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 December 31, 2012
|| Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of
1934 For the transition period _____________to______________
Commission File Number 333-174872
COLORADO GOLD MINES, INC.
------------------------------------
(Exact name of small Business
Issuer as specified in its
charter)
Nevada 68-0681435
--------------------------------- ------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3896 Ruskin Street
Las Vegas, NV 89147 80162-0490
---------------------------------------- ------------------------------
(Address of principal executive offices) (Postal or Zip Code)
Issuer's telephone number, including area code: 702-553-5308
-------------------------------
(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 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-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such file). |X| Yes || No
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer || Accelerated filer ||
Non-accelerated filer || Small reporting company |X|
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
||Yes |X| No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 67,500,000 shares of common stock as
of February 7, 2013.
1
COLORADO GOLD MINES, INC
formerly CASCADE SPRINGS LTD.
(An Exploration Stage Company)
BALANCE SHEET
ASSETS
December 31, 2012 March 31, 2012
---------------------------------
(Unaudited)
Current assets:
Cash $ 25 $ 3,298
---------------------------------
Total current assets $ 25 $ 3,298
---------------------------------
Total assets $ 25 $ 3,298
=================================
LIABILITIES AND
STOCKHOLDERS'
DEFICIT
Current liabilities:
Accounts payable $ 26,853 $ --
Accounts payable, former
Officer and Director 72,000 5,604
Loan from former
officer and director 33,950 68,880
Notes payable, unrelated
party 28,027
---------------------------------
Total current liabilities 160,830 74,484
---------------------------------
Total liabilities 160,830 74,484
---------------------------------
Common stock, $0.001 par value, 67,500 67,500
100,000,000 shares authorized,
67,500,000 shares issued and
outstanding at December 31, 2012
and March 31, 2012, respectively
Preferred stock, $0.0001 par value, 800 --
20,000,000 shares authorized,
8,000,000 shares outstanding at
December 31, 2012 and no shares
isuued atMarch 31, 2012
Additional paid-in capital 13,862,370 (41,025)
Deficit accumulated during the exploration stage (14,091,475) (97,661)
-----------------------------
Total stockholders' deficit (160,805) (71,186)
-----------------------------
Total liabilities and stockholders' deficit $ 25 $ 3,298
=============================
The accompanying notes are an integral part of these financial
statements.
2
COLORADO GOLD MINES, INC
formerly CASCADE SPRINGS LTD.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
For the three and nine months ended December 31, 2012 and 2011
and the period from January 19, 2010 (inception) through
December 31, 2012
(Unaudited)
Inception
Three months Three months Nine months Nine months through
ended December ended December ended December 31, ended December December 31,
31, 2012 31, 2011 2012 31, 2011 2012
----------------------------------------------------------------------------------------
Costs and expenses:
Mineral exploration $ -- $ -- $ -- $ 903 $ 10,582
General and
administrative 15,000 30,585 137,640 63,641 214,615
------------- ------------- ------------- ------------ -----------
Total expenses 15,000 16,861 137,640 64,544 225,197
------------- ------------- ------------- ------------ -----------
Net loss from operations (15,000) (30,585) (137,640) (64,544) (225,197)
Impairment expense (13,760,000) -- (13,860,000) -- (13,868,000)
Cancellation of
Common Stock 5,000 5,000 5,000
Interest expense -- (799) (1,174) (1,032) (3,278)
------------- ------------- ------------- ------------ -----------
Net loss $ (13,770,000) $ (31,384) $(13,993,814) $ (65,576) $(14,091,475)
------------- ------------- ------------- ------------ -----------
Net loss per share:
Basic and diluted $ ( 0.00) $ ( 0.00) $ ( 0.00) $ ( 0.00)
============= ============= ============= ============
Weighted average shares
outstanding:
Basic and diluted 69,160,000 67,500,000 67,500,000 7,500,000
============= ============= ============= ============
The accompanying notes are an integral part of these financial statements.
3
COLORADO GOLD MINES, INC
formerly CASCADE SPRINGS LTD.
