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EX-32.1 - EXHIBIT 32.1 SECTION 906 CERTIFICATIONS - GRAPHITE CORPf10k123111_ex32z1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________


 FORM 10-K 

________________


  X .

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

  

               For the Fiscal Year Ended December 31, 2011

 

 

      .

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

 

 

               For the Transition Period from ________ to _________


FIRST RESOURCES CORP.

(Exact name of registrant as specified in its charter)


Nevada

000-54336

26-0641585

(State or other jurisdiction

(Commission File Number)

(IRS Employer

of Incorporation)

 

Identification Number)

 


7337 E Doubletree Ranch Road #190

Scottsdale, AZ 85258

 

 

(Address of principal executive offices)

 

 


(480) 558-8920

 

 

(Registrant’s Telephone Number)

 


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes       .  No   X .


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes       .  No   X .


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 (§ 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.      .

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See 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 Exchange Act). Yes      .. No  X ..





The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2011 was $450,000 based upon the price ($0.75) at which the common stock was last sold as of the last business day of the most recently completed second fiscal quarter, multiplied by the approximate number of shares of common stock held by persons other than executive officers, directors and five percent stockholders of the registrant without conceding that any such person is an “affiliate” of the registrant for purposes of the federal securities laws. Our common stock is traded in the over-the-counter market and quoted on the Over-The-Counter Bulletin Board under the symbol “MEZE.OB”


As of March 26, 2012, there were 13,100,000 shares of the registrant’s $0.0001 par value common stock issued and outstanding.


Documents incorporated by reference: None



2




Table of Contents

  

 

Page

  

PART I

  

  

  

  

Item 1

Business

5

Item 1A

Risk Factors

13

Item 1B

Unresolved Staff Comments

13

Item 2

Properties

13

Item 3

Legal Proceedings

13

Item 4

[REMOVED AND RESERVED]

13

  

  

 

  

PART II

 

  

  

 

Item 5

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

14

Item 6

Selected Financial Data

14

Item 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

15

Item 7A

Quantitative and Qualitative Disclosures about Market Risk

18

Item 8

Financial Statements and Supplementary Data

19

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

32

Item 9A

Controls and Procedures

32

Item 9B

Other Information

33

  

  

 

  

PART III

 

  

  

 

Item 10

Directors and Executive Officers and Corporate Governance

34

Item 11

Executive Compensation

36

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

37

Item 13

Certain Relationships and Related Transactions

38

Item 14

Principal Accountant Fees and Services

39

  

  

 

  

PART IV

 

  

  

 

Item 15

Exhibits

40

  

  

 





3




FORWARD-LOOKING STATEMENTS


 This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:


·

The availability and adequacy of our cash flow to meet our requirements;

·

Economic, competitive, demographic, business and other conditions in our local and regional markets;

·

Changes or developments in laws, regulations or taxes in our industry;

·

Actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities;

·

Competition in our industry;

·

The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business;

·

Changes in our business strategy, capital improvements or development plans;

·

The availability of additional capital to support capital improvements and development; and

·

Other risks identified in this report and in our other filings with the Securities and Exchange Commission or the SEC.

 

This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.


Use of Term

 

Except as otherwise indicated by the context, references in this report to “Company”, “MEZE”, “we,” “us” and “our” are references to First Resources Corp. All references to “USD” or United States Dollars refer to the legal currency of the United States of America.




4




PART I


ITEM 1.  

BUSINESS


DESCRIPTION OF OUR BUSINESS


We were incorporated in the State of Nevada on August 3, 2007 under the name Medzed, Inc.  We were originally established for the purpose of becoming a third party reseller of medical office business solutions.  However, due to poor performance related to the sales of the medical office business solutions, we believe as of September 30, 2008, the Company became a “shell” company, as that term is defined in Rule 12b-2 of the Securities Exchange Act of 1934.  On December 3, 2009, Mr. Dan MacLean, the then Chief Executive Officer/President, Chief Financial Officer/Treasurer, Secretary and Director of the Company, resigned from all positions with the Company and, as his final act as the sole member of the Company’s Board of Directors, Mr. MacLean appointed Ms. Gloria Ramirez-Martinez as the Company’s Chief Executive Officer/President, Chief Financial Officer/Treasurer, Secretary and Director.  In December 2009, Ms. Ramirez-Martinez accepted such appointments.  On September 28, 2011, Ms. Ramirez-Martinez resigned from her position as Secretary of the Company and Mr. Steven Radvak was appointed to serve as Secretary.  Mr. Radvak accepted such appointment on September 28, 2011.

 

From the time that the Company was considered a shell company until the time that we ceased being a shell company, we had focused our efforts on developing a new business, merging with, or acquiring an operating company with operating history and assets. Accordingly, we refocused the Company's business direction to include a new business plan based on the exploration of mineral claims. We decided to enter the mining business because we were seeking out viable and feasible alternatives to create value for our shareholders. We determined that staking and exploring potential mineral claims could be an excellent long term investment strategy that could lead to lucrative business opportunities. To reflect the Company’s new focus, on August 19, 2010, we filed an amendment to our Articles of Incorporation with the Nevada Secretary of State changing our name to First Resources Corp.


We are considered an exploration or exploratory stage company because we are involved in the examination and investigation of land that we believe may contain valuable minerals, for the purpose of discovering the presence of gold, silver and other minerals, if any, and their extent.  Because we are an exploration stage company, there is no assurance that a commercially viable mineral deposit exists on the property underlying our mineral claims, and a great deal of further exploration will be required before a final evaluation as to the economic and legal feasibility for our future exploration is determined. We have no known reserves of any type of mineral. To date, we have not discovered an economically viable mineral deposit on the claims, and there is no assurance that we will discover one.


Exploration for minerals is a speculative venture involving substantial risk. The expenditures to be made by us on our exploration program may not result in the discovery of commercially exploitable reserves of valuable minerals.  The probability of a mineral claim ever having commercially exploitable reserves is extremely remote, and in all probability, our mineral claims may not contain any reserves. If we are unable to find reserves of valuable minerals or if we cannot remove the minerals because we either do not have the capital to do so, or because it is not economically feasible to do so, then we will cease operations and potential investors will lose their investment.


We anticipate that any additional funding that we require will be in the form of equity financing from the sale of our Common Stock. However, there is no assurance that we will be able to raise sufficient funding from the sale of our Common Stock. The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable mine can be demonstrated. We do not have any arrangements in place for any future equity financing. If we are unable to secure additional funding, we will cease or suspend operations. We have no plans, arrangements or contingencies in place in the event that we cease operations.


If we discontinue our exploration of our currently staked claims, we may seek to acquire other natural resource exploration properties. Any such acquisition(s) will involve due diligence costs in addition to the acquisition costs. We will also have an ongoing obligation to maintain our periodic filings with the appropriate regulatory authorities, which will involve legal and accounting costs. In the event that our available capital is insufficient to acquire an alternative resource property and sustain minimum operations, we will need to secure additional funding or else we will be compelled to discontinue our business. We are presently in the exploration stage of our business and have not commenced planned principal operations. We can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such deposits are discovered, that we will enter into further substantial exploration programs.




5




If commercially marketable quantities of mineral deposits exist on the property underlying our mineral claims and sufficient funds are available, we will evaluate the financial viability, technical and financial risks of extraction, including an evaluation of the economically recoverable portion of the deposit, the metallurgy and ore recoverability, marketability and payability of the ore concentrates, engineering concerns, milling and infrastructure costs, finance and equity requirements and an analysis of the proposed mine from the initial excavation all the way through to reclamation. After we conduct this analysis and determine that a given ore body is worth recovering, we will begin the development process. Development will require us to obtain a processing plant and other necessary equipment including delivery equipment to transport the processed ore to our future customers.


Although we are not required to deliver annual reports to our shareholders, we will make available to our shareholders annual reports containing financial statements audited by our independent auditors and our quarterly reports containing unaudited financial statements for each of the first three quarters of each year; however, we will not send the annual report to our shareholders unless requested by an individual shareholder.  To date, we have not earned any revenues and have incurred a net loss of $45,410, in the year ended December 31, 2011 and a net loss of $1,246,808 for the year ended December 31, 2010. We do not anticipate earning revenues until such time as we enter into commercial production of our mineral properties.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its plan of operations described herein and eventually attain profitable operations.


Our Acquisitions


1.

MDZ Lode Claims


The Company has staked four claims, the MDZ Lode Claims, situated in Mohave County, Arizona. We intend to undertake exploration work on our claims. The fee simple title to the property is owned by the United States of America.  We staked the land and have provided Arizona Bureau of Land Management the requisite Location Notice of Lode Mining Claim, upon providing the location notice and the requisite fees we are entitled to enter onto the property with our employees, representatives and agents, and to prospect, explore, test, develop, work and mine the property as we see fit. Our Vice President of Exploration and Secretary, Mr. Steve Radvak (“Mr. Radvak”) has been on the property during the process of staking the Claims.


