Lode-Star Mining Inc. - Quarter Report: 2013 September (Form 10-Q)
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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 10-Q
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x
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QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2013
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission file number 333-123134
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INTERNATIONAL GOLD CORP.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
1111 West Georgia Street, Suite 1720
Vancouver, British Columbia
Canada V6E 4M8
(Address of principal executive offices, including zip code.)
(604) 687-0760
(telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 last 90 days. YES x NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large Accelerated Filer
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o
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Accelerated Filer
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o
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Non-accelerated Filer
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o
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Smaller Reporting Company
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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 x NO o
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 11,509,000 as of November 18, 2013.
1
TABLE OF CONTENTS
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Page
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PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements
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3 |
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Balance Sheets as of September 30, 2013 (unaudited) and December 31, 2012
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4 |
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Statements of Operations for the Nine Months ended September 30, 2013 and 2012 (unaudited)
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5 |
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Statements of Cash Flows for the Nine Months ended September 30 2013 and 2012 (unaudited)
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6 |
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Notes to Financial Statements (unaudited)
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7 |
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Item 2. Management’s Discussion and Analysis Of Financial Condition and Results of Operations
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11 |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
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14 |
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Item 4. Controls and Procedures
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15 |
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PART II - OTHER INFORMATION
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Item 1A. Risk Factors
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15 |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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15 |
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Item 6. Exhibits
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16 |
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SIGNATURES
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17 |
2
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
INTERNATIONAL GOLD CORP.
INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(Unaudited)
(Stated in U.S. Dollars)
3
INTERNATIONAL GOLD CORP.
INTERIM BALANCE SHEETS
(Stated in U.S. Dollars)
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SEPTEMBER 30
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DECEMBER 31
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2013
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2012
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(Unaudited)
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ASSETS
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Current
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Cash
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$
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90
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$
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11,282
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Amounts receivable
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-
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9,464
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Prepaid consulting fees to related parties
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8,990
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43,022
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$
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9,080
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$
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63,768
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LIABILITIES
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Current
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Accounts payable and accrued liabilities
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$
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59,475
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$
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88,069
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Loans payable
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99,047
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92,860
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Promissory notes due to related party
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-
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7,116
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158,522
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188,045
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Contractual Obligations, Commitments And Subsequent Events (Note 6)
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STOCKHOLDERS’ DEFICIENCY
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Capital Stock
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Authorized:
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100,000,000 voting common shares with a par value of $0.00001 per share
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Issued:
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9,901,500 common shares at September 30, 2013 and December 31, 2012
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99
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99
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Additional Paid-In Capital
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392,651
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392,651
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Shares To Be Issued
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299,750
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188,000
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Accumulated Deficit
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(841,942
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(705,027
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)
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(149,442
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(124,277
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)
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$
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9,080
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$
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63,768
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The accompanying condensed notes are an integral part of these interim financial statements.
4
INTERNATIONAL GOLD CORP.
INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
(Stated in U.S. Dollars)
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THREE MONTHS ENDED
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NINE MONTHS ENDED
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SEPTEMBER 30
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SEPTEMBER 30
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2013
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2012
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2013
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2012
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Revenue
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$
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-
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$
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-
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$
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-
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$
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-
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Expenses
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Consulting services
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26,623
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27,000
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83,480
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72,000
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Corporate support services
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1,838
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8,963
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9,397
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28,958
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Interest, bank and finance charges
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2,158
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4,505
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(3,069)
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15,453
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Office, foreign exchange and sundry
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3,923
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5,431
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4,409
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9,519
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Professional fees
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6,550
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4,750
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32,547
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43,218
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Transfer and filing fees
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1,046
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5,224
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10,151
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10,916
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42,138
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55,873
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136,915
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180,064
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Net Loss For The Period
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$
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(42,138)
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$
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(55,873
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)
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$
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(136,915
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$
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(180,064
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)
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Basic And Diluted Loss Per Common Share
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$
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(0.00
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$
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(0.01
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)
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$
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(0.01
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)
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$
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(0.03
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Weighted Average Number Of Common Shares Outstanding
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9,901,500
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8,729,043
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9,901,500
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7,082,380
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The accompanying condensed notes are an integral part of these interim financial statements.
