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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, 2013

                                       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.)

355 Burrard Street, Suite 1000, Vancouver, BC Canada               V6C 2G8
     (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 November 4th, 2015: 4,612,500

AMERICAN PARAMOUNT GOLD CORP. INDEX PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Balance Sheets at February 28, 2013 and August 31, 2012 3 Statements of Operations for the three and six months ended February 28, 2013 and 2012 4 Statements of Cash Flows for the six months ended February 28, 2013 and 2012 5 Notes to Financial Statements 6 2
American Paramount Gold Corp. Balance Sheets (Expressed in U.S. Dollars) (Unaudited) February 28, August 31, 2013 2012 ------------ ------------ ASSETS Current Assets Excise tax receivable $ -- $ 977 ------------ ------------ Total Assets $ -- $ 977 ============ ============ LIABILITIES Current Liabilities Bank overdraft $ -- $ 5,529 Accounts payable 291,420 289,039 Accrued liabilities 188,482 140,092 Convertible loan payable - related party 980,413 975,652 ------------ ------------ Total Liabilities 1,460,315 1,410,312 ------------ ------------ STOCKHOLDERS' DEFICIT Common stock 3,750,000 authorized shares, par value $0.001 1,612,500 shares issued and outstanding as at February 28, 2013 and August 31, 2012 1,613 1,613 Additional paid-in-capital 3,291,370 3,291,370 Stock payable 476,191 476,191 Deficit (5,229,489) (5,178,509) ------------ ------------ Total Stockholders' Deficit (1,460,315) (1,409,335) ------------ ------------ Total Liabilities and Stockholders' Deficit $ -- $ 977 ============ ============ The accompanying notes are an integral part of these interim financial statements 3
American Paramount Gold Corp. Statements of Operations (Expressed in U.S. Dollars) (Unaudited) For the Three Months Ended For the Six Months Ended February 28, February 28, 2013 2012 2013 2012 ---------- ---------- ---------- ---------- EXPENSES Operating expenses Consulting $ -- $ 19,227 $ -- $ 33,952 Exploration -- 310,640 -- 432,280 General and administrative 956 10,874 2,589 21,925 Professional fees -- -- -- 3,739 ---------- ---------- ---------- ---------- Total operating expenses 956 340,741 2,589 491,896 ---------- ---------- ---------- ---------- Net loss from operations (956) (340,741) (2,589) (491,896) ---------- ---------- ---------- ---------- Other expenses Impairment of mining claims -- -- -- 250,000 Impairment of capital assets -- -- -- 15,693 Interest expense 24,067 23,750 48,391 44,072 ---------- ---------- ---------- ---------- Total other expenses 24,067 23,750 48,391 309,765 ---------- ---------- ---------- ---------- NET AND COMPREHENSIVE LOSS $ (25,023) $ (364,491) $ (50,980) $ (801,661) ========== ========== ========== ========== BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.02) $ (0.03) $ (0.03) $ (0.50) ========== ========== ========== ========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED 1,612,500 1,612,500 1,612,500 1,612,500 ========== ========== ========== ========== The accompanying notes are an integral part of these interim financial statements 4
American Paramount Gold Corp. Statements of Cash Flows (Expressed in U.S. Dollars) (Unaudited) For the Six Months Ended February 28, 2013 2012 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (50,980) $ (801,661) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Impairment of mining claims -- 250,000 Impairment of capital assets -- 15,693 Interest expense 48,391 44,072 Change in operating assets and liabilities: Decrease in excise tax receivable 977 15,479 Decrease in prepaids -- 39,629 Increase in accounts payable and accrued liabilities 2,380 258,534 ---------- ---------- NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES 768 (178,254) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Bank overdraft repayments (5,529) (21,882) Convertible loan proceeds - related party 4,761 128,650 ---------- ---------- NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES (768) 106,768 ---------- ---------- NET CHANGE IN CASH -- (71,486) CASH, BEGINNING OF THE PERIOD -- 71,552 ---------- ---------- CASH, END OF THE PERIOD $ -- $ 66 ========== ========== The accompanying notes are an integral part of these interim financial statements 5
