UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
August 31, 2011
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from [ ] to [
]
Commission file number
333-138148
AMERICAN PARAMOUNT GOLD
CORP.
(Exact name of registrant as specified in its
charter)
Nevada
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20-5243308
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(State or other jurisdiction of incorporation or
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(I.R.S. Employer Identification No.)
|
organization)
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|
|
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141 Adelaide St. West, Suite 240, Toronto, Ontario,
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M5H 3L5
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Canada
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code:
(416)
214-0049
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
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Name of Each Exchange On Which Registered
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N/A
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N/A
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Securities registered pursuant to Section 12(g) of the Act:
N/A
(Title of class)
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 the Securities Act.
Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act
Yes
[ ] No [X]
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the last 90 days."
Yes [
] No [X]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-K (§229.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
Yes [ ] No [ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form
10-K.
[ ]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definition of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ]
|
Accelerated
filer [
]
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Non-accelerated filer [ ]
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Smaller reporting company
[X]
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Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes [
] No [X]
State the aggregate market value of voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was last sold, or the average bid and ask price of such common
equity, as of the last business day of the registrants most recently completed
second fiscal quarter.
The aggregate market value of Common Stock held by
non-affiliates of the Registrant on February 28, 2011 was $8,000,000 based on a
$0.125 closing price for the Common Stock on February 28, 2011. For purposes of
this computation, all executive officers and directors have been deemed to be
affiliates. Such determination should not be deemed to be an admission that such
executive officers and directors are, in fact, affiliates of the Registrant.
Indicate the number of shares outstanding of each of the
registrants classes of common stock as of the latest practicable date.
1,612,500 shares of common stock issued & outstanding
as of May 14, 2012.
DOCUMENTS INCORPORATED BY REFERENCE
None.
2
Table of Contents
3
PART I
Item
1.
Business
This annual report contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors, that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.
Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.
In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common
shares refer to the common shares in our capital stock.
As used in this annual report, the terms we, us, our,
our company and American Paramount refer to American Paramount Gold Corp.,
unless otherwise indicated.
Corporate Overview
Our principal executive offices are located at 141 Adelaide St.
West, Suite 240, Toronto, Ontario, Canada, M5H 3L5. Our telephone number is
(416) 214-0049.
Our common stock is quoted on the OTC Bulletin Board under the
symbol APGA.
Corporate History
We were incorporated under the laws of the State of Nevada on
July 20, 2006 under the name Zebra Resources Incorporated (aka Zebra
Resources Inc.). At inception, we were an exploration stage company engaged in
the acquisition, exploration and development of mineral properties. On July 26,
2006, we entered into a mineral property option agreement to earn an interest in
a mineral claim known as the Astro 2006 claim. Based on the information
available to us, we determined that the Astro 2006 claim did not, in all
likelihood, contain a commercially viable mineral deposit, and we therefore
abandoned any further exploration on the property.
As a result, we investigated several other business
opportunities to enhance shareholder value.
On February 26, 2010, Monaco Capital Inc. acquired a
controlling interest in our company by purchasing 20,000,000 shares of our
common stock in a private transaction.
Effective March 17, 2010, we effected a one (1) old for two (2)
new forward stock split of our issued and outstanding common stock. As a result,
our authorized capital increased from 75,000,000 to 150,000,000 shares of common
stock and our issued and outstanding increased from 32,000,000 shares of common
stock to 64,000,000 shares of common stock, all with a par value of $0.001.
4
Also effective March 17, 2010, we changed our name from "Zebra
Resources Incorporated" to "American Paramount Gold Corp.", by way of a merger
with our wholly owned subsidiary American Paramount Gold Corp., which was formed
solely for the change of name.
The name change and forward stock split became effective with
the Over-the-Counter Bulletin Board at the opening for trading on April 12, 2010
under the new stock symbol "APGA".
On April 16, 2010, we entered into an option agreement to
acquire a 100% long-term lease interest in 189 unpatented mining claims situated
in the Walker Lane Structural Belt in Nye County, Nevada, known as Cap Gold
Project. The 189 claims making up the Cap Gold Project form a contiguous block
of approximately 3,960 acres (1,602 hectares). We paid $125,000 to secure the
option, giving us the right acquire a 100% long-term lease interest in the Cap
Gold Project. To exercise the option we must: (i) make ongoing yearly advance
production royalty cash payments during the term of the agreement of $125,000 in
years two (2) through five (5), $150,000 in years six (6) through twelve (12),
$200,000 in years 13 through 20 and $300,000 in years 21 through 30; (ii) incur
expenditures on exploration of the Cap Gold Project of not less than an
aggregate of $1,250,000 over five (5) years; and (iii) make production royalty
payments from production from the property after the advance production royalty
cash payments described above have been repaid to our company from production
from the property. At our companys election, the production royalty may be
calculated either on a sliding scale or on a fixed production royalty basis, and
must range from 1% to a maximum of 3%. We do not currently intend on conducting
any further exploration on the Cap Gold Project.
On April 22, 2010, we entered into a convertible loan agreement
with Monaco Capital Inc., wherein Monaco Capital Inc. has agreed to loan our
company up to $500,000. The loan (and accrued interest) is convertible in whole
or in part into common shares of our company at a conversion price of $1.05 and
will bear interest at 10% per annum. The principal amount of the loan and
accrued interest is due and payable one year from the advancement date. We may
at any time during the term of the loan prepay any sum up to the full amount of
the loan and accrued interest then outstanding for an additional 10% of such
amount. This agreement was subsequently cancelled and replaced with a new
agreement on December 17, 2010. The new agreement provided for funding of up to
$5,000,000, and any amounts advanced would bear interest at 10% per annum. In
addition, any outstanding principal and accrued interest would be convertible at
the volume weighted average trading price for the companys shares of common
stock for the ten trading day period prior to any conversion.
On July 30, 2010, our directors approved the adoption of the
2010 Stock Option Plan which permits our company to issue up to 6,500,000 shares
of our common stock to directors, officers, employees and consultants of our
company upon the exercise of stock options granted under the 2010 Plan.
On July 28, 2010, we obtained an extra-provincial license to
carry on business in the Province of Ontario, Canada. Our Ontario Corporation
Number is 1827852.
On October 6, 2010, we granted an aggregate of 5,400,000 stock
options to ten individuals, including directors, officers, consultants and
employees, pursuant to our 2010 Stock Plan, at an exercise price of $0.68 per
share. Of the 5,400,000 stock options, 400,000 options are exercisable until
October 6, 2012 and 5,000,000 options are exercisable until October 6, 2015. All
the stock options vested upon issuance. We issued the stock options to seven (7)
non-U.S. persons (as that term is defined in Regulation S of the Securities Act
of 1933), in an offshore transaction relying on Regulation S and/or Section 4(2)
of the Securities Act of 1933 and to three (3) U.S. persons (as that term is
defined in Regulation S of the Securities Act of 1933) relying upon Rule 506 of
Regulation D of the Securities Act of 1933.
On November 9, 2010, we announced by press release our entry
into a non-binding letter of intent with Lonsdale Acquisition Corporation to
acquire the Kisita Gold Mine Property, an operational gold property four hours
northwest of the capital city of Kampala, Uganda. The acquisition was subject to
further negotiation and due diligence of the project satisfactory to us. On
December 9, 2010, having performed the due diligence required to acquire the
Kisita Gold Mine Property, advised Lonsdale Acquisition Corporation that we
declined to proceed with the purchase agreement under its current terms and
conditions. Discussions with Lonsdale Acquisition Corporation are ongoing.
5
On December 17, 2010, we entered into a convertible loan
agreement with Monaco Capital Inc. This agreement replaces the convertible loan
agreement entered into with Monaco Capital Inc. on April 22, 2010. The new
agreement provided for funding of up to $5,000,000, and any amounts advanced
would bear interest at 10% per annum. In addition, any outstanding principal and
accrued interest would be convertible at the volume weighted average trading
price for the companys shares of common stock for the ten trading day period
prior to any conversion.
On November 16, 2011, our companys board of directors approved
a forty (40) for one (1) reverse stock split of our authorized and issued and
outstanding common shares.
On November 28, 2011, the Nevada Secretary of State accepted
for filing a Certificate of Change, wherein we effected an amendment to our
Articles of Incorporation to decrease the authorized number of shares of our
common stock from 150,000,000 to 3,750,000 shares of common stock, par value of
$0.001. On November 29, 2011 the Nevada Secretary of State accepted for filing a
Certificate of Correction, wherein we effected an amendment to our Articles of
Incorporation to correct the Certificate of Change filed on November 28, 2011 to
state that no fractional shares shall be issued and that fractional shares shall
be rounded up rather than rounded down.
The reverse split became effective with the Over-the-Counter
Bulletin Board at the opening of trading on January 26, 2012. Our new symbol is
APGA
. Our new CUSIP number is 02882T 204.
Our Current Business
We are an exploration stage mining company engaged in the
identification, acquisition, and exploration of metals and minerals which until
recently was focused on gold mineralization on our property located in Nevada.
We intend to conduct exploration and development programs on our recently
optioned property.
Since we are an exploration stage company, there is no
assurance that a commercially viable mineral reserve exists on any of our
current or future properties, To date, we do not know if an economically viable
mineral reserve exists on our property and there is no assurance that we will
discover one. Even if we do eventually discover a mineral reserve on our
property, there can be no assurance that we will be able to develop our property
into a producing mine and extract those resources. Both mineral exploration and
development involve a high degree of risk and few properties which are explored
are ultimately developed into producing mines.
Our operational focus has been to conduct exploration
activities on the Cap Gold Project and to complete the terms of the Cap Gold
option agreement. After completing drilling on our first hole,the Board
determined to abandon the project entirely.
Subsidiaries
We do not have any subsidiaries.
Research and Development Expenditures
We have incurred $nil in research and development expenditures
over the last two fiscal years.
Employees
Currently, with the exception of our directors and officers, we
do not have any employees. Additionally, we have not entered into any consulting
or employment agreements with our president, chief executive officer, treasurer,
secretary or chief financial officer. Our directors, executive officers and
certain contracted individuals play an important role in the running of our
company. We do not expect any material changes in the number of employees over
the next 12 month period. We do and will continue to outsource contract
employment as needed.
6
We engage contractors from time to time to consult with us on
specific corporate affairs or to perform specific tasks in connection with our
exploration programs.
Intellectual Property
We own all copyright in and to the contents of our website,
www.americanparamountgold.com. We do not own, either legally or beneficially,
any patent or trademark.
REPORTS TO SECURITY HOLDERS
We are required to file annual, quarterly and current reports,
proxy statements and other information with the Securities and Exchange
Commission and our filings are available to the public over the internet at the
Securities and Exchange Commissions website at http://www.sec.gov. The public
may read and copy any materials filed by us with the Securities and Exchange
Commission at the Securities and Exchange Commissions Public Reference Room at
100 F Street N.E. Washington D.C. 20549. The public may obtain information on
the operation of the Public Reference Room by calling the Securities and
Exchange Commission at 1-800-732-0330. The SEC also maintains an Internet site
that contains reports, proxy and formation statements, and other information
regarding issuers that file electronically with the SEC, at http://www.sec.gov.
Item
1A. Risk
Factors
Risks Associated With Mining
Our property is in the exploration stage. There is no
assurance that we can establish the existence of any mineral resource on our
property in commercially exploitable quantities. Until we can do so, we cannot
earn any revenues from operations and if we do not do so we will lose all of the
funds that we expend on exploration. If we do not discover any mineral resource
in a commercially exploitable quantity, our business could fail.
Despite exploration work on our mineral property, we have not
established that it contains any mineral reserve, and there can be no assurance
that we will be able to do so. If we do not, our business could fail.
A mineral reserve is defined by the Securities and Exchange
Commission in its Industry Guide 7 (which can be viewed over the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7
) as
that part of a mineral deposit which could be economically and legally extracted
or produced at the time of the reserve determination. The probability of an
individual prospect ever having a "reserve" that meets the requirements of the
Securities and Exchange Commissions Industry Guide 7 is extremely remote; in
all probability our mineral resource property does not contain any reserve and
any funds that we spend on exploration will probably be lost.
Even if we do eventually discover a mineral reserve on our
property, there can be no assurance that we will be able to develop our property
into a producing mine and extract those resources. Both mineral exploration and
development involve a high degree of risk and few properties which are explored
are ultimately developed into producing mines.
The commercial viability of an established mineral deposit will
depend on a number of factors including, by way of example, the size, grade and
other attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.
7
Mineral operations are subject to applicable law and
government regulation. Even if we discover a mineral resource in a commercially
exploitable quantity, these laws and regulations could restrict or prohibit the
exploitation of that mineral resource. If we cannot exploit any mineral resource
that we might discover on our property, our business may fail.
Both mineral exploration and extraction require permits from
various foreign, federal, state, provincial and local governmental authorities
and are governed by laws and regulations, including those with respect to
prospecting, mine development, mineral production, transport, export, taxation,
labor standards, occupational health, waste disposal, toxic substances, land
use, environmental protection, mine safety and other matters. There can be no
assurance that we will be able to obtain or maintain any of the permits required
for the continued exploration of our mineral properties or for the construction
and operation of a mine on our properties at economically viable costs. If we
cannot accomplish these objectives, our business could fail.
We believe that we are in compliance with all material laws and
regulations that currently apply to our activities but there can be no assurance
that we can continue to remain in compliance. Current laws and regulations could
be amended and we might not be able to comply with them, as amended. Further,
there can be no assurance that we will be able to obtain or maintain all permits
necessary for our future operations, or that we will be able to obtain them on
reasonable terms. To the extent such approvals are required and are not
obtained, we may be delayed or prohibited from proceeding with planned
exploration or development of our mineral properties.
If we establish the existence of a mineral resource on our
property in a commercially exploitable quantity, we will require additional
capital in order to develop the property into a producing mine. If we cannot
raise this additional capital, we will not be able to exploit the resource, and
our business could fail.
If we do discover mineral resources in commercially exploitable
quantities on our property, we will be required to expend substantial sums of
money to establish the extent of the resource, develop processes to extract it
and develop extraction and processing facilities and infrastructure. Although we
may derive substantial benefits from the discovery of a major deposit, there can
be no assurance that any discovered resource will be large enough to justify
commercial operations, nor can there be any assurance that we will be able to
raise the funds required for development on a timely basis. If we cannot raise
the necessary capital or complete the necessary facilities and infrastructure,
our business may fail.
Mineral exploration and development is subject to
extraordinary operating risks. We do not currently insure against these risks.
In the event of a cave-in or similar occurrence, our liability may exceed our
resources, which would have an adverse impact on our company.
