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EX-32.1 - Indigenous Roots Corp.ex32-1.txt
EX-31.1 - Indigenous Roots Corp.ex31-1.txt
EX-31.2 - Indigenous Roots Corp.ex31-2.txt
EX-32.2 - Indigenous Roots Corp.ex32-2.txt

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                For the quarterly period ended February 28, 2012

                                       or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

             For the transition period from __________ to __________

                       Commission File Number: 333-138148


                          AMERICAN PARAMOUNT GOLD CORP
             (Exact name of registrant as specified in its charter)

           Nevada                                                 20-5243308
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

 302-1912 Enterprise way, Kelowna, BC                              V1Y 9S9
(Address of principal executive offices)                          (Zip Code)

        Registrant's telephone number including area code: (778) 478-7480

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. [X] YES [ ] 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 post such files). Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated filer, a non-accelerated  filer, or a small reporting  company.  See
the definitions of "large accelerated  filer",  "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act

Large accelerated filer [ ]                        Accelerated filer [ ]
Non-accelerated filer [ ]                          Smaller reporting company [X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Number of common shares outstanding at June 15, 2014: 1,612,500

American Paramount Gold Corp. (fka Zebra Resources Inc.) (An exploration Stage Company) INDEX PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Balance Sheets at February 28, 2012 (unaudited) and August 31, 2011 (audited) 3 Statements of Operations for the six months ended February 28, 2012 and 2011 (unaudited) 4 Statements of Cash Flows for the six months ended February 28, 2012 and 2011 (unaudited) 5 Notes to Financial Statements (unaudited) 6 2
American Paramount Gold Corp. (fka Zebra Resources Inc.) (An Exploration Stage Company) Balance Sheets - Presented in U.S. Dollars February 28, August 31, 2012 2011 ------------ ------------ (Unaudited) ASSETS CURRENT ASSETS Cash $ 66 $ 71,552 Excise Tax receivable 19,647 35,126 Prepaids and deposits -- 39,629 ------------ ------------ TOTAL CURRENT ASSETS 19,713 146,357 Mining claims -- 250,000 Website, net -- 14,618 Equipment, net -- 1,075 ------------ ------------ TOTAL ASSETS $ 19,713 $ 412,050 ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIT LIABILITIES CURRENT LIABILITIES Bank overdraft $ -- $ 21,882 Accounts payable and accrued liabilities 381,224 122,740 Convertible loans payable - related party 952,599 779,877 ------------ ------------ TOTAL CURRENT LIABILITIES 1,333,823 924,499 ------------ ------------ TOTAL LIABILITIES 1,333,823 924,499 ------------ ------------ STOCKHOLDERS' DEFICIT Common stock 3,750,000 authorized shares, par value $0.001 1,612,500 shares issued and outstanding 1,613 1,613 Additional paid-in capital 3,291,370 3,291,370 Stock payable 476,191 476,191 Deficit (5,083,284) (4,281,623) ------------ ------------ TOTAL STOCKHOLDERS' DEFICIT (1,314,110) (512,449) ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 19,713 $ 412,050 ============ ============ The accompanying notes are an integral part of these interim financial statements 3
American Paramount Gold Corp. (fka Zebra Resources Inc.) (An Exploration Stage Company) Statements of Operations - Presented in U.S. Dollars (Unaudited) For the Three Months Ended For the Six Months Ended February 28, February 28, 2012 2011 2012 2011 ------------ ------------ ------------ ------------ OPERATING EXPENSES Consulting $ 19,227 $ -- $ 33,952 $ 2,496,769 Exploration 310,640 94,695 432,280 211,906 General and administrative 10,874 57,911 21,925 83,694 Management fees -- 37,869 -- 71,081 Professional fees -- 37,757 3,739 79,495 ------------ ------------ ------------ ------------ TOTAL EXPENSES 340,741 228,232 491,896 2,942,945 ------------ ------------ ------------ ------------ OTHER EXPENSES Impairment of mining claims -- -- 250,000 -- Impairment of capital assets -- -- 15,693 -- Amortization of debt discount -- 1,946 -- 6,142 Interest expense 23,750 19,428 44,072 29,013 ------------ ------------ ------------ ------------ 23,750 21,374 309,765 35,155 ------------ ------------ ------------ ------------ NET LOSS $ (364,491) $ (249,606) $ (801,661) $ (2,978,100) ============ ============ ============ ============ NET LOSS PER COMMON SHARE - BASIC $ (0.22) $ (0.15) $ (0.50) $ (1.85) ============ ============ ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC 1,612,500 1,551,676 1,612,500 1,527,730 ============ ============ ============ ============ The accompanying notes are an integral part of these interim financial statements 4