The United States owns mineral rights in the United States, and those mineral rights are administered by the U.S. Bureau of Land Management (the “BLM”).  The BLM allows certain minerals, including metals, to be “claimed” by staking the land in accordance with state and federal regulations, without any sort of formal agreement. Staking of these minerals rights gives you the right to enter, explore and exploit these resources in accordance with local, state, and federal regulations. In order to locate and stake a mining claim one must do the following: 1) put up a conspicuous structure at the place of discovery, distinctly mark the claim’s boundaries on the ground, and post a notice of location at such site, 2) file a copy of the official signed notice of location and the maintenance fee of $140 per claim plus a $15 filing fee to the Arizona BLM, 3) file the same location notice with the respective county recorder’s office within 90 days of filing the claim.  The location notice must contain the following: i) the name of the claim, ii) the type of claim (lode or placer claim), iii) the name and address of the owner of the claim, iv) a legal description of the approximate location of the claim, and v) a map or narrative showing the location of the claim within a quarter section. Filing a claim and paying the filing fees provides for one calendar year of rights. We have complied with all of the above and we have rights to our claims until August 31, 2012, unless we renew. The annual maintenance fees for mining claims, due to BLM on or before September 1, 2012, for the 2013 assessment year is $140 per claim. Any new mining claims will cost $189 to record with the BLM. This includes $34 location fee, $140 maintenance fee, and $15 processing fee.


The MDZ Lode Claim property consists of four (4) located mineral claims as follows:


Name

Area (in acres)

Expiration

Location

MDZ Lode Claim #1

20

August 31, 2012

The NE corner of the claim is 2745 ft south and 3830 feet west of the NE corner of Section 21, Township 21N, and Range 20E.

MDZ Lode Claim #2

20

August 31, 2012

The NE corner of the claim is 2745 ft south and 3830 feet west of the NE corner of Section 21, Township 21N, and Range 20E.

MDZ Lode Claim #3

20

August 31, 2012

The SE corner of the claim is 2745 ft south and 3830 feet west of the NE corner of Section 21, Township 21N, and Range 20E.

MDZ Lode Claim #4

20

August 31, 2012

The SE corner of the claim is 2745 ft south and 3830 feet west of the NE corner of Section 21, Township 21N, and Range 20E.




6





[f10k123111_10k002.gif]


The map above depicts the MDZ Lode Claims, which are located in Section(s) 21, Township 20N, Range 20W, Gila and Salt River Base Meridians in Mohave County, Arizona, and are staked in a north-south direction.


Location and Access


[f10k123111_10k004.gif]


The MDZ Lode Claims are staked in the San Francisco (Oatman) Mining District in Mohave County, Arizona.  Collectively, the Claims comprise a total of 80 acres of land. The claims are located approximately 10 miles east of Bullhead City, Arizona and 70 miles southeast of Las Vegas, Nevada. The Town of Oatman, Arizona is located 8 miles southeast of the property. The host rock of the mineralization forms a conspicuous ridge.


The nearby towns offer some of the necessary infrastructure required to base and carryout an exploration program such as limited accommodations, communications, some equipment and supplies.


Climate


The area is characterized by desert conditions with very hot summers and mild winters.  The area has an arid desert climate, however its elevation tempers this somewhat. Summer daytime highs reach above 90° F (32° C) frequently, and summertime lows usually remain between 60° F (16° C) and 70° F (21° C). Winter highs are generally mild, ranging in the mid to upper 50s, but nights are usually right around or slightly above freezing (32° F/0° C).



7





Property Geology


According to our geologist, Mr. Radvak, and based on his knowledge relating to the area and his technical background, the following is a general description of the geology of the area in which we have staked our claims. The area consists of a Tertiary porphyrytic quartz monzonite intruding Tertiary age volcanics and volcanic-rich sediments. Precambrian rocks uncomfortably underlie the volcanic rocks. The area is dominated by the quartz monzonite with a few mafic Tertiary dikes cross-cutting.  The veins consist of quartz-calcite and lesser adularia. The hanging walls of the veins commonly have several tens of feet of stockworks veining. The dip of the vein usually remains steep with little evidence of flattening, as would be the case for a listric fault.


2.

The Sheep Mountain West Property Option


On October 22, 2011, the Company entered into that certain Property Option Agreement (the "Option Agreement") with MinQuest, Inc. ("MinQuest"). Pursuant to the terms and conditions of the Option Agreement, MinQuest shall grant the Company with the right and option (the “Option”) to acquire one hundred percent (100%) of the mining interests in that certain Property known as Sheep Mountain West (the “Sheep Mountain Property”) which is comprised of 27 mining claims and is located in Yavapai County, Arizona. In order to exercise the Option, the Company shall be required to: (i) pay an initial cash payment of fifteen thousand dollars ($15,000) to Minquest, (ii) reimburse Minquest for all holding costs and government filing fees incurred in relation to the Sheep Mountain Property, (iii) issue an aggregate of seven hundred thousand (700,000) shares of the Company’s Common Stock to Minquest; (iv) pay an additional aggregate payment of one hundred five thousand dollars ($105,000) over a seven (7) year period; (v) incur work expenditures on or with respect to the Sheep Mountain Property pursuant to the Option schedule; and (vi) pay a production royalty (the “Royalty”) to Minquest equal to three percent (3%) of the net smelter returns, per the terms and conditions of the Option Agreement. The Option Agreement also provides that the Company shall have a one-time right to purchase up to fifty percent (50%) of Minquest’s Royalty in the Sheep Mountain Property for three million dollars ($3,000,000). The above description of the Option Agreement is intended as a summary only and which is qualified in its entirety by the terms and conditions set forth therein, and may not contain all information that is of interest to the reader.  For further information regarding the terms and conditions of the Option Agreement, this reference is made to such agreement, which was filed on October 27, 2011 with the SEC as part of our Current Report on Form 8-K.


As of the date of this Annual Report, the Company has made an initial payment of $15,000 to exercise the Option, however, no exploration work has been completed on the Sheep Mountain Property.  


Glossary of Technical Geological Terms

 

The following defined technical geological terms are used in our annual report:


Term

Definition

 

 

Adularia

A feldspar mineral and potassium aluminosilicate (KAlSi3O8).  It commonly forms colourless, glassy, prismatic, twinned crystals in low-temperature veins of felsic plutonic rocks and in cavities in crystalline schists.

 

 

Assay

The act of testing the purity of precious metals.  

 

 

Calcite

A carbonate mineral and the most stable polymorph of calcium carbonate (CaCO3).

 

 

Dip

The angle that a rock unit, fault or other rock structure makes with a horizontal plane.  Expressed as the angular difference between the horizontal plane and the structure.  The angle is measured in a plane perpendicular to the strike of the rock structure.

 

 

Fault

A fracture or fracture zone in rock along which movement has occurred.

 

 

Lode

A mineral deposit in solid rock.

 

 

Mafic

A term used to describe an igneous rock that has a large percentage of dark-colored minerals such as amphibole, pyroxene and olivine. Also used in reference to the magmas from which these rocks crystallize. Mafic rocks are generally rich in iron and magnesium.

 

 

Mineralization

The concentration of metals and their chemical compounds within a body of rock.

 

 

Monzonite

An intermediate igneous intrusive rock composed of approximately equal amounts of sodic to intermediate plagioclase and orthoclase feldspars with minor amounts of hornblende, biotite and other minerals.



8





 

 

Ore

A mixture of minerals and gangue from which at least one metal can be extracted at a profit.

 

 

Outcrop

A segment of bedrock exposed to the atmosphere.

 

 

Porphyry

A heterogeneous rock characterized by the presence of crustals in a relatively finer- grained matrix.

 

 

Precambrian

Noting or pertaining to the earliest era of earth history, ending 570 million years ago, during which the earth's crust formed and life first appeared in the seas.

 

 

Quartz

A mineral whose composition is silicon dioxide. A crystalline form of silica.

 

 

Reserve

(For the purposes of this report): that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.  Reserves consist of:

 

 

1)

Proven (Measured) Reserves. Reserves for which: (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling; and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.

 

 

2)

Probable (Indicated) Reserves.  Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced.  The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation.

 

 

Sediment

Any particulate matter that can be transported by fluid flow and which eventually is deposited as a layer of solid particles on the bed or bottom of a body of water or other liquid.

 

 

Sedimentary

A type of rock which has been created by the deposition of solids from a liquid.

 

 

Stockwork

A complex system of structurally controlled or randomly oriented veins.  Stockworks are common in many ore deposit types and especially notable in greisens. They are also referred to as stringer zones.

 

 

Tertiary

Relating to the first period of the Cenozoic era, about 65 to 1.64 million years ago.

 

 

Trenching

The removal of overburden to expose the underlying bedrock.

 

 

Vein

An occurrence of ore with an irregular development in length, width and depth usually from an intrusion of igneous rock.

 

 

Volcanic

Characteristic of, pertaining to, situated in or upon, formed in, or derived from volcanoes.


Management Experience


Our President, Ms. Ramirez-Martinez, has no professional or technical training or experience in the exploration or operation of mines. As such, our President may not be fully aware of the specific requirements related to working in this industry. Our President may make mistakes in her decisions and choices that could cause our operations and ultimate financial success to suffer irreparable harm. She may not be able to recognize or take advantage of potential acquisition and exploration opportunities in the sector without the aid of additional qualified geological consultants.


