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

Form 10-Q/A
(Amendment No. 1)

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

For the quarterly period ended August 31, 2019

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
 
CENTURY COBALT CORP.
(Exact name of registrant as specified in its charter)

Nevada
98-0579157
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 
 
10100 Santa Monica Blvd., Suite 300, Century City, Los Angeles, CA
90067
(Address of principal executive offices)
(Zip Code)

(310) 772-2209
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading Symbol(s)
 
Name of exchange on which registered
Common Stock
 
CCOB
 
OTCQB
Preferred Stock
 
N/A
 
N/A

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes  ☐   No ☒

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

Large accelerated filer  ☐
 
Accelerated filer ☐
Non-Accelerated filer ☒
Smaller reporting company ☒
Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 77,248,120 Common shares issued and outstanding as of October 15, 2019
 

Explanatory Not

The purpose of this Amendment No. 1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2019, filed with the Securities and Exchange Commission on October 15, 2019 (the "Form 10-Q"), is solely to furnish Exhibit 101 to the Form 10-Q.  Exhibit 101 provides the financial statements and related notes from the Form 10-Q formatted in XBRL (Extensible Business Reporting Language)

No other changes have been made to the Form 10-Q.  This Amendment No. 1 to the Form 10-Q continues to speak as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.

Pursuant to rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Act of 1934, as amended, and otherwise are not subject to liability under those sections.


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
16
 
 
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
20
 
 
 
Item 4.
Controls and Procedures
20
 
 
 
PART II - OTHER INFORMATION
 
 
 
 
Item 1.
Legal Proceedings
21
 
 
 
Item 1A.
Risk Factors
21
 
 
 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
21
 
 
 
Item 3.
Defaults Upon Senior Securities
22
 
 
 
Item 4.
Mine Safety Disclosures
22
 
 
 
Item 5.
Other Information
22
 
 
 
Item 6.
Exhibits
22
 
 
 
SIGNATURES
 
23
 
2
PART I - FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
Our unaudited interim financial statements for the nine-month period ended August 31, 2019 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
 CENTURY COBALT CORP.
(FORMERLY FIRST AMERICAN SILVER CORP.)
CONSOLIDATED BALANCE SHEETS


   
August 31, 2019
   
November 30, 2018
 
   
(Unaudited)
       
Assets
           
Current assets:
           
Cash
 
$
48,020
   
$
1,172
 
Prepaid expenses
   
17,890
     
10,787
 
Total current assets
   
65,910
     
11,959
 
                 
Other assets
               
                 
Resource property
   
380,910
     
248,000
 
Total other assets
   
380,910
     
248,000
 
                 
Total Assets
 
$
446,820
   
$
259,959
 
                 
Liabilities and Stockholders' Equity (Deficit)
               
                 
Current liabilities:
               
Accounts payable
 
$
163,202
   
$
81,280
 
Accounts payable - related parties
   
62,689
     
27,870
 
Accrued interest
   
28,138
     
3,415
 
Accrued interest - related parties
   
31,184
     
71,231
 
Due to related parties
   
68,923
     
95,640
 
Notes payable - current portion
   
41,700
     
10,000
 
Notes payable to related parties - current portion
   
195,000
     
467,866
 
Total current liabilities
   
590,836
     
757,302
 
                 
Long term liabilities:
               
Notes payable
   
132,875
     
114,575
 
Notes payable to related parties
   
72,500
     
20,500
 
Convertible note, net of discount of $11,200 and $-0- at August 30, 2019
               
and November 30, 2018, respectively
   
178,825
     
-
 
Total long term liabilities
   
384,200
     
135,075
 
                 
Total liabilities
   
975,036
     
892,377
 
                 
Commitments and contingencies
               
                 
Stockholders' equity (deficit):
               
Preferred stock, $0.001 par value; 20,000,000 shares authorized,
               
-0- preferred stock shares issued  and outstanding as of August 31, 2019 and November 30, 2018
   
-
     
-
 
Common stock, $0.001 par value, 3,500,000,000 shares authorized,
               
77,248,120 and 74,142,211 issued and outstanding as of  August 31, 2019 and November 30, 2018, respectively
   
77,248
     
74,142
 
Additional paid-in capital
   
2,181,754
     
1,815,625
 
Common stock payable
   
157,128
     
55,120
 
Accumulated deficit
   
(2,944,346
)
   
(2,577,305
)
Total stockholders' equity (deficit)
   
(528,216
)
   
(632,418
)
                 
Total Liabilities and Stockholders' equity (deficit)
 
$
446,820
   
$
259,959
 




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

4
CENTURY COBALT CORP.
(FORMERLY FIRST AMERICAN SILVER CORP.)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


   
For the Three Months Ended
   
For the Nine Months Ended
 
   
August 31, 2019
   
August 31, 2018
   
August 31, 2019
   
August 31, 2018
 
          (Restated)
          (Restated)  
Operating expenses:
                       
Accounting and legal
 
$
4,255
   
$
21,222
   
$
32,941
   
$
40,133
 
Transfer agent and filing fees
   
6,866
     
5,196
     
17,147
     
10,730
 
Consulting
   
115,025
     
309,488
     
186,513
     
343,943
 
Exploration
   
-
     
9,842
     
32,923
     
9,842
 
General and administrative
   
19,758
     
35,886
     
62,604
     
51,297
 
Total operating expenses
   
145,904
     
381,634
     
332,128
     
455,945
 
                                 
Net operating income (loss)
   
(145,904
)
   
(381,634
)
   
(332,128
)
   
(455,945
)
                                 
Other income (expense):
                               
Interest expense
   
(24,759
)
   
(11,954
)
   
(49,164
)
   
(25,144
)
Debt forgiveness
   
-
     
-
     
14,251
     
100,000
 
Total Other income (expense)
   
(24,759
)
   
(11,954
)
   
(34,913
)
   
74,856
 
                                 
Net income (loss)
 
$
(170,663
)
 
$
(393,588
)
 
$
(367,041
)
 
$
(381,089
)
                                 
Basic and diluted income (loss) per share
 
$
(0.00
)
 
$
(0.01
)
 
$
(0.00
)
 
$
(0.01
)
                                 