American Paramount Gold Corp. Notes to the Financial Statements February 28, 2013 (Stated in U.S. Dollars) (Unaudited) 1. ORGANIZATION AND NATURE OF BUSINESS American Paramount Gold Corp., a Nevada corporation, (the "Company") was incorporated in the State of Nevada on July 20, 2006. The Company was formed to engage in the acquisition, exploration and development of natural resource properties. UNAUDITED INTERIM FINANCIAL STATEMENTS The unaudited interim 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, 2012, 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, 2013 are not necessarily indicative of the results that may be expected for the year ending August 31, 2013. GOING CONCERN The accompanying unaudited interim financial statements have been prepared assuming the Company will continue as a going concern. Continuation as a going concern is dependent upon the ability of the Company to obtain the necessary obligations and pay its liabilities arising from normal business operations when they come due and ultimately upon its ability to achieve profitable operations. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that the Company will be able to continue as a going concern. These unaudited interim financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. RECENT ACCOUNTING PRONOUNCEMENTS The following are recent FASB accounting pronouncements, which may have an impact on the Company's future financial statements: "INCOME TAXES (ASC TOPIC 740): PRESENTATION OF AN UNRECOGNIZED TAX BENEFIT WHEN A NET OPERATING LOSS CARRY-FORWARD, A SIMILAR TAX LOSS, OR A TAX CREDIT CARRY-FORWARD EXISTS" ("ASU 2013-11") was issued during July 2013. FASB issued guidance on how to present an unrecognized tax benefit. The guidance is effective for annual periods beginning after December 15, 2013 for public companies. The Company has adopted this pronouncement. The adoption of ASC Topic 740 did not have a significant impact on the Company's results of operations, financial performance or cash flows. In June 2014, the FASB issued ASU No. 2014-10, "DEVELOPMENT STAGE ENTITIES (TOPIC 915): ELIMINATION OF CERTAIN FINANCIAL REPORTING REQUIREMENTS, INCLUDING AN AMENDMENT TO VARIABLE INTEREST ENTITIES GUIDANCE IN TOPIC 810, CONSOLIDATION." This ASU is intended to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements for development stage entities. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder 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 6
American Paramount Gold Corp. Notes to the Financial Statements February 28, 2013 (Stated in U.S. Dollars) (Unaudited) 1. ORGANIZATION AND NATURE OF BUSINESS (CONTINUED) a development stage entity that in prior years it had been in the development stage. As of the first annual period beginning after December 15, 2014, the presentation and disclosure requirements in Topic 915 will no longer be required. The revised consolidation standards are effective one year later, in annual periods beginning after December 15, 2015. The Company has early adopted these changes and removed inception-to-date information and no longer describes as an exploration stage entity. In August 2014, the FASB issued ASU No. 2014-15, "PRESENTATION OF FINANCIAL STATEMENTS--GOING CONCERN (SUBTOPIC 205-40): DISCLOSURE OF UNCERTAINTIES ABOUT AN ENTITY'S ABILITY TO CONTINUE AS A GOING CONCERN." This ASU is intended to define management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans and requires an express statement and other disclosures when substantial doubt is not alleviated. The new standard will be effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of this standard on its financial statements. 2. CONVERTIBLE LOAN On April 22, 2010 and as amended December 17, 2010, the Company entered into an agreement with Monaco Capital Inc., majority shareholder, for a principal amount of up to $5,000,000. The loan is unsecured and bears interest at the rate of 10% per annum. The Company 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 at any time for the sum plus an additional 10% of such amount. The loan (including accrued interest) is convertible into securities of the Company at a conversion price calculated as the mean volume weighted average price for the Company's common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. At any time after the advancement date, if the Company has not paid the loan and accrued interest in full, the Lender may, by providing written notice to the Company, exercise its rights of conversion in respect of either a portion of the total outstanding amount of the loan as of that date into shares of the Company. The amounts advanced plus accrued are due one year following the date advanced. At February 28, 2013, $952,600 plus related interest past due. As at February 28, 2013, interest of $188,482 (August 31, 2012 - $140,092) is included in accrued liabilities. 3. COMMON STOCK On October 13, 2015, the Company amended its Articles of Incorporation to increase its authorized and issued and outstanding common shares to 200,000,000 common shares at a par value of $0.001 and 10,000,000 preferred shares at a par value of $0.001. 4. STOCK OPTIONS The Company has adopted a stock option plan (the "2010 Plan") which permits the Company to issue up to 6,500,000 shares of common stock to directors, officers, employees and consultants of the Company upon the exercise of stock options granted under the 2010 Plan. At the time of the grant of the option, the plan administrator shall designate the expiration date of the option, which date shall not be later than five (5) years from the date of grant. The vesting schedule for each option shall be specified by the plan administrator at the time of grant of the option. Effective September 29, 2010 the 2010 Plan provides 7