Our exploration activities include a determination by our geologic consultant to see if the properties contain reserves. On September 10, 2010, the Company engaged Mr. Radvak to serve as Vice President of Exploration. On September 28, 2011, the Company further appointed Mr. Radvak to serve as Secretary to the Company. Mr. Radvak is considered a consultant functioning as an independent contractor and is not an employee of the Company. In this capacity, Mr. Radvak's duties shall include all regular secretarial duties and providing general assistance to the Company in developing its current plan of operations, as it relates to property acquisition and exploration, and performance of such other duties and responsibilities as may be reasonably required from time to time by the Board of Directors.



9





Competitive Factors


We are a new mineral resources exploration company. The mining industry is highly fragmented and we will be competing with many other exploration companies looking for minerals. While we will generally compete with other exploration companies, there is no competition for the exploration or removal of minerals from our claims as we currently hold all interest and rights to the claims.  In regards to the Sheep Mountain Property, the Company has the exclusive right and option to acquire an undivided 100% right, title and interest in and to the Sheep Mountain Property and will hold all interest and right to the claims upon the Company’s full exercise of the Option.


However, we will compete with other mineral resource exploration companies for the acquisition of new mineral properties and for available resources. Many of the mineral resource exploration companies with whom we will compete have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford more geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration. This competition could adversely impact our ability to finance further exploration and development of our mineral properties.  We will be competing with other mineral resource exploration companies for available resources, including, but not limited to: professional geologists, camp staff, mineral exploration supplies and drill rigs. Competing for available resources will depend on our technical abilities, financial capacities, industry contacts, and any consulting arrangements we may have in place.


We will also compete with other mineral resource exploration companies for financing from investors that are prepared to make investments in mineral resource exploration companies.  The presence of competing mineral resource exploration companies may impact our ability to raise additional capital in order to fund our exploration programs if investors view our competitors as more attractive investments, based on the merit of the mineral properties under investigation and the price of the investment offered to investors.


Plan of Operations of the MDZ Claims


Our plan of operation is entirely dependent upon raising proceeds from our offering of up to 10,000,000 shares of common stock pursuant to our Registration Statement, as originally filed with the SEC on Form S-1 on or about September 21, 2010 (the “Offering”).  We are not going to spend any sums of money or implement our exploration program until the Offering is completed.  We have not begun exploration. If we are successful in raising funds from the Offering, we plan to implement the following initial exploration program consisting of three phases.  We plan to conduct mineral exploration activities on the MDZ Claims to assess whether the claims contain mineral reserves capable of commercial extraction.  Our exploration program is designed to explore for commercially viable deposits of gold, silver and other minerals.  We have not, nor has any predecessor identified any commercially exploitable reserves of these or other minerals on the Company’s mineral claims.


Within the three months following the date of our prospectus and subject to the raising of sufficient funds through the Offering, we plan to complete the first phase (Phase I) of the exploration program on our claims.  This work will consist of retaining consultant(s) to conduct exploration activities on the claims, including: geological mapping, geological prospecting, assaying and information review.  Geological mapping involves plotting previous exploration data relating to a property area on a map in order to determine the best property locations to conduct subsequent exploration work.  It also consists of a consulting geologist completing a detailed mapping, gathering soil samples from property areas with the most potential to host economically significant mineralization based on past exploration results.  Geological prospecting involves analyzing rocks on the property surface in order to discover indications of potential mineralization.  All samples gathered will be sent to a laboratory where they are crushed and analyzed for metal content.  Assaying is the chemical analysis of a substance to determine its components.


Subject to the receipt of sufficient funds from the Offering, we plan to commence Phase I of the exploration program on the claim in the first quarter of 2013.  We expect this phase to take approximately 60 days to complete and an additional month for the consulting geologist to receive the results of the assay lab and prepare his report.  We have determined that Phase I is estimated to cost $66,000.


If Phase I proves successful in identifying mineral deposits, and if we have sufficient funds on hand, we intend to proceed with the second phase of the program (Phase II) as soon as practicable upon completion of Phase I.  In Phase II, we will begin trenching, surveying localized soils, and detailed sampling of historic zones.  The estimated cost of the Phase II program is $59,500.  It will take approximately 50 days to complete Phase II and an additional month for the consulting geologist to receive the results from the assay lab and prepare his report.  We expect to commence work on Phase II in the spring of 2013, subject to weather conditions and the availability of funds.



10





After all surveys and initial samples have been collected, we expect to begin the third phase of the program (Phase III), which will consist of core sampling and analysis.  If all operations go according to our exploration plan, we expect to begin this phase around the third quarter of 2013.  Core sampling is the process of drilling holes to a depth of up to 100 feet in order to extract a sample of earth.  Assuming that we raise the maximum amount of money, we will drill 32 holes to a depth of 100 feet, totaling approximately 3,200 linear feet.  If we only raise a minimal amount of funding under the Offering, we will drill approximately 1600 feet, or 16 holes to a depth of 100 feet.  We estimate that it will take between one to three months to drill 16-32 holes to a depth of 100 feet each.  We will pay a consultant up to a maximum of $5,000 per month for his services during the three-month period or a total of $15,000.  The total cost for drilling is estimated to be around $32,000 to $64,000.  The driller will be retained by our consultant.


After core sampling, we will proceed with the analysis of the samples collected from the core drilling.  We expect to begin this towards the end of 2013.  The total estimates cost for analyzing the core samples is $3,500, and we estimate this process will take approximately 30 days.  The core samples will be tested to determine if mineralized material is located on the claims.  Mineralized material is a mineralized body, which has been delineated by appropriate spaced drilling or underground sampling to support sufficient tonnage and average grade of metals to justify removal.  Based upon the tests of the core samples, we will determine if we will terminate operations; proceed with additional exploration of the claims; or develop the claims.  If we do not find mineralized material or we cannot remove mineralized material, either because we do not have the money to do it or because it is not economically feasible to do it, we will cease operations.


We intend to take our core samples to analytical chemists, geochemists and registered assayers located in Mohave County, Arizona.  Delivery of the samples to the independent third party is necessary to complete this phase.  We have not selected any of the foregoing as of the date of this report.   


Total expenditures, relating to the exploration of the MDZ Claims over the next 12 months and our offering expenses are expected to be up to approximately $242,500, which we will attempt to raise through the sale of our Common Stock being offered through our S-1 Registration Statement.


The success of our business is entirely dependent upon raising proceeds from the Offering.  If less than the maximum proceeds are received under the Offering, we will use any funds received to pay the offering expenses foremost, and then to pay any working capital expenses.  If sufficient funds are available after the offering expenses and working capital expenses have been paid, we will commence Phase I of our exploration program.  If Phase I proves to be successful and sufficient funds are available after completion of such Phase, we will continue with Phase II and so on until funds are no longer available.  In the event we have enough money to begin but not to complete one of the Phases, we will cease operations until we raise more money.  If we cannot or do not raise sufficient money to complete one or more Phases, or if our exploration activities are not successful, we will discontinue exploration of our Claims and any funds spent on exploration will probably be lost.


Phase

Exploration Program

Cost

Status

Phase I

Retention of consultant(s) to conduct exploration activities, Geological prospecting, Geological mapping, Assaying and Evaluation of information.

$66,000

Expected to begin in the first quarter of 2013, (dependent on funding and the consultant/geologist’s schedule).

Phase II

Trenching, detailed sampling and mapping of historic zones, and surveying of localized soil.

$37,000 – $59,500

Expected to begin between the first and second quarter of 2013 (dependent on funding, results of exploratory activities, and the consultant/geologist’s schedule).

Phase III

Core sampling.  Core sampling we be subcontracted to non-affiliated third parties, or retained consultants. Analysis of the samples derived from core sampling by an independent third party to determine if mineralized material is below the ground. If mineralized material is found, we will attempt to define the ore body.

$20.00/foot

$40,500-$82,500

(Dependent on number of holes drilled)

Expected to begin in the third quarter of 2013 (dependent on funding and the consultant/geologist’s schedule, and results of survey/initial sampling).


The data obtained from our exploration program and sampling will consist of survey data, lithological data and assay results. Quality Assurance/Quality Control (QA/QC) protocols will be in place at the mining site and at the laboratory to test the sampling and analysis procedures.



11





The Company will utilize statistical methodologies to calculate mineral reserves based on interpolation between and projection beyond sample points.  Interpolation and projection are limited by certain factors including geologic boundaries, economic considerations and constraints to safe mining practices.  Sample points will consist of variably spaced drill core intervals obtained from drill sites located on the surface and in underground development workings.  Results from all sample points within the mineral reserve area will be evaluated and applied in determining the mineral reserves.


