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EX-32.1 - WESTMOUNTAIN GOLD, INC.wmtn_ex321.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
 
þ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
 
For the fiscal year ended October 31, 2012
 
o TRANSACTION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
 
For the transaction period from ________ to ________
 
Commission File No. 0-53028

WESTMOUNTAIN INDEX ADVISOR, INC.
(Exact Name of Issuer as specified in its charter)

Colorado
 
26-1315498
(State or other jurisdiction  of incorporation)
 
(IRS Employer File Number)

2186 S. Holly St., Suite 104 Denver, CO
 
80222
(Address of principal executive offices)
 
(zip code)

(303) 800-0678
 (Registrant's telephone number, including area code)
 
Securities registered pursuant to Section 12 (b) of the Exchange Act:
 
 Common
 
 OTCBB
(Title of each class)
 
(Name of each exchange on which registered)
 
Securities registered pursuant to Section 12 (g) of the Exchange Act:
None
(Title of Class)
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes    þ No
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. o Yes    þ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.   þ Yes    o 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes   o No
 
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K  (§229.405) 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.  þ
 
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 the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer
o
Accelerated filer
 
o
Non-accelerated filer
o
Smaller reporting company
 
þ
(Do not check if a smaller reporting company)
       
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     o Yes    þ No

As of April 30, 2012 (the last business day of our most recently completed second fiscal quarter), based upon the last reported trade on that date, the aggregate market value of the voting and non-voting common equity held by non-affiliates (for this purpose, all outstanding and issued common stock minus stock held by the officers, directors and known holders of 10% or more of the Company’s common stock) was $9,309,852.

As of January 22, 2013, the Company had 23,732,344 shares of common stock issued.
 


 
 

 

TABLE OF CONTENTS
  
     
Page
 
PART 1
 
         
ITEM 1.
Description of Business
      3  
           
ITEM 1A.
Risk Factors
      4  
           
ITEM 1B
Unresolved Staff Comments
      11  
           
ITEM 2.
Properties
      11  
           
ITEM 3.
Legal Proceedings
      11  
           
ITEM 4.
Mine Safety Disclosure
      11  
           
PART II
 
           
ITEM 5.
Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
      12  
           
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
      18  
           
ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
      18  
           
ITEM 9A.
Controls and Procedures
      19  
           
ITEM 9B.
Other Information
      19  
           
PART III
 
           
ITEM 10.
Directors, Executive Officers and Corporate Governance
      20  
           
ITEM 11.
Executive Compensation
      25  
           
ITEM 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
      33  
           
ITEM 13.
Certain Relationships and Related Transactions, and Director Independence
      34  
           
ITEM 14.
Principal Accounting Fees and Services
      35  
           
PART IV
 
           
ITEM 15.
Exhibits, Financial Statement Schedules
      37  
           
 
SIGNATURES
     41  
 
 
2

 
 
PART I
 
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

The following discussion, in addition to the other information contained in this report, should be considered carefully in evaluating us and our prospects. This report (including without limitation the following factors that may affect operating results) contains forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act") regarding us and our business, financial condition, results of operations and prospects. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this report. Additionally, statements concerning future matters such as revenue projections, projected profitability, growth strategies, development of new products, enhancements or technologies, possible changes in legislation and other statements regarding matters that are not historical are forward-looking statements.

Forward-looking statements in this report reflect the good faith judgment of our management and the statements are based on facts and factors as we currently know them. Forward-looking statements are subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, but are not limited to, those discussed below and in "Management's Discussion and Analysis of Financial Condition and Results of Operations" as well as those discussed elsewhere in this report. Readers are urged not to place undue reliance on these forward-looking statements which speak only as of the date of this report. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report.

ITEM 1.    DESCRIPTION OF BUSINESS

THE COMPANY AND OUR BUSINESS

WestMountain Index Advisor, Inc. (“WestMountain,” “WMTN” or the “Company”) is an exploration and development company that explores, acquires, and develops advanced stage properties. We have a high-grade gold system in the resource definition phase with 168,000 ounces of inferred gold which in total offers potential of 1,000,000 or more ounces that is owned by our wholly owned subsidiary, TMC. The property consists of 344 Alaska state mining claims covering approximately 85 square miles. All government permits and reclamation plans for continued exploration through 2014 were renewed in 2010.  We refer to this project as the “TMC project”.

The TMC project is located in the mining friendly Tintina gold belt. Three of the top five gold producers are investing billions in this region, which has estimated reserves of 180 million ounces.
 
We have budgeted expenditures for the next twelve months of approximately $2,425,000, depending on additional financing, for general and administrative expenses and exploration and development to implement the business plan as described below.  For further details see “Liquidity and Capital Resources” below.
 
We will have to raise substantial additional capital in order to fully implement the business plan.  If economic reserves of gold and/or other minerals are proven, additional capital will be needed to actually develop and mine those reserves. As discussed under “Liquidity and Capital Resources” below, we must expend $4.5 million over the next two years as our “earn in” on the TMC project to own rights to 80% of the project.  Even if economic reserves are found, if we are unable to raise this capital, we will not be able to complete our earn in on this project.  

Our principal source of liquidity for the next several years will need to be the continued raising of capital through the issuance of equity or debt.  WMTN plans to raise funds for each step of the project and as each step is successfully completed, raise the capital for the next phase.  WMTN believes this will reduce the cost of capital as compared to trying to raise all the anticipated capital at once up front.  However, since WMTN’s ability to raise additional capital will be affected by many factors, most of which are not within our control (see “Risk Factors”), no assurance can be given that WMTN will in fact be able to raise the additional capital as it is needed.
 
Our primary activity will be to proceed with the TMC project and other mining opportunities that may present themselves from time to time. We cannot guarantee that the TMC project will be successful or that any project that we embark upon will be successful. Our goal is to build our Company into a successful mineral exploration and development company. 
 
 
3

 

CORPORATE INFORMATION
 
We were incorporated in the state of Colorado on October 18, 2007.  Our principal executive office is located at 2186 S. Holly St., Suite 104, Denver, CO 80222, and our telephone number is (303) 800-0678.   Our principal website address is located at www.westmountaingold.com. The information on our website is not incorporated as a part of this Form 10-K.
 
THE COMPANY’S COMMON STOCK
 
Our common stock currently trades on the OTCBB ("OTCBB") under the symbol "WMTN."

KEY MARKET PRIORITIES

Our primary key market priority will be to proceed with the TMC project and other mining opportunities that may present themselves from time to time. We cannot guarantee that the TMC project will be successful or that any project that we embark upon will be successful. Our goal is to build our Company into a successful mineral exploration and development company.

PRIMARY RISKS AND UNCERTAINTIES 

We are exposed to various risks related to the volatility of the price of gold, our need for additional financing, our joint venture agreements, our reserve estimates, operating as a going concern, unique difficulties and uncertainties in mining exploration ventures, and a volatile market price for our common stock. These risks and uncertainties are discussed in more detail below in this item.

EMPLOYEES

As of October 31, 2012, we had five full-time and part-time employees.  Additionally, we use employees of Minex Exploration, an Idaho partnership affiliated with our Chief Executive Officer, as contractors for exploration and development of our Alaska property. Most of our employees are based in Sandpoint, ID. The Chief Executive Officer is based out of the Sandpoint, ID office. The Chief Financial Officer is based out of Seattle, WA.

WEBSITE ACCESS TO UNITED STATES SECURITIES AND EXCHANGE COMMISSION REPORTS

We file annual and quarterly reports, proxy statements and other information with the Securities and Exchange Commission ("SEC"). You may read and copy any document we file at the SEC's Public Reference Room at 100 F Street, N.E., Washington D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC maintains a website at http://www.sec.gov that contains reports, proxy and information statements and other information concerning filers. We also maintain a web site at http://www.westmountaingold.com that provides additional information about us and links to documents we file with the SEC. Our charters for the Audit, Compensation and Nominations and Governance Committees and the Code of Conduct & Ethics are also available on our website.
 
ITEM 1A. RISK FACTORS

An investment in our Common Stock involves a high degree of risk. You should carefully consider the following risk factors and other information in this prospectus before deciding to invest in shares of the our Common Stock. The most significant risks and uncertainties known and identified by our management are described below; however, they are not the only risks that we face. If any of the following risks actually occurs, our business, financial condition, liquidity, results of operations and prospects for growth could be materially adversely affected, the trading price of our Common Stock could decline, and you may lose all or part of your investment. You should acquire shares of our Common Stock only if you can afford to lose your entire investment. We make various statements in this section that constitute “forward-looking statements”. See “Forward-Looking Statements” beginning on page 5 of this Annual Report on Form 10-K.
 
 
4

 

The volatility of the price of gold could adversely affect our future operations and our ability to develop our properties.   

The potential for profitability of our operations, the value of our properties and our ability to raise funding to conduct continued exploration and development, if warranted, are directly related to the market price of gold and other precious metals.  The price of gold may also have a significant influence on the market price of our common stock and the value of our properties.  Our decision to put a mine into production and to commit the funds necessary for that purpose must be made long before the first revenue from production would be received.  A decrease in the price of gold may prevent our property from being economically mined or result in the write-off of assets whose value is impaired as a result of lower gold prices. 

As of January 17, 2013, the price of gold was $1,691 per ounce, based on the daily London PM fix on that date.  The volatility of mineral prices represents a substantial risk which no amount of planning or technical expertise can fully eliminate.  In the event gold prices decline or remain low for prolonged periods of time, we might be unable to develop our properties, which may adversely affect our results of operations, financial performance and cash flows. 

Our Joint Venture Agreement and Amended Claim Agreement are critical to our operations and are subject to cancellation.

On September 15, 2010, we signed an Exploration, Development and Mine Operating Agreement (“JV Agreement”) with Raven.

The failure to operate in accordance with the JV Agreement could result in our interest in the JV Agreement being terminated. See Note 3 to the Consolidated Financial Statements for a discussion of this critical agreement.

On January 7, 2011, TMC entered into an Amended Claims Agreement with Ben Porterfield related to five mining claims known as Fish Creek 1-5 (ADL-648383 through ADL-648387), which claims have been assigned to the TMC project. As part of this Amended Claims Agreement, Ben Porterfield consented to certain conveyances, assignments, contributions and transfers related to this above five mining claims.

The failure to operate in accordance with the Amended Claims Lease or Agreement could result in the lease pertaining to the mining claims that are the subject of the Amended Claims Agreement being terminated. See Note 3 to the Consolidated Financial Statements for a discussion of this critical agreement.

Estimates of mineralized material are based on interpretation and assumptions and may yield less mineral production under actual conditions than is currently estimated.   

Unless otherwise indicated, estimates of mineralized material presented in our press releases and regulatory filings are based upon estimates made by us and our consultants.  When making determinations about whether to advance any of our projects to development, we must rely upon such estimated calculations as to the mineralized material on our properties.  Until mineralized material is actually mined and processed, it must be considered an estimate only.  These estimates are imprecise and depend on geological interpretation and statistical inferences drawn from drilling and sampling analysis, which may prove to be unreliable.  We cannot assure you that these mineralized material estimates will be accurate or that this mineralized material can be mined or processed profitably.  Any material changes in estimates of mineralized material will affect the economic viability of placing a property into production and such property’s return on capital.  There can be no assurance that minerals recovered in small scale metallurgical tests will be recovered at production scale.  

The mineralized material estimates have been determined and valued based on assumed future prices, cut-off grades and operating costs that may prove inaccurate.  Extended declines in market prices for gold and silver may render portions of our mineralized material uneconomic and adversely affect the commercial viability of one or more of our properties and could have a material adverse effect on our results of operations or financial condition.
 
 
5

 

We need to continue as a going concern if our business is to succeed. 

Our audited financial statements for the period from inception (March 25, 2010) to October 31, 2012 indicate that there are a number of factors that raise substantial doubt about our ability to continue as a going concern.   Such factors identified in the report result from our limited history of operations, limited assets, and operating losses since inception.  If we are not able to continue as a going concern, it is likely investors will lose their investments.
 
Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure. 

Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us in the exploration of the mineral claim may not result in the discovery of mineral deposits. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of our exploration do not reveal viable commercial mineralization, we may decide to abandon our claim and acquire new claims for new exploration. The acquisition of additional claims will be dependent upon us possessing capital resources at the time in order to purchase such claims. If no funding is available, we may be forced to abandon our operations. 

If we do not obtain additional financing, our business will fail. 

For the years ended October 31, 2012 and 2011 and for the period from inception (March 25, 2010) to October 31, 2010, we had no revenues. 

Net loss for the year ended October 31, 2012 was $5,550,000. Net loss for the year ended October 31, 2011 was $4,035,000. The net loss included $1,993,000 of non-cash expenses for the year ended October 31, 2012.

Our current operating funds are less than necessary to complete all intended exploration of the property, and therefore we will need to obtain additional financing in order to complete our business plan.  As of January 22, 2013, we had approximately $400,000 in cash. 

Our business plan calls for significant expenses in connection with the exploration of the property.  We do not currently have sufficient funds to conduct continued exploration on the property and require additional financing in order to determine whether the property contains economic mineralization.  We will also require additional financing if the costs of the exploration of the property are greater than anticipated. 

We will require additional financing to sustain our business operations if we are not successful in earning revenues once exploration is complete.  We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including the market prices for copper, silver and gold, investor acceptance of our property and general market conditions.  These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. 

The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders.  The only other anticipated alternative for the financing of further exploration would be our sale of a partial interest in the property to a third party in exchange for cash or exploration expenditures, which is not presently contemplated. 

Because we have commenced limited business operations, we face a high risk of business failure.

We started exploring our properties in the summer of 2011.  Accordingly, we have no way to evaluate the likelihood that our business will be successful.  Although we were incorporated in the state of Colorado on October 18, 2007, the Company just acquired our mineral properties with our acquisition of TMC on February 28, 2011.  We have not earned any revenues as of the date of this Form 10K.  TMC itself has only been in existence since March 25, 2010.
 
 
6

 

Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues.  We therefore expect to incur significant losses into the foreseeable future.  We recognize that if we are unable to generate significant revenues from development of the mineral claims and the production of minerals from the claims, we will not be able to earn profits or continue operations. 

There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.

We are dependent on key personnel.

Our success depends to a significant degree upon the continued contributions of key management and other personnel, some of whom could be difficult to replace. We do not maintain key man life insurance covering certain of our officers. Our success will depend on the performance of our officers, our ability to retain and motivate our officers, our ability to integrate new officers into our operations and the ability of all personnel to work together effectively as a team. Our failure to retain and recruit officers and other key personnel could have a material adverse effect on our business, financial condition and results of operations.
 
We lack an operating history and we expect to have losses in the future.
 
Except for our initial exploration efforts as described above, we have not started our proposed business operations or realized any revenues. We have no operating history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon the following: 

 
Our ability to locate a profitable mineral property;
  
Our ability to generate revenues; and
  
Our ability to reduce exploration costs.
 
Based upon current plans, we expect to incur operating losses in foreseeable future periods. This will happen because there are expenses associated with the research and exploration of our mineral properties. We cannot guarantee that we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.

Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.

The search for valuable minerals involves numerous hazards.  As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. Although we conducted a due diligence investigation prior to entering into the acquisition of TMC, risk remains regarding any undisclosed or unknown liabilities associated with this project. The payment of such liabilities may have a material adverse effect on our financial position.

Because we are small and do not have sufficient capital, we may have to cease operation even if we have found mineralized material.

Because we are small and do not have sufficient capital, we must limit our exploration. Because we may have to limit our exploration, we may be unable to mine mineralized material, even if our mineral claims contain mineralized material. If we cannot mine mineralized material, we may have to cease operations.

If we become subject to onerous government regulation or other legal uncertainties, our business will be negatively affected.  Governmental regulations impose material restrictions on mineral property exploration and development. Under Alaska mining law, to engage in exploration will require permits, the posting of bonds, and the performance of remediation work for any physical disturbance to the land. If we proceed to commence drilling operations on the mineral claims, we will incur additional regulatory compliance costs.
 
 
7

 

In addition, the legal and regulatory environment that pertains to mineral exploration is uncertain and may change. Uncertainty and new regulations could increase our costs of doing business and prevent us from exploring for ore deposits. The growth of demand for ore may also be significantly slowed. This could delay growth in potential demand for and limit our ability to generate revenues.  In addition to new laws and regulations being adopted, existing laws may be applied to limit or restrict mining that have not as yet been applied.  These new laws may increase our cost of doing business with the result that our financial condition and operating results may be harmed. 

We may not have access to all of the supplies and materials we need to begin exploration that could cause us to delay or suspend operations. 

Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies, such as explosives, and certain equipment such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or negotiate with any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials after this offering is complete. If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we do find the products and equipment we need. 

Because of the speculative nature of exploration of mineral properties, there is no assurance that our exploration activities will result in the discovery of new commercially exploitable quantities of minerals. 

We plan to continue to source exploration mineral claims. The search for valuable minerals as a business is extremely risky. We can provide investors with no assurance that additional exploration on our properties will establish that additional commercially exploitable reserves of gold exist on our properties.  Problems such as unusual or unexpected geological formations or other variable conditions are involved in exploration and often result in exploration efforts being unsuccessful. The additional potential problems include, but are not limited to, unanticipated problems relating to exploration and attendant additional costs and expenses that may exceed current estimates. These risks may result in us being unable to establish the presence of additional commercial quantities of ore on our mineral claims with the result that our ability to fund future exploration activities may be impeded. 
 
Weather and location challenges may restrict and delay our work on our property.   

We plan to conduct our exploration on a seasonal basis. It is possible that snow or rain could restrict and delay work on the properties to a significant degree. Our property is located in a relatively remote location, which creates additional transportation and energy costs and challenges. 

As we face intense competition in the mining industry, we will have to compete with our competitors for financing and for qualified managerial and technical employees. 

The mining industry is intensely competitive in all of its phases. Competition includes large established mining companies with substantial capabilities and with greater financial and technical resources than we have. As a result of this competition, we may be unable to acquire additional attractive mining claims or financing on terms we consider acceptable. We also compete with other mining companies in the recruitment and retention of qualified managerial and technical employees. If we are unable to successfully compete for financing or for qualified employees, our exploration and development programs may be slowed down or suspended.
 
 
8

 

Trading of our stock may be restricted by Blue Sky eligibility and the SEC's penny stock regulations which may limit a stockholder's ability to buy and sell our stock. 

We currently are not Blue Sky eligible in certain states so trading of the Company’s stock in such states may be restricted. In addition, the SEC has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions.  Under the penny stock rules, additional sales practice requirements are imposed on broker-dealers who sell to persons other than established customers and "accredited investors."  The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.  The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account.  The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation.  In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction.  These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to broker-dealers ability to trade in the Company’s securities.  The Blue Sky eligibility and the penny stock rules may discourage investor interest in and limit the marketability of, the Company’s common stock.

The sale of a significant number of our shares of common stock could depress the price of our common stock. 

Sales or issuances of a large number of shares of common stock in the public market or the perception that sales may occur could cause the market price of our common stock to decline. As of January 23, 2013, there were 37.2 million shares of common stock and warrants issued and outstanding on a fully diluted basis. Therefore the amount of shares that have been registered by the Company for resale by certain investors (up to 6,707,715 shares of common stock) constitutes a significant percentage of the issued and outstanding shares and the sale of all or a portion of these shares could have a negative effect on the market price of our common stock. Significant shares of common stock are held by our principal shareholders, other Company insiders and other large shareholders. As “affiliates” (as defined under Rule 144 of the Securities Act (“Rule 144”)) of the Company, our principal shareholders, other Company insiders and other large shareholders may only sell their shares of common stock in the public market pursuant to an effective registration statement or in compliance with Rule 144. 
 
We may engage in acquisitions, mergers, strategic alliances, joint ventures and divestitures that could result in financial results that are different than expected. 
 
In the normal course of business, we may engage in discussions relating to possible acquisitions, equity investments, mergers, strategic alliances, joint ventures and divestitures. All such transactions are accompanied by a number of risks, including:

  
Use of significant amounts of cash,
  
Potentially dilutive issuances of equity securities on potentially unfavorable terms,
  
Incurrence of debt on potentially unfavorable terms as well as impairment expenses related to goodwill and amortization expenses related to other intangible assets, and

  
The possibility that we may pay too much cash or issue too many of our shares as the purchase price for an acquisition relative to the economic benefits that we ultimately derive from such acquisition.
  
The process of integrating any acquisition may create unforeseen operating difficulties and expenditures. The areas where we may face difficulties in the foreseeable include:
  
Diversion of management time, during the period of negotiation through closing and after closing, from its focus on operating the businesses to issues of integration,
  
The need to integrate each company's accounting, management information, human resource and other administrative systems to permit effective management, and the lack of control if such integration is delayed or not implemented,
  
The need to implement controls, procedures and policies appropriate for a public company that may not have been in place in private companies, prior to acquisition,
  
The need to incorporate acquired technology, content or rights into our products and any expenses related to such integration, and
  
The need to successfully develop any acquired in-process technology to realize any value capitalized as intangible assets.
 
 
9

 
 
From time to time, we may engage in discussions with candidates regarding potential divestures. If a divestiture does occur, we cannot be certain that our business, operating results and financial condition will not be materially and adversely affected. A successful divestiture depends on various factors, including our ability to:

  
Effectively transfer liabilities, contracts, facilities and employees to any purchaser,
  
Identify and separate the intellectual property to be divested from the intellectual property that we wish to retain,
  
Reduce fixed costs previously associated with the divested assets or business, and
  
Collect the proceeds from any divestitures.
 
In addition, if customers of the divested business do not receive the same level of service from the new owners, this may adversely affect our other businesses to the extent that these customers also purchase other products offered by us. All of these efforts require varying levels of management resources, which may divert our attention from other business operations.

If we do not realize the expected benefits or synergies of any divestiture transaction, our consolidated financial position, results of operations, cash flows and stock price could be negatively impacted.

The market price of our common stock may be volatile.  

The market price of our common stock has been and is likely in the future to be volatile. Our common stock price may fluctuate in response to factors such as:  

Announcements by us regarding resources, liquidity, significant acquisitions, equity investments and divestitures, strategic relationships, addition or loss of significant customers and contracts, capital expenditure commitments, loan, note payable and agreement defaults, loss of our subsidiaries and impairment of assets,
Issuance or repayment of debt, accounts payable or convertible debt for general or merger and acquisition purposes,
Sale of a significant number of shares of our common stock by shareholders,
General market and economic conditions,
Quarterly variations in our operating results,
Investor relation activities,
Announcements of technological innovations,
New product introductions by us or our competitors,
Competitive activities, and
Additions or departures of key personnel.
 
These broad market and industry factors may have a material adverse effect on the market price of our common stock, regardless of our actual operating performance. These factors could have a material adverse effect on our business, financial condition and results of operations. 

Our management has substantial influence over our company.  

As of January 22, 2013, Greg Schifrin, our CEO, and Mr. James Baughman together, either directly or indirectly, own or control 6.6 million shares as of the filing date or approximately 17.8% of the Company’s issued and outstanding common stock on a fully diluted basis as of the date of this Form 10-K. 

BOCO Investments LLC (“BOCO”) owns or controls 7.3 million shares as of the filing date or approximately 14.5% of the Company’s issued and outstanding common stock as of the date of this annual report on Form 10-K and 19.7% of our common stock on a fully diluted basis, excluding the potential conversion of $1,853,965 of debt that is due and payable by the Company on January 22, 2013 (“BOCO Secured Promissory Note”), that as of December 31, 2012, is convertible along with accrued interest into Company common stock at a rate of $0.75 per share  and 3,302,115 for exercise of warrants. See Note 5 and 6 to the Company’s Financial Statements for a more detailed description of this Secured Promissory Note and the warrants.
 
 
10

 

As a major creditor of the Company as well as shareholder, BOCO has additional influence and control over the Company.