5
INTERNATIONAL GOLD CORP.
INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
(Stated in U.S. Dollars)
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NINE MONTHS ENDED
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SEPTEMBER 30
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2013
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2012
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Cash Provided By (Used In)
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Operating Activities
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Net loss for the period
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$
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(136,915
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$
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(180,064)
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Adjustments to reconcile net loss to net cash used in operating activities:
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Accrued interest payable
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7,247
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7,128
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Loss on foreign exchange
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-
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488
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Net changes in non-cash operating working capital items:
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Decrease in prepaid consulting fees to related parties
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34,032
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-
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Decrease (increase) in amounts receivable
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9,464
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(18,345
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)
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(Decrease) increase in accounts payable and accrued liabilities
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(35,710
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)
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31,183
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(121,882
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(159,610
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)
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Financing Activities
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Issuance of common stock subscriptions
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90,000
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210,700
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Repayments to related parties
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-
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(51,679
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)
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Loan advances
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20,690
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-
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110,690
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159,021
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Net Decrease In Cash
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(11,192
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(589
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)
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Cash, Beginning Of Period
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11,282
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759
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Cash, End Of Period
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$
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90
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$
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170
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Supplemental Disclosure Of Cash Flow Information
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Cash paid during the period for:
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Interest
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$
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-
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$
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-
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Income taxes
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$
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-
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$
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-
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Shares issued for debt settlement
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$
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21,750
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$
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-
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The accompanying condensed notes are an integral part of these interim financial statements.
6
INTERNATIONAL GOLD CORP.
CONDENSED NOTES TO INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(Unaudited)
(Stated in U.S. Dollars)
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1.
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BASIS OF PRESENTATION AND NATURE OF OPERATIONS
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Organization
International Gold Corp. (“the Company”) was incorporated in the State of Nevada, U.S.A., on December 9, 2004. The Company’s principal executive offices are located in Vancouver, British Columbia, Canada. The Company was originally formed for the purpose of acquiring exploration stage natural resource properties. The Company currently has no properties, is not conducting any exploration work and is currently not in the “exploration stage”. The Company has not yet realized any revenues from its operations.
Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern.
The future of the Company is dependent upon its ability to establish a business and to obtain new financing to execute a business plan. As shown in the accompanying financial statements, the Company has incurred accumulated losses of $841,942 for the period from December 9, 2004 (inception) to September 30, 2013, and has had no revenue. There is no assurance that management’s plans to seek additional capital through private placements of its common stock will be realized, and these factors cast substantial doubt upon the use of the going concern assumption. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
Basis of Presentation
The unaudited financial information furnished herein reflects all adjustments which, in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented. These third quarter financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s report on Form 10-K for the year ended December 31, 2012. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding fiscal year, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s financial statements for the fiscal year ended December 31, 2012, has been omitted. The results of operations for the nine month period ended September 30, 2013 are not necessarily indicative of results for the entire year ending December 31, 2013.
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2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. All dollar amounts are in U.S. dollars unless otherwise noted.
The financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:
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a)
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Basis of Accounting
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The Company’s financial statements have been prepared using the accrual method of accounting. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein.
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7
INTERNATIONAL GOLD CORP.
CONDENSED NOTES TO INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(Unaudited)
(Stated in U.S. Dollars)
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2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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b)
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Asset Retirement Obligations
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The Company has no asset retirement obligations, including environmental expenditures, which relate to an existing condition caused by past operations.
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c)
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Cash and Cash Equivalents
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Cash consists of cash on deposit with high quality major financial institutions. For purposes of the balance sheet and statements of cash flows, the Company considers all highly liquid debt instruments purchased with maturity of 90 days or less to be cash equivalents. At September 30, 2013 and December 31, 2012, the Company had no cash equivalents.
