Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended August 31, 2014
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number 000-54327
FIRST AMERICAN SILVER CORP.
(Exact name of registrant as specified in its charter)
Nevada 98-0579157
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
11380 S. Virginia St, #2011 89511
(Address of principal executive offices) (Zip Code)
(775) 323-3278
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] YES [ ] NO
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). [X] YES [ ] NO
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
the definitions of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act [ ] YES [X] NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. [ ] YES [ ] NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
60,970,567 common shares issued and outstanding as of October 20, 2014.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 17
Item 3. Quantitative and Qualitative Disclosures About Market Risk 23
Item 4. Controls and Procedures 23
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 23
Item 3. Defaults Upon Senior Securities 23
Item 4. Mine Safety Disclosures 24
Item 5. Other Information 24
Item 6. Exhibits 24
SIGNATURES 26
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
These unaudited financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for
interim financial information and the Securities and Exchange Commission
instructions to Form 10-Q. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. Operating
results for the interim period ended August 31, 2014 are not necessarily
indicative of the results that can be expected for the full year.
3
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
TABLE OF CONTENTS
AUGUST 31, 2014
Balance Sheets as of August 31, 2014 and November 30, 2013 (unaudited) 5
Statements of Operations for the three and nine months ended
August 31, 2014 and 2013 and the period from April 29, 2008 (inception)
to August 31, 2014 (unaudited) 6
Statement of Stockholders' Equity (Deficit) as of
August 31, 2014 (unaudited) 7
Statements of Cash Flows for the six months ended August 31, 2014
and 2013 and the period from April 29, 2008 (inception) to
August 31, 2014 (unaudited) 8
Notes to the Financial Statements 9
4
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEETS (unaudited)
August 31, November 30,
2014 2013
------------ ------------
ASSETS
Current Assets
Cash and cash equivalents $ -- $ 80
Accounts receivable - other -- 6,433
Prepaid expenses 26,126 19,514
------------ ------------
Total Current Assets 26,126 26,027
------------ ------------
Other Assets
Reclamation bond 591 591
Website - net -- 2,167
------------ ------------
Total Other Assets 591 2,758
Total Assets $ 26,717 $ 28,785
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 67,312 $ 56,866
Accrued expenses 28,800 18,125
Due to related parties 4,361 25,000
Notes payable - current portion 200,750 168,750
------------ ------------
Total Current Liabilities 301,223 268,741
Long-term Debt -- 45,000
------------ ------------
Total Liabilities 301,223 313,741
------------ ------------
Stockholders' Equity (Deficit)
Preferred stock, par value $0.001, 20,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, par value $0.001, 3,500,000,000 shares authorized,
62,050,567 shares issued and outstanding (58,448,067 - 2013) 62,051 58,448
Additional paid-in capital 1,089,374 1,023,302
Deficit accumulated during the exploration stage (1,425,931) (1,366,706)
------------ ------------
Total Stockholders' Equity (Deficit) (274,506) (284,956)
------------ ------------
Total Liabilities and Stockholders' Equity (Deficit) $ 26,717 $ 28,785
============ ============
The accompanying notes are an integral part of these financial statements.
5
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS (unaudited)
FOR THE THREE AND NINE MONTHS ENDED MAY 31, 2014 AND 2013
AND THE PERIOD FROM APRIL 29, 2008 (INCEPTION) TO MAY 31, 2014
Three Months Three Months Nine Months Nine Months April 29, 2008
Ended Ended Ended Ended (Inception) to
August 31, August 31, August 31, August 31, August 31,
2014 2013 2014 2013 2014
------------ ------------ ------------ ------------ ------------
REVENUES $ -- $ 32,650 $ -- $ 32,650 $ --
------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES
Exploration costs -- -- -- -- 172,697
Accounting and legal 1,500 21,641 1,500 69,355 335,714
Impairment loss on mineral properties -- 40,000 -- 40,000 429,929
Consulting fees 53,786 10,000 81,286 42,807 322,184
Transfer agent and filing fees 1,450 -- 5,700 -- 19,967
Miscellaneous fees -- -- -- -- 5,536
Incorporation costs -- -- -- -- 1,387
General and administrative 1,519 10,589 3,553 18,971 182,410
------------ ------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES 58,255 82,230 92,039 171,133 1,469,824
------------ ------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (58,255) (49,580) (92,039) (138,483) (1,469,824)
------------ ------------ ------------ ------------ ------------
OTHER INCOME (EXPENSES)
Debt forgiveness -- 50,000 -- 50,000 --
Interest expense (12,894) (5,951) (40,209) (12,220) (67,213)
Impairment of website -- -- (1,667) -- (1,667)
Gain on sale of rights 74,690 -- 74,690 -- 74,690
Exercise of option on mining claims -- -- -- -- 38,083
------------ ------------ ------------ ------------ ------------
TOTAL OTHER INCOME (EXPENSE) 61,796 44,059 32,814 37,780 43,893
------------ ------------ ------------ ------------ ------------
LOSS BEFORE PROVISION FOR INCOME TAX 3,541 (5,531) (59,225) (100,703) (1,425,931)
PROVISION FOR INCOME TAX -- -- -- -- --
------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 3,541 $ (5,531) $ (59,225) $ (100,703) $ (1,425,931)
============ ============ ============ ============ ============
INCOME (LOSS) PER SHARE:
BASIC AND DILUTED $ 0.00 $ (0.00) $ (0.00) $ (0.00)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING: BASIC AND DILUTED 60,612,768 57,247,217 59,362,638 56,219,504
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
6
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