Mr. Schifrin, Mr. Baughman and BOCO, in combination with other large shareholders, could cause a change of control of our board of directors, approve or disapprove any matter requiring stockholder approval, cause, delay or prevent a change in control or sale of the Company, which in turn could adversely affect the market price of our common stock.

ITEM 1B.     UNRESOLVED STAFF COMMENTS

We have no unresolved Staff comments.

ITEM 2.     PROPERTIES

The WMTN principal executive offices are located at 2186 S. Holly St., Suite 104, Denver, CO 80222, and its telephone number is (303) 800-0678.   On September 1, 2012, we leased our corporate office at the rate of $400 per month to August 31, 2013.   On April 1, 2012, we entered into a lease at 120 Lake Street, Suite 401, Sandpoint, ID 83864.  This office is leased at the net of $1,000 per month and expires March 31, 2013. The office is shared with an entity affiliated with our Chief Executive Officer. We have the option to extend the lease for one year.

Other than our mining claims, leases, and other real property interests specifically related to mining, WMTN does not own real estate nor have plans to acquire any real estate.
 
ITEM 3.    LEGAL PROCEEDINGS
 
There are no pending legal proceedings against us that are expected to have a material adverse effect on our cash flows, financial condition or results of operations. 
 
ITEM 4.    MINE SAFETY DISCLOSURE
 
Not applicable.
 
 
11

 

PART II
 
ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock currently trades on the Over the Counter Bulletin Board (“OTCBB”) under the symbol “WMTN.” The following table sets forth the range of the high and low sale prices of the common stock for the periods indicated:

Quarter Ended
 
High
   
Low
 
January 31, 2012
  $ 3.99     $ 1.60  
April 30, 2012
  $ 1.60     $ 1.00  
July 31, 2012
  $ 1.19     $ 0.30  
October 31, 2012
  $ 1.13     $ 0.30  
                 
January 31, 2011
  $ -     $ -  
April 30, 2011
  $ 3.97     $ 3.75  
July 31, 2011
  $ 3.97     $ 1.25  
October 31, 2011
  $ 3.99     $ 1.25  
                 
March 31, 2010
  $ 0.66     $ 0.66  
June 30, 2010
  $ 0.66     $ 0.66  
September 30, 2010
  $ 2.76     $ 0.66  
December 31, 2010
  $ 2.77     $ 0.30  
 
As of January 17, 2012, the closing price of the Company's common stock was $0.90 per share. As of January 22, 2013, there were 23,732,344 shares of common stock outstanding held by 180 stockholders of record. The number of stockholders, including the beneficial owners' shares through nominee names is approximately 250.

DIVIDEND POLICY

We have never paid any cash dividends and intend, for the foreseeable future, to retain any future earnings for the development of our business. Our future dividend policy will be determined by the board of directors on the basis of various factors, including our results of operations, financial condition, capital requirements and investment opportunities.

RECENT SALES OF UNREGISTERED SECURITIES

During the three months ended October 31, 2012, there were the following sales of unregistered equity securities:

On September 17, 2012, the Company entered into Amended and Restated Revolving Credit Loan and Security and Secured Convertible Promissory Note Agreements with BOCO Investments, LLC (“BOCO”), an existing lender to and shareholder in the Company. On October 1, 2012, the Company entered into a Warrant to Purchase Stock Agreement with BOCO related to this financing (such Agreements and Warrant, the “Transaction Documents”). The Transaction Documents supersede the Revolving Credit Loan and Security, Secured Convertible Promissory Note and Warrant to Purchase Stock Agreements entered into on August 8, 2012 with BOCO as reported in the Company 8-K filed on Aug. 2012.  For a more detailed description of the terms of these Transaction Documents, see Note 6 to the Company’s Financial Statements.
 
 
12

 

On September 11, 2012, the Company issued to BOCO a Warrant to purchase 3,102,115 shares of common stock at the lesser of $1.50 or the lowest price at which common shares in the Company are issued in any round of financing commencing after the date of the convertible Promissory Note in the face amount of $1,853,965. The Warrant expires September 30, 2017. There are no registration requirements.

On September 19, 2012, the Company issued a warrant for the purchase of 5,080 shares of common stock of the Company at $2.00 per share to Hinman Au for advisory services.  The warrant expires September 18, 2015 and does not have registration rights. The warrant may be called by the Company if it has registered the sale of the underlying shares with the SEC and a closing price of $4.00 or more for the Company’s common stock has been sustained for five trading days. The warrants were valued based on Black-Scholes and $1,727 was expensed as consulting expense during the three months ended October 31, 2012.

During the three months ended October 31, 2012, the Company signed Subscription Agreements with seven accredited investors for $625,000 and issued 625,000 shares of restricted common stock at $1.00 per share.  The restricted common stock does not have registration rights.  In addition, the Company issued warrants for 625,000 shares at $2.00 per share. The warrants expire three years after issuance and do not have registration rights. The warrants may be called by the Company if it has registered the sale of the underlying shares with the SEC and a closing price of $4.00 or more for the Company’s common stock has been sustained for five trading days. A notice filing under Regulation D was filed with the SEC during the three months ended October 31, 2012 with regard to these stock issuances.

During the three months ended October 31, 2012, the Company converted $130,000 in accounts payable into 130,000 shares of restricted common stock at $1.00 per share.  The restricted common stock does not have registration rights.  In addition, the Company issued warrants for 130,000 shares at $1.85 per share. The warrants expire three years after issuance and do not have registration rights. The warrants may be called by the Company if it has registered the sale of the underlying shares with the SEC and a closing price of $4.00 or more for the Company’s common stock has been sustained for five trading days. A notice filing under Regulation D was filed with the SEC during the three months ended October 31, 2012 with regard to these stock issuances. The Warrants were valued based on Black-Scholes and expensed at $16,900.

On October 12, 2012, Mark Macklin converted debt of $100,000 and accrued interest of $2,500 into 102,500 shares of restricted common stock. The restricted common stock does not have registration rights.  In addition, the Company issued warrants dated September 19, 2012 for 102,500 shares at $2.00 per share. The warrants expire three years after issuance and do not have registration rights. The warrants may be called by the Company if it has registered the sale of the underlying shares with the SEC and a closing price of $4.00 or more for the Company’s common stock has been sustained for five trading days. A notice filing under Regulation D was filed with the SEC on October 31, 2012 with regard to this stock issuance. The warrants were based on Black-Scholes and $17,425 was expensed during the year ended October 31, 2012.

On October 24, 2012, the Company granted 25,000 shares of restricted common stock to a director that was valued at $25,000. A notice filing under Regulation D was filed with the SEC on October 31, 2012 with regard to this stock issuance.

Unless otherwise indicated, all of the above private placements of Company securities were conducted under the exemption from registration as provided under Section 4(2) of the Securities Act of 1933 (and also qualified for exemption under 4(5), formerly 4(6) of the Securities Act of 1933, as noted above). All of the shares issued were issued in private placements not involving a public offering, are considered to be “restricted stock” as defined in Rule 144 promulgated under the Securities Act of 1933 and stock certificates issued with respect thereto bear legends to that effect.
 
 
13

 
 
Performance Graph
Comparison of Cumulative Total Return

Among WestMountain Index Advisor, Inc., Market Vectors Junior Gold Mine ETF
and SPDR Gold Trust ETF
 
 
   
10/31/2010
   
10/31/2011
   
10/31/2012
 
                         
WestMountain Index Advisor, Inc.
  $ 100.00     $ 399,000.00     $ 80,000.00  
                         
Market Vectors Junior Gold Mine ETF
  $ 100.00     $ 92.70     $ 71.89  
                         
SPDR Gold Trust ETF
  $ 100.00     $ 126.18     $ 125.80  
 
The above assumes that $100 was invested in the common stock and each index on October 31, 2010. Although the Company has not declared a dividend on its common stock, the total return for each index assumes the reinvestment of dividends. Stockholder returns over the periods presented should not be considered indicative of future returns. The foregoing table shall not be deemed incorporated by reference by any general statement incorporating by reference the Form 10-K  into any filing under the Securities Act or the Exchange Act, except to the extent the company specifically incorporates this information by reference, and shall not otherwise be deemed filed under the acts.

EQUITY COMPENSATION PLAN INFORMATION
 
We do not have any equity compensation plans in effect.
 
ITEM 6.    SELECTED FINANCIAL DATA

In the following table, we provide you with our selected consolidated historical financial and other data. We have prepared the consolidated selected financial information using our consolidated financial statements for the years ended October 31, 2012 and 2011 and for the period from inception ( March 25, 2010) to October 31, 2010. When you read this selected consolidated historical financial and other data, it is important that you read along with it the historical financial statements and related notes in our consolidated financial statements included in this report, as well as Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 
14

 
 
   
Year Ended,
 
   
October 31, 2012
   
10/31/2011 (2)
   
10/31/2010 (1)
 
(in thousands, except for per share data)
                 
STATEMENT OF OPERATIONS DATA:
                 
Revenue
  $ -     $ -     $ -  
Net loss
    (5,550,190 )     (4,035,260 )     (495,018 )
Net loss applicable to WestMountain Index Advisor, Inc. common shareholders
    (5,550,190 )     (4,035,260 )     (495,018 )
Net loss per share
    (0.28 )     (0.32 )     (0.13 )
                         
BALANCE SHEET DATA:
                       
Total assets
    1,229,192       1,298,696       675,781  
Stockholders' deficit
    (2,383,844 )     (109,066 )     (267,016 )
 
(1) Reflects net loss of Terra Mining Corporation and subsidiary.
 
(2) Reflects net loss of WestMountain Index Advisor, Inc. which Terra Mining Corporation and subsidiary acquired on February 28, 2011.
 
ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Overview

WMTN is an exploration and development company that explores, acquires, and develops advanced stage properties. We have a high-grade gold system in the resource definition phase with 168,000 ounces of inferred gold which in total offers potential of 1,000,000 or more ounces that is owned by our wholly owned subsidiary, TMC. The property consists of 344 Alaska state mining claims covering approximately 85 square miles. All government permits and reclamation plans for continued exploration through 2014 were renewed in 2010.  We refer to this project as the “TMC project”.

We have budgeted expenditures for the next twelve months of approximately $2,425,000, depending on additional financing, for general and administrative expenses and exploration and development to implement the business plan as described below.  For further details see “Liquidity and Capital Resources” below.

WMTN believes we will have to raise substantial additional capital in order to fully implement the business plan.  If economic reserves of gold and/or other minerals are proven, additional capital will be needed to actually develop and mine those reserves. As discussed under “Liquidity and Capital Resources” below, we must expend $4.5 million over the next two years as our “earn in” on the TMC project to own rights to 80% of the project.  Even if economic reserves are found, if we are unable to raise this capital, we will not be able to complete our earn in on this project.

Our principal source of liquidity for the next several years will need to be the continued raising of capital through the issuance of equity or debt.  WMTN plans to raise funds for each step of the project and as each step is successfully completed, raise the capital for the next phase.  WMTN believes this will reduce the cost of capital as compared to trying to raise all the anticipated capital at once up front.  However, since WMTN’s ability to raise additional capital will be affected by many factors, most of which are not within our control (see “Risk Factors”), no assurance can be given that WMTN will in fact be able to raise the additional capital as it is needed.
 
Our primary activity will be to proceed with the Terra Mining Corporation (“TMC”) project and other mining opportunities that may present themselves from time to time. We cannot guarantee that the TMC project will be successful or that any project that we embark upon will be successful. Our goal is to build our Company into a successful mineral exploration and development Company.

 
15

 
 
RESULTS OF OPERATIONS

The following table presents certain consolidated statement of operations information and presentation of that data as a percentage of change from year-to-year.