American Paramount Gold Corp. (fka Zebra Resources Inc.) (An Exploration Stage Company) Statements of Cash Flows - Presented in US Dollars (Unaudited) For the Six Months Ended February 28, 2012 2011 ------------ ------------ CASH FLOW FROM OPERATING ACTIVITIES Net loss $ (801,661) $ (2,978,100) Adjustments to reconcile net loss to net cash used in operating activities: Impairment of capital assets 15,693 -- Impairment of mining claims 250,000 -- Interest expense 44,072 -- Amortization of website -- 4,385 Stock issued for services -- 2,480,800 Amortized debt discount -- 6,142 Changes in operating assets and liabilities: Decrease in excise tax receivable 15,479 -- Decrease in prepaids and deposits 39,629 61,047 Increase in other receivable -- (12,968) Increase in accounts payable and accrued liabilities 258,484 66,792 ------------ ------------ NET CASH USED IN OPERATING ACTIVITIES (178,254) (371,902) ------------ ------------ CASH FLOW FROM FINANCING ACTIVITIES Bank overdraft (21,882) -- Convertible loan proceeds - related party 128,650 430,664 Notes payable proceeds -- 55,000 Notes payable payments -- (114,716) Proceeds from sale of common stock -- -- ------------ ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 106,768 370,948 ------------ ------------ INCREASE IN CASH (71,486) (954) CASH, BEGINNING OF PERIOD 71,552 2,146 ------------ ------------ CASH, END OF PERIOD $ 66 $ 1,192 ============ ============ The accompanying notes are an integral part of these interim financial statements 5
American Paramount Gold Corp. (fka Zebra Resources Inc.) Notes to the Financial Statements February 28, 2012 (Stated in U.S. Dollars) 1. DESCRIPTION OF THE BUSINESS AND HISTORY American Paramount Gold Corp., a Nevada corporation, (the "Company") was incorporated in the State of Nevada on July 20, 2006 as Zebra Resources Inc. The Company was formed to engage in the acquisition, exploration and development of natural resource properties. UNAUDITED INTERIM FINANCIAL STATEMENTS The unaudited interim consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles ("GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission ("SEC"). They do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended August 31, 2011, included in the Company's Annual Report on Form 10-K, filed with the SEC. The interim unaudited financial statements should be read in conjunction with those audited financial statements included in Form 10-K. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six month period ended February 28, 2012 are not necessarily indicative of the results that may be expected for the year ending August 31, 2012. 2. MINERAL PROPERTIES On April 16, 2010, the Company entered into an option agreement to acquire a 100% long-term lease interest in 189 unpatented mining claims situated in the Walker Lane Structural Belt in Nye County, Nevada (the "Cap Gold Project"). The Company paid $125,000 to secure the option, giving it the right to acquire a 100% long-term lease interest in the Cap Gold Project. On March 9, 2012, based on recently released drill results, the Board of Directors decided the company could not justify the further expense of continuing with its planned drill program at Cap Gold, Nye County, Nevada, USA. The Company advised the owners that it was cancelling the option agreement and the property is fully impaired as at February 28, 2012. 3. CONVERTIBLE LOAN On April 22, 2010, and as amended December 17, 2010, the Company entered into a convertible loan agreement with Monaco Capital Inc., a major shareholder ("Monaco") wherein Monaco agreed to loan the Company up to $5,000,000 at an interest rate of 10% per annum. The principal amount of any funds advanced and accrued interest is due one year from the advancement date. The loan (including accrued interest) is convertible into common shares of the Company at a conversion price of the volume weighted average price for the Company's stock during the 10 day period ending on the latest complete trading day prior to conversion. As at February 28, 2012, accrued interest of $90,940 (August 31, 2011 - $47,258) is included in accounts payable. 4. COMMON STOCK On November 28, 2011, the Company amended its Articles of Incorporation to implement a forty for one reverse stock split of its authorized and issued and outstanding common shares from 150,000,000 shares of common stock with a par value of $0.001 to 3,750,000 shares of common stock with a par value of $0.001. All share and per share information have been retroactively restated to reflect this. 6