Weighted average number of common
                               
shares outstanding - basic and diluted
   
77,248,120
     
63,490,037
     
76,806,038
     
63,092,941
 




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

5
CENTURY COBALT CORP.
(FORMERLY FIRST AMERICAN SILVER CORP.)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) - (UNAUDITED)


   
Common Stock
   
Preferred Stock
   
Additional
    Common          
During
   
Total
 
                           
Paid-In
   
 Stock
   
Accumulated
   
Development
   
Stockholders'
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
Payable
   
Deficit
   
Stage
   
Deficiency
 
                                                       
For the nine months ended August 31, 2018
                                                 
                                                       
Balance at November 28, 2017
   
62,892,211
   
$
62,892
     
-
   
$
-
   
$
1,206,875
   
$
15,120
     
(1,800,868
)
 
$
-
   
$
(515,981
)
Shares issued for mineral properties
   
2,500,000
     
2,500
                     
97,500
                     
-
     
100,000
 
Common Stock to be issued
                                           
290,000
             
-
     
290,000
 
Net loss
                                                   
(381,089
)
   
-
     
(381,089
)
                                                                         
Balance at August 31, 2018 (unaudited)
   
65,392,211
   
$
65,392
     
-
   
$
-
   
$
1,304,375
   
$
305,120
     
(2,181,957
)
 
$
-
   
$
(507,070
)
                                                                         
For the three months ended August 31, 2018
                                                                 
                                                                         
Balance at May 31, 2018
   
62,892,211
   
$
62,892
     
-
   
$
-
   
$
1,206,875
   
$
15,120
     
(1,788,369
)
 
$
-
   
$
(503,482
)
Shares issued for mineral properties
   
2,500,000
     
2,500
                     
97,500
                     
-
     
100,000
 
Common Stock to be issued
                                           
290,000
             
-
     
290,000
 
Net loss
                                                   
(393,588
)
   
-
     
(393,588
)
                                                                         
Balance at August 31, 2018 (unaudited)
   
65,392,211
   
$
65,392
     
-
   
$
-
   
$
1,304,375
   
$
305,120
     
(2,181,957
)
 
$
-
   
$
(507,070
)
                                                                         
For the nine months ended August 31, 2019
                                                                 
                                                                         
Balance at November 30, 2018
   
74,142,211
   
$
74,142
     
-
   
$
-
   
$
1,815,625
   
$
55,120
     
(2,577,305
)
 
$
-
   
$
(632,418
)
Shares issued for services
   
3,105,909
     
3,106
                     
353,475
     
-
             
-
     
356,581
 
Shares payable for services
                                           
102,008
                     
102,008
 
Discount on shares issued for notes payable
                                   
12,654
     
-
             
-
     
12,654
 
Net loss
                                                   
(367,041
)
   
-
     
(367,041
)
                                                                         
Balance at August 31, 2019 (unaudited)
   
77,248,120
   
$
77,248
     
-
   
$
-
   
$
2,181,754
   
$
157,128
     
(2,944,346
)
 
$
-
   
$
(528,216
)
                                                                         
For the three months ended August 31, 2019
                                                                 
                                                                         
Balance at May 31, 2019
   
77,248,120
   
$
77,248
     
-
   
$
-
   
$
2,163,128
   
$
85,120
     
(2,773,682
)
 
$
-
   
$
(448,186
)
Shares issued for services
   
-
     
-
                     
5,972
                     
-
     
5,972
 
Shares payable for services
                                           
72,008
             
-
     
72,008
 
Discount on shares issued for notes payable
                                   
12,654
                     
-
     
12,654
 
Net loss
                                                   
(170,664
)
   
-
     
(170,664
)
                                                                         
Balance at August 31, 2019 (unaudited)
   
77,248,120
   
$
77,248
     
-
   
$
-
   
$
2,181,754
   
$
157,128
     
(2,944,346
)
 
$
-
   
$
(528,216
)




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

6
CENTURY COBALT CORP.
(FORMERLY FIRST AMERICAN SILVER CORP.)
STATEMENTS OF CASH FLOW (UNAUDITED)


    For the Nine Months Ended       
   
August 31, 2019
   
August 31, 2018
 
          (Restated)  
Cash flows from operating activities:
           
Net income (loss)
 
$
(367,041
)
 
$
(381,089
)
Adjustments to reconcile net loss to net cash used in operating activities:
               
Write off reclamation bond
   
-
     
591
 
Stock based compensation
   
113,086
     
250,000
 
Debt discount interest
   
1,454
     
-
 
Forgiveness of debt
   
(14,250
)
   
(100,000
)
Changes in operating assets and liabilities:
               
Prepaid expenses
   
(3,251
)
   
(15,071
)
Accounts payable
   
55,206
     
63,270
 
Accounts payable expenses - related parties
   
34,819
     
33,290
 
Accrued expenses
   
24,723
     
24,258
 
Accrued expenses - related parties
   
22,987
     
886
 
Due to related parties
   
-
     
51,789
 
Net cash used in operating activities
   
(132,267
)
   
(72,076
)
                 
Cash flows from investing activities:
               
Acquisition of resource properties
   
(132,910
)
   
(108,000
)
Net cash used in investing activities
   
(132,910
)
   
(108,000
)
                 
Cash flows from financing activities
               
Proceeds from notes payable - current portion
   
-
     
41,700
 
Proceeds from notes payable to related parties - current portion
   
20,000
     
138,000
 
Proceeds from notes payable - long term portion
   
50,000
     
-
 
Proceeds from notes payable to related parties - long term portion
   
52,000
     
-
 
Proceeds from convertible notes payable - long term portion
   
190,025
     
-
 
Net cash provided by financing activities
   
312,025
     
179,700
 
                 
Net increase (decrease) in cash
   
46,848
     
(376
)
Cash - beginning of the year
   
1,172
     
541
 
Cash - end of the year
 
$
48,020
   
$
165
 
                 
Supplemental disclosures:
               
Interest paid
 
$
-
   
$
-
 
Income taxes
 
$
-
   
$
-
 
                 
Non-cash transactions:
               
Stock Compensation
 
$
113,086
   
$
250,000
 




The accompanying notes are an integral part of these financial statements.
 