Mineral exploration, development and production involve many
risks which even a combination of experience, knowledge and careful evaluation
may not be able to overcome. Our operations will be subject to all the hazards
and risks inherent in the exploration for mineral resources and, if we discover
a mineral resource in commercially exploitable quantity, our operations could be
subject to all of the hazards and risks inherent in the development and
production of resources, including liability for pollution, cave-ins or similar
hazards against which we cannot insure or against which we may elect not to
insure. Any such event could result in work stoppages and damage to property,
including damage to the environment. We do not currently maintain any insurance
coverage against these operating hazards. The payment of any liabilities that
arise from any such occurrence would have a material adverse impact on our
company.
8
Mineral prices are subject to dramatic and unpredictable
fluctuations.
We expect to derive revenues, if any, either from the sale of
our mineral resource property or from the extraction and sale of ore. The price
of those commodities has fluctuated widely in recent years, and is affected by
numerous factors beyond our control, including international, economic and
political trends, expectations of inflation, currency exchange fluctuations,
interest rates, global or regional consumptive patterns, speculative activities
and increased production due to new extraction developments and improved
extraction and production methods. The effect of these factors on the price of
base and precious metals, and therefore the economic viability of any of our
exploration properties and projects, cannot accurately be predicted.
The mining industry is highly competitive and there is no
assurance that we will continue to be successful in acquiring mineral claims. If
we cannot continue to acquire properties to explore for mineral resources, we
may be required to reduce or cease operations.
The mineral exploration, development, and production industry
is largely un-integrated. We compete with other exploration companies looking
for mineral resource properties. While we compete with other exploration
companies in the effort to locate and acquire mineral resource properties, we
will not compete with them for the removal or sales of mineral products from our
properties if we should eventually discover the presence of them in quantities
sufficient to make production economically feasible. Readily available markets
exist worldwide for the sale of mineral products. Therefore, we will likely be
able to sell any mineral products that we identify and produce.
In identifying and acquiring mineral resource properties, we
compete with many companies possessing greater financial resources and technical
facilities. This competition could adversely affect our ability to acquire
suitable prospects for exploration in the future. Accordingly, there can be no
assurance that we will acquire any interest in additional mineral resource
properties that might yield reserves or result in commercial mining
operations.
Risks Related To Our Company
The fact that we have not earned any operating revenues
since our incorporation raises substantial doubt about our ability to continue
to explore our mineral properties as a going concern.
We have not generated any revenue from operations since our
incorporation and we anticipate that we will continue to incur operating
expenses without revenues unless and until we are able to identify a mineral
resource in a commercially exploitable quantity on our mineral property and we
build and operate a mine. We had cash in the amount of $71,552 as of August 31,
2011 and a working capital deficit of $778,142. We have also incurred a net loss
of $3,500,776 during the year ended August 31, 2011 and a cumulative net loss of
$4,261,623 from our inception on July 20, 2006 through August 31, 2011. We
estimate that our average monthly operating expenses will be approximately
$158,333, including exploration costs, management services and administrative
costs, assuming we recommence exploration or the Cap Gold Project Should the
results of our planned exploration require us to increase our current operating
budget, we may have to raise additional funds to meet our currently budgeted
operating requirements for the next 12 months. As we cannot assure a lender that
we will be able to successfully explore and develop our mineral property, we
will probably find it difficult to raise debt financing from traditional lending
sources. We have traditionally raised our operating capital from sales of equity
securities, but there can be no assurance that we will continue to be able to do
so. If we cannot raise the money that we need to continue exploration of our
mineral property, we may be forced to delay, scale back, or eliminate our
exploration activities. If any of these were to occur, there is a substantial
risk that our business would fail.
9
These circumstances lead our independent registered public
accounting firm, in their report dated May 23, 2012, to comment about our
companys ability to continue as a going concern. Management plans to seek
additional capital through a private placement of its capital stock. These
conditions raise substantial doubt about our companys ability to continue as a
going concern. Although there are no assurances that managements plans will be
realized, management believes that our company will be able to continue
operations in the future. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts of and classification of liabilities that might be
necessary in the event our company cannot continue in existence. We continue to
experience net operating losses.
Risks Associated with Our Common Stock
Trading on the OTC Bulletin Board may be volatile and
sporadic, which could depress the market price of our common stock and make it
difficult for our stockholders to resell their shares.
Our common stock is quoted on the OTC Bulletin Board service of
the Financial Industry Regulatory Authority. Trading in stock quoted on the OTC
Bulletin Board is often thin and characterized by wide fluctuations in trading
prices, due to many factors that may have little to do with our operations or
business prospects. This volatility could depress the market price of our common
stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin
Board is not a stock exchange, and trading of securities on the OTC Bulletin
Board is often more sporadic than the trading of securities listed on a
quotation system like NASDAQ or a stock exchange like NYSE Amex. Accordingly,
shareholders may have difficulty reselling any of their shares.
Our stock is a penny stock. Trading of our stock may be
restricted by the SECs penny stock regulations and FINRAs sales practice
requirements, which may limit a stockholders ability to buy and sell our
stock.
Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. 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 term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers 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 customers
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 purchasers 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. 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.
10
In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, the Financial Industry Regulatory Authority
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 customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the Financial Industry Regulatory Authority believes that there
is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The Financial Industry Regulatory
Authority 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.
Other Risks
Trends, Risks and Uncertainties
We have sought to identify what we believe to be the most
significant risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to our common stock.
Item
1B. Unresolved
Staff Comments
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item
2.
Properties
Executive Offices
Our executive, administrative, and operating offices are
located at 141 Adelaide St. West, Suite 240, Toronto, Ontario, Canada, M5H 3L5.
We believe these facilities are adequate for our current needs. They are free of
charge.
Mineral Properties
The Cap Gold Project
Location and Access
The Cap Gold Project consists of the CAP (14 claims), KAP (2
claims), and the CAPX (173 claims) unpatented mining claims forming a contiguous
block of approximately 3,960 acres (1,602 hectares). The claims are located in
sections 25, 26, 27, 34, 35, and 36, Township 1 South, Range 51 East, and
MDB&M, in Nye County, Nevada. The geographic coordinates are 37°49 North
Latitude, 116°15 West Longitude. The property is in the Reveille Valley on the
pediment east of the Kawich Range on lands administered by the U.S. Department
of the Interior, Bureau of Land Management (BLM), Tonopah District.
Access to the center of the property is by paved, gravel, and
dirt roads. Follow U.S. Highway 6 easterly from Tonopah for 50 miles (80 km) to
a junction with U.S. Highway 375 at Warm Springs. From Warm Springs turn right
(southerly) on Highway 375 for 0.5 mile (0.8 km), thence turn right onto a
graded gravel county road which trends southerly along the southern part of
Reveille Valley for 27 miles (43.5 km). Turn right (westerly) 0.25 miles (0.4
km) south of Willow Witch Well and continue for 3 miles (4.8 km) on a dirt road
into the center of the claim block. From Rachel, Nevada, follow Nevada State
Highway 375 for approximately 15 miles (24.1 km) northwesterly to the eastern
edge of Railroad Valley, turn left and go westerly on a paved road approximately
10 miles (6.2 km). Turn right onto a graded gravel county road that trends
northerly up the Reveille Valley and go approximately 9 miles (14.5 km). Turn
left on the dirt road 0.25 miles (0.4 km) south of the Willow Witch Well and
proceed 3 miles (4.8 km) to the claim block. 4- Wheel drive vehicles or ATVs can
access most areas of the property.
11
Option Agreement
Our company has an option to earn an interest in the Cap Gold
Project through an agreement entered into between our company and Royce L.
Hackworth and Belva L.Tomany. In order to complete the transactions contemplated
by the agreement, we paid $25,000 upon the closing of the agreement and an
additional $100,000 upon satisfaction of our due diligence. The agreement gives
our company the option to acquire a 100% long-term lease interest in the Cap
Gold Project by (i) making ongoing yearly advance production royalty cash
payments during the term of the agreement of $125,000 in years two (2) through
five (5), $150,000 in years six (6) through twelve (12), $200,000 in years 13
through 20 and $300,000 in years 21 through 30; (ii) incurring expenditures on
exploration of the Cap Gold Project of not less than an aggregate of $1,250,000
over five (5) years; and (iii) making production royalty payments from
production from the property after the advance production royalty cash payments
described above have been repaid to our company from production from the
property. The production royalty is based on, at our companys election, a
sliding scale or fixed production royalty basis, which in either case ranges
from 1% to a maximum of 3%. Currently, we do not intend to conduct any further
activity on the Cap Gold Project.
History
Ownership of the property is not known prior to 1987 when
Production Exploration Resources staked 14 CAP claims over several outcrops
containing elevated amounts of mercury and antimony. From 1990 to August 1992
Pegasus Gold Corporation held the property under option. Subsequently Kennecott
Exploration optioned the property in the period of 1994-1996. Redhawk Resources
Inc. leased the property starting October 3, 2003.
Four small prospect pits, dug by unknown persons, had explored
outcroppings prior to the staking of the CAP claims in 1987. During 1988,
Production Exploration Resources drilled 5 reverse circulation (RC) holes
(T-88-1 to T-88-5), totaling 1845 feet (557 meters) on mercury-antimony
anomalies.
Pegasus Gold Corporation completed soil geochemistry and
drilled 29 reverse circulation holes (C1-29) for a total of 12,855 feet (3918
meters). A 5-foot interval (1.5 meters) of 24.4 ppm Au (0.712 oz Au/ton) was
intersected in hole C-6 and a 5-foot interval (1.5 meters) of 11.0 ppm (0.321 oz
Au/ton) in hole C-8. Otherwise only low gold values were obtained. Drill logs
and assay sheets are incomplete, and chips for C1 through C5 were not available.
After the drilling was completed, Pegasus Gold Corporation performed an induced
polarization and resistivity survey over the central part of the target area. A
magnetic survey, also perhaps done after the drilling, suggests magnetic low
patterns near and parallel to the high resistivity trends.
In 1993, Production Exploration Resources drilled an additional
8 reverse circulation holes (T-93-6 to T-93-13) totaling 6270 feet (1912
meters). Significant intersections were cut in holes T-93-8, 6.2 ppm Au (0.181
oz Au/ton) across 10 feet (3 meters), and in hole T-93-9, 6.5 ppm Au (0.190 oz
Au/ton) across 5 feet (1.5 meters).
In 1994-1996, Kennecott drilled 11 reverse circulation holes
(CG-1 to CG-11) for a total of 7905 feet (2411 meters). No high-grade
intersections were obtained, although hole CG-1 intercepted long intervals of
low-grade gold and silver, similar to those found in the Cap Structure,
enclosing six separate 5 foot intervals of >0.4 g/t gold. A soil geochemical
survey was also completed.
In 1996 Newmont Exploration carried out a limited gravity
survey over the central portion of the property.
Production Exploration Resources drilled a further 5 reverse
circulation holes (T-00-14 to T-00-18) in 2000 totaling 6470 feet (1972 meters).
Intersections were cut in hole T-00-15 of 15.4 ppm Au (0.449 oz Au/ton) across
5.0 feet (1.5 meters) and in hole T-00-18 of 31.0 ppm Au (0.904 oz Au/ton)
across 5.0 feet (1.5 meters).
In total 35,345 feet (10,773 meters) of reverse circulation
drilling in 58 holes has been completed since 1988.
12
In 2004 Redhawk Resources Inc. commissioned a gradient array
resistivity (GAR) survey to cover approximately one square mile centered on the
CAP Zone and the area of high gold and silver values encountered in RC drilling.
Spontaneous Potential Gradient (SPG) readings were also recorded during the GAR
survey. Also in June-July 2004, Redhawk drilled five angle, large diameter (HQ
2.5 inch core), core holes across the CAP Zone in the area of the RC drilling
with high precious metal values. The core drill holes were designed to test
below and/or laterally from the previous RC drilling. Drilling in the five core
holes totaled 5,645 feet (1,720 meters) along approximately 1200 feet (365
meters) strike length of the CAP Zone.
There is no known mineral resource or mineral reserve estimates
and there is no known mineral production from the property.
Rock Formations and Mineralization
The Cap Gold Project is situated in the Toiyabe-Kawich
Structural Zone of the Walker Lane Structural Belt. The Walker Lane is a terrain
dominated by a series of parallel to sub-parallel, northwest trending, right
lateral transcurrent faults that cross central and western Nevada. This belt
hosts numerous precious metal districts and deposits; including Bullfrog,
Goldfield, Tonopah, and Comstock Districts, and the Midway, Paradise Peak, and
Rawhide deposits. Estimated production from the volcanic-hosted epithermal gold
and silver deposits within this belt has exceeded 40 million ounces of gold and
540 million ounces of silver.
Mining Districts along the approximately 10 miles wide by 50
miles long Toiyabe-Kawich Structural Zone include (from north to south):
Paradise Peak, Fairplay, Athens, Bell, Republic, Cloverdale, San Antonio,
Baxter-Willow Springs, Midway, Hannapah, Ellendale, Golden Arrow, Silver Bow,
and Eden Creek. The tertiary volcanic-hosted epithermal Cap Gold Project is on
the southern projection of this Zone approximately 12 miles southeast of the
Eden District.
The host rocks are rhyolite to rhyo-dacite to dacite in
composition and of mid-Tertiary age. Precious metal values are hosted in
silicified zones, stockworks, veins, and breccias developed along WNW, ENE, and
E-W structures. Mineralized zones are enveloped by successive argillic and
propylitic alteration haloes.
In 2004 a five hole core drill hole drill program was
undertaken by Redhawk Resources Inc. at Cap Gold. This program confirmed the
presence of high gold grades (15.5 g/t gold over 4 feet in hole AC-2), and
confirmed the presence of long intervals of low grade gold mineralization
intersected in earlier RC drilling programs and increased the knowledge of the
aurific epithermal system at Cap Gold. This program also confirmed the presence
of a large, multi-episodic, precious metal bearing hydrothermal system. In
addition strong argillic and strong silicification zones encountered in drilling
appears to correspond well with the low and high resistivity trends,
respectively, interpreted from the GAR/SPG survey.
There is no known mineral resource or mineral reserve estimates
and there is no known mineral production from the property.
As noted herein, we do not currently intend to conduct any
further exploration on the CAP Gold project, and have provided notice of our
termination of the option agreement.
Item
3.
Legal Proceedings
Other than as noted below, there are no proceedings in which any
of our directors, officers or affiliates, or any registered or beneficial
shareholder, is an adverse party or has a material interest adverse to our
company.
On May 14, 2012 our resident agent was served on our behalf
with a summons in regards to a lawsuit commenced by DOSECC Exploration Services,
LLC. The action has been commenced in District Court, in Nye County, Nevada. The
plaintiff is claiming approximately $200,000 for drilling work done on the Cap
Gold Project. We are currently considering what course of action is warranted in
regards to this recent development, but have not made any final determination.
13
Item
4.