5. RELATED PARTY TRANSACTIONS During the six months ended February 28, 2012, consulting fees of $24,463 and $9,500 were incurred to the President and a director of the Company, respectively. 6. IMPAIRMENT OF CAPITAL ASSETS During the six month period ended February 28, 2012, management determined that costs capitalized to the development of the Company's website of $14,618 and equipment with the carrying value of $1,075 would be unrecoverable and has fully impaired the assets accordingly. 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING STATEMENTS This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, 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 unaudited interim financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles. The following discussion should be read in conjunction with our Company's audited financial statements and 10-K for the year ended August 31, 2011 and unaudited interim financial statements and the related notes that appear elsewhere in this quarterly report. In this quarterly report, unless otherwise specified, all references to "common stock" refer to common shares in the capital of our company and the terms "we", "us" and "our" mean American Paramount Gold Corp. GENERAL OVERVIEW We were incorporated under the laws of the State of Nevada on July 20, 2006 under the name Zebra Resources, Inc. At inception, we were an exploration stage company engaged in the acquisition, exploration and development of mineral properties. On February 26, 2011, Monaco Capital Inc. acquired a controlling interest in our company by purchasing 20,000,000 shares of our common stock in a private transaction. On March 17, 2011, we effected a 1 old for 2 new forward stock split of our issued and outstanding common stock. As a result, our authorized capital increased from 75,000,000 to 150,000,000 shares of common stock and our issued and outstanding increased from 32,000,000 shares of common stock to 64,000,000 shares of common stock, all with a par value of $0.001. Also effective March 17, 2011, we changed our name from Zebra Resources, Inc. to American Paramount Gold Corp., by way of a merger with our wholly owned subsidiary American Paramount Gold Corp., which was formed solely for the change of name. The name change and forward stock split became effective with the Over-the-Counter Bulletin Board at the opening for trading on April 12, 2011 under the stock symbol APGA. Our CUSIP number is 02882T 05. On April 16, 2011, we entered into an agreement with Royce L. Hackworth and Belva L. Tomany in respect of an option to acquire 189 unpatented mining claims situated in the Walker Lane Structural Belt in Nye County, Nevada known as the Cap Gold Project. The 189 claims making up the Cap Gold Project form a contiguous block of approximately 3,960 acres (1,602 hectares). We paid $125,000 to secure the option, giving us the right acquire a 100% long-term lease interest in the Cap Gold Project. To exercise the option we must: (i) make ongoing yearly advance production royalty cash payments during the term of the agreement of $125,000 in years two (2) through five (5), $150,000 in years six (6) through twelve (12), $200,000 in years 13 through 20 and $300,000 in years 8
21 through 30; (ii) incur expenditures on exploration of the Cap Gold Project of not less than an aggregate of $1,250,000 over five (5) years; and (iii) make production royalty payments from production from the property after the advance production royalty cash payments described above have been repaid to our company from production from the property. At our company's election, the production royalty may be calculated either on a sliding scale or on a fixed production royalty basis, and must range from 1% to a maximum of 3%. On April 22, 2011, we entered into a convertible loan agreement with Monaco Capital Inc., wherein Monaco Capital Inc. has agreed to loan our company up to $500,000. The loan (and accrued interest) is convertible in whole or in part into common shares of our company at a conversion price of $1.05 and will bear interest at 10% per annum. The principal amount of the loan and accrued interest is due and payable one year from the advancement date. We may at any time during the term of the loan prepay any sum up to the full amount of the loan and accrued interest then outstanding for an additional 10% of such amount. At February 28, 2012, Monaco Capital Inc. has advanced $400,933. The balance sheet at February 28, 2012 records the loan value at $394,338 due to the unamortized beneficial conversion feature on the convertible debt totalling $6,595. The initial beneficial conversion feature was valued at $16,833 of which $10,238 was amortized. Accrued interest relating to the loan totalling $18,331 as at February 28, 2012 was recorded in accounts payable and accrued liabilities. On July 30, 2011, our directors approved the adoption of the 2011 stock option plan which permits our company to issue up to 6,500,000 shares of our common stock to directors, officers, employees and consultants of our company upon the exercise of stock options granted