BLUSKY AI INC.
10-Ks and 10-Qs
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
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R
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ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT
OF 1934
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For
the Fiscal Year Ended July 31, 2010
OR
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£
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TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT
OF 1934
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Commission
File No. 333-147056
(Exact
Name of Registrant as Specified in Its Charter)
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Nevada
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35-2302128
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(State
or Other Jurisdiction
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(I.R.S.
Employer Identification
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Of
Incorporation or Organization)
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Number)
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10775 Double R Boulevard
Reno, NV
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89521
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
(775)
996-8200
Securities
registered pursuant to Section 12(b) of the Act:
None.
(Title of
Class)
Securities
registered pursuant to Section 12(g) of the Act:
None.
(Title of
Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
Yes
o
No
þ
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.
Yes
þ
No
o
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 issuer
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes
þ
No
o
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 (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes
o
No
o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.
þ
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large
accelerated filer
o
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Accelerated
filer
o
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Non-accelerated
filer
o
(Do
not check if a smaller reporting company)
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Smaller
reporting company
þ
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
£
Yes
R
No
The aggregate market value of voting
stock held by non-affiliates computed by reference to the price at which the
common equity was last sold as of the last business day of the registrant’s most
recently completed second fiscal quarter, January 31, 2010, was
$4,253,333.30. For purposes of this computation, it has been assumed
that the shares beneficially held by directors and officers of registrant were
“held by affiliates”; this assumption is not to be deemed to be an admission by
such persons that they are affiliates of registrant.
The number of shares of registrant’s
common stock outstanding as of November 9, 2010, was 87,789,393.
DOCUMENTS
INCORPORATED BY REFERENCE
No
documents are incorporated by reference.
TABLE OF
CONTENTS
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PART
I
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ITEM
1.
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BUSINESS
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1
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ITEM
1A.
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RISK
FACTORS
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6
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ITEM
1B.
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UNRESOLVED
STAFF COMMENTS
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12
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ITEM
2.
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PROPERTIES
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12
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ITEM
3.
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LEGAL
PROCEEDINGS
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12
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ITEM
4.
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REMOVED
AND RESERVED
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12
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PART
II
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ITEM
5.
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MARKET
FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
PURCHASES OF EQUITY SECURITIES
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13
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ITEM
6.
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SELECTED
FINANCIAL DATA
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14
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ITEM
7.
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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14
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ITEM 7A.
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QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
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18
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ITEM
8.
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FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
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19
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ITEM
9.
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CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
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19
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| ITEM 9A(T). | CONTROLS AND PROCEDURES | |
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ITEM
9B.
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OTHER
INFORMATION
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20
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PART
III
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ITEM
10.
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DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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21
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ITEM
11.
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EXECUTIVE
COMPENSATION
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24
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ITEM
12.
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
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26
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ITEM
13.
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
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26
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ITEM
14.
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PRINCIPAL
ACCOUNTING FEES AND SERVICES
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27
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PART
IV
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ITEM
15.
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EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
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28
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SIGNATURES
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29
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Description
Of Business
As used
in this Annual Report on Form 10-K, unless otherwise indicated, the terms “we,”
“us,” “our” and “the Company” refer to Gold American Mining Corp., a Nevada
corporation.
Forward-Looking Statements and
Associated Risks. This Annual Report on Form 10-K contains
forward-looking statements. Such forward-looking statements include
statements regarding, among other things, (1) discussions about mineral
resources and mineralized material, (2) our projected sales and profitability,
(3) our growth strategies, (4) anticipated trends in our industry, (5) our
future financing plans, (6) our anticipated needs for working capital, (7) our
lack of operational experience and (8) the benefits related to ownership of our
common stock. Forward-looking statements, which involve assumptions and describe
our future plans, strategies, and expectations, are generally identifiable by
use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,”
“believe,” “intend,” or “project” or the negative of these words or other
variations on these words or comparable terminology. These statements constitute
forward-looking statements within the meaning of the Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995. This information may
involve known and unknown risks, uncertainties, and other factors that may cause
our actual results, performance, or achievements to be materially different from
the future results, performance, or achievements expressed or implied by any
forward-looking statements. These statements may be found under “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” as
well as in this filing generally. Actual events or results may differ materially
from those discussed in forward-looking statements as a result of various
factors, including, without limitation, the risks outlined under Item 1A below
and other risks and matters described in this filing and in our other SEC
filings. In light of these risks and uncertainties, there can be no assurance
that the forward-looking statements contained in this filing will in fact occur
as projected. We do not undertake any obligation to update any
forward-looking statements.
The
Company
Overview
We are a precious metal mineral
acquisition, exploration and development company, formed in Nevada on July 2,
2007. At the time of our incorporation, we were incorporated under
the name “The Golf Alliance Corporation,” and our original business plan was to
act as a service-based firm that would provide opportunities for golfers to play
on private courses normally closed to them because of membership
requirements. On February 12, 2010, Johannes Petersen acquired the
majority of the shares of our issued and outstanding common stock in accordance
with a stock purchase agreement by and between Mr. Petersen and John
Fahlberg. Further, on March 5, 2010, we effected a name change to
“Silver America, Inc.” and at the same time effected a 50-for-1 forward stock
split and increased our authorized capital from 100,000,000 shares of common
stock, par value $0.00001 per share, and 10,000,000 shares of preferred stock,
par value $0.00001 per share, to 500,000,000 shares of common stock, par value
$0.00001 per share, and 10,000,000 shares of preferred stock, par value
$0.00001. In addition to the name change, we changed our
intended business purpose to that of precious metal mineral exploration,
development and production. Unless specifically stated otherwise, all
share amounts referenced herein, will refer to post-forward stock split share
amounts. On June 23, 2010, we effected a name change from Silver
America, Inc., to “Gold American Mining Corp.” in order to better reflect the
nature of our operations as a precious metal mining and exploration company,
with a more specific emphasis on gold exploration.
1
Our primary business focus is to
option, acquire, explore and develop precious metals properties in North
America. On April 26, 2010, we entered into a definitive option
agreement (“Guadalupe Option Agreement”) with Yale Resources Ltd. (“Yale”) with
respect to our acquisition of an exclusive option (the “Option”) to purchase an
undivided 90% interest in those two certain mining concessions in Zacatecas
State, Mexico, covering approximately 282.83 hectares (the “Guadalupe
Property”). The Guadalupe Option Agreement was entered into pursuant
to a binding letter of intent between the parties (the “LOI”) dated March 5,
2010.
To exercise the option, we must pay
cash to Yale, issue restricted shares of Company common stock to Yale, and fund
exploration and development expenditures on the Guadalupe
Property. The cash payments contemplated under the agreement total
$900,000.00 and are to be distributed in installments from the date of the LOI
through December 30, 2013. The number of Company shares to be issued
to Yale total 1,000,000 and are to be distributed in installments from the date
of the definitive agreement through December 30, 2013. We are also
obligated to fund a total of $2,000,000.00 worth of exploration and development
on the Guadalupe Property by December 30, 2013. Upon the
execution and exercise of the Option, Yale will transfer a 90% undivided
interest in the Guadalupe Property to the Company. Yale will act as
the operator for the project, and should the earn-in be completed, Yale will
retain a 10% participating interest in the Guadalupe Property as well as a 2%
NSR, which can be bought out in its entirety for $2,000,000.
On April 28, 2010, we entered into a
definitive option agreement (the “Keeno Strike Option Agreement”) with four
individuals (collectively, the “Optionor”) with respect to our acquisition of an
exclusive option (the “Keeno Option”) to purchase an undivided 72% interest in
those certain 12 mining claims and a mill site claim containing approximately
245 acres, located in Clark County, Nevada (“Keeno Property”). To
exercise the Keeno Option, we must pay cash to the Optionor, issue restricted
shares of Company common stock to Optionor, and fund exploration and development
expenditures on the Keeno Property. The cash payments contemplated
under the agreement total $272,000 to be paid in installments on or before June
30, 2010, such payments having been completed as of the date of the filing of
this Annual Report on Form 10-K. The number of Company shares to be issued to
Optionor total 2,000,000 and are to be distributed in installments from the date
of the definitive agreement through October 31, 2011. The Company
needs to fund a minimum of $750,000 worth of exploration and development on the
Keeno Property, with at least $400,000 to be incurred or funded on or before
April 30, 2011 and $350,000 to be incurred or funded on or before April 30,
2012. Upon our fulfillment of each of the above-referenced conditions
and exercise of the Keeno Option, the Optionor will transfer an undivided 72%
interest in the Keeno Property to us.
Further, pursuant to the Keeno Strike
Option Agreement, if, prior to the Option Deadline, the work program provides
evidence that there are at least 10,000,000 ounces of indicated silver resources
and/or 500,000 ounces of indicated gold resources on the Keeno Property, such
estimates to be evidenced by an independent third party report, we must issue
the Optionor an additional 3,000,000 shares of our common
stock. Should the earn-in be completed, the Optionor will retain a
28% interest in the Keeno Property as well as a 4% NSR. After our
completion of the initial work commitment and exercise of the Keeno Option, the
Optionor may elect to remain as a 28% carried joint venture partner or to offer
the Company the right to purchase the Optionor’s remaining 28% interest at a
fair market valuation, as determined by a valuation report prepared by an
independent third party mining engineer or qualified
geologist. Further, we will have the right to purchase 2% of the 4%
NSR retained by the Optionor for a purchase price of $20,000,000, or such pro
rata portion thereof.
2
On May 7, 2010, we entered into an
Equity Issuance Agreement (the “Agreement”) with ZUG Financing Group S.A., a
corporation organized under the laws of Nevis (“ZUG”), whereby we have the right
to require ZUG to purchase up to $7,500,000 of our securities until December 31,
2011, unless extended by either ourselves or ZUG for an additional twelve (12)
months.
Under the terms of the Agreement, we
may, from time to time, request an advance from ZUG up to $1,000,000, in
integral multiples of $100,000 (each, an “Advance”) per request, for operating
expenses, acquisitions, working capital and general corporate
activities. Following receipt of any Advance, we are obligated to
sell and issue ZUG units, each unit consisting of one share of the Company’s
common stock and one-half of a warrant (such that ZUG must purchase two units in
order to obtain one whole warrant), with each whole warrant entitling ZUG to
purchase one additional share of common stock (the “Units”), at the Unit
Price. The “Unit Price” means a price equal to 90% of the volume
weighted average of the closing price of our common stock for the ten (10)
business days preceding the date of any notice requesting an Advance, as quoted
on the OTCBB or such other quotation system as agreed upon by the Company and
ZUG. Each whole warrant issued as components to Units shall represent
the right of ZUG to purchase one share of common stock at an exercise price
equal to 150% of the Unit Price. All warrants to be issued as
components to the Units will have a two (2) year term from the date of
issuance. As of the date of the filing of this Annual Report on Form
10-K, we have received an aggregate of $1,000,000 in net proceeds based on
Advances, and have issued, or are currently obligated to issue, an aggregate of
1,186,060 shares of Company common stock and warrants to purchase an additional
aggregate of 593,030 shares of Company common stock. Such proceeds
are being used to satisfy our obligations under the Guadalupe Option Agreement
and the Keeno Strike Option Agreement and to move forward the exploration and
development of each property.
There are numerous levels of government
regulation associated with the activities of exploration and mining
companies. Permits that we, or the current operators of the mining
properties we have an interest in, are maintaining and amending include “Notice
of Intent” to explore, “Plan of Operations” to explore, “Plan of Operations” to
mine, “Reclamation Permits,” “Air Quality Permits,” “Water Quality Permits,”
“Industrial Artificial Pond Permits,” and several other health and safety
permits. These permits are subject to amendment or renewal during our
operations. Although there is no guarantee that the regulatory
agencies will timely approve, if at all, the necessary permits for our current
or anticipated operations, we have no reason to believe that necessary permits
will not be issued in due course. The total cost and effects on our
operations of the permitting and bonding process cannot be estimated at this
time. The cost will vary for each project when initiated and could be
material.
Within the United States, the Federal
government owns public lands that are administered by the Bureau of Land
Management or the United States Forest Service. Ownership of the
subsurface mineral estate can be acquired by staking a twenty (20) acre mining
claim granted under the General Mining Law of 1872, as amended (the “General
Mining Law”). The Federal government still owns the surface estate
even though the subsurface can be controlled with a right to extract through
claim staking. Private fee lands are lands that are controlled by
fee-simple title by private individuals or corporations. These lands
can be controlled for mining and exploration activities by either leasing or
purchasing the surface and subsurface rights from the private
owner. Unpatented mining claims located on public land owned by
another entity can be controlled by leasing or purchasing the claims outright
from the owners. Patented mining claims are claims that were staked
under the General Mining Law, and through application and approval the owners
were granted full private ownership of the surface and subsurface estate by the
Federal government. These lands can be acquired for exploration and
mining through lease or purchase from the owners. Tribal lands are
those lands that are under control by sovereign Native American
tribes. Areas that show promise for exploration and mining can be
leased or joint ventured with the tribe controlling the land.
3
Competition
and Mineral Prices
Given the continual increase in the
value of gold and silver, the business of acquiring, developing and/or exploring
gold and silver properties is more competitive than ever before. Our
competitors include companies with larger staffs, greater resources and
equipment and, as such, those companies may be in a better position to compete
for mineral properties. In order to compete with such companies, we
need to raise additional capital. The competitive nature of the
business and the risks we are therefore faced with are discussed further in the
item entitled “Risk Factors,” below.