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
For the nine months ended December 31, 2012 and 2011 and the
period from January 19, 2010 (inception) through December 31, 2012
(Unaudited)
Nine months ended Nine months ended Inception through
December 31, 2012 December 31, 2011 December 31, 2012
--------------------------------------------------------
OPERATING ACTIVITIES
Net loss $(13,993,814) $ (65,576) $(14,091,475)
Adjustment to reconcile net
loss to cash used in
operating activities:
Impairment expense 13,860,000 -- 13,868,000
Forgivness of Loan 48,470 -- 48,470
Gain on Common Stock
Cancellation (5,000) -- (5,000)
Stock based compensation 725 1,450 2,900
Net change in:
Accounts payable 26,853 -- 26,853
Accounts payable, related
party 66,396 5,532 72,000
------------------------------------------------------
CASH FLOWS USED IN OPERATING 3,630 (58,594) (78,252)
------------------------------------------------------
ACTIVITIES
INVESTING ACTIVITIES
Purchase of mineral property -- -- (8,000)
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CASH FLOWS USED IN INVESTING -- -- (8,000)
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ACTIVITIES
FINANCING ACTIVITIES:
Proceeds from issuance of
common stock -- -- 24,300
Proceeds from Notes
Payable, unrelated party 61,977 -- 28,027
Proceeds from related party
advances, net (68,880) 48,470 33,950
------------------------------------------------------
CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES (6,903) 48,470 86,277
------------------------------------------------------
NET CHANGE IN CASH (3,273) (10,124) 25
Cash, beginning of period 3,298 10,467 --
------------------------------------------------------
Cash, end of period 25 343 25
======================================================
SUPPLEMENTAL CASH FLOW
INFORMATION
Cash paid on interest
expenses $ -- $ --
====================================
Cash paid for income taxes $ -- $ --
====================================
NON CASH TRANSACTIONS:
Issuance of preferred stock
for Keeno Option $ 13,760,000 $ -- $ 13,760,000
The accompanying notes are an integral part of these financial statements.
4
COLORADO GOLD MINES, INC.
Formerly CASCADE SPRINGS LTD.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2012
(UNAUDITED)
Note 1 Basis of Presentation
The accompanying unaudited interim financial statements of Colorado Gold
Mines, Inc. (formerly Cascade Springs, Ltd.) ("CGM" or the "Company") have
been prepared 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 on June 14, 2012. In the
opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position and
the results of operations for the interim periods presented have been
reflected herein. The results of operations for the interim periods are not
necessarily indicative of the results to be expected for the full year.
Notes to the financial statements that would substantially duplicate the
disclosure contained in the audited financial statements for fiscal 2012,
as reported on the Form 10-K of the Company, have been omitted.
General
The Company is in the exploration stage, and is in the process of exploring
and evaluating its mineral properties and determining whether they contain
ore reserves that are economically recoverable. The recoverability of
amounts shown for mineral properties is dependent upon the discovery of
economically recoverable ore reserves, the ability of the Company to obtain
the necessary financing to complete development, confirmation of the
Company's interest in the underlying mineral claims and upon future
profitable production or proceeds from the disposition of all or part of
its mineral properties.
Note 2 Going Concern
These financial statements have been prepared in accordance with generally
accepted accounting principles applicable to a going concern, which assumes
that the Company will be able to meet its obligations and continue its
operations for its next fiscal year. Realization values may be
substantially different from carrying values as shown and these financial
statements do not give effect to adjustments that would be necessary to the
carrying values and classification of assets and liabilities should the
Company be unable to continue as a going concern. At December 31, 2012, the
Company had not yet achieved profitable operations, has accumulated losses
of $(14,091,475) and expects to incur further losses in the development of
its business, all of which raise substantial doubt about the Company's
ability to continue as a going concern. The Company's ability to continue
as a going concern is dependent upon its ability to generate future
profitable operations and/or to obtain the necessary financing to meet its
obligations and repay its liabilities arising from normal business
operations when they come due. Management has no formal plan in place to
address this concern
5
but considers that the Company will be able to obtain additional funds by
equity financing and/or related party advances, however there is no
assurance of additional funding being available.
Note 3 Related Party Transactions
Part of the related party advance is due to a director of the Company for
funds advanced. The advance is unsecured, non-interest bearing and has no
specific terms for repayment. Another part of the related party advance is
due to Mr. Sawatsky, a former consultant and warrant holder of the Company,
for funds advanced with a 10% interest rate and has no specific terms for
repayment. Interest accrual was cancelled July 1, 2012.
Beginning April 1, 2011, Mr. Delahunte, the Company's former President,
began receiving $1,500 per month, when available, for services rendered.
Mr. Delahunte has since resigned and is no longer related to the Company
and is not receiving any compensation.
Mr. Delahunte, the Company's former President and Mr. Sawatsky, the
Company's former consultant, previously advanced $48,470 to this company.
Mr. Delahunte and Mr. Sawatsky agreed to forgive and cancel that
obligation. Accordingly, effective December 30, 2011, this $48,470
obligation of the Company has been extinguished.