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d)
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Foreign Currency Accounting
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The Company’s functional currency is the U.S. dollar. Head office financing and investing activities are generally in Canadian dollars. Transactions in Canadian currency are translated into U.S. dollars as follows:
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i)
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monetary items at the exchange rate prevailing at the balance sheet date;
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ii)
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non-monetary items at the historical exchange rate; and
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iii)
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revenue and expense items at the rate in effect of the date of transactions.
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Gains and losses arising on the settlement of foreign currency denominated transactions or balances are recorded in the statements of operations.
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e)
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Fair Value of Financial Instruments
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ASC Topic 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
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These tiers include:
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§
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Level 1 – defined as observable inputs such as quoted prices in active markets;
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§
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Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
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§
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Level 3 – defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
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Liabilities measured at fair value on a recurring basis were presented on the Company’s balance sheet as at September 30, 2013 as follows:
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Fair Value Measurements Using
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Quoted prices in
active markets for
identical instruments
(Level 1)
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Significant other
observable inputs
(Level 2)
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Significant
unobservable inputs
(Level 3)
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Balance,
September 30, 2013
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Balance,
December 31, 2012
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Loans payable
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$ | - | $ | 99,047 | $ | - | $ | 99,047 | $ | 92,860 | ||||||||||
The carrying amount of loans payable was a reasonable approximation of the fair value.
8
INTERNATIONAL GOLD CORP.
CONDENSED NOTES TO INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(Unaudited)
(Stated in U.S. Dollars)
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2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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f)
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Use of Estimates and Assumptions
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The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions are determining the fair value of transactions involving related parties and common stock. Actual results may differ from the estimates.
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g)
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Basic and Diluted Loss Per Share
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The Company reports basic loss per share in accordance with ASC Topic 260, “Earnings Per Share”. Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common stock outstanding during the period. Diluted loss per share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As the Company generated net losses in the period presented, the basic and diluted loss per share are the same.
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h)
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Income Taxes
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The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. This standard requires the use of an asset and liability approach for financial accounting and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.
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i)
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Recent Accounting Pronouncements
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The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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3.
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CAPITAL STOCK
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During the year ended December 31, 2012, in connection with a private placement of $0.20 shares, the Company received $247,500 as subscriptions for 1,237,500 shares of its common stock. 940,000 shares were issued on October 3, 2013 in connection with $188,000 of those subscriptions, and are included on the Balance Sheet in Shares To Be Issued.
During the nine months ended September 30, 2013, in connection with the $0.20 private placement, the Company received $90,000 as subscriptions for 450,000 shares of its common stock. 250,000 shares were issued on October 3, 2013 and 200,000 on October 25, 2013 in connection with those subscriptions, which are also included on the Balance Sheet in Shares To Be Issued.
During the nine months ended September 30, 2013, the Company reached agreement with a lender to issue 217,500 shares of its common stock to settle $21,750 in loans payable. Those shares were issued on October 3, 2013 and are included on the Balance Sheet in Shares To Be Issued.
The Company has no stock option plan, warrants or other dilutive securities.
9
INTERNATIONAL GOLD CORP.
CONDENSED NOTES TO INTERIM FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(Unaudited)
(Stated in U.S. Dollars)
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4.
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LOANS PAYABLE
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The Company has the following outstanding loans:
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i.
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$5,000: unsecured, bearing interest at 15% per annum, which was due on April 20, 2012. The loan balance remains outstanding to date and the Company intends to renegotiate the repayment terms with the lender. The loan was originally $10,000. During the year ended December 31, 2012, loan principal of $5,000 together with accrued loan interest of $1,000 was converted to a subscription for 120,000 shares of the Company’s common stock. Those shares were issued on July 24, 2012. As at September 30, 2013, the Company has accrued a total of $1,902 in interest payable on this loan.
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ii.
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$75,000: unsecured, bearing interest at 10% per annum, which was due on August 2, 2011. The loan balance remains outstanding to date and the Company intends to renegotiate the repayment terms with the lender. In 2011, the Company issued 250,000 shares of its common stock as additional consideration for receiving the loan. As at September 30, 2013, the Company has accrued a total of $17,179 in interest payable on this loan.
