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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


[X]

Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended August 31, 2013.

 

 

[   ]

Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from ___________ to __________.


000-50738

(Commission file number)


[amcor10q_083113final002.gif]


AMERICAN CORDILLERA MINING CORPORATION


 (Exact name of small business issuer as specified in its charter)


Nevada

91-1959986

(State or other jurisdiction

(IRS Employer

of incorporation or organization)

Identification No.)


1314 S. Grand Blvd, Ste. 2-250, Spokane, WA 99202

(Address of principal executive offices)


(509) 744-8590

(Registrant’s telephone number)


______________________________________

(Former name, former address and former fiscal year, if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes [X]   No [  ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive DataFile required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X]   No [  ]





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 [  ]

Accelerated filer [  ] 

Non-accelerated filer [  ] 

Smaller reporting company [X]

(Do not check if a smaller reporting company)

 


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [   ]   No [X]


As of October 21, 2013, there were 89,882,679 shares of the registrant’s common stock outstanding.




TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION

 

3

Item 1.

Financial Statements

 

3

Item 2.

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

 

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

21

Item 4.

Controls and Procedures

 

21

PART II – OTHER INFORMATION

 

22

Item 1.

Legal Proceedings

 

22

Item 1A.

Risk Factors

 

22

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

22

Item 3.

Defaults Upon Senior Securities

 

22

Item 4.

Mine Safety Disclosure [Not Applicable]

 

22

Item 5.

Other Information

 

22

Item 6.

Exhibits

 

23

SIGNATURES

 

 

24




- 2 -




PART I – FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


AMERICAN CORDILLERA MINING CORPORATION


INDEX TO FINANCIAL STATEMENTS

AUGUST 31, 2013


Consolidated Balance Sheets as of August 31, 2013 and December 31, 2012

4

  

 

Consolidated Statements of Operations and Other Comprehensive Income for the Three Months Ended August 31, 2013 and August 31, 2012, and the Eight Months Ended August 31,

 

2013 and August 31, 2012, and the period from December 28, 2012 through August 31, 2013

5

 

 

Consolidated Statements of Cash Flows for the Eight Months Ended August 31, 2013

 

and August 31, 2012, and the period from December 28, 2012 through August 31, 2013

6

  

 

Notes to Consolidated Financial Statements

7





- 3 -





AMERICAN CORDILLERA MINING CORPORATION

AN EXPLORATION STAGE COMPANY

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

August 31, 2013

 

December 31, 2012

ASSETS

 

 

(unaudited)

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash

 

$

20,991 

 

$

10,051 

 

 

Prepaid expenses

 

3,482 

 

4,382 

 

 

 

Total Current Assets

 

24,473 

 

14,433 

 

Mineral rights

 

494,564 

 

484,564 

 

Investments

 

87,500 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

606,537 

 

$

498,997 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable

 

$

74,893 

 

$

30,226 

 

 

Convertible notes payable

 

35,500 

 

10,500 

 

 

Notes payable

 

 

4,000 

 

 

 

Total Current Liabilities

 

110,393 

 

44,726 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

110,393 

 

44,726 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

Preferred stock, 10,000,000 shares authorized, $0.001 par value; no shares issued and outstanding   

 

 

 

 

Common stock, 200,000,000 shares authorized, $0.001 par value; 89,782,679 and  88,742,679 shares issued and outstanding, respectively

 

89,783 

 

88,743 

 

 

Additional paid-in capital

 

4,383,670 

 

4,333,799 

 

 

Accumulated other comprehensive income

 

87,500 

 

 

 

Accumulated deficit prior to exploration stage

 

(462,504)

 

(462,504)

 

 

Accumulated deficit during the exploration stage

 

(3,602,305)

 

(3,505,767)

 

 

 

Total Stockholders' Equity (Deficit)

 

496,144 

 

454,271 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

$

606,537 

 

$

498,997 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 




- 4 -





AMERICAN CORDILLERA MINING CORPORATION

AN EXPLORATION STAGE COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONSAND OTHER COMPREHENSIVE INCOME

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Period from

 

 

 

 

 

 

 

 

 

 

 

 

December 28, 2012

 

 

 

 

3 Months Ended

 

8 Months Ended

 

through

 

 

 

 

August 31, 2013

 

August 31, 2012

 

August 31, 2013

 

August 31, 2012

 

August 31, 2013

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

$

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

Marketing

 

 

175 

 

 

777 

 

 

Rent

 

1,200 

 

900 

 

2,700 

 

2,700 

 

2,700 

 

General and administrative

 

3,248 

 

398 

 

9,885 

 

3,055 

 

9,893 

 

Professional fees

 

16,090 

 

19,552 

 

123,756 

 

55,186 

 

126,015 

 

Land consulting

 

 

 

 

31,259 

 

 

 

TOTAL EXPENSES

 

20,538 

 

21,025 

 

136,341 

 

92,977 

 

138,608 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

(20,538)

 

(21,025)

 

(136,341)

 

(92,977)

 

(138,608)

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

5,495 

 

 

10,497 

 

 

Other income

 

 

 

40,589 

 

 

40,589 

 

Interest expense

 

(428)

 

(6,967)

 

(786)

 

(13,547)

 

(786)

 

Loss on impairment

 

 

 

 

 

(3,503,500)

 

 

TOTAL OTHER INCOME (EXPENSE)

 

(428)

 

(1,472)

 

39,803 

 

(3,050)

 

(3,463,697)

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

(20,967)

 

(22,497)

 

(96,538)

 

(96,027)

 

(3,602,305)

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAXES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

(20,967)

 

(22,497)

 

(96,538)

 

(96,027)

 

(3,602,305)

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on investments

 

87,500 

 

 

87,500 

 

 

87,500 

 

 

TOTAL COMPREHENSIVE INCOME (LOSS)

 

$

66,534 

 

$

 

$

(9,038)

 

$

 

$

3,514,805 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE,

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED

 

$

(0.00)

 

$

(0.00)

 

$

(0.00)

 

$

(0.02)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF

 

 

 

 

 

 

 

 

 

 

 

 

COMMON STOCK SHARES

 

 

 

 

 

 

 

 

 

 

 

 

OUTSTANDING, BASIC AND DILUTED

 

89,495,866 

 

6,151,111 

 

89,319,332 

 

6,054,532 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements

 




- 5 -





 

AMERICAN CORDILLERA MINING CORPORATION

AN EXPLORATION STAGE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Period from

 

 

 

 

 

 

 

 

December 28, 2012

 

 

 

 

8 Months Ended

 

 through

 

 

 

 

August 31, 2013

 

August 31, 2012

 

August 31, 2013

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net loss

 

$

(96,538)

 

$

(96,027)

 

$

(3,602,305)

 

Loss on impairment

 

 

 

 

3,503,500 

 

Non-cash reduction in expenses

 

(3,089)

 

 

(3,089)

 

Adjustments to reconcile net loss to net cash used by operations:

 

 

 

 

 

 

 

 

Decrease (increase) in interest receivable

 

 

(10,496)

 

 

 

Increase (decrease) in accrued expenses

 

 

(6,000)

 

 

 

Increase (decrease) in accounts payable

 

43,881 

 

20,920 

 

46,140 

 

 

Increase (decrease) in prepaid expenses

 

900 

 

 

900 

 

 

Increase (decrease) in interest payable

 

786 

 

13,547 

 

786 

Net cash used by operating activities

 

(54,060)

 

(78,056)

 

(54,068)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

Purchase of mineral rights

 

(10,000)

 

 

(10,000)

 

Increase in receivable

 

 

(135,000)

 

Net cash used by investing activities

 

(10,000)

 

(135,000)

 

(10,000)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

Proceeds from sale of common stock

 

54,000 

 

71,000 

 

54,000 

 

Proceeds from convertible notes payable

 

28,000 

 

149,000 

 

38,000 

 

Payment of note payable

 

(7,000)

 

(20,000)

 

(7,000)

Net cash provided by financing activities

 

75,000 

 

200,000 

 

85,000 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

10,940 

 

(13,056)

 

20,932 

CASH, BEGINNING OF PERIOD

 

10,051 

 

15,040 

 

59 

CASH, END OF PERIOD

 

$

20,991 

 

$

1,984 

 

$

20,991 

 

 

 

 

 

 

 

 

 

NON-CASH INVESTING AND FINANCING ACTIVITES

 

 

 

 

 

 

 

Shares issued for mineral rights

 

$

 

$

 

$

3,575,000 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW DISCLOSURES:

 

 

 

 

 

 

 

Interest paid

 

$

 

$

 

$

 

Income taxes paid

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.




