DEFENSE TECHNOLOGIES INTERNATIONAL CORP. - Quarter Report: 2013 January (Form 10-Q)

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

 

[   ]

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

 

Delaware	Not Applicable
(State or jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number

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

 

Class	Outstanding as of March 15, 2013
Common Stock, $0.001 par value	28,116,702

 

	PART  I    —   FINANCIAL INFORMATION	Page
Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21
Item 4.	Controls and Procedures	21
	PART II   —   OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults upon Senior Securities	22
Item 4.	Mine Safety Disclosure	22
Item 5.	Other Information	22
Item 6.	Exhibits	22
	Signatures	23

 

 

 

January 31, 2013

CONTENTS

Consolidated Balance Sheets	4
Consolidated Statements of Operations	5
Consolidated Statements of Stockholders’ Deficit	6
Consolidated Statements of Cash Flows	7
Notes to the Consolidated Financial Statements	8

 

 

Canyon Gold Corp.
(An Exploration Stage Company)
Consolidated Balance Sheets
		January 31,				April 30,
		2013				2012
		(unaudited)
ASSETS
Current assets
Cash		$	282			$	50,434
Prepaid expenses			3,975				35,061
Total current assets			4,257				85,495
Mineral claims			37,820				37,820
TOTAL ASSETS		$	42,077			$	123,315
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable		$	47,049			$	23,717
Accrued interest payable-related parties			45,308				45,097
Convertible note payable			100,000				100,000
Convertible notes payable - related parties			181,010				156,000
Notes payable - related parties			24,656				-
Payables - related parties			523,784				316,106
Total current liabilities			921,807				640,920
Total liabilities			921,807				640,920
Contingencies and commitments
STOCKHOLDERS' DEFICIT
Preferred stock, $0.0001 par value; 20,000,000 shares authorized, 1,100,000 and 1,100,000 shares issued & outstanding, respectively			110				110
Common stock, $0.0001 par value, 200,000,000 shares authorized 28,116,702 and 28,116,702 shares issued and outstanding, respectively			2,812				2,812
Additional paid-in capital			(86,780	)			(105,140	)
Accumulated deficit			(795,872	)			(415,387	)
Total stockholders' deficit			(879,730	)			(517,605	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	42,077			$	123,315

Canyon Gold Corp.
(An Exploration Stage Company)
Consolidated Statements of Operations
(unaudited)
																		From Inception
																		on June 19, 2008
		For the Nine Months Ended								For the Three Months Ended								through
		January 31,								January 31,								January 31,
		2013				2012				2013				2012				2013
Revenue		$	-			$	-			$	-			$	-			$	-
Expenses
General and administrative			100,686				42,792				63,185				15,984				236,465
Management and administration fees			30,126				45,968				20,235				15,000				92,279
Professional fees			63,916				78,665				6,801				10,426				166,298
Directors' fees			97,500				7,500				82,500				-				111,500
Exploration Costs			69,686				49,693				26,575				33,662				167,609
Total expenses			361,914				224,618				199,296				75,072				774,151
Other expense
Interest expense			18,571				2,140				6,585				1,010				21,721
Net loss		$	(380,485	)		$	(226,758	)		$	(205,881	)		$	(76,082	)		$	(795,872	)
Net loss per share		$	(0.01	)		$	(0.01	)		$	(0.01	)		$	(0.00	)
Weighted average shares outstanding			28,116,702				28,116,702				28,116,702				28,116,702