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5.
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RELATED PARTY TRANSACTIONS AND AMOUNTS DUE
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Transactions with related parties were in the normal course of operations and have been valued in these financial statements at the exchange amount, which is the amount of consideration agreed to and established by the related parties.
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a)
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Related Party Amounts Due
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At September 30, 2013, the Company owed a company controlled by its sole director and officer $13,700 (December 31, 2012 - $30,970) which was included in accounts payable.
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At September 30, 2013, the Company had prepaid $8,990 (December 31, 2012 - $43,022) in consulting fees to a company controlled by its sole director and officer.
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b)
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Promissory Notes Due to Related Party
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At December 31, 2012, the Company was indebted for unsecured promissory notes due on demand, bearing interest at 8% per annum, totaling $7,116 including accrued interest of $1,216. The promissory notes were due to a company controlled by the sole director and officer of the Company. Effective January 1, 2013 the Company, its sole director and CEO, and his private company, mutually agreed that all funds due to the CEO and his company would no longer bear interest. Consequently, the promissory notes were reclassified to accounts payable.
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c)
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Consulting Services
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During the nine months ended September 30, 2013, the Company incurred $83,480 (September 30, 2012 - $72,000) in consulting fees to the sole director and officer of the Company. See Note 6.
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6.
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CONTRACTUAL OBLIGATIONS, COMMITMENTS AND SUBSEQUENT EVENTS
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On February 21, 2012, a consulting agreement was fully executed between the Company and another company controlled by the sole director and officer of the Company, effective January 1, 2012 for a term of 48 months, whereby the related company agreed to provide the services of its shareholder as the Company’s CEO, COO, CFO and Corporate Secretary. As compensation, the Company was to pay $90,000 per annum, in equal monthly installments of $7,500, in arrears and plus applicable taxes. The Company also agreed to reimburse reasonable business and/or entertainment and automobile expenses during the duration of the consulting agreement. Effective July 1, 2012, the agreement was revised to amend the compensation to be monthly installments of $9,000 CAD plus applicable taxes, with the 48 month term to commence from the new effective date.
Management has evaluated subsequent events and the impact on the reported results and disclosures and has concluded that no other significant events require disclosure as of the date these financial statements were issued.
10
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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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The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. In addition to historical financial information, the following discussion includes a number of forward-looking statements that reflect our plans, estimates and our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report.
Plan of Operation
We are currently considered a “shell” company inasmuch as we are not generating revenues, do not own an operating business, and have no specific plan other than to engage in a merger or acquisition transaction with an operating company or business. We have no employees and minimal cash.
Our plan is to seek, investigate, and consummate a merger or other business combination, purchase of assets or other strategic transaction with a corporation, partnership, or other operating business entity desiring the perceived advantages of becoming a publicly reporting and publicly held corporation. We have no operating business, and conduct minimal operations necessary to meet regulatory requirements. Our ability to commence any operations is contingent upon obtaining adequate financial resources.
We may consider a business which has recently commenced operations and is seeking to develop a new product or service, or a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering. Alternatively, we may consider acquiring a project that is no longer aligned with the strategic direction of the business in which it was developed.
We are not currently engaged in any business activities that provide cash flow. The costs of meeting our regulatory and reporting requirements, as well as the costs of investigating and analyzing potential business combinations or projects for the next twelve months will need to be funded through sales of our common stock and/or loans.
Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. We have not generated any revenues and no revenues are anticipated until after we engage in a merger or acquisition transaction. We cannot currently estimate the timing of any possible future revenues. We currently have no definitive agreements or understandings with any prospective business combination or project candidates and there are no assurances that we will find a suitable business with which to combine or project to acquire. The implementation of our business objectives is wholly contingent upon a business combination or project acquisition and/or the successful sale of our securities. We intend to utilize the proceeds of any offering, any sales of equity securities or debt securities, bank and other borrowings or a combination of those sources to effect a business combination or project acquisition which we believe has significant growth potential. There is no certainty that we will be able to complete any of those steps. Our only sources for cash at this time are loans, or investments by others in a public offering or a private placement.
