Attached files
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, 2011
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________ to _____________
Commission File Number 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.)
10597 Double R Blvd. Ste. 2, Reno, NV, USA 89521
(Address of principal executive offices) (Zip Code)
(775) 323-3278
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
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 submit and 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 [X] NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. [ ] YES [ ] NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. 55,575,000 common shares issued
and outstanding as of October 17, 2011.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements................................................. 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................18
Item 3. Quantitative and Qualitative Disclosures About Market Risk...........24
Item 4. Controls and Procedures..............................................24
PART II - OTHER INFORMATION
Item 1. Legal Proceedings....................................................25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds...........25
Item 3. Defaults Upon Senior Securities......................................25
Item 5. Other Information....................................................25
Item 6. Exhibits.............................................................25
SIGNATURES....................................................................27
2
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, 2011 are not necessarily
indicative of the results that can be expected for the full year.
3
FIRST AMERICAN SILVER CORP.
(formerly MAYETOK, INC.)
(AN EXPLORATION STAGE COMPANY)
TABLE OF CONTENTS
AUGUST 31, 2011
Balance Sheets as of August 31, 2011 and November 30, 2010 (unaudited)........ 5
Statements of Operations for the three and nine months ended August 31, 2011
and 2010 and the period from April 29, 2008 (inception) to August 31, 2011
(unaudited)................................................................... 6
Statement of Stockholders' Equity as of August 31, 2011 (unaudited)........... 7
Statements of Cash Flows for the nine months ended August 31, 2011 and 2010
and the period from April 29, 2008 (inception) to August 31, 2011 (unaudited). 8
Notes to the Financial Statements............................................. 9
4
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEETS (unaudited)
AS OF AUGUST 31, 2011 AND NOVEMBER 30, 2010
August 31, November 30,
2011 2010
---------- ----------
ASSETS
CURRENT ASSETS
Cash and bank accounts $ 254,852 $ 238,205
Prepaid expenses 42,254 --
---------- ----------
TOTAL CURRENT ASSETS 297,106 238,205
Website development 5,000 --
Equipment and office improvements (net of depreciation) 4,666 --
Mineral properties 354,415 180,000
---------- ----------
TOTAL ASSETS $ 661,187 $ 418,205
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 3,250 $ 36,501
Accrued professional fees 1,500 5,600
Due to related party 1,850 1,850
---------- ----------
TOTAL LIABILITIES 6,600 43,951
---------- ----------
Stockholders' Equity
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,
55,575,000 shares issued and outstanding (2010: 78,300,000) 55,575 78,300
Additional paid-in capital 634,695 359,218
Common stock warrants 223,480 12,482
Deficit accumulated during the exploration stage (259,163) (75,746)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 654,587 374,254
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 661,187 $ 418,205
========== ==========
The accompanying notes are an integral part of these financial statements.
5
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS (unaudited)
FOR THE THREE AND NINE MONTHS ENDED AUGUST 31, 2011 AND 2010
AND THE PERIOD FROM APRIL 29, 2008 (INCEPTION) TO AUGUST 31, 2011
Three Months Three Months Nine Months Nine Months April 29, 2008
Ended Ended Ended Ended (Inception) To
August 31, August 31, August 31, August 31, August 31,
2011 2010 2011 2010 2011
------------ ------------ ------------ ------------ ------------
REVENUE $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES
Accounting and legal 11,646 875 34,677 7,047 83,323
Depreciation 1,231 -- 2,356 -- 2,356
Transfer agent and filing fees 1,857 -- 3,498 -- 8,673
Miscellaneous fees 13,905 1,052 21,762 3,152 52,300
Investor relations 2,425 -- 13,322 -- 13,322
Exploration costs 69,943 -- 73,999 -- 73,999
Consulting 10,750 -- 10,750 -- 10,750
Incorporation costs -- -- -- -- 1,387
Travel 13,706 -- 23,053 -- 23,053
------------ ------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES (125,463) (2,501) (183,417) (10,199) (259,163)
------------ ------------ ------------ ------------ ------------
LOSS BEFORE PROVISION FOR INCOME TAX (125,463) (2,501) (183,417) (10,199) (259,163)
PROVISION FOR INCOME TAX -- -- -- -- --
------------ ------------ ------------ ------------ ------------
