Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended November 30, 2014
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______________ to________________
Commission file number 000-54327
FIRST AMERICAN SILVER CORP.
(Exact name of registrant as specified in its charter)
Nevada 98-0579157
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1 Nachal Maor, Suite 2, Ramat Bet Shemesh, Israel 99623
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 775-287-1664
Securities registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
None N/A
Securities registered under Section 12(g) of the Act:
Common Stock, $0.001 par value
(Title of class)
Indicate by checkmark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by checkmark if the registrant is not required to file reports pursuant
to Section 13 or 15(d) of the Act. Yes [ ] No [X]
Indicate by checkmark 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 Web site, 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 files). Yes [X] No [ ]
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
Indicate by checkmark 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.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [X] No [ ]
The aggregate market value of Common Stock held by non-affiliates of the
Registrant on May 31, 2014 was $2,004,582 based on a $0.04 average bid and asked
price of such common equity, as of the last business day of the registrant's
most recently completed second fiscal quarter.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date: 62,050,567 as of March 2, 2015
DOCUMENTS INCORPORATED BY REFERENCE
See Item 15(b).
TABLE OF CONTENTS
Item 1. Business............................................................. 3
Item 1A. Risk Factors......................................................... 6
Item 1B. Unresolved Staff Comments............................................10
Item 2. Properties...........................................................10
Item 3. Legal Proceedings....................................................10
Item 4. Mine Safety Disclosures..............................................10
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities............................11
Item 6. Selected Financial Data..............................................12
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................12
Item 7A. Quantitative and Qualitative Disclosures About Market Risk...........17
Item 8. Financial Statements and Supplementary Data..........................18
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.................................................33
Item 9A. Controls and Procedures .............................................33
Item 9B. Other Information....................................................34
Item 10. Directors, Executive Officers and Corporate Governance...............34
Item 11. Executive Compensation...............................................37
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters..........................................39
Item 13. Certain Relationships and Related Transactions, and Director
Independence.........................................................39
Item 14. Principal Accounting Fees and Services...............................40
Item 15. Exhibits, Financial Statement Schedules..............................41
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PART I
ITEM 1. BUSINESS
This annual report contains forward-looking statements. These statements relate
to future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled "Risk Factors", that may cause our or our industry's actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.
Our financial statements are stated in United States Dollars (US$) and are
prepared in accordance with United States Generally Accepted Accounting
Principles.
In this annual report, unless otherwise specified, all dollar amounts are
expressed in United States dollars and all references to "common shares" refer
to the common shares in our capital stock.
As used in this annual report, the terms "we", "us", "our", and "company" mean
First American Silver Corp., unless the context clearly requires or states
otherwise.
CORPORATE OVERVIEW
We are an exploration stage company engaged in the acquisition, exploration and
development of mineral properties.
The address of our principal executive office is located at 1 Nachal Maor, Suite
2, Ramat Bet Shemesh, Israel 99623. Our telephone number is +972 52 798 0831.
Our common stock is quoted on the OTC Bulletin Board under the symbol "FASV".
CORPORATE HISTORY
We were incorporated in the State of Nevada on April 29, 2008, under the name
"Mayetok, Inc.". As Mayetok, Inc. we were engaged in the development of a
website to market vacation properties in the Ukraine.
On June 8, 2010, we initiated a one (1) old for 35 new forward stock split of
our issued and outstanding common stock. As a result, our authorized capital
increased from 100,000,000 to 3,500,000,000 shares of common stock and the
issued and outstanding increased from 2,200,000 shares of common stock to
77,000,000 shares of common stock, all with a par value of $0.001.
Also on June 8, 2010, we changed our name from "Mayetok, Inc." to "First
American Silver Corp.", by way of a merger with our wholly owned subsidiary
First American Silver Corp., which was formed solely for the change of name. We
changed the name of our company to reflect the new direction of our company in
the business of acquiring, exploring and developing mineral properties. As of
June 2010, we had abandoned our former business plan of seeking to market
vacation properties.
Our name change and forward stock split became effective with the
Over-the-Counter Bulletin Board at the opening of trading on June 16, 2010, on
which date we adopted the new stock symbol "FASV".
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OUR CURRENT BUSINESS
On November 26, 2010 we entered into three option agreements with All American
Resources LLC for the acquisition of certain mineral property interests located
in Elko County and White Pine County, Nevada. The interests that we have
acquired are as follows:
* An option to acquire a 100% interest in a mineral exploration property
called the "Eagan Canyon" property in White Pine County, Nevada;
* An option to acquire a 100% interest in a mineral exploration property
called the "Muncy Creek" property in White Pine County, Nevada; and
* An option to acquire a 100% interest in a mineral exploration property
called the "Mountain City" property in Elko County, Nevada.
Pursuant to the above described option agreements, we may, at our option,
purchase any of the applicable properties by providing to All American Resources
LLC the following compensation in respect of each applicable property over the
nine year option term:
* making annual periodic payments in the aggregate amount of $180,000
ranging from $10,000 to $50,000;
* issuing to All American Resources 300,000 common shares in our capital
stock in the aggregate, with 100,000 shares issuable before the 1st
anniversary of the option agreement and 25,000 shares issuable each
year thereafter until the ninth anniversary of the option agreement;
and
* on or before the tenth anniversary of the option agreement either (i)
paying to All American Resources $1,000,000, in which case All
American Resources shall retain a two percent (2%) mineral production royalty;
or (ii) paying to All American Resources $2,000,000, in which case All American
Resources shall retain a one percent (1%) mineral production royalty.
To date, we have issued 375,000 shares of our common stock and paid $30,000 in
the aggregate to All American Resources LLC pursuant to the three mineral
property option agreement.
The Company did not meet its October 29, 2013 obligations on these properties
and, as such, have returned the properties.
On September 22, 2011, we entered into a License and Assignment Agreement dated
and effective as of September 16, 2011 with our then president and director,
Thomas J. Menning. Mr. Menning is the successor in interest of the rights of
Universal Gas, Inc. and Universal Exploration, Ltd. (together "Universal")
pursuant to an agreement among Universal, Bullion Monarch Company, Polar
Resources Co., Camsell River Investments, Ltd., Lameert Management Ltd., and
Etel Holdings Ltd. dated May 10, 1979 (the "1979 Agreement"). Pursuant to the
License Agreement, we acquired the rights and obligations of Universal
established by the 1979 Agreement and pertaining to 256-square-miles of the
Carlin Gold Trend in Elko County, Nevada.
Under the terms of the 1979 Agreement and the License Agreement, we are deemed
the successor of a specific Right to Participate on a 50 percent basis with
ongoing and future projects operated, controlled and/or conveyed by Newmont
Mining and Barrick Gold Corporation within the area of interest.
Under the terms of the License Agreement, we are required to finance the cost of
pursuing the rights established in the 1979 Agreement. The distribution of any
proceeds will be as follows: After First American has been reimbursed for any
and all out-of-pocket expenses, it will share proceeds on an 80/20 percent basis
with Mr. Menning. The term of the licensing agreement will be for 10 years with
an option to renew for an additional 10 years.
Under the terms of the agreement, a notification of assignment to the operator
is required. Both Newmont Mining and Barrick Gold Corp. have been notified.
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COMPETITION
We are a development stage mineral resource exploration company. We compete with
other mineral resource exploration companies for financing and for the
acquisition of new mineral properties. Many of the mineral resource exploration
companies with whom we compete have greater financial and technical resources
than those available to us. Accordingly, these competitors may be able to spend
greater amounts on acquisitions of mineral properties of merit, on exploration
of their mineral properties and on development of their mineral properties. In
addition, they may be able to afford more geological expertise in the targeting
and exploration of mineral properties. This competition could result in
competitors having mineral properties of greater quality and interest to
prospective investors who may finance additional exploration. This competition
could adversely impact on our ability to finance further exploration and to
achieve the financing necessary for us to develop our mineral properties.
COMPLIANCE WITH GOVERNMENT REGULATION
We are committed to complying with and are, to our knowledge, in compliance
with, all governmental and environmental regulations applicable to our company
and our properties. Permits from a variety of regulatory authorities are
required for many aspects of mine operation and reclamation. We cannot predict
the extent to which these requirements will affect our company or our properties
if we identify the existence of minerals in commercially exploitable quantities.
In addition, future legislation and regulation could cause additional expense,
capital expenditure, restrictions and delays in the exploration of our
properties.
RESEARCH AND DEVELOPMENT
We have not incurred any research and development expenditures over the past
three fiscal years.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment over the twelve months
ending November 30, 2015.
SUBSIDIARIES
We do not have any subsidiaries.
CORPORATE OFFICES
Our principal office is located at 1 Nachal Maor, Suite 2, Ramat Bet Shemesh,
Israel 99623 and is provided to us at no cost.
EMPLOYEES
We have no employees other than our chief executive officer, Mark Radom, with
whom we entered into a service agreement on December 3, 2014.
INTELLECTUAL PROPERTY
We do not own, either legally or beneficially, any patent or trademark, and have
not registered any rights we may have under copyright.
DESCRIPTION OF SECURITIES
COMMON STOCK
Our authorized capital stock consists of 3,500,000,000 shares of common stock,
par value $0.001 per share, and 20,000,000 shares of preferred stock, par value
$0.001 per share.
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The holders of our common stock:
* Have equal ratable rights to dividends from funds legally available
therefore, when, as and if declared by our Board of Directors;
* Are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution
or winding up of our affairs;
* Do not have pre-emptive, subscription or conversion rights and there
are no redemption or sinking fund provisions or rights; and
* Are entitled to one non-cumulative vote per share on all matters on
which stockholders may vote.
The shares of common stock are not subject to any future call or assessment and
all have equal voting rights. There are no special rights or restrictions of any
nature attached to any of the common shares and they all rank at equal rate or
PARI PASSU, each with the other, as to all benefits, which might accrue to the
holders of the common shares. All registered stockholders are entitled to
receive a notice of any general annual meeting to be convened by our Board of
Directors.
At any general meeting, subject to the restrictions on joint registered owners
of common shares, on a showing of hands every stockholder who is present in
person and entitled to vote has one vote, and on a poll every stockholder has
one vote for each share of common stock of which he is the registered owner and
may exercise such vote either in person or by proxy. To the knowledge of our
management, at the date hereof, our sole officer and director is the only person
to exercise control, directly or indirectly, over more than 10% of our
outstanding common shares. See "Security Ownership of Certain Beneficial Owners
and Management."
We refer you to our Articles of Incorporation and Bylaws, copies of which were
filed with the registration statement of which this prospectus is a part, and to
the applicable statutes of the State of Nevada for a more complete description
of the rights and liabilities of holders of our securities.
