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EX-32.1 - Indigenous Roots Corp.ex32-1.htm
EX-32.2 - Indigenous Roots Corp.ex32-2.htm
EX-31.2 - Indigenous Roots Corp.ex31-2.htm
EX-31.1 - Indigenous Roots Corp.ex31-1.htm
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 May 31, 2017

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)
 
(Exact name of registrant as specified in its charter)

Nevada
20-5243308
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
   
6-307, 2735 West Pebble Road, Las Vegas Nevada
89123
(Address of principal executive offices)
(Zip Code)
 
Registrant's telephone number including area code: (250) 258-7481
 
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 [  ]
(Do not check if a smaller reporting company)
Smaller reporting company [X]
 
Indicate by check mark whether the  registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]
 
Number of common shares outstanding at September 27, 2017: 7,737,618
 

 
American Paramount Gold Corp.
Index
 
PART I: FINANCIAL INFORMATION
 
ITEM 1. Financial Statements

Interim Condensed Balance Sheets at May 31, 2017 and August 31, 2016
3
   
Interim Condensed Statements of Operations for the nine months ended May 31, 2017 and 2016
4
   
Interim Condensed Statements of Cash Flows for the nine months ended May 31, 2017 and 2016
5
   
Notes to the Condensed Financial Statements
6
 
 
 
2

AMERICAN PARAMOUNT GOLD CORP.
INTERIM CONDENSED BALANCE SHEETS
(EXPRESSED IN US DOLLARS)


 
 
May 31, 2017
   
August 31, 2016
 
 
 
(unaudited)
       
ASSETS
           
             
Current Assets
           
Cash
 
$
4,432
   
$
866
 
                 
Total Assets
 
$
4,432
   
$
866
 
                 
LIABILITIES
               
                 
Current Liabilities
               
Accounts payable and accrued liabilities
 
$
553,508
   
$
596,241
 
Due to related parties
   
133,852
     
55,266
 
Convertible loan payable - related party
   
980,413
     
980,413
 
                 
Total Liabilities
   
1,667,773
     
1,631,920
 
 
               
STOCKHOLDERS’ DEFICIT
 
                 
Common stock
               
200,000,000 authorized shares, par value $0.001
               
7,612,500 shares issued and outstanding
               
as at May 31, 2017 and August 31, 2016
   
7,613
     
7,613
 
Additional paid-in-capital
   
3,552,370
     
3,552,370
 
Shares to be issued
   
506,516
     
476,191
 
Deficit
   
(5,729,840
)
   
(5,667,228
)
Total Stockholders’ Deficit
   
(1,663,341
)
   
(1,631,054
)
                 
Total Liabilities and Stockholders’ Deficit
 
$
4,432
   
$
866
 
 
 
 

The accompanying notes are an integral part of these condensed interim financial statements.

 
3

AMERICAN PARAMOUNT GOLD CORP.
INTERIMCONDENSEDSTATEMENTS OF OPERATIONS
(EXPRESSED IN US DOLLARS)
(UNAUDITED)


 
 
For the Three Months
   
For the Nine Months
 
 
 
Ended May 31,
   
Ended May 31,
 
 
 
2017
   
2016
   
2017
   
2016
 
EXPENSES
                       
General and administration
 
$
37,757
   
$
2,049
   
$
99,597
   
$
272,777
 
Legal and audit
   
154
     
6,937
     
154
     
28,617
 
Loss before other items
   
37,911
     
8,986
     
99,751
     
301,394
 
 
                               
OTHER EXPENSES
                               
Gain on extinguishment of debt
   
-
     
-
     
(37,612
)
   
-
 
Foreign exchange
   
421
     
(914
)
   
473
     
(6,461
)
Interest expense
   
-
     
24,712
     
-
     
73,598
 
 
                               
Net and comprehensive loss
 
$
(38,332
)
 
$
(32,784
)
 
$
(62,612
)
 
$
(368,531
)
 
                               
BASIC AND DILUTED LOSS PER COMMON SHARE
 
$
(0.01
)
 
$
(0.01
)
 
$
(0.01
)
 
$
(0.06
)
 
                               
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING –
                               
BASIC AND DILUTED
   
7,612,500
     
5,782,830
     
7,612,500
     
6,397,290
 


 
 
