Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended August 31, 2010
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period to __________
Commission File Number: 333-157515
FIRST AMERICAN SILVER CORP.
(Exact name of small business issuer as specified in its charter)
Nevada 98-0579157
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
10900 N.E. 4th Street, Suite 2300, Bellevue, Washington, USA, 98004
(Address of principal executive offices)
(425) 698-2030
(Issuer's telephone number)
Mayetok Inc.
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) 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 issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
the definitions of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [X] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 77,000,000 common shares as of October
15, 2010
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements........................................... 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operation....................................... 13
Item 3. Quantitative and Qualitative Disclosures about Market Risk..... 17
Item 4. Controls and Procedures........................................ 17
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.... 17
Item 3. Defaults upon Senior Securities................................ 17
Item 4. [Removed and Reserved]......................................... 18
Item 5. Other Information.............................................. 18
Item 6. Exhibits....................................................... 18
SIGNATURES................................................................... 19
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
These financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and the SEC instructions to Form 10-Q. In the opinion of
management, all adjustments considered necessary for a fair presentation have
been included. Operating results for the interim period ended August 31, 2010
are not necessarily indicative of the results that can be expected for the full
year.
3
FIRST AMERICAN SILVER CORP.
(A Development Stage Company)
BALANCE SHEETS
August 31, November 30,
2010 2009
-------- --------
(unaudited) (audited)
ASSETS
Current assets
Cash and bank accounts $ 667 $ 10,516
Prepaid expenses 15,000 15,000
-------- --------
Total assets $ 15,667 $ 25,516
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 5,750 $ 5,400
Due to Stockholder 100 100
-------- --------
Total liabilities 5,850 5,500
-------- --------
Stockholders' equity
Authorized 3,500,000,000 Common shares with a par value
of $0.0001 per share 20,000,000 Preferred shares with a
par value of $0.0001 per share
Issued and outstanding - 77,000,000 Common Shares (Note 4) 7,700 7,700
Additional paid-in capital 42,300 42,300
Deficit accumulated during the development stage (40,183) (29,984)
-------- --------
Total stockholders' equity 9,817 20,016
-------- --------
Total liabilities and stockholders' equity $ 15,667 $ 25,516
======== ========
The accompanying notes are an integral part of these financial statements.
4
FIRST AMERICAN SILVER CORP.
(A Development Stage Company)
STATEMENTS OF OPERATIONS (unaudited)
FOR THE THREE AND NINE MONTHS ENDED AUGUST 31, 2010 AND 2009,
AND THE PERIOD FROM APRIL 29, 2008 (INCEPTION) TO AUGUST 31, 2010
Three Months Three Months Nine Months Nine Months April 29, 2008
Ended Ended Ended Ended (Inception) To
August 31, August 31, August 31, August 31, August 31,
2010 2009 2010 2009 2010
------------ ------------ ------------ ------------ ------------
REVENUE $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES
Accounting and legal 1,000 875 7,047 8,963 29,940
Miscellaneous fees 1,052 1,626 3,152 4,008 8,856
Incorporation costs -- -- -- -- 1,387
------------ ------------ ------------ ------------ ------------
Loss before income taxes (2,052) (2,501) (10,199) (12,971) (40,183)
Provision for income taxes -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Net loss $ (2,052) $ (2,501) $ (10,199) $ (12,971) $ (40,183)
============ ============ ============ ============ ============
Basic and Diluted loss per share (1) (1) (1) (1) (1)
============ ============ ============ ============
Weighted Average Number of Common
Shares Outstanding 77,000,000 77,000,000 77,000,000 77,000,000
============ ============ ============ ============
----------
(1) less than $0.01
The accompanying notes are an integral part of these financial statements.