American Paramount Gold Corp. Notes to the Financial Statements February 28, 2013 (Stated in U.S. Dollars) (Unaudited) 4. STOCK OPTIONS (CONTINUED) for an exercise price to be established based on the fair market value of a common share of the Company being the average of the high and low sales prices (or bid and ask prices, if sales prices are not reported) for the common stock for the last trading day immediately preceding the date with respect to which fair market value is being determined, as reported for the principal trading market for the common stock. A summary of the Company's stock options outstanding as at February 28, 2013 and August 31, 2012 is presented below: Number of Options Outstanding Weighted Average Weighted Average Life and Exercisable Exercise Price Remaining (years) --------------- -------------- ----------------- Balance, August 31, 2011 and 2012, and February 28, 2013 5,150,000 $ 0.12 2.92 ========= ====== ==== The following is a summary of the Company's stock options outstanding and exercisable as at February 28, 2013: Number of options outstanding and exercisable Exercise Price Expiry Date --------------- -------------- ----------- 150,000 $ 0.12 March 2, 2013 (subsequently expired) 5,000,000 $ 0.12 March 2, 2016 --------- 5,150,000 ========= 5. RELATED PARTY TRANSACTIONS During the six months ended February 28, 2013, consulting fees of $Nil (2012: $24,463) and $Nil (2012: $9,500) were incurred to the President and a director of the Company, respectively. At February 28, 2013, Monaco Capital Inc., a majority shareholder has advanced $980,413 (August 31, 2012 - $975,652) with terms as discussed in Note 2. 6. SUBSEQUENT EVENTS On October 1, 2015, Dennis Petke was appointed as the sole officer of the Company, and as a director of the Company. The Company entered into an agreement with a company owned by Dennis Petke beginning on October 1, 2015 whereby the Company will pay a monthly service fee of $2,500 and issue on a monthly basis 50,000 shares of the Company's common stock for the services of Mr. Petke. This agreement can be terminated by the Company with 180 days notice, and by the company owned by Mr. Petke with 30 days notice. 8
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, 2012 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, 2010, 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, 2010, 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, 2010, 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, 2010 under the stock symbol APGA. Our CUSIP number is 02882T 05. On April 16, 2010, 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 9
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 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, 2010, 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, 2013, Monaco Capital Inc. has advanced $975,652. Accrued interest relating to the loan totalling $164,416 as at February 28, 2013 was recorded in accounts payable and accrued liabilities. On July 30, 2010, our directors approved the adoption of the 2010 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 2012 plan. On July 28, 2010 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, 2010, 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, 2012 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. Both mineral exploration and development involve a high degree of risk and few properties which are explored are ultimately developed into producing mines. 10
CASH REQUIREMENTS We intend to search for qualifying exploration properties 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 Identification of properties of merit $ 50,000 -------- TOTAL $150,000 ======== At present, our cash requirements for the next 12 months outweigh the funds available. Of the $150,000 that we require for the next 12 months, we had $Nil in cash as of February 28, 2013. 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, 2010, we entered into a convertible loan agreement with Monaco Capital Inc., wherein Monaco Capital Inc. agreed to loan our company up to $500,000 The total advanced under the Convertible Loan as at February 28, 2013 is $980,413. RESULTS OF OPERATIONS - THREE MONTHS ENDED NOVEMBER, 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, 2013 and 2012 which are included herein. Our operating results for the three months ended February 28, 2013 and 2012 are summarized as follows: 11