Capital
Equipment and R&D Expenditures
We are not currently conducting any
research and development activities other than those relating to the possible
acquisition of new gold and/or silver properties or projects. As we
proceed with our exploration programs, we may need to engage additional
contractors and consider the possibility of adding permanent employees, as well
as the possible purchase or lease of equipment.
Mining
Properties And Projects
Reference is made to the previous
discussion of the Keeno Property and the Guadalupe Property, and the mining
development projects thereon, as disclosed above.
Employees
As of November 9, 2010 we had no
employees other than our sole director and officer.
Patents/Trade
Marks/Licenses/Franchises/Concessions/Royalty Agreements or Labor
Contracts
We do not currently own any patents or
trademarks. Also, we are not a party to any license or franchise
agreements, concessions, royalty agreements or labor contracts arising from any
patents or trademarks.
Reports
to Security Holders
We are
subject to the reporting and other requirements of the Exchange Act and we
intend to furnish our shareholders with annual reports containing financial
statements audited by our independent auditors and to make available quarterly
reports containing unaudited financial statements for each of the first three
quarters of each year.
The
public may read and copy any materials that we file with the SEC at the SEC’s
Public Reference Room at 100 F Street, NE, Washington, D.C.
20549. The public may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC. The address of that site is
www.sec.gov.
4
Government
Regulations
Property
Interests and Mining Claims
Our exploration activities are
conducted in the state of Nevada and in Mexico. Mineral interests may
be owned by (a) the country, (b) the state or province, or (c) private
parties. Where prospective mineral properties are owned by private
parties, or by the state, some type of property acquisition agreement is
necessary in order for us to explore or develop such
property. Generally, these agreements take the form of long-term
mineral leases under which we acquire the right to explore and develop the
property in exchange for periodic cash payments during the exploration and
development phase and a royalty, usually expressed as a percentage of gross
production or net profits derived from the leased properties if and when mines
on the properties are brought into production. Other forms of
acquisition agreements are exploration agreements coupled with options to
purchase and joint venture agreements. Where prospective mineral
properties are held by the United States, mineral rights may be acquired through
the location of unpatented mineral claims upon unappropriated federal
land. If the statutory requirements for the location of a mining
claim are met, the locator obtains a valid possessory right to develop and
produce minerals from the claim. The right can be freely transferred
and, provided that the locator is able to prove the discovery of locatable
minerals on the claims, is protected against appropriation by the government
without just compensation. The claim locator also acquires the right
to obtain a patent or fee title to his claim from the federal government upon
compliance with certain additional procedures. Since October 1994,
however, the BLM has been prohibited by Acts of Congress from accepting any new
mineral patent applications.
Mining claims are subject to the same
risk of defective title that is common to all real property interests.
Additionally, mining claims are self-initiated and self-maintained and
therefore, possess some unique vulnerabilities not associated with other types
of property interests. It is impossible to ascertain the validity of unpatented
mining claims solely from an examination of the public real estate records and,
therefore, it can be difficult or impossible to confirm that all of the
requisite steps have been followed for location and maintenance of a
claim. If the validity of a patented mining claim is challenged by
the BLM or the U.S. Forest Service on the grounds that mineralization has not
been demonstrated, the claimant has the burden of proving the present economic
feasibility of mining minerals located thereon. Such a challenge
might be raised when a patent application is submitted or when the government
seeks to include the land in an area to be dedicated to another
use.
Government
Regulation
Mining operations and exploration
activities are subject to various national, state and local laws and regulations
in the United States and Mexico, which govern prospecting, development, mining,
production, exports, taxes, labor standards, occupational health, waste
disposal, protection of the environment, mine safety, hazardous substances and
other matters. We have obtained or have pending applications for those licenses,
permits or other authorizations currently required to conduct our exploration
and other programs. We believe that we are in compliance in all material
respects with applicable mining, health, safety and environmental statutes and
the regulations passed thereunder in the United States, Mexico and in any other
jurisdiction in which we will operate. We are not aware of any
current orders or directions relating to us with respect to the foregoing laws
and regulations.
Environmental
Regulation
Our gold and silver projects are
subject to various federal and state laws and regulations governing protection
of the environment. These laws are continually changing and, in
general, are becoming more restrictive. It is our policy to conduct
business in a way that safeguards public health and the
environment. We believe that our operations are and will be conducted
in material compliance with applicable laws and regulations.
Changes to current state or federal
laws and regulations where we operate currently, or in jurisdictions where we
may operate in the future, could require additional capital expenditures and
increased operating and/or reclamation costs. Although we are unable
to predict what additional legislation, if any, might be proposed or enacted,
additional regulatory requirements could impact the economics of our
projects.
5
During fiscal 2010, there were no
material environmental incidents or non-compliance with any applicable
environmental regulations on the properties now held by us. We did
not incur material capital expenditures for environmental control facilities
during fiscal 2010.
The risks described below are the ones
we believe are most important for you to consider. These risks are
not the only ones that we face. If events anticipated by any of the
following risks actually occur, our business, operating results or financial
condition could suffer and the price of our common stock could
decline.
Risks Associated with our
Business
We Have A Limited Operating History
With Significant Losses And Expect Losses
To Continue For The Foreseeable
Future.
We have yet to establish any history of
profitable operations. We have incurred net losses of $1,351,087 and
$31,521 for the fiscal years ended July 31, 2010 and 2009,
respectively. As a result, at July 31, 2010, we had an
accumulated deficit of $1,458,042 and a total stockholders’ deficiency of
$68,681. We have not yet generated any revenues. We expect that our
revenues will not be sufficient to sustain our operations for the foreseeable
future. Our profitability will require the successful
commercialization of our mining properties. We may not be able to
successfully commercialize our mines or ever become profitable.
There Is Doubt About Our Ability To
Continue As A Going Concern Due To
Recurring Losses From Operations,
Accumulated Deficit And Insufficient Cash Resources To Meet Our Business
Objectives, All Of Which Means That We May Not Be Able To Continue
Operations.
Our independent auditors have added an
explanatory paragraph to their audit opinion issued in connection with the
financial statements for the years ended July 31, 2010, and 2009, respectively,
with respect to their doubt about our ability to continue as a going
concern. As discussed in Note 7 to our financial statements for the
year ended July 31, 2010, we have generated operating losses since inception,
and our cash resources are insufficient to meet our planned business objectives,
which together raises doubt about our ability to continue as a going
concern.
We
May Not Be Able To Secure Additional Financing To Meet Our Future Capital Needs
Due To Changes In General Economic Conditions.
We anticipate needing significant
capital to conduct further exploration and development needed to bring our
existing mining properties into production and/or to continue to seek out
appropriate joint venture partners or buyers for certain mining
properties. We may use capital more rapidly than currently
anticipated and incur higher operating expenses than currently expected, and we
may be required to depend on external financing to satisfy our operating and
capital needs. We may need new or additional financing in the future
to conduct our operations or expand our business. Any sustained
weakness in the general economic conditions and/or financial markets in the
United States or globally could adversely affect our ability to raise capital on
favorable terms or at all. From time to time we have relied, and may
also rely in the future, on access to financial markets as a source of liquidity
to satisfy working capital requirements and for general corporate
purposes. We may be unable to secure debt or equity financing on
terms acceptable to us, or at all, at the time when we need such
funding. If we do raise funds by issuing additional equity or
convertible debt securities, the ownership percentages of existing stockholders
would be reduced, and the securities that we issue may have rights, preferences
or privileges senior to those of the holders of our common stock or may be
issued at a discount to the market price of our common stock which would result
in dilution to our existing stockholders. If we raise additional
funds by issuing debt, we may be subject to debt covenants, which could place
limitations on our operations including our ability to declare and pay
dividends. Our inability to raise additional funds on a timely basis
would make it difficult for us to achieve our business objectives and would have
a negative impact on our business, financial condition and results of
operations.
6
Our
Business And Operating Results Could Be Harmed If We Fail To Manage Our Growth
Or Change.
Our business may experience periods of
rapid change and/or growth that could place significant demands on our personnel
and financial resources. To manage possible growth and change, we
must continue to try to locate skilled geologists, mappers, drillers, engineers,
technical personnel and adequate funds in a timely manner.
We
May Not Have Access To The Supplies And Materials Needed For Exploration, Which
Could Cause Delays Or Suspension Of Our Operations.
Competitive demands for contractors and
unforeseen shortages of supplies and/or equipment could result in the disruption
of planned exploration activities. Current demand for exploration
drilling services, equipment and supplies is robust and could result in suitable
equipment and skilled manpower being unavailable at scheduled times in our
exploration programs. Furthermore, fuel prices are
rising. We will attempt to locate suitable equipment, materials,
manpower and fuel if sufficient funds are available. If we cannot
find the equipment and supplies needed for our various exploration programs, we
may have to suspend some or all of them until equipment, supplies, funds and/or
skilled manpower can be obtained.
An
Unsuccessful Material Strategic Transaction Or Relationship Could Result In
Operating Difficulties And Other Harmful Consequences To Our
Business.
We have evaluated, and expect to
continue to evaluate, a wide array of potential strategic transactions and
relationships with third parties. From time to time, we may engage in
discussions regarding potential acquisitions or joint
ventures. Currently, we have entered into certain mining exploration
and development agreements for mining properties in Nevada and Mexico, including
the Keeno Strike Option Agreement and the Guadalupe Option Agreement as
disclosed under Item 1.01 of this Form 8-K. Any of these transactions
could be material to our financial condition and results of operations, and the
failure of any of these material relationships and transactions may have a
negative financial impact on our business and our results of
operations.
Attraction
And Retention Of Qualified Personnel Is Necessary To Implement And Conduct Our
Mineral Exploration Programs.
Our future success will depend largely
upon the continued services of our Board members, executive officers and other
key personnel. Our success will also depend on our ability to
continue to attract and retain qualified personnel with mining
experience. Key personnel represent a significant asset for us,
and the competition for qualified personnel is intense in the mineral
exploration industry. We may have particular difficulty attracting
and retaining key personnel in the initial phases of our exploration
programs. We do not have key-person life insurance coverage on any of
our personnel. The loss of one or more of our key people or our
inability to attract, retain and motivate other qualified personnel could
negatively impact our ability to complete our exploration
programs.
7
Risks Associated with our
Industry
Environmental Controls Could Curtail
Or Delay Exploration And Development Of
Our Mines And Impose Significant
Costs On Us.
We are required to comply with numerous
environmental laws and regulations imposed by federal and state
authorities. At the federal level, legislation such as the Clean
Water Act, the Clean Air Act, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation Liability Act and the National
Environmental Policy Act impose effluent and waste standards, performance
standards, air quality and emissions standards and other design or operational
requirements for various components of mining and mineral processing, including
gold and silver mining and processing. In addition, insurance
companies are now requiring additional cash collateral from mining companies in
order for the insurance companies to issue a surety bond. This
addition of cash collateral for a bond could have a significant impact on our
ability to bring properties into production.
Many states have also adopted
regulations that establish design, operation, monitoring, and closing
requirements for mining operations. Under these regulations, mining
companies are required to provide a reclamation plan and financial assurance to
ensure that the reclamation plan is implemented upon completion of mining
operations. Additionally, Nevada and other states require mining
operations to obtain and comply with environmental permits, including permits
regarding air emissions and the protection of surface water and
groundwater. Although we believe that the mining properties we
currently have an interest in are in compliance with applicable federal and
state environmental laws, changes in those laws and regulations may necessitate
significant capital outlays or delays, may materially and adversely affect the
economics of a given property, or may cause material changes or delays in our
intended exploration, development and production activities. Any of
these results could force us to curtail or cease our business
operations.
Proposed Legislation Affecting The
Mining Industry Could Have An Adverse Effect
On Us.
During the past several years, the
United States Congress considered a number of proposed amendments to the General
Mining Law of 1872, which governs mining claims and related activities on
federal lands. For example, a broad based bill to reform the General
Mining Law of 1872, the Hardrock Mining and Reclamation Act of 2007 (H.R. 2262)
was introduced in the U.S. House of Representatives on May 10, 2007, and was
passed by the U.S. House of Representatives on November 1, 2007, and was
submitted to the U.S. Senate where no further action was taken. More
recently, on January 27, 2009, the Hardrock Mining and Reclamation Act of 2009
(H.R. 699) was introduced. If enacted, this act will have several
negative impacts on us including but not limited to: requiring royalty payments
of 8% of gross income from mining a claim on Federal land, or 4% of claims on
Federal land that are subject to an existing permit; and prohibition of certain
areas from being open to the location of mining claims, including wilderness
study areas, areas of critical environmental concern and related
areas. Subcommittee hearings for the bill were held on February 26,
2009. To date the bill hasn’t come to a vote.
The extent of any such changes to the
General Mining Law of 1872 that may be enacted is not presently known, and the
potential impact on us as a result of future congressional action is difficult
to predict. If enacted, proposed legislation could adversely affect
the economics of developing and operating our mining properties, which may
consist of unpatented mining claims on federal lands. Our financial
performance could therefore be materially and adversely affected by passage of
all or pertinent parts of the proposed legislation, which could force us to
curtail or cease our business operations.
8
The Development And Operation Of Our
Mining Projects Involve Numerous
Uncertainties.
Mine development projects, including
our planned projects, typically require a number of years and significant
expenditures during the development phase before production is
possible.
