BLUSKY AI INC.
10-Ks and 10-Qs
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
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x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the
quarterly period ended October 31, 2010
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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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For the
transition period from _____ to _____.
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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(IRS
Employer Identification
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Of
Incorporation or Organization)
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Number)
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10775
Double R Boulevard
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||
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Reno,
Nevada
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89521
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(775)
682 - 4313
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(Registrant’s
telephone number, including
area
code)
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Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports); and (2) has been subject to such filing requirements for
the past 90 days.
Yes
x
No
¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§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
¨
No
¨
Indicate
by checkmark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-3 of the Exchange Act.
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Large
accelerated filer
¨
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Accelerated
filer
¨
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Non-accelerated
filer
¨
(Do
not check if smaller reporting company)
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Smaller
reporting company
x
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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
¨
No
x
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.
Yes
¨
No
¨
APPLICABLE
ONLY TO CORPORATE ISSUERS:
As of
December 20, 2010, there were 87,846,893 shares of the registrant’s common stock
issued and outstanding.
GOLD
AMERICAN MINING CORP.
FORM
10-Q INDEX
TABLE OF
CONTENTS
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PART
I – FINANCIAL INFORMATION
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||||
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Item
1.
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Financial
Statements
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1
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Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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19
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Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk
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23
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Item
4T.
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Controls
and Procedures
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24
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PART
II – OTHER INFORMATION
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Item
1.
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Legal
Proceedings
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24
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Item
1A.
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Risk
Factors
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24
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Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
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24
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Item
3.
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Defaults
Upon Senior Securities
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25
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Item
4.
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(Removed
and Reserved).
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25
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Item
5.
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Other
Information
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25
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Item
6.
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Exhibits
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25
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Signature
Page
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26
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GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
CONTENTS
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Condensed
Balance Sheets as of October 31, 2010 (Unaudited) and July 31,
2010
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2
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|
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Condensed
Statement of Operations for the Three Months Ended October 31, 2010 and
2009 And for the Period From July 2, 2007 (Inception) to October 31, 2010
(Unaudited)
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3
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|
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Condensed
Statement of Changes in Stockholders’ Equity/(Deficiency) for the Period
From July 2, 2007 (Inception) to October 31, 2010
(Unaudited)
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4
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|
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Condensed
Statement of Cash Flows for the Three Months Ended October 31, 2010 and
2009 And for the Period From July 2, 2007 (Inception) to October 31, 2010
(Unaudited)
|
5
|
|
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Notes