[Removed and Reserved]
PART II
Item 5.
|
Market for Registrants Common Equity, Related
Stockholder Matters and Issuer
Purchases of Equity Securities
|
Our common shares are quoted on the Over-the-Counter (OTC)
Bulletin Board under the symbol APGA. The following quotations, obtained from
Yahoo Finance, reflect the high and low bids for our common shares based on
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.
The high and low bid prices of our common stock for the periods
indicated below are as follows:
OTC Bulletin Board
(1)
|
Quarter Ended
|
High
|
Low
|
February 29, 2012
|
$0.16
|
$0.017
|
November 30, 2011
|
$0.051
|
$0.02
|
August 31, 2011
|
$0.095
|
$0.035
|
May 31, 2011
|
$0.198
|
$0.06
|
February 28, 2011
|
$0.69
|
$0.10
|
November 30, 2010
|
$0.89
|
$0.30
|
August 31, 2010
|
$1.18
|
$0.58
|
May 31, 2010
(3)
|
$1.20
|
$1.01
|
February 28, 2010
|
$N/A
(2)
|
$N/A
(2)
|
November 30, 2009
|
$N/A
(2)
|
$N/A
(2)
|
August 31, 2009
|
$N/A
(2)
|
$N/A
(2)
|
|
(1)
|
Over-the-counter market quotations reflect inter-dealer
prices without retail mark-up, mark- down or commission, and may not
represent actual transactions.
|
|
|
|
|
(2)
|
No trades occurred during this period.
|
|
|
|
|
(3)
|
The first trade in our stock did not occur until March 4,
2010.
|
Our shares are issued in registered form. Nevada Agency and
Transfer Company, 50 West Liberty Street, Suite 880, Reno, Nevada 89501
(Telephone: (775) 322-0626; Facsimile: (775) 322-5623) is the registrar and
agent for our common and preferred shares.
On May 14, 2012, the shareholders list showed 40 registered
shareholders, 1,612,500 common shares outstanding.
Dividend Policy
We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.
14
Recent Sales of Unregistered Securities; Use of Proceeds
from Registered Securities
We did not sell any equity securities which were not registered
under the Securities Act during the year ended August 31, 2011 that were not
otherwise disclosed on our quarterly reports on Form 10-Q or our current reports
on Form 8-K filed during the year ended August 31, 2011.
Equity Compensation Plan Information
We have no long-term incentive plans, other than the Stock
Option Plan described below.
2010 Stock Option Plan
On July 30, 2010, our directors approved the adoption of the
2010 Stock Option Plan which permits our company to issue up to 6,500,000 shares
of our common stock to directors, officers, employees and consultants of our
company upon the exercise of stock options granted under the 2010 Plan. As of
August 31, 2011, there are 5,400,000 options outstanding under the 2010
Plan.
Equity Compensation Plan Information
|
Plan category
|
Number of securities
to
be issued upon exercise
of outstanding options,
warrants and rights
|
Weighted-average
exercise price of
outstanding options,
warrants
and rights
|
Number of securities
remaining available for
future issuance under equity
compensation plans
(excluding securities reflected
in column (a))
|
Equity compensation plans approved by security
holders
|
Nil
|
Nil
|
Nil
|
Equity compensation plans not approved by security
holders
|
5,400,000
|
$1.00
|
Nil
|
Total
|
5,400,000
|
$1.00
|
Nil
|
Purchase of Equity Securities by the Issuer and Affiliated
Purchasers
We did not purchase any of our shares of common stock or other
securities during our fourth quarter of our fiscal year ended August 31, 2011.
Item
6.
Selected Financial Data
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item
7.
Managements Discussion and Analysis of Financial Condition and Results of
Operations
The following discussion should be read in conjunction with our
audited consolidated financial statements and the related notes for the years
ended August 31, 2011 and August 31, 2010 that appear elsewhere in this annual
report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include, but are not limited to
those discussed below and elsewhere in this annual report, particularly in the
section entitled "Risk Factors" beginning on page 7 of this annual report.
15
Our audited consolidated financial statements are stated in
United States Dollars and are prepared in accordance with United States
Generally Accepted Accounting Principles.
Cash Requirements
Over the next 12 months we intend to operate as a business
development company. We anticipate that we will incur the following operating
expenses during this period:
Estimated Funding Required During the Next
12 Months
|
Expense
|
Amount
|
General, Administrative, and Corporate Expenses
|
$200,000
|
Operating Expenses
|
$200,000
|
Exploration
|
$1,500,000
|
Total
|
$1,900,000
|
At present, our cash requirements for the next 12 months
outweigh the funds available to maintain or develop our properties. Of the
$1,900,000 that we require for the next 12 months, we have $71,552 in cash as of
August 31, 2011 and a working capital deficit of $778,141. In order to improve
our liquidity, we plan pursue additional equity financing from private investors
or possibly a registered public offering. With the exception of the ongoing
convertible loan agreement with Monaco Capital Inc. described below, we do not
currently have any definitive arrangements in place for the completion of any
further private placement financings and there is no assurance that we will be
successful in completing any further private placement financings. If we are
unable to achieve the necessary additional financing, then we plan to reduce the
amounts that we spend on our business activities and administrative expenses in
order to be within the amount of capital resources that are available to us.
On April 22, 2010, we entered into a convertible loan agreement
with Monaco Capital Inc., wherein Monaco Capital Inc. has agreed to loan our
company up to $500,000. The loan (including accrued interest) is convertible in
whole or in part into common shares of our company at a conversion price of
$1.05. The loan will bear interest at 10% per annum. The principal amount of the
loan and accrued interest is due and payable one year from the advancement date.
As at November 30, 2010, $400,933 had been advanced under the
loan agreement. The balance sheets at November 30, 2010 and August 31, 2010
recorded the loan value at $394,338 and $240,142, respectively, due to the
unamortized beneficial conversion feature on the convertible debt totaling
$6,595 and $10,791, respectively. On September 7, 2010 and October 13, 2010
Monaco Capital Inc. advanced $100,000 and $50,000, respectively.
On December 6, 2010, Monaco Capital advanced $100,000.
On December 17, 2010, we entered into a convertible loan
agreement with Monaco Capital Inc., wherein Monaco Capital Inc. has agreed to
loan our company up to $5,000,000. The convertible loan agreement replaced the
original agreement with Monaco Capital Inc., dated April 22, 2010 and provided
that the principal of $500,933 advanced under it, along with $20,664 in unpaid,
accrued interest, to and including December 17, 2010, be treated as if issued
under the terms of the new agreement. The loan is unsecured and bears interest
at the rate of 10% per annum payable on the due date. The loan is convertible
into securities of our company at a conversion price calculated as the mean
volume weighted average price for our companys common stock during the ten (10)
trading day period ending on the latest complete trading day prior to the
conversion date. The principal amount of the loan and accrued interest is due
and payable one year from the advancement date. We may at any time during the
term of the loan prepay any sum up to the full amount of the loan and accrued
interest then outstanding for an additional 10% of such amount.
On August 24, 2011, Monaco Capital Inc. advanced $30,000. The
total advanced under the convertible loan is $711,596.
16
On August 29, 2011, J. Trevor Eyton resigned as our chairman.
Mr. Eytons resignation was not the result of any disagreements regarding our
companys operations, policies, practices or other disagreements and he remains
a member of our board of directors. As a result Wayne Parsons was appointed as
our chairman. Hugh H. Aird our chief executive officer agreed to a reduction in
his compensation from $12,500 per month to $2,500 per month.
On August 30, 2011, Monaco Capital Inc. advanced $70,000. The
total advanced under the convertible loan is $781,596.
The total balance outstanding as at August 31, 2011, net of
beneficial convertible feature debt discount, was $779,877.
Purchase of Significant Equipment
We do not anticipate the purchase or sale of any plant or
significant equipment during the next 12 months.
Going Concern
The financial statements included in this filing have been
prepared in conformity with generally accepted accounting principles that
contemplate the continuance of our company as a going concern, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. However, our company is in the exploration stage and,
accordingly, has not generated revenues from operations. As shown on the
accompanying financial statements, our company has incurred a net loss of
$4,261,623 for the period from inception (July 20, 2006) to August 31, 2011.
These conditions raise substantial doubt about our companys ability to continue
as a going concern.
The future of our company is dependent upon its ability to
obtain financing and upon future profitable operations from the development of
its mining activities.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.
Results of Operations for the Years Ended August 31, 2011
and 2010
The following summary of our results of operations should be
read in conjunction with our audited consolidated financial statements for the
years ended August 31, 2011 and 2010.
Our operating results for the years ended August 31, 2011 and
2010 are summarized as follows:
|
|
|
Year Ended
|
|
|
|
|
August 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Operating Expenses
|
$
|
3,423,199
|
|
$
|
674,503
|
|
|
Other Expenses
|
$
|
77,577
|
|
$
|
14,789
|
|
|
Net Income (Loss)
|
$
|
(3,500,776
|
)
|
$
|
(689,292
|
)
|
Expenses
Our operating expenses for the years ended August 31, 2011 and
2010 are outlined in the table below:
17
|
|
|
Year Ended
|
|
|
|
|
August 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Consulting expenses
|
$
|
2,774,909
|
|
$
|
537,230
|
|
|
Exploration
|
$
|
216,344
|
|
$
|
Nil
|
|
|
General and administrative
|
$
|
174,362
|
|
$
|
42,434
|
|
|
Rent expenses
|
$
|
36,153
|
|
$
|
2,000
|
|
|
Management fees
|
$
|
162,389
|
|
$
|
Nil
|
|
|
Professional fees
|
$
|
59,042
|
|
$
|
92,839
|
|
Operating expenses for the year ended August 31, 2011,
increased by 425% as compared to the comparative period in 2010 primarily as a
result of an increase in consulting expenses, general and administrative
expenses, management expenses and exploration expenses.
Equity Compensation
We currently do not have any equity compensation plans or
arrangements. On July 31, 2010 our directors approved the adoption of our 2010
Stock Option Plan which permits our company to grant up to 6,500,000 options to
acquire shares of common stock, to directors, officers, employees and
consultants of our company.
Liquidity and Financial Condition
Working Capital
|
|
|
At August 31,
|
|
|
Percentage
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Increase/Decrease
|
|
|
Current Assets
|
$
|
146,357
|
|
$
|
72,869
|
|
|
100%
|
|
|
Current Liabilities
|
$
|
924,499
|
|
$
|
380,072
|
|
|
143%
|
|
|
Working Capital Deficit
|
$
|
(778,142
|
)
|
$
|
(307,203
|
)
|
|
153%
|
|
|
Cash Flows
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
August 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Net Cash Used in Operating Activities
|
$
|
(770,133
|
)
|
$
|
(176,546
|
)
|
|
Net Cash Used in Investing Activities
|
$
|
(126,290
|
)
|
$
|
(151,313
|
)
|
|
Net Cash Provided by Financing Activities
|
$
|
965,829
|
|
$
|
322,586
|
|
|
Decrease in Cash during the Period
|
$
|
69,406
|
|
$
|
(5,273
|
)
|
As of August 31, 2011, our company had working capital deficit
of $778,142.
Contractual Obligations
As a smaller reporting company, we are not required to
provide tabular disclosure obligations.
18
Critical Accounting Policies
Our financial statements and accompanying notes have been
prepared in conformity with accounting principles generally accepted in the
United States of America for financial statements. Preparing financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue, and expenses. These estimates
and assumptions are affected by managements application of accounting policies.
We believe that understanding the basis and nature of the estimates and
assumptions involved with the following aspects of our financial statements is
critical to an understanding of our financials.
Accounting estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and cash equivalents
For purposes of the statement of cash flows, our company
considers highly liquid financial instruments purchased with a maturity of three
months or less to be cash equivalents.
Capitalized interest
Our company capitalizes interest (Nil in 2011 and 2010) on
expenditures made in connection with exploration and development projects that
are not subject to current amortization. Interest is capitalized only for the
period that activities are in progress to bring the projects to their intended
use.
Fair value of financial instruments
The table below presents the carrying value and fair value of
our companys financial instruments.
The fair value represents managements best estimates based on
a range of methodologies and assumptions. The carrying value of receivables and
payables arising in the ordinary course of business and the receivable from
taxing authorities, approximate fair value because of the relatively short
period of time between their origination and expected realization.
|
|
|
|
|
Quoted
|
|
|
Significant
|
|
|
Significant
|
|
|
|
|
|
|
Prices in
|
|
|
Other
|
|
|
Unobservable
|
|
|
|
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
|
Carrying value
|
|
|
|
|
|
|
|
|
|
|
|
|
August 31, 2011
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
$
|
49,669
|
|
$
|
49,669
|
|
$
|
-
|
|
$
|
-
|
|
Excise tax receivable
|
|
35,176
|
|
|
35,176
|
|
|
-
|
|
|
-
|
|
Prepaid and deposits
|
|
39,629
|
|
|
-
|
|
|
39,629
|
|
|
-
|
|
Equipment (net)
|
|
1,075
|
|
|
-
|
|
|
1,075
|
|
|
-
|
|
Website (net)
|
|
14,618
|
|
|
-
|
|
|
14,618
|
|
|
-
|
|
Mining claims
|
|
250,000
|
|
|
-
|
|
|
250,000
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
122,739
|
|
|
122,739
|
|
|
-
|
|
|
-
|
|
Accounts payable - related parties
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Convertible notes - related parties
|
|
779,877
|
|
|
-
|
|
|
779,877
|
|
|
-
|
|
19
|
|
August 31, 2010
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
$
|
2,146
|
|
$
|
2,146
|
|
$
|
-
|
|
$
|
-
|
|
Prepaid and deposits
|
|
70,723
|
|
|
-
|
|
|
70,723
|
|
|
-
|
|
Website (net)
|
|
23,389
|
|
|
-
|
|
|
23,389
|
|
|
-
|
|
Mining claims
|
|
125,000
|
|
|
-
|
|
|
125,000
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
76,023
|
|
|
-
|
|
|
76,023
|
|
|
-
|
|
Accounts payable - related parties
|
|
1,000
|
|
|
-
|
|
|
1,000
|
|
|
-
|
|
Convertible notes - related parties
|
|
240,142
|
|
|
-
|
|
|
240,142
|
|
|
-
|
|
Notes payable
|
|
62,907
|
|
|
-
|
|
|
62,907
|
|
|
-
|
|
Income taxes
Our company accounts for our income taxes in accordance with
FASB ASC 740 "Income Taxes", which requires recognition of deferred tax assets
and liabilities for future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax basis and tax credit carry-forwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in operations in the period that includes the
enactment date. Our company has a net operating loss carry-forward to be used in
future years. Our company has established a valuation allowance for the full tax
benefit of the operating loss carry-forwards due to the uncertainty regarding
realization.