AS OF AUGUST 31, 2014
Deficit
Accumulated
Common Stock Additional Common During the Total
-------------------- Paid in Stock Exploration Stockholders'
Shares Amount Capital Warrants Stage Equity
------ ------ ------- -------- ----- ------
Inception, April 29, 2008 -- $ -- $ -- $ -- $ -- $ --
Shares issued to founder on June 30,
2008 @ $0.00028 per share 52,500,000 1,500 13,500 -- -- 15,000
Private placement on April 30, 2008
@ $0.00143 per share 24,500,000 700 34,300 -- -- 35,000
Net loss for the period -- -- -- -- (13,639) (13,639)
----------- -------- ---------- --------- ----------- ---------
Balance, November 30, 2008 77,000,000 2,200 47,800 -- (13,639) 36,361
Net loss for the year ended
November 30, 2009 -- -- -- -- (16,345) (16,345)
----------- -------- ---------- --------- ----------- ---------
Balance, November 30, 2009 77,000,000 2,200 47,800 -- (29,984) 20,016
Adjust for 35:1 forward stock split -- 74,800 (74,800) -- -- --
Private placement on October 29, 2010
@ $0.25 per share 1,000,000 1,000 236,518 12,482 -- 250,000
Common stock issued in relation to
acquisition of mineral properties 300,000 300 149,700 -- -- 150,000
Net loss for the year ended
November 30, 2010 -- -- -- -- (45,762) (45,762)
----------- -------- ---------- --------- ----------- ---------
Balance, November 30, 2010 78,300,000 78,300 359,218 12,482 (75,746) 374,254
Cancellation of common shares (23,850,000) (23,850) 23,850 -- -- --
Common stock issued in relation to
acquisition of mineral properties 100,000 100 102,900 -- -- 103,000
Private placement on October 29, 2010
@ $0.25 per share 1,000,000 1,000 217,365 131,635 -- 350,000
Common stock issued for services 50,000 50 15,200 -- -- 15,250
Options issued to consultant -- -- 50,855 -- -- 50,855
Net loss for the year ended
November 30, 2011 -- -- -- -- (537,359) (537,359)
----------- -------- ---------- --------- ----------- ---------
Balance, November 30, 2011 55,600,000 55,600 769,388 144,117 (613,105) 356,000
Common stock issued for mineral
property payments 75,000 75 12,675 -- -- 12,750
Common stock issued for services 25,000 25 2,725 -- -- 2,750
Expiration of warrants -- -- 12,482 (12,482) -- --
Net loss for the year ended
November 30, 2012 -- -- -- -- (558,465) (558,465)
----------- -------- ---------- --------- ----------- ---------
Balance, November 30, 2012 55,700,000 55,700 797,270 131,635 (1,171,570) (186,965)
Common stock issued for mineral
property payment 1,000,000 1,000 39,000 -- -- 40,000
Common stock issued to pay
accounts payable 877,067 877 25,454 -- -- 26,331
Common stock issued for services 25,000 25 725 -- -- 750
Common stock issued for loan
extensions 846,000 846 27,234 -- -- 28,080
Expiration of warrants -- -- 131,635 (131,635) -- --
Board member debt forgiveness -- -- 1,984 -- -- 1,984
Net loss for the year ended
November 30, 2013 -- -- -- -- (195,136) (195,136)
----------- -------- ---------- --------- ----------- ---------
Balance, November 30, 2013 58,448,067 58,448 1,023,302 -- (1,366,706) (284,956)
Common stock issued for loan
extensions 1,714,500 1,715 30,290 -- -- 32,005
Common stock to settle accounts
payable 1,888,000 1,888 35,782 -- -- 37,670
Net loss for the period ended
August 31, 2014 -- -- -- -- (59,225) (59,225)
----------- -------- ---------- --------- ----------- ---------
Balance, August 31, 2014 62,050,567 $ 62,051 $1,089,374 $ -- $(1,425,931) $(274,506)
=========== ======== ========== ========= =========== =========
The accompanying notes are an integral part of these financial statements.
7
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS (unaudited)
FOR THE NINE MONTHS ENDED AUGUST 31, 2014 AND 2013
FOR THE PERIOD FROM APRIL 29, 2008 (INCEPTION) TO AUGUST 31, 2014
Nine Months Nine Months April 29, 2008
Ended Ended (Inception) to
August 31, August 31, August 31,
2014 2013 2014
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (59,225) $ (100,703) $ (1,425,931)
Adjustments to Reconcile Net Loss to Net Cash
Provided by (Used In) Operating Activities:
Depreciation and amortization 500 2,789 9,055
Accretion included in interest -- 2,484 2,484
Write down of website 1,667 -- 1,667
Stock issued for services 16,286 -- 35,036
Stock issued for mineral property payment -- -- 40,000
Stock issued for loan extension fees 32,005 -- 60,085
Stock options issued for services -- -- 50,855
Impairment loss on mineral properties -- 40,000 429,929
Gain on sale of rights (74,690) -- (74,690)
Changes in operating assets and liabilities:
Accounts receivable - other 6,433 -- --
Prepaid expenses (6,612) 15,000 (28,610)
Accounts payable 52,389 (16,669) 110,756
Accrued expenses 14,806 9,738 32,931
------------ ------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (16,441) (47,351) (756,433)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment -- -- (5,722)
Reclamation bond -- -- (591)
Website development costs -- -- (5,000)
Acquisition of mineral properties -- -- (164,179)
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- -- (175,492)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from (repayment to) related party debt 4,361 (18,252) 56,175
Proceeds from the issuance of common stock -- -- 650,000
Proceeds from notes payable 12,000 58,750 250,750
Payments on notes payable -- -- (25,000)
------------ ------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 16,361 40,498 931,925
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (80) (6,853) --
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 80 7,003 --
------------ ------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ -- $ 150 $ --
============ ============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes $ -- $ -- $ --
============ ============ ============
Cash paid for interest $ -- $ -- $ --
============ ============ ============
SUPPLEMENTAL NON-CASH INAVESTING AND FINANCING ACTIVITES:
Cancellation of common shares $ -- $ -- $ 23,850
============ ============ ============
Common stock issued to acquire mineral properties $ -- $ -- $ 265,750
============ ============ ============
The accompanying notes are an integral part of these financial statements.