REPORTS TO SECURITY HOLDERS
We are required to file annual, quarterly and current reports, proxy statements
and other information with the Securities and Exchange Commission and our
filings are available to the public over the internet at the Securities and
Exchange Commission's website at http://www.sec.gov. The public may read and
copy any materials filed by us with the Securities and Exchange Commission at
the Securities and Exchange Commission's Public Reference Room at 100 F Street
N.E. Washington D.C. 20549. The public may obtain information on the operation
of the Public Reference Room by calling the Securities and Exchange Commission
at 1-800-732-0330. The SEC also maintains an Internet site that contains
reports, proxy and formation statements, and other information regarding issuers
that file electronically with the SEC, at http://www.sec.gov.
ITEM 1A. RISK FACTORS
RISKS ASSOCIATED WITH MINING
OUR PROPERTIES ARE IN THE EXPLORATION STAGE AND THERE IS NO ASSURANCE THAT WE
CAN ESTABLISH THE EXISTENCE OF ANY MINERAL RESOURCE ON OUR PROPERTIES IN
COMMERCIALLY EXPLOITABLE QUANTITIES. UNLESS WE ESTABLISH THE PRESENCE OF A
COMMERCIALLY EXPLOITABLE MINERAL RESOURCE, WE CANNOT EARN ANY REVENUES FROM
OPERATIONS AND, IF WE FAIL TO DO SO, WE WILL LOSE ALL OF THE FUNDS THAT WE MAY
EXPEND ON EXPLORATION. IF WE DO NOT DISCOVER ANY MINERAL RESOURCE IN A
COMMERCIALLY EXPLOITABLE QUANTITY, OUR BUSINESS COULD FAIL.
We have not conducted any exploration work on our mineral properties and have
not established that they contain any mineral reserve. Even if we successfully
carry out a program of exploration on our mineral properties, we may fail to
establish that any of our properties contain any mineral reserve, which could
result in the failure of our business.
A mineral reserve is defined by the Securities and Exchange Commission in its
Industry Guide 7 (which can be viewed over the Internet at http://www.sec.gov/
divisions/corpfin/forms/industry.htm#secguide7) as that part of a mineral
deposit, which could be economically and legally extracted or produced at the
time of the reserve determination. The probability of an individual prospect
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ever having a "reserve" that meets the requirements of the Securities and
Exchange Commission's Industry Guide 7 is extremely remote. In all probability
our mineral resource properties do not contain any 'reserve' and any funds that
we spend on exploration will probably be lost.
Even if we do eventually discover a mineral reserve on our properties, there can
be no assurance that we will be able to develop any of our properties into a
producing mine and extract those resources. Both mineral exploration and
development involve a high degree of risk and few properties, which are explored
are ultimately developed into producing mines.
The commercial viability of an established mineral deposit will depend on a
number of factors including, by way of example, the size, grade and other
attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.
MINERAL OPERATIONS ARE SUBJECT TO APPLICABLE LAW AND GOVERNMENT REGULATION. EVEN
IF WE DISCOVER A MINERAL RESOURCE IN A COMMERCIALLY EXPLOITABLE QUANTITY, THESE
LAWS AND REGULATIONS COULD RESTRICT OR PROHIBIT THE EXPLOITATION OF THAT MINERAL
RESOURCE. IF WE CANNOT EXPLOIT ANY MINERAL RESOURCE THAT WE MIGHT DISCOVER ON
OUR PROPERTIES, OUR BUSINESS MAY FAIL.
Both mineral exploration and extraction require permits from various, federal,
provincial, and local governmental authorities and are governed by laws and
regulations, including those with respect to prospecting, mine development,
mineral production, transport, export, taxation, labor standards, occupational
health, waste disposal, toxic substances, land use, environmental protection,
mine safety and other matters. We have yet to undertake any exploration
activities on any of our properties, and there can be no assurance that we will
be able to obtain or maintain any of the permits required for the exploration of
our mineral properties or for the construction and operation of a mine on our
properties on reasonable terms or at economically viable costs. If we cannot
accomplish these objectives, our business could fail.
IF WE ESTABLISH THE EXISTENCE OF A MINERAL RESOURCE ON OUR PROPERTIES IN A
COMMERCIALLY EXPLOITABLE QUANTITY, WE WILL REQUIRE ADDITIONAL CAPITAL IN ORDER
TO DEVELOP THE APPLICABLE PROPERTIES INTO A PRODUCING MINE. IF WE CANNOT RAISE
THIS ADDITIONAL CAPITAL, WE WILL NOT BE ABLE TO EXPLOIT THE RESOURCE, AND OUR
BUSINESS COULD FAIL.
If we do discover mineral resources in commercially exploitable quantities on
our properties, we will be required to expend substantial sums of money to
establish the extent of the resource, develop processes to extract it and
develop extraction and processing facilities and infrastructure. Although we may
derive substantial benefits from the discovery of a major deposit, there can be
no assurance that any discovered resource will be large enough to justify
commercial operations, nor can there be any assurance that we will be able to
raise the funds required for development on a timely basis. If we cannot raise
the necessary capital or complete the necessary facilities and infrastructure,
our business may fail.
MINERAL EXPLORATION AND DEVELOPMENT IS SUBJECT TO EXTRAORDINARY OPERATING RISKS.
WE MAY NOT INSURE AGAINST THESE RISKS. IN THE EVENT OF A CAVE-IN OR SIMILAR
OCCURRENCE, OUR LIABILITY MAY EXCEED OUR RESOURCES, WHICH WOULD HAVE AN ADVERSE
IMPACT ON OUR COMPANY.
Mineral exploration, development and production involve many risks, which even a
combination of experience, knowledge and careful evaluation may not be able to
overcome. Our future operations will be subject to all the hazards and risks
inherent in the exploration for mineral resources and, if we discover a mineral
resource in commercially exploitable quantity, our operations could be subject
to all of the hazards and risks inherent in the development and production of
resources, including liability for pollution, cave-ins or similar hazards
against which we cannot insure or against which we may elect not to insure. Any
such event could result in physical injury or death, work stoppages, and damage
to property, including damage to the environment. We do not currently maintain
any insurance coverage against these operating hazards and may not have
sufficient financial resources to obtain such insurance coverage when it becomes
7
advisable or required. The payment of any liabilities that arise from the
occurrence of any operating hazard against which we do not maintain insurance
coverage would have a material adverse impact on our company.
MINERAL PRICES ARE SUBJECT TO DRAMATIC AND UNPREDICTABLE FLUCTUATIONS.
We aim to derive revenues either from the sale of our mineral resource
properties or from the extraction and sale of ore. The price of those
commodities has fluctuated widely in recent years, and is affected by numerous
factors beyond our control, including international, economic and political
trends, expectations of inflation, currency exchange fluctuations, interest
rates, global or regional consumptive patterns, speculative activities and
increased production due to new extraction developments and improved extraction
and production methods.
The effect of these factors on the price of base and precious metals, and
therefore the economic viability of any of our exploration properties and
projects, cannot accurately be predicted.
THE MINING INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE THAT WE WILL
BE SUCCESSFUL IN ACQUIRING ANY MINERAL CLAIMS. IF WE CANNOT ACQUIRE PROPERTIES
TO EXPLORE FOR MINERAL RESOURCES, WE MAY BE REQUIRED TO REDUCE OR CEASE
OPERATIONS.
The mineral exploration, development, and production industry is largely
un-integrated. We compete with other exploration companies looking for mineral
resource properties. While we compete with other exploration companies in the
effort to locate and acquire mineral resource properties, we will not compete
with them for the removal or sales of mineral products from our properties if we
should eventually discover the presence of them in quantities sufficient to make
production economically feasible. Readily accessible and liquid markets exist
worldwide for the sale of mineral products. Therefore, we will likely be able to
sell any mineral products that we identify and produce.
In identifying and acquiring additional mineral resource properties, we will
compete with many companies possessing greater financial resources and technical
facilities. This competition could adversely affect our ability to acquire
suitable prospects for exploration in the future. Accordingly, there can be no
assurance that we will acquire any interest in additional mineral resource
properties that might yield reserves or result in commercial mining operations.
RISKS RELATED TO OUR COMPANY
THE FACT THAT WE HAVE NOT EARNED ANY OPERATING REVENUES SINCE OUR INCORPORATION
RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE TO EXPLORE OUR MINERAL
PROPERTIES AS A GOING CONCERN.
We have not generated any revenue from operations since our incorporation and we
anticipate that we will continue to incur operating expenses without revenues
unless and until we are able to identify a mineral resource in a commercially
exploitable quantity on our mineral property and we build and operate a mine. We
had cash in the amount of $0 as of November 30, 2014 and a working capital
deficit of $314,601. We have also incurred a cumulative net loss of $1,547,326
from our inception on April 29, 2008 through November 30, 2014. We estimate that
our average monthly operating expenses will be approximately $5,000, including
management services and administrative costs. Should the results of our planned
exploration require us to increase our current operating budget, we may have to
raise additional funds to meet our currently budgeted operating requirements for
the next 12 months. As we cannot assure a lender that we will be able to
successfully explore and develop our mineral property, we will probably find it
difficult to raise debt financing from traditional lending sources. We have in
the past raised our operating capital from sales of equity securities, but there
can be no assurance that we will continue to be able to do so. If we cannot
raise the money that we need to continue exploration of our mineral property, we
may be forced to delay, scale back, or eliminate our exploration activities. If
any of these were to occur, there is a substantial risk that our business would
fail.
These circumstances lead our independent registered public accounting firm, in
their report dated February 24, 2015, to comment about our company's ability to
continue as a going concern. Management plans to seek additional capital through
a private placement of its capital stock. These conditions raise substantial
8
doubt about our company's ability to continue as a going concern. Although there
are no assurances that management's plans will be realized, management believes
that our company will be able to continue operations in the future. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts of and
classification of liabilities that might be necessary in the event our company
cannot continue in existence." We continue to experience net operating losses.
RISKS ASSOCIATED WITH OUR COMMON STOCK
TRADING ON THE OTC BULLETIN BOARD MAY BE VOLATILE AND SPORADIC, WHICH COULD
DEPRESS THE MARKET PRICE OF OUR COMMON STOCK AND MAKE IT DIFFICULT FOR OUR
STOCKHOLDERS TO RESELL THEIR SHARES.
Our common stock is quoted on the OTC Bulletin Board service of the Financial
Industry Regulatory Authority. Trading in stock quoted on the OTC Bulletin Board
is often thin and characterized by wide fluctuations in trading prices due to
many factors that may have little to do with our operations or business
prospects. This volatility could depress the market price of our common stock
for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board
is not a stock exchange, and trading of securities on the OTC Bulletin Board is
often more sporadic than the trading of securities listed on a quotation system
like Nasdaq or a stock exchange like the American Stock Exchange. Accordingly,
our shareholders may have difficulty reselling any of their shares.
