UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 10-Q
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x
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QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2014
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission file number 333-123134
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Large Accelerated Filer
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o
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Accelerated Filer
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o
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Non-accelerated Filer
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o
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Smaller Reporting Company
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x
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Page
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PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements
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3 |
Balance Sheets as of June 30, 2014 (unaudited) and December 31, 2013
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4 |
Statements of Operations for the Six Months ended June 30, 2014 and 2013 (unaudited)
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5 |
Statements of Cash Flows for the Six Months ended June 30 2014 and 2013 (unaudited)
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6 |
Notes to Financial Statements (unaudited)
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7 |
Item 2. Management’s Discussion and Analysis Of Financial Condition and Results of Operations
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12 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk
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16 |
Item 4. Controls and Procedures
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17 |
PART II - OTHER INFORMATION
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Item 1A. Risk Factors
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17 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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17 |
Item 6. Exhibits
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18 |
SIGNATURES
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19 |
JUNE 30
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DECEMBER 31
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|||||||
2014
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2013
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|||||||
(Unaudited)
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||||||||
ASSETS
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||||||||
Current
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||||||||
Cash
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$
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27
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$
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21
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||||
$
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27
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$
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21
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|||||
LIABILITIES
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||||||||
Current
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||||||||
Accounts payable and accrued liabilities
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$
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127,880
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$
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78,076
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||||
Loans payable
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147,739
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111,731
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||||||
275,619
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189,807
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|||||||
Contractual Obligations, Commitments And Subsequent Events (Note 6)
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||||||||
STOCKHOLDERS’ DEFICIENCY
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||||||||
Capital Stock
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||||||||
Authorized:
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||||||||
100,000,000 voting common shares with a par value of $0.00001 per share
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||||||||
Issued:
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||||||||
11,509,000 common shares at June 30, 2014 and December 31, 2013
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115
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115
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||||||
Additional Paid-In Capital
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692,385
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692,385
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||||||
Accumulated Deficit
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(968,092
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)
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(882,286
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)
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||||
(275,592
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)
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(189,786
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)
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|||||
$
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27
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$
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21
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THREE MONTHS ENDED
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SIX MONTHS ENDED
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|||||||||||||||
JUNE 30
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JUNE 30
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|||||||||||||||
2014
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2013
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2014
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2013
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Revenue
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$
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-
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$
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-
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$
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-
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$
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-
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||||||||
Expenses
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||||||||||||||||
Consulting services
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25,885
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26,617
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51,801
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56,857
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||||||||||||
Corporate support services
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-
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3,079
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-
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7,559
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||||||||||||
Interest, bank and finance charges
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2,364
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(8,587
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)
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4,717
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(5,227
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)
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Office, foreign exchange and sundry
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2,508
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372
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40
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486
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||||||||||||
Professional fees
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19,289
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22,997
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22,031
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25,997
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||||||||||||
Transfer and filing fees
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5,103
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7,056
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7,217
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9,105
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||||||||||||
55,149
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51,534
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85,806
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94,777
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Net Loss For The Period
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$
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(55,149
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)
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$
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(51,534
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)
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$
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(85,806
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)
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$
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(94,777
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)
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Basic And Diluted Loss Per Common Share
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$
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(0.01
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)
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$
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(0.01
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)
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$
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(0.01
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)
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$
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(0.01
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)
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Weighted Average Number Of Common Shares Outstanding
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11,509,000
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9,901,500
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11,509,000
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9,901,500
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SIX MONTHS ENDED
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||||||||
JUNE 30
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2014
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2013
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|||||||
Cash Provided By (Used In)
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Operating Activities
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Net loss for the period
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$
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(85,806
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)
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$
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(94,777
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)
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Adjustments to reconcile net loss to net cash used in operating activities:
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Accrued interest payable
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4,091
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4,092
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Net changes in non-cash operating working capital items:
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Decrease in prepaid consulting fees to related parties
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-
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34,032
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Decrease in amounts receivable
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-
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9,464
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Increase (decrease) in accounts payable and accrued liabilities
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49,804
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(69,218
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)
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(31,911
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)
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(116,407
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)
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Financing Activities
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Issuance of common stock subscriptions
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-
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90,000
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Loan advances
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31,917
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20,690
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31,917
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110,690
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|||||||
Net Increase (Decrease) In Cash
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6
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(5,717
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)
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|||||
Cash, Beginning Of Period
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21
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11,282
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||||||
Cash, End Of Period
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$
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27
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$
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5,565
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Supplemental Disclosure Of Cash Flow Information
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Cash paid during the period for:
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Interest
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$
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-
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$
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-
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Income taxes
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$
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-
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$
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-
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1.
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BASIS OF PRESENTATION AND NATURE OF OPERATIONS
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2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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a)
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Basis of Accounting
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The Company’s financial statements have been prepared using the accrual method of accounting.