- 6 -




AMERICAN CORDILLERA MINING CORP.

An Exploration Stage Company

Notes to the Consolidated Financial Statements

August 31, 2013



NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS


American Cordillera Mining Corporation (formally APD Antiquities, Inc., and hereinafter “AMCOR” or “the Company”) was incorporated on July 23, 1996 under the laws of the State of Nevada for the purpose of acquiring, importing, marketing, and selling valuable antiquity and art items of Asian origin.


The Company is an exploration stage company in the mineral industry.  The Company is locating, exploring, acquiring and developing mineral properties.  Our business operations are currently limited to mineral exploration/development of selected properties in North America.  The Company will continue with this segment of its business plan.


The Company maintains its corporate office in Spokane, Washington.  The Company’s 2012 fiscal year end was December 31, however the 2013 fiscal year has been changed to November 30th and the Company filed its transitional first quarter as of the two months ended February 28, 2013.



NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


This summary of significant accounting policies of the Company is presented to assist in understanding the financial statements. The financial statements and notes are  representations of the Company’s management, which is responsible for their integrity and objectivity.


Exploration Stage Company

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to exploration stage companies. An exploration-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.  The Company has recognized that it has entered the exploration stage with the acquisition of the mineral properties on December 28, 2012 as described in Note 4.


Basis of Presentation

These unaudited interim consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”).  Such rules and regulations allow the omission of certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America, so long as such omissions do not render the financial statements misleading.


In the opinion of management, these financial statements reflect all adjustments that are necessary for a fair statement of the results for the periods presented.  All adjustments were of a normal recurring nature.  These interim financial statements should be read in conjunction with the annual financial statements of the Company included in its 2012 Annual Report on Form 10-K.


Consolidation Policy

The Company and its wholly owned subsidiary, AMCOR Exploration, Inc. are presented as part of the consolidated financial statements and all material inter-company transactions have been eliminated in the presentation of the financial statements.


Accounting Method

The Company’s financial statements are prepared using the accrual method of accounting.


Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a remaining maturity of three months or less to be cash equivalents.







- 7 -




Fair Value of Financial Instruments

The Company’s financial instruments as defined in Topic 825 in the Accounting Standards Codification (ASC 825) include cash and cash equivalents, deposits and prepaid expenses, investments in available-for-sale securities, accounts payable and short-term borrowings.  All instruments other than the investments in available-for-sale securities are accounted for on an historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at the reporting dates.  Investments in available-for-sale securities are recorded at fair value at the reporting dates in accordance with ASC Topic 825.


Fair Value Measurements

Topic 820 in the Accounting Standards Codification (ASC 820) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements.  ASC 820 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances.  In this standard, the FASB clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability.  In support of this principle, ASC 820 establishes a fair value hierarchy that prioritizes the information used to develop those assumptions.  The fair value hierarchy is as follows:


 

Level 1 inputs — Unadjusted quoted process in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date.


 

Level 2 inputs — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.


 

Level 3 inputs — Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.


Commitments and contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.


Investments

The Company determines the appropriate classification of marketable securities at the time of acquisition and reevaluates this designation as of each balance sheet date.  The Company classifies these securities as either held-to-maturity, trading, or available-for-sale.  All marketable securities and restricted investments were classified as available-for-sale securities.  The Company classifies its investments as "available for sale" because it does not intend to actively buy and sell for short-term profits.  The Company's investments are subject to market risk, primarily interest rate and credit risk.  The fair value of investments is determined using observable or quoted market prices for those securities.


Available-for-sale securities are carried at fair value, with unrealized gains and losses included as a component of accumulated other comprehensive income (loss).  Realized gains and losses, declines in value judged to be other than temporary and interest on available-for-sale securities are included in net income.  The cost of securities sold is based on the specific identification method.


Income taxes

The Company accounts for income taxes under paragraph 740-10-30-2 of the FASB Accounting Standards Codification.  Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.


The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”).  Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax




- 8 -




return should be recorded in the financial statements.  Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.


Net income (loss) per common share

Net income (loss) per common share is computed pursuant to paragraph of 260-10-45-10 of the FASB Accounting Standards Codification.  Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during each period.  Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period to reflect the potential dilution that could occur from common shares issuable through stock options and warrants.  There were no potentially dilutive shares outstanding as of August 31, 2013 and August 31, 2012.


Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period.  Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of AMCOR’s financial position and results of operations.


Revenue Recognition

As an exploration stage company, the Company’s revenue from operations is referred to as income earned during the exploration stage. Revenue is recognized when title and risk of ownership of metals or metal bearing concentrate have passed and collection is reasonably assured. Revenue from the sale of metals may be subject to adjustment upon final settlement of estimated metal prices, weights and assays, and are recorded as adjustments to revenue in the period of final settlement of prices, weights and assays; such adjustments are typically not material in relation to the initial invoice amounts.


Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718.  To date, the Company has adopted a stock option plan but has not granted any stock options.


Mining Properties, Land and Water Rights

Costs of acquiring and developing mining properties, land and water rights are capitalized as appropriate by project area. Exploration and related costs and costs to maintain mining properties, land and water rights are expensed as incurred while the property is in the exploration and evaluation stage.  Development and related costs and costs to maintain mining properties, land and water rights are capitalized as incurred while the property is in the development stage.  When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production basis over proven and probable reserves. Mining properties, land and water rights are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment.  If a property is abandoned or sold, a gain or loss is recognized and included in the consolidated statement of operations.  See Note 4.


Mineral Exploration and Development Costs

All exploration expenditures are expensed as incurred. Significant property acquisition payments for active exploration properties are capitalized.  If no economic 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 units-of-production basis over proven and probable reserves.


Should a property be abandoned, its capitalized costs are charged to operations.  The Company charges to the consolidated statement of 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.




- 9 -





Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation.  These reclassifications had no effect on reported losses.


Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements, and no pronouncements were determined to have a significant impact on the financial statements that have not been disclosed in prior reporting periods.


Subsequent events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events.  The Company will disclose the date through which subsequent events have been evaluated and that date is the date when the financial statements were issued.



NOTE 3 – GOING CONCERN


As reflected in the accompanying financial statements, the Company had an accumulated deficit of $4,064,809 at August 31, 2013, and had a net loss of $96,538 and net cash used in operating activities of $54,060 for the eight months ended August 31, 2013.  These facts raise substantial doubt about the company continuing as a going concern.


While the Company is attempting to generate sufficient revenues, the Company’s cash position may not be sufficient enough to support the Company’s daily operations.  Management intends to raise additional funds by way of a public or private offering.  Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues provide the opportunity for the Company to continue as a going concern.  While the Company believes in the viability of its strategy to generate sufficient revenues and in its ability to raise additional funds, there can be no assurances to that effect.  The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenues.