to Unaudited Condensed Financial Statements
|
6
|
1
Gold
American Mining Corp. (F/K/A Silver America, Inc. and The Golf Alliance
Corporation)
(An
Exploration Stage Company)
Condensed
Balance Sheets
|
October
31, 2010
|
July
31, 2010
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|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
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Current
Assets
|
||||||||
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Cash
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$ | 246,574 | $ | 8,202 | ||||
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Prepaid
Expenses
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155,908 | 16,350 | ||||||
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Total
Current Assets
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402,482 | 24,552 | ||||||
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Property
and Equipment, net
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24,086 | 24,247 | ||||||
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Total
Assets
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$ | 426,568 | $ | 48,799 | ||||
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LIABILITIES AND STOCKHOLDERS'
EQUITY/(DEFICIENCY)
|
||||||||
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Current
Liabilities
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||||||||
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Accounts
Payable and accrued expenses
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$ | 27,156 | $ | 114,839 | ||||
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Loans
payable - related party
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3,536 | 2,641 | ||||||
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Total Liabilities
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30,692 | 117,480 | ||||||
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Commitments
and Contingencies
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- | - | ||||||
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Stockholders'
Equity/(Deficiency)
|
||||||||
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Preferred
stock, $0.00001 par value; 10,000,000 shares authorized, none issued and
outstanding
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- | - | ||||||
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Common
stock, $0.00001 par value; 500,000,000 shares authorized, 87,799,393 and
86,343,560 issued and outstanding,
respectively
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878 | 863 | ||||||
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Additional
paid-in capital
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2,637,433 | 1,388,498 | ||||||
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Deficit
accumulated during the exploration stage
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(2,242,435 | ) | (1,458,042 | ) | ||||
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Total
Stockholders' Equity/(Deficiency)
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395,876 | (68,681 | ) | |||||
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Total
Liabilities and Stockholders' Equity/(Deficiency)
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$ | 426,568 | $ | 48,799 | ||||
See
accompanying notes to unaudited condensed financial statements
2
Gold
American Mining Corp. (F/K/A Silver America, Inc. and The Golf Alliance
Corporation)
(An
Exploration Stage Company)
Condensed
Statements of Operations
(Unaudited)
|
For the Period From
|
||||||||||||
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For the Three Months Ended
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July 2, 2007 (Inception)
|
|||||||||||
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October 31, 2010
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October 31, 2009
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to October 31, 2010
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||||||||||
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Operating
Expenses
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||||||||||||
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Professional
fees
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$ | 30,329 | $ | 5,958 | $ | 176,345 | ||||||
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Exploration
Costs
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623,952 | - | 1,708,870 | |||||||||
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General
and administrative
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129,656 | 3,015 | 355,629 | |||||||||
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Total
Operating Expenses
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783,937 | 8,973 | 2,240,844 | |||||||||
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Loss
from Operations
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(783,937 | ) | (8,973 | ) | (2,240,844 | ) | ||||||
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Other
Income/(Expenses)
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||||||||||||
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Interest
Income
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14 | - | 16 | |||||||||
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Interest
Expense
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(470 | ) | (263 | ) | (1,607 | ) | ||||||
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LOSS
FROM OPERATIONS BEFORE INCOME TAXES
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(784,393 | ) | (9,236 | ) | (2,242,435 | ) | ||||||
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Provision
for Income Taxes
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- | - | - | |||||||||
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NET
LOSS