7
 CENTURY COBALT CORP.
 (FORMERLY FIRST AMERICAN SILVER CORP.)
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AUGUST 31, 2019
 

NOTE 1 – NATURE OF OPERATIONS

Century Cobalt Corp. (formerly First American Silver Corp.) was incorporated in the state of Nevada on April 29, 2008.  The Company’s principal office is located at 10100 Santa Monica Boulevard, Suite 300, Century City, California 90067.  The Company’s principal business activity is the identification and exploration of mineral properties for the purposes of discovering economical cobalt assets.

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 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 Company’s unaudited condensed consolidated financial statements have been prepared on an accrual basis of accounting, in conformity with accounting principles generally accepted in the United States of America (US GAAP) for interim financial information applicable for a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of the business, and in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended. Certain information and disclosures included in the financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations.

In the opinion of management, the condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.

The results for the nine-months ended August 31, 2019 are not necessarily indicative of the results of operations for the full year. These unaudited financial statements and related footnotes should be read in conjunction with the amended consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K/A for the year ended November 30, 2018 filed with the Securities and Exchange Commission on May 30, 2019.

These consolidated financial statements comprise the accounts of the Company and its wholly owned subsidiary Emperium 1 Holdings Corp.  Emperium 1 Holdings Corp. was incorporated as a wholly owned subsidiary on October 8, 2018 by the Company through the issuance of 100 common shares at $0.01 per share for proceeds of $1. As Emperium 1 Holdings Corp. is a holding company and, as such, has no accounts or activity.  The Company owns 100% of the issued and outstanding shares of Emperium 1 Holdings Corp.

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 3 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 August 31, 2019 and November 30, 2018, respectively, the Company had $48,020 and $1,172 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.

8
CENTURY COBALT CORP.
(FORMERLY FIRST AMERICAN SILVER CORP.)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2019


NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.

Stock-Based Compensation

The Company accounts for share-based compensation in accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 718 and No. 505. After December 15, 2018, the scope of Topic 718, Compensation—Stock Compensation, was expanded to include share-based payments issued to nonemployees for goods and services. The Company issues restricted stock to employees and consultants for their services. Cost for these transactions are measured at the fair value of the equity instruments issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as expense in the period granted. The Company recognized consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. For agreements requiring future services, the consulting expense is to be recognized ratably over the requisite service period.

Total stock-based compensation amounted to $80,319 and $-0- for the three months ended August 31, 2019 and 2018, respectively, and $113,086 and $-0- for the nine months ended August 31, 2019 and 2018, respectively 

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 August 31, 2019, 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.

9
CENTURY COBALT CORP.
(FORMERLY FIRST AMERICAN SILVER CORP.)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2019


NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flows.

Mineral Properties

Costs of exploration are expensed as incurred.  Mineral property acquisition costs are capitalized including licenses and lease payments.  Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company's title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

Mineral properties are analyzed for impairment on an annual basis, or more often if warranted by circumstances. Impairment losses are recorded on mineral properties used in operations when indicators of impairment are present.

Capitalization

Only assets with a cost of $5,000 and a useful life of over 2 years are capitalized.  All other costs are expensed in the period incurred.

Reclassifications

Certain prior year amounts have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results of operations. In addition, certain prior year amounts from the restated amounts have been reclassified for consistency with the current period presentation.

NOTE 3 – GOING CONCERN

The accompanying financial statements have been prepared assuming that Century Cobalt Corp., 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 $2,944,000 as of August 31, 2019. Management continues to seek funding from its shareholders and other qualified investors.

10
CENTURY COBALT CORP.
(FORMERLY FIRST AMERICAN SILVER CORP.)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2019


NOTE 4 – PREPAID EXPENSES

Prepaid expenses include stock-based compensation paid to a consultant for future services and the OTCBB for prepaid listing fees.

Prepaid expenses are as follows:

    August 31, 2019     November 30, 2018  
             
Consulting
 
$
12,473
   
$
8,620
 
Listing Fees
   
5,417
     
2,167
 
Total
 
$
17,890
   
$
10,787
 

NOTE 5 – RESOURCE PROPERTY

On August 7, 2018, the Company entered into an assignment agreement with Oriental Rainbow Group Ltd., in regards to the acquisition of certain mineral claims in Lemhi County, Idaho known as the “Idaho Cobalt Belt”.

Oriental Rainbow and Plateau Ventures LLC had entered into a purchase agreement dated September 4, 2017, wherein Oriental Rainbow had acquired from Plateau a 100% interest in the property, subject to certain subsequent payments and conditions.  The claims comprising the property (649 claims) initially totaled approximately 12,980 acres, subject to an option under the purchase agreement for the acquisition of additional claims by issuing a further 500,000 common shares valued at $20,000 to Plateau Ventures LLC.  Such option had been exercised with additional claims acquired, resulting in a total of 695 claims comprising approximately 13,900 acres.

Oriental Rainbow has assigned its interest in the property to the Company in consideration for 2,500,000 restricted shares (issued) of common stock valued at $100,000 (the “Consideration Shares”). The Company has assumed all of Oriental Rainbow’s obligations under the purchase agreement, which material obligations include: the issuance of up to 500,000 restricted shares of common stock, valued at $20,000, to Plateau upon listing on a recognized stock exchange (issued) and paying Plateau $1,000,000 in four equal staged payments upon completion of a positive feasibility study on the property.  The vendor retains a 1% royalty on revenue derived from the sale of cobalt concentrate and other ore extracts from the property.  The Company has the option to purchase this 1% royalty at any time for $1,000,000 in cash or common shares. As of August 31, 2019 and November 30, 2018, the Company has invested $380,910 and $248,000, respectively, into the above mentioned mineral claims.  These amounts are reported in the accompanying consolidated balance sheet.

On April 1, 2019, the Company signed a six-month Option Agreement for sole and exclusive right and option to explore and evaluate the battery material (manganese + nickel + copper + cobalt) potential for property in the Chamberlain area of South Dakota, USA. The optionor provides the property free and clear of all liens, charges, encumbrances, claims, rights, or interest of any person subject to incurring or funding expenditures up to an aggregate of $10,000 within six months of signing this agreement.  On April 1, 2019, the Company granted to the optionor 163,132 unregistered shares of the Company stock worth $20,000 or $0.1226 per shares (based on the 30-day average closing price as of April 1, 2019).  At the end of the six-month period, the Company has the right to extend the option period for 3 months by issuing the optionor an additional $20,000 of unregistered shares of the Company’s common based on the 30 days average closing price on the date of the extension.  At any time during the option periods, both parties agree to work towards signing a binding Exploration and Development Agreement in the event the initial exploration results on the subject properly prove encouraging.  The Company may terminate the agreement with 30 days written notice to the optionor.