Samples will be sent to a laboratory for analyses.  The samples will be under a strict monitoring and tracking system from log-in to completion.  Samples will be logged-in immediately upon receipt and carefully checked for any special handling that may be needed.  All analytical procedures, sample handling, and preservation techniques used will strictly adhere to those approved by the Environmental Protection Agency (“EPA”), where applicable.  To test assay accuracy and reproducibility, pulps from core samples will be resubmitted for analysis and compared.  To test for sample errors or cross-contamination, blank core, (waste core), samples will be submitted with the mineralized samples and compared.  Reference samples from the EPA or from private sources will also be tested with every set of samples to provide an additional measure of accuracy.


The QA/QC protocols will be practiced on both resource development and production samples.  The data will be entered into a 3-dimensional modeling software package and analyzed to produce a 3-dimensional solid block model of the resource.  The assay values will be further analyzed by a geostatistical modeling technique to establish a grade distribution within the 3-dimensional block model.  Dilution will then be applied to the model and a diluted tonnage and grade will be calculated for each block.  Mineral and waste tons, contained ounces and grade will then be calculated and summed for all blocks.  A percent mineable factor based on historic geologic unit values will be applied and the final proven reserve tons and grade will be calculated.


The Company will review its methodology for calculating mineral reserves on an annual and as-needed basis.  Conversion, an indicator of the success in upgrading probable ore reserves to proven ore reserves, will be evaluated as part of the reserve process.  The review will examine the effect of new geologic information, changes implemented or planned in mining practices and mine economics on factors used for the estimation of probable mineral reserves.  The review will include an evaluation of the Company’s rate of conversion of probable reserves to proven reserves.


Government Regulations

 

Exploration activities are subject to various national, state, foreign and local laws and regulations, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters.  We believe that we are in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations promulgated by the State of Arizona and the United States Federal Government.  Currently, there are no costs associated with our compliance with such regulations and laws.

 

Our exploration activities are subject to various federal, state and local laws and regulations governing protection of the environment.  These laws are continually changing and, as a general matter, are becoming more restrictive.  Our policy is to conduct business in a way that safeguards public health and the environment.  We believe that our exploration activities are conducted in material compliance with applicable laws and regulations.  Changes to current local, state or federal laws and regulations in the jurisdictions where we operate could require additional capital expenditures and increased operating and/or reclamation costs.  Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could render certain exploration activities uneconomic.

 

Employees


We have no significant employees other than Gloria Ramirez-Martinez, our President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director, and Steven Radvak our Secretary and Vice President of Exploration.  We believe that until such time that we have fully developed our plan of operations we will not have any employees and that we will frequently use consultants to assist in the completion of various projects.  We believe that consultants will be instrumental to keep the exploration of projects on time and on budget.


WHERE YOU CAN GET ADDITIONAL INFORMATION


We file annual, quarterly and current reports, proxy statements and other information with the SEC.  You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.W., Washington, DC 20549.  You can obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  You can also access these reports and other filings electronically on the SEC’s web site, www.sec.gov.



12





ITEM 1A.  

RISK FACTORS


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 1B.  

UNRESOLVED STAFF COMMENTS


None.


ITEM 2.  

PROPERTIES


 

Our principal executive office is located at 7337 E. Doubletree Ranch Road #190, Scottsdale, AZ 85258.  Our telephone number is (480) 558-8920.  We are currently leasing executive office space on a month-to-month basis for approximately $400.00 per month.  It is our belief that the space is adequate for our immediate needs. Additional space may be required as we expand our operations. We do not foresee any significant difficulties in obtaining any required additional facilities. We do not presently own any real property.


The Company has staked four claims, the MDZ Lode Claims, situated in Mohave County, Arizona. We intend to undertake exploration work on our claims. The fee simple title to the property is owned by the United States of America.  We staked the land and have provided Arizona Bureau of Land Management (“BLM”) the requisite Location Notice of Lode Mining Claim.  Upon providing the location notice and the requisite fees, we are entitled to enter onto the property with our employees, representatives and agents, and to prospect, explore, test, develop, work and mine the property until August 31, 2012, unless we renew. Our Vice President of Exploration, Mr. Radvak has been on the property during the process of staking the Claims. The annual maintenance fees for mining claims, due to BLM on or before September 1, 2012, for the 2013 assessment year is $140 per claim. Any new mining claims cost $189 to record with BLM.  This includes a $34 location fee, $140 maintenance fee, and $15 processing fee.


On October 22, 2011, the Company entered into that certain Property Option Agreement (the "Option Agreement") with MinQuest, Inc. ("MinQuest"). Pursuant to the terms and conditions of the Option Agreement, MinQuest shall grant the Company with the right and option (the “Option”) to acquire one hundred percent (100%) of the mining interests in that certain Property known as Sheep Mountain West (the “Sheep Mountain Property”) which is comprised of 27 mining claims and is located in Yavapai County, Arizona. In order to exercise the Option, the Company shall be required to: (i) pay an initial cash payment of fifteen thousand dollars ($15,000) to Minquest, (ii) reimburse Minquest for all holding costs and government filing fees incurred in relation to the Sheep Mountain Property, (iii) issue an aggregate of seven hundred thousand (700,000) shares of the Company’s Common Stock to Minquest; (iv) pay an additional aggregate payment of one hundred five thousand dollars ($105,000) over a seven (7) year period; (v) incur work expenditures on or with respect to the Sheep Mountain Property pursuant to the Option schedule; and (vi) pay a production royalty (the “Royalty”) to Minquest equal to three percent (3%) of the net smelter returns, per the terms and conditions of the Option Agreement. The Option Agreement also provides that the Company shall have a one-time right to purchase up to fifty percent (50%) of Minquest’s Royalty in the Sheep Mountain Property for three million dollars ($3,000,000).   As of the date of this Annual Report, the Company has made an initial payment of $15,000 to exercise the Option, however, no exploration work has been completed on the Sheep Mountain Property.  


ITEM 3.  

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 our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.


ITEM 4.  

[REMOVED AND RESERVED]



13





PART II


ITEM 5.  

MARKET FOR THE COMPANY’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


Common Stock


Our common stock is currently quoted on the OTC Bulletin Board.  Our common stock has been quoted on the OTC Bulletin Board since March 11, 2009, under the symbol “MEZE.OB.”  Because we are quoted on the OTC Bulletin Board, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.


The following table sets forth the high and low bid prices for our Common Stock per quarter as reported by the OTCBB for the period from January 1, 2010 through December 31, 2011, based on our fiscal year end December 31. These prices represent quotations between dealers without adjustment for retail mark-up, markdown or commission and may not represent actual transactions.  


  

 

First Quarter

 

 

Second Quarter

 

 

Third Quarter

 

 

Fourth Quarter

2011 – High

 

$0.80

 

 

 

$0.80

 

 

 

$0.75

 

 

$1.05

2011 – Low

 

$0.38

 

 

 

$0.38

 

 

 

$0.75

 

 

 $0.75

2010 – High

 

$0.20

 

 

 

$1.75

 

 

 

$1.75

 

 

$0.80

2010 – Low

 

$0.08

 

 

 

$0.09

 

 

 

$0.05

 

 

$0.70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Record Holders

 

As of December 31, 2011, there were 12,700,000 shares of the registrant’s $0.0001 par value common stock issued and outstanding and were owned by approximately 4 holders of record, based on information provided by our transfer agent.

 

Recent Sales of Unregistered Securities

 

On January 19, 2012, the Company issued 200,000 common shares at $0.05 per share for proceeds of $10,000.


On February 1, 2012, the Company issued 200,000 common shares at $0.05 per share for proceeds of $10,000.


Re-Purchases of Equity Securities


None.


Dividends

 

We have not paid any cash dividends on our Common Stock since inception and presently anticipate that all earnings, if any, will be retained for development of our business and that no dividends on our Common Stock will be declared in the foreseeable future.  Any future dividends will be subject to the discretion of our Board of Directors and will depend upon, among other things, future earnings, operating and financial condition, capital requirements, general business conditions and other pertinent facts.  Therefore, there can be no assurance that any dividends on our Common Stock will be paid in the future.  


Securities Authorized for Issuance Under Equity Compensation Plans

 

None.


ITEM 6.  

SELECTED FINANCIAL DATA


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.



14





ITEM 7.  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections.  We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements.  These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted.  You should read this report completely and with the understanding that actual future results may be materially different from what we expect.  The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report.  We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.



RESULTS OF OPERATIONS


Working Capital


 

December 31,

2011

$

December 31,

2010

$

Current Assets

70

216

Current Liabilities

67,452

23,548

Working Capital (Deficit)

(67,382)

(23,332)

 

Cash Flows

 

 

 

 

Year ended December 31,

2011

$

Year ended

December 31,

2010

$

Cash Flows from (used in) Operating Activities

(37,170)

(31,048)

Cash Flows from (used in) Financing Activities

37,024

30,260

Net Increase (decrease) in Cash During Period

(146)

(788)


Operating Revenues


Operating revenues for the period ended December 31, 2011 was $Nil.


Operating revenues for the period ended December 31, 2010 was $Nil.


Operating Expenses and Net Loss


Operating expenses for the years ended December 31, 2011 and 2010 was $45,410 and $1,246,808 and is comprised of expenses related to mineral claims and general and administrative expenses.


