UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

þ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended October 31, 2015

 

o TRANSACTION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transaction period from ________ to ________

 

Commission File No. 0-53028

 

WESTMOUNTAIN GOLD, INC.

(Exact Name of Issuer as specified in its charter)

 

 

 

 

(208)265-1717 (Registrant's telephone number, including area code)

 

Securities registered pursuant to Section 12 (b) of the Exchange Act:

 

 

Securities registered pursuant to Section 12 (g) of the Exchange Act:

None

(Title of Class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes    þ No

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. o Yes    þ No

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   þYes    o No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes   o No

 

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K  (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

 

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):

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    o Yes    þ No

 

As of April 30, 2015 (the last business day of our most recently completed second fiscal quarter), based upon the last reported trade on that date, the aggregate market value of the voting and non-voting common equity held by non-affiliates (for this purpose, all outstanding and issued common stock minus stock held by the officers, directors and known holders of 10% or more of the Company’s common stock) was $1,810,302. This value was computed by reference to the price at which the registrant’s common stock was last sold as of April 30, 2015, and excludes the market value of the registrant’s voting and non-voting common stock beneficially owned by directors and executive officers of the registrant and known holders of 10% or more of the registrant’s common equity.  These determinations and the underlying assumptions should not be deemed to constitute an admission that all directors and executive officers of the registrant and known holders of 10% or more of the registrant’s common equity are, in fact, affiliates of the registrant, or that there are no other persons who may be deemed to be affiliates of our company.  Further information concerning shareholdings of our directors, executive officers and beneficial owners of more than 5% of the registrant’s outstanding common equity is included in Part III, Item 12 of this Annual Report on Form 10-K.

 

As of February 10, 2016, the Company had 61,650,537 shares of common stock issued.

 

NO DOCUMENTS INCORPORATED BY REFERENCE

 

 

 

GLOSSARY OF TECHNICAL TERMS

“Base Metal” means a classification of metals usually considered to be of low value and higher chemical activity when compared with the precious metals (gold, silver, platinum, etc.).  This nonspecific term generally refers to the high-volume, low-value metals copper, lead, tin, and zinc.

“Claim” means a mining interest giving its holder the right to prospect, explore for and exploit minerals within a defined area.

“Deposit” means an informal term for an accumulation of mineral ores.

“Development Stage”means the stage in which a company is engaging in the preparation of its mineral asset projects containing established commercially minable mineral reserves for extraction, which has not yet reached Production Stage.

“Diamond Core” means a rotary type of rock drill that cuts a core of rock and is recovered in long cylindrical sections, two centimeters or more in diameter.

“Exploration Stage” means the earliest stage of mineral commercialization, in which a company is investigating, exploring, defining and evaluating its mineral asset projects for potential mineral reserves, but is not yet in either the development or production stage and for which no decision has yet been reached to actively prepare it for commercial development.

“Feasibility Study” means an engineering study designed to define the technical, economic, and legal viability of a mining project with a high degree of reliability.

“Grade” means the metal content of ore, usually expressed in troy ounces per ton (2,000 pounds) or in grams per ton or metric tons which contain 2,204.6 pounds or 1,000 kilograms.

“Mineralization” means the concentration of metals within a body of rock.

“Mining” means the process of extraction and beneficiation of mineral reserves to produce a marketable metal or mineral product.  Exploration continues during the mining process and, in many cases, mineral reserves are expanded during the life of the mine operations as the exploration potential of the deposit is realized.

“Ore” means material containing minerals that can be economically extracted.

“Precious Metals” means any of several relatively scarce and valuable metals, such as gold, silver, and the platinum-group metals.

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

“Production Stage” means the stage in which a company is actively engaging in the process of extraction and exploitation of mineral reserves from its mineral asset projects to produce a marketable metal or mineral product.

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

“Reclamation” means the process of returning land to another use after mining is completed.

“Recovery” means that portion of the metal contained in the ore that is successfully extracted by processing, expressed as a percentage.

“Reserves” means that part of a mineral deposit that could be economically and legally extracted or produced at the time of reserve determination.

“Sampling” means selecting a fractional, but representative, pare of a mineral deposit for analysis.

“Underground” means a mine working or excavation closed to the surface.

“Vein” means a fissure, faults or crack in the rock filled by minerals that have traveled upward from some deep source.

 

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TABLE OF CONTENTS

 

 

			Page
PART 1
ITEM 1.	Description of Business			3
ITEM 1A.	Risk Factors			5
ITEM 2.	Properties			15
ITEM 3.	Legal Proceedings			19
ITEM 4.	Mine Safety Disclosure			19
PART II
ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			19
ITEM 6.	Selected Financial Data			22
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
ITEM 8.	Consolidated Financial Statements and Supplementary Data			29
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			58
ITEM 9A.	Controls and Procedures			58
ITEM 9B.	Other Information			59
ITEM 10.	Directors, Executive Officers and Corporate Governance			59
ITEM 11.	Executive Compensation			63
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			69
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence			70
ITEM 14.	Principal Accounting Fees and Services			70
PART IV
ITEM 15.	Description of Business			71
	SIGNATURES			72

 

 

 

 

 

 

 

PART I

 

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

 

The information contained in this 2015 Annual Report on Form 10-K should be considered carefully in evaluating us and our prospects. This 2015 Annual Report on Form 10-K and other publicly available documents, contain, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). These forward-looking statements include, without limitation, statements regarding: proposed new operations or enhancements in technology; our statements concerning litigation or other matters; statements concerning projections, predictions, expectations, estimates or forecasts for our business, financial and operating results and future economic performance; statements of management’s goals and objectives; trends affecting our financial condition, results of operations or future prospects; our financing plans or growth strategies; possible changes in legislation; and other similar expressions concerning matters that are not historical facts. Words such as "expects," "anticipates," "intends," "plans," “goals,” "believes," “projects,” "estimates," “strategies,” “future,” “likely,” “may,” “should,” “will,” and similar expressions or variations of such words, as well as statements in future tense, are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this report.

 

Forward-looking statements are neither historical facts nor assurances of future performance or results, and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved.  Instead, forward-looking statements are the good faith beliefs, expectations and assumptions of our management based on facts and factors as we currently know them. Because forward-looking statements related to the future, they are subject to risks, inherent uncertainties, and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results, outcomes, and financial condition may differ materially from those discussed in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, but are not limited to, the following:

 

Readers are urged not to place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date of this report. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, including, without limitation, actual results or changes in assumptions or other factors affecting forward-looking statements, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

 

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ITEM 1.    DESCRIPTION OF BUSINESS

 

 

(a)                 History of the Company

 

WestMountain Gold, Inc. (“WMTN”, the “Company”, “we”, “us”, “our”, and similar phrases, as the context requires) is an exploration stage mining company, in accordance with applicable guidelines of the Securities and Exchange Commission (“SEC”), which pursues gold projects that are anticipated to have low operating costs and high returns on capital.

 

We were incorporated in the state of Colorado on October 18, 2007, under the name WestMountain Index Advisor, Inc..  We acquired Terra Mining Corporation (“TMC”) on February 28, 2011 and accounted for the transaction as a reverse acquisition using the purchase method of accounting, whereby TMC is deemed to be the accounting acquirer (legal acquiree) and WMTN to be the accounting acquiree (legal acquirer). Our financial statements before the date of the acquisition are those of TMC with the results of WMTN being consolidated from the date of the acquisition. The equity section and earnings per share have been retroactively restated to reflect the reverse acquisition and no goodwill has been recorded. We adopted TMC’s fiscal year, which is October 31.  On February 28, 2013, we changed our name to WestMountain Gold, Inc.

 

TMC’s wholly owned subsidiary, Terra Gold Corporation (“TGC”), is currently focused on mineral production from mineralized material at a high-grade gold system called the “TMC project” in the state of Alaska. The TMC project consists of 344 Alaska state mining claims including 5 unpatented lode mining claims held under lease (subject to a 3-4% NSR royalty to the lessor, dependent upon the gold price) covering 223 square kilometers (22,300 hectares). The property is centered on an 8-km-long (800 hectares) trend of high-grade gold vein occurrences.  All government permits and reclamation plans for continued exploration through 2013 were renewed in 2010.  The $136,730 of fees to maintain the Terra claims through 2015 were paid by us on November 20, 2014.  The property lies approximately 200 km (20,000 hectares) west-northwest of Anchorage and is accessible via helicopter or fixed-wing aircraft.  The property has haul roads, a mill facility and adjoining camp infrastructure, a tailings pond and other infrastructure.  The remote camp is powered by diesel powered generators and water is supplied to the mill by spring fed sources and year round water wells.

 

Outcropping gold veins were first discovered at Terra in the late 1990's by Kennecott Exploration.  The claims were transferred to Mr. Ben Porterfield in 2000. AngloGold Ashanti (USA) Exploration Inc. optioned these claims in 2004 and staked additional claims in the vicinity.  Initial detailed soil and rock surveys were conducted at Terra that same year with results leading to the definition of an initial zone of high-grade gold veins over a 2.5 km (250 hectares) strike length.  AngloGold followed up with a discovery drill program of 12 holes in 2005 and drilled three additional holes in 2006.  A total of 587 rock samples were collected on the property.  The TMC project was joint-ventured to International Tower Hill Mines Ltd. (“ITH”) in August of 2006.

 

On September 15, 2010, WMTN and its wholly owned subsidiary, TGC, and Raven Gold Alaska, Inc. (“Raven”) signed an Exploration, Development and Mine Operating Agreement (“JV Agreement”) pertaining to the TMC Project. WMTN made payments of cash and stock to Raven pursuant to the JV Agreement.

 

On February 12, 2014, the Company, through TGC, acquired 100% ownership interest in the TMC Project from Raven for $1.8 million in cash and 200,000 shares of WMTN.  No further payments are due to Raven from TGC under the JV Agreement, (including but not limited to any royalty or residual payments), and each party is fully released from its obligations to the other under the JV Agreement.  The $1.8 million of cash paid and 200,000 shares of common stock of the Company (valued at $136,000 at the time) that were issued to Raven is recorded as Mining Claims in the accompanying consolidated balance sheet.

 

(b)                 Significant Business Transactions Overview

 

The Company did not enter into any business transactions that we consider significant during the three months ended October 31, 2015.

 

(c)                 Business of Issuer

 

Business Overview

 

We intend to devote substantially all of our efforts on growing the Company’s operations in the mineral exploration and mining sector.  We are currently focused on further exploration of the TMC project for mineral reserves and to gauge the prospects for efficient mining operations if such reserves are discovered.  Additionally, we are engaged in limited extraction and exploitation of mineralized material through surface mining techniques at the TMC project. Our primary key market priority will be to proceed with the TMC project and other mining opportunities that may present themselves from time to time. We cannot guarantee that the TMC project, or any project that we embark upon, will be successful.  We have budgeted expenditures for the TMC project for the next twelve months of approximately $2,400,000, depending on additional financing, for general and administrative expenses and exploration, mining and exploration to implement the business plan as described above. Approximately $1.3 million of these budgeted expenditures are for mining and exploration expenses and the other $1.1 million are for corporate general and administrative expenses.

 

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We are currently considered an exploration stage company under SEC criteria because it has not demonstrated the existence of proven or probable reserves at the TMC project.  Accordingly, as required under SEC guidelines and U.S. GAAP for companies in the exploration stage, substantially all of our investment in mining properties to date, including construction of the mill, mine facilities and exploration expenditures, have been expensed as incurred and therefore do not appear as assets on our balance sheet.  We expect construction expenditures and underground mine exploration and capital improvements will continue during 2016 and subsequent years. We expect to remain as an exploration stage company for the foreseeable future. We do not exit the exploration stage until such time that we demonstrate the existence of proven or probable reserves that meet SEC guidelines. Likewise, unless mineralized material is classified as proven or probable reserves, substantially all expenditures for mine exploration and construction will continue to be expensed as incurred.

 

We may choose to scale back operations to operate at break-even with a smaller level of business activity, while adjusting overhead depending on the availability of additional financing. In addition, we expect that we will need to raise additional funds if we decide to pursue more rapid expansion, appropriate responses to competitive pressures, or the acquisition of complementary businesses or technologies, or if we must respond to unanticipated events that require us to make additional investments. We cannot assure that additional financing will be available when needed on favorable terms, or at all.

 

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

 

Competition

 

We are an exploration stage mineral resource exploration company that competes with other mineral resource exploration companies for financing and for the acquisition of mineral properties. Many of the mineral resource exploration companies with whom we compete have greater financial and technical resources than those available to us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford more geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact our ability to achieve the financing necessary for us to acquire mineral property interests and conduct exploration activities.