Net loss per common share
Our company computes net loss per share in accordance with FASB
ASC 260 "Earnings per Share". Under the provisions of FASB ASC 260 "Earnings per
Share", basic net loss per share is computed by dividing the net loss available
to common stockholders for the period by the weighted average number of shares
of common stock outstanding during the period. The calculation of diluted net
loss per share gives effect to common stock equivalents; however, potential
common shares are excluded if their effect is anti-dilutive. For the period from
Inception (July 20, 2006) through August 31, 2011, common stock equivalents are
the rights conferred upon Monaco Capital Inc. pursuant to the convertible loan
agreement (Note 7) and those arising from the 2010 Stock Option Plan (Note 9).
These stock equivalents were not included as their effect was anti-dilutive for
the periods presented.
Stock-based compensation
On August 1, 2009, our company adopted the fair value
recognition provisions of FASB ASC 718-10 and 505-10. Our company accounts for
equity instruments issued in exchange for the receipt of goods or services from
other than employees in accordance with FASB ASC 718-10 and the conclusions
reached in FASB ASC 505-10. Costs are measured at the estimated fair market
value of the consideration received or the estimated fair value of the equity
instruments issued, whichever is more reliably measurable. The value of equity
instruments issued for consideration other than employee services is determined
on the earliest of a performance commitment or completion of performance by the
provider of goods or services as defined by FASB ASC 505-10.
Our company records stock based compensation in accordance with
the guidance in ASC 718. ASC Topic 718 requires our company to recognize expense
related to the fair value of our employee stock option awards. This eliminates
accounting for share-based compensation transactions using the intrinsic value
and requires instead that such transactions be accounted for using a
fair-value-based method. Our company recognizes the cost of all share-based
awards on a graded vesting basis over the vesting period of the award.
20
Concentration of credit risk
Our company places our cash and cash equivalents with high
credit quality financial institutions. Our company obtained financing during the
year from Monaco Capital Inc. which holds 51% of our companys common shares.
The balance of the loan as at August 31, 2011 was $779,877.
Recent accounting pronouncements
Our company has evaluated the recent accounting pronouncements
through April 2012 and believes that none of them will have a material effect on
the companys financial position, results of operations or cash flows.
Item
7A.
Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we are not required to
provide the information required by this Item.
Item
8.
Financial Statements and Supplementary Data
21
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES INC.)
FINANCIAL STATEMENTS
August 31, 2011
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
American
Paramount Gold Corp.
We have audited the accompanying balance sheets of American
Paramount Gold Corp. (An exploration Stage Company) as of August 31, 2011 and
2010 and the related statements of operations, stockholders equity (deficit),
and cash flows for the years then ended and from inception (July 20, 2006) to
August 31, 2011. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The company
is not required to have, nor were we engaged to perform an audit of its internal
control over financial reporting. Our 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 companys internal control over the
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 audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of American
Paramount Gold Corp. (A Development Stage Company) as of August 31, 2011 and
2010 and the results of its operation and its cash flow for the years then ended
and from inception (July 20, 2006) to August 31, 2011, in conformity with
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 2 to
the financial statements, the Company has suffered recurring losses from
operations, which raise substantial doubt about its ability to continue as a
going concern. Managements 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.
De Joya Griffith & Company, LLC
/s/ De Joya Griffith & Company, LLC
Henderson,
Nevada
May 23, 2012
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
BALANCE SHEETS
(Stated in U.S. Dollars)
|
|
August 31
|
|
|
August 31
|
|
|
|
2011
|
|
|
2010
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
ASSETS
|
|
Current Assets
|
|
|
|
|
|
|
Cash
|
|
71,552
|
|
|
2,146
|
|
Excise Tax receivable
|
|
35,176
|
|
|
-
|
|
Prepaid and deposit
|
|
39,629
|
|
|
70,723
|
|
Total current assets
|
|
146,357
|
|
|
72,869
|
|
|
|
|
|
|
|
|
Mining claims
|
|
250,000
|
|
|
125,000
|
|
|
|
|
|
|
|
|
Website (net)
|
|
14,618
|
|
|
23,389
|
|
|
|
|
|
|
|
|
Equipment (net)
|
|
1,075
|
|
|
-
|
|
|
|
|
|
|
|
|
Total Assets
|
|
412,050
|
|
|
221,258
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
Current Liabilities
|
|
|
|
|
|
|
Bank overdraft
|
|
21,882
|
|
|
-
|
|
Accounts payable and accrued liabilities
|
|
122,740
|
|
|
76,023
|
|
Account payable - related party
|
|
-
|
|
|
1,000
|
|
Notes payable
|
|
-
|
|
|
62,907
|
|
Convertible loan payable - related party,
net
of unamortized discount of $1,719 (2010 - $10,791)
|
|
779,877
|
|
|
240,142
|
|
Total current liabilities
|
|
924,499
|
|
|
380,072
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
924,499
|
|
|
380,072
|
|
|
|
|
|
|
|
|
STOCKHOLDERSDEFICIT
|
|
Common stock
3,750,000
authorized shares, par value $0.001
1, 612,500 and 1,600,000
shares issued and outstanding
As at August 31, 2011 and
August 31, 2010 respectively
|
|
1,613
|
|
|
1,600
|
|
Additional paid-in-capital
|
|
3,291,370
|
|
|
620,433
|
|
Stock Payable
|
|
476,191
|
|
|
-
|
|
Deficit accumulated during exploration stage
|
|
(4,281,623
|
)
|
|
(780,847
|
)
|
Total Stockholders Deficit
|
|
(512,449
|
)
|
|
(158,814
|
)
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders Deficit
|
|
412,050
|
|
|
221,258
|
|
See accompanying notes to the financial statements
24
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Stated in U.S. Dollars)
|
|
|
|
|
|
|
|
From Inception
|
|
|
|
|
|
|
|
|
|
(July 20, 2006)
|
|
|
|
Twelve Months Ended
|
|
|
to
|
|
|
|
August 31
|
|
|
August 31
|
|
|
August 31
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
2,774,909
|
|
|
537,230
|
|
|
3,312,139
|
|
Exploration
|
|
216,344
|
|
|
-
|
|
|
233,844
|
|
General and administrative
|
|
174,362
|
|
|
42,434
|
|
|
217,604
|
|
Rent - related party
|
|
36,153
|
|
|
2,000
|
|
|
43,653
|
|
Management fees
|
|
162,389
|
|
|
-
|
|
|
162,389
|
|
Professional fees
|
|
59,042
|
|
|
92,839
|
|
|
199,628
|
|
Total operating expenses
|
|
3,423,199
|
|
|
674,503
|
|
|
4,169,257
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from operations
|
|
(3,423,199
|
)
|
|
(674,503
|
)
|
|
(4,169,257
|
)
|
|
|
|
|
|
|
|
|
|
|
Other expenses
|
|
|
|
|
|
|
|
|
|
Amortization of debt discount
|
|
9,072
|
|
|
6,042
|
|
|
15,114
|
|
Interest
|
|
68,505
|
|
|
8,747
|
|
|
77,252
|
|
Total other expenses
|
|
77,577
|
|
|
14,789
|
|
|
92,366
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(3,500,776
|
)
|
|
(689,292
|
)
|
|
(4,261,623
|
)
|
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS PER COMMON SHARE
|
$
|
(2.18
|
)
|
$
|
(0.43
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - BASIC
|
|
1,604,281
|
|
|
1,600,000
|
|
|
|
|
See accompanying notes to the financial statements
25
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
Statement of
Stockholders Equity (Deficit)
from Inception (July 20, 2006) to
August 31, 2011
(Stated in U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
accumulated
|
|
|
|
|
Common
Stock
|
|
Paid in
|
|
Stock
|
|
during the
|
|
|
|
|
Number
|
|
Amount
|
|
Capital
|
|
Payable
|
|
Exploration
Stage
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, July 20, 2006
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued for cash at $0.0005 per share on July 26, 2006
|
|
1,000,000
|
|
1,000
|
|
39,000
|
|
|
|
(20,000)
|
|
20,000
|
Net loss
|
|
|
|
|
|
|
|
|
|
(18,575)
|
|
(18,575)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2006
|
|
1,000,000
|
|
1,000
|
|
39,000
|
|
|
|
(38,575)
|
|
1,425
|
Issued for cash at $0.0025 per share on December 20, 2006
|
|
600,000
|
|
600
|
#
|
59,400
|
|
|
|
|
|
60,000
|
Net loss
|
|
|
|
|
|
|
|
|
|
(15,058)
|
|
(15,058)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2007
|
|
1,600,000
|
|
1,600
|
|
98,400
|
|
|
|
(53,633)
|
|
46,367
|
Net loss
|
|
|
|
|
|
|
|
|
|
(20,102)
|
|
(20,102)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2008
|
|
1,600,000
|
|
1,600
|
|
98,400
|
|
|
|
(73,735)
|
|
26,265
|
Net loss
|
|
|
|
|
|
|
|
|
|
(17,820)
|
|
(17,820)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,600,000
|
|
1,600
|
|
98,400
|
|
|
|
(91,555)
|
|
8,445
|
Beneficial conversion feature
|
|
|
|
|
|
16,833
|
|
|
|
|
|
16,833
|
Share-based compensation
|
|
|
|
|
|
505,200
|
|
|
|
|
|
505,200
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,600,000
|
|
1,600
|
|
620,433
|
|
|
|
(780,847)
|
|
(158,814)
|
Issued for cash at $0.10 per share, net of issuance cost
|
|
-
|
|
-
|
|
-
|
|
476,191
|
|
-
|
|
476,191
|
Issued to settle debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
13
|
|
67,488
|
|
|
|
-
|
|
67,500
|
Share based compensation
|
|
|
|
|
|
2,603,450
|
|
|
|
-
|
|
2,603,450
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, August 31, 2011
|
|
1,612,500
|
|
1,613
|
|
3,291,370
|
|
476,191
|
|
(4,281,623)
|
|
(512,449)
|
See accompanying notes to the financial statements
26
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
|
|
|
|
|
|
|
|
From Inception
|
|
|
|
|
|
|
|
|
|
(July 20, 2006)
|
|
|
|
Twelve Months Ended
|
|
|
to
|
|
|
|
August 31
|
|
|
August 31
|
|
|
August 31
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(3,500,776
|
)
|
|
(689,292
|
)
|
|
(4,261,623
|
)
|
Adjustments to reconcile net loss to net cash
|
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Amortization of website
|
|
8,771
|
|
|
2,924
|
|
|
11,695
|
|
Depreciation of
equipment
|
|
215
|
|
|
-
|
|
|
215
|
|
Share based compensation
|
|
2,603,450
|
|
|
505,200
|
|
|
3,108,650
|
|
Shares issued to
settle debt
|
|
67,500
|
|
|
-
|
|
|
67,500
|
|
Amortized debt discount
|
|
9,072
|
|
|
6,042
|
|
|
15,114
|
|
Change in operating assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
Increase in excise tax receivable
|
|
(35,176
|
)
|
|
-
|
|
|
(35,176
|
)
|
Decrease (increase)
in prepaids
|
|
31,094
|
|
|
(69,047
|
)
|
|
(39,629
|
)
|
Increase (decrease)
in accounts payable and accrued liabilities
|
|
46,717
|
|
|
67,127
|
|
|
112,994
|
|
Increase in accounts
payable - related party
|
|
(1,000
|
)
|
|
500
|
|
|
1,000
|
|
NET CASH FLOWS USED IN
OPERATING ACTIVITIES
|
|
(770,133
|
)
|
|
(176,546
|
)
|
|
(1,019,260
|
)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Mining claims
|
|
(125,000
|
)
|
|
(125,000
|
)
|
|
(250,000
|
)
|
Website
|
|
-
|
|
|
(26,313
|
)
|
|
(26,313
|
)
|
Equipment
|
|
(1,290
|
)
|
|
-
|
|
|
(1,290
|
)
|
NET CASH FLOWS USED IN
INVESTING ACTIVITIES
|
|
(126,290
|
)
|
|
(151,313
|
)
|
|
(277,603
|
)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Bank overdraft
|
|
21,882
|
|
|
-
|
|
|
21,882
|
|
Convertible loan proceeds - related
party
|
|
530,663
|
|
|
259,679
|
|
|
790,342
|
|
Notes payable
|
|
(62,907
|
)
|
|
62,907
|
|
|
-
|
|
Proceeds on sale of common stock
|
|
476,191
|
|
|
-
|
|
|
556,191
|
|
NET CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
965,829
|
|
|
322,586
|
|
|
1,368,415
|
|
|
|
|
|
|
|
|
|
|
|
Net change in Cash
|
|
69,406
|
|
|
(5,273
|
)
|
|
71,552
|
|
|
|
|
|
|
|
|
|
|
|
CASH, BEGINNING OF THE PERIOD
|
|
2,146
|
|
|
7,419
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
CASH, END OF THE PERIOD
|
|
71,552
|
|
|
2,146
|
|
|
71,552
|
|
|
|
|
|
|
|
|
|
|
|
NON CASH FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Beneficial conversion feature
|
|
-
|
|
|
16,833
|
|
|
16,833
|
|
Shares issued to
settle accounts payable
|
|
67,500
|
|
|
-
|
|
|
67,500
|
|
See accompanying notes to the financial statements
27
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
1. DESCRIPTION OF THE BUSINESS AND HISTORY
American Paramount Gold Corp., a Nevada corporation,
(hereinafter referred to as the "Company" or "APGC") was incorporated in the
State of Nevada on July 20, 2006. The Company was formed to engage in the
acquisition, exploration and development of natural resource properties of
merit. The Company acquired a mineral claims option located in the Province of
British Columbia, Canada during the period ending August 31, 2006 for $15,000.
The Company entered into a Mineral Property Options Agreement (the "MPOA") with
a private British Columbia company, whereby the Company obtained an option to
acquire mineral claims known as "Astro 2006" located in British Columbia. During
the period ending August 31, 2009, the Company terminated the MPOA and relieved
itself from any further obligations there under.
On September 12, 2008, Karl Kottmeier resigned as our
President, Chief Executive Officer, Treasurer, and Chief Financial Officer. As a
result, on September 12, 2008, we appointed Dan Gravelle as President, Chief
Executive Officer, Treasurer, and Chief Financial Officer of the Company.
Additionally, Mr. Gravelle was appointed a director of the Company.
On December 1, 2008, Karl Kottmeier resigned as a director of
the Company.
On November 30, 2009, we appointed Mr. Peter Jenks as a member
of our board of directors.
On February 26, 2010, Monaco Capital Inc. acquired a
controlling interest in our Company by purchasing 20,000,000 shares of our
common stock in a private transaction.