NET LOSS $ (125,463) $ (2,501) $ (183,417) $ (10,199) $ (259,163)
============ ============ ============ ============ ============
LOSS PER SHARE: Basic and Diluted $ (.00) $ (.00) $ (.00) $ (.00)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: Basic and diluted 55,082,609 77,000,000 61,064,671 77,000,000
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
6
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (unaudited)
AS OF AUGUST 31, 2011
Deficit
Accumulated
Common Stock Additional Common During the Total
---------------------- Paid in Stock Exploration Stockholders'
Shares Amount Capital Warrants Stage Equity
------ ------ ------- -------- ----- ------
Inception, April 29, 2008 -- $ -- $ -- $ -- $ -- $ --
Shares issued to founder on
June 30, 2008 @ $0.00028
per share 52,500,000 52,500 (37,500) -- -- 15,000
Private placement on
April 30, 2008 @ $0.00143 per
share 24,500,000 24,500 10,500 -- -- 35,000
Net loss for the year -- -- -- -- (13,639) (13,639)
----------- --------- --------- -------- --------- ---------
Balance, November 30, 2008 77,000,000 77,000 (27,000) -- (13,639) 36,361
Net loss for the year -- -- -- -- (16,345) (16,345)
----------- --------- --------- -------- --------- ---------
Balance, November 30, 2009 77,000,000 77,000 (27,000) -- (29,984) 20,016
Private placement on October 29,
2010 @ $0.25 per share 1,000,000 1,000 236,518 12,482 -- 250,000
Common stock issued in relation
to acquisition of mineral properties 300,000 300 149,700 -- -- 150,000
Net loss for the year -- -- -- (45,762) (45,762)
----------- --------- --------- -------- --------- ---------
Balance, November 30, 2010 78,300,000 78,300 359,218 12,482 (75,746) 374,254
Cancellation of stock (23,850,000) (23,850) 23,850 -- -- --
Common stock issued in relation to
acquisition of mineral properties 100,000 100 102,900 -- -- 103,000
Common stock issued for cash 1,000,000 1,000 138,002 210,998 350,000
Common stock issued for services 25,000 25 10,725 -- -- 10,750
Net loss for the period -- -- -- -- (183,417) (183,417)
----------- --------- --------- -------- --------- ---------
Balance, August 31, 2011 55,575,000 $ 55,575 $ 634,695 $223,480 $(259,163) $ 654,587
=========== ========= ========= ======== ========= =========
The accompanying notes are an integral part of these financial statements.
7
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS (unaudited)
FOR THE NINE MONTHS ENDED AUGUST 31, 2011 AND 2010
AND THE PERIOD FROM APRIL 29, 2008 (INCEPTION) TO MAY 31, 2011
Nine Months Nine Months April 29, 2008
Ended Ended (Inception) To
August 31, August 31, August 31,
2011 2010 2011
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (183,417) $ (10,199) $ (259,163)
Adjustment for non-cash item:
Amortization 2,356 -- 2,356
Consulting fees paid in stock 10,750 -- 10,750
Adjustments to Reconcile Net Loss to Net Cash Used in
Operating Activities:
Changes in operating assets and liabilities:
(Increase) Decrease in prepaid expenses (42,254) -- (42,254)
Increase in accounts payable (33,251) 350 3,250
Increase in accrued professional fees (4,100) -- 1,500
Increase in due to related party -- -- 1,850
---------- ---------- ----------
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES (249,916) (9,849) (281,711)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in website development (5,000) -- (5,000)
Purchase of equipment and office improvements (7,022) -- (7,022)
Acquisition of mineral properties (71,415) -- (101,415)
---------- ---------- ----------
CASH FLOWS USED IN INVESTING ACTIVITIES (83,437) -- (113,437)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of common stock 350,000 -- 650,000
---------- ---------- ----------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 350,000 -- 650,000
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH 16,647 (9,849) 254,852
CASH, BEGINNING OF PERIOD 238,205 10,516 --
---------- ---------- ----------
CASH, END OF PERIOD $ 254,852 $ 667 $ 254,852
========== ========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes $ -- $ -- $ --
========== ========== ==========
Cash paid for interest $ -- $ -- $ --
========== ========== ==========
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued to acquire mineral properties $ 103,000 $ -- $ 253,000
========== ========== ==========
Common stock issued for consulting services $ 10,750 $ -- $ 10,750
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
8
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
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.
In October 2010, the Company entered into Property Option Agreements to acquire
100% interests in three mineral properties located in Nevada for prospecting,
exploration and production of gold, silver, and all other metals. Development
and exploration activities are currently being undertaken.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
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
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.