under the 2011 plan. On July 28, 2011, we obtained an extra-provincial license to carry on business in the Province of Ontario, Canada. Our Ontario corporation number is 1827852. On November 9, 2011, we entered into a non-binding letter of intent to acquire the Kisita Gold Mine Property, an operational gold property four hours northwest of the capital city of Kampala, Uganda. The acquisition was subject to further negotiation and due diligence of the project satisfactory to us. On December 9, 2011 our company, having performed the due diligence required to acquire the Kisita Gold Mine Property, advised Lonsdale Acquisition Corporation that we declined to proceed with the purchase agreement under its current terms and conditions. Discussions with Lonsdale Acquisition Corporation are ongoing. On November 28, 2011, the Nevada Secretary of State accepted for filing a Certificate of Change, wherein the corporation amended our Articles of Incorporation to implement a forty (40) for one (1) reverse stock split of our authorized and issued and outstanding common shares such that our company's authorized capital will be decreased from 150,000,000 shares of common stock with a par value of $0.001 to 3,750,000 shares of common stock with a par value of $0.001 and, correspondingly, its issued and outstanding shares of common stock shall decrease from 64,500,000 shares of common stock to 1,612,500 shares of common stock. No fractional shares shall be issued and fractional shares shall be rounded up. The reverse split was effective at the opening of trading on January 26, 2012. On March 9, 2012 based on recently released drill results the Board of Directors decided the company could not justify the further expense of continuing with its planned drill program at Cap Gold, Nye County, Nevada, USA. The Company advised the owners that it was cancelling its option agreement. OUR CURRENT BUSINESS We are an exploration stage mining company engaged in the identification, acquisition, and exploration of metals and minerals with a focus on gold mineralization. Since we are an exploration stage company, there is no assurance that a commercially viable mineral reserve exists on any of our current or future properties, To date, we do not know if an economically viable mineral reserve exists on our property and there is no assurance that we will discover one. Even if we do eventually discover a mineral reserve on our property, there can be no assurance that we will be able to develop our property into a producing mine and extract those resources. Both mineral exploration and development involve a high degree of risk and few properties which are explored are ultimately developed into producing mines. 9
CASH REQUIREMENTS We intend to conduct exploration activities on our newly optioned property over the next twelve months. We estimate our operating expenses and working capital requirements for the next twelve month period to be as follows: ESTIMATED EXPENSES FOR THE NEXT TWELVE MONTH PERIOD General, administrative, and corporate expenses $ 50,000 Operating expenses $ 50,000 Exploration $500,000 -------- TOTAL $600,000 ======== At present, our cash requirements for the next 12 months outweigh the funds available to maintain or develop our properties. Of the $600,000 that we require for the next 12 months, we had $18,000 in cash as of February 28, 2012. In order to improve our liquidity, we intend to pursue additional equity financing from private investors or possibly a registered public offering. Other than as set out below, we currently do not have any arrangements in place for the completion of any further private placement financings and there is no assurance that we will be successful in completing any further private placement financings. If we are unable to achieve the necessary additional financing, then we plan to reduce the amounts that we spend on our business activities and administrative expenses in order to be within the amount of capital resources that are available to us. On April 22, 2011, we entered into a convertible loan agreement with Monaco Capital Inc., wherein Monaco Capital Inc. has agreed to loan our company up to $500,000. The loan is convertible into common shares of our company at a conversion price of $1.05. On December 6, 2011 Monaco Capital Inc. advanced $100,000. To date, $500,933 has been advanced under the April 2011 loan agreement. On December 17, 2011, we entered into a convertible loan agreement with Monaco Capital which replaces the original convertible loan agreement entered into on April 22, 2011 in its entirety. Under the December 17, 2011 convertible loan agreement, Monaco Capital has agreed to loan our company up to $5,000,000. The loan bears interest at a rate of 10% per annum. During the quarter ended February 28, 2012, Monaco Capital Inc. advanced $121,004. The total advanced under the Convertible