Six Months Six Months Ended Ended February 28, February 28, 2013 2012 ---------- ---------- Consulting expenses $ -- $ 33,952 Exploration expenses -- 432,280 General and administrative 2,589 21,925 Professional fees -- 3,739 Impairment of mining claims -- 250,000 Impairment of capital assets -- 15,693 Interest expense 48,391 44,072 ---------- ---------- Net loss from operations $ (50,580) $ (801,661) ========== ========== REVENUES We have not generated revenues since inception and we do not anticipate earning revenues in the near future. CONSULTING EXPENSES Consulting expenses decreased by $33,952 for the six months ended February 28, 2013 as compared to the six months ended February 28, 2012. EXPLORATION EXPENSES Exploration expenses decreased by $432,280 during the six months ended February 28, 2013 as compared to the six months ended February 28, 2012. GENERAL AND ADMINISTRATIVE EXPENSES General and administrative expenses decreased by $19,336 during the six months ended February 28, 2013 as compared to the six months ended February 28, 2012. PROFESSIONAL FEES Professional fees decreased by $3,739 during the three months ended February 28, 2013 compared to the three months ended February 28, 2012. 12
LIQUIDITY AND FINANCIAL CONDITION WORKING CAPITAL February 28, August 31, 2013 2012 ------------ ------------ Current assets $ -- $ 977 Current liabilities 1,460,315 1,410,312 ------------ ------------ Working capital (deficit) $ (1,460,315) $ (1,409,335) ============ ============ OPERATING ACTIVITIES Net cash provided by operating activities was $768 for the six months ended February 28, 2013. INVESTING ACTIVITIES Net cash used in investing activities was $Nil for the six months ended February 28, 2013. FINANCING ACTIVITIES Net cash used in financing activities for the six months ended February 28, 2013 was $768. CONTRACTUAL OBLIGATIONS As a "smaller reporting company", we are not required to provide tabular disclosure obligations. 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. 13
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, 2013, 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 $50,580 for the six month period ended February 28, 2013 and at February 28, 2013 had a deficit accumulated of $5,229,399. Since inception (July 20, 2006) to February 28, 2013, 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. 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. 14
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, 2013 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. RISKS ASSOCIATED WITH MINING THERE IS NO ASSURANCE THAT WE CAN ACQUIRE OR DEVELOP ANY MINERAL RESOURCE PROPERTIES 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. 15
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 the mineral resource property does not contain any "reserve" and any funds that we spend on exploration will probably be lost. 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 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 mineral properties. 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 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. 16
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 THE 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 the mineral property and we build and operate a mine. We had cash in the amount of $Nil as of February 28, 2013. At February 28, 2013, we had working capital deficit of $1,460,315. We incurred a net loss of $50,580 for the six month period ended February 28, 2013 and $5,229,399 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 the 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 the 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. 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. 17
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 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. 18
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, 2010, we granted an aggregate of 5,400,000 stock options to ten individuals, including directors, officers, consultants and employees, pursuant to our 2010 stock option plan, at an exercise price of $0.68 per share. Of the 5,400,000 stock options, 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 October 6, 2015, the Company appointed Dennis Petke as director, Interim President, Chief Financial Officer and Secretary Treasurer. Our board of directors now consists of Dennis Petke. 19
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, 2010). 3.4 Certificate of Change (incorporated by reference from our Current Report on Form 8-K filed on April 12, 2010). (10) MATERIAL CONTRACTS 10.1 Mineral Lease Agreement between Royce L. Hackworth and Belva L. Tomany and our company dated April 16, 2012. (incorporated by reference from our Current Report on Form 8-K filed on April 19, 2010). 10.2 Consulting agreement with Vista Partners LLC dated January 29, 2010 10.3* Convertible Loan Agreement between our company and Monaco Capital Inc. dated December 17, 2010. (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. 20
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: November 16, 2015 /s/ Dennis Petke ------------------------------------------------ Dennis Petke President, Chief Executive Officer and Director (Principal Executive Officer) Date: November 16, 2015 /s/ Dennis Petke ------------------------------------------------ Dennis Petke Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer) 2