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$ | (784,393 | ) | $ | (9,236 | ) | $ | (2,242,435 | ) | |||
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Net
Loss Per Share - Basic and Diluted
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$ | (0.01 | ) | $ | (0.00 | ) | ||||||
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Weighted
average number of shares outstanding during the Period – Basic and
Diluted
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86,918,679 | 290,000,000 | ||||||||||
See accompanying notes to unaudited condensed financial
statements
3
Gold
American Mining Corp. (F/K/A Silver America, Inc. and The Golf Alliance
Corporation)
(An
Exploration Stage Company)
Condensed
Statement of Changes in Stockholders’ Equity/(Deficiency)
For
the period from July 2, 2007 (Inception) to October 31, 2010
(Unaudited)
|
Deficit
|
||||||||||||||||||||||||||||
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Additional
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accumulated
during
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Total
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||||||||||||||||||||||||||
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Preferred stock
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Common stock
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paid-in
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exploration
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Stockholders'
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||||||||||||||||||||||||
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Shares
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Amount
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Shares
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Amount
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capital
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stage
|
Equity/(Deficiency)
|
||||||||||||||||||||||
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Balance
July 2, 2007
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- | $ | - | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
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Common
stock issued for services to founder ($0.00001)
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- | - | 250,000,000 | 2,500 | (2,450 | ) | - | 50 | ||||||||||||||||||||
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In
kind contribution of services
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- | - | - | - | 1,080 | - | 1,080 | |||||||||||||||||||||
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Net
loss for the period July 2, 2007 (inception) to July 31,
2007
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- | - | - | - | - | (4,879 | ) | (4,879 | ) | |||||||||||||||||||
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Balance,
July 31, 2007
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- | - | 250,000,000 | 2,500 | (1,370 | ) | (4,879 | ) | (3,749 | ) | ||||||||||||||||||
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Common
stock issued for cash ($0.10 per share)
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- | - | 40,000,000 | 400 | 79,600 | - | 80,000 | |||||||||||||||||||||
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In
kind contribution of services
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- | - | - | - | 5,760 | - | 5,760 | |||||||||||||||||||||
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Net
loss for the year ended July 31, 2008
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- | - | - | - | - | (70,555 | ) | (70,555 | ) | |||||||||||||||||||
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Balance,
July 31, 2008
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- | - | 290,000,000 | 2,900 | 83,990 | (75,434 | ) | 11,456 | ||||||||||||||||||||
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In
kind contribution of services
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- | - | - | - | 5,760 | - | 5,760 | |||||||||||||||||||||
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In
kind contribution of interest
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- | - | - | - | 256 | - | 256 | |||||||||||||||||||||
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Net
loss for the year ended July 31, 2009
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- | - | - | - | - | (31,521 | ) | (31,521 | ) | |||||||||||||||||||
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Balance,
July 31, 2009
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- | - | 290,000,000 | 2,900 | 90,006 | (106,955 | ) | (14,049 | ) | |||||||||||||||||||
|
Shares
issued in exchange for mining rights
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- | - | 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
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- | - | (205,000,000 | ) | (2,050 | ) | 2,050 | - | - | |||||||||||||||||||
|
Shares
issued for services
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- | - | 37,500 | 0 | 48,375 | - | 48,375 | |||||||||||||||||||||
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Shares
and warrants issued for cash ($1.10 per share)
|
- | - | 272,727 | 3 | 299,997 | - | 300,000 | |||||||||||||||||||||
|
Forgiveness
of debts by principal stockholder
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- | - | - | - | 24,262 | - | 24,262 | |||||||||||||||||||||
|
Expenses
paid by shareholder on Company's behalf
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- | - | - | - | 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 | ) | |||||||||||||||||||
|
Shares
issued for services
|
- | - | 47,500 | - | 43,950 | - | 43,950 | |||||||||||||||||||||
|
Shares
issued in exchange for mining rights
|
- | - | 500,000 | 5 | 504,995 | - | 505,000 | |||||||||||||||||||||
|
Shares
and warrants issued for cash ($0.80 per share)
|
- | - | 375,000 | 4 | 299,996 | - | 300,000 | |||||||||||||||||||||
