UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended February 28 , 2017

Or

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  ________________to ________________

Commission File Number 000-54327

 
FIRST AMERICAN SILVER CORP.
(Exact name of registrant as specified in its charter)

Nevada
 
98-0579157
(State or other jurisdiction of incorporation or organization)
 
(IRS Employer Identification No.)
     
1031 Railroad St., Ste 102B, Elko, NV 89801 USA
 
99623
(Address of principal executive offices)
 
(Zip Code)

775-287-1664
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] YES [  ] NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 [X] NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) [X] YES [  ] NO
 
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. [  ] YES [  ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

62,892,211 common shares issued and outstanding as of May 10, 2017
 

TABLE OF CONTENTS

 
PART I - FINANCIAL INFORMATION
 
     
Item 1.
Financial Statements
3
     
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
5
     
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
9
     
Item 4.
Controls and Procedures
9
     
PART II - OTHER INFORMATION
 
     
Item 1.
Legal Proceedings
10
     
Item 1A.
Risk Factors
10
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
10
     
Item 3.
Defaults Upon Senior Securities
10
     
Item 4.
Mine Safety Disclosures
10
     
Item 5.
Other Information
10
     
Item 6.
Exhibits
10
     
SIGNATURES
 
12

 
2
 
PART I - FINANCIAL INFORMATION
 
Item 1. Financial Statements
 
Our unaudited interim financial statements for the three month period ended February 28, 2017 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
 

 
3


FIRST AMERICAN SILVER CORP.

TABLE OF CONTENTS

FEBRUARY 28, 2017


Condensed Balance Sheets as of February 28, 2017 and November 30, 2016 (unaudited)
5
   
Condensed Statements of Operations for the three months ended  February 28, 2017 and 2016 (unaudited)
6
   
Condensed Statements of Cash Flows for the three months ended February 28, 2017 and 2016 (unaudited)
7
   
Notes to the Condensed Financial Statements (unaudited)
8
 

 
4

FIRST AMERICAN SILVER CORP.
CONDENSED BALANCE SHEETS (unaudited)


 
 
February 28,
2017
   
November 30,
2016
 
ASSETS
           
             
Current Asset
           
Prepaid expenses
 
$
4,995
   
$
592
 
Total Current Assets
   
4,995
     
592
 
                 
Other Asset
               
Reclamation bond
   
591
     
591
 
Total Other Assets
   
591
     
591
 
                 
Total Assets
 
$
5,586
   
$
1,183
 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
               
                 
Current Liabilities
               
Accounts payable
 
$
153,692
   
$
155,359
 
Accrued expenses
   
19,692
     
13,717
 
Due to related party
   
26,717
     
26,717
 
Loan payable
   
8,100
     
8,100
 
Notes payable – current portion
   
306,866
     
297,866
 
                 
Total Liabilities
   
515,067
     
501,759
 
                 
Stockholders’ Equity (Deficit)
               
Preferred stock, par value $0.001, 20,000,000 shares authorized, no shares issued and outstanding
   
-
     
-
 
Common stock, par value $0.001, 3,500,000,000 shares authorized, 62,892,211 shares issued and outstanding (2016 - 62,892,211)
   
62,892
     
62,892
 
Additional paid-in capital
   
1,169,618
     
1,169,618
 
Common stock payable
   
15,120
     
15,120
 
Accumulated deficit
   
(1,757,111
)
   
(1,748,206
)
Total Stockholders’ Equity (Deficit)
   
(509,481
)
   
(500,576
)
                 
Total Liabilities and Stockholders' Equity (Deficit)
 
$
5,586
   
$
1,183
 




The accompanying notes are an integral part of these financial statements.
5

FIRST AMERICAN SILVER CORP.
CONDENSED STATEMENTS OF OPERATIONS (unaudited)


   
Three Months
Ended
February 28,
2017
   
Three Months
Ended
February 29,
2016
 
                 
REVENUES
 
$
-
   
$
-
 
                 
OPERATING EXPENSES
               
Accounting and legal
   
1,718
     
4,000
 
Consulting fees
   
-
     
21,277
 
Transfer agent and filing fees
   
1,196
     
574
 
General and administrative
   
16
     
-
 
TOTAL OPERATING EXPENSES
   
2,930
     
25,851
 
                 
LOSS FROM OPERATIONS
   
(2,930
)
   
(25,851
)
                 
OTHER INCOME (EXPENSES)
               
Interest expense
   
(5,975
)
   