 

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

 

Environmental and Other Government Regulation and Standards

 

The Company’s business is subject to extensive federal, state and local laws and regulations, including regulation of mining and exploration activities which could involve the discharge of materials and contaminants into the environment, the investigation and cleanup of such discharges, disturbance of land, reclamation of disturbed lands, associated potential impacts to threatened or endangered species and other environmental concerns. In particular, statutes including, but not limited to, the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Emergency Planning and Community Right-to-Know Act, the Endangered Species Act, the National Environmental Policy Act and the Comprehensive Environmental Response, Compensation and Liability Act impose permit requirements, effluent standards, air emission standards, waste handling and disposal restrictions and other design and operational requirements, as well as record keeping and reporting requirements, upon various aspects of mineral exploration, extraction and processing. In addition, the Company’s existing operations may become subject to additional environmental control and mitigation requirements if applicable federal, state and local laws and regulations governing environmental protection, land use and species protection are amended or become more stringent in the future. The Company is aware that federal regulation under the Resource Conservation and Recovery Act governing the manner in which secondary materials and by-products of mineral extraction and beneficiation are handled, stored and reclaimed or reused is subject to frequency review by the regulatory agencies which could affect the Company’s current and future facility design, operations, and permitting requirements. In addition, future building of mines and other systems by the Company may be delayed by permit review processes. The Company could be required to conduct investigatory and remedial actions to mitigate pollution conditions caused by or attributed to its operations or former operations. In order to comply with applicable regulations, the Company is and may be required, from time to time, to obtain work permits, post bonds and perform remediation work for any physical disturbance to land, which could cause significant adverse consequences on the Company’s operations.

 

Seasonality

 

Currently, the Company’s operations are limited to those occurring at the TMC project in Alaska.  Due to the remote location of the TMC project, the long winter at that location, and harsh weather conditions during the winter, the Company’s operations at the TMC project are currently limited to the months of May through September.

 

Employees

 

As of October 31, 2015, we had four full-time and one part-time employees.  Additionally, we use employees of Minex Exploration, an Idaho partnership affiliated with our Chief Executive Officer, as contractors for exploration of the TMC project. Most of our employees are based in Sandpoint, ID. The Chief Executive Officer is based out of the Sandpoint, ID office and the Chief Financial Officer is based out of Denver, CO but travels to the Sandpoint, ID office on a regular basis.

 

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WEBSITE ACCESS TO UNITED STATES SECURITIES AND EXCHANGE COMMISSION REPORTS

 

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

 

 

ITEM 1A. RISK FACTORS

 

There are certain inherent risks which will have an effect on the Company’s exploration in the future and the most significant risks and uncertainties known and identified by our management are described below.

 

We are currently in default on several of our notes.  If we are unable to extend our debt as it becomes due, we will risk forfeiture of all of our assets.

 

Under the Loan Modification Agreement with BOCO dated as of May 15, 2015, the Company had payments of $209,346 plus interest and approximately $700,000 plus interest due on October 1, 2015 and November 15, 2015, respectively. The Company did not make these payments in full and on time and is currently in default under its BOCO Notes, which are secured by all of the Company’s assets.  Due to the default, interest on the outstanding amounts now accrues at the default rate of 45% per annum.  Additionally, under the terms of the Loan Modification Agreement and related notes and security agreements, BOCO has certain rights upon a default by the Company, including the right to accelerate the amounts due thereunder and foreclose on all of the Company’s assets. 

 

In addition, the outstanding balance of $200,000 plus interest on the Andres Notes was due and payable on October 31, 2015, which the Company has not paid and, is therefore currently in default.  The Andres Notes are not secured, but provide other standard rights to the holder thereof upon default.

 

As of the filing of this Annual Report on Form 10-K, neither BOCO nor Andres has taken action to exercise their respective rights in response to the Company’s default.  Further, neither BOCO nor Andres has indicated its intention regarding its rights and remedies under their respective agreements.  While the Company intends to pay the amounts due when it has sufficient funds to do so, there can be no assurance if and when the Company will generate sufficient revenues or financing to make such payments.  Furthermore, there can be no assurance whether or when BOCO and/or Andres may exercise its rights and remedies under the respective agreements, including, in the case of BOCO, foreclosing on all of the Company’s assets.

 

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

 

Our current operating funds are significantly less than necessary to complete all intended exploration of the property, and therefore we will need to obtain additional financing in order to complete our business plan.  We anticipate that we will require a minimum of $500,000 to $1,000,000 to fund our continued operations for the next three to five months to commence seasonal operations for 2016. As of October 31, 2015, we had approximately $383,412 in cash.

 

We have budgeted expenditures for the TMC project for the next twelve months of approximately $2,200,000, depending on additional financing, for general and administrative, mining and exploration expenses.  Additionally, we have debt payments that are currently past due totaling $1,058,380 plus accrued interest, and additional debt payments in the amount of $2,500 come due on November 15, 2016. 

 

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

 

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

 

The most likely source of future funds presently available to us is through the sale of equity capital, which would be subject to the factors listed above. Any sale of share capital will result in dilution to existing shareholders.  The only other anticipated alternative for the financing of further exploration would be our sale of a partial interest in the property to a third party in exchange for cash or exploration expenditures, which is not presently contemplated.  There can be no assurance that we will be able to successfully identify and close on the necessary additional financing or that the proposed terms of any such financing will be favorable or acceptable to the Company.

 

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

 

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

 

As of February 12, 2016, the price of gold was $1,237.26 per ounce, based on the daily London PM fix on that date.  The volatility of mineral prices is beyond our control and represents a substantial risk which no amount of planning or technical expertise can fully eliminate.  In the event gold prices decline or remain low for prolonged periods of time, we might be unable to develop our properties, which may adversely affect our results of operations, financial performance and cash flows.

 

A single major shareholder and creditor has substantial influence over our company.   

 

As of October 31, 2015, BOCO owns or controls approximately 31.9 million shares as of the filing date or approximately 50.8% of our issued and outstanding common stock including shares beneficially owned within sixty days, and including (i) the potential conversion of $1,852,115 of debt due and payable by the Company on November 15, 2017, that as of October 31, 2015, is currently convertible along with accrued interest into Company common stock at a rate of $0.12 per share (subject to re-pricing provisions in the promissory note evidencing the debt); (ii) and the potential conversion of $250,000 of Series A Convertible Preferred Stock (convertible into 250,000 shares of common stock). See Notes 7 and 8 to the Company’s Financial Statements for a more detailed description of terms of the Loan Modification Agreement dated May 15, 2015 regarding the aforementioned debt and related Secured Promissory Notes and Promissory Notes in addition to the Series A Convertible Preferred Stock. 

   

As a major creditor and shareholder of the Company, BOCO has additional influence and control over the Company.  BOCO has imposed a number of loan covenants on the Company which restrict our ability to operate our business as well as our ability to raise additional financing.

 

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BOCO could cause a change of control of our board of directors, approve or disapprove any matter requiring stockholder approval, or cause, delay or prevent a change in control or sale of the Company, which in turn could adversely affect the market price of our common stock.

 

We have no proven or probable reserves and our decision to continue further exploration is not based on a study demonstrating economic recovery of any mineral reserves and is therefore inherently risky.

 

Any funds spent by us on exploration could be lost. We have not established the presence of any proven or probable mineral reserves, as defined by the SEC, at any of our properties. Under Industry Guide 7, the SEC has defined a “reserve” as that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Any mineralized material discovered or produced by us should not be considered proven or probable reserves.

 

In order to demonstrate the existence of proven or probable reserves, it would be necessary for us to perform additional exploration to demonstrate the existence of sufficient mineralized material with satisfactory continuity and obtain a positive feasibility study which demonstrates with reasonable certainty that the deposit can be economically and legally extracted and produced. We have not completed a feasibility study with regard to all or a portion of any of our properties to date. The absence of proven or probable reserves makes it more likely that our properties may cease to be profitable and that the money we spend on exploration may never be recovered.

 

Since we have no proven or probable reserves, our investment in mineral properties is not reported as an asset in our financial statements which may cause volatility in our net earnings and have a negative impact on the price of our stock.

 

We prepare our financial statements in accordance with accounting principles generally accepted in the United States of America and report substantially all exploration and construction expenditures as expenses until such time, if ever, we are able to establish proven or probable reserves. Since it is uncertain when, if ever, we will establish proven or probable reserves, it is uncertain whether we will ever report these types of future capital expenditures as an asset. Accordingly, our financial statements report fewer assets and greater expenses than would be the case if we had proven or probable reserves, which could produce volatility in our earnings and have a negative impact on our stock price.

 

There are differences in U.S. and Canadian practices for reporting reserves and resources.

 

Our reserve and resource estimates are not directly comparable to those made in filings subject to SEC reporting and disclosure requirements, as we generally calculate reserves and resources in accordance with Canadian practices. The Geologic Report, upon which we have based our mineralization estimates, was prepared in accordance with Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) National Instrument 43-101 (NI 43-101) and Form 43-101F1 (43-101F1). These practices are different from the practices used to report reserve and resource estimates in reports and other materials filed with the SEC. It is Canadian practice to report measured, indicated and inferred mineral resources, which are generally not permitted in disclosure filed with the SEC by United States issuers. In the United States, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into reserves.

 

Further, “inferred mineral resources” have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Disclosure of “contained ounces” is permitted disclosure under Canadian regulations; however, the SEC only permits issuers to report “resources” as in place, tonnage and grade without reference to unit measures.

 

Accordingly, information concerning descriptions of mineralization, reserves and resources contained in this report, or in the documents incorporated herein by reference, may not be comparable to information made public by other United States companies subject to the reporting and disclosure requirements of the SEC.

 

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

 

Unless otherwise indicated, estimates of mineralized material presented in our press releases and regulatory filings are based upon estimates made by us and our consultants.  When making determinations about whether to advance any of our projects to development, we must rely upon such estimated calculations as to the mineralized material on our properties.  Until mineralized material is actually mined and processed, it must be considered an estimate only.  These estimates are imprecise and depend on geological interpretation and statistical inferences drawn from drilling and sampling analysis, which may prove to be unreliable.  There can be no assurance that these mineralized material estimates will be accurate or that this mineralized material can be mined or processed profitably.  Any material changes in estimates of mineralized material will affect the economic viability of placing a property into production and such property’s return on capital.  There can be no assurance that minerals recovered in small scale metallurgical tests will be recovered at production scale.  

 

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

 

There is substantial doubt about our ability to continue as a going concern. 

 

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.  The company has incurred losses since its inception resulting in an accumulated deficit of $21,424,146 as of October 31, 2015 and further losses are anticipated in the development of its business.  Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.

 

Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure. 

 

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

 

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

 

We started exploring our properties in the summer of 2011.  While we have continued to explore the TMC project and have conducted only limited mining during the summer months since then, we do not yet have sufficient information about the project to evaluate the likelihood that our business will be successful.  Although we were incorporated in the state of Colorado on October 18, 2007, the Company just acquired our mineral properties with our acquisition of TMC on February 28, 2011.   TMC itself has only been in existence since March 25, 2010.  We have generated aggregate revenues of $3,290,812 as of the date of this Form 10-K.

 

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

 

8

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

 

We are dependent on key personnel.

 

Our success depends to a significant degree upon the continued contributions of key management and other personnel, some of whom could be difficult to replace, particularly Greg Schifrin, our CEO. We do not maintain key man life insurance covering certain of our officers. Our success will depend on the performance of our officers, our ability to retain and motivate our officers, our ability to integrate new officers into our operations and the ability of all personnel to work together effectively as a team. Our failure to retain and recruit officers and other key personnel could have a material adverse effect on our business, financial condition and results of operations.

 

We lack an operating history and we expect to have losses in the future.

 

Except for our initial exploration efforts as described above, we have not progressed substantially on implementing our proposed business plan. We have commenced only limited business operations and have not realized any significant revenues or generated profit from our operations. We have no operating history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent, in part, upon the following: 

 

	●	Our ability to locate a profitable mineral property;
	●	Our ability to generate sufficient revenues; and
	●	Our ability to reduce exploration costs.

 

Based upon current plans, we expect to incur operating losses in foreseeable future periods. This will happen because there are expenses associated with the research and exploration of our mineral properties. We cannot guarantee that we will be successful in generating significant revenues in the future. Failure to generate significant revenues will cause the business to fail and we may cease operations.

 

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

 

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

 

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

 

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

 

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

 

9

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

 

We are subject to governmental regulations, which affect our operations and costs of conducting our business.

 

Our current and future operations are and will be governed by laws and regulations, including:

 

	●	laws and regulations governing mineral concession acquisition, prospecting, exploration, mining and production;
	●	laws and regulations related to exports, taxes and fees;
	●	labor standards and regulations related to occupational health and mine safety; and
	●	environmental standards and regulations related to clean water, waste disposal, toxic substances, land use and environmental protection; and other matters.