On June 6, 2012, Robert Sawatsky loaned the Company $8,000. The loan has a
5% interest rate and matures June 7, 2014. Interest accrual was cancelled
July 1, 2012.
The Company was charged the following by directors of the Company:
Nine months Nine months ended
ended December December 31, 2011
31, 2012
-----------------------------------
Management fees $ - $ 9,000
===================================
Note 4 Commitments
On July 1, 2011, the Company entered into a consulting agreement (the
"Agreement") with a consultant. In accordance with the Agreement, the
Company granted the consultant warrants to purchase 5,400,000 shares of the
Company's common stock at an exercise price of $0.10 per share. The
warrants were held in escrow and were given to the consultant quarterly.
The warrants expire on July 1, 2014. The fair value of the warrants was
$2,900 and was recognized over the twelve months ended June 30, 2012.
Subsequently, this transaction was cancelled and the warrants were returned
to the Company.
Note 5 Equity
On July 3, 2012 Denver Equity Corporation, a corporation controlled by
Kelly Fielder purchased 41,250,000 shares of the Company's common stock
6
from Willaim Delahunte, then an officer and director of the Company, this
transaction resulted in a change of control of the Company.
On July 9, 2012 the Company's directors, and shareholders holding a
majority of the outstanding common stock of the Company, approved
amendments to the Company's Articles of Incorporation changing the name of
the Company to Colorado Gold Mines, Inc. and authorizing the issuance of
10,000,000 shares of preferred stock. The amendment was filed with the
Nevada Secretary of State on July 12, 2012. The change in the Company's
name became effective in the over-the-counter market on July 30, 2012.
On July 27, 2012 the Company, through a wholly-owned subsidiary, acquired a
50% interest in Union Milling Company, LLC ("Union") from Denver Equity
Corporation in exchange for 5,000,000 shares of the Company's common stock.
Union's assets consist of approximately 21 acres of real property, an ore
processing mill and various milling equipment. The mill has been inactive
since 1997 and was purchased by Union in 2007.
On September 20, 2012 Denver Equity Corporation lost its 50% interest in
Union due to its inability to comply with the terms of its agreement with
Union. Consequently, the Company no longer has any interest in Union and
its investment in Union has been changed to current period losses as an
impairment charge. The 5,000,000 shares of common stock previously issued
to Denver Equity were returned to the Company and cancelled.
On December 3, 2012 Natalie Gorman purchased 41,250,000 shares of the
Company's common stock from Kelly Fielder, then an officer and director of
the Company. This transaction resulted in a change in the control of the
Company. On December 31, 2012 the Company entered into an Option Agreement
with Global Resource Search Group, Inc. The agreement granted the Company
an option to purchase 12 unpatented mining claims and one mill site claim
located in Clark County, Nevada (the "Property"). In consideration for the
option, the Company issued to Global 8,000,000 shares of preferred stock.
Each preferred share entitles the holder to 40 votes on any matter which
the Company's shareholders are entitled to vote and is convertible at any
time, at the option of the holder, into four shares of the Company's common
stock; In order to exercise the option, the Company will have to: (i) pay
Global $500,000 by March 15, 2013; (ii) raise $2,500,000 by August 31,
2013; and (iii) spend $2,500,000 on mining exploration and development on
the Property by December 31, 2014. Upon exercise of the option, Global will
convey a 100% interest in the Property to the Company, but will retain a 5%
net smelter return in any production from the Property.
At the present time the property is undeveloped and has no proven reserves.
The Option Agreement pertains to the Keeno Strike gold and silver property.
The property consists of 12 unpatented 20-acre lode-mining claims and one
5-acre mill site claim located in Clark County, Nevada. The claims are
located near the historical Monte Cristo Mine and the Keeno-Mint workings
near Porter Wash near Interstate Highway 15.
The Keeno Strike property is located approximately 30 miles southwest of
Las Vegas in the historical mining district known as the Goodsprings
District that contains deposits of gold, silver, copper, cobalt nickel,
zinc and lead. One of the many mines in this district that historically
produced ore is the Yellow Pine mine about seven miles northwest of the
Keeno Strike property, which contained over 1.4 million ounces of silver.
In January, 2013 the directors of the Company and a shareholder holding a
majority of the Company's outstanding shares approved amendments to the
Company's Articles of Incorporation increasing the number of authorized
shares of common stock to 500,000,000 shares and increasing the number of
authorized shares of preferred stock to 20,000,000 shares.