(dollars in thousands)
 
     
Year Ended October 31,
 
     
2012
   
2011
   
$ Variance
   
% Variance
 
                           
Revenue
  $ -     $ -     $ -        
Cost of sales
    -       -       -        
Gross profit
    -       -       -        
Selling, general and administrative expenses
    2,039       1,710       329       -19.2 %
Exploration expenses
    2,167       1,461       706       -100.0 %
Operating loss
    (4,206 )     (3,171 )     (1,035 )     -32.6 %
Other income (expense):
                               
 
Interest expense
    (1,344 )     -       (1,344 )     -100.0 %
 
Consulting income - Terra Mining Corporation
    -       50       (50 )     100.0 %
 
Finance fee
    -       (14 )     14       -100.0 %
 
Merger expense
    -       (900 )     900       -100.0 %
Total other expense
    (1,344 )     (864 )     (480 )     -55.6 %
Net loss
  $ (5,550 )   $ (4,035 )   $ (1,515 )     -37.5 %
 
YEAR ENDED OCTOBER 31, 2012 COMPARED TO THE YEAR ENDED OCTOBER 31, 2011

EXPENSES

Selling, general and administrative expenses for the year ended October 31, 2012 increased $329,000 to $2,039,000 as compared to $1,710,000 for the year ended October 31, 2011. Exploration expenses for the year ended October 31, 2012 increased $706,000 to $2,167,000 as compared to $1,461,000 for the year ended October 31, 2011. We acquired TMC on February 28, 2011 and expanded mining and business development activities in 2012.

Such expenses for the years ended October 31, 2012 and 2011 consisted primarily of employee and independent contractor expenses, expenses related to share issuances, rent, audit, overhead, amortization and depreciation, professional and consulting fees, sales and marketing costs, investor relations, legal, and other general and administrative costs and exploration expenses.

NET LOSS

Net loss for the year ended October 31, 2012 was $5,550,000 as compared to a net loss of $4,035,000 for the year ended October 31, 2011. The net loss for the year ended October 31, 2012 included $1,993,000 of non-cash expenses. We acquired TMC on February 28, 2011 and expanded mining and business development activities in 2012.

LIQUIDITY AND CAPITAL RESOURCES
 
We had cash of $89,000, a working capital deficit of approximately $3,517,000 as of October 31, 2012. In addition, we have $1,109,000 due under operating leases in 2013 and future years.  Further, we have $4,450,000 in mining expenditures planned in 2013 and future years.

With the acquisition of TMC, we expect that compared to the historic expenses incurred by TMC and, subject to raising additional capital, expenditures will ramp up for exploration and development.  We have budgeted expenditures for the next twelve months of approximately $2,450,000, depending on additional financing, for general and administrative expenses and exploration and development. We may choose to scale back operations to operate at break-even with a smaller level of business activity, while adjusting overhead depending on the availability of additional financing. In addition, we expect that we will need to raise additional funds if it decides to pursue more rapid expansion, the development of new or enhanced services or products, appropriate responses to competitive pressures, or the acquisition of complementary businesses or technologies, or if it must respond to unanticipated events that require it to make additional investments. We cannot assure that additional financing will be available when needed on favorable terms, or at all.

 
16

 
 
If economic reserves of gold and/or other minerals are proven, additional capital will be needed to actually develop and mine those reserves. We must expend $4,450,000 over the next three years as our “earn in” on the TMC project to own rights to 80% of the project.  Even if economic reserves are found, if we are unable to raise this capital, we will not be able to complete our earn in on this project.
  
We have budgeted the following expenditures for the next twelve months of approximately $2,450,000, depending on additional financing, for general and administrative expenses and exploration and development to implement the business plan as described above. 
 
OPERATING ACTIVITIES

Net cash used in operating activities for the year ended October 31, 2012 was $3,180,000. This amount was primarily related to a net loss of $5,550,000, offset by depreciation and amortization and other non-cash expenses of $1,993,000.

INVESTING ACTIVITIES
 
Net cash used in investing activities for the year ended October 31, 2012 was $204,000. This amount was primarily related to capital expenditures of $204,000.

FINANCING ACTIVITIES

Net cash provided by financing activities for the year ended October 31, 2012 was $3,463,000. This amount was primarily related to the issuance of promissory notes of $2,183,000 and common stock of $1,280,000.

Our unaudited contractual cash obligations as of October 31, 2012 are summarized in the table below:
 
         
Less Than
               
Greater Than
 
Contractual Cash Obligations
 
Total
   
1 Year
   
1-3 Years
   
3-5 Years
   
5 Years
 
Operating leases
  $ 1,109,000     $ 384,000     $ 350,000     $ 250,000     $ 125,000  
Capital lease obligations
    0       0       0       0       0  
Note payable
    2,138,965       2,138,965       0       0       0  
Mining expenditures
    4,450,000       1,450,000       3,000,000       0       0  
Acquisitions
    0       0       0       0       0  
    $ 7,697,965     $ 3,972,965     $ 3,350,000     $ 250,000     $ 125,000  

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The application of GAAP involves the exercise of varying degrees of judgment. On an ongoing basis, we evaluate our estimates and judgments based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe that of our significant accounting policies (see summary of significant accounting policies more fully described in Note 2 to the financial statements set forth in this report), the following policies involve a higher degree of judgment and/or complexity:

Cash and Cash Equivalents
We classify highly liquid temporary investments with an original maturity of three months or less when purchased as cash equivalents. The Company maintains cash balances at various financial institutions. Balances at US banks are insured by the Federal Deposit Insurance Corporation up to $250,000. Beginning December 31, 2010, through December 31, 2012, all noninterest-bearing transaction accounts are fully insured, regardless of the balance of the account, at all FDIC-insured institutions. We have not experienced any losses in such accounts and believe it is not exposed to any significant risk for cash on deposit.  As of October 31, 2012, we had no uninsured cash amounts.

Equipment
Equipment consists of machinery, furniture and fixtures and software, which are stated at cost less accumulated depreciation and amortization. Depreciation is computed by the straight-line method over the estimated useful lives or lease period of the relevant asset, generally 3-5 years. 

 
17

 
 
Mineral Properties
Costs of acquiring mineral properties are capitalized by project area upon purchase of the associated claims. Costs to maintain the mineral rights and leases are expensed as incurred.  When a property reaches the production stage, the related capitalized costs will be amortized, using the units of production method on the basis of periodic estimates of ore reserves.

We have access to the camp by airplane. There is no road access from camp to the project area where drilling and bulk sampling mining occurs. It is approximately 1 1/2 miles from camp to the project area.  Power generation is by diesel generator at the camp. Fuel is brought in for the generators by a cargo plane to the airstrip.

Long-Lived Assets
We review our long-lived assets for impairment annually or when changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets under certain circumstances are reported at the lower of carrying amount or fair value. Assets to be disposed of and assets not expected to provide any future service potential to the Company are recorded at the lower of carrying amount or fair value (less the projected cost associated with selling the asset). To the extent carrying values exceed fair values, an impairment loss is recognized in operating results.  As of October 31, 2012 there are no impairments recognized.

Alaska Reclamation and Remediation Liabilities
TMC operates in Alaska. The State of Alaska Department of Natural Resources requires a pool of funds from all permittees with exploration and mining projects to cover reclamation. There is a $750 per acre disturbance reclamation bond that is required for disturbance of 5 acres or more and/or removal of more the 50,000 cubic yards of material. TMC does not expect to exceed the minimum requirements and is not expected to be required to file a reclamation bond. As the project advances and feasibility justifies expansion, TMC may exceed the minimums outlined and may be required to file a reclamation plan and bond.  

We expect to record reclamation bond as a liability in the period in which we are required to pay a reclamation bond. A corresponding asset is also recorded and depreciated over the life of the asset. After the initial measurement of the asset retirement obligation, the liability will be adjusted at the end of each reporting period to reflect changes in reclamation bond.

Mineral Exploration and Development Costs
All exploration expenditures are expensed as incurred.  Significant property acquisition payments for active exploration properties are capitalized.  If no minable ore body is discovered, previously capitalized costs are expensed in the period the property is abandoned.  Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized and amortized on a unit of production basis over proven and probable reserves.

Should a property be abandoned, its capitalized costs are charged to operations.  We charge to operations the allocable portion of capitalized costs attributable to properties sold.  Capitalized costs are allocated to properties sold based on the proportion of claims sold to the claims remaining within the project area. 

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have no investments in any market risk sensitive instruments either held for trading purposes or entered into for other than trading purposes.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to our consolidated financial statements beginning on page F-1 of this report.
 
ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
Not applicable.

 
18

 
 
ITEM 9A. CONTROLS AND PROCEDURES
 
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

a) Evaluation of Disclosure Controls and Procedures
 
We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC’s rules and forms and that the information is gathered and communicated to our management to allow for timely decisions regarding required disclosure.

As required by Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, our management conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of October 31, 2012. Our disclosure controls and procedures are designed to provide reasonable assurance 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 SEC’s rules and forms, and our management necessarily was required to apply its judgment in evaluating and implementing our disclosure controls and procedures. Based upon the evaluation described above, our management concluded that they believe that our disclosure controls and procedures were not effective, as of the end of the period covered by this report, in providing reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management to allow timely decisions regarding required disclosures, and is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Management identified the weaknesses discussed below.  
 
Identified Material Weakness
 
A material weakness in our internal control over financial reporting is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected. Management identified material weaknesses during its assessment of internal controls over financial reporting as of October 31, 2012:
 
We formed an audit committee on October 26, 2012.  An audit committee is expected to improve oversight in the establishment and monitoring of required internal controls and procedures.
 
(b)  Changes In Internal Control Over Financial Reporting
 
During the quarter ended October 31, 2012, there were no other changes in our internal controls over financial reporting during this fiscal quarter that materially affected, or is reasonably likely to have a materially affect, on our internal control over financial reporting.
 
ITEM 9B. OTHER INFORMATION
 
There were no disclosures of any information required to be filed on Form 8-K during the three months ended October 31, 2012 that were not filed.   
 
 
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PART III
 
ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth, as of January 22, 2013, the name, age, and position of each executive officer and director and the tenure in office of each director of the Company.  
 
Name
 
Age
 
Positions and Offices Held
 
Since
Gregory Schifrin
  54  
Director, President and Chief Executive Officer
 
February 28, 2011
             
James Baughman
  56  
Director, Chief Operating Officer and Senior Vice President
 
February 28, 2011
             
Mark Scott
  59  
Chief Financial Officer and Secretary
 
February 28, 2011
             
Kevin Cassidy
  56  
Independent Director
 
August 24, 2011
             
Michael Lavigne
  55  
Independent Director
 
August 24, 2011
             
Dale L. Rasmussen
  62  
Independent Director
 
October 24, 2012
 
Business Experience Descriptions

Set forth below is certain biographical information regarding each of the Company's executive officers and directors.

Our Management Directors
 
Gregory Schifrin
 
Mr. Schifrin has worked as a geologist and manager for 28 years in mining and mineral exploration industry where he has been involved in precious, base metals, and uranium exploration and development. Mr. Schifrin has provided technical services and project management for major and junior mining companies.
 
From February 2011 to the present Mr. Schifrin was the President and CEO and Director of WestMountain Index Advisor, Inc. (dba WestMountain Gold, Inc.). From March 2010 to the present Mr. Schifrin was the President and CEO of Terra Mining Corp. From December 2007 to the present Mr. Schifrin was the President and Director of Silver Verde May Mining Corporation. During his tenure Mr. Schifrin managed corporate finance, accounting, legal and regulatory requirements, exploration, geologic evaluation, project generation and land acquisition. 

From March 19, 2012 to the present Mr. Schifrin has served as Director of Fisher Watt. From February 2011 to November 2011 Mr. Schifrin has served as an officer of Colorado Rare Earths and from November 2011 to the present Mr. Schifrin has served as a director and officer of US Rare Earths. Mr. Schifrin also served as President and a Director in February and March 2010 of American Mining Corporation.
 
From 1985 to the Present, Mr. Schifrin was the co-founder and President of Minex Exploration, a mining industry known exploration consulting and service company, where Mr. Schifrin managed a staff of 15 to 20 personnel, clients and contracts, accounting, legal and regulatory requirements, as well as managing exploration projects, grassroots through drilling and development phase, throughout North America for major and junior mining companies.
 
From October 1992 to the Present, Mr. Schifrin co-founded Selkirk Environmental, Inc., an environmental consulting and service company where he managed environmental regulatory compliance, risk analysis, pollution cleanup and environmental assessment for public and private clients. 
 
