compared to $40,209 for the nine months ended August 31, 2014. We had gain of 74,690 on the sale of and impairment expense of $1,677 for the nine months ended August 31, 2014 compared to $0 and $0 for the nine months ended August 31, 2015.
LIQUIDITY AND FINANCIAL CONDITION
WORKING CAPITAL
At At Percentage
August 31, November 30, Increase/
2015 2014 Decrease
--------- --------- --------
Current Assets $ 5,409 $ 22,128 (76)%
Current Liabilities $ 428,069 $ 336,729 27%
Working Capital (Deficiency) $(422,660) $(314,601) 34%
CASH FLOWS
Nine Months Nine Months
Ended Ended
August 31, August 31,
2015 2014
---------- ----------
Net cash from (used in) operations $ (24,972) $ (16,441)
Net cash (used in) investing activities $ - $ -
Net cash provided by financing activities $ 24,972 $ 16,361
Increase (Decrease) In Cash During The Period $ 0 $ (80)
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We had cash in the amount of $[0] as of August 31, 2015 as compared to $0 as of November 30, 2015. We had working capital deficiency of $422,660 as of August 31, 2015 compared to a working capital deficiency of $314,601 as of November 30, 2014.
Our cash used in operating activities was $24,972 for the nine months ended August 31, 2015 compared to $16,441 for the same period in 2014.
Our cash from investing activities was $0 for the nine months ended August 31, 2015 and 2014.
Our cash provided by financing activities was $24,972 for the nine months ended August 31, 2015 compared to $16,361 for the same period in 2014.
We have not attained profitable operations and are dependent upon obtaining financing to pursue our business plan over the next twelve months. If we do not generate revenue sufficient to sustain operations, we may not be able to continue as a going concern. We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed, but there can be no assurance that we will be able to raise any further financing.
GOING CONCERN
We have suffered recurring losses from operations and are dependent on our ability to raise capital from stockholders or other sources to meet our obligations and repay our liabilities arising from normal business operations when they become due. In their report on our audited financial statements for the year ended November 30, 2014, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosure describing the circumstances that lead to this disclosure by our independent auditors.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
EXPLORATION STAGE COMPANY
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to accounting and reporting by exploration-stage companies. An exploration-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.
BASIS OF PRESENTATION
Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.
ACCOUNTING BASIS
We use the accrual basis of accounting and accounting principles generally accepted in the United States of America ("GAAP" accounting). We adopted a November 30 fiscal year end.
RISKS AND UNCERTAINTIES
The Company's operations are subject to significant risk and uncertainties including financial, operational, technological, and regulatory risks including the potential risk of business failure.
CASH AND CASH EQUIVALENTS
We consider all highly liquid investments with maturities of three months or less to be cash equivalents. At August 31, 2015 and November 30, 2014, respectively, we had $0 and $0 of unrestricted cash to be used for future business operations. Our bank accounts are deposited in insured institutions. The funds are insured up to $250,000. At times, our bank deposits may exceed the insured amount. Management believes it has little risk related to the excess deposits.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Our financial instruments consist of cash, prepaid expenses, accounts payable, accrued professional fees, and amount due to a related party. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
CONCENTRATIONS OF CREDIT RISK
Our company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. Our company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. Our company believes it is not exposed to any significant credit risk on cash and cash equivalents.
STOCK-BASED COMPENSATION
We account for employee stock-based compensation in accordance with the guidance of ASC Topic 718, COMPENSATION - STOCK COMPENSATION, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. There has been no stock-based compensation issued to employees, although our chief executive officer is entitled to receive 600,000 shares of common stock on annual basis.
We follow ASC Topic 505-50, formerly EITF 96-18, "ACCOUNTING FOR EQUITY INSTRUMENTS THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN CONJUNCTION WITH SELLING GOODS AND SERVICES," for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.
INCOME TAXES
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is our company's policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of August 31, 2015, there have been no interest or penalties incurred on income taxes.
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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
REVENUE RECOGNITION
We have yet to realize revenues from operations. Once our company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.
BASIC INCOME (LOSS) PER SHARE
Basic income (loss) per share is calculated by dividing the Company's net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company's net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.
On June 8, 2010, we affected a 35:1 forward stock split of its common shares. All share and per share data have been adjusted to reflect such stock split.
DIVIDENDS
We have not adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown.
MINERAL PROPERTIES
Costs of exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. Mineral property acquisition costs are capitalized including licenses and lease payments. Although we have taken steps to verify title to mineral properties in which it has an interest, 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.
Mineral properties are analyzed for impairment on an annual basis, or more often if warranted by circumstances. Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present.
RECENT ACCOUNTING PRONOUNCEMENTS
Our company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flows.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a "smaller reporting company", we are not required to provide the information required by this Item.
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 the information disclosed in the reports we file with the Securities and Exchange Commission under the Exchange Act 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 president (our principal executive officer and our principal financial and accounting officer), as appropriate, to allow timely decisions regarding required disclosure.
Management, including our president (our principal executive officer and our principal financial and accounting officer), evaluated the effectiveness of our disclosure controls and procedures, as of August 31, 2015, in accordance with Rules 13a-15(b) and 15d-15(b) of the Securities and Exchange Act of 1934, as amended are effective to ensure the information required to be disclosed by us in the reports that we file or submit under the Securities and Exchange Act of 1934, as amended is recorded, processed, summarized and reported within the time period specified in SEC rules and forms.