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S
PENNY STOCK REGULATIONS AND FINRA'S SALES PRACTICE REQUIREMENTS, WHICH MAY LIMIT
A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.
Our stock is a penny stock. The Securities and Exchange Commission has adopted
Rule 15g-9 which generally defines "penny stock" to be any equity security that
has a market price (as defined) less than $5.00 per share or an exercise price
of less than $5.00 per share, subject to certain exceptions. Our securities are
covered by the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell to persons other than established
customers and "accredited investors". The term "accredited investor" refers
generally to institutions with assets in excess of $5,000,000 or individuals
with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document in a form prepared
by the SEC, which provides information about penny stocks and the nature and
level of risks in the penny stock market. The broker-dealer also must provide
the customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules; the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in, and limit the marketability of, our common stock.
In addition to the "penny stock" rules promulgated by the Securities and
Exchange Commission, FINRA has adopted rules that require that in recommending
an investment to a customer, a broker-dealer must have reasonable grounds for
believing that the investment is suitable for that customer. Prior to
recommending speculative low priced securities to their non-institutional
customers, broker-dealers must make reasonable efforts to obtain information
about the customer's financial status, tax status, investment objectives and
other information. Under interpretations of these rules, FINRA believes that
there is a high probability that speculative low-priced securities will not be
suitable for at least some customers. FINRA requirements make it more difficult
for broker-dealers to recommend that their customers buy our common stock, which
may limit your ability to buy and sell our stock.
9
THE COMPANY AND ITS SHAREHOLDERS MAY BE ADVERSELY AFFECTED BY RECENT RULE
AMENDMENTS MAKING RULE 144 UNAVAILABLE FOR COMPANY SECURITIES.
Rule 144 under the Securities Act of 1933 provides a safe harbour under which
holders of restricted securities and affiliates of an issuer may resell their
securities into the public market. Effective February 15, 2008, Rule 144 was
amended to make it unavailable for securities of shell companies until, among
other things, twelve months have elapsed since the former "shell company" has
filed "Form 10 information" with the Securities and Exchange Commission. The
Company is a "shell company". Accordingly, Rule 144 is no longer available to
permit our shareholders to resell their Company securities. No assurance can be
provided as to the date that the Company's securities will again become eligible
for resale under Rule 144.
The unavailability of the Rule 144 resale exemption for our securities may
adversely affect our ability to raise additional financing on a private
placement basis, and may adversely affect the ability of our private placees and
affiliates to resell their securities into the public market, all of which could
have a material adverse effect on us and our shareholders.
TRENDS, RISKS AND UNCERTAINTIES
We have sought to identify what we believe to be the most significant risks to
our business, but we cannot predict whether, or to what extent, any of such
risks may be realized nor can we guarantee that we have identified all possible
risks that might arise. Investors should carefully consider all of such risk
factors before making an investment decision with respect to our common shares.
ITEM 1B. UNRESOLVED STAFF COMMENTS
As a "smaller reporting company", we are not required to provide the information
required by this Item.
ITEM 2. PROPERTIES
Our principal office is located at 1 Nachal Maor, Suite 2, Ramat Bet Shemesh,
Israel 99623 and is leased to us at no cost.
ITEM 3. LEGAL PROCEEDINGS
We know of no material, existing or pending legal proceedings against our
company, nor are we involved as a plaintiff in any material proceeding or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial stockholder, is an
adverse party or has a material interest adverse to our interest.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable
10
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Our shares of common stock are currently trading on the OTC Bulletin Board under
the Symbol "FASV". Our common shares became quoted for trading on the OTCBB on
August 13, 2009 under the symbol "MAYT". On June 16, 2010 our symbol changed to
"FASV" in connection with the change of the name of our company from Mayetok
Inc. to First American Silver Corp. and our 35 for one (1) forward stock split.
The following table reflects the high and low bid information for our common
stock obtained from yahoo.finance and reflects inter-dealer prices, without
retail mark-up, markdown or commission, and may not necessarily represent actual
transactions.
The high and low bid prices of our common stock for the periods indicated below
are as follows:
OTC Bulletin Board
Quarter Ended High Low
------------- ---- ---
November 30, 2014 $ 0.09 $ 0.02
August 31, 2014 $ 0.02 $ 0.02
May 31, 2014 $ 0.02 $ 0.01
February 28, 2014 $ 0.03 $ 0.01
November 30, 2013 $ 0.05 $ 0.03
August 31, 2013 $ 0.04 $ 0.03
May 31, 2013 $ 0.07 $ 0.03
February 28, 2013 $ 0.08 $ 0.02
(1) Our stock was first quoted for trading on the OTC Bulletin Board on August
13, 2009, the first trade did not occur until June 25, 2010.
As of March 2, 2014, there were 26 registered holders of record of our common
stock and 60,970,567 shares of our common stock were issued and outstanding.
Our common shares are issued in registered form. Our securities registrar and
transfer agent is Securities Transfer Corporation, 2591 Dallas Parkway, Suite
102, Frisco, Texas 75034. Their telephone number is (469) 633-0101. The
registrar and transfer agent is responsible for all record-keeping and
administrative functions in connection with our issued and outstanding common
stock.
DIVIDEND POLICY
We have not paid any cash dividends on our common stock and have no present
intention of paying any dividends on the shares of our common stock. Our current
policy is to retain earnings, if any, for use in our operations and in the
development of our business. Our future dividend policy will be determined from
time to time by our board of directors.
RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED
SECURITIES
We did not sell any equity securities which were not registered under the
Securities Act during the year ended November 30, 2014 that were not otherwise
disclosed on our quarterly reports on Form 10-Q or our current reports on Form
8-K filed during the year ended November 30, 2014.
11
EQUITY COMPENSATION PLAN INFORMATION
Except as disclosed below, we do not have a stock option plan in favor of any
director, officer, consultant or employee of our company.
PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
We did not purchase any of our shares of common stock or other securities during
our fiscal year ended November 30, 2014.
ITEM 6. SELECTED FINANCIAL DATA
As a "smaller reporting company", we are not required to provide the information
required by this Item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with our audited
consolidated financial statements and the related notes for the years ended
November 30, 2014 and November 30, 2013 that appear elsewhere in this annual
report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward-looking statements. Factors that
could cause or contribute to such differences include, but are not limited to
those discussed below and elsewhere in this annual report, particularly in the
section entitled "Risk Factors" beginning on page 29 of this annual report.
Our audited consolidated financial statements are stated in United States
Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.
CASH REQUIREMENTS
We intend to conduct exploration activities on our optioned properties during
the next twelve months. We estimate our operating expenses and working capital
requirements for the next twelve months to be as follows:
Expense Cost
------- -------
General and administrative expenses $15,000
Management and administrative costs $30,000
Legal Fees $10,000
Auditor Fees $12,000
-------
$67,000
=======
Of the $67,000 that we require for the next 12 months, we had $0 in cash as of
November 30, 2014, and a working capital deficit of $314,601. In order to
improve our liquidity, we plan pursue additional equity financing from private
investors or possibly a registered public offering. We do not currently have any
definitive arrangements in place for the completion of any further private
placement financings and there is no assurance that we will be successful in
completing any further private placement financings. If we are unable to achieve
the necessary additional financing, then we plan to reduce the amounts that we
spend on our business activities and administrative expenses in order to be
within the amount of capital resources that are available to us.
12
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment over the twelve months
ending November 30, 2015.
RESEARCH AND DEVELOPMENT
We have not expended any funds on research and development since inception and
we do not intend to allocate any funds to research and development over the
twelve months ending November 30, 2015.
RESULTS OF OPERATIONS FOR THE YEARS ENDED NOVEMBER 30, 2014 AND 2013.
The following summary of our results of operations should be read in conjunction
with our audited financial statements for the year ended November 30, 2014.
Our operating results for the year ended November 30, 2014 are summarized as
follows in comparison to our operating results for the same period ended
November 30, 2013:
Year Ended
November 30,
2014 2013
---------- ----------
Revenue $ Nil $ Nil
Operating Expenses $ 125,218 $ 209,700
Net Loss $ (180,620) $ (195,136)
REVENUE
We have not earned any revenues since our inception and we do not anticipate
earning revenues in the near future.
GENERAL AND ADMINISTRATIVE EXPENSES
Our general and administrative expenses for the year ended November 30, 2014 are
outlined in the table below in comparison to our general and administrative
expenses for the same period ended November 30, 2013:
Year Ended
November 30,
2014 2013
---------- ----------
Exploration costs $ 0 $ 41,771
Accounting and legal 13,100 90,587
Consulting fees 98,786 55,554
Transfer agent and filing fees 8,322 1,565
General and administrative 5,010 20,223
The decrease in accounting and legal expenses for the year ended November 30,
2014, compared to the same period in fiscal 2013, was mainly due to activity
related to our legal proceedings as disclosed elsewhere in this Form 10K.
The decrease in exploration costs is a result of our reduced cash position,
which has affected our ability to pursue additional exploration costs.
13
LIQUIDITY AND FINANCIAL CONDITION
WORKING CAPITAL
At At Percentage
November 30, November 30, Increase/
2014 2013 Decrease
---------- ---------- --------
Current Assets $ 22,128 $ 26,027 (15)%
Current Liabilities $ 336,729 $ 268,741 25 %
Working Capital (Deficiency) $ (314,601) $ (242,714)
CASH FLOWS
Year Ended Year Ended
November 30, November 30,
2014 2013
---------- ----------
Net cash from (used in) operations $ (20,180) $ (138,961)
Net cash (used in) investing activities $ -- $ 23,288
Net cash provided by financing activities $ 20,100 $ 108,750
Increase (Decrease) In Cash During The Period $ (80) $ (6,923)
We had cash in the amount of $0 as of November 30, 2014 as compared to $80 as of
November 30, 2013. We had working capital deficiency of $314,601 as of November
30, 2014 compared to a working capital deficiency of $242,714 as of November 30,
2013.
We have suffered recurring losses from operations. The continuation of our
company is dependent upon our company attaining and maintaining profitable
operations and raising additional capital as needed, but there can be no
assurance that we will be able to raise any further financing.
FUTURE FINANCINGS
We will require additional funds to implement our growth strategy for our new
business. These funds may be raised through equity financing, debt financing, or
other sources, which may result in further dilution in the equity ownership of
our shares.
There can be no assurance that additional financing will be available to us when
needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to obtain the additional financing on a timely basis
should it be required, or generate significant material revenues from
operations, we will not be able to meet our other obligations as they become due
and we will be forced to scale down or perhaps even cease our operations.
CONTRACTUAL OBLIGATIONS
As a "smaller reporting company", we are not required to provide tabular
disclosure obligations.