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, 2011 and November 30, 2010,
the Company had $79,564 and $238,205 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 professional fees, and amount due to 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.
9
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
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 FASB 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. There has been no
stock-based compensation issued to non-employees.
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, 2011, 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.
10
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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. Common share
equivalents totalling 1,000,000 at August 31, 2011, representing outstanding
warrants were not included in the computation of diluted earnings per share for
the year ended August 31, 2011, as their effect would have been anti-dilutive.
There were no such common stock equivalents outstanding as of August 31, 2011.
On June 8, 2010, the Company 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
The Company has 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 the Company has taken steps to
verify title to mineral properties in which it has an interest, 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.
Impairment losses are recorded on mineral properties used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount.
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.
11
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
NOTE 3 - MINERAL PROPERTIES
MOUNTAIN CITY PROPERTY
On October 29, 2010 the Company entered into a Property Option Agreement with
All American Resources. Pursuant to this agreement, the Company has the option
to acquire a 100% interest in the Elko Property making payments in aggregate of
$180,000, a $1,000,000 or $2,000,000 final balloon payment (see October 29, 2020
below), issuing 300,000 common shares and by paying all property maintenance
fees and obligations as they come due. The payments are to completing under the
following terms:
Date Cash Common Stock
---- ---- ------------
November 2, 2010 $ 10,000 100,000 Paid
October 29, 2012 $ -- 25,000
October 29, 2013 $ 10,000 25,000
October 29, 2014 $ 10,000 25,000
October 29, 2015 $ 10,000 25,000
October 29, 2016 $ 20,000 25,000
October 29, 2017 $ 30,000 25,000
October 29, 2018 $ 40,000 25,000
October 29, 2019 $ 50,000 25,000
October 29, 2020 $1,000,000 In case of $1,000,000 payment,
or the optionor shall retain a 2%
$2,000,000 NSR (Net Smelter Royalty). In
case of a $2,000,000, the
optionor shall retain a 1% NSR.
Eagan Canyon Property
On October 29, 2010 the Company entered into a Property Option Agreement with
All American Resources. Pursuant to this agreement, the Company has the option
to acquire a 100% interest in the White Pine Property #1 making payments in
aggregate of $180,000, a $1,000,000 or $2,000,000 final balloon payment (see
October 29, 2020 below), issuing 300,000 common shares and by paying all
property maintenance fees and obligations as they come due. The payments are to
completing under the following terms:
Date Cash Common Stock
---- ---- ------------
November 2, 2010 $ 10,000 100,000 Paid
October 29, 2012 $ -- 25,000
October 29, 2013 $ 10,000 25,000
October 29, 2014 $ 10,000 25,000
October 29, 2015 $ 10,000 25,000
October 29, 2016 $ 20,000 25,000
October 29, 2017 $ 30,000 25,000
October 29, 2018 $ 40,000 25,000
October 29, 2019 $ 50,000 25,000
October 29, 2020 $1,000,000 In case of $1,000,000 payment,
or the optionor shall retain a 2%
$2,000,000 NSR (Net Smelter Royalty). In
case of a $2,000,000, the
optionor shall retain a 1% NSR.
12
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
NOTE 3 - MINERAL PROPERTIES (CONTINUED)
Muncy Creek Property
On October 29, 2010 the Company entered into a Property Option Agreement with
All American Resources. Pursuant to this agreement, the Company has the option
to acquire a 100% interest in the White Pine Property #2 making payments in
aggregate of $180,000, a $1,000,000 or $2,000,000 final balloon payment (see
October 29, 2020 below), issuing 300,000 common shares and by paying all
property maintenance fees and obligations as they come due. The payments are to
completing under the following terms:
Date Cash Common Stock
---- ---- ------------
November 2, 2010 $ 10,000 100,000 Paid
October 29, 2012 $ -- 25,000
October 29, 2013 $ 10,000 25,000
October 29, 2014 $ 10,000 25,000
October 29, 2015 $ 10,000 25,000
October 29, 2016 $ 20,000 25,000
October 29, 2017 $ 30,000 25,000
October 29, 2018 $ 40,000 25,000
October 29, 2019 $ 50,000 25,000
October 29, 2020 $1,000,000 In case of $1,000,000 payment,
or the optionor shall retain a 2%
$2,000,000 NSR (Net Smelter Royalty). In
case of a $2,000,000, the
optionor shall retain a 1% NSR.