5
FIRST AMERICAN SILVER CORP.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (unaudited)
AS OF AUGUST 31, 2010
Deficit
Accumulated
Common Stock Additional During the Total
-------------------- Paid in Development Stockholders'
Shares Amount Capital Stage Equity
------ ------ ------- ----- ------
Inception, April 29, 2008 -- $ -- $ -- $ -- $ --
Shares issued to founder on
June 30, 2008 @ $0.01 per share 52,500,000 5,250 9,750 -- 15,000
Private placement on April 30, 2008
@ $0.05 per share 24,500,000 2,450 32,550 -- 35,000
Net loss for the period -- -- -- (13,639) (13,639)
---------- ------- -------- --------- ---------
Balance, November 30, 2008 77,000,000 7,700 42,300 (13,639) 36,361
Net loss for the period -- -- -- (16,345) (16,345)
---------- ------- -------- --------- ---------
Balance, November 30, 2009 77,000,000 7,700 42,300 (29,984) 20,016
Net loss for the period -- -- -- (10,199) (10,199)
---------- ------- -------- --------- ---------
Balance, August 31, 2010 77,000,000 $ 7,700 $ 42,300 $ (40,183) $ 9,817
========== ======= ======== ========= =========
The accompanying notes are an integral part of these financial statements.
6
FIRST AMERICAN SILVER CORP.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (unaudited)
FOR THE NINE MONTHS ENDED AUGUST 31, 2010 AND 2009
AND THE PERIOD FROM APRIL 29, 2008 (INCEPTION) TO AUGUST 31, 2010
Nine Months Nine Months April 29, 2008
Ended Ended (Inception) To
August 31, August 31, August 31,
2010 2009 2010
-------- -------- --------
CASH FLOWS USED IN OPERATING ACTIVITIES
Net loss for the period $(10,199) $(12,971) $(40,183)
Adjustments to reconcile net (loss) to net
cash (used in) operating activities:
(Increase) Decrease in prepaid expenses -- (15,000) (15,000)
Increase (Decrease) in accounts payable 350 (2,865) 5,750
Increase (Decrease) in due to stockholder -- -- 100
-------- -------- --------
Net cash used in operating activities (9,849) (30,836) (49,333)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities -- -- --
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock -- -- 50,000
-------- -------- --------
Cash from financing activities -- -- 50,000
-------- -------- --------
Change in cash during the period (9,849) (30,836) 667
Cash, beginning of the period 10,516 41,576 --
-------- -------- --------
Cash, end of the period $ 667 $ 10,740 $ 667
======== ======== ========
Supplemental disclosure with respect to cash flows:
Cash paid for income taxes $ -- $ -- $ --
Cash paid for interest $ -- $ -- $ --
The accompanying notes are an integral part of these financial statements.
7
FIRST AMERICAN SILVER CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010
NOTE 1 - NATURE OF OPERATIONS
First American Silver Corp. ("the Company"), incorporated as "Mayetok, Inc. in
the state of Nevada on April 29, 2008. On June 8, 2010, we have changed our name
from "Mayetok Inc." to "First American Silver Corp.", by way of a merger with
our wholly owned subsidiary First American Silver Corp., which was formed solely
for the change of name.
The company has limited operations and is considered to be in the development
stage.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying unaudited interim financial statements have been prepared on
the accrual basis of accounting in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission ("SEC"), and should be read in conjunction
with the audited financial statements and notes thereto contained in the
Company's annual report filed with the SEC on Form 10-K. In the opinion of
management, all adjustments necessary in order to make the financial statements
not misleading have been reflected herein. The results of operations for interim
periods are not necessarily indicative of the results to be expected for the
full year. Notes to the financial statements which would substantially duplicate
the disclosure contained in the audited financial statements as of and for the
periods ended November 30, 2009 as reported in Form 10-K, have been omitted.
ACCOUNTING BASIS
These financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
FINANCIAL INSTRUMENT
The Company's financial instrument consists of amount due to stockholder. The
amount due to stockholder is non interest-bearing. It is management's opinion
that the Company is not exposed to significant interest, currency or credit
risks arising from its other financial instruments and that their fair values
approximate their carrying values except where separately disclosed. See Note 3
below.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles of the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
8
FIRST AMERICAN SILVER CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
LOSS PER SHARE
Net income (loss) per common share is computed based on the weighted average
number of common shares outstanding and common stock equivalents, if not
anti-dilutive. The Company has not issued any potentially dilutive common
shares.
Basic loss per share is calculated using the weighted average number of common
shares outstanding and the treasury stock method is used to calculate diluted
earnings per share. For the years presented, this calculation proved to be
anti-dilutive.
DIVIDENDS
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown.
INCOME TAXES
The Company provides for income taxes using an asset and liability approach.