The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.



NOTE 4 – MINERAL PROPERTY ACQUISITION


Pursuant to the execution of the Asset Purchase Agreement on December 28, 2012, the Company acquired certain mineral properties and interests made up of the following nine projects which will be owned outright by our company or controlled pursuant to mineral lease agreements or options to acquire leases: 1) an agreement to explore and acquire the Bayhorse silver mine consisting of 3 patented and 10 unpatented claims located in Baker County, Oregon; 2) a lease agreement pertaining to 37 unpatented mining claims located on Quartz Creek, in Mineral County, Montana; 3) a lease agreement pertaining to 58 unpatented mining claims located Trout Creek, in Mineral County, Montana; 4) a lease agreement pertaining to 18 unpatented mining claims referred to as the Vienna prospect locate in Shoshone County, Idaho; 5) a lease agreement pertaining to the Monitor-Richmond and Copper Age mines consisting of a total of 105 unpatented mining claims (20 original claims and Archean Resources, Inc., our joint venture partner for this lease, has paid for an additional 85 claims that are in our area of influence covered by the agreements) located in Shoshone County, Idaho; 6) ten state leases were acquired by the company and seven of the ten leases were assign to Kinross Gold USA, Inc. (“Kinross”) pursuant to an agreement between the Company and Kinross and three leases have been retained by the company and are currently in good standing.; 7) acquisition agreements pertaining to 15 unpatented mining claims located in Stevens County, Washington referred to as the Box Group; 8) acquisition agreements pertaining to 15 unpatented mining claims located in Stevens County, Washington referred to as the McKinley-McNally Property; and 9) directly owned all right, title, and claim to 26 unpatented claims commonly known as the North Moccasin Project or Plum Claims located in Fergus County, Montana.  In addition to these nine projects, we also seek to find, develop, produce and sell other precious metal and mineral property interests.


As part of the acquisition of the properties the Company converted a note receivable from Northern Adventures LLC of $382,500 and accrued interest on the note of $30,564.  The Company also issued 71,500,000 shares of its common stock valued at $0.05 per share for a total stock value of $3,575,000.  The Company recognized a total acquisition cost of the mineral properties of $3,988,064.  Subsequent to the acquisition, management decided to




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impair the value of the acquired mineral properties by $3,503,500.  This impairment was a consequence of the assets being exploratory in nature and not being supported any ore reserves.  It is not possible to evaluate and establish the real value of the mineral properties until additional work is completed and that may take several years.  With that being stated, our position is that these acquired mineral assets, which consist of ownership of unpatented mining claims, acquired mineral leases and an option to acquire certain mineral leases granted by the Department of Natural Resources for the State of Washington cannot be truly assessed at this time.  The Company assumes that these assets have been impaired and the exchange price based on $.05 per share is not supportable as the possible value of these assets in the future.  The Company impaired the stock value exchange to $71,500 and the carrying value of all mineral properties was determined to be $484,564 as of December 31, 2012.  During the quarter ended May 31, 2013, the company paid $10,000 to acquire additional rights from Hydro Imaging, Inc.  As of August 31, 2013, the carrying value of mineral properties was $494,564.


See the discussion in Note 5 under Obligations Under Mineral Property Agreements for the details on each of the above properties.



NOTE 5 – COMMITMENTS AND CONTINGENCIES


Rental Agreement

The Company has a month-to-month rental agreement for office space in Spokane, Washington.  The monthly rent is $300.


Obligations Under Mineral Property Agreements

We currently have five mineral properties leased from third parties and an option to acquire mineral prospecting and leases from the State of Washington, plus 27 unpatented mining claims.  Below is a summary of the financial obligations, terms and conditions of each of the five leases:


Bayhorse Mine:


The date of our mining lease with Bayhorse Silver Mine LLC is June 26, 2012. The term of the lease on the three patented and 10 unpatented claims that make up the property is for 25 years, with an option to renew the lease for two additional successive terms of fifteen (15) years each, so long as there are ores or minerals being developed, mined, processed or marketed on a continuing basis or when exploration activities have advanced far enough that the construction activities related to the start up of ore production are expected to commence within one year.  The initial consideration for the lease was a cash payment of ten thousand ($10,000) dollars.  Annual minimum advanced royalties will be due the Lessor on the following basis.  We are required to pay an annual advance minimum royalty of $10,000 on the first anniversary of this lease, $20,000 on the second anniversary, $30,000 on the third anniversary, $40,000 on the fourth anniversary, $50,000 on the fifth anniversary, and $50,000 on each anniversary thereafter.  In July 2013, the first anniversary royalty payment was deferred until December 31, 2013, or payable within ten business days after AMCOR secures funding in excess of $500,000.  There are also work requirements for each year and the lease calls for a variable net smelter royalty in the future. The first year's work requirement has been deferred, allowed to be accomplished at the earliest possible time, weather permitting.


Vienna Mine:


The date of our mining lease with Martin Clemets is June 26, 2012. The term of the lease on 18 unpatented claims that make up the property is for 25 years, with an option to renew the lease for two additional successive terms of fifteen (15) years each, so long as there are ores or minerals being developed, minded, processed or marketed on a continuing basis or when exploration activities have advanced far enough that the construction activities related to the start up of ore production are expected to commence within one year. The initial consideration for the lease was a cash payment of five thousand ($5,000) dollars.  Annual minimum advanced royalties will be due the Lessor on the following basis.  We are required to pay an annual advance minimum royalty of $10,000 on the first anniversary of this lease, $20,000 on the second anniversary, $30,000 on the third anniversary, $40,000 on the fourth anniversary, $50,000 on the fifth anniversary, and $50,000 on each anniversary thereafter.  In July 2013, the first anniversary royalty payment was deferred until December 31, 2013, or payable within ten business days after AMCOR secures funding in excess of $500,000.  There are also work requirements for each year and the lease calls for a variable net smelter royalty in the future. The first year's work requirement has been deferred, allowed to be accomplished at the earliest possible time, weather permitting.


 


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Monitor-Richmond-Copper Age Mines:


The date of our mining lease with Northern Adventures LLC is June 27, 2012. The term of the lease on 20 unpatented claims that make up the property is for 25 years, with an option to renew the lease for two additional successive terms of fifteen (15) years each, so long as there are ores or minerals being developed, minded, processed or marketed on a continuing basis or when exploration activities have advanced far enough that the construction activities related to the start up of ore production are expected to commence within one year. The initial consideration for the lease was a cash payment of five thousand ($5,000) dollars. Annual minimum advanced royalties will be due the Lessor on the following basis. We are required to pay an annual advance minimum royalty of $10,000 on the first anniversary of this lease, $20,000 on the second anniversary, $30,000 on the third anniversary, $40,000 on the fourth anniversary, $50,000 on the fifth anniversary, and $50,000 on each anniversary thereafter.  The year one payment has been satisfied by Archean Star, our joint venture partner on the project.  There are also work requirements for each year and the lease calls for a variable net smelter royalty in the future.  The work requirements for year one have been satisfied by Archean Star, our joint venture partner on the project.  On February 5, 2013, the Company entered into a definitive Option Joint Venture Agreement with Archean Star Resources Inc. (ASR) pertaining to these 20 unpatented claims leased by AMCOR pursuant to a Mining Lease with Northern Adventures.