Esmeralda Property
On April 15, 2011 the Company entered into a Property Option Agreement with
Pyramid Lake LLC and Anthony A. Longo. Pursuant to this agreement, the Company
has the option to acquire a 100% interest in the Esmeralda Property by making
payments in aggregate of $505,000 and issuing 100,000 common shares and by
paying all property maintenance fees and obligations as they come due. The
payments are to completing under the following terms:
Date Cash Common Stock
---- ---- ------------
April 15, 2011 $ 15,000 100,000 Paid
April 15, 2012 $ 40,000 --
April 15, 2013 $ 50,000 --
April 15, 2014 $ 60,000 --
April 15, 2015 $ 70,000 --
April 15, 2016 $ 80,000 --
April 15, 2017 $ 90,000 --
April 15, 2018 $ 100,000 --
NOTE 4 - RELATED PARTY TRANSACTION
As of August 31, 2011, there is a balance owing to a former director of the
Company in the amount of $1,850. The amount is unsecured, non-interest bearing
and has no specific terms of repayment.
13
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
NOTE 5 - COMMON STOCK WARRANTS
On October 29, 2010, the Company issued 1,000,000 common stock warrants in
connection with a private placement to an unrelated third party. The Company has
accounted for these warrants as equity instruments in accordance with EITF 00-19
(ASC 815-40), Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Company's Own Stock, and as such, will be classified
in stockholders' equity as they meet the definition of "...indexed to the
issuer's stock" in EITF 01-06 (ASC 815-40) The Meaning of Indexed to a Company's
Own Stock. The Company has estimated the fair value of the warrants issued in
connection with the private placements at $12,482 as of the grant date using the
Black-Scholes option pricing model.
Key assumptions used by the Company in the Black-Scholes pricing model are
summarized as follows:
PPM Warrants
------------
Stock price $ .25 - .35
Exercise price .50 - .65
Expected volatility 42 - 147%
Expected dividend yield 0.00%
Risk-free rate over the estimated
expected term of the warrants .34 - 37%
Expected term (in years) 2
NOTE 6 - STOCKHOLDERS' EQUITY
The company has 3,500,000,000 common shares authorized at a par value of $0.001
per share.
The company has 20,000,000 preferred shares authorized at a par value of $0.001
per share.
During the period ended November 30, 2008, the Company issued 77,000,000 common
shares for total proceeds of $50,000.
On June 8, 2010, the Company 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.
On October 29, 2010, the Company completed a private placement whereby it issued
1,000,000 units at $0.25 each for gross proceeds of $250,000 to an unrelated
third party. Each unit consists of one common share and one share purchase
warrant exercisable at a price of $0.50 expiring on October 29, 2012.
On November 26, 2010, the Company issued 300,000 common shares as part of the
acquisition of interests in three mineral properties. These shares were valued
at a fair market value of $.50 per share on the date of issuance for total
proceeds of $150,000.
14
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
NOTE 6 - STOCKHOLDERS' EQUITY (continued)
On December 20, 2010, 23,850,000 common shares were cancelled.
As at February 28, 2011, the Company has 1,000,000 warrants outstanding which
are exercisable at $0.50 per warrant and expire on October 29, 2012.
On April 15, 2011, the Company issued 100,000 common shares as part of the
acquisition of interests in three mineral properties. These shares were valued
at a fair market value of $1.03 per share on the date of issuance for total
proceeds of $103,000.
On July 1, 2011, the Company issued 25,000 common shares for consulting
services. These shares were valued at $10,750 which represents the fair market
value on the date the agreement was signed.
On July 13, 2011, the Company completed a private placement whereby it issued
1,000,000 units at $0.35 each for gross proceeds of $350,000 to an unrelated
third party. Each unit consists of one common share and one share purchase
warrant exercisable at a price of $0.65 expiring on July 13, 2013.
NOTE 7 - INCOME TAXES
For the periods ended August 31, 2011 and 2010, the Company has incurred net
losses and, therefore, has no tax liability. The net deferred tax asset
generated by the loss carry-forward has been fully reserved. The cumulative net
operating loss carry-forward is $248,413 at August 31, 2011, and will begin to
expire in the year 2030.