 

Companies engaged in mining exploration activities often experience increased costs and delays in production and other schedules as a result of the need to comply with applicable laws, regulations and permits. Failure to comply with applicable laws, regulations and permits may result in enforcement actions, including the forfeiture of claims, orders issued by regulatory or judicial authorities requiring operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or costly remedial actions. We may be required to compensate those suffering loss or damage by reason of our mineral exploration activities and may have civil or criminal fines or penalties imposed for violations of such laws, regulations and permits.

 

Existing and possible future laws, regulations and permits governing operations and activities of exploration companies, or more stringent implementation, could have a material adverse impact on our business and cause increases in capital expenditures or require abandonment or delays in exploration.

 

Our activities are subject to environmental laws and regulations that may increase our costs of doing business and restrict our operations.

 

All phases of our operations are subject to various federal and state environmental regulation. Environmental legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. These laws address, among other issues, emissions into the air, discharges into water, management of waste, management of hazardous substances, protection of natural resources, antiquities and endangered species and reclamation of lands disturbed by mining operations. Compliance with environmental laws and regulations and future changes in these laws and regulations may require significant capital outlays and may cause material changes or delays in our operations and future activities. It is possible that future changes in these laws or regulations could have a significant adverse impact on our properties or some portion of our business, causing us to re-evaluate those activities at that time.

 

U.S. Federal Laws. The Comprehensive Environmental, Response, Compensation, and Liability Act (CERCLA), and comparable state statutes, impose strict, joint and several liability on current and former owners and operators of sites and on persons who disposed of or arranged for the disposal of hazardous substances found at such sites. It is not uncommon for the government to file claims requiring cleanup actions, demands for reimbursement for government-incurred cleanup costs, or natural resource damages, or for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into the environment. The Federal Resource Conservation and Recovery Act (RCRA), and comparable state statutes, govern the disposal of solid waste and hazardous waste and authorize the imposition of substantial fines and penalties for noncompliance, as well as requirements for corrective actions. CERCLA, RCRA and comparable state statutes can impose liability for clean-up of sites and disposal of substances found on exploration, mining and processing sites long after activities on such sites have been completed.

 

10

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We may also be subject to compliance with other federal environmental laws, including the Clean Air Act, National Environmental Policy Act (NEPA) and other environmental laws and regulations.

 

Additionally, the State of Alaska Department of Natural Resources has established a pool of funds to cover reclamation to which all permittees with exploration and mining projects are required to contribute. Currently, a $750 per acre disturbance reclamation bond is required for disturbance of 5 acres or more and/or removal of more the 50,000 cubic yards of material.

 

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

 

Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies, such as explosives, and certain equipment such as bulldozers and excavators that we might need to conduct exploration. While we currently have supplies and equipment for use in our operations, but will need additional supplies and equipment to support full operations under our business plan. We do not have existing relationships with suppliers and will need to identify and develop strategic relationships with suppliers to ensure access to supplies and equipment prior to commencement of full operations. Additionally, our claims are in remote, difficult to access locations where resources are scarce and require specialized transportation for much of our necessary supplies and equipment that can result in delivery delays and increased acquisition expenses.  If we cannot find the products and equipment we need or fail to develop and maintain relationships with suppliers, we will have to suspend our exploration plans until we do find and obtain the products and equipment we need. 

 

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

 

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

 

Weather and location challenges may restrict and delay our work on our property.    

 

We plan to conduct our exploration on a seasonal basis. Because of the severe Alaska winters and lack of sunlight and with our current operational capabilities, we are only able to perform exploration and surface mining operations for approximately five months per year. It is possible that snow or rain could restrict and delay work on the properties to a significant degree. Our property is located in a relatively remote location, which creates additional transportation and energy costs and challenges. Currently, we have drilled our test sites with helicopter-supported drill rigs, which are expensive to operate.  

 

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

 

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

 

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Our stock is categorized as a penny stock. Trading of our stock may be restricted by the SEC's penny stock regulations which may limit a shareholder's ability to buy and sell our stock.

 

Our stock is categorized as a penny stock. The SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than US$ 5.00 per share or an exercise price of less than US$ 5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Additionally, brokers may be less willing to execute transactions in securities subject to the penny stock rules.  Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

 

FINRA sales practice requirements may also limit a shareholder’s ability to buy and sell our stock.

 

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

 

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

 

Sales or issuances of a large number of shares of common stock in the public market or the perception that sales may occur could cause the market price of our common stock to decline. As of October 31, 2015, there were approximately 65 million shares of common stock and warrants issued and outstanding. Significant shares of common stock are held by our principal shareholders, other Company insiders and other large shareholders. As “affiliates” (as defined under Rule 144 of the Securities Act (“Rule 144”)) of the Company, our principal shareholders, other Company insiders and other large shareholders may only sell their shares of common stock in the public market pursuant to an effective registration statement or in compliance with Rule 144. 

 

The market price of our common stock may be volatile.  

 

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

 

●	Announcements by us regarding resources, liquidity, significant acquisitions, equity investments and divestitures, strategic relationships, addition or loss of significant customers and contracts, capital expenditure commitments, loan, note payable and agreement defaults, loss of our subsidiaries and impairment of assets,
●	Issuance or repayment of debt, accounts payable or convertible debt for general or merger and acquisition purposes,
●	Sale of a significant number of shares of our common stock by shareholders,
●	General market and economic conditions,
●	Quarterly variations in our operating results,
●	Investor relation activities,
●	Announcements of technological innovations,
●	New product introductions by us or our competitors,
●	Competitive activities, and
●	Additions or departures of key personnel.

 

 

 

These broad market and industry factors may have a material adverse effect on the market price of our common stock, regardless of our actual operating performance. These factors could have a material adverse effect on our business, financial condition and results of operations. 

 

We may engage in acquisitions, mergers, strategic alliances, joint ventures and divestitures that could result in financial results that are different than expected. 

 

In the normal course of business, we may engage in discussions relating to possible acquisitions, equity investments, mergers, strategic alliances, joint ventures and divestitures. All such transactions are accompanied by a number of risks, including:

 

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

 

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

 

	●	Effectively transfer liabilities, contracts, facilities and employees to any purchaser,
	●	Identify and separate the intellectual property to be divested from the intellectual property that we wish to retain,
	●	Reduce fixed costs previously associated with the divested assets or business, and
	●	Collect the proceeds from any divestitures.

 

In addition, if customers of the divested business do not receive the same level of service from the new owners, this may adversely affect our other businesses to the extent that these customers also purchase other products offered by us. All of these efforts require varying levels of management resources, which may divert our attention from other business operations.

 

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

 

13

 

Our directors and officers may have conflicts of interest with the Company as a result of their relationships with other companies.

 

To the extent that any of our officers and directors are also directors and officers of other companies, conflicts of interest may arise between their duties as our officers and directors and as directors and officers of other companies. In addition, in the past the Company entered into supplier, financing and consulting arrangements with entities controlled by directors of the Company, and we may consider entering into such arrangements in the future.  These factors could have a material adverse effect on our business, financial condition and results of operations.

 

We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws.

 

Without any anti-takeover provisions, there are limited deterrents for a take-over of our Company, which may result in a change in our management and directors that we cannot control. 

 

The laws of the State of Colorado and our Articles of Incorporation and Bylaws may protect our directors from certain types of lawsuits.

 

The laws of the State of Colorado provide that our directors will not be liable to us or our shareholders for monetary damages for all but certain types of conduct as directors of the company. Our Articles of Incorporation and Bylaws permit us to indemnify our directors and officers against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing shareholders from recovering damages against our directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require us to use our limited assets to defend our directors and officers against claims, including claims arising out of their negligence, poor judgment, or other circumstances.

 

Because our executive officers and directors have other business interests, they may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to fail.

 

Our officers have other business interests. While each officer spends more than 40 hours per week on our business, if the demands on our executive officers from their other obligations increase, they may no longer be able to devote sufficient time to the management of our business. This could negatively impact our business exploration and could cause our business to fail.

 

Transfer of our securities may be restricted by virtue of state securities “blue sky” laws, which prohibit trading absent compliance with individual state laws, and Rule 144. These restrictions may make it difficult or impossible to sell shares in those states.

 

Transfers of our common stock may be restricted under the securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as “blue sky” laws and by federal Rule 144. Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions. Because the securities held by many of our stockholders have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them should be aware that there may be significant state blue sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. Additionally, unless the shares are registered with the SEC, any sale must also comply with the provisions of Rule 144, which requires, among other things, that the company is current in its reporting obligations.  These restrictions may prohibit the secondary trading of our common stock and there can be no assurance that exemptions will be available and/or compliance with Rule 144 will be possible. Investors should consider the secondary market for our securities to be a limited one.

 

We are subject to corporate governance and internal control reporting requirements, and our costs related to compliance with, or our failure to comply with existing and future requirements, could adversely affect our business.

 

We must comply with corporate governance requirements under the Sarbanes-Oxley Act of 2002 and the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, as well as additional rules and regulations currently in place and that may be subsequently adopted by the SEC and the Public Company Accounting Oversight Board. These laws, rules, and regulations continue to evolve and may become increasingly stringent in the future. We are required to include management’s report on internal controls as part of our annual report pursuant to Section 404 of the Sarbanes-Oxley Act. We strive to continuously evaluate and improve our control structure to help ensure that we comply with Section 404 of the Sarbanes-Oxley Act. The financial cost of compliance with these laws, rules, and regulations is expected to remain substantial.

 

14

 

Our management has concluded that our disclosure controls and procedures were not effective due to the presence of the following material weaknesses in internal control over financial reporting:

 

We currently lack appropriate segregation of duties over treasury management due to lack of personnel. We expect to revise our procedures during 2016 once we have fully reconstituted our board of directors.

 

There is a lack of disclosure controls to ensure adequate disclosures are made in our periodic filings.

 

We have not maintained continuity in key personnel or have adequate staffing to ensure adequately efficient preparation of financial and operational statements.

 

The Company lacks sufficient personnel and financial resources to implement adequate handling, tracking, accounting and safeguarding of ore and finished goods inventory assets.

 

We formed an audit committee on October 26, 2012, which, until their recent resignations, consisted of two independent directors with significant financial expertise.  We plan to name new members to the audit committee following the addition of independent members to the board of directors.  An audit committee is expected to improve oversight in the establishment and monitoring of required internal controls and procedures. 

 

Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated. We cannot assure you that we will be able to fully comply with these laws, rules, and regulations that address corporate governance, internal control reporting, and similar matters. Failure to comply with these laws, rules and regulations could materially adversely affect our reputation, financial condition, and the value of our securities.

 

ITEM 2.     PROPERTIES

 

The WMTN principal executive offices are located at 120 E. Lake St. Ste. 401, Sandpoint, ID 83864, and our telephone number is (208)265-1717. On April 1, 2011, we entered into a lease at 120 Lake Street, Suite 401, Sandpoint, ID 83864.  This office is leased at the net of $1,000 per month and expired March 31, 2013. On April 5, 2015, we entered into Commercial Lease Amendment to extend the lease for one year. The office is shared with an entity affiliated with our Chief Executive Officer.

 

On June 6, 2014 we signed a one year lease for a residential property located in Anchorage, AK for $3,175 per month.  The lease expired on June 6, 2015 and the Company continues to lease the property on a month-to-month basis at the same cost.  The property is used as a central office for operations in Alaska and to house personnel traveling from the mining camp during the mining season.

 

On January 1, 2015 the Company signed a three-year lease for a testing and processing facility in Anchorage, AK for $3,500 per month. The property, which includes a warehouse and storage yard, will house processing, recovery and metallurgical testing equipment and serve as a staging area as the company moves forward with TMC project development.

 

Other than our mining claims, leases, and other real property interests specifically related to mining, WMTN does not own real estate nor have plans to acquire any real estate.

 

Alaska Property - The TMC Project

 

The TMC project consists of 344 Alaska state mining claims including 5 unpatented lode mining claims held under lease (subject to a 3-4% net smelter return (“NSR”) royalty to the lessor, dependent upon the gold price) covering 223 square kilometers (22,300 hectares). The property is centered on an 8-km-long (800 hectares) trend of high-grade gold vein occurrences.  All government permits and reclamation plans for continued exploration through 2019 were renewed in 2015.  The $163,720 of fees to maintain the Terra claims through 2016 were paid by the Company on November 27, 2015.  The property lies approximately 200 km west-northwest of Anchorage between the Revelation and Terra Cotta mountains of the Alaska Range in southwestern Alaska and is accessible via helicopter or fixed-wing aircraft. The property has haul roads, a mill facility and adjoining camp infrastructure, a tailings pond and other infrastructure.  The remote camp is powered by diesel powered generators and water is supplied to the mill by spring fed sources and wells.