Archean Star Agreement


On February 5, 2013, we entered into a definitive Option and Joint Venture Agreement with Archean Star Resources Inc. (ASR) pertaining to 20 unpatented claims leased by AMCOR pursuant to a Mining Lease with Northern Adventures, LLC.  On June 27, 2012, Northern Adventures, LLC originally entered into the Mining Lease with Northern Adventures, Inc., and AMCOR assumed the rights in that Mining Lease from Northern Adventures, Inc. pursuant to the Asset Purchase Agreement dated December 28, 2013.  As part of the transaction, AMCOR received 500,000 shares of ASR common stock and will receive an additional 500,000 shares of ASR common stock on the second and third anniversaries of the agreement, subject to ASR going forward with the agreement after year one.  (See Note 6)  ASR will assume the obligations of the underlying lease agreement and paid an up-front fee of $7,500 to AMCOR.  Under the terms of the agreement ASR can earn up to 80% ownership interest in the property lease by expending $2,100,000 over a three year period, with a minimum expenditure of $700,000 in year one of the agreement.  AMCOR’s interest shall be a Carried Interest until such time as a Bankable Feasibility Study has been produced or a Decision to Mine has been made.  As of September 30, 2013, ASR has expended approximately $485,000 on the project.


Quartz Creek:


The date of our mining lease with Northern Adventures, LLC is June 26, 2012. The term of the lease on 37 unpatented claims that make up the property is for 25 years, with an option to renew the lease for two additional successive terms of fifteen (15) years each, so long as there are ores or minerals being developed, minded, processed or marketed on a continuing basis or when exploration activities have advanced far enough that the construction activities related to the start up of ore production are expected to commence within one year.  The initial consideration for the lease was a cash payment of twenty five thousand ($25,000) dollars. Annual minimum advanced royalties will be due the Lessor on the following basis.  We are required to pay an annual advance minimum royalty of $10,000 on the first anniversary of this lease, $20,000 on the second anniversary, $30,000 on the third anniversary, $40,000 on the fourth anniversary, $50,000 on the fifth anniversary, and $50,000 on each anniversary thereafter.  In July 2013, the first anniversary royalty payment was deferred until December 31, 2013, or payable within ten business days after AMCOR secures funding in excess of $500,000.  There are also work requirements for each year and the lease calls for a variable net smelter royalty in the future. The first year's work requirement has been deferred, allowed to be accomplished at the earliest possible time, weather permitting.


Trout Creek:


The date of our mining lease with Northern Adventures LLC is June 26, 2012. The term of the lease on 58 unpatented claims that make up the property is for 25 years, with an option to renew the lease for two additional successive terms of fifteen (15) years each, so long as there are ores or minerals being developed, minded, processed or marketed on a continuing basis or when exploration activities have advanced far enough that the construction activities related to the start up of ore production are expected to commence within one year.  The initial consideration for the lease was a cash payment of twenty five thousand ($25,000) dollars. Annual minimum advanced royalties will be due the Lessor on the following basis.  We are required to pay an annual advance minimum royalty of $10,000 on the first anniversary of this lease, $20,000 on the second anniversary, $30,000 on the third anniversary, $40,000 on the fourth anniversary, $50,000 on the fifth anniversary, and $50,000 on each




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anniversary thereafter.  In July 2013, the first anniversary royalty payment was deferred until December 31, 2013, or payable within ten business days after AMCOR secures funding in excess of $500,000.  There are also work requirements for each year and the lease calls for a variable net smelter royalty in the future. The first year's work requirement has been deferred, allowed to be accomplished at the earliest possible time, weather permitting.


Washington State Mineral Prospecting Leases—Bodie Project Toroda Creek-Wauconda Mining District-Kinross Gold USA, Inc:


The terms and conditions for annual prospecting leases granted from the State of Washington require the expenditure of $3.00 per acre on prospecting or exploration on an annual basis during the term of the lease.  The work conducted must be performed in such a manner as to contribute directly to the evaluation of the economic mineral potential of the leased property. As an alternative there is the option to make cash payment to the State in the amount of $3.00 per acre in lieu of the performance of prospecting work for up to, but not more than three (3) years during the term of the prospecting lease.  In addition to the requirement to expend $3.00 per acre on prospecting and exploration on an annual basis, there is a requirement to pay the State of Washington an annual rental fee of $2.00 per acre for the first three years of the mineral prospecting lease and $3.00 per year for each subsequent year.  Pursuant to the assignment of the Washington State prospecting permit and leases to Kinross, all annual rental fees payable to the state of Washington and work requirements were assumed by Kinross, as detailed below.


Kinross Agreement


On April 5, 2013 AMCOR exercised an option to acquire three mineral leases located in Okanogan County, Washington, pursuant to an Option to Purchase Mineral Leases between Hydro Imaging, Inc. and Northern Adventures, Inc. (NAI) entered into on June 25, 2012 and amended on December 7, 2012, which option was transferred to us on December 28, 2012 by NAI pursuant to an Asset Purchase Agreement.  We also acquired Hydro Imaging’s rights in a Mineral Lease and Assignment agreement with Kinross Gold USA, Inc.  The original option was granted by HydroImaging, Inc (Hydro), a private company owned solely by David Boleneus, currently a member of our board of directors, to NAI on June 25, 2012.  Under the terms of the original option Hydro granted the right to acquire ten leases granted by the Department of Natural Resources for the State of Washington totaling 4,583.76 acres and 27 unpatented mining claims located in the Toroda Creek-Wauconda Mining district in Okanogan country in the State of Washington for the payment of an exercise price of $10,000.


On February 28, 2013, Hydro concluded the Mining Lease and Assignment agreement with Kinross concerning seven of the ten mineral leases totaling 2,934.56 acres and a lease on 27 unpatented mining claims located in Okanogan County, Washington.  The seven state leases were transferred from Hydro to Kinross and approved by the State of Washington on March 27, 2013.  Pursuant to the terms of the Kinross agreement, Kinross will assume all of the underlying obligations, annual rental expenses, and work requirements related to the seven leases and 27 unpatented mining claims.  The remaining three state mining leases totaling 1,649.2 acres were transferred from Hydro to AMCOR and the transfer was approved from the Department of Natural Resources for the State of Washington.


Under the terms of the Mining Lease and Assignment agreement Kinross will pay AMCOR production royalties as follows: a 1% net smelter return royalty on all minerals extracted from the area covered by the 7 leases and a 2.5% net smelter return royalty on all minerals extracted from the area covered by the 27 unpatented mining claims.  The amount of royalties to be paid (both production royalties and advance royalty payments) are capped at $3 million per lease.  Kinross will also pay advance royalty payments in the aggregate amount of $1 million as follows:  $15,000 payable within 7 days of February 28, 2013, the effective date, $15,000 payable within 15 days of the effective date, $40,000 payable on February 28, 2014, $50,000 payable on February 28, 2015, and thereafter the annual advance royalty payment is to increase by 5% per year up to a maximum annual payment of $100,000.  The obligation to pay the advance royalty payment shall cease once an aggregate of $1 million has been paid.  Advance minimum royalty payments shall be creditable against the production royalties.  The production royalty payments for minerals produced from the state leases shall be capped at $3,000,000 for each of the seven leases, including any advanced royalty payments to be offset.  Kinross also undertakes to make such payments and undertake such other actions necessary to maintain the seven state mining leases and the unpatented claims in effect and good standing.


 


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NOTE 6 - INVESTMENTS


In February 2013, the Company acquired common stock investments through a joint venture agreement.  Archean Star Resources (ASR) provided the Company with 500,000 shares of common stock.  The Company originally determined that these shares had no material current value and were restricted from trading.  The Canadian restriction on these shares was lifted on June 23, 2013.  At that time, the Company determined these securities would be available-for-sale securities.  The Company has posted the fair value of these securities to its investment account and the change in value is recorded as other comprehensive income in the company's equity.