NOTE 6 – FORGIVENESS OF DEBT

During the year ended November 30, 2018, a creditor of the Company waived a stale balance owing by the Company in the amount of $100,000.

11
CENTURY COBALT CORP.
(FORMERLY FIRST AMERICAN SILVER CORP.)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2019

 
NOTE 7 – NOTES PAYABLE
 
Notes payable consisted of the following at August 31, 2019:
 
Date of Note
 
Note
Amount
   
Interest
Rate
   
Maturity Date
 
Collateral
 
Interest
Accrued
 
 
             
 
 
 
     
May 1, 2016 (1)
 
$
-
     
8
%
 
May 1, 2017 (2)
 
None
 
$
-
 
October 20, 2016
 
$
5,000
     
8
%
 
October 20, 2017 (2)
 
None
 
$
1,145
 
January 9, 2017
 
$
9,000
     
8
%
 
January 9, 2018 (2)
 
None
 
$
1,902
 
April 24, 2017
 
$
10,000
     
8
%
 
April 24, 2018 (2)
 
None
 
$
1,883
 
June 19, 2017
 
$
7,000
     
8
%
 
June 19, 2018 (2)
 
None
 
$
1,232
 
September 18, 2017
 
$
6,000
     
8
%
 
September 18, 2018 (2)
 
None
 
$
936
 
January 5, 2018
 
$
10,000
     
8
%
 
January 5, 2019 (2)
 
None
 
$
1,322
 
April 17, 2018
 
$
30,000
     
8
%
 
April 17, 2019 (2)
 
None
 
$
3,294
 
July 27, 2018
 
$
31,700
     
12
%
 
July 27, 2019 (2))
 
None
 
$
4,169
 
August 15, 2018
 
$
108,000
     
12
%
 
August 15, 2019 (2)
 
None
 
$
13,528
 
September 7, 2018
 
$
15,000
     
12
%
 
July 31, 2020
 
None
 
$
1,765
 
September 12, 2018
 
$
20,500
     
12
%
 
August 15, 2020
 
None
 
$
2,379
 
September 27, 2018
 
$
10,000
     
12
%
 
July 31, 2020
 
None
 
$
1,111
 
October 10, 2018
 
$
42,000
     
12
%
 
July 31, 2020
 
None
 
$
4,488
 
November 20, 2018
 
$
7,905
     
12
%
 
July 31, 2020
 
None
 
$
738
 
November 20, 2018
 
$
7,970
     
12
%
 
July 31, 2020
 
None
 
$
744
 
December 18, 2018
 
$
25,000
     
12
%
 
February 18, 2020
 
None
 
$
2,104
 
January 24, 2019
 
$
42,000
     
12
%
 
August 15, 2020
 
None
 
$
3,024
 
February 18, 2019
 
$
20,000
     
12
%
 
February 18, 2020
 
None
 
$
1,275
 
March 6, 2019
 
$
10,000
     
12
%
 
August 15, 2020
 
None
 
$
585
 
May 3, 2019
 
$
25,000
     
12
%
 
July 31, 2020
 
None
 
$
987
 
Total
 
$
442,075
           
 
 
       
 
$
48,611
 
 

(1)
On January 8, 2019, the Company agreed to convert principle and interest of $341,650 into 3,105,909 unregistered shares of the Company’s common stock to fully satisfy the obligation.  The common stock was valued at $0.11 per share. In-addition, the Company recognized $14,250 income from debt forgiveness for the portion of the Promissory note accrued interest not converted to the Company’s common stock. The Company calculated the fair value of the beneficial conversion feature on the debt modification as the difference between the conversion price and the fair market value of the Company’s common stock into on the date of modification. The fair value of the conversion provision in connection with the note on the date of modification was $-0-.

(2)
The Company is not compliant with the repayment terms of the notes payable.

Convertible notes payable consisted of the following at August 31, 2019:

On July 31, 2019, the Company entered into a convertible unsecured term loan facility of £200,000 ($253,900) for funding working capital requirements. The promissory note has a maturity date of September 30, 2020, an interest rate of 10% and a conversion rate of $0.08 per share. After maturity, the interest rate increases to 8% above the Bank of England Base Rate. In addition, a 5% facility fee is added to the loan. The Company may draw the loan in installments of £25,000 ($31,735) at any time on or after the date of this agreement. During the three months ended August 31, 2019, the Company has drawn four installments against the loan facility for an aggregate of $190,025. The Company calculated the fair value of the beneficial conversion feature as the difference between the conversion price and the fair market value of the Company’s common stock into on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $12,654, and was recorded as debt discount. The debt discount was amortized through the term of the note. The unpaid balance including accrued interest was $200,735 at August 31, 2019.
As of August 31, 2019, the total short-term loans - convertible amounted to $200,735 which includes $10,710 of accrued interest. The conversion price of the note was fixed and determinable on the date of issuance and as such in accordance with ASC Topic 815 “Derivatives and Hedging” (“ASC 815”), the embedded conversion option of the note was not considered a derivative liability. The beneficial conversion features of certain convertible notes are at a price below fair market value. The Company recorded interest expense on the debt discount of $1,454 for the three and nine months ended August 31, 2019, in the accompanying consolidated statements of operations.

Notes payable and convertible notes payable transactions during the nine months ended August 31, 2019 consisted of the following:

Balance, November 30, 2018
 
$
612,941
 
Borrowings
   
312,025
 
Less repayments
   
292,866
 
Balance, August 31, 2019
 
$
632,100
 

Repayment schedule of notes payable and convertible notes payable is as follows:
 
Year Due
Principal
 
Interest
 
Total
 
 
           
2019
 
$
216,700
   
$
29,410
   
$
246,110
 
2020
   
415,400
     
29,912
     
445,312
 
Total
 
$
632,100
   
$
59,322
   
$
691,422
 

12
CENTURY COBALT CORP.
(FORMERLY FIRST AMERICAN SILVER CORP.)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2019


NOTE 8 – RELATED PARTY TRANSACTIONS

On August 31, 2019, notes payable owing to related parties is $267,500 (November 30, 2018: $488,366) and accrued interest owing to related parties is $31,184 (November 30, 2018: $71,231).