From November of 2006 to December 2007, Mr. Schifrin was the President and CEO of Golden Eagle Mining Corporation, where he managed corporate affairs, geological exploration, property acquisition and accounting. 
 
 
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In August of 1983, Mr. Schifrin received a Bachelor of Science degree in Geology from the University of Idaho, Moscow. He is a registered professional geologist in the State of Washington. Mr. Schifrin resides in Sandpoint, Idaho.
 
Mr. Schifrin was appointed as a Director based on his significant experience in the mining and mineral exploration industry.

James Baughman
 
Mr. Baughman has worked as a geologist for more than 25 years in mining operations and mineral exploration projects for precious, base metals, and uranium. Mr. Baughman has provided technical services and project management for a number of major and junior mining companies.

Mr. Baughman is the Chief Operations Officer of WestMountain Index Advisor, Inc. (dba WestMountain Gold, Inc.). From March 2010 to the present Mr. Baughman has been the Chief Operations Officer of Terra Mining Corp.

Mr. Baughman has been President, Chief Executive Officer and a Director of Big Bear Mining Corp from September 2011 to the present. From March 19, 2012 to the present Mr. Baughman has been President and CEO and Director of Fischer Watt.
 
From July 2004 to May 2006, Mr. Baughman was the co-founder, President and Chief Executive Officer of High Plains Uranium Corp, where he managed the company’s corporate finance, accounting, legal and regulatory requirements. He also managed a successful initial public offering on the TSX.
 
From May 2006 to October 2006, Mr. Baughman was the Chief Executive Officer of Kenai Resources, formerly known as Triumph Gold Corp., where he managed the company's properties in Venezuela and Oregon. He also managed the consulting engineers and geologists, and prepared engineering reports. 
 
From October 2006 to September 2010, Mr. Baughman led an acquisition of mineral rights on uranium properties, hired professional staff, developed company presentation and conducted road shows to investors and potential investors for US Uranium Corp., a company he co-founded. Mr. Baughman also served as Chief Operating Officer and a Director in March 2010 of American Mining Corporation.
 
James Baughman is a Director of Big Bear Mining Corp. Mr. Baughman is currently assisting several private mining development companies and is on the Advisory Board of a Canadian exploration company. In July 1983, Mr. Baughman received a Bachelor of Science degree in Geology from the University of Wyoming, Laramie. He is a registered professional geologist in the State of Wyoming. Mr. Baughman resides in Aurora, Colorado.
 
Mr. Baughman was appointed as a Director based on his significant experience in the mining and mineral exploration industry. 
 
Our Independent Directors
 
Kevin Cassidy
 
Mr. Cassidy is the Managing Member and Founder of Logic International Consulting Group, LLC, a consulting firm founded in 1996 specializing in the development of global trading businesses and the creation of the requisite infrastructure, management and support paradigms of said platforms.
 
Previously Mr. Cassidy was a Founding Partner & Chief Operating Officer of Archeus Capital Management, LLC, a multi strategy hedge fund which managed in excess of $3.5 billion in assets. Mr. Cassidy was responsible to optimize the use of the firm’s Capital Balance which regularly exceeded $1 billion by deploying an effective treasury and cash management strategy at the firm.

 
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Mr. Cassidy also served as the Chief Operating Officer for Bank Julius Baer (BJB), based in Zurich. BJB at that time was the largest privately held Bank in Switzerland. He was a member of the BJB Management Committee and responsible for organizing and directing the re-branding of the BJB global trading platform, including both new product and business development. In addition, Mr. Cassidy developed the global FX Option Trading Business and Operating Support Paradigm for the Bank.
 
Prior to BJB, Mr. Cassidy was Managing Director of UBS, where he was the Global Head of Fixed Income Derivatives Support. He also served as the Global Head of the Bank’s Derivatives Infrastructure, including operations, finance, IT systems and legal. While at UBS, Mr. Cassidy was also President of UBS Securities Swaps Inc., the bank’s US based derivatives platform and business center.
 
Earlier in his career, Mr. Cassidy was Managing Director of Bear Sterns, where he was credited with the development of multiple new products, including, Currency Exchange Warrants (CEW’s) and Remarketed Preferred, and was also responsible for the new product planning and development group.
 
Mr. Cassidy began his career at Merrill Lynch, where he rose to the position of Senior Section Manager in charge of New Product Planning & Development.  In this position, he was credited with the development of (i) the Remarketed Preferred Product and Trading Platform, and (ii) the development of the Short Term Put Securities Product and Global Trading Platform.
 
Mr. Cassidy was appointed a Director based on his significant experience and contacts in the banking industry. We expect Mr. Cassidy to advise and assist the Company with regard to raising additional capital for the development of the business.

Mr. Cassidy did not stand for re-election in 2013.

Michael Lavigne
 
Mr. Lavigne has served as the CEO and a board member of Silver Verde May Mining Company, Inc. from December 2008 to the present. Silver Verde May, an exploration stage mining company located in Wallace, Idaho, holds a number of properties in Idaho, Utah and Wyoming. From August 2008, Mr. Lavigne served as a consultant for Golden Eagle Mining Company, which was acquired by Silver Verde May in December 2008. Mr. Lavigne also serves on the board of Mascot Mining which holds properties in Idaho and Montana.
 
Mr. Lavigne is the owner and Managing Partner of Capital Peak Partners, LLC.  Capital Peak provides consulting services in the area of corporate and business development. Capital Peak Partners was founded in September of 2010.
 
Previously Mr. Lavigne held a number of positions in the travel and hospitality industry. From November 2006 to July 2008, Mr. Lavigne founded and served as a director and CEO of Travel Services Group. From September 2003 to October 2006, Mr. Lavigne was the COO of Glacier Bay Cruise Lines, an adventure cruise in South East Alaska.  Mr. Lavigne was a director of Coastal Hotel Group, a partner in NorthCoast Hotels and a member of Starwood Hotel’s Leisure Travel Advisory Board.  Also, Mr. Lavigne was the CEO and chairman of Global Leisure, Inc., the parent company of Maupin Tours, Sunmakers, Jet Set North America, Hawaii Leisure and Regency Pacific.
 
Prior to the travel and hospitality business Mr. Lavigne was involved in the securities and corporate finance business and served as he managing Director of Northwest Capital and Advisory Services and the CEO and chairman of RCL Northwest.  Mr. Lavigne was a board of member of the Spokane Stock Exchange, a registered national securities exchange which listed primarily mining and resources related companies.
 
Mr. Lavigne has been on a number of community and charitable boards including, The Giving Back Fund, Communities and Schools of Seattle, The Seahawk Academy and the Jacob Green Golf Classic.
 
Mr. Lavigne received his BA in Accounting from the University of Idaho and a JD from Gonzaga University School of Law.
 
Mr. Lavigne was appointed as a Director based on his significant experience in the mining and mineral exploration industry.
 
 
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Dale L. Rasmussen

Dale L. Rasmussen was appointed to the Board of Director on October 24, 2012.

During his career Mr. Rasmussen has served on the Board of over a dozen private and public companies (Chairman of three) and was instrumental in raising nearly a billion dollars in equity capital.  Three of the companies, co-founded by Mr. Rasmussen, reached market capitalization of over half a billion U.S. dollars.

Mr. Rasmussen served as the Chairman of the Board of Quantum Fuel System Technologies Worldwide from 2002 to 2012, as well as being a member of the Board of Directors since 2000.  Mr. Rasmussen was a founding member of the Board of Directors of Fisker Automotive and served as the Chairman of the Board since its formation in November 2007 until February 2010.  Mr. Rasmussen was the Senior Vice President and Secretary of IMPCO Technologies (now Fuel Systems Solutions) from 1989 through 2005, joining the Company in 1984 as Vice President of Finance and Administration and Corporate Secretary.  IMPCO was the parent company of Quantum Technologies, prior to its spin-off in 2002.  While at IMPCO, Mr. Rasmussen’s areas of expertise were Mergers and Acquisitions, Strategic Planning and Investor Relations.  Prior to joining IMPCO, Mr. Rasmussen was a commercial banker for twelve years at two banks, both acquired by Key Bank and U.S. Bank, and was responsible for managing the bank's investment portfolio, branch and corporate development, and served as corporate secretary.  Mr. Rasmussen is a graduate of Western Washington University and is also a graduate of Pacific Coast Banking School, University of Washington.

Mr. Rasmussen was appointed as a Director due to his significant board experience and related finance and banking skills.

Other Executive Officers
 
Mark Scott
 
Mr. Scott has significant financial, capital market and experience in public microcap companies. Mr. Scott serves as (i) Chief Financial Officer, Secretary and Treasurer of Visualant, Inc., a position he has held since May 2010 and (ii) Chief Financial Officer, Secretary and Treasurer of WestMountain Index Advisor, Inc. (dba WestMountain Gold, Inc.) since December 8, 2010. Mr. Scott also provides consulting financial services to other public companies.

Mr. Scott previously served as Chief Financial Officer and Secretary of IA Global, Inc. from October 2003 to June 2011. Previously, he held executive financial positions with Digital Lightwave; Network Access Solutions; and Teltronics, Inc. He has also held senior financial positions at Protel, Inc., Crystals International, Inc., Ranks Hovis McDougall, LLP and Brittania Sportswear, and worked at Arthur Andersen. Mr. Scott is also a certified public accountant and received a Bachelor of Arts in Accounting from the University of Washington.
 
Family Relationships
 
There are no family relationships among our directors and executive.

Involvement in Certain Legal Proceedings
 
None of our directors or executive officers has, during the past five years:
 
 
Had any petition under the federal bankruptcy laws or any state insolvency law filed by or against, or had a receiver, fiscal agent, or similar officer 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;
 
 
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Been convicted in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
     
 
Been 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:
   
 
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;
     
 
Engaging in any type of business practice; or

 
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;
     
 
Been 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 (i) above, or to be associated with persons engaged in any such activity;
     
 
Been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, where the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated; or
     
 
Been 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, where the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended, or vacated.

Committees of the Board of Directors
 
The Board has three standing committees to facilitate and assist the Board in the execution of its responsibilities. The committees are currently the Audit Committee, the Nominations and Governance Committee and the Compensation Committee. The Committees were formed October 26, 2012 and held their first meeting in December, 2012. The Audit and Compensation committees are comprised solely of non-employee, independent directors. The Nominations and Governance committee has one management director. We expect to add one independent director to the Audit and Compensation Committees in early 2013. Charters for each committee are available on our website at www.westmountaingold.com. The table below shows current membership for each of the standing Board committees.
 
Audit
 
Compensation
 
Nominating
         
Dale L. Rasmussen (Chairman)
 
Michael Lavigne (Chairman)
 
Michael Lavigne (Chairman)
Michael Lavigne
 
Dale L. Rasmussen
 
Dale L. Rasmussen
       
Gregory Schifrin
 
 
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Compensation Committee Interlocks and Insider Participation
 
No member of the Compensation Committee during the fiscal year that ended on October 31, 2012 served as an officer, former officer, or employee of the Company or participated in a related party transaction that would be required to be disclosed in this proxy statement. Further, during this period, no executive officer of the Company served as:

 
a member of the Compensation Committee (or equivalent) of any other entity, one of whose executive officers served as one of our directors or was an immediate family member of a director, or served on our Compensation Committee; or
     
 
a director of any other entity, one of whose executive officers or their immediate family member served on our Compensation Committee.

Code of Conduct and Ethics

We have adopted conduct and ethics standards titled the Code of Conduct and Ethics (the “Code of Conduct”), which are available at www.westmountaingold.com. These standards were adopted by the Board to promote transparency and integrity. The standards apply to the Board, executives and employees. Waivers of the requirements of the Code of Conduct or associated polices with respect to members of the Board or executive officers are subject to approval of the full Board.
 
Our Code of Conduct includes the following:
 
- promotes honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest; promotes the full, fair, accurate, timely and understandable disclosure of our financial results in accordance with applicable disclosure standards, including, where appropriate, standards of materiality;
 
- promotes compliance with applicable SEC and governmental laws, rules and regulations;
 
- deters wrongdoing; and
 
- requires prompt internal reporting of breaches of, and accountability for adherence to, the Code of Conduct.
 