 

15

 

Outcropping gold veins were first discovered at the TMC project (also referred to as “Terra” in the following maps) in the late 1990's by Kennecott Exploration.  The claims were transferred to Mr. Ben Porterfield in 2000. AngloGold Ashanti (USA) Exploration Inc. optioned these claims in 2004 and staked additional claims in the vicinity.  Initial detailed soil and rock surveys were conducted at the TMC project that same year with results leading to the definition of an initial zone of high-grade gold veins over a 2.5 km (250 hectares) strike length.  AngloGold followed up with a discovery drill program of 12 holes in 2005 and drilled three additional holes in 2006.  A total of 587 rock samples were collected on the property.  

 

TMC received geological reports in June 2010 and February 2010 from the State of Alaska Division of Mines and Geology that represented a 400m spacing aerial magnetic and resistivity survey that included the area of the TMC project.

 

A total of 44 drill holes have been completed on the TMC project.  The mineralization has been characterized as deep epithermal or mesothermal and could have significant extent down dip and along strike.  Furthermore, there is potential to develop a number of continuous high-grade veins forming a highly attractive mining target.  Gold characterization work on Bens Vein indicates a large percentage of the gold and silver reports to a gravity concentrate.

 

 

 

 

 

 

16

 

 

 

Terra Property Location (from Puchner and Meyers, 2007)

 

 

 

 

 

17

 

 

 

State Claim Groups held by the TMC Project in 2012 

 

 

 

TMC property illustrating target vein locations

 

 

 

18

 

 

In the Bens Vein zone the main vein system has a core high grade zone of around 29,893 tonnes with 29.48 g/t gold at a 10 g/t cutoff which expands significantly when the cutoff is lowered to 1 g/t.  Drilling on Bens Vein zone has outlined an open-ended mineralized zone over 350m long and 250m down dip with an average true width of ~1.3m that has around 852,942 tonnes with 15.3 g/t gold at a 5 g/t cutoff.  Drilling on the project has identified numerous veins. Environmental baseline studies were started in 2010 on the Terra property in anticipation of future development. The 2005-2013 drill results for the Ben Vein Zone are encouraging not only because they outlined a consistent and well mineralized main vein structure, but because a large number of well-mineralized hanging wall and foot wall subsidiary veins were also encountered. These subsidiary veins offer significant potential for expansion of the system with intercepts such as holes TR-07-20 with new footwall zone of 0.6m @ 43.2 g/t gold and TR-07-22 with new hanging wall zone 0.8m @ 14.5 g/t gold.  From the data currently available it appears that a higher grade shoot is developing within the overall Bens Vein system which could form the nucleus for an initial mining target on the project.  

 

ITEM 3.    LEGAL PROCEEDINGS

 

There are no pending legal proceedings against us that are expected to have a material adverse effect on our cash flows, financial condition or results of operations. 

 

ITEM 4.    MINE SAFETY DISCLOSURE

 

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities from the Federal Mine Safety and Health Administration, or MSHA, under the Federal Mine Safety and Health Act of 1977, or the Mine Act. During the year ended October 31, 2015, the TMC project was in production and as such, we were subject to regulation by MSHA under the Mine Act.

 

During the fiscal year ended October 31, 2015, there were no health and safety violations, orders or citations under the Federal Mine Safety and Health Act of 1977, and there were no injuries or fatalities at the TMC project.  Additionally, during the fiscal year ended October 31, 2015, and as of the date of the filing of this Annual Report, there are no pending legal actions involving the TMC project.

 

 

PART II

 

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

 

Common Stock

 

We are authorized to issue 200,000,000 shares of common stock with a $0.001 par value.  As of February 10, 2016, 61,650,537 shares of our common stock are issued and outstanding, held by 170 shareholders of record (including beneficial owners holding shares through nominee names the number of total shareholders is approximately 350). Each share of Common Stock entitles its holder to one vote on each matter submitted to the shareholders for a vote, and no cumulative voting for directors is permitted.  Stockholders do not have any preemptive rights to acquire additional securities issued by the Company.  As of February 10, 2016, we had 2,838,084 shares of common stock reserved for issuance upon the exercise of outstanding warrants and 1,000,000 shares of common stock reserved for the issuance upon the exercise of outstanding options.

 

Preferred Stock

 

We are authorized to issue 1,000,000 shares of preferred stock, $0.10 par value. The rights and preferences of our preferred stock may be designated by our Board of Directors from time to time. As of February 10, 2016, we had 12,100 shares of preferred stock, designated as Series A Convertible Preferred Stock, issued and outstanding.

 

On November 29, 2013, our Board of Directors of the Company approved a Certificate of Designation of Rights and Preferences of Series A Convertible Preferred Stock, designating 12,100 shares of preferred stock as Series A Convertible Preferred Stock (also referred to as, “Series A Preferred”). The Certificate of Designation was filed with the state of Colorado on December 2, 2013. Each holder of outstanding shares of Series A Preferred shall be entitled to the number of votes equal to the number of whole shares of common stock of the Corporation into which the shares of Series A Preferred held by such holder are then convertible as of the applicable record date. We cannot amend, alter or repeal any preferences, rights, or other terms of the Series A Preferred so as to adversely affect the Series A Preferred, without the written consent or affirmative vote of the holders of at least sixty-six and two-thirds percent (66.66%) of the then outstanding shares of Series A Preferred, voting as a separate voting group, given by written consent or by vote at a meeting called for such purpose for which notice shall have been duly given to the holders of the Series A Preferred.

 

 

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Change in Control Provisions

 

Our articles of incorporation provide for a maximum of five directors. There is no provision for classification or staggered terms for the members of the Board of Directors.

 

Our articles of incorporation also provide that, except to the extent the provisions of Colorado General Corporation Law require a greater voting requirement, any action, including the amendment of the Company’s articles or bylaws, the approval of a plan of merger or share exchange, the sale, lease, exchange or other disposition of all or substantially all of the Company’s property other than in the usual and regular course of business, shall be authorized if approved by a simple majority of stockholders, and if a separate voting group is required or entitled to vote thereon, by a simple majority of all the votes entitled to be cast by that voting group.

 

Our bylaws provide that our President or a majority of our Board of Directors may call a special meeting of stockholders.  The bylaws further require our President to call a special meeting of the stockholders upon written request of the stockholders holding at least twenty percent (20%) of the outstanding shares entitled to vote in the aggregate.

 

Amendment of Bylaws

 

Our Board of Directors has the authority to amend our bylaws; however, the stockholders holding a majority of the issued and outstanding shares of the Company also have the concurrent power to amend the bylaws.

 

Market Price of and Dividends on Common Equity and Related Stockholder Matters

 

Our common stock trades on OTCQB Exchange under the symbol "WMTN". The following table sets forth the range of the high and low sale prices of the common stock for the periods indicated (quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions):

 

 

Quarter Ended		High				Low
January 31, 2015			$	0.48		$	0.25
April 30, 2015			$	0.42		$	0.11
July 31, 2015			$	0.17		$	0.05
October 31, 2015			$	0.09		$	0.04
January 31, 2014			$	1.14		$	0.60
April 30, 2014			$	0.92		$	0.56
July 31, 2014			$	0.74		$	0.44
October 31, 2014			$	0.56		$	0.39

 

As of February 10, 2016, the closing price of the Company's common stock was $0.04 per share. As of February 10, 2016, there were 61,650,537 shares of common stock outstanding held by 170 stockholders of record (including beneficial owners holding shares through nominee names the number of total stockholders is approximately 350).

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Transfer Agent

 

The stock transfer agent for our securities is Corporate Stock Transfer of Denver, Colorado.  Their address is 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209. Their phone number is (303) 282-4800.

 

Dividends

 

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

 

RECENT SALES OF UNREGISTERED SECURITIES

 

During the three months ended October 31, 2015, there were no sales of unregistered equity securities.

 

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EQUITY COMPENSATION PLAN INFORMATION

 

The following table provides information as of October 31, 2015 related to the equity compensation plan in effect at that time.

 

 

Stock Incentive Plan

 

On February 28, 2013, the 2012 Stock Incentive Plan was approved at the Annual Stockholder Meeting. We were authorized to issue options for, and have reserved for issuance, up to 4,000,000 shares of common stock under the 2012 Stock Incentive Plan. On January 13, 2016 at the Special Stockholder Meeting the stockholders authorized increasing the shares reserved under the 2012 Stock Incentive Plan from 4,000,000 share to 8,000,000 shares.  As of February 10, 2016, 6,020,000 shares of common stock remain available for grant under the 2012 Stock Incentive Plan.

 

 

ITEM 6.    SELECTED FINANCIAL DATA

 

In the following table, we provide you with our selected consolidated historical financial and other data. We have prepared the consolidated selected financial information using our consolidated financial statements for the years ended October 31, 2015 and 2014. When you read this selected consolidated historical financial and other data, it is important that you read along with it the historical financial statements and related notes in our consolidated financial statements included in this report, as well as Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 

 

	Years Ended
	October 31, 2015			October 31, 2014
(in thousands, except for per share data)
STATEMENT OF OPERATIONS DATA:
Revenue	$	2,153,008		$	1,043,571
Net loss		(1,183,689)			(2,550,162)
Net loss applicable to WestMountain Gold, Inc. common shareholders		(1,183,689)			(2,550,162)
Net loss per share		(0.03)			(0.10)
BALANCE SHEET DATA:
Total assets		4,288,407			3,783,404
Stockholders' deficit		(3,657,361)			(7,108,796)

 

 

 

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

RESULTS OF OPERATIONS

 

As we are an early stage company, we have commenced only limited operations and have yet to reach full operations; therefore, we have little operations to report at this time.  Our main focus has been on the development of our business plan.  Our seasonal operations currently consist solely of surface mining and processing of mineralized material at the TMC project and the sale of commercially viable minerals recovered from such activities.  The following table presents certain consolidated statement of operations information and presentation of that data as a percentage of change from year-to-year:

 

FISCAL YEAR ENDED OCTOBER 31, 2015 COMPARED TO THE FISCAL YEAR ENDED OCTOBER 31, 2014

 

 

 

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REVENUE

 

Revenue for the year ended October 31, 2015, increased $1,109,437 to $2,153,008 as compared to $1,043,571 for the year ended October 31, 2014. The revenue increase resulted from our ability to run production through our pilot mill for approximately 5 months in the 2015 season.  As of October 31, 2015, the Company ended with an ore inventory valued at $559,432, which we anticipate being able to process and convert into revenues during the third quarter of 2016.  In addition, we anticipate being able to run production through the pilot mill for the full 2016 season (total of 5 months) which management believes will result in another substantial increase in revenue for the Company.

 

COST OF SALES

 

Cost of sales for the year ended October 31, 2015, decreased $403,817 to $1,125,703 as compared to $1,529,520 for the year ended October 31, 2014.  This decrease was attributable to increased and more efficient production for the 2015 season as compared to the 2014 season. The Company was able to decrease the per ounce cost of sales from approximately $700 per ounce in 2014 to approximately $575 per ounce in 2015 and management believes that in can maintain this lower cost per ounce or even continue to decrease the cost going forward.

 

EXPENSES

 

Selling, general and administrative expenses for the year ended October 31, 2015, increased $21,228 to $1,072,616 as compared to $1,051,388 for the year ended October 31, 2014.  Such expenses for the years ended October 31, 2015, and 2014 consisted primarily of employee and independent contractor expenses, expenses related to share and warrant issuances, rent, audit, overhead, amortization and depreciation, professional and consulting fees, sales and marketing costs, investor relations, legal, and other general and administrative costs.  The Company continues to actively control these expenses. Management intends to maintain or slightly increase the current level of selling, general and administrative expenses through 2016.

 

NET LOSS

 

Net loss for the year ended October 31, 2015, was $1,183,688 as compared to a net loss of $2,550,162 for the year ended October 31, 2014. The net loss for the year ended October 31, 2015, included $530,940 of non-cash expenses comprised of $250,924 in expenses related to stock option expense, $187,190 related to depreciation and amortization of fixed assets, and $92,826 related to the amortization of debt discount. The net loss for the year ended October 31, 2014, included $1,353,691 of non-cash expenses comprised of $1,223,721 in expenses related to the issuance of common stock and warrants related to services, gain on derivative liability of $907,403, loss on forward sale contracts and loan agreements of $70,000, loss on the settlement of forward contracts of $349,779, and other expense totaling $617,594 during the year ended October 31, 2014. 

 

The substantial decrease in net loss was due to a combination of increasing revenues in addition to a significant decrease in our operating expenses.  While operating expenses should remain fairly stable for the next year, management believes that it can continue to grow revenues during 2016 and should be able to see a further decrease in our net loss.

  

LIQUIDITY AND CAPITAL RESOURCES

 

As of October 31, 2015, the Company had a working capital deficit of $6,792,175.  We had a cash balance of $383,412 and ore inventory of $559,432 offset by current liabilities of $7,761,723. Current liabilities consisted of derivative liabilities of $867,557, current debt, including a line of credit, promissory notes and related interest, of $5,338,513 and accrued and accounts payable of $1,305,041.