|
Shares
and warrants issued for cash ($0.75 per share)
|
- | - | 533,333 | 6 | 399,994 | - | 400,000 | |||||||||||||||||||||
|
Net
loss for the period ended October 31, 2010
|
- | - | - | - | (784,393 | ) | (784,393 | ) | ||||||||||||||||||||
|
Balance,
October 31, 2010
|
- | $ | - | 87,799,393 | $ | 878 | $ | 2,637,433 | $ | (2,242,435 | ) | $ | 395,876 | |||||||||||||||
See accompanying notes to unaudited condensed financial
statements
4
Gold
American Mining Corp. (F/K/A Silver America, Inc. and The Golf Alliance
Corporation)
(An
Exploration Stage Company)
Condensed
Statements of Cash Flows
(Unaudited)
|
For the Three Months
Ended October 31, 2010
|
For the Three Months
Ended October 31, 2009
|
For the Period from July 2, 2007
(Inception) to October 31, 2010
|
||||||||||
|
Cash
Flows From Operating Activities:
|
||||||||||||
|
Net
Loss
|
$ | (784,393 | ) | $ | (9,236 | ) | $ | (2,242,435 | ) | |||
|
Adjustments
to reconcile net loss to net cash used in operations
|
||||||||||||
|
Depreciation
expense
|
2,260 | - | 4,475 | |||||||||
|
Stock
issued for mining rights
|
505,000 | - | 1,163,000 | |||||||||
|
Stock
issued for services
|
43,950 | - | 92,325 | |||||||||
|
In-kind
contribution of services
|
- | 1,440 | 16,920 | |||||||||
|
In-kind
contribution of interest
|
- | 263 | 883 | |||||||||
|
Changes
in operating assets and liabilities:
|
||||||||||||
|
Increase/(Decrease)
in accounts payable and accrued expenses
|
(87,683 | ) | (60 | ) | 27,156 | |||||||
|
(Increase)/Decrease
in prepaid expenses
|
(139,558 | ) | - | (155,908 | ) | |||||||
|
Net
Cash Used In Operating Activities
|
(460,424 | ) | (7,593 | ) | (1,093,584 | ) | ||||||
|
Cash
Flows From Investing Activities:
|
||||||||||||
|
Purchase
of fixed assets
|
(2,099 | ) | - | (28,561 | ) | |||||||
|
Net
Cash Used In Investing Activities
|
(2,099 | ) | - | (28,561 | ) | |||||||
|
Cash
Flows From Financing Activities:
|
||||||||||||
|
Repayment
of loan payable- related party
|
(18,584 | ) | - | (60,979 | ) | |||||||
|
Expenses
paid by shareholder on Company's behalf
|
- | - | 60,871 | |||||||||
|
Proceeds
from loan payable-related party
|
19,479 | 3,000 | 88,777 | |||||||||
|
Proceeds
from issuance of common stock
|
700,000 | - | 1,280,050 | |||||||||
|
Net
Cash Provided by Financing Activities
|
700,895 | 3,000 | 1,368,719 | |||||||||
|
Net
Increase / (Decrease) in Cash
|
238,372 | (4,593 | ) | 246,574 | ||||||||
|
Cash
at Beginning of Period
|
8,202 | 4,611 | - | |||||||||
|
Cash
at End of Period
|
$ | 46,574 | $ | 8 | $ | 246,574 | ||||||
|
Supplemental
disclosure of cash flow information:
|
||||||||||||
|
Cash
paid for interest
|
470 | - | 530 | |||||||||
|
Cash
paid for taxes
|
- | 60 | 60 | |||||||||
|
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.
See accompanying notes to unaudited condensed financial
statements
5
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
(A) Basis of
Presentation
The
accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America and the rules and regulations of the Securities and Exchange Commission
for interim financial information. Accordingly, they do not include
all the information necessary for a comprehensive presentation of financial
position and results of operations.
It is
management's opinion, however that all material adjustments (consisting of
normal recurring adjustments) have been made which are necessary for a fair
financial statements presentation. The results for the interim period
are not necessarily indicative of the results to be expected for the
year.
Gold
American Mining, Corp. (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.
6
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
(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 October
31, 2010 and July 31, 2010, the Company had no cash equivalents.
(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 three months ended October 31, 2010 and 2009, the Company recorded
exploration costs of $623,952 and $0, respectively.
(E) Prope
rty 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.
7
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
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 three months ended October 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.
There
were no impairment losses recorded during the three months ended October 31,
2010 and 2009, respectively.
(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 October 31, 2010 and 2009 there
were 593,030 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.
8
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
(I) Inco
me 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.
(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.
(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, accrued
expenses, and loans payable – related party approximate fair value based on
the short-term maturity of these instruments.
9
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
At
October 31, 2010, and July 31, 2010, respectively, property and equipment is as
follows:
|
October 31,
2010
(Unaudited)
|
July 31,
2010
|
|||||||
|
Website
Development
|
$ | 24,463 | $ | 24,463 | ||||
|
Office
Equipment
|
4,098 | 1,999 | ||||||
|
Less
accumulated depreciation
|
(4,475 | ) | (2,215 | ) | ||||
|
Total
Property and Equipment
|
$ | 24,086 | $ | 24,247 | ||||
Depreciation/amortization
expense for the three months ended October 31, 2010 and 2009 and the period from
July 2, 2007 (Inception) to October 31, 2010 was $2,260, $0 and $4,475,
respectively.
During
the three months ended October 31, 2010, the principal stockholder loaned the
Company $19,479 to pay Company expenses and was repaid 15,943 during the period.
There is $3,536 owed to the principal stockholder as of October 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 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. The Company repaid the $2,641
to the principal stockholder during the three months ended October 31,
2010.