On March 17, 2010, the Company filed a Plan of Merger, Merger
Agreement and Certificate of Change with the Nevada Secretary of State to affect
a forward stock split of its common shares on a 2 new for 1 old basis and to
change its name to American Paramount Gold Corp. These changes were approved by
FINRA effective April 12, 2010. As a result, our authorized capital increased
from 75,000,000 to 150,000,000 shares of common stock and our issued and
outstanding increased from 32,000,000 shares of common stock to 64,000,000
shares of common stock, all with a par value of $0.001.
On April 14, 2010, we appointed Wayne Parsons as a member of
the board of directors and as our President, Chief Executive Officer, Treasurer,
Secretary and Chief Financial Officer.
On April 14, 2010, Dan Gravelle resigned as our President,
Chief Executive Officer, Treasurer, Secretary and Chief Financial Officer.
On April 14, 2010, we entered into a consulting agreement with
Wayne Parsons whereby the Company agreed to make monthly payments of Cdn. $1,500
and to grant 1,000,000 options to acquire 1,000,000 shares of our common stock
at a purchase price of US $1.00 per share. (Note 9 Stock Options)
28
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
1. DESCRIPTION OF THE BUSINESS AND HISTORY (continued)
On April 16, 2010, the Company entered into an agreement with
Royce L. Hackworth and Belva L. Tomany in respect of 189 unpatented mining
claims situated in the Walker Lane Structural Belt in Nye County, Nevada (the
"Cap Gold Project"). In order to complete the transactions contemplated by the
Agreement, the Company paid $125,000 to secure the option. (Note 4 Mineral
Properties)
On April 22, 2010, we entered into a convertible loan agreement
with Monaco Capital Inc., wherein Monaco Capital Inc. has agreed to loan our
Company up to $500,000. The loan (including accrued interest) is convertible
into common shares of our Company at a conversion price of $1.05 and will bear
interest of 10% per annum. The principal amount of the loan and accrued interest
is due and payable one year from the advancement date. At August 31, 2010,
Monaco Capital Inc. has advanced $250,933. The balance sheet at August 31, 2010
records the loan value at $240,142 due to the unamortized beneficial conversion
feature of $10,791 (Note 7 Convertible Loan- Related Party).
On April 27, 2010, we appointed Mr. John Goodwin to the board
of directors.
On July 19, 2010 we increased the numbers of directors on our
board of directors from three to four and appointed J. Trevor Eyton to fill the
ensuing vacancy.
On July 30, 2010 our directors approved the adoption of the
2010 Stock Option Plan which permits our Company to issue up to 6,500,000 shares
of our common stock to directors, officers, employees and consultants of our
Company upon the exercise of stock options granted under the 2010 Plan. (Note 9
Stock Options)
On August 30, 2010, Wayne Parsons resigned as our secretary and
treasurer. Concurrently on September 29, 2010, the consulting agreement dated
April 14, 2010 between Mr. Parsons and the Company was terminated. In connection
with the termination of the consulting agreement the Company agree to cancel
1,000,000 fully vested stock options with an exercise price of $1.00 that were
issued to Mr. Parsons on April 14, 2010 as compensation under the consulting
agreement, and to issue to Mr. Parsons 1,000,000 fully vested stock options
under the 2010 Stock Plan. The 1,000,000 options under the 2010 Stock Plan were
issued on October 6, 2010 and are exercisable at a price of $0.68 until October,
2015. The 1,000,000 options issued on April 14, 2010 were cancelled effective
November 18, 2010. (Note 9 Stock Options)
On August 30, 2010 we increased the number of directors on our
board of directors from four to seven and appointed Hugh Aird, Dr. H. Neville
Rhoden and Leland Verner to fill the ensuing vacancies.
At August 31, 2010 our board of directors consists of 7
directors including Peter Jenks, Wayne Parsons, John Goodwin, J. Trevor Eyton,
Hugh Aird, Dr. H. Neville Rhoden, and Leland Verner.
29
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
1. DESCRIPTION OF THE BUSINESS AND HISTORY (continued)
On September 7, 2010, and October 13, 2010 Monaco Capital Inc.
advanced $100,000 and $50,000 respectively. The total advanced under the
convertible Loan is $400,933.
On September 27, 2010, Peter Jenks and John Goodwin each
resigned as members of our board of directors. Mr. Jenks and Mr. Goodwins
resignations were not the result of any disagreements regarding the Companys
operations, policies, practices or other disagreements.
On September 29, 2010, Wayne Parsons resigned as our president,
chief executive officer and chief financial officer. Mr. Parsons resignation
was not the result of any disagreements regarding the Companys operations,
policies, practices or other disagreements and he remains a member of our board
of directors. As a result on September 29, 2010, we appointed Hugh Aird as our
president and chief executive officer and Ann Dumyn as our chief financial
officer.
On October 6, 2010 we granted an aggregate of 5,400,000 stock
options to ten individuals including directors, owners, consultants and
employees pursuant to our 2010 Stock Plan at an exercise price of $0.68 per
share. Of the 5,400,000 stock options, 400,000 options are exercisable until
October 5, 2012 and 5,000,000 options are exercisable until October 6, 2015. We
issued the stock options to seven (7) non-U.S. persons (as that term is defined
in Regulation S of the Securities Act of 1933) in an offshore transaction
relying on Regulation S and/or Section 4(2) of the Securities Act of 1933 and to
three (3) U.S. persons (as that term is defined in Regulation S of the
Securities Act of 1933) relying upon Rule 506 of Regulation D of the Securities
Act of 1933. (Note 9 Stock Options)
On December 6, 2010 Monaco Capital Inc. advanced $100,000. The
total advanced under the Convertible Loan is $500,933.
On December 9, 2010 the Company, having performed the due
diligence required to acquire the Kisita Gold Mine Property advised Lonsdale
Acquisition Corporation that it declined to proceed with the purchase agreement
under its current terms and conditions.
On December 16, 2010 Leland Verner resigned as a member of our
board of directors. Mr. Verners resignation was not the result of any
disagreements regarding the Companys operations, policies, practices or other
disagreements.
30
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
1. DESCRIPTION OF THE BUSINESS AND HISTORY (continued)
On December 17, 2010 the Company entered into a Convertible
Loan agreement with Monaco Capital Inc., majority shareholder, for a principal
amount of up to $5,000,000 for a term of one year. The convertible loan
agreement replaced the original agreement with Monaco Capital Inc., dated April
22, 2010 and provided that the principal of $500,933 advanced under it, along
with $20,664 in unpaid, accrued interest, to and including December 17, 2010 be
treated as if issued under the terms of the new agreement. The loan is unsecured
and shall bear interest at the rate of I0% per annum payable on the due date.
The Company may at any time during the term of the loan prepay any sum up to the
full amount of the loan and accrued interest then outstanding at any time for an
additional 10% of such amount. The loan (including accrued interest) is
convertible into securities of the Company at a conversion price calculated as
the mean volume weighted average price for the Companys common stock during the
ten (10) trading day period ending on the latest complete trading day prior to
the conversion date. At any time after the advancement date, if the Company has
not paid the loan and accrued interest in full, the Lender may, by providing
written notice to the Company, exercise its rights of conversion in respect of
either a portion of the total outstanding amount of the loan as of that date
into shares of the Company. (Note 7 Convertible Loan - Related Party)
On December 29, 2010, Monaco Capital Inc. advanced $100,000.
The total advanced under the Convertible Loan is $621,596.
On February 15, 2011, Monaco Capital Inc. advanced $60,000. The
total advanced under the Convertible Loan is $681,596.
On March 1, 2011, the Company entered into a consulting
agreement with IIIyria Inc., (whose executive, Leland Verner, is a former
director of the Company) to provide strategic planning and business development
services to the Company. The agreement has a term ending December 31, 2012 and a
fee of $120,000 per annum with eligibility for additional compensation in the
form of warrants or options at the discretion of the Company.
On March 1, 2011, the Company entered into a consulting
agreement with Wayne Parsons, a director of the Company, to provide strategic
planning and business development services to the Company. The agreement has a
term ending December 31, 2012 and a fee of $60,000 per annum with eligibility
for additional compensation in the form of warrants or options at the discretion
of the Company.
31
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
1. DESCRIPTION OF THE BUSINESS AND HISTORY (continued)
On March 2, 2011, the Company approved a Private Placement
Offering (the "Offering") to sell up to a maximum of 40,000,000 units ("Units")
of the Companys securities at $0.10 per Unit, each Unit consisting of one
common share (a "Share") and one-half of one common share purchase warrant (each
whole warrant a "Warrant") entitling the holder to subscribe for one Share at a
price of $0.15 per Share for a period of 18 months from closing. The Offering
was made pursuant to Section 4(2) of the Securities Act of 1933 and applicable
exemptions in other jurisdictions to Accredited Investors.
On March 2, 2011, the Company cancelled 5,400,000 stock options
previously granted on October 6, 2010 to various directors, officers, and
consultants of the Company pursuant to our 2010 Stock Plan. The cancelled
options constituted all of the active stock options of the Company as at the
cancellation date and were variably exercisable for a term of 2 or 5 years at an
exercise price of $0.68 per share. The cancellations were made in accordance
with cancellation agreements between the Company and the respective option
holders. (Note 9 Stock Options)
On March 2, 2011, we granted 5,150,000 stock options to the
officers, directors, and consultants of the Company in accordance with our 2010
Stock Plan, at an exercise price of $0.12 per share. Of the 5,150,000 stock
options, 150,000 options are exercisable until March 2, 2013 and 5,000,000
options are exercisable until March 2, 2016. These stock options all vest
immediately. (Note 9 Stock Options)
On March 28, 2011 and April 19, 2011, Accredited Investors
purchased an aggregate of 5,000,000 Units of the Companys securities under the
Private Placement Offering for net proceeds of $471,191.
On April 11, 2011, the Company issued 500,000 restricted common
shares of the Company in full satisfaction of the debt owed to Investors
Resource Group ("IRG") in the amount of $180,000 which accrued pursuant to a
consulting agreement between IRG and the Company.
On May 1, 2011, the Company entered into a consulting agreement
with Stephen Cook to provide general business, investor relations and marketing
services to the Company. The agreement has a term ending October 31, 2011 and a
fee of $3,500 per month with a signing bonus of 500,000 common shares of the
Company.
On May 1, 2011, the Company entered into a consulting agreement
with Ann Dumyn to provide the services of Secretary, Treasurer and Chief
Financial Officer to the Company. The agreement can be terminated by either
party upon 30 days written notice. The Company will pay a fee of $5,000 per
month.
On May 1, 2011, the Company entered into a consulting agreement
with with Hugh H. Aird to provide the services of President to the Company. The
Company will pay a fee of $12,500 per month with a signing bonus of $35,000.
32
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
1. DESCRIPTION OF THE BUSINESS AND HISTORY (continued)
On June 9, 2011, the Company approved the sale of 2,000,000
common shares at $0.0005 per share to each of two directors, Hugh H. Aird and J.
Trevor Eyton, subject to the transactions being reviewed by the Companys legal
counsel for eligibility under any legal and regulatory requirements.
On June 27, 2011, the Company terminated the consulting
agreement with Ann Dumyn, by giving 30 days notice pursuant to the consulting
agreement.
On July 14, 2011, the Company appointed Wayne Parsons,
director, as Chief Financial Officer and Secretary Treasurer.
On August 24, 2011, Monaco Capital Inc. advanced $30,000. The
total advanced under the Convertible Loan is $711,596.
On August 29, 2011, J. Trevor Eyton resigned as our chairman.
Mr. Eytons resignation was not the result of any disagreements regarding the
Companys operations, policies, practices or other disagreements and he remains
a member of our board of directors. As a result Wayne Parsons was appointed as
our chairman. Hugh H. Aird our chief executive officer agreed to a reduction in
his compensation from $12,500 per month to $2,500 per month.
On August 30, 2011, Monaco Capital Inc. advanced $70,000. The
total advanced under the Convertible Loan is $781,596.
THE COMPANY TODAY
- The Company is an exploration stage
enterprise, as defined in FASB ASC 915-10 "Development Stage Entities".
As an exploration stage mining company we are engaged in the
identification, acquisition, and exploration of metals and minerals with a focus
on gold mineralization. Our current operational focus is to conduct exploration
activities on the Cap Gold Project and to complete the terms of the Cap Gold
option agreement (Note 4 Mineral Properties).
2. BASIS OF PRESENTATION AND GOING CONCERN
The balance sheet presented is that of the Company for the year
ended August 31, 2011 and 2010. The statements of operations, cash flows and
stockholders equity (deficit) reflect the changes in stockholders equity
(deficit), the results of operations and the changes in cash flows of the
Company for the year ended August 31, 2011 and 2010 and from inception (July 20,
2006) to August 31, 2011.
These accompanying financial statements have been prepared by
management, who is responsible for their content, in accordance with accounting
principles generally accepted in the United States of America.
33
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
The Company has not generated any revenue in the current year
and has accumulated substantial losses, and require additional funds to maintain
its operations. Managements plans in this regard are to raise equity and/or
debt financing as required.
Going concern
These financial statements have been prepared in accordance
with accounting principles generally accepted in the United States applicable to
a going concern, which contemplates the realization of assets and the
satisfaction of liabilities and commitments in the normal course of business.
The Company has incurred a net loss of $3,500,776 and $689,292 for the years
ended August 31, 2011 and 2010. At August 31, 2011 and 2010, the Company had a
deficit accumulated of $4,281,623 and $780,847, respectively. Since Inception
(July 20, 2006) to August 31, 2011, the Company has commenced limited
operations, raising substantial doubt about the Companys ability to continue as
a going concern. The Company will seek additional sources of capital through the
issuance of debt or equity financing, but there can be no assurance the Company
will be successful in accomplishing its objectives.
The ability of the Company to continue as a going concern is
dependent on additional sources of capital and the success of the Companys
plan. The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, or amounts and
classification of liabilities that might result from the outcome of this
uncertainty.
3. SIGNIFICANT ACCOUNTING POLICIES
Accounting estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Cash and cash equivalents
For purposes of the statement of cash flows, the Company
considers highly liquid financial instruments purchased with a maturity of three
months or less to be cash equivalents.
Capitalized interest
The Company capitalizes interest (Nil in 2011 and 2010) on
expenditures made in connection with exploration and development projects that
are not subject to current amortization. Interest is capitalized only for the
period that activities are in progress to bring the projects to their intended
use.
34
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
Fair value of financial instruments
The table below presents the carrying value and fair value of
the Companys financial instruments.