8
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014
NOTE 1 - NATURE OF OPERATIONS
Mayetok, Inc. ("the Company") was incorporated in the state of Nevada on April
29, 2008.
On June 8, 2010, the Company changed its name to First American Silver Corp.
In October 2010, the Company entered into Property Option Agreements to acquire
100% interests in three mineral properties located in Nevada. On April 15, 2011
the Company entered into a Property Option Agreement with Pyramid Lake LLC and
Anthony A. Longo to acquire a 100% interest in the Esmeralda Property, also
located in Nevada. These properties have been acquired for prospecting,
exploration and production of gold, silver, and all other metals. Development
and exploration activities are currently being undertaken.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
EXPLORATION STAGE COMPANY
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles related to accounting and reporting by
exploration-stage companies. An exploration-stage company is one in which
planned principal operations have not commenced or if its operations have
commenced, there has been no significant revenues there from.
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.
ACCOUNTING BASIS
The Company uses the accrual basis of accounting and accounting principles
generally accepted in the United States of America ("GAAP" accounting). The
Company has adopted a November 30 fiscal year end.
RISKS AND UNCERTAINTIES
The Company's operations are subject to significant risk and uncertainties
including financial, operational, technological, and regulatory risks including
the potential risk of business failure. See Note 13 regarding going concern
matters.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three
months or less to be cash equivalents. At August 31, 2014 and November 30, 2013,
respectively, the Company had $0 and $80 of unrestricted cash to be used for
future business operations.
The Company's bank accounts are deposited in insured institutions. The funds are
insured up to $250,000. At times, the Company's bank deposits may exceed the
insured amount. Management believes it has little risk related to the excess
deposits.
9
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, prepaid expenses, accounts
payable, accrued expenses, notes payable, and note payable-related party. The
carrying amount of these financial instruments approximates fair value due to
either length of maturity or interest rates that approximate prevailing market
rates unless otherwise disclosed in these financial statements.
CONCENTRATIONS OF CREDIT RISK
The Company maintains its cash in bank deposit accounts, the balances of which
at times may exceed federally insured limits. The Company continually monitors
its banking relationships and consequently has not experienced any losses in
such accounts. The Company believes it is not exposed to any significant credit
risk on cash and cash equivalents.
STOCK-BASED COMPENSATION
The Company accounts for employee stock-based compensation in accordance with
the guidance of ASC Topic 718, COMPENSATION - STOCK COMPENSATION which requires
all share-based payments to employees, including grants of employee stock
options, to be recognized in the financial statements based on their fair
values. There has been no stock-based compensation issued to employees.
The Company follows ASC Topic 505-50, formerly EITF 96-18, "ACCOUNTING FOR
EQUITY INSTRUMENTS THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN
CONJUNCTION WITH SELLING GOODS AND SERVICES," for stock options and warrants
issued to consultants and other non-employees. In accordance with ASC Topic
505-50, these stock options and warrants issued as compensation for services
provided to the Company are accounted for based upon the fair value of the
services provided or the estimated fair market value of the option or warrant,
whichever can be more clearly determined. The fair value of the equity
instrument is charged directly to compensation expense and additional paid-in
capital over the period during which services are rendered.
INCOME TAXES
Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized. It is the
Company's policy to classify interest and penalties on income taxes as interest
expense or penalties expense. As of August 31, 2014, there have been no interest
or penalties incurred on income taxes.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
10
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUE RECOGNITION
The Company is in the exploration stage and has yet to realize revenues from
operations. Once the Company has commenced operations, it will recognize
revenues when delivery of goods or completion of services has occurred provided
there is persuasive evidence of an agreement, acceptance has been approved by
its customers, the fee is fixed or determinable based on the completion of
stated terms and conditions, and collection of any related receivable is
probable.
BASIC INCOME (LOSS) PER SHARE
Basic income (loss) per share is calculated by dividing the Company's net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company's net income available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted for any potentially dilutive debt or equity.
On June 8, 2010, the Company affected a 35:1 forward stock split of its common
shares. All share and per share data have been adjusted to reflect such stock
split.
DIVIDENDS
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.
MINERAL PROPERTIES
Costs of exploration are expensed as incurred. Mineral property acquisition
costs are capitalized including licenses and lease payments. Although the
Company has taken steps to verify title to mineral properties in which it has an
interest, these procedures do not guarantee the Company's title. Such properties
may be subject to prior agreements or transfers and title may be affected by
undetected defects.