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 Notes 4(G) and
5).
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. The Company repaid $3,100
of a stockholder loan and $60 of accrued interest as of July 31, 2008 (See Note
5).
10
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
(A) Common Stock Issued for
Cash
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
(266,667 warrants) 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
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 (187,499
warrants) 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 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 (136,364
warrants) 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).
11
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
(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.
(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
October 31, 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).
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 August
23, 2010, the Company issued 10,000 shares of common stock having a fair value
of 8,700 ($0.87) in exchange for consulting services (See Note 6).
On August
1, 2010, the Company issued 37,500 shares of common stock having a fair value of
$35,250 ($0.94) in exchange for consulting services (See Note 6).
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).
12
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
(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 Notes 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 three months ended October
31, 2010 and 2009, and the related changes during these periods are presented
below:
|
|
Number of
Options
|
Weighted
Average
Exercise
Price
|
||||||
|
Stock
Warrants
|
||||||||
|
Balance
at July 31, 2010
|
138,864 | $ | 1.65 | |||||
|
Granted
|
454,167 | $ | 1.17 | |||||
|
Exercised
|
- | - | ||||||
|
Forfeited
|
- | |||||||
|
Balance
at October 31, 2010
|
593,030 | $ | 1.27 | |||||
|
Options
Exercisable at October 31, 2010
|
593,030 | $ | 1.27 | |||||
|
Weighted
Average Fair Value of Options Granted During 2010
|
$ | 1.27 | ||||||
13
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
|
2010 Warrants Outstanding
|
Warrants Exercisable
|
|||||||||||||||||||||
|
Range of Exercise
Price
|
Number
Outstanding
at
October
31, 2010
|
Wei
ghted
Average
Remaining
Contractual Life
|
Weighted
Average Exercise
Price
|
Number
Exercise
October 31, 2010
|
Weighted
Average Exercise
Price
|
|||||||||||||||||
| $ | 1.13-1.65 | 593,030 | 0.59 | $ | 1.27 | 593,030 | $ | 1.27 | ||||||||||||||
During
the three months ended October 31, 2010, the Company paid $22,500 to its
President for consulting services.
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 Notes 3 and
4(F)).
During
the three months ended October 31, 2010, the principal stockholder loaned the
Company $19,479 to pay Company expenses and was repaid $15,943 during the
period. There is $3,536 owed to the principal stockholder as of October 31, 2010
(See Note 3). Pursuant to the terms of the loan, the loans are
non-interest bearing, unsecured and due on demand.
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. The Company repaid the $2,641
to the principal stockholder during the three months ended October 31,
2010.
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)).
14
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
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
(ticker 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. 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 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 (See Notes 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. For the three months ended October 31, 2010 the Company issued
37,500 shares of common stock with a fair value of $36,250 and paid $22,500 in
consulting fees (See Note 4(F)). This agreement will remain effective
until terminated by either party.
15
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
On April
28, 2010, 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 October
31, 2010, the Company issued 1,000,000 shares of common stock having a fair
value of $1,010,000 (See Note 4(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.
On March
5, 2010, 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 a refundable
deposit.
·
Upon
signing of a Definitive 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.
16
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
·
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 shares
of common stock.
·
On
or before December 30, 2013, the Company will pay $355,000, issue 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 October 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.
On August
4, 2010, the Company and three individuals collectively referred to as the “La
Escondida Property Optionor” entered into a mineral property option
agreement. The Company acquired an option to obtain a 100% interest
in an approximately 178 acres property located in Opodepe Municipality, Sonora
State, Mexico (the “La Escondida Property”). To exercise the
option the Company shall pay cash and fund exploration and development
expenditures on the Sonora 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.
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. For the three months ended October 31, 2010 the Company issued 10,000
shares of common stock with a fair value of $8,700 and paid $2,000 in consulting
fees (See Note 4(F)). This agreement will remain
effective until terminated by either party.
17
GOLD
AMERICAN MINING CORP.