The fair value represents managements best estimates based on
a range of methodologies and assumptions. The carrying value of receivables and
payables arising in the ordinary course of business and the receivable from
taxing authorities, approximate fair value because of the relatively short
period of time between their origination and expected realization.
|
|
|
|
|
Quoted
|
|
|
Significant
|
|
|
Significant
|
|
|
|
|
|
|
Prices in
|
|
|
Other
|
|
|
Unobservable
|
|
|
|
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
|
Carrying value
|
|
|
|
|
|
|
|
|
|
|
|
|
August 31, 2011
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
$
|
49,669
|
|
$
|
49,669
|
|
$
|
-
|
|
$
|
-
|
|
Excise tax receivable
|
|
35,176
|
|
|
35,176
|
|
|
-
|
|
|
-
|
|
Prepaid and deposits
|
|
39,629
|
|
|
-
|
|
|
39,629
|
|
|
-
|
|
Equipment (net)
|
|
1,075
|
|
|
-
|
|
|
1,075
|
|
|
-
|
|
Website (net)
|
|
14,618
|
|
|
-
|
|
|
14,618
|
|
|
-
|
|
Mining claims
|
|
250,000
|
|
|
-
|
|
|
250,000
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
|
|
|
|
|
|
|
|
|
|
|
|
|
accrued expenses
|
|
122,739
|
|
|
122,739
|
|
|
-
|
|
|
-
|
|
Accounts payable - related parties
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Convertible notes - related parties
|
|
779,877
|
|
|
-
|
|
|
779,877
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 31, 2010
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
$
|
2,146
|
|
$
|
2,146
|
|
$
|
-
|
|
$
|
-
|
|
Prepaid and deposits
|
|
70,723
|
|
|
-
|
|
|
70,723
|
|
|
-
|
|
Website (net)
|
|
23,389
|
|
|
-
|
|
|
23,389
|
|
|
-
|
|
Mining claims
|
|
125,000
|
|
|
-
|
|
|
125,000
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
|
|
|
|
|
|
|
|
|
|
|
|
|
accrued expenses
|
|
76,023
|
|
|
-
|
|
|
76,023
|
|
|
-
|
|
Accounts payable - related parties
|
|
1,000
|
|
|
-
|
|
|
1,000
|
|
|
-
|
|
Convertible notes - related parties
|
|
240,142
|
|
|
-
|
|
|
240,142
|
|
|
-
|
|
Notes payable
|
|
62,907
|
|
|
-
|
|
|
62,907
|
|
|
-
|
|
35
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
Income taxes
The Company accounts for its income taxes in accordance with
FASB ASC 740 "Income Taxes", which requires recognition of deferred tax assets
and liabilities for future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax basis and tax credit carry-forwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in operations in the period that includes the
enactment date. The Company has a net operating loss carry-forward to be used in
future years. The Company has established a valuation allowance for the full tax
benefit of the operating loss carry-forwards due to the uncertainty regarding
realization.
Net loss per common share
The Company computes net loss per share in accordance with FASB
ASC 260 "Earnings per Share". Under the provisions of FASB ASC 260 "Earnings per
Share", basic net loss per share is computed by dividing the net loss available
to common stockholders for the period by the weighted average number of shares
of common stock outstanding during the period. The calculation of diluted net
loss per share gives effect to common stock equivalents; however, potential
common shares are excluded if their effect is anti-dilutive. For the period from
Inception (July 20, 2006) through August 31, 2011, common stock equivalents are
the rights conferred upon Monaco Capital Inc. pursuant to the convertible loan
agreement (Note 7) and those arising from the 2010 Stock Option Plan (Note 9).
These stock equivalents were not included as their effect was anti-dilutive for
the periods presented.
Stock-based compensation
On August 1, 2009, the Company adopted the fair value
recognition provisions of FASB ASC 718-10 and 505-10. The Company accounts for
equity instruments issued in exchange for the receipt of goods or services from
other than employees in accordance with FASB ASC 718-10 and the conclusions
reached in FASB ASC 505-10. Costs are measured at the estimated fair market
value of the consideration received or the estimated fair value of the equity
instruments issued, whichever is more reliably measurable. The value of equity
instruments issued for consideration other than employee services is determined
on the earliest of a performance commitment or completion of performance by the
provider of goods or services as defined by FASB ASC 505-10.
36
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
3. SIGNIFICANT ACCOUNTING POLICIES (continued)
The Company records stock based compensation in accordance with
the guidance in ASC 718. ASC Topic 718 requires the Company to recognize expense
related to the fair value of its employee stock option awards. This eliminates
accounting for share-based compensation transactions using the intrinsic value
and requires instead that such transactions be accounted for using a
fair-value-based method. The Company recognizes the cost of all share-based
awards on a graded vesting basis over the vesting period of the award.
Concentration of credit risk
The Company places its cash and cash equivalents with high
credit quality financial institutions. The Company obtained financing during the
year from Monaco Capital Inc. which holds 51% of the Companys common shares.
The balance of the loan as at August 31, 2011 was $779,877.
4. MINERAL PROPERTIES AND WEBSITE DEVELOPMENT
On April 16, 2010, the Company entered into an option agreement
to acquire a 100% long-term lease interest in 189 unpatented mining claims
situated in the Walker Lane Structural Belt in Nye County, Nevada (the "Cap Gold
Project"). The 189 claims making up the Cap Gold Project form a contiguous block
of approximately 3,960 acres (1,602 hectares). The Company paid $125,000 to
secure the option, giving it the right to acquire a 100% long-term lease
interest in the Cap Gold Project. To exercise the option the Company must: (i)
make ongoing yearly advance production royalty cash payments during the term of
the agreement of $125,000 in years two (2) through five (5), $150,000 in years
six (6) through twelve (12), $200,000 in years 13 through 20 and $300,000 in
years 21 through 30; (ii) incur expenditures on exploration of the Cap Gold
Project of not less than an aggregate of $1,250,000 over five (5) years; and
(iii) make production royalty payments from production from the property after
the advance production royalty cash payments described above have been repaid to
our Company from production from the property. At our Companys election, the
production royalty may be calculated either on a sliding scale or on a fixed
production royalty basis, and must range from 1% to a maximum of 3%.
The Company capitalizes the costs associated with the
development of the Companys website pursuant to ASC Topic 350. Other costs
related to the maintenance of the website are expensed as incurred. Amortization
is provided over the estimated useful life of 3 years using the straight-line
method for financial statement purposes. The Company capitalized $26,313 in
Website development in the 2010 year. The net book value at August 31, 2011 was
$14,618.
37
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
5. NEW ACCOUNTING PRONOUNCEMENTS
The Company has evaluated the recent accounting pronouncements
through April 2012 and believes that none of them will have a material effect on
the companys financial position, results of operations or cash flows.
6. NOTES PAYABLE
On August 27, 2010 the Company obtained a loan from an
individual in the principal amount of $32,077. Due to its short term nature the
Company agreed to pay the individual $6,493 as a premium. The note payable
totaling $38,569 was due and payable on or before September 15, 2010. The note
was paid in full on September 10, 2010.
On November 26, 2010 the Company obtained a demand promissory
note from Taio Investments Ltd. ("Taio") of CDN $50,000 ($49,518 US). Due to its
short term nature the Company agreed to pay Taio $5,000 as a premium. The note
payable totaling CDN $55,000 was due and payable on December 6, 2010. The note
was paid in full on December 6, 2010.
38
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
7. CONVERTIBLE LOAN - RELATED PARTY
On April 22, 2010, the Company entered into a convertible loan
agreement with Monaco Capital Inc., majority shareholder, for a principal amount
of up to $500,000 for a term of one year from any applicable advancement date.
The loan is unsecured and shall bear interest at the rate of 10% per annum
payable on the due date. The Company may at any time during the term of the loan
prepay any sum up to the full amount of the loan and accrued interest then
outstanding at any time for an additional 10% of such amount. The loan
(including accrued interest) is convertible into securities of the Company at a
conversion price of $1.05 per share. At any time after the advancement date, if
the Company has not paid the loan and accrued interest in full, the Lender may,
by providing written notice to the Company, exercise its rights of conversion in
respect of either a portion of the total outstanding amount of the loan as of
that date into shares of the Company.
On December 17, 2010 the Company entered into a Convertible
Loan agreement with Monaco Capital Inc., majority shareholder, for a principal
amount of up to $5,000,000 for a term of one year. The convertible loan
agreement replaced the original agreement with Monaco Capital Inc., dated April
22, 2010 and provided that the principal of $500,933 advanced under it, along
with $20,665 in unpaid, accrued interest, to and including December 17, 2010 be
treated as if issued under the terms of the new agreement. The loan is unsecured
and shall bear interest at the rate of 10% per annum payable on the due date.
The Company may at any time during the term of the loan prepay any sum up to the
full amount of the loan and accrued interest then outstanding at any time for an
additional 10% of such amount. The loan (including accrued interest) is
convertible into securities of the Company at a conversion price calculated as
the mean volume weighted average price for the Companys common stock during the
ten (10) trading day period ending on the latest complete trading day prior to
the conversion date. At any time after the advancement date, if the Company has
not paid the loan and accrued interest in full, the Lender may, by providing
written notice to the Company, exercise its rights of conversion in respect of
either a portion of the total outstanding amount of the loan as of that date
into shares of the Company.
At August 31, 2011, Monaco Capital Inc. has advanced to the
Company $781,597. The balance sheets at August 31, 2011 and 2010 recorded the
loan value at $779,877 and $240,142 due to the unamortized beneficial conversion
feature on the convertible debt totaling $1,719 and $10,791. The initial
beneficial conversion feature was valued at $16,833 of which $15,114 and $6,042
has been amortized. The beneficial conversion feature amount has been accounted
for as a debt discount which is being amortized and treated as interest expense
over the term of the convertible debentures. Accrued interest at August 31, 2011
and 2010 relating to the loan totaling $46,869 and $8,746 was recorded in
accounts payable and accrued liabilities, respectively.
39
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
8. STOCKHOLDERS EQUITY (DEFICIT)
The Company has 150,000,000 (75,000,000 pre-forward stock
split) shares authorized with a par value of $0.001 per share.
Effective July 25, 2006, the Company issued 40,000,000
(20,000,000 pre-forward stock split) to the founding and sole director of the
Company pursuant to a stock subscription agreement at $0.0005 per share for
total proceeds of $20,000, the shares were issued below par thus $20,000 was
applied to accumulated deficit.
Effective December 20, 2006, the Company issued 24,000,000
(12,000,000 pre-forward stock split) shares of the Companys common stock
pursuant to the Companys SB-2 prospectus offering at $0.0025 per share for
total proceeds of $60,000.
On February 26, 2010, Monaco Capital Inc. acquired a
controlling interest in the Company by purchasing 40,000,000 (20,000,000
pre-forward stock split) shares of our common stock in a private transaction.
On March 17, 2010, the Company filed a Plan of Merger, Merger
Agreement and Certificate of Change with the Nevada Secretary of State to affect
a forward stock split of its common shares on a 2 new for 1 old basis. The
change was approved by FINRA effective April 12, 2010. As a result, our
authorized capital increased from 75,000,000 to 150,000,000 shares of common
stock and our issued and outstanding increased from 32,000,000 shares of common
stock to 64,000,000 shares of common stock, all with a par value of $0.001. All
references in these financial statements and notes to the financial statements
to the number of shares, price per share and weighted average number of shares
outstanding of common stock prior to this stock split have been adjusted to
reflect the stock split on a retroactive basis unless otherwise noted.
On April 22, 2010, the Company entered into a convertible loan
agreement with Monaco Capital Inc., a majority shareholder, resulting in a
beneficial conversion feature valued at $16,833 which was applied to additional
paid in capital.
On March 28, 2011 and April 19, 2011, Accredited Investors
purchased an aggregate of 5,000,000 Units of the Companys securities under the
Private Placement Offering for net proceeds of $476,191. These shares were
presented as issued and outstanding as at May 31, 2011, however the shares were
not actually issued to the shareholders per the transfer agent records due to
some administrative delay. Hence these shares are reclassified under Stock
Payable in the current period.
On April 11, 2011, the company issued 500,000 restricted common
shares of the Company, valued at $67,500, in full satisfaction of the debt owed
to Investors Resource Group ("IRG") in the amount of $180,000 which accrued
pursuant to a consulting agreement between IRG and the Company.
40
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
9. STOCK OPTIONS
On April 14, 2010, the Company entered into a consulting
agreement with Wayne Parsons, to act as President, CEO, CFO, Secretary and
Treasurer of the Company. As part of the compensation package he was granted
1,000,000 fully vested, non-transferable stock options with an exercise price of
$1.00.
Under SFAS 123 (R) (ASC 718 and 505), the fair value of options
is estimated at the date of grant using a Black-Scholes-Menon ("Black-Scholes")
option-pricing model, which requires the input of highly subjective assumptions
including the expected stock price volatility. Volatility is determined using
historical stock prices over a period consistent with the expected term of the
option. The Company utilizes the guidelines of staff Accounting Bulletin No. 107
(SAD 107) of the Securities and Exchange Commission relative to "plain vanilla"
options in determining the expected term of option grants. SAB 107 permits the
expected term of "plain vanilla" options to be calculated as the average of the
optionss vesting term and contractual period.
The fair value of the 1,000,000 options using the Black-Scholes
option pricing model with the following weighted average assumptions was
recorded in the statement of operations as consulting expenses at a value of
$505,200:
|
Risk Free Interest Rate
|
1.07 %
|
|
Expected life
|
913 days
|
|
Expected volatility
|
72 %
|
|
Dividend per share
|
$Nil
|
On July 30, 2010, the Company adopted the 2010 Stock Option
Plan which permits the Company to issue up to 6,500,000 shares of common stock
to directors, officers, employees and consultants of the Company upon the
exercise of stock options granted under the 2010 Plan. At the time of the grant
of the option, the Plan Administrator shall designate the expiration date of the
option, which date shall not be later than five (5) years from the date of
grant. The vesting schedule for each option shall be specified by the Plan
Administrator at the time of grant of the Option. Effective September 29, 2010
the Plan provides for an exercise price to be established based on the Fair
Market Value of a common share of the Company being the average of the high and
low sales prices (or bid and ask prices, if sales prices are not reported) for
the common stock for the last trading day immediately preceding the date with
respect to which Fair Market Value is being determined, as reported for the
principal trading market for the Common Stock.
41
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
9. STOCK OPTIONS (continued)
The 1,000,000 options issued to Wayne Parsons April 14, 2010
were cancelled and re issued on October 6, 2010 with a purchase price of $0.68
under our 2010 Stock Plan. Under ASC(718) this concurrent cancellation and
reissuance of options was accounted for as a modification. Accordingly, the
Company compared the fair value of the options cancelled to the fair value of
the options reissued on October 6, 2010. In connection with this modification
the company recorded stock-based compensation of $276,000. Also on October 6,
2010, an additional 4,400,000 stock options were granted to nine other
individuals, including directors, officers, consultants and employees, pursuant
to our 2010 Stock Plan, at an exercise price of $.68 per share. Of the aggregate
5,400,000 stock options, 400,000 options are exercisable until October 5, 2012
and 5,000,000 options are exercisable until October 6, 2015. These options all
vest immediately.
