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EXCEL - IDEA: XBRL DOCUMENT - AMERICAN CORDILLERA MINING CorpFinancial_Report.xls


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


[   ]

Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended February 28, 2013.

 

 

[X]

Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from January 1, 2013 to February 28, 2013.


000-50738

(Commission file number)


[amcor10q_022813002.gif]


AMERICAN CORDILLERA MINING CORPORATION


 (Exact name of small business issuer as specified in its charter)


Nevada

91-1959986

(State or other jurisdiction

(IRS Employer

of incorporation or organization)

Identification No.)


1314 S. Grand Blvd, Ste. 2-250, Spokane, WA 99202

(Address of principal executive offices)


(509) 744-8590

(Registrant’s telephone number)


______________________________________

(Former name, former address and former fiscal year, if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes [X]   No [  ]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive DataFile required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X]   No [  ]





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer [  ]

Accelerated filer [  ] 

Non-accelerated filer [  ] 

Smaller reporting company [X]

(Do not check if a smaller reporting company)

 


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [   ]   No [X]


As of April 22, there were 89,342,679 shares of the registrant’s common stock outstanding.




TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION

 

3

Item 1.

Financial Statements

 

3

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

20

Item 4.

Controls and Procedures

 

21

PART II – OTHER INFORMATION

 

22

Item 1.

Legal Proceedings

 

22

Item 1A.

Risk Factors

 

22

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

22

Item 3.

Defaults Upon Senior Securities

 

22

Item 4.

Mine Safety Disclosure [Not Applicable]

 

22

Item 5.

Other Information

 

22

Item 6.

Exhibits

 

23

SIGNATURES

 

 

24




- 2 -




PART I – FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


AMERICAN CORDILLERA MINING CORPORATION


INDEX TO FINANCIAL STATEMENTS

FEBRUARY 28, 2013


Consolidated Balance Sheets as of February 28, 2013 and December 31, 2012

4

  

 

Consolidated Statements of Operations for the Two Months Ended

 

February 28, 2013 and February 29, 2012

5

 

 

Consolidated Statements of Cash Flows for the Two Months Ended

 

February 28, 2013 and February 29, 2012

6

  

 

Notes to Consolidated Financial Statements

7





- 3 -





AMERICAN CORDILLERA MINING CORPORATION

AN EXPLORATION STAGE COMPANY

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

 

February 28,

2013

 

December 31,

2012

ASSETS

 

 

(unaudited)

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash

 

$

5,069 

 

$

10,051 

 

 

Prepaid expenses

 

4,682 

 

4,382 

 

 

 

Total Current Assets

 

9,751 

 

14,433 

 

 

 

 

 

 

 

 

 

Mineral rights

 

484,564 

 

484,564 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

494,315 

 

$

498,997 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable

 

$

18,851 

 

$

30,226 

 

 

Convertible notes payable

 

8,000 

 

10,500 

 

 

Notes payable

 

4,000 

 

4,000 

 

 

 

Total Current Liabilities

 

30,851 

 

44,726 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

30,851 

 

44,726 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

Preferred stock, 10,000,000 shares authorized, $0.001 par value; no shares issued and outstanding   

 

 

 

 

Common stock, 200,000,000 shares authorized, $0.001 par value; 89,342,679 and  88,742,679 shares issued and outstanding, respectively

 

89,343 

 

88,743 

 

 

Additional paid-in capital

 

4,360,110 

 

4,333,799 

 

 

Accumulated deficit prior to exploration stage

 

(462,504)

 

(462,504)

 

 

Accumulated deficit during the exploration stage

 

(3,523,485)

 

(3,505,767)

 

 

 

Total Stockholders' Equity (Deficit)

 

463,464 

 

454,271 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS'

       EQUITY (DEFICIT)

 

$

494,315 

 

$

498,997 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements

 




- 4 -





AMERICAN CORDILLERA MINING CORPORATION

AN EXPLORATION STAGE COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Period from

 

 

 

 

 

 

 

 

December 28, 2012

 

 

 

 

Quarter Ended

 

through

 

 

 

 

February 28, 2013

 

February 29, 2012

 

February 28, 2013

 

 

 

 

 

 

 

REVENUE

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

Marketing

 

 

500 

 

 

Rent

 

600 

 

600 

 

600 

 

General and administrative

 

311 

 

2,041 

 

319 

 

Professional fees

 

27,396 

 

26,642 

 

29,655 

 

 

TOTAL EXPENSES

 

28,307 

 

29,783 

 

30,574 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

(28,307)

 

(29,783)

 

(30,574)

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

Interest income

 

 

3,256 

 

 

Miscellaneous income

 

10,589 

 

 

10,589 

 

Interest expense

 

 

(4,298)

 

 

Loss on impairment

 

 

 

(3,503,500)

 

 

TOTAL OTHER INCOME (EXPENSE)

 

10,589 

 

(1,042)

 

(3,492,911)

 

 

 

 

 

 

 

 

 

 LOSS BEFORE INCOME TAXES

 

(17,718)

 

(30,825)

 

(3,523,485)

 

 

 

 

 

 

 

 

 

INCOME TAXES

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$

(17,718)

 

(30,825)

 

$

(3,523,485)

 

 

 

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE,

 

 

 

 

 

 

 

 

BASIC AND DILUTED

 

$

(0.00)

 

$

(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF

 

 

 

 

 

 

 

 

COMMON STOCK SHARES

 

 

 

 

 

 

 

 

OUTSTANDING, BASIC AND DILUTED

 

88,904,748 

 

5,490,232 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements

 




- 5 -





AMERICAN CORDILLERA MINING CORPORATION

AN EXPLORATION STAGE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the

Period from

 

 

 

 

 

 

 

 

December

28, 2012

 

 

 

 

Quarter Ended

 

 through

 

 

 

 

February 28, 2013

 

February 29, 2012

 

February 28, 2013

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

Net loss

 

$

(17,718)

 

$

(30,825)

 

$

(3,523,485)

 

Loss on impairment

 

 

 

3,503,500 

 

Miscellaneous adjustments from equity

 

(3,089)

 

 

(3,089)

 

Adjustments to reconcile net loss to net cash used by operations:

 

 

 

 

 

 

 

Decrease (increase) in interest receivable

 

 

(3,256)

 

 

 

Increase (decrease) in accounts payable

 

(11,375)

 

(3,441)

 

(9,116)

 

 

Increase (decrease) in prepaid expenses

 

(300)

 

 

(300)

 

 

Increase (decrease) in interest payable

 

 

4,298 

 

Net cash used by operating activities

 

(32,482)

 

(33,224)

 

(32,490)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

Increase in receivable

 

 

(32,500)

 

Net cash used by investing activities

 

 

(32,500)

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

Proceeds from sale of common stock

 

30,000 

 

46,000 

 

30,000 

 

Proceeds from convertible notes payable

 

 

25,000 

 

10,000 

 

Payments of notes payable

 

(2,500)

 

(20,000)

 

(2,500)

Net cash provided by financing activities

 

27,500 

 

51,000 

 

37,500 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

(4,982)

 

(14,724)

 

5,010 

CASH, BEGINNING OF PERIOD

 

10,051 

 

15,040 

 

59 

CASH, END OF PERIOD

 

$

5,069 

 

$

316 

 

$

5,069 

 

 

 

 

 

 

 

 

 

NON-CASH INVESTING AND FINANCING ACTIVITES

 

 

 

 

 

 

 

Shares issued for mineral rights

 

$

 

$

 

$

3,575,000 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW DISCLOSURES:

 

 

 

 

 

 

 

Interest paid

 

$

 

$

 

$

 

Income taxes paid

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements




- 6 -




AMERICAN CORDILLERA MINING CORP.