 

On May 26, 2015, the Company received from BOCO the fully executed Loan and Note Modification Agreement dated as of May 15, 2015 (the “Loan Modification Agreement”) between the Company, its directors, BOCO, and two other creditors of the Company. The Loan Modification Agreement modifies all outstanding Loan Agreements, Security Agreements and related Promissory Notes between the Company and BOCO (collectively, the “Loan Documents”) that were previously in default and extends the repayment and maturity dates over the course of a three year period in addition converting all outstanding accrued interest in the amount of $2,221,159 and principal in the amount of $300,000 under the notes to equity and lowering the annual interest rate on all BOCO notes to 8%.

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This restructuring of these debts under the Loan Modification Agreement not only resolved the Company’s default situation at that time, but also significantly lowered our interest expense moving forward, positioning the Company to be able to continue mining operations and pay these notes down over a three-year period.  Unfortunately, subsequent to October 31, 2015, the Company was unable to repay $909,346 of notes that were due on November 15, 2015.  Although BOCO extended the notes until December 15, 2015, the notes are once again in default and we are currently working with BOCO to resolve the matter.

 

In the course of its start-up activities, the Company has sustained operating losses.  Expenses incurred from October 18, 2007, (date of inception) through October 31, 2015, relate primarily to the Company’s formation, general administrative activities, property acquisition, and limited operations.  Although our limited operations are beginning to generate revenue, which is providing capital and liquidity for the Company, there can be no assurance if and when such revenue will be sufficient to fully support our operations.  Therefore, we will need to continue raising of capital through the issuance of equity and/or debt as our principal source of liquidity over the next several years to continue operations and fund our growth.  WMTN plans to raise funds for each step of the project and as each step is successfully completed, raise the capital for the next phase.  WMTN believes this will reduce the cost of capital as compared to trying to raise all the anticipated capital at once up front.  However, since WMTN’s ability to raise additional capital will be affected by many factors, most of which are not within our control (see “Risk Factors”), no assurance can be given that WMTN will in fact be able to raise the additional capital as it is needed.

 

Our independent registered accounting firm has expressed substantial doubt about our ability to continue as a going concern as a result of the Company’s history of net loss. Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to successfully execute the plans to pursue the TMC project as described in this Form 10-K. The outcome of these matters cannot be predicted at this time. These consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should we be unable to continue our business.

 

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

 

We have budgeted the following expenditures for the next twelve months for general and administrative expenses, mining and exploration to implement the business plan as described above, in the approximate aggregate amount of $2,400,000, depending on additional financing.  Approximately $1.3 million of these budgeted expenditures are for mining and exploration expenses and the other $1.1 million are for corporate general and administrative expenses.

 

NET CASH PROVIDED BY/USED IN OPERATING ACTIVITIES

 

Net cash provided by operating activities for the year ended October 31, 2015, was $52,401. The net cash provided was primarily due to the net loss of $1,183,689, prepaid expenses of $17,772, inventory of $99,971, and accounts payable and accrued liabilities of $410,829, offset by increases in non-cash activities of $677,576, accrued interest of $1,036,085 and related accounts payable and accrued liabilities of $106,394.

 

Net cash used in operating activities for the year ended October 31, 2014, was $589,693. This amount was primarily related to a net loss of $2,550,162, inventory of $392,976 and prepaid expenses of $2,577, accounts payable of $57,575, accounts payable related parties of $84,021, offset by an increase in accrued interest of $1,143,902, depreciation and amortization and other non-cash expenses of $1,353,691 of non-cash expenses. Non-cash expenses included $1,223,721 in expenses related to the issuance of common stock and warrants related to services; gain on derivative liability of $907,403; loss on forward sale contracts and loan agreements of $70,000; loss on the settlement of forward contracts of $349,779; and other expense totaling $617,594 during the year ended October 31, 2014. 

 

NET CASH USED IN INVESTING ACTIVITIES

 

Net cash used in investing activities for the year ended October 31, 2015, was $165,432. This amount was primarily related to capital expenditures of $65,432, and prepaid royalties of $100,000.

 

Net cash used in investing activities for the year ended October 31, 2014, was $1,970,069. This amount was primarily related to capital expenditures of $70,069, prepaid royalties of $100,000 and cash paid for mining claims of 1,800,000.

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

Net cash provided by financing activities for the year ended October 31, 2015, was $473,677. This amount was primarily related to the proceeds from promissory notes and line of credit of $209,346, and proceeds from warrants exercised of $264,331.

 

Net cash provided by financing activities for the year ended October 31, 2014, was $2,500,152. This amount was primarily related to the proceeds from promissory notes of $2,500,000.

 

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CONTRACTUAL OBLIGATIONS

 

Our unaudited contractual cash obligations as of October 31, 2015 are summarized in the table below:

 

 

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

 

Equipment

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

 

Metal and Other Inventory

Inventories were $559,432 and $459,461 as of October 31, 2015 and October 31, 2014, respectively. Inventories include doré. All inventories are stated at the lower of cost or market, with cost being determined using a weighted average cost method. Metal inventory costs include direct labor, materials, depreciation, as well as administrative overhead costs relating to mining activities.

 

Mineral Properties

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

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Long-Lived Assets

The Company reviews its long-lived assets for impairment when changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets under certain circumstances are reported at the lower of carrying amount or fair value. Assets to be disposed of and assets not expected to provide any future service potential to the Company are recorded at the lower of carrying amount or fair value (less the projected cost associated with selling the asset). To the extent carrying values exceed fair values, an impairment loss is recognized in operating results. 

 

Alaska Reclamation and Remediation Liabilities

The Company operates in Alaska. The State of Alaska Department of Natural Resources requires a pool of funds from all permittees with exploration and mining projects to cover reclamation. There is a $750 per acre disturbance reclamation bond that is required for disturbance of 5 acres or more and/or removal of more than 50,000 cubic yards of material. The Company’s asset retirement obligation (“ARO”), consisting of estimated future mine reclamation and closure costs, may increase or decrease significantly in the future as a result of changes in regulations, mine plans, estimates, or other factors. The Company’s ARO is recognized as a liability at fair value in the period incurred. An ARO, which is initially estimated based on discounted cash flow estimates, is accreted to full value over time through charges to accretion expense. Resultant ARO cost assets are depreciated on a units-of-production method over the related long-lived asset’s useful life. The Company’s ARO is adjusted annually, or more frequently at interim periods if necessary, to reflect changes in the estimated present value resulting from revisions to the timing or amount of reclamation and closure costs. The Company recorded the asset retirement obligation in fiscal year 2015.  Management believes any prior year obligations were immaterial.

 

Fair Value Measurements

ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  This topic also establishes a fair value hierarchy, which requires classification based on observable and unobservable inputs when measuring fair value.  The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs).  The hierarchy consists of three levels:

 

Level 1 – Quoted prices in active markets for identical assets and liabilities;

 

Level 2 – Inputs other than level one inputs that are either directly or indirectly observable; and

Level 3 – Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

 

 

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Stock-Based Compensation

FASB ASC 718 establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, but primarily focuses on transactions whereby an entity obtains employee services for share-based payments. FASB ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the consolidated financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.

 

The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of FASB ASC 505-50. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. Stock-based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the fair value of the services, whichever is more readily determinable in accordance with FASB ASC 718.

 

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ITEM 8.    CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

Board of Directors and Shareholders
WestMountain Gold, Inc.

Denver, Colorado

 

We have audited the accompanying consolidated balance sheets of WestMountain Gold, Inc. and subsidiaries (the “Company”) as of October 31, 2015 and the related statements of operations, cash flows, and stockholders' deficit for the year then ended.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audit.

 

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

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of WestMountain Gold, Inc. and subsidiaries, as of October 31, 2015, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company has suffered significant recurring losses and has had negative cash flows from operating activities and has limited liquidity resources.  These matters raise substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

 

 

EKS&H LLLP

 

February 16, 2016

Denver, Colorado

 

 

 

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

WestMountain Gold, Inc.:

We have audited the accompanying consolidated balance sheet of WestMountain Gold, Inc. (the “Company”) as of October 31, 2014, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended October 31, 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of WestMountain Gold, Inc. as of October 31, 2014, and the related consolidated statement of operations, stockholders’ deficit, and cash flows for the year ended October 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has sustained a net loss from operations and has an accumulated deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/PMB Helin Donovan, LLP

PMB Helin Donovan, LLP

 

February 16, 2016

Seattle, Washington

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NOTE 10.  INCOME TAXES

 

The Company has incurred losses since inception, which have generated net operating loss carryforwards. The net operating loss carryforwards arise from United States sources.  The Company does not have income from foreign sources.

Pretax losses arising from United States operations were approximately $1,180,000 for the year ended October 31, 2015.

Pretax losses arising from United States operations were approximately $2,550,000 for the year ended October 31, 2014.

The Company has net operating loss carryforwards of approximately $18,930,000, which expire in 2022-2034. Because it is not more likely than not that sufficient tax earnings will be generated to utilize the net operating loss canyforwards, a corresponding valuation allowance of approximately $8,225,000 and $7,767,000 was established as of October 31, 2015 and 2014 respectively.  Additionally, under the Tax Reform Act of 1986, the amounts of, and benefits from, net operating losses may be limited in certain circumstances, including a change in control.

Section 382 of the Internal Revenue Code generally imposes an annual limitation on the amount ofnet operating loss canyforwards that may be used to offset taxable income when a corporation has undergone significant changes in its stock ownership. There can be no assurance that the Company will be able to utilize any net operating loss carryforwards in the future.

 

A reconciliation of the United States Federal Statutory rate to the Company's effective tax rate for the year ended October 31, 2015 and 2014 is as follows:

 

	2015			2014
Federal Statutory Rate	-34.0	%		-34.0	%
Increase in Income Taxes Resulting from:
State and local income taxes, net of federal impact	-6.0	%		-6.0	%
Non-deductible differences	-0.7	%		-0.2	%
Change in Valuation allowance	40.7	%		40.2	%
Effective Tax Rate	0.0	%		0.0	%

 

The principal components of the Company's deferred tax assets at October31, 2015 and 2014 are as follows:

 

 

	2015			2014
Non-current:
U.S. net operating loss carryovers	$	7,318,319		$	6,896,287
Share-based payments		583,003			482,634
Derivative Gain/Loss		347,023			437,039
Fixed assets and intangibles		(29,469)			(70,745)
Other		6,577			21,902
Total		8,225,453			7,767,117
Less Valuation Allowance		(8,225,453)			(7,767,117)
Net Deferred Tax Assets	$	-		$	-

 

We have a requirement of reporting of taxes based on tax positions which meet a more likely than not standard and which are measured at the amount that is more likely than not to be realized. Differences between financial and tax reporting which do not meet this threshold are required to be recorded as unrecognized tax benefits. This standard also provides guidance on the presentation of tax matters and the recognition of potential IRS interest and penalties.  For the year ended October 31, 2015 and 2014, the Company did not have any unrecognized tax benefits.

The Company classifies penalty and interest expense related to income tax liabilities as an income tax expense. There are no interest and penalties recognized in the statement of operations or accrued on the balance sheet.

The Company files tax returns in the United States, in the states of Alaska, Colorado and Idaho. The tax years 2012 through 2015 remain open to examination by the major taxing jurisdictions to which the Company is subject.

 

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NOTE 11.  ASSET RETIREMENT AND RECLAMATION LIABILITIES

 

This is the first year the Company has prepared a closure plan. We will continue our efforts in 2016 to modify our plan. We will continue to accrue additional estimated ARO amounts based on an asset retirement plan as activities requiring future reclamation and remediation occur. The following table summarizes the Company’s activity in the ARO.

 

	Year Ended
	October 31,
	2015
Beginning balance	-
Changes in estimates	182,992
Accretion expense	1,053
Ending balance	184,045

 

 

 

NOTE 12.  SUBSEQUENT EVENTS

 

Appointment of Director

 

On January 28, 2016, James W. Creamer III was appointed as a director of WestMountain Gold, Inc. (the “Company”) by a majority vote of the directors of the Company.  This appointment fills a vacancy created by the increase in the number of the Company’s directors from three (3) to four (4).  As of the filing of this Current Report on Form 8-K, Mr. Creamer has not been assigned to serve on any committees of the Company board of directors, nor have any arrangements been finalized to compensate Mr. Creamer for his service on the Company’s Board of Directors.  Mr. Creamer will continue to serve as the Chief Financial Officer, Secretary, and Treasurer of the Company.

 

Departure of Directors

 

On January 28, 2016, following the appointment of Mr. Creamer to the Board of Directors, Gregory L. Schifrin, Michael Lavigne, and Dale L. Rasmussen each notified the Company of their respective resignations from the Company’s Board of Directors effective immediately.  The respective decisions of Messrs. Schifrin, Lavigne, and Rasmussen to resign did not involve any disagreement between the Company and any of Messrs. Schifrin, Lavigne, and Rasmussen on any matter relating to the Company’s operations, policies, or practices.