Mineral properties are analyzed for impairment on an annual basis, or more often
if warranted by circumstances. Impairment losses are recorded on mineral
properties used in operations when indicators of impairment are present.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed on the
straight line method over the estimated useful lives of the assets, which range
from three to seven years.
RECLASSIFICATIONS
Certain accounts and financial statement captions in the prior periods have been
reclassified to conform to the current period financial statements.
RECENT ACCOUNTING PRONOUNCEMENTS
First American Silver does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flows.
11
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014
NOTE 3 - PREPAID EXPENSES
Prepaid expenses consisted of the following::
August 31, November 30,
2014 2013
-------- --------
Loan extension fees $ 26,126 $ 19,514
Other -- --
-------- --------
Total prepaid expenses $ 26,126 $ 19,514
======== ========
NOTE 4 - WEBSITE
The cost of developing the Company website has been capitalized and is being
amortized over a 5 year period using straight-line amortization: Website
development costs consisted of the following:
August 31, November 30,
2014 2013
-------- --------
Website development costs $ 5,000 $ 5,000
Less: accumulated amortization (3,333) (2,833)
Less: writedown (1,667) --
-------- --------
Website development costs, net $ -- $ 2,167
======== ========
Amortization expense was $500 and $500 for the nine months ended August 31, 2014
and 2013, respectively.
The Company has determined that its website should be subject to a impairment
allowance of $1,667 as a result of the website no longer being applicable to the
current business of the Company.
NOTE 5 - NOTES PAYABLE
Notes payable consisted of the following at August 31, 2014:
Date of Note Note Amount Interest Rate Maturity Date Collateral Interest Accrued
------------ ----------- ------------- ------------- ---------- ----------------
June 12, 2014 $ 6,250 8% June 12, 2015 None $ 609
June 18, 2014 $ 50,000 8% June 18, 2015 None $ 8,811
August 22, 2014 $ 55,000 8% August 22, 2015 None $ 8,908
November 1, 2013 $ 25,000 8% November 1, 2014 None $ 3,660
February 5, 2014 $ 15,000 8% February 5, 2015 None $ 1,880
February 22, 2014 $ 30,000 8% February 22, 2015 None $ 3,649
March 10, 2014 $ 12,000 8% March 10, 2015 None $ 458
April 17, 2014 $ 7,500 8% April 17, 2015 None $ 825
-------- -------
Total $200,750 $28,800
======== =======
12
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014
NOTE 6 - RELATED PARTY TRANSACTIONS
On August 19, 2013, the president loaned the Company $25,000. The note bears
interest at 8% and matures on August 19, 2014. The note is not secured and all
principal and interest are due to be repaid on the maturity date. As of August
31, 2014, this note was forgiven.
NOTE 7 - CAPITAL STOCK
The company has 3,500,000,000 common shares authorized at a par value of $0.001
per share.
The company has 20,000,000 preferred shares authorized at a par value of $0.001
per share.
In 2008, the Company issued 77,000,000 common shares for total proceeds of
$50,000.
On June 8, 2010, the Company affected a 35:1 forward stock split of its common
shares. All share and per share data have been adjusted to reflect such stock
split.
On October 29, 2010, the Company completed a private placement whereby it issued
1,000,000 units at $0.25 each for gross proceeds of $250,000 to an unrelated
third party. Each unit consists of one common share and one share purchase
warrant exercisable at a price of $0.50 expiring on October 29, 2012.
On November 26, 2010, the Company issued 300,000 common shares as part of the
acquisition of interests in three mineral properties. These shares were valued
at a fair market value of $.50 per share on the date of issuance for total value
of $150,000.
On December 20, 2010, the Company cancelled 23,850,000 common shares.
On April 15, 2011, the Company issued 100,000 common shares as part of the
acquisition of an interest in a mineral property. These shares were valued at a
fair market value of $1.03 per share on the date of issuance for total value of
$103,000.
On July 1, and October 1, 2011, the Company issued 25,000 common shares to a
consultant for services. The shares issued on July 1, 2011 were valued at
$4,500; the shares issued on October 1, 2011 were valued at $10,725.
On July 13, 2011, the Company completed a private placement whereby it issued
1,000,000 units at $0.35 each for gross proceeds of $350,000 to an unrelated
third party. Each unit consists of one common share and one share purchase
warrant exercisable at a price of $0.65 expiring on July 13, 2013.
On April 15, 2011, the Company issued 100,000 common shares as part of the
acquisition of an interest in a mineral property. These shares were valued at a
fair market value of $1.03 per share on the date of issuance for total value of
$103,000.
On April 15, 2011, the Company issued 100,000 common shares as part of the
acquisition of an interest in a mineral property. These shares were valued at a
fair market value of $1.03 per share on the date of issuance for total value of
$103,000.
13
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014
NOTE 7 - CAPITAL STOCK (CONTINUED)
On July 1, and October 1, 2011, the Company issued 25,000 common shares to a
consultant for services. The shares issued on July 1, 2011 were valued at
$4,500; the shares issued on October 1, 2011 were valued at $10,725.
On July 13, 2011, the Company completed a private placement whereby it issued
1,000,000 units at $0.35 each for gross proceeds of $350,000 to an unrelated
third party. Each unit consisted of one common share and one share purchase
warrant exercisable at a price of $0.65 expiring on July 13, 2013.