GOING CONCERN
We have suffered recurring losses from operations and are dependent on our
ability to raise capital from stockholders or other sources to meet our
obligations and repay our liabilities arising from normal business operations
when they become due. In their report on our audited financial statements for
the year ended November 30, 2014, our independent auditors included an
explanatory paragraph regarding concerns about our ability to continue as a
going concern. Our financial statements contain additional note disclosure
describing the circumstances that lead to this disclosure by our independent
auditors.
14
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to stockholders.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with the accounting principles generally accepted in the United
States of America. Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by management's application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our financial statements is critical to an
understanding of our financial statements.
EXPLORATION STAGE COMPANY
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles related to accounting and reporting by
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.
BASIS OF PRESENTATION
Our financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America and are presented
in US dollars.
ACCOUNTING BASIS
We use the accrual basis of accounting and accounting principles generally
accepted in the United States of America ("GAAP" accounting). We adopted a
November 30 fiscal year end.
RISKS AND UNCERTAINTIES
The Company's operations are subject to significant risk and uncertainties
including financial, operational, technological, and regulatory risks including
the potential risk of business failure.
CASH AND CASH EQUIVALENTS
We consider all highly liquid investments with maturities of three months or
less to be cash equivalents. At November 30, 2014 and 2013, respectively, we had
$0 and $80 of unrestricted cash to be used for future business operations. Our
bank accounts are deposited in insured institutions. The funds are insured up to
$250,000. At times, our bank deposits may exceed the insured amount. Management
believes it has little risk related to the excess deposits.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Our financial instruments consist of cash, prepaid expenses, accounts payable,
accrued professional fees, and amount due to a related party. The carrying
amount of these financial instruments approximates fair value due to either
length of maturity or interest rates that approximate prevailing market rates
unless otherwise disclosed in these financial statements.
CONCENTRATIONS OF CREDIT RISK
Our company maintains its cash in bank deposit accounts, the balances of which
at times may exceed federally insured limits. Our company continually monitors
its banking relationships and consequently has not experienced any losses in
such accounts. Our company believes it is not exposed to any significant credit
risk on cash and cash equivalents.
15
STOCK-BASED COMPENSATION
We account for employee stock-based compensation in accordance with the guidance
of ASC Topic 718, COMPENSATION - STOCK COMPENSATION, which requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the financial statements based on their fair values. There
has been no stock-based compensation issued to employees, although our chief
executive officer is entitled to receive 600,000 shares of common stock on
annual basis.
We follow ASC Topic 505-50, formerly EITF 96-18, "ACCOUNTING FOR EQUITY
INSTRUMENTS THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN
CONJUNCTION WITH SELLING GOODS AND SERVICES," for stock options and warrants
issued to consultants and other non-employees. In accordance with ASC Topic
505-50, these stock options and warrants issued as compensation for services
provided to the Company are accounted for based upon the fair value of the
services provided or the estimated fair market value of the option or warrant,
whichever can be more clearly determined. The fair value of the equity
instrument is charged directly to compensation expense and additional paid-in
capital over the period during which services are rendered.
INCOME TAXES
Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized. It is our
company's policy to classify interest and penalties on income taxes as interest
expense or penalties expense. As of November 30, 2014, there have been no
interest or penalties incurred on income taxes.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
REVENUE RECOGNITION
We have yet to realize revenues from operations. Once our company has commenced
operations, it will recognize revenues when delivery of goods or completion of
services has occurred provided there is persuasive evidence of an agreement,
acceptance has been approved by its customers, the fee is fixed or determinable
based on the completion of stated terms and conditions, and collection of any
related receivable is probable.
BASIC INCOME (LOSS) PER SHARE
Basic income (loss) per share is calculated by dividing the Company's net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company's net income available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted for any potentially dilutive debt or equity.
On June 8, 2010, we affected a 35:1 forward stock split of its common shares.
All share and per share data have been adjusted to reflect such stock split.
DIVIDENDS
We have not adopted any policy regarding payment of dividends. No dividends have
been paid during the periods shown.
16
MINERAL PROPERTIES
Costs of exploration, carrying and retaining unproven mineral lease properties
are expensed as incurred. Mineral property acquisition costs are capitalized
including licenses and lease payments. Although we have taken steps to verify
title to mineral properties in which it has an interest, these procedures do not
guarantee our company's title. Such properties may be subject to prior
agreements or transfers and title may be affected by undetected defects.
Mineral properties are analyzed for impairment on an annual basis, or more often
if warranted by circumstances. Impairment losses are recorded on mineral
properties used in operations when indicators of impairment are present. The
claims owned by the Company were analyzed for impairment by the management of
the Company as of November 30, 2014 and 2013. Impairment losses totaling $0were
recorded in 2014 (2013: $0) relating to mineral properties.
RECENT ACCOUNTING PRONOUNCEMENTS
Our company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on our results of operations,
financial position or cash flows.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a "smaller reporting company", we are not required to provide the information
required by this Item.
17
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FIRST AMERICAN SILVER CORP.
TABLE OF CONTENTS
NOVEMBER 30, 2014
Reports of Independent Registered Public Accounting Firms 18
Balance Sheets as of November 30, 2014 and 2013 20
Statements of Operations for the years ended
November 30, 2014 and 2013 21
Statement of Stockholders' Equity (Deficit) as of
November 30, 2014 22
Statements of Cash Flows for the years ended
November 30, 2014 and 2013 23
Notes to the Financial Statements 24
18
[KLJ & ASSOCIATES, LLP LOGO]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of First American Silver Corp.
We have audited the accompanying balance sheet of First American Silver Corp. as
of November 30, 2014 and the related statements of operations, stockholders'
equity (deficit), and cash flows for the year then ended. First American Silver
Corp.'s management is responsible for these financial statements. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First American Silver Corp. as
of November 30, 2014, the results of their operations, and their cash flows, for
the year ended November 30, 2014, in conformity with accounting principles
generally accepted in the United States of America.
As discussed in Note 10 to the financial statements, the Company has incurred
losses from operations, has negative working capital and is in need of
additional capital to grow its operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 10. The financial
statements do not include any adjustments relating to the recoverability and
classification of asset carrying amounts or the amount and classification of
liabilities that might result should the Company be unable to continue as a
going concern.
/s/ KLJ & Associates, LLP
-------------------------------------
KLJ & Associates, LLP
St. Louis Park, MN
February 24, 2015
19
Silberstein Ungar, PLLC CPAs and Business Advisors
--------------------------------------------------------------------------------
Phone (248) 203-0080
Fax (248) 281-0940
30600 Telegraph Road, Suite 2175
Bingham Farms, MI 48025-4586
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
First American Silver Corp.
Reno, Nevada
We have audited the accompanying balance sheet of First American Silver Corp.
(the "Company") as of November 30, 2013, and the related statements of
operations, stockholders' equity (deficit), and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First American Silver Corp. as
of November 30, 2013 and the results of its operations and its cash flows for
the year then ended in conformity with accounting principles generally accepted
in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 10 to the
financial statements, the Company has limited working capital, has not yet
received revenue from sales of products or services, and has incurred losses
from operations. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans with regard to these
matters are described in Note 10. The accompanying financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Silberstein Ungar, PLLC
-------------------------------------
Bingham Farms, Michigan
March 11, 2014
20
FIRST AMERICAN SILVER CORP.
BALANCE SHEETS
NOVEMBER 30, 2014 AND 2013
2014 2013
------------ ------------
ASSETS
Current Assets
Cash and cash equivalents $ -- $ 80
Accounts receivable - other -- 6,433
Prepaid expenses 22,128 19,514
------------ ------------
Total Current Assets 22,128 26,027
------------ ------------
Other Assets
Reclamation bond 591 591
Website - net -- 2,167
------------ ------------
Total Other Assets 591 2,758
------------ ------------
Total Assets $ 22,719 $ 28,785
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 95,075 $ 56,866
Accrued expenses 32,804 18,125
Due to related parties -- 25,000
Loans payable 8,100 --
Notes payable - current portion 200,750 168,750
------------ ------------
Total Current Liabilities 336,729 268,741
------------ ------------
Long-term Liabilities
Notes payable - net of current portion -- 45,000
------------ ------------
Total Liabilities 336,729 313,741
------------ ------------
Stockholders' Equity (Deficit)
Preferred stock, par value $0.001, 20,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, par value $0.001, 3,500,000,000 shares authorized,
62,320,567 shares issued and outstanding (58,448,067 - 2013) 62,321 58,448
Additional paid-in capital 1,170,995 1,023,302
Accumulated deficit (1,547,326) (1,366,706)
------------ ------------
Total Stockholders' Equity (Deficit) (314,010) (284,956)
------------ ------------
Total Liabilities and Stockholders' Equity (Deficit) $ 22,719 $ 28,785
============ ============
The accompanying notes are an integral part of these financial statements.
21
FIRST AMERICAN SILVER CORP.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED NOVEMBER 30, 2014 AND 2013
Year Ended Year Ended
November 30, November 30,
2014 2013
------------ ------------
REVENUES $ -- $ --
------------ ------------
OPERATING EXPENSES
Exploration costs -- 41,771
Accounting and legal 13,100 90,587
Consulting fees 98,786 55,554
Transfer agent and filing fees 8,322 1,565
General and administrative 5,010 20,223
------------ ------------
TOTAL OPERATING EXPENSES 125,218 209,700
------------ ------------
LOSS FROM OPERATIONS (125,218) (209,700)
------------ ------------
OTHER INCOME (EXPENSES)
Interest expense (55,402) (23,519)
Exercise of option on mining claims -- 38,083
------------ ------------
TOTAL OTHER INCOME (EXPENSE) (55,402) 14,564
------------ ------------
LOSS BEFORE PROVISION FOR INCOME TAX (180,620) (195,136)
PROVISION FOR INCOME TAX -- --
------------ ------------
NET LOSS $ (180,620) $ (195,136)
============ ============
LOSS PER SHARE: BASIC AND DILUTED $ (0.00) $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
BASIC AND DILUTED 60,185,820 56,069,167
============ ============
The accompanying notes are an integral part of these financial statements.
22
FIRST AMERICAN SILVER CORP.