We have no employees. The services of our president and CEO, Robert M. Baker, are provided through a consulting agreement effective July 1, 2012 with a company owned by Mr. Baker. We expect to use outside consultants, advisors, attorneys and accountants as necessary, none of whom will be hired on a retainer basis. We do not anticipate hiring any full-time employees so long as we are seeking and evaluating business opportunities.
The time and costs required to select and evaluate a target business or project (including conducting a due diligence review) and to structure and consummate the business combination or project acquisition (including negotiating and documenting relevant agreements and preparing requisite documents for filing pursuant to applicable corporate and securities laws) cannot be determined at this time. Our president will devote such time as he deems reasonably necessary to carry out our business and affairs. The amount of time devoted to our business and affairs may vary significantly depending upon, among other things, whether we have identified a target business or project or are engaged in active negotiation of a business combination or project acquisition.
We anticipate that various prospective target businesses or projects will be brought to our attention from various sources, including securities broker-dealers, investment bankers, venture capitalists, bankers and other members of the financial community.
11
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
|
Termination of Letter of Intent
As disclosed in previous filings, on July 15, 2012, we entered into a Letter of Intent (the “LOI”) with SignalChem Lifesciences Corporation, a private company incorporated in the Province of British Columbia, Canada (“SLC”), with respect to a proposed exchange of all of the issued and outstanding shares of SLC. We were unable to conclude negotiations with SLC and agreed with that company on October 1, 2013 to terminate the LOI.
Limited Operating History; Need for Additional Capital
There is not sufficient historical financial information about us upon which to base an evaluation of our performance. We are considered a shell company and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including, without limitation, the items listed in Item 1A RISK FACTORS in our report filed on Form 10-K for the year ended December 31, 2012.
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue our operations.
Results of Operations
To September 30, 2013
The following summary of our results of operations should be read in conjunction with our financial statements for the period ended September 30, 2013 which are included with this Report.
|
Three Months Ended September 30
|
Change
|
|||||||||||||||
|
2013
|
2012
|
Amount
|
Percentage
|
|||||||||||||
|
Revenue
|
$
|
-
|
$
|
-
|
$
|
-
|
-
|
|||||||||
|
Operating Expenses
|
$
|
42,138
|
$
|
55,873
|
$
|
(13,735
|
)
|
(25%)
|
||||||||
|
Net (Loss) Income
|
$
|
(42,138
|
)
|
$
|
(55,873
|
)
|
$
|
13,735
|
25%
|
|||||||
|
Nine Months Ended September 30
|
Change
|
|||||||||||||||
|
2013
|
2012
|
Amount
|
Percentage
|
|||||||||||||
|
Revenue
|
$
|
-
|
$
|
-
|
$
|
-
|
-
|
|||||||||
|
Operating Expenses
|
$
|
136,915
|
$
|
180,064
|
$
|
(43,149
|
)
|
(24%)
|
||||||||
|
Net (Loss) Income
|
$
|
(136,915
|
)
|
$
|
(180,064
|
)
|
$
|
43,149
|
24%
|
|||||||
Revenues
We have had no operating revenues since our inception on December 9, 2004. We recorded a net loss of $42,138 for the three month period ended September 30, 2013 and have an accumulated deficit of $841,942. We have no way to generate any revenue until after we are able to effect a business combination or project acquisition. The possibility and timing of revenue being generated after that cannot be predicted at this time. There is no assurance that a business combination or project acquisition will be completed.