(F/K/A
SILVER AMERICA, INC. AND THE GOLF ALLIANCE CORPORATION)
(AN
EXPLORATION STAGE COMPANY)
NOTES TO
CONDENSED FINANCIAL STATEMENTS
AS OF
OCTOBER 31, 2010
(UNAUDITED)
As
reflected in the accompanying condensed unaudited financial statements, the
Company is in the exploration stage with minimal operations, has a net loss
since inception of $2,242,435 and used cash in operations of $1,093,584 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.
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
Note 6) and continue to explore its mining rights provide the opportunity for
the Company to continue as a going concern.
Subsequent
to October 31, 2010 the Company repaid the principal stockholder $3,000 of the
$3,536 owed as of October 31, 2010.
The
principal stockholder paid an additional $923 of expenses on behalf of the
Company subsequent to October 31, 2010.
On November 1, 2010, the Company issued 37,500 shares of common
stock having a fair value of $30,000 ($0.80) in exchange for consulting
services.
On December 1, 2010, the Company issued 10,000 shares of common
stock having a fair value of $4,900 ($0.49) in exchange for consulting
services.
18
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.
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 beginning June 30, 2011
and continuing through 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.
19
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 Quarterly Report on
Form 10-Q. 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.
Finally, on August 4, 2010, the Company and three individuals
collectively entered into a mineral property option agreement. The Company
acquired an option to obtain a 100% interest in an approximately 178 acres
property located in Opodepe Municipality, Sonora State, Mexico (the “La
Escondida Property”). To exercise the option the Company shall pay cash
and fund exploration and development expenditures on the La Escondida 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 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.
Results
of Operations
Three-months ended October
31, 2010 compared to the three-months ended October 31, 2009
We had a
net loss of $784,393 for the three-months ended October 31, 2010, which was
$775,157 greater than the net loss of $9,236 for the three-months ended October
31, 2009. This change in our results over the two periods is primarily the
result of an increase in exploration costs at the Guadalupe and Keeno Strike
properties. We also experienced increases in professional fees and
administrative expenses during the period. The following table summarizes
key items of comparison and their related increase (decrease) for the
three-months ended October 31, 2010 and 2009:
20
|
Three-Months
Ended
|
||||||||||||
|
October 31,
|
Increase
|
|||||||||||
|
2010
|
2009
|
(Decrease)
|
||||||||||
|
Revenues
|
$ | 0 | $ | 0 | $ | 0 | ||||||
|
Professional
Fees
|
30,329 | 5,958 | 24,371 | |||||||||
|
Exploration
Costs
|
623,952 | - | 623,952 | |||||||||
|
General
and Administrative
|
129,656 | 3,015 | 126,641 | |||||||||
|
Total
Operating Expenses
|
783,937 | 8,973 | 774,964 | |||||||||
|
(Loss)
from Operations
|
(783,937 | ) | (8,973 | ) | (774,964 | ) | ||||||
|
Net
Interest Income (Expense)
|
(456 | ) | (263 | ) | (193 | ) | ||||||
|
(Loss)
from Operations Before Taxes
|
(784,393 | ) | (9,236 | ) | (775,157 | ) | ||||||
|
Net
(Loss)
|
$ | (784,393 | ) | $ | (9,236 | ) | $ | (775,157 | ) | |||
Liquidity
And Capital Resources
Our
balance sheet as of October 31, 2010, reflects assets of
$426,568. Although we had cash in the amount of $246,574 and working
capital in the amount of $371,790 as of October 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 as we will require approximately $1,000,000
over that period.
Working
Capital
|
2010
|
||||||||
|
October 31
(unaudited)
|
July 31
|
|||||||
|
Current
assets
|
$ | 402,482 | $ | 8,202 | ||||
|
Current
liabilities
|
30,692 | 117,480 | ||||||
|
Working
capital
|
$ | 371,790 | $ | (92,928 | ) | |||
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.