(6,234
)
TOTAL OTHER INCOME (EXPENSE)
   
(5,975
)
   
(6,234
)
                 
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX
   
(8,905
)
   
(32,085
)
                 
PROVISION FOR INCOME TAX
   
-
     
-
 
                 
NET INCOME (LOSS)
 
$
(8,905
)
 
$
(32,085
)
                 
LOSS PER SHARE: BASIC AND DILUTED
 
$
(0.00
)
 
$
(0.00
)
                 
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED
   
62,892,211
     
62,295,733
 




The accompanying notes are an integral part of these financial statements.
6

FIRST AMERICAN SILVER CORP.
 CONDENSED STATEMENTS OF CASH FLOWS (unaudited)


   
Three Months
Ended
February 28,
2017
   
Three Months
Ended
February 29,
2016
 
CASH FLOWS FROM OPERATING ACTIVITIES
           
Net loss for the period
 
$
(8,905
)
 
$
(32,085
)
Adjustments to Reconcile Net Loss to Net Cash Provided by (Used in) Operating Activities:
               
Stock issued for loan extension fees and services
   
-
     
13,777
 
Changes in operating assets and liabilities:
               
Prepaid expenses
   
-
     
2,068
 
Accounts payable
   
(1,667
)
   
7,774
 
Accrued expenses
   
5,975
     
4,166
 
Net Cash Used in Operating Activities
   
(4,597
)
   
(4,300
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Proceeds from notes payable
   
9,000
     
4,000
 
Due to related party
   
-
     
300
 
Net Cash Used in Operating Activities
   
9,000
     
4,300
 
                 
Net Increase (Decrease) in Cash and Cash Equivalents
   
4,403
     
-
 
Cash and Cash Equivalents, Beginning of Period
   
592
     
-
 
                 
Cash and Cash Equivalents, End of Period
 
$
4,995
   
$
-
 
                 
SUPPLEMENTAL CASH FLOW INFORMATION:
               
Cash paid for income taxes
 
$
-
   
$
-
 
Cash paid for interest
 
$
-
   
$
-
 




The accompanying notes are an integral part of these financial statements
7

FIRST AMERICAN SILVER CORP.
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
FEBRUARY 28, 2017 (Unaudited)


NOTE 1 – NATURE OF OPERATIONS

Mayetok, Inc. (“the Company”) was incorporated in the state of Nevada on April 29, 2008. On June 8, 2010, the Company changed its name to First American Silver Corp.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Exploration Stage Company
On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued update ASU 2014-10, Development Stage Entities (Topic 915).   Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US GAAP.  In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and shareholders equity, (2) label the financial statements as those of a development stage entity;  (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.  The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015, however entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued.  The Company has elected to early adopt these amendments and accordingly have not labeled the financial statements as those of a development stage entity and have not presented inception-to-date information on the respective financial statements.

Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

Accounting Basis
The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted a November 30 fiscal year end.

Risks and Uncertainties
The Company's operations are subject to significant risk and uncertainties including financial, operational, technological, and regulatory risks including the potential risk of business failure.  See Note 6 regarding going concern matters.

Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.  At February 28, 2017 and November 30, 2016, respectively, the Company had $4,995 and $592 of unrestricted cash to be used for future business operations.

The Company's bank accounts are deposited in insured institutions. The funds are insured up to $250,000. At times, the Company's bank deposits may exceed the insured amount.  Management believes it has little risk related to the excess deposits.

Fair Value of Financial Instruments
The Company's financial instruments consist of cash, prepaid expenses, accounts payable, accrued expenses, notes payable, and note payable-related party. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
8

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Concentrations of Credit Risk
The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.

Stock-Based Compensation
The Company accounts for employee stock-based compensation in accordance with the guidance of ASC Topic 718, Compensation – Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. There has been no stock-based compensation issued to employees.

The Company follows ASC Topic 505-50, formerly EITF 96-18, “ Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services ,” for stock options and warrants issued to consultants and other non-employees.  In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined.  The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.

Income Taxes
Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of February 28, 2017, there have been no interest or penalties incurred on income taxes.

Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Revenue Recognition
The Company is in the exploration stage and has yet to realize revenues from operations.  Once the Company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.

Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.
9

NOTE 3 – NOTES PAYABLE

Notes payable consisted of the following at February 28, 2017:

Date of Note
 
Note Amount
   
Interest Rate
   
 
Maturity Date
 
 
Collateral
 
Interest Accrued
 
                                 
May 1, 2016
 
$
292,866
     
8
%
 
May 1, 2017
 
None
 
$
19,449
 
October 20, 2016
 
$
5,000
     
8
%
 
October 20, 2017
 
None
 
$
143
 
January 9, 2017
 
$
9,000
     
8
%
 
January 9, 2018
 
None
 
$
100
 
Total
 
$
306,866
                     
$
19,692
 

Notes payable transactions during the period-ended February 28, 2017 consisted of the following:

Balance, November 30, 2016
 
$
297,866
 
Borrowings
   
9,000
 
Balance, February 28, 2017
 
$
306,866
 

NOTE 4 – RELATED PARTY TRANSACTIONS

The Company paid consulting fees totaling $0 and $21,277 to related parties for the periods ended February 28, 2017 and February 29, 2016, respectively.

NOTE 5 – CAPITAL STOCK

The Company has 20,000,000 preferred shares authorized at a par value of $0.001 per share.

The Company has 3,500,000,000 common shares authorized at a par value of $0.001 per share.

On February 16, 2016, the Company issued 769,315 shares to its president valued at $4,231 based on the stock closing price on the date of the grant.

On April 20, 2016, the Company issued 72,329 share to its former president valued at $362 based on the stock closing price on the date of the grant.
 
NOTE 6 – GOING CONCERN

The accompanying financial statements have been prepared assuming that First American Silver, Inc. will continue as a going concern.  The Company has a working capital deficit, has not yet received revenue from sales of products or services, and has incurred losses from operations.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Without realization of additional debt or capital, it would be unlikely for the Company to continue as a going concern.  The financial statements do not include any adjustments that might result from this uncertainty.

The Company’s activities to date have been supported by debt and equity financing.  It has sustained losses in all previous reporting periods with an inception to date loss of approximately $1,757,000 as of February 28, 2017. Management continues to seek funding from its shareholders and other qualified investors.

NOTE 7 – SUBSEQUENT EVENTS

On April 24, 2017, the Company entered into an agreement for a promissory note in the amount of $10,000.  The promissory note is unsecured and accrues interest at 10% per annum on the unpaid principal balance.  The promissory note is payable on or before April 24, 2018.
 
In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to the date these financial statements were issued, and has determined that, other than those events mentioned above, it does not have any material subsequent events to disclose in these financial statements.
 
10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
 
FORWARD LOOKING STATEMENTS
 
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
 
Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
 
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
 
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
 
As used in this quarterly report, the terms “we”, “us”, “our” and “our company” mean First American Silver Corp., unless otherwise indicated.
 
General Overview
 
We were incorporated in the State of Nevada on April 29, 2008, under the name "Mayetok, Inc.".  As Mayetok, Inc. we were engaged in the development of a website to market vacation properties in the Ukraine.
 
On June 8, 2010, we initiated a one (1) old for 35 new forward stock split of our issued and outstanding common stock. As a result, our authorized capital increased from 100,000,000 to 3,500,000,000 shares of common stock and the issued and outstanding increased from 2,200,000 shares of common stock to 77,000,000 shares of common stock, all with a par value of $0.001.
 
Also on June 8, 2010, we changed our name from "Mayetok, Inc." to "First American Silver Corp.", by way of a merger with our wholly owned subsidiary First American Silver Corp., which was formed solely for the change of name. We changed the name of our company to reflect the new direction of our company in the business of acquiring, exploring and developing mineral properties. As of June 2010, we had abandoned our former business plan of seeking to market vacation properties.
 
Our name change and forward stock split became effective with the Over-the-Counter Bulletin Board at the opening of trading on June 16, 2010, on which date we adopted the new stock symbol "FASV".
 
Our Current Business
 
In 2014, we abandoned our mineral property business and initiated efforts to enter a new line of business. To-date, although our company has engaged in a number of negotiations in respect of new business lines, we have not yet consummated any transactions or started any new commercial activities.
 
11

 
Results of Operations
 
Three Months Ended February 28, 2017 Compared to the Three Months Ended February 29, 2016
 
We had a net loss of $8,905 for the three month period ended February 28, 2017, which was $23,180 less than the net loss of $32,085 for the three month period ended February 29, 2016. The change in our results over the two periods is a result of decrease in consulting fees during the current period.
 