Deferred tax assets are reduced by a valuation allowance if, based on the weight
of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. No provision for income taxes is
included in the statement due to its immaterial amount, net of the allowance
account, based on the likelihood of the Company to utilize the loss
carry-forward.
NOTE 3 - DUE TO STOCKHOLDER
The amount owing to stockholder is unsecured, non-interest bearing and has no
specific terms of repayment.
NOTE 4 - STOCKHOLDERS' EQUITY
On June 8, 2010, we effected a one (1) old for 35 new forward stock split of our
issued and outstanding common stock. As a result, our authorized capital
increased from 100,000,000 to 3,500,000,000 shares of common stock and the
issued and outstanding increased from 2,200,000 shares of common stock to
77,000,000 shares of common stock, all with a new par value of $0.0001. All
prior share amounts presented in these financial statements have been restated
to reflect the stock split.
9
FIRST AMERICAN SILVER CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010
Shares - Authorized
The company has 3,500,000,000 common shares authorized at a par value of $0.0001
per share.
The company has 20,000,000 preferred shares authorized at a par value of $0.0001
per share.
Common Shares - Issued and Outstanding
During the period ended November 30, 2008, the company issued 77,000,000 common
shares for total proceeds of $50,000.
As at August 31, 2010, the company has no warrants or options outstanding.
NOTE 5 - INCOME TAXES
The Company provides for income taxes using an asset and liability approach.
Deferred tax assets and liabilities are recorded based on the differences
between the financial statement and tax bases of assets and liabilities and the
tax rates in effect currently.
Deferred tax assets are reduced by a valuation allowance if, based on the weight
of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. In the Company's opinion, it is
uncertain whether they will generate sufficient taxable income in the future to
fully utilize the net deferred tax asset. Accordingly, a valuation allowance
equal to the deferred tax asset has been recorded. The total deferred tax asset
is $8,840, which is calculated by multiplying a 22% estimated tax rate by the
cumulative NOL of $40,183.
NOTE 6 - RELATED PARTY TRANSACTION
As at August 31, 2010, there is a balance owing to a stockholder of the Company
in the amount of $100.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
NOTE 7 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. The Company has no established source
of revenue. This raises substantial doubt about the Company's ability to
continue as a going concern. Without realization of additional capital, it would
be unlikely for the Company to continue as a going concern. The financial
statements do not include any adjustments that might result from this
uncertainty.
The Company's activities to date have been supported by equity financing. It has
sustained losses in all previous reporting periods with an inception to date
loss of $40,183 as of August 31, 2010. Management continues to seek funding from
its shareholders and other qualified investors.
10
FIRST AMERICAN SILVER CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010
NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENTS
In May 2009, FASB issued ASC 855, Subsequent Events, which establishes general
standards of for the evaluation, recognition and disclosure of events and
transactions that occur after the balance sheet date. Although there is new
terminology, the standard is based on the same principles as those that
currently exist in the auditing standards. The standard, which includes a new
required disclosure of the date through which an entity has evaluated subsequent
events, is effective for interim or annual periods ending after June 15, 2009.
The adoption of ASC 855 did not have a material effect on the Company's
financial statements.
In June 2009, the FASB issued guidance now codified as ASC 105, Generally
Accepted Accounting Principles as the single source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in conformity with U.S. GAAP, aside from
those issued by the SEC. ASC 105 does not change current U.S. GAAP, but is
intended to simplify user access to all authoritative U.S. GAAP by providing all
authoritative literature related to a particular topic in one place. The
adoption of ASC 105 did not have a material impact on the Company's financial
statements, but did eliminate all references to pre-codification standards.
In August 2009, FASB issued an amendment to the accounting standards related to
the measurement of liabilities that are recognized or disclosed at fair value on
a recurring basis. This standard clarifies how a company should measure the fair
value of liabilities and that restrictions preventing the transfer of a
liability should not be considered as a factor in the measurement of liabilities
within the scope of this standard. This standard is effective for the Company on
October 1, 2009. The adoption of this amendment did not have a material effect
on the Company's financial statements.