 

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ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

During our fiscal year ended October 31, 2015, the Company changed its independent registered public accounting firm.  The change was not the result of any disagreements with our prior independent registered public accounting firm.  The forgoing description is not complete and is qualified in its entirety by reference to the Company’s Current Report on Form 8-K filed August 10, 2015.

 

ITEM 9A. CONTROLS AND PROCEDURES

 

a) Evaluation of Disclosure Controls and Procedures

 

We conducted an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures as of October 31, 2015. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our principal executive and principal financial officers concluded that, as of October 31, 2015, our disclosure controls and procedures were not effective at the reasonable assurance level due to limited accounting and reporting personnel and a lack of segregation of duties due to limited financial resources and the size of our Company.  We will need to adopt additional disclosure controls and procedures prior to commencement of material operations. Consistent therewith, on an on-going basis we will evaluate the adequacy of our controls and procedures.

 

b) Management’s Annual Report on Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we assessed the effectiveness of our internal control over financial reporting as of the end of the period covered by this report based on the framework in "Internal Control—Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our principal executive officer and principal financial officer concluded that, as of October 31, 2015, our internal control over financial reporting were ineffective to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with United States generally accepted accounting principles. 

 

A material weakness is a significant deficiency, or combination of significant deficiencies, that result in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. During the assessment for the year ended October 31, 2015, management identified the following material weaknesses:

 

Lack of Segregation of Duties.  We have an inadequate number of personnel to properly implement control procedures.

 

Lack of Disclosure Controls.  There is a lack of disclosure controls to ensure adequate disclosures are made in our periodic filings.

 

Lack of Continuity in Key Personnel.  We have not maintained continuity in key personnel or have adequate staffing to ensure adequately efficient preparation of financial and operational statements.

 

Lack of Inventory Management Control. The Company lacks sufficient personnel and financial resources to implement adequate handling, tracking, accounting, and safeguarding of ore and finished goods inventory assets.

 

Management is committed to improving its internal controls and will continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities.  At this time, however, management has not established a time table for when it intends to address the aforementioned material weaknesses.

 

The effectiveness of our internal control over financial reporting as of October 31, 2015, is not attested to by an independent registered public accounting firm.  Management’s report was not subject to attestation by the our registered public accounting firm pursuant to rules of the SEC that permit is the Company to provide only management’s report in the annual report.

 

c) Changes in Internal Control Over Financial Reporting

 

During the three months ended October 31, 2015, there were no changes in our internal controls over financial reporting that materially affected, or is reasonably likely to have a materially affect, on our internal control over financial reporting.

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 ITEM 9B. OTHER INFORMATION

 

There were no disclosures of any information required to be filed on Form 8-K during the three months ended October 31, 2015 that were not filed.   

 

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

The following table sets forth, as of February 12, 2016, the name, age, and position of each executive officer and director and the tenure in office of each director of the Company.  

 

 

As of our fiscal year end on October 31, 2015, Michael Lavigne and Dale L. Rasmussen served as independent directors of the Company and Gregory Schifrin also served as a director.  Each resigned their position as a director of the Company effective January 28, 2016.  James W. Creamer III was named a director of the Company on January 28, 2016.

 

Business Experience Descriptions

 

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

 

Our Management Director

 

James W. Creamer III

 

James W. Creamer III was named Chief Financial Officer, Secretary and Treasurer on September 8, 2014, and appointed a director of the Company on January 28, 2016.

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Mr. Creamer has served as Chief Financial Officer for several publicly traded companies since 2005 following a fifteen year Investment Banking career.  Since 2011, Mr. Creamer has been the Principle of Corporate Solution Advisors, LLC which offers contract CFO services to small, growth oriented companies.  From 2010 to 2011, Mr. Creamer served as Chief Financial Officer of NexCore Healthcare Capital Corp., following its acquisition of CapTerra Financial Group, Inc.  In 2005, Mr. Creamer was hired by CapTerra Financial Group, Inc. as its Chief Financial Officer and served in that capacity until 2009 when he was named CapTerra’s President and Chief Executive Officer and served in that position until CapTerra’s acquisition by NexCore in 2010. 

 

Between 1990 and 2005, Mr. Creamer held positions as Vice President of Commercial Banking at Vectra Bank Colorado, Vice President of Investment Banking at J.P. Turner & Company, Director of Equity Research at Global Capital Securities and Vice President of Institutional Fixed Income Sales at Hanifen Imhoff, Inc.

 

Mr. Creamer received a Bachelor of Science degree in Finance from Arizona State University and holds the Chartered Financial Analyst (CFA) designation. 

 

Mr. Creamer was appointed as a Director based on his significant experience in public company governance accounting, and finance.

 

Other Executive Officers

 

Gregory Schifrin

 

Mr. Schifrin has worked as a geologist and manager for more than 25 years in mining and mineral exploration industry where he has been involved in precious, base metals, and uranium exploration and development. Mr. Schifrin has provided technical services and project management for major and junior mining companies.

 

From February 2011 to the present Mr. Schifrin was the President and CEO of WestMountain Gold, Inc.  He also served as a Director of WestMountain Gold, Inc. from February 2011 to January 28, 2016.  From March 2010 to the present Mr. Schifrin was the President and CEO of Terra Mining Corp. From December 2007 to the present Mr. Schifrin was the President and Director of Silver Verde May Mining Corporation. During his tenure Mr. Schifrin managed corporate finance, accounting, legal and regulatory requirements, exploration, geologic evaluation, project generation and land acquisition. 

 

From March 19, 2012 to the present Mr. Schifrin has served as Director of Fisher Watt. From February 2011 to November 2011 Mr. Schifrin has served as an officer of Colorado Rare Earths and from November 2011 to December 2012 Mr. Schifrin served as a director and officer of US Rare Earths. Mr. Schifrin also served as President and a Director in February and March 2010 of American Mining Corporation.

 

From 1985 Mr. Schifrin was the co-founder and President of Minex Exploration, a mining industry known exploration consulting and service company, where Mr. Schifrin managed a staff of 15 to 20 personnel, clients and contracts, accounting, legal and regulatory requirements, as well as managing exploration projects, grassroots through drilling and development phase, throughout North America for major and junior mining companies.

 

From October 1992 Mr. Schifrin co-founded Selkirk Environmental, Inc., an environmental consulting and service company, where he managed environmental regulatory compliance, risk analysis, pollution cleanup and environmental assessment for public and private clients. 

 

From November of 2006 to December 2007, Mr. Schifrin was the President and CEO of Golden Eagle Mining Corporation, where he managed corporate affairs, geological exploration, property acquisition and accounting. 

 

In August of 1983, Mr. Schifrin received a Bachelor of Science degree in Geology from the University of Idaho, Moscow. He is a registered professional geologist in the State of Washington. Mr. Schifrin resides in Sandpoint, Idaho.

 

Directors

 

Our bylaws authorize no less than one (1) and no more than five (5) directors.  We currently have set the number of Directors at four (4).

 

Term of Office

 

Our Directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws.  Our officers are appointed by our board of directors and hold office until removed by the board.

 

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Family Relationships

 

There are no family relationships among our directors and executive.

 

Involvement in Certain Legal Proceedings

 

None of our directors or executive officers has, during the past ten years:

 

 

	●	Had any petition under the federal bankruptcy laws or any state insolvency law filed by or against, or had a receiver, fiscal agent, or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
	●	Been convicted in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
	●	Been the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
	●	Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
	●	Engaging in any type of business practice; or
	●	Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;
	●	Been the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any federal or state authority barring, suspending, or otherwise limiting for more than 60 days the right of such person to engage in any activity described in (i) above, or to be associated with persons engaged in any such activity;
	●	Been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, where the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated; or
	●	Been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, where the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended, or vacated.

 

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

  

The Company’s executive officers, directors and 10% stockholders are required under Section 16(a) of the Exchange Act to file reports of ownership and changes in ownership with the SEC. Copies of these reports must also be furnished to the Company.

 

Based solely on a review of copies of reports furnished to the Company, or written representations that no reports were required, the Company believes that during the fiscal year ended October 31, 2015 its executive officers, directors and 10% holders complied with all filing requirements, with the following possible exceptions:

 

1.     Form 4 for Minex Exploration, Inc./Gregory L. Schifrin dated May 26, 2015 and required to be filed on June 1, 2015 was filed on December 9, 2015.

 

2.    Form 4 for Capital Peak Partners/Michael Lavigne dated May 26, 2015 and required to be filed on June 1, 2015 was filed on December 10, 2015.

 

Committees of the Board of Directors

 

The Board has three standing committees to facilitate and assist the Board in the execution of its responsibilities. The committees are currently the Audit Committee, the Nominations and Governance Committee and the Compensation Committee. The Committees were formed October 26, 2012 and held their first meeting in December, 2012. Due to the recent resignations of all but one of our directors (including all of our independent directors), none of our committees currently have members.  We intend to reconstitute the committees once additional directors are named.  When constituted, the Audit and Compensation committees consists solely of non-employee, independent directors. The Nominations and Governance committee may consist of one management director along with independent directors. Charters for each committee are available on our website at www.westmountaingold.com. The table below shows membership for each of the aforementioned Board committees as of October 31, 2015 (none of the following committees currently has members).

 

 

Audit		Compensation		Nominating
Dale L. Rasmussen (Chairman)		Michael Lavigne (Chairman)		Michael Lavigne (Chairman)
Michael Lavigne		Dale L. Rasmussen		Dale L. Rasmussen
				Gregory Schifrin

 

 

Compensation Committee Interlocks and Insider Participation

 

No member of the Compensation Committee during the fiscal year that ended on October 31, 2015, served as an officer, former officer, or employee of the Company or participated in a related party transaction that would be required to be disclosed in this proxy statement. Further, during this period, no executive officer of the Company served as:

 

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

 

Code of Conduct and Ethics

 

We have adopted conduct and ethics standards titled the Code of Conduct and Ethics (the “Code of Conduct”), which are available at www.westmountaingold.com. These standards were adopted by the Board to promote transparency and integrity. The standards apply to the Board, executives and employees. Waivers of the requirements of the Code of Conduct or associated polices with respect to members of the Board or executive officers are subject to approval of the full Board.

 

Our Code of Conduct includes the following:

 

- promotes honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest; promotes the full, fair, accurate, timely and understandable disclosure of our financial results in accordance with applicable disclosure standards, including, where appropriate, standards of materiality;

 

- promotes compliance with applicable SEC and governmental laws, rules and regulations;

 

- deters wrongdoing; and

 

- requires prompt internal reporting of breaches of, and accountability for adherence to, the Code of Conduct.

 

On an annual basis, each director and executive officer is obligated to complete a Director and Officer Questionnaire which requires disclosure of any transactions with the Company in which the director or executive officer, or any member of his or her immediate family, have a direct or indirect material interest. Pursuant to the Code of Conduct, the Audit Committee and the Board are charged with resolving any conflict of interest involving management, the Board and employees on an ongoing basis.

 

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 ITEM 11.  EXECUTIVE COMPENSATION

 

Overview of Compensation Program

 

The Compensation Committee of the Board has responsibility for overseeing, reviewing and approving executive compensation and benefit programs in accordance with the Compensation Committee’s charter.  The Compensation Committee was formed October 26, 2012, held its first meeting on December 13, 2012 and met twice during the fiscal year ended October 31, 2015. The Compensation Committee members as of October 31, 2015, were Michael Lavigne (Chairman) and Dale L. Rasmussen. Both members of our Compensation Committee resigned their respective positions as directors effective January 28, 2016, and we currently have not members on our Compensation Committee.

 

This Compensation Discussion and Analysis describes the material elements of compensation awarded to, earned by or paid to each of our named executive officers who served during the year ended October 31, 2015. This compensation discussion primarily focuses on the information contained in the following tables and related footnotes and narrative for the last completed fiscal year. We also describe compensation actions taken after the last completed fiscal year to the extent that it enhances the understanding of our executive compensation disclosure.

 

Compensation Philosophy and Objectives

 

The major compensation objectives for named executive officers are as follows:

 

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

 

Role of Chief Executive Officer in Compensation Decisions

 

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

 

Setting Executive Compensation

 

The Compensation Committee believes that compensation for named executive officers must be managed to what we can afford and in a way that allows us to meet our goals for overall performance. The Compensation Committee attempts to compensate the named executive officers in a manner that is reflective of the financial condition of the Company and does not currently use a peer group of publicly-traded and privately-held companies in structuring the compensation packages.  The Compensation Committee may also take into account the non-binding advice of the shareholders of the Company regarding executive pay.