Canyon Gold Corp.
(An Exploration Stage Company)
Consolidated Statement of Stockholders' Deficit
From Inception on June 19, 2008 through January 31, 2013
																		Additional								Total
		Common Stock								Preferred Stock								Paid-in				Accumulated				Stockholders'
		Shares				Amount				Shares				Amount				Capital				Deficit				Deficit
Inception, June 19, 2008			-			$	-				-			$	-			$	-			$	-			$	-
Common stock issued for debtat $0.001 per share on December 31, 2009			16,500,000				1,650				-				-				14,850				-				16,500
Common stock issued for cash at $0.01 per share during 2009			200,000				20				-				-				1,980				-				2,000
Common stock issued for services at $0.05 per share on December 31, 2009			458,299				46				-				-				22,869				-				22,915
																											-
Net loss for the year ended December 31, 2009			-				-				-				-				-				(25,595	)			(25,595	)
Balance, December 31, 2009			17,158,299				1,716				-				-				39,699				(25,595	)			15,820
Common stock issued for debtat $0.001 per share on December 31, 2010			6,800,000				680				-				-				6,120				-				6,800
Common stock issued for debtat $0.01 per share on December 31, 2010			500,000				50				-				-				4,950				-				5,000
Common stock issued for services at $0.05 per share on December 31, 2010			505,000				50				-				-				25,200				-				25,250
Net loss for the year ended December 31, 2010			-				-				-				-				-				(35,195	)			(35,195	)
Balance, December 31, 2010			24,963,299				2,496				-				-				75,969				(60,790	)			17,675
Common stock issued for debt at $0.05 per share on April 30, 2011			1,280,000				128				-				-				63,872				-				64,000
Common stock issued for cash  at $0.05 per share on April 30, 2011			955,400				96				-				-				47,675				-				47,771
Net loss for the 4 months ended April 30, 2011			-				-				-				-				-				(26,727	)			(26,727	)
Balance, April 30, 2011			27,198,699				2,720				-				-				187,516				(87,517	)			102,719
Common stock issued for debt at an average of $0.144 per share on May 31, 2011			800,000				80				-				-				114,920				-				115,000
Recapitalization with reverse acquisition			118,003				12				500,000				50				(407,576	)			-				(407,514	)
Preferred Series 'A' shares issued at par for payables			-				-				600,000				60				-				-				60
Net loss for the year ended April 30, 2012			-				-				-				-				-				(327,870	)			(327,870	)
Balance, April 30, 2012			28,116,702				2,812				1,100,000				110				(105,140	)			(415,387	)			(517,605	)
Imputed interest on related party convertible notes (unaudited)			-				-				-				-				18,360				-				18,360
Net loss for the nine months ended January 31, 2013 (unaudited)			-				-				-				-				-				(380,485	)			(380,485	)
Balance, January 31, 2013 (unaudited)			28,116,702			$	2,812				1,100,000			$	110			$	(86,780	)		$	(795,872	)		$	(879,730	)

CANYON GOLD CORP.
(An Exploration Stage Company)
Consolidated Statements of Cash Flow
(unaudited)
										From Inception
										on June 19, 2008
		For the Nine Months Ended								through
		January 31,								January 31,
		2013				2012				2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(380,485	)		$	(226,758	)		$	(795,872	)
Adjustments to reconcile net loss to net cash used by operating activities:
Interest accrued on related party notes payable			211				2,140				3,361
Interest imputed on related party convertible notes payable			18,360				-				18,360
Common stock issued for services			-				-				48,165
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable			-				21,952				-
(Increase) decrease in prepaid expenses			31,086				8,895				16,328
(Increase) decrease in loans receivable			-				-				(15,000	)
Increase (decrease) in accounts payable			23,332				(7,200	)			34,637
Increase (decrease) in accrued liabilities			-				-				-
Increase (decrease) in payable-related parties			207,677				30,760				218,582
Net Cash Used by Operating Activities			(99,819	)			(170,211	)			(471,439	)
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES
Cash received from reverse acquisition			-				29,973				29,973
Purchase of mineral claims			-				-				(19,990	)
Net Cash Provided by Investing Activities			-				29,973				9,983
CASH FLOWS FROM PROVIDED BY FINANCING ACTIVITIES
Proceeds from sale of stock			-				-				49,771
Payments on convertible debt			-				-				(56,000	)
Proceeds from related party debt			24,656				-				24,656
Proceeds from related party convertible debt			25,011				115,000				443,311
Net Cash Provided by Financing Activities			49,667				115,000				461,738
INCREASE IN CASH			(50,152	)			(25,238	)			282
CASH AT BEGINNING OF PERIOD			50,434				42,327				-
CASH AT END OF PERIOD		$	282			$	17,089			$	282
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Related party loan converted to common shares		$	-			$	115,000			$	115,000
Related party payable converted to preferred shares		$	-			$	110			$	110
SUPPLEMENTAL CASH FLOW INFORMATION:
CASH PAID FOR:
Taxes		$	-			$	-			$	-
Interest		$	-			$	-			$	-

These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The company’s fiscal year end is April 30. These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Long Canyon Gold Resources Corp. (“Long Canyon”). All inter-company transactions and balances have been eliminated.

 

 

 

(k)

Non-Monetary Transactions

(l)

Comprehensive Loss

The Company considers all investments purchased with original maturity of six or fewer months to be cash equivalents.

The convertible debt is eligible for conversion 30 days from the first day Canyon Gold common shares are qualified for trading on the OTC Bulletin Board.

 

(c) During the year ended December 31, 2009, the Company issued 458,299 shares of common stock at a price of $0.05 per share in exchange for $22,915 worth of services.