The fair value of the 5,400,000 options using the Black-Scholes
option pricing model with the following weighted average assumptions and
including the $276,000 modification was recorded in the statement of operations
as consulting expenses at a value of $2,480,800:
|
Risk Free Interest Rate
|
0.38% and 1.16% respectively
|
|
Expected life
|
730 days and 1825 days respectively
|
|
Expected volatility
|
85.4 %
|
|
Dividend per share
|
$Nil
|
On March 2, 2011, the Company cancelled 5,400,000 stock options
previously granted on October 6, 2010 to various directors, officers, and
consultants of the Company pursuant to our 2010 Stock Plan. The cancelled
options constituted all of the active stock options of the Company as at the
cancellation date and were variably exercisable for a term of 2 or 5 years at an
exercise price of $0.68 per share. The cancellations were made in accordance
with cancellation agreements between the Company and the respective option
holders.
The Company concurrently reissued 5,150,000 stock options to
the officers, directors, and consultants of the Company in accordance with our
2010 Stock Plan, at an exercise price of $0.12 per share. Of the 5,150,000 stock
options, 150,000 options are exercisable until March 2, 2013 and 5,000,000
options are exercisable until March 2, 2016. These stock options all vest
immediately. Under ASC (718) this concurrent cancellation and reissuance of
options was accounted for as a modification. Accordingly, the company compared
the fair value of the options cancelled to the fair value of the options
reissued on March 2, 2011. In connection with this modification the company
recorded stock-based compensation of $122,650.
42
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
9. STOCK OPTIONS (continued)
A summary of the status of the Companys stock option plan as
of August 31, 2011 and 2010 and changes during the years is presented below:
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
Weighted
|
|
|
|
Number of
|
|
|
average
|
|
|
Number of
|
|
|
average
|
|
|
|
Shares
|
|
|
exercise price
|
|
|
Shares
|
|
|
exercise price
|
|
|
|
#
|
|
|
$
|
|
|
#
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at beginning of year
|
|
1,000,000
|
|
|
1.00
|
|
|
-
|
|
|
-
|
|
Granted
|
|
10,550,000
|
|
|
0.41
|
|
|
1,000,000
|
|
|
1.00
|
|
Exercised
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Forfeited or cancelled
|
|
(6,400,000
|
)
|
|
(0.73
|
)
|
|
-
|
|
|
-
|
|
Outstanding at end of year
|
|
5,150,000
|
|
|
0.12
|
|
|
1,000,000
|
|
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable
|
|
5,150,000
|
|
|
0.12
|
|
|
1,000,000
|
|
|
1.00
|
|
10. INCOME TAXES
The Company accounts for income taxes using the liability
method, under which deferred tax liabilities and assets are determined based on
the difference between the financial statement carrying amounts and the tax
basis of assets and liabilities using enacted tax rates in effect in the years
in which the differences are expected to reverse.
As of August 31, 2011, the Company had net operating loss
carry-forwards of approximately $1,152,973 which expire in varying amounts
between 2026 and 2030. Realization of this potential future tax benefit is
dependent on generating sufficient taxable income prior to expiration of the
loss carry-forward. The deferred tax asset related to this potential future tax
benefit has been offset by a valuation allowance in the same amount. The amount
of the deferred tax asset ultimately realizable could be increased in the near
term if estimates of future taxable income during the carry-forward period are
revised.
43
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
10. INCOME TAXES (continued)
|
|
August 31
|
|
|
August 31
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
Federal net operating loss carryforward
|
$
|
4,261,623
|
|
$
|
760,846
|
|
Less share based compensation
|
|
(3,108,650
|
)
|
|
(505,200
|
)
|
Net operating loss carryforward
|
|
1,152,973
|
|
|
255,646
|
|
|
|
|
|
|
|
|
Deferred Tax Assets
|
|
-
|
|
|
-
|
|
Net operating loss carryforward - 35%
|
|
403,541
|
|
|
89,476
|
|
Less: Valuation allowance
|
|
(403,541
|
)
|
|
(89,476
|
)
|
Net Deferred Tax Assets:
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
Effective Tax Rate Reconcilliation:
|
|
|
|
|
|
|
Federal statutory tax rate
|
|
-35.0%
|
|
|
-35.0%
|
|
Change in valuation allowance
|
|
35.0%
|
|
|
35.0%
|
|
Effective tax rate:
|
|
0.0%
|
|
|
0.0%
|
|
11. RELATED PARTY TRANSACTIONS
The Company paid American Lithium Minerals Inc., whose
President and Director is Hugh H. Aird, CDN $5,000 per month for office rent,
supplies and administrative support.
At August 31, 2011, Monaco Capital Inc., a majority shareholder
has advanced $781,597. The balance sheets at August 31, 2011 and 2010 recorded
the loan value at $779,877 and $240,142 due to the unamortized beneficial
conversion feature on the convertible debt totaling $1,719 and $10,791. The
initial beneficial conversion feature was valued at $16,833 of which $9,072 and
$6,042 has been amortized. The beneficial conversion feature amount has been
accounted for as a debt discount which is being amortized and treated as
interest expense over the term of the convertible debentures. Accrued interest
at August 31, 2011 and 2010 relating to the loan totaling $46,869 and $8,746 was
recorded in accounts payable and accrued liabilities, respectively.
44
AMERICAN PARAMOUNT GOLD CORP.
(fka ZEBRA RESOURCES
INC.)
(An Exploration Stage Company)
NOTED TO THE FINANCIAL
STATEMENTS
AUGUST 31, 2011 AND 2010
(Stated in U.S. Dollars)
12. COMMITMENTS AND CONTINGENCIES
On November 8, 2010, the company entered into a letter of
intent with Lonsdale Acquisitions Corp. to acquire the Kisita Gold Mine
Property, an operational gold property four hours northwest of the capital city
of Kampala in Uganda. On December 9, 2010 the company, having performed the due
diligence required to acquire the Kisita Gold Mine Property advised Lonsdale
Acquisition Corporation that it declined to proceed with the purchase agreement
under its current terms and conditions. Lonsdale has issued a general expense
claim requesting a remittance of $35,000 for services rendered. Up to the date
of these financial statements the company maintains it has not received any
services justifying an expense of $35,000 and maintains its position that no
liability needs to be accrued for this non-receipt of services. As per ASC 450
the company deems that the possibility of loss is minimal and therefore does not
consider it necessary to disclose or accrue any potential liability in these
financial statements.
13. SUBSEQUENT EVENTS
On November 28, 2011, the Nevada Secretary of State accepted
for filing a Certificate of Change, wherein the corporation amended our Articles
of Incorporation to implement a forty (40) for one (1) reverse stock split of
our authorized and issued and outstanding common shares such that our companys
authorized capital will be decreased from 150,000,000 shares of common stock
with a par value of $0.001 to 3,750,000 shares of common stock with a par value
of $0.001 and, correspondingly, its issued and outstanding shares of common
stock shall decrease from 69,500,000 shares of common stock to 1,735,000 shares
of common stock. No fractional shares shall be issued and fractional shares
shall be rounded up. The reverse split was effective at the opening of trading
on January 26, 2012.
On February 24, 2012, H. Neville Rhoden and J. Trevor Eyton
resigned as members of the Companys board of directors. The resignations were
not the result of any disagreements with our company regarding our operations,
policies, practices or otherwise.
On February 27, 2012, the company issued a news release with an
update on the data results of our companys Cap Gold Project.
On March 9, 2012 based on recently released drill results the
Board of Directors decided the company could not justify the further expense of
continuing with its planned drill program at Cap Gold, Nye County, Nevada, USA.
45
Item
9.
Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
There were no disagreements related to accounting principles or
practices, financial statement disclosure, internal controls or auditing scope
or procedure during the two fiscal years and interim periods.
Item
9A.
Controls and Procedures
Managements Report on Disclosure Controls and
Procedures
We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the
Securities Exchange Act of 1934
, as amended, is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commissions rules and forms, and that such
information is accumulated and communicated to our management, including our
president and chief financial officer (who are acting as our principal executive
officer and as our principal financial officer and principle accounting officer)
to allow for timely decisions regarding required disclosure
As of August 31, 2011, the end of our fiscal year covered by
this report, we carried out an evaluation, under the supervision and with the
participation of our president (our principal executive officer) and our chief
financial officer (our principal financial and accounting officer), of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, our president (our principal executive
officer) and our chief financial officer (our principal financial and accounting
officer) concluded that our disclosure controls and procedures were not
effective as of the end of the period covered by this annual report.
Managements Report on Internal Control over Financial
Reporting
Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of control procedures. The objectives of internal control include
providing management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition, and that
transactions are executed in accordance with managements authorization and
recorded properly to permit the preparation of consolidated financial statements
in conformity with accounting principles generally accepted in the United
States. Our management assessed the effectiveness of our internal control over
financial reporting as of August 31, 2011. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in
Internal
Control-Integrated Framework
. Our management has concluded that, as of
August 31, 2011, our internal control over financial reporting is not effective.
Our management reviewed the results of their assessment with our Board of
Directors.
This annual report does not include an attestation report of
our companys registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by our
Companys registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit our Company to provide only
managements report in this annual report.
Inherent limitations on effectiveness of controls
Internal control over financial reporting has inherent
limitations which include but is not limited to the use of independent
professionals for advice and guidance, interpretation of existing and/or
changing rules and principles, segregation of management duties, scale of
organization, and personnel factors. Internal control over financial reporting
is a process which involves human diligence and compliance and is subject to
lapses in judgment and breakdowns resulting from human failures. Internal
control over financial reporting also can be circumvented by collusion or
improper management override. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements on a
timely basis, however these inherent limitations are known features of the
financial reporting process and it is possible to design into the process
safeguards to reduce, though not eliminate, this risk. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
46
Changes in Internal Control over Financial
Reporting
There have been no changes in our internal controls over
financial reporting that occurred during the year ended August 31, 2011 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.
Item
9B.
Other Information
Effective February 24, 2012, H. Neville Rhoden and J. Trevor
Eyton resigned as directors of our company.
PART III
Item
10.
Directors, Executive Officers and Corporate Governance
The following individuals serve as the directors and executive
officers of our company as of the date of this annual report. All directors of
our company hold office until the next annual meeting of our shareholders or
until their successors have been elected and qualified. The executive officers
of our company are appointed by our board of directors and hold office until
their death, resignation or removal from office.
Name
|
Position Held with Our
Company
|
Age
|
Date First Elected or
Appointed
|
Hugh Aird
|
President, Chief Executive Officer, Director
|
56
|
August 30, 2010
|
Wayne Parsons
|
Director
|
48
|
April 14, 2010
|
Business Experience
The following is a brief account of the education and business
experience during at least the past five years of each director, executive
officer and key employee of our company, indicating the persons principal
occupation during that period, and the name and principal business of the
organization in which such occupation and employment were carried out.
Hugh AirdPresident, Chief Executive Officer and Director
Mr. Aird was appointed a director of our company on August 30,
2010 and as president and chief executive officer on September 29, 2010.
Since graduating from Harvard University, Hugh Aird has held
numerous top level executive positions throughout the financial industry. From
1998 to 2002 he was the Managing Director at Berenson, Mineralla LTD, a firm
providing Mergers & Acquisitions advisory services, and from 1994 to 1998 he
was Vice-Chairman of Merrill Lynch Canada. From 2002 to 2004 Mr. Aird was
President of DRIA Capital, a financial consulting firm. Since 2004, Mr. Aird has
been the Vice-Chairman, North America, and Business Development for Edelman
Public Relations.
Mr. Aird served as President of American Lithium Minerals, Inc.
from September 29, 2009 until September 29, 2010, when he was appointed Chairman
of the Board of Directors.
47
Wayne ParsonsChief Financial Officer and Director
Mr. Parsons served as our secretary and treasurer from April
14, 2010 until August 30, 2010. He also served as our president, chief financial
officer and chief executive from April 14, 2010 to September 29, 2010. Mr.
Parsons has been a member of our board of directors since April 14, 2010. Mr.
Parsons was appointed as our Chief Financial Officer, Secretary and Treasurer on
July 14, 2011.
Wayne Parsons graduated University of Western Ontario 1985,
Richard Ivey School of Business, and HBA. He began his career as an investment
advisor in Toronto with Nesbitt Thomson Bongard, moving to RBC Dominion
Securities in 1994 as Senior Investment Advisor. Mr. Parsons then joined
National Bank Financial in 2003 as Senior Investment Advisor, working in London
until 2008. He has been involved in many mining deals over the years and helped
fund a number of junior mining projects in North America and abroad.
Family Relationships
There are no family relationships between any of our directors,
executive officers and proposed directors or executive officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or
executive officers has, during the past ten years:
1.
|
been convicted in a criminal proceeding or been subject
to a pending criminal proceeding (excluding traffic violations and other
minor offences);
|
|
|
2.
|
had any bankruptcy petition filed by or against the
business or property of the person, or of any partnership, corporation or
business association of which he was a general partner or executive
officer, either at the time of the bankruptcy filing or within two years
prior to that time;
|
|
|
3.
|
been subject to any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction or federal or state authority, permanently or temporarily
enjoining, barring, suspending or otherwise limiting, his involvement in
any type of business, securities, futures, commodities, investment,
banking, savings and loan, or insurance activities, or to be associated
with persons engaged in any such activity;
|
|
|
4.
|
been found by a court of competent jurisdiction in a
civil action or by the SEC or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated;
|
|
|
5.
|
been the subject of, or a party to, any federal or state
judicial or administrative order, judgment, decree, or finding, not
subsequently reversed, suspended or vacated (not including any settlement
of a civil proceeding among private litigants), relating to an alleged
violation of any federal or state securities or commodities law or
regulation, any law or regulation respecting financial institutions or
insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil money
penalty or temporary or permanent cease-and-desist order, or removal or
prohibition order, or any law or regulation prohibiting mail or wire fraud
or fraud in connection with any business entity; or
|
|
|
6.
|
been the subject of, or a party to, any sanction or
order, not subsequently reversed, suspended or vacated, of any
self-regulatory organization (as defined in Section 3(a)(26) of the
Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in
Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or
any equivalent exchange, association, entity or organization that has
disciplinary authority over its members or persons associated with a
member.
|
48
Compliance with Section 16(a) of the Securities Exchange Act
of 1934
Our common stock is not registered pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (the Exchange Act).
Accordingly, our officers, directors, and principal stockholders are not subject
to the beneficial ownership reporting requirements of Section 16(a) of the
Exchange Act.