On an annual basis, each director and executive officer is obligated to complete a Director and Officer Questionnaire which requires disclosure of any transactions with the Company in which the director or executive officer, or any member of his or her immediate family, have a direct or indirect material interest. Pursuant to the Code of Conduct, the Audit Committee and the Board are charged with resolving any conflict of interest involving management, the Board and employees on an ongoing basis.

ITEM 11. EXECUTIVE COMPENSATION

Overview of Compensation Program
 
The Compensation Committee of the Board has responsibility for overseeing, reviewing and approving executive compensation and benefit programs in accordance with the Compensation Committee’s charter.  The Compensation Committee was formed October 26, 2012 and held its first meeting on December 13, 2012. The Compensation Committee members are Michael Lavigne (Chairman), and Dale L. Rasmussen. We expect to add one independent director to the Compensation Committee in early 2013.

This Compensation Discussion and Analysis describes the material elements of compensation awarded to, earned by or paid to each of our named executive officers who served during the year ended October 31, 2012. This compensation discussion primarily focuses on the information contained in the following tables and related footnotes and narrative for the last completed fiscal year. We also describe compensation actions taken after the last completed fiscal year to the extent that it enhances the understanding of our executive compensation disclosure.

 
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Compensation Philosophy and Objectives
 
The major compensation objectives for named executive officers are as follows:

 
to attract and retain highly qualified individuals capable of making significant contributions to the long-term success of the Company;
     
 
to motivate and reward named executive officers whose knowledge, skills, and performance are critical to the Company’s success;
     
 
to closely align the interests of the Company’s named executive officers and other key employees with those of its shareholders; and
     
 
to utilize incentive based compensation to reinforce performance objectives and reward superior performance; and

Role of Chief Executive Officer in Compensation Decisions
 
The Board approves all compensation for the chief executive officer. The Compensation Committee makes recommendations on the compensation for the chief executive officer and approves all compensation decisions, including equity awards, for our named executive officers. Our chief executive officer makes recommendations regarding the base salary and non-equity compensation of other named executive officers that are approved by the Compensation Committee in its discretion.

Setting Executive Compensation
 
The Compensation Committee believes that compensation for named executive officers must be managed to what we can afford and in a way that allows us to meet our goals for overall performance. During 2012, the Compensation Committee and the Board compensated its Chief Executive Officer and Chief Operating Officer with a monthly salary fee of $10,000. During 2012, the Committee compensated its Chief Financial Officer with a $8,000 monthly salary. This compensation reflected the financial condition of the Company. The Compensation Committee does not use a peer group of publicly-traded and privately-held companies in structuring the compensation packages.

Although no compensation was paid until October 1, 2010, with the acquisition of TMC in February 2011, the amount of time and effort needed to structure and manage the acquisition, and the additional workload that management of TMC’s activities involves, the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer have been compensated since October 1, 2010, as described under “Employment Agreements” below.

Executive Compensation Components for the Year Ended October 31, 2012
 
The Compensation Committee did not use a formula for allocating compensation among the elements of total compensation during the fiscal year ended October 31, 2012. The Compensation Committee believes that in order to attract and retain highly effective people it must maintain a flexible compensation structure. For fiscal 2012, the principal components of compensation for named executive officers were base salary and consulting fees.

Base Salary
 
Base salary is intended to ensure that our employees are fairly and equitably compensated. Generally, base salary is used to appropriately recognize and reward the experience and skills that employees bring to the Company and provides motivation for career development and enhancement. Base salary ensures that all employees continue to receive a basic level of compensation that reflects any acquired skills which are competently demonstrated and are consistently used at work.

Base salaries for the Company’s named executive officers are initially established based on their prior experience, the scope of their responsibilities and the applicable competitive market compensation paid by other companies for similar positions. During 2012, the Compensation Committee and the Board compensated its Chief Executive Officer and Chief Operating Officer with a monthly salary fee of $10,000. During 2012, the Committee compensated its Chief Financial Officer with a $8,000 monthly salary. This compensation reflected our financial condition.

 
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Performance-Based Incentive Compensation
 
The Compensation Committee believes incentive compensation reinforces performance objectives, rewards superior performance and is consistent with the enhancement of stockholder value. All of the Company’s named executive officers are eligible to receive performance-based incentive compensation. The Compensation Committee did not recommend or approve payment of any performance-based incentive compensation to the named executive officers during 2012 based on our financial condition.

Ownership Guidelines
 
We do not require our named executive officers to hold a minimum number of our shares. However, to directly align the interests of executive officers with the interests of the stockholders, we encourage each named executive officer to maintain an ownership interest in the Company.
 
Stock Option Program
 
We do not have a stock option program; however the Board has adopted the 2012 Stock Incentive Plan described in Proposal 2 below, subject to stockholder approval.

Retirement and Other Benefits
 
We have no other retirement, savings, long-term stock award or other type of plans for the named executive officers.

Perquisites and Other Personal Benefits
 
During the year ended October 31, 2012, the Company provided the named Chief Executive, Operating and Financial Officers were provided with medical insurance. No other personal benefits were provided.

Tax and Accounting Implications
 
Deductibility of Executive Compensation
 
Subject to certain exceptions, Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") generally denies a deduction to any publicly held corporation for compensation paid to its chief executive officer and its three other highest paid executive officers (other than the principal financial officer) to the extent that any such individual's compensation exceeds $1 million. “performance-based compensation” (as defined for purposes of Section 162(m)) is not taken into account for purposes of calculating the $1 million compensation limit, provided certain disclosure, shareholder approval and other requirements are met. We periodically review the potential consequences of Section 162(m) and may structure the performance-based portion of our executive compensation to comply with certain exceptions to Section 162(m). However, we may authorize compensation payments that do not comply with the exceptions to Section 162(m) when we believe that such payments are appropriate and in the best interests of the stockholders, after taking into consideration changing business conditions or the officer's performance.

Section 409A is a relatively recent provision of the Code. If an executive is entitled to nonqualified deferred compensation benefits that are subject to Section 409A of the Code, and such benefits do not comply with Section 409A of the Code, the executive would be subject to adverse tax treatment, including accelerated income recognition (in the first year that benefits are no longer subject to a substantial risk of forfeiture) and an additional income tax of 20% of the amount so recognized.

COMPENSATION COMMITTEE REPORT
 
The Compensation Committee, composed entirely of independent directors in accordance with the applicable laws and regulations, sets and administers policies that govern the Company's executive compensation programs, and incentive and stock programs. The Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
 
 
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THE COMPENSATION COMMITTEE

Michael Lavigne, Chairman
Dale L. Rasmussen
 
REMUNERATION OF EXECUTIVE OFFICERS
 
The following table provides information concerning remuneration of the chief executive officer, the chief financial officer and another named executive officer for the indicated periods.

Summary Compensation Table
 
                             
Non-Equity
                   
                             
Incentive
                   
                       
Stock
   
Plan
   
Option
   
Other
       
           
Salary
   
Bonus
   
Awards
   
Compensation
   
Awards
   
Compensation
   
Total
 
Name
 
Principal Position
     
($) (1)
   
($) (2)
   
($) (3)
   
($)
   
($)
   
($) (4)
   
($)
 
                                                   
Gregory Schifrin
 
Chief Executive Officer,
 
10/31/2012
  $ 120,000     $ -     $ -     $ -     $ -     $ -     $ 120,000  
   
Director
 
10/31/2011
  $ 120,000     $ -     $ 30,000     $ -     $ -     $ -     $ 150,000  
       
10/31/2010
  $ 40,000     $ 10,000     $ -     $ -     $ -     $ -     $ 50,000  
                                                                 
James Baughman
 
Chief Operating Officer,
 
10/31/2012
  $ 120,000     $ -     $ -     $ -     $ -     $ -     $ 120,000  
   
Director
 
10/31/2011
  $ 120,000     $ -     $ 30,000     $ -     $ -     $ -     $ 150,000  
       
10/31/2010
  $ 40,000     $ 10,000     $ -     $ -     $ -     $ -     $ 50,000  
                                                                 
Mark Scott
 
Chief Financial Officer,
 
10/31/2012
  $ 96,000     $ -     $ -     $ -     $ -     $ -     $ 96,000  
   
Secretary
 
10/31/2011
  $ 56,000     $ -     $ 87,200     $ -     $ -     $ 32,000     $ 175,200  
       
10/31/2010
  $ -     $ -     $ -     $ -             $ -     $ -  
 
(1)         The 2010 amounts for Mr. Schifrin and Mr. Baughman include salary paid by TMC to those individuals from March 25, 2010 (the date TMC was incorporated) to October 31, 2010. The 2011 amounts for Mr. Schifrin and Mr. Baughman include salary since the Employment Agreements were signed on October 1, 2010 and include the issuance of 60,000 shares of common stock that were valued at $.50 per share or $30,000 on June 1, 2011 related to the conversion of accrued payroll. The 2011 amount for Mr. Scott includes salary since the Employment Agreement was signed on April 9, 2011.

(2)         The 2010 amounts for Mr. Schifrin and Mr. Baughman include salary paid by TMC to those individuals from March 25, 2010 (the date TMC was incorporated) to October 31, 2010.

(3)         The 2011 amount for Mr. Schifrin and Mr. Baughman reflects 100,000 shares of restricted common stock issued by us on August 24, 2011 valued at $.30 per share or $30,000. The 2011 amount for Mr. Scott reflects (i) 100,000 shares of restricted common stock issued by us on August 24, 2011 and valued at $.30 per share or $30,000; and (ii) 236,000 shares of restricted common stock issued by us on during the year ended at October 31, 2011 per Mr. Scott’s Consulting and Employment Agreements and valued at $.369 per share or $87,200. These amounts reflects the dollar amount recognized for financial statement reporting purposes for the fiscal year ended October 31, 2011, in accordance with FASB ASC Topic 718. Assumptions used in the calculation of this amount are included in footnotes to the Company's audited financial statements for the fiscal year ended October 31, 2011.

(4)         The 2011 amount for Mr. Scott includes consulting fees paid from December 8, 2010 to April 8, 2011.

Grants of Stock Based Awards in Fiscal Year Ended October 31, 2012

We did not provide performance-based incentive compensation paid to the named executive officers during 2012 based on our financial condition.

Pension Benefits
 
We do not provide any pension benefits. 
 
Nonqualified Deferred Compensation
 
We do not have a nonqualified deferred compensation program. 
 
 
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EMPLOYMENT AGREEMENTS
 
On October 1, 2010, TMC signed an Employment Agreement with Gregory Schifrin (“Schifrin Agreement”), which agreement was acquired by WMTN as a result of the acquisition of TMC. Under the terms of the Schifrin Agreement, Mr. Schifrin was appointed Chief Executive Officer for an indefinite period at a salary of $120,000 per year. Mr. Schifrin is eligible for annual bonuses and incentive plans as determined by the Company’s Compensation Committee. Mr. Schifrin is eligible for employee benefit programs, including 4 weeks of vacation per year, medical benefits and $500 in expenses per day spent on the Company’s project sites. Mr. Schifrin may resign with 60 days' notice. If Mr. Schifrin is terminated without cause, including a change in control (after six months), he is to receive in a lump sum equal to, two times his annual salary, two times his targeted annual bonus and two times his last year’s bonus, plus any accrued vacation.
 
On October 1, 2010, TMC signed an Employment Agreement with James Baughman (“Baughman Agreement”), which agreement was acquired by WMTN as a result of the acquisition of TMC. Under the terms of the Baughman Agreement, Mr. Baughman was appointed Chief Operating Officer for an indefinite period at a salary of $120,000 per year. Mr. Baughman is eligible for annual bonuses and incentive plans as determined by the Company’s Compensation Committee. Mr. Baughman is eligible for employee benefit programs, including 4 weeks of vacation per year, medical benefits and $500 in expenses per day spent on the Company’s project sites. Mr. Baughman may resign with 60 days' notice. If Mr. Baughman is terminated without cause, including a change in control (after six months), he is to receive in a lump sum equal to two times his annual salary, two times his targeted annual bonus and two times his last year’s bonus, plus any accrued vacation.