In October 2009, FASB issued an amendment to the accounting standards related to
the accounting for revenue in arrangements with multiple deliverables including
how the arrangement consideration is allocated among delivered and undelivered
items of the arrangement. Among the amendments, this standard eliminated the use
of the residual method for allocating arrangement considerations and requires an
entity to allocate the overall consideration to each deliverable based on an
estimated selling price of each individual deliverable in the arrangement in the
absence of having vendor-specific objective evidence or other third party
evidence of fair value of the undelivered items. This standard also provides
further guidance on how to determine a separate unit of accounting in a
multiple-deliverable revenue arrangement and expands the disclosure requirements
about the judgments made in applying the estimated selling price method and how
those judgments affect the timing or amount of revenue recognition. This
standard, for which the Company is currently assessing the impact, will become
effective on January 1, 2011.
In October 2009, the FASB issued an amendment to the accounting standards
related to certain revenue arrangements that include software elements. This
standard clarifies the existing accounting guidance such that tangible products
that contain both software and non-software components that function together to
deliver the product's essential functionality, shall be excluded from the scope
of the software revenue recognition accounting standards. Accordingly, sales of
these products may fall within the scope of other revenue recognition standards
or may now be within the scope of this standard and may require an allocation of
the arrangement consideration for each element of the arrangement. This
standard, for which the Company is currently assessing the impact, will become
effective on January 1, 2011.
In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities
that declare dividends to shareholders that may be paid in cash or shares at the
election of the shareholders are considered to be a share issuance that is
reflected prospectively in EPS, and is not accounted for as a stock dividend.
This standard is effective for interim and annual periods ending on or after
December 15, 2009 and is to be applied on a retrospective basis. The adoption of
this standard is not expected to have a significant impact on the Company's
financial statements.
11
FIRST AMERICAN SILVER CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2010
In January 2010, the FASB issued an amendment to ASC 820, Fair Value
Measurements and Disclosure, to require reporting entities to separately
disclose the amounts and business rationale for significant transfers in and out
of Level 1 and Level 2 fair value measurements and separately present
information regarding purchase, sale, issuance, and settlement of Level 3 fair
value measures on a gross basis. This standard, for which the Company is
currently assessing the impact, is effective for interim and annual reporting
periods beginning after December 15, 2009 with the exception of disclosures
regarding the purchase, sale, issuance, and settlement of Level 3 fair value
measures which are effective for fiscal years beginning after December 15, 2010.
The Company has implemented all new accounting pronouncements that are in effect
and that may impact its financial statements and does not believe that there are
any other new accounting pronouncements that have been issued that might have a
material impact on its financial statements.
NOTE 9 - SUBSEQUENT EVENTS
The Company has analyzed its operations subsequent to August 31, 2010 through
October 19, 2010, the date these financial statements were issued, and has
determined that it does not have any material subsequent events to disclose in
these financial statements.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, that may cause our or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) and
are prepared in accordance with United States Generally Accepted Accounting
Principles. The following discussion should be read in conjunction with our
financial statements and the related notes that appear elsewhere in this
quarterly report. The following discussion contains forward-looking statements
that reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed below and elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all dollar amounts are
expressed in United States dollars. All references to "US$" refer to United
States dollars and all references to "common stock" refer to the common shares
in our capital stock.
As used in this quarterly report, the terms "we", "us", "our" and "our company"
mean First American Silver Corp., unless otherwise indicated.
OVERVIEW
We were incorporated in the state of Nevada on April 29, 2008 as Mayetok, Inc.,
and changed our name on June 8, 2010 to First American Silver Corp . Our offices
are currently located at 10900 N.E. 4th Street, Suite 2300, Bellevue, Washington
98004. Our telephone number is (425) 698-2030. Our website, www.mayetokinc.com,
is currently under construction and the information that is or will be contained
on our website does not form a part of the registration statement of which this
prospectus is a part.
We are a development stage company that has not generated any revenue and has
had limited operations to date. From April 29, 2008 (inception) to May 31, 2010,
we have incurred accumulated net losses of $40,183. As of August 31, 2010, we
had total assets of $15,667 and total liabilities of $5,850. Based on our
financial history since inception, our independent auditor has expressed doubt
as to our ability to continue as a going concern.
RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED AUGUST 31, 2010 AND
2009 AND THE PERIOD FROM INCEPTION (APRIL 30, 2008) TO AUGUST 31, 2010
We did not earn any revenues from inception through the period ending August 31,
2010.