12
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
|
Expenses – Three months ended September 30, 2013 and 2012
Notable period over period differences are as follows:
|
Three Months Ended September 30
|
Change
|
|||||||||||||||
|
2013
|
2012
|
Amount
|
Percentage
|
|||||||||||||
|
Corporate support services
|
$
|
1,838
|
$
|
8,963
|
$
|
(7,125
|
)
|
(79%
|
)
|
|||||||
|
Interest, bank and finance charges
|
$
|
2,158
|
$
|
4,505
|
$
|
(2,347
|
)
|
(52%
|
)
|
|||||||
|
Transfer and filing fees
|
$
|
1,046
|
$
|
5,224
|
$
|
(4,178
|
)
|
(80%
|
)
|
|||||||
|
|
§
|
Corporate support services decreased as a result of being billed at a lower monthly rate in 2013 than in 2012. Bookkeeping services are no longer included. Those are now billed separately and included in Professional fees.
|
|
|
§
|
Interest, bank and finance charges were lower in 2013 primarily due to a reversal of interest charges on overdue accounts payable.
|
|
|
§
|
Transfer and filing fees decreased due to one-time costs for new XBRL filing requirements in the 2012 quarter.
|
Balance Sheet at September 30, 2013 and December 31, 2012
Items with notable period-end differences are as follows:
|
September 30
|
December 31
|
Change
|
|||||||||||||
|
2013
|
2012
|
Amount
|
Percentage
|
||||||||||||
|
Cash
|
$
|
90
|
$
|
11,282
|
$
|
(11,192
|
)
|
(99%
|
)
|
||||||
|
Amounts receivable
|
$
|
-
|
$
|
9,464
|
$
|
(9,464
|
)
|
(100%
|
)
|
||||||
|
Prepaid consulting fees to related parties
|
$
|
8,990
|
$
|
43,022
|
$
|
(34,032
|
)
|
(79%
|
)
|
||||||
|
Accounts payable and accrued liabilities
|
$
|
59,475
|
$
|
88,069
|
$
|
(28,594
|
)
|
(32%
|
)
|
||||||
|
Loans payable
|
$
|
99,047
|
$
|
92,860
|
$
|
6,187
|
7%
|
||||||||
|
Promissory notes due to related party
|
$
|
-
|
$
|
7,116
|
$
|
(7,116
|
)
|
(100%
|
)
|
||||||
|
|
§
|
Cash decreased due to the amount of cash provided by financing activities being lower than the amount of cash used by operating activities.
|
|
|
§
|
Amounts receivable decreased due to the receipt in the first quarter of 2013 of the final Goods and Services tax refund for which we were eligible. As a non-operating company, we can no longer claim a refund of GST payments. Those amounts are now expensed.
|
|
|
§
|
Prepaid consulting fees to related parties decreased due to an agreement to offset December 31, 2012 prepaid consulting fees against payables.
|
|
|
§
|
Accounts payable and accrued liabilities decreased mainly due to an agreed assignment to our payable account for a related party of various amounts due to a related party, which is our president and/or a company controlled by him.
|
|
|
§
|
Loans payable increased due to an increase in accrued interest.
|
|
|
§
|
Promissory notes due to related party decreased as a result of an agreed assignment of the December 31, 2012 balance to our payable account for a related party.
|
13
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
|
Liquidity and Capital Resources
As of September 30, 2013, our total assets were $9,080 (December 31, 2012: $63,768), comprised of cash of $90 and prepaid fees of $8,990, while our total liabilities were $158,522 (December 31, 2012: $188,045), all of which were current. Our working capital as at September 30, 2013 and December 31, 2012 and the changes between those dates are summarized as follows:
|
September 30
|
December 31
|
Increase/(Decrease)
|
||||||||||||||
|
2013
|
2012
|
Amount
|
Percentage
|
|||||||||||||
|
Current Assets
|
$
|
9,080
|
$
|
63,768
|
$
|
(54,688
|
)
|
(86%
|
)
|
|||||||
|
Current Liabilities
|
158,522
|
188,045
|
(29,523
|
)
|
(16%
|
)
|
||||||||||
|
Working Capital (Deficiency)
|
$
|
(149,442
|
)
|
$
|
(124,277
|
)
|
$
|
(25,165
|
)
|
(20%
|
)
|
|||||
The increase in our working capital deficiency from December 31, 2012 to September 30, 2013 is explained by the changes outlined above for notable Balance Sheet items, all of which are Current Assets or Current Liabilities.