 

Executive Compensation Components for the Year Ended October 31, 2015

 

The Compensation Committee did not use a formula for allocating compensation among the elements of total compensation during the fiscal year ended October 31, 2015. The Compensation Committee believes that in order to attract and retain highly effective people it must maintain a flexible compensation structure. For fiscal 2015, the principal components of compensation for named executive officers were base salary and stock options.

 

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Base Salary

 

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

 

Base salaries for the Company’s named executive officers are initially established based on their prior experience, the scope of their responsibilities and the applicable competitive market compensation paid by other companies for similar positions. During 2015, the Compensation Committee and the Board compensated its Chief Executive Officer and Chief Operating Officer with a monthly salary of $10,000. During 2015, the Committee compensated its Chief Financial Officer with a monthly salary of $8,000. This compensation reflected our financial condition.

 

Performance-Based Incentive Compensation

 

The Compensation Committee believes incentive compensation reinforces performance objectives, rewards superior performance and is consistent with the enhancement of stockholder value. All of the Company’s named executive officers are eligible to receive performance-based incentive compensation. The Compensation Committee did not recommend or approve payment of any performance-based incentive compensation to the named executive officers during 2015 based on our financial condition.

 

Ownership Guidelines

 

We do not require our named executive officers to hold a minimum number of our shares. However, to directly align the interests of executive officers with the interests of the stockholders, we encourage each named executive officer to maintain an ownership interest in the Company.

 

Stock Option Program

 

The Company adopted the 2012 Stock Incentive Plan which was approved by stockholders at the 2013 Annual Meeting of Stockholders.

 

Retirement and Other Benefits

 

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

 

Perquisites and Other Personal Benefits

 

During the year ended October 31, 2015, the Company provided the named Chief Executive Officer and the Chief Financial Officer with medical insurance. No other personal benefits were provided.

 

Tax and Accounting Implications

 

Deductibility of Executive Compensation

 

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

 

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

 

REMUNERATION OF EXECUTIVE OFFICERS

 

The following table provides information concerning remuneration of the chief executive officer, the chief financial officer and another named executive officer for the indicated periods.

 

Summary Compensation Table

 

 

Name	Principal Position				Salary ($)			Bonus ($)			Stock Awards ($)			Non-Equity Incentive Plan Compensation ($)			Option Awards ($)			Other Compensation ($)			Total ($)
Gregory Schifrin (1)	Chief Executive Officer, Director		10/31/2015		$	120,000		$	-		$	-		$	-		$	-		$	-		$	120,000
			10/31/2014		$	120,000		$	-		$	75,000		$	-		$	-		$	-		$	195,000
James W. Creamer III (2)	CFO, Secretary & Treasurer		10/31/2015		$	96,000		$	-		$	-		$	-		$	6,849		$	-		$	102,849
			10/31/2014		$	14,133		$	-		$	25,000		$	-		$	490,125		$	14,867		$	544,125

 

 

(1)  During the year ended October 31, 2015, and 2014, Mr. Schifrin was paid a monthly salary of $10,000. The 2014 stock award for 150,000 shares of restricted common stock was issued by us on October 10, 2014 at the grant date market value of $0.50 per share.

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(2)  On September 15, 2014, the Company signed an Employment Agreement with James W. Creamer III and appointed him as Chief Financial Officer.  Under the terms of the agreement, Mr. Creamer’s salary will be $96,000 per year and he is eligible for annual bonuses and incentive plans determined by the Company’s Compensation Committee.  Mr. Creamer was also granted 1,000,000 options to purchase the Company’s common stock for $0.50 per share for a period of seven years.  250,000 of the options vested immediately and 250,000 options shall vest on each of the first, second and third anniversaries of employment.  On July 6, 2015, the Company cancelled the existing options and issued 1,000,000 options to Mr. Creamer to purchase shares of our common stock at $0.12 per share for a period of approximately 6.25 years.  500,000 of the options vested immediately, 250,000 options vested on September 8, 2015 and the remaining 250,000 options will vest on September 8, 2016.  The transaction was treated as a modification of the terms to the initial grant.  The 2014 stock award for 50,000 shares of restricted common stock was issued by us on October 10, 2014 at the grant date market value of $0.50 per share.  In addition, Mr. Creamer provided consulting services to the company during the two months prior to his employment for which he was compensated $14,867.

 

Grants of Stock Based Awards in Fiscal Year Ended October 31, 2015

 

We did not provide performance-based incentive compensation paid to the named executive officers during 2015 based on our financial condition.

 

Pension Benefits

 

We do not provide any pension benefits. 

 

Nonqualified Deferred Compensation 

 

We do not have a nonqualified deferred compensation program. 

 

EMPLOYMENT AGREEMENTS

 

On October 1, 2010, TMC signed an Employment Agreement with Gregory Schifrin, which was assumed by WMTN as a result of the acquisition of TMC in February 2011. Under the terms of the agreement, Mr. Schifrin was appointed Chief Executive Officer for an indefinite period at a salary of $120,000 per year. Mr. Schifrin was eligible for annual bonuses and incentive plans as determined by the Company’s Compensation Committee. Mr. Schifrin was also eligible for employee benefit programs, including 4 weeks of vacation per year, medical benefits and $500 per day spent on the Company’s project sites. Mr. Schifrin may resign with 60 days’ notice. If Mr. Schifrin is terminated without cause, including a change in control (after six months), he was to receive in a lump sum, two times his annual salary, two times his targeted annual bonus, two times his last year’s bonus and any accrued vacation. 

 

The Loan Modification Agreement with BOCO dated as of May 15, 2015 provides for the waiver by Greg Schifrin, CEO of the Company, of all rights and benefits under his employment agreement with the Company.  Mr. Schifrin is currently employed by the Company as an “at will” employee without a contract.

 

On September 15, 2014, the Company signed an Employment Agreement with James W. Creamer III and appointed him as Chief Financial Officer.  Under the terms of the agreement, Mr. Creamer’s salary will be $96,000 per year and he is eligible for annual bonuses and incentive plans determined by the Company’s Compensation Committee.  Mr. Creamer was also granted 1,000,000 options to purchase the Company’s common stock for $0.50 per share for a period of seven years.  250,000 of the options vested immediately and 250,000 options shall vest on each of the first, second and third anniversaries of employment.  On July 6, 2015, the Company cancelled the existing options and issued 1,000,000 options to Mr. Creamer to purchase shares of our common stock at $0.12 per share for a period of approximately 6.25 years.  500,000 of the options vested immediately, 250,000 options vested on September 8, 2015 and the remaining 250,000 options will vest on September 8, 2016. 

 

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Definitions Used in Mr. Creamer’s Employment Agreement

 

For purposes of Mr. Creamer’s Employment Agreement described above, the following definitions apply:

 

As used herein, “Cause” is defined as any of the following events which occur during the term of this agreement: Good Cause” means the occurrence of one of the following events without the Executive’s express written consent:

the assignment by the Company of any substantial new or different duties inconsistent with the Executive’s positions, duties, responsibilities and status with the Company immediately prior to such change in assigned duties;

a material reduction in the Executive’s responsibilities, except as a result of the Executive’s death, disability or retirement;

a reduction by the Company in the Executive’s Annual Salary;

a change in the principal executive office of the Company to a location more than 50 kilometres from the then-current location of the principal executive office of the Company;

the requirement by the Company that the Executive be based anywhere other than within a 100 kilometre radius of the Executive’s then current location;

the failure by the Company to continue in effect, or a material change in the terms of the Executive’s participation in benefits under any Incentive Plan or Benefits plan (collectively, the “Existing Plans”), the effect of which would be to materially reduce the total value, in the aggregate, of the benefit to the Executive of the Existing Plans;

any reduction by the Company of the number of paid vacation days to which the Executive is entitled; or

any other events or circumstances which would constitute a constructive dismissal at common law.

As used herein, “Change of Control” is defined as any one of the following occurrences:

(a)        the acquisition, directly or indirectly, by any person or group of persons acting jointly or in concert, as such terms are defined in the Securities Act, British Columbia, of common shares of the Company which, when added to all other common shares of the Company at the time held directly or indirectly by such person or persons acting jointly or in concert, constitutes for the first time in the aggregate 30% or more of the outstanding common shares of the Company and such shareholding exceeds the collective shareholding of the current directors of the Company, excluding any directors acting in concert with the acquiring party; or

(b)        the removal, by extraordinary resolution of the shareholders of the Company, of more than 51% of the then incumbent Board of the Company, or the election of a majority of Board members to the Company’s board who were not nominees of the Company’s incumbent board at the time immediately preceding such election; or

(c)             consummation of a sale of all or substantially all of the assets of the Company; or

(d)           the consummation of a reorganization, plan of arrangement, merger or other transaction which has substantially the same effect as (a) to (c) above.

As used herein, “Constructive Termination” is defined as any of the following, without your express written consent:

 

(a)         engages in conduct which is detrimental to the reputation of the Company or any of its Affiliates in any material respect;

(b)          has committed an act of fraud or material dishonesty in connection with or related in any way to his employment with the Company;

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(c)            is the subject of any enforcement proceeding by a securities regulatory authority or agency; or

(d)          breaches his duties under this Agreement; or willfully neglects his duties to a material degree.

Potential Payments upon Termination or Change in Control

 

The Company’s Employment Agreements with the named executive officers have provisions providing for severance payments as discussed below.

 

James W. Creamer III Termination Payments

 

The following table shows the potential payments upon termination for James W. Creamer III:

 

					Early			Not for Good			Change in
Executive		For Cause			or Normal			Cause			Control			Disability
Payments Upon		Termination			Retirement			Termination			Termination			or Death
Seperation		on 10/31/15			on 10/31/15			on 10/31/15			on 10/31/15			on 10/31/15
Compensation:
Basic Salary (1)		$	-		$	-		$	96,000		$	96,000		$	-
Performance-based incentive
Compensation		$	-		$	-		$	-		$	-		$	-
Stock Options (2)		$	-		$	-		$	103,516		$	-		$	-
Benefits and Perquisites:
Health and welfare benefits		$	-		$	-		$	-		$	-		$	-
Accrued vacation pay (3)		$	-		$	-		$	7,385		$	7,385		$	-
Total		$	-		$	-		$	206,901		$	103,385		$	-

 

 

 

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

 

(2)         Reflects remaining expense associated with the vesting of remaining unvested options upon termination without cause.

 

(3)           Reflects the value of vacation pay accrued as of October 31, 2015.

 

DIRECTOR COMPENSATION

 

We use stock grants to incentive compensation to attract and retain qualified candidates to serve on the Board. In setting director compensation, we consider the significant amount of time that Directors expend in fulfilling their duties to the Company as well as the skill-level required by us for members of the Board. During the year ended October 31, 2015, none of the Directors received any compensation for their services as a director.  Furthermore, our independent non-employee directors were not compensated in cash for the year ended October 31, 2015.

 

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

 

The following table sets forth certain information regarding the ownership of our common stock as of February 10, 2015:

 

The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership within 60 days. Under these rules more than one person may be deemed a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest.

 

Unless otherwise indicated below, each beneficial owner named in the table has sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable.  The percentages below are calculated based on 61,650,537 shares of our common stock and issued and outstanding as of February 10, 2015 (except as noted with respect to the percentage of BOCO).

 

	Shares Beneficially Owned
	Amount		%
Directors and Officers:
Gregory L. Schifrin/Mining Minerals LLC (1)	9,512,100		15.4	%
James W. Creamer III (2)	850,313		1.4	%
Total Directors and Officers as a Group (2 total)	10,362,413		16.8	%

 

 

(1) Reflects the shares beneficially owned by Gregory Schifrin and affiliated entities.

 

(2) Reflects 1,000,000 options granted to Mr. Creamer to purchase the Company’s common stock for $0.50 per share for a period of seven years.  250,000 of the options vested immediately and 250,000 options shall vest on each of the first, second and third anniversaries of employment.  In addition Mr. Creamer was granted 50,000 shares of restricted stock on October 10, 2014.

 

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(3) BOCO’s holdings include 31,946,857 shares held outright, and an additional 16,267,625 shares which are issuable on conversion by BOCO Investments LLC at its option of all of the Company’s convertible debt to BOCO, which is convertible at the lower of $0.12 or the price of any subsequent financing by the Company, converted at the current $0.12 conversion rate.  The percentage of shares beneficially owned by BOCO is calculated with respect to 77,918,162 issued and outstanding shares, which reflects the post-conversion total.  Joseph Zimlich is the CEO of BOCO.

 

Since the beginning of the fiscal year ended October 31, 2015, the number of shares of the Company’s common stock held by BOCO Investments LLC increased by a significant amount after the effectiveness of the Loan Modification Agreement with BOCO dated as of May 15, 2015. As of the date of the Company’s last Annual Report on Form 10-K, filed February 13, 2015, BOCO was the beneficial owner of approximately 34.3% of the Company’s common stock. The increase in BOCO’s ownership percentage was as a result of the conversion of debt and exercise of warrants as detailed in the Loan Modification Agreement.