 

 

Amount

     Archean Star Resources: 500,000 Shares of Common Stock

 

 

Cost Basis

 

-

Value at June 23, 2013

 

60,000

Net Unrealized Gain as of August 31, 2013

 

27,500

Fair Value at August 31, 2013

 

87,500



NOTE 7 - NOTES PAYABLE


On December 28, 2012, $486,000 in promissory notes and $41,078 in related accrued interest owed to 16 individuals and entities were converted to common shares at $0.05 per share for a total of 10,541,567 shares issued.


On December 31, 2012, the Company entered into a definitive agreement with an accredited investor and executed a convertible promissory note relating to a loan in the amount of $10,000 at 8% interest per annum with a maturity date of January 31, 2013.  The maturity date was extended to December 31, 2013. $2,500 of this note was paid back on February 12, 2013, leaving $7,500 outstanding.  This promissory note and accrued interest can be converted to shares of restricted common stock at $.05 per share at any time during the term of the promissory note.


As of February 28, 2013, the Company had a few minor non-interest bearing operating loans.  One $500 note was a convertible note.  Three other notes totaling $4,000 were not convertible.  On April 4, 2013, these notes in the amounts of $2,000, $850, $500, and $1,150 due to the company, in aggregate of $4,500, were repaid to note holders.


On March 8, 2013, the Company entered into a definitive agreement with an accredited investor and executed a convertible promissory note relating to a loan in the amount of $5,000 at 5% interest per annum with a maturity date of June 30, 2013.  On June 30, 2013, the maturity date of this convertible promissory note was extended to December 31, 2013.  This promissory note and accrued interest can be converted to shares of restricted common stock at $.05 per share at any time during the term of the promissory note.


On March 21, 2013, the Company entered into a definitive agreement with an accredited investor and executed a convertible promissory note relating to a loan in the amount of $3,000 at 5% interest per annum with a maturity date of June 30, 2013.  On June 30, 2013, the maturity date of this convertible promissory note was extended to December 31, 2013.  This promissory note and accrued interest can be converted to shares of restricted common stock at $.05 per share at any time during the term of the promissory note.


On June 28, 2013, the Company issued a convertible promissory note to an affiliated accredited investor, AMCOR Director Manuel Graiwer, relating to a loan in the amount of $20,000 at 5% interest per annum with a maturity date of September 26, 2013.  On September 26, 2013, the maturity date of this convertible promissory note was extended to December 31, 2013.  This promissory note and accrued interest can be converted to shares of restricted common stock at $.05 per share at any time during the term of the promissory note.



NOTE 8 – PREFERRED AND COMMON STOCK


The Company has 10,000,000 shares of preferred stock authorized and none issued.  The Company has 200,000,000 shares of common stock authorized and 89,782,679 issued and outstanding as of August 31, 2013.


On December 28, 2012, the Company issued 10,541,568 shares of common stock in exchange for the conversion of debt in the principal amount of $486,000 and accrued interest in the amount of $41,078.


Also on December 28, 2012, the Company issued 71,500,000 shares of common stock to Northern Adventures, Inc. pursuant to an Asset Purchase Agreement which involved, in part, the exchange of debt in the amount of $382,500




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and accrued interest in the amount of $30,564, which was applies as partial consideration for the purchase of mining assets.


On February 11, 2013, the Company entered into a definitive agreement relating to the private placement of $25,000 of its securities through the sale of 500,000 shares of its common stock at $0.05 per share to an investor.


On February 19, 2013, the Company entered into a definitive agreement relating to the private placement of $5,000 of its securities through the sale of 100,000 shares of its common stock at $0.05 per share to an investor.


On May 1, 2013, the Company entered into a definitive agreement relating to the private placement of $7,000 of its securities through the sale of 140,000 shares of its common stock at $0.05 per share to an investor.


On August 21, 2013, the Company entered into a definitive agreement relating to the private placement of $5,000 of its securities through the sale of 100,000 shares of its common stock at $0.05 per share to an investor.


On August 30, 2013, the Company entered into a definitive agreement relating to the private placement of $12,000 of its securities through the sale of 200,000 shares of its common stock at $0.06 per share to an investor.



NOTE 9 – STOCK OPTION PLAN


The Company’s Board of Directors approved the “2001 Non-Qualified Stock Option and Stock Appreciation Rights Plan” by unanimous consent on January 15, 2001 and then on November 30, 2012, authorized an increase in the total common stock, $.001 par value, available for issuance pursuant to the Corporation's 2001 Non-Qualified Stock  Option and Stock Appreciation Rights Plan from one million (1,000,000) shares to five million (5,000,000) shares. This increase will be subjected to a vote of the shareholders as the next annual meeting.  The total number of options that can be granted under the plan will not exceed 5,000,000 shares.  Non-qualified stock options will be granted by the Board of Directors with an option price not less than the fair market value of the shares of common stock to which the non-qualified stock option relates on the date of grant.  In no event may the option price with respect to an incentive stock option granted under the stock option plan be less than the fair market value of such common stock.


Each option granted under the stock option plan will be assigned a time period for exercising not to exceed ten years after the date of the grant.  Certain other restrictions will apply in connection with this plan when some awards may be exercised.  This plan is intended to encourage directors, officers, employees and consultants to acquire ownership of common stock.  The opportunity so provided is intended to foster in participants a strong incentive to put forth maximum effort for our continued success and growth, to aid in retaining individuals who put forth such effort, and to assist in attracting the best available individuals to AMCOR in the future.



NOTE 10 – INCOME TAXES


The Company accounts for income taxes and the related accounts under the liability method.  Deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the income tax basis of assets and liabilities.  A valuation allowance is applied against any net deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.


At August 31, 2013 and December 31, 2012, the Company had gross deferred tax assets calculated at the expected rate of 35% of approximately $196,000 and $163,000, respectively, principally arising from net operating loss carry forwards for income tax purposes.  As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the deferred tax asset, a valuation allowance of approximately $196,000 and $163,000 has been established at August 31, 2013 and December 31, 2012, respectively.


The significant components of the Company’s net deferred tax asset (liabilities) at August 31, 2013 and December 31, 2012 are as follows:




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August 31,

2013

 

December 31,

2012

Net operating loss carryforwards

 

$

561,000 

 

$

465,000 

 

 

 

 

 

 

Gross deferred tax assets (liabilities):

 

 

 

 

 

Net Operating Loss

 

$

196,000 

 

$

163,000 

 

Valuation Allowance

 

(196,000)

 

(163,000)

 

 

 

 

 

 

Net Deferred tax asset (liability)

 

$

 

$



At August 31, 2013 and December 31, 2012, the Company has net operating loss carryforwards of approximately $561,000 and $464,000, respectively, which will expire in the years 2016 through 2031.  The net change in the allowance account was an increase of approximately $33,000.


The Company has had a change in control during 2012 which may limit the availability of prior years’ net operating losses under the Internal Revenue Code.  The Company will be assessing the ramification of this control change to determine the effect upon future income, but has not made a determination as of August 31, 2013.  The Company is currently in default on some of its federal tax reporting obligations, but expect no material financial obligations from this default.



NOTE 11 - SUBSEQUENT EVENTS


The company's management has evaluated the company's financial information for possible material subsequent events through October 21, 2013.  The following items are subsequent events being disclosed:


On September 30, 2013, the Company entered into a definitive agreement relating to the private placement of $6,000 of its securities through the sale of 100,000 shares of its common stock at $0.06 per share to an investor.


On October 11, 2013, the Company issued a promissory note to a non-affiliated entity, relating to a loan in the amount of $1,000 at 5% interest per annum with a maturity date of October 11, 2014.