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
AS OF NOVEMBER 30, 2014
Total
Common Stock Additional Common Stockholders'
------------------- Paid in Stock Accumulated Equity
Shares Amount Capital Warrants Deficit (Deficit)
------ ------ ------- -------- ------- ---------
Balance, November 30, 2012 55,700,000 $ 55,700 $ 797,270 $ 131,635 $(1,171,570) $(186,965)
Common stock issued for mineral property
payment 1,000,000 1,000 39,000 -- -- 40,000
Common stock issued to pay accounts payable 877,067 877 25,454 -- -- 26,331
Common stock issued for services 25,000 25 725 -- -- 750
Common stock issued for loan extensions 846,000 846 27,234 -- -- 28,080
Expiration of warrants -- -- 131,635 (131,635) -- --
Board member debt forgiveness -- -- 1,984 -- -- 1,984
Net loss for the year ended November 30, 2013 -- -- -- -- (195,136) (195,136)
---------- -------- ---------- --------- ----------- ---------
Balance, November 30, 2013 58,448,067 58,448 1,023,302 -- (1,366,706) (284,956)
Common stock issued for loan extensions 1,984,500 1,985 36,950 -- -- 38,935
Common stock issued for services 816,025 816 15,471 -- -- 16,287
Common stock issued for debt 1,071,975 1,072 20,311 21,383
Board member debt forgiveness -- -- 74,961 -- -- 74,961
Net loss for the year ended November 30, 2014 -- -- -- -- (180,620) (180,620)
---------- -------- ---------- --------- ----------- ---------
Balance, November 30, 2014 62,320,567 $ 62,321 $1,170,995 $ -- $(1,547,326) $(314,010)
========== ======== ========== ========= =========== =========
The accompanying notes are an integral part of these financial statements.
23
FIRST AMERICAN SILVER CORP.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED NOVEMBER 30, 2014 AND 2013
Year ended Year ended
November 30, November 30,
2014 2013
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period $ (180,620) $ (195,136)
Adjustments to Reconcile Net Loss to Net Cash
Provided by (Used in) Operating Activities:
Depreciation and amortization 500 3,049
Stock issued for services 16,287 750
Stock issued for mineral property payment -- 40,000
Stock issued for loan extension fees 38,935 28,080
Impairment loss on website 1,667 --
Changes in operating assets and liabilities:
Accounts receivable - other 6,433 (6,433)
Prepaid expenses (2,614) (19,514)
Accounts payable 80,421 (4,710)
Accrued expenses 18,811 14,953
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (20,180) (138,961)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Reclamation bond -- 8,288
Decrease (increase) in deposits -- 15,000
---------- ----------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -- 23,288
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Loan proceeds from related party debt -- 25,000
Loan proceeds - other 8,100 --
Proceeds from notes payable 12,000 83,750
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 20,100 108,750
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (80) (6,923)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 80 7,003
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ -- $ 80
========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes $ -- $ --
========== ==========
Cash paid for interest $ -- $ 5,394
========== ==========
The accompanying notes are an integral part of these financial statements
24
FIRST AMERICAN SILVER CORP.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2014
NOTE 1 - NATURE OF OPERATIONS
Mayetok, Inc. ("the Company") was incorporated in the state of Nevada on April
29, 2008. On June 8, 2010, the Company changed its name to First American Silver
Corp.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
EXPLORATION STAGE COMPANY
On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued
update ASU 2014-10, Development Stage Entities (Topic 915). Amongst other
things, the amendments in this update removed the definition of development
stage entity from Topic 915, thereby removing the distinction between
development stage entities and other reporting entities from US GAAP. In
addition, the amendments eliminate the requirements for development stage
entities to (1) present inception-to-date information on the statements of
income, cash flows and shareholders equity, (2) label the financial statements
as those of a development stage entity; (3) disclose a description of the
development stage activities in which the entity is engaged and (4) disclose in
the first year in which the entity is no longer a development stage entity that
in prior years it had been in the development stage. The amendments are
effective for annual reporting periods beginning after December 31, 2014 and
interim reporting periods beginning after December 15, 2015, however entities
are permitted to early adopt for any annual or interim reporting period for
which the financial statements have yet to be issued. The Company has elected to
early adopt these amendments and accordingly have not labeled the financial
statements as those of a development stage entity and have not presented
inception-to-date information on the respective financial statements.
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.
ACCOUNTING BASIS
The Company uses the accrual basis of accounting and accounting principles
generally accepted in the United States of America ("GAAP" accounting). The
Company has adopted a November 30 fiscal year end.
RISKS AND UNCERTAINTIES
The Company's operations are subject to significant risk and uncertainties
including financial, operational, technological, and regulatory risks including
the potential risk of business failure. See Note 10 regarding going concern
matters.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with maturities of three
months or less to be cash equivalents. At November 30, 2014 and 2013,
respectively, the Company had $0 and $80 of unrestricted cash to be used for
future business operations.
The Company's bank accounts are deposited in insured institutions. The funds are
insured up to $250,000. At times, the Company's bank deposits may exceed the
insured amount. Management believes it has little risk related to the excess
deposits.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash, prepaid expenses, accounts
payable, accrued expenses, notes payable, and note payable-related party. The
carrying amount of these financial instruments approximates fair value due to
either length of maturity or interest rates that approximate prevailing market
rates unless otherwise disclosed in these financial statements.
25
FIRST AMERICAN SILVER CORP.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2014
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATIONS OF CREDIT RISK
The Company maintains its cash in bank deposit accounts, the balances of which
at times may exceed federally insured limits. The Company continually monitors
its banking relationships and consequently has not experienced any losses in
such accounts. The Company believes it is not exposed to any significant credit
risk on cash and cash equivalents.
STOCK-BASED COMPENSATION
The Company accounts for employee stock-based compensation in accordance with
the guidance of ASC Topic 718, COMPENSATION - STOCK COMPENSATION which requires
all share-based payments to employees, including grants of employee stock
options, to be recognized in the financial statements based on their fair
values. There has been no stock-based compensation issued to employees.
The Company follows ASC Topic 505-50, formerly EITF 96-18, "ACCOUNTING FOR
EQUITY INSTRUMENTS THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN
CONJUNCTION WITH SELLING GOODS AND SERVICES," for stock options and warrants
issued to consultants and other non-employees. In accordance with ASC Topic
505-50, these stock options and warrants issued as compensation for services
provided to the Company are accounted for based upon the fair value of the
services provided or the estimated fair market value of the option or warrant,
whichever can be more clearly determined. The fair value of the equity
instrument is charged directly to compensation expense and additional paid-in
capital over the period during which services are rendered.
INCOME TAXES
Income taxes are computed using the asset and liability method. Under the asset
and liability method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that,
based on available evidence, are not expected to be realized. It is the
Company's policy to classify interest and penalties on income taxes as interest
expense or penalties expense. As of November 30, 2014, there have been no
interest or penalties incurred on income taxes.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
REVENUE RECOGNITION
The Company is in the exploration stage and has yet to realize revenues from
operations. Once the Company has commenced operations, it will recognize
revenues when delivery of goods or completion of services has occurred provided
there is persuasive evidence of an agreement, acceptance has been approved by
its customers, the fee is fixed or determinable based on the completion of
stated terms and conditions, and collection of any related receivable is
probable.
BASIC INCOME (LOSS) PER SHARE
Basic income (loss) per share is calculated by dividing the Company's net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company's net income available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted for any potentially dilutive debt or equity.
26
FIRST AMERICAN SILVER CORP.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2014
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
MINERAL PROPERTIES
Costs of exploration are expensed as incurred. Mineral property acquisition
costs are capitalized including licenses and lease payments. Although the
Company has taken steps to verify title to mineral properties in which it has an
interest, these procedures do not guarantee the Company's title. Such properties
may be subject to prior agreements or transfers and title may be affected by
undetected defects.
Mineral properties are analyzed for impairment on an annual basis, or more often
if warranted by circumstances. Impairment losses are recorded on mineral
properties used in operations when indicators of impairment are present.
RECENT ACCOUNTING PRONOUNCEMENTS
First American Silver does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flows.
NOTE 3 - MINERAL PROPERTIES
MOUNTAIN CITY PROPERTY
On October 29, 2010 the Company entered into a Property Option Agreement with
All American Resources. Pursuant to this agreement, the Company has the option
to acquire a 100% interest in the Elko Property making payments in aggregate of
$180,000, a $1,000,000 or $2,000,000 final balloon payment (see October 29, 2020
below), issuing 300,000 common shares and by paying all property maintenance
fees and obligations as they come due. The payments are to completing under the
following terms:
Date Cash Common Stock
---- ---- ------------
November 2, 2010 $ 10,000 100,000 Paid
October 29, 2012 -- 25,000 Paid
October 29, 2013 $10,000 25,000
October 29, 2014 $10,000 25,000
October 29, 2015 $10,000 25,000
October 29, 2016 $20,000 25,000
October 29, 2017 $30,000 25,000
October 29, 2018 $40,000 25,000
October 29, 2019 $50,000 25,000
$1,000,000 In case of $1,000,000 payment,
or the optionor shall retain a 2%
October 29, 2020 $2,000,000 NSR (Net Smelter Royalty).
In case of a $2,000,000, the
option or shall retain a 1% NSR.
The Company did not meet its October 29, 2013 obligation and, as such, has
returned the property.
EAGAN CANYON PROPERTY
On October 29, 2010 the Company entered into a Property Option Agreement with
All American Resources. Pursuant to this agreement, the Company has the option
to acquire a 100% interest in the White Pine Property #1 making payments in
aggregate of $180,000, a $1,000,000 or $2,000,000 final balloon payment (see
October 29, 2020 below), issuing 300,000 common shares and by paying all
property maintenance fees and obligations as they come due. The payments are to
completing under the following terms:
27
FIRST AMERICAN SILVER CORP.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2014
NOTE 3 - MINERAL PROPERTIES (CONTINUED)
Date Cash Common Stock
---- ---- ------------
November 2, 2010 $ 10,000 100,000 Paid
October 29, 2012 -- 25,000 Paid
October 29, 2013 $10,000 25,000
October 29, 2014 $10,000 25,000
October 29, 2015 $10,000 25,000
October 29, 2016 $20,000 25,000
October 29, 2017 $30,000 25,000
October 29, 2018 $40,000 25,000
October 29, 2019 $50,000 25,000
$1,000,000 In case of $1,000,000 payment,
or the optionor shall retain a 2%
October 29, 2020 $2,000,000 NSR (Net Smelter Royalty).
In case of a $2,000,000, the
option or shall retain a 1% NSR.
The Company did not meet its October 29, 2013 obligation and, as such, has
returned the property.
MUNCY CREEK PROPERTY
On October 29, 2010 the Company entered into a Property Option Agreement with
All American Resources. Pursuant to this agreement, the Company has the option
to acquire a 100% interest in the White Pine Property #2 making payments in
aggregate of $180,000, a $1,000,000 or $2,000,000 final balloon payment (see
October 29, 2020 below), issuing 300,000 common shares and by paying all
property maintenance fees and obligations as they come due. The payments are to
completing under the following terms:
Date Cash Common Stock
---- ---- ------------
November 2, 2010 $ 10,000 100,000 Paid
October 29, 2012 -- 25,000 Paid
October 29, 2013 $10,000 25,000
October 29, 2014 $10,000 25,000
October 29, 2015 $10,000 25,000
October 29, 2016 $20,000 25,000
October 29, 2017 $30,000 25,000
October 29, 2018 $40,000 25,000
October 29, 2019 $50,000 25,000
$1,000,000 In case of $1,000,000 payment,
or the optionor shall retain a 2%
October 29, 2020 $2,000,000 NSR (Net Smelter Royalty).