Going
Concern Consideration
As
reflected in the accompanying financial statements, we are in the exploration
stage with no revenue generating operations and have a net loss since inception
of $2,242,435 and used cash in operations of $1,093,584 from inception. This
raises substantial doubt about our ability to continue as a going
concern. Our ability to continue as a going concern is dependent on
our ability to raise additional capital and implement our business
plan. The financial statements do not include any adjustments that
might be necessary if we are 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 and
implement its strategic plans provide the opportunity for the Company to
continue as a going concern.
21
|
|
Three-months Ended
|
|||||||
|
|
October 31,
(unaudited)
|
|||||||
|
2010
|
2009
|
|||||||
|
Net
Cash Provided by (Used in) Operating Activities
|
$ | (460,424 | ) | $ | (7,593 | ) | ||
|
Net
Cash Provided by (Used in) Investing Activities
|
(2,099 | ) | - | |||||
|
Net
Cash Provided by Financing Activities
|
700,895 | 3,000 | ||||||
|
Net
Increase (Decrease) in Cash
|
$ | 238,372 | $ | (4,593 | ) | |||
Operating
Activities
Net cash
flow used in operating activities during the three-months ended October 31, 2010
was $460,424 – an increase of $452,831 from the $7,593 net cash outflow during
the three-months ended October 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 three-months ended October 31, 2010 was
$2,099 – an increase of $2,099 when compared to the figures during the
three-months ended October 31, 2009. This increase in the cash used in investing
activities was primarily due to the purchase of computer equipment.
Financing
Activities
Financing
activities during the three-months ended October 31, 2010, provided $700,895 to
us, an increase of $697,895 from the $3,000 provided by financing activities
during the three-months ended October 31, 2009. During the three-months ended
October 31, 2010, we received $700,000 in proceeds from the issuance of common
stock, and $895 from net loans payable to related parties.
Our
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. Our
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.
On May 7,
2010, we entered into an Equity Issuance Agreement with ZUG Financing Group S.A.
(“ZUG”) wherein ZUG has agreed to advance us up to $7,500,000 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
October 31, 2010, $1,000,000 has been advanced to the Company from ZUG financing
under the Equity Issuance Agreement.
Finally,
should we choose to exercise our option under the La Escondida Option Agreement,
our financial commitments total $765,000 in cash installment payments, of which
$40,000 has been paid, with the final payment of $400,000 being due on or before
December 23, 2012. In addition to the cash payments, should we
exercise our option on the La Escondida property, we must pay a 1% royalty as a
result of exploitation activities or a $500,000 lump sum cash payment, at our
discretion.
22
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 October 31, 2010, none of our properties has proven
reserves.
Off-Balance Sheet
Arrangements
We have
no off-balance sheet arrangements.
Not
Applicable.
23
Evaluation
of Disclosure Controls and Procedures
Our
management evaluated, with the participation of Mr. Johannes Petersen, who
currently serves as both 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 Securities
Exchange Act of 1934) as of the end of the period covered by this Quarterly
Report on Form 10-Q. Based on this evaluation, our Chief Executive
Officer and our Chief Financial Officer 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 the Securities and Exchange Commission’s rules and forms, and (ii)
is accumulated and communicated to our management, including our Chief Executive
Officer and our Chief Financial Officer, 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.
Changes
in Internal Controls Over Financial Reporting
There
have been no changes in our internal controls over financial reporting that
occurred during the period covered by this quarterly report, that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
We may be
involved from time to time in ordinary litigation, negotiation and settlement
matters that will not have a material effect on our operations or
finances. We are not aware of any pending or threatened litigation
against us or our officers and directors in their capacity as such that could
have a material impact on our operations or finances.
Not
Applicable.