As at August 31, 2019, accounts payable and compensation owing to stockholders and officers of the Company were $62,689 (November 30, 2018: $27,870).

As at August 31, 2019, the Company owed $60,823 to its President and Director (November 30, 2018: $60,823) and $ 8,100 to a Former President and Director (November 30, 2018: $34,817).

On September 11, 2018, the Company signed a Consulting Agreement for the Company’s Chief Operating Officer (COO) beginning August 1, 2018 through December 31, 2020.  Effective April 1, 2018, the COO is compensated £200 (approximately $250) for each day performing services to the Company (approximately one day per week).  Effective August 1, 2018, the COO was compensated with 250,000 unregistered shares of the Company’s common stock valued at $10,000 or $0.04 per share. On February 1, 2019 the CCO was compensated with 250,000 unregistered shares of the Company’s common stock valued at $10,000 or $0.04 share. On August 1, 2019 the CCO was compensated with 250,000 unregistered shares of the Company’s common stock valued at $24,375 or $0.0975 share.   The cash compensation amounted to $7,341 and $6,240 for the three months ended August 31, 2019 and 2018, respectively, and $15,061 and $8,665 for the nine months ended August 31, 2019 and 2018, respectively.

On September 17, 2018, the Company signed a three-year Consulting Agreement for the Company’s President.  Effective June 1, 2018, the President is compensated $8,500 per month for an aggregate of $102,000 per year.  Effective August 1, 2018, the President was compensated with 5,000,000 unregistered shares of the Company’s common stock valued at $200,000 or $0.04 per share.  In addition, on August 1 of each year for this agreement, the President will be compensated with 1,000,000 unregistered shares of the Company’s common stock. On August 1, 2018, 1,000,000 unregistered shares of the Company’s common stock were earned by the Company’s President.  The shares were valued at $40,000 or $0.04 share.  On August 1, 2019, 1,000,000 unregistered shares of the Company’s common stock were earned by the Company’s President.  The shares were valued at $40,000 or $0.04 share. Effective August 1, 2019, the President compensation was increased to $15,000 per month for an aggregate of $180,000 per year. The compensation amounted to $32,000 and $25,500 for the three months ended August 31, 2019 and 2018, respectively, and $83,000 and $25,500 for the nine months ended August 31, 2019 and 2018, respectively.

NOTE 9 – CAPITAL STOCK

The Company has 20,000,000 preferred shares authorized at a par value of $0.001 per share.  As of August 31, 2019, no rights have been assigned to the preferred shares and the rights will be established upon issuance.

As at August 31, 2019, the Company has 3,500,000,000 common shares authorized at a par value of $0.001 per share.

On August 7, 2018, the Company issued 2,500,000 unregistered common shares at $0.04 per share, valued at $100,000, as per a property acquisition agreement.

On September 10, 2018, the Company issued 500,000 at $0.04 per share, valued at $20,000, unregistered common shares as per a property acquisition agreement.

On September 13, 2018, the Company issued 250,000 at $0.04 per share, valued at $10,000, unregistered common shares pursuant to a consulting agreement.

On September 18, 2018, the Company issued 5,000,000 unregistered common shares, at $0.04 per share, valued at $200,000, to the Company’s president pursuant to a consulting agreement.

On September 18, 2018, the Company granted 1,000,000 unregistered common shares, at $0.04 per share, valued at $40,000, to the Company’s president pursuant to a consulting agreement for annual share compensation. As of August 31, 2019, the shares have not been issued to the Company’s president.

On September 18, 2018, the Company exercised an option to acquire additional mineral properties through the issuance of 500,000 unregistered common shares at $0.04 per share for a total value of $20,000.

On October 19, 2018, the Company issued 2,500,000 unregistered common shares at $0.108 per share, valued at $270,000, to the Company’s president pursuant to a consulting agreement.

On January 8, 2019, the Company agreed to convert principle and interest of $341,650 from a Related Party Promissory Note Payable into 3,105,909 unregistered shares of the Company’s common stock to fully satisfy the obligation.  The common stock was valued at $0.11 per share.

On February 1, 2019, the Company granted 250,000 at $0.04 per share, valued at $10,000, unregistered common shares pursuant to a consulting agreement for the Company’s Chief Operating Officer (COO).  As of August 31, 2019, the shares have not been issued to the COO.

On April 1, 2019, the Company granted 163,132 at $0.1226 per share, valued at $20,000, unregistered common shares as per an option agreement to explore and evaluate the battery materials in South Dakota. See Note 5. As of August 31, 2019, the shares have not been issued to the individual.

On June 5, 2019, the Company entered into an agreement with a consultant to provide finance and accounting services to the Company.  The Consultant is compensated with a combination of cash and unregistered shares of the Company’s common stock. In addition, the consultant was granted 50,000 shares of the Company’s common stock valued at $4,990 or .0998 per share. As of August 31, 2019, the consultant has earned 30,052 shares valued at $2,643 or $0.0879 per share. As of August 31, 2019, the shares have not been issued to the consultant.

On August 1, 2019, the Company granted 1,000,000 unregistered common shares, at $0.04 per share, valued at $40,000, to the Company’s president pursuant to a consulting agreement for annual share compensation. As of August 31, 2019, the shares have not been issued to the Company’s president.

On August 1, 2019, the Company granted 250,000 at $0.0975 per share, valued at $24,375, unregistered common shares for services to the Company for the Company’s Chief Operating Officer (COO).  As of August 31, 2019, the shares have not been issued to the Company’s COO.


As of August 31, 2019, the Company had 77,248,120 (November 30, 2018: 74,142,211) common shares issued and outstanding.