Net loss for the years ended December 31, 2011 and 2010 was $45,410 and $1,246,808 is comprised of expenses related to mineral claims and general and administrative expenses.


Liquidity and Capital Resources


As at December 31, 2011, the Company’s cash and total asset balance was $70 compared to $216 as at December 31, 2010.  The decrease in total assets is attributed to cash going down as a result of the company not being able to raise sufficient cash via debt or equity to fund operations.


As at December 31, 2011, the Company had total liabilities of $67,452 compared with total liabilities of $23,548 as at December 31, 2010.  The increase in total liabilities was attributed to increased funding received by a related party of the Company.



15





As at December 31, 2011, the Company had a working capital deficit of $67,382 compared with a working capital deficit of 23,332 as at December 31, 2010.


Cashflow from Operating Activities


During the period ended December 31, 2011, the Company used $37,170 of cash for operating activities compared to the use of $31,048 of cash for operating activities during the period ended December 31, 2010.  The change in net cash used in operating activities is attributed to decrease in losses in the vehicles.



Cashflow from Financing Activities


During the period ended December 31, 2011, the Company received $37,024 of cash from financing activities compared to $30,260 for the period ended December 31, 2010.


Going Concern


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities.  For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.


Off-Balance Sheet Arrangements


We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.


Future Financings


We will continue to rely on equity sales of our common shares in order to continue to fund our business operations.  Issuances of additional shares will result in dilution to existing stockholders.  There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.


Critical Accounting Policies


Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis.  The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.


We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements.  A complete summary of these policies is included in the notes to our financial statements.  In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances.  Actual results could differ from those estimates made by management.


Contractual Obligations


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.



16





Recently Issued Accounting Pronouncements


In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”, which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for the Company on December 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 is not expected to have a material impact on our financial position or results of operations.


In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will become effective for the Company on December 1, 2012. We are currently evaluating ASU 2011-04 and have not yet determined the impact that adoption will have on our financial statements.


In April 2011, the FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”. This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. ASU 2011-02 has become effective for the Company on September 1, 2012. The Company does not believe that the guidance will have a material impact on its financial statements.


In December 2010, the FASB issued ASU 2010-29, “Business Combinations (Topic 805): Disclosure of supplementary pro forma information for business combinations.” This update changes the disclosure of pro forma information for business combinations. These changes clarify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Also, the existing supplemental pro forma disclosures were expanded to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.


In December 2010, the FASB issued ASU 2010-28, “Intangible –Goodwill and Other (Topic 350): When to perform Step 2 of the goodwill impairment test for reporting units with zero or negative carrying amounts.” This update requires an entity to perform all steps in the test for a reporting unit whose carrying value is zero or negative if it is more likely than not (more than 50%) that a goodwill impairment exists based on qualitative factors, resulting in the elimination of an entity’s ability to assert that such a reporting unit’s goodwill is not impaired and additional testing is not necessary despite the existence of qualitative factors that indicate otherwise. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.


In April 2010, the FASB issued ASU No. 2010-18 regarding improving comparability by eliminating diversity in practice about the treatment of modifications of loans accounted for within pools under Subtopic 310-30 – Receivable – Loans and Debt Securities Acquired with Deteriorated Credit Quality (“Subtopic 310-30”). Furthermore, the amendments clarify guidance about maintaining the integrity of a pool as the unit of accounting for acquired loans with credit deterioration.  Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors. The amendments in this Update are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early adoption is permitted. The adoption of this ASU did not have a material impact on our financial statements.



17





In April 2010, the FASB issued ASU 2010-13, "Compensation—Stock Compensation (Topic 718) - Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades (A consensus of the FASB Emerging Issues Task Force)" (“ASU 2010-13”). ASU 2010-13 clarifies that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, such an award should not be classified as a liability if it otherwise qualifies as equity. This clarification of existing practice is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010, with early application permitted. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.


In February 2010, the FASB issued ASU No. 2010-09 regarding subsequent events and amendments to certain recognition and disclosure requirements. Under this ASU, a public company that is a SEC filer, as defined, is not required to disclose the date through which subsequent events have been evaluated. This ASU is effective upon the issuance of this ASU. The adoption of this ASU did not have a material impact on our financial statements.


In January 2010, the FASB issued ASU No. 2010-06 regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements. This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers.  Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.


The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial statements.    


ITEM 7A.  

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

































18





ITEM 8. 

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
















FIRST RESOURCES CORP.

(An Exploration Stage Company)


For the Periods Ended December 31, 2011 and 2010





Report of Independent Registered Public Accounting Firm

20

Balance Sheets

21

Statements of Operations

22

Statements of Stockholders’ Deficit

23

Statements of Cash Flows

24

Notes to the Financial Statements

25














19




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Board of Directors

First Resources Corp.

(An Exploration Stage Company)


We have audited the accompanying balance sheets of First Resources Corp. (An Exploration Stage Company) as of December 31, 2011 and 2010, and the related statements of operations, stockholders’ equity (deficit) and cash flows for each of the twelve month periods ended December 31, 2011 and 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.


We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of First Resources Corp. as of December 31, 2011 and 2010, and the results of its operations and cash flows for the period described above in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ M&K CPAS, PLLC


www.mkacpas.com

Houston, Texas

March 30, 2012

















20




First Resources Corp.

An Exploration Stage Company

Balance Sheets





ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

2011

 

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

                70

 

$

              216

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Current Assets

 

                70

 

 

              216

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

$

                70

 

$

              216

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

$

         10,880

 

$

           4,000

 

 

Related party payable

 

         56,572

 

 

          19,548

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Current Liabilities

 

         67,452

 

 

          23,548

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock: $0.0001 par value, 300,000,000 shares  authorized, 12,700,000 issued and outstanding

 

           1,270

 

 

           1,270

 

 

Additional paid-in capital

 

     1,297,116

 

 

     1,295,756

 

 

Deficit accumulated during the exploration stage

 

    (1,365,768)

 

 

    (1,320,358)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Stockholders' Equity (Deficit)

 

        (67,382)

 

 

         (23,332)

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

$

                70

 

$

              216

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 














21




First Resources Corp.

An Exploration Stage Company

Statements of Operations





 

 

 

 

 

For the

 

 

For the

 

From Inception

 

 

 

 

 

Year

 

 

Year

 

on August 3,

 

 

 

 

 

Ended

 

 

Ended

 

2007 Through

 

 

 

 

 

December 31,

 

 

December 31,

 

December 31,

 

 

 

 

 

2011

 

 

2010

 

2011

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

$

-

 

 $

-

 

 $

-

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mineral claims

 

 

23,829

 

 

3,000

 

 

26,829

 

General and administrative

 

 

21,581

 

 

1,243,808

 

 

1,338,939

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Expenses

 

 

45,410

 

 

1,246,808

 

 

1,365,768

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(45,410)

 

 

(1,246,808)

 

   

(1,365,768)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$

(45,410)

 

$

(1,246,808)

 

 $

(1,365,768)

 

 

 

 

 

 

 

 

 

 

 

 

BASIC LOSS PER SHARE

 

$

(0.00)

 

$

(0.14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

12,700,000

 

 

8,918,630

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 























22




First Resources Corp.

An Exploration Stage Company

Statements of Stockholders’ Deficit



 

 

 

 

 

 

 

 

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

Total

 

 

 

 

 

 

 

Additional

 

During the

 

Stockholders'

 

 

Common Stock

 

Paid-in

 

Exploration

 

Equity

 

 

Shares

 

Amount

 

Capital

 

Stage

 

(Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at inception, August 3, 2007

 

-

 

$

-

 

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash per share

 

1,500,000

 

 

150

 

 

14,850

 

 

-

 

 

15,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from inception on August 3, 2007 through December 31, 2007

 

-

 

 

-

 

 

-

 

 

(19,589)

 

 

(19,589)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2007

 

1,500,000

 

 

150

 

 

14,850

 

 

(19,589)

 

 

(4,589)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash

 

1,000,000

 

 

100

 

 

39,900

 

 

-

 

 

40,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended  December 31, 2008

 

-

 

 

-

 

 

-

 

 

(34,552)

 

 

(34,552)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2008

 

2,500,000

 

 

250

 

 

54,750

 

 

(54,141)

 

 

859

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imputed interest

 

-

 

 

-

 

 

576

 

 

-

 

 

576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended  December 31, 2009

 

-

 

 

-

 

 

-

 

 

(19,409)

 

 

(19,409)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2009

 

2,500,000

 

 

250

 

 

55,326

 

 

(73,550)

 

 

(17,974)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued to President for Cash

 

10,000,000

 

 

1,000

 

 

24,000

 

 

-

 

 

25,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation on 10,000,000   shares issued to President

 

-

 

 

-

 

 

875,000

 

 

-

 

 

875,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock issued for services

 

200,000

 

 

20

 

 

339,980

 

 

-

 

 

340,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imputed interest

 

-

 

 

-

 

 

1,450

 

 

-

 

 

1,450

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended  December 31, 2010

 

-

 

 

-

 

 

-

 

 

(1,246,808)

 

 

(1,246,808)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2010

 

12,700,000

 

 

1,270

 

 

1,295,756

 

 

(1,320,358)

 

 

(23,332)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imputed interest

 

-

 

 

-

 

 

1,360

 

 

-

 

 

1,360

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended  December 31, 2011

 

-

 

 

-

 

 

-

 

 

(45,410)

 

 

(45,410)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2011

 

12,700,000

 

$

1,270

 

$

1,297,116

 

$

(1,365,768)

 

$

(67,382)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 






23




First Resources Corp.