The provision for Federal income tax consists of the following:
August 31, 2011 August 31, 2010
--------------- ---------------
Federal income tax attributable to:
Current operations $ 39,002 $ 3,467
Less: valuation allowance (39,002) (3,467)
--------- ---------
Net provision for Federal income taxes $ -- $ --
========= =========
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows:
August 31, 2011 November 30, 2010
--------------- -----------------
Deferred tax asset attributable to:
Net operating loss carryover $ 84,460 $ 25,754
Less: valuation allowance (84,460) (25,754)
--------- ---------
Net deferred tax asset $ -- $ --
========= =========
15
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2011
NOTE 7 - INCOME TAXES (continued)
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry forwards for federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur net operating
loss carry forwards may be limited as to use in future years.
NOTE 8 - COMMITMENTS AND CONTINGINCIES
On November 26, 2010 we entered into three agreements with All American
Resources LLC in regards to the acquisition of certain property interests. The
interests that we have acquired are as follows:
* An option to acquire a 100% interest in a mineral exploration property
called the "Eagan Canyon" property in White Pine County, Nevada;
* An option to acquire a 100% interest in a mineral exploration property
called the "Muncy Creek" property in White Pine County, Nevada; and
* An option to acquire a 100% interest in a mineral exploration property
called the "Mountain City" property in Elko County, Nevada.
In regard to the above option agreements for the properties, our obligations for
each property consist of:
Making payments in the aggregate amount of $180,000 in annual periodic payments
ranging from $10,000 to $50,000, to the ninth anniversary of the option
agreement.
Make certain restricted common stock share issuances to All American Resources
LLC under the terms of the option agreements, periodically to the ninth
anniversary of the agreement (300,000 shares in regards to each property, with
100,000 shares in the first year and 25,000 shares each year thereafter).
On or before the tenth anniversary of the option agreement, in addition to the
payments described above, paying to All American Resources $1,000,000, in which
case All American Resources shall retain a two percent (2%) mineral production
royalty (the "Royalty") or, paying to All American Resources $2,000,000, in
which case All American Resources shall retain a one percent (1%) royalty.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
16
FIRST AMERICAN SILVER CORP.
(formerly Mayetok, Inc.)
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2011
NOTE 9 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. The Company has no established source
of revenue. This raises substantial doubt about the Company's ability to
continue as a going concern. Without realization of additional 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 equity financing. It has
sustained losses in all previous reporting periods with an inception to date
loss of $248,413 as of August 31, 2011. Management continues to seek funding
from its shareholders and other qualified investors.
NOTE 10- SUBSEQUENT EVENTS
Management has analyzed its operations through the date on which the financial
statements were issued, October 14, 2011, and has determined it does not have
any material subsequent events to disclose.
17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) and
are prepared in accordance with United States Generally Accepted Accounting
Principles. The following discussion should be read in conjunction with our
financial statements and the related notes that appear elsewhere in this
quarterly report. The following discussion contains forward-looking statements
that reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed below and elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are
expressed in United States dollars. All references to "US$" refer to United
States dollars and all references to "common stock" refer to the common shares
in our capital stock.
As used in this quarterly report, the terms "we", "us", "our" and "our company"
mean First American Silver Corp., unless otherwise indicated.
OVERVIEW
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 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. On December
20, 2010, we cancelled 23,850,000 common shares held by a former director and
officer of our company.
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 abandoned our former business plan of seeking to market vacation
properties. Our name change and forward stock split was effective with the
Over-the-Counter Bulletin Board at the opening of trading on June 16, 2010, on
which date we adopted the stock symbol "FASV".
OUR CURRENT BUSINESS
On November 26, 2010 we entered into three option agreements with All American
Resources LLC for the acquisition of certain mineral property interests located
Elko County and White Pine County, Nevada. The interests that we acquired are as
follows:
18
* An option to acquire a 100% interest in a mineral exploration property
called the "Eagan Canyon" property in White Pine County, Nevada;
* An option to acquire a 100% interest in a mineral exploration property
called the "Muncy Creek" property in White Pine County, Nevada; and
* An option to acquire a 100% interest in a mineral exploration property
called the "Mountain City" property in Elko County, Nevada.
Pursuant to the above described option agreements, we may, at our option,
purchase any of the applicable properties by providing to All American Resources
LLC the following compensation in respect of each applicable property over the
nine year option term:
* making annual periodic payments in the aggregate amount of $180,000
ranging from $10,000 to $50,000;
* issuing to All American Resources 300,000 common shares in our capital
stock in the aggregate, with 100,000 shares issuable before the 1st
anniversary of the option agreement and 25,000 shares issuable each
year thereafter until the ninth anniversary of the option agreement;
and
* on or before the tenth anniversary of the option agreement either (i)
paying to All American Resources $1,000,000, in which case All
American Resources shall retain a 2% mineral production royalty; or
(ii) paying to All American Resources $2,000,000, in which case All
American Resources shall retain a 1% mineral production royalty.