Notes to the Consolidated Financial Statements

February 28, 2013



NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS


American Cordillera Mining Corporation (formally APD Antiquities, Inc., and hereinafter “AMCOR” or “the Company”) was incorporated on July 23, 1996 under the laws of the State of Nevada for the purpose of acquiring, importing, marketing, and selling valuable antiquity and art items of Asian origin.


We are now an exploration stage company in the mineral industry. We previously located, explored, acquired and developed mineral properties. Our business operations had been limited to mineral exploration/development of selected properties in North America.  We will continue with this segment of our business plan. Our Board of Directors anticipates that these new ventures will add significantly to our potential for long term revenue and profit.


The Company maintains its corporate office in Spokane, Washington.  The Company’s 2012 fiscal year end was December 31, however the 2013 fiscal year has been changed to November 30th and the Company is filing its transitional first quarter as of the two months ended February 28, 2013.



NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


This summary of significant accounting policies of the Company is presented to assist in understanding the financial statements. The financial statements and notes are  representations of the Company’s management, which is responsible for their integrity and objectivity.


Exploration Stage Company

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to exploration stage companies. An exploration-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.  The Company has recognized that it has entered the exploration stage with the acquisition of the mineral properties on December 28, 2012 as described in Note 4.


Basis of Presentation

These unaudited interim consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”).  Such rules and regulations allow the omission of certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America, so long as such omissions do not render the financial statements misleading.


In the opinion of management, these financial statements reflect all adjustments that are necessary for a fair statement of the results for the periods presented.  All adjustments were of a normal recurring nature.  These interim financial statements should be read in conjunction with the annual financial statements of the Company included in its Annual Report on Form 10-K.


Consolidation Policy

The Company and its wholly owned subsidiary, AMCOR Exploration, Inc. are presented as part of the consolidated financial statements and all material inter-company transactions have been eliminated in the presentation of the financial statements.


Accounting Method

The Company’s financial statements are prepared using the accrual method of accounting.


Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a remaining maturity of three months or less to be cash equivalents.


Fair Value of Financial Instruments

The Company’s financial instruments as defined in Topic 825 in the Accounting Standards Codification (ASC 825) include cash and cash equivalents, deposits and prepaid expenses, supplies inventory, investments in available-for-




- 7 -




sale securities and silver bars and coins, accounts payable and short-term borrowings.  All instruments other than the investments in available-for-sale securities and silver bars and coins are accounted for on an historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at the reporting dates.  Investments in available-for-sale securities and silver bars and coins are recorded at fair value at the reporting dates in accordance with ASC Topic 825.


Fair Value Measurements

Topic 820 in the Accounting Standards Codification (ASC 820) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. In this standard, the FASB clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, ASC 820 establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy is as follows:


 

Level 1 inputs — Unadjusted quoted process in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date.


 

Level 2 inputs — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.


 

Level 3 inputs — Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.


Commitments and contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.


Income taxes

The Company accounts for income taxes under paragraph 710-10-30-2 of the FASB Accounting Standards Codification.  Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  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 the statements of operations in the period that includes the enactment date.


The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”).  Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.  Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.


Net income (loss) per common share

Net income (loss) per common share is computed pursuant to paragraph of 260-10-45-10 of the FASB Accounting Standards Codification.  Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during each period.  Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period to reflect the potential dilution that could occur




- 8 -




from common shares issuable through stock options and warrants.  There were no potentially dilutive shares outstanding as of February 28, 2013 and February 29, 2012.


Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period.  Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of Shoshone’s financial position and results of operations.


Revenue Recognition

As an exploration stage company, the Company’s revenue from operations is referred to as income earned during the exploration stage. Revenue is recognized when title and risk of ownership of metals or metal bearing concentrate have passed and collection is reasonably assured. Revenue from the sale of metals may be subject to adjustment upon final settlement of estimated metal prices, weights and assays, and are recorded as adjustments to revenue in the period of final settlement of prices, weights and assays; such adjustments are typically not material in relation to the initial invoice amounts.


Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has adopted a stock option plan but has not granted any stock options.


Mining Properties, Land and Water Rights

Costs of acquiring and developing mining properties, land and water rights are capitalized as appropriate by project area. Exploration and related costs and costs to maintain mining properties, land and water rights are expensed as incurred while the property is in the exploration and evaluation stage. Development and related costs and costs to maintain mining properties, land and water rights are capitalized as incurred while the property is in the development stage. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production basis over proven and probable reserves. Mining properties, land and water rights are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, a gain or loss is recognized and included in the consolidated statement of operations.  See Note  4.


Mineral Exploration and Development Costs

All exploration expenditures are expensed as incurred. Significant property acquisition payments for active exploration properties are capitalized. If no economic ore body is discovered, previously capitalized costs are expensed in the period the property is abandoned. Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized and amortized on a units-of-production basis over proven and probable reserves.


Should a property be abandoned, its capitalized costs are charged to operations. The Company charges to the consolidated statement of operations the allocable portion of capitalized costs attributable to properties sold. Capitalized costs are allocated to properties sold based on the proportion of claims sold to the claims remaining within the project area.


Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation.  These reclassifications had no effect on reported losses.


Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements, and no pronouncements were determined to have a significant impact on the financial statements that have not been disclosed in prior reporting periods.


Subsequent events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events.  The Company will disclose the date through which subsequent events have been evaluated and that date is the date when the financial statements were issued.






- 9 -




NOTE 3 – GOING CONCERN


As reflected in the accompanying financial statements, the Company had an accumulated deficit of $3,985,989 at February 28, 2013, and had a net loss of $17,718 and net cash used in operating activities of $32,482 for the two months ended February 28, 2013.


While the Company is attempting to generate sufficient revenues, the Company’s cash position may not be sufficient enough to support the Company’s daily operations.  Management intends to raise additional funds by way of a public or private offering.  Management believes that the actions presently being taken to further implement its business plan and generate sufficient revenues provide the opportunity for the Company to continue as a going concern.  While the Company believes in the viability of its strategy to generate sufficient revenues and in its ability to raise additional funds, there can be no assurances to that effect.  The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenues.


The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.