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2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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b)
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Cash and Cash Equivalents
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Cash consists of cash on deposit with high quality major financial institutions. For purposes of the balance sheet and statements of cash flows, the Company considers all highly liquid debt instruments purchased with maturity of 90 days or less to be cash equivalents.
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c)
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Foreign Currency Accounting
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The Company’s functional currency is the U.S. dollar. Head office financing and investing activities are generally in Canadian dollars. Transactions in Canadian currency are translated into U.S. dollars as follows:
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Gains and losses arising on the settlement of foreign currency denominated transactions or balances are recorded in the statements of operations.
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d)
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Fair Value of Financial Instruments
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ASC Topic 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
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These tiers include:
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§
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Level 1 – defined as observable inputs such as quoted prices in active markets;
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§
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Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
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§
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Level 3 – defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
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Liabilities measured at fair value on a recurring basis were presented on the Company’s balance sheet as at June 30, 2014 as follows:
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Fair Value Measurements Using
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Quoted prices in
active markets for
identical instruments
(Level 1)
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Significant other
observable inputs
(Level 2)
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Significant
unobservable inputs
(Level 3)
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Balance,
June 30, 2014
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Balance,
December 31, 2013
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|||||||||||||||
Loans payable
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$
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-
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$
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147,739
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$
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-
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$
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147,739
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$
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111,731
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|||||||||
2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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e)
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Use of Estimates and Assumptions
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The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions are determining the fair value of transactions involving related parties and common stock. Actual results may differ from the estimates.
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f)
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Basic and Diluted Loss Per Share
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The Company reports basic loss per share in accordance with ASC Topic 260, “Earnings Per Share”. Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common stock outstanding during the period. Diluted loss per share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As the Company generated net losses in the period presented, the basic and diluted loss per share are the same.
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g)
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Income Taxes
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The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. This standard requires the use of an asset and liability approach for financial accounting and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.
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h)
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Recent Accounting Pronouncements
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The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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3.
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CAPITAL STOCK
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·
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in connection with the $0.20 private placement, the Company received $90,000 as subscriptions for 450,000 shares of its common stock. 250,000 shares were issued on October 3, 2013 and 200,000 on October 25, 2013 in connection with those subscriptions; and
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·
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the Company reached an agreement with a lender to issue 217,500 shares of its common stock to settle $21,750 in loans payable. Those shares were issued on October 3, 2013.
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4.
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LOANS PAYABLE
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Principal balances as at June 30, 2014:
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i)
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$5,000: unsecured; interest at 15% per annum; due on April 20, 2012.
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ii)
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$75,000: unsecured; interest at 10% per annum; due on August 2, 2011.
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iii)
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$15,668: unsecured; non-interest bearing; with no specific terms of repayment.
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iv)
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$24,983: unsecured; non-interest bearing; with no specific terms of repayment.
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v)
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$1,886: unsecured; non-interest bearing; with no specific terms of repayment.
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Principal balances as at December 31, 2013:
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i)
|
$5,000: unsecured; interest at 15% per annum; due on April 20, 2012.
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ii)
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$75,000: unsecured; interest at 10% per annum; due on August 2, 2011.
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iii)
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$1,642: unsecured; non-interest bearing; with no specific terms of repayment.
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iv)
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$8,979: unsecured; non-interest bearing; with no specific terms of repayment.
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5.
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RELATED PARTY TRANSACTIONS AND AMOUNTS DUE
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a)
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Related Party Amounts Due
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At June 30, 2014, the Company owed a company controlled by its sole director and officer $64,115 (December 31, 2013: $32,108) which was included in accounts payable.
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b)
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Consulting Services
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During the six months ended June 30, 2014, the Company incurred $51,801 (June 30, 2013 - $56,857) in consulting fees to the sole director and officer of the Company. See Note 6.
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6.
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CONTRACTUAL OBLIGATIONS, COMMITMENTS AND SUBSEQUENT EVENTS
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ITEM 2.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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ITEM 2.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
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ITEM 2.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
|
Three Months Ended
June 30
|
Change
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|||||||||||||||
2014
|
2013
|
Amount
|
Percentage
|
|||||||||||||
Revenue
|
$
|
-
|
$
|
-
|
$
|
-
|
-
|
|||||||||
Operating Expenses
|
$
|
55,149
|
$
|
51,534
|
$
|
3,615
|
7%
|
|||||||||
Net (Loss) Income
|
$
|
(55,149
|
)
|
$
|
(51,534
|
)
|
$
|
(3,615
|
)
|
7%
|
||||||
Six Months Ended
June 30
|
Change
|
|||||||||||||||
2014
|
2013
|
Amount
|
Percentage
|
|||||||||||||
Revenue
|
$
|
-
|
$
|
-
|
$
|
-
|
-
|
|||||||||
Operating Expenses
|
$
|
85,806
|
$
|
94,777
|
$
|
(8,971
|
)
|
(9%)
|
||||||||
Net (Loss) Income
|
$
|
(85,806
|
)
|
$
|
(94,777
|
)
|
$
|
8,971
|
(9%)
|
|||||||
Three Months Ended June 30
|
Change
|
||||||||||||
2014
|
2013
|
Amount
|
Percentage
|
||||||||||
Corporate support services
|
$
|
-
|
$
|
3,079
|
$
|
(3,079
|
)
|
(100%)
|
|||||
Interest, bank and finance charges
|
$
|
2,364
|
$
|
(8,587
|
)
|
$
|
10,952
|
(128%)
|
|||||
Office, foreign exchange and sundry
|
$
|
2,508
|
$ |
372
|
$
|
2,136
|
574%
|
||||||
Professional fees
|
$
|
19,289
|
$
|
22,997
|
$
|
(3,708
|
)
|
(16%)
|
|||||
Transfer and filing fees
|
$
|
5,103
|
$
|
7,056
|
$
|
(1,953
|
)
|
(28%)
|
|
§
|
Corporate support services decreased as a result of the agreement to supply those services being terminated by the service provider as of December 31, 2013.