The accompanying notes are an integral part of these condensed interim financial statements
 
4

AMERICAN PARAMOUNT GOLD CORP.
INTERIM CONDENSED STATEMENTS OF CASH FLOWS
(EXPRESSED IN US DOLLARS)
(UNAUDITED)


 
 
For the Nine Months
 
 
 
Ended May 31,
 
 
 
2017
   
2016
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
 
$
(62,612
)
 
$
(368,531
)
Non-cash items:
               
Gain on extinguishment of accounts payable
   
(37,612
)
   
-
 
Interest expense
   
-
     
73,598
 
Shares issued for services
   
-
     
267,000
 
Accrued consulting fees
   
45,000
     
-
 
Accrued management fees
   
45,000
     
-
 
Change in operating assets and liabilities:
               
Accounts payable and accrued liabilities
   
(5,121
)
   
8,085
 
Due to related party
   
(11,414
)
   
21,760
 
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
   
(26,759
)
   
1,912
 
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds received for share subscriptions
   
30,325
     
-
 
NET CASH FLOWS USED IN FINANCING ACTIVITIES
   
30,325
     
-
 
                 
Net change in cash
   
3,566
     
1,912
 
CASH, BEGINNING OF THE PERIOD
   
866
     
37
 
                 
CASH, END OF THE PERIOD
 
$
4,432
   
$
1,949
 
 
 
 
 
The accompanying notes are an integral part of these condensed interim financial statements
 
5

AMERICAN PARAMOUNT GOLD CORP.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
MAY 31, 2017
(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.

Basis of presentation
The unaudited interim financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Annual Report on Form 10-K of the Company for the year ended August 31, 2016. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended May 31, 2017 are not necessarily indicative of the results that may be expected for the year ended August 31, 2017.  For further information, these unaudited interim financial statements and the related notes should be read in conjunction with the Company’s audited financial statements for the year ended August 31, 2016, included in the Company’s report on Form 10-K.

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 financing to meet 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 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. Management intends to obtain additional funding by borrowing funds from its directors and officers, issuing promissory notes and/or a private placement of common stock.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and are presented in US dollars.
 
Accounting estimates
The preparation of these financial statements in conformity with US GAAP 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 amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis from making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Fair Value Measurements
The book value of cash, accounts payable and accrued liabilities, due to related parties and convertible loan payable approximate their fair values due to the short term maturity of those instruments. The fair value hierarchy under GAAP is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:
 
6


 
Level 1- quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 -observable inputs other than Level I, quoted prices for similar assets or liabilities in active markets, quoted prices for identical
or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and
Level 3 -assets and liabilities whose significant value drivers are unobservable by little or no market activity and that are significant to
the fair value of the assets or liabilities.

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). There were no assets or liabilities measured at fair value on a nonrecurring basis during the period ended May 31, 2017.

3. CONVERTIBLE LOAN - RELATED PARTY

On April 22, 2010, and as amended December 17, 2010, the Company entered into an agreement with Monaco Capital Inc., a significant 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 calculated on the principal balance. 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 interest are due one year following the date advanced.
 
As at May 31, 2017, the Company owed a principal balance of $980,413 (August 31, 2016 - $980,413) under this loan and accrued interest thereon of $532,362.
 
The loan is in default and due on demand.

4. STOCKHOLDERS’ DEFICIT

Shares to be issued
 
During the nine months ended May 31, 2017, the company received $30,325 for subscription agreements for 1,561,250 common shares at $0.02 per share, for shares yet to be issued.

5. RELATED PARTY TRANSACTIONS

The Company entered into an agreement with a company owned by the President and director of the Company beginning on September 1, 2016 whereby the Company will pay a monthly management and consulting fee of $5,000. The agreement is for a term of 3 years.

The Company entered into an agreement with the Controller of the Company beginning on September 1, 2016 whereby the Company will pay a monthly consulting fee of $5,000. The agreement is for a term of 3 years.

As at May 31, 2017, the Company owed $45,000 (August 31, 2016 - $Nil) to the President of the Company for services provided to the Company.

As at May 31, 2017, the Company owed $88,852 (August 31, 2016 - $55,266) to the Controller of the Company for services and cash proceeds provided to the Company.

At May 31, 2017, Monaco Capital Inc., a significant shareholder has advanced $980,413 (November 30, 2015 - $980,413) with terms as discussed in Note 3.
 