The following table summarizes key items of comparison and their related increase (decrease) for the three month periods ended February 28, 2017 and February 29, 2016:
 
   
Three Months
Ended
February 28,
2017
   
Three Months
Ended
February,
2016
   
Change Between
Three Month
Periods Ended
February 28, 2017
and February 29,
2016
 
                         
Accounting and legal
 
$
1,718
   
$
4,000
   
$
(2,282
)
Consulting fees
   
-
     
21, 277
     
(21,277
)
Transfer agent and filing fees
   
1,196
     
574
     
622
 
General and administrative
   
16
     
-
     
16
 
Interest/Other (income) expense
   
5,975
     
6,234
     
(259
)
Net loss
 
$
(8,905
)
 
$
(32,085
)
 
$
(23,180
)
 
Revenue
 
We have not earned any revenues since our inception and we do not anticipate earning revenues in the upcoming quarter.
 
Liquidity and Capital Resources
 
Our balance sheet as of February 28, 2017 reflects current assets of $5,586.  We had cash in the amount of $4,995 and working capital in the amount of $510,072 as of February 28, 2017. We have sufficient working capital to enable us to carry out our stated plan of operation for the next twelve months.
 
Working Capital
 
   
At
February 28,
2017
   
At
November 30,
2016
 
                 
Current assets
 
$
4,995
   
$
592
 
Current liabilities
   
515,067
     
501,759
 
Working capital
 
$
(510,072
)
 
$
(501,167
)
 
We anticipate generating losses and, therefore, may be unable to continue operations further in the future.
 
12

 
Cash Flows
 
    Three Months Ended  
   
February 28.
2017
   
February 29.
2016
 
                 
Net cash (used in) operating activities
 
$
(4,597
)
 
$
(4,300
)
Net cash (used in) investing activities
   
-
     
-
 
Net cash provided by (used in) financing activities
   
9,000
     
4,300
 
Net (decrease) in cash during period
 
$
4,403
   
$
-
 
 
Operating Activities
 
Net cash used in operating activities during the three months ended February 28, 2017 was $4,597, an increase of $297 from the $4,300 net cash outflow during the three months ended February 29, 2016.
 
Financing Activities
 
Cash provided by financing activities during the three months ended February 28, 2017 was $9,000 as compared to $4,300 in cash provided by financing activities during the three months ended February 29, 2016.
 
We estimate that our operating expenses and working capital requirements for the next 12 months to be as follows:
 
Estimated Net Expenditures During The Next Twelve Months
 
General and administrative expenses
 
$
10,000
 
Professional fees
 
$
14,000
 
Total
 
$
24,000
 
 
To date we have relied on proceeds from the sale of our shares in order to sustain our basic, minimum operating expenses; however, we cannot guarantee that we will secure any further sales of our shares.  We estimate that the cost of maintaining basic corporate operations (which includes the cost of satisfying our public reporting obligations) will be approximately $2,000 per month.   Due to our current cash position of approximately $4,995 as of February 28, 2017, we estimate that we have sufficient cash to sustain our basic operations for the next twelve months.
 
We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way.
 
Future Financings
 
We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.
 
We presently do not have any arrangements for additional financing for the expansion of our exploration operations, and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with our plan of operations.
 
Off-Balance Sheet Arrangements
 
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, and capital expenditures or capital resources that are material to stockholders.
 
13

 
Critical Accounting Policies
 
Exploration Stage Company

On June 10, 2014, the Financial Accounting Standards Board ("FASB") issued update ASU 2014-10, Development Stage Entities (Topic 915).   Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from US GAAP.  In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and shareholders equity, (2) label the financial statements as those of a development stage entity;  (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.  The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015, however entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued.  The Company has elected to early adopt these amendments and accordingly have not labeled the financial statements as those of a development stage entity and have not presented inception-to-date information on the respective financial statements.

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted a November 30 fiscal year end.

Risks and Uncertainties

The Company's operations are subject to significant risk and uncertainties including financial, operational, technological, and regulatory risks including the potential risk of business failure.  See Note 6 regarding going concern matters.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.  At February 28, 2017 and November 30, 2016, respectively, the Company had $4,995 and $592 of unrestricted cash to be used for future business operations.

The Company's bank accounts are deposited in insured institutions. The funds are insured up to $250,000. At times, the Company's bank deposits may exceed the insured amount.  Management believes it has little risk related to the excess deposits.

Fair Value of Financial Instruments

The Company's financial instruments consist of cash, prepaid expenses, accounts payable, accrued expenses, notes payable, and note payable-related party. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Concentrations of Credit Risk

The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents.
14

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with the guidance of ASC Topic 718, Compensation – Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. There has been no stock-based compensation issued to employees.