In case of a $2,000,000, the
option or shall retain a 1% NSR.
The Company did not meet its October 29, 2013 obligation and, as such, has
returned the property.
28
FIRST AMERICAN SILVER CORP.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2014
NOTE 3 - MINERAL PROPERTIES (CONTINUED)
ESMERALDA PROPERTY
On April 15, 2011 the Company entered into a Property Option Agreement with
Pyramid Lake LLC and Anthony A. Longo. Pursuant to this agreement, the Company
has the option to acquire a 100% interest in the Esmeralda Property by making
payments in aggregate of $505,000 and issuing 100,000 common shares and by
paying all property maintenance fees and obligations as they come due. The
payments are to completing under the following terms:
Date Cash Common Stock
---- ---- ------------
April 15, 2011 $ 30,000 100,000 Paid
April 15, 2012 $ 40,000 -- Paid
April 15, 2013 $ 50,000 --
April 15, 2014 $ 60,000 --
April 15, 2015 $ 70,000 --
April 15, 2016 $ 80,000 --
April 15, 2017 $ 90,000 --
April 15, 2018 $100,000 --
The Company has not made the prescribed $50,000 payment due on April 15, 2013.
As such, costs related to this property have been written off and the property
has been deemed abandoned.
NOTE 4 - PREPAID EXPENSES
Prepaid expenses consisted of the following at November 30, 2014 and 2013:
2014 2013
-------- --------
Loan extension fees $ 22,128 $ 19,514
Other -- --
-------- --------
Total prepaid expenses $ 22,128 $ 19,514
======== ========
NOTE 5 - WEBSITE
The cost of developing the Company website has been capitalized and is being
amortized over a 5 year period using straight-line amortization: Website
development costs consisted of the following at November 30, 2014 and 2013:
2014 2013
-------- --------
Website development costs $ 5,000 $ 5,000
Less: accumulated amortization (3,333) (2,833)
Less: write down (1,667) --
-------- --------
Website development costs, net $ -- $ 2,167
======== ========
Amortization expense was $500 and $1,000 for the years ended November 30, 2014
and 2013, respectively. The website was abandoned in 2014, and the remaining
value of $1,667 was written off.
29
FIRST AMERICAN SILVER CORP.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2014
NOTE 6 - NOTES PAYABLE
Notes payable consisted of the following at November 30, 2014:
Note Interest Maturity Interest
Date of Note Amount Rate Date Collateral Accrued
------------ ------ ---- ---- ---------- -------
February 5, 2013 $ 15,000 8% February 5, 2015 None $ 2,178
February 22, 2013 $ 30,000 8% February 22, 2015 None $ 4,248
April 17, 2013 $ 7,500 8% April 17, 2015 None $ 973
June 12, 2013 $ 6,250 8% June 12, 2015 None $ 734
June 18, 2013 $ 50,000 8% June 18, 2015 None $ 9,809
August 22, 2013 $ 55,000 8% August 22, 2015 None $10,006
November 1, 2013 $ 25,000 8% November 1, 2015 None $ 4,159
March 10, 2014 $ 12,000 8% March 10, 2015 None $ 697
-------- -------
Total $200,750 $32,804
======== =======
NOTE 7 - RELATED PARTY TRANSACTIONS
During the year ended November 30, 2014, the Company issued 1,888,000 shares to
its president to retire $21,383 of accounts payable owing.
On August 19, 2013, the president loaned the Company $25,000. The note bears
interest at 8% and matures on August 19, 2014. The note is not secured and all
principal and interest are due to be repaid on the maturity date. During the
year-ended November 30, 2014, this note and accrued interest were forgiven.
The Company paid consulting fees totaling $43,786 and $50,410 to a related party
for the years ended November 30, 2014 and 2013, respectively.
NOTE 8 - CAPITAL STOCK
The Company has 20,000,000 preferred shares authorized at a par value of $0.001
per share.
The Company has 3,500,000,000 common shares authorized at a par value of $0.001
per share.
On June 18, 2013, the Company issued 270,000 to extend the maturity date of a
note payable to June 18, 2014. The value of these shares has been included in
prepaid expenses and will amortize to interest expense over the term of the
extension period (1 year).
On August 22, 2013, the Company issued 396,000 to extend the maturity date of a
note payable to August 22, 2014. The value of these shares has been included in
prepaid expenses and will amortize to interest expense over the term of the
extension period (1 year).
On September 27, 2013, the Company issued 1,000,000 shares to Pyramid Lake LLC
in consideration for the April 15, 2012 option payment on the Esmeralda
Property.
On September 28, 2013, the Company issued 25,000 common shares to a consultant
for services. The shares were valued at a fair market value of $0.03/share on
the date of issuance for a total value of $750.
On October 16, 2013, the Company issued 403,000 common shares to retire $12,109
of accounts payable owing to a former consultant.
30
FIRST AMERICAN SILVER CORP.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2014
NOTE 8 - CAPITAL STOCK (CONTINUED)
On November 1, 2013, the Company issued 180,000 to extend the maturity date of a
note payable to November 1, 2014. The value of these shares has been included in
prepaid expenses and will amortize to interest expense over the term of the
extension period (1 year).
On November 30, 2013, the Company issued 68,667 common shares to retire $2,060
of accounts payable owing to a former consultant.
On November 30, 2013, the Company issued 405,400 shares to its president to
retire $12,162 of accounts payable owing.
On April 11, 2014, the Company issued 486,000 shares to extend a certain loan
for one year. The value of these shares has been included in prepaid expenses
and will amortize to interest expense over the term of the extension period (1
year).
On April 30, 2014, the Company issued 1,000,000 shares valued at $19,910 based
on the stock closing price on the date of the grant to its president. The
issuance paid $12,500 of accounts payable owing, and consulting fees of $7,410.
On August 14, 2014, the Company issued 148,500 shares to extend a certain loan
for one year. The value of these shares has been included in prepaid expenses
and will amortize to interest expense over the term of the extension period (1
year).
On August 14, 2014, the Company issued 888,000 shares valued at $17,760 based on
the stock closing price on the date of the grant to its president. The issuance
paid $8,883 of accounts payable owing, and consulting fees of $8,877.
On October 17, 2014, the Company issued 1,080,000 shares to extend a certain
loan for one year. The value of these shares has been included in prepaid
expenses and will amortize to interest expense over the term of the extension
period (1 year).
On November 30, 2014, the Company issued 270,000 shares to extend a certain loan
for one year. The value of these shares has been included in prepaid expenses
and will amortize to interest expense over the term of the extension period (1
year).
NOTE 9 - INCOME TAXES
For the years ended November 30, 2014 and 2013, the Company has incurred net
losses and, therefore, has no tax liability. The net deferred tax asset
generated by the loss carry-forward has been fully reserved. The cumulative net
operating loss carry-forward is approximately $1,547,000 at November 30, 2014,
and will begin to expire in the year 2028.
The provision for Federal income tax consists of the following as of November
30, 2014 and 2013:
2014 2013
-------- --------
Federal income tax benefit attributable to:
Current operations $ 61,410 $ 66,346
Less: valuation allowance (61,410) (66,346)
-------- --------
Net provision for Federal income taxes $ -- $ --
======== ========
The cumulative tax effect at the expected rate of 34% of significant items
comprising our net deferred tax amount is as follows as of November 30, 2014 and
2013:
31
FIRST AMERICAN SILVER CORP.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2014
NOTE 9 - INCOME TAXES (CONTINUED)
2014 2013
---------- ----------
Deferred tax asset attributable to:
Net operating loss carryover $ 526,090 $ 464,680
Less: valuation allowance (526,090) (464,680)
---------- ----------
Net deferred tax asset $ -- $ --
========== ==========
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry forwards for federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur net operating
loss carry forwards may be limited as to use in future years.
NOTE 10 - GOING CONCERN
The accompanying financial statements have been prepared assuming that First
American Silver, Inc. will continue as a going concern. The Company has a
working capital deficit, has not yet received revenue from sales of products or
services, and has incurred losses from operations. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Without realization of additional debt or capital, it would be unlikely for the
Company to continue as a going concern. The financial statements do not include
any adjustments that might result from this uncertainty.
The Company's activities to date have been supported by debt and equity
financing. It has sustained losses in all previous reporting periods with an
inception to date loss of approximately $1,547,000 as of November 30, 2014.
Management continues to seek funding from its shareholders and other qualified
investors.
NOTE 11 - SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES
Year ended Year ended
November 30, November 30,
2014 2013
-------- --------
Common stock issued to pay debt $ 21,383 $ 26,331
======== ========
Board member forgiveness of debt $ 74,691 $ 1,984
======== ========
Expiration of stock warrants $ -- $131,635
======== ========
NOTE 12 - SUBSEQUENT EVENTS
On November 1, 2014, the Company's Chief Executive Officer resigned.
On December 8, 2014, the Board of Directors appointed a new Chief Executive
Officer. The Chief Executive Officer signed an agreement whereby he will be
compensated $30,000 annually and be entitled to 600,000 common shares on an
annual basis.
In accordance with ASC Topic 855-10, the Company has analyzed its operations
subsequent to the date these financial statements were issued, and has
determined that, other than those events mentioned above, it does not have any
material subsequent events to disclose in these financial statements.
32
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no disagreements with our accountants related to accounting
principles or practices, financial statement disclosure, internal controls or
auditing scope or procedure during the two fiscal years and subsequent interim
periods.
ITEM 9A. CONTROLS AND PROCEDURES
MANAGEMENT'S REPORT ON DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that
the information disclosed in the reports we file with the Securities and
Exchange Commission under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to our president (our principal executive officer and our principal
financial and accounting officer), as appropriate, to allow timely decisions
regarding required disclosure.
Management, including our president (our principal executive officer and our
principal financial and accounting officer), evaluated the effectiveness of our
disclosure controls and procedures, as of November 30, 2014, in accordance with
Rules 13a-15(b) and 15d-15(b) of the Securities and Exchange Act of 1934, as
amended are effective to ensure the information required to be disclosed by us
in the reports that we file or submit under the Securities and Exchange Act of
1934, as amended is recorded, processed, summarized and reported within the time
period specified in SEC rules and forms.
Our management, including our president (our principal executive officer and our
principal financial and accounting officer), do not expect that our disclosure
controls, and procedures or internal controls will prevent all possible error
and fraud. Our disclosure controls and procedures are, however, designed to
provide reasonable assurance of achieving their objectives, and our president
(our principal executive officer and our principal financial and accounting
officer) have concluded that our financial controls and procedures are effective
at that reasonable assurance level.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
control procedures. The objectives of internal control include providing
management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition, and that
transactions are executed in accordance with management's authorization and
recorded properly to permit the preparation of consolidated financial statements
in conformity with accounting principles generally accepted in the United
States. Our management assessed the effectiveness of our internal control over
financial reporting as of November 30, 2014. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO") in INTERNAL CONTROL-INTEGRATED
FRAMEWORK. Our management has concluded that, as of November 30, 2014, our
internal control over financial reporting was effective in providing reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with US generally
accepted accounting principles. Our management reviewed the results of their
assessment with our Board of Directors.