|
|
§
|
Interest, bank and finance charges were lower in Q2 of 2013 primarily due to a reversal of interest charges on overdue accounts payable.
|
|
§
|
Office, foreign exchange and sundry were higher in 2014 due to an increase in foreign exchange (approximately $3,000), offset by decreases in IT and parking expenses (approximately $1,000).
|
|
§
|
Professional fees decreased year over year for the quarter primarily due to timing of billings for audit and review services, together with lower year end costs.
|
|
§
|
Transfer and filing fees decreased due to lower costs for XBRL filing requirements in the 2014 quarter.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
|
June 30
|
December 31
|
Change
|
|||||||||||
2014
|
2013
|
Amount
|
Percentage
|
||||||||||
Accounts payable and accrued liabilities
|
$
|
127,880
|
$
|
78,076
|
$
|
49,804
|
64%
|
||||||
Loans payable
|
$
|
147,739
|
$
|
111,731
|
$
|
36,008
|
32%
|
|
§
|
Accounts payable and accrued liabilities increased mainly due to accrued costs for bookkeeping (approximately $3,000), accounting services (approximately $12,000), consulting fees (approximately $32,000), and filing and transfer fees (approximately $3,000).
|
|
§
|
Loans payable increased due to the receipt in 2014 of loans of approximately $32,000, together with an increase in accrued interest of approximately $4,000.
|
June 30
|
December 31
|
Increase/(Decrease)
|
|||||||||||
2014
|
2013
|
Amount
|
Percentage
|
||||||||||
Current Assets
|
$
|
27
|
21
|
$
|
6
|
29%
|
|||||||
Current Liabilities
|
275,619
|
189,807
|
85,812
|
45%
|
|||||||||
Working Capital (Deficiency)
|
$
|
(275,592
|
)
|
(189,786
|
)
|
$
|
(85,806
|
)
|
45%
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
|
Six Months Ended June 30
|
Change
|
||||||||||||
2014
|
2013
|
Amount
|
Percentage
|
||||||||||
Cash Flows (Used In) Provided By:
|
|||||||||||||
Operating Activities
|
$
|
(31,911
|
)
|
(116,407
|
)
|
84,496
|
(73%)
|
||||||
Financing Activities
|
31,917
|
110,690
|
(78,773
|
)
|
(71%)
|
||||||||
Net increase (decrease) in cash
|
6
|
(5,717
|
)
|
5,723
|
(100%)
|
|
Cash Used In Operating Activities
|
|
The decrease in cash used in operating activities of approximately $84,000 is due to the following:
|
|
§
|
Operating expenses were lower by approximately $9,000 in the current six month period than in the equivalent period last year;
|
|
§
|
The decrease in Prepaid expenses was $Nil in 2014, compared to approximately $34,000 in 2013;
|
|
§
|
The decrease in Amounts receivable was $Nil in 2014, compared to approximately $9,000 in 2013;
|
|
§
|
In 2014, Accounts payable increased by approximately $50,000, while in the corresponding 2013 period, it decreased by approximately $69,000, for a net year over year difference of approximately $119,000.
|
|
The decrease of approximately $79,000 in cash provided by financing activities was due to:
|
|
§
|
loan advances in the first six months of 2014 of approximately $32,000, compared to approximately $21,000 in the same period in 2013; and
|
|
§
|
the receipt of subscriptions for our common stock being $Nil in the first six months of 2014, compared to $90,000 in the same period in 2013.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
ITEM 4.
|
CONTROLS AND PROCEDURES.
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
ITEM 6.
|
EXHIBITS.
|
Exhibit No.
|
Document Description
|
31.1
|
Certification of Principal Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief Executive and Chief Financial Officer.
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
INTERNATIONAL GOLD CORP.
|
|||
BY:
|
“Robert M. Baker”
|
||
Robert M. Baker
|
|||
President, Principal Executive Officer, Treasurer, Principal Financial Officer, Principal Accounting Officer, and sole member of the Board of Directors
|
|||
Exhibit No.
|
Document Description
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|