NOTE 4 – MINERAL PROPERTY


Pursuant to the execution of the Asset Purchase Agreement on December 28, 2012, the Company acquired certain mineral properties and interests made up of the following nine projects which will be owned outright by our company or controlled pursuant to mineral lease agreements or options to acquire leases: 1) an agreement to explore and acquire the Bayhorse silver mine consisting of 3 patented and 21 unpatented claims located in Baker County, Oregon; 2) a lease agreement pertaining to 37 unpatented mining claims located on Quartz Creek, in Mineral County, Montana; 3) a lease agreement pertaining to 58 unpatented mining claims located Trout Creek, in Mineral County, Montana; 4) a lease agreement pertaining to 18 unpatented mining claims referred to as the Vienna prospect locate in Shoshone County, Idaho; 5) a lease agreement pertaining to the Monitor-Richmond and Copper Age mines consisting of a total of 20 unpatented mining claims located in Shoshone County, Idaho; 6) the option to acquire ten leases granted by the State of Washington covering 4,664 acres of state mineral leases and 27 unpatented mining claims known as the Toroda Creek Project in the Bodie Mining District in Okanogan County, Washington; 7) acquisition agreements pertaining to 15 unpatented mining claims located in Stevens County, Washington referred to as the Box Group; 8) acquisition agreements pertaining to 15 unpatented mining claims located in Stevens County, Washington referred to as the McKinley-McNally Property; and 9) directly owned all right, title, and claim to 26 unpatented claims commonly known as the North Moccasin Project or Plum Claims located in Fergus County, Montana.  In addition to these nine projects, we also seek to find, develop, produce and sell other precious metal and mineral property interests.


As part of the acquisition of the properties the Company converted a note receivable from Northern Adventures LLC of $382,500 and accrued interest on the note of $30,564.  The Company also issued 71,500,000 shares of its common stock valued at $0.05 per share for a total stock value of $3,575,000.  The Company recognized a total acquisition cost of the mineral properties of $3,988,064.  Subsequent to the acquisition, management decided to impair the value of the acquired mineral properties by $3,503,500.  This impairment was a consequence of the assets being exploratory in nature and not being supported any ore reserves.  It is not possible to evaluate and establish the real value of the mineral properties until additional work is completed and that may take several years.  With that being stated, our position is that these acquired mineral assets, which consist of ownership of unpatented mining claims, acquired mineral leases and an option to acquire certain mineral leases granted by the Department of Natural Resources for the State of Washington cannot be truly assessed at this time.  The Company assumes that these assets have been impaired and the exchange price based on $.05 per share is not supportable as the possible value of these assets in the future.  The Company impaired the stock value exchange to $71,500 and the carrying value of all mineral properties was determined to be $484,564 as of February 28, 2013 and December 31, 2012.



NOTE 5 – COMMITMENTS AND CONTINGENCIES


Rental Agreement

The Company has a month-to-month rental agreement for office space in Spokane, Washington.  The monthly rent is $300.






- 10 -




Obligations Under Mineral Property Agreements

We currently have five mineral properties leased from third parties and an option to acquire mineral prospecting and leases from the State of Washington, plus 27 unpatented mining claims. Below is a summary of the financial obligations, terms and conditions of each of the five leases.


Bayhorse Mine:


The date of our mining lease with Bayhorse Silver Mine LLC is June 26, 2012. The term of the lease on the 3 patented and 21 unpatented claims that make up the property is for 25 years, with an option to renew the lease for two additional successive terms of fifteen (15) years each, so long as there are ores or minerals being developed, mined, processed or marketed on a continuing basis or when exploration activities have advanced far enough that the construction activities related to the start up of ore production are expected to commence within one year. The initial consideration for the lease was a cash payment of ten thousand ($10,000) dollars. Annual minimum advanced royalties will be due the Lessor on the following basis. We are required to pay an annual advance minimum royalty of $10,000 on the first anniversary of this lease, $20,000 on the second anniversary, $30,000 on the third anniversary, $40,000 on the fourth anniversary, $50,000 on the fifth anniversary, and $50,000 on each anniversary thereafter.  There are also work requirements for each year and the lease calls for a variable net smelter royalty in the future.


Vienna Mine:


The date of our mining lease with Martin Clemets is June 26, 2012. The term of the lease on 18 unpatented claims that make up the property is for 25 years, with an option to renew the lease for two additional successive terms of fifteen (15) years each, so long as there are ores or minerals being developed, minded, processed or marketed on a continuing basis or when exploration activities have advanced far enough that the construction activities related to the start up of ore production are expected to commence within one year. The initial consideration for the lease was a cash payment of five thousand ($5,000) dollars. Annual minimum advanced royalties will be due the Lessor on the following basis. We are required to pay an annual advance minimum royalty of $10,000 on the first anniversary of this lease, $20,000 on the second anniversary, $30,000 on the third anniversary, $40,000 on the fourth anniversary, $50,000 on the fifth anniversary, and $50,000 on each anniversary thereafter.  There are also work requirements for each year and the lease calls for a variable net smelter royalty in the future.


Monitor-Richmond-Copper Age Mines:


The date of our mining lease with Northern Adventures LLC is June 27, 2012. The term of the lease on 20 unpatented claims that make up the property is for 25 years, with an option to renew the lease for two additional successive terms of fifteen (15) years each, so long as there are ores or minerals being developed, minded, processed or marketed on a continuing basis or when exploration activities have advanced far enough that the construction activities related to the start up of ore production are expected to commence within one year. The initial consideration for the lease was a cash payment of five thousand ($5,000) dollars. Annual minimum advanced royalties will be due the Lessor on the following basis. We are required to pay an annual advance minimum royalty of $10,000 on the first anniversary of this lease, $20,000 on the second anniversary, $30,000 on the third anniversary, $40,000 on the fourth anniversary, $50,000 on the fifth anniversary, and $50,000 on each anniversary thereafter. There are also work requirements for each year and the lease calls for a variable net smelter royalty in the future.  There are also work requirements for each year and the lease calls for a variable net smelter royalty in the future.  On February 5, 2013, the Company entered into a definitive Option Joint Venture Agreement with Archean Star Resources Inc. (ASR) pertaining to these 20 unpatented claims leased by AMCOR pursuant to a Mining Lease with Northern Adventures.


Archean Star Agreement


On February 5, 2013, we entered into a definitive Option and Joint Venture Agreement with Archean Star Resources Inc. (ASR) pertaining to 20 unpatented claims leased by AMCOR pursuant to a Mining Lease with Northern Adventures, LLC.  On June 27, 2012, Northern Adventures, LLC originally entered into the Mining Lease with Northern Adventures, Inc., and AMCOR assumed the rights in that Mining Lease from Northern Adventures, Inc. pursuant to the Asset Purchase Agreement dated December 28, 2013.  As part of the transaction, AMCOR received 500,000 shares of ASR common stock and will receive an additional 500,000 shares of ASR common stock on the second and third anniversaries of the agreement, subject to ASR going forward with the agreement after year one.  ASR will assume the obligations of the underlying lease agreement and paid an up-front fee of $7,500 to AMCOR.  Under the terms of the agreement ASR can earn up to 80% ownership interest in the property lease by expending $2,100,000 over a three year period, with a minimum expenditure of $700,000 in year one of the agreement.  