This annual report does not include an attestation report of our company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by our Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit our company to provide only management's
report in this annual report.
33
INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS
Internal control over financial reporting has inherent limitations which include
but is not limited to the use of independent professionals for advice and
guidance, interpretation of existing and/or changing rules and principles,
segregation of management duties, scale of organization, and personnel factors.
Internal control over financial reporting is a process, which involves human
diligence and compliance and is subject to lapses in judgment and breakdowns
resulting from human failures.
Internal control over financial reporting also can be circumvented by collusion
or improper management override. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements on a
timely basis, however these inherent limitations are known features of the
financial reporting process and it is possible to design into the process
safeguards to reduce, though not eliminate, this risk. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal controls over financial reporting
that occurred during the year ended November 30, 2014 that have materially or
are reasonably likely to materially affect, our internal controls over financial
reporting.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following individuals serve as the directors and executive officers of our
company as of the date of this annual report. All directors of our company hold
office until the next annual meeting of our shareholders or until their
successors have been elected and qualified. The executive officers of our
company are appointed by our board of directors and hold office until their
death, resignation or removal from office.
Position Held Date First Elected
Name with the Company Age or Appointed
---- ---------------- --- ------------
Mark Radom President, Chief Executive 46 December 8, 2014
Officer, Secretary,
Treasurer and Director
BUSINESS EXPERIENCE
The following is a brief account of the education and business experience during
at least the past five years of each director, executive officer and key
employee of our company, indicating the person's principal occupation during
that period, and the name and principal business of the organization in which
such occupation and employment were carried out.
MARK RADOM - PRESIDENT, CHIEF EXECUTIVE OFFICER, SECRETARY, TREASURER AND
DIRECTOR
From August 6, 2014 to-date, Mr. Radom has served as chief executive officer and
director of Graphite Corp. From February 2010 to-date, Mr. Radom has served as
the chief carbon officer and general counsel of Bluesphere Corporation. From
2009 through 2010, Mr. Radom was managing director of Carbon MPV Limited, a
Cyprus company focused on developing renewable energy and carbon credit
projects. From 2007 to 2009, Mr. Radom was general counsel and chief operating
officer of Carbon Markets Global Limited, a London-based carbon credit and
renewable energy project developer. Mr. Radom has extensive experience in
34
business development in the renewable energy and carbon credit sectors. He has
sourced over U.S. $100,000,000 in renewable energy, industrial gas and carbon
credit projects and managed many complex aspects of their implementation. He was
legal counsel for a number of carbon and ecological project developers and was
responsible for structuring joint ventures and advising on developing projects
through the CDM/JI registration cycle and emission reduction purchase agreements
under the auspices of the Kyoto Protocol. Prior to this, he worked on Wall
Street and in the City of London as a US securities and capital markets lawyer
where he represented sovereigns, global investment banks and fortune 500
companies across a broad range of capital raising and corporate transactions. He
is a graduate of Duke University and Brooklyn Law School. Mr. Radom is admitted
to practice law in New York and New Jersey and speaks fluent Russian.
FAMILY RELATIONSHIPS
There are no family relationships between any of our directors, executive
officers and proposed directors or executive officers.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
To the best of our knowledge, none of our directors or executive officers has,
during the past ten years:
1. been convicted in a criminal proceeding or been subject to a pending
criminal proceeding (excluding traffic violations and other minor
offences);
2. had any bankruptcy petition filed by or against the business or
property of the person, or of any partnership, corporation or business
association of which he was a general partner or executive officer,
either at the time of the bankruptcy filing or within two years prior
to that time;
3. been subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction
or federal or state authority, permanently or temporarily enjoining,
barring, suspending or otherwise limiting, his involvement in any type
of business, securities, futures, commodities, investment, banking,
savings and loan, or insurance activities, or to be associated with
persons engaged in any such activity;
4. been found by a court of competent jurisdiction in a civil action or
by the SEC or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated;
5. been the subject of, or a party to, any federal or state judicial or
administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated (not including any settlement of a
civil proceeding among private litigants), relating to an alleged
violation of any federal or state securities or commodities law or
regulation, any law or regulation respecting financial institutions or
insurance companies including, but not limited to, a temporary or
permanent injunction, order of disgorgement or restitution, civil
money penalty or temporary or permanent cease-and-desist order, or
removal or prohibition order, or any law or regulation prohibiting
mail or wire fraud or fraud in connection with any business entity; or
6. been the subject of, or a party to, any sanction or order, not
subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Exchange Act (15
U.S.C. 78c(a)(26))), any registered entity (as defined in Section
1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any
equivalent exchange, association, entity or organization that has
disciplinary authority over its members or persons associated with a
member.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our
executive officers and directors and persons who own more than 10% of a
registered class of our equity securities to file with the Securities and
Exchange Commission initial statements of beneficial ownership, reports of
changes in ownership and annual reports concerning their ownership of our shares
of common stock and other equity securities, on Forms 3, 4 and 5, respectively.
Executive officers, directors and greater than 10% shareholders are required by
the Securities and Exchange Commission regulations to furnish us with copies of
all Section 16(a) reports they file.
35
Based solely on our review of the copies of such forms received by our company,
or written representations from certain reporting persons that no Form 5s were
required for those persons, we believe that, during the fiscal year ended
November 30, 2014, all filing requirements applicable to our officers, directors
and greater than 10% beneficial owners as well as our officers, directors and
greater than 10% beneficial owners of our subsidiaries were complied with.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the Nevada Revised
Statutes and by our Bylaws.
Under the Nevada Revised Statutes, director immunity from liability to a company
or its stockholders for monetary liabilities applies automatically unless it is
specifically limited by a company's Articles of Incorporation. Our Articles of
Incorporation do not specifically limit our directors' immunity. Excepted from
that immunity are: (a) a willful failure to deal fairly with the company or its
stockholders in connection with a matter in which the director has a material
conflict of interest; (b) a violation of criminal law, unless the director had
reasonable cause to believe that his or her conduct was lawful or no reasonable
cause to believe that his or her conduct was unlawful; (c) a transaction from
which the director derived an improper personal profit; and (d) willful
misconduct.
Our Bylaws provide that we will indemnify our directors and officers to the
fullest extent not prohibited by Nevada law; provided, however, that we may
modify the extent of such indemnification by individual contracts with our
directors and officers; and, provided, further, that we shall not be required to
indemnify any director or officer in connection with any proceeding, or part
thereof, initiated by such person unless such indemnification: (a) is expressly
required to be made by law, (b) the proceeding was authorized by our Board of
Directors, (c) is provided by us, in our sole discretion, pursuant to the powers
vested in us under Nevada law or (d) is required to be made pursuant to the
Bylaws.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and control persons pursuant to the
foregoing provisions or otherwise, we have been advised that, in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy, and is, therefore, unenforceable.
CODE OF ETHICS
On February 13, 2012, our board of directors adopted a Code of Ethics and
Business Conduct that applies to, among other persons, our company's chief
executive officer, president and chief financial officer (being our principal
executive officer, principal financial officer and principal accounting
officer), as well as persons performing similar functions. As adopted, our Code
of Ethics and Business Conduct sets forth written standards that are designed to
deter wrongdoing and to promote:
1. honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
2. full, fair, accurate, timely, and understandable disclosure in reports
and documents that we file with, or submit to, the Securities and
Exchange Commission and in other public communications made by us;
3. compliance with applicable governmental laws, rules and regulations;
4. the prompt internal reporting of violations of the Code of Ethics and
Business Conduct to an appropriate person or persons identified in the
Code of Ethics and Business Conduct; and
5. accountability for adherence to the Code of Ethics and Business
Conduct.
Our Code of Ethics and Business Conduct requires, among other things, that all
of our company's senior officers commit to timely, accurate and consistent
disclosure of information; that they maintain confidential information; and that
they act with honesty and integrity.
In addition, our Code of Ethics and Business Conduct emphasizes that all
employees have a responsibility for maintaining financial integrity within our
company, consistent with generally accepted accounting principles, and federal
and state securities laws. Any employee who becomes aware of any incidents
involving financial or accounting manipulation or other irregularities, whether
by witnessing the incident or being told of it, must report it to our company.
Any failure to report such inappropriate or irregular conduct of others is to be
treated as a severe disciplinary matter. It is against our company policy to
retaliate against any individual who reports in good faith the violation or
potential violation of our company's Code of Ethics and Business Conduct by
another.
36
Our Code of Ethics and Business Conduct will be filed with the Securities and
Exchange Commission as Exhibit 14.1 to this annual report on Form 10-K. We will
provide a copy of the Code of Ethics and Business Conduct to any person without
charge, upon request. Requests can be sent to: First American Silver Corp., 1
Nachal Maor, Suite 2, Ramat Bet Shemesh, Israel 99623.
AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that it does not have a member of its
audit committee that qualifies as an "audit committee financial expert" as
defined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent" as the
term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange
Act of 1934, as amended.
We believe that the members of our board of directors are collectively capable
of analyzing and evaluating our financial statements and understanding internal
controls and procedures for financial reporting. We believe that retaining an
independent director who would qualify as an "audit committee financial expert"
would be overly costly and burdensome and is not warranted in our circumstances
given the early stages of our development and the fact that we have not
generated any material revenues to date. In addition, we currently do not have
nominating, compensation or audit committees or committees performing similar
functions nor do we have a written nominating, compensation or audit committee
charter. Our board of directors does not believe that it is necessary to have
such committees because it believes the functions of such committees can be
adequately performed by our board of directors.
ITEM 11. EXECUTIVE COMPENSATION
The particulars of the compensation paid to the following persons:
* our principal executive officer; and
* each of our two most highly compensated executive officers who were
serving as executive officers at the end of the years ended November
30, 2014 and 2013
who we will collectively refer to as the named executive officers of our
company, are set out in the following summary compensation table, except that no
disclosure is provided for any named executive officer, other than our principal
executive officers, whose total compensation did not exceed $100,000 for the
respective fiscal year:
SUMMARY COMPENSATION TABLE
Change in
Pension
Value and
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- ---- --------- -------- --------- --------- --------------- ----------- --------------- ---------
Thomas Menning (1) 2014 Nil Nil Nil Nil Nil Nil 27,500 27,500
President, Chief 2013 Nil Nil Nil Nil Nil Nil Nil Nil
Executive Officer, 2012 Nil Nil Nil Nil Nil Nil Nil Nil
Chief Financial
Officer, Secretary,
Treasurer and
Director
Mark Radom (2) 2014 2,339 (3) Nil Nil Nil Nil Nil Nil Nil
President, Chief
Executive Officer,
Secretary,
Treasurer and
Director
----------
(1) Mr. Menning was appointed President, Chief Executive Officer, Chief
Financial Officer, Secretary, Treasurer and as a Director on March 2, 2011
and resigned in November 2014.