The Company follows ASC Topic 505-50, formerly EITF 96-18, “ Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services ,” for stock options and warrants issued to consultants and other non-employees.  In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined.  The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.

Income Taxes

Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of February 28, 2017, there have been no interest or penalties incurred on income taxes.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Revenue Recognition

The Company is in the exploration stage and has yet to realize revenues from operations.  Once the Company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk
 
As a “smaller reporting company”, we are not required to provide the information required by this Item.
 
Item 4. Controls and Procedures
 
Management’s Report on Disclosure Controls and Procedures
 
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.
 
15
 
As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.
 
C hanges in Internal Control Over Financial Reporting
 
During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
PART II - OTHER INFORMATION
 
Item 1. Legal Proceedings
 
We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, executive officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
 
Item 1A. Risk Factors
 
As a “smaller reporting company”, we are not required to provide the information required by this Item.
 
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 
None.
 
Item 3. Defaults Upon Senior Securities
 
None.
 
Item 4. Mine Safety Disclosures
 
Not applicable.
 
Item 5. Other Information
 
None.
 
16

 
Item 6. Exhibits
 
Exhibit
Number
 
Description
      
(3)
 
(i) Articles of Incorporation; (ii) By-laws
      
3.1
 
Articles of Incorporation (Incorporated by reference to our Registration Statement filed on Form S-1 on February 25, 2009).
      
3.2
 
By-laws (Incorporated by reference to our Registration Statement filed on Form S-1 on February 25, 2009)
      
3.3
 
Certificate of Amendment (Incorporated by reference to our Registration Statement filed on Form S-1 on February 25, 2009).
      
3.4
 
Articles of Merger (Incorporated by reference to our Current Report filed on Form 8-K on July 15, 2010).
      
3.5
 
Certificate of Change (Incorporated by reference to our Current Report filed on Form 8-K on July 15, 2010).
      
(10)
 
Material Contracts
      
10.1
 
Property Option Agreement between our company and All American Resources LLC with respect to the Mountain City claim dated November 26, 2010 (Incorporated by reference to our Current Report filed on Form 8-K on December 21, 2010).
      
10.2
 
Property Option Agreement between our company and All American Resources LLC with respect to the Eagan Canyon claim dated November 26, 2010 (Incorporated by reference to our Current Report filed on Form 8-K on December 21, 2010).
      
10.3
 
Property Option Agreement between our company and All American Resources LLC with respect to the Muncy Creek claim dated November 26, 2010 (Incorporated by reference to our Current Report filed on Form 8-K on December 21, 2010).
      
10.4
 
Mining Lease and Option to Purchase Agreement between our company, Pyramid Lake LLC and Anthony A. Longo dated April 15, 2011 (Incorporated by reference to our Current Report filed on Form 8-K on May 17, 2011).
      
10.5
 
License and Assignment Agreement between Thomas J. Menning and our company dated September 16, 2011(incorporated by reference to our Current Report filed on Form 8-K on October 14, 2011).
      
10.6
 
2011 Stock Option Plan (incorporated by reference to our Current Report filed on Form 8-K on November 14, 2011).
      
10.8
 
Foxglove Promissory Note dated June 28, 2015 (incorporated by reference to our Quarterly Report filed on Form 10-Q on October 14, 2015).
      
10.9
 
$7,000 Convertible Promissory Note dated October 15, 2015 issued to Consorcio Empresarial Vesubio SA  (incorporated by reference to our Quarterly Report filed on Form 10-Q on October 14, 2015).
      
(31)
 
Rule 13a-14(a) / 15d-14(a) Certifications
      
31.1*
 
Certification pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer.
      
(32)
 
Section 1350 Certifications
      
32.1*
 
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer.
      
101*
 
Interactive Data File
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
 
XBRL Instance Document
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Extension Calculation Linkbase Document
XBRL Taxonomy Extension Definition Linkbase Document
XBRL Taxonomy Extension Label Linkbase Document
XBRL Taxonomy Extension Presentation Linkbase Document
 
* Filed herewith
 
17

 
 
SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
   
FIRST AMERICAN SILVER CORP.
   
(Registrant)
     
     
Dated:  May 10, 2017
 
/s/ Brian Goss
 
   
Brian Goss
   
President, Chief Executive Officer, Treasurer, Secretary and Director
   
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

 

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