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AMCOR’s interest shall be a Carried Interest until such time as a Bankable Feasibility Study has been produced or a Decision to Mine has been made.  


Quartz Creek:


The date of our mining lease with Northern Adventures, LLC is June 26, 2012. The term of the lease on 37 unpatented claims that make up the property is for 25 years, with an option to renew the lease for two additional successive terms of fifteen (15) years each, so long as there are ores or minerals being developed, minded, processed or marketed on a continuing basis or when exploration activities have advanced far enough that the construction activities related to the start up of ore production are expected to commence within one year.  The initial consideration for the lease was a cash payment of twenty five thousand ($25,000) dollars. Annual minimum advanced royalties will be due the Lessor on the following basis. We are required to pay an annual advance minimum royalty of $10,000 on the first anniversary of this lease, $20,000 on the second anniversary, $30,000 on the third anniversary, $40,000 on the fourth anniversary, $50,000 on the fifth anniversary, and $50,000 on each anniversary thereafter.  There are also work requirements for each year and the lease calls for a variable net smelter royalty in the future.


Trout Creek:


The date of our mining lease with Northern Adventures LLC is June 26, 2012. The term of the lease on 58 unpatented claims that make up the property is for 25 years, with an option to renew the lease for two additional successive terms of fifteen (15) years each, so long as there are ores or minerals being developed, minded, processed or marketed on a continuing basis or when exploration activities have advanced far enough that the construction activities related to the start up of ore production are expected to commence within one year. The initial consideration for the lease was a cash payment of twenty five thousand ($25,000) dollars. Annual minimum advanced royalties will be due the Lessor on the following basis. We are required to pay an annual advance minimum royalty of $10,000 on the first anniversary of this lease, $20,000 on the second anniversary, $30,000 on the third anniversary, $40,000 on the fourth anniversary, $50,000 on the fifth anniversary, and $50,000 on each anniversary thereafter.  There are also work requirements for each year and the lease calls for a variable net smelter royalty in the future.


Washington State Mineral Prospecting Leases—Bodie Project Toroda Creek-Wauconda Mining District-Kinross Gold USA, Inc:


The terms and conditions for annual prospecting leases granted from the State of Washington require the expenditure of $3.00 per acre on prospecting or exploration on an annual basis during the term of the lease. The work conducted must be performed in such a manner as to contribute directly to the evaluation of the economic mineral potential of the leased property. As an alternative there is the option to make cash payment to the State in the amount of $3.00 per acre in lieu of the performance of prospecting work for up to, but not more than three (3) years during the term of the prospecting lease. In addition to the requirement to expend $3.00 per acre on prospecting and exploration on an annual basis, there is a requirement to pay the State of Washington an annual rental fee of $2.00 per acre for the first three years of the mineral prospecting lease and $3.00 per year for each subsequent year.  Pursuant to the assignment of the Washington State prospecting permit and leases to Kinross, all annual rental fees payable to the state of Washington and work requirements were assumed by Kinross, as detailed below.  On April 5, 2013 the Company exercised an option to acquire three mineral leases located in Okanogan County, Washington, pursuant to an Option to Purchase Mineral Leases between Hydro Imaging, Inc. and Northern Adventures, Inc. (NAI) entered into on June 25, 2012 and amended on December 7, 2012, which option was transferred to us on December 28, 2012 by NAI pursuant to an Asset Purchase Agreement.  The original option was granted by HydroImaging, Inc (Hydro), a private company owned solely by David Boleneus, currently a member of our board of directors, to NAI on June 25, 2012.  Under the terms of the original option Hydro granted the right to acquire ten leases granted by the Department of Natural Resources for the State of Washington totaling 4,583.76 acres and 27 unpatented mining claims located in the Toroda Creek-Wauconda Mining district in Okanogan country in the State of Washington for the payment of an exercise price of $10,000.  An amendment to the Option to Purchase Mineral Leases on December 7, 2012 provided Hydro the authority to enter into a Mining Lease and Assignment agreement with Kinross Gold USA, Inc. (Kinross), as an alternative to transferring the ten leases and subject to Hydro executing an agreement with Kinross.  As an alternative to acquiring the ten leases and pursuant to the amendment, AMCOR was also granted an option to acquire all right, title and interest in any agreement reached between Kinross and Hydro.  On February 28,  2013, Hydro concluded a Mining Lease and Assignment agreement with Kinross transferring seven of the ten mineral leases totaling 2,934.56 acres and a lease on 27 unpatented mining claims located in Okanogan County, Washington.  See subsequent events note below.





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NOTE  6 – NOTES PAYABLE


On December 28, 2012, $486,000 in promissory notes and $41,078 in related accrued interest owed to 16 individuals and entities were converted to common shares at $0.05 per share for a total of 10,541,567 shares issued.


On December 31, 2012, the Company entered into a definitive agreement with an accredited investor and executed a convertible promissory note relating to a loan in the amount of $10,000 at 8% interest per annum with a maturity date of January 31, 2013.  The maturity date was extended to June 30, 2013. $2,500 of this note was paid back on February 12, 2013, leaving $7,500 outstanding.  This promissory note and accrued interest can be converted to shares of restricted common stock at $.05 per share at any time during the term of the promissory note.


As of February 28, 2013, the Company had a few minor operating loans of which $500 was convertible note.  The Company also had three other minor notes totaling $4,000 which were not convertible.



NOTE  7 – PREFERRED AND COMMON STOCK


The Company has 10,000,000 shares of preferred stock authorized and none issued.  The Company has 200,000,000 shares of common stock authorized and 89,342,679 issued and outstanding as of February 28, 2013.


On December 28, 2012, the Company issued 10,541,568 shares of common stock in exchange for the conversion of debt in the principal amount of $486,000 and accrued interest in the amount of $41,078.


Also on December 28, 2012, the Company issued 71,500,000 shares of common stock to Northern Adventures, Inc. pursuant to an Asset Purchase Agreement which involved, in part, the exchange of debt in the amount of $382,500 and accrued interest in the amount of $30,564, which was applies as partial consideration for the purchase of mining assets.


On February 11, 2013, the Company entered into a definitive agreement relating to the private placement of $25,000 of its securities through the sale of 500,000 shares of its common stock at $0.05 per share to an accredited investor.


On February 19, 2013, the Company entered into a definitive agreement relating to the private placement of $5,000 of its securities through the sale of 100,000 shares of its common stock at $0.05 per share to an accredited investor.



NOTE  8 – STOCK OPTION PLAN


The Company’s Board of Directors approved the “2001 Non-Qualified Stock Option and Stock Appreciation Rights Plan” by unanimous consent on January 15, 2001 and then on November 30, 2012, authorized an increase in the total common stock, $.001 par value, available for issuance pursuant to the Corporation's 2001 Non-Qualified Stock Option and Stock Appreciation Rights Plan from one million (1,000,000) shares to five million (5,000,000) shares. This increase will be subjected to a vote of the shareholder as the next annual meeting. The total number of options that can be granted under the plan will not exceed 5,000,000 shares. Non-qualified stock options will be granted by the Board of Directors with an option price not less than the fair market value of the shares of common stock to which the non-qualified stock option relates on the date of grant. In no event may the option price with respect to an incentive stock option granted under the stock option plan be less than the fair market value of such common stock.