(2) Mr. Radom was appointed President, Chief Executive Officer, Secretary,
Treasurer and as a Director on December 8, 2014, which is after the end of
fiscal 2014.
(3) Mr. Radom is entitled to receive a monthly salary of $2,500, which will be
paid only if and after the Company raises sufficient funds therefor.
37
There are no compensatory plans or arrangements with respect to our executive
officers resulting from their resignation, retirement or other termination of
employment or from a change of control.
STOCK OPTION PLAN
On November 10, 2011, our directors approved the adoption of our 2011 Stock
Option Plan, which permits our company to issue options to acquire up to
2,500,000 shares of our common stock by directors, officers, employees and
consultants of our company.
STOCK OPTIONS/SAR GRANTS
During our fiscal year ended November 30, 2014 there were no options granted to
our named officers or directors, although effective as of December 3, 2014, our
chief executive officer, Mr. Radom, is entitled to receive 600,000 shares of our
common stock annually as compensation for his service.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
No equity awards were outstanding as of the year ended November 30, 2014.
OPTION EXERCISES
During our Fiscal year ended November 30, 2014 there were no options exercised
by our named officers.
COMPENSATION OF DIRECTORS
We do not have any agreements for compensating our directors for their services
in their capacity as directors, although such directors are expected in the
future to receive stock options to purchase shares of our common stock as
awarded by our board of directors.
We have determined that none of our directors are independent directors, as that
term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the SECURITIES
EXCHANGE ACT OF 1934, as amended, and as defined by Rule 4200(a)(15) of the
NASDAQ Marketplace Rules.
PENSION, RETIREMENT OR SIMILAR BENEFIT PLANS
There are no arrangements or plans in which we provide pension, retirement or
similar benefits for directors or executive officers. We have no material bonus
or profit sharing plans pursuant to which cash or non-cash compensation is or
may be paid to our directors or executive officers, except that stock options
may be granted at the discretion of the board of directors or a committee
thereof.
INDEBTEDNESS OF DIRECTORS, SENIOR OFFICERS, EXECUTIVE OFFICERS AND OTHER
MANAGEMENT
None of our directors or executive officers or any associate or affiliate of our
company during the last two fiscal years, is or has been indebted to our company
by way of guarantee, support agreement, letter of credit or other similar
agreement or understanding currently outstanding.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2014, we did not have a compensation committee or another
committee of the board of directors performing equivalent functions. Instead the
entire board of directors performed the function of compensation committee. Our
board of directors approved the executive compensation, however, there were no
deliberations relating to executive officer compensation during fiscal 2013.
38
COMPENSATION COMMITTEE REPORT
None.
FAMILY RELATIONSHIPS
There are no family relationships between any of our directors, executive
officers or directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth, as of March 2, 2015, certain information with
respect to the beneficial ownership of our common shares by each shareholder
known by us to be the beneficial owner of more than 5% of our common shares, as
well as by each of our current directors and executive officers as a group. Each
person has sole voting and investment power with respect to the shares of common
stock, except as otherwise indicated. Beneficial ownership consists of a direct
interest in the shares of common stock, except as otherwise indicated.
Amount and Nature
Name and Address Title of Beneficial Percentage of
of Beneficial Owner of Class Ownership Class (1)
------------------- -------- --------- ---------
Thomas J. Menning Common 3,936,000 6.73%
11380 S. Virginia Street, #2011
Reno, NV 89511
Directors and Officers as a group Common 0 0%
Henry H. Tonking Common 8,000,000 13.68%
546 Lantern Ct.
Incline Village, NV 89451
----------
(1) Under Rule 13d-3, a beneficial owner of a security includes any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares: (i) voting power, which includes
the power to vote, or to direct the voting of shares; and (ii) investment
power, which includes the power to dispose or direct the disposition of
shares. Certain shares may be deemed to be beneficially owned by more than
one person (if, for example, persons share the power to vote or the power
to dispose of the shares).In addition, shares are deemed to be beneficially
owned by a person if the person has the right to acquire the shares (for
example, upon exercise of an option) within 60 days of the date as of which
the information is provided .In computing the percentage ownership of any
person, the amount of shares outstanding is deemed to include the amount of
shares beneficially owned by such person (and only such person) by reason
of these acquisition rights. As a result, the percentage of outstanding
shares of any person as shown in this table does not necessarily reflect
the person's actual ownership or voting power with respect to the number of
shares of common stock actually outstanding on March 2, 2015. As of March
2, 2015, there were 62,050,567 shares of our company's common stock issued
and outstanding.
CHANGES IN CONTROL
We are unaware of any contract or other arrangement or provisions of our
Articles or Bylaws the operation of which may at a subsequent date result in a
change of control of our company. There are not any provisions in our Articles
or Bylaws, the operation of which would delay, defer, or prevent a change in
control of our company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Except as disclosed herein, no director, executive officer, shareholder holding
at least 5% of shares of our common stock, or any family member thereof, had any
material interest, direct or indirect, in any transaction, or proposed
transaction since the year ended November 30, 2014, in which the amount involved
39
in the transaction exceeded or exceeds the lesser of $120,000 or one percent of
the average of our total assets at the year end for the last three completed
fiscal years.
DIRECTOR INDEPENDENCE
We currently act with one director, Mark Radom. We have determined that he is
not an "independent director" as defined in NASDAQ Marketplace Rule 4200(a)(15).
We do not have a standing audit, compensation or nominating committee, but our
entire board of directors acts in such capacities. We believe that our members
of our board of directors are capable of analyzing and evaluating our financial
statements and understanding internal controls and procedures for financial
reporting. The board of directors of our company does not believe that it is
necessary to have an audit committee because we believe that the functions of an
audit committee can be adequately performed by the board of directors. In
addition, we believe that retaining an independent director who would qualify as
an "audit committee financial expert" would be overly costly and burdensome and
is not warranted in our circumstances given the early stages of our development.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The aggregate fees billed for the most recently completed fiscal year ended
November 30, 2014 and for the fiscal year ended November 30, 2013 for
professional services rendered by the principal accountant for the audit of our
annual financial statements and review of the financial statements included in
our quarterly reports on Form 10-Q and services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:
Year Ended
November 30, 2014 November 30, 2013
----------------- -----------------
Audit Fees $ 6,000 $ 8,000
Audit Related Fees 4,800 4,050
Tax Fees Nil Nil
All Other Fees Nil Nil
------- -------
Total $10,800 $ 12,050
======= =======
Our board of directors pre-approves all services provided by our independent
auditors. All of the above services and fees were reviewed and approved by the
board of directors either before or after the respective services were rendered.
Our board of directors has considered the nature and amount of fees billed by
our independent auditors and believes that the provision of services for
activities unrelated to the audit is compatible with maintaining our independent
auditors' independence.
40
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
(1) Financial statements for our company are listed in the index under Item 8 of
this document
(2) All financial statement schedules are omitted because they are not
applicable, not material or the required information is shown in the financial
statements or notes thereto.
(b) Exhibits
Exhibit
Number Description
------ -----------
(3) (I) ARTICLES OF INCORPORATION; (II) BY-LAWS
3.1 Articles of Incorporation (incorporated by reference to our
Registration Statement filed on Form S-1 on February 25, 2009).
3.2 By-laws (incorporated by reference to our Registration Statement filed
on Form S-1 on February 25, 2009)
3.3 Certificate of Amendment (incorporated by reference to our Registration
Statement filed on Form S-1 on February 25, 2009).
3.4 Articles of Merger (incorporated by reference to our Current Report
filed on Form 8-K on July 15, 2010).
3.5 Certificate of Change (incorporated by reference to our Current Report
filed on Form 8-K on July 15, 2010).
(10) MATERIAL CONTRACTS
10.1 Property Option Agreement between our company and All American
Resources LLC with respect to the Mountain City claim dated November
26, 2010 (incorporated by reference to our Current Report filed on Form
8-K on December 21, 2010).
10.2 Property Option Agreement between our company and All American
Resources LLC with respect to the Eagan Canyon claim dated November 26,
2010 (incorporated by reference to our Current Report filed on Form 8-K
on December 21, 2010).
10.3 Property Option Agreement between our company and All American
Resources LLC with respect to the Muncy Creek claim dated November 26,
2010 (incorporated by reference to our Current Report filed on Form 8-K
on December 21, 2010).
10.4 Mining Lease and Option to Purchase Agreement between our company,
Pyramid Lake LLC and Anthony A. Longo dated April 15, 2011
(incorporated by reference to our Current Report filed on Form 8-K on
May 17, 2011).
10.5 Assignment and License Agreement between Thomas J. Menning and our
company dated September 16, 2011(incorporated by reference to our
Current Report filed on Form 8-K on October 14, 2011).
10.6 Service Agreement with Mark Radom, CEO, dated December 3, 2014
(incorporated by reference to our Current Report filed on Form 8-K on
December 5, 2014.
41
Exhibit
Number Description
------ -----------
(14) CODE OF ETHICS
14.1* Code of Ethics
(31) RULE 13A-14(A) / 15D-14(A) CERTIFICATIONS
31.1* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of the Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer.
(32) SECTION 1350 CERTIFICATIONS
32.1* Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
of the Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer.
101 INTERACTIVE DATA FILE
101** Interactive Data File (Form 10-K for the year ended November 30, 2011
furnished in XBRL).
101.PRE XBRL Instance Document
101.INS XBRL Taxonomy Extension Schema Document
101.SCH XBRL Taxonomy Extension Calculation Linkbase Document
101.CAL XBRL Taxonomy Extension Definition Linkbase Document
101.DEF XBRL Taxonomy Extension Label Linkbase Document
101.LAB XBRL Taxonomy Extension Presentation Linkbase Document
----------
* Filed herewith.
** Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the
Interactive Data Files on Exhibit 101 hereto are deemed not filed or part
of any registration statement or prospectus for purposes of Sections 11 or
12 of the Securities Act of 1933, are deemed not filed for purposes of
Section 18 of the Securities and Exchange Act of 1934, and otherwise are
not subject to liability under those sections.
42
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FIRST AMERICAN SILVER CORP.
(Registrant)
Dated: March 2, 2015 /s/ Mark Radom
--------------------------------------
Mark Radom
President, Chief Executive Officer,
Secretary, Treasurer and Director
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Dated: March 2, 2015 /s/ Mark Radom
--------------------------------------
Mark Radom
President, Chief Executive Officer,
Secretary, Treasurer and Director
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
4