On January 1, 2012, the Company issued 25,000 common shares to a consultant for
services. The shares were valued at a fair market value of $0.13/share on the
date of issuance for a total value of $3,250.
On January 26, 2012, the Company issued 75,000 common shares as part of the
acquisition of interests in three mineral properties. These shares were valued
at a fair market value of $0.13/share on the date of issuance for a total value
of $9,750.
On June 18, 2013, the Company issued 270,000 to extend the maturity date of a
note payable to June 18, 2014. The value of these shares has been included in
prepaid expenses and will amortize to interest expense over the term of the
extension period (1 year).
On August 22, 2013, the Company issued 396,000 to extend the maturity date of a
note payable to August 22, 2014. The value of these shares has been included in
prepaid expenses and will amortize to interest expense over the term of the
extension period (1 year).
On September 27, 2013, the Company issued 1,000,000 shares to Pyramid Lake LLC
in consideration for the April 15, 2012 option payment on the Esmeralda
Property.
On September 28, 2013, the Company issued 25,000 common shares to a consultant
for services. The shares were valued at a fair market value of $0.03/share on
the date of issuance for a total value of $750.
On October 16, 2013, the Company issued 403,000 common shares to retire $12,109
of accounts payable owing to a former consultant.
On November 1, 2013, the Company issued 180,000 to extend the maturity date of a
note payable to November 1, 2014. The value of these shares has been included in
prepaid expenses and will amortize to interest expense over the term of the
extension period (1 year).
On November 30, 2013, the Company issued 68,667 common shares to retire $2,060
of accounts payable owing to a former consultant.
On November 30, 2013, the Company issued 405,400 shares to its president to
retire $12,162 of accounts payable owing.
On February 4, 2014, 162,000 shares of common stock valued at $2,754 were issued
to a lender to extend a $15,000 loan.
14
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014
NOTE 7 - CAPITAL STOCK (CONTINUED)
On February 21, 2014, 324,000 shares of common stock valued at $6,480 were
issued to a lender to extend a $30,000 loan.
On April 17, 2014, 162,000 shares of common stock valued at $1,620 were issued
to a lender to extend a $7,500 loan.
On June 18, 2014, 540,000 shares of common stock valued at $10,800 were issued
to a lender to extend a $50,000 loan.
On August 22, 2014, 540,000 shares of common stock valued at $10,800 were issued
to a lender to extend a $55,000 loan.
On April 30, 2014, 1,000,000 shares of common stock valued at $20,000 were
issued to settle accounts payable.
On August 14, 2014, 888,000 shares of common stock valued at $17,670 were to
settle accounts payable.
NOTE 8 - GOING CONCERN
The accompanying financial statements have been prepared assuming that First
American Silver, Inc. will continue as a going concern. The Company has a
working capital deficit, has not yet received revenue from sales of products or
services, and has incurred losses from operations. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Without realization of additional debt or capital, it would be unlikely for the
Company to continue as a going concern. The financial statements do not include
any adjustments that might result from this uncertainty.
The Company's activities to date have been supported by debt and equity
financing. It has sustained losses in all previous reporting periods with an
inception to date loss of approximately $1,425,000 as of August 31, 2014.
Management continues to seek funding from its shareholders and other qualified
investors.
15
FIRST AMERICAN SILVER CORP.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2014
NOTE 9 - COMMITMENTS AND CONTINGENCIES
On September 22, 2011, the Company entered into a License and Assignment
Agreement with its President, Mr. Tom Menning, whereby Mr. Menning has assigned
80% of his rights to participate on a 50% basis with ongoing and future projects
operated, controlled and conveyed within the area of interest.
Under the terms of the License Agreement, the Company will finance the cost of
pursuing rights for 80% percent of future proceeds received from the rights. The
term of the agreement is 10 years with an option to renew for an additional 10
years.
The Company is currently a plaintiff in two separate legal actions in relation
to the above mentioned license agreement whereby the Company wishes to obtain
mining claims that were placed on auction. Currently discovery is ongoing and
management intends to pursue the claims while being receptive to potential
settlement.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
NOTE 10 - SUBSEQUENT EVENTS
In accordance with ASC Topic 855-10, the Company has analyzed its operations
subsequent to the date these financial statements were issued, and has
determined that it does not have any material subsequent events to disclose in
these financial statements.
16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may", "should",
expects", "plans", "anticipates", "believes", "estimates", "predicts",
potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) and
are prepared in accordance with United States Generally Accepted Accounting
Principles. The following discussion should be read in conjunction with our
financial statements and the related notes that appear elsewhere in this
quarterly report. The following discussion contains forward-looking statements
that reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward-looking statements. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed below and elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are
expressed in United States dollars. All references to "US$" refer to United
States dollars and all references to "common stock" refer to the common shares
in our capital stock.
As used in this quarterly report, the terms "we", "us", "our" and "our company"
mean First American Silver Corp., unless otherwise indicated.
OVERVIEW
We are an exploration stage company engaged in the acquisition, exploration and
development of mineral properties.
The address of our principal executive office is located at 11380 S. Virginia
St, #2011, Reno, NV 89511. Our telephone number is (775) 323-3278.
Our common stock is quoted on the OTC Bulletin Board under the symbol "FASV".