To date, we have issued 300,000 shares of our common stock and paid $30,000 in
the aggregate to All American Resources LLC pursuant to the three mineral
property option agreements.
On April 15, 2011, we entered into a mining lease and option to purchase
agreement with Pyramid Lake LLC and Anthony A. Longo for an option to acquire
certain unpatented mining claims in Esmeralda County, Nevada.
In order for us to exercise the option and acquire the Esmeralda County
property, we are required to make the following payments to the owners:
Date Payment Amount
---- --------------
April 15, 2011 $ 30,000
April 15, 2012 $ 40,000
April 15, 2013 $ 50,000
April 15, 2014 $ 60,000
April 15, 2015 $ 70,000
April 15, 2016 $ 80,000
April 15, 2017 $ 90,000
April 15, 2018 $100,000
April 15, 2019 - April 15, 2031 *$100,000
----------
* Commencing April 15, 2019, the amount of the payments will be increased
(and never decreased) for inflation.
In addition to the payments described above and pursuant to the terms of the
option agreement, we issued an aggregate of 100,000 restricted shares of our
common stock to the owners. Furthermore, the owners will retain a production
royalty of 3% of the net smelter returns.
As a result our entry into the above noted option agreements, we became a
mineral exploration company and presently endeavor to plan and implement an
exploration program for the properties commencing in 2012. Currently, however,
we maintain nominal operations and are seeking additional sources of financing
or collaborators to further the development of our business plan.
If we are unable to secure additional financing, we will be unable to develop or
implement our new business plan, including our prospective exploration plan, and
our business may fail.
19
We are a development stage company that has not generated any revenue and has
had limited operations to date. From April 29, 2008 (inception) to August 31,
2011, we have incurred accumulated net losses of $248,413. As of August 31,
2011, we had total assets of $661,187 and total liabilities of $6,600.
Results of Operations for the Three and Nine Months Ended August 31, 2011 and
2010 and the period from Inception (April 29, 2008) to August 31, 2011
We have not earned any revenues from inception through the period ending August
31, 2011.
Three Months Three Months Nine Months Nine Months April 29, 2008
Ended Ended Ended Ended (Inception) to
August 31, August 31, August 31, August 31, August 31,
2011 2010 2011 2010 2011
---------- ---------- ---------- ---------- ----------
Revenues $ Nil $ Nil $ Nil $ Nil $ Nil
Expenses $ 114,713 $ (2,501) $ 172,667 $ (10,199) $ 248,413
Net Loss $ (114,713) $ (2,501) $ (172,667) $ (10,199) $ (248,413)
We incurred a net loss in the amount of $ 114,713 for the three months ended
August 31, 2011 compared to $2,501 for the three months ended August 31, 2010.
We incurred a net loss of $248,413 for the period from our inception on April
29, 2008 to August 31, 2011.
We incurred a net loss in the amount of $ 172,667 for the nine months ended
August 31, 2011 compared to $10,199 for the nine months ended August 31, 2010.
Three Months Three Months Nine Months Nine Months April 29, 2008
Ended Ended Ended Ended (Inception) to
August 31, August 31, August 31, August 31, August 31,
2011 2010 2011 2010 2011
---------- ---------- ---------- ---------- ----------
Accounting and legal $ 11,646 $ 875 $ 34,667 $ 7,047 $ 83,323
Depreciation $ 1,231 $ Nil $ 2,356 $ Nil $ 2,356
Transfer agent and
filing fees $ 1,856 $ Nil $ 3,498 $ Nil $ 8,673
Miscellaneous fees $ 13,906 $ 1,052 $ 21,762 $ 3,152 $ 52,300
Investor relations $ 2,425 $ Nil $ 13,322 $ Nil $ 13,322
Explorations costs $ 69,943 $ Nil $ 73,999 $ Nil $ 73,999
Consulting $ 10,750 $ Nil $ 10,750 $ Nil $ 10,750
Incorporation costs $ Nil $ Nil $ Nil $ Nil $ 1,387
General and
administrative $ 13,706 $ Nil $ 23,053 $ Nil $ 23,053
Our operating expenses incurred for the three months ended August 31, 2011
included $11,646 for accounting and legal fees, $1,231 for depreciation, $1,856
for transfer agent and filing fees, $13,906 for miscellaneous fees, $2,425 for
investor relations expenses, $69,943 for exploration costs, $10,750 for
consulting and $13,706 for general and administrative expenses compared to the
three months ended August 31, 2010 of $875 for accounting and legal fees and
$1,052 for miscellaneous expenses. Our operating expenses incurred for the
period from our inception on April 29, 2008 to August 31, 2011 included $83,323
for accounting and legal fees, $2,356 for deprecation, $8,673 for transfer agent
and filing fees, $52,300 for miscellaneous fees, $13.322 for investor relations
expenses, $73,999 for exploration costs, $1,387 for incorporation costs and
$23,053 for general and administrative expenses.