7
FORWARD LOOKING STATEMENTS
The information contained in this Form 10-Q contains certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995. These
forward-looking statements involve risks and uncertainties, including among
other things, statements regarding our capital needs, business strategy and
expectations. Any statement which does not contain a historical fact may be
deemed to be a forward-looking statement. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expect", "plan", "intend", "anticipate", "believe", "estimate", "predict",
"potential" or "continue", the negative of such terms or other comparable
terminology. In evaluating forward looking statements, you should consider
various factors outlined in our latest Form 10-K, filed with the U.S. Securities
Exchange Commission ("SEC") on June 14, 2012, and, from time to time, in other
reports we file with the SEC. These factors may cause our actual results to
differ materially from any forward-looking statement. We disclaim any obligation
to publicly update these statements, or disclose any difference between our
actual results and those reflected in these statements.
Item 2. Management's Discussion and Analysis of Financial Condition and Plan of
Operation.
The Company was incorporated in Nevada as Cascade Springs Ltd. on January
19, 2010. In 2012 the Company amended its Articles of Incorporation changing the
its name to Colorado Gold Mines, Inc. The amendment was filed with the Nevada
Secretary of State and the Company's new name became effective in the
over-the-counter market on July 30, 2012.
On July 27, 2012 the Company, through a wholly owned subsidiary, acquired a
50% interest in Union Milling Company, LLC ("Union") from Denver Equity
Corporation in exchange for 5,000,000 shares of the Company's common stock.
Denver Equity Corporation is controlled by the Company's sole officer and
director.
On September 20, 2012 Denver Equity Corporation lost its 50% interest in
Union due to its inability to comply with the terms of its agreement with Union.
Consequently, the Company no longer has any interest in Union and its investment
in Union has been expensed.
On December 31, 2012 the Company entered into an Option Agreement with
Global Resource Search Group, Inc. The agreement granted the Company an option
to purchase 12 unpatented mining claims and one mill site claim (known as the
"Keeno Strike" property) located in Clark County, Nevada. In consideration for
the option, the Company issued 8,000,000 shares of its Series A preferred stock
to Global. Each preferred share entitles the holder to 40 votes on any matter on
which the Company's shareholders are entitled to vote and is convertible at any
time, at the option of the holder, into four shares of the Company's common
stock; In order to exercise the option, the Company is required to: (i) pay
Global $500,000 by March 15, 2013; (ii) raise $2,500,000 by August 31, 2013; and
(iii) spend $2,500,000 on mining exploration and development on the property by
December 31, 2014. Upon exercise of the option, Global will convey a 100%
interest in the property to the Company, but will retain a 5% net smelter return
in any production from the property.
At the present time the property is undeveloped and has no proven reserves.
8
The Company's new management and controlling shareholder have plans to
develop the Company into a silver and precious metals producer. The initial
transaction to accomplish this plan is the Option Agreement to purchase the
Keeno Strike property as described above in. There can no no assurance that this
transaction will be completed as described because it is based on future events
which may or may not take place as planned.
As of December 31, 2012, the Company had a non-binding arrangement with
Global Resource Search Group, Inc. to provide the Company with capital. There
can be no assurance that Global Resource Search Group, Inc. will be successful
in raising any capital required by the Company, Further, there is no assurance
that if an alternative source of capital is offered, it will be subject to terms
considered acceptable.
The Company did not have any off balance sheet arrangements as of December
31, 2012.
Item 4. Controls and Procedures.
(a) The Company maintains a system of controls and procedures designed to
ensure that information required to be disclosed in reports filed or
submitted under the Securities Exchange Act of 1934, as amended ("1934
Act"), is recorded, processed, summarized and reported within time
periods specified in the SEC's rules and forms and to ensure that
information required to be disclosed by it in the reports that it
files or submits under the 1934 Act is accumulated and communicated to
the Company's management, including the Company's Principal Executive
and Financial Officer, as appropriate to allow timely decisions
regarding required disclosure. As of December 31, 2012, the Company's
Principal Executive and Financial Officer evaluated the effectiveness
of the design and operation of its disclosure controls and procedures.
Based on that evaluation, the Company's Principal Executive and
Financial Officer concluded that the Company's disclosure controls and
procedures were effective.
(b) There were no changes in the Company's internal control over financial
reporting during the quarter ended December 31, 2012 that materially
affected, or are reasonably likely to materially affect, the Company's
internal control over financial reporting.
PART II
Item 6. Exhibits.
Exhibits
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act.
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COLORADO GOLD MINES, INC.
February 14, 2013 By: /s/ William K. Lundy
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William K. Lundy, Principal Executive Officer
February 14, 2013 By: /s/ Thomas W. Randall
------------------------------------
Thomas W. Randall, Principal Financial and
Accounting Officer