On October 15, 2013, the Company issued a promissory note to a non-affiliated individual, relating to a loan in the amount of $1,500 at 5% interest per annum with a maturity date of October 15, 2014




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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION


THE FOLLOWING PLAN OF OPERATIONS SECTION SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED IN THIS QUARTERLY REPORT ON FORM 10-Q.  ALL STATEMENTS IN THIS QUARTERLY REPORT RELATED TO OUR CHANGING FINANCIAL OPERATIONS AND EXPECTED FUTURE OPERATIONAL PLANS CONSTITUTE FORWARD-LOOKING STATEMENTS. THE ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED OR EXPRESSED IN SUCH STATEMENTS.  FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE.


This discussion and analysis of our financial condition and results of operations are based on our financial statements that have been prepared under accounting principles generally accepted in the United States of America.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could materially differ from those estimates.  We have disclosed all significant accounting policies in Note 2 to the financial statements included in this Form 10-Q.


Corporate Background


American Cordillera Mining Corporation or AMCOR, was incorporated on July 23, 1996, under the laws of the State of Nevada for the purpose of acquiring, importing, marketing, and selling valuable antiquity and art items of Asian origin.


Since our inception to August 31, 2013, we have generated minimal revenue from our distribution and sales business, while incurring a loss of approximately $4,064,809 since inception.  Because we were unable to develop our Asian art and antiquities business into a financially viable business, the Board of Directors decided to redirect our business and to acquire mineral properties, leases on mineral properties, and mining claims from Northern Adventures, Inc., a private Nevada corporation.


On December 28, 2012, AMCOR, AMCOR Exploration, Inc. a wholly owned subsidiary of American Cordillera Mining Corporation, Northern Adventures, LLC, and Northern Adventures, Inc. entered into an Asset Purchase Agreement to assign all right, title, and interest of specific NAI owned assets to AMCOR Exploration, with NAI shareholders, on a post acquisition basis, to hold a controlling 80.5% interest in American Cordillera Mining Corporation.  The Asset Purchase Agreement was executed on December 28, 2012 by issuing restricted common stock as consideration to Northern Adventures, Inc. and the exchange of certain promissory notes from Northern Adventures LLC detailed in the Asset Purchase Agreement.  Under the terms of the Asset Purchase Agreement, AMCOR exchanged loans to NALLC in the amount of $382,500 including additional accrued interest and issued NAI 71,500,000 shares of restricted common stock as a total consideration for the mineral assets acquired.  With the issuance of the 71,500,000 shares to NAI for transferring to its shareholders as a dividend, they own the controlling interest in AMCOR.


The Asset Purchase Agreement related to the acquisition of:  1) all right, title and interest in five existing mineral leases consisting of 154 unpatented claims and 3 patented claims; 2) ownership of 83 unpatented mining claims; and 3) the transfer of all right, title and interest to an Option to Purchase Mineral Leases agreement relating to ten mineral leases granted by the State of Washington covering 4,664 acres of land and 27 unpatented mining claims.


Plan of Operations


AMCOR intends to conduct exploration for gold, silver and base metal deposits and mineral targets primarily located in the following mining districts; 1) the Coeur d’Alene Mining District of northern Idaho; 2) in the Quartz Creek Mining District of western Montana; 3) in the Connor Creek Mining District of eastern Oregon; 4) in the Kootenai ARC district in Idaho; 5) the Judith-Moccasin Mining District in central Montana; and 6) the Toroda Creek, Wauconda and Republic Mining Districts in Northern Washington.  Our strategy is to explore for gold, silver and base metal deposits primarily in the Coeur d’Alene Mining District, a world class mining district and other known districts, by forming joint ventures with other companies who will potentially earn their interest in the property by contributing cash and undertaking exploratory work on specific properties.  Revival of operations in old districts can be easily justified on the basis of increases in prices of metals in the last decade.




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Several important corporate priorities set by AMCOR management are expressed by the choice of these abandoned mines, exploration projects, and prospects.  There are certain priorities that may contribute to the strategic advantages to AMCOR’s operations, as well as advantages in efficiencies, economy, and cost savings.  These priorities are: (1) the properties be valuable for gold or silver for the purpose of leveraging future returns from the current prices of these metals; additional metal values also known to be present in several of these properties would represent added value; (2) emphasize work in select mining districts in order to leverage operational experiences, similar geology and knowledge bases peculiar within a district; (3) assemble operations within hauling distance to operating custom mills in view of establishing future toll milling agreements; and (4) operate in areas within reasonable commute distance to AMCOR’s base of operations.  The emphasis for locating of projects in known mining districts is important because other mining prospects within the same districts are also available from time to time for evaluation and/or acquisition.


We plan to structure our operations in such a way as to keep our capital expenditures and administrative expenses to a minimum.  Overhead and staff will be kept to a minimum and the majority of operational duties will be outsourced to consultants and independent contractors.  We currently have no employees, but we expect to eventually hire three to five employees, commensurate with the development of our business and the availability of additional capital from the future sale of common stock, of which there is no assurance.  We believe that most operational responsibilities can be handled by the officers and directors, and through the working partnership of other consultants.  Two of our officers may draw salaries in the future, Frank H. Blair, our President and CEO, and Dwight Weigelt, CPA, our Secretary, Treasurer and Chief Financial Officer.  Our other officers and directors may be retained on an as needed basis and will be paid an hourly rate to be determined by the Board and reimbursed any out of pocket expenses.


We will focus our future business on evolving into a growth-orientated, newly reorganized, early stage, and independent mineral and precious metal exploration company engaged in the acquisition, exploration, exploitation and development of mineral and precious metal properties; focusing our activities in the western United States.  Through the recent acquisitions from NAI, AMCOR owns all, right, title and interest in 83 unpatented mining claims which make up four properties; has the option to acquire certain mineral leases from the state of Washington covering 4,664 acres and 27 unpatented mining claims in Okanogan County; and all right, title and interest in ten existing mineral leases. Seven leases covering 2,934.56 acres were assigned to Kinross Gold USA, Inc.


Our future financial results will depend primarily on: (i) the ability to discover commercial quantities of precious or base metal on properties which we own or lease: (ii) the ability to continue to source and screen potential projects; (iii) the market price for precious metals; and (iv) the ability to fully implement our exploration and development programs on our nine projects, which is dependent on the availability of capital resources. There can be no assurance that we will be successful in any of these respects or that the prices of metals will be at a level allowing for profitable production, in the event we are able to define a commercial ore body, of which there is no assurance.


Archean Star Agreement


On February 5, 2013, we entered into a definitive Option and Joint Venture agreement with Archean Star Resources Inc. (ASR) pertaining to 20 unpatented claims leased by AMCOR pursuant to a Mining Lease with Northern Adventures, LLC.  On June 27, 2012, Northern Adventures, LLC originally entered into the Mining Lease with Northern Adventures, Inc., and AMCOR assumed the rights in that Mining Lease from Northern Adventures, Inc. pursuant to the Asset Purchase Agreement dated December 28, 2013.  As part of the transaction, AMCOR received 500,000 shares of ASR common stock and will receive an additional 500,000 shares of ASR common stock on the second and third anniversaries of the agreement, subject to ASR going forward with the agreement after year one.  ASR will assume the obligations of the underlying lease agreement and paid an up-front fee of $7,500 to AMCOR.  Under the terms of the agreement ASR can earn up to 80% ownership interest in the property lease by expending $2,100,000 over a three year period, with a minimum expenditure of $700,000 in year one of the agreement.  As of this date ASR has not expended the minimum $700,000 required in year one of the agreement.  However, it is anticipated that this minimum expenditure will be made before the first anniversary of the existing agreement with ASR.  AMCOR’s interest shall be a Carried Interest until such time as a Bankable Feasibility Study has been produced or a Decision to Mine has been made.