13
CENTURY COBALT CORP.
(FORMERLY FIRST AMERICAN SILVER CORP.)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2019


NOTE 10 – MATERIAL CONTRACTS

On January 9, 2019, the Company entered an agreement with a consultant to head the Company’s Advisory Board to provide essential prospective on technology and public policy developments that are shaping the cobalt markets.  In addition, the consultant will provide press releases, additional messaging and focus on exploring potential relationships with major cobalt users.  The agreement terminates on December 31, 2019.  After December 31, 2019, the agreement automatically renews unless the Company or consultant provide 30 days written notice.  The consultant is compensated with a $5,000 retainer which commences the first of the month following the completion of the Company’s next capital raise. In addition, the Company granted the consultant a three-year option to purchase 250,000 shares of the Company’s unregistered common stock at $0.10 per share. The option vested as to 100,000 shares on the grant date, vests 100,000 shares on August 9, 2019 and 50,000 on January 9, 2020. The fair value of the option was $23,891. The Company uses a Black-Scholes-Merton option pricing model to estimate the fair value option with the following assumptions:
 
Risk-free interest rate
   
2.54
%
Expected life (in years)
   
3
 
Expected volatility
   
310.6
%
Grant date fair value
 
$
.097
 

On March 11, 2019, the Company signed a twelve-month lease agreement for a four-bedroom living unit.  The lease starts on April 1, 2019 and ends on March 31, 2020. The monthly rental is $1,200 and an aggregate of $14,400 over the term of the lease.

On April 2, 2019, the Company signed a twelve-month lease agreement for office space.  The lease starts on 1 July, 2019 and ends on 30 June, 2020.  The monthly rental is $730.15 and an aggregate of $8,761.80 over the term of the lease.

NOTE 11 – SUBSEQUENT EVENTS

The Company evaluated all events or transactions that occurred after August 31, 2019 up through October 15, 2019.  During this period, the Company did not have any material recognizable subsequent events.

NOTE 12 – RESTATEMENT

The August 31, 2018 financial statements are being restated to restate the value of consideration paid on the acquisition of a mineral property, allocate the expenses to the proper period according to services performed, correcting mineral properties, accounts payable, common stock, additional paid in capital and operating expenses.

The following table summarizes changes made to the August 31, 2018 balance sheet.
 
 
 
August 31, 2018
 
 
 
As Reported
   
Adjustment
   
As Restated
 
Balance Sheet:
                 
Current Assets
 
$
236,693
   
$
(221,457
)
 
$
15,236
 
Resource Property
   
378,000
     
(130,000
)
   
248,000
 
Total assets
 
$
614,693
   
$
(351,457
)
 
$
263,236
 
 
                       
Accounts payable
 
$
53,688
   
$
10,910
   
$
64,598
 
Accounts payable – related parties
   
32,635
     
12,740
     
45,375
 
Due to related party
   
97,513
     
(10,907
)
   
86,606
 
Accrued interest
   
-
     
886
     
886
 
Accrued interest – related party
   
60,282
     
2,993
     
63,275
 
Notes payable
   
-
     
41,700
     
41,700
 
Notes payable – related party
   
479,566
     
(11,700
)
   
467,866
 
Total liabilities
   
723,684
     
46,622
     
770,306
 
 
                       
Common stock
   
65,392
     
-
     
65,392
 
Additional paid-in capital
   
1,429,375
     
(125,000
)
   
1,304,375
 
Common stock payable
   
310,120
     
(5,000
)
   
305,120
 
Accumulated deficit
   
(1,913,878
)
   
(268,079
)
   
(2,181,957
)
Total Stockholders’ Equity
   
(108,991
)
   
(398,079
)
   
(507,070
)
Total liabilities and stockholders’ equity
 
$
614,693
   
$
(351,457
)
 
$
263,236
 

The following table summarizes changes made to the nine months ended August 31, 2018 Statement of Operations.

   For the nine months ended August 31, 2018  
 
As Reported
 
   
Adjustment
     
As Restated
 
 
 
 
   
 
     
 
 
Operating expenses
 
$
191,745
 
   
$264,200
     
$455,945
 
Interest expense
 
 
21,265
 
   
3,879
     
25,144
 
Forgiveness of debt
 
 
(100,000
)
   
-
     
(100,000
)
Net Loss
 
$
(113,010
)
   
$268,079
     
$381,089
 

14
CENTURY COBALT CORP.
(FORMERLY FIRST AMERICAN SILVER CORP.)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2019


The May 31, 2018 financial statements are being restated to restate the value of consideration paid on the acquisition of a mineral property, allocate the expenses to the proper period according to services performed, correcting mineral properties, accounts payable, common stock, additional paid in capital and operating expenses.

The following table summarizes changes made to the May 31, 2018 balance sheet.

 
 
May 31, 2018
 
 
 
As Reported
   
Adjustment
   
As Restated
 
Balance Sheet:
                 
Current Assets
 
$
5,924
   
$
(938
)
 
$
4,986
 
Deposit
   
591
     
-
     
591
 
Total assets
 
$
6,515
   
$
-
   
$
5,577
 
 
                       
Accounts payable
 
$
69,894
   
$
(46,844
)
 
$
23,050
 
Accounts payable – related parties
   
7,085
     
7,425
     
14,510
 
Due to related party
   
38,170
     
11,256
     
49,426
 
Accrued interest
   
-
     
320
     
320
 
Accrued interest – related party
   
52,497
     
(610
)
   
51,887
 
Notes payable
   
-
     
10,000
     
10,000
 
Notes payable – related party
   
339,866
     
20,000
     
359,866
 
Total liabilities
   
507,512
     
1,547
     
509,059
 
 
                       
Common stock
   
62,892
     
-
     
62,892
 
Additional paid-in capital
   
1,206,875
     
-
     
1,206,875
 
Common stock payable
   
15,120
     
-
     
15,120
 
Accumulated deficit
   
(1,785,884
)
   
(2,485
)
   
(1,788,369
)
Total Stockholders’ Equity
   
(500,997
)
   
(2,485
)
   
(503,482
)
Total liabilities and stockholders’ equity
 
$
6,515
   
$
-
   
$
5,577
 

The following table summarizes changes made to the nine months ended May 31, 2018 Statement of Operations.