Each option granted under the stock option plan will be assigned a time period for exercising not to exceed ten years after the date of the grant. Certain other restrictions will apply in connection with this plan when some awards may be exercised. This plan is intended to encourage directors, officers, employees and consultants to acquire ownership of common stock. The opportunity so provided is intended to foster in participants a strong incentive to put forth maximum effort for our continued success and growth, to aid in retaining individuals who put forth such effort, and to assist in attracting the best available individuals to AMCOR in the future.



NOTE  9 – INCOME TAXES


The Company accounts for income taxes and the related accounts under the liability method.  Deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the




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income tax basis of assets and liabilities.  A valuation allowance is applied against any net deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.


At February 28, 2013 and December 31, 2012, the Company had gross deferred tax assets calculated at the expected rate of 35% of approximately $168,900 and $162,670, respectively, principally arising from net operating loss carry forwards for income tax purposes.  As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the deferred tax asset, a valuation allowance of $168,900 and $162,670 has been established at February 28, 2013 and December 31, 2012, respectively.


The significant components of the Company’s net deferred tax asset (liabilities) at February 28, 2013 and December 31, 2012 are as follows:


  

 

February 28, 2013

 

December 31,

2012

Net operating loss carryforwards

 

482,500 

 

$

464,771 

 

 

 

 

 

 

Gross deferred tax assets (liabilities):

 

 

 

 

 

Net Operating Loss

 

168,900 

 

162,670 

 

Valuation Allowance

 

(168,900)

 

(162,670)

 

 

 

 

 

 

Net Deferred tax asset (liability)

 

$

 

$



At February 28, 2013 and December 31, 2012, the Company has net operating loss carryforwards of $482,500 and $464,771, respectively, which will expire in the years 2016 through 2031.  The net change in the allowance account was an increase of $6,230.


The Company has had a change in control during 2012 which may limit the availability of prior years’ net operating losses under the Internal Revenue Code.  The Company will be assessing the ramification of this control change to determine the effect upon future income, but has not made a determination as of February 28, 2013.  The Company is currently in default on some of its federal tax reporting obligations, but expect no material financials obligations from this default.



NOTE  10 – SUBSEQUENT EVENTS


The company's management has evaluated the company's financial information for possible material subsequent events through April 22, 2013.  The following items are subsequent events being disclosed:


On March 8, 2013, the Company entered into a definitive agreement with an accredited investor and executed a convertible promissory note relating to a loan in the amount of $5,000 at 5% interest per annum with a maturity date of June 30, 2013.


On March 21, 2013, the Company entered into a definitive agreement with an accredited investor and executed a convertible promissory note relating to a loan in the amount of $3,000 at 5% interest per annum with a maturity date of June 30, 2013.


On April 4, 2013, non interest loans in the amount of $2,000, $850, $500, and $1,150 due to the company, in aggregate of $4,500, were repaid to note holders.


Kinross Agreement.


On April 5, 2013 AMCOR exercised an option to acquire three mineral leases located in Okanogan County, Washington, pursuant to an Option to Purchase Mineral Leases between Hydro Imaging, Inc. and Northern Adventures, Inc. (NAI) entered into on June 25, 2012 and amended on December 7, 2012, which option was transferred to us on December 28, 2012 by NAI pursuant to an Asset Purchase Agreement.  We also acquired Hydro Imaging’s rights in a Mineral Lease and Assignment agreement with Kinross Gold USA, Inc.  The original option was granted by HydroImaging, Inc (Hydro), a private company owned solely by David Boleneus, currently a member of our board of directors, to NAI on June 25, 2012.  Under the terms of the original option Hydro granted the right to acquire ten leases granted by the Department of Natural Resources for the State of Washington totaling




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4,583.76 acres and 27 unpatented mining claims located in the Toroda Creek-Wauconda Mining district in Okanogan country in the State of Washington for the payment of an exercise price of $10,000.


On February 28, 2013, Hydro concluded the Mining Lease and Assignment agreement with Kinross concerning seven of the ten mineral leases totaling 2,934.56 acres and a lease on 27 unpatented mining claims located in Okanogan County, Washington.  The seven state leases were transferred from Hydro to Kinross and approved by the State of Washington on March 27, 2013.  Pursuant to the terms of the Kinross agreement, Kinross will assume all of the underlying obligations, annual rental expenses, and work requirements related to the seven leases and 27 unpatented mining claims.  The remaining three state mining leases totaling 1,649.2 acres will be transferred from Hydro to AMCOR, subject to approval from the Department of Natural Resources for the State of Washington.    


Under the terms of the Mining Lease and Assignment agreement Kinross will pay AMCOR production royalties as follows: a 1% net smelter return royalty on all minerals extracted from the area covered by the 7 leases and a 2.5% net smelter return royalty on all minerals extracted from the area covered by the 27 unpatented mining claims.  The amount of royalties to be paid (both production royalties and advance royalty payments) are capped at $3 million per lease.  Kinross will also pay advance royalty payments in the aggregate amount of $1 million as follows:  $15,000 payable within 7 days of February 28, 2013, the effective date, $15,000 payable within 15 days of the effective date, $40,000 payable on February 28, 2014, $50,000 payable on February 28, 2015, and thereafter the annual advance royalty payment is to increase by 5% per year up to a maximum annual payment of $100,000.  The obligation to pay the advance royalty payment shall cease once an aggregate of $1 million has been paid.  Advance minimum royalty payments shall be creditable against the production royalties.  The production royalty payments for minerals produced from the state leases shall be capped at $3,000,000 for each of the seven leases, including any advanced royalty payments to be offset.  Kinross also undertakes to make such payments and undertake such other actions necessary to maintain the seven state mining leases and the unpatented claims in effect and good standing.





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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION


THE FOLLOWING PLAN OF OPERATIONS SECTION SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED IN THIS QUARTERLY REPORT ON FORM 10-Q.  ALL STATEMENTS IN THIS QUARTERLY REPORT RELATED TO OUR CHANGING FINANCIAL OPERATIONS AND EXPECTED FUTURE OPERATIONAL PLANS CONSTITUTE FORWARD-LOOKING STATEMENTS. THE ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED OR EXPRESSED IN SUCH STATEMENTS.  FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE.


This discussion and analysis of our financial condition and results of operations are based on our financial statements that have been prepared under accounting principles generally accepted in the United States of America.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results could materially differ from those estimates.  We have disclosed all significant accounting policies in Note 2 to the financial statements included in this Form 10-Q.


Corporate Background


American Cordillera Mining Corporation or AMCOR, was incorporated on July 23, 1996, under the laws of the State of Nevada for the purpose of acquiring, importing, marketing, and selling valuable antiquity and art items of Asian origin.