Cash Flows
|
Nine Months Ended September 30
|
Change
|
|||||||||||||||
|
2013
|
2012
|
Amount
|
Percentage
|
|||||||||||||
|
Cash Flows (Used In) Provided By:
|
||||||||||||||||
|
Operating Activities
|
$
|
(121,882
|
)
|
(159,610
|
)
|
37,728
|
(24%)
|
|||||||||
|
Financing Activities
|
110,690
|
159,021
|
(48,331
|
)
|
(30%)
|
|||||||||||
|
Net (decrease) in cash
|
(11,192
|
)
|
(589
|
)
|
(10,603
|
)
|
1,800%
|
|||||||||
|
|
Cash Used In Operating Activities
|
|
|
The decrease in cash used in operating activities of approximately $38,000 is primarily due to the following:
|
|
|
§
|
Operating expenses were lower by approximately $43,000 in the current nine month period than in the equivalent period last year;
|
|
|
§
|
The 2013 Amounts receivable decrease was approximately $28,000 higher than in 2012;
|
|
|
§
|
Prepaid expenses decreased approximately $34,000; and
|
|
|
§
|
The above items were offset by the Accounts payable decrease, which was higher in the 2013 period by approximately $67,000.
|
Cash Provided By Financing Activities
|
|
The decrease of approximately $48,000 in cash provided by financing activities was due to:
|
|
|
§
|
loan advances in 2013 of approximately $21,000, compared to none in the same period in 2012; and
|
|
|
§
|
a decrease between the same periods in repayments to related parties of approximately $52,000; offset by
|
|
|
§
|
the receipt of subscriptions for our common stock being lower in 2013 than in the same period in 2012 by approximately $121,000.
|
As of the date of this quarterly report, we have yet to generate any revenues from our business operations. Our ability to generate adequate amounts of cash to meet our needs is entirely dependent on the issuance of shares, debt securities, or loans.
Our principal source of working capital has been in the form of loans and capital contributions from our shareholders or management, loans from third parties, and funds received as subscriptions for our common stock. For the foreseeable future, we will have to continue to rely on those sources for funding. We have no assurance that we can successfully engage in any further private sales of our securities or that we can obtain any additional loans.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
14
|
ITEM 4.
|
CONTROLS AND PROCEDURES.
|
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our Disclosure Controls were effective as of the end of the period covered by this report.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
|
ITEM 1A.
|
RISK FACTORS
|
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item. Our business is subject to risks inherent in the establishment of a new business enterprise, including, without limitation, the items listed in Item 1A RISK FACTORS in our report filed on Form 10-K for the year ended December 31, 2012.
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
We had no sales of unregistered securities during the three months ended September 30, 2013.
Subsequent to September 30, 2013, we issued 1,390,000 shares of our common stock as follows:
On October 3, 2013, in connection with $188,000 of subscriptions received during the year ended December 31, 2012, we issued 940,000 shares of our common stock.
Also on October 3, 2013, in connection with $50,000 of subscriptions received in the first six months of 2013, we issued 250,000 shares of our common stock.
On October 25, 2013, in connection with $40,000 of subscriptions received in the first six months of 2013, we issued 200,000 shares of our common stock.
850,000 of the above shares were part of a private placement of securities to offshore subscribers pursuant to Regulation S of the Securities Act of 1933. The subscribers represented that they are not a US person, as defined in Regulation S. No compensation was or will be paid in connection with these subscriptions.
The remaining 540,000 of the above shares were a private placement of securities to a US subscriber pursuant to Rule 506 of Regulation D of the Securities Act of 1933. The subscriber represented that they were an accredited investor. No compensation was or will be paid in connection with this subscription.
15
|
ITEM 6.
|
EXHIBITS.
|
The following documents are included herein:
|
Exhibit No.
|
Document Description
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
16
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 18th day of November, 2013
|
INTERNATIONAL GOLD CORP.
|
|||
|
BY:
|
“Robert M. Baker”
|
||
|
Robert M. Baker
|
|||
|
President, Principal Executive Officer, Treasurer, Principal Financial Officer, Principal Accounting Officer, and sole member of the Board of Directors
|
|||
17
EXHIBIT INDEX
|
Exhibit No.
|
Document Description
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
18