Development projects are subject to the
completion of successful feasibility studies, issuance of necessary governmental
permits and receipt of adequate financing. The economic feasibility
of development projects is based on many factors such as:
|
•
|
estimation
of reserves;
|
|
•
|
anticipated
metallurgical recoveries;
|
|
•
|
future
gold and silver prices; and
|
|
•
|
anticipated
capital and operating costs of such
projects.
|
Our mine development projects may have
limited relevant operating history upon which to base estimates of future
operating costs and capital requirements. Estimates of proven and
probable reserves and operating costs determined in feasibility studies are
based on geologic and engineering analyses.
Any of the following events, among
others, could affect the profitability or economic feasibility of a
project:
|
•
|
unanticipated
changes in grade and tonnage of material to be mined and
processed;
|
|
•
|
unanticipated
adverse geotechnical conditions;
|
|
•
|
incorrect
data on which engineering assumptions are
made;
|
|
•
|
costs
of constructing and operating a mine in a specific
environment;
|
|
•
|
availability
and cost of processing and refining
facilities;
|
|
•
|
availability
of economic sources of power;
|
|
•
|
adequacy
of water supply;
|
|
•
|
adequate
access to the site;
|
|
•
|
unanticipated
transportation costs;
|
|
•
|
government
regulations, domestic and foreign (including regulations relating to
prices, royalties, duties, taxes, restrictions on production, quotas on
exportation of minerals, as well as the costs of protection of the
environment and agricultural
lands);
|
|
•
|
fluctuations
in metal prices; and
|
|
•
|
accidents,
labor actions and force majeure
events.
|
Any of the above-referenced events may
necessitate significant capital outlays or delays, may materially and adversely
affect the economics of a given property, or may cause material changes or
delays in our intended exploration, development and production
activities. Any of these results could force us to curtail or cease
our business operations.
Mineral Exploration Is Highly
Speculative, Involves Substantial Expenditures,
And Is Frequently
Non-Productive.
Mineral exploration involves a high
degree of risk and exploration projects are frequently
unsuccessful. Few prospects that are explored end up being ultimately
developed into producing mines. To the extent that we continue to be
involved in mineral exploration, the long-term success of our operations will be
related to the cost and success of our exploration programs. We
cannot assure you that our mineral exploration efforts will be
successful. The risks associated with mineral exploration
include:
9
|
•
|
the
identification of potential economic mineralization based on superficial
analysis;
|
|
•
|
the
quality of our management and our geological and technical expertise;
and
|
|
•
|
the
capital available for exploration and
development.
|
Substantial expenditures are required
to determine if a project has economically mineable
mineralization. It may take several years to establish proven and
probable reserves and to develop and construct mining and processing
facilities. Because of these uncertainties, our current and future
exploration programs may not result in the discovery of reserves, the expansion
of our existing reserves or the further development of our mines.
The Price Of Gold and Silver are
Highly Volatile And A Decrease In The
Price Of Gold or Silver Would Have A
Material Adverse Effect On Our Business.
The profitability of mining operations
is directly related to the market prices of metals. The market prices
of metals fluctuate significantly and are affected by a number of factors beyond
our control, including, but not limited to, the rate of inflation, the exchange
rate of the dollar to other currencies, interest rates, and global economic and
political conditions. Price fluctuations of metals from the time
development of a mine is undertaken to the time production can commence can
significantly affect the profitability of a mine. Accordingly, we may
begin to develop one or more of our mining properties at a time when the price
of metals makes such exploration economically feasible and, subsequently, incur
losses because the price of metals decreases. Adverse fluctuations of
the market prices of metals may force us to curtail or cease our business
operations.
Mining
Risks And Insurance Could Have An Adverse Effect On Our
Profitability.
Our operations are subject to all of
the operating hazards and risks normally incident to exploring for and
developing mineral properties, such as unusual or unexpected geological
formations, environmental pollution, personal injuries, flooding, cave-ins,
changes in technology or mining techniques, periodic interruptions because of
inclement weather and industrial accidents. Although maintenance of
insurance to ameliorate some of these risks is part of our proposed exploration
program associated with those mining properties we have an interest in, such
insurance may not be available at economically feasible rates or in the future
be adequate to cover the risks and potential liabilities associated with
exploring, owning and operating our properties. Either of these
events could cause us to curtail or cease our business operations.
Due
To The Uncertain Nature Of Exploration, There Is A Substantial Risk That We May
Not Find Economically Exploitable Reserves Of Gold And/Or Silver.
The search for valuable minerals is an
extremely risky business. We do not know whether the claims and
properties that we have optioned contain commercially exploitable reserves of
gold and/or silver. The likelihood of success must be considered in
light of the costs, difficulties, complications, problems and delays encountered
in connection with the exploration of mineral properties. These
potential problems include, but are not limited to, additional costs and
unanticipated delays and expenses that may exceed current
estimates.
10
We
Face Significant Competition In The Mineral Exploration Industry.
We compete with other mining and
exploration companies possessing greater financial resources and technical
facilities than we do in connection with the acquisition of exploration
properties and leases on prospects and properties and in connection with the
recruitment and retention of qualified personnel. Such competition
may result in our being unable to acquire interests in economically viable gold
and silver exploration properties or qualified personnel.
Our
Applications For Exploration Permits May Be Delayed Or May Be Denied In The
Future.
Exploration activities usually require
the granting of permits from various governmental agencies. For
exploration drilling on unpatented mineral claims, a drilling plan must be filed
with the Bureau of Land Management or the United States Forest Service, which
may then take several months or more to grant the requested
permit. Depending on the size, location and scope of the exploration
program, additional permits may also be required before exploration activities
can be undertaken. Prehistoric or Indian grave yards, threatened or
endangered species, archeological sites or the possibility thereof, difficult
access, excessive dust and important nearby water resources may all result in
the need for additional permits before exploration activities can
commence. With all permitting processes, there is the risk that
unexpected delays and excessive costs may be experienced in obtaining required
permits or the refusal to grant required permits may not be granted at all, all
of which may cause delays and unanticipated costs in conducting planned
exploration activities. Any such delays or unexpected costs in the
permitting process could result in serious adverse consequences to the price of
our stock and to the value of your investment.
Risks Associated with our
Common Stock
The Market Price Of Our Common Stock
Is Highly Volatile, Which Could Hinder Our
Ability To Raise Additional
Capital.
The market price of our common stock
has been and is expected to continue to be highly volatile. Factors,
including regulatory matters, concerns about our financial condition, operating
results, litigation, government regulation, developments or disputes relating to
agreements, title to our properties or proprietary rights, may have a
significant impact on the market price of our stock. In addition,
potential dilutive effects of future sales of shares of common stock by
shareholders and by us, and subsequent sale of common stock by the holders of
warrants and options could have an adverse effect on the price of our
securities, which could hinder our ability to raise additional capital to fully
implement our business, operating and development plans.
Penny Stock Regulations Affect Our
Stock Price, Which May Make It More
Difficult For Investors To Sell Their
Stock.
Broker-dealer practices in connection
with transactions in “penny stocks” are regulated by certain penny stock rules
adopted by the SEC. Penny stocks generally are equity securities with
a price per share of less than $5.00 (other than securities registered on
certain national securities exchanges or quoted on the NASDAQ Stock Market,
provided that current price and volume information with respect to transactions
in such securities is provided by the exchange or system). 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 that provides information about penny stocks and the risks in the penny
stock market. The broker-dealer must also 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. In addition, the penny stock rules generally require that
prior to a transaction in a penny stock the broker-dealer 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 a stock that
becomes subject to the penny stock rules. Our securities are subject
to the penny stock rules, and investors may find it more difficult to sell their
securities.
11
Not applicable.
We
currently maintain our corporate offices at 10775 Double R Boulevard, Reno, NV
89521. During the fiscal year ended July 31, 2010, we paid monthly
rent of $225.00 for use of a virtual US corporate office, which we anticipate
will be sufficient until we commence full operations. Our interests
in the Guadalupe Property and the Keeno Property are discussed
above.
We are not aware of any material
pending legal proceedings to which we are a party or of which our property is
the subject. We also know of no proceedings to which any of our
directors, officers or affiliates, or any registered or beneficial holders of
more than 5% of any class of our securities, or any associate of any such
director, officer, affiliate or security holder are an adverse party or have a
material interest adverse to us.
12
Market
Information
Our common stock is not traded on any
exchange. Our common stock is quoted on OTC Bulletin Board, under the
trading symbol “SILA.OB.” We cannot assure you that there will be a
market in the future for our common stock.
OTC Bulletin Board securities are not
listed and traded on the floor of an organized national or regional stock
exchange. Instead, OTC Bulletin Board securities transactions are
conducted through a telephone and computer network connecting
dealers. OTC Bulletin Board issuers are traditionally smaller
companies that do not meet the financial and other listing requirements of a
national or regional stock exchange.
The following table reflects the high
and low bid information for our common stock and reflects inter-dealer prices,
without retail mark-up, markdown or commission, and may not necessarily
represent actual transactions.
The high and low bid prices of our
common stock for the periods indicated below are as follows:
|
OTC Bulletin Board
|
||||||||
|
Quarter Ended
|
High
|
Low
|
||||||
|
January
31, 2010
|
$ | 0.10 | $ | 0.10 | ||||
|
April
30, 2010
|
$ | 1.05 | $ | 1.05 | ||||
|
July
31, 2010
|
$ | 1.45 | $ | 0.40 | ||||
Holders
As of November 9, 2010 there were nine
(9) holders of record of our common stock.
Dividends
To date, we have not paid dividends on
shares of our common stock and we do not expect to declare or pay dividends on
shares of our common stock in the foreseeable future. The payment of
any dividends will depend upon our future earnings, if any, our financial
condition, and other factors deemed relevant by our Board of
Directors.
Equity
Compensation Plans
As of November 9, 2010 we did not have
any equity compensation plans.
Recent
Sales Of Unregistered Securities
All sales of unregistered securities
sold by the Company during the fiscal year ended July 31, 2010 have been
reported on Current Reports on Form 8-K, as filed with the
Commission.
13
This
information is not required because we are a smaller reporting
company.
Forward
Looking Statements
Except for historical information,
the following Management’s Discussion and Analysis contains forward-looking
statements based upon current expectations that involve certain risks and
uncertainties. Such forward-looking statements include statements regarding,
among other things, (a) discussions about mineral resources and mineralized
material, (b) our projected sales and profitability, (c) our growth strategies,
(d) anticipated trends in our industry, (e) our future financing plans, (f) our
anticipated needs for working capital, (g) our lack of operational experience
and (h) the benefits related to ownership of our common
stock. Forward-looking statements, which involve assumptions and
describe our future plans, strategies, and expectations, are generally
identifiable by use of the words “may,” “will,” “should,” “expect,”
“anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of
these words or other variations on these words or comparable
terminology. This information may involve known and unknown risks,
uncertainties, and other factors that may cause our actual results, performance,
or achievements to be materially different from the future results, performance,
or achievements expressed or implied by any forward-looking
statements. These statements may be found under “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and
“Description of Business,” as well as in this Report
generally. Actual events or results may differ materially from those
discussed in forward-looking statements as a result of various factors,
including, without limitation, the risks outlined under “Risk Factors” and
matters described in this Report generally. In light of these risks
and uncertainties, there can be no assurance that the forward-looking statements
contained in this Report will in fact occur as projected.
Overview
We are a precious metal mineral
acquisition, exploration and development company, formed in Nevada on July 2,
2007. At the time of our incorporation, we were incorporated under
the name “The Golf Alliance Corporation,” and our original business plan was to
act as a service-based firm that would provide opportunities for golfers to play
on private courses normally closed to them because of membership
requirements. On February 12, 2010, Johannes Petersen acquired the
majority of the shares of our issued and outstanding common stock in accordance
with a stock purchase agreement by and between Mr. Petersen and John
Fahlberg. Further, on March 5, 2010, we effected a name change to
“Silver America, Inc.” and at the same time effected a 50-for-1 forward stock
split and increased our authorized capital from 100,000,000 shares of common
stock, par value $0.00001 per share, and 10,000,000 shares of preferred stock,
par value $0.00001 per share, to 500,000,000 shares of common stock, par value
$0.00001 per share, and 10,000,000 shares of preferred stock, par value
$0.00001. In addition to the name change, we changed our intended business
purpose to that of precious metal mineral exploration, development and
production. Unless specifically stated otherwise, all share amounts
referenced herein, will refer to post-forward stock split share
amounts. On June 23, 2010, we effected a name change from Silver
America, Inc., to “Gold American Mining Corp.” in order to better reflect the
nature of our operations as a precious metal mining and exploration company,
with a more specific emphasis on gold exploration.
14
Our primary business focus is to
option, acquire, explore and develop precious metals properties in North
America. On April 26, 2010, we entered into a definitive option
agreement (“Guadalupe Option Agreement”) with Yale Resources Ltd. (“Yale”) with
respect to our acquisition of an exclusive option (the “Option”) to purchase an
undivided 90% interest in those two certain mining concessions in Zacatecas
State, Mexico, covering approximately 282.83 hectares (the “Guadalupe
Property”). The Guadalupe Option Agreement was entered into pursuant
to a binding letter of intent between the parties (the “LOI”) dated March 5,
2010.
To exercise the option, we must pay
cash to Yale, issue restricted shares of Company common stock to Yale, and fund
exploration and development expenditures on the Guadalupe
Property. The cash payments contemplated under the agreement total
$900,000.00 and are to be distributed in installments from the date of the LOI
through December 30, 2013. The number of Company shares to be issued
to Yale total 1,000,000 and are to be distributed in installments from the date
of the definitive agreement through December 30, 2013. We are also
obligated to fund a total of $2,000,000.00 worth of exploration and development
on the Guadalupe Property by December 30, 2013. Upon the execution
and exercise of the Option, Yale will transfer a 90% undivided interest in the
Guadalupe Property to the Company. Yale will act as the operator for
the project, and should the earn-in be completed, Yale will retain a 10%
participating interest in the Guadalupe Property as well as a 2% NSR, which can
be bought out in its entirety for $2,000,000.