On April 18, 2011, the Company entered into an Employment Agreement (“Scott Employment Agreement”) with Mark Scott as the Company’s Chief Financial Officer, which was effective April 9, 2011. The Scott Employment Agreement replaced the Scott Consulting Agreement dated February 18, 2011 and which expired on April 8, 2011.
 
Under the terms of the Scott Employment Agreement, Mr. Scott was appointed Chief Financial Officer for an indefinite period at a salary of $96,000 per year. Mr. Scott is eligible for annual bonuses and incentive plans as determined by the Company’s Compensation Committee. Mr. Scott is eligible for employee benefit programs, including 4 weeks of vacation per year, medical benefits, life and disability insurance. Mr. Scott may resign with 60 days' notice. If Mr. Scott is terminated without cause, including a change in control (after six months), he is to receive in a lump sum equal to one times his annual salary, one times his targeted annual bonus and one times his last year’s bonus, plus any accrued vacation.
 
Definitions Used in Employment Agreements

For purposes of the each of the Employment Agreements described above, the following definitions apply:

As used herein, “Cause” is defined as any of the following events which occur during the term of this agreement: Good Cause” means the occurrence of one of the following events without the Executive’s express written consent:
 
(a)  the assignment by the Company of any substantial new or different duties inconsistent with the Executive’s positions, duties, responsibilities and status with the Company immediately prior to such change in assigned duties;
 
(b)  a material reduction in the Executive’s responsibilities, except as a result of the Executive’s death, disability or retirement;
 
(c)  a reduction by the Company in the Executive’s Annual Salary;
 
(d)  a change in the principal executive office of the Company to a location more than 50 kilometers from the then-current location of the principal executive office of the Company;
 
(e)  the requirement by the Company that the Executive be based anywhere other than within a 100 kilometer radius of the Executive’s then current location;
 
 
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(f)  the failure by the Company to continue in effect, or a material change in the terms of the Executive’s participation in benefits under any Incentive Plan or Benefits plan (collectively, the “Existing Plans”), the effect of which would be to materially reduce the total value, in the aggregate, of the benefit to the Executive of the Existing Plans;
 
(g)  any reduction by the Company of the number of paid vacation days to which the Executive is entitled; or
 
(h)  any other events or circumstances which would constitute a constructive dismissal at common law.
 
As used herein, “Change of Control” is defined as any one of the following occurrences:
 
(a)  the acquisition, directly or indirectly, by any person or group of persons acting jointly or in concert, as such terms are defined in the Securities Act, British Columbia, of common shares of the Company which, when added to all other common shares of the Company at the time held directly or indirectly by such person or persons acting jointly or in concert, constitutes for the first time in the aggregate 30% or more of the outstanding common shares of the Company and such shareholding exceeds the collective shareholding of the current directors of the Company, excluding any directors acting in concert with the acquiring party; or
 
(b)  the removal, by extraordinary resolution of the shareholders of the Company, of more than 51% of the then incumbent Board of the Company, or the election of a majority of Board members to the Company’s board who were not nominees of the Company’s incumbent board at the time immediately preceding such election; or
 
(c)  consummation of a sale of all or substantially all of the assets of the Company; or
 
(d)  the consummation of a reorganization, plan of arrangement, merger or other transaction which has substantially the same effect as (a) to (c) above.
 
As used herein, “Constructive Termination” is defined as any of the following, without your express written consent:

(a)  engages in conduct which is detrimental to the reputation of the Company or any of its Affiliates in any material respect;
 
(b)  has committed an act of fraud or material dishonesty in connection with or related in any way to his employment with the Company;
 
(c)  is the subject of any enforcement proceeding by a securities regulatory authority or agency; or
 
(d)  breaches his duties under this Agreement; or willfully neglects his duties to a material degree.
 
Potential Payments upon Termination or Change in Control

Our Employment Agreements with the named executive officers have provisions providing for severance payments as discussed below.
 
 
30

 

Gregory Schifrin Termination Payments

The following table shows the potential payments upon termination for Gregory Schifrin:
 
         
Early
   
Not For Good
   
Change in
       
Executive
 
For Cause
   
or Normal
   
Cause
   
Control
   
Disability
 
Payments Upon
 
Termination
   
Retirement
   
Termination
   
Termination
   
or Death
 
Separation
 
on 10/31/12
   
on 10/31/12
   
on 10/31/12
   
on 10/31/12
   
on 10/31/12
 
Compensation:
                             
Base salary (1)
  $ -     $ -     $ 120,000     $ 240,000     $ -  
Performance-based incentive
                                       
    compensation
  $ -     $ -     $ -     $ -     $ -  
Stock options
  $ -     $ -     $ -     $ -     $ -  
                                         
Benefits and Perquisites:
                                       
Health and welfare benefits
  $ -     $ -     $ -     $ -     $ -  
Accrued vacation pay (2)
  $ -     $ -     $ 14,617     $ -     $ -  
                                         
Total
  $ -     $ -     $ 134,617     $ 240,000     $ -  

(1)         Reflects twelve month’s severance to be paid upon termination without cause and twenty four months upon termination in a change of control.

(2)         Reflects the value of vacation pay accrued as of October 31, 2012.

James Baughman Termination Payments

The following table shows the potential payments upon termination for James Baughman:
 
         
Early
   
Not For Good
   
Change in
       
Executive
 
For Cause
   
or Normal
   
Cause
   
Control
   
Disability
 
Payments Upon
 
Termination
   
Retirement
   
Termination
   
Termination
   
or Death
 
Separation
 
on 10/31/12
   
on 10/31/12
   
on 10/31/12
   
on 10/31/12
   
on 10/31/12
 
Compensation:
                             
Base salary (1)
  $ -     $ -     $ 120,000     $ 240,000     $ -  
Performance-based incentive
                                       
    compensation
  $ -     $ -     $ -     $ -     $ -  
Stock options
  $ -     $ -     $ -     $ -     $ -  
                                         
Benefits and Perquisites:
                                       
Health and welfare benefits
  $ -     $ -     $ -     $ -     $ -  
Accrued vacation pay (2)
  $ -     $ -     $ 8,155     $ -     $ -  
                                         
Total
  $ -     $ -     $ 128,155     $ 240,000     $ -  

(1)         Reflects twelve month’s severance to be paid upon termination without cause and twenty four months upon termination in a change of control.

(2)         Reflects the value of vacation pay accrued as of October 31, 2012.
 
 
31

 

Mark Scott Termination Payments

The following table shows the potential payments upon termination for Mark Scott:
 
         
Early
   
Not For Good
   
Change in
       
Executive
 
For Cause
   
or Normal
   
Cause
   
Control
   
Disability
 
Payments Upon
 
Termination
   
Retirement
   
Termination
   
Termination
   
or Death
 
Separation
 
on 10/31/12
   
on 10/31/12
   
on 10/31/12
   
on 10/31/12
   
on 10/31/12
 
Compensation:
                             
Base salary (1)
  $ -     $ -     $ 96,000     $ 96,000     $ -  
Performance-based incentive
                                       
    compensation
  $ -     $ -     $ -     $ -     $ -  
Stock options
  $ -     $ -     $ -     $ -     $ -  
                                         
Benefits and Perquisites:
                                       
Health and welfare benefits
  $ -     $ -     $ -     $ -     $ -  
Accrued vacation pay (2)
  $ -     $ -     $ 5,786     $ -     $ -  
                                         
Total
  $ -     $ -     $ 101,786     $ 96,000     $ -  

(1)         Reflects twelve month’s severance to be paid upon termination without cause and twenty four months upon termination in a change of control.

(2)         Reflects the value of vacation pay accrued as of October 31, 2012.
 
DIRECTOR COMPENSATION

We use stock grants to incentive compensation to attract and retain qualified candidates to serve on the Board. In setting director compensation, we consider the significant amount of time that Directors expend in fulfilling their duties to the Company as well as the skill-level required by us for members of the Board. During the year ended October 31, 2012, Gregory Schifrin and James Baughman did not receive any compensation for their services as a director.  The compensation disclosed in the Summary Compensation Table on page 32 represents the total compensation.

Director Summary Compensation Table

The table below summarizes the compensation paid by us to non-employee directors during the year ended October 31, 2012.
 
   
Stock
   
Option
       
Name
 
Awards (2)
   
Awards
   
Total
 
Michael Lavigne
  $ -     $ -     $ -  
                         
Kevin Cassidy (1)
    -       -       -  
                         
Dale L. Rasmussen
    25,000       -       25,000  
                         
Total
  $ 25,000     $ -     $ 25,000  

(1) Mr. Cassidy did not stand for re-election for 2013.

(2) The 2012 amount for Mr. Rasmussen reflects 25,000 shares of restricted common stock issued by us on October 24, 2012 were valued at $1.00 per share or $25,000. These amounts reflects the dollar amount recognized for financial statement reporting purposes for the fiscal year ended October 31, 2012, in accordance with FASB ASC Topic 718. Assumptions used in the calculation of this amount are included in footnotes to the Company's audited financial statements for the fiscal year ended October 31, 2012.

 
32

 
 
Compensation Paid to Board Members

Our independent non-employee directors are not compensated in cash.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information regarding the ownership of our common stock as of January 22, 2013
 
 
each director and nominee for director;
     
 
each person known by us to own beneficially 5% or more of our common stock;
     
 
each officer named in the summary compensation table elsewhere in this report; and
     
 
all directors and executive officers as a group.
 
The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership within 60 days. Under these rules more than one person may be deemed a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.
 
Unless otherwise indicated below, each beneficial owner named in the table has sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable.
 
   
November 30, 2012
   
November 30, 2012
 
   
Shares Beneficially Owned
   
Fully Diluted Ownership
 
   
Amount
   
%
   
Amount
   
%
 
Directors and Officers-
                       
Gregory L. Schifrin
    3,618,750       16.9 %     3,918,750       12.0 %
James G. Baughman
    2,502,500       11.7 %     2,702,500       8.3 %
Mark Scott
    322,000       1.5 %     322,000       1.0 %
Capital Peak Partners LLC/ Michael Lavigne
    1,892,500       8.8 %     2,477,500       7.6 %
Logic International Consulting Group LLC/ Kevin Cassidy
    100,000       *       1,430,000       4.4 %
Dale Rasmussen
    25,000       *       25,000       *  
Total Directors and Officers as a Group (6 total)
    8,460,750       38.9 %     10,875,750       33.2 %
 
 
33

 
 
   
November 30, 2012
   
November 30, 2012
 
   
Shares Beneficially Owned
   
Fully Diluted Ownership
 
   
Amount
   
%
   
Amount
   
%
 
Greater Than 5% Ownership
                       
                         
Gregory Schifrin/ Mineral Mining LLC
    3,618,750       16.9 %     3,918,750       12.0 %
WestMountain Index Advisor, Inc.
                               
2186 S. Holly St., Suite 104
                               
Denver, CO 80222
                               
                                 
James Baughman/ Mineral Mining LLC
    2,502,500       11.7 %     2,702,500       8.3 %
WestMountain Index Advisor, Inc.
                               
2186 S. Holly St., Suite 104
                               
Denver, CO 80222
                               
                                 
BOCO Investments LLC (Joseph Zimlich)
    3,100,000       14.5 %     7,302,115       22.3 %
262 East Mountain Avenue
                               
Fort Collins, CO 80524
                               
                                 
Michael Lavigne (Capital Peak Partners LLC and Silver
    1,892,500       8.8 %     2,477,500       7.6 %
Verde Mining Company, Inc.)
                               
602 Cedar St, Suite 205
                               
Wallace, ID 83873
                               

The shares for BOCO Investments LLC exclude shares of common stock to be issued upon the conversion of convertible debentures of $1,853,965. The exact number of shares cannot be calculated until the debentures are converted however, as of January 23, 2012, this debt, including accrued interest is convertible into common stock at the rate of $0.75 per share.  For a more detailed description of this convertible debt see Note 6 to the Company’s Financial Statements.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related Party Transactions

Related party transactions for the year ended October 31, 2012 are detailed in Note 3 to the Company’s  Financial Statements filed with this Form 10-K.