 

 ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

Related Party Transactions

 

Related party transactions for the year ended October 31, 2015, are detailed in Note 6 to the Company’s Financial Statements contained in Item 8 of this Form 10-K under the heading “Related Party Transactions.”

 

Review and Approval of Related Person Transactions

 

We have operated under a Code of Conduct since inception. Our Code of Conduct requires all employees, officers and directors, without exception, to avoid the engagement in activities or relationships that conflict, or would be perceived to conflict, with the Company’s interests or adversely affect its reputation. It is understood, however, that certain relationships or transactions may arise that would be deemed acceptable and appropriate upon full disclosure of the transaction, following review and approval to ensure there is a legitimate business reason for the transaction and that the terms of the transaction are no less favorable to the Company than could be obtained from an unrelated person.

 

The Audit Committee is responsible for reviewing and approving all transactions with related persons. In 2013, The Board reviewed all relationships and transactions in which we and our directors and executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. As required under SEC rules, transactions that are determined to be directly or indirectly material to the Company or a related person are disclosed.

 

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

 

The Company formed an Audit Committee on October 26, 2012. The Board has established a pre-approval policy and procedures for audit, audit-related and tax services that can be performed by the independent auditors without specific authorization from the Board subject to certain restrictions. The policy sets out the specific services pre-approved by the Board and the applicable limitations, while ensuring the independence of the independent auditors to audit our financial statements is not impaired. The pre-approval policy does not include a delegation to management of the Board responsibilities under the Exchange Act. During fiscal year ended October 31, 2015, the Board pre-approved all audit and permissible non-audit services provided by our independent auditors.

 

Service Fees Paid to the Independent Registered Public Accounting Firm

 

The Board engaged PMB Helin Donovan, LLP to perform an annual audit of our financial statements for the year ended October 31, 2014 and for the first two quarterly reviews in 2015.  EKS&H, LLLP was engaged by the Company beginning with the quarterly review for the third quarter of 2015.  The following is the breakdown of aggregate fees paid to the auditors for the Company for the periods indicated:

 

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- “Audit Fees” are fees billed by PMB Helin Donovan, LLP for the audit of our financial statements for the year ended October 31, 2014, and fees to be billed by EKS&H, LLLP for the audit of our financial statements for the year ended October 31, 2015 have been accrued.

 

- “Audit-Related fees” are fees billed by PMB Helin Donovan, LLP to us for services not included in audit fees, specifically, SAS 100 reviews, SEC filings and consents, and accounting consultations on matters addressed during the audit or interim reviews, and review work related to quarterly filings for the year ended October 31, 2014, and for the quarters ended January 31, 2015, and April 30, 2015, and fees billed by EKS&H, LLLP for the quarter ended July 31, 2015.

 

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

 

PART IV

 

ITEM 15.    DESCRIPTION OF BUSINESS

 

(a)   1.             The information required by this item is included in Item 8 of Part II of this annual report.

 

2.             The information required by this item is included in Item 8 of Part II of this annual report.

 

3.             Exhibits: See Index to Exhibits, which is incorporated by reference in this Item. The Exhibits listed in the accompanying Index to Exhibits are filed or incorporated by reference as part of this Annual Report.

 

(b)   Exhibits. See Index to Exhibits, which is incorporated by reference in this Item. The Exhibits listed in the accompanying Index to Exhibits are filed or incorporated by reference as part of this annual report.

 

(c)    Not applicable.

 

INDEX TO EXHIBITS

 

Exhibit No.	Description
*3.1	Articles of Incorporation (Previously filed with Form SB-2 Registration Statement, January 2, 2008, as amended per the 8-K filed on Oct. 12, 2010).
*3.2	Articles of Amendment dated February 28, 2013 (Attached as an exhibit to the Company’s Form 8-K dated March 8, 2013 and filed with the SEC on March 12, 2013).
*3.3	Bylaws (Previously filed with Form SB-2 Registration Statement, January 2, 2008).
*3.4	Certificate of Designation of Rights, Preferences and Privileges of Series A Convertible Preferred Stock (Attached as an exhibit to the Company’s Form 8-K dated December 3, 2013 and filed with the SEC on December 6, 2013).
*4.1	WestMountain Gold, Inc. 2012 Stock Incentive Plan (Filed as an Exhibit to the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on December 31, 2013, and hereby incorporated by reference).
*10.1	Amended Porterfield Lease dated February 18, 2011 by and between Terra Gold Corp and Ben Porterfield (Attached as an Exhibit to the Company’s Form 10-K dated October 31, 2011 and filed with the SEC on December 20, 2011).
*10.2	Amended and Restated Revolving Credit Loan and Security Agreement dated September 17, 2012 by and between WestMountain Index Advisor, Inc. and BOCO  (Filed as exhibits on Form 8-K/A dated September 11, 2012 and filed with the SEC on October 10, 2012. Investments, LLC).
*10.3	Amended and Restated Secured Convertible Promissory Note dated September 17, 2012 by and between WestMountain Index Advisor, Inc. and BOCO (Filed as exhibits on Form 8-K/A dated September 11, 2012 and filed with the SEC on October 10, 2012. Investments, LLC).
*10.4	Loan Agreement dated May 7, 2013 by and between WestMountain Gold, Inc. and BOCO Investments, LLC. (Attached as an exhibit to the Company’s Form 8-K/A dated May 14, 2013 and filed with the SEC on June 6, 2013).
*10.5	Promissory Note dated May 7, 2013 by and between WestMountain Gold, Inc. and BOCO Investments, LLC. (Attached as an exhibit to the Company’s Form 8-K/A dated May 14, 2013 and filed with the SEC on June 6, 2013).
*10.6	Security Agreement dated May 7, 2013 by and between WestMountain Gold, Inc. and BOCO Investments, LLC. (Attached as an exhibit to the Company’s Form 8-K/A dated May 14, 2013 and filed with the SEC on June 6, 2013).
*10.7	Warrant for the Purchase of Common Stock dated May 7, 2013 by and between WestMountain Gold, Inc. and BOCO Investments, LLC. (Attached as an exhibit to the Company’s Form 8-K/A dated May 14, 2013 and filed with the SEC on June 6, 2013).
*10.8	Loan Agreement dated June 27, 2013 by and between WestMountain Gold, Inc. and BOCO Investments, LLC. (Attached as an exhibit to the Company’s Form 8-K dated June 27, 2013 and filed with the SEC on July 1, 2013).
*10.9	Promissory Note dated June 27, 2013 by and between WestMountain Gold, Inc. and BOCO Investments, LLC. (Attached as an exhibit to the Company’s Form 8-K dated June 27, 2013 and filed with the SEC on July 1, 2013).
*10.10	Security Agreement dated June 27, 2013 by and between WestMountain Gold, Inc. and BOCO Investments, LLC. (Attached as an exhibit to the Company’s Form 8-K dated June 27, 2013 and filed with the SEC on July 1, 2013).
*10.11	Warrant for the Purchase of Common Stock dated June 27, 2013 by and between WestMountain Gold, Inc. and BOCO Investments, LLC. (Attached as an exhibit to the Company’s Form 8-K dated June 27, 2013 and filed with the SEC on July 1, 2013).
*10.12	First Amendment to Amended and Restated Secured Convertible Promissory Note dated August 1, 2013 by and between WestMountain Gold, Inc. and BOCO Investments, LLC. Attached as an exhibit to the Company’s Form 8-K dated August 29, 2013 and filed with the SEC on August 30, 2013.
*10.13	Form of Warrant for the Purchase of Preferred Stock. (Attached as an exhibit to the Company’s Form 10-K dated October 31, 2013 and filed with the SEC on February 12, 2014).
*10.14	Form of Warrant for the Purchase of Common Stock  (Attached as an exhibit to the Company’s Form 10-K dated October 31, 2013 and filed with the SEC on February 12, 2014).
*10.15	Form of Subscription Agreement for the Purchase of Preferred Stock (Attached as an exhibit to the Company’s Form 10-K dated October 31, 2013 and filed with the SEC on February 12, 2014).
10.16	Lease Agreement signed January 1, 2015, by and between WestMountain Gold, Inc. and TLC Properties, LLC.
*10.17	Commercial Lease Amendment II signed June 5, 2013 by and between WestMountain Index Advisor, Inc. and Waterfront Property Management LLC.  (Attached as an exhibit to the Company’s Form 10-K dated October 31, 2013 and filed with the SEC on February 12, 2014).
*10.18	Commercial Lease April 1, 2011 by and between WestMountain Index Advisor, Inc. and Waterfront Property Management LLC. (Attached as an exhibit to the Company’s Form 10-K dated October 31, 2013 and filed with the SEC on February 12, 2014).
*10.19	Secured Promissory Note between WestMountain Gold, Inc. and BOCO dated February 14, 2014 (Attached as an exhibit to the Company's Form 10-Q/A dated January 31, 2014 and filed with the SEC on March 26, 2014)
*10.20	Convertible Promissory Note dated December 17, 2013 between West Mountain Gold Inc. and BOCO Investments, LLC. (Attached as an exhibit to the Company’s Form 8-K dated December 31, 2013 and filed with the SEC on January 3, 2014).
*10.21	Letter Agreement between Raven Gold Alaska, Inc. and Terra Gold Corporation dated February 12, 2014 (Attached as an exhibit to the Company's Form 10-Q/A dated January 31, 2014 and filed with the SEC on March 26, 2014)
*10.22	Convertible Promissory Note between WestMountain Gold, Inc. and Dessi dated December 17, 2013 (Attached as an exhibit to the Company's Form 10-Q/A dated January 31, 2014 and filed with the SEC on March 26, 2014)
*10.23	Purchase Agreement between WestMountain Gold, Inc. and Lincoln Park Capital, LLC dated November 20, 2013 (Attached as an exhibit to the Company's Form 10-Q/A dated January 31, 2014 and filed with the SEC on March 26, 2014)
*10.24	Registration Rights Agreement between WestMountain Gold, Inc. and Lincoln Park Capital, LLC dated November 20,2013 (Attached as an exhibit to the Company's Form 10-Q/A datedJanuary 31, 2014 and filed with the SEC on March 26, 2014)
*10.25	Separation and Full Release of Claims Agreement between WestMountain Gold, Inc. and Mark Scott dated November 15, 2013 (Attached as an exhibit to the Company's Form 10-Q/A datedJanuary 31, 2014 and filed with the SEC on March 26, 2014)
*10.26	Loan and Note Modification Agreement beween WestMountain Gold, Inc and BOCO Investments, LLC dated April 15, 2014 (Attached as an exhibit to the Company's Form 8-K dated April 23, 2014 and file with the SEC on April 24, 2014)
*10.27	Amendment to Loan and Note Modification Agreement dated May 27, 2014 between WestMountain Gold, Inc. and BOCO Investments, LLC (Attached as an exhibit to the Company's Form 8-K dated June 2, 2014 and filed with the SEC on June 6, 2014)
*10.28	Employment Agreement between WestMountain Gold, Inc. and James W. Creamer III effective September 8, 2014, executed and formally excepted on September 15, 2014 (Attached as an exhibit to the Company's Form 8-K dated September 15, 2014 and filed with the SEC on September 19, 2014)
*10.29	Loan and Note Modification Agreement by and among WestMountain Gold, Inc, BOCO Investments, LLC, Minex Exploration, Slver Verde May Mining Co., Dale L. Rasmussen and Michael Lavigne (Attached as an exhibit to the Company's Form 8-K dated May 26, 2015 and filed with the SEC on June 1, 2015)
*14.1	Code of Conduct & Ethics dated November 30, 2012. (Attached as an exhibit to the Company’s Form 8-K dated November 26, 2012 and filed with the SEC on November 30, 2012).
21.1	Subsidiaries  (Attached as an exhibit to the Company’s Form 10-K dated October 31, 2013 and filed with the SEC on February 12, 2014).
†31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.
†31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.
‡32.1 and 32.2	Section 906 Certifications.
*99.1	Audit Committee Charter dated November 30, 2012. (Attached as an exhibit to the Company’s Form 8-K dated November 26, 2012 and filed with the SEC on November 30, 2012).
*99.2	Compensation Committee Charter dated November 30, 2012.  (Attached as an exhibit to the Company’s Form 8-K dated November 26, 2012 and filed with the SEC on November 30, 2012).
*99.3	Nominations and Governance Committee Charter dated November 30, 2012. (Attached as an exhibit to the Company’s Form 8-K dated November 26, 2012 and filed with the SEC on November 30, 2012).
101	Interactive data files pursuant to Rule 405 of Regulation S-T. (1)
*	Included in previously filed reporting documents.
†	Filed herewith
‡	Furnished herewith

 

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SIGNATURES

 

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

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

 

 

 

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