Since our inception to February 28, 2013, we have generated minimal revenue from our distribution and sales business, while incurring a loss of approximately $3,985,989 since inception.  Because we were unable to develop our Asian art and antiquities business into a financially viable business, the Board of Directors decided to redirect our business and to acquire mineral properties, leases on mineral properties and mining claims from Northern Adventures, Inc., a private Nevada corporation.


On December 28, 2012, AMCOR, AMCOR Exploration, Inc. a wholly owned subsidiary of American Cordillera Mining Corporation, Northern Adventures, LLC, and Northern Adventures, Inc. entered into an Asset Purchase Agreement to assign all right, title, and interest of specific NAI owned assets to AMCOR Exploration, with NAI shareholders, on a post acquisition basis, will hold a controlling 80.5% interest in American Cordillera Mining Corporation  The Asset Purchase Agreement was executed on December 28, 2012 by issuing restricted common stock as consideration to Northern Adventures, Inc. and the exchange of certain promissory notes from Northern Adventures LLC detailed in the Asset Purchase Agreement.  Under the terms of the Asset Purchase Agreement, AMCOR exchanged loans to NALLC in the amount of $382,500 including additional accrued interest and issued NAI 71,500,000 shares of restricted common stock as a total consideration for the assets acquired.  With the issuance of the 71,500,000 shares to NAI for transferring to its shareholders as a dividend, they own the controlling interest in AMCOR.


The Asset Purchase Agreement related to the acquisition of:  1) all right, title and interest in five existing mineral leases consisting of 154 unpatented claims and 3 patented claims; 2) ownership of 83 unpatented mining claims; and 3) the transfer of all right, title and interest to an Option to Purchase Mineral Leases agreement relating to ten mineral leases granted by the State of Washington covering 4,664 acres of land and 27 unpatented mining claims.  On December 6, 2012, the Option to Purchase Mineral Leases was amended between all the parties to the option agreement, Hydro Imaging, Inc., NAI and AMCOR.  The amended option agreement speaks to the possibility of a large company entering into an agreement with HydroImaging, Inc., the owner of the prospecting rights and future leases; and the claims, in which case AMCOR would still exercise the existing option pursuant to the same terms and conditions, the only material difference being that it would then acquire all right, title and interest in the agreement between HydroImaging and the unrelated third party company, as compared to acquiring the prospecting rights and future leases directly.  HydroImaging, Inc. is owned by David Boleneus, one of our directors.  See Subsequent Events below for a detailed description of the Mining Lease and Assignment agreement entered into with Kinross USA Gold, Inc relating to the ten mineral leases and 27 unpatented mining claims.


At November 30, 2012, a total of $41,078 of interest had accrued on the convertible promissory notes issued by AMCOR to 16 individuals and entities with an aggregate principal amount payable by AMCOR of $486,000.  All of these convertible promissory note holders agreed to convert the principal of their notes and the accrued interest on each note as of November 30, 2012 into 10,541,567  shares of restricted common stock at $.05 per share.




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Plan of Operations


AMCOR intends to conduct exploration for gold, silver and base metal deposits and mineral targets in; 1) the Coeur d’Alene Mining District of northern Idaho; 2) in the Quartz Creek Mining District of western Montana; 3) in the Connor Creek Mining District of eastern Oregon; 4) in the Kootenai ARC district in Idaho; 5) the Judith-Moccasin Mining District in central Montana; and 6) the Toroda Creek, Wauconda and Republic Mining Districts in northern Washington.  Our strategy is to explore for gold, silver and base metal deposits primarily in the Coeur d’Alene Mining District, a world class mining district and other known districts, by forming joint ventures with other companies who will potentially earn their interest in the property by contributing cash.  Revival of operations in old districts can be easily justified on the basis of increases in prices of metals in the last decade.


Several important corporate priorities set by AMCOR management are expressed by the choice of these abandoned mines, exploration projects, and prospects.  There are certain priorities that may contribute to the strategic advantages to AMCOR’s operations, as well as advantages in efficiencies, economy, and cost savings.  These priorities are: (1) the properties be valuable for gold or silver for the purpose of leveraging future returns from the current prices of these metals; additional metal values also known to be present in several of these properties would represent added value; (2) emphasize work in select mining districts in order to leverage operational experiences, similar geology and knowledge bases peculiar within a district; (3) assemble operations within hauling distance to operating custom mills in view of establishing future toll milling agreements; and (4) operate in areas within reasonable commute distance to AMCOR’s base of operations.  The emphasis for locating of projects in known mining districts is important because other mining prospects within the same districts are also available from time to time for evaluation and/or acquisition.


We plan to structure our operations in such a way as to keep our capital expenditures and administrative expenses to a minimum.  Overhead and staff will be kept to a minimum and the majority of operational duties will be outsourced to consultants and independent contractors.  We currently have no employees, but we expect to eventually hire three to five employees, commensurate with the development of our business and the availability of additional capital from the future sale of common stock, of which there is no assurance.  We believe that most operational responsibilities can be handled by the officers and directors, and through the working partnership of other consultants.  Two of our officers may draw salaries in the future, Frank H. Blair, our President and CEO, and Dwight Weigelt, CPA, our Secretary, Treasurer and Chief Financial Officer.  Our other officers and directors may be retained on an as needed basis and will be paid an hourly rate of to be determined by the Board and reimbursed any out of pocket expenses.


We anticipate that any additional funding that we require will be in the form of equity financing from the sale of restricted shares of our restricted common stock. However, there is no assurance that we will be able to raise sufficient funding from the sale of our restricted shares.  The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable mine can be demonstrated.  We do not have any arrangements in place for any future equity financing. If we are unable to secure additional funding, we will cease or suspend operations.  We have no plans, arrangements or contingencies in place in the event that we cease operations.


We will focus our future business on evolving into a growth-orientated, newly reorganized, early stage, and independent mineral and precious metal exploration company engaged in the acquisition, exploration, exploitation and development of mineral and precious metal properties; focusing our activities in the western United States.  Through the recent acquisitions from NAI, AMCOR owns all, right, title and interest in 83 unpatented mining claims which make up four properties; has the option to acquire certain mineral leases from the state of Washington covering 4,664 acres and 27 unpatented mining claims in Okanogan County; and all right, title and interest in five existing mineral leases.


Our material financial obligations for the future will include our public reporting expenses, transfer agent fees, bank fees, lease payments due on mineral properties and other recurring fees, combined with any additional operating expense related to our new business.


During the next twelve months we plan to begin to engage in possible joint ventures and attempt to as well as seek financing opportunities to commence a growth plan that will include the acquisition of additional mineral exploration properties as well as the possibility of selling additional equity in the form of common stock.





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To accelerate the development program we will attempt to engage in other joint venture programs that will take responsibility, both financially and in labor, of the capital costs of early exploration.  This economic strategy may allow us to utilize our own financial assets toward the exploration on our own properties and mineral leases.  


Our future financial results will depend primarily on: (i) the ability to discover commercial quantities of precious or base metal on properties which we own or lease: (ii) the ability to continue to source and screen potential projects; (iii) the market price for precious metals; and (iv) the ability to fully implement our exploration and development programs on our nine projects, which is dependent on the availability of capital resources. There can be no assurance that we will be successful in any of these respects or that the prices of metals will be at a level allowing for profitable production, in the event we are able to define a commercial ore body, of which there is no assurance.