Review and Approval of Related Person Transactions
 
We have operated under a Code of Conduct since inception. Our Code of Conduct requires all employees, officers and directors, without exception, to avoid the engagement in activities or relationships that conflict, or would be perceived to conflict, with the Company’s interests or adversely affect its reputation. It is understood, however, that certain relationships or transactions may arise that would be deemed acceptable and appropriate upon full disclosure of the transaction, following review and approval to ensure there is a legitimate business reason for the transaction and that the terms of the transaction are no less favorable to the Company than could be obtained from an unrelated person.
 
The Audit Committee is responsible for reviewing and approving all transactions with related persons. In 2012, The Board reviewed all relationships and transactions in which we and our directors and executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. As required under SEC rules, transactions that are determined to be directly or indirectly material to the Company or a related person are disclosed.

Director Independence
 
The Board has affirmatively determined that each of Messrs. Lavigne, Cassidy and Rasmussen is an independent director.  For purposes of making that determination, the Board used NASDAQ’s Listing Rules even though the Company is not currently listed on NASDAQ.
 
 
34

 
 
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

We formed an Audit Committee on October 26, 2012. The Board has established a pre-approval policy and procedures for audit, audit-related and tax services that can be performed by the independent auditors without specific authorization from the Board subject to certain restrictions. The policy sets out the specific services pre-approved by the Board and the applicable limitations, while ensuring the independence of the independent auditors to audit our financial statements is not impaired. The pre-approval policy does not include a delegation to management of the Board responsibilities under the Exchange Act. During fiscal year ended October 31, 2012, the Board pre-approved all audit and permissible non-audit services provided by our independent auditors.

Service Fees Paid to the Independent Registered Public Accounting Firm
 
The Board engaged PMB Helin Donovan, LLP to perform an annual audit of our financial statements for the year ended October 31, 2012 and 2011 and the period from inception (March 25, 2010) to October 31, 2010. The following is the breakdown of aggregate fees paid to the auditors for the Company for the periods indicated:
 
   
Year Ended,
   
The Period from Inception
(March 25, 2010) to
 
   
October 31, 2012
   
October 31, 2011
   
October 31, 2010
 
Audit fees
  $ 12,220     $ 7,185     $ 3,000  
Audit related fees
    20,100       6,274       4,436  
Tax fees
    6,220       880       320  
All other fees
    -       13,400       -  
                         
    $ 38,540     $ 27,739     $ 7,756  
 
- “Audit Fees” are fees billed by PMB Helin Donovan, LLP for the audit of our financial statements for the years ended October 31, 2012 and 2011.

- “Audit-Related fees” are fees billed by PMB Helin Donovan, LLP to us for services not included in audit fees, specifically, SAS 100 reviews, SEC filings and consents, and accounting consultations on matters addressed during the audit or interim reviews, and review work related to quarterly filings for the years ended October 31, 2012 and 2011.

- “Tax Fees” are fees primarily for tax compliance in connection with filing US income tax returns.

“All other fees for 2011 related to the acquisition audit of Terra Mining Corporation. The audit was completed by PMB Helin Donovan, LLP.
 
SECTION16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
  
The Company’s executive officers, directors and 10% stockholders are required under Section 16(a) of the Exchange Act to file reports of ownership and changes in ownership with the SEC. Copies of these reports must also be furnished to the Company.
 
 
35

 

Based solely on a review of copies of reports furnished to the Company, or written representations that no reports were required, the Company believes that during the fiscal year ended October 31, 2012 its executive officers, directors and 10% holders complied with all filing requirements, with the following possible exceptions:

1.     Form 13D’s for Gregory Schifrin and James Baughman dated February 28, 2011 and required to be filed on March 4, 2011 was filed on March 14, 2011.

2.    Form 13D’s for Capital Peak Partners LLC and Joseph Zimlich (BOCO Investments LLC) dated February 28, 2011 and required to be filed on March 4, 2011 was filed on March 15, 2011.
 
3     A Form 4 for BOCO Investments LLC dated February 18, 2011 and required to be filed on February 22, 2011 was filed on March 15, 2011.

4     A Form 4 for BOCO Investments LLC dated June 17, 2011 and required to be filed on June 21, 2011 was filed on June 30, 2011.

5.    A Form 4 for Mark Scott dated September 21, 2011 and required to be filed on September 23, 2011 was filed on February 29, 2012.
 
 
36

 

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) FINANCIAL STATEMENTS:

Our financial statements, as indicated by the Index to Consolidated Financial Statements set forth below, begin on page F-1 of this Form 10-K, and are hereby incorporated by reference. Financial statement schedules have been omitted because they are not applicable or the required information is included in the financial statements or notes thereto.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
Title of Document
 
Page
 
       
Report of Independent Registered Public Accounting Firm
   
F-1
 
         
Consolidated Balance Sheets as of October 31, 2012 and 2011
   
F-2
 
         
Consolidated Statements of Operations for the year ended October 31, 2012 and 2011 and the period from inception of March 25, 2010 to October 31, 2012
   
F-3
 
         
Consolidated Statements of Changes in Stockholders' Deficit for the year ended October 31, 2012 and 2011 and the period from inception of March 25, 2010 to October 31, 2012
   
F-4
 
         
Consolidated Statements of Cash Flows for the for the year ended October 31, 2012 and 2011 and the period from inception of March 25, 2010 to October 31, 2012
   
F-5
 
         
Notes to the Financial Statements
   
F-6
 
 
 
37

 
 
(b) EXHIBITS:
 
Exhibit No.
 
Description
     
3.1 
 
Articles of Incorporation (2)
     
3.2 
 
Bylaws (2)
     
10.1
 
Note and Warrant Purchase Agreement dated November 15, 2011 by and between WestMountain Index Advisor, Inc. and BOCO Investments, LLC. (3)
     
10.2
 
Secured Convertible Promissory Note dated November 15, 2011 by and between WestMountain Index Advisor, Inc. and BOCO Investments, LLC. (3)
     
10.3
 
Warrant to Purchase Stock dated November 15, 2011 by and between WestMountain Index Advisor, Inc. and BOCO Investments, LLC. (3)
     
10.4
 
Amended and Restated Revolving Credit Loan and Security Agreement dated September 17, 2012 by and between WestMountain Index Advisor, Inc. and BOCO Investments, LLC. (4)
     
10.5
 
Amended and Restated Secured Convertible Promissory Note dated September 17, 2012 by and between WestMountain Index Advisor, Inc. and BOCO Investments, LLC. (4)
     
10.6   Consulting Agreement dated September 11, 2012 by and between WestMountain Index Advisor, Inc. and BOCO Investments, LLC. (4)
     
10.7   Warrant to Purchase Stock dated October 1, 2012 by and between WestMountain Index Advisor, Inc. and BOCO Investments, LLC. (4)
     
10.8   Warrant to Purchase Stock dated October 1, 2012 by and between WestMountain Index Advisor, Inc. and BOCO Investments, LLC. (4)
     
10.9   Revolving Credit Line and Security Agreement dated August 8, 2012 by and between WestMountain Index Advisor, Inc. and BOCO Investments, LLC. (5)
     
10.10   Secured Convertible Promissory Note dated August 8, 2012 by and between WestMountain Index Advisor, Inc. and BOCO Investments, LLC. (5)
     
10.11   Warrant to Purchase Stock dated August 8, 2012 by and between WestMountain Index Advisor, Inc. and BOCO Investments, LLC. (5)
     
21.1    Subsidiaries (1)
 
 
38

 
 
 
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer (1)
     
 
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer (1)
     
 
Section 906 Certifications (1)
     
 
Section 906 Certifications (1)
     
99.1
 
Code of Conducts and Ethics dated February 28, 2011 (1)
  
(1) Filed herewith.
 
(2) Previously filed with Form SB-2 Registration Statement, January 2, 2008 (in the case of the Articles of Incorporation, as amended per the 8-K filed on Oct. 12, 2010).
 
(3) Filed as exhibits on Form 8-K dated November 15, 2011 and filed with the SEC on November 21, 2011. 
.
(4) Filed as exhibits on Form 8-K/A dated September 11, 2012 and filed with the SEC on October 10, 2012. 

(5) Filed as exhibits on Form 8-K/A dated August 8, 2012 and filed with the SEC on August 14, 2012. 
 
 
39

 

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
WestMountain Index Advisors, Inc.:
 
We have audited the accompanying balance sheets of WestMountain Index Advisors, Inc. (the “Company”) (a development stage company) as of October 31, 2012 and 2011, and the related statements of operations, stockholders’ equity, and cash flows for the period from March 25, 2010 (“Inception”) through October 31, 2012.  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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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 audits 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 also 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 WestMountain Index Advisors, Inc. as of October 31, 2012 and 2011, and the results of its operations and its cash flows for the period from Inception through October 31, 2012 and 2011, in conformity with generally accepted accounting principles 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 1 to the financial statements, the Company has sustained a net loss from operations and has an accumulated deficit during the development stage.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in this regard are also described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 
 
PMB Helin Donovan, LLP  
   
/s/ PMB Helin Donovan, LLP  
   
January 21, 2013  
Seattle, Washington  

 
F-1

 
 
WESTMOUNTAIN INDEX ADVISOR, INC. AND SUBSIDIARIES
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED BALANCE SHEETS
 
   
October 31, 2012
   
October 31, 2011
 
ASSETS
           
             
CURRENT ASSETS:
           
Cash and cash equivalents
  $ 88,870     $ 9,791  
Prepaid expenses
    7,017       238,860  
Total current assets
    95,887       248,651  
                 
EQUIPMENT, NET
    417,802       412,070  
                 
OTHER ASSETS
               
Contractual rights
    700,000       600,000  
Mining claims
    13,453       15,086  
Security deposits
    2,050       2,050  
                 
TOTAL ASSETS
  $ 1,229,192     $ 1,277,857  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
                 
CURRENT LIABILITIES:
               
Accounts payable
  $ 781,631     $ 774,235  
Accounts payable - related parties
    511,270       468,596  
Accrued expenses
    128,559       35,914  
Accrued expenses - related parties
    52,611       80,011  
Promissory notes
    2,138,965       -  
Other current liabilities
    -       28,167  
Total current liabilities
    3,613,036       1,386,923  
                 
COMMITMENTS AND CONTINGENCIES
    -       -  
                 
STOCKHOLDERS' DEFICIT
               
                 
Preferred stock, $.10 par value; 1,000,000 shares authorized, -0- shares issued and
               
       outstanding at October 31, 2012 and 2011, respectively
    -       -  
Common stock - $0.001 par value, 200,000,000 shares authorized, 21,382,776
               
and 18,450,354 shares issued and outstanding at October 31, 2012 and 2011, respectively
    21,383       18,450  
Additional paid in capital
    7,675,241       4,402,762  
Accumulated deficit
    (10,080,468 )     (4,530,278 )
Total stockholders' deficit
    (2,383,844 )     (109,066 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $ 1,229,192     $ 1,277,857  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
F-2

 

WESTMOUNTAIN INDEX ADVISOR, INC. AND SUBSIDIARIES
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
 
   
Year Ended,
   
From March 25, 2010 (Inception)
 
   
October 31, 2012
   
October 31, 2011
   
to October 31, 2012
 
                   
REVENUE
  $ -     $ -     $ -  
COST OF SALES
    -       -       -  
GROSS PROFIT
    -       -       -  
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    2,039,332       1,710,150       4,191,941  
EXPLORATION EXPENSE
    2,167,052       1,461,183       3,628,235  
OPERATING LOSS
    (4,206,384 )     (3,171,333 )     (7,820,176 )
                         
OTHER INCOME (EXPENSE):
                       
Interest (expense) income, net
    (1,343,806 )     118       (1,356,047 )
Consulting income - Terra Mining Corporation
    -       50,400       50,400  
Financing fee
    -       (14,445 )     (54,645 )
Merger expense
    -       (900,000 )     (900,000 )
Total other expense
    (1,343,806 )     (863,927 )     (2,260,292 )