(d) During the year ended December 31, 2010, the Company issued 6,800,000 shares of common stock at a price of $0.001 per share for the conversion of $6,800 worth of debt.

(e) During the year ended December 31, 2010, the Company issued 500,000 shares of common stock at a price of $0.01 per share for the conversion of $5,000 worth of debt.

(f) During the year ended December 31, 2010, the Company issued 505,000 shares of common stock at a price of $0.05 per share in exchange for $25,250 worth of services.

(g) During the three months ended October 31, 2011, the Company issued 1,280,000   shares of common stock at a price of $0.05 per share for the conversion of $64,000 worth of debt.

(h) During the three months ended October 31, 2011, the Company issued 955,400 shares of common stock for cash at a price of $0.05 per share for cash.

 

(a)

During the year ended April 30, 2012, the Company issued 600,000 shares of preferred stock Series A. These shares were transferred to a related party in payment of an outstanding debt. See Note 9.

(b)

During the year ended April 30, 2012, the Company issued 500,000 shares of preferred stock Series B.

The par value of the Series B convertible preferred shares is $0.0001 and are convertible into ten common voting shares. These shares are non-voting shares.

(a)

Litigation

(b)

Indemnities and Guarantees

(c)

Commitments

a)

Administration Agreement with EMAC Handels AG, signed on April 20, 2011, for a six year term. From April 2011 to April 2012, the Company paid EMAC a monthly fee of $2,750 for administration services, office rent and telephone expenses. Commencing May 1, 2012, the monthly fee is $ 3,750. Extraordinary expenses are invoiced by EMAC on a quarterly basis. The fee may be paid in cash and or with common stock.

b)

Service Agreement with Harold Schneider signed on April 30, 2011, for a one year period and renewable as decided by the Board of Directors. The Company pays Schneider a monthly fee of $2,500 for accounting and related services. The fee may be paid in cash and or with common stock. The Company with Board Resolution has extended the Service Agreement with Harold Schneider for a further one year period to April 30, 2013, at the same rate.

c)

Service Agreement with Delbert G. Blewett signed on April 30, 2011. The Company pays Blewett a Director’s fee of $2,500 per month and office rent of $250 per month. The fees may be paid in cash and or with common stock.

d)

In May 2012, the Company agreed to compensate the following for future services: Delbert G. Blewett, President of Canyon Gold, Harold Schneider President of Long Canyon and Alex Burton, Vice-President of the Advisory and Exploration Committee, whereby each shall receive 250,000 common voting shares of the Company. These shares shall be issued within 30 days from the first day of trading of the Company’s shares on the OTC Bulletin Board.

e)

On May 15, 2011, the Company executed an option agreement wherein the Company has the option to acquire 100% interest in 275 mineral claims located in the same areas in Nevada for consideration of $350,000 and 425,000 shares of Series B preferred stock and in addition the Company shall hold a 2% Net Smelter Royalty on these claims. The option agreement stated the option must be exercised by May 31, 2012. As of March 28, 2012, the option had not been exercised and the Company entered into an extension agreement to extend the option term until December 31, 2012. On October 30, 2012, the option had not been exercised, and a second extension agreement to the option agreement was executed, extending the option to May 31, 2013. There was no additional cost or consideration related to the extension of this option. As of January 31, 2013, the option had not been exercised.

 
 

 

 

 

Results of Operations

Operating Expenses

 

Liquidity and Capital Resources

 

 

 

 

 

●	Analysis of surface geochemical sample results with values that are suggestive of a mineral deposit, when considered in the context of the geologic setting of the property;
●	Analysis of geophysical anomalies that are suggestive of a mineral deposit considered in the context of the geologic setting of the property; and
●	Interpretation of geological results that is indicative of a favourable setting for a mineral deposit.

Stage “A”
●	Geochemistry
		Hand held Auger Pediment and Upper slope soil sampling
		Combined with surface cobble sampling
		20 line of 6000m length at 50m spacings includes $30 analysis		$	80,000
		Blasting and Channel sampling outcrops on upper slopes and pediment		$	80,000
		Valley Flats ATV mounted auger sampling includes $30 assay		$	80,000
		Water Well drill (RC type)
		30 holes to 60 feet at $25/foot		$	45,000
	●	Collection and assay costs $70 per sample 30 holes X 10 samples		$	21,000
	●	Geophysical surveys		$	170,000
	●	Engineering		$	45,000
	●	Contingency (20%)		$	104,200
	Total Estimated budget, Stage A			$	625,200