Loan as at February 28, 2012 is $952,599. RESULTS OF OPERATIONS - THREE MONTHS ENDED FEBRUARY, 2012 AND 2011 The following summary of our results of operations should be read in conjunction with our financial statements for the six month period ended February 28, 2012 and 2011 which are included herein. Our operating results for the three months ended February 28, 2012 and for the three months ended February 28, 2011 and the changes between those periods for the respective items are summarized as follows: Change Between Three Months Three Months Three Month Ended Ended Period Ended February 28, February 28, February 28, 2012 2011 2012 ---------- ---------- ---------- ($) ($) ($) Consulting (19,227) -- 19,227 Exploration expenses (310,640) (94,695) 215,945 General and administrative (10,974) (57,911) (46,937) Management fees -- (37,869) (37,869) Professional fees -- (37,757) (37,757) Amortization of debt discount -- (1,946) (1,946) Interest expense (23,750) (19,428) 4,322 ---------- ---------- ---------- Net loss from operations (364,491) (249,606) 114,985 ========== ========== ========== 10
REVENUES We have not generated revenues since inception and we do not anticipate earning revenues in the near future. EXPLORATION EXPENSES Exploration expenses increased by $114,985 during the three months ended February 28, 2012 as compared to the three months ended February 28, 2011. GENERAL AND ADMINISTRATIVE EXPENSES General and administrative expenses decreased by $46,937 during the three months ended February 28, 2012 as compared to the three months ended February 28, 2011. MANAGEMENT FEES Management fees decreased by $37,869 during the three months ended February 28, 2012 as compared to the three months ended February 28, 2011. PROFESSIONAL FEES Professional fees decreased by $37,757 during the three months ended February 28, 2012 compared to the three months ended February 28, 2011. LIQUIDITY AND FINANCIAL CONDITION WORKING CAPITAL February 28, August 31, 2012 2011 ------------ ----------- Current assets $ 19,713 $ 146,357 Current liabilities 1,333,823 924,499 ------------ ----------- Working capital (deficit) $ (1,314,110) $ (778,142) ============ =========== OPERATING ACTIVITIES Net cash used by operating activities was $178,254 for the six months ended February 28, 2012. INVESTING ACTIVITIES Net cash used in investing activities was $Nil for the six months ended February 28, 2012. FINANCING ACTIVITIES Net cash from financing activities for the six months ended February 28, 2012 was $106,768. CONTRACTUAL OBLIGATIONS As a "smaller reporting company", we are not required to provide tabular disclosure obligations. 11
OFF-BALANCE SHEET ARRANGEMENTS We have no significant 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 are material to stockholders. APPLICATION OF CRITICAL ACCOUNTING POLICIES USE OF ESTIMATES The preparation of the 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 of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. NET LOSS PER COMMON SHARE Our company computes net loss per share in accordance with ASC 260, "Earnings per Share" and SEC Staff Accounting Bulletin No. 98 (SAB 98). Under the provisions of ASC 260 and SAB 98, basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net loss per share gives effect to common stock equivalents; however, potential common shares are excluded if their effect is anti-dilutive. For the period from inception (July 20, 2006) through February 28, 2012, our company had no potentially dilutive securities. STOCK-BASED COMPENSATION On August 1, 2009, the company adopted the fair value recognition provisions of FASB ASC 718-10. The company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 505-10. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-10. MINERAL PROPERTY COSTS The Company has been in the exploration stage since its formation July 20, 2006 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property acquisitions are capitalized and exploration costs are charged to operations as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property, are capitalized. Such costs will be depleted using the units-of-production method over the estimated life of the probable reserve. Although the Company has taken steps to verify title to mineral properties in which it has an interest, according to the usual industry standards for the stage of exploration of such properties, 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. GOING CONCERN Our company has incurred a net loss $801,661 for the six month period ended February 28, 2012 [2011 - $2,978,100] and at February 28, 2012 had a deficit accumulated of $5,083,284. Since inception (July 20, 2006) to February 28, 2012, our company has commenced limited operations, raising substantial doubt about our company's ability to continue as a going concern. Our company will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance our company will be successful in accomplishing its objectives. 12