As of September 30, ASR completed a multi-phase surface exploration program which consisted of mapping, rock chip and soil sampling, and location of an additional 85 unpatented mining claims owned by Northern Adventures LLC, but the costs related to the acquisition of these additional mining claims was paid for by ASR, but deemed to be part of the agreement pursuant to the standard area of influence.  The initial surface work was undertaken to delineate the mineralized structures and veins that were known to exist on the Richmond and Monitor properties.  




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Initial work was completed related to opening the Adair adit, which was a haulage way that was driven in the 1920’s.  Access was gained back to a point approximately 3,200 feet from the portal.  Additional work will be required to be completed to gain complete access to the balance of the haulage way, which estimated from historical maps to continue for another 2,000 feet or more.  Applications have been made to the United States Forest Service to receive permits to undertake a rehabilitation of the Adair portal and to drill up to 12 surface diamond drill holes in the spring of 2014.  As of September 30, ASR has expended approximately $485,000 on the project.


Kinross Agreement


On April 5, 2013 AMCOR exercised an option to acquire three mineral leases located in Okanogan County, Washington from Hydro Imaging, Inc., pursuant to an Option to Purchase Mineral Leases between Hydro Imaging, Inc. and Northern Adventures, Inc. (NAI) entered into on June 25, 2012 and amended on December 7, 2012, which option was transferred to us on December 28, 2012 by NAI pursuant to an Asset Purchase Agreement.  We also acquired Hydro Imaging’s rights in a Mineral Lease and Assignment agreement with Kinross Gold USA, Inc.  The original option was granted by HydroImaging, Inc (Hydro), a private company owned solely by David Boleneus, currently a member of our board of directors, to NAI on June 25, 2012.  Under the terms of the original option Hydro granted AMCOR the right to acquire ten leases granted by the Department of Natural Resources for the State of Washington totaling 4,583.76 acres and 27 unpatented mining claims located in the Toroda Creek-Wauconda Mining district in Okanogan country in the State of Washington for the payment of an exercise price of $10,000.


On February 28, 2013, Hydro concluded the Mining Lease and Assignment agreement with Kinross concerning seven of the ten mineral leases totaling 2,934.56 acres and a lease on 27 unpatented mining claims located in Okanogan County, Washington.  Seven of the state leases were transferred from Hydro to Kinross and approved by the State of Washington on March 27, 2013.  Pursuant to the terms of the Kinross agreement, Kinross will assume all of the underlying obligations, annual rental expenses, and work requirements related to the seven leases and 27 unpatented mining claims.


Under the terms of the Mining Lease and Assignment agreement acquired by AMCOR from Hydro-Imaging, Kinross will pay AMCOR production royalties as follows: a 1% net smelter return royalty on all minerals extracted from the area covered by the 7 leases and a 2.5% net smelter return royalty on all minerals extracted from the area covered by the 27 unpatented mining claims.  The amount of royalties to be paid (both production royalties and advance royalty payments) are capped at $3 million per lease.  Kinross will also pay advance royalty payments in the aggregate amount of $1 million as follows:  $15,000 payable within 7 days of February 28, 2013, the effective date, $15,000 payable within 15 days of the effective date, $40,000 payable on February 28, 2014, $50,000 payable on February 28, 2015, and thereafter the annual advance royalty payment is to increase by 5% per year up to a maximum annual payment of $100,000.  The obligation to pay the advance royalty payment shall cease once an aggregate of $1 million has been paid.  Advance minimum royalty payments shall be creditable against the production royalties.  The production royalty payments for minerals produced from the state leases shall be capped at $3,000,000 for each of the seven leases, including any advanced royalty payments to be offset.  Kinross also undertakes to make such payments and undertake such other actions necessary to maintain the seven state mining leases and the unpatented claims in effect and good standing.


Results of Operations


Since AMCOR was formed on July 23, 1996, it has earned minimal revenues and has incurred an accumulated deficit since its inception of approximately $4,065,000 through August 31, 2013.  Results of operations are as follows:


Operating Expenses and Net Loss


Net cash used in operating activities during the eight months ended August 31, 2013 was $54,060 as compared to net cash used in operating activities during the eight months ended August 31, 2012 of $78,057.  The significant decrease in net cash used between the two eight month periods was attributable mainly to an increase in accounts payable of $22,961 related to an increase in professional fees.  For the eight months ended August 31, 2013, we reported a net loss of $96,538 compared to a net loss of $96,027 during the eight months ended August 31, 2012.  There was a large decrease in land consulting expenses of $31,259 and a large increase in professional fee expenses of $68,570, as well as a minor increase of $6,830 in general and administrative expenses.  An increase of other income between the periods of $42,853 made the net loss for each period similar.  We have begun a new exploration stage between the 2013 and 2012 periods, which would be expected to change our future expectations.


 


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Revenues


We had no sales revenue in the eight months ended August 31, 2013 and August 31, 2012.  The lack of revenue is attributable to the change in business focus of our company in 2012.


Liabilities


At August 31, 2013, we had total liabilities of $110,393 and $44,726 at December 31, 2012.  The increase was due to more accounts payable.  Of the $110,393 in total liabilities, $74,893 was accounts payable, mostly payable to our independent auditor of $55,658.  In addition, $35,500 of liabilities was for convertible notes payable.


Other Comprehensive Income


In February 2013 the Company received restricted securities from Archean Star Resources, Inc. as part of a joint venture.  The shares are accounted for as available-for-sale securities.  The Company does not expect to sell these shares, which are restricted for certain trading purposes, but had a fair market value of $87,500 as of August 31, 2013.


Liquidity and Capital Resources


Our cash in the bank at August 31, 2013 was $20,991.  We do not have any available lines of credit.  Since inception we have financed our operations from private placements of equity securities and loans.  On December 28, 2012, AMCOR issued a total of 10,541,568 shares of restricted common stock in exchange for the conversion of debt in the amount of $486,000 and accrued interest of $41,078 as of November 30, 2012.  At May 31, 2013, our total liabilities were $86,145.  Of these liabilities, $15,500 were from convertible notes payable all due December 31, 2013.  A $10,000 loan on December 31, 2012, with 8% interest per annum and convertible to common shares at $0.05 per share was due on January 31, 2013.  This loan was reduced by $2,500 on February 12, 2013 and the balance of $7,500 remains outstanding and the maturity date has been extended to December 31, 2013.  Four other non-interest bearing loans that were outstanding at December 31, 2012, in the aggregate principal amount of $4,500 were repaid on April 4, 2013. On March 8, 2013, we issued a convertible promissory note to an accredited investor relating to a loan in the amount of $5,000 at 5% interest per annum with a maturity date of June 30, 2013.  On March 21, 2013, we issued a convertible promissory note to an accredited investor relating to a loan in the amount of $3,000 at 5% interest per annum with a maturity date of June 30, 2013.  The maturity date of these notes was extended to December 31, 2013.  On June 28, 2013, we issued a $20,000 convertible promissory note to an affiliate, Manuel Graiwer, who is a member of our board of directors.


On August 21, 2013, we entered into a definitive agreement relating to the private placement of $5,000 of our securities through the sale of 100,000 shares of AMCOR common stock at $0.05 per share to an individual.  On August 30, 2013, we entered into a definitive agreement relating to the private placement of $12,000 of its securities through the sale of 200,000 shares of its common stock at $0.06 per share to an individual.  In these private placements we relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933.  We believed that Section 4(2) was available because the offer and sale involved sophisticated investors with full disclosure and did not involve a public offering and there was no general solicitation or general advertising involved in the offer or sale and no fees were paid in connection with the transaction.  Proceeds were used for normal business activity.