On April 28, 2010, we entered into a
definitive option agreement (the “Keeno Strike Option Agreement”) with four
individuals (collectively, the “Optionor”) with respect to our acquisition of an
exclusive option (the “Keeno Option”) to purchase an undivided 72% interest in
those certain 12 mining claims and a mill site claim containing approximately
245 acres, located in Clark County, Nevada (“Keeno Property”). To
exercise the Keeno Option, we must pay cash to the Optionor, issue restricted
shares of Company common stock to Optionor, and fund exploration and development
expenditures on the Keeno Property. The cash payments contemplated
under the agreement total $272,000 to be paid in installments on or before June
30, 2010, such payments having been completed as of the date of the filing of
this Annual Report on Form 10-K. The number of Company shares to be issued to
Optionor total 2,000,000 and are to be distributed in installments from the date
of the definitive agreement through October 31, 2011. The Company
needs to fund a minimum of $750,000 worth of exploration and development on the
Keeno Property, with at least $400,000 to be incurred or funded on or before
April 30, 2011 and $350,000 to be incurred or funded on or before April 30,
2012. Upon our fulfillment of each of the above-referenced conditions
and exercise of the Keeno Option, the Optionor will transfer an undivided 72%
interest in the Keeno Property to us.
Further, pursuant to the Keeno Strike
Option Agreement, if, prior to the Option Deadline, the work program provides
evidence that there are at least 10,000,000 ounces of indicated silver resources
and/or 500,000 ounces of indicated gold resources on the Keeno Property, such
estimates to be evidenced by an independent third party report, we must issue
the Optionor an additional 3,000,000 shares of our common
stock. Should the earn-in be completed, the Optionor will retain a
28% interest in the Keeno Property as well as a 4% NSR. After our
completion of the initial work commitment and exercise of the Keeno Option, the
Optionor may elect to remain as a 28% carried joint venture partner or to offer
the Company the right to purchase the Optionor’s remaining 28% interest at a
fair market valuation, as determined by a valuation report prepared by an
independent third party mining engineer or qualified
geologist. Further, we will have the right to purchase 2% of the 4%
NSR retained by the Optionor for a purchase price of $20,000,000, or such pro
rata portion thereof.
15
Results
of Operations
Year ended July 31, 2010
compared to the year ended July 31, 2009
We had a
net loss of $1,351,087 for the year ended July 31, 2010, which was $1,319,566
greater than the net loss of $31,521 for the year ended July 31,
2009. This change in our results over the two periods is primarily
the result of an increase in professional fees, exploration costs and general
and administrative expenses. The following table summarizes key items
of comparison and their related increase (decrease) for the years ended July 31,
2010 and 2009:
|
|
|
Year Ended
|
|
|
|
|||||||
|
|
|
July 31,
|
|
|
Increase
|
|
||||||
|
2010
|
2009
|
(Decrease)
|
||||||||||
|
Revenues
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||
|
Professional
Fees
|
74,555
|
15,691
|
58,864
|
|||||||||
|
Exploration
Costs
|
1,084,918
|
-
|
1,084,918
|
|||||||||
|
General
and Administrative
|
190,795
|
15,574
|
175,221
|
|||||||||
|
Total
Operating Expenses
|
1,350,268
|
31,265
|
1,319,003
|
|||||||||
|
(Loss)
from Operations
|
(1,350,268
|
)
|
(31,265
|
)
|
(1,319,003
|
)
|
||||||
|
Net
Interest Income (Expense)
|
(819
|
)
|
(256
|
)
|
(563
|
)
|
||||||
|
Loss
from Operations Before Taxes
|
(1,351,087
|
)
|
(31,521
|
) |
(1,319,566
|
)
|
||||||
|
Net
Loss
|
$
|
(1,351,087
|
)
|
$
|
(31,521
|
)
|
$
|
(1,319,566
|
)
|
|||
Liquidity
And Capital Resources
Our
balance sheet as of July 31, 2010, reflects assets of $48,799. As we had cash in
the amount of $8,202 and a working capital deficit in the amount of $92,928 as
of July 31, 2010, we do not have sufficient working capital to enable us to
carry out our stated plan of operation for the next twelve months.
Working
Capital
|
|
Year Ended
|
|||||||
|
July 31,
|
||||||||
|
|
2010
|
2009
|
||||||
|
Current
assets
|
$
|
24,552
|
$
|
4,611
|
||||
|
Current
liabilities
|
117,480
|
18,660
|
||||||
|
Working
capital
|
$
|
(92,928
|
)
|
$
|
(14,049
|
)
|
||
We
anticipate generating losses and, therefore, may be unable to continue
operations in the future. If we require additional capital, we would have to
issue debt or equity or enter into a strategic arrangement with a third
party.
16
Going
Concern Consideration
As
reflected in the accompanying financial statements, the Company is in the
exploration stage with no revenue generating operations and has a net loss since
inception of $1,458,042 and used cash in operations of $633,160 from inception.
This raises substantial doubt about its ability to continue as a going
concern. The ability of the Company to continue as a going concern is
dependent on the Company’s ability to raise additional capital and implement its
business plan. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
From
March 5, 2010, the Company changed its intended business purpose to that of
precious metals mineral exploration, development and production. Management
believes that actions presently being taken to obtain additional funding and
implement its strategic plans provide the opportunity for the Company to
continue as a going concern.
|
|
Year Ended
|
|||||||
|
|
July 31,
|
|||||||
|
2010
|
2009
|
|||||||
|
Net
Cash Used in Operating Activities
|
$ | (540,321 | ) | (20,479 | ) | |||
|
Net
Cash Used in Investing Activities
|
(26,462 | ) | 0 | |||||
|
Net
Cash Provided by Financing Activities
|
570,374 | 17,400 | ||||||
|
Net
Increase (Decrease) in Cash
|
$ | 3,591 | $ | (3,079 | ) | |||
Operating
Activities
Net cash
flow used in operating activities during the year ended July 31, 2010 was
$540,321 – an increase of $519,842 from the $20,479 net cash outflow during the
year ended July 31, 2009. This increase in the cash used in operating activities
was primarily due to the acquisition and operations on the Keeno Property and
the Guadalupe Property.
Investing
Activities
Cash used
in investing activities during the year ended July 31, 2010 was $26,462 – an
increase of $26,462 when compared to the figures as of July 31, 2009. This
increase in the cash used in investing activities was primarily due to the
development of our corporate website and purchase of computer
equipment.
Financing
Activities
Financing
activities during the year ended July 31, 2010, provided $570,374 to us, an
increase of $552,974 from the $17,400 provided by financing activities during
the year ended July 31, 2009. During the year ended July 31, 2010, the company
received $500,000 in proceeds from the issuance of common stock, $9,503 from net
loans payable to related parties and $60,871 from expenses paid by a shareholder
on behalf of the company.
The
Company’s financial commitments under the Guadalupe Option Agreement total
$900,000 in cash payments to Yale and the funding of a total of $2,000,000 worth
of exploration and development on the Property before December 30, 2013. The
Company’s financial commitments under the Keeno Strike Option Agreement total
$272,000 in cash payments to the Optionor on or before June 30, 2010 (paid), and
the funding of a minimum of $750,000 worth of exploration and development on the
Property, with at least $400,000 to be incurred or funded on or before April 30,
2011 and $350,000 to be incurred or funded on or before April 30,
2012.
17
On May 7,
2010, we entered into an Equity Issuance Agreement with ZUG Financing Group S.A.
(“ZUG”) wherein ZUG has agreed to advance up to $7,500,000 to our Company until
December 31, 2011. While we have arranged for advances of up to $7,500,000 from
ZUG, there can be no assurances that we will receive these funds from
ZUG. As of July 31, 2010, we had received an aggregate of $300,000 in
net proceeds from ZUG under the Equity Issuance Agreement.
Critical Accounting
Policies
Our
financial statements and accompanying notes are prepared in accordance with
generally accepted accounting principles used in the United States. Preparing
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue, and expenses. These
estimates and assumptions are affected by management's application of accounting
policies. We believe that understanding the basis and nature of the estimates
and assumptions involved with the following aspects of our financial statements
is critical to an understanding of our financials.
Costs of
acquiring mining properties and any exploration and development costs are
expensed as incurred unless proven and probable reserves exist and the property
is a commercially mineable property. Mine development costs incurred either to
develop new gold and silver deposits, expand the capacity of operating mines, or
to develop mine areas substantially in advance of current production are
capitalized. Costs incurred to maintain current production or to maintain assets
on a standby basis are charged to operations. Costs of abandoned projects are
charged to operations upon abandonment. The Company evaluates, at least
quarterly, the carrying value of capitalized mining costs and related property,
plant and equipment costs, if any, to determine if these costs are in excess of
their net realizable value and if a permanent impairment needs to be recorded.
The periodic evaluation of carrying value of capitalized costs and any related
property, plant and equipment costs are based upon expected future cash flows
and/or estimated salvage value.
The
Company capitalizes costs for mining properties by individual property and
defers such costs for later amortization only if the prospects for economic
productions are reasonably certain. Capitalized costs are expensed in the period
when the determination has been made that economic production does not appear
reasonably certain. As of July 31, 2010, none of our properties have proven
reserves.
Recent Accounting
Pronouncements
For
recent accounting pronouncements, please refer to the notes to the financial
statements section of this annual report.
Off-Balance Sheet
Arrangements
We have
no off-balance sheet arrangements.
We are not required to provide
disclosure under this item because we are a smaller reporting
company.
18
Our financial statements appear
beginning at page F-1.
We have not had any changes in or
disagreements with our independent public accountants during the last two fiscal
years.
.
Evaluation
of Disclosure Controls and Procedures
Our management evaluated, with the
participation of our Chief Executive Officer and Chief Financial Officer, the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)
as of the end of the period covered by this Annual Report on Form
10-K. Based on this evaluation, Johannes Petersen, our CEO and CFO,
concluded that our disclosure controls and procedures are effective to ensure
that information we are required to disclose in reports that we file or submit
under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized
and reported within the time periods specified in Securities and Exchange
Commission rules and forms, and (ii) is accumulated and communicated to our
management as appropriate, to allow timely decisions regarding required
disclosure. Our disclosure controls and procedures are designed to
provide reasonable assurance that such information is accumulated and
communicated to our management. Our disclosure controls and
procedures include components of our internal control over financial
reporting. Management’s assessment of the effectiveness of our
internal control over financial reporting is expressed at the level of
reasonable assurance that the control system, no matter how well designed and
operated, can provide only reasonable, but not absolute, assurance that the
control system’s objectives will be met.
Management’s
Annual Report on Internal Control over Financial Reporting
Our management is responsible for
establishing and maintaining adequate internal control over financial reporting,
as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act. Our internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of our financial statements for external reporting
purposes in accordance with U.S. generally accepted accounting
principles. It should be noted, however, that because of inherent
limitations, any system of internal controls, however well-designed and
operated, can provide only reasonable, but not absolute, assurance that
financial reporting objectives will be met. In addition, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions or that the
degree of compliance with the policies or procedures may
deteriorate.
Under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, we conducted an evaluation of the effectiveness of our
internal control over financial reporting based on the framework in
Internal Control – Integrated
Framework
issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on the results of its assessment under
that framework, management concluded that our internal control over financial
reporting was effective as of July 31, 2010.
19
This Annual Report does not include an
attestation report of our registered independent auditor regarding internal
control over financial reporting. Our internal control over financial
reporting was not subject to attestation by our registered public accounting
firm pursuant to temporary rules of the Securities and Exchange Commission that
permit us to provide only our management’s report in this Annual
Report.
This report shall not be deemed to be
filed for purposes of Section 18 of the Exchange Act or otherwise subject to the
liabilities of that section.
Changes
in Internal Control over Financial Reporting
There were no changes in our internal
control over financial reporting during its most recent fiscal quarter that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
None.
20
Directors
and Executive Officers
Our Bylaws state that our authorized
number of directors shall one or more and shall be set by resolution of our
Board of Directors. Our Board of Directors has fixed the number of
directors at one, and we currently have one director.
Our current director and officers are
as follows:
|
Name
|
Age
|
Position
|
|
Johannes
Petersen
|
38
|
President,
Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and
Director
|
Our Director will serve in that
capacity until our next annual shareholder meeting or until his successor is
elected and qualified. Officers hold their positions at the will of
our Board of Directors. There are no arrangements, agreements or
understandings between non-management security holders and management under
which non-management security holders may directly or indirectly participate in
or influence the management of our affairs.
Johannes
Petersen.
Mr. Petersen was appointed as a director and our
President, Chief Executive Officer, Chief Financial Officer, Secretary and
Treasurer on February 12, 2010. Mr. Petersen holds a BSc in Economics
from Universidad del Pacifico (Peru) and an MBA degree from the London Business
School (UK). He brings experience gained from multiple managerial and
directorship positions within diverse private and public
companies. From 2003, Mr. Petersen gained business development and
business planning experience with an emphasis in the resources
industry. He has worked in business planning and development for
natural resource projects and has also covered several functions within the
financial services industry, ranging from fixed income to currency
trading.