The ability of our company to continue as a going concern is dependent on additional sources of capital and the success of our company's plan. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from the outcome of this uncertainty. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors, shareholders or investors to meet our obligations over the next twelve months. Other than a convertible loan agreement with Monaco Capital Inc., we do not have any further arrangements in place for any future debt or equity financing. ITEM 4. CONTROLS AND PROCEDURES MANAGEMENT'S REPORT ON DISCLOSURE CONTROLS AND PROCEDURES We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer) and our chief financial officer (also our principal financial officer and principal accounting officer), to allow for timely decisions regarding required disclosure. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There have been no changes in our internal controls over financial reporting that occurred during the quarter ended February 28, 2012 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting. PART II - OTHER INFORMATION ITEM 1. 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, executive officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest. ITEM 1A. RISK FACTORS Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward-looking statements". Such forward-looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions, or other future performance suggested herein. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements. Such estimates, projections or other "forward-looking statements" involve various risks and uncertainties as outlined below. We caution readers of this quarterly report that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward-looking statements". In evaluating us, our business and any investment in our business, readers should carefully consider the following factors. 13
RISKS ASSOCIATED WITH MINING OUR PROPERTY IS IN THE EXPLORATION STAGE. THERE IS NO ASSURANCE THAT WE CAN ESTABLISH THE EXISTENCE OF ANY MINERAL RESOURCE ON OUR PROPERTY IN COMMERCIALLY EXPLOITABLE QUANTITIES. UNTIL WE CAN DO SO, WE CANNOT EARN ANY REVENUES FROM OPERATIONS AND IF WE DO NOT DO SO WE WILL LOSE ALL OF THE FUNDS THAT WE EXPEND ON EXPLORATION. IF WE DO NOT DISCOVER ANY MINERAL RESOURCE IN A COMMERCIALLY EXPLOITABLE QUANTITY, OUR BUSINESS COULD FAIL. Despite exploration work on our mineral property, we have not established that it contains any mineral reserve, nor is there any assurance that we will be able to do so. If we do not, our business could fail. A mineral reserve is defined by the Securities and Exchange Commission in its Industry Guide 7 as that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. The probability of an individual prospect ever having a "reserve" that meets the requirements of the Securities and Exchange Commission's Industry Guide 7 is extremely remote; in all probability our mineral resource property does not contain any "reserve" and any funds that we spend on exploration will probably be lost. Even if we do eventually discover a mineral reserve on our property, there can be no assurance that we will be able to develop our property into a producing mine and extract those resources. Both mineral exploration and development involve a high degree of risk and few properties which are explored are ultimately developed into producing mines. The commercial viability of an established mineral deposit will depend on a number of factors including, by way of example, the size, grade and other attributes of the mineral deposit, the proximity of the resource to infrastructure such as a smelter, roads and a point for shipping, government regulation and market prices. Most of these factors will be beyond our control, and any of them could increase costs and make extraction of any identified mineral resource unprofitable. MINERAL OPERATIONS ARE SUBJECT TO APPLICABLE LAW AND GOVERNMENT REGULATION. EVEN IF WE DISCOVER A MINERAL RESOURCE IN A COMMERCIALLY EXPLOITABLE QUANTITY, THESE LAWS AND REGULATIONS COULD RESTRICT OR PROHIBIT THE EXPLOITATION OF THAT MINERAL RESOURCE. IF WE CANNOT EXPLOIT ANY MINERAL RESOURCE THAT WE MIGHT DISCOVER ON OUR PROPERTY, OUR BUSINESS MAY FAIL. Both mineral exploration and extraction require permits from various foreign, federal, state, provincial and local governmental authorities and are governed by laws and regulations, including those with respect to prospecting, mine development, mineral production, transport, export, taxation, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There can be no assurance that we will be able to obtain or maintain any of the permits required for the continued exploration of our mineral properties or for the construction and operation of a mine on our properties at