An Exploration Stage Company

Statements of Cash Flows




 

 

 

 

 

For the

 

 

For the

 

From Inception

 

 

 

 

 

Year

 

 

Year

 

on August 3,

 

 

 

 

 

Ended

 

 

Ended

 

2007 Through

 

 

 

 

 

December 31

2011

 

 

December 31

2010

 

December 31

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

      (45,410)

 

 

 $

  (1,246,808)

 

 $

 (1,365,768)

 

Adjustments to reconcile net loss to net cash used by operating activities:

 

 

 

 

 

 

 

 

 

 

Non cash item -

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

                -

 

 

 

   1,215,000

 

 

  1,215,000

 

 

Imputed interest on shareholder loan

 

         1,360

 

 

 

         1,450

 

 

         3,386

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in accounts payable

 

         6,880

 

 

 

           (690)

 

 

       10,880

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Used in  Operating Activities

 

      (37,170)

 

 

 

      (31,048)

 

 

    (136,502)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITY

 

                -

 

 

 

                -

 

 

                -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from related party loans

 

       37,024

 

 

 

         5,260

 

 

       56,572

 

 

Common stock issued for cash

 

                -

 

 

 

       25,000

 

 

       80,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by  Financing Activities

 

       37,024

 

 

 

       30,260

 

 

     136,572

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET DECREASE IN CASH

 

          (146)

 

 

 

           (788)

 

   

             70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH AT BEGINNING OF PERIOD

 

           216

 

 

 

         1,004

 

 

                -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH AT END OF PERIOD

$

             70

 

 

 $

            216

 

 $

             70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH PAID FOR:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 $

                -

 

 

 $

                -

 

 $

                -

 

 

Income Taxes

 $

                -

 

 

 $

                -

 

 $

                -

 

 

 

 

 

 

 

 

 

 

 

 

 

 



24




First Resources Corp.

An Exploration Stage Company

Notes to the Financial Statements



NOTE 1 – NATURE OF OPERATIONS


First Resources Corp. (formerly Medzed, Inc.) (the “Company”) was organized on August 3, 2007, under the laws of the State of Nevada to engage in any lawful activity. The Company engages in the exploration of certain mineral interests in the state of Arizona. The Company is in the exploration stage.


On August 19, 2010, the Company filed Amended and Restated Articles of Incorporation with the Nevada Secretary of State. As a result of the Amendment the Registrant, among other things, has: (i) changed its name to “First Resources Corp.;” and, (ii) increased the aggregate number of authorized shares to 310,000,000 shares, consisting of 300,000,000 shares of Common Stock, par value $0.0001 per share and 10,000,000 shares of preferred stock, par value $0.0001 per share


The Company's financial statements are prepared using the accrual method of accounting. The Company has elected a December 31 year-end.


NOTE 2 - GOING CONCERN


The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.


In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.


The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation


These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company’s fiscal year-end is December 31.


Use of Estimates


The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.


Cash and Cash Equivalents


The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As of December 31, 2011 and December 31, 2010, the Company had no cash equivalents.



25




First Resources Corp.

An Exploration Stage Company

Notes to the Financial Statements




NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (continued)


Basic and Diluted Net Loss Per Share


The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.


Income Taxes


Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740, Income Taxes, as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.


Comprehensive Loss


ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at December 31, 2011 and 2010, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.


Stock-based Compensation


The Company accounts for stock-based compensation issued to employees based on ASC Topic “Share Based Payment” which establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.


The Topic does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, “Employers’ Accounting for Employee Stock Ownership Plans”.


It requires an entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award – the requisite service period (usually the vesting period). It further requires that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of the Topic includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.


As at December 31, 2011, the Company had not adopted a stock option plan nor had it granted any stock options. No stock based compensation was recorded in the year ended December 31, 2011.  $1,215,000 of stock based compensation was recorded in the year ended December 31, 2010 related to shares issued for services.



26




First Resources Corp.

An Exploration Stage Company

Notes to the Financial Statements




NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (continued)


Financial Instruments


ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:


Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.


Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.


Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.


The Company’s financial instruments consist principally of cash, accounts payable, and amounts due to related parties. Pursuant to ASC 820 and ASC 825, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.


Recent Accounting Pronouncements


In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”, which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for the Company on December 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 is not expected to have a material impact on our financial position or results of operations.


In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will become effective for the Company on December 1, 2012. We are currently evaluating ASU 2011-04 and have not yet determined the impact that adoption will have on our financial statements.



27




First Resources Corp.

An Exploration Stage Company

Notes to the Financial Statements



NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (continued)


In April 2011, the FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”. This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. ASU 2011-02 has become effective for the Company on September 1, 2012. The Company does not believe that the guidance will have a material impact on its financial statements.


In December 2010, the FASB issued ASU 2010-29, “Business Combinations (Topic 805): Disclosure of supplementary pro forma information for business combinations.” This update changes the disclosure of pro forma information for business combinations. These changes clarify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Also, the existing supplemental pro forma disclosures were expanded to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.


In December 2010, the FASB issued ASU 2010-28, “Intangible –Goodwill and Other (Topic 350): When to perform Step 2 of the goodwill impairment test for reporting units with zero or negative carrying amounts.” This update requires an entity to perform all steps in the test for a reporting unit whose carrying value is zero or negative if it is more likely than not (more than 50%) that a goodwill impairment exists based on qualitative factors, resulting in the elimination of an entity’s ability to assert that such a reporting unit’s goodwill is not impaired and additional testing is not necessary despite the existence of qualitative factors that indicate otherwise. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.


In April 2010, the FASB issued ASU No. 2010-18 regarding improving comparability by eliminating diversity in practice about the treatment of modifications of loans accounted for within pools under Subtopic 310-30 – Receivable – Loans and Debt Securities Acquired with Deteriorated Credit Quality (“Subtopic 310-30”). Furthermore, the amendments clarify guidance about maintaining the integrity of a pool as the unit of accounting for acquired loans with credit deterioration.  Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors. The amendments in this Update are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early adoption is permitted. The adoption of this ASU did not have a material impact on our financial statements.


In April 2010, the FASB issued ASU 2010-13, "Compensation—Stock Compensation (Topic 718) - Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades (A consensus of the FASB Emerging Issues Task Force)" (“ASU 2010-13”). ASU 2010-13 clarifies that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, such an award should not be classified as a liability if it otherwise qualifies as equity. This clarification of existing practice is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010, with early application permitted.



28




First Resources Corp.

An Exploration Stage Company

Notes to the Financial Statements




NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (continued)


We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.


In February 2010, the FASB issued ASU No. 2010-09 regarding subsequent events and amendments to certain recognition and disclosure requirements. Under this ASU, a public company that is a SEC filer, as defined, is not required to disclose the date through which subsequent events have been evaluated. This ASU is effective upon the issuance of this ASU. The adoption of this ASU did not have a material impact on our financial statements.


In January 2010, the FASB issued ASU No. 2010-06 regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements. This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers.  Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.


The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial statements.   


NOTE 4 – MINERAL PROPERTY INTEREST


On October 22, 2011, the Company entered into a property option agreement whereby the Company shall receive the right and option to acquire 100% of the mining interests in the Sheep Mountain West Property (the “Property”) in Yavapai County, Arizona. In order to exercise the Option, the Company shall be required to pay an initial cash payment of $15,000 (paid), pay for all holding costs and government filing fees incurred in relation to the Property (paid), issue an aggregate of 700,000 shares of the Company’s common stock, pay an additional aggregate payment of $105,000 over a 7 year period, incur work expenditures on or with respect to the Property pursuant to the Option schedule and pay a production royalty (the “Royalty”) equal to 3% of the net smelter returns. The Option Agreement also provides that the Company shall have a one-time right to purchase up to 50% of the Royalty in the Property for $3,000,000.


In order to meet it’s option commitment on the Sheep Mountain West Property, the Company must:


(i) On or before October 18th, 2012 incur expenditures of $100,000 USD on the property, pay $15,000 and issue 100,000 shares to the Optionor;


(ii) On or before October 18th, 2013 incur additional expenditures of $200,000 USD on the property, pay $15,000 and issue 100,000 shares to the Optionor;


(iii) On or before October 18th, 2014 incur additional expenditures of $200,000 USD on the property, pay $15,000 and issue 100,000 shares to the Optionor;


(iv) On or before October 18th, 2015 incur additional expenditures of $200,000 USD on the property, pay $15,000 and issue 100,000 shares to the Optionor;


(v) On or before October 18th, 2016 incur additional expenditures of $250,000 USD on the property, pay $15,000 and issue 100,000 shares to the Optionor;



29




First Resources Corp.