13
We incurred a net loss in the amount of $2,052 for the three months ended August
31, 2010 compared to $2,501 for the three months ended August 31, 2009. We
incurred a net loss in the amount of $10,199 for the nine months ended August
31, 2010 compared to $12,971 for the nine months ended August 31, 2009. We
incurred a net loss of $40,183 for the period from our inception on April 29,
2008 to August 31, 2010.
Our operating expenses incurred for the three months ended August 31, 2010
included $1,000 for accounting and legal fees, $1,052 in miscellaneous expenses
compared the three months ended August 31, 2009 of $875 for accounting and legal
fees and $1,626 in miscellaneous expenses. Our operating expenses incurred for
the nine months ended August 31, 2010 included $7,047 for accounting and legal
fees, $3,152 in miscellaneous expenses compared the nine months ended August 31,
2009 of $8,963 for accounting and legal fees and $4,008 in miscellaneous
expenses. Our operating expenses incurred for the period from our inception on
April 29, 2008 to August 31, 2010 included $29,940 for accounting and legal
fees, $8,856 in miscellaneous fees and $1,387 in incorporation costs. We
anticipate our operating expenses will increase as we undertake our plan of
operations. The increase will be attributable to undertaking operations and the
professional fees that we will incur in connection with becoming a reporting
company under the Securities Exchange Act of 1934.
LIQUIDITY AND CAPITAL RESOURCES
As of August 31, 2010, we had current assets in the amount of $15,667,
consisting of cash and prepaid expenses. Our current liabilities as of August
31, 2010 were $5,850. Thus our working capital on August 31, 2010 was $9,817.
Our cash used in operating activities was $9,849 for the nine months ended
August 31, 2010 and $49,333 for the period from inception on April 29, 2008 to
August 31, 2010.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue our business plan over the next twelve months. If we do not
generate revenue sufficient to sustain operations, we may not be able to
continue as a going concern.
OFF BALANCE SHEET ARRANGEMENTS
As of August 31, 2010, there were no off balance sheet arrangements.
GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in the notes to the
financial statements, we have no established source of revenue. Our auditors
have expressed substantial doubt about our ability to continue as a going
concern. Without realization of additional capital, it would be unlikely for us
to continue as a going concern. The financial statements do not include any
adjustments that might result from this uncertainty.
Our activities to date have been supported by equity financing. We have
sustained losses in all previous reporting periods with an inception to date
loss of $40,183 as of August 31, 2010. Management continues to seek funding from
its shareholders and other qualified investors to pursue our business plan. In
the alternative, we may be amenable to a sale, merger or other acquisition in
the event such transaction is deemed by management to be in the best interests
of the shareholders.
CRITICAL ACCOUNTING POLICIES
In December 2001, the SEC requested that all registrants list their most
"critical accounting polices" in the Management Discussion and Analysis. The SEC
indicated that a "critical accounting policy" is one which is both important to
14
the portrayal of a company's financial condition and results, and requires
management's most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain. We believe that the following accounting policies fit this
definition.
BASIS OF PRESENTATION
The accompanying unaudited interim financial statements have been prepared on
the accrual basis of accounting in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission ("SEC"), and should be read in conjunction
with the audited financial statements and notes thereto contained in the
Company's registration statement filed with the SEC on Form 10-K. In the opinion
of management, all adjustments necessary in order to make the financial
statements not misleading have been reflected herein. The results of operations
for interim periods are not necessarily indicative of the results to be expected
for the full year. Notes to the financial statements which would substantially
duplicate the disclosure contained in the audited financial statements as of and
for the periods ended November 30, 2009 as reported in Form 10-K, have been
omitted.
ACCOUNTING BASIS
These financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
FINANCIAL INSTRUMENT
Our company's financial instrument consists of amount due to stockholder. The
amount due to stockholder is non interest-bearing. It is management's opinion
that our company is not exposed to significant interest, currency or credit
risks arising from its other financial instruments and that their fair values
approximate their carrying values except where separately disclosed.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles of the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.
LOSS PER SHARE
Net income (loss) per common share is computed based on the weighted average
number of common shares outstanding and common stock equivalents, if not
anti-dilutive. Our company has not issued any potentially dilutive common
shares.
Basic loss per share is calculated using the weighted average number of common
shares outstanding and the treasury stock method is used to calculate diluted
earnings per share. For the years presented, this calculation proved to be
anti-dilutive.