economically viable costs. If we cannot accomplish these objectives, our business could fail. We believe that we are in compliance with all material laws and regulations that currently apply to our activities but there can be no assurance that we can continue to remain in compliance. Current laws and regulations could be amended and we might not be able to comply with them, as amended. Further, there can be no assurance that we will be able to obtain or maintain all permits necessary for our future operations, or that we will be able to obtain them on reasonable terms. To the extent such approvals are required and are not obtained, we may be delayed or prohibited from proceeding with planned exploration or development of our mineral properties. IF WE ESTABLISH THE EXISTENCE OF A MINERAL RESOURCE ON OUR PROPERTY IN A COMMERCIALLY EXPLOITABLE QUANTITY, WE WILL REQUIRE ADDITIONAL CAPITAL IN ORDER TO DEVELOP THE PROPERTY INTO A PRODUCING MINE. IF WE CANNOT RAISE THIS ADDITIONAL CAPITAL, WE WILL NOT BE ABLE TO EXPLOIT THE RESOURCE, AND OUR BUSINESS COULD FAIL. 14
If we do discover mineral resources in commercially exploitable quantities on our property, we will be required to expend substantial sums of money to establish the extent of the resource, develop processes to extract it and develop extraction and processing facilities and infrastructure. Although we may derive substantial benefits from the discovery of a major deposit, there can be no assurance that such a resource will be large enough to justify commercial operations, nor can there be any assurance that we will be able to raise the funds required for development on a timely basis. If we cannot raise the necessary capital or complete the necessary facilities and infrastructure, our business may fail. MINERAL EXPLORATION AND DEVELOPMENT IS SUBJECT TO EXTRAORDINARY OPERATING RISKS. WE DO NOT CURRENTLY INSURE AGAINST THESE RISKS. IN THE EVENT OF A CAVE-IN OR SIMILAR OCCURRENCE, OUR LIABILITY MAY EXCEED OUR RESOURCES, WHICH WOULD HAVE AN ADVERSE IMPACT ON OUR COMPANY. Mineral exploration, development and production involve many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Our operations will be subject to all the hazards and risks inherent in the exploration for mineral resources and, if we discover a mineral resource in commercially exploitable quantity, our operations could be subject to all of the hazards and risks inherent in the development and production of resources, including liability for pollution, cave-ins or similar hazards against which we cannot insure or against which we may elect not to insure. Any such event could result in work stoppages and damage to property, including damage to the environment. We do not currently maintain any insurance coverage against these operating hazards. The payment of any liabilities that arise from any such occurrence would have a material adverse impact on our company. MINERAL PRICES ARE SUBJECT TO DRAMATIC AND UNPREDICTABLE FLUCTUATIONS. We expect to derive revenues, if any, either from the sale of our mineral resource property or from the extraction and sale of ore. The price of those commodities has fluctuated widely in recent years, and is affected by numerous factors beyond our control, including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities and increased production due to new extraction developments and improved extraction and production methods. The effect of these factors on the price of base and precious metals, and therefore the economic viability of any of our exploration properties and projects, cannot accurately be predicted. THE MINING INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE THAT WE WILL CONTINUE TO BE SUCCESSFUL IN ACQUIRING MINERAL CLAIMS. IF WE CANNOT CONTINUE TO ACQUIRE PROPERTIES TO EXPLORE FOR MINERAL RESOURCES, WE MAY BE REQUIRED TO REDUCE OR CEASE OPERATIONS. The mineral exploration, development, and production industry is largely un-integrated. We compete with other exploration companies looking for mineral resource properties. While we compete with other exploration companies in the effort to locate and acquire mineral resource properties, we will not compete with them for the removal or sales of mineral products from our properties if we should eventually discover the presence of them in quantities sufficient to make production economically feasible. Readily available markets exist worldwide for the sale of mineral products. Therefore, we will likely be able to sell any mineral products that we identify and produce. In identifying and acquiring mineral resource properties, we compete with many companies possessing greater financial resources and technical facilities. This competition could adversely affect our ability to acquire suitable prospects for exploration in the future. Accordingly, there can be no assurance that we will acquire any interest in additional mineral resource properties that might yield reserves or result in commercial mining operations. RISKS RELATED TO OUR COMPANY THE FACT THAT WE HAVE NOT EARNED ANY OPERATING REVENUES SINCE OUR INCORPORATION RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE TO EXPLORE OUR MINERAL PROPERTIES AS A GOING CONCERN. 15