Archean Star Agreement


On February 5, 2013, we entered into a definitive Option and Joint Venture agreement with Archean Star Resources Inc. (ASR) pertaining to 20 unpatented claims leased by AMCOR pursuant to a Mining Lease with Northern Adventures, LLC.  On June 27, 2012, Northern Adventures, LLC originally entered into the Mining Lease with Northern Adventures, Inc., and AMCOR assumed the rights in that Mining Lease from Northern Adventures, Inc. pursuant to the Asset Purchase Agreement dated December 28, 2013.  As part of the transaction, AMCOR received 500,000 shares of ASR common stock and will receive an additional 500,000 shares of ASR common stock on the second and third anniversaries of the agreement, subject to ASR going forward with the agreement after year one.  ASR will assume the obligations of the underlying lease agreement and paid an up-front fee of $7,500 to AMCOR.  Under the terms of the agreement ASR can earn up to 80% ownership interest in the property lease by expending $2,100,000 over a three year period, with a minimum expenditure of $700,000 in year one of the agreement.  AMCOR’s interest shall be a Carried Interest until such time as a Bankable Feasibility Study has been produced or a Decision to Mine has been made.  


Results of Operations


Since AMCOR was formed on July 23, 1996, it has earned minimal revenues and has incurred an accumulated deficit since its inception of approximately $3,985,989 through February 28, 2013.  Results of operations for the two months ended February 28, 2013, compared to the two months ended February 29, 2012:


Operating Expenses and Net Loss


Net cash used in operating activities during the two months ended February 28, 2013 was $32,482 as compared to net cash used in operating activities during the two months ended February 29, 2012 of $33,224.  The figures were similar for the two periods.  For the two months ended February 28, 2013, we reported a net loss of $17,718 compared to a net loss of $30,825 during the two months ended February 29, 2012.  The decrease in the net loss was primarily due to a decrease in general and administrative expenses and less interest expense.  We incurred operating expenses of $32,482 in the two months ended February 28, 2013 and $33,224 in the two months ended February 29, 2012.  The figures were similar for the two periods, but the company has begun a new exploration stage between the 2013 and 2012 periods, which would be expected to have changed the company's future expectations.


Revenues


We had no sales revenue in the two months ended February 28, 2013 and February 29, 2012.  The lack of revenue is attributable to the change in business focus of the company in 2012.


Liabilities


At February 28, 2013, we had total liabilities of $30,851 compared with $44,726 at February 29, 2012.  The decrease was due to less accounts payable and convertible notes.  Of the $30,851 in total liabilities, $18,851 was accounts payable, mostly payable to our independent auditor ($3,858) and a mineral mining consulting company ($12,259).  $8,000 was for convertible notes payable and $4,000 was for notes payable.


Liquidity and Capital Resources


With respect to long term liquidity (periods in excess of one year), we are unable to reasonably project or otherwise make assumptions concerning future cash flows or amounts of funds that may be available to us.  With additional funding to carry on and support operations, management anticipates that our operating expenses would increase in




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the long-term as a result of an increased acquiring, leasing, exploration, and development of mining properties, as well as general and administrative costs.


Our cash in the bank at February 28, 2013 was $5,069.  We do not have any available lines of credit.  Since inception we have financed our operations from private placements of equity securities and loans.  On December 28, 2012, AMCOR issued a total of 10,541,568 shares of restricted common stock in exchange for the conversion of debt in the amount of $486,000 and accrued interest which was $41,078 as of November 30, 2012.  At February 28, 2013, our total liabilities were $30,851.  Of these liabilities, $12,000 were from notes payable, consisting of $8,000 convertible and $4,000 non-convertible.  A $10,000 loan on December 31, 2012, with 8% interest per annum and convertible to common shares at $0.05 per share was due on January 31, 2013.  This loan was reduced by $2,500 on February 12, 2013 and the balance of $7,500 remains outstanding and the maturity date has been extended to June 30, 2013.  Four other non-interest bearing loans were outstanding at December 31, 2012, in the aggregate principal amount of $4,500 which were due on June 30, 2013, were repaid on April 4, 2013 (see Subsequent Events below).  


Our recent cash burn rate in our operations during 2012 has been approximately $11,500 per month.  We expect that that cash burn rate to remain constant over the next quarter.  Given this recent rate of use of cash in our operations, and the fact that we raised additional capital in March 2013 (see Subsequent Events below) we do not have sufficient capital to carry on operations past May 2013.  Our long term capital requirements and the adequacy of our available funds will depend on many factors, including the reporting company costs, public relations fees, and operating expenses, among others.  If we are unable to raise additional capital to repay loans, generate sufficient revenue, or receive further loans on an as needed basis, we will have to curtail or cease our operations.


We believe that we could experience negative operating cash flow for the foreseeable future.  At February 28, 2013, we had outstanding liabilities of $30,851 of which $18,851 was due to accounts payable and $12,000 in notes payable.  If our outstanding convertible and non-convertible loans are not repaid before June 30, 2013 and our convertible debt is not converted to equity before June 30, 2013 and we cannot repay this debt on the maturity date, we will be required to ask for extensions from the lenders or engage in another equity offering to provide capital to repay the debt.  If the lenders do not convert their debt to equity and we cannot raise further capital through and equity offering, there is a high probability that the company would become insolvent and could potentially go out of business.


Our existing cash position is not sufficient to support our operations.  Accordingly, we continue to examine a range of possible funding sources, including additional strategic alliances, additional equity or debt private placements, the sale of existing assets, as well as the possibility of entering into one or more business transactions that could involve a merger or sale of our company and/or the sale of some or all of its assets.  We do not currently have any contractual restrictions on our ability to incur debt.  Any such indebtedness could contain covenants that would restrict our operations.  There can be no assurance that additional financing will be available on terms favorable to us, or at all.  If equity or convertible debt securities are issued, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution and such securities may have rights, preferences or privileges senior to those of our common stock.  This effect is attributed to the fact that while additional shares of common stock are issued from our treasury, our earnings at that particular moment remain consistent and, therefore, the earnings per share decreases.  If we are unsuccessful in these efforts, we will be required to curtail our ongoing operations.  If we were unable to sufficiently curtail our costs in such a situation, we might be forced to seek protection of the courts through reorganization, bankruptcy or insolvency proceeding, or cease operations completely.


Going Concern


Our independent public accountants have included explanatory paragraphs in their report on our financial statements for the years ended December 31, 2012 and 2011, which express substantial doubt about our ability to continue as a going concern.  As discussed in Note 3 of our financial statements included with this 10-K, we have suffered recurring losses from operations since inception and have an accumulated deficit that raises substantial doubt about the Company’s ability to continue as a going concern.


Critical Accounting Policies and Estimates


Please see Note 2 of the financial statements.





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Subsequent Events


On March 8, 2013, the Company entered into a definitive agreement with an accredited investor and executed a convertible promissory note relating to a loan in the amount of $5,000 at 5% interest per annum with a maturity date of June 30, 2013.