Code of Ethics
Effective December 13, 2011, our companys board of directors
adopted a Code of Business Conduct and Ethics that applies to, among other
persons, members of our board of directors, our companys officers including our
president (being our principal executive officer and principal financial
officer), contractors, consultants and advisors. As adopted, our Code of
Business Conduct and Ethics sets forth written standards that are designed to
deter wrongdoing and to promote:
|
1.
|
honest and ethical conduct, including the ethical
handling of actual or apparent conflicts of interest between personal and
professional relationships;
|
|
|
|
|
2.
|
full, fair, accurate, timely, and understandable
disclosure in reports and documents that we file with, or submit to, the
Securities and Exchange Commission and in other public communications made
by us;
|
|
|
|
|
3.
|
compliance with applicable governmental laws, rules and
regulations;
|
|
|
|
|
4.
|
the prompt internal reporting of violations of the Code
of Business Conduct and Ethics to an appropriate person or persons
identified in the Code of Business Conduct and Ethics; and
|
|
|
|
|
5.
|
accountability for adherence to the Code of Business
Conduct and Ethics.
|
Our Code of Business Conduct and Ethics requires, among other
things, that all of our companys personnel shall be accorded full access to our
president and secretary with respect to any matter which may arise relating to
the Code of Business Conduct and Ethics.
Further, all of our companys personnel are to be accorded full
access to our companys board of directors if any such matter involves an
alleged breach of the Code of Business Conduct and Ethics by our Company
officers. In addition, our Code of Business Conduct and Ethics emphasizes that
all employees, and particularly managers and/or supervisors, have a
responsibility for maintaining financial integrity within our company,
consistent with generally accepted accounting principles and federal and state
securities laws. Any employee who becomes aware of any incidents involving
financial or accounting manipulation or other irregularities, whether by
witnessing the incident or being told of it, must report it to his or her
immediate supervisor or to our companys president or secretary. If the incident
involves an alleged breach of the Code of Business Conduct and Ethics by the
president or secretary, the incident must be reported to any member of our board
of directors. Any failure to report such inappropriate or irregular conduct of
others is to be treated as a severe disciplinary matter. It is against our
company policy to retaliate against any individual who reports in good faith the
violation or potential violation of our companys Code of Business Conduct and
Ethics by another. We will provide a copy of the Code of Business Conduct and
Ethics to any person without charge, upon request. Requests may be sent in
writing to our company, 130 King Street West, Suite 3670, Toronto, Ontario M5X
1A9.
Audit Committee and Audit Committee Financial Expert
Our audit committee consists of Wayne Parsons.
Our board of directors has determined that it does not have a
member of its audit committee that qualifies as an "audit committee financial
expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent"
as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities
Exchange Act of 1934, as amended.
49
We believe that the members of our audit committee are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated any material revenues to date. In addition, we
currently do not have nominating or compensation committee or committees
performing similar functions nor do we have a written nominating or compensation
committee charters. Our board of directors does not believe that it is necessary
to have such committees because it believes the functions of such committees can
be adequately performed by our board of directors.
Item
11.
Executive Compensation
The particulars of the compensation paid to the following
persons:
our principal executive officer;
each of our two most highly compensated
executive officers who were serving as executive officers at the end of the
years ended August 31, 2011 and 2010; and
up to two additional individuals for
whom disclosure would have been provided under (b) but for the fact that the
individual was not serving as our executive officer at the end of the years
ended August 31, 2011 and 2010,
who we will collectively refer to as the named executive
officers of our company, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer,
other than our principal executive officers, whose total compensation did not
exceed $100,000 for the respective fiscal year:
SUMMARY COMPENSATION
TABLE
|
Name and
principal position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All Other
Compensation
($)
|
Total
($)
|
Hugh H. Aird
President, Chief Executive
Officer and Director
|
2011
2010
|
N/A
N/A
|
N/A
N/A
|
N/A
N/A
|
538,000
N/A
|
N/A
N/A
|
N/A
N/A
|
110,000
N/A
|
648,000
N/A
|
Ann Dumyn
Former Chief Financial
Officer, Secretary and
Treasurer
|
2011
2010
|
N/A
N/A
|
N/A
N/A
|
N/A
N/A
|
269,000
N/A
|
N/A
N/A
|
N/A
N/A
|
N/A
N/A
|
269,000
N/A
|
Wayne Parsons
Former President,
Former Chief Executive
Officer, Chief Financial
Officer, Secretary, and
Director
|
2011
2010
|
N/A
6,000
|
N/A
Nil
|
N/A
505,200
|
299,000
Nil
|
N/A
Nil
|
N/A
Nil
|
N/A
Nil
|
N/A
511,200
|
50
SUMMARY COMPENSATION TABLE
|
Name and
principal position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All Other
Compensation
($)
|
Total
($)
|
Dan Gravelle
Former
President, Chief
Executive
Officer,
Treasurer, Chief
Financial
Officer,
Secretary and
Director
|
2011
2010
|
N/A
Nil
|
N/A
Nil
|
N/A
Nil
|
30,975
Nil
|
N/A
Nil
|
N/A
Nil
|
N/A
Nil
|
30,975
Nil
|
There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. Our
directors and executive officers may receive share options at the discretion of
our board of directors in the future. We do not have any material bonus or
profit sharing plans pursuant to which cash or non-cash compensation is or may
be paid to our directors or executive officers, except that share options may be
granted at the discretion of our board of directors.
Stock Option Plan
On June 30, 2010 our directors approved the adoption of our
2010 Stock Option Plan which permits our company to grant up to 6,500,000
options to acquire shares of common stock, to directors, officers, employees and
consultants of our company.
2011 Grants of Plan-Based Awards
The following table provides information about equity and
non-equity awards granted to the named executives in 2011:
GRANTS
OF PLAN-BASED AWARDS
|
Name
|
Grant
Date
|
Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
|
All
Other
Stock
Awards:
Number
of
Shares
of
Stocks
or Units
(#)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
Grant
Date Fair
Value of
Stock
and
Option
Awards
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Hugh Aird
|
March 2, 2011
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
1,000,000
|
$0.12
|
$538,000
|
Ann Dumyn
|
March 2, 2011
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
5,000,000
|
$0.12
|
$269,000
|
Dan Gravelle
|
March 2, 2011
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
75,000
|
$0.12
|
$30,975
|
51
Outstanding Equity Awards at Fiscal Year End
The particulars of unexercised options, stock that has not
vested and equity incentive plan awards for our named executive officers are set
out in the following table:
|
Options Awards
|
Stock Awards
|
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units
or
Other
Rights That
Have Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($)
|
|
|
|
|
|
|
|
|
|
|
Hugh Aird
|
1,000,000
|
N/A
|
N/A
|
$0.12
|
March 2,
2016
|
N/A
|
N/A
|
N/A
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ann Dumyn
|
500,000
|
N/A
|
N/A
|
$0.12
|
March 2,
2016
|
N/A
|
N/A
|
N/A
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dan
Gravelle
|
75,000
|
N/A
|
N/A
|
$0.12
|
March 2,
2016
|
N/A
|
N/A
|
N/A
|
N/A
|
Option Exercises
During our fiscal year ended August 31, 2011, there were no options
exercised by our named officers.
Compensation of Directors
Other than as set forth below, we do not have any agreements
for compensating our directors for their services in their capacity as
directors, although such directors are expected in the future to receive stock
options to purchase shares of our common stock as awarded by our board of
directors.
On March 1, 2011, we entered into a consulting agreement with
Wayne Parsons, a director of our company, to provide strategic planning and
business development services to our company. The agreement has a term ending
December 31, 2012 and a fee of $60,000 per annum with eligibility for additional
compensation in the form of warrants or options at the discretion of our
company.
52
The following table sets forth a summary of the compensation
paid to our non-employee directors in 2011:
DIRECTOR COMPENSATION
|
Name
|
Fees
Earned or
Paid in
Cash
($)
|
Stock
Awards
($)
|
Option
Awards
(#)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
J. Trevor Eyton
|
N/A
|
N/A
|
1,000,000
|
N/A
|
N/A
|
N/A
|
538,000
|
Neville Rhoden
|
N/A
|
N/A
|
500,000
|
N/A
|
N/A
|
N/A
|
269,000
|
Wayne Parsons
|
N/A
|
N/A
|
1,000,000
|
N/A
|
N/A
|
N/A
|
299,000
|
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. We have no
material bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers, except
that stock options may be granted at the discretion of the board of directors or
a committee thereof.
Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management
None of our directors or executive officers or any associate or
affiliate of our company during the last two fiscal years, is or has been
indebted to our company by way of guarantee, support agreement, letter of credit
or other similar agreement or understanding currently outstanding.
Item
12.
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
The following table sets forth, as of April 11, 2012, certain
information with respect to the beneficial ownership of our common shares by
each shareholder known by us to be the beneficial owner of more than 5% of our
common shares, as well as by each of our current directors and executive
officers as a group. Each person has sole voting and investment power with
respect to the shares of common stock, except as otherwise indicated. Beneficial
ownership consists of a direct interest in the shares of common stock, except as
otherwise indicated.
Name and Address of
Beneficial Owner
|
Title of Class
|
Amount and
Nature of
Beneficial
Ownership
|
Percentage
of
Class
(1)
|
Hugh
H. Aird
|
Common
|
Nil
|
0%
|
Wayne Parsons
|
Common
|
Nil
|
0%
|
Directors and Officers as a group
|
Common
|
Nil
|
0%
|
Monaco Capital Ltd.
PO Box 2079
7 New
Rd. FL 2 Ste. 6
Belize City, Belize
|
Common
|
863,750
|
53.6%
|
(1)
|
Based on 1,612,500 shares of common stock issued and
outstanding as of May 14, 2012. Except as otherwise indicated, we believe
that the beneficial owners of the common shares listed above, based on
information furnished by such owners, have sole investment and voting
power with respect to such shares, subject to community property laws
where applicable. Beneficial ownership is determined in accordance with
the rules of the Securities and Exchange Commission and generally includes
voting or investment power with respect to securities. Shares of common
stock subject to options or warrants currently exercisable, or exercisable
within 60 days, are deemed outstanding for purposes of computing the
percentage ownership of the person holding such option or warrants, but
are not deemed outstanding for purposes of computing the percentage
ownership of any other person.
|
53
Changes in Control
We are unaware of any contract or other arrangement or
provisions of our Articles or Bylaws the operation of which may at a subsequent
date result in a change of control of our company. There are not any provisions
in our Articles or Bylaws, the operation of which would delay, defer, or prevent
a change in control of our company.
Item
13.
Certain Relationships and Related Transactions, and Director Independence
Except as disclosed herein, no director, executive officer,
shareholder holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in any
transaction, or proposed transaction since the year ended August 31, 2011, in
which the amount involved in the transaction exceeded or exceeds the lesser of
$120,000 or one percent of the average of our total assets at the year end for
the last three completed fiscal years.
Director Independence
We currently act with two directors, consisting of Hugh H. Aird
and Wayne Parsons. We have determined that we do not have a director that is an
independent director as defined in NASDAQ Marketplace Rule 4200(a)(15).
Our audit committee consists of Wayne Parsons.
Our board of directors has determined that it does not have a
member of its audit committee that qualifies as an "audit committee financial
expert" as defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent"
as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities
Exchange Act of 1934, as amended.
We believe that the members of our audit committee are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact that we have not generated any material revenues to date. In addition, we
currently do not have nominating or compensation committee or committees
performing similar functions nor do we have a written nominating or compensation
committee charters. Our board of directors does not believe that it is necessary
to have such committees because it believes the functions of such committees can
be adequately performed by our board of directors.
Item
14.
Principal Accounting Fees and Services
The aggregate fees billed for the most recently completed
fiscal year ended August 31, 2011 and for fiscal year ended August 31, 2010 for
professional services rendered by the principal accountant for the audit of our
annual financial statements and review of the financial statements included in
our quarterly reports on Form 10-Q and services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:
54
|
Year Ended
|
|
August 31, 2011
$
|
August 31, 2010
$
|
Audit Fees
|
16,000
|
16,000
|
Audit Related Fees
|
Nil
|
Nil
|
Tax Fees
|
Nil
|
Nil
|
All Other Fees
|
Nil
|
Nil
|
Total
|
16,000
|
16,000
|
Our board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.
Our board of directors has considered the nature and amount of
fees billed by our independent auditors and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our independent auditors independence.
PART IV
Item
15.
Exhibits, Financial Statement Schedules
(a)
|
Financial Statements
|
|
|
|
|
(1)
|
Financial statements for our company are listed in the
index under Item 8 of this document
|
|
|
|
|
(2)
|
All financial statement schedules are omitted because
they are not applicable, not material or the required information is shown
in the financial statements or notes thereto.
|
|
|
|
(b)
|
Exhibits
|
Exhibit
|
Exhibit
|
Number
|
Description
|
|
|
(3)
|
Articles of Incorporation and By-laws
|
|
|
3.1
|
Articles of Incorporation (incorporated by reference from
our Registration Statement on Form SB-2 filed on October 23, 2006).
|
|
|
3.2
|
By-laws (incorporated by reference from our Registration
Statement on Form SB-2 filed on October 23, 2006).
|
|
|
3.3
|
Articles of Merger (incorporated by reference from our
Current Report on Form 8-K filed on April 12, 2010).
|
|
|
3.4
|
Certificate of Change (incorporated by reference from our
Current Report on Form 8-K filed on April 12, 2010).
|
|
|
3.5
|
Certificate of Change filed with the Nevada Secretary of
State on November 28, 2011 (incorporated by reference from our Current
Report on Form 8-K filed on January 24, 2012).
|
|
|
3.6
|
Certificate of Correction filed with the Nevada Secretary
of State on November 29, 2011 (incorporated by reference from our Current
Report on Form 8-K filed on January 24, 2012).
|
55
*
|
Filed herewith.
|
|
|
**
|
Furnished herewith. Pursuant to Rule 406T of
Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are
deemed not filed or part of any registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed
not filed for purposes of Section 18 of the Securities and Exchange Act of
1934, and otherwise are not subject to liability under those
sections.
|
56
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
AMERICAN PARAMOUNT GOLD CORP.
|
|
(Registrant)
|
|
|
|
|
Dated: June 11, 2012
|
/s/
Hugh Aird
|
|
Hugh Aird
|
|
President, Chief Executive Officer and Director
|
|
(Principal Executive Officer)
|
|
|
|
|
Dated: June 11, 2012
|
/s/
Wayne Parsons
|
|
Wayne Parsons
|
|
Chief Financial Officer, Secretary and
Treasurer
|
|
(Principal Financial Officer and Principal
Accounting
|
|
Officer)
|
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.
Dated: June 11, 2012
|
/s/
Hugh Aird
|
|
Hugh Aird
|
|
President, Chief Executive Officer and Director
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
Dated: June 11, 2012
|
/s/
Wayne Parsons
|
|
Wayne Parsons
|
|
Chief Financial Officer, Secretary and
Treasurer
|
|
(Principal Financial Officer and Principal
Accounting
|
|
Officer)
|
57
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