Our management, including our president (our principal executive officer and our principal financial and accounting officer), do not expect that our disclosure controls, and procedures or internal controls will prevent all possible error and fraud. Our disclosure controls and procedures are, however, designed to provide reasonable assurance of achieving their objectives, and our president (our principal executive officer and our principal financial and accounting officer) have concluded that our financial controls and procedures are effective at that reasonable assurance level.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States. Our management assessed the effectiveness of our internal control over financial reporting as of August 31, 2015. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in INTERNAL CONTROL-INTEGRATED FRAMEWORK. Our management has concluded that, as of August 31, 2015, our internal control over financial reporting was effective in providing reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US generally accepted accounting principles. Our management reviewed the results of their assessment with our Board of Directors.
This quarterly report does not include an attestation report of our company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit our company to provide only management's report in this quarterly report.
INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS
Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process, which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.
Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal controls over financial reporting that occurred during the quarterly period covered by this report 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, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
On June 28, 2015, we issued a promissory note to a non-US investor in exchange for a loan of $7,500 bearing interest at eight (8) percent and payable in full, including accrued, but unpaid, interest on April 16, 2016.
ITEM 6. EXHIBITS
(b) Exhibits
Exhibit
Number Description
------ -----------
(3)(I) ARTICLES OF INCORPORATION; (II) BY-LAWS
3.1 Articles of Incorporation (incorporated by reference to our
Registration Statement filed on Form S-1 on February 25, 2009).
3.2 By-laws (incorporated by reference to our Registration Statement filed
on Form S-1 on February 25, 2009)
3.3 Certificate of Amendment (incorporated by reference to our Registration
Statement filed on Form S-1 on February 25, 2009).
3.4 Articles of Merger (incorporated by reference to our Current Report
filed on Form 8-K on July 15, 2010).
3.5 Certificate of Change (incorporated by reference to our Current Report
filed on Form 8-K on July 15, 2010).
(10) MATERIAL CONTRACTS
10.1 Mining Lease and Option to Purchase Agreement between our company,
Pyramid Lake LLC and Anthony A. Longo dated April 15, 2011
(incorporated by reference to our Current Report filed on Form 8-K on
May 17, 2011).
10.2 Assignment and License Agreement between Thomas J. Menning and our
company dated September 16, 2011(incorporated by reference to our
Current Report filed on Form 8-K on October 14, 2011).
10.3 Employment Agreement with Mark Radom, CEO, dated December 3, 2014
(incorporated by reference to our Current Report filed on Form 8-K on
December 5, 2014.
10.4* Foxglove promissory note dated June 28, 2015.
(31) RULE 13A-14(A) / 15D-14(A) CERTIFICATIONS
31.1* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of the Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer.
(32) SECTION 1350 CERTIFICATIONS
32.1* Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
of the Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer.
101 INTERACTIVE DATA FILE
101** Interactive Data File (Form 10-K for the year ended November 30, 2011
furnished in XBRL).
101.PRE XBRL Instance Document
101.INS XBRL Taxonomy Extension Schema Document
101.SCH XBRL Taxonomy Extension Calculation Linkbase Document
101.CAL XBRL Taxonomy Extension Definition Linkbase Document
101.DEF XBRL Taxonomy Extension Label Linkbase Document
101.LAB XBRL Taxonomy Extension Presentation Linkbase Document
----------
|
* Filed herewith.
** Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the
Interactive Data Files on Exhibit 101 hereto are deemed not filed or part
of any registration statement or prospectus for purposes of Sections 11 or
12 of the Securities Act of 1933, are deemed not filed for purposes of
Section 18 of the Securities and Exchange Act of 1934, and otherwise are
not subject to liability under those sections.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FIRST AMERICAN SILVER CORP.
(Registrant)
Dated: October 14, 2015 /s/ Mark Radom
-------------------------------------
Mark Radom
President, Chief Executive Officer,
Secretary, Treasurer and Director
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Dated: October 14, 2015 /s/ Mark Radom
-------------------------------------
Mark Radom
President, Chief Executive Officer,
Secretary, Treasurer and Director
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
|
EXHIBIT 10.4
PROMISSORY NOTE AGREEMENT
Loan Amount: $7,500 United States Dollars Due: April 16, 2016
For value received, the undersigned promises to pay to Foxglove Trading Inc. ("Holder"), the sum of Seven Thousand Five Hundred United States Dollars (USD$7,500), with interest on so much of the Principal Sum as shall from time to time remain unpaid, at a rate which is eight percent (8%) percent per annum calculated annually after the Principal Sum is advanced to the undersigned, payment to be made by money wire payable to and delivered to Foxglove Trading Inc., Suite 13 Oliaji Trade Centre, Francis Rachel Street, Victoria, Seychelles (the "Principal Amount and interest herein collectively referred to from time to time as the "Secured Moneys").
The whole of the Secured Moneys shall be paid to the Holder on or before April 16, 2016.
The undersigned herein waives presentment, demand, notice or dishonor and protest or further notice of any kind and agrees that it shall remain liable in respect of this Note as if presentment, demand, notice of dishonor and protest had been duly made or given.
Dated this 28th day of June 2015.
/s/ Mark Radom ------------------------------------- For First American Silver Corp. 1 Nachal Maor, Suite 2 Ramat Bet Shemesh Israel 99623 |
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. SS 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Mark Radom, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of First American Silver Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Dated: October 14, 2015 /s/ Mark Radom ---------------------------------------------- Mark Radom President, Chief Executive Officer, Secretary, Treasurer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Mark Radom, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Quarterly Report on Form 10-Q of First American Silver Corp. for the period ended August 31, 2015 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of First American Silver Corp.
Dated: October 14, 2015 /s/ Mark Radom ---------------------------------------------- Mark Radom President, Chief Executive Officer, Secretary, Treasurer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to First American Silver Corp. and will be retained by First American Silver Corp. and furnished to the Securities and Exchange Commission or its staff upon request.