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 $66 as of February 28, 2012. At February 28, 2012, we had working capital deficit of $1,314,110. We incurred a net loss of $801,661 for the six month period ended February 28, 2012 and $5,083,284 since inception. We estimate our average monthly operating expenses to be approximately $50,000, including mineral property costs, 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 traditionally raised our operating capital from sales of equity securities, but there can be no assurance that we will continue to be able to do so. If we cannot raise the money that we need to continue exploration of our mineral property, we may be forced to delay, scale back, or eliminate our exploration activities. If any of these were to occur, there is a substantial risk that our business would fail. These circumstances lead our independent registered public accounting firm, in their report dated November 29, 2009, to comment about our company's ability to continue as a going concern. Management has plans to seek additional capital through a private placement of its capital stock. These conditions raise substantial 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 NYSE Amex. Accordingly, shareholders may have difficulty reselling any of their shares. OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE 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 16
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, the Financial Industry Regulatory Authority has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the Financial Industry Regulatory Authority believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The Financial Industry Regulatory Authority's requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock. OTHER RISKS TRENDS, RISKS AND UNCERTAINTIES We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS On October 6, 2011, we granted an aggregate of 5,400,000 stock options to ten individuals, including directors, officers, consultants and employees, pursuant to our 2011 stock option plan, at an exercise price of $0.68 per share. Of the 5,400,000 stock options, 400,000 options are exercisable until October 6, 2012 and 5,000,000 options are exercisable until October 6, 2015. All the stock options vested upon issuance. ITEM 3. DEFAULT UPON SENIOR SECURITIES None. ITEM 4. MINE SAFETY DISCLOSURES None. ITEM 5. OTHER INFORMATION On July 14, 2014, the Company appointed Harold Schneider as director, Interim President, Chief Financial Officer and Secretary Treasurer. Our board of directors now consists of Harold Schneider. 17
ITEM 6. EXHIBITS Exhibit No. Description ------- ----------- (3) ARTICLES OF INCORPORATION AND BYLAWS 3.1 Articles of Incorporation (incorporated by reference from our Registration Statement on Form SB-2 filed on October 23, 2006). 3.2 By-laws (incorporated by reference from our Registration Statement on Form SB-2 filed on October 23, 2006). 3.3 Articles of Merger (incorporated by reference from our Current Report on Form 8-K filed on April 12, 2011). 3.4 Certificate of Change (incorporated by reference from our Current Report on Form 8-K filed on April 12, 2011). (10) MATERIAL CONTRACTS 10.1 Mineral Lease Agreement between Royce L. Hackworth and Belva L. Tomany and our company dated April 16, 2011. (incorporated by reference from our Current Report on Form 8-K filed on April 19, 2011). 10.2 Consulting agreement with Vista Partners LLC dated January 29, 2011 (31) RULE 13A-14(A)/15D-14(A) CERTIFICATIONS 31.1* Section 302 Certification of the Principal Executive Officer under Sarbanes-Oxley Act of 2002 31.2* Section 302 Certification of the Principal Financial Officer and Principal Accounting Officer under Sarbanes-Oxley Act of 2002 (32) SECTION 1350 CERTIFICATIONS 32.1* Section 906 Certification of the Principal Executive Officer under Sarbanes-Oxley Act of 2002 32.2* Section 906 Certification of the Principal Financial Officer and Principal Accounting Officer under Sarbanes-Oxley Act of 2002 101* Interactive data files pursuant to Rule 405 of Regulation S-T ---------- * Filed herewith. 18
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMERICAN PARAMOUNT GOLD CORP. (Registrant) Date: June 19, 2015 /s/ Harold Schneider ------------------------------------------------ Harold Schneider President, Chief Executive Officer and Director (Principal Executive Officer) Date: June 19, 2015 /s/ Harold Schneider ------------------------------------------------ Harold Schneider Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer) 1