Mr. Petersen currently sits on the
board of directors of Hainan Mining Corporation Ltd. (from 2005), a private UK
company of which he was a founder, and American Power Corp (f/k/a Teen Glow
Makeup Inc.), a U.S. public company currently quoted on the OTC Bulletin
Board.
Mr. Petersen formerly worked for
American Sierra Gold Corp. (f/k/a C.E. Entertainment, Inc.), a U.S. public
company, currently quoted on the OTC Bulletin Board, Century Petroleum Corp.
(f/k/a SOM Resources Inc.), a U.S. public company, currently quoted on the Pink
Sheets, Dragon Gold Resources Inc. (n/k/a Edgeline Holdings, Inc.), a U.S.
company previously listed on the OTC Bulletin Board, and formerly worked in
Lima, Peru for the following: Peru Scan Trading SAC, Credibolsa SAB, Banco de
Credito del Peru and CONASEV (Peruvian securities regulation agency equivalent
to the SEC).
Other
Directorships
Other than as set forth above, none of
our directors hold any other directorships in any company with a class of
securities registered pursuant to section 12 of the Exchange Act or subject to
the requirements of section 15(d) of such Act or any company registered as an
investment company under the Investment Company Act of 1940.
21
Board
of Directors and Director Nominees
Since our Board of Directors does not
include a majority of independent directors, the decisions of the Board
regarding director nominees are made by persons who have an interest in the
outcome of the determination. The Board will consider candidates for
directors proposed by security holders, although no formal procedures for
submitting candidates have been adopted. Unless otherwise determined,
at any time not less than 90 days prior to the next annual Board meeting at
which a slate of director nominees is adopted, the Board will accept written
submissions from proposed nominees that include the name, address and telephone
number of the proposed nominee; a brief statement of the nominee’s
qualifications to serve as a director; and a statement as to why the security
holder submitting the proposed nominee believes that the nomination would be in
the best interests of our security holders. If the proposed nominee
is not the same person as the security holder submitting the name of the
nominee, a letter from the nominee agreeing to the submission of his or her name
for consideration should be provided at the time of submission. The
letter should be accompanied by a résumé supporting the nominee’s qualifications
to serve on the Board, as well as a list of references.
The Board identifies director nominees
through a combination of referrals from different people, including management,
existing Board members and security holders. Once a candidate has
been identified, the Board reviews the individual’s experience and background
and may discuss the proposed nominee with the source of the
recommendation. If the Board believes it to be appropriate, Board
members may meet with the proposed nominee before making a final determination
whether to include the proposed nominee as a member of the slate of director
nominees submitted to security holders for election to the Board.
Some of the factors which the Board
considers when evaluating proposed nominees include their knowledge of and
experience in business matters, finance, capital markets and mergers and
acquisitions. The Board may request additional information from each
candidate prior to reaching a determination, and it is under no obligation to
formally respond to all recommendations, although as a matter of practice, it
will endeavor to do so.
Conflicts
of Interest
Our directors are not obligated to
commit their full time and attention to our business and, accordingly, they may
encounter a conflict of interest in allocating their time between our operations
and those of other businesses. In the course of their other business
activities, they may become aware of investment and business opportunities which
may be appropriate for presentation to us as well as other entities to which
they owe a fiduciary duty. As a result, they may have conflicts of
interest in determining to which entity a particular business opportunity should
be presented. They may also in the future become affiliated with
entities that are engaged in business activities similar to those we intend to
conduct.
In general, officers and directors of a
corporation are required to present business opportunities to the corporation
if:
|
|
·
|
the
corporation could financially undertake the
opportunity;
|
|
|
·
|
the
opportunity is within the corporation’s line of business;
and
|
|
|
·
|
it
would be unfair to the corporation and its stockholders not to bring the
opportunity to the attention of the
corporation.
|
22
We plan to adopt a code of ethics that
obligates our directors, officers and employees to disclose potential conflicts
of interest and prohibits those persons from engaging in such transactions
without our consent.
Significant
Employees
Other than as described above, we do
not expect any other individuals to make a significant contribution to our
business.
Legal
Proceedings
None of our directors, executive
officers or control persons has been involved in any of the following events
during the past five years:
|
|
·
|
any
bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that
time;
|
|
|
·
|
any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor
offences);
|
|
|
·
|
being
subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities;
or
|
|
|
·
|
being
found by a court of competent jurisdiction (in a civil action), the SEC or
the Commodity Futures Trading Commission to have violated a federal or
state securities or commodities law, where the judgment has not been
reversed, suspended, or vacated.
|
No
Audit Committee or Financial Expert
The Company does not have an audit
committee or a financial expert serving on the Board of
Directors. The Company plans to form and implement an audit committee
and hire a Chief Financial Officer who also may serve on the Board of
Directors.
Family
Relationships
There are no family relationships among
our officers, directors, or persons nominated for such positions.
Code
of Ethics
Due to our recent change in business
strategy and objectives and our small size and limited resources, we have not
yet adopted a code of ethics that applies to our principal executive officer and
principal accounting officer, but intend to do so this year.
23
Section
16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Exchange
Act, all executive officers, directors, and each person who is the beneficial
owner of more than 10% of the common stock of a company that files reports
pursuant to Section 12 of the Exchange Act of 1934, are required to report the
ownership of such common stock, options, and stock appreciation rights (other
than certain cash only rights) and any changes in that ownership with the
Securities and Exchange Commission. The Company has not registered as
a public company under Section 12 of the Securities Exchange Act of 1934, and
therefore no reports have been filed under Section 16(a)
thereunder.
Our Board of Directors has not
established a separate compensation committee. Instead, the entire
Board of Directors reviews and approves executive compensation policies and
practices, reviews, salaries and bonuses for our officers, administers our
benefit plans, and considers other matters as may, from time to time, be
referred to it. We do not currently have a Compensation Committee
Charter. Our Board continues to emphasize the important link between
our performance, which ultimately benefits all shareholders, and the
compensation of our executives. Therefore, the primary goal of our
executive compensation policy is to closely align the interests of the
shareholders with the interests of the executive officers. In order
to achieve this goal, we attempt to (i) offer compensation opportunities that
attract and retain executives whose abilities and skills are critical to our
long-term success and reward them for their efforts in ensuring our success and
(ii) encourage executives to manage from the perspective of owners with an
equity stake in us.
SUMMARY
COMPENSATION TABLE
|
Name and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Non-Qualified
Deferred
Compensation
Earnings
($)
|
All Other
Compensation
($)
|
Totals
($)
|
||||||||||||||||||||||||
|
Johannes
Petersen (President, CEO, CFO, Secretary and Director)
|
2010
|
0 | 0 | 0 | 0 | 0 | 0 | $ | 22,500 |
(1)
|
$ | 22,500 | |||||||||||||||||||||
|
2009
|
n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||
|
John
Fahlberg
(Former
President,
Chief
Executive Officer, Treasurer, Secretary and Director)
|
2010
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
|
2009
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
|
Martha
C. Fahlberg (Former Director)
|
2010
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
|
2009
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||
24
|
(1)
|
Mr.
Petersen earns $7,500 per month based on a consulting
arrangement
with the Company for providing services as an executive officer of the
Company.
|
None of
our named executive officers received any compensation from us during the fiscal
years ended July 31, 2010, and July 31, 2009, but for a consulting arrangement
with Mr. Petersen as described below under “Management Agreements.”
Option
Grants
As of July 31, 2010 we had not granted
any options or stock appreciation rights to our named executive officers or
directors.
Management
Agreements
We have entered into a consulting
arrangement with Johannes Petersen, our sole executive officer, pursuant to
which, we pay Mr. Petersen $7,500 per month for providing consulting services in
his capacity as Chief Executive Officer and Chief Financial Officer, however,
such consulting arrangement is not pursuant to any written
agreement.
Compensation
of Directors
Our directors did not receive any
compensation for their services as directors from our inception to July 31,
2010. We have no formal plan for compensating our directors for their
services in the future in their capacity as directors, although such directors
are expected in the future to receive options to purchase shares of our common
stock as awarded by our Board of Directors or by any compensation committee that
may be established.
Pension,
Retirement or Similar Benefit Plans
There are no arrangements or plans in
which we provide pension, retirement or similar benefits to our directors or
executive officers. We have no material bonus or profit sharing plans
pursuant to which cash or non-cash compensation is or may be paid to our
directors or executive officers, except that stock options may be granted at the
discretion of the Board of Directors or a committee thereof.
Compensation
Committee
We do not currently have a compensation
committee of the Board of Directors or a committee performing similar
functions. The Board of Directors as a whole participates in the
consideration of executive officer and director compensation.
25
The following table sets forth the
ownership, as of November 9, 2010, of our common stock by each of our directors,
by all of our executive officers and directors as a group and by each person
known to us who is the beneficial owner of more than 5% of any class of our
securities. As of November 9, 2010, there were 87,789,393 shares of our common
stock issued and outstanding. All persons named have sole or shared
voting and investment control with respect to the shares, except as otherwise
noted. The number of shares described below includes shares which the
beneficial owner described has the right to acquire within 60 days of the date
of this Form 10-K.
|
Title of Class
|
Name and Address of
Beneficial Owner
|
Amount and
Nature of
Beneficial
Ownership
|
Percent of Class
|
|||||||
|
Common
Stock
|
Johannes
Petersen
c/o
Gold American Mining Corp.
10775
Double R Boulevard
Reno,
NV 89521
|
45,000,000 | 51.26 | % | ||||||
|
All
Officers and Directors as a Group
|
45,000,000 | 51.26 | % | |||||||
Changes
in Control
As of July 31, 2010 we had no pension
plans or compensatory plans or other arrangements which provide compensation in
the event of termination of employment or a change in our control.
Securities
authorized for issuance under equity compensation plans.
As of
July 31, 2010, we did not have any equity compensation plans in
effect.
Related
Party Transactions
There have been no transactions since
the beginning of our last fiscal year or any currently proposed transactions in
which we are, or plan to be, a participant and the amount involved exceeds
$120,000, and in which any related person had or will have a direct or indirect
material interest.
Director
Independence
Our securities are quoted on the OTC
Bulletin Board, which does not have any director independence
requirements. Once we engage further directors and officers, we plan
to develop a definition of independence and scrutinize our Board of Directors
with regard to this definition.
26
Audit Fees.
The aggregate fees
paid for the annual audit of financial statements included in our Annual Report
for the year ended July 31, 2010, and the review of our quarterly reports for
such years amounted to $13,139. The aggregate fees paid for the
annual audit of financial statements included in our Annual Report for the year
ended July 31, 2009, and the review of our quarterly reports for such year,
amounted to $8,500.
Audit Related Fees.
For the
years ended July 31, 2010, and July 31, 2009, there were no fees billed for
other audit related fees.
Tax Fees.
For the years ended
July 31, 2010, and July 31, 2009, we paid $0 and $0, respectively, for tax
fees.
All Other Fees.
For
the years ended July 31, 2010, and July 31, 2009, there were no fees billed for
services other than services described above.
Our Board of Directors serves as the
Audit Committee and has unanimously approved all audit and non-audit services
provided by the independent auditors. The independent accountants and management
are required to periodically report to the Board of Directors regarding the
extent of services provided by the independent accountants, and the fees for the
services performed to date.
There have been no non-audit services
provided by our independent accountant for the year ended July 31,
2010.
27
(a)(1)(2)
Financial Statements: See index to financial statements and supporting
schedules.
(a)(3)
Exhibits.
|
Exhibit
No.
|
Description
|
|
|
3.1
|
Articles
of Incorporation
(1)
|
|
|
3.2
|
Certificate
of Amendment, effective March 5, 2010
(2)
|
|
|
3.3
|
Certificate
of Amendment, effective June 23, 2010
(6)
|
|
|
3.4
|
Bylaws
(1)
|
|
|
10.1
|
Stock
Purchase Agreement by and between John Fahlberg and Johannes Petersen,
dated February 12, 2010
(3)
|
|
|
10.2
|
Letter
of Intent by and between the Company and Yale Resources, Ltd., dated March
5, 2010
(2)
|
|
|
10.3
|
Guadalupe
Option Agreement between the Company and Yale Resources, dated April 26,
2010.
(4)
|
|
|
10.4
|
Keeno
Strike Option Agreement between the Company and Certain Individuals, dated
April 28, 2010.
(4)
|
|
|
10.5
|
Private
Placement Subscription Agreement, dated April 30, 2010
(5)
|
|
|
31.1
|
Certification
of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
|
|
|
31.2
|
Certification
of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
|
|
|
32
|
Certification
of Chief Executive and Chief Financial Officers pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.*
|
* Filed
herewith.
|
(1)
|
Incorporated by reference from
Form SB-2 filed with the SEC on October 31,
2007.
|
|
(2)
|
Incorporated by reference from
Form 8-K filed with the SEC on March 10,
2010.
|
|
(3)
|
Incorporated by reference from
Form 8-K filed with the SEC on February 18,
2010.
|
|
(4)
|
Incorporated
by reference from Form 10-Q filed with the SEC on June 21,
2010.
|
|
(5)
|
Incorporated
by reference from Form 8-K filed with the SEC on May 6,
2010.
|
|
(6)
|
Incorporated
by reference from Form 8-K filed with the SEC on June 28,
2010.
|
28
SIGNATURES
Pursuant to the requirements of
Sections 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.
|
GOLD
AMERICAN MINING CORP.
|
||
|
Date:
November 11,
2010
|
By:
|
/s/ Johannes Petersen
|
|
Name:
Johannes Petersen
|
||
|
Title:
Chief Executive Officer
|
||
|
(Principal
Executive Officer)
|
||
|
Date:
November 11,
2010
|
By:
|
/s/ Johannes Petersen
|
|
Name:
Johannes Petersen
|
||
|
Title:
Chief Financial Officer
|
||
|
(Principal
Accounting and Financial
Officer)
|
||
Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
|
SIGNATURE
|
TITLE
|
DATE
|
|
|
/s/ Johannes Petersen
|
|||
|
Johannes
Petersen
|
Sole
Director
|
November
11, 2010
|
29
GOLD
AMERICAN MINING CORP.