As
disclosed on our Current Report on Form 8-K filed with the SEC on September 2,
2010, we entered into a private placement Subscription Agreement (the “August
Subscription Agreement”) with ZUG Financing Group S.A., a corporation organized
under the laws of Nevis (“ZUG”), on August 27, 2010 for the purchase and sale of
375,000 Units at $0.80 per Unit. Per the terms and conditions of the
August Subscription Agreement, a Unit consists of one (1) share of common stock
of the Company (a “Share”), 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 (1) additional share of common stock at an
exercise price of 150% of the Unit price, or $1.20 per Share (each, a
“Warrant”), exercisable for a period of two (2) years from the date of the
August Subscription Agreement. Gross proceeds from the issuance of
the Units as of August 27, 2010 totaled $300,000. The issuance of the
Units is being conducted in reliance upon certain exemptions from the
registration requirements of the Securities Act of 1933, as amended (the “Act”),
afforded by Regulation S promulgated thereunder.
24
As
disclosed on our Current Report on Form 8-K filed with the SEC on October 1,
2010, we entered into a private placement Subscription Agreement (the “September
Subscription Agreement”) with ZUG on September 30, 2010 for the purchase and
sale of 533,333 Units at $0.75 per Unit. Per the terms and conditions
of the September Subscription Agreement, a Unit consists of one (1) share of
common stock of the Company (a “Share”), 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 (1) additional share of common stock
at an exercise price of 150% of the Unit price, or $1.13 per Share (each, a
“Warrant”), exercisable for a period of two (2) years from the date of the
August Subscription Agreement. Gross proceeds from the issuance of
the Units as of September 30, 2010 totaled $400,000. The issuance of
the Units is being conducted in reliance upon certain exemptions from the
registration requirements of the Act afforded by Regulation S promulgated
thereunder.
As
disclosed on our Current Report on Form 8-K filed with the SEC on April 29,
2010, on October 31, 2010 we issued 500,000 shares of common stock to certain
individuals pursuant to the terms of the Keeno Strike Option Agreement in
furtherance of our payments toward the ultimate exercise of our option to
acquire a 72% interest in the Keeno Property. All of the securities
issued to the individuals are being issued in reliance upon certain exemptions
from the registration requirements of the Securities Act of 1933, as amended,
including Section 4(2) and from various similar state exemptions.
Further,
on August 1, 2010, we issued 37,500 shares of our common stock to an individual
in consideration for consulting services rendered, pursuant to a consulting
agreement. Such shares were issued in reliance upon certain
exemptions from the registration requirements of the Securities Act of 1933, as
amended, including Section 4(2) and from various similar state
exemptions.
Finally,
on August 23, 2010, we issued 10,000 shares of our common stock to an individual
in consideration for consulting services rendered, pursuant to a consulting
agreement. Such shares were issued in reliance upon certain
exemptions from the registration requirements of the Securities Act of 1933, as
amended, including Section 4(2).
None.
None.
|
Exhibit
No.
|
Description
|
|
|
3.1
|
Articles
of Incorporation(1)
|
|
|
3.2
|
Certificate
of Amendment, effective March 5, 2010(2)
|
|
|
Certificate
of Amendment, effective June 23, 2010 (3)
|
||
|
3.3
|
Bylaws(1)
|
|
|
10.1
|
Definitive
Option Agreement for La Escondida property, entered into on August 4,
2010, dated as of July 27, 2010 *
|
|
|
31.1
|
Certification
by the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*
|
|
|
31.2
|
Certification
by the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*
|
|
|
32
|
Certification
by the Chief Executive Officer and Chief Financial Officer 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 June 28,
2010.
|
25
SIGNATURES
Pursuant
to the requirements 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: December
20, 2010
|
By:
|
/s/
Johannes
Petersen
|
|
Johannes
Petersen
|
||
|
Title: Chief
Executive Officer, Chief Financial Officer, Principal Accounting Officer,
President, Chairman of the Board of
Directors
|
||
26
TABLE OF CONTENTS
Part I Financial InformationItem 1. Financial StatementsNote 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 EventsItem 2. Management S Discussion and Analysis Of Financial Condition and Results Of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4T. Controls and ProceduresPart II - Other InformationItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. (removed and Reserved)Item 5. Other InformationItem 6. Exhibits