Our operating expenses incurred for the nine months ended August 31, 2011
included $34,667 for accounting and legal fees, $2,356 in depreciation, $3,498
for transfer agent and filing fees, $21,762 for miscellaneous fees, $13,322 for
investor relations expenses, $73,999 for exploration costs, $10,750 for
consulting and $23,053 for general and administrative expenses compared to the
nine months ended August 31, 2010 of $7,047 for accounting and legal fees and
20
$3,152 for miscellaneous expenses. We anticipate our operating expenses will
increase as we undertake our plan of operations.
Liquidity and Capital Resources
Working Capital
At August 31, November 30,
2011 2010
---------- ----------
Current Assets $ 297,106 $ 238,205
Current Liabilities $ 6,600 $ 43,951
Working Capital $ 290,506 $ 194,254
Cash Flows
Nine Months Nine Months April 29, 2008
Ended Ended (Inception) to
August 31, August 31, August 31,
2011 2010 2011
---------- ---------- ----------
Net Cash Provided by (Used in)
Operating Activities $ (249,916) $ (9,849) $ (281,711)
Net Cash Provided by (Used In)
Investing Activities $ (83,437) $ Nil $ (113,437)
Net Cash Provided by
Financing Activities $ 350,000 $ Nil $ 650,000
Net Increase (Decrease) In
Cash During The Period $ 16,647 $ (9,849) $ 254,852
As of August 31, 2011, we had current assets in the amount of $297,106,
consisting of cash and prepaid expenses. Our current liabilities as of August
31, 2011 were $6,600. We had a working capital deficit of $290,506 on August 31,
2011.
Our cash used in operating activities was $249,916 for the nine months ended
August 31, 2011 compared to $9,849 for the same period in 2010 and $281,711 for
the period from inception on April 29, 2008 to August 31, 2011.
Our cash used in investing activities was $83,437 for the nine months ended
August 31, 2011 compared to $Nil for the same period in 2010 and $113,437 for
the period from inception on April 29, 2008 to August 31, 2011.
Our cash provided by financing activities was $350,000 for the nine months ended
August 31, 2011 compared to $Nil for the same period in 2010 and $650,000 for
the period from inception on April 29, 2008 to August 31, 2011.
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.
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.
Going Concern
The accompanying financial statements have been prepared assuming that our
company will continue as a going concern. As discussed in the notes to the
financial statements, we have no established source of revenue. Our auditors
have expressed substantial doubt about our ability to continue as a going
concern. Without realization of additional capital, it would be unlikely for us
to continue as a going concern. The financial statements do not include any
adjustments that might result from this uncertainty.
21
Our activities to date have been supported by equity financing. We have
sustained losses in all previous reporting periods with an inception to date
loss of $259,163 as of August 31, 2011. Management continues to seek funding
from our shareholders and other qualified investors to pursue our business plan.
In the alternative, we may be amenable to a sale, merger or other acquisition in
the event such transaction is deemed by management to be in the best interests
of the shareholders.
Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their most
"critical accounting polices" in the Management Discussion and Analysis. The SEC
indicated that a "critical accounting policy" is one which is both important to
the portrayal of a company's financial condition and results, and requires
management's most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain. We believe that the following accounting policies fit this
definition.
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
The financial statements of our 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
Our company uses the accrual basis of accounting and accounting principles
generally accepted in the United States of America ("GAAP" accounting). Our
company has adopted a November 30 fiscal year end.
CASH AND CASH EQUIVALENTS
Our company considers all highly liquid investments with maturities of three
months or less to be cash equivalents. At August 31, 2011 and November 30, 2010,
our company had $254,852 and $238,205 of unrestricted cash to be used for future
business operations.