An Exploration Stage Company

Notes to the Financial Statements




NOTE 4 – MINERAL PROPERTY INTEREST (continued)


(vi) On or before October 18th, 2017 incur additional expenditures of $250,000 USD on the property, pay $15,000 and issue 100,000 shares to the Optionor;


(vii) On or before October 18th, 2018 incur additional expenditures of $300,000 USD on the property, pay $15,000 and issue 100,000 shares to the Optionor.


Once these above option payments are made, the Company has earned 100% undivided interest in the property.


No accrual has been recorded for shares to be issued or for cash to be spent as this is an option and not an obligation.


NOTE 5 – RELATED PARTY PAYABLES


As of December 31, 2011 and December 31, 2010, the Company has received cash advances from a shareholder or related party of $56,572 and $19,548. The advances are non interest bearing, unsecured and due upon demand. Imputed interest in the amount of $1,360 and $1,450 is included in additional paid in capital for the periods ended December 31, 2011 and December 31, 2010.


NOTE 6 – STOCKHOLDERS’ EQUITY


During the year ended December 31, 2007, the Company issued 1,500,000 shares of its par value $0.0001 common stock for cash at $0.01 per share as founders shares for proceeds of $15,000.


During the year ended December 31, 2008, the Company issued 1,000,000 shares of its par value $0.0001 common stock for cash at $0.04 per share for proceeds of $40,000.  


During the period ended December 31, 2010, the Company issued to the President of the Company, 10,000,000 shares of its par value $0.0001 common stock for cash at $0.0025 per share for proceeds of $25,000. Stock based compensation in the amount of $875,000 was recorded because the Company issued the stock to a related party.  The stock based compensation on the issuance to a related party was based on the quoted trading value of the shares on the date of issuance being $0.09 per share.


During the period ended December 31, 2010, the Company issued 200,000 shares of its par value $0.0001 common stock for services valued at $340,000 based on the quoted trading value of the shares on the date of issuance being $1.70 per share.


A total of 12,700,000 shares of common stock were issued and outstanding at December 31, 2011.         


NOTE 7 - INCOME TAXES


The Company has a net operating loss carried forward of $150,768 available to offset taxable income in future years which commence expiring in fiscal 2027.


The Company is subject to United States federal and state income taxes at an approximate rate of 34%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:



30




First Resources Corp.

An Exploration Stage Company

Notes to the Financial Statements




NOTE 7 - INCOME TAXES (continued)


 

 

Year

Ended

December 31, 2011

$

 

Year

Ended

December 31, 2010

$

 

 

 

 

 

Income tax recovery at statutory rate

 

15,439

 

10,814

 

 

 

 

 

Valuation allowance change

 

(15,439)

 

(10,814)

 

 

 

 

 

Provision for income taxes

 

 


The significant components of deferred income tax assets and liabilities at December 31, 2011 and December 31, 2010 are as follows:


 

 

December 31,

2011

$

 

December 31,

2010

$

 

 

 

 

 

Net operating loss carried forward

 

51,261

 

35,822

 

 

 

 

 

Valuation allowance

 

(51,261)

 

(35,822)

 

 

 

 

 

Net deferred income tax asset

 

 



NOTE 8 – SUBSEQUENT EVENTS


On January 15, 2012, the Company issued 200,000 shares at $0.05 for $10,000.


On January 24, 2012, the Company issued 200,000 shares at $0.05 for $10,000.


The Company executed an agreement with Stock Transfer Corporation to become the transfer agent of the Company.



31






ITEM 9. 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.


None.


ITEM 9A.  

CONTROLS AND PROCEDURES.


Disclosure Controls and Procedures


We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit 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 management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.


We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2011.  Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.


Management’s Report on Internal Control Over Financial Reporting


Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f).  The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, 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.


Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011, using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").  


A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.  In its assessment of the effectiveness of internal control over financial reporting as of December 31, 2011, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.


      

1.     

We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.  

 

 

 

2.      

We did not maintain appropriate cash controls – As of December 31, 2011, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts.  Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts.

 

 

 

 

3.

We did not implement appropriate information technology controls – As at December 31, 2011, the Company retains copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of the data in the event of theft, misplacement, or loss due to unmitigated factors.  




32







Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

     

As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by COSO. 

  

Changes in Internal Control over Financial Reporting

 

There has been no change in our internal control over financial reporting identified in connection with our evaluation we conducted of the effectiveness of our internal control over financial reporting as of December 31, 2011, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  


This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Managements report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.


Continuing Remediation Efforts to address deficiencies in Company’s Internal Control over Financial Reporting


Once the Company is engaged in a business of merit and has sufficient personnel available, then our Board of Directors, in particular and in connection with the aforementioned deficiencies, will establish the following remediation measures:


      

1.     

Our Board of Directors will nominate an audit committee or a financial expert on our Board of Directors in the next fiscal year.  

 

 

 

2.      

We will appoint additional personnel to assist with the preparation of the Company’s monthly financial reporting, including preparation of the monthly bank reconciliations.


ITEM 9B.

OTHER INFORMATION


None.




33







PART III


ITEM 10.

DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE


Identification of Directors and Executive Officers


The following table sets forth the names and ages of our current directors and executive officers:


Name

Age

Position with the Company

Date of Appointment

Gloria Ramirez-Martinez

36

President, Chief Executive Officer, Chief Financial Officer, Treasurer and a Director

December 7, 2009

Steven Radvak

51

Secretary

September 28, 2011


The board of directors has no nominating, audit or compensation committee at this time.


Term of Office


Each of our officers is elected by the Company’s Board of Directors and their terms of office are at the discretion of the Board.  Our officers serve until the earlier occurrence of the election of his or her successor at the next meeting of stockholders, death, resignation or removal by the Board of Directors.  All of our directors hold office until the next annual general meeting of the shareholders or until their successors are elected and qualified.


Background and Business Experience


The business experience during the past five years of each of the persons presently listed above as an Officer or Director of the Company is as follows:


Gloria Ramirez-Martinez has over 9 years of experience in international trade.  She has overseen all aspects of the import/export business from client services to logistics.  She started her career in 1999 as a programmer working for a major appliance distributor in Mexico.  Ms. Ramirez Martinez graduated with a degree in Business Administration from the Institute of Technology of Celaya (Mexico) in 1999.  Since 2007, she has been working for GKN Driveline as Materials Planner.  From 2001 to 2007, she worked for Hutchison Autopartes Mexico as Production Assistant.


Steven Radvak, P.E., P.Eng. was appointed as the Vice President of Exploration for the Company in September 2010.  Additionally, Mr. Radvak is a director and the Vice President of Exploration for Tombstone Exploration Corp., a Canadian Federal corporation (TMBXF.OB).  From 1998 through 2008, Mr. Radvak was the President, Chief Executive Officer, and Director of Compliance Management Inc.  Thereafter, the business was acquired by Eaton Sales and Service LLC (“Eaton”).  Mr. Radvak worked for Eaton as Compliance Manager from 2008 to 2009.  Mr. Radvak is a member of RM Fencing LLC (“RM”), which was originally organized in Arizona as Achieva Development, LLC in June of 2006.  RM provides fences, gates and enclosures in Arizona.  Mr. Radvak has a B.A.Sc. in Mining and Mineral Processing Engineering from the University of British Columbia.  He is a registered professional engineer in Arizona and British Columbia.  Mr. Radvak has extensive experience in managing mineral exploration projects in the United States, Canada, Africa and Europe and will continue to be a valuable asset to the Company.


Identification of Significant Employees


We have no significant employees other than Gloria Ramirez-Martinez, our President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director, and Steven Radvak our Secretary and Vice President of Exploration.


Family Relationships


We currently do not have any officers or directors of our company who are related to each other.


Involvement in Certain Legal Proceedings


During the past ten years no director, executive officer, promoter or control person of the Company has been involved in the following:



34







(1)

A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;


(2)

Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);


i.

Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:


ii.

Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;


iii.

Engaging in any type of business practice; or


iv.

Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;


(3)

Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;


(4)

Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;


(5)

Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;


(6)

Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:


i.

Any Federal or State securities or commodities law or regulation; or


ii.

Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or


iii.

Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or


(7)

Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.


Code of Ethics


Our board of directors has not adopted a code of ethics due to the fact that we presently only have one director and we are in the exploration stage of our operations.  We anticipate that we will adopt a code of ethics when we increase either the number of our directors and officers or the number of our employees.



35







Audit Committee and Audit Committee Financial Expert


The Company does not have an audit committee or an audit committee financial expert (as defined in Item 407 of Regulation S-K) serving on its Board of Directors. All current members of the Board of Directors lack sufficient financial expertise for overseeing financial reporting responsibilities. The Company has not yet employed an audit committee financial expert on its Board due to the inability to attract such a person.


The Company intends to establish an audit committee of the board of directors, which will consist of independent directors.  The audit committee’s duties will be to recommend to the Company’s board of directors the engagement of an independent registered public accounting firm to audit the Company’s financial statements and to review the Company’s accounting and auditing principles.  The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls.  The audit committee will at all times be composed exclusively of directors who are, in the opinion of the Company’s board of directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.