Our recent cash burn rate in our operations during 2013 has been approximately $12,000 per month.  We expect that that cash burn rate to increase over the next quarter due to mineral lease and claim payments to be made.  Given this recent rate of use of cash in our operations, and the additional capital we raised in August 2013, we do not have sufficient capital to carry on operations past October 2013.  Our long term capital requirements and the adequacy of our available funds will depend on many factors, including the reporting company costs, public relations fees, and operating expenses, among others.  If we are unable to raise additional capital to repay loans, generate sufficient revenue, or receive further loans on an as needed basis, we will have to curtail or cease our operations.


We believe that we could experience negative operating cash flow for the foreseeable future.  If our outstanding convertible loans are not repaid before their due dates of December 31, 2013, and our convertible debt is not converted to equity before these dates and we cannot repay this debt on the maturity date, we will be required to ask for extensions from the lenders or engage in another equity offering to provide capital to repay the debt.  If the lenders do not convert their debt to equity and we cannot raise further capital through and equity offering, there is a high probability that the company would become insolvent and could potentially go out of business.


 

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Our existing cash position is not sufficient to support our operations.  Accordingly, we continue to examine a range of possible funding sources, including additional strategic alliances, additional equity or debt private placements, the sale of existing assets, as well as the possibility of entering into one or more business transactions that could involve a merger or sale of our company and/or the sale of some or all of its assets.  We do not currently have any contractual restrictions on our ability to incur debt.  Any such indebtedness could contain covenants that would restrict our operations.  There can be no assurance that additional financing will be available on terms favorable to us, or at all.  If equity or convertible debt securities are issued, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution and such securities may have rights, preferences or privileges senior to those of our common stock.  This effect is attributed to the fact that while additional shares of common stock are issued from our treasury, our earnings at that particular moment remain consistent and, therefore, the earnings per share decreases.  If we are unsuccessful in these efforts, we will be required to curtail our ongoing operations.  If we were unable to sufficiently curtail our costs in such a situation, we might be forced to seek protection of the courts through reorganization, bankruptcy or insolvency proceeding, or cease operations completely.


Going Concern


Our independent public accountants have included explanatory paragraphs in their report on our financial statements for the years ended December 31, 2012 and 2011, which express substantial doubt about our ability to continue as a going concern.  As discussed in Note 3 of our financial statements included with our 2012 Annual Report on Form 10-K, we have suffered recurring losses from operations since inception and have an accumulated deficit that raises substantial doubt about the Company’s ability to continue as a going concern.


Critical Accounting Policies and Estimates


Please see Note 2 of the financial statements.


Subsequent Events


On September 27, 2013, we became eligible through our application with the Depository Trust Company for electronic trading.  The trading symbol is AUAG.


On September 30, 2013, we entered into a definitive agreement relating to the private placement of $6,000 of our securities through the sale of 100,000 shares of AMCOR common stock at $0.06 per share to an individual.  In that private placement we relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933.  We believed that Section 4(2) was available because the offer and sale involved a sophisticated investor with full disclosure and did not involve a public offering and there was no general solicitation or general advertising involved in the offer or sale and no fees were paid in connection with the transaction.  Proceeds were used for normal business activity.


On October 11, 2013, the Company issued a promissory note to a non-affiliated entity, relating to a loan in the amount of $1,000 at 5% interest per annum with a maturity date of October 11, 2014.


On October 15, 2013, the Company issued a promissory note to a non-affiliated individual, relating to a loan in the amount of $1,500 at 5% interest per annum with a maturity date of October 15, 2014


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Not required


ITEM 4.  CONTROLS AND PROCEDURES


Evaluation of Disclosure Controls and Procedures


In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by our management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)).  Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.  Based on its evaluation, and in light of the previously-identified material




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weaknesses in internal control over financial reporting, as of December 31, 2012, described in the 2012 Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer concluded that, as of August 31, 2013, our  disclosure controls and procedures were not effective.



Changes in Internal Control Over Financial Reporting


There has been no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  There has been no progress towards remediating our previously disclosed material weakness due to the lack of funding.


PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS


The Registrant is not currently involved in any litigation.


ITEM 1A.  RISK FACTORS


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


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


On August 21, 2013, we entered into a definitive agreement relating to the private placement of $5,000 of our securities through the sale of 100,000 shares of AMCOR common stock at $0.05 per share to an individual.  In that private placement we relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933.  We believed that Section 4(2) was available because the offer and sale involved a sophisticated investor with full disclosure and did not involve a public offering and there was no general solicitation or general advertising involved in the offer or sale and no fees were paid in connection with the transaction.  Proceeds were used for normal business activity.


On August 30, 2013, we entered into a definitive agreement relating to the private placement of $12,000 of our securities through the sale of 200,000 shares of AMCOR common stock at $0.06 per share to an individual.  In that private placement we relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933.  We believed that Section 4(2) was available because the offer and sale involved a sophisticated investor with full disclosure and did not involve a public offering and there was no general solicitation or general advertising involved in the offer or sale and no fees were paid in connection with the transaction.  Proceeds were used for normal business activity.


On September 30, 2013, we entered into a definitive agreement relating to the private placement of $6,000 of our securities through the sale of 100,000 shares of AMCOR common stock at $0.06 per share to an individual.  In that private placement we relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933.  We believed that Section 4(2) was available because the offer and sale involved a sophisticated investor with full disclosure and did not involve a public offering and there was no general solicitation or general advertising involved in the offer or sale and no fees were paid in connection with the transaction.  Proceeds were used for normal business activity.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES


None


ITEM 4.  MINE SAFETY DISCLOSURE


[Not Applicable]


ITEM 5.  OTHER INFORMATION


None





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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.



Exhibits

 

 

3.1

Articles of Incorporation*

 

 

3.2

By-Laws*

 

 

10.1

2001 Stock Option Plan (Incorporated by reference to Exhibit 10.1 to the December 31, 2008 Annual Report on Form 10-K) (File No. 000-50738)

 

 

10.2

Option and Joint Venture Agreement between AMCOR and Archean Star Resources, Inc. dated February 5, 2013 (incorporated hereto by reference to Form 8-K, Exhibit 10.1 filed with the Securities and Exchange commission on February 11, 2013, file number 000-50738)

 

 

10.3

Notice of Intent to Exercise Option  Agreement between AMCOR and HydroImaging, Inc dated April 5, 2013. (incorporated hereto by reference to Form 8-K, Exhibit 10.1 filed with the Securities and Exchange commission on April 11, 2013, file number 000-50738)

 

 

10.4

Mining Lease and Assignment agreement between Kinross Gold USA, Inc. and Hydro Imaging, Inc. dated February 28, 2013. (incorporated hereto by reference to Form 8-K, Exhibit 10.2 filed with the Securities and Exchange commission on April 11, 2013, file number 000-50738)

 

 

31.1

Section 302(a) Principal Executive Officer Certification

 

 

31.2

Section 302(a) Principal Financial Officer Certification

 

 

32.1

Section 1350 Certifications

 

 

32.2

Section 1350 Certifications

 

 

101.INS**

XBRL Instance Document

 

 

101.SCH**

XBRL Taxonomy Extension Schema Document

 

 

101.CAL**

XBRL Taxonomy Extension Calculation Linkbase Document

 

 

101.LAB**

XBRL Taxonomy Extension Labels Linkbase Document

 

 

101.PRE**

XBRL Taxonomy Extension Presentation Linkbase Document

 

 

101.DEF**

XBRL Taxonomy Extension Definition Linkbase Document

 

* Incorporated by reference to the Registrant's Registration Statement on Form 10SB12G filed on May 3, 2004, File No. 000-50738

** Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.





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SIGNATURES


Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


APD ANTIQUITIES, INC.


BY:  /s/ Frank H. Blair

Date: October 21, 2013

        Frank H. Blair

        President, CEO





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