Our company's bank accounts are deposited in insured institutions. The funds are
insured up to $250,000. At times, our 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
Our company's financial instruments consist of cash, prepaid expenses, accounts
payable, accrued professional fees, and amount due to 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.
22
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.
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, 2011, 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.
BASIC INCOME (LOSS) PER SHARE
Basic income (loss) per share is calculated by dividing our 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
our 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. Common share
equivalents totalling 1,000,000 at August 31, 2011, representing outstanding
warrants were not included in the computation of diluted earnings per share for
the year ended August 31, 2011, as their effect would have been anti-dilutive.
There were no such common stock equivalents outstanding as of August 31, 2011.
On June 8, 2010, our company 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
Our company has 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 our company has 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.
23
Impairment losses are recorded on mineral properties used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount.
RECENT ACCOUNTING PRONOUNCEMENTS
Our company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on our company's 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 carried out an evaluation, under the supervision and with the participation
of our management, including our president and chief financial officer (our
principal executive officer, principal financial officer and principal
accounting officer), of the effectiveness of our disclosure controls and
procedures. Based upon that evaluation, our president and chief financial
officer (our principal executive officer, principal financial officer and
principal accounting officer) concluded that, as of the end of the period
covered in this report, our disclosure controls and procedures were not
effective at ensuring that information required to be disclosed in reports filed
under the Securities and Exchange Act of 1934 is recorded, processed, summarized
and reported within the required time periods and is accumulated and
communicated to our management, including our president and chief financial
officer (our principal executive officer, principal financial officer and
principal accounting officer), as appropriate to allow timely decisions
regarding required disclosure. This determination was a result of our external
auditor needing to post adjustments to our financial statements.
Our management, including our president and chief financial officer (our
principal executive officer, principal financial officer and principal
accounting officer), does not expect that our disclosure controls and procedures
or our internal controls will prevent all error or fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints and the benefits of controls must be considered relative to their
costs. Due to the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues and instances of
fraud, if any, have been detected. We performed additional analysis and other
post-closing procedures in an effort to ensure our consolidated financial
statements included in this quarterly report have been prepared in accordance
with generally accepted accounting principles. Accordingly, management believes
that the financial statements included in this report fairly present in all
material respects our financial condition, results of operations and cash flows
for the periods presented.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during
the quarterly period covered by this report that have materially affected, or
are reasonably likely to materially affect, our internal control 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.
24
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On July 13, 2011, we issued 1,000,000 units at $0.35 each for gross proceeds of
$350,000 in connection with a private placement to an unrelated third party.
Each unit consists of one common share and one share purchase warrant
exercisable at a price of $0.65 expiring on July 13, 2013. We have issued all of
the units to one non-US person (as that term is defined in Regulation S of the
Securities Act of 1933) in an off-shore transaction relying on Regulation S of
the Securities Act of 1933.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. [REMOVED AND RESERVED]
ITEM 5. OTHER INFORMATION
None.
ITEM 6. 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).
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES
4.1 Sample Stock Certificate (Incorporated by reference to our
Registration Statement filed on Form S-1 on February 25, 2009).
(10) MATERIAL CONTRACTS
10.1 Property Option Agreement between our company and All American
Resources LLC with respect to the Mountain City claim dated
November 26, 2010 (Incorporated by reference to our Current Report
filed on Form 8-K on December 21, 2010).
10.2 Property Option Agreement between our company and All American
Resources LLC with respect to the Eagan Canyon claim dated
November 26, 2010 (Incorporated by reference to our Current Report
filed on Form 8-K on December 21, 2010).
10.3 Property Option Agreement between our company and All American
Resources LLC with respect to the Muncy Creek claim dated November
26, 2010 (Incorporated by reference to our Current Report filed on
Form 8-K on December 21, 2010).
25
Exhibit
Number Description
------ -----------
10.4 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).
(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 Files pursuant to Rule 405 of Regulation S-T.
----------
* Filed herewith.
** To be filed by Amendment
26
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST AMERICAN SILVER CORP.
(Registrant)
Date: October 17, 2011 /s/ Thomas Menning
-----------------------------------------
Thomas Menning
President, Chief Executive Officer,
Chief Financial Officer, Secretary,
Treasurer and Director (Principal
Executive Officer, Principal Financial
Officer and Principal Accounting Officer)
27