 
For the nine months ended May 31, 2018
 
 
As Reported
 
Adjustment
 
As Restated
 
 
 
 
 
 
 
 
Operating expenses
 
$
71,536
 
 
$
2,775
 
 
$
74,311
 
Interest expense
 
 
13,480
 
 
 
(290
)
 
 
13,190
 
Forgiveness of debt
 
 
(100,000
)
 
 
-
 
 
 
(100,000
)
Net Income (Loss)
 
$
14,984
 
 
$
2,485
 
 
$
12,499
 
 

15
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".

On June 18, 2018, we changed our name from "First American Silver Corp." to “Century Cobalt Corp”, by way of a merger with our wholly owned subsidiary Century Cobalt 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. Our name change became effective with the Over-the-Counter Bulletin Board at the opening of trading on June 18, 2018, on which date we adopted the new stock symbol "CCOB”

Our Current Business

On August 7, 2018, we entered into an assignment agreement with Oriental Rainbow Group Ltd., in regards to the acquisition of certain mineral claims in Lemhi County, Idaho known as the “Idaho Cobalt Belt”.

16
Oriental Rainbow and Plateau Ventures LLC had entered into a purchase agreement dated September 4, 2017, wherein Oriental Rainbow had acquired from Plateau a 100% interest in the property, subject to certain subsequent payments and conditions.  The claims comprising the property (649 claims) initially totaled approximately 12,980 acres, subject to an option under the purchase agreement for the acquisition of additional claims.  Such option had been exercised with additional claims acquired, resulting in a total of 695 claims comprising approximately 13,900 acres.

Oriental Rainbow has assigned its interest in the property to us in consideration for 2,500,000 restricted shares of common stock (the “Consideration Shares”). We have assumed all of Oriental Rainbow’s obligations under the purchase agreement, which material obligations include: the issuance of up to 500,000 restricted shares of common stock to Plateau upon listing on a recognized stock exchange; paying pending BLM fees for the claims in the amount of $100,595; and paying Plateau $1,000,000 in four equal staged payments upon completion of a positive feasibility study on the property.

On September 14, 2018, we entered into a consulting agreement with Alexander Stanbury, whereby Mr. Stanbury agreed to provide consulting services to us regards to his position is our President and Chief Executive Officer. The agreement has a three-year term, commencing August 1, 2018.  As compensation for entering into the agreement and providing such consulting services, we have agreed to compensate Mr. Stanbury by issuing 5,000,000 restricted common shares of our capital stock.  In addition, Mr. Stanbury will be receiving a salary of $102,000 per annum and shall be entitled to receive an additional 1,000,000 common shares on each anniversary of the effective date of the agreement. On August 1, 2019, Mr. Stanbury salary was increased to $180,000 per annum.

Prior thereto on September 11, 2018 we entered into a consulting agreement with Lester Kemp, whereby Mr. Kemp agreed to provide services as our Chief Technical Officer. The agreement has term expiring December 31, 2020, with the term having commenced on August 1, 2018. As compensation for entering into the agreement and providing such consulting services, we have agreed to compensate Mr. Kemp by issuing 250,000 restricted common shares of our capital stock.  In addition, Mr. Kemp shall be entitled to receive an additional 250,000 common shares after six months from the effective date of the agreement.

On January 9, 2019, the Company entered an agreement with a consultant to head the Company’s Advisory Board to provide essential prospective on technology and public policy developments that are shaping the cobalt markets.  In addition, the consultant will provide press releases, additional messaging and focus on exploring potential relationships with major cobalt users.  The agreement terminates on December 31, 2019.  After December 31, 2019, the agreement automatically renews unless the Company or consultant provide 30 days written notice.  The consultant is compensated with a $5,000 retainer which commences the first of the month following the completion of the Company’s next capital raise. In addition, the Company granted the consultant a three-year option to purchase 250,000 shares of the Company’s unregistered common stock.

On April 1, 2019, the Company signed a six-month Option Agreement for sole and exclusive right and option to explore and evaluate the battery material (manganese + nickel + copper + cobalt) potential for property in the Chamberlain area of South Dakota, USA. The optionor provides the property free and clear of all liens, charges, encumbrances, claims, rights, or interest of any person subject to incurring or funding expenditures up to an aggregate of $10,000 within six months of signing this agreement.  On April 1, 2019, the Company granted to the optionor 163,132 unregistered shares of the Company stock.  At the end of the six-month period, the Company has the right to extend the option period for 3 months by issuing the optionor an additional $20,000 of unregistered shares of the Company’s common based on the 30 days average closing price on the date of the extension.  At any time during the option periods, both parties agree to work towards signing a binding Exploration and Development Agreement in the event the initial exploration results on the subject properly prove encouraging.  The Company may terminate the agreement with 30 days written notice to the optionor.

Results of Operations

Three Months Ended August 31, 2019 Compared to the Three Months Ended August 31, 2018

We had a net loss of $170,663 for the three-month period ended August 31, 2019 which was $222,925 lower than the net loss of $393,588 for the three-month period ended August 31, 2018. The change in our net loss over the two periods are primarily a result of an approximate $194,000 decrease in consulting fees and stock-based compensation paid primarily to our new president during the three months ended August 31, 2018, an approximate $16,000 decrease in general administrative expenses from travel, rent expense, and other expenses, an approximate $16,000 decrease in professional fees, an approximate $10,000 decrease increase in exploration fees for potential mining operations, offset by an approximate $13,000 increase in interest expense for our new notes payable.

17
Nine months Ended August 31, 2019 Compared to the Nine months Ended August 31, 2018

We had a net loss of $367,041 for the nine-month period ended August 31, 2019 which was $14,048 lower than the net loss of $381,089 for the nine-month period ended August 31, 2018. The change in net loss between the two periods are primarily a result of an approximate $157,000 decrease in consulting fees and stock-based compensation paid primarily to our new president during the three months ended August 31, 2018, offset by an approximate $23,000 increase in exploration fees for potential mining operations, an approximate $10,000 increase in other general and administrative expenses from travel, rent expense, professional fees and other expenses necessary to launch our business,  an approximate $24,000 increase in interest expense for our new notes payable, and an approximate $86,000 decrease in debt forgiveness income.

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 August 31, 2019 reflects current assets of $65,910.  We had cash in the amount of $48,020 and working capital deficit in the amount of $524,926 as of August 31, 2019. We do not have sufficient working capital to enable us to carry out our stated plan of operation for the next twelve months.