CORPORATE HISTORY
We were incorporated in the State of Nevada on April 29, 2008, under the name
"Mayetok, Inc.". As Mayetok, Inc. we were engaged in the development of a
website to market vacation properties in the Ukraine.
On June 8, 2010, we initiated a 1 old for 35 new forward stock split of our
issued and outstanding common stock. As a result, our authorized capital
increased from 100,000,000 to 3,500,000,000 shares of common stock and the
issued and outstanding increased from 2,200,000 shares of common stock to
77,000,000 shares of common stock, all with a par value of $0.001.
Also on June 8, 2010, we changed our name from "Mayetok, Inc." to "First
American Silver Corp.", by way of a merger with our wholly owned subsidiary,
First American Silver Corp., which was formed solely for the change of name. We
changed the name of our company to reflect the new direction of our company in
the business of acquiring, exploring and developing mineral properties. As of
June 2010, we abandoned our former business plan of seeking to market vacation
properties.
17
Our name change and forward stock split was effective with the Over-the-Counter
Bulletin Board at the opening of trading on June 16, 2010, on which date we
adopted the stock symbol "FASV".
OUR CURRENT BUSINESS
On September 22, 2011, we entered into a license and assignment agreement dated
and effective as of September 16, 2011, with our president and director, Thomas
J. Menning. Mr. Menning is the successor in interest of the rights of Universal
Gas, Inc. and Universal Exploration, Ltd. (together "Universal") pursuant to an
agreement among Universal, Bullion Monarch Company, Polar Resources Co., Camsell
River Investments, Ltd., Lameert Management Ltd., and Etel Holdings Ltd. dated
May 10, 1979 (the "1979 Agreement"). Pursuant to the license agreement, we have
acquired the rights and obligations of Universal established by the 1979
Agreement and pertaining to 256-square-miles of the Carlin Gold Trend in Elko
County, Nevada.
Under the terms of the 1979 Agreement and the license agreement, we are now
deemed the successor of a specific right to participate on a 50% basis with
ongoing and future projects operated, controlled and/or conveyed by Newmont
Mining and Barrick Gold Corporation within the area of interest.
Under the terms of the license agreement, we will finance the cost of pursuing
the rights established in the 1979 Agreement. The distribution of any proceeds
will be as follows: After our company has been reimbursed for any and all
out-of-pocket expenses, we will share proceeds on an 80/20 percent basis with
Mr. Menning. The term of the licensing agreement will be for 10 years with an
option to renew for an additional 10 years.
Under the terms of the 1979 Agreement, a notification of assignment to the
operator is required. Both Newmont Mining and Barrick Gold Corp. have been
notified.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 31, 2014 AND 2013
We have not earned any revenues from inception through the period ending August
31, 2014.
Three Months Three Months
Ended Ended
August 31, August 31,
2014 2013
-------- --------
Revenues $ Nil $ 32,650
Operating Expenses $ 58,255 $ 82,230
Operating Loss $(58,255) $(49,580)
Other Income (Expense) $ 61,796 $ 44,059
Net Income (Loss) $ 3,541 $ (5,531)
We incurred a net income in the amount of $3,541 for the three months ended
August 31, 2014 compared to a net loss of $5,531 for the three months ended
August 31, 2013 which represents an increase of $1,990. Included in other
expense is interest expense.
Our operating expenses incurred for the three months ended August 31, 2014
included $1,519 for general and administrative expenses, $53,786 for consulting
fees, $1,500 in professional fees and $1,450 of transfer agent and filing fees.
18
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED AUGUST 31, 2014 AND 2013
We have not earned any revenues from inception through the period ending August
31, 2014.
Nine Months Nine Months
Ended Ended
August 31, August 31,
2014 2013
---------- ----------
Revenues $ Nil $ 32,560
Operating Expenses $ 92,039 $ 171,133
Operating Loss $ (92,039) $ (138,483)
Other Income (Expense) $ 32,814 $ 37,780
Net Loss $ (59,225) $ (100,703)
We incurred a net loss in the amount of $59,225 for the nine months ended August
31, 2014 compared to a net loss of $100,703 for the nine months ended August 31,
2013 which represents a decrease of $41,478. Included in other expense is
interest expense.
Our operating expenses incurred for the nine months ended August 31, 2014
included $3,553 for general and administrative expenses, $81,286 for consulting
fees, $1,500 for professional fees and $5,700 of transfer agent and filing fees.
LIQUIDITY AND CAPITAL RESOURCES
WORKING CAPITAL
August 31, November 30,
2014 2013
---------- ----------
Current Assets $ 26,126 $ 26,027
Current Liabilities $ 301,223 $ 268,741
Working Capital (Deficit) $ (275,097) $ (242,714)
CASH FLOWS
Nine Months Nine Months April 29, 2008
Ended Ended (Inception) to
August 31, August 31, August 31,
2014 2013 2014
---------- ---------- ----------
Net Cash Provided by (Used in) Operating Activities $ (16,441) $ (47,351) $ (756,433)
Net Cash Provided by (Used In) Investing Activities $ -- $ -- $ (175,492)
Net Cash Provided by Financing Activities $ 16,361 $ 40,498 $ 931,925
NET INCREASE (DECREASE) IN CASH DURING THE PERIOD $ (80) $ (6,853) $ 0
As of August 31, 2014, we had current assets in the amount of $26,126,
consisting of cash of prepaid expenses. Our current liabilities as of August 31,
2014 were $301,223. We had a working capital deficit of $275,097 on August 31,
2014.