On March 21, 2013, the Company entered into a definitive agreement with an accredited investor and executed a convertible promissory note relating to a loan in the amount of $3,000 at 5% interest per annum with a maturity date of June 30, 2013.


On April 4, 2013, non interest loans in the amount of $2,000, $850, $500, and $1,150 due to the company, in aggregate of $4,500, were repaid to note holders.  $7,500 in notes payable is currently outstanding.


Kinross Agreement.


On April 5, 2013 we exercised an option to acquire three mineral leases located in Okanogan County, Washington, pursuant to an Option to Purchase Mineral Leases between Hydro Imaging, Inc. and Northern Adventures, Inc. (NAI) entered into on June 25, 2012 and amended on December 7, 2012, which option was transferred to us on December 28, 2012 by NAI pursuant to an Asset Purchase Agreement.  We also acquired Hydro Imaging’s rights in a Mineral Lease and Assignment agreement with Kinross Gold USA, Inc.  The original option was granted by HydroImaging, Inc (Hydro), a private company owned solely by David Boleneus, currently a member of our board of directors, to NAI on June 25, 2012.  Under the terms of the original option Hydro granted the right to acquire ten leases granted by the Department of Natural Resources for the State of Washington totaling 4,583.76 acres and 27 unpatented mining claims located in the Toroda Creek-Wauconda Mining district in Okanogan country in the State of Washington for the payment of an exercise price of $10,000.


On February 28, 2013, Hydro concluded the Mining Lease and Assignment agreement with Kinross concerning seven of the ten mineral leases totaling 2,934.56 acres and a lease on 27 unpatented mining claims located in Okanogan County, Washington.  The seven state leases were transferred from Hydro to Kinross and approved by the State of Washington on March 27, 2013.  Pursuant to the terms of the Kinross agreement, Kinross will assume all of the underlying obligations, annual rental expenses, and work requirements related to the seven leases and 27 unpatented mining claims.  The remaining three state mining leases totaling 1,649.2 acres will be transferred from Hydro to AMCOR, subject to approval from the Department of Natural Resources for the State of Washington.    


Under the terms of the Mining Lease and Assignment agreement Kinross will pay AMCOR production royalties as follows: a 1% net smelter return royalty on all minerals extracted from the area covered by the 7 leases and a 2.5% net smelter return royalty on all minerals extracted from the area covered by the 27 unpatented mining claims.  The amount of royalties to be paid (both production royalties and advance royalty payments) are capped at $3 million per lease.  Kinross will also pay advance royalty payments in the aggregate amount of $1 million as follows:  $15,000 payable within 7 days of February 28, 2013, the effective date, $15,000 payable within 15 days of the effective date, $40,000 payable on February 28, 2014, $50,000 payable on February 28, 2015, and thereafter the annual advance royalty payment is to increase by 5% per year up to a maximum annual payment of $100,000.  The obligation to pay the advance royalty payment shall cease once an aggregate of $1 million has been paid.  Advance minimum royalty payments shall be creditable against the production royalties.  The production royalty payments for minerals produced from the state leases shall be capped at $3,000,000 for each of the seven leases, including any advanced royalty payments to be offset.  Kinross also undertakes to make such payments and undertake such other actions necessary to maintain the seven state mining leases and the unpatented claims in effect and good standing.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Not required





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ITEM 4.  CONTROLS AND PROCEDURES


Evaluation of Disclosure Controls and Procedures


In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by our management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)).  Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.  Based on its evaluation, and in light of the previously-identified material weaknesses in internal control over financial reporting, as of December 31, 2012, described in the 2012 Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer concluded that, as of February 28, 2013, our  disclosure controls and procedures were not effective.


Changes in Internal Control Over Financial Reporting


There has been no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  There has been no progress towards remediating our previously disclosed material weakness due to the lack of funding.




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PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS


The Registrant is not currently involved in any litigation.


ITEM 1A.  RISK FACTORS


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


In the private placement of the securities, AMCOR is relying on the exemption from registration provided by Section 4(2) of the Securities Act of 1933.  We believed that Section 4(2) was available because the offer and sale involved sophisticated investors with full disclosure and did not involve a public offering and there was not general solicitation or general advertising involved in the offer or sale and no fees were paid in connection with the transaction.


On February 11, 2013, the Company entered into a definitive agreement relating to the private placement of $25,000 of its securities through the sale of 500,000 shares of its common stock at $0.05 per share to an accredited investor.


On February 19, 2013, the Company entered into a definitive agreement relating to the private placement of $5,000 of its securities through the sale of 100,000 shares of its common stock at $0.05 per share to an accredited investor.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES


None


ITEM 4.  MINE SAFETY DISCLOSURE


[Not Applicable]


ITEM 5.  OTHER INFORMATION


None





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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.



Exhibits

 

 

3.1

Articles of Incorporation*

 

 

3.2

By-Laws*

 

 

10.1

2001 Stock Option Plan (Incorporated by reference to Exhibit 10.1 to the December 31, 2008 Annual Report on Form 10-K) (File No. 000-50738)

 

 

10.2

Option and Joint Venture Agreement between AMCOR and Archean Star Resources, Inc. dated February 5, 2013 (incorporated hereto by reference to Form 8-K, Exhibit 10.1 filed with the Securities and Exchange commission on February 11, 2013, file number 000-50738)

 

 

10.3

Notice of Intent to Exercise Option  Agreement between AMCOR and HydroImaging, Inc dated April 5, 2013. (incorporated hereto by reference to Form 8-K, Exhibit 10.1 filed with the Securities and Exchange commission on April 11, 2013, file number 000-50738)

 

 

10.4

Mining Lease and Assignment agreement between Kinross Gold USA, Inc. and Hydro Imaging, Inc. dated February 28, 2013. (incorporated hereto by reference to Form 8-K, Exhibit 10.2 filed with the Securities and Exchange commission on April 11, 2013, file number 000-50738)

 

 

31.1

Section 302(a) Principal Executive Officer Certification

 

 

31.2

Section 302(a) Principal Financial Officer Certification

 

 

32.1

Section 1350 Certifications

 

 

32.2

Section 1350 Certifications

 

 

101.INS**

XBRL Instance Document

 

 

101.SCH**

XBRL Taxonomy Extension Schema Document

 

 

101.CAL**

XBRL Taxonomy Extension Calculation Linkbase Document

 

 

101.LAB**

XBRL Taxonomy Extension Labels Linkbase Document

 

 

101.PRE**

XBRL Taxonomy Extension Presentation Linkbase Document

 

 

101.DEF**

XBRL Taxonomy Extension Definition Linkbase Document

 

* Incorporated by reference to the Registrant's Registration Statement on Form 10SB12G filed on May 3, 2004, File No. 000-50738

** Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.





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SIGNATURES


Pursuant to 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.


APD ANTIQUITIES, INC.


BY:  /s/ Frank H. Blair

Date: April 22, 2013

        Frank H. Blair

        Frank Blair, President,

        CEO





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