6. SUBSEQUENT EVENT
 
On September 25, 2017, the Company issued 125,000 common shares at a price of $ CDN 4.00 per share pursuant to share subscriptions previously received in the amount of $476,191.
 

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, 2016 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 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 $5,000,000. 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 November 30, 2016, Monaco Capital Inc. has advanced $980,413. Interest relating to the loan totalling $532,362 as at November 30, 2016 was recorded in 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.
 
8

 
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.
 
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.

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 $4,432 in cash as of May 31, 2017. 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.
 
RESULTS OF OPERATIONS - NINE MONTHS ENDED MAY 31, 2017 AND 2016
 
The following summary of our results of operations should be read in conjunction with our financial statements for the nine months ended May 31, 2017 and 2016 which are included herein.
 
Our operating results for the nine months ended May 31, 2017 and 2016 are summarized as follows:
 
   
Nine Months
   
Nine Months
 
   
Ended
   
Ended
 
   
May 31,
   
May 31,
 
   
2017
   
2016
 
             
General and administrative
 
$
99,597
   
$
272,777
 
Legal and audit
   
154
      28,617  
Foreign exchange
   
473
 
   
(6,641
)
Interest expense
   
-
     
73,598
 
Gain on extinguishment of debt     (37,612 )     -  
Net loss from operations
 
$
(62,612
)
 
$
(368,531
)
 
 
9


 
 
REVENUES
 
We have not generated revenues since inception and we do not anticipate earning revenues in the near future.
 
EXPENSES
 
General and administrative expenses decreased by $173,180 during the nine months ended May 31, 2017 as compared to the nine months ended May 31, 2016.
 
Legal and audit expenses decreased by $28,463 during the nine months ended May 31, 2017 as compared to the nine months ended May 31, 2016.

LIQUIDITY AND FINANCIAL CONDITION
 
WORKING CAPITAL

   
May 31,
   
August 31,
 
   
2017
   
2016
 
             
Current assets
 
$
4,432
   
$
866
 
Current liabilities
   
1,667,773
     
1,631,920
 
Working capital (deficit)
 
$
(1,663,341
)
 
$
(1,631,054
)
 
OPERATING ACTIVITIES
 
Cash used in operating activities was $26,759 for the nine months ended May 31, 2017.
 
FINANCING ACTIVITIES
 
Cash provided by financing activities was $30,325 for the nine months ended May 31, 2017.
 
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 an 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. As at May 31, 2017, our company had no potentially dilutive securities.
 
10

 
STOCK-BASED COMPENSATION
 
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.
 
GOING CONCERN
 
Our company has incurred a net loss $62,612 for the nine months ended May 31, 2017 and at May 31, 2017 had a deficit accumulated of $5,729,840. 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.
 
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 principal financial officer (also our principal financial officer and principal accounting officer), to allow for timely decisions regarding required disclosure.
 
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective, as of May 31, 2017.
 
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 May 31, 2017 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.
 
11

 
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.
 
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, 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 those 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.
 
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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 a 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 the 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 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 $4,432 as of May 31, 2017. At May 31, 2017, we had a working capital deficit of $1,663,341. We incurred a net loss of $62,612 for the nine months ended May 31, 2017. We estimate our average monthly operating expenses to be approximately $12,500, 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.
 
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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 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.
 
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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 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
 
There are no outstanding stock options or warrants as at May 31, 2017.
 
ITEM 3. DEFAULT UPON SENIOR SECURITIES
 
None.
 
ITEM 4. MINE SAFETY DISCLOSURES
 
None
 
ITEM 5. OTHER INFORMATION
 
None.
 
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 File
     
101.INS
 
XBRL Instance Document
101.SCH
 
XBRL Taxonomy Extension Schema Document.
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document.

* Filed herewith.
 
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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: October 2, 2017
/s/ Ron Loudoun
 
 
Ron Loudoun
 
President, Chief Executive Officer and Director
 
(Principal Executive Officer)
   
   
   
Date: October 2, 2017
/s/ Ron Loudoun
 
 
Ron Loudoun
 
Chief Financial Officer, Secretary and Treasurer
 
(Principal Financial Officer and
 
Principal Accounting Officer)
 
 
 
 
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