Our cash used in operating activities was $16,441 for the nine months ended
August 31, 2014 compared to $7,351 for the same period in 2013 and $756,433 for
the period from inception on April 29, 2008 to August 31, 2014.
Our cash used in investing activities was $0 for the nine months ended August
31, 2014 and 2013 and $175,492 from the period from inception on April 29, 2008
to August 31, 2014.
19
Our cash provided by financing activities was $16,361 for the nine months ended
August 31, 2014 compared to $40,498 for the same period in 2013 and $931,925 for
the period from inception on April 29, 2008 to August 31, 2014.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue our business plan over the next twelve months. If we do not
generate revenue sufficient to sustain operations, we may not be able to
continue as a going concern.
OFF BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to stockholders.
GOING CONCERN
The accompanying financial statements have been prepared assuming that our
company will continue as a going concern. As discussed in the notes to the
financial statements, we have no established source of revenue. Our auditors
have expressed substantial doubt about our ability to continue as a going
concern. Without realization of additional capital, it would be unlikely for us
to continue as a going concern. The financial statements do not include any
adjustments that might result from this uncertainty.
Our activities to date have been supported by equity financing. We have
sustained losses in all previous reporting periods with an inception to date
loss of $1,425,931 as of August 31, 2014. Management continues to seek funding
from our shareholders and other qualified investors to pursue our business plan.
In the alternative, we may be amenable to a sale, merger or other acquisition in
the event such transaction is deemed by management to be in the best interests
of the shareholders.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with the accounting principles generally accepted in the United
States of America. Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by management's application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our financial statements is critical to an
understanding of our financial statements.
EXPLORATION STAGE COMPANY
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles related to accounting and reporting by
exploration-stage companies. An exploration-stage company is one in which
planned principal operations have not commenced or if its operations have
commenced, there has been no significant revenues there from.
BASIS OF PRESENTATION
Our financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America and are presented
in US dollars.
ACCOUNTING BASIS
We use the accrual basis of accounting and accounting principles generally
accepted in the United States of America ("GAAP" accounting). We adopted a
November 30 fiscal year end.
20
RISKS AND UNCERTAINTIES
The Company's operations are subject to significant risk and uncertainties
including financial, operational, technological, and regulatory risks including
the potential risk of business failure. See Note 13 regarding going concern
matters.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three
months or less to be cash equivalents. At August 31, 2014 and November 30, 2013,
respectively, the Company had $0 and $80 of unrestricted cash to be used for
future business operations.
The Company's bank accounts are deposited in insured institutions. The funds are
insured up to $250,000. At times, the Company's bank deposits may exceed the
insured amount. Management believes it has little risk related to the excess
deposits.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Our financial instruments consist of cash, prepaid expenses, accounts payable,
accrued professional fees, and amount due to a related party. The carrying
amount of these financial instruments approximates fair value due to either
length of maturity or interest rates that approximate prevailing market rates
unless otherwise disclosed in these financial statements.
CONCENTRATIONS OF CREDIT RISK
Our company maintains its cash in bank deposit accounts, the balances of which
at times may exceed federally insured limits. Our company continually monitors
its banking relationships and consequently has not experienced any losses in
such accounts. Our company believes it is not exposed to any significant credit
risk on cash and cash equivalents.
STOCK-BASED COMPENSATION
We account for employee stock-based compensation in accordance with the guidance
of ASC Topic 718, COMPENSATION - STOCK COMPENSATION which requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the financial statements based on their fair values. There
has been no stock-based compensation issued to employees.
We follow ASC Topic 505-50, formerly EITF 96-18, "ACCOUNTING FOR EQUITY
INSTRUMENTS THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN
CONJUNCTION WITH SELLING GOODS AND SERVICES," for stock options and warrants
issued to consultants and other non-employees. In accordance with ASC Topic
505-50, these stock options and warrants issued as compensation for services
provided to the Company are accounted for based upon the fair value of the
services provided or the estimated fair market value of the option or warrant,
whichever can be more clearly determined. The fair value of the equity
instrument is charged directly to compensation expense and additional paid-in
capital over the period during which services are rendered.
INCOME TAXES
Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized. It is our
company's policy to classify interest and penalties on income taxes as interest
expense or penalties expense. As of August 31, 2014, there have been no interest
or penalties incurred on income taxes.
21
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
REVENUE RECOGNITION
We are in the exploration stage and have yet to realize revenues from
operations. Once our company has commenced operations, it will recognize
revenues when delivery of goods or completion of services has occurred provided
there is persuasive evidence of an agreement, acceptance has been approved by
its customers, the fee is fixed or determinable based on the completion of
stated terms and conditions, and collection of any related receivable is
probable.
BASIC INCOME (LOSS) PER SHARE
Basic income (loss) per share is calculated by dividing the Company's net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company's net income available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted for any potentially dilutive debt or equity.
On June 8, 2010, we affected a 35:1 forward stock split of its common shares.
All share and per share data have been adjusted to reflect such stock split.
DIVIDENDS
We have not adopted any policy regarding payment of dividends. No dividends have
been paid during the periods shown.
MINERAL PROPERTIES
Costs of exploration are expensed as incurred. Mineral property acquisition
costs are capitalized including licenses and lease payments. Although the
Company has taken steps to verify title to mineral properties in which it has an
interest, these procedures do not guarantee the Company's title. Such properties
may be subject to prior agreements or transfers and title may be affected by
undetected defects.