(FORMERLY
SILVER AMERICA, INC.; FORMERLY THE GOLF ALLIANCE CORP.)
(AN
EXPLORATION STAGE COMPANY)
INDEX
TO FINANCIAL STATEMENTS
JULY
31, 2010, AND 2009
|
Report
of Registered Independent Auditors
|
F-1
|
|
Financial
Statements-
|
|
|
Balance
Sheets as of July 31, 2010, and 2009
|
F-2
|
|
Statements
of Operations for the Years Ended July 31, 2010, and 2009, and for the
Period from July 2, 2007 (Inception) to July 31, 2010
|
F-3
|
|
Statement
of Changes in Stockholders’ Equity (Deficiency) for the
Period from July 2, 2007 (Inception) Through July 31,
2010
|
F-4
|
|
Statements
of Cash Flows for the Years Ended July 31, 2010, and 2009, and
for the Period from July 2, 2007 (Inception) to July 31,
2010
|
F-5
|
|
Notes
to Financial Statements
|
F-6
|
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors of:
Gold
American Mining Corp (f/k/a Silver America, Inc. and The Golf Alliance
Corporation)
(An
Exploration Stage Company)
We have
audited the accompanying balance sheets of Gold American Mining Corp. (f/k/a
Silver America, Inc. and The Golf Alliance Corporation) (An Exploration Stage
Company) as of July 31, 2010 and 2009 and the related statements of operations
and changes in stockholders’ equity/(deficiency) and cash flows for the years
ended July 31, 2010 and 2009 and for the period from July 2, 2007 (Inception) to
July 31, 2010. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our
opinion, the financial statements referred to above present fairly in all
material respects, the financial position of Gold American Mining Corp. (f/k/a
Silver America, Inc. and The Golf Alliance Corporation) (an Exploration Stage
Company)
as of
July 31, 2010 and 2009 and the results of its of operations and its cash flows
for the years ended July 31, 2010 and 2009 and for the period from July 2, 2007
(Inception) to July 31, 2010, in conformity with accounting principles generally
accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 7 to the
financial statements, the Company is in the exploration stage with minimal
operations, has a net loss from inception of $1,458,042 and used cash in
operations of $633,160 since inception. In addition, there is a working capital
deficiency of $92,928 and a stockholders’ deficiency of $68,681 as of July 31,
2010. This raises substantial doubt about the Company's ability to continue as a
going concern. Management's plans concerning this matter are also
described in Note 7. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/S/ WEBB
& COMPANY, P.A
WEBB
& COMPANY, P.A
Certified
Public Accountants.
Boynton
Beach, Florida
October
26, 2010
F-1
Gold
American Mining Corp. (F/K/A Silver America, Inc. and The Golf Alliance
Corporation)
(An
Exploration Stage Company)
|
July 31, 2010
|
July 31, 2009
|
|||||||
|
ASSETS
|
||||||||
|
Current
Assets
|
||||||||
|
Cash
|
$ | 8,202 | 4,611 | |||||
|
Prepaid
Expenses
|
16,350 | - | ||||||
|
Total
Current Assets
|
24,552 | 4,611 | ||||||
|
Property
and Equipment, net
|
24,247 | - | ||||||
|
Total
Assets
|
$ | 48,799 | $ | 4,611 | ||||
|
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
|
||||||||
|
Current
Liabilities
|
||||||||
|
Accounts
Payable and accrued expenses
|
$ | 114,839 | $ | 1,260 | ||||
|
Loans
payable - related party
|
2,641 | 17,400 | ||||||
|
Total Liabilities
|
117,480 | 18,660 | ||||||
|
Commitments
and Contingencies
|
- | - | ||||||
|
Stockholders'
Deficiency
|
||||||||
|
Preferred
stock, $0.00001 par value; 10,000,000 shares authorized, none issued and
outstanding
|
- | - | ||||||
|
Common
stock, $0.00001 par value; 500,000,000 shares authorized, 86,343,560 and
290,000,000 issued and outstanding, respectively
|
863 | 2,900 | ||||||
|
Additional
paid-in capital
|
1,388,498 | 90,006 | ||||||
|
Deficit
accumulated during the exploration stage
|
(1,458,042 | ) | (106,955 | ) | ||||
|
Total
Stockholders' Deficiency
|
(68,681 | ) | (14,049 | ) | ||||
|
Total
Liabilities and Stockholders' Deficiency
|
$ | 48,799 | $ | 4,611 | ||||
F-2
Gold
American Mining, Inc. (F/K/A Silver America, Inc. and The Golf Alliance
Corporation)
(An
Exploration Stage Company)
|
For the Years Ended
|
For the Period
From July 2, 2007
(Inception) to
|
|||||||||||
|
July 31, 2010
|
July 31, 2009
|
July 31, 2010
|
||||||||||
|
Operating
Expenses
|
||||||||||||
|
Professional
fees
|
$ | 74,555 | $ | 15,691 | $ | 146,016 | ||||||
|
Exploration
costs
|
1,084,918 | - | 1,084,918 | |||||||||
|
General
and administrative
|
190,795 | 15,574 | 225,973 | |||||||||
|
Total
Operating Expenses
|
1,350,268 | 31,265 | 1,456,907 | |||||||||
|
Loss
from Operations
|
(1,350,268 | ) | (31,265 | ) | (1,456,907 | ) | ||||||
|
Other
Income/(Expenses)
|
||||||||||||
|
Interest
Income
|
2 | - | 2 | |||||||||
|
Interest
Expense
|
(821 | ) | (256 | ) | (1,137 | ) | ||||||
|
LOSS
FROM OPERATIONS BEFORE INCOME TAXES
|
(1,351,087 | ) | (31,521 | ) | (1,458,042 | ) | ||||||
|
Provision
for Income Taxes
|
- | - | - | |||||||||
|
NET
LOSS
|
$ | (1,351,087 | ) | $ | (31,521 | ) | $ | (1,458,042 | ) | |||
|
Net
Loss Per Share - Basic and Diluted
|
$ | (0.01 | ) | $ | (0.00 | ) | ||||||
|
Weighted
average number of shares outstanding during the period - Basic and
Diluted
|
206,951,148 | 290,000,000 | ||||||||||
F-3
Gold
American Mining Corp. (F/K/A Silver America, Inc. and The Golf Alliance
Corporation)
(An
Exploration Stage Company)
Statement
of Changes in Stockholders' Deficiency
For
the period from July 2, 2007 (Inception) to July 31, 2010
|
Preferred Stock
|
Common stock
|
Additional
paid-in
|
Deficit
accumulated
during
exploration
|
Total
Stockholder's
Equity/ |
||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
stage
|
(Deficiency)
|
||||||||||||||||||||||
|
Balance
July 2, 2007
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
|
Common
stock issued for services to founder ($0.00001)
|
- | - | 250,000,000 | 2,500 | (2,450 | ) | - | 50 | ||||||||||||||||||||
|
In
kind contribution of services
|
- | - | - | - | 1,080 | - | 1,080 | |||||||||||||||||||||
|
Net
loss for the period July 2, 2007 (inception) to July 31,
2007
|
- | - | - | - | - | (4,879 | ) | (4,879 | ) | |||||||||||||||||||
|
Balance,
July 31, 2007
|
- | - | 250,000,000 | 2,500 | (1,370 | ) | (4,879 | ) | (3,749 | ) | ||||||||||||||||||
|
Common
stock issued for cash ($0.10 per share)
|
- | - | 40,000,000 | 400 | 79,600 | - | 80,000 | |||||||||||||||||||||
|
In
kind contribution of services
|
- | - | - | - | 5,760 | - | 5,760 | |||||||||||||||||||||
|
Net
loss for the year ended July 31, 2008
|
- | - | - | - | - | (70,555 | ) | (70,555 | ) | |||||||||||||||||||
|
Balance,
July 31, 2008
|
- | - | 290,000,000 | 2,900 | 83,990 | (75,434 | ) | 11,456 | ||||||||||||||||||||
|
In
kind contribution of services
|
- | - | - | - | 5,760 | - | 5,760 | |||||||||||||||||||||
|
In
kind contribution of interest
|
- | - | - | - | 256 | - | 256 | |||||||||||||||||||||
|
Net
loss for the year ended July 31, 2009
|
- | - | - | - | - | (31,521 | ) | (31,521 | ) | |||||||||||||||||||
|
Balance,
July 31, 2009
|
- | - | 290,000,000 | 2,900 | 90,006 | (106,955 | ) | (14,049 | ) | |||||||||||||||||||
|
Shares
issued in exchange for mining rights
|
- | - | 700,000 | 7 | 657,993 | - | 658,000 | |||||||||||||||||||||
|
Shares
issued for cash ($0.60 per share)
|
- | - | 333,333 | 3 | 199,997 | - | 200,000 | |||||||||||||||||||||
|
Shares
returned by founder as an in kind contribution
|
- | - | (205,000,000 | ) | (2,050 | ) | 2,050 | - | - | |||||||||||||||||||
|
Shares
issued for services
|
- | - | 37,500 | 0 | 48,375 | - | 48,375 | |||||||||||||||||||||
|
Shares
and warrants issued for cash ($1.10 per share)
|
- | - | 272,727 | 3 | 299,997 | - | 300,000 | |||||||||||||||||||||
|
Forgiveness
of debts by principal stockholder
|
- | - | - | - | 24,262 | - | 24,262 | |||||||||||||||||||||
|
Expenses
paid by shareholder on Company's behalf
|
- | - | - | - | 60,871 | - | 60,871 | |||||||||||||||||||||
|
In
kind contribution of services
|
- | - | - | - | 4,320 | - | 4,320 | |||||||||||||||||||||
|
In
kind contribution of interest
|
- | - | - | - | 627 | - | 627 | |||||||||||||||||||||
|
Net
loss for the year ended July 31, 2010
|
- | - | - | - | - | (1,351,087 | ) | (1,351,087 | ) | |||||||||||||||||||
|
Balance,
July 31, 2010
|
- | $ | - | 86,343,560 | $ | 863 | $ | 1,388,498 | $ | (1,458,042 | ) | $ | (68,681 | ) | ||||||||||||||
F-4
Gold
American Mining Corp. (F/K/A Silver America, Inc. and The Golf Alliance
Corporation
(An
Exploration Stage Company)
|
For the Year
Ended
July 31, 2010
|
For the Year
Ended
July 31, 2009
|
For the Period
from
July 2, 2007
(Inception) to
July 31, 2010
|
||||||||||
|
Cash
Flows From Operating Activities:
|
||||||||||||
|
Net
Loss
|
$ | (1,351,087 | ) | $ | (31,521 | ) | $ | (1,458,042 | ) | |||
|
Adjustments
to reconcile net loss to net cash used in operations
|
||||||||||||
|
Depreciation
expense
|
2,215 | - | 2,215 | |||||||||
|
Stock
issued for mining rights
|
658,000 | - | 658,000 | |||||||||
|
Stock
issued for services
|
48,375 | - | - | |||||||||
|
In-kind
contribution of services
|
4,320 | 5,760 | 16,920 | |||||||||
|
In-kind
contribution of interest
|
627 | 256 | 883 | |||||||||
|
Changes
in operating assets and liabilities:
|
||||||||||||
|
Increase/(Decrease)
in accounts payable and accrued expenses
|
113,579 | (125 | ) | 114,839 | ||||||||
|
(Increase)/Decrease
in prepaid expenses
|
(16,350 | ) | 5,151 | (16,350 | ) | |||||||
|
Net
Cash Used In Operating Activities
|
(540,321 | ) | (20,479 | ) | (633,160 | ) | ||||||
|
Cash
Flows From Investing Activities:
|
||||||||||||
|
Purchase
of fixed assets
|
(26,462 | ) | - | (26,462 | ) | |||||||
|
Net
Cash Used In Investing Activities
|
(26,462 | ) | - | (26,462 | ) | |||||||
|
Cash
Flows From Financing Activities:
|
||||||||||||
|
Repayment
of loan payable- related party
|
(39,295 | ) | - | (42,395 | ) | |||||||
|
Expenses
paid by shareholder on Company's behalf
|
60,871 | - | 60,871 | |||||||||
|
Proceeds
from loan payable-related party
|
48,798 | 17,400 | 69,298 | |||||||||
|
Proceeds
from issuance of common stock
|
500,000 | - | 580,050 | |||||||||
|
Net
Cash Provided by Financing Activities
|
570,374 | 17,400 | 667,824 | |||||||||
|
Net
Increase / (Decrease) in Cash
|
3,591 | (3,079 | ) | 8,202 | ||||||||
|
Cash
at Beginning of Period
|
4,611 | 7,690 | - | |||||||||
|
Cash
at End of Period
|
$ | 8,202 | $ | 4,611 | $ | 8,202 | ||||||
|
Supplemental disclosure of cash flow
information:
|
||||||||||||
|
Cash
paid for interest
|
$ | - | $ | - | $ | 60 | ||||||
|
Cash
paid for taxes
|
$ | - | $ | - | $ | - | ||||||
|
Supplemental disclosure of non-cash investing and
financing activities:
|
||||||||||||
During
the year ended July 31, 2010, the Company's principal stockholder forgave loans
of $24,262. The forgiveness was treated as contributed capital from
the principal stockholder.