Compliance with Section 16(a) of the Exchange Act


Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of change in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us under Rule 16a-3(e) during the year ended December 31, 2011, Forms 5 and any amendments thereto furnished to us with respect to the year ended December 31, 2011, and the representations made by the reporting persons to us, we believe that during the year ended December 31, 2011, our executive officers and directors and all persons who own more than ten percent of a registered class of our equity securities complied with all Section 16(a) filing requirements.


ITEM 11.  

EXECUTIVE COMPENSATION


Summary Compensation Table

The following table sets forth the compensation paid to our executive officers during the twelve month periods ended December 31, 2011 and 2010: 


Summary Compensation Table

 

Name And

Principal Position

Fiscal

Year

Ended

12/31




Salary

($)

Bonus

($)

Stock

Awards

($)

Option

Awards

($)

Non-Equity

Incentive

Plan

Compensation

($)

Nonqualified

Deferred

Compensation

Earnings

($)

All Other

Compensation

($)

Total

($)

Gloria Ramirez-Martinez (1)

2011

-

-

-

-

-

-

-

-

2010

-

-

$875,000(2)

-

-

-

-

$875,000

Steven Radvak(3)

2011

-

-

-

-

-

-

-

-

 

2010

-

-

-

-

-

-

-

-


1.

On December 2, 2009, Ms. Gloria Ramirez-Martinez was appointed as the Company’s President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director.  Ms. Ramirez-Martinez accepted such appointments.   On September 28, 2011, Ms. Ramirez-Martinez resigned as the Company’s Secretary.  Ms. Ramirez-Martinez informed the Company that her decision to resign was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices.


2.

During the period ended December 31, 2010, the Company issued to the President of the Company, 10,000,000 shares of its par value $0.0001 common stock for cash at $0.0025 per share.  Stock based compensation in the amount of $875,000 was recorded because the Company issued the stock to a related party.  The stock based compensation on the issuance to a related party was based on the quoted value of the shares on the date of issuance being $0.09 per share in accordance with FASB ASC Topic 718.


3.

On September 28, 2011, Mr. Steven Radvak was appointed as the Company’s Secretary.  Mr. Radvak accepted such appointment on the same date.



36








Narrative Disclosure to Summary Compensation Table


There are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.


Outstanding Equity Awards at Fiscal Year-End


No named executive officer or director received any equity awards, or holds exercisable or unexercisable options, as of the years ended December 31, 2011 and 2010.


Compensation of Directors


Our directors receive no extra compensation for their service on our board of directors.


Long-Term Incentive Plans


There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.  


Compensation Committee

 

We currently do not have a compensation committee of the Board of Directors.  The Board of Directors as a whole determines executive compensation.


ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


Security Ownership of Certain Beneficial Owners


The following table sets forth the amount certain information concerning the number of shares of our common stock owned beneficially as of March 26, 2012 by: (i) each of our directors; (ii) each of our named executive officers; and (iii) each person or group known by us to beneficially own more than 5% of our outstanding shares of common stock.  Unless otherwise indicated, the shareholders listed below possess sole voting and investment power with respect to the shares they own.


Name and Address of Beneficial Owner

Title of Class

Amount and Nature of  Beneficial

Ownership (1)

(#)

Percent of Class (2)

(%)

Gloria Ramirez-Martinez(3)

Fraccionamiento Nuevo Celaya

Celaya, Guanajuato

Mexico 38020

Common

11,400,000

87.02%

Steven Radvak(4)

10017 N. 60th Place

Paradise Valley, AZ 85253

Common

100,000

0.76%

All Officers and Directors as a Group

(2 Persons)

Common

11,500,000

87.78%


(1)

The number and percentage of shares beneficially owned is determined under the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose.  Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days through the exercise of any stock option or other right.  The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.



37







(2)

Based on 13,100,000 shares of common stock outstanding on March 26, 2012.


(3)

Gloria Ramirez-Martinez is the President, CEO, CFO, Treasurer and a Director of the Company.  Her beneficial ownership includes 11,400,000 common shares.  She acquired 1,400,000 million shares on December 3, 2009 in a private transaction from Dan MacLean, our former sole officer and director.  On May 11, 2010, Gloria Ramirez-Martinez received 10,000,000 shares of restricted common stock, par value $0.0001, in exchange for previous advances totaling $25,000.


(4)

Steven Radvak is the Secretary and Vice President of Exploration of the Company.  His beneficial ownership includes 100,000 common shares.  He acquired the 100,000 shares on September 8, 2010, as per the terms of his Consulting Agreement with the Company as the Vice President of Exploration.


Changes in Control


There are no present arrangements or pledges of the Company’s securities which may result in a change in control of the Company.


ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE


Director Independence


For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2).  The OTCBB on which shares of common stock are quoted does not have any director independence requirements.  The NASDAQ definition of “Independent Officer” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.


According to the NASDAQ definition, Ms. Ramirez-Martinez is not an independent director because she is also an executive officer of the Company.


Related Party Transactions


As of December 31, 2011 and December 31, 2010, the Company has received cash advances from a shareholder or related party of $56,572 and $19,548.  The advances are non-interest bearing, unsecured and due upon demand.  Imputed interest in the amount of $1,360 and $1,450 is included in additional paid in capital for the periods ended December 31, 2011 and December 31, 2010.

 

Other than the foregoing, none of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.


With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manner:

 

·

disclosing such transactions in reports where required;

·

disclosing in any and all filings with the SEC, where required;

·

obtaining disinterested directors consent; and

·

obtaining shareholder consent where required.


Review, Approval or Ratification of Transactions with Related Persons


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.



38







ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES



 

Year Ended

December 31, 2011

Year Ended

December 31, 2010

Audit fees

$9,000

$8,100

Audit-related fees

$0

$0

Tax fees

$0

$0

All other fees

$0

$0

Total

$9,000

$8,100


Audit Fees


During the fiscal year ended December 31, 2011, we incurred approximately $9,000 in fees to our principal independent accountants for professional services rendered in connection with the audit and review of our financial statements for fiscal year ended December 31, 2011.


During the fiscal year ended December 31, 2010, we incurred approximately $8,100 in fees to our principal independent accountants for professional services rendered in connection with the audit and review of our financial statements for fiscal year ended December 31, 2010.


Audit-Related Fees


The aggregate fees billed during the fiscal years ended December 31, 2011 and 2010 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item 9(e)(1) of Schedule 14A) was $0 and $0, respectively.


Tax Fees


The aggregate fees billed during the fiscal years ended December 31, 2011 and 2010 for professional services rendered by our principal accountant tax compliance, tax advice and tax planning were $0 and $0, respectively.


All Other Fees


The aggregate fees billed during the fiscal years ended December 31, 2011 and 2010 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A) was $0 and $0, respectively.

 



39






PART IV

 

ITEM 15.

EXHIBITS.


Exhibit

 

 

Number

Description of Exhibit

Filing

3.01

Articles of Incorporation

Filed with the SEC on January 17, 2008 as part of our Registration Statement on Form SB-2.

3.01(a)

Amended and Restated Articles of Incorporation

Filed with the SEC on September 3, 2010 as part of our Current Report on Form 8-K.

3.02

Bylaws

Filed with the SEC on January 17, 2008 as part of our Registration Statement on Form SB-2.

10.01

Stock Purchase Agreement between Gloria Ramirez-Martinez and Daniel MacLean dated December 3, 2009.

Filed with the SEC on March 15, 2011 as part of our Amended Registration Statement on Form S-1/A.

10.02

Consulting Agreement between the Company and Steve Radvak dated September 10, 2010.

Filed with the SEC on September 13, 2010 as part of our Current Report on Form 8-K.

10.03

Property Option Agreement between the Company and MinQuest, Inc. dated October 22, 2011

Filed with the SEC on October 27, 2011 as part of our Current Report on Form 8-K.

16.01

Letter from Moore & Associates, Chartered dated August 11, 2009

Filed with the SEC on August 12, 2009 as part of our Current Report on Form 8-K.

16.02

Letter from Seale & Beers, CPAs dated September 15, 2009

Filed with the SEC on September 16, 2009 as part of our Current Report on Form 8-K.

31.01

Certification of Principal Executive Officer Pursuant to Rule 13a-14

Filed herewith.

31.02

Certification of Principal Financial Officer Pursuant to Rule 13a-14

Filed herewith.

32.01

CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

Filed herewith.

101.INS*

XBRL Instance Document

Filed herewith.

101.SCH*

XBRL Taxonomy Extension Schema Document

Filed herewith.

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith.

101.LAB*

XBRL Taxonomy Extension Labels Linkbase Document

Filed herewith.

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith.

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.



SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


FIRST RESOURCES CORP.



Dated: March 30, 2012

/s/ Gloria Ramirez-Martinez                            

By: Gloria Ramirez-Martinez

Its: President, Principal Executive Officer, Principal Financial Officer and Treasurer


Pursuant to the requirement 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: March 30, 2012

/s/ Gloria Ramirez-Martinez                            

Gloria Ramirez-Martinez

Its:  Director



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