Mineral properties are analyzed for impairment on an annual basis, or more often
if warranted by circumstances. Impairment losses are recorded on mineral
properties used in operations when indicators of impairment are present.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed on the
straight line method over the estimated useful lives of the assets, which range
from three to seven years.
RECLASSIFICATIONS
Certain accounts and financial statement captions in the prior periods have been
reclassified to conform to the current period financial statements.
RECENT ACCOUNTING PRONOUNCEMENTS
Our company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on our results of operations,
financial position or cash flows.
22
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a "smaller reporting company", we are not required to provide the information
required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
MANAGEMENT'S REPORT ON DISCLOSURE CONTROLS AND PROCEDURES
We carried out an evaluation, under the supervision and with the participation
of our management, including our president and chief financial officer (our
principal executive officer, principal financial officer and principal
accounting officer), of the effectiveness of our disclosure controls and
procedures. Based upon that evaluation, our president and chief financial
officer (our principal executive officer, principal financial officer and
principal accounting officer) concluded that, as of the end of the period
covered in this report, our disclosure controls and procedures were not
effective at ensuring that information required to be disclosed in reports filed
under the Securities and Exchange Act of 1934 is recorded, processed, summarized
and reported within the required time periods and is accumulated and
communicated to our management, including our president and chief financial
officer (our principal executive officer, principal financial officer and
principal accounting officer), as appropriate to allow timely decisions
regarding required disclosure. This determination was a result of our external
auditor needing to post adjustments to our financial statements.
Our management, including our president and chief financial officer (our
principal executive officer, principal financial officer and principal
accounting officer), does not expect that our disclosure controls and procedures
or our internal controls will prevent all error or fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints and the benefits of controls must be considered relative to their
costs. Due to the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues and instances of
fraud, if any, have been detected. We performed additional analysis and other
post-closing procedures in an effort to ensure our consolidated financial
statements included in this quarterly report have been prepared in accordance
with generally accepted accounting principles. Accordingly, management believes
that the financial statements included in this report fairly present in all
material respects our financial condition, results of operations and cash flows
for the periods presented.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during
the quarterly period covered by this report that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We know of no material, existing or pending legal proceedings against our
company, nor are we involved as a plaintiff in any material proceeding or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial shareholder, is an
adverse party or has a material interest adverse to our interest.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
23
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Exhibit
Number Description
------ -----------
(3) (I) ARTICLES OF INCORPORATION; (II) BY-LAWS
3.1 Articles of Incorporation (Incorporated by reference to our
Registration Statement filed on Form S-1 on February 25, 2009).
3.2 By-laws (Incorporated by reference to our Registration Statement filed
on Form S-1 on February 25, 2009)
3.3 Certificate of Amendment (Incorporated by reference to our Registration
Statement filed on Form S-1 on February 25, 2009).
3.4 Articles of Merger (Incorporated by reference to our Current Report
filed on Form 8-K on July 15, 2010).
3.5 Certificate of Change (Incorporated by reference to our Current Report
filed on Form 8-K on July 15, 2010).
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES
4.1 Sample Stock Certificate (Incorporated by reference to our Registration
Statement filed on Form S-1 on February 25, 2009).
(10) MATERIAL CONTRACTS
10.1 Property Option Agreement between our company and All American
Resources LLC with respect to the Mountain City claim dated November
26, 2010 (Incorporated by reference to our Current Report filed on Form
8-K on December 21, 2010).
10.2 Property Option Agreement between our company and All American
Resources LLC with respect to the Eagan Canyon claim dated November 26,
2010 (Incorporated by reference to our Current Report filed on Form 8-K
on December 21, 2010).
10.3 Property Option Agreement between our company and All American
Resources LLC with respect to the Muncy Creek claim dated November 26,
2010 (Incorporated by reference to our Current Report filed on Form 8-K
on December 21, 2010).
10.4 Mining Lease and Option to Purchase Agreement between our company,
Pyramid Lake LLC and Anthony A. Longo dated April 15, 2011
(Incorporated by reference to our Current Report filed on Form 8-K on
May 17, 2011).
10.5 License and Assignment Agreement between Thomas J. Menning and our
company dated September 16, 2011(incorporated by reference to our
Current Report filed on Form 8-K on October 14, 2011).
10.6 2011 Stock Option Plan (incorporated by reference to our Current Report
filed on Form 8-K on November 14, 2011).
24
(31) RULE 13A-14(A) / 15D-14(A) CERTIFICATIONS
31.1* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of the Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer.
(32) SECTION 1350 CERTIFICATIONS
32.1* Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
of the Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer.
101** INTERACTIVE DATA FILE
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
* Filed herewith.
** Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the
Interactive Data Files on Exhibit 101 hereto are deemed not filed or part
of any registration statement or prospectus for purposes of Sections 11 or
12 of the Securities Act of 1933, are deemed not filed for purposes of
Section 18 of the Securities and Exchange Act of 1934, and otherwise are
not subject to liability under those sections.
25
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST AMERICAN SILVER CORP.
(Registrant)
Date: October 20, 2014 /s/ Thomas Menning
-----------------------------------------
Thomas Menning
President, Chief Executive Officer,
Chief Financial Officer, Secretary,
Treasurer and Director (Principal
Executive Officer, Principal Financial
Officer and Principal Accounting Officer)
2