F-5
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
AS OF JULY 31, 2010 AND
2009
(A)
Organization
Gold
American Mining, Inc. (f/k/a Silver America, Inc. and The Golf Alliance
Corporation) (an exploration stage company) (the "Company") was incorporated
under the laws of the State of Nevada on July 2, 2007. Gold American
Mining, Inc. is a precious metal mineral acquisition, exploration and
development company.
Gold
American Mining Corp. (the ‘Company’) was incorporated under the laws of the
State of Nevada on July 2, 2007 under the name Golf Alliance Corporation. Golf
Alliance Corporation pursued its original business plan to provide opportunities
for golfers to play on private golf courses normally closed to them due to the
membership requirements of the private clubs. During the year ended July 31,
2010, the Company decided to redirect its business focus toward precious metal
mineral acquisition and exploration.
Activities
during the exploration stage include developing the business plan and raising
capital.
The
Company is in the exploration stage in accordance with Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 915
(formerly Statement of Financial Accounting Standards (“SFAS”) No.7, “Accounting
and Reporting by Exploration Stage Enterprises”).
On March
5, 2010, the Company amended its articles of incorporation to (1) to change its
name to Silver America, Inc. and (2) increased its authorized common stock from
100,000,000 to 500,000,000.
On June
23, 2010, the Company amended its articles of incorporation to change its name
to Gold American Mining Corp.
(B) Use of
Estimates
In
preparing financial statements in conformity with generally accepted accounting
principles, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and expenses
during the reported period. Actual results could differ from those
estimates.
(C) Cash and Cash
Equivalents
The
Company considers all highly liquid temporary cash investments with an original
maturity of three months or less to be cash equivalents. At July 31,
2010 and July 31, 2009, the Company had no cash equivalents.
F-6
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
AS OF JULY 31, 2010 AND
2009
(D) Exploration and
Development Costs
Costs of
acquiring mining properties and any exploration and development costs are
expensed as incurred unless proven and probable reserves exist and the property
is a commercially mineable property in accordance with FASB Accounting Standards
Codification No. 930, Extractive Activities- Mining. Mine development costs
incurred either to develop new gold and silver deposits, expand the capacity of
operating mines, or to develop mine areas substantially in advance of current
production are capitalized. Costs incurred to maintain current production or to
maintain assets on a standby basis are charged to operations. Costs of abandoned
projects are charged to operations upon abandonment. The Company evaluates, at
least quarterly, the carrying value of capitalized mining costs and related
property, plant and equipment costs, if any, to determine if these costs are in
excess of their net realizable value and if a permanent impairment needs to be
recorded. The periodic evaluation of carrying value of capitalized costs and any
related property, plant and equipment costs are based upon expected future cash
flows and/or estimated salvage value.
The
Company capitalizes costs for mining properties by individual property and
defers such costs for later amortization only if the prospects for economic
productions are reasonably certain.
Capitalized
costs are expensed in the period when the determination has been made that
economic production does not appear reasonably certain.
During
the year ended July 31, 2010, the Company recorded exploration costs of
$1,084,918.
(E) Property and
Equipment
The
Company values property and equipment at cost and depreciates these assets using
the straight-line method over their expected useful life. The Company uses a
five year life for computer equipment.
In
accordance with FASB Accounting Standards Codification No. 360, Property, Plant
and Equipment, the Company carries long-lived assets at the lower of the
carrying amount or fair value. Impairment is evaluated by estimating future
undiscounted cash flows expected to result from the use of the asset and its
eventual disposition. If the sum of the expected undiscounted future cash flow
is less than the carrying amount of the assets, an impairment loss is
recognized. Fair value, for purposes of calculating impairment, is measured
based on estimated future cash flows, discounted at a market rate of
interest.
There
were no impairment losses recorded during the years ended July 31, 2010 and
2009, respectively.
(F) Website
Development
The
Company has adopted the provisions of FASB Accounting Standards Codification No.
350
Intangible-Goodwills and
Other
. Costs incurred in the planning stage of a website are expensed,
while costs incurred in the development state are capitalized and amortized over
the estimated three year life of the asset. During the years ended July 31, 2010
and 2009, the Company incurred $24,463 and $0, respectively, in website
development costs.
There
were no impairment losses recorded during the years ended July 31, 2010 and
2009, respectively.
F-7
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
AS OF JULY 31, 2010 AND
2009
(G) Loss Per
Share
Basic and
diluted net loss per common share is computed based upon the weighted average
common shares outstanding as defined by FASB Accounting Standards Codification
Topic 260,
“Earnings Per
Share.” As
of July 31, 2010 and 2009 there were 138,864 and 0, respectively, warrants
issued and outstanding that were not included in the computation of earnings per
share because their inclusion is anti-dilutive.
(H) Revenue
Recognition
The Company recognizes revenue on
arrangements in accordance with FASB Accounting Standards Codification No. 605,
Revenue Recognition. In all cases, revenue is recognized only when
the price is fixed or determinable, persuasive evidence of an arrangement
exists, the service is performed and collectability is reasonably assured. The
Company has not yet entered into any contractual obligation to deliver ore
product or finished metals.
(I) Income
Taxes
The
Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC
740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under ASC 740-10-25, the effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
The net
deferred tax liability in the accompanying balance sheets includes the following
amounts of deferred tax assets and liabilities:
|
2010
|
2009
|
|||||||
|
Expected
income tax recovery (expense) at the statutory rate of 34%
|
$ | (459,370 | ) | $ | (10,717 | ) | ||
|
Tax
effect of expenses that are not deductible for income tax purposes (net of
other amounts deductible for tax purposes)
|
241,851 | 884 | ||||||
|
Mining
Rights
|
104,080 | - | ||||||
|
Change
in valuation allowance
|
113,439 | 9,833 | ||||||
|
Provision
for income taxes
|
$ | - | $ | - | ||||
|
The
components of deferred income taxes are as follows:
|
||||||||
|
2010
|
2009
|
|||||||
|
Deferred
income tax asset:
|
||||||||
|
Net
operating loss carryforwards
|
$ | 149,715 | $ | 36,276 | ||||
|
Valuation
allowance
|
(149,715 | ) | (36,276 | ) | ||||
|
Deferred
income taxes
|
$ | - | $ | - | ||||
At July
31, 2010, the Company had net operating loss carryforwards of approximately
$333,648 that may be offset against future taxable income. All other losses
incurred by the Company in 2009 and previous years are limited due to Internal
Revenue Code Section 382 which restricts the deductibility of prior net
operating losses where there has been a change in control. These net operating
loss carryforwards will expire at approximately $16,682 annually through the
year ending 2030.
F-8
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
AS OF JULY 31, 2010 AND
2009
The
valuation allowance was established to reduce the deferred tax asset to the
amount that will more likely than not be realized. This is necessary due to
the Company’s continued operating losses and the uncertainty of the Company’s
ability to utilize all of the net operating loss carryforwards before they will
expire through the year 2030.
The net
change in the valuation allowance for the year ended July 31, 2010 and 2009 was
an increase of $217,519 and $9,833, respectively.
The
components of income tax expense related to continuing operations are as
follows:
|
2010
|
2009
|
|||||||
|
Federal
|
||||||||
|
Current
|
$ | - | $ | - | ||||
|
Deferred
|
- | - | ||||||
| $ | - | $ | - | |||||
|
State
and Local
|
||||||||
|
Current
|
$ | - | $ | - | ||||
|
Deferred
|
- | - | ||||||
| $ | - | $ | - | |||||
(J) Stock-Based
Compensation
In
December 2004, the FASB issued FASB Accounting Standards Codification No. 718,
Compensation – Stock
Compensation
. Under FASB Accounting Standards Codification No.
718, companies are required to measure the compensation costs of share-based
compensation arrangements based on the grant-date fair value and recognize the
costs in the financial statements over the period during which employees are
required to provide services. Share-based compensation arrangements include
stock options, restricted share plans, performance-based awards, share
appreciation rights and employee share purchase plans. As such,
compensation cost is measured on the date of grant at their fair
value. Such compensation amounts, if any, are amortized over the
respective vesting periods of the option grant. The Company applies
this statement prospectively.
Equity
instruments (“instruments”) issued to other than employees are recorded on the
basis of the fair value of the instruments, as required by FASB Accounting
Standards Codification No. 718. FASB Accounting Standards Codification No.
505,
Equity Based Payments to
Non-Employees
defines the measurement date and recognition period for
such instruments. In general, the measurement date is when either a (a)
performance commitment, as defined, is reached or (b) the earlier of (i) the
non-employee performance is complete or (ii) the instruments are vested. The
measured value related to the instruments is recognized over a period based on
the facts and circumstances of each particular grant as defined in the FASB
Accounting Standards Codification.
F-9
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
AS OF JULY 31, 2010 AND
2009
(K) Business
Segments
The
Company operates in one segment and therefore segment information is not
presented.
(L) Fair Value of Financial
Instruments
The
carrying amounts reported in the balance sheet for accounts payable and loans
payable – related party approximate fair value based on the short-term
maturity of these instruments.
At July
31, 2010, and July 31, 2009, respectively, property and equipment is as
follows:
|
July 31, 2010
|
July 31, 2009
|
|||||||
|
Website
Development
|
$ | 24,463 | $ | - | ||||
|
Office
Equipment
|
1,999 | - | ||||||
|
Less
accumulated depreciation
|
(2,215 | ) | - | |||||
|
Total
Property and Equipment
|
$ | 24,247 | $ | $ - | ||||
Depreciation/amortization
expense for the years ended July 31, 2010 and 2009 and the period from July 2,
2007 to July 31, 2010 was $2,215, $0 and $2,215, respectively.
During
the year ended July 31, 2010, the principal stockholder loaned the Company
$41,915 to pay Company expenses and was repaid $ 39,274 during the year. There
is $2,641 owed to the principal stockholder as of July 31, 2010 (See Note
5). Pursuant to the terms of the loan, the loans are non-interest
bearing, unsecured and due on demand.
On
various dates from 2008 through 2010, the Company received $24,283 from a
principal stockholder. Pursuant to the terms of the loan, the loans were
non-interest bearing, were unsecured and due on demand. During the
year ended July 31, 2010, the principal stockholder forgave $24,262 and this was
recorded by the Company as contributed capital (See Note 4(G) and
5).
During
the three months ended October 31, 2007 the Company received $3,100 from a
principal stockholder. Pursuant to the terms of the loan, the loan bears
interest at 8%, is unsecured and matures on July 31, 2008. The
Company repaid $3,100 of a stockholder loan and $60 of accrued interest as of
July 31, 2008 (See Note 5).
F-10
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
AS OF JULY 31, 2010 AND
2009
(A) Common Stock Issued for
Cash
On June
1, 2010, the Company issued 272,727 units, each unit consisted of 1 share of
common stock and a warrant to purchase 0.5 of a share of common stock for a
total of $300,000 ($1.10/sh). Each warrant is exercisable
for a two year period and has an exercise price of $1.65 per share
On April
30, 2010, the Company issued 333,333 shares of common stock for $200,000
($0.60/sh).
For the
year ending July 31, 2008 the Company entered into stock purchase agreements to
issue 40,000,000 shares of common stock for cash of $80,000
($0.02/sh).
On July
24, 2007, the Company issued 250,000,000 shares of common stock for $50
($0.0000002/sh).
(B) In-Kind
Contribution
For the
year ended July 31, 2010 the shareholder of the Company contributed $4,320 of
services on behalf of the Company (See Note 5).
For the
year ended July 31, 2010 the shareholder of the Company contributed $627 of in
kind contribution of interest on behalf of the Company (See Note
5).
For the
year ended July 31, 2009 the shareholder of the Company contributed $5,760 of
services on behalf of the Company (See Note 5).
For the
year ended July 31, 2009 the shareholder of the Company contributed $256 of in
kind contribution of interest on behalf of the Company (See Note
5).
For the
year ending July 31, 2008 the shareholder of the Company contributed $5,760 of
services on behalf of the Company (See Note 5).
For the
year ending July 31, 2007 the shareholder of the Company contributed $1,080 of
services on behalf of the Company (See Note 5).
(C) Amendments to Articles
of Incorporation
On July
6, 2007 the Company amended its Articles of Incorporation to decrease the par
value to $0.00001 per share from $0.001 par value.
On March
5, 2010 the Company amended its Articles of Incorporation to increase its
authorized common stock from 100,000,000 to 500,000,000 and changed its name
from Golf Alliance Corporation to Silver America Inc.
On June
23, 2010, the Company amended its Articles of Incorporation to change its name
to Gold American Mining Corp.
F-11
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
AS OF JULY 31, 2010 AND
2009
(D
) Return
of Common Stock
Immediately
prior to the forward split, the Company’s sole member of the board of directors,
returned 205,000,000 shares of common stock out of the total of 250,000,000 held
by him as an in-kind contribution.
(E
) Stock
Issued for Mining Rights
On June
30, 2010, the Company issued 100,000 shares of common stock having a fair value
of $52,000 ($0.52/share) in exchange for mining rights (See Note
6).
On April
26, 2010, the Company issued 100,000 shares of common stock having a fair value
of $101,000 ($1.01/share) in exchange for mining rights (See Note
6).