We anticipate generating losses and, therefore, may be unable to continue operations further in the future.

Cash Flows

Operating Activities

Net cash used in operating activities during the nine months ended August 31, 2019 was $132,267, a $60,191 increase from the $72,076 net cash outflow during the nine months ended August 31, 2018 as a result of our work towards building the business.

Investing Activities

Cash used in investing activities during the nine months ended August 31, 2019 was $132,910, which was a $24,910 increase from the $108,000 cash used in investing activities during the nine months ended August 31, 2018.   The increase was a result of expenditures related to the acquisition of resource properties.

Financing Activities

Cash provided by financing activities during the nine months ended August 31, 2019 was $312,025 as compared to $179,700 in cash provided by financing activities during the three months ended August 31, 2018 from promissory notes payable and a convertible note payable from corporations and related parties.

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

Expense
 
Cost
 
 
     
General and administrative expenses
 
$
25,000
 
Management and administrative costs
 
$
150,000
 
Legal Fees
 
$
10,000
 
Auditor Fees
 
$
12,000
 
Exploration
 
$
150,000
 
Total
 
$
347,000
 


18
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 $5,000 per month.   Due to our current cash position of approximately $48,020, which is committed to the acquisition of resource properties at August 31, 2019, we estimate that we do 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.

Critical Accounting Policies

Accounting Basis

Our company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America ("GAAP" accounting). Our company has adopted a November 30 fiscal year end.

Our company considers all highly liquid investments with maturities of three months or less to be cash equivalents.  At August 31, 2019 and August 31, 2018, respectively, we had $48,020 and $1,172 of unrestricted cash to be used for future business operations.

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

Concentrations of Credit Risk

Our company maintains our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. Our company continually monitors our banking relationships and consequently has not experienced any losses in such accounts. Our company believes we are not exposed to any significant credit risk on cash and cash equivalents.

Stock-based Compensation

Our company accounts for employee and non-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, and others to be recognized in the financial statements based on their fair values.

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.

19
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 our company's policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of August 31, 2019, 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 of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

Our company is in the exploration stage and has yet to realize revenues from operations. Once our company has commenced operations, we 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 our 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 our 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 our 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.

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.

Changes 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.

20
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

On August 7, 2018, the Company issued 2,500,000 unregistered common shares at $0.04 per share, valued at $100,000, as per a property acquisition agreement.

On September 10, 2018, the Company issued 500,000 at $0.04 per share, valued at $20,000, unregistered common shares as per a property acquisition agreement.

On September 14, 2018, we entered into a consulting agreement with Alexander Stanbury, whereby Mr. Stanbury agreed to provide consulting services to us regards to his position as our President and Chief Executive Officer. The agreement has a three-year term, effectively commencing August 1, 2018.  As compensation for entering into the agreement and providing such consulting services, we have agreed to compensate Mr. Stanbury by issuing 5,000,000 restricted common shares of our capital stock.  In addition, Mr. Stanbury will be entitled to receive an additional 1,000,000 common shares on each anniversary of the effective date of the agreement. To date, Mr. Stanbury has earned 7,000,000 shares valued at $280,000 or $0.04 per share. On October 19, 2018, the Company issued 2,500,000 unregistered common shares at $0.108 per share, valued at $270,000, to the Company’s president pursuant to a consulting agreement.

Prior thereto on September 11, 2018 we entered into a consulting agreement with Lester Kemp, whereby Mr. Kemp agreed to provide services as our Chief Technical Officer. The agreement has term expiring December 31, 2020, with the term having effectively commenced on August 1, 2018. As compensation for entering into the agreement and providing such consulting services, we have agreed to compensate Mr. Kemp by issuing 250,000 restricted common shares of our capital stock.  In addition, Mr. Kemp shall be entitled to receive an additional 250,000 common shares after nine months from the effective date of the agreement. To date, Mr. Kemp has been granted 500,000 shares valued at $20,000 or $0.04 per share. On August 1, 2019, the Company granted Mr. Kemp 250,000 unregistered common shares for services to the Company. The shares were valued at $24,375 or $0.0975 per share.

On September 18, 2018, the Company exercised an option to acquire additional mineral properties through the issuance of 500,000 unregistered common shares at $0.04 per share for a total value of $20,000.

On January 8, 2019, the Company agreed to convert principle and interest of $341,650 from a Related Party Promissory Note Payable into 3,105,909 unregistered shares of the Company’s common stock to fully satisfy the obligation.  The common stock was valued at $0.11 per share.

Pursuant to the above consulting agreements, we have issued an aggregate of 8,000,000 shares of our common stock to two non-US persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S of the Securities Act of 1933, as amended.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.
21

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).
     
   
 
3.6
 
Articles of Merger (Incorporated by reference to our Current Report filed on Form 8-K on June 25, 2018).
     
   
 
(10
)
Material Contracts
     
   
 
10.1
 
2011 Stock Option Plan (incorporated by reference to our Current Report filed on Form 8-K on November 14, 2011).
     
   
 
10.2
 
Foxglove Promissory Note dated June 28, 2015 (incorporated by reference to our Quarterly Report filed on Form 10-Q on October 14, 2015).
     
   
 
10.3
 
$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).
     
   
 
10.4
 
Assignment Agreement dated effective August 7, 2018 between Oriental Rainbow Group Ltd. and Century Cobalt Corp. (incorporated by reference to our Current Report filed on Form 8-K on August 14, 2018).
     
   
 
10.5
 
Consulting Agreement with Alexander Stanbury, dated September 14, 2018. (incorporated by reference to Exhibit 10.10 to our Quarterly Report filed on Form 10-Q on October 22, 2018).
     
   
 
10.6
 
Consulting Agreement with Lester Kemp, dated September 11, 2018. (incorporated by reference to Exhibit 10.11 to our Quarterly Report filed on Form 10-Q on October 22, 2018).
     
   
 
(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.

22

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.
 
 
 
CENTURY COBALT CORP.
 
 
(Registrant)
 
 
 
 
 
 
Dated:  October 17, 2019
 
/s/ Alexander Stanbury
 
 
 
Alexander Stanbury
 
 
President, Chief Executive Officer, Treasurer, Secretary and Director
  `
 
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)



23
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