15
DIVIDENDS
Our company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown.
INCOME TAXES
Our company provides for income taxes using an asset and liability approach.
Deferred tax assets are reduced by a valuation allowance if, based on the weight
of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized. No provision for income taxes is
included in the statement due to its immaterial amount, net of the allowance
account, based on the likelihood of our company to utilize the loss
carry-forward.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Below is a listing of the most recent accounting standards SFAS 150-154 and
their effect on our company.
In May 2009, the FASB issued SFAS 165 (ASC 855-10) entitled "Subsequent Events".
Companies are now required to disclose the date through which subsequent events
have been evaluated by management. Public entities (as defined) must conduct the
evaluation as of the date the financial statements are issued, and provide
disclosure that such date was used for this evaluation. SFAS 165 (ASC 855-10)
provides that financial statements are considered "issued" when they are widely
distributed for general use and reliance in a form and format that complies with
GAAP. SFAS 165 (ASC 855-10) is effective for interim and annual periods ending
after June 15, 2009 and must be applied prospectively. The adoption of SFAS 165
(ASC 855-10) during the year ended November 30, 2009 did not have a significant
effect on our company's financial statements as of that date. In connection with
the preparation of the accompanying financial statements as of August 31, 2010,
management evaluated subsequent events through the date that such financial
statements were issued.
In June 2009, the FASB issued SFAS 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles.
("SFAS 168" or ASC 105-10) SFAS 168 (ASC 105-10) establishes the Codification as
the sole source of authoritative accounting principles recognized by the FASB to
be applied by all nongovernmental entities in the preparation of financial
statements in conformity with GAAP. SFAS 168 (ASC 105-10) was prospectively
effective for financial statements issued for fiscal years ending on or after
September 15, 2009 and interim periods within those fiscal years. The adoption
of SFAS 168 (ASC 105-10) on July 1, 2009 did not impact our company's results of
operations or financial condition. The Codification did not change GAAP,
however, it did change the way GAAP is organized and presented.
As a result, these changes impact how companies reference GAAP in their
financial statements and in their significant accounting policies. Our company
implemented the Codification in this Report by providing references to the
Codification topics alongside references to the corresponding standards.
With the exception of the pronouncements noted above, no other accounting
standards or interpretations issued or recently adopted are expected to have a
material impact on Our company's financial position, operations or cash flows.
The adoption of these and other new Statements is not expected to have a
material effect on our current financial position, results or operations, or
cash flows.
16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
ITEM 4. CONTROLS AND PROCEDURES
MANAGEMENT'S QUARTERLY EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures are controls and procedures that are designed
to ensure that information required to be disclosed in our reports filed under
the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the SEC's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by our company in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to our management, including its principal executive and principal financial
officers, or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure. Our management carried out an
evaluation under the supervision and with the participation of our Chief
Executive Officer and Principal Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures pursuant to Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange
Act"). Based upon that evaluation, our Chief Executive Officer and Principal
Financial Officer have concluded that our disclosure controls and procedures
were not effective as of August 31, 2010, due to the material weaknesses
resulting from i) a lack of a formally adopted and written code of business
conduct and ethics that governs to the Company's employees, officers and
directors; ii) controls were not designed and in place to ensure that all
disclosures required were originally addressed in our financial statements; and,
iii) controls were not designed and in place to ensure that equity transactions
were properly reflected. Please refer to our Annual Report on Form 10-K as filed
with the SEC on October 15, 2010, for a complete discussion relating to the
foregoing evaluation of Disclosures and Procedures.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in internal controls over financial reporting that
occurred during the nine months ended August 31, 2010, that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not a party to any pending legal proceeding. We are not aware of any
pending legal proceeding to which any of our officers, directors, or any
beneficial holders of 5% or more of our voting securities are adverse to us or
have a material interest adverse to us.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
17
ITEM 4. [REMOVED AND RESERVED]
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
Exhibit
Number Description of Exhibit
------ ----------------------
31.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
31.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
32.1 Certification of Chief Executive Officer and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
18
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
First American Silver Corp.
Date: October 15, 2010
By: /s/ Robert Suda
--------------------------------------
Robert Suda
Title: President and Sole Director
1