On April
28, 2010, the Company issued 500,000 shares of common stock having a fair value
of $505,000 ($1.01/share) in exchange for mining rights (See Note
6).
(F
) Stock
Issued for Services
On May 7,
2010, the Company issued 37,500 shares of common stock having a fair value of
$48,375 ($1.29/share) in exchange for consulting services (See Note
6).
(G
) Cash
contributed on Company’s behalf
During
the year ended July 31, 2010, the principal stockholder forgave loans of $24,262
and this was recorded by the Company as contributed capital (See Note 3 and
5).
(H
)
Expenses paid on Company’s behalf
During
the year ended July 31, 2010, the principal stockholder paid $60,871 of expenses
on the Company’s behalf, which was recorded as an in kind contribution of
capital (See Note 5).
(I
) Stock
Split
On March
5, 2010, the Company implemented a 50 for 1 forward stock split. Upon
effectiveness of the stock split, each shareholder received 50 shares of common
stock for every share of common stock owned as of March 5, 2010. All share and
per share references have been retroactively adjusted to reflect this 50 to 1
forward stock split in the financial statements and in the notes to financial
statements for all periods presented, to reflect the stock split as if it
occurred on the first day of the first period presented.
(J) Warrants
Issued for Cash
The
following tables summarize all warrant grants for the year ended July 31, 2010
and 2009, and the related changes during these periods are presented
below:
F-12
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
AS OF JULY 31, 2010 AND
2009
|
|
Number of
Options
|
Weighted
Average
Exercise
Price
|
||||||
|
Stock
Warrants
|
||||||||
|
Balance
at July 31, 2009
|
-
|
-
|
||||||
|
Granted
|
138,864
|
$
|
1.65
|
|||||
|
Exercised
|
-
|
-
|
||||||
|
Forfeited
|
-
|
|||||||
|
Balance
at July 31, 2010
|
138,864
|
$
|
1.65
|
|||||
|
Options
Exercisable at July 31, 2010
|
138,864
|
$
|
1.65
|
|||||
|
Weighted
Average Fair Value of Options Granted During 2010
|
$
|
1.65
|
||||||
|
2010 Warrants Outstanding
|
Warrants Exercisable
|
|
|||||||||||||||||||
|
Range of Exercise
Price |
Number
Outstanding at
June 30, 2010
|
Weighted
Average
Remaining
Contractual Life
|
Weighted
Average Exercise
Price
|
Number
Exercisable at
June 30, 2010
|
Weighted
Average Exercise
Price
|
|
|||||||||||||||
| $ |
1.65
|
138,864
|
1.84
|
$
|
1.65
|
138,864
|
$
|
1.65
|
|||||||||||||
During
the year ended July 31, 2010, the Company paid $22,500 to its President for
consulting services.
On
various dates from 2008 through 2010, the Company received $24,283 from a
principal stockholder. Pursuant to the terms of the loan, the loans were
non-interest bearing, were unsecured and due on demand. During the
year ended July 31, 2010, the principal stockholder forgave $24,262 and this was
recorded by the Company as contributed capital (See Note 3 and
4(F)).
During
the year ended July 31, 2010, the principal stockholder loaned the Company
$41,915 to pay Company expenses and was repaid $ 39,274 during the year. There
is $2,641 owed to the principal stockholder as of July 31, 2010 (See Note
5). Pursuant to the terms of the loan, the loans are non-interest
bearing, unsecured and due on demand.
During
the period ended October 31, 2007 the Company received $3,100 from a principal
stockholder. Pursuant to the terms of the loan, the loan bears interest at 8%,
is unsecured and matures on July 31, 2008. At October 31, 2007, the
Company had recorded $60 of related accrued interest payable. The
Company repaid $3,100 of a stockholder loan and $60 of accrued interest as of
July 31, 2008 (See Note 3).
For the
year ended July 31, 2009 the shareholder of the Company contributed $256 of in
kind contribution of interest on behalf of the Company (See Note
4(B)).
F-13
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
AS OF JULY 31, 2010 AND
2009
For the
year ended July 31, 2010, the shareholder of the Company contributed $4,320 of
services on behalf of the Company (See Note 4(B)).
For the
year ended July 31, 2010, the shareholder of the Company contributed $627 of in
kind contribution of interest on behalf of the Company (See Note
4(B)).
During
the year ended July 31, 2010, the principal stockholder paid $60,871 of expenses
on Company’s behalf, which was recorded as an in kind contribution of capital
(See Note 4(H)).
As of
July 31, 2009, the shareholder of the Company contributed $12,600 of services on
behalf of the Company (See Note 4 (B)).
On May 7,
2010 the Company entered into a share issuance agreement with a non-related
party for share subscriptions up to $7,500,000. The subscriber shall make
available to the Company by way of advances up to $7,500,000 until December 31,
2011. Upon receipt of the advances, the Company shall issue units of the Company
at a price equal to 90% of volume weighted average closing price of the Company
(ticket symbol “SILA.OB”) during the 10 previous trading days according to
http://www.nasdaq.com. Each unit consists of one common share of the Company and
one half share purchase warrant. Each whole warrant may be exercised within two
years of the date of issuance to the purchaser at a price equal to 150% of
subscription price. For the year ended July 31, 2010 the Company issued 272,727
shares of common stock for cash of $300,000 ($1.10/sh) and 138,864 warrants at
$1.65 per unit (See Note 4(A) and 4(J)).
On May 7,
2010, the Company entered into a consulting agreement with an unrelated third
party to provide consulting services in exchange for $7,500 per month and 37,500
share of Common Stock for every three months while the agreement remains in
place. For the year ended July 31, 2010 the Company issued 37,500 shares of
common stock with a fair value of $48,375 and paid $22,500 in consulting fees
(See Note 4(F)). This agreement will remain effective until
terminated by either party.
On April
28, 2010, Gold American Mining Corp (the “Company) and four individuals
collectively referred to as the “Optionor” entered into a mineral property
option agreement. The Company acquired an option to acquire an option
to acquire 72% interest in an approximately 245 acres property located in Clark
County, Nevada. To exercise the option the Company shall pay cash,
issue common shares of the Company’s stock and fund exploration and development
expenditures on the Property. The cash payments contemplated in the
agreement total $272,000 and are distributed in installments from the date of
the agreement through June 30, 2010. The number of Company’s shares
to be issued total 2,000,000 and are to be distributed in installment from the
date of the agreement through October 31, 2011. The Company is also
obligated to fund a minimum of $750,000 and at the Company’s sole discretion up
to $1,000,000 worth of exploration and development on the Property beginning
April 30, 2011 and continuing through April 30, 2012. As of
July 31, 2010, the Company issued 500,000 shares of common stock having a fair
value of $505,000 (See Note 3(E)) and paid $272,000 in cash
payment. In addition as part of the work commitment, the Company is
to provide $350,000 on or before April 30, 2012. Finally, the Company
is to issue 500,000 shares on October 31, 2010, April 30, 2011 and 500,000 on
October 31, 2011.
F-14
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
AS OF JULY 31, 2010 AND
2009
On March
5, 2010, Gold American Mining Corp. (the “Company”) and Yale Resources Ltd.
(“Yale”) (collectively referred to below as the “Parties”), entered into a
Binding Letter of Intent (“LOI”) whereby the Parties agreed to a transaction in
which Yale will grant the Company an option to acquire a 90% undivided interest
in an approximately 282.83 hectare property located in Zacatcas State, Mexico
(the “Property”). The Company entered into a definitive agreement on April 26,
2010. A brief description of the material terms and conditions of the
option contemplated by the agreement is set forth below.
To
exercise the option the Company shall pay cash to Yale, issue restricted common
shares of Company stock to Yale, and fund exploration and development
expenditures on the Property. The cash payments contemplated under the agreement
total $900,000 and are to be distributed in installments from the date of the
LOI through December 30, 2013. The number of Company shares to be issued to Yale
total 1,000,000 and are to be distributed in installments from the date of the
definitive agreement through December 30, 2013. The Company is also obligated to
fund a total of $2,000,000 worth of exploration and development on the Property
beginning June 30, 2011 and continuing through December 30, 2013 according the
following schedule:
|
|
·
|
Upon
signing the letter of intent the Company paid Yale $10,000 in refundable
deposit
|
|
|
·
|
Upon
signing of a Definite Agreement the Company paid $10,000 and issued
100,000 shares of common stock having a fair value of
$101,000
|
|
|
·
|
For
the year ended July 31, 2010 the Company paid $20,000 and issued 100,000
shares of common stock (See Note
4(E)).
|
|
|
·
|
On
or before December 30, 2010, the Company will pay $30,000 and issue
100,000 shares of common stock.
|
|
|
·
|
On
or before June 30, 2011, the Company will pay $50,000 and issue 100,000
shares of common stock. and have minimum expenditures of
$400,000
|
|
|
·
|
On
or before December 30, 2011, the company will pay $50,000 and issue
100,000 shares of common stock.
|
|
|
·
|
On
or before June 30, 2012, the Company will pay $75,000 and issue 100,000
shares of common stock
|
|
|
·
|
On
or before December 30, 2012, the company will pay $100,000, issue 100,000
shares of common stock and have minimum expenditures of an additional
$700,000
|
|
|
·
|
On
or before June 30, 2013, the Company will pay $200,000 and issue 100,000
share of common stock
|
|
|
·
|
On
or before December 30, 2013, the Company will pay $355,000, issue an
200,000 shares of common stock and have minimum expenditures of an
additional $900,000
|
Upon the
execution and exercise of the option, Yale will transfer a 90% undivided
interest in the property to the Company. As of July 31, 2010, the
Company issued 200,000 shares of common stock having a fair value of $153,000
(See Note 4(E)) and paid $20,000 in cash payments.
F-15
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
AS OF JULY 31, 2010 AND
2009
As
reflected in the accompanying condensed financial statements, the Company is in
the exploration stage with minimal operations, has a net loss since inception of
$1,458,042 and used cash in operations of $633,160 from inception and
stockholders deficiency of $68,681 as of July 31, 2010. In addition,
there is a working capital deficiency of $92,928 as of July 31, 2010. This
raises substantial doubt about its ability to continue as a going
concern. The ability of the Company to continue as a going concern is
dependent on the Company’s ability to raise additional capital and implement its
business plan. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
On March
5, 2010, the Company changed its intended business purpose to that of precious
metals mineral exploration, development and production. Management
believes that actions presently being taken to obtain additional funding (see
Notes 6 and 8) and continue to explore its mining rights provide the opportunity
for the Company to continue as a going concern
On August
16, 2010, the Company issued 375,000 units, each unit consisted of 1 share of
common stock and a warrant to purchase 0.5 shares of common stock for a total
of $300,000 ($.80/sh). Each warrant is exercisable for a two year
period and has an exercise price of $1.20 per share
On
September 24, 2010, the Company issued 533,333 units, each unit consisted of 1
share of common stock and a warrant to purchase 0.5 shares of common stock for a
total of $400,000 ($.75/sh). Each warrant is exercisable for a two
year period and has an exercise price of $1.13 per share
On August
4, 2010, Gold American Mining Corp (the “Company”) and three individuals
collectively referred to as the “Optionor” entered into a mineral property
option agreement. The Company acquired a 100% interest in an
approximately 178 acres property located in Opodepe Municipality, Sonara Sate,
Mexico. To exercise the option the Company shall pay cash and fund
exploration and development expenditures on the Property. The cash
payments contemplated in the agreement total $765,000 and are distributed in
installments from the date of the agreement through December 31, 2012, in the
following installments:
|
·
|
Upon
the execution of the agreement the Company paid $40,000 on August 23,
2010.
|
|
·
|
On
or before December 23, 2010 the Company will pay
$50,000.
|
|
·
|
On
or before June 23, 2011 the Company will pay
$50,000.
|
|
·
|
On
or before December 23, 2011 the Company will pay
$50,000.
|
|
·
|
On
or before June 23, 2012, the Company will pay
$175,000.
|
|
·
|
On
or before December 23, 2012 the Company will pay
$400,000.
|
In
addition to the above payment schedule the Company will pay a 1% royalty as a
result of the exploitation activities or a $500,000 lump sum payment upon the
Company’s discretion.
Subsequent
to July 31, 2010 the Company repaid the principal stockholder $2,641 owed as of
July 31, 2010.
F-16
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
FINANCIAL STATEMENTS
AS OF JULY 31, 2010 AND
2009
The
principal stockholder paid an additional $15,943 of expenses on behalf of the
Company subsequent to July 31, 2010 and was repaid.
On August
23, 2010 the Company signed a consulting agreement with an unrelated party in
exchange for $1,000 per month and 10,000 shares of common stock every three
months.
F-17
TABLE OF CONTENTS
Part IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. (removed and Reserved)Part IIItem 5. Market For Common Equity, Related Stockholder Matters and Small Business Issuer Purchases Of Equity SecuritiesItem 6. Selected Financial DataItem 7. Management S Discussion and Analysis Of Financial Condition and Results Of OperationsItem 7(a). Quantitative and Qualitative Disclosure About Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9. Changes in and Disagreements with Accountants on Accounting andItem 9a(t). Controls and ProceduresItem 9B. Other InformationPart IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accounting Fees and ServicesPart IVItem 15. Exhibits, Financial Statment SchedulesNote 1 Summary Of Significant Accounting Policies and OrganizationNote 2 Property and EquipmentNote 3 Stockholder LoansNote 4 Stockholders Equity (deficiency)Note 5 Related Party TransactionsNote 6 Agreements and CommitmentsNote 7